~~INGERSOLL-RAND~~

TRANE TECHNOLOGIES PLC

FORM 10-Q

INDEX




PART I FINANCIAL INFORMATION	1

Item 1 -		Financial Statements	1

		Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, ~~2019~~2020 and ~~2018~~2019	1

		Condensed Consolidated Balance Sheets at September 30, ~~2019~~2020 and December 31, ~~2018~~2019	23

		Condensed Consolidated Statements of Equity for the three and nine months ended September 30, ~~2019~~2020 and ~~2018~~2019	34

		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2019~~2020 and ~~2018~~2019	56

		Notes to Condensed Consolidated Financial Statements	67

Item 2 -		Management’s Discussion and Analysis of Financial Condition and Results of Operations	3834

Item 3 -		Quantitative and Qualitative Disclosures about Market Risk	5052

Item 4 -		Controls and Procedures	5052

PART II OTHER INFORMATION			5153

Item 1 -		Legal Proceedings	5153

Item 1A -		Risk Factors	5153

Item 2 -		Unregistered Sales of Equity Securities and Use of Proceeds	5155

Item 6 -		Exhibits	5256

SIGNATURES			5357

Table of Contents

PART I - FINANCIAL INFORMATION


~~Item 1.~~	~~Financial Statements~~

Item 1.Financial Statements

~~INGERSOLL-RAND PLC~~

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(Unaudited)~~


TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

	Three months ended				Nine months ended
	September 30,				September 30,
In millions, except per share amounts	2020		2019		2020		2019
Net revenues	$	3,495.5	$	3,470.9	$	9,275.6	$	9,892.2
Cost of goods sold	(2,360.8)		(2,366.6)		(6,420.1)		(6,818.6)
Selling and administrative expenses	(567.8)		(567.8)		(1,710.7)		(1,733.7)
Operating income	566.9		536.5		1,144.8		1,339.9
Interest expense	(62.4)		(63.9)		(186.8)		(179.4)
Other income/(expense), net	(4.5)		(5.8)		7.6		(21.7)
Earnings before income taxes	500.0		466.8		965.6		1,138.8
Benefit (provision) for income taxes	(89.9)		(80.5)		(224.4)		(192.6)
Earnings from continuing operations	410.1		386.3		741.2		946.2
Discontinued operations, net of tax	(5.5)		77.1		(120.4)		181.2
Net earnings (loss)	404.6		463.4		620.8		1,127.4
Less: Net earnings from continuing operations attributable to noncontrolling interests	(4.0)		(3.7)		(9.7)		(10.3)
Less: Net earnings from discontinuing operations attributable to noncontrolling interests	0		(0.9)		(0.9)		(2.3)
Net earnings (loss) attributable to Trane Technologies plc	$	400.6	$	458.8	$	610.2	$	1,114.8

Amounts attributable to Trane Technologies plc ordinary shareholders:
Continuing operations	$	406.1	$	382.6	$	731.5	$	935.9
Discontinued operations	(5.5)		76.2		(121.3)		178.9
Net earnings (loss)	$	400.6	$	458.8	$	610.2	$	1,114.8
Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:
Basic:
Continuing operations	$	1.69	$	1.58	$	3.05	$	3.86
Discontinued operations	(0.02)		0.32		(0.51)		0.74
Net earnings (loss)	$	1.67	$	1.90	$	2.54	$	4.60
Diluted:
Continuing operations	$	1.67	$	1.57	$	3.01	$	3.82
Discontinued operations	(0.03)		0.31		(0.50)		0.73
Net earnings (loss)	$	1.64	$	1.88	$	2.51	$	4.55
Weighted-average shares outstanding:
Basic	240.4		241.7		240.0		242.1
Diluted	243.7		244.6		242.7		244.8

Table of Contents

Three months ended Nine months ended
September 30, September 30,
In millions, except per share amounts 2019 2018 2019 2018
Net revenues $ 4,344.3
$ 4,030.9
$ 12,448.0
$ 11,773.1
Cost of goods sold (2,935.8 ) (2,718.3 ) (8,547.2 ) (8,102.6 )
Selling and administrative expenses (785.3 ) (725.6 ) (2,308.6 ) (2,199.8 )
Operating income 623.2
587.0
1,592.2
1,470.7
Interest expense (64.1 ) (48.5 ) (179.7 ) (171.7 )
Other income/(expense), net (7.2 ) (8.5 ) (22.6 ) (16.0 )
Earnings before income taxes 551.9
530.0
1,389.9
1,283.0
Benefit (provision) for income taxes (112.9 ) 1.1
(279.2 ) (159.9 )
Earnings from continuing operations 439.0
531.1
1,110.7
1,123.1
Discontinued operations, net of tax 24.4
(11.7 ) 16.7
(27.0 )
Net earnings 463.4
519.4
1,127.4
1,096.1
Less: Net earnings attributable to noncontrolling interests (4.6 ) (4.3 ) (12.6 ) (12.5 )
Net earnings attributable to Ingersoll-Rand plc $ 458.8
$ 515.1
$ 1,114.8
$ 1,083.6
Amounts attributable to Ingersoll-Rand plc ordinary shareholders:
Continuing operations $ 434.4
$ 526.8
$ 1,098.1
$ 1,110.6
Discontinued operations 24.4
(11.7 ) 16.7
(27.0 )
Net earnings $ 458.8
$ 515.1
$ 1,114.8
$ 1,083.6
Earnings (loss) per share attributable to Ingersoll-Rand plc ordinary shareholders:
Basic:
Continuing operations $ 1.80
$ 2.14
$ 4.54
$ 4.48
Discontinued operations 0.10
(0.05 ) 0.06
(0.11 )
Net earnings $ 1.90
$ 2.09
$ 4.60
$ 4.37
Diluted:
Continuing operations $ 1.78
$ 2.11
$ 4.48
$ 4.43
Discontinued operations 0.10
(0.05 ) 0.07
(0.11 )
Net earnings $ 1.88
$ 2.06
$ 4.55
$ 4.32
Weighted-average shares outstanding:
Basic 241.7
246.4
242.1
248.1
Diluted 244.6
249.5
244.8
250.9

Total comprehensive income $ 332.3
$ 504.0
$ 1,022.8
$ 952.2
Less: Total comprehensive income attributable to noncontrolling interests (4.1 ) (4.1 ) (13.7 ) (9.6 )
Total comprehensive income attributable to Ingersoll-Rand plc $ 328.2
$ 499.9
$ 1,009.1
$ 942.6


TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (continued)
(Unaudited)

	Three months ended				Nine months ended
	September 30,				September 30,
In millions, except per share amounts	2020		2019		2020		2019
Net earnings (loss)	$	404.6	$	463.4	$	620.8	$	1,127.4
Other comprehensive income (loss):
Currency translation	111.3		(143.2)		107.4		(139.3)
Cash flow hedges:
Unrealized net gains (losses) arising during period	1.5		(0.5)		1.7		(0.7)
Net gains (losses) reclassified into earnings	0.7		(0.2)		1.1		0.8
Tax (expense) benefit	(0.4)		0.2		0.4		0.1
Total cash flow hedges, net of tax	1.8		(0.5)		3.2		0.2
Pension and OPEB adjustments:

Net actuarial gains (losses) for the period	0		0		(21.3)		0
Amortization reclassified into earnings	10.5		10.1		32.7		35.8
Settlements/curtailments reclassified to earnings	(0.1)		0.7		(3.7)		2.4
Currency translation and other	(6.6)		4.6		(3.0)		4.7
Tax (expense) benefit	(1.9)		(2.8)		(6.9)		(8.4)
Total pension and OPEB adjustments, net of tax	1.9		12.6		(2.2)		34.5
Other comprehensive income (loss), net of tax	115.0		(131.1)		108.4		(104.6)
Comprehensive income (loss), net of tax	$	519.6	$	332.3	$	729.2	$	1,022.8
Less: Comprehensive (income) loss attributable to noncontrolling interests	(3.9)		(4.1)		(12.7)		(13.7)
Comprehensive income (loss) attributable to Trane Technologies plc	$	515.7	$	328.2	$	716.5	$	1,009.1

See accompanying notes to Condensed Consolidated Financial Statements.

~~INGERSOLL-RAND~~

Table of Contents

TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	(Unaudited)
In millions	September 30, 2019			December 31, 2018			In millions	September 30, 2020		December 31, 2019
ASSETS							ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	830.9		$	903.4		Cash and cash equivalents	$	3,190.1	$	1,278.6
Accounts and notes receivable, net	2,968.9			2,679.2			Accounts and notes receivable, net	2,312.6		2,184.6
Inventories	1,890.6			1,677.8			Inventories	1,229.2		1,278.6

Other current assets	412.7			471.6			Other current assets	241.6		344.8
Assets held-for-sale							Assets held-for-sale	0		4,207.2
Total current assets	6,103.1			5,732.0			Total current assets	6,973.5		9,293.8
Property, plant and equipment, net	1,779.1			1,730.8			Property, plant and equipment, net	1,314.1		1,352.0
Goodwill	6,712.8			5,959.5			Goodwill	5,144.3		5,125.7
Intangible assets, net	4,174.4			3,634.7			Intangible assets, net	3,233.0		3,323.6
Other noncurrent assets	1,537.5			857.9			Other noncurrent assets	1,274.5		1,397.2

Total assets	$	20,306.9		$	17,914.9		Total assets	$	17,939.4	$	20,492.3
LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current liabilities:							Current liabilities:
Accounts payable	$	1,758.8		$	1,705.3		Accounts payable	$	1,458.8	$	1,381.3
Accrued compensation and benefits	485.8			531.6			Accrued compensation and benefits	421.0		442.4
Accrued expenses and other current liabilities	1,881.0			1,728.2			Accrued expenses and other current liabilities	1,515.2		1,564.2
Short-term borrowings and current maturities of long-term debt	650.5			350.6			Short-term borrowings and current maturities of long-term debt	775.1		650.3
Liabilities held-for-sale							Liabilities held-for-sale	0		1,200.4
Total current liabilities	4,776.1			4,315.7			Total current liabilities	4,170.1		5,238.6
Long-term debt	4,921.9			3,740.7			Long-term debt	4,494.2		4,922.9
Postemployment and other benefit liabilities	1,178.8			1,192.9			Postemployment and other benefit liabilities	977.2		1,048.2
Deferred and noncurrent income taxes	666.3			538.4			Deferred and noncurrent income taxes	635.5		572.0
Other noncurrent liabilities	1,484.7			1,062.4			Other noncurrent liabilities	1,281.4		1,398.2

Total liabilities	13,027.8			10,850.1			Total liabilities	11,558.4		13,179.9

Equity:							Equity:
Ingersoll-Rand plc shareholders’ equity:
Trane Technologies plc shareholders’ equity:							Trane Technologies plc shareholders’ equity:
Ordinary shares	264.1			266.4			Ordinary shares	264.5		262.8
Ordinary shares held in treasury, at cost	(1,719.4		)	(1,719.4		)	Ordinary shares held in treasury, at cost	(1,719.4)		(1,719.4)
Capital in excess of par value							Capital in excess of par value	93.3		0
Retained earnings	9,762.7			9,439.8			Retained earnings	8,489.3		9,730.8
Accumulated other comprehensive income (loss)	(1,069.8		)	(964.1		)	Accumulated other comprehensive income (loss)	(761.0)		(1,006.6)
Total Ingersoll-Rand plc shareholders’ equity	7,237.6			7,022.7
Total Trane Technologies plc shareholders’ equity							Total Trane Technologies plc shareholders’ equity	6,366.7		7,267.6
Noncontrolling interests	41.5			42.1			Noncontrolling interests	14.3		44.8
Total equity	7,279.1			7,064.8			Total equity	6,381.0		7,312.4
Total liabilities and equity	$	20,306.9		$	17,914.9		Total liabilities and equity	$	17,939.4	$	20,492.3

Long-term debt, excluding current maturities, consisted of the following:

In millions September 30,
2019 December 31,
2018
2.625% Senior notes due 2020 ⁽¹⁾
$ —
$ 299.4
2.900% Senior notes due 2021 298.9
298.3
9.000% Debentures due 2021 124.9
124.9
4.250% Senior notes due 2023 697.6
697.1
7.200% Debentures due 2020-2025 37.3
44.8
3.550% Senior notes due 2024 496.4
495.9
6.480% Debentures due 2025 149.7
149.7
3.500% Senior notes due 2026 396.7
—
3.750% Senior notes due 2028 544.9
544.5
3.800% Senior notes due 2029 743.5
—
5.750% Senior notes due 2043 494.4
494.3
4.650% Senior notes due 2044 295.9
295.8
4.300% Senior notes due 2048 296.0
295.9
4.500% Senior notes due 2049 345.5
—
Other loans and notes 0.2
0.1
Total $ 4,921.9
$ 3,740.7


In millions	September 30, 2020		December 31, 2019
2.900% Senior notes due 2021 (1)	$	0	$	299.1
9.000% Debentures due 2021 (2)	0		124.9
4.250% Senior notes due 2023	698.3		697.8
7.200% Debentures due 2020-2025	29.9		37.3
3.550% Senior notes due 2024	497.1		496.6
6.480% Debentures due 2025	149.7		149.7
3.500% Senior notes due 2026	397.2		396.8
3.750% Senior notes due 2028	545.5		545.1
3.800% Senior notes due 2029	744.1		743.6
5.750% Senior notes due 2043	494.7		494.5
4.650% Senior notes due 2044	296.0		295.9
4.300% Senior notes due 2048	296.1		296.0
4.500% Senior notes due 2049	345.6		345.5
Other loans and notes	0		0.1
Total	$	4,494.2	$	4,922.9

(1) ~~During the second quarter of 2019, the Company reclassified its 2.625%~~The 2.900% Senior notes are due ~~May 2020~~in February 2021 and have been reclassified from noncurrent to current.

(2) The 9.000% Debentures are due in August 2021 and have been reclassified from noncurrent to current.

Issuance of Senior Notes

In March 2019, the Company issued $1.5 billion principal amount of senior notes in three tranches through ~~Ingersoll-Rand~~Trane Technologies Luxembourg Finance S.A., an indirect, wholly-owned subsidiary. The tranches consist of $400 million aggregate principal amount of 3.500% senior notes due 2026, $750 million aggregate principal amount of 3.800% senior notes due 2029 and $350 million aggregate principal amount of 4.500% senior notes due 2049. The notes are fully and unconditionally guaranteed by each of ~~Ingersoll Rand~~Trane Technologies plc, ~~Ingersoll-Rand Global Holding~~Trane Technologies Irish Holdings Unlimited Company, ~~Limited, Ingersoll-Rand~~Trane Technologies Lux International Holding Company S.à.r.l, ~~Ingersoll-Rand Irish Holdings Unlimited~~Trane Technologies Global Holding Company Limited, Trane Technologies HoldCo Inc. and ~~Ingersoll-Rand Company.~~Trane Technologies Company LLC. The Company has the option to redeem the notes in whole or in part at any time, prior to their stated maturity date at redemption prices set forth in the indenture agreement. The notes are subject to certain customary covenants, however, none of these covenants are considered restrictive to the Company’s operations. During the three months ended March 31, 2019, the Company capitalized $13.1 million of debt issuance costs which will be amortized over the remaining life of the debt. The Company used the net proceeds to finance the acquisition of Precision Flow Systems and for general corporate purposes.

Other Credit Facilities

~~The~~On June 4, 2020, the Company entered into a new $1.0 billion senior unsecured revolving credit facility which matures in March 2022 and terminated its $1.0 billion facility set to expire in March 2021. As a result, the Company maintains two ~~5-year,~~ $1.0 billion senior unsecured revolving credit facilities, one of which matures in March 2022 and the other in April 2023 (the Facilities) through its wholly-owned subsidiaries, ~~Ingersoll-Rand~~Trane Technologies HoldCo Inc., Trane Technologies Global Holding Company Limited and ~~Ingersoll-Rand~~Trane Technologies Luxembourg Finance S.A. (collectively, the Borrowers). Each senior unsecured credit facility ~~one of which matures in March 2021 and the other in April 2023,~~ provides support for the Company's commercial paper program and can be used for working capital and other general corporate purposes. ~~Ingersoll-Rand~~Trane Technologies plc, ~~Ingersoll-Rand~~Trane Technologies Irish Holdings Unlimited Company, ~~Ingersoll-Rand~~Trane Technologies Lux International Holding Company S.à.r.l. and ~~Ingersoll-Rand~~Trane Technologies Company LLC each provide irrevocable and unconditional guarantees for these Facilities. In addition, each Borrower will guarantee the obligations under the Facilities of the other ~~Borrower.~~Borrowers. Total commitments of $2.0 billion were unused at September 30, ~~2019~~2020 and December 31, ~~2018.~~2019.

Fair Value of Debt

The carrying value of the Company's short-term borrowings is a reasonable estimate of fair value due to the short-term nature of the instruments. The fair value of the Company's debt instruments at September 30, ~~2019~~2020 and December 31, ~~2018~~2019 was $6.2 ~~billion and $4.2 billion, respectively.~~billion. The Company measures the fair value of its long-term debt instruments for disclosure purposes based upon observable market prices quoted on public exchanges for similar assets. These fair value inputs are considered Level 2 within the fair value hierarchy. The methodologies used by the Company to determine the fair value of its long-term debt instruments at September 30, ~~2019~~2020 are the same as those used at December 31, ~~2018.~~

2019.

Note 8. Financial Instruments

In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors. These fluctuations can increase the cost of financing, investing and operating the business. The Company may use various financial instruments, including derivative instruments, to manage the risks associated with interest rate, commodity price and foreign currency exposures. These financial instruments are not used for trading or speculative purposes. The Company recognizes all derivatives on the Condensed Consolidated Balance Sheet at their fair value as either assets or liabilities.

On the date a derivative contract is entered into, the Company designates the derivative instrument as a cash flow hedge of a forecasted transaction or as an undesignated derivative. The Company formally documents its hedge relationships, including identification of the derivative instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. This process includes linking derivative instruments that are designated as hedges to specific assets, liabilities or forecasted transactions.

The Company assesses at inception and at least quarterly thereafter, whether the derivatives used in cash flow hedging transactions are highly effective in offsetting the changes in the cash flows of the hedged item. To the extent the derivative is deemed to be a highly effective hedge, the fair market value changes of the instrument are recorded to Accumulated other comprehensive income (loss) (AOCI). If the hedging relationship ceases to be highly effective, or it becomes probable that a forecasted transaction is no longer expected to occur, the hedging relationship will be undesignated and any future gains and losses on the derivative instrument will be recorded in Net earnings.

The fair values of derivative instruments included within the Condensed Consolidated Balance Sheets were as follows:


	Derivative assets				Derivative liabilities					Derivative assets				Derivative liabilities
In millions	September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018		In millions	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Derivatives designated as hedges:									Derivatives designated as hedges:
Currency derivatives	$	1.1	$	1.3	$	2.5	$	0.7	Currency derivatives	$	0.4	$	0.1	$	2.8	$	3.9

Derivatives not designated as hedges:									Derivatives not designated as hedges:
Currency derivatives	0.3		0.9		0.7		0.6		Currency derivatives	3.0		1.0		3.5		3.3

Total derivatives	$	1.4	$	2.2	$	3.2	$	1.3	Total derivatives	$	3.4	$	1.1	$	6.3	$	7.2

Asset and liability derivatives included in the table above are recorded within Other current assets and Accrued expenses and other current liabilities, respectively.

Currency Derivative Instruments

The notional amount of the Company’s currency derivatives was ~~$0.6~~$0.5 billion at both September 30, ~~2019~~2020 and December 31, ~~2018.~~2019. At September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, a net loss of ~~$1.0~~$1.8 million and ~~a net gain of $0.5~~$2.9 million, net of tax, respectively, was included in AOCI related to the fair value of the Company’s currency derivatives designated as accounting hedges. The amount expected to be reclassified into Net earnings over the next twelve months is a ~~gain~~loss of ~~$0.1~~$1.1 million. The actual amounts that will be reclassified to Net earnings may vary from this amount as a result of changes in market conditions. Gains and losses associated with the Company’s currency derivatives not designated as hedges are recorded in Net earnings as changes in fair value occur. At September 30, ~~2019,~~2020, the maximum term of the Company’s currency derivatives was approximately 12 months, except for currency derivatives in place related to a certain long-term contract.

Other Derivative Instruments

Prior to 2015, the Company utilized forward-starting interest rate swaps and interest rate locks to manage interest rate exposure in periods prior to the anticipated issuance of certain fixed-rate debt. These instruments were designated as cash flow hedges and had a notional amount of $1.3 billion. Consequently, when the contracts were settled upon the issuance of the underlying debt, any realized gains or losses in the fair values of the instruments were deferred into AOCI. These deferred gains or losses are subsequently recognized in Interest expense over the term of the related notes. The net unrecognized gain in AOCI was $~~6.2~~$5.5 million at September 30, ~~2019~~2020 and ~~$6.7~~$6.0 million at December 31, ~~2018~~.2019. The net deferred gain at September 30, ~~2019~~2020 will continue to be amortized over the term of notes with maturities ranging from 2023 to 2044. The amount expected to be amortized over the next twelve months is a net gain of $0.7 million. The Company has no0 forward-starting interest rate swaps or interest rate lock contracts outstanding at September 30, ~~2019~~2020 or December 31, ~~2018.~~2019.

The following table represents the amounts associated with derivatives designated as hedges affecting Net earnings and AOCI for the three months ended September 30:

Amount of gain (loss)
recognized in AOCI Location of gain (loss) reclassified from
AOCI and recognized
into Net earnings Amount of gain (loss)
reclassified from AOCI and
recognized into Net earnings
In millions 2019 2018 2019 2018
Currency derivatives designated as hedges $ (0.5 ) $ (1.9 ) Cost of goods sold $ 0.1
$ (0.1 )
Interest rate swaps & locks —
—
Interest expense 0.2
0.2
Total $ (0.5 ) $ (1.9 ) $ 0.3
$ 0.1


	Amount of gain (loss) recognized in AOCI				Location of gain (loss) reclassified from AOCI and recognized into Net earnings	Amount of gain (loss) reclassified from AOCI and recognized into Net earnings
In millions	2020		2019			2020		2019
Currency derivatives designated as hedges	$	1.5	$	(0.5)	Cost of goods sold	$	(0.9)	$	0

Interest rate swaps & locks	0		0		Interest expense	0.2		0.2
Total	$	1.5	$	(0.5)		$	(0.7)	$	0.2

The following table represents the amounts associated with derivatives not designated as hedges affecting Other income/(expense), net for the three months ended September 30:

Amount of gain (loss)
recognized in Net earnings
In millions 2019 2018
Currency derivatives not designated as hedges $ (1.7 ) $ (6.0 )
Total $ (1.7 ) $ (6.0 )


		Amount of gain (loss) recognized in Net earnings
In millions	2020			2019
Currency derivatives not designated as hedges		$	1.6		$	(0.5)

Total		$	1.6		$	(0.5)

The following table represents the amounts associated with derivatives designated as hedges affecting Net earnings and AOCI for the nine months ended September 30:

Amount of gain (loss)
recognized in AOCI Location of gain (loss) reclassified from
AOCI and recognized
into Net earnings Amount of gain (loss)
reclassified from AOCI and
recognized into Net earnings
In millions 2019 2018 2019 2018
Currency derivatives designated as hedges $ (0.9 ) $ (0.5 ) Cost of goods sold $ (1.1 ) $ (0.4 )
Interest rate swaps & locks —
—
Interest expense 0.5
(0.2 )
Total $ (0.9 ) $ (0.5 )
$ (0.6 ) $ (0.6 )


	Amount of gain (loss) recognized in AOCI				Location of gain (loss) reclassified from AOCI and recognized into Net earnings	Amount of gain (loss) reclassified from AOCI and recognized into Net earnings
In millions	2020		2019			2020		2019
Currency derivatives designated as hedges	$	1.7	$	(0.7)	Cost of goods sold	$	(1.6)	$	(1.3)

Interest rate swaps & locks	0		0		Interest expense	0.5		0.5
Total	$	1.7	$	(0.7)		$	(1.1)	$	(0.8)

The following table represents the amounts associated with derivatives not designated as hedges affecting Other income/(expense), net for the nine months ended September 30:

Amount of gain (loss)
recognized in Net earnings
In millions 2019 2018
Currency derivatives not designated as hedges $ (5.9 ) $ (29.1 )
Total $ (5.9 ) $ (29.1 )


		Amount of gain (loss) recognized in Net earnings
In millions	2020			2019
Currency derivatives not designated as hedges		$	8.4		$	(4.0)

Total		$	8.4		$	(4.0)

The gains and losses associated with the Company’s undesignated currency derivatives are materially offset in Other income/(expense), net by changes in the fair value of the underlying transactions.

The following table presents the effects of the Company's designated financial instruments on the associated financial statement line item within the Consolidated Statement of Comprehensive Income (Loss) where the financial instruments are recorded for the three months ended September 30:


	Classification and amount of gain (loss) recognized in income on cash flow hedging relationships
	2020				2019
In millions	Cost of goods sold		Interest expense		Cost of goods sold		Interest expense
Total amounts presented in the Consolidated Statements of Comprehensive Income (Loss)	$	(2,360.8)	$	(62.4)	$	(2,366.6)	$	(63.9)
Gain (loss) on cash flow hedging relationships
Currency derivatives:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	$	(0.9)	$	—	$	0	$	—
Amount excluded from effectiveness testing recognized in net earnings based on changes in fair value and amortization	$	(0.5)	$	—	$	(0.8)	$	—



Interest rate swaps & locks:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	$	—	$	0.2	$	—	$	0.2

Classification and amount of gain (loss) recognized in income on cash flow hedging relationships
2019 2018
In millions Cost of goods sold Interest expense Cost of goods sold Interest expense
Total amounts presented in the Consolidated Statements of Comprehensive Income $ (2,935.8 ) $ (64.1 ) $ (2,718.3 ) $ (48.5 )
Gain (loss) on cash flow hedging relationships
Currency derivatives:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings $ 0.1
$ —
$ (0.1 ) $ —
Amount excluded from effectiveness testing recognized in net earnings based on changes in fair value and amortization $ (0.8 ) $ —
$ —
$ —
Interest rate swaps & locks:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings $ —
$ 0.2
$ —
$ 0.2

Classification and amount of gain (loss) recognized in income on cash flow hedging relationships
2019 2018
In millions Cost of goods sold Interest expense Cost of goods sold Interest expense
Total amounts presented in the Consolidated Statements of Comprehensive Income $ (8,547.2 ) $ (179.7 ) $ (8,102.6 ) $ (171.7 )
Gain (loss) on cash flow hedging relationships
Currency derivatives:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings $ (1.1 ) $ —
$ (0.4 ) $ —
Amount excluded from effectiveness testing recognized in net earnings based on changes in fair value and amortization $ (2.3 ) $ —
$ —
$ —
Interest rate swaps & locks:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings $ —
$ 0.5
$ —
$ (0.2 )


	Classification and amount of gain (loss) recognized in income on cash flow hedging relationships
	2020				2019
In millions	Cost of goods sold		Interest expense		Cost of goods sold		Interest expense
Total amounts presented in the Consolidated Statements of Comprehensive Income (Loss)	$	(6,420.1)	$	(186.8)	$	(6,818.6)	$	(179.4)
Gain (loss) on cash flow hedging relationships
Currency derivatives:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	$	(1.6)	$	—	$	(1.3)	$	—
Amount excluded from effectiveness testing recognized in net earnings based on changes in fair value and amortization	$	(1.6)	$	—	$	(2.3)	$	—



Interest rate swaps & locks:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	$	—	$	0.5	$	—	$	0.5

Concentration of Credit Risk

The counterparties to the Company’s forward contracts consist of a number of investment grade major international financial institutions. The Company could be exposed to losses in the event of nonperformance by the counterparties. However, the credit ratings and the concentration of risk in these financial institutions are monitored on a continuous basis and present no significant credit risk to the Company.

Note 9. Fair Value Measurements

ASC 820, "Fair Value Measurement," (ASC 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:


•	•Level 1: Observable inputs such as quoted prices in active markets; •Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • ~~Observable inputs such as quoted prices in active markets;~~


•	~~Level 2:~~ ~~Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and~~


•	Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, ~~2019:~~2020:

In millions Fair Value Fair value measurements
Level 1 Level 2 Level 3
Assets:
Derivative instruments $ 1.4
$ —
$ 1.4
$ —
Liabilities:
Derivative instruments $ 3.2
$ —
$ 3.2
$ —


In millions	Fair Value		Fair value measurements
			Level 1		Level 2		Level 3

Assets:
Derivative instruments	$	3.4	$	0	$	3.4	$	0

Liabilities:
Derivative instruments	$	6.3	$	0	$	6.3	$	0

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, ~~2018:~~2019:

In millions Fair Value Fair value measurements
Level 1 Level 2 Level 3
Assets:
Derivative instruments $ 2.2
$ —
$ 2.2
$ —
Liabilities:
Derivative instruments $ 1.3
$ —
$ 1.3
$ —


In millions	Fair Value		Fair value measurements
			Level 1		Level 2		Level 3

Assets:
Derivative instruments	$	1.1	$	0	$	1.1	$	0

Liabilities:
Derivative instruments	$	7.2	$	0	$	7.2	$	0

Derivative instruments include forward foreign currency contracts and instruments related to non-functional currency balance sheet exposures. The fair value of the derivative instruments are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily accessible and observable.

The carrying values of cash and cash equivalents, accounts receivable, and accounts payable are a reasonable estimate of their fair value due to the short-term nature of these instruments. These methodologies used by the Company to determine the fair value of its financial assets and liabilities at September 30, ~~2019~~2020 are the same as those used at December 31, ~~2018.~~2019. There have been no transfers between levels of the fair value hierarchy.

Note 10. Leases

The Company’s lease portfolio includes various contracts for real estate, vehicles, information technology and other equipment. At contract inception, the Company determines a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as the right to direct the use of that asset. If a contract is considered to be a lease, the Company recognizes a lease liability based on the present value of the future lease payments, with an offsetting entry to recognize a right-of-use asset. Options to extend or terminate a lease are included when it is reasonably certain an option will be exercised. As a majority of the Company’s leases do not provide an implicit rate within the lease, an incremental borrowing rate is used which is based on information available at the commencement date.

The following table includes a summary of the Company's lease portfolio and Balance Sheet classification:


In millions (except lease term and discount rate)	Classification	September 30, 2020			December 31, 2019
Assets
Operating lease right-of-use assets (1)	Other noncurrent assets	$	439.5		$	469.4
Liabilities
Operating lease current	Other current liabilities	144.0			145.0
Operating lease noncurrent	Other noncurrent liabilities	301.2			329.9

Weighted average remaining lease term		4.2 years			4.3 years
Weighted average discount rate		3.4		%	3.6		%

In millions Classification September 30,
2019 January 1,
2019
Assets
Operating lease right-of-use assets ⁽¹⁾
Other noncurrent assets $ 559.0
$ 517.1
Liabilities
Operating lease current Other current liabilities 171.3
160.3
Operating lease noncurrent Other noncurrent liabilities 392.4
360.5

(1) Per ASC 842, prepaid lease payments and lease incentives are recorded as part of the right-of-use asset. The net impact was ~~$4.7~~$5.7 million and ~~$3.7~~$5.5 million at September 30, ~~2019~~2020 and ~~January 1,~~December 31, 2019, respectively.

The Company ~~elected the practical expedient as an accounting policy election by class of underlying asset to account~~accounts for each separate lease component of a contract and its associated non-lease component as a single lease component. ~~This practical expedient was applied to all underlying asset classes.~~ In addition, the Company ~~elected the practical expedient to utilize~~utilizes a portfolio approach for the vehicle, information technology and equipment asset classes as the application of the lease model to the portfolio would not differ materially from the application of the lease model to the individual leases within the portfolio.

The following table includes lease costs and related cash flow information for the three and nine months ended September ~~30, 2019:~~30:

In millions Three months ended Nine months ended
Operating lease expense $ 52.6
$ 152.9
Variable lease expense 8.4
22.8
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases 52.2
151.8
Right-of-use assets obtained in exchange for new operating lease liabilities 41.3
165.2


	Three months ended				Nine months ended
In millions	2020		2019		2020		2019
Operating lease expense	$	43.8	$	42.2	$	130.2	$	121.4
Variable lease expense	6.6		5.6		19.0		17.8
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	43.8		41.8		129.8		120.0
Right-of-use assets obtained in exchange for new operating lease liabilities	30.5		35.4		98.0		132.3

Operating lease expense is recognized on a straight-line basis over the lease term. In addition, the Company has certain leases that contain variable lease payments which are based on an index, a rate referenced in the lease or on the actual usage of the leased asset. These payments are not included in the right-to-use asset or lease liability and are expensed as incurred as variable lease expense. The Company elected the practical expedient as an accounting policy election by class of underlying asset to not apply the balance sheet recognition criteria required in ASC 842 to leases with an initial lease term of twelve months or less. Payments for these leases are recognized on a straight-line basis over the lease term.

Maturities of lease obligations were as follows:


In millions	September 30, 2020
Operating leases:
Remaining three months of 2020	$	42.9
2021	148.9
2022	111.3
2023	76.3
2024	46.1
After 2024	61.2
Total lease payments	$	486.7
Less: Interest	(41.5)
Present value of lease liabilities	$	445.2

In millions September 30,
2019
Operating leases:
Remaining three months of 2019 $ 51.0
2020 180.7
2021 139.5
2022 94.8
2023 65.5
After 2023 96.1
Total lease payments $ 627.6
Less: Interest (63.9 )
Present value of lease liabilities $ 563.7

Accounts receivable and current liabilities were stated at their historical carrying values, which approximates fair value given the short nature of these assets and liabilities. The estimate of fair value for inventory and property, plant and equipment are based on an assessment of the acquired assets condition as well as an evaluation of current market value of such assets. Measurement period adjustments primarily relate to the reassessment of realizability of deferred tax assets and the tax rates used to calculate deferred taxes on intangible assets.

~~The Company recorded intangible assets based on their preliminary estimate of fair value, which consisted of the following:~~

In millions
Weighted-average useful life (in years)
May 15,
2019
Customer relationships 14 $ 457.6
Trade names Indefinite 168.2
Other 7 36.4
Total $ 662.2

The valuation of intangible assets was determined using an income approach methodology. Any excess of the purchase price over the estimated fair value of net assets was recognized as goodwill. The goodwill is attributed primarily to the fair value of the expected cost synergies and revenue growth from PFS businesses. As of September 30, 2019, the Company has not finalized the process of allocating the purchase price and valuing the acquired assets and liabilities assumed for the PFS acquisition.

The results of PFS are reported within the Industrial segment from the date of acquisition. During the nine months ended September 30, 2019, the Company incurred $12.7 million of acquisition-related costs which are included in ~~Selling and administrative expenses~~ in the accompanying Condensed Consolidated Statements of Comprehensive Income. The Company has not included pro forma financial information required under ASC 805 as the pro forma impact was deemed not material.

~~Divestitures~~

The Company has retained obligations from previously sold businesses, including amounts related to the 2013 spin-off of its commercial and residential security business, that primarily include ongoing expenses for postretirement benefits, product liability and legal costs. The components of ~~Discontinued operations, net of tax~~ ~~for the three and nine months ended September 30 were as follows:~~

Three months ended Nine months ended
In millions 2019 2018 2019 2018
Pre-tax earnings (loss) from discontinued operations $ 32.0
$ (16.0 ) $ 22.2
$ (36.7 )
Tax benefit (expense) (7.6 ) 4.3
(5.5 ) 9.7
Discontinued operations, net of tax $ 24.4
$ (11.7 ) $ 16.7
$ (27.0 )

Pre-tax earnings (loss) from discontinued operations includes costs associated with Ingersoll-Rand Company for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims. Refer to Note 21, "Commitments and Contingencies," for more information related to asbestos.

Note 19. Earnings Per Share (EPS)

Basic EPS is calculated by dividing Net earnings attributable to ~~Ingersoll-Rand~~Trane Technologies plc by the weighted-average number of ordinary shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potentially dilutive ordinary shares, which in the Company’s case, includes shares issuable under share-based compensation plans. The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted earnings per share calculations for the three and nine months ended September 30:

Three months ended
Nine months ended
In millions, except per share amounts 2019 2018 2019 2018
Weighted-average number of basic shares 241.7
246.4
242.1
248.1
Shares issuable under incentive stock plans 2.9
3.1
2.7
2.8
Weighted-average number of diluted shares 244.6
249.5
244.8
250.9
Anti-dilutive shares —
0.7
0.7
1.5

Dividends declared per ordinary share $ —
$ —
$ 1.59
$ 1.43


	Three months ended				Nine months ended
In millions, except per share amounts	2020		2019		2020		2019
Weighted-average number of basic shares	240.4		241.7		240.0		242.1
Shares issuable under incentive stock plans	3.3		2.9		2.7		2.7

Weighted-average number of diluted shares	243.7		244.6		242.7		244.8
Anti-dilutive shares	0.6		0		0.8		0.7

Dividends declared per ordinary share	$	0	$	0	$	1.59	$	1.59

Note 20. Business Segment Information

The ~~accounting policies of the~~Company operates under three regional operating segments ~~are~~designed to create deep customer focus and relevance in markets around the same as those described in the summary of significant accounting policies except that the operating segments’ results are prepared on a management basis that is consistent with the manner in which the Company prepares financial information for internal review and decision making. The Company largely evaluates performance based on Segment operating income and Segment operating margins.world. Intercompany sales between segments are ~~considered~~ immaterial.

•The Company's ~~Climate~~Americas segment ~~delivers energy-efficient products~~innovates for customers in the North America and ~~innovative energy services. It includes Trane~~^®Latin America regions. The Americas segment encompasses commercial heating and ~~American Standard~~^®~~Heating & Air Conditioning which provide heating, ventilation~~cooling systems, building controls, and ~~air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls;~~ energy services and ~~building automation through Trane Building Advantage~~solutions; residential heating and ~~Nexia;~~cooling; and ~~Thermo King~~^®transport ~~temperature control~~refrigeration systems and solutions.

•The Company's ~~Industrial~~EMEA segment ~~delivers products~~innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating and cooling systems, services ~~that enhance energy efficiency, productivity~~ and ~~operations. It includes compressed air~~solutions for commercial buildings, and ~~gas~~transport refrigeration systems and ~~services, power tools, material handling systems, fluid management systems, as well as Club Car~~ ^®~~golf, utility and consumer low-speed vehicles.~~solutions.

•The Company's Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating and cooling systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

Management measures operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, unallocated corporate expenses and discontinued operations (Segment Adjusted EBITDA). Segment ~~operating income~~Adjusted EBITDA is ~~the measure of profit~~not defined under GAAP and ~~loss that the Company's chief operating decision maker uses~~may not be comparable to ~~evaluate the financial performance of the business~~similarly-titled measures used by other companies and ~~as the basis~~should not be considered a substitute for ~~performance reviews, compensation and resource allocation. For these reasons, the~~net earnings or other results reported in accordance with GAAP. The Company believes ~~that~~ Segment ~~operating income represents~~Adjusted EBITDA provides the most relevant measure of ~~segment profit~~profitability as well as earnings power and ~~loss.~~the ability to generate cash. This measure is a useful financial metric to assess the Company's operating performance from period to period by excluding certain items that it believes are not representative of its core business and the Company uses this measure for business planning purposes. Segment Adjusted EBITDA also provides a useful tool for assessing the comparability between periods and the Company's 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.

A summary of operations by reportable segment for the three and nine months ended September 30 was as follows:

Three months ended
Nine months ended
In millions 2019 2018 2019 2018
Net revenues
Climate $ 3,470.9
$ 3,238.7
$ 9,892.2
$ 9,342.3
Industrial 873.4
792.2
2,555.8
2,430.8
Total $ 4,344.3
$ 4,030.9
$ 12,448.0
$ 11,773.1
Segment operating income
Climate $ 583.5
$ 535.6
$ 1,510.1
$ 1,378.7
Industrial 116.3
110.7
310.3
291.8
Unallocated corporate expense (76.6 ) (59.3 ) (228.2 ) (199.8 )
Operating income $ 623.2
$ 587.0
$ 1,592.2
$ 1,470.7


	Three months ended				Nine months ended
In millions	2020		2019		2020		2019
Net revenues
Americas	$	2,745.8	$	2,707.5	$	7,300.0	$	7,685.5
EMEA	445.2		456.3		1,182.7		1,289.4
Asia Pacific	304.5		307.1		792.9		917.3
Total Net revenues	$	3,495.5	$	3,470.9	$	9,275.6	$	9,892.2

Segment Adjusted EBITDA
Americas	$	555.0	$	529.9	$	1,287.6	$	1,388.3
EMEA	87.6		82.0		190.1		196.1
Asia Pacific	58.5		46.8		129.2		128.3
Total Segment Adjusted EBITDA	$	701.1	$	658.7	$	1,606.9	$	1,712.7

Reconciliation of Segment Adjusted EBITDA to earnings before income taxes
Total Segment Adjusted EBITDA	$	701.1	$	658.7	$	1,606.9	$	1,712.7
Interest expense	(62.4)		(63.9)		(186.8)		(179.4)
Depreciation and amortization	(74.5)		(72.7)		(223.7)		(215.8)
Restructuring costs	(8.2)		(16.6)		(71.3)		(36.0)
Unallocated corporate expenses	(56.0)		(38.7)		(159.5)		(142.7)
Earnings before income taxes	$	500.0	$	466.8	$	965.6	$	1,138.8

Note 21. Commitments and Contingencies

The Company is involved in various litigations, claims and administrative proceedings, including those related to asbestos, environmental, ~~asbestos,~~ and product liability matters. In accordance with ASC 450, "Contingencies" (ASC 450), the Company records accruals for loss contingencies when it is both probable that a liability will be incurred and the amount of the loss can be reasonably estimated. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

Asbestos-Related Matters

Certain wholly-owned subsidiaries and former companies of the Company are named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims were filed against predecessors of Aldrich and Murray and generally allege injury caused by exposure to asbestos contained in certain historical products sold by predecessors of Aldrich or Murray, primarily pumps, boilers and railroad brake shoes. None of the Company's existing or previously-owned businesses were a producer or manufacturer of asbestos.

On June 18, 2020, Aldrich and Murray filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code to resolve equitably and permanently all current and future asbestos related claims in a manner beneficial to claimants, Aldrich and Murray. As a result of the Chapter 11 filings, all asbestos-related lawsuits against Aldrich and Murray have been stayed due to the imposition of a statutory automatic stay applicable in Chapter 11 bankruptcy cases. In addition, at the request of Aldrich and Murray, the Bankruptcy Court has entered an order temporarily staying all asbestos-related claims against the Trane Companies that relate to claims against Aldrich or Murray (except for asbestos-related claims for which the exclusive remedy is provided under workers' compensation statutes or similar laws).

The goal of these Chapter 11 filings is an efficient and permanent resolution of all current and future asbestos claims through court approval of a plan of reorganization, which would establish, in accordance with section 524(g) of the Bankruptcy Code, a

trust to which all asbestos claims would be channeled for resolution. Aldrich and Murray intend to seek an agreement with representatives of the asbestos claimants on the terms of a plan for the establishment of such a trust.

Prior to the Petition Date, predecessors of each of Aldrich and Murray had been litigating asbestos-related claims brought against them. No such claims have been paid since the Petition Date, and it is not contemplated that any such claims will be paid until the end of the Chapter 11 cases. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether or how long the Bankruptcy Court order temporarily staying asbestos-related claims against the Trane Companies will be extended, whether or when any agreement with representatives of the asbestos claimants on the terms of a plan for the establishment of a trust will be reached, what the terms of any plan of reorganization or the extent of the asbestos liability will be or how long the Chapter 11 cases will last.

From an accounting perspective, the Company no longer has control over Aldrich and Murray as of the Petition Date as their activities are subject to review and oversight by the Bankruptcy Court. Therefore, Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated as of the Petition Date and their respective assets and liabilities were derecognized from the Company's Condensed Consolidated Financial Statements. Amounts derecognized primarily related to the legacy asbestos-related liabilities and asbestos-related insurance recoveries and $41.7 million of cash. However, in connection with the 2020 Corporate Restructuring, certain subsidiaries of the Company entered into funding agreements with Aldrich and Murray (collectively the Funding Agreements), pursuant to which those subsidiaries are obligated, among other things, to pay the costs and expenses of Aldrich and Murray during the pendency of the Chapter 11 cases to the extent distributions from their respective subsidiaries are insufficient to do so and to provide an amount for the funding for a trust established pursuant to section 524(g) of the Bankruptcy Code, to the extent that the other assets of Aldrich and Murray are insufficient to provide the requisite trust funding.

Accounting Treatment Prior to the Petition Date

Historically, the Company performed a detailed analysis and projected an estimated range of the Company’s total liability for pending and unasserted future asbestos-related claims. In accordance with ASC 450, the Company records the liability at the low end of the range as it believed that no amount within the range was a better estimate than any other amount. Asbestos-related defense costs were excluded from the liability and were recorded separately as services were incurred. The methodology used to prepare estimates relied upon and included the following factors, among others:

•the interpretation of a widely accepted forecast of the population likely to have been occupationally exposed to asbestos;

•epidemiological studies estimating the number of people likely to develop asbestos-related diseases such as mesothelioma and lung cancer;

•the Company’s historical experience with the filing of non-malignancy claims and claims alleging other types of malignant diseases filed against the Company relative to the number of lung cancer claims filed against the Company;

•the analysis of the number of people likely to file an asbestos-related personal injury claim against the Company based on such epidemiological and historical data and the Company’s claims history;

•an analysis of the Company’s pending cases, by type of disease claimed and by year filed;

•an analysis of the Company’s history to determine the average settlement and resolution value of claims, by type of disease claimed;

•an adjustment for inflation in the future average settlement value of claims, at a 2.5% annual inflation rate, adjusted downward to 1.0% to take account of the declining value of claims resulting from the aging of the claimant population; and

•an analysis of the period over which the Company has and is likely to resolve asbestos-related claims against it in the future (currently projected through 2053).

Prior to the Petition Date and at December 31, 2019, over 73 percent of the open and active claims against the Company were non-malignant or unspecified disease claims. In addition, the Company has a number of claims that had been placed on inactive or deferred dockets and were expected to have little or no settlement value against the Company.

At June 17, 2020, immediately prior to the Petition Date, and at December 31, 2019, the Company’s liability for asbestos-related matters and the asset for probable asbestos-related insurance recoveries were included in the following balance sheet accounts:


In millions	June 17, 2020		December 31, 2019
Accrued expenses and other current liabilities	$	57.1	$	63.0
Other noncurrent liabilities	451.0		484.4
Total asbestos-related liabilities	$	508.1	$	547.4

Other current assets	$	50.3	$	66.2
Other noncurrent assets	220.6		237.8
Total asset for probable asbestos-related insurance recoveries	$	270.9	$	304.0

The Company's asbestos insurance receivable related to the predecessors of Aldrich and Murray were $160.4 million and $110.5 million, respectively, at June 17, 2020 and $188.7 million and $115.3 million, respectively, at December 31, 2019. These receivables attributable to the predecessors of each of Aldrich and Murray for probable insurance recoveries as of June 17, 2020 and December 31, 2019 are entirely supported by settlement agreements between them and their respective insurance carriers. Most of these settlement agreements constitute “coverage-in-place” arrangements, in which the insurer signatories agree to reimburse the predecessors of Aldrich and Murray, as applicable, for specified portions of their respective costs for asbestos bodily injury claims and the predecessors of Aldrich and Murray, as applicable, agree to certain claims-handling protocols and grants to the insurer signatories certain releases and indemnifications.

Prior to the Petition Date, the costs associated with the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of the Company's liability for potential future claims and recoveries were included in the income statement within continuing operations or discontinued operations depending on the business to which they relate. Income and expenses associated with asbestos-related matters of Aldrich and its predecessors were recorded within discontinued operations as they related to previously divested businesses, primarily Ingersoll-Dresser Pump, which was sold by the Company in 2000. Income and expenses associated with asbestos-related matters for Murray and its predecessors were recorded within continuing operations. The nine months ended September 30, 2020 includes a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years.

The net income (expense) associated with these pre-Petition Date transactions for the three and nine months ended September 30, were as follows:


	Three months ended				Nine months ended
In millions	2020		2019		2020		2019
Continuing operations	$	0	$	3.7	$	14.8	$	7.8
Discontinued operations	0		36.0		(11.2)		30.5
Total	$	0	$	39.7	$	3.6	$	38.3

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets were based on currently available information. Key assumptions underlying the estimated asbestos-related liabilities included the number of people occupationally exposed and likely to develop asbestos-related diseases such as mesothelioma and lung cancer, the number of people likely to file an asbestos-related personal injury claim against the Company, the average settlement and resolution of each claim and the percentage of claims resolved with no payment. Furthermore, predictions with respect to estimates of the liability were subject to greater uncertainty as the projection period lengthened. Other factors that affected the Company’s liability included uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that might be made by state and federal courts, and the passage of state or federal tort reform legislation.

The aggregate amount of the stated limits in insurance policies available to Aldrich and Murray for asbestos-related claims acquired, over many years and from many different carriers, is substantial. However, as a result of limitations in that coverage, the projected total liability to claimants substantially exceeds the probable insurance recovery.

Accounting Treatment After the Petition Date

Upon deconsolidation, the Company recorded its retained interest in Aldrich and Murray at fair value within Other noncurrent assets in the Condensed Consolidated Balance Sheet. In determining the fair value of its equity investment, the Company used a market-adjusted multiple of earnings valuation technique (a market approach). Under the market approach, the Company used an adjusted multiple ranging from 11.0 to 12.5 of projected earnings before interest, taxes, depreciation and amortization (EBITDA) based on the market information of comparable companies. As a result, the Company recorded an aggregate equity investment of $53.6 million as of the Petition Date. Subsequent to deconsolidation, the Company will account for its equity investment in Aldrich and Murray at cost less impairment under the measurement alternative election in ASC 321, "Investments - Equity Securities".

Simultaneously, the Company recognized a liability of $248.8 million within Other noncurrent liabilities in the Condensed Consolidated Balance Sheet related to its obligation under the Funding Agreements. Although the amounts that Aldrich and Murray may ultimately require under the Funding Agreements are unknown, the Company believes that an estimate of $248.8 million in the aggregate is reasonable at this time as the Company has no better estimate for the amounts that may ultimately be required under the Funding Agreement. The liability is based on asbestos-related liabilities and insurance-related assets balances previously recorded by the Company prior to the Petition Date and may be subject to change based on the facts and circumstances of the Chapter 11 proceedings.

As a result of these actions, the Company recognized an aggregate loss of $22.7 million in its Condensed Consolidated Statements of Comprehensive Income (Loss). A gain of $0.9 million related to Murray and its wholly-owned subsidiary ClimateLabs was recorded within Other income/ (expense), net and a loss of $23.6 million related to Aldrich and its wholly-owned subsidiary 200 Park was recorded within Discontinued operations, net of tax. Additionally, the deconsolidation resulted in an investing cash outflow of $41.7 million in the Company's Condensed Consolidated Statements of Cash Flows, of which $10.8 million was recorded within continuing operations.

Furthermore, in connection with the 2020 Corporate Restructuring, Aldrich, Murray and their respective subsidiaries entered into several agreements with subsidiaries of the Company to ensure they each have access to services necessary for the effective operation of their respective businesses and access to capital to address any liquidity needs that arise as a result of working capital requirements or timing issues. In addition, the Company regularly transacts business with Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs. As of the Petition Date, these entities are considered related parties and post deconsolidation activity between the Company and them are reported as third party transactions and are reflected within the Company's Condensed Consolidated Statements of Comprehensive Income (Loss). Since the Petition Date, there were no material transactions between the Company and these entities.

Environmental Matters

The Company continues to be dedicated to environmental and sustainability programs to minimize the use of natural resources, and reduce the utilization and generation of hazardous materials from our manufacturing processes and to remediate identified environmental concerns. As to the latter, the Company is currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former manufacturing facilities.

The Company is sometimes a party to environmental lawsuits and claims and has received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state authorities. It has also been identified as a potentially responsible party (PRP) for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites. For all such sites, there are other PRPs and, in most instances, the Company’s involvement is minimal.

In estimating its liability, the Company has assumed it will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable. The ability of other PRPs to participate has been taken into account, based on the Company's understanding of the parties’ financial condition and probable contributions on a per site basis. Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.

Reserves for environmental matters are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on their expected ~~term.~~payment date. As of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company has recorded reserves for environmental matters of ~~$42.5~~$39.3 million and ~~$41.2~~$40.2 million, respectively. Of these amounts, ~~$36.8~~$36.9 million and ~~$36.1~~$37.5 million, respectively, relate to remediation of sites previously disposed of by the Company.

~~Asbestos-Related Matters~~

Certain wholly-owned subsidiaries and former companies of ours are named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims have been filed against either Ingersoll-Rand Company or Trane U.S. Inc. (Trane) and generally allege injury caused by exposure to asbestos contained in certain historical products sold by Ingersoll-Rand Company or Trane, primarily pumps, boilers and railroad brake shoes. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos.

The Company engages an outside expert to perform a detailed analysis and project an estimated range of the Company’s total liability for pending and unasserted future asbestos-related claims. In accordance with ASC 450, the Company records the liability at the low end of the range as it believes that no amount within the range is a better estimate than any other amount. Asbestos-related defense costs are excluded from the liability and are recorded separately as services are incurred. The methodology used to prepare estimates relies upon and includes the following factors, among others:

~~the outside expert’s interpretation of a widely accepted forecast of the population likely to have been occupationally exposed to asbestos;~~

~~epidemiological studies estimating the number of people likely to develop asbestos-related diseases such as mesothelioma and lung cancer;~~

the Company’s historical experience with the filing of non-malignancy claims and claims alleging other types of malignant diseases filed against the Company relative to the number of lung cancer claims filed against the Company;

the outside expert’s analysis of the number of people likely to file an asbestos-related personal injury claim against the Company based on such epidemiological and historical data and the Company’s claims history;

~~an analysis of the Company’s pending cases, by type of disease claimed and by year filed;~~

~~an analysis of the Company’s history to determine the average settlement and resolution value of claims, by type of disease claimed;~~

an adjustment for inflation in the future average settlement value of claims, at a 2.5% annual inflation rate, adjusted downward to 1.0% to take account of the declining value of claims resulting from the aging of the claimant population; and

~~an analysis of the period over which the Company has and is likely to resolve asbestos-related claims against it in the future (currently projected through 2053).~~

At September 30, 2019 and December 31, 2018, over 75 percent of the open and active claims against the Company are non-malignant or unspecified disease claims. In addition, the Company has a number of claims which have been placed on inactive or deferred dockets and expected to have little or no settlement value against the Company.

~~The Company’s liability for asbestos-related matters and the asset for probable asbestos-related insurance recoveries were included in the following balance sheet accounts:~~

In millions September 30,
2019 December 31,
2018
Accrued expenses and other current liabilities $ 65.9
$ 63.3
Other noncurrent liabilities 496.6
548.3
Total asbestos-related liabilities $ 562.5
$ 611.6

Other current assets $ 86.2
$ 69.2
Other noncurrent assets 213.4
199.0
Total asset for probable asbestos-related insurance recoveries $ 299.6
$ 268.2
32

~~The Company's asbestos insurance receivables related to Ingersoll-Rand Company and Trane were $178.3 million and $121.3 million, respectively, at September 30, 2019, and $141.7 million and $126.5 million, respectively, at~~ ~~December 31, 2018~~. The receivable attributable to Trane for probable insurance recoveries as of September 30, 2019 is entirely supported by settlement agreements between Trane and the respective insurance carriers, and approximately 90% of the receivable attributable to Ingersoll-Rand Company for probable insurance recoveries as of September 30, 2019 is supported by settlement agreements between Ingersoll-Rand Company and the respective insurance carriers. Most of these settlement agreements constitute “coverage-in-place” arrangements, in which the insurer signatories agree to reimburse Trane or Ingersoll-Rand Company, as applicable, for specified portions of their respective costs for asbestos bodily injury claims and Trane or Ingersoll-Rand Company, as applicable, agrees to certain claims-handling protocols and grants to the insurer signatories certain releases and indemnifications.

The costs associated with the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of the Company's liability for potential future claims are included in the income statement within continuing operations or discontinued operations depending on the business to which they relate. Income and expenses associated with Ingersoll-Rand Company's asbestos-related matters are recorded within discontinued operations as they relate to previously divested businesses, primarily Ingersoll-Dresser Pump, which was sold by the Company in 2000. Income and expenses associated with Trane’s asbestos-related matters are recorded within continuing operations. During the third quarter of 2019, the Company reached settlements with several insurance carriers associated with pending asbestos insurance coverage litigation. As these settlements relate to Ingersoll-Rand Company, they are recorded within discontinued operations.

~~The net income (expense) associated with these transactions, for the three and nine months ended September 30, were as follows:~~

Three months ended Nine months ended
In millions 2019 2018 2019 2018
Continuing operations $ 3.7
$ 0.5
$ 7.8
$ 1.3
Discontinued operations 36.0
(11.4 ) 30.5
(20.9 )
Total $ 39.7
$ (10.9 ) $ 38.3
$ (19.6 )

In 2012 and 2013, Ingersoll-Rand Company filed actions in the Superior Court of New Jersey, Middlesex County, seeking a declaratory judgment and other relief regarding the Company's rights to defense and indemnity for asbestos claims. The defendants were several dozen solvent insurance companies, including companies that had been paying a portion of Ingersoll-Rand Company's asbestos claim defense and indemnity costs. The responding defendants generally challenged the Company's right to recovery, and raised various coverage defenses. As of September 30, 2019, Ingersoll-Rand Company has settled with approximately 90% of the insurer defendants, and has dismissed one of the actions in its entirety.

The Company continually monitors the status of pending litigation that could impact the allocation of asbestos claims against the Company's various insurance policies. The Company has concluded that its Ingersoll-Rand Company insurance receivable is probable of recovery because of the following factors:

~~Ingersoll-Rand Company has reached favorable settlements regarding asbestos coverage claims for approximately 90% of its recorded asbestos-related insurance receivable;~~

a review of other companies in circumstances comparable to Ingersoll-Rand Company, including Trane, and the success of other companies in recovering under their insurance policies, including Trane's favorable settlements discussed above;

~~the Company's confidence in its right to recovery under the terms of its policies and pursuant to applicable law; and~~

~~the Company's history of receiving payments under the Ingersoll-Rand Company insurance program, including under policies that had been the subject of prior litigation.~~

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on currently available information. The Company’s actual liabilities or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the calculations vary significantly from actual results. Key variables in these assumptions include the number and type of new claims to be filed each year, the average cost of resolution of each such new claim, the resolution of coverage issues with insurance carriers, and the solvency risk with respect to the Company’s insurance carriers. Furthermore, predictions with respect to these variables are subject to greater uncertainty as the projection period lengthens. Other factors that may affect the Company’s liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts, and the passage of state or federal tort reform legislation.

The aggregate amount of the stated limits in insurance policies available to the Company for asbestos-related claims acquired, over many years and from many different carriers, is substantial. However, limitations in that coverage, primarily due to the considerations described above, are expected to result in the projected total liability to claimants substantially exceeding the probable insurance recovery.

Warranty Liability

Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. The Company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available.

The changes in the standard product warranty liability for the nine months ended September 30 were as follows:

In millions 2019 2018
Balance at beginning of period $ 278.9
$ 270.5
Reductions for payments (116.5 ) (120.2 )
Accruals for warranties issued during the current period 121.1
122.5
Changes to accruals related to preexisting warranties 3.1
5.1
Translation (1.8 ) (1.6 )
Balance at end of period $ 284.8
$ 276.3


In millions	2020		2019
Balance at beginning of period	$	251.4	$	245.6
Reductions for payments	(99.3)		(108.0)
Accruals for warranties issued during the current period	103.9		110.9

Changes to accruals related to preexisting warranties	14.1		4.1
Translation	0.8		(1.3)
Balance at end of period	$	270.9	$	251.3

Standard product warranty liabilities are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on their expected ~~term.~~payment date. The Company's total current standard product warranty reserve at September 30, ~~2019~~2020 and December 31, ~~2018~~2019 was ~~$158.2~~$142.9 million and ~~$149.5~~$124.9 million, respectively.

Warranty Deferred Revenue

The Company's extended warranty liability represents the deferred revenue associated with its extended warranty contracts and is amortized into Net revenues on a straight-line basis over the life of the contract, unless another method is more representative of the costs incurred. The Company assesses the adequacy of its liability by evaluating the expected costs under its existing contracts to ensure these expected costs do not exceed the extended warranty liability.

The changes in the extended warranty liability for the nine months ended September 30 were as follows:

In millions 2019 2018
Balance at beginning of period $ 292.2
$ 293.0
Amortization of deferred revenue for the period (88.5 ) (84.7 )
Additions for extended warranties issued during the period 98.6
83.6
Changes to accruals related to preexisting warranties (0.3 ) 0.1
Translation (0.5 ) (0.8 )
Balance at end of period $ 301.5
$ 291.2


In millions	2020		2019
Balance at beginning of period	$	302.8	$	290.6
Amortization of deferred revenue for the period	(91.7)		(88.6)
Additions for extended warranties issued during the period	93.7		98.9
Changes to accruals related to preexisting warranties	(0.1)		(0.3)
Translation	0.4		(0.4)
Balance at end of period	$	305.1	$	300.2

The extended warranty liability is classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on the timing of when the deferred revenue is expected to be amortized into revenue. The Company's total current extended warranty liability at September 30, ~~2019~~2020 and December 31, ~~2018~~2019 was ~~$104.4~~$104.9 million and ~~$103.1~~$107.3 million, respectively.

~~Note 22. Guarantor Financial Information~~

Ingersoll-Rand 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. The following condensed consolidating financial information is provided so that separate financial statements of these subsidiary issuer and guarantors are not required to be filed with the U.S. Securities and Exchange Commission.

~~The following table shows the Company’s guarantor relationships as of September 30, 2019:~~



~~Parent, issuer or guarantors~~	~~Notes issued~~	~~Notes guaranteed~~ ⁽¹⁾
~~Ingersoll-Rand plc (Plc)~~	~~None~~	~~All registered notes and debentures~~
~~Ingersoll-Rand Irish Holdings Unlimited Company (Irish Holdings)~~	~~None~~	~~All notes issued by Global Holding and Lux Finance~~
~~Ingersoll-Rand Lux International Holding Company S.à.r.l. (Lux International)~~	~~None~~	~~All notes issued by Global Holding and Lux Finance~~
~~Ingersoll-Rand Global Holding Company Limited (Global Holding)~~	~~2.900% Senior notes due 2021~~ ~~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 Lux Finance~~
~~Ingersoll-Rand Company (New Jersey)~~	~~9.000% Debentures due 2021~~ ~~7.200% Debentures due 2020-2025~~ ~~6.480% Debentures due 2025~~ ~~Puttable debentures due 2027-2028~~	~~All notes issued by Global Holding and Lux Finance~~
~~Ingersoll-Rand Luxembourg Finance S.A. (Lux Finance)~~	~~2.625% Notes due 2020~~ ~~3.550% Notes due 2024~~ ~~3.500% Notes due 2026~~ ~~3.800% Notes due 2029~~ ~~4.650% Notes due 2044~~ ~~4.500% Notes due 2049~~	~~All notes and debentures issued by Global Holding and New Jersey~~

~~(1) All subsidiary issuers and all guarantors provide irrevocable guarantees of borrowings, if any, made under revolving credit facilities.~~

Each subsidiary debt issuer and guarantor is owned 100% directly or indirectly by the Parent Company. Each guarantee is full and unconditional, and provided on a joint and several basis. There are no significant restrictions of the Parent Company, or any guarantor, to obtain funds from its subsidiaries, such as provisions in debt agreements that prohibit dividend payments, loans or advances to the parent by a subsidiary.

~~Basis of presentation~~

The following Condensed Consolidating Financial Statements present the financial position, results of operations and cash flows of each issuer or guarantor on a legal entity basis. The financial information for all periods has been presented based on the Company’s legal entity ownerships and guarantees outstanding at September 30, 2019. Assets and liabilities are attributed to each issuer and guarantor generally based on legal entity ownership. Investments in subsidiaries of the Parent Company, subsidiary guarantors and issuers represent the proportionate share of their subsidiaries’ net assets. Certain adjustments are needed to consolidate the Parent Company and its subsidiaries, including the elimination of investments in subsidiaries and related activity that occurs between entities in different columns. These adjustments are presented in the Consolidating Adjustments column. This basis of presentation is intended to comply with the specific reporting requirements for subsidiary issuers and guarantors, and is not intended to present the Company’s financial position or results of operations or cash flows for any other purpose.

~~Condensed Consolidating Statement of Comprehensive Income~~

~~For the three months ended September 30, 2019~~

In millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
Net revenues $ —
$ —
$ —
$ —
$ 320.0
$ —
$ 4,110.0
$ (85.7 ) $ 4,344.3
Cost of goods sold —
—
—
—
(236.8 ) —
(2,784.7 ) 85.7
(2,935.8 )
Selling and administrative expenses 8.6
—
(0.1 ) (0.1 ) (140.4 ) (0.1 ) (653.2 ) —
(785.3 )
Operating income (loss) 8.6
—
(0.1 ) (0.1 ) (57.2 ) (0.1 ) 672.1
—
623.2
Equity earnings (loss) in subsidiaries, net of tax 481.7
481.2
373.6
408.1
394.2
47.3
—
(2,186.1 ) —
Interest expense —
—
0.1
(26.7 ) (11.4 ) (25.8 ) (0.3 ) —
(64.1 )
Intercompany interest and fees (30.9 ) —
24.1
(81.8 ) 47.9
9.8
30.9
—
—
Other income/(expense), net —
—
0.2
—
(3.0 ) 0.2
(4.6 ) —
(7.2 )
Earnings (loss) before income taxes 459.4
481.2
397.9
299.5
370.5
31.4
698.1
(2,186.1 ) 551.9
Benefit (provision) for income taxes (0.6 ) —
—
25.9
5.2
—
(143.4 ) —
(112.9 )
Earnings (loss) from continuing operations 458.8
481.2
397.9
325.4
375.7
31.4
554.7
(2,186.1 ) 439.0
Discontinued operations, net of tax —
—
—
—
24.3
—
0.1
—
24.4
Net earnings (loss) 458.8
481.2
397.9
325.4
400.0
31.4
554.8
(2,186.1 ) 463.4
Less: Net earnings attributable to noncontrolling interests —
—
—
—
—
—
(4.6 ) —
(4.6 )
Net earnings (loss) attributable to Ingersoll-Rand plc $ 458.8
$ 481.2
$ 397.9
$ 325.4
$ 400.0
$ 31.4
$ 550.2
$ (2,186.1 ) $ 458.8

Other comprehensive income (loss), net of tax (130.6 ) (130.1 ) (124.7 ) (99.0 ) (98.7 ) (23.2 ) (134.7 ) 610.4
(130.6 )
Comprehensive income (loss) attributable to Ingersoll-Rand plc $ 328.2
$ 351.1
$ 273.2
$ 226.4
$ 301.3
$ 8.2
$ 415.5
$ (1,575.7 ) $ 328.2

~~Condensed Consolidating Statement of Comprehensive Income~~

~~For the nine months ended September 30, 2019~~

In millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
Net revenues $ —
$ —
$ —
$ —
$ 973.3
$ —
$ 11,735.9
$ (261.2 ) $ 12,448.0
Cost of goods sold —
—
—
—
(734.8 ) —
(8,073.6 ) 261.2
(8,547.2 )
Selling and administrative expenses (10.1 ) —
(0.5 ) (0.2 ) (376.3 ) (0.2 ) (1,921.3 ) —
(2,308.6 )
Operating income (loss) (10.1 ) —
(0.5 ) (0.2 ) (137.8 ) (0.2 ) 1,741.0
—
1,592.2
Equity earnings (loss) in subsidiaries, net of tax 1,210.8
1,210.0
932.2
977.4
986.9
166.1
—
(5,483.4 ) —
Interest expense —
—
0.1
(80.0 ) (34.6 ) (64.7 ) (0.5 ) —
(179.7 )
Intercompany interest and fees (91.5 ) —
49.2
(214.9 ) 120.8
18.7
117.7
—
—
Other income/(expense), net —
—
59.4
—
(14.2 ) 4.3
(72.1 ) —
(22.6 )
Earnings (loss) before income taxes 1,109.2
1,210.0
1,040.4
682.3
921.1
124.2
1,786.1
(5,483.4 ) 1,389.9
Benefit (provision) for income taxes 5.6
—
—
67.7
33.6
—
(386.1 ) —
(279.2 )
Earnings (loss) from continuing operations 1,114.8
1,210.0
1,040.4
750.0
954.7
124.2
1,400.0
(5,483.4 ) 1,110.7
Discontinued operations, net of tax —
—
—
—
12.3
—
4.4
—
16.7
Net earnings (loss) 1,114.8
1,210.0
1,040.4
750.0
967.0
124.2
1,404.4
(5,483.4 ) 1,127.4
Less: Net earnings attributable to noncontrolling interests —
—
—
—
—
—
(12.6 ) —
(12.6 )
Net earnings (loss) attributable to Ingersoll-Rand plc $ 1,114.8
$ 1,210.0
$ 1,040.4
$ 750.0
$ 967.0
$ 124.2
$ 1,391.8
$ (5,483.4 ) $ 1,114.8

Other comprehensive income (loss), net of tax (105.7 ) (105.2 ) (101.6 ) (81.3 ) (80.7 ) (17.9 ) (120.6 ) 507.3
(105.7 )
Comprehensive income (loss) attributable to Ingersoll-Rand plc $ 1,009.1
$ 1,104.8
$ 938.8
$ 668.7
$ 886.3
$ 106.3
$ 1,271.2
$ (4,976.1 ) $ 1,009.1

~~Condensed Consolidating Statement of Comprehensive Income~~

~~For the three months ended September 30, 2018~~

In millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
Net revenues $ —
$ —
$ —
$ —
$ 345.7
$ —
$ 3,785.3
$ (100.1 ) $ 4,030.9
Cost of goods sold —
—
—
—
(252.0 ) —
(2,566.4 ) 100.1
(2,718.3 )
Selling and administrative expenses (1.2 ) —
(0.2 ) (0.1 ) (120.5 ) (0.3 ) (603.3 ) —
(725.6 )
Operating income (loss) (1.2 ) —
(0.2 ) (0.1 ) (26.8 ) (0.3 ) 615.6
—
587.0
Equity earnings (loss) in subsidiaries, net of tax 528.0
527.3
435.1
427.4
404.8
67.5
—
(2,390.1 ) —
Interest expense —
—
0.1
(26.7 ) (11.5 ) (10.3 ) (0.1 ) —
(48.5 )
Intercompany interest and fees (11.9 ) —
11.6
(58.8 ) 8.8
(3.8 ) 54.1
—
—
Other income/(expense), net —
—
0.1
—
(3.5 ) —
(5.1 ) —
(8.5 )
Earnings (loss) before income taxes 514.9
527.3
446.7
341.8
371.8
53.1
664.5
(2,390.1 ) 530.0
Benefit (provision) for income taxes 0.2
—
—
19.6
67.8
—
(86.5 ) —
1.1
Earnings (loss) from continuing operations 515.1
527.3
446.7
361.4
439.6
53.1
578.0
(2,390.1 ) 531.1
Discontinued operations, net of tax —
—
—
—
(12.2 ) —
0.5
—
(11.7 )
Net earnings (loss) 515.1
527.3
446.7
361.4
427.4
53.1
578.5
(2,390.1 ) 519.4
Less: Net earnings attributable to noncontrolling interests —
—
—
—
—
—
(4.3 ) —
(4.3 )
Net earnings (loss) attributable to Ingersoll-Rand plc $ 515.1
$ 527.3
$ 446.7
$ 361.4
$ 427.4
$ 53.1
$ 574.2
$ (2,390.1 ) $ 515.1

Other comprehensive income (loss), net of tax (15.2 ) (15.2 ) 12.3
6.3
6.5
6.9
(20.6 ) 3.8
(15.2 )
Comprehensive income (loss) attributable to Ingersoll-Rand plc $ 499.9
$ 512.1
$ 459.0
$ 367.7
$ 433.9
$ 60.0
$ 553.6
$ (2,386.3 ) $ 499.9

~~Condensed Consolidating Statement of Comprehensive Income~~

~~For the nine months ended September 30, 2018~~

in millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
Net revenues $ —
$ —
$ —
$ —
$ 1,038.4
$ —
$ 11,037.4
$ (302.7 ) $ 11,773.1
Cost of goods sold —
—
—
—
(758.0 ) —
(7,647.3 ) 302.7
(8,102.6 )
Selling and administrative expenses (7.4 ) —
(0.3 ) (0.2 ) (383.1 ) (0.2 ) (1,808.6 ) —
(2,199.8 )
Operating income (loss) (7.4 ) —
(0.3 ) (0.2 ) (102.7 ) (0.2 ) 1,581.5
—
1,470.7
Equity earnings (loss) in subsidiaries, net of tax 1,113.0
1,111.8
914.1
918.4
969.5
156.1
—
(5,182.9 ) —
Interest expense —
—
0.1
(103.7 ) (35.1 ) (32.7 ) (0.3 ) —
(171.7 )
Intercompany interest and fees (21.4 ) —
30.0
(137.1 ) 24.1
(7.4 ) 111.8
—
—
Other income/(expense), net —
—
(0.1 ) 0.7
(11.6 ) 0.1
(5.1 ) —
(16.0 )
Earnings (loss) before income taxes 1,084.2
1,111.8
943.8
678.1
844.2
115.9
1,687.9
(5,182.9 ) 1,283.0
Benefit (provision) for income taxes (0.6 ) —
—
55.1
103.0
—
(317.4 ) —
(159.9 )
Earnings (loss) from continuing operations 1,083.6
1,111.8
943.8
733.2
947.2
115.9
1,370.5
(5,182.9 ) 1,123.1
Discontinued operations, net of tax —
—
—
—
(29.0 ) —
2.0
—
(27.0 )
Net earnings (loss) 1,083.6
1,111.8
943.8
733.2
918.2
115.9
1,372.5
(5,182.9 ) 1,096.1
Less: Net earnings attributable to noncontrolling interests —
—
—
—
—
—
(12.5 ) —
(12.5 )
Net earnings (loss) attributable to Ingersoll-Rand plc $ 1,083.6
$ 1,111.8
$ 943.8
$ 733.2
$ 918.2
$ 115.9
$ 1,360.0
$ (5,182.9 ) $ 1,083.6

Other comprehensive income (loss), net of tax (141.0 ) (140.6 ) (109.8 ) (59.7 ) (59.9 ) (46.4 ) (158.2 ) 574.6
(141.0 )
Comprehensive income (loss) attributable to Ingersoll-Rand plc $ 942.6
$ 971.2
$ 834.0
$ 673.5
$ 858.3
$ 69.5
$ 1,201.8
$ (4,608.3 ) $ 942.6

~~Condensed Consolidating Balance Sheet~~

~~September 30, 2019~~

In millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ —
$ 0.1
$ —
$ —
$ —
$ 26.0
$ 804.8
$ —
$ 830.9
Accounts and notes receivable, net —
—
0.2
—
166.4
—
2,802.3
—
2,968.9
Inventories —
—
—
—
155.9
—
1,734.7
—
1,890.6
Other current assets 6.0
—
2.4
7.6
120.9
—
275.8
—
412.7
Intercompany receivables 31.6
—
166.9
—
4,683.7
1,464.9
6,227.7
(12,574.8 ) —
Total current assets 37.6

0.1

169.5

7.6

5,126.9

1,490.9

11,845.3

(12,574.8 )
6,103.1
Property, plant and equipment, net —
—
0.1
—
281.6
—
1,497.4
—
1,779.1
Goodwill and other intangible assets, net —
—
—
—
425.7
—
10,461.5
—
10,887.2
Other noncurrent assets —
—
8.2
181.1
815.5
—
938.0
(405.3 ) 1,537.5
Investments in consolidated subsidiaries 10,309.5
10,268.6
4,772.7
14,150.2
11,193.5
1,390.1
—
(52,084.6 ) —
Intercompany notes receivable —
—
2,781.9
—
—
—
2,249.7
(5,031.6 ) —
Total assets $ 10,347.1

$ 10,268.7

$ 7,732.4

$ 14,338.9

$ 17,843.2

$ 2,881.0

$ 26,991.9

$ (70,096.3 )
$ 20,306.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 9.5
$ —
$ —
$ 47.8
$ 691.5
$ 18.6
$ 3,358.2
$ —
$ 4,125.6
Short-term borrowings and current maturities of long-term debt —
—
—
—
350.4
299.7
0.4
—
650.5
Intercompany payables 3,100.0
—
3,019.8
3,816.4
2,556.7
34.5
47.4
(12,574.8 ) —
Total current liabilities 3,109.5

—

3,019.8

3,864.2

3,598.6

352.8

3,406.0

(12,574.8 )
4,776.1
Long-term debt —
—
—
2,331.8
312.1
2,277.9
0.1
—
4,921.9
Other noncurrent liabilities —
—
—
—
1,281.9
—
2,453.2
(405.3 ) 3,329.8
Intercompany notes payable —
—
—
3,699.7
—
—
1,331.9
(5,031.6 ) —
Total liabilities 3,109.5

—

3,019.8

9,895.7

5,192.6

2,630.7

7,191.2

(18,011.7 )
13,027.8
Equity:
Total equity 7,237.6
10,268.7
4,712.6
4,443.2
12,650.6
250.3
19,800.7
(52,084.6 ) 7,279.1
Total liabilities and equity $ 10,347.1

$ 10,268.7

$ 7,732.4

$ 14,338.9

$ 17,843.2

$ 2,881.0

$ 26,991.9

$ (70,096.3 )
$ 20,306.9

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~~Condensed Consolidating Balance Sheet~~

~~December 31, 2018~~

In millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ —
$ 0.1
$ 0.2
$ —
$ 363.5
$ —
$ 539.6
$ —
$ 903.4
Accounts and notes receivable, net —
—
0.1
—
183.4
—
2,495.7
—
2,679.2
Inventories —
—
—
—
146.6
—
1,531.2
—
1,677.8
Other current assets 0.2
—
7.8
—
101.0
—
363.4
(0.8 ) 471.6
Intercompany receivables 59.5
—
3.9
—
3,851.0
0.1
3,838.0
(7,752.5 ) —
Total current assets 59.7
0.1
12.0
—
4,645.5
0.1
8,767.9
(7,753.3 ) 5,732.0
Property, plant and equipment, net —
—
0.1
—
314.6
—
1,416.1
—
1,730.8
Goodwill and other intangible assets, net —
—
—
—
432.1
—
9,162.1
—
9,594.2
Other noncurrent assets —
—
8.0
180.0
498.1
—
610.6
(438.8 ) 857.9
Investments in consolidated subsidiaries 9,308.9
9,267.8
3,935.4
11,743.2
9,923.2
1,264.2
—
(45,442.7 ) —
Intercompany notes receivable —
—
—
—
—
—
2,249.7
(2,249.7 ) —
Total assets $ 9,368.6
$ 9,267.9
$ 3,955.5
$ 11,923.2
$ 15,813.5
$ 1,264.3
$ 22,206.4
$ (55,884.5 ) $ 17,914.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 11.3
$ —
$ 0.1
$ 41.7
$ 599.6
$ 6.9
$ 3,306.3
$ (0.8 ) $ 3,965.1
Short-term borrowings and current maturities of long-term debt —
—
—
—
350.4
—
0.2
—
350.6
Intercompany payables 2,334.6
—
132.9
3,518.7
1,700.9
0.2
65.2
(7,752.5 ) —
Total current liabilities 2,345.9
—
133.0
3,560.4
2,650.9
7.1
3,371.7
(7,753.3 ) 4,315.7
Long-term debt —
—
—
2,330.0
319.5
1,091.0
0.2
—
3,740.7
Other noncurrent liabilities —
—
—
5.5
1,100.5
—
2,126.5
(438.8 ) 2,793.7
Intercompany notes payable —
—
—
2,249.7
—
—
—
(2,249.7 ) —
Total liabilities 2,345.9
—
133.0
8,145.6
4,070.9
1,098.1
5,498.4
(10,441.8 ) 10,850.1
Equity:
Total equity 7,022.7
9,267.9
3,822.5
3,777.6
11,742.6
166.2
16,708.0
(45,442.7 ) 7,064.8
Total liabilities and equity $ 9,368.6
$ 9,267.9
$ 3,955.5
$ 11,923.2
$ 15,813.5
$ 1,264.3
$ 22,206.4
$ (55,884.5 ) $ 17,914.9

~~Condensed Consolidating Statement of Cash Flows~~

~~For the nine months ended~~ ~~September 30, 2019~~

in millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) continuing operating activities $ 64.4
$ —
$ 50.7
$ (188.8 ) $ 848.6
$ (46.8 ) $ 361.7
$ —
$ 1,089.8
Net cash provided by (used in) discontinued operating activities —
—
—
—
(41.1 ) —
4.4
—
(36.7 )
Net cash provided by (used in) operating activities 64.4

—

50.7

(188.8 )
807.5

(46.8 )
366.1

—

1,053.1
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures —
—
—
—
(18.5 ) —
(167.7 ) —
(186.2 )
Acquisitions and equity method investments, net of cash acquired —
—
(58.4 ) (1,446.3 ) —
—
(32.1 ) —
(1,536.8 )
Other investing activities, net —
—
—
—
1.0
—
8.0
—
9.0
Intercompany investing activities, net 0.3
—
(1,559.1 ) —
(664.0 ) (1,450.0 ) 391.0
3,281.8
—
Net cash provided by (used in) continuing investing activities 0.3

—

(1,617.5 )
(1,446.3 )
(681.5 )
(1,450.0 )
199.2

3,281.8

(1,714.0 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments of) debt —
—
—
—
(7.5 ) 1,497.9
—
—
1,490.4
Debt issuance costs —
—
—
—
(0.2 ) (12.7 ) —
—
(12.9 )
Dividends paid to ordinary shareholders (383.1 ) —
—
—
—
—
—
—
(383.1 )
Dividends paid to noncontrolling interests —
—
—
—
—
—
(14.3 ) —
(14.3 )
Repurchase of ordinary shares (500.1 ) —
—
—
—
—
—
—
(500.1 )
Other financing activities, net 36.5
—
—
—
(1.1 ) —
(0.8 ) —
34.6
Intercompany financing activities, net 782.0
—
1,566.6
1,635.1
(480.7 ) 37.6
(258.8 ) (3,281.8 ) —
Net cash provided by (used in) continuing financing activities (64.7 )
—

1,566.6

1,635.1

(489.5 )
1,522.8

(273.9 )
(3,281.8 )
614.6
Effect of exchange rate changes on cash and cash equivalents —
—
—
—
—
—
(26.2 ) —
(26.2 )
Net increase (decrease) in cash and cash equivalents —

—

(0.2 )
—

(363.5 )
26.0

265.2

—

(72.5 )
Cash and cash equivalents - beginning of period —
0.1
0.2
—
363.5
—
539.6
—
903.4
Cash and cash equivalents - end of period $ —
$ 0.1
$ —
$ —
$ —
$ 26.0
$ 804.8
$ —
$ 830.9

~~Condensed Consolidating Statement of Cash Flows~~

~~For the nine months ended~~ ~~September 30, 2018~~

in millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) continuing operating activities $ 97.2
$ (2.7 ) $ 17.5
$ (116.4 ) $ 791.7
$ (24.7 ) $ 183.8
$ —
$ 946.4
Net cash provided by (used in) discontinued operating activities —
—
—
—
(51.0 ) —
2.0
—
(49.0 )
Net cash provided by (used in) operating activities 97.2
(2.7 ) 17.5
(116.4 ) 740.7
(24.7 ) 185.8
—
897.4
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures —
—
—
—
(69.0 ) —
(182.2 ) —
(251.2 )
Acquisitions and equity method investments, net of cash acquired —
—
—
—
—
—
(281.5 ) —
(281.5 )
Other investing activities, net —
—
(4.0 ) —
3.0
—
13.1
—
12.1
Intercompany investing activities, net 889.7
(648.3 ) 501.0
—
(1,205.7 ) —
636.4
(173.1 ) —
Net cash provided by (used in) continuing investing activities 889.7
(648.3 ) 497.0
—
(1,271.7 ) —
185.8
(173.1 ) (520.6 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments of) debt —
—
—
31.6
(7.5 ) —
(6.4 ) —
17.7
Debt issuance costs —
—
—
(12.0 ) —
—
—
—
(12.0 )
Dividends paid to ordinary shareholders (351.2 ) —
—
—
—
—
—
—
(351.2 )
Dividends paid to noncontrolling interests —
—
—
—
—
—
(41.1 ) —
(41.1 )
Repurchase of ordinary shares (514.1 ) —
—
—
—
—
—
—
(514.1 )
Other financing activities, net 36.3
—
—
—
(1.2 ) —
(3.3 ) —
31.8
Intercompany financing activities, net (157.9 ) 651.0
(474.8 ) 96.8
434.9
24.7
(747.8 ) 173.1
—
Net cash provided by (used in) continuing financing activities (986.9 ) 651.0
(474.8 ) 116.4
426.2
24.7
(798.6 ) 173.1
(868.9 )
Effect of exchange rate changes on cash and cash equivalents —
—
—
—
—
—
(34.8 ) —
(34.8 )
Net increase (decrease) in cash and cash equivalents —
—
39.7
—
(104.8 ) —
(461.8 ) —
(526.9 )
Cash and cash equivalents - beginning of period —
—
0.6
—
359.3
—
1,189.5
—
1,549.4
Cash and cash equivalents - end of period $ —
$ —
$ 40.3
$ —
$ 254.5
$ —
$ 727.7
$ —
$ 1,022.5

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

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed under Part II, Item 1A – Risk Factors in this Quarterly Report on Form 10-Q; and under Part I, Item 1A – Risk Factors in the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018, as updated by any disclosures under Part II, Item 1A – Risk Factors in our Quarterly Reports on Form 10-Q.~~2019. The following section is qualified in its entirety by the more detailed information, including our financial statements and the notes thereto, which appears elsewhere in this Quarterly Report.

Overview

Organizational

Trane Technologies plc is a global climate innovator. We ~~are~~bring efficient and sustainable climate solutions to buildings, homes and transportation driven by strategic brands Trane® and Thermo King® and an environmentally responsible portfolio of products and services. Prior to the separation of our Industrial segment on February 29, 2020, we announced a ~~diversified, global company that provides products,~~new organizational model and business segment structure designed to enhance our regional go-to-market capabilities, aligning the structure with our strategy and increased focus on climate innovation. Under the revised structure, we created three new regional operating segments from the former climate segment, which also serve as our reportable segments.

•Our Americas segment innovates for customers in the North America and Latin America regions. The Americas segment encompasses commercial heating and cooling 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 regions. The EMEA segment encompasses heating and cooling 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 and cooling systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

This model is designed to ~~enhance~~create deep customer focus and relevance in markets around the ~~quality, energy efficiency~~world. All prior period comparative segment information has been recast to reflect the current reportable segments.

Significant Events

Reorganization of Aldrich and ~~comfort~~Murray

On June 18, 2020 (Petition Date), our indirect wholly-owned subsidiaries Aldrich Pump LLC (Aldrich) and Murray Boiler LLC (Murray) each filed a voluntary petition for reorganization under Chapter 11 of ~~air~~Title 11 of the United States Code (the Bankruptcy Code) in ~~homes~~the United States Bankruptcy Court for the Western District of North Carolina in Charlotte (the Bankruptcy Court). Only Aldrich and ~~buildings, transport~~Murray have filed for Chapter 11 relief. Neither Aldrich's wholly-owned subsidiary, 200 Park, Inc. (200 Park), Murray's wholly-owned subsidiary, ClimateLabs LLC (ClimateLabs), Trane Technologies plc nor its other subsidiaries (the Trane Companies) are part of the Chapter 11 filings.

The goal of these Chapter 11 filings is an efficient and ~~protect food~~permanent resolution of all current and ~~perishables~~future asbestos claims through court approval of a plan of reorganization, which would establish, in accordance with section 524(g) of the Bankruptcy Code, a trust to pay all asbestos claims. 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 September 30, 2020.

From an accounting perspective, we no longer have control over Aldrich and ~~increase industrial productivity~~Murray as of thePetition Date as their activities are subject to review and ~~efficiency. Our business segments consist~~oversight by the Bankruptcy Court. Therefore, Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated as of ~~Climate~~the Petition Date and ~~Industrial, both with strong brands and highly differentiated products within~~ their respective ~~markets. We generate revenue~~assets and liabilities were derecognized from our Condensed Consolidated Financial Statements. As a result, we recorded an equity investment for an aggregate of $53.6 million within Other noncurrent assets in the Condensed Consolidated Balance Sheet. Simultaneously, we recognized a liability of $248.8 million within Other noncurrent liabilities in the Condensed Consolidated Balance Sheet related to our obligation under the Funding Agreements. The liability recorded may be subject to change based on the facts and circumstances of the Chapter 11 proceedings.

As a result of these actions, we recognized an aggregate loss of $22.7 million in our Condensed Consolidated Statements of Comprehensive Income (Loss). A gain of $0.9 million related to Murray and its wholly-owned subsidiary ClimateLabs was recorded within Other income/ (expense), net and a loss of $23.6 million related to Aldrich and its wholly-owned subsidiary

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200 Park was recorded within Discontinued operations, net of tax. Additionally, the deconsolidation resulted in an investing cash ~~primarily~~outflow of $41.7 million in our Condensed Consolidated Statements of Cash Flows, of which $10.8 million was recorded within continuing operations.

Separation of Industrial Segment Businesses

On February 29, 2020 (Distribution Date), we completed our Reverse Morris Trust transaction (the Transaction) with Gardner Denver Holdings, Inc. (Gardner Denver) whereby we separated our former Industrial segment (Ingersoll Rand Industrial) through a pro rata distribution to shareholders of record as of February 24, 2020. Ingersoll Rand Industrial then merged into a wholly-owned subsidiary of Gardner Denver, which changed its name to Ingersoll-Rand Inc. Upon close of the ~~design, manufacture, sale~~Transaction, our existing shareholders received 50.1% of the shares of Gardner Denver common stock on a fully-diluted basis and ~~service~~Gardner Denver stockholders retained 49.9% of the shares of Gardner Denver on a fully diluted basis. As a result, our shareholders received .8824 shares of Gardner Denver common stock with respect to each share owned as of February 24, 2020. In connection with the Transaction, Ingersoll-Rand Services Company, an affiliate of Ingersoll Rand Industrial, borrowed an aggregate principal amount of $1.9 billion under a senior secured first lien term loan facility (Term Loan), the proceeds of which were used to make a special cash payment of $1.9 billion to a subsidiary of ours. The obligations under the Term Loan were retained by Ingersoll-Rand Services Company, which following the Transaction is a wholly-owned subsidiary of Gardner Denver.

In connection with the Transaction, we entered into several agreements covering supply, administrative and tax matters to provide or obtain services on a transitional basis for varying periods after the Distribution Date. The agreements cover services such as manufacturing, information technology, human resources and finance. Income and expenses under these agreements are not expected to be material. In accordance with several customary transaction-related agreements between the us and Gardner Denver, the parties are in a process to determine final adjustments to working capital, cash and indebtedness amounts as of the Distribution Date, as well as another process to determine funding levels related to pension plans, non-qualified deferred compensation plans and retiree health benefits. As of September 30, 2020, both are ongoing in accordance with the timelines established in the transaction-related agreements.

COVID-19 Global Pandemic

In March 2020, the World Health Organization declared the outbreak of a ~~diverse portfolio~~respiratory disease caused by a newly discovered coronavirus, known now as COVID-19, as a global pandemic and recommended containment and mitigation measures worldwide. Beginning in the first quarter, many countries responded by implementing measures to combat the outbreak which impacted global business operations and resulted in our decision to temporarily close or limit our workforce to essential crews within many facilities throughout the world in order to ensure employee safety. In addition, our non-essential employees were instructed to work from home in compliance with global government stay-in-place protocols.

We have been adversely impacted by the COVID-19 global pandemic. Temporary facility closures beginning in the first quarter disrupted results in the Asia Pacific region with impacts more widely felt throughout operations in the Americas and EMEA in the months thereafter. During the second quarter, we began to reopen facilities while maintaining appropriate health and safety precautions. However, the challenges in connection with the pandemic continued as we experienced lower volume which negatively impacted revenue, supply chain disruptions and unfavorable foreign currency exchange rate movements. In response, we proactively initiated cost cutting actions in an effort to mitigate the impact of ~~industrial~~the pandemic on our business. This included reducing discretionary spending, suspending our share repurchase program, restricting travel, delaying merit increases and ~~commercial products that include well-recognized, premium brand names such~~implementing employee furloughs in certain markets.

We continue to navigate the new realities brought about by the COVID-19 global pandemic as ~~Ingersoll-Rand~~^®~~, Trane~~^®~~, Thermo King~~^®~~, American Standard~~^®~~, ARO~~^®well as any impact on our liquidity needs and ~~Club Car~~^®.

~~To achieve our mission of being a world leader in creating comfortable, sustainable~~ability to access capital markets. Despite these challenges, all production facilities remain open and ~~efficient environments,~~ we continue to ~~focus on growth by increasing~~sell, install and service our ~~recurring revenue stream from parts, service, controls, used equipment~~products. During the third quarter, we did not experience any major disruptions in our supply chain and ~~rentals; and to continuously improve the efficiencies and capabilities of the products and services of our businesses. We also continue~~continued to focus on ~~operational excellence strategies~~health and safety precautions to protect our employees and customers. In addition, we intend to move forward with several restorative actions that include the reinstatement of annual merit increases and the execution of our balanced capital allocation strategy. Operationally, our financial reporting systems, internal control over financial reporting and disclosure controls and procedures continue to operate effectively despite a remote workforce. We will continue to monitor the ongoing situation as it evolves globally and will assess any potential impacts to our business and financial position.

The preparation of financial statements requires management to use judgments in making estimates and assumptions based on the relevant information available at the end of each period. These estimates and assumptions have a significant effect on reported amounts of assets and liabilities, revenue and expenses, as well as the disclosure of contingencies because they may arise from matters that are inherently uncertain. The financial statements reflect our best estimates as of September 30, 2020 (including as it relates to the actual and potential future impacts of the global pandemic) with respect to the recoverability of our assets, including our receivables and long-lived assets such as goodwill and intangibles. However, due to significant uncertainty surrounding the COVID-19 global pandemic, management's judgment regarding this could change in the future. In addition,

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while our results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be estimated with certainty at this time

As part of the response to COVID-19 global pandemic, many countries implemented emergency economic relief plans as a ~~central theme~~way of minimizing the economic impact of this health crisis. We are evaluating the potential benefits from certain of these measures and will continue to ~~improving~~monitor the plans as they are finalized and implemented. In the United States, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted on March 27, 2020 providing numerous tax provisions and other stimulus measures. We are currently applying the CARES Act to our ~~earnings~~operations, which includes the deferral of employer social security payroll tax payments under the CARES Act until January 1, 2021, with 50 percent owed on December 31, 2021 and ~~cash flows.~~the other half owed on December 31, 2022.

Trends and Economic Events

We are a global corporation with worldwide operations. As a global business, our operations are affected by worldwide, regional and industry-specific economic factors as well as political and social factors wherever we operate or do business. Our geographic ~~and industry~~ diversity and the breadth of our product and services portfolios have helped mitigate the impact of any one industry or the economy of any single country on our consolidated operating results.

Given ~~the~~our broad range of products manufactured and geographic markets served, management uses a variety of factors to predict the outlook for ~~the Company.~~our company. We monitor key competitors and customers in order to gauge relative performance and the outlook for the future. We regularly perform detailed evaluations of the different market segments we are serving to proactively detect trends and to adapt our strategies accordingly. In addition, we believe our order rates are indicative of future revenue and thus are a key measure of anticipated performance. In those industry segments where we are a capital equipment provider, revenues depend on the capital expenditure budgets and spending patterns of our customers, who may delay or accelerate purchases in reaction to changes in their businesses and in the economy.

Current economic conditions ~~have moderated during~~are uncertain as a result of the ~~year and are mixed between~~COVID-19 global pandemic, impacting both the ~~segments in which we participate.~~global Heating, Ventilation and Air Conditioning (HVAC) ~~equipment, replacement, services, controls~~ and ~~aftermarket continue to experience healthy demand. In addition, Residential and Commercial markets have seen continued momentum~~Transport end-markets as well as limiting visibility in the ~~United States, positively impacting~~factors used to predict the ~~results of~~outlook for our ~~HVAC businesses. Global Industrial markets~~company. As a result, we have ~~moderated during the year. While geopolitical uncertainty exists~~not reinstated financial guidance for 2020 but we remain confident in ~~markets such as Europe, Asia~~our sustainability strategy and ~~Latin America, we expect growth~~remain in ~~both our Climate and Industrial segments in 2019, each benefiting from operational excellence initiatives, new product launches and continued productivity programs.~~a strong financial position.

We believe we have a solid foundation of global brands that are highly differentiated in all of our major product lines. Our ~~growing~~ geographic and ~~industry~~product diversity coupled with our large installed product base provides growth opportunities within our service, parts and replacement revenue streams. In addition, we are investing substantial resources to innovate and develop new products and services which we expect will drive our future growth.

~~Significant Events~~

~~Separation~~

Table of ~~Industrial Segment Businesses~~Contents

In April 2019, Ingersoll-Rand plc and Gardner Denver Holdings, Inc. (GDI) announced that they entered into definitive agreements pursuant to which we will separate our Industrial segment businesses (IR Industrial) by way of spin-off to our shareholders and then combine with GDI to create a new company focused on flow creation and industrial technologies (IndustrialCo). Our remaining HVAC and transport refrigeration businesses, reported under the Climate segment, will focus on climate control solutions for buildings, homes and transportation (ClimateCo). The transaction is expected to close by early 2020, subject to approval by GDI’s shareholders, regulatory approvals and customary closing conditions. We expect to incur costs ranging from $150 million to $200 million related to the separation activities.

~~Acquisition of Precision Flow Systems~~

On May 15, 2019, we acquired all the outstanding capital stock of Precision Flow Systems (PFS), a manufacturer of precision flow control equipment including precision dosing pumps and controls that serve the global water, oil and gas, agriculture, industrial and specialty market segments. Total cash paid, net of cash acquired, was approximately $1.46 billion and was financed through the issuance of senior notes. The results of PFS have been included in our Condensed Consolidated Financial Statements from the date of acquisition and reported within the Industrial segment.

~~Issuance of Senior Notes~~

In March 2019, we issued $1.5 billion principal amount of senior notes in three tranches through Ingersoll-Rand Luxembourg Finance S.A., an indirect, wholly-owned subsidiary. The tranches consist of $400 million aggregate principal amount of 3.500% senior notes due 2026, $750 million aggregate principal amount of 3.800% senior notes due 2029 and $350 million aggregate principal amount of 4.500% senior notes due 2049. The net proceeds were used to finance the acquisition of PFS and for general corporate purposes.

~~Share Repurchase Program~~

Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (2018 Authorization) upon completion of the prior authorized share repurchase program. During the nine months ended September 30, 2019, we repurchased and canceled approximately $500 million of our ordinary shares leaving approximately $1 billion remaining under the 2018 Authorization.

Results of Operations

~~Our Climate segment delivers energy-efficient products and innovative energy services. It includes Trane~~^®~~and American Standard~~^®Heating & Air Conditioning which provide heating, ventilation and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; energy services and building automation through Trane Building Advantage and Nexia; and Thermo King^®~~transport temperature control solutions.~~

Our Industrial segment delivers products and services that enhance energy efficiency, productivity and operations. It includes compressed air and gas systems and services, power tools, material handling systems, fluid management systems, as well as Club Car ^®~~golf, utility and consumer low-speed vehicles.~~

~~Segment operating income is~~In connection with the ~~measure of profit and loss that our chief operating decision maker uses to evaluate the financial performance~~completion of the ~~business~~Transaction, we do not beneficially own any Ingersoll Rand Industrial shares of common stock and asno longer consolidate Ingersoll Rand Industrial in our financial statements. As a result, the ~~basis for performance reviews, compensation~~following Management’s Discussion and ~~resource allocation. For these reasons, we believe that Segment operating income represents~~Analysis of Financial Condition and Results of Operations presents the ~~most relevant measure~~results of ~~segment profit and loss. We define Segment operating margin as Segment operating income~~Ingersoll Rand Industrial as a ~~percentage~~discontinued operation for periods prior to the Distribution date. In addition, the assets and liabilities of ~~Net revenues~~.Ingersoll Rand Industrial have been recast to held-for-sale at December 31, 2019.

Three Months Ended September 30, ~~2019~~2020 Compared to the Three Months Ended September 30, ~~2018~~2019

- Consolidated Results


Dollar amounts in millions	2019			2018			Period Change			2019 % of revenues		2018 % of revenues		Dollar amounts in millions	2020		2019		Period Change		2020 % of revenues		2019 % of revenues
Net revenues	$	4,344.3		$	4,030.9		$	313.4						Net revenues	$	3,495.5	$	3,470.9	$	24.6
Cost of goods sold	(2,935.8		)	(2,718.3		)	(217.5		)	67.6	%	67.4	%	Cost of goods sold	(2,360.8)		(2,366.6)		5.8		67.5	%	68.2	%
Gross profit														Gross profit	1,134.7		1,104.3		30.4		32.5	%	31.8	%
Selling and administrative expenses	(785.3		)	(725.6		)	(59.7		)	18.1	%	18.0	%	Selling and administrative expenses	(567.8)		(567.8)		—		16.3	%	16.3	%
Operating income	623.2			587.0			36.2			14.3	%	14.6	%	Operating income	566.9		536.5		30.4		16.2	%	15.5	%
Interest expense	(64.1		)	(48.5		)	(15.6		)					Interest expense	(62.4)		(63.9)		1.5
Other income/(expense), net	(7.2		)	(8.5		)	1.3							Other income/(expense), net	(4.5)		(5.8)		1.3
Earnings before income taxes	551.9			530.0			21.9							Earnings before income taxes	500.0		466.8		33.2
Benefit (provision) for income taxes	(112.9		)	1.1			(114.0		)					Benefit (provision) for income taxes	(89.9)		(80.5)		(9.4)
Earnings from continuing operations	439.0			531.1			(92.1		)					Earnings from continuing operations	410.1		386.3		23.8
Discontinued operations, net of tax	24.4			(11.7		)	36.1							Discontinued operations, net of tax	(5.5)		77.1		(82.6)
Net earnings	$	463.4		$	519.4		$	(56.0	)
Net earnings (loss)														Net earnings (loss)	$	404.6	$	463.4	$	(58.8)

Net Revenues

Net revenues for the three months ended September 30, ~~2019~~2020 increased by ~~7.8%~~0.7%, or ~~$313.4~~$24.6 million, compared with the same period in ~~2018,~~2019, which resulted from the following:



~~Volume/product mix~~Volume	~~4.8~~(0.5)	%
~~Acquisitions~~	~~2.3~~		%
Pricing	~~1.6~~1.0	%
Currency translation	~~(0.9~~0.2	)%
Total	~~7.8~~0.7	%

~~The increase was primarily driven~~In light of the current economic environment resulting from the COVID-19 global pandemic, strong operational performance helped mitigate its impacts and increased Net revenues by ~~overall higher volumes. In addition, incremental revenues from acquisitions and~~70 basis points. Other key drivers included improved pricing ~~further contributed to the year-over-year increase. However, each segment was impacted by unfavorable~~and favorable foreign currency exchange rate ~~movements.~~movements, partially offset by lower volumes in most of our businesses which continue to be impacted by the COVID-19 global pandemic. Refer to the “Results by Segment” below for a discussion of Net Revenues by segment.

Gross Profit Margin

~~Our revenues by segment~~Gross profit margin for the three months ended September 30, ~~were as follows:~~

Dollar amounts in millions 2019 2018 % change
Climate $ 3,470.9
$ 3,238.7
7.2 %
Industrial 873.4
792.2
10.2 %
Total $ 4,344.3
$ 4,030.9

~~Climate~~

~~Net revenues~~2020 increased 70 basis points to 32.5% compared to 31.8% for ~~the three months ended September 30, 2019 increased by 7.2% or $232.2 million, compared with~~ the same period of ~~2018.~~2019. The ~~components~~increase was primarily driven by improved pricing, cost containment initiatives and favorable foreign currency exchange rate movements. These increases were partially offset by unfavorable product mix due to lower volumes in higher margin products, the under absorption of fixed production overhead costs and inflation. Although we continue to be impacted by the ~~period change were as follows:~~COVID-19 global pandemic, mitigation actions supported modest revenue growth.

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~~Volume/product mix~~	~~6.2~~	%
~~Pricing~~	~~1.8~~	%
~~Currency translation~~	~~(0.8~~	)%
~~Total~~	~~7.2~~	%

~~Industrial~~Selling and Administrative Expenses

~~Net revenues~~Selling and administrative expenses for the three months ended September 30, ~~2019 increased by 10.2% or $81.2~~2020remained flat at $567.8 million compared with the same period of ~~2018. The components~~2019. Due to the COVID-19 global pandemic, we initiated cost containment actions in order to mitigate its impacts on our business. As a result, we benefited from reduced discretionary spending and lower compensation due to reduced headcount and delayed merit increases. These amounts were offset by higher spending on restructuring and transformation initiatives associated with the completion of the ~~period change were~~Transaction. Selling and administrative expenses as ~~follows:~~



~~Volume/product mix~~	~~(1.2~~	)%
~~Acquisitions~~	~~11.6~~	%
~~Pricing~~	~~1.2~~	%
~~Currency translation~~	~~(1.4~~	)%
~~Total~~	~~10.2~~	%

~~Operating Income/Margin~~

~~Operating margin decreased to 14.3%~~a percentage of net revenues for the three months ended September 30, ~~2019~~2020 remained flat at 16.3% compared to ~~14.6% for~~ the same period of ~~2018. The decrease was~~2019 primarily driven by Industrial Segment separation-related costs (0.7%), higher spending on investments and restructuring (0.4%), lower volume/product mix (0.2%), unfavorable foreign exchange rate movements (0.1%) and acquisition related inventory step-up and backlog amortization (0.1%) contributeddue to ~~the year-over-year decrease. These amounts were partially offset by productivity benefits in excess of other inflation (0.8%) and pricing improvements in excess of material inflation (0.4%).~~

~~Our~~ ~~Operating income~~ ~~and Operating margin by segment were as follows:~~

Dollar amounts in millions 2019 Operating Income (Expense) 2018 Operating Income (Expense) Period Change 2019 Operating Margin 2018 Operating Margin
Climate $ 583.5
$ 535.6
$ 47.9
16.8 % 16.5 %
Industrial 116.3
110.7
5.6
13.3 % 14.0 %
Unallocated corporate expenses (76.6 ) (59.3 ) (17.3 ) N/A
N/A
Total $ 623.2
$ 587.0
$ 36.2
14.3 % 14.6 %

~~Climate~~

Operating margin increased to 16.8% for the three months ended September 30, 2019 compared to 16.5% for the same period of 2018. The increase was driven by productivity benefits in excess of other inflation and pricing improvements in excess of material inflation. These amounts were partiallycost containment actions offset by higher ~~spending on investments~~restructuring and ~~lower volume/product mix.~~

~~Industrial~~

~~Operating margin decreased to 13.3% for~~transformation spend during the three months ended September 30, 2019 compared to 14.0% for the same period of 2018. The decrease was primarily the result of lower volume/product mix, higher spending on restructuring, acquisition related inventory step-up and backlog amortization and unfavorable foreign exchange rate movements. These amounts were partially offset by productivity benefits in excess of other inflation and pricing improvements in excess of material inflation.

~~Unallocated Corporate Expenses~~

Unallocated corporate expense for the three months ended September 30, 2019 increased by $17.3 million compared with the same period of 2018. The primary driver of the increase was due to Industrial Segment separation-related costs of $29 million, partially offset by lower compensation and benefit charges related to variable compensation.period.

Interest Expense

Interest expense for the three months ended September 30, ~~2019increased~~2020 decreased by $~~15.6~~1.5 million compared with the same period of ~~2018. The increase~~2019 primarily ~~relates~~due to the ~~issuance~~redemption of ~~$1.5 billion~~our $300.0 million of ~~senior~~2.625% Senior notes ~~to finance~~in April 2020 and repayment of $179.0 million of commercial paper during the ~~acquisition of PFS in the first half~~third quarter of 2019.

Other Income/(Expense), Net

The components of Other income/(expense), net for the three months ended September 30 were as follows:


In millions	2019			2018			In millions	2020		2019
Interest income (loss)	$	(0.4	)	$	0.1
Exchange gain (loss)	(5.1		)	(5.1		)
Interest income/(loss)							Interest income/(loss)	$	1.9	$	(1.1)
Exchange gain/(loss)							Exchange gain/(loss)	(2.5)		(4.0)
Other components of net periodic benefit cost	(8.2		)	(6.3		)	Other components of net periodic benefit cost	(3.9)		(7.2)

Other activity, net	6.5			2.8			Other activity, net	—		6.5
Other income/(expense), net	$	(7.2	)	$	(8.5	)	Other income/(expense), net	$	(4.5)	$	(5.8)

Other income /(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, we include the components of net periodic benefit cost for pension and post retirement obligations other than the service cost component. Other activity, net primarily includes items associated with ~~Trane U.S. Inc. (Trane) for the settlement of~~certain legal matters as well as asbestos-related ~~claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims.~~activities.

Provision for Income Taxes

For the three months ended September 30, 2020, our effective tax rate was 18.0% which was lower than the U.S. Statutory rate of 21% primarily due to a $24.5 million reduction in valuation allowances on deferred taxes associated with net operating losses partially offset by a related $12.4 million expense resulting from revised income projections of a planned restructuring in a non-U.S. tax jurisdiction. In addition, excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate, provided tax rate benefits. These amounts were partially offset by U.S. state and local taxes and certain non-deductible employee expenses. The reduction of the valuation allowances and related expense decreased the effective tax rate by 2.4%. For the three months ended September 30, 2019 our effective tax rate was ~~20.5%~~17.2% which ~~is slightly~~was lower than the U.S. Statutory rate of 21% primarily due to a reduction in deferred tax asset valuation allowances for certain non-U.S. net deferred tax assets and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. These amounts were partially offset by ~~U.S. state~~U.S.state and local income taxes and certain non-deductible expenses. The effective tax rate for the three months ended September 30, 2018 was a benefit of (0.2)% which is lower than the U.S. Statutory rate of 21% primarily due to $77.1 million of measurement period adjustments associated with the Tax Cuts and Job Act (the "Act") and a $28.5 million reduction in a deferred tax asset valuation allowance for certain state net deferred tax assets. Measurement period adjustments associated with the transition tax and the change in permanent reinvestment assertion primarily relate to the realization of foreign tax credits and result from the filing of the U.S. Federal income tax return, legislative guidance issued during the quarter and revised projections of future foreign sourced income during the carryforward period. The reduction in the valuation allowance for certain state net deferred tax assets is primarily the result of revised projections of future state taxable income during the carryforward period. In addition, the lower effective income tax rate was driven by excess tax benefits from employee share-based payments, the provision to return true-up due to the filing of the U.S. Federal income tax return and the revaluation of deferred taxes associated with changes in U.S. state tax rates. These amounts were partially offset by U.S. state and local income taxes and certain non-deductible employee expenses.

Discontinued Operations

The components of Discontinued operations, net of tax for the three months ended September 30 were as follows:


In millions	2019			2018			In millions	2020		2019
Net revenues							Net revenues	$	—	$	873.4
Pre-tax earnings (loss) from discontinued operations	$	32.0		$	(16.0	)	Pre-tax earnings (loss) from discontinued operations	(7.7)		117.3
Tax benefit (expense)	(7.6		)	4.3			Tax benefit (expense)	2.2		(40.2)
Discontinued operations, net of tax	$	24.4		$	(11.7	)	Discontinued operations, net of tax	$	(5.5)	$	77.1

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PART II – OTHER INFORMATION

Item 1 – Legal Proceedings

In the normal course of business, we are involved in a variety of lawsuits, claims and legal proceedings, including commercial and contract disputes, employment matters, product liability claims, asbestos-related claims, environmental liabilities, intellectual property disputes, and tax-related matters. In our opinion, pending legal matters are not expected to have a material adverse impact on our results of operations, financial condition, liquidity or cash flows.

Asbestos-Related Matters

Certain of our wholly-owned subsidiaries and former companies are named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims allege injury caused by exposure to asbestos contained in certain historical products, primarily pumps, boilers and railroad brake shoes. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos.

See also the discussion contained in our Annual Report on Form 10-K for the period ended December 31, ~~2018~~2019 under Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and also Note 21 to the Condensed Consolidated Financial Statements in this Form 10-Q.

Item 1A – Risk Factors

~~There have been no material changes~~In addition to ~~our~~the other information set forth in this report, you should carefully consider the risk factors discussed in Item 1A.

"Risk Factors" contained in our Annual Report on Form 10-K for the period ended December 31, ~~2018 or as further updated by~~2019 and the risk factors ~~contained~~below.

The Aldrich and Murray Chapter 11 cases involve various risks and uncertainties that could have a material effect on us.

On June 18, 2020, our indirect wholly-owned subsidiaries Aldrich Pump LLC (Aldrich) and Murray Boiler LLC (Murray) each filed a voluntary petition for reorganization under Chapter 11 of Title 11 the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the Western District of North Carolina in Charlotte (the Bankruptcy Court). The goal of these Chapter 11 filings is an efficient and permanent resolution of all current and future asbestos claims through court approval of a plan of reorganization, which would establish, in accordance with section 524(g) of the Bankruptcy Code, a trust to pay all asbestos claims. 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.

Certain of our subsidiaries have entered into funding agreements with Aldrich and Murray (collectively the Funding Agreements), pursuant to which those subsidiaries are obligated, among other things, to pay the costs and expenses of Aldrich and Murray during the pendency of the Chapter 11 cases to the extent distributions from their respective subsidiaries are insufficient to do so and to provide an amount for the funding for a trust established pursuant to section 524(g) of the Bankruptcy Code, to the extent that the other assets of Aldrich and Murray are insufficient to provide the requisite trust funding.

There 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;

•the outcome of negotiations with a committee of asbestos personal injury claimants, a future claimants' representative 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 their potential opposition to the extension of the Bankruptcy Court order temporarily staying asbestos-related claims against us, their potential opposition to efforts by Aldrich and Murray to have the Bankruptcy Court estimate their aggregate asbestos liability, potential actions by them seeking dismissal of Chapter 11 cases and potential efforts by them to seek court approval of their own plan of reorganization;

•the decisions of the Bankruptcy Court relating to numerous substantive and procedural aspects of the Chapter 11 case, including with regard to the extension of the Bankruptcy Court order temporarily staying asbestos-related claims against us, efforts by Aldrich and Murray to have the Bankruptcy Court estimate their aggregate asbestos liability and the ultimate disposition of the Chapter 11 cases, whether in response to action by representatives of the asbestos claimants seeking dismissal thereof, efforts by any party to confirm a plan of reorganization or otherwise; and

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•the decisions of appellate courts regarding approval of a plan of reorganization or relating to orders of the Bankruptcy Court that may be appealed.

The ability of Aldrich and Murray to successfully reorganize and resolve their asbestos liabilities will depend on various factors, including their ability to reach an agreement with the representatives of the asbestos claimants on the terms of a plan of reorganization that satisfies all applicable legal requirements and to obtain the requisite court approvals of such plan, and remains subject to the risks and uncertainties described above. We cannot ensure that Aldrich and Murray can successfully reorganize, nor can we give any assurances as to the amount of the ultimate obligations under the Funding Agreements or the resulting impact on our financial condition, results of operations or future prospects. We are also unable to predict the timing of any of the foregoing matters or the timing for a resolution of the Chapter 11 cases, all of which could have an impact on us.

It also is possible that, in the Chapter 11 cases, various parties will seek to bring claims against us and other related parties, including by raising allegations that we are liable for the asbestos-related liabilities of Aldrich and Murray. Although we believe we have no such responsibility for liabilities of Aldrich and Murray, except indirectly through our obligation to provide funding to Aldrich and Murray under the terms of the Funding Agreements, we cannot provide assurances that such claims will not be pursued.

In sum, the outcome of the Chapter 11 cases is uncertain and there is uncertainty as to what extent we may have to contribute to a section 524(g) trust under the Funding Agreements.

The COVID-19 global pandemic and resulting adverse economic conditions have already adversely impacted our business and could have a more material adverse impact on our business, financial condition and results of operations.

We are closely monitoring the impact of the COVID-19 global pandemic on all aspects of our business and geographies, including how it has and will impact our customers, team members, suppliers, vendors, business partners and distribution channels. The COVID-19 global pandemic has created significant volatility, uncertainty and economic disruption, which will adversely affect our business operations and may materially and adversely affect our results of operations, cash flows and financial position.

While our business is largely categorized as “essential” by the U.S. Department of Homeland Security, the COVID-19 global pandemic has caused certain disruptions to and shutdowns of our business and operations and could cause material disruptions to and shutdowns of our business and operations in the future as a result of, among other things, quarantines, worker absenteeism as a result of illness or other factors, social distancing measures and other travel, health-related, business or other restrictions. Our business and operations have been impacted globally, including, but are not limited to, lower volume which negatively impacted revenue, supply chain disruptions and unfavorable foreign currency exchange rate movements. For similar reasons, the COVID-19 global pandemic has also adversely impacted, and may continue to adversely impact, our suppliers and their manufacturers and our customers. Some of our purchases are from sole or limited source suppliers for reasons of cost effectiveness, uniqueness of design, or product quality. The effects of the COVID-19 global pandemic may exacerbate supply chain issues with these suppliers. Any delay in receiving critical supplies could have a material adverse effect on our results of operations, financial condition and cash flows.

As a result of the effects of the COVID-19 global pandemic, our costs have increased (including the costs to address the health and safety of our employees), our ability to obtain products or services from suppliers has been and may be adversely impacted, and our ability to operate at certain impacted locations has been and may be impacted, and, as a result, our business, financial condition and results of operations have been adversely impacted and could be materially adversely affected if the current outbreak and spread of the COVID-19 global pandemic continues.

The COVID-19 global pandemic has also resulted in severe disruption and volatility in the financial markets which has had a material adverse impact on some of our customers and suppliers and which could impact our access to capital and credit markets. The severity of the pandemic’s impact on economies around the world and the potential length of the economic recovery continues to extend. The current and potential further outbreaks and spread of the COVID-19 global pandemic could cause a prolonged recession and a delayed recovery, which could have a further adverse impact on our financial condition and operations.

The impact of the COVID-19 global pandemic may also exacerbate other risks discussed in Item 1A. Risk Factors in our Annual Report on Form ~~10-Q for the period ended March 31, 2019.~~10-K, any of which could have a material effect on us. This situation is continuing to evolve rapidly and additional impacts may arise that we are not aware of currently.

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Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information with respect to purchases of our ordinary shares during the third quarter of ~~2019~~:2020:


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)
July 1 - July 31	—	$	88.91	—	$	749,959
August 1 - August 31	3.6	112.11		—	749,959
September 1 - September 30	—	—		—	749,959
Total	3.6	$	111.73	—

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)
July 1 - July 31 0.1
$ 127.27
—
$ 1,249,967
August 1- August 31 973.4
118.02
973.1
1,135,128
September 1 - September 30 1,104.7
122.36
1,104.6
999,961
Total 2,078.2
$ 120.33
2,077.7

(a) Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (2018 Authorization) upon completion of the prior authorized share repurchase program. ~~During the three months ended September 30, 2019, we repurchased and canceled approximately $250 million of our ordinary shares leaving approximately $1 billion remaining~~There were no share repurchases under the 2018 Authorization ~~at September 30, 2019.~~during the third quarter.

(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 59 shares in July ~~332~~and 3,585 shares in August ~~and 96 shares in September~~ in transactions outside of the repurchase programs.

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Item 6 – Exhibits

(a) Exhibits

Exhibit No.

Description

Method of Filing

~~Exhibit No.~~

31.1

~~Description~~

~~Method of Filing~~

~~31.1~~

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Furnished herewith.

101

The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2019,~~2020, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Comprehensive Income (Loss), (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.

Filed herewith.

~~INGERSOLL-RAND~~

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TRANE TECHNOLOGIES PLC

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


				TRANE TECHNOLOGIES PLC (Registrant)

Date:				~~INGERSOLL-RAND PLC~~ ~~(Registrant)~~

~~Date:~~	October ~~29, 2019~~	~~/s/ Susan K. Carter~~
		~~Susan K. Carter, Senior Vice President~~ ~~and Chief Financial Officer~~ ~~Principal Financial Officer~~

~~Date:~~	~~October 29, 2019~~28, 2020	/s/ Christopher J. Kuehn
				Christopher J. Kuehn, Senior Vice President and Chief Financial Officer Principal Financial Officer

Date:			October 28, 2020	/s/ Heather R. Howlett
				Heather R. Howlett, Vice President and Chief Accounting Officer Principal Accounting Officer



Ireland			98-0626632
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)



In millions	September 30, 2019			December 31, 2018
Raw materials	$	640.2		$	550.5
Work-in-process	254.8			182.0
Finished goods	1,079.7			1,028.8
	1,974.7			1,761.3
LIFO reserve	(84.1		)	(83.5		)
Total	$	1,890.6		$	1,677.8


In millions	September 30, 2020		December 31, 2019
Raw materials	$	318.1	$	333.5
Work-in-process	181.3		173.7
Finished goods	770.1		804.9
	1,269.5		1,312.1
LIFO reserve	(40.3)		(33.5)
Total	$	1,229.2	$	1,278.6



In millions	Climate			Industrial			Total
Net balance as of December 31, 2018	$	5,099.2		$	860.3		$	5,959.5
Acquisitions ⁽¹⁾	15.5			805.5			821.0
Currency translation	(58.3		)	(9.4		)	(67.7		)
Net balance as of September 30, 2019	$	5,056.4		$	1,656.4		$	6,712.8


In millions	Americas		EMEA		Asia Pacific		Total
Net balance as of December 31, 2019	$	3,858.8	$	731.1	$	535.8	$	5,125.7

Deconsolidation of certain entities under Chapter 11(1)	(9.2)		0		0		(9.2)
Currency translation	(7.0)		22.7		12.1		27.8
Net balance as of September 30, 2020	$	3,842.6	$	753.8	$	547.9	$	5,144.3



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


In millions, except per share amounts	Total equity			Ordinary shares					Ordinary shares held in treasury, at cost				Capital in excess of par value				Retained earnings				Accumulated other comprehensive income (loss)				Noncontrolling Interests			In millions, except per share amounts				Total equity				Ordinary shares			Ordinary shares held in treasury, at cost				Capital in excess of par value				Retained earnings				Accumulated other comprehensive income (loss)				Noncontrolling Interests
				Amount			Shares																	Amount at par value											Shares
Balance at December 31, 2018	$	7,064.8		$	266.4		266.4					$	(1,719.4	)		$				—				$			9,439.8		$	(964.1	)		$	42.1
Balance at December 31, 2019																												Balance at December 31, 2019				$	7,312.4			$	262.8	262.8			$	(1,719.4)			$	0			$	9,730.8			$	(1,006.6)			$	44.8
Net earnings	203.7			—			—		—				—				199.9				—				3.8			Net earnings				(25.9)				—		—	—				—				(29.2)				—				3.3
Other comprehensive income (loss)	5.9			—			—		—				—				—				5.5				0.4			Other comprehensive income (loss)				(58.6)				—		—	—				—				—				(58.7)				0.1
Shares issued under incentive stock plans	6.3			1.5			1.5		—				4.8				—				—				—			Shares issued under incentive stock plans				(5.6)				0.9		0.9	—				(6.5)				—				—				—
Repurchase of ordinary shares	(250.0		)	(2.4		)	(2.4	)	—				(34.6		)		(213.0		)		—				—

Share-based compensation																												Share-based compensation				27.6				—		—	—				29.0				(1.4)				—				—
Dividends declared to noncontrolling interest																												Dividends declared to noncontrolling interest				(6.1)				—		—	—				—				—				—				(6.1)
Investment by joint venture partner																												Investment by joint venture partner				7.0				—		—	—				3.9				—				—				3.1
Cash dividends declared																												Cash dividends declared				(126.7)				—		—	—				—				(126.7)				—				—
Separation of Ingersoll Rand Industrial																												Separation of Ingersoll Rand Industrial				(1,334.3)				—		—	—				—				(1,445.6)				139.3				(28.0)

Balance at March 31, 2020																												Balance at March 31, 2020				$	5,789.8			$	263.7	263.7	$	(1,719.4)			$	26.4			$	8,127.9			$	(926.0)			$	17.2
Net earnings																												Net earnings				242.1				—		—	—				—				238.8				—				3.3
Other comprehensive income (loss)																												Other comprehensive income (loss)				52.0				—		—	—				—				—				49.9				2.1
Shares issued under incentive stock plans																												Shares issued under incentive stock plans				3.7				0.1		0.1	—				3.6				—				—				—

Share-based compensation																												Share-based compensation				16.0				—		—	—				16.5				(0.5)				—				—

Cash dividends declared																												Cash dividends declared				(126.9)				—		—	—				—				(126.9)				—				—
Separation of Ingersoll Rand Industrial																												Separation of Ingersoll Rand Industrial				(17.2)				—		—	—				—				(17.2)				—				—

Balance at June 30, 2020																												Balance at June 30, 2020				$	5,959.5			$	263.8	263.8	$	(1,719.4)			$	46.5			$	8,222.1			$	(876.1)			$	22.6
Net earnings																												Net earnings				404.6				—		—	—				—				400.6				—				4.0
Other comprehensive income (loss)																												Other comprehensive income (loss)				115.0				—		—	—				—				—				115.1				(0.1)
Shares issued under incentive stock plans																												Shares issued under incentive stock plans				35.5				0.7		0.7	—				34.8				—				—				—

Share-based compensation	29.0			—			—		—				29.7				(0.7		)		—				—			Share-based compensation				11.6				—		—	—				12.0				(0.4)				—				—
Dividends declared to noncontrolling interest	(9.3		)	—			—		—				—				—				—				(9.3		)	Dividends declared to noncontrolling interest				(12.2)				—		—	—				—				—				—				(12.2)
Cash dividends declared	(127.7		)	—			—		—				—				(127.7		)		—				—			Cash dividends declared				(127.1)				—		—	—				—				(127.1)				—				—
Other	0.1			—			—		—				0.1				—				—				—
Balance at March 31, 2019	$	6,922.8		$	265.5		265.5		$	(1,719.4	)		$	—			$	9,298.3			$	(958.6	)		$	37.0
Net earnings	460.3			—			—		—				—				456.1				—				4.2
Other comprehensive income (loss)	20.6			—			—		—				—				—				19.4				1.2
Shares issued under incentive stock plans	14.9			0.4			0.4		—				14.5				—				—				—
Share-based compensation	10.2			—			—		—				11.5				(1.3		)		—				—
Cash dividends declared	(255.9		)	—			—		—				—				(255.9		)		—				—
Balance at June 30, 2019	$	7,172.9		$	265.9		265.9		$	(1,719.4	)		$	26.0			$	9,497.2			$	(939.2	)		$	42.4
Net earnings	463.4			—			—		—				—				458.8				—				4.6
Other comprehensive income (loss)	(131.1		)	—			—		—				—				—				(130.6		)		(0.5		)
Shares issued under incentive stock plans	15.2			0.3			0.3		—				14.9				—				—				—
Repurchase of ordinary shares	(250.1		)	(2.1		)	(2.1	)	—				(54.1		)		(193.9		)		—				—
Share-based compensation	13.1			—			—		—				13.2				(0.1		)		—				—
Dividends declared to noncontrolling interest	(5.0		)	—			—		—				—				—				—				(5.0		)
Cash dividends declared	0.6			—			—		—				—				0.6				—				—
Other	0.1			—			—		—				—				0.1				—				—
Balance at September 30, 2019	$	7,279.1		$	264.1		264.1		$	(1,719.4	)		$	—			$	9,762.7			$	(1,069.8	)		$	41.5
Separation of Ingersoll Rand Industrial																												Separation of Ingersoll Rand Industrial				(5.9)				—		—	—				—				(5.9)				—				—

Balance at September 30, 2020																												Balance at September 30, 2020				$	6,381.0			$	264.5	264.5	$	(1,719.4)			$	93.3			$	8,489.3			$	(761.0)			$	14.3



	September 30, 2019							December 31, 2018
In millions	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Customer relationships	$	2,542.6	$	(1,278.4	)	$	1,264.2	$	2,086.8	$	(1,176.3	)	$	910.5
Completed technologies/patents	206.0		(184.9		)	21.1		206.6		(182.0		)	24.6
Other	119.4		(66.0		)	53.4		84.5		(54.4		)	30.1
Total finite-lived intangible assets	2,868.0		(1,529.3		)	1,338.7		2,377.9		(1,412.7		)	965.2
Trademarks (indefinite-lived)	2,835.7		—			2,835.7		2,669.5		—			2,669.5
Total	$	5,703.7	$	(1,529.3	)	$	4,174.4	$	5,047.4	$	(1,412.7	)	$	3,634.7


	September 30, 2020						December 31, 2019
In millions	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Customer relationships	$	1,925.1	$	(1,326.5)	$	598.6	$	1,928.5	$	(1,239.2)	$	689.3
Patents	166.4		(166.0)		0.4		171.8		(169.7)		2.1
Other	41.0		(34.1)		6.9		40.4		(33.7)		6.7
Total finite-lived intangible assets	2,132.5		(1,526.6)		605.9		2,140.7		(1,442.6)		698.1
Trademarks (indefinite-lived)	2,627.1		—		2,627.1		2,625.5		—		2,625.5
Total	$	4,759.6	$	(1,526.6)	$	3,233.0	$	4,766.2	$	(1,442.6)	$	3,323.6



In millions	December 31, 2018
Operating leases
2019	$	197.1
2020	152.0
2021	107.4
2022	68.4
2023	42.2
After 2023	42.7
Total	$	609.8



In millions	Ordinary shares issued		Ordinary shares held in treasury
December 31, 2018	266.4		24.5
Shares issued under incentive plans, net	2.2		—
Repurchase of ordinary shares	(4.5	)	—
September 30, 2019	264.1		24.5


In millions	Derivative Instruments			Pension and OPEB			Foreign Currency Translation			Total			In millions	Derivative Instruments		Pension and OPEB		Foreign Currency Translation		Total
Balance at December 31, 2018	$	6.7		$	(454.0	)	$	(516.8	)	$	(964.1	)
Balance at December 31, 2019													Balance at December 31, 2019	$	5.6	$	(457.4)	$	(554.8)	$	(1,006.6)
Other comprehensive income (loss) before reclassifications	(0.9		)	7.1			(140.4		)	(134.2		)	Other comprehensive income (loss) before reclassifications	1.7		(28.0)		105.3		79.0
Amounts reclassified from AOCI	0.6			35.8			—			36.4			Amounts reclassified from AOCI	1.1		32.7		0		33.8
Benefit from (provision for) income taxes	0.5			(8.4		)	—			(7.9		)
Separation of Ingersoll Rand Industrial, net of tax													Separation of Ingersoll Rand Industrial, net of tax	0		69.1		70.2		139.3
Benefit (provision) for income taxes													Benefit (provision) for income taxes	0.4		(6.9)		0		(6.5)
Net current period other comprehensive income (loss)	$	0.2		$	34.5		$	(140.4	)	$	(105.7	)	Net current period other comprehensive income (loss)	$	3.2	$	66.9	$	175.5	$	245.6
Balance at September 30, 2019	$	6.9		$	(419.5	)	$	(657.2	)	$	(1,069.8	)
Balance at September 30, 2020													Balance at September 30, 2020	$	8.8	$	(390.5)	$	(379.3)	$	(761.0)



	2019			2018
	Number granted	Weighted- average fair value per award		Number granted	Weighted- average fair value per award
Stock options	1,285,257	$	17.17	1,524,625	$	15.49
RSUs	265,964	$	102.81	317,073	$	89.69
Performance shares ⁽¹⁾	311,158	$	111.04	357,096	$	106.06



	2019		2018
Dividend yield	2.06	%	2.00	%
Volatility	21.46	%	21.64	%
Risk-free rate of return	2.46	%	2.48	%
Expected life in years	4.8		4.8


•	~~Risk-free rate of return~~ ~~- The Company applies a yield curve of continuous risk-free rates based upon the published U.S. Treasury spot rates on the grant date.~~


•	~~Expected life~~ - The expected life of the Company’s stock option awards represents the weighted-average of the actual period since the grant date for all exercised or canceled options and an expected period for all outstanding options.


•	~~Dividend yield~~ ~~- The Company determines the dividend yield based upon the expected quarterly dividend payments as of the grant date and the current fair market value of the Company’s stock.~~


•	Forfeiture Rate - The Company analyzes historical data of forfeited options to develop a reasonable expectation of the number of options to forfeit prior to vesting per year. This expected forfeiture rate is applied to the Company’s ongoing compensation expense; however, all expense is adjusted to reflect actual vestings and forfeitures.



In millions	Preliminary May 15, 2019			Measurement Period Adjustments			As Adjusted May 15, 2019
Current assets	$	124.8		$	—		$	124.8
Intangibles	662.2			—			662.2
Goodwill	888.0			(82.5		)	805.5
Other noncurrent assets	48.4			—			48.4
Accounts payable, accrued expenses and other liabilities	(72.3		)	0.3			(72.0		)
Noncurrent deferred tax liabilities	(195.9		)	83.3			(112.6		)
Total purchase price, net of cash acquired	$	1,455.2		$	1.1		$	1,456.3



In millions	Weighted-average useful life (in years)	May 15, 2019
Customer relationships	14	$	457.6
Trade names	Indefinite	168.2
Other	7	36.4
Total		$	662.2



In millions	Plc			Irish Holdings			Lux International			Global Holding			New Jersey			Lux Finance			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net revenues	$	—		$	—		$	—		$	—		$	320.0		$	—		$	4,110.0		$	(85.7	)	$	4,344.3
Cost of goods sold	—			—			—			—			(236.8		)	—			(2,784.7		)	85.7			(2,935.8		)
Selling and administrative expenses	8.6			—			(0.1		)	(0.1		)	(140.4		)	(0.1		)	(653.2		)	—			(785.3		)
Operating income (loss)	8.6			—			(0.1		)	(0.1		)	(57.2		)	(0.1		)	672.1			—			623.2
Equity earnings (loss) in subsidiaries, net of tax	481.7			481.2			373.6			408.1			394.2			47.3			—			(2,186.1		)	—
Interest expense	—			—			0.1			(26.7		)	(11.4		)	(25.8		)	(0.3		)	—			(64.1		)
Intercompany interest and fees	(30.9		)	—			24.1			(81.8		)	47.9			9.8			30.9			—			—
Other income/(expense), net	—			—			0.2			—			(3.0		)	0.2			(4.6		)	—			(7.2		)
Earnings (loss) before income taxes	459.4			481.2			397.9			299.5			370.5			31.4			698.1			(2,186.1		)	551.9
Benefit (provision) for income taxes	(0.6		)	—			—			25.9			5.2			—			(143.4		)	—			(112.9		)
Earnings (loss) from continuing operations	458.8			481.2			397.9			325.4			375.7			31.4			554.7			(2,186.1		)	439.0
Discontinued operations, net of tax	—			—			—			—			24.3			—			0.1			—			24.4
Net earnings (loss)	458.8			481.2			397.9			325.4			400.0			31.4			554.8			(2,186.1		)	463.4
Less: Net earnings attributable to noncontrolling interests	—			—			—			—			—			—			(4.6		)	—			(4.6		)
Net earnings (loss) attributable to Ingersoll-Rand plc	$	458.8		$	481.2		$	397.9		$	325.4		$	400.0		$	31.4		$	550.2		$	(2,186.1	)	$	458.8

Other comprehensive income (loss), net of tax	(130.6		)	(130.1		)	(124.7		)	(99.0		)	(98.7		)	(23.2		)	(134.7		)	610.4			(130.6		)
Comprehensive income (loss) attributable to Ingersoll-Rand plc	$	328.2		$	351.1		$	273.2		$	226.4		$	301.3		$	8.2		$	415.5		$	(1,575.7	)	$	328.2



Dollar amounts in millions	2019 Operating Income (Expense)			2018 Operating Income (Expense)			Period Change			2019 Operating Margin		2018 Operating Margin
Climate	$	583.5		$	535.6		$	47.9		16.8	%	16.5	%
Industrial	116.3			110.7			5.6			13.3	%	14.0	%
Unallocated corporate expenses	(76.6		)	(59.3		)	(17.3		)	N/A		N/A
Total	$	623.2		$	587.0		$	36.2		14.3	%	14.6	%



Volume/product mix	~~4.2~~(6.7)	%
~~Acquisitions~~	~~1.2~~		%
Pricing	~~1.9~~0.8	%
Currency translation	~~(1.6~~(0.3)	)%
Total	~~5.7~~(6.2)	%



~~Volume/product mix~~	~~5.2~~	%
~~Pricing~~	~~2.1~~	%
~~Currency translation~~	~~(1.4~~	)%
~~Total~~	~~5.9~~	%



~~Volume/product mix~~	~~0.4~~	%
~~Acquisitions~~	~~5.9~~	%
~~Pricing~~	~~1.2~~	%
~~Currency translation~~	~~(2.4~~	)%
~~Total~~	~~5.1~~	%


Volume	(5.7)	%

Pricing	1.0	%
Currency translation	(0.3)	%
Total	(5.0)	%


Volume	(13.4)	%

Pricing	0.5	%
Currency translation	(0.7)	%
Total	(13.6)	%


Parent, issuer or guarantors (1)	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 TT Lux and TTC HoldCo
Trane Technologies Lux International Holding Company S.à.r.l. (TT International)	None	All notes issued by TT Lux and TTC HoldCo
Trane Technologies Global Holding Company Limited (TT Global)	None	All notes issued by TT Lux and TTC HoldCo
Trane Technologies Luxembourg Finance S.A. (TT Lux)	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. (TTC HoldCo)	2.900% Senior notes due 2021 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 TT Lux
Trane Technologies Company LLC (TTC)	9.000% Debentures due 2021 7.200% Debentures due 2021-2025 6.480% Debentures due 2025 Puttable debentures due 2027-2028	All notes issued by TT Lux and TTC HoldCo


	Nine months ended September 30, 2020
In millions	Obligor group 1		Obligor group 2
Net revenues	$	—	$	—
Gross profit (loss)	(1.6)		(1.6)
Intercompany interest and fees	(116.4)		(5.9)
Earnings (loss) from continuing operations	(415.0)		(275.3)
Discontinued operations, net of tax	(136.7)		(107.8)
Net earnings (loss)	(551.7)		(383.1)
Less: Net earnings attributable to noncontrolling interests	—		—
Net earnings (loss) attributable to Trane Technologies plc	$	(551.7)	$	(383.1)