UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, ~~2020~~2021


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

For the transition period from to

Commission File Number 001-34400

_____________________________

TRANE TECHNOLOGIES PLC

(Exact name of registrant as specified in its charter)


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

170/175 Lakeview Dr.

Airside Business Park

Swords Co. Dublin

Ireland

(Address of principal executive offices, including zip code)

+(353) (0) 18707400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Ordinary Shares, Par Value $1.00 per Share

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated filer

Emerging growth company

☐

Non-accelerated filer

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of ordinary shares outstanding of Trane Technologies plc as of October ~~16, 2020~~22, 2021 was ~~240,124,921.~~237,540,178.

Table of Contents

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, ~~2020~~2021 and ~~2019~~2020	1

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020	2

	Condensed Consolidated Balance Sheets at September 30, ~~2020~~2021 and December 31, ~~2019~~2020	3

	Condensed Consolidated Statements of Equity for the three and nine months ended September 30, ~~2020~~2021 and ~~2019~~2020	4

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2020~~2021 and ~~2019~~2020	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3430

Item 3 -	Quantitative and Qualitative Disclosures about Market Risk	5248

Item 4 -	Controls and Procedures	5248

PART II OTHER INFORMATION		5349

Item 1 -	Legal Proceedings	5349

Item 1A -	Risk Factors	5350

Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	5553

Item 6 -	Exhibits	5654

SIGNATURES		5755

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1.Financial Statements

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~~

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


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

	Three months ended				Nine months ended
	September 30,				September 30,
In millions, except per share amounts	2021		2020		2021		2020
Net revenues	$	3,719.8	$	3,495.5	$	10,567.1	$	9,275.6
Cost of goods sold	(2,515.6)		(2,360.8)		(7,139.0)		(6,420.1)
Selling and administrative expenses	(620.8)		(567.8)		(1,840.5)		(1,710.7)
Operating income	583.4		566.9		1,587.6		1,144.8
Interest expense	(57.7)		(62.4)		(177.7)		(186.8)
Other income/(expense), net	(6.9)		(4.5)		(13.8)		7.6
Earnings before income taxes	518.8		500.0		1,396.1		965.6
Benefit (provision) for income taxes	(96.8)		(89.9)		(268.0)		(224.4)
Earnings from continuing operations	422.0		410.1		1,128.1		741.2
Discontinued operations, net of tax	(13.3)		(5.5)		(12.6)		(120.4)
Net earnings	408.7		404.6		1,115.5		620.8
Less: Net earnings from continuing operations attributable to noncontrolling interests	(3.0)		(4.0)		(9.9)		(9.7)
Less: Net earnings from discontinuing operations attributable to noncontrolling interests	—		—		—		(0.9)
Net earnings attributable to Trane Technologies plc	$	405.7	$	400.6	$	1,105.6	$	610.2

Amounts attributable to Trane Technologies plc ordinary shareholders:
Continuing operations	$	419.0	$	406.1	$	1,118.2	$	731.5
Discontinued operations	(13.3)		(5.5)		(12.6)		(121.3)
Net earnings	$	405.7	$	400.6	$	1,105.6	$	610.2
Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:
Basic:
Continuing operations	$	1.76	$	1.69	$	4.68	$	3.05
Discontinued operations	(0.06)		(0.02)		(0.06)		(0.51)
Net earnings	$	1.70	$	1.67	$	4.62	$	2.54
Diluted:
Continuing operations	$	1.73	$	1.67	$	4.61	$	3.01
Discontinued operations	(0.05)		(0.03)		(0.06)		(0.50)
Net earnings	$	1.68	$	1.64	$	4.55	$	2.51
Weighted-average shares outstanding:
Basic	238.2		240.4		239.2		240.0
Diluted	241.7		243.7		242.8		242.7

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents


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

	Three months ended				Nine months ended
	September 30,				September 30,
In millions	2021		2020		2021		2020
Net earnings	$	408.7	$	404.6	$	1,115.5	$	620.8
Other comprehensive income (loss):
Currency translation	(67.7)		111.3		(101.4)		107.4
Cash flow hedges:
Unrealized net gains (losses) arising during period	5.1		1.5		1.3		1.7
Net (gains) losses reclassified into earnings	(7.9)		0.7		(5.1)		1.1
Tax (expense) benefit	0.5		(0.4)		1.9		0.4
Total cash flow hedges, net of tax	(2.3)		1.8		(1.9)		3.2
Pension and OPEB adjustments:

Net actuarial gains (losses) for the period	—		—		—		(21.3)
Amortization reclassified into earnings	9.7		10.5		29.1		32.7
Net curtailment and settlement (gains) losses reclassified to earnings	—		(0.1)		6.9		(3.7)
Currency translation and other	4.6		(6.6)		4.9		(3.0)
Tax (expense) benefit	(2.4)		(1.9)		(17.1)		(6.9)
Total pension and OPEB adjustments, net of tax	11.9		1.9		23.8		(2.2)
Other comprehensive income (loss), net of tax	(58.1)		115.0		(79.5)		108.4
Comprehensive income, net of tax	$	350.6	$	519.6	$	1,036.0	$	729.2
Less: Comprehensive income attributable to noncontrolling interests	(1.9)		(3.9)		(8.1)		(12.7)
Comprehensive income attributable to Trane Technologies plc	$	348.7	$	515.7	$	1,027.9	$	716.5

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

~~(Unaudited)~~


							(Unaudited)
In millions	In millions	September 30, 2020		December 31, 2019		In millions	September 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	3,190.1	$	1,278.6	Cash and cash equivalents	$	2,738.8	$	3,289.9
Accounts and notes receivable, net	Accounts and notes receivable, net	2,312.6		2,184.6		Accounts and notes receivable, net	2,432.3		2,202.1
Inventories	Inventories	1,229.2		1,278.6		Inventories	1,482.8		1,189.2

Other current assets	Other current assets	241.6		344.8		Other current assets	337.5		224.4
Assets held-for-sale		0		4,207.2
Total current assets	Total current assets	6,973.5		9,293.8		Total current assets	6,991.4		6,905.6
Property, plant and equipment, net	Property, plant and equipment, net	1,314.1		1,352.0		Property, plant and equipment, net	1,336.7		1,349.5
Goodwill	Goodwill	5,144.3		5,125.7		Goodwill	5,310.1		5,342.8
Intangible assets, net	Intangible assets, net	3,233.0		3,323.6		Intangible assets, net	3,198.4		3,286.4
Other noncurrent assets	Other noncurrent assets	1,274.5		1,397.2		Other noncurrent assets	1,365.6		1,272.4

Total assets	Total assets	$	17,939.4	$	20,492.3	Total assets	$	18,202.2	$	18,156.7
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,458.8	$	1,381.3	Accounts payable	$	1,757.8	$	1,520.2
Accrued compensation and benefits	Accrued compensation and benefits	421.0		442.4		Accrued compensation and benefits	462.4		451.1
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	1,515.2		1,564.2		Accrued expenses and other current liabilities	1,742.9		1,592.0
Short-term borrowings and current maturities of long-term debt	Short-term borrowings and current maturities of long-term debt	775.1		650.3		Short-term borrowings and current maturities of long-term debt	350.4		775.6
Liabilities held-for-sale		0		1,200.4
Total current liabilities	Total current liabilities	4,170.1		5,238.6		Total current liabilities	4,313.5		4,338.9
Long-term debt	Long-term debt	4,494.2		4,922.9		Long-term debt	4,490.7		4,496.5
Postemployment and other benefit liabilities	Postemployment and other benefit liabilities	977.2		1,048.2		Postemployment and other benefit liabilities	977.1		1,024.6
Deferred and noncurrent income taxes	Deferred and noncurrent income taxes	635.5		572.0		Deferred and noncurrent income taxes	598.9		578.5
Other noncurrent liabilities	Other noncurrent liabilities	1,281.4		1,398.2		Other noncurrent liabilities	1,334.3		1,291.1

Total liabilities	Total liabilities	11,558.4		13,179.9		Total liabilities	11,714.5		11,729.6

Equity:	Equity:					Equity:
Trane Technologies plc shareholders’ equity:	Trane Technologies plc shareholders’ equity:					Trane Technologies plc shareholders’ equity:
Ordinary shares	Ordinary shares	264.5		262.8		Ordinary shares	262.0		263.3
Ordinary shares held in treasury, at cost	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		Capital in excess of par value	15.2		—
Retained earnings	Retained earnings	8,489.3		9,730.8		Retained earnings	8,626.5		8,495.3
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(761.0)		(1,006.6)		Accumulated other comprehensive income (loss)	(709.2)		(631.5)
Total Trane Technologies plc shareholders’ equity	Total Trane Technologies plc shareholders’ equity	6,366.7		7,267.6		Total Trane Technologies plc shareholders’ equity	6,475.1		6,407.7
Noncontrolling interests	Noncontrolling interests	14.3		44.8		Noncontrolling interests	12.6		19.4
Total equity	Total equity	6,381.0		7,312.4		Total equity	6,487.7		6,427.1
Total liabilities and equity	Total liabilities and equity	$	17,939.4	$	20,492.3	Total liabilities and equity	$	18,202.2	$	18,156.7

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


In millions, except per share amounts	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 at par value				Shares													In millions, except per share amounts				Total equity			Amount at par value				Shares					Ordinary shares held in treasury, at cost					Capital in excess of par value			Retained earnings	Accumulated other comprehensive income (loss)	Noncontrolling Interests
Balance at December 31, 2019				$	7,312.4			$	262.8		262.8			$	(1,719.4)				$	0				$		9,730.8			$	(1,006.6)		$	44.8
Balance at December 31, 2020																															Balance at December 31, 2020			$	6,427.1				$	263.3			263.3							$	(1,719.4)						$	—			$	8,495.3	$	(631.5)	$	19.4
Net earnings	Net earnings	(25.9)				—				—		—						—			(29.2)				—			3.3					Net earnings			237.8			—			—			—					—				235.2			—				2.6
Other comprehensive income (loss)	Other comprehensive income (loss)	(58.6)				—				—		—				—			—			(58.7)				0.1					Other comprehensive income (loss)			(70.7)			—				—		—					—				—			(68.3)				(2.4)
Shares issued under incentive stock plans	Shares issued under incentive stock plans	(5.6)				0.9				0.9		—				(6.5)			—			—				—					Shares issued under incentive stock plans			(7.0)			1.0				1.0		—					(8.0)				—			—				—

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

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		242.1				—				—		—				—			238.8			—				3.3
Other comprehensive income (loss)		52.0				—				—		—				—			—			49.9				2.1
Shares issued under incentive stock plans		3.7				0.1				0.1		—				3.6			—			—				—

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

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

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		404.6				—				—		—				—			400.6			—				4.0
Other comprehensive income (loss)		115.0				—				—		—				—			—			115.1				(0.1)
Shares issued under incentive stock plans		35.5				0.7				0.7		—				34.8			—			—				—

Repurchase of ordinary shares																															Repurchase of ordinary shares			(104.2)			(0.7)				(0.7)		—					(16.7)				(86.8)			—				—
Share-based compensation	Share-based compensation	11.6				—				—		—				12.0			(0.4)			—				—					Share-based compensation			24.2			—				—		—					24.7				(0.5)			—				—
Dividends declared to noncontrolling interest	Dividends declared to noncontrolling interest	(12.2)				—				—		—				—			—			—				(12.2)					Dividends declared to noncontrolling interest			(3.5)			—				—		—					—				—			—				(3.5)
Cash dividends declared	Cash dividends declared	(127.1)				—				—		—				—			(127.1)			—				—					Cash dividends declared			(141.0)			—				—		—					—				(141.0)			—				—
Separation of Ingersoll Rand Industrial	Separation of Ingersoll Rand Industrial	(5.9)				—				—		—				—			(5.9)			—				—					Separation of Ingersoll Rand Industrial			(49.9)			—				—		—					—				(49.9)			—				—

Balance at September 30, 2020		$	6,381.0			$	264.5			264.5		$	(1,719.4)			$	93.3		$	8,489.3		$	(761.0)			$	14.3
Balance at March 31, 2021																															Balance at March 31, 2021			$	6,312.8		$	263.6			263.6		$	(1,719.4)				$	—			$	8,452.3		$	(699.8)			$	16.1
Net earnings																															Net earnings			469.0			—				—		—					—				464.7			—				4.3
Other comprehensive income (loss)																															Other comprehensive income (loss)			49.3			—				—		—					—				—			47.6				1.7
Shares issued under incentive stock plans																															Shares issued under incentive stock plans			25.7			0.5				0.5		—					25.2				—			—				—
Repurchase of ordinary shares																															Repurchase of ordinary shares			(250.0)			(1.4)				(1.4)		—					(40.0)				(208.6)			—				—
Share-based compensation																															Share-based compensation			13.9			—				—		—					14.8				(0.9)			—				—
Dividends declared to noncontrolling interest																															Dividends declared to noncontrolling interest			(6.7)			—				—		—					—				—			—				(6.7)
Cash dividends declared																															Cash dividends declared			(281.4)			—				—		—					—				(281.4)			—				—

Balance at June 30, 2021																															Balance at June 30, 2021			$	6,332.6		$	262.7			262.7		$	(1,719.4)				$	—			$	8,426.1		$	(652.2)			$	15.4
Net earnings																															Net earnings			408.7			—				—		—					—				405.7			—				3.0
Other comprehensive income (loss)																															Other comprehensive income (loss)			(58.1)			—				—		—					—				—			(57.0)				(1.1)
Shares issued under incentive stock plans																															Shares issued under incentive stock plans			43.1			0.6				0.6		—					42.5				—			—				—
Repurchase of ordinary shares																															Repurchase of ordinary shares			(246.0)			(1.3)				(1.3)		—					(40.0)				(204.7)			—				—
Share-based compensation																															Share-based compensation			11.9			—				—		—					12.6				(0.7)			—				—
Dividends declared to noncontrolling interest																															Dividends declared to noncontrolling interest			(4.7)			—				—		—					—				—			—				(4.7)

Other																															Other			0.2			—				—		—					0.1				0.1			—				—
Balance at September 30, 2021																															Balance at September 30, 2021			$	6,487.7		$	262.0			262.0		$	(1,719.4)				$	15.2			$	8,626.5		$	(709.2)			$	12.6

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)

(Unaudited)


In millions, except per share amounts	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 at par value				Shares													In millions, except per share amounts				Total equity			Amount at par value				Shares					Ordinary shares held in treasury, at cost					Capital in excess of par value			Retained earnings	Accumulated other comprehensive income (loss)	Noncontrolling Interests
Balance at December 31, 2018				$	7,064.8			$	266.4		266.4			$	(1,719.4)				$	0				$		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)						$	—			$	9,730.8	$	(1,006.6)	$	44.8
Net earnings	Net earnings	203.7				—				—		—						—			199.9				—			3.8					Net earnings			(25.9)			—			—			—					—				(29.2)			—				3.3
Other comprehensive income (loss)	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	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	29.0				—				—		—				29.7			(0.7)			—				—					Share-based compensation			27.6			—				—		—					29.0				(1.4)			—				—
Dividends declared to noncontrolling interest	Dividends declared to noncontrolling interest	(9.3)				—				—		—				—			—			—				(9.3)					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	(127.7)				—				—		—				—			(127.7)			—				—					Cash dividends declared			(126.7)			—				—		—					—				(126.7)			—				—
Other		0.1				—				—		—				0.1			—			—				—
Balance at March 31, 2019		$	6,922.8			$	265.5			265.5		$	(1,719.4)			$	0		$	9,298.3		$	(958.6)			$	37.0
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	460.3				—				—		—				—			456.1			—				4.2					Net earnings			242.1			—				—		—					—				238.8			—				3.3
Other comprehensive income (loss)	Other comprehensive income (loss)	20.6				—				—		—				—			—			19.4				1.2					Other comprehensive income (loss)			52.0			—				—		—					—				—			49.9				2.1
Shares issued under incentive stock plans	Shares issued under incentive stock plans	14.9				0.4				0.4		—				14.5			—			—				—					Shares issued under incentive stock plans			3.7			0.1				0.1		—					3.6				—			—				—
Share-based compensation	Share-based compensation	10.2				—				—		—				11.5			(1.3)			—				—					Share-based compensation			16.0			—				—		—					16.5				(0.5)			—				—
Cash dividends declared	Cash dividends declared	(255.9)				—				—		—				—			(255.9)			—				—					Cash dividends declared			(254.0)			—				—		—					—				(254.0)			—				—
Balance at June 30, 2019		$	7,172.9			$	265.9			265.9		$	(1,719.4)			$	26.0		$	9,497.2		$	(939.2)			$	42.4
Separation of Ingersoll Rand Industrial																															Separation of Ingersoll Rand Industrial			(17.2)			—				—		—					—				(17.2)			—				—
Balance at June 30, 2020																															Balance at June 30, 2020			$	5,832.4		$	263.8			263.8		$	(1,719.4)				$	46.5			$	8,095.0		$	(876.1)			$	22.6
Net earnings	Net earnings	463.4				—				—		—				—			458.8			—				4.6					Net earnings			404.6			—				—		—					—				400.6			—				4.0
Other comprehensive income (loss)	Other comprehensive income (loss)	(131.1)				—				—		—				—			—			(130.6)				(0.5)					Other comprehensive income (loss)			115.0			—				—		—					—				—			115.1				(0.1)
Shares issued under incentive stock plans	Shares issued under incentive stock plans	15.2				0.3				0.3		—				14.9			—			—				—					Shares issued under incentive stock plans			35.5			0.7				0.7		—					34.8				—			—				—
Repurchase of ordinary shares		(250.1)				(2.1)				(2.1)		—				(54.1)			(193.9)			—				—

Share-based compensation	Share-based compensation	13.1				—				—		—				13.2			(0.1)			—				—					Share-based compensation			11.6			—				—		—					12.0				(0.4)			—				—
Dividends declared to noncontrolling interest	Dividends declared to noncontrolling interest	(5.0)				—				—		—				—			—			—				(5.0)					Dividends declared to noncontrolling interest			(12.2)			—				—		—					—				—			—				(12.2)
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)			$	0		$	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

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Nine months ended					Nine months ended
		September 30,					September 30,
In millions	In millions	2020		2019		In millions	2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net earnings (loss)		$	620.8	$	1,127.4
Net earnings						Net earnings	$	1,115.5	$	620.8
Discontinued operations, net of tax	Discontinued operations, net of tax	120.4		(181.2)		Discontinued operations, net of tax	12.6		120.4
Adjustments for non-cash transactions:	Adjustments for non-cash transactions:					Adjustments for non-cash transactions:
Depreciation and amortization	Depreciation and amortization	223.7		215.8		Depreciation and amortization	223.0		223.7
Pension and other postretirement benefits	Pension and other postretirement benefits	49.6		70.3		Pension and other postretirement benefits	40.4		49.6
Stock settled share-based compensation	Stock settled share-based compensation	57.5		54.4		Stock settled share-based compensation	52.2		57.5
Changes in assets and liabilities, net of the effects of acquisitions	Changes in assets and liabilities, net of the effects of acquisitions	49.4		(368.9)		Changes in assets and liabilities, net of the effects of acquisitions	(258.9)		49.4
Other non-cash items, net	Other non-cash items, net	11.5		(23.3)		Other non-cash items, net	(22.2)		11.5
Net cash provided by (used in) continuing operating activities	Net cash provided by (used in) continuing operating activities	1,132.9		894.5		Net cash provided by (used in) continuing operating activities	1,162.6		1,132.9
Net cash provided by (used in) discontinued operating activities	Net cash provided by (used in) discontinued operating activities	(324.8)		158.6		Net cash provided by (used in) discontinued operating activities	(1.4)		(324.8)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	808.1		1,053.1		Net cash provided by (used in) operating activities	1,161.2		808.1
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(89.1)		(151.6)		Capital expenditures	(121.6)		(89.1)
Acquisitions of businesses, net of cash acquired	Acquisitions of businesses, net of cash acquired	(2.5)		(80.5)		Acquisitions of businesses, net of cash acquired	(18.0)		(2.5)

Deconsolidation of certain entities under Chapter 11	Deconsolidation of certain entities under Chapter 11	(10.8)		0		Deconsolidation of certain entities under Chapter 11	—		(10.8)
Other investing activities, net	Other investing activities, net	1.3		3.8		Other investing activities, net	(69.2)		1.3

Net cash provided by (used in) continuing investing activities	Net cash provided by (used in) continuing investing activities	(101.1)		(228.3)		Net cash provided by (used in) continuing investing activities	(208.8)		(101.1)
Net cash provided by (used in) discontinued investing activities	Net cash provided by (used in) discontinued investing activities	(37.7)		(1,485.7)		Net cash provided by (used in) discontinued investing activities	—		(37.7)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(138.8)		(1,714.0)		Net cash provided by (used in) investing activities	(208.8)		(138.8)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Proceeds from long-term debt		0		1,497.9

Payments of long-term debt	Payments of long-term debt	(307.5)		(7.5)		Payments of long-term debt	(432.5)		(307.5)
Net proceeds from (payments of) debt		(307.5)		1,490.4

Debt issuance costs	Debt issuance costs	(3.6)		(12.9)		Debt issuance costs	(2.6)		(3.6)

Dividends paid to ordinary shareholders	Dividends paid to ordinary shareholders	(380.3)		(383.1)		Dividends paid to ordinary shareholders	(421.9)		(380.3)
Dividends paid to noncontrolling interests	Dividends paid to noncontrolling interests	(18.3)		(14.3)		Dividends paid to noncontrolling interests	(14.9)		(18.3)

Proceeds (payments) from shares issued under incentive plans, net	Proceeds (payments) from shares issued under incentive plans, net	33.6		36.4		Proceeds (payments) from shares issued under incentive plans, net	61.8		33.6
Repurchase of ordinary shares	Repurchase of ordinary shares	0		(500.1)		Repurchase of ordinary shares	(600.2)		—
Receipt of a special cash payment		1,900.0		0
Receipt of / (Settlement related to) special cash payment						Receipt of / (Settlement related to) special cash payment	(49.5)		1,900.0
Other financing activities, net	Other financing activities, net	7.0		(0.7)		Other financing activities, net	(5.2)		7.0

Net cash provided by (used in) continuing financing activities	Net cash provided by (used in) continuing financing activities	1,230.9		615.7		Net cash provided by (used in) continuing financing activities	(1,465.0)		1,230.9
Net cash provided by (used in) discontinued financing activities		0		(1.1)
Net cash provided by (used in) financing activities		1,230.9		614.6
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	11.3		(26.2)		Effect of exchange rate changes on cash and cash equivalents	(38.5)		11.3
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	1,911.5		(72.5)		Net increase (decrease) in cash and cash equivalents	(551.1)		1,911.5
Cash and cash equivalents - beginning of period	Cash and cash equivalents - beginning of period	1,278.6		878.4		Cash and cash equivalents - beginning of period	3,289.9		1,278.6

Cash and cash equivalents - end of period	Cash and cash equivalents - end of period	$	3,190.1	$	805.9	Cash and cash equivalents - end of period	$	2,738.8	$	3,190.1

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

TRANE TECHNOLOGIES PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

Trane Technologies plc, ~~(formerly known as Ingersoll-Rand plc),~~ a public limited company incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively, the Company), is a global climate innovator that brings 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. The accompanying unaudited Condensed Consolidated Financial Statements of Trane Technologies plc reflects the consolidated operations of the Company and have been prepared in accordance with United States Securities and Exchange Commission (SEC) interim reporting requirements. Accordingly, the accompanying Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP) for full financial statements and should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments, which include only normal recurring adjustments, necessary to fairly state the condensed consolidated results for the interim periods presented.

~~Reportable Segments~~

Prior to the separation of the Company's Industrial segment on February 29, 2020, the Company announced a new organizational model and business segment structure designed to enhance its regional go-to-market capabilities, aligning the structure with the Company's strategy and increased focus on climate innovation. Under the revised structure, the Company created three new regional operating segments from the former climate segment, which also serve as the Company's reportable segments.

•The Company's 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.

•The Company's EMEA segment innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating and cooling systems, services and solutions for commercial buildings, and transport refrigeration systems and 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.

This model is designed to create deep customer focus and relevance in markets around the world. Each segment reports through separate management teams and regularly reviews their operating results with the Chief Executive Officer, the Company's Chief Operating Decision Maker (CODM) determined in accordance with applicable accounting guidance. All prior period comparative segment information has been recast to reflect the current reportable segments.

Reorganization of Aldrich and Murray

On May 1, 2020, certain subsidiaries of the Company underwent an internal corporate restructuring that was effectuated through a series of transactions (2020 Corporate Restructuring). As a result, Aldrich Pump LLC (Aldrich) and Murray Boiler LLC (Murray), indirect wholly-owned subsidiaries of Trane Technologies plc, became solely responsible for the asbestos-related liabilities, and the beneficiaries of the asbestos-related insurance assets, of Trane Technologies Company LLC ~~formerly known as Ingersoll-Rand Company,~~ and Trane U.S. Inc, respectively. On a consolidated basis, the 2020 Corporate Restructuring did not have an impact on the Condensed Consolidated Financial Statements. 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.

subsidiary ClimateLabs were deconsolidated and their respective assets and liabilities were derecognized from the Company's Condensed Consolidated Financial Statements. Refer to Note ~~21,~~20, "Commitments and Contingencies," for more information regarding the status of Chapter 11 bankruptcy and asbestos-related matters.

~~COVID-19 Global Pandemic~~Revision for Correction of an Error in Previously Issued Interim Financial Statements

~~In March~~Cash dividends declared for the three months ended June 30, 2021, June 30, 2020 ~~the World Health Organization declared the outbreak of a respiratory disease caused~~and September 30, 2020 have been revised by ~~a newly discovered coronavirus, known now as COVID-19, as a global pandemic~~$140.1 million (from $141.3 million to $281.4 million), by $127.1 million (from $126.9 million to $254.0 million) and ~~recommended containment and mitigation measures worldwide. Beginning~~by $127.1 million (from $127.1 million to $0), respectively, in the ~~first quarter, many countries responded by implementing measures~~Condensed Consolidated Statements of Equity to ~~combat~~correct the ~~outbreak which impacted global business operations~~accounting for cash dividends declared on June 3, 2021 and ~~resulted in a Company decision to temporarily close or limit its workforce to essential crews within many facilities throughout~~June 5, 2020 and paid on September 30, 2021 and 2020.

The revision had no impact on the ~~world in order to ensure employee safety. In addition, the Company's non-essential employees were instructed to work from home in compliance with global government stay-in-place protocols.~~

The Company has 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, the Company began to reopen facilities while maintaining appropriate health and safety precautions. However, the challenges in connection with the pandemic continued as the Company experienced lower volume which negatively impacted revenue, supply chain disruptions and unfavorable foreign currency exchange rate movements. In response, the Company proactively initiated cost cutting actions in an effort to mitigate the impactCompany’s Condensed Consolidated Statements of the pandemic on its business. This included reducing discretionary spending, suspending its share repurchase program, restricting travel, delaying merit increases and implementing employee furloughs in certain markets.

~~The Company continues to navigate the new realities brought about by the COVID-19 global pandemic. Despite these challenges, all production facilities remain open~~Cash Flows for any period and the Company continues to sell, install and service its products. During the third quarter, the Company did not experience any major disruptions in its supply chain and continued to focus on health and safety precautions to protect its employees and customers. In addition, the Company intends to move forward with several restorative actions that include the reinstatement of annual merit increases and the execution of its balanced capital allocation strategy.

~~The preparation of financial statements requires management to use judgments in making estimates and assumptions based~~revision had no impact 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 the Company's best estimatesending Retained Earnings balance as of September 30, ~~2020 (including as it relates to the actual~~2021 and potential future impacts of the global pandemic) with respect to the recoverability of its assets, including its 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, while the Company's 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.September 30, 2020.

Note 2. Completion of Reverse Morris Trust Transaction

On February 29, 2020 (Distribution Date), the Company completed its Reverse Morris Trust transaction (the Transaction) with Gardner Denver Holdings, Inc. (Gardner Denver) whereby the Company separated its 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~~Ingersoll Rand Inc. (Ingersoll Rand). Upon close of the Transaction, the Company’s existing shareholders received 50.1% of the shares of ~~Gardner Denver~~Ingersoll Rand common stock on a fully-diluted basis and Gardner Denver stockholders retained 49.9% of the shares of ~~Gardner Denver~~Ingersoll Rand on a fully diluted basis. As a result, the Company’s shareholders received .8824 shares of ~~Gardner Denver~~Ingersoll Rand 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 the Company. 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.~~Ingersoll Rand.

During the nine months ended September 30, 2021, the Company paid Ingersoll Rand $49.5 million to settle certain items related to the Transaction. The Company recorded the $49.5 million settlement as a reduction to

Retained earnings during the first quarter of 2021. This payment was related to working capital, cash and indebtedness amounts as of the Distribution Date, as well as funding levels related to pension plans, non-qualified deferred compensation plans and retiree health benefits.

Discontinued Operations

After the Distribution Date, the Company does not beneficially own any Ingersoll Rand Industrial shares of common stock and ~~will~~ no longer ~~consolidate~~consolidates Ingersoll Rand Industrial in its financial statements. In accordance with GAAP, the historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Condensed Consolidated ~~Statement~~Statements of ~~Comprehensive~~ Income (Loss) and Condensed Consolidated ~~Statement~~Statements of Cash Flows. In addition, the assets and liabilities of Ingersoll Rand Industrial have been recast to held-for-sale at December 31, 2019. In connection with the Transaction, the Company entered into several agreements with Gardner Denver 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 Company 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.

Note 3. Recent Accounting Pronouncements

The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update (ASU) to communicate changes to the codification. The Company considers the applicability and impact of all ASU's. ASU's not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the Condensed Consolidated Financial Statements.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract" (ASU 2018-15), which aligns the requirements for capitalizing implementation costs in a cloud-computing arrangement service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. In addition, the guidance also clarifies the presentation requirements for reporting such costs in the financial statements. ASU 2018-15 is effective for annual reporting periods beginning after December 15, 2019 with early adoption permitted. The Company adopted this standard on January 1, 2020 on a prospective basis with no material impact on its financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses” (ASU 2016-13) which changes the impairment model for most financial assets and certain other instruments from an incurred loss model to an expected loss model. In addition, the guidance also requires incremental disclosures regarding allowances and credit quality indicators. ASU 2016-13 is required to be adopted using the modified-retrospective approach and is effective in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard on January 1, 2020 with no material impact on its financial statements.

~~Recently Issued Accounting Pronouncements~~

In December 2019, the FASB issued ASU 2019-12, ~~“Income~~"Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" (ASU 2019-12), which simplifies certain aspects of income tax accounting guidance in ASC 740, reducing the complexity of its application. Certain exceptions to ASC 740 presented within the ASU include: intraperiod tax allocation, deferred tax liabilities related to outside basis differences and year-to-date loss in interim periods, among others. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020 including interim periods therein with early adoption permitted. The Company ~~does not expect~~adopted this ~~ASU to have a~~standard on January 1, 2021 with no material impact on its financial statements.

Note 4. Inventories

Depending on the business, U.S. inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method or the lower of cost ~~or market~~and net realizable value (NRV) using the first-in, first-out (FIFO) method. Non-U.S. inventories are primarily stated at the lower of cost ~~or market~~and NRV using the FIFO method.

The major classes of inventory were as follows:


In millions	In millions	September 30, 2020		December 31, 2019		In millions	September 30, 2021		December 31, 2020
Raw materials	Raw materials	$	318.1	$	333.5	Raw materials	$	417.2	$	305.0
Work-in-process	Work-in-process	181.3		173.7		Work-in-process	204.8		163.9
Finished goods	Finished goods	770.1		804.9		Finished goods	913.1		761.4
		1,269.5		1,312.1			1,535.1		1,230.3
LIFO reserve	LIFO reserve	(40.3)		(33.5)		LIFO reserve	(52.3)		(41.1)
Total	Total	$	1,229.2	$	1,278.6	Total	$	1,482.8	$	1,189.2

The Company performs periodic assessments to determine the existence of obsolete, slow-moving and non-saleable inventories and records necessary provisions to reduce such inventories to ~~net realizable value.~~NRV. Reserve balances, primarily related to obsolete and slow-moving inventories, were ~~$80.0~~$85.4 million and ~~$66.1~~$85.6 million at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Note 5. Goodwill

The Company records goodwill as the excess of the purchase price over the fair value of the net assets acquired in a business combination. Measurement period adjustments may be recorded once a final valuation has been performed. Goodwill is tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the reporting unit may be less than its carrying value.

In connection with the new organizational model and business segment structure, the Company performed a goodwill impairment assessment immediately prior to the reorganization becoming effective, the results of which did not indicate any goodwill impairment. The Company then reassigned its goodwill between the newly designated reporting units using a relative fair value approach. Subsequent to the reassignment, the Company performed a second goodwill impairment assessment under the new reporting structure, the results of which also did not indicate any goodwill impairment.

~~The reassigned amounts of goodwill as of December 31, 2019 and the~~ changes in the carrying amount of goodwill for the nine months ended September 30, ~~2020~~2021 were as follows:

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

~~(1)~~ ~~Refer to Note 21, "Commitments and Contingencies", for more information regarding the Chapter 11 bankruptcy and asbestos-related matters.~~


In millions	Americas		EMEA		Asia Pacific		Total
Net balance as of December 31, 2020	$	3,980.0	$	793.5	$	569.3	$	5,342.8
Acquisitions	2.7		4.2		—		6.9

Currency translation	(0.7)		(41.4)		2.5		(39.6)
Net balance as of September 30, 2021	$	3,982.0	$	756.3	$	571.8	$	5,310.1

The net goodwill balances at September 30, ~~2020~~2021 and December 31, ~~2019~~2020 include $2,496.0 million of accumulated ~~impairment.~~impairment, primarily related to the Americas segment. The accumulated impairment relates entirely to a charge recorded in 2008.

Note 6. Intangible Assets

Indefinite-lived intangible assets are tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset may be less than the carrying amount of the asset. All other intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives.

The gross amount of the Company’s intangible assets and related accumulated amortization were as follows:


		September 30, 2020						December 31, 2019							September 30, 2021						December 31, 2020
In millions	In millions	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount		In millions	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Customer relationships	Customer relationships	$	1,925.1	$	(1,326.5)	$	598.6	$	1,928.5	$	(1,239.2)	$	689.3	Customer relationships	$	2,007.2	$	(1,446.1)	$	561.1	$	2,010.2	$	(1,362.4)	$	647.8
Patents		166.4		(166.0)		0.4		171.8		(169.7)		2.1
Other	Other	41.0		(34.1)		6.9		40.4		(33.7)		6.7		Other	210.7		(199.7)		11.0		210.7		(199.4)		11.3
Total finite-lived intangible assets	Total finite-lived intangible assets	2,132.5		(1,526.6)		605.9		2,140.7		(1,442.6)		698.1		Total finite-lived intangible assets	2,217.9		(1,645.8)		572.1		2,220.9		(1,561.8)		659.1
Trademarks (indefinite-lived)	Trademarks (indefinite-lived)	2,627.1		—		2,627.1		2,625.5		—		2,625.5		Trademarks (indefinite-lived)	2,626.3		—		2,626.3		2,627.3		—		2,627.3
Total	Total	$	4,759.6	$	(1,526.6)	$	3,233.0	$	4,766.2	$	(1,442.6)	$	3,323.6	Total	$	4,844.2	$	(1,645.8)	$	3,198.4	$	4,848.2	$	(1,561.8)	$	3,286.4

Intangible asset amortization expense was ~~$29.9~~$29.0 million and ~~$29.1~~$29.9 million for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Intangible asset amortization expense was ~~$89.8~~$90.7 million and ~~$87.3~~$89.8 million for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Note 7. Debt and Credit Facilities

Short-term borrowings and current maturities of long-term debt consisted of the following:


In millions	In millions	September 30, 2020		December 31, 2019		In millions	September 30, 2021		December 31, 2020
Debentures with put feature	Debentures with put feature	$	343.0	$	343.0	Debentures with put feature	$	342.9	$	342.9

2.625% Senior notes due 2020 (1)		0		299.8
2.900% Senior notes due 2021 (2)		299.6		0
9.000% Debentures due 2021 (3)		125.0		0
2.900% Senior notes due 2021 (1)						2.900% Senior notes due 2021 (1)	—		299.9
9.000% Debentures due 2021 (2)						9.000% Debentures due 2021 (2)	—		125.0

Other current maturities of long-term debt	Other current maturities of long-term debt	7.5		7.5		Other current maturities of long-term debt	7.5		7.8

Total	Total	$	775.1	$	650.3	Total	$	350.4	$	775.6

(1) ~~The 2.625% Senior notes due in May 2020 were redeemed in April 2020.~~

~~(2)~~ The 2.900% Senior notes ~~are due~~were repaid in February 2021.

~~(3)~~(2) The 9.000% Debentures ~~are due~~were repaid in August 2021.

Commercial Paper Program

The Company uses borrowings under its commercial paper program for general corporate purposes. The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $2.0 billion. The Company had 0no outstanding balance under its commercial paper program as of September 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

Debentures with Put Feature

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had ~~$343.0~~$342.9 million of fixed rate debentures outstanding which contain a put feature that the holders may exercise on each anniversary of the issuance date. If exercised, the Company is obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount of the debentures plus accrued interest. If these options are not exercised, the final contractual maturity dates would range between 2027 and 2028. Holders of these debentures had the option to exercise the put feature on $37.2 million of the outstanding debentures in February ~~2020,~~2021, subject to the notice requirement. No exercises were made.

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


In millions	In millions	September 30, 2020		December 31, 2019		In millions	September 30, 2021		December 31, 2020
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	4.250% Senior notes due 2023	698.3		697.8		4.250% Senior notes due 2023	$	698.9	$	698.4
7.200% Debentures due 2020-2025		29.9		37.3
7.200% Debentures due 2021-2025						7.200% Debentures due 2021-2025	22.4		29.9
3.550% Senior notes due 2024	3.550% Senior notes due 2024	497.1		496.6		3.550% Senior notes due 2024	497.8		497.3
6.480% Debentures due 2025	6.480% Debentures due 2025	149.7		149.7		6.480% Debentures due 2025	149.7		149.7
3.500% Senior notes due 2026	3.500% Senior notes due 2026	397.2		396.8		3.500% Senior notes due 2026	397.7		397.3
3.750% Senior notes due 2028	3.750% Senior notes due 2028	545.5		545.1		3.750% Senior notes due 2028	546.1		545.6
3.800% Senior notes due 2029	3.800% Senior notes due 2029	744.1		743.6		3.800% Senior notes due 2029	744.9		744.4
5.750% Senior notes due 2043	5.750% Senior notes due 2043	494.7		494.5		5.750% Senior notes due 2043	494.9		494.7
4.650% Senior notes due 2044	4.650% Senior notes due 2044	296.0		295.9		4.650% Senior notes due 2044	296.2		296.1
4.300% Senior notes due 2048	4.300% Senior notes due 2048	296.1		296.0		4.300% Senior notes due 2048	296.3		296.2
4.500% Senior notes due 2049	4.500% Senior notes due 2049	345.6		345.5		4.500% Senior notes due 2049	345.8		345.7
Other loans and notes	Other loans and notes	0		0.1		Other loans and notes	—		1.2
Total	Total	$	4,494.2	$	4,922.9	Total	$	4,490.7	$	4,496.5

~~(1)~~ ~~The 2.900% Senior notes are due 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 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 Trane Technologies plc, Trane Technologies Irish Holdings Unlimited Company, Trane Technologies Lux International Holding Company S.à.r.l, Trane Technologies Global Holding Company Limited, Trane Technologies HoldCo Inc. and 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.

Other Credit Facilities

On June ~~4, 2020,~~18, 2021, the Company entered into a new $1.0 billion senior unsecured revolving credit facility which matures in ~~March 2022~~June 2026 (2026 Credit Facility) and terminated its $1.0 billion facility set to expire in March ~~2021.~~2022. On September 24, 2021, the Company amended its other $1.0 billion senior unsecured revolving credit facility which matures in April 2023 (2023 Credit Facility) primarily to conform the interest rate provisions in the 2023 Credit Facility to the terms included in the 2026 Credit Facility. As a result, the Company maintains two $1.0 billion senior unsecured revolving credit facilities ~~one of which matures in March 2022 and~~(collectively, the ~~other in April 2023 (the~~ Facilities) through its wholly-owned subsidiaries, Trane Technologies HoldCo Inc., Trane Technologies Global Holding Company Limited and Trane Technologies ~~Luxembourg Finance S.A.~~Financing Limited (collectively, the Borrowers). The covenants under the 2026 Credit Facility are substantially the same as the covenants under the 2023 Credit Facility. The terms of the 2026 Credit Facility include Environmental, Social, and Governance (ESG) metrics related to two of the Company’s sustainability commitments: a reduction in greenhouse gas intensity and an increase in the percentage of women in management. The Company's annual performance against these ESG metrics may result in price adjustments to the commitment fee and applicable interest rate.

Each senior unsecured credit facility provides support for the Company's commercial paper program and can be used for working capital and other general corporate purposes. Trane Technologies plc, Trane Technologies Irish Holdings Unlimited Company, Trane Technologies Lux International Holding Company S.à.r.l. and 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 Borrowers. Total commitments of $2.0 billion were unused at September 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

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, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$6.2 billion.~~$5.7 billion and $6.3 billion, respectively. 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, 2020 are the same as those used at December 31, 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~~uses 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 onin the Condensed Consolidated Balance ~~Sheet~~Sheets 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	In millions	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019		In millions	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020
Derivatives designated as hedges:	Derivatives designated as hedges:									Derivatives designated as hedges:
Currency derivatives	Currency derivatives	$	0.4	$	0.1	$	2.8	$	3.9	Currency derivatives	$	0.1	$	0.7	$	2.2	$	1.7

Commodity derivatives										Commodity derivatives	6.6		—		0.1		—

Derivatives not designated as hedges:	Derivatives not designated as hedges:									Derivatives not designated as hedges:
Currency derivatives	Currency derivatives	3.0		1.0		3.5		3.3		Currency derivatives	9.0		1.5		10.2		4.8

Total derivatives	Total derivatives	$	3.4	$	1.1	$	6.3	$	7.2	Total derivatives	$	15.7	$	2.2	$	12.5	$	6.5

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 $0.5 billion at both September 30, ~~2020~~2021 and December 31, ~~2019.~~2020. At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, a net loss of $1.8 million and ~~$2.9~~$0.7 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 net loss of ~~$1.1~~$1.8 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, ~~2020,~~2021, the maximum term of the Company’s currency derivatives was approximately 12 ~~months, except for currency derivatives~~months.

Commodity Derivative Instruments

At September 30, 2021, a net gain of $4.9 million, net of tax, was included in ~~place~~AOCI related to the fair market value of the Company's commodity derivatives designated as accounting hedges. A change in fair value of commodity derivative instruments deemed highly effective is included in AOCI and is reclassified to Cost of Goods Sold in the period the sale of the finished goods inventory containing the commodity impacts Net earnings. The amount expected to be reclassified into Net earnings over the next twelve months is a net gain of $4.9 million. The actual amounts that will be reclassified to Net earnings may vary from this amount as a result of changes in market conditions. At September 30, 2021, the Company has commodity contracts to hedge certain ~~long-term contract.~~forecasted purchases through June 2022.

The Company had the following outstanding contracts to hedge forecasted commodity purchases (in metric tons):


	Volume outstanding as of
Commodity	September 30, 2021	December 31, 2020
Aluminum	12,741	—

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 ~~$5.5~~$4.8 million at September 30, ~~2020~~2021 and ~~$6.0~~$5.3 million at December 31, ~~2019.~~2020. The net deferred gain at September 30, ~~2020~~2021 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 0no forward-starting interest rate swaps or interest rate lock contracts outstanding at September 30, ~~2020~~2021 or December 31, ~~2019.~~2020.

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									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	In millions	2020		2019			2020			2019		In millions		2021					2020							2021			2020
Currency derivatives designated as hedges(1)	Currency derivatives designated as hedges(1)	$	1.5	$	(0.5)		Cost of goods sold			$	(0.9)				$	0		Currency derivatives designated as hedges(1)	$	(0.9)			$	1.5		Cost of goods sold			$	7.5			$	(0.9)

Commodity derivatives designated as hedges															Commodity derivatives designated as hedges		6.0				—				Cost of goods sold		0.2				—
Interest rate swaps & locks	Interest rate swaps & locks	0		0		Interest expense		0.2				0.2			Interest rate swaps & locks		—				—				Interest expense		0.2				0.2
Total	Total	$	1.5	$	(0.5)			$	(0.7)			$	0.2		Total		$	5.1			$	1.5					$	7.9			$	(0.7)

(1) Amounts excluded from effectiveness testing and recognized into Cost of goods sold based on changes in fair value and amortization was a gain of $0.9 million and loss of $0.5 million for the three months ended September 30, 2021 and 2020, respectively.

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


			Amount of gain (loss) recognized in Net earnings								Location of gain (loss) recognized in Net earnings		Amount of gain (loss) recognized in Net earnings
In millions	In millions	2020			2019	In millions			2021	Location of gain (loss) recognized in Net earnings			2020
Currency derivatives not designated as hedges			$	1.6		$	(0.5)
Currency derivatives - continuing								Currency derivatives - continuing				Other income (expense), net			$	0.9			$	1.6

Total	Total		$	1.6		$	(0.5)	Total					$	0.9			$	1.6

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									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	In millions	2020		2019			2020			2019		In millions		2021					2020							2021			2020
Currency derivatives designated as hedges(1)	Currency derivatives designated as hedges(1)	$	1.7	$	(0.7)		Cost of goods sold			$	(1.6)				$	(1.3)		Currency derivatives designated as hedges(1)	$	(6.2)			$	1.7		Cost of goods sold			$	4.4			$	(1.6)

Commodity derivatives designated as hedges															Commodity derivatives designated as hedges		7.5				—				Cost of goods sold		0.2				—
Interest rate swaps & locks	Interest rate swaps & locks	0		0		Interest expense		0.5				0.5			Interest rate swaps & locks		—				—				Interest expense		0.5				0.5
Total	Total	$	1.7	$	(0.7)			$	(1.1)			$	(0.8)		Total		$	1.3			$	1.7					$	5.1			$	(1.1)

(1) Amounts excluded from effectiveness testing and recognized into Cost of goods sold based on changes in fair value and amortization was a loss of $0.7 million and $1.6 million for the nine months ended September 30, 2021 and 2020, respectively.

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							Location of gain (loss) recognized in Net earnings		Amount of gain (loss) recognized in Net earnings
In millions	In millions	2020			2019	In millions			Location of gain (loss) recognized in Net earnings					2020
Currency derivatives not designated as hedges			$	8.4		$	(4.0)
Currency derivatives - continuing								Currency derivatives - continuing			Other income (expense), net			$	(5.0)			$	8.4
Currency derivatives - discontinued								Currency derivatives - discontinued		Discontinued operations		—				(0.4)

Total	Total		$	8.4		$	(4.0)	Total				$	(5.0)			$	8.0

The gains and losses associated with the Company’s undesignated currency derivatives are materially offset in ~~Other income/(expense), net~~Net earnings 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
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.

1513

Note 9. Fair Value Measurements

~~ASC 820, "Fair Value Measurement," (ASC 820) defines fair~~Fair value asis 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~~The fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability is 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

•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~~Observable market data ~~when available,~~is required to be used in making fair value ~~measurements.~~measurements when available. 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, ~~2020:~~2021:


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

Assets:	Assets:									Assets:
Derivative instruments	Derivative instruments	$	3.4	$	0	$	3.4	$	0	Derivative instruments	$	15.7	$	—	$	15.7	$	—

Liabilities:	Liabilities:									Liabilities:
Derivative instruments	Derivative instruments	$	6.3	$	0	$	6.3	$	0	Derivative instruments	$	12.5	$	—	$	12.5	$	—

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, ~~2019:~~2020:


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

Assets:	Assets:									Assets:
Derivative instruments	Derivative instruments	$	1.1	$	0	$	1.1	$	0	Derivative instruments	$	2.2	$	—	$	2.2	$	—

Liabilities:	Liabilities:									Liabilities:
Derivative instruments	Derivative instruments	$	7.2	$	0	$	7.2	$	0	Derivative instruments	$	6.5	$	—	$	6.5	$	—

Derivative instruments include forward foreign currency contracts and instruments related to non-functional currency balance sheet ~~exposures.~~exposures and commodity swaps. The fair value of the ~~derivative instruments are~~foreign exchange derivatives is 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 fair value of the commodity derivatives is valued under a market approach using published prices, where applicable, or dealer quotes.

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, 2020 are the same as those used at December 31, 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 %

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

The Company accounts for each separate lease component of a contract and its associated non-lease component as a single lease component. In addition, the Company 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:~~

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.

~~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

Note ~~11.~~10. Pensions and Postretirement Benefits Other than Pensions

The Company sponsors several U.S. defined benefit and defined contribution plans covering substantially all of the Company's U.S. employees. Additionally, the Company has many non-U.S. defined benefit and defined contribution plans covering eligible non-U.S. employees. Postretirement benefits other than pensions (OPEB) provide healthcare benefits, and in some instances, life insurance benefits for certain eligible employees.

Pension Plans

The noncontributory defined benefit pension plans covering non-collectively bargained U.S. employees provide benefits on a final average pay formula while plans for most collectively bargained U.S. employees provide benefits on a flat dollar benefit formula or a percentage of pay formula. The non-U.S. pension plans generally provide benefits based on earnings and years of service. The Company also maintains additional other supplemental plans for officers and other key or highly compensated employees.

In connection with completion of the Transaction, the Company transferred certain pension obligations for current and former employees of Ingersoll Rand Industrial to Gardner Denver. The transfer of these obligations reduced pension liabilities by $488.7 million, pension assets by $351.3 million and AOCI by $114.2 million.

The components of the Company’s net periodic pension benefit cost for the three and nine months ended September 30 were as follows:


		Three months ended				Nine months ended					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Service cost	Service cost	$	10.3	$	19.0	$	44.0	$	55.2	Service cost	$	12.6	$	10.3	$	38.2	$	44.0
Interest cost	Interest cost	20.2		29.7		63.2		89.3		Interest cost	14.7		20.2		44.0		63.2
Expected return on plan assets	Expected return on plan assets	(29.8)		(34.6)		(91.3)		(103.8)		Expected return on plan assets	(26.5)		(29.8)		(79.7)		(91.3)
Net amortization of:	Net amortization of:									Net amortization of:
Prior service costs	Prior service costs	1.3		1.2		4.0		3.6		Prior service costs	1.3		1.3		3.8		4.0
Net actuarial (gains) losses	Net actuarial (gains) losses	11.4		14.0		33.0		40.7		Net actuarial (gains) losses	8.9		11.4		26.8		33.0
Net periodic pension benefit cost	Net periodic pension benefit cost	$	13.4	$	29.3	$	52.9	$	85.0	Net periodic pension benefit cost	$	11.0	$	13.4	$	33.1	$	52.9
Net curtailment and settlement (gains) losses	Net curtailment and settlement (gains) losses	(0.1)		0.8		(3.7)		2.4		Net curtailment and settlement (gains) losses	—		(0.1)		6.9		(3.7)
Net periodic pension benefit cost after net curtailment and settlement (gains) losses	Net periodic pension benefit cost after net curtailment and settlement (gains) losses	$	13.3	$	30.1	$	49.2	$	87.4	Net periodic pension benefit cost after net curtailment and settlement (gains) losses	$	11.0	$	13.3	$	40.0	$	49.2
Amounts recorded in continuing operations:	Amounts recorded in continuing operations:									Amounts recorded in continuing operations:	0		0		0		0
Operating income	Operating income	$	9.2	$	14.7	$	38.7	$	43.2	Operating income	$	11.8	$	9.2	$	35.5	$	38.7
Other income/(expense), net	Other income/(expense), net	3.7		8.0		6.8		23.1		Other income/(expense), net	(1.8)		3.7		1.4		6.8
Amounts recorded in discontinued operations	Amounts recorded in discontinued operations	0.4		7.4		3.7		21.1		Amounts recorded in discontinued operations	1.0		0.4		3.1		3.7
Total	Total	$	13.3	$	30.1	$	49.2	$	87.4	Total	$	11.0	$	13.3	$	40.0	$	49.2

The Company made contributions to its defined benefit pension plans of ~~$90.5~~$47.1 million and ~~$59.3~~$90.5 million during the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The ~~current year~~2020 contribution ~~includes~~included $24.4 million to fund Ingersoll Rand Industrial plans prior to the completion of the ~~Transaction.~~Transaction which was included within Net cash provided by (used in) discontinued operating activities on the Condensed Consolidated Statements of Cash Flows. The Company currently projects that it will contribute a total of approximately ~~$99~~$57 million to its enterprise plans worldwide in ~~2020.~~

2021.

Postretirement Benefits Other Than Pensions

The Company sponsors several postretirement plans that provide for healthcare benefits, and in some instances, life insurance benefits that cover certain eligible employees. These plans are unfunded and have no plan assets, but are instead funded by the Company on a pay-as-you-go basis in the form of direct benefit payments. Generally, postretirement health benefits are contributory with contributions adjusted annually. Life insurance plans for retirees are primarily noncontributory.

In connection with the completion of the Transaction, the Company transferred certain postretirement benefit obligations for current and former employees of Ingersoll Rand Industrial to Gardner Denver. The transfer of these obligations reduced postretirement plan liabilities by $29.8 million and increased AOCI by $4.1 million.

The components of net periodic postretirement benefit cost for the three and nine months ended September 30 were as follows:


		Three months ended				Nine months ended					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Service cost	Service cost	$	0.7	$	0.8	$	1.8	$	2.0	Service cost	$	0.6	$	0.7	$	1.6	$	1.8
Interest cost	Interest cost	2.4		3.3		7.4		11.1		Interest cost	1.3		2.4		4.1		7.4
Net amortization of:
Prior service gains		0		(0.1)		0		(0.3)
Net actuarial (gains) losses		(2.2)		(5.0)		(4.3)		(8.2)

Net amortization of net actuarial (gains) losses										Net amortization of net actuarial (gains) losses	(0.5)		(2.2)		(1.5)		(4.3)
Net periodic postretirement benefit cost	Net periodic postretirement benefit cost	$	0.9	$	(1.0)	$	4.9	$	4.6	Net periodic postretirement benefit cost	$	1.4	$	0.9	$	4.2	$	4.9
Amounts recorded in continuing operations:	Amounts recorded in continuing operations:									Amounts recorded in continuing operations:	0		0		0		0
Operating income	Operating income	$	0.7	$	0.7	$	1.8	$	1.9	Operating income	$	0.6	$	0.7	$	1.6	$	1.8
Other income/(expense), net	Other income/(expense), net	0.3		(0.9)		2.3		2.1		Other income/(expense), net	0.6		0.3		1.9		2.3
Amounts recorded in discontinued operations	Amounts recorded in discontinued operations	(0.1)		(0.8)		0.8		0.6		Amounts recorded in discontinued operations	0.2		(0.1)		0.7		0.8
Total	Total	$	0.9	$	(1.0)	$	4.9	$	4.6	Total	$	1.4	$	0.9	$	4.2	$	4.9

Note ~~12.~~11. Equity

The authorized share capital of Trane Technologies plc is 1,185,040,000 shares, consisting of (1) 1,175,000,000 ordinary shares, par value $1.00 per share, (2) 40,000 ordinary shares, par value EUR 1.00 and (3) 10,000,000 preference shares, par value $0.001 per share. There were 0no Euro-denominated ordinary shares or preference shares outstanding at September 30, ~~2020~~2021 or December 31, ~~2019.~~2020.

Changes in ordinary shares and treasury shares for the nine months ended September 30, ~~2020~~2021 were as follows:


In millions	In millions	Ordinary shares issued	Ordinary shares held in treasury	In millions	Ordinary shares issued	Ordinary shares held in treasury
December 31, 2019		262.8	24.5
December 31, 2020				December 31, 2020	263.3	24.5
Shares issued under incentive plans, net	Shares issued under incentive plans, net	1.7	0	Shares issued under incentive plans, net	2.1	—

September 30, 2020		264.5	24.5
Repurchase of ordinary shares				Repurchase of ordinary shares	(3.4)	—
September 30, 2021				September 30, 2021	262.0	24.5

Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. Shares acquired and ~~cancelled~~canceled upon repurchase are accounted for as a reduction of Ordinary Shares and Capital in excess of par value,, or Retained earnings to the extent Capital in excess of par value is exhausted. Shares acquired and held in treasury are presented separately on the balance sheet as a reduction to Equity and recognized at cost. In October 2018, the Company's Board of Directors authorized the repurchase of up to $1.5 billion of its ordinary shares under a share repurchase program (2018 Authorization). In February 2021, the Company's Board of Directors authorized the repurchase of up to $2.0 billion of its ordinary shares under a new share repurchase program (2021 Authorization) upon completion of the ~~prior authorized share repurchase program.~~2018 Authorization. During the nine months ended September 30, ~~2020, 0 amounts were~~2021, the Company repurchased ~~or cancelled~~and canceled $600.2 million of its ordinary shares thus completing the 2018 Authorization and initiating repurchases under the 2021 Authorization of $100.2 million of its ordinary shares leaving approximately ~~$750 million~~$1.9 billion remaining under the ~~2018 Authorization at September 30, 2020.~~

2021 Authorization.

Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated other comprehensive income (loss) for the nine months ended September 30, ~~2020~~2021 were as follows:

In millions Derivative Instruments Pension and OPEB Foreign Currency Translation Total
Balance at December 31, 2019 $ 5.6 $ (457.4) $ (554.8) $ (1,006.6)
Other comprehensive income (loss) before reclassifications 1.7 (28.0) 105.3 79.0
Amounts reclassified from AOCI 1.1 32.7 0 33.8
Separation of Ingersoll Rand Industrial, net of tax 0 69.1 70.2 139.3
Benefit (provision) for income taxes 0.4 (6.9) 0 (6.5)
Net current period other comprehensive income (loss) $ 3.2 $ 66.9 $ 175.5 $ 245.6
Balance at September 30, 2020 $ 8.8 $ (390.5) $ (379.3) $ (761.0)


In millions	Derivative Instruments		Pension and OPEB		Foreign Currency Translation		Total
Balance at December 31, 2020	$	10.8	$	(416.5)	$	(225.8)	$	(631.5)
Other comprehensive income (loss) attributable to Trane Technologies plc	(1.9)		23.8		(99.6)		(77.7)
Balance at September 30, 2021	$	8.9	$	(392.7)	$	(325.4)	$	(709.2)

The changes in Accumulated other comprehensive income (loss) for the nine months ended September 30, ~~2019~~2020 were as follows:

In millions Derivative Instruments Pension and OPEB Foreign Currency Translation Total
Balance at December 31, 2018 $ 6.7 $ (454.0) $ (516.8) $ (964.1)
Other comprehensive income (loss) before reclassifications (0.7) 7.1 (140.4) (134.0)
Amounts reclassified from AOCI 0.8 35.8 0 36.6
Benefit (provision) for income taxes 0.1 (8.4) 0 (8.3)
Net current period other comprehensive income (loss) $ 0.2 $ 34.5 $ (140.4) $ (105.7)
Balance at September 30, 2019 $ 6.9 $ (419.5) $ (657.2) $ (1,069.8)


In millions	Derivative Instruments		Pension and OPEB		Foreign Currency Translation		Total
Balance at December 31, 2019	$	5.6	$	(457.4)	$	(554.8)	$	(1,006.6)
Other comprehensive income (loss) attributable to Trane Technologies plc	3.2		(2.2)		105.3		106.3
Separation of Ingersoll Rand Industrial, net of tax	—		69.1		70.2		139.3
Balance at September 30, 2020	$	8.8	$	(390.5)	$	(379.3)	$	(761.0)

Note ~~13.~~12. Revenue

The Company recognizes revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of the Company's revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of the Company's revenues are recognized over time as the customer simultaneously receives control as the Company performs work under a contract. For these arrangements, the cost-to-cost input method is used as it best depicts the transfer of control to the customer that occurs as the Company incurs costs.

Disaggregated Revenue

Net revenues by geography and major type of good or service for the three and nine months ended September 30 were as follows:


		Three months ended				Nine months ended					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Americas	Americas									Americas
Equipment	Equipment	$	1,837.0	$	1,810.2	$	4,893.6	$	5,291.3	Equipment	$	1,878.6	$	1,837.0	$	5,458.0	$	4,893.6
Services and parts	Services and parts	908.8		897.3		2,406.4		2,394.2		Services and parts	1,031.7		908.8		2,749.6		2,406.4

Total Americas	Total Americas	$	2,745.8	$	2,707.5	$	7,300.0	$	7,685.5	Total Americas	$	2,910.3	$	2,745.8	$	8,207.6	$	7,300.0
EMEA	EMEA									EMEA
Equipment	Equipment	$	295.6	$	302.1	$	792.6	$	873.7	Equipment	$	322.7	$	295.6	$	996.7	$	792.6
Services and parts	Services and parts	149.6		154.2		390.1		415.7		Services and parts	172.3		149.6		465.4		390.1
Total EMEA	Total EMEA	$	445.2	$	456.3	$	1,182.7	$	1,289.4	Total EMEA	$	495.0	$	445.2	$	1,462.1	$	1,182.7
Asia Pacific	Asia Pacific									Asia Pacific
Equipment	Equipment	$	208.6	$	213.7	$	545.5	$	645.2	Equipment	$	218.9	$	208.6	$	619.7	$	545.5
Services and parts	Services and parts	95.9		93.4		247.4		272.1		Services and parts	95.6		95.9		277.7		247.4
Total Asia Pacific	Total Asia Pacific	$	304.5	$	307.1	$	792.9	$	917.3	Total Asia Pacific	$	314.5	$	304.5	$	897.4	$	792.9

Total Net revenues	Total Net revenues	$	3,495.5	$	3,470.9	$	9,275.6	$	9,892.2	Total Net revenues	$	3,719.8	$	3,495.5	$	10,567.1	$	9,275.6

Revenue from goods and services transferred to customers at a point in time accounted for approximately 81% ~~and 83%~~ of the Company's revenue for both the nine months ended September 30, ~~2020~~2021 and ~~2019, respectively.~~2020.

Contract Balances

The opening and closing balances of contract assets and contract liabilities arising from contracts with customers for the period ended September 30, ~~2020~~2021 and December 31, ~~2019~~2020 were as follows:


In millions	In millions	September 30, 2020		December 31, 2019		In millions	September 30, 2021		December 31, 2020

Contract assets	Contract assets	$	231.5	$	172.6	Contract assets	$	366.7	$	255.4
Contract liabilities	Contract liabilities	1,027.6		941.9		Contract liabilities	1,179.0		1,077.0

The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance ~~Sheet.~~Sheets. In general, the Company receives payments from customers based on a billing schedule established in its contracts. Contract assets relate to the conditional right to consideration for any completed performance under the contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities relate to payments received in advance of performance under the contract or when the Company has a right to consideration that is unconditional before it transfers a good or service to the customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. During the three and nine months ended September 30, ~~2020,~~2021, changes in contract asset and liability balances were not materially impacted by any other factors.

Approximately 9% and ~~50%~~47% of the contract liability balance at December 31, ~~2019~~2020 was recognized as revenue during the three and nine months ended September 30, ~~2020,~~2021, respectively. Additionally, approximately ~~40%~~38% of the contract liability balance at September 30, ~~2020~~2021 was classified as noncurrent and not expected to be recognized as revenue in the next 12 months.

Note ~~14.~~13. Share-Based Compensation

The Company accounts for stock-based compensation plans in accordance with ASC 718, "Compensation - Stock Compensation" (ASC 718), which requires a fair-value based method for measuring the value of stock-based compensation. Fair value is measured once at the date of grant and is not adjusted for subsequent changes. The Company’s share-based compensation plans include programs for stock options, restricted stock units (RSUs), performance share units (PSUs) and deferred compensation.

In connection with the completion of the Transaction, the provisions of the Company's existing share-based compensation plans required adjustment to the terms of outstanding awards in order to preserve the intrinsic value of the awards immediately before and after the separation. The outstanding awards ~~will~~ continue to vest over the original vesting period, which is generally three years from the grant date.

~~The stock awards held as of February 29, 2020 were adjusted as follows:~~

•~~Vested stock options -~~ ~~Outstanding stock options that were vested and exercisable at~~ At the time of the transaction were converted into vested and exercisable stock options of the Company. The number of underlying shares and exercise price for each award was adjusted to preserve the overall intrinsic value of the awards immediately prior to the separation.

•~~Unvested stock options -~~ Unvested stock options held at the time of the transaction were converted into stock options of the participants employer following the separation. The number of underlying shares and exercise price for each award was adjusted to preserve the overall intrinsic value of the awards immediately prior to the separation.

•~~Restricted stock units -~~ Outstanding RSUs held at the time of the transaction were converted into RSUs of the participants employer following the separation. The number of underlying shares was adjusted to preserve the overall intrinsic value of the awards immediately prior to the separation.

•~~Performance share units -~~ Active and outstanding PSU awards held at the time of the transaction were converted into active and outstanding PSUs of the Company. Post-transaction, the Company's employees will continue to participate in the plan at target levels with payout based on actual performance at the end of the respective three-year performance period for each award. Post-transaction, Ingersoll Rand Industrial employees will continue to participate in the plan with the target number of PSUs prorated based on the portion of the performance cycle completed as of the transaction date with payout based on actual performance at the end of the respective three year performance period for each award. The number of underlying shares was adjusted to preserve the overall intrinsic value of the awards immediately prior to the separation.

Per ASC 718, an adjustment to the terms of a stock-based compensation award to preserve its value after an equity restructuring may result in significant incremental compensation cost if there was no requirement to make such an adjustment based on the awards existing terms. The Company reviewed the provisions of its existing share-based compensation plans and determined the Transaction required modification to the terms of outstanding awards. As a result,Distribution Date, the Company incurred less than $0.1 million of incremental compensation costs atrelated to the ~~date~~preservation of the ~~Transaction.~~stock-based compensation intrinsic value post-separation.

Compensation Expense

Share-based compensation expense related to continuing operations is included in Selling and administrative expenses. The expense recognized for the three and nine months ended September 30 was as follows:


		Three months ended				Nine months ended					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Stock options	Stock options	$	2.6	$	2.9	$	15.7	$	17.5	Stock options	$	2.9	$	2.6	$	14.7	$	15.7
RSUs	RSUs	3.4		4.1		20.6		22.9		RSUs	3.6		3.4		19.0		20.6
Performance shares	Performance shares	5.7		5.8		20.1		12.7		Performance shares	5.8		5.7		17.4		20.1
Deferred compensation	Deferred compensation	1.1		0.8		2.9		2.3		Deferred compensation	0.8		1.1		2.4		2.9
Other (1)	Other (1)	2.6		(0.2)		1.4		2.7		Other (1)	(0.7)		2.6		2.4		1.4
Pre-tax expense	Pre-tax expense	15.4		13.4		60.7		58.1		Pre-tax expense	12.4		15.4		55.9		60.7
Tax benefit	Tax benefit	(3.7)		(3.3)		(14.7)		(14.1)		Tax benefit	(3.0)		(3.7)		(13.5)		(14.7)
After-tax expense	After-tax expense	$	11.7	$	10.1	$	46.0	$	44.0	After-tax expense	$	9.4	$	11.7	$	42.4	$	46.0
Amounts recorded in continuing operations	Amounts recorded in continuing operations	11.5		8.3		44.5		38.0		Amounts recorded in continuing operations	9.4		11.5		42.4		44.5
Amounts recorded in discontinued operations	Amounts recorded in discontinued operations	0.2		1.8		1.5		6.0		Amounts recorded in discontinued operations	—		0.2		—		1.5
Total	Total	$	11.7	$	10.1	$	46.0	$	44.0	Total	$	9.4	$	11.7	$	42.4	$	46.0

(1) Includes certain plans that have a market-based component.

Grants issued during the nine months ended September 30 were as follows:


		2020			2019				2021			2020
		Number granted	Weighted- average fair value per award		Number granted	Weighted- average fair value per award			Number granted	Weighted- average fair value per award		Number granted	Weighted- average fair value per award
Stock options	Stock options	1,020,535	$	16.75	1,285,257	$	17.17	Stock options	582,657	$	29.55	1,020,535	$	16.75
RSUs	RSUs	211,307	$	104.09	265,964	$	102.81	RSUs	149,214	$	153.53	211,307	$	104.09
Performance shares (1)	Performance shares (1)	278,468	$	140.72	311,158	$	111.04	Performance shares (1)	283,412	$	181.71	278,468	$	140.72

(1) The number of performance shares represents the maximum award level.

For stock options, RSUs and PSUs granted prior to the completion of the Transaction, the number granted and weighted average fair value reflect historical information.

Stock Options / RSUs

Eligible participants may receive (i) stock options, (ii) RSUs or (iii) a combination of both stock options and RSUs. The fair value of each of the Company’s stock option and RSU awards is expensed on a straight-line basis over the required service period, which is generally the 3-year vesting period. However, for stock options and RSUs granted to retirement eligible employees, the Company recognizes an expense for the entire fair value at the grant date.

The average fair value of the stock options granted is determined using the Black-Scholes option-pricing model. The following assumptions were used during the nine months ended September 30:


		2020		2019			2021		2020
Dividend yield	Dividend yield	2.01	%	2.06	%	Dividend yield	1.60	%	2.01	%
Volatility	Volatility	24.33	%	21.46	%	Volatility	27.90	%	24.33	%
Risk-free rate of return	Risk-free rate of return	0.56	%	2.46	%	Risk-free rate of return	0.45	%	0.56	%
Expected life in years	Expected life in years	4.8		4.8		Expected life in years	4.8		4.8

A description of the significant assumptions used to estimate the fair value of the stock option awards is as follows:

•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.

•Volatility - The expected volatility is based on a weighted average of the Company’s implied volatility and the most recent historical volatility of the Company’s stock commensurate with the expected life.

•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 in years - 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 cancelled 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.

Performance Shares

The Company has a Performance Share Program (PSP) for key employees. The program provides awards in the form of PSUs based on performance against pre-established objectives. The annual target award level is expressed as a number of the Company's ordinary shares based on the fair market value of the Company's stock on the date of grant. All PSUs are settled in the form of ordinary shares.

Beginning with the 2018 grant year, PSU awards are earned based 50% upon a performance condition, measured by relative Cash Flow Return on Invested Capital (CROIC) to the S&P 500 Industrials Index over a 3-year performance period, and 50% upon a market condition, measured by the Company's relative total shareholder return (TSR) as compared to the TSR of the S&P 500 Industrials Index over a 3-year performance period. The fair value of the market condition is estimated using a Monte Carlo Simulation approach in a risk-neutral framework based upon historical volatility, risk-free rates and correlation matrix. Awards granted prior to 2018 were earned based 50% upon a performance condition, measured by relative EPS growth as

compared to the industrial group of companies in the S&P 500 Index over a 3-year performance period, and 50% upon a market condition, measured by the Company's relative TSR as compared to the TSR of the industrial group of companies in the S&P 500 Index over a 3-year performance period.

Deferred Compensation

The Company allows key employees to defer a portion of their eligible compensation into a number of investment choices, including its ordinary share equivalents. Any amounts invested in ordinary share equivalents will be settled in ordinary shares of the Company at the time of distribution.

Note ~~15.~~14. Restructuring Activities

The Company incurs costs associated with announced restructuring initiatives intended to result in improved operating performance, profitability and working capital levels. Actions associated with these initiatives may include workforce reduction, improving manufacturing productivity, realignment of management structures and rationalizing certain assets. The following table details restructuring charges recorded during the three and nine months ended September 30:


		Three months ended				Nine months ended					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Americas	Americas	$	6.6	$	15.4	$	33.2	$	28.3	Americas	$	0.8	$	6.6	$	3.9	$	33.2
EMEA	EMEA	0.7		0.8		7.2		3.6		EMEA	1.1		0.7		2.2		7.2
Asia Pacific	Asia Pacific	0.8		0.4		3.3		3.3		Asia Pacific	1.4		0.8		1.2		3.3
Corporate and Other	Corporate and Other	0.1		0		27.6		0.8		Corporate and Other	4.6		0.1		12.4		27.6
Total	Total	$	8.2	$	16.6	$	71.3	$	36.0	Total	$	7.9	$	8.2	$	19.7	$	71.3

Cost of goods sold	Cost of goods sold	$	3.3	$	14.0	$	21.9	$	27.6	Cost of goods sold	$	1.0	$	3.3	$	3.6	$	21.9
Selling and administrative expenses	Selling and administrative expenses	4.9		2.6		49.4		8.4		Selling and administrative expenses	6.9		4.9		16.1		49.4
Total	Total	$	8.2	$	16.6	$	71.3	$	36.0	Total	$	7.9	$	8.2	$	19.7	$	71.3

The changes in the restructuring reserve for the nine months ended September 30, ~~2020~~2021 were as follows:


In millions	In millions	Americas		EMEA		Asia Pacific		Corporate and Other		Total		In millions	Americas		EMEA		Asia Pacific		Corporate and Other		Total
December 31, 2019		$	11.9	$	2.8	$	9.1	$	1.6	$	25.4
December 31, 2020												December 31, 2020	$	12.6	$	4.3	$	2.0	$	10.6	$	29.5
Additions, net of reversals (1)	Additions, net of reversals (1)	29.2		7.2		3.3		27.6		67.3		Additions, net of reversals (1)	3.9		1.5		1.2		12.4		19.0
Cash paid/other	Cash paid/other	(27.2)		(5.0)		(11.5)		(18.0)		(61.7)		Cash paid/other	(5.5)		(2.2)		(2.0)		(17.7)		(27.4)

September 30, 2020		$	13.9	$	5.0	$	0.9	$	11.2	$	31.0
September 30, 2021												September 30, 2021	$	11.0	$	3.6	$	1.2	$	5.3	$	21.1

(1) Excludes the ~~non-cash costs of asset rationalizations~~accelerated depreciation on buildings and equipment ($~~4.0~~0.7 million).

During the nine months ended September 30, ~~2020,~~2021, costs associated with announced restructuring actions primarily included the following:

•costs related to workforce reductions and reorganization of resources to improve the Company's cost structure and functional transformation initiatives;

•the plan to close a U.S. manufacturing facility and relocate production to another existing U.S. facility announced in 2018; and

•costs related to the reorganization of resources and facilities in response to the completion of the Transaction and separation of Ingersoll Rand ~~Industrial; and~~

•~~the plan to close a U.S. manufacturing facility within the Americas and relocate production to another existing U.S. facility announced in 2018.~~Industrial.

Amounts recognized primarily relate to severance and exit costs. In addition, the Company also includes costs that are directly attributable to the restructuring activity but do not fall into the severance, exit or disposal categories. As of September 30, ~~2020,~~2021, the Company had ~~$31.0~~$21.1 million accrued for costs associated with its ongoing restructuring actions, of which a majority is expected to be paid within one year.

2420

Note ~~16.~~15. Other Income/(Expense), Net

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


		Three months ended				Nine months ended					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Interest income/(loss)	Interest income/(loss)	$	1.9	$	(1.1)	$	3.6	$	0.4	Interest income/(loss)	$	0.8	$	1.9	$	3.0	$	3.6
Exchange gain/(loss)		(2.5)		(4.0)		(8.5)		(9.4)
Other components of net periodic benefit cost		(3.9)		(7.2)		(9.0)		(25.3)

Foreign currency exchange loss										Foreign currency exchange loss	(2.2)		(2.5)		(8.9)		(8.5)
Other components of net periodic benefit credit/(cost)										Other components of net periodic benefit credit/(cost)	1.2		(3.9)		(3.3)		(9.0)
Other activity, net	Other activity, net	0		6.5		21.5		12.6		Other activity, net	(6.7)		—		(4.6)		21.5
Other income/(expense), net	Other income/(expense), net	$	(4.5)	$	(5.8)	$	7.6	$	(21.7)	Other income/(expense), net	$	(6.9)	$	(4.5)	$	(13.8)	$	7.6

Other ~~income /(expense)~~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, the Company includes the components of net periodic benefit ~~cost~~credit/(cost) for pension and post retirement obligations other than the service cost component. Other activity, net primarily includes items associated with certain legal matters, as well as asbestos-related activities. During the three and nine months ended September 30, 2021, the Company recorded a charge of $7.2 million to increase its Funding Agreement liability from asbestos-related activities ~~through the Petition Date.~~of Murray within other activity, net. During the nine months ended September 30, 2020, the Company recorded a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years and a gain of $0.9 million related to the deconsolidation of Murray and its wholly-owned subsidiary ClimateLabs within other activity, net. Refer to Note ~~21,~~20, "Commitments and Contingencies," for more information regarding asbestos-related matters.

Note ~~17.~~16. Income Taxes

The Company accounts for its Provision for income taxes in accordance with ASC 740, "Income Taxes" (ASC 740), which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. For the nine months ended September 30, ~~2020~~2021 and September 30, ~~2019,~~2020, the Company's effective income tax rate was ~~23.2%~~19.2% and ~~16.9%~~23.2%, respectively. The effective income tax rate for the nine months ended September 30, 2021 was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate, partially offset by U.S. state and local taxes. The effective tax rate for the nine months ended September 30, 2020 was higher than the U.S. statutory rate of 21% due to a $37.0 million non-cash charge ~~related~~ to ~~the establishment of~~establish valuation allowances on net deferred tax assets, primarily net operating losses in certain tax jurisdictions as a result of the completion of the Transaction, U.S. state and local taxes and certain non-deductible employee expenses. These amounts were partially offset by excess tax benefits from employee share-based payments, a $3.9 million benefit primarily related to a reduction in valuation allowances on deferred taxes related to net operating losses as a result of a planned restructuring in a non-U.S. tax jurisdiction and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. The impact of the changes in the valuation allowances increased the effective tax rate by 3.4%. The effective tax rate for the nine months ended September 30, 2019 was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments, a reduction in deferred tax asset valuation allowances for certain non-U.S. net deferred tax assets, a reduction in the Company's unrecognized tax benefits due to the settlement of an audit in a major tax jurisdiction 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 and local taxes and certain non-deductible expenses.

Total unrecognized tax benefits as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020 were ~~$64.3~~$66.0 million and ~~$63.7~~$65.4 million, respectively. Although management believes its tax positions and related provisions reflected in the Condensed Consolidated Financial Statements are fully supportable, it recognizes that these tax positions and related provisions may be challenged by various tax authorities. These tax positions and related provisions are reviewed on an ongoing basis and are adjusted as additional facts and information become available, including progress on tax audits, changes in interpretations of tax laws, developments in case law and closing of statute of limitations. To the extent that the ultimate results differ from the original or adjusted estimates of the Company, the effect will be recorded in Provision for income taxes.

The Provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by the Company. In addition, tax authorities periodically review income tax returns filed by the Company and can raise issues regarding its filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which the Company operates. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Belgium, Brazil, Canada, China, France,

Germany, Ireland, Italy, Mexico, Spain, the Netherlands, the United Kingdom and the United States. These examinations on their own, or any subsequent litigation related to the examinations, may result in additional taxes or penalties against the Company. If the ultimate result of these audits differ from original or adjusted estimates, they could have a material impact on the Company’s tax provision. In general, the examination of the Company's U.S. federal tax returns is complete or effectively settled for years prior to 2016. In general, the examination of the Company’s material non-U.S. tax returns is complete or effectively settled for the years prior to 2011, with certain matters prior to 2011 being resolved through appeals and litigation and also unilateral procedures as provided for under double tax treaties.

Note ~~18.~~17. Acquisitions and Divestitures

Acquisitions

On October 15, 2021, the Company acquired 100% of Farrar Scientific Corporation's (Farrar Scientific) assets, including its patented ultra-low temperature control technologies, a development and assembly operation in Marietta, Ohio, and a specialized team of engineers, sales engineers, operators, and technicians. Farrar Scientific is a leader in ultra-low temperature control for biopharmaceutical and other life science applications. The results of Farrar Scientific will be reported within the Americas segment starting in the fourth quarter of 2021.

The Company paid $250.0 million in initial cash consideration and agreed to an additional earnout payment of up to $115.0 million to be paid in 2025, tied to the attainment of key financial targets during the period January 1, 2022 through December 31, 2024. This additional payment, to the extent earned, will be payable in cash. Due to the close proximity of the acquisition date and the Company’s filing of its quarterly report on Form 10-Q for the nine months ended September 30, 2021, the initial accounting for the business combination is still in process, and therefore the Company has not disclosed the information required by ASC 805, Business Combinations. Such information will be included in the Company’s subsequent Form 10-K for the year ended December 31, 2021.

During the fourth quarter of 2020, the Company acquired two independent dealers, reported within the Americas segment, to support the Company's ongoing strategy to expand its distribution network and service area. The aggregate cash paid, net of cash acquired, totaled $182.8 million and was financed through cash on hand. Intangible assets associated with these acquisitions totaled $76.9 million and primarily relate to customer relationships. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $131.8 million. During the nine months ended September 30, 2021, the Company completed the determination of the final allocation of the purchase price with respect to the assets acquired and liabilities assumed.

The fair values of the customer relationship intangible assets were determined using the multi-period excess earnings method based on discounted projected net cash flows associated with the net earnings attributable to the acquired customer relationships. These projected cash flows are estimated over the remaining economic life of the intangible asset and are considered from a market participant perspective. Key assumptions used in estimating future cash flows included projected revenue growth rates and customer attrition rates. The projected future cash flows are discounted to present value using an appropriate discount rate. The customer relationships had a weighted-average useful life of 16 years.

Divestitures

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					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Net revenues	Net revenues	$	0	$	873.4	$	469.8	$	2,555.8	Net revenues	$	—	$	—	$	—	$	469.8
Cost of goods sold	Cost of goods sold	0		(569.2)		(315.8)		(1,728.6)		Cost of goods sold	—		—		—		(315.8)
Selling and administrative expenses	Selling and administrative expenses	(0.3)		(217.5)		(234.4)		(574.9)		Selling and administrative expenses	(1.3)		(0.3)		(0.8)		(234.4)
Operating income		(0.3)		86.7		(80.4)		252.3
Operating income (loss)										Operating income (loss)	(1.3)		(0.3)		(0.8)		(80.4)
Other income/ (expense), net	Other income/ (expense), net	(7.4)		30.6		(50.7)		21.1		Other income/ (expense), net	(17.7)		(7.4)		(31.6)		(50.7)
Pre-tax earnings (loss) from discontinued operations	Pre-tax earnings (loss) from discontinued operations	(7.7)		117.3		(131.1)		273.4		Pre-tax earnings (loss) from discontinued operations	(19.0)		(7.7)		(32.4)		(131.1)
Tax benefit (expense)	Tax benefit (expense)	2.2		(40.2)		10.7		(92.2)		Tax benefit (expense)	5.7		2.2		19.8		10.7
Discontinued operations, net of tax	Discontinued operations, net of tax	$	(5.5)	$	77.1	$	(120.4)	$	181.2	Discontinued operations, net of tax	$	(13.3)	$	(5.5)	$	(12.6)	$	(120.4)

The table above presents the financial statement line items that support amounts included in Discontinued operations, net of tax. For the three and nine months ended September 30, 2021, Other income/(expense), net included a charge of $14.0 million to increase the Company's Funding Agreement liability from asbestos-related activities of Aldrich. For the three and nine months ended September 30, 2020, Selling and administrative expenses included pre-tax Ingersoll Rand Industrial separation costs of $2.3 million and $113.9 million, respectively, which are primarily related to legal, consulting and advisory fees. In addition, for the nine months ended September 30, 2020,, Other income/(expense), net included a loss of $23.6 million related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park. ~~The three and nine months ended September 30, 2019includes $29.0 million and $45.1 million of pre-tax Ingersoll Rand Industrial separation costs within~~ ~~Selling and administrative expenses~~.

Separation of Industrial Segment Businesses

On February 29, 2020, the Company completed the Transaction with ~~Gardner Denver~~Ingersoll Rand whereby the Company separated Ingersoll Rand Industrial which then merged with a wholly-owned subsidiary of ~~Gardner Denver.~~Ingersoll Rand. In accordance with GAAP, the historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Condensed Consolidated ~~Statement~~Statements of ~~Comprehensive~~ Income (Loss) and Condensed Consolidated ~~Statement~~Statements of Cash Flows. ~~In addition, the assets and liabilities of Ingersoll Rand Industrial have been recast to held-for-sale at December 31, 2019.~~

Net revenues and earnings from operations, net of tax of Ingersoll Rand Industrial for the three and nine months ended September 30 were as follows:


		Three months ended				Nine months ended					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Net revenues	Net revenues	$	0	$	873.4	$	469.8	$	2,555.8	Net revenues	$	—	$	—	$	—	$	469.8
Earnings (loss) attributable to Trane Technologies plc	Earnings (loss) attributable to Trane Technologies plc	(0.5)		51.8		(83.0)		162.2		Earnings (loss) attributable to Trane Technologies plc	0.3		(0.5)		4.2		(83.0)
Earnings (loss) attributable to noncontrolling interests	Earnings (loss) attributable to noncontrolling interests	0		0.9		0.9		2.3		Earnings (loss) attributable to noncontrolling interests	—		—		—		0.9
Earnings (loss) from operations, net of tax	Earnings (loss) from operations, net of tax	$	(0.5)	$	52.7	$	(82.1)	$	164.5	Earnings (loss) from operations, net of tax	$	0.3	$	(0.5)	$	4.2	$	(82.1)

Earnings (loss) attributable to Trane Technologies plc includes Ingersoll Rand Industrial separation costs, net of tax primarily related to legal, consulting and advisory fees of $1.8 million and $95.9 million during the three and nine months ended September 30, 2020, respectively. ~~In addition, the three and nine months ended September 30, 2019 includes $28.3 million and $44.4 million, respectively of Ingersoll Rand Industrial separation costs, net of tax.~~

2623

~~The components of Ingersoll Rand Industrial's assets and liabilities recorded as held-for-sale on the Condensed Consolidated Balance Sheet at December 31, 2019 were as follows:~~

~~In millions~~

~~December 31, 2019~~

~~Assets~~

~~Current assets(1)~~

~~1,130.6~~

~~Property, plant and equipment, net~~

~~454.3~~

~~Goodwill~~

~~1,657.4~~

~~Intangible assets, net~~

~~825.2~~

~~Other noncurrent assets~~

~~139.7~~

~~Assets held-for-sale~~

~~4,207.2~~

~~Liabilities~~

~~Current liabilities~~

~~823.7~~

~~Noncurrent liabilities~~

~~376.7~~

~~Liabilities held-for-sale~~

~~1,200.4~~

~~(1)~~ ~~Includes $25 million cash and cash equivalents in accordance with the merger agreement.~~

Other Discontinued Operations

Other discontinued operations, net of tax related to retained obligations from previously sold businesses that primarily include ongoing expenses for postretirement benefits, product liability and legal costs. In addition, the Company includes asbestos-related activities of ~~Aldrich through the Petition Date.~~Aldrich.

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					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Ingersoll Rand Industrial, net of tax	Ingersoll Rand Industrial, net of tax	$	(0.5)	$	52.7	$	(82.1)	$	164.5	Ingersoll Rand Industrial, net of tax	$	0.3	$	(0.5)	$	4.2	$	(82.1)
Other discontinued operations, net of tax	Other discontinued operations, net of tax	(5.0)		24.4		(38.3)		16.7		Other discontinued operations, net of tax	(13.6)		(5.0)		(16.8)		(38.3)
Discontinued operations, net of tax	Discontinued operations, net of tax	$	(5.5)	$	77.1	$	(120.4)	$	181.2	Discontinued operations, net of tax	$	(13.3)	$	(5.5)	$	(12.6)	$	(120.4)

For the three and nine months ended September 30, 2021, other discontinued operations, net of taxincluded a charge of $14.0 million related to the increase to its potential liability under the Funding Agreement from asbestos-related activities of Aldrich. In addition, other discontinued operations, net of tax includes a loss of $23.6 million ~~($16.9 million net of tax)~~ related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park, for the nine months ended September 30, 2020. Refer to Note ~~21,~~20, "Commitments and Contingencies," for more information regarding ~~the deconsolidation and~~ asbestos-related matters.

~~Acquisitions~~

During the nine months ended September 30, 2019, the Company acquired several businesses including independent dealers to support its ongoing strategy to expand its distribution network as well as other businesses that strengthen the Company's product portfolios, reported within the Americas segment. The aggregate cash paid, net of cash acquired totaled $80.5 million and was funded through cash on hand. Acquisitions are recorded using the acquisition method of accounting in accordance with ASC 805, "Business Combinations." (ASC 805). As a result, the aggregate price has been allocated to assets acquired and liabilities assumed based on the estimate of fair market value of such assets and liabilities at the date of acquisition. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $15.5 million. These acquisitions were not material to the Company's financial statements.

Note ~~19.~~18. Earnings Per Share (EPS)

Basic EPS is calculated by dividing Net earnings attributable to 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 months ended September 30:


		Three months ended				Nine months ended					Three months ended				Nine months ended
In millions, except per share amounts	In millions, except per share amounts	2020		2019		2020		2019		In millions, except per share amounts	2021		2020		2021		2020
Weighted-average number of basic shares	Weighted-average number of basic shares	240.4		241.7		240.0		242.1		Weighted-average number of basic shares	238.2		240.4		239.2		240.0
Shares issuable under incentive stock plans	Shares issuable under incentive stock plans	3.3		2.9		2.7		2.7		Shares issuable under incentive stock plans	3.5		3.3		3.6		2.7

Weighted-average number of diluted shares	Weighted-average number of diluted shares	243.7		244.6		242.7		244.8		Weighted-average number of diluted shares	241.7		243.7		242.8		242.7
Anti-dilutive shares	Anti-dilutive shares	0.6		0		0.8		0.7		Anti-dilutive shares	—		0.6		0.3		0.8

Dividends declared per ordinary share	Dividends declared per ordinary share	$	0	$	0	$	1.59	$	1.59	Dividends declared per ordinary share	$	—	$	—	$	1.77	$	1.59

Note ~~20.~~19. Business Segment Information

The Company operates under three regional operating segments designed to create deep customer focus and relevance in markets around the world. Intercompany sales between segments are immaterial.

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 Adjusted EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results reported in accordance with GAAP. The Company believes Segment Adjusted EBITDA provides the most relevant measure of profitability as well as earnings power and 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					Three months ended				Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions	2021		2020		2021		2020
Net revenues	Net revenues									Net revenues
Americas	Americas	$	2,745.8	$	2,707.5	$	7,300.0	$	7,685.5	Americas	$	2,910.3	$	2,745.8	$	8,207.6	$	7,300.0
EMEA	EMEA	445.2		456.3		1,182.7		1,289.4		EMEA	495.0		445.2		1,462.1		1,182.7
Asia Pacific	Asia Pacific	304.5		307.1		792.9		917.3		Asia Pacific	314.5		304.5		897.4		792.9
Total Net revenues	Total Net revenues	$	3,495.5	$	3,470.9	$	9,275.6	$	9,892.2	Total Net revenues	$	3,719.8	$	3,495.5	$	10,567.1	$	9,275.6

Segment Adjusted EBITDA	Segment Adjusted EBITDA									Segment Adjusted EBITDA
Americas	Americas	$	555.0	$	529.9	$	1,287.6	$	1,388.3	Americas	$	566.9	$	555.0	$	1,571.7	$	1,287.6
EMEA	EMEA	87.6		82.0		190.1		196.1		EMEA	99.4		87.6		283.4		190.1
Asia Pacific	Asia Pacific	58.5		46.8		129.2		128.3		Asia Pacific	57.3		58.5		163.8		129.2
Total Segment Adjusted EBITDA	Total Segment Adjusted EBITDA	$	701.1	$	658.7	$	1,606.9	$	1,712.7	Total Segment Adjusted EBITDA	$	723.6	$	701.1	$	2,018.9	$	1,606.9

Reconciliation of Segment Adjusted EBITDA to earnings before income taxes	Reconciliation of Segment Adjusted EBITDA to earnings before income taxes									Reconciliation of Segment Adjusted EBITDA to earnings before income taxes
Total Segment Adjusted EBITDA	Total Segment Adjusted EBITDA	$	701.1	$	658.7	$	1,606.9	$	1,712.7	Total Segment Adjusted EBITDA	$	723.6	$	701.1	$	2,018.9	$	1,606.9
Interest expense	Interest expense	(62.4)		(63.9)		(186.8)		(179.4)		Interest expense	(57.7)		(62.4)		(177.7)		(186.8)
Depreciation and amortization	Depreciation and amortization	(74.5)		(72.7)		(223.7)		(215.8)		Depreciation and amortization	(72.2)		(74.5)		(223.0)		(223.7)
Restructuring costs	Restructuring costs	(8.2)		(16.6)		(71.3)		(36.0)		Restructuring costs	(7.9)		(8.2)		(19.7)		(71.3)
Unallocated corporate expenses	Unallocated corporate expenses	(56.0)		(38.7)		(159.5)		(142.7)		Unallocated corporate expenses	(67.0)		(56.0)		(202.4)		(159.5)
Earnings before income taxes	Earnings before income taxes	$	500.0	$	466.8	$	965.6	$	1,138.8	Earnings before income taxes	$	518.8	$	500.0	$	1,396.1	$	965.6

Note ~~21.~~20. Commitments and Contingencies

The Company is involved in various ~~litigations,~~litigation, claims and administrative proceedings, including those related to ~~asbestos,~~the bankruptcy proceedings for Aldrich and Murray and environmental 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~~were 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 each 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, in connection with the Chapter 11 filings, 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). On August 23, 2021, the Bankruptcy Court entered its findings of facts and conclusions of law and order declaring that the automatic stay applies to certain asbestos related claims against the Trane Companies and enjoining such actions. As a result, all asbestos-related lawsuits against Aldrich, Murray and the Trane Companies remain stayed due to the continuance of the statutory automatic stay applicable in Chapter 11 bankruptcy cases.

trust to which all asbestos claims would be channeled for resolution. Further to this goal and as discussed more fully below, Aldrich and Murray ~~intend to seek~~have reached an agreement in principle with ~~representatives~~the court-appointed legal representative of ~~the~~future asbestos claimants (the FCR) 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~~recorded 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~~(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~~had 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~~Condensed Consolidated Statements of Income (Loss) 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~~There was 0 net income (expense) associated with these pre-Petition Date transactions for the three months ended September 30, 2021 and 2020. For the nine months ended September 30, ~~were~~the net income (expense) associated with these pre-Petition Date transactions was as follows:


		Three months ended				Nine months ended					Nine months ended
In millions	In millions	2020		2019		2020		2019		In millions		2021		2020
Continuing operations	Continuing operations	$	0	$	3.7	$	14.8	$	7.8	Continuing operations		$	—	$	14.8
Discontinued operations	Discontinued operations	0		36.0		(11.2)		30.5		Discontinued operations		—		(11.2)
Total	Total	$	0	$	39.7	$	3.6	$	38.3	Total		$	—	$	3.6

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets were based on ~~currently~~the most recently 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 assetsin 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.technique. 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 iswas based on ~~asbestos-related~~asbestos related liabilities and ~~insurance-related~~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.~~Date.

As a result of ~~these actions,~~the deconsolidation, the Company recognized an aggregate loss of $22.7 million in its Condensed Consolidated Statements of ~~Comprehensive~~ Income (Loss). during the second quarter of 2020. 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.~~operations during the second quarter of 2020.

On August 26, 2021, the Company announced that Aldrich and Murray reached an agreement in principle with the court-appointed legal representative of the FCR in the bankruptcy proceedings. The agreement in principle includes the key terms for the permanent resolution of all current and future asbestos claims against Aldrich and Murray pursuant to a plan of reorganization (the Plan). Under the agreed terms, the Plan would create a trust pursuant to section 524(g) of the Bankruptcy Code and establish claims resolution procedures for all current and future claims against Aldrich and Murray (Asbestos Claims). On the effective date of the Plan, Aldrich and Murray would fund the trust with $545.0 million, comprised of $540.0 million in cash and a promissory note to be issued by Aldrich and Murray to the trust in the principal amount of $5.0 million, and the Asbestos Claims would be channeled to the trust for resolution in accordance with the claims resolution procedures. Following the effective date of the Plan, Aldrich and Murray, would have no further obligations with respect to the Asbestos Claims. The FCR has agreed to support such Plan. The agreement in principle with the FCR is subject to final documentation and is conditioned on arrangements acceptable to Aldrich and Murray with respect to their asbestos insurance assets. It is currently contemplated that the asbestos insurance assets of Aldrich and Murray would be contributed to the trust, and that, in consideration of their cash contribution to the trust, Aldrich and Murray would have the exclusive right to pursue, collect and retain all insurance reimbursements available in connection with the resolution of Asbestos Claims by the trust. The committee representing current asbestos claimants (the ACC) is not a party to the agreement in principle. Any settlement and its implementation in a plan of reorganization is subject to the approval of the Bankruptcy Court, and there can be no assurance that the Bankruptcy Court will approve the agreement on the terms proposed.

On September 24, 2021, Aldrich and Murray filed the Plan with the Bankruptcy Court. The Plan is supported by, and reflects the previously announced agreement in principle reached with the FCR. In connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a Qualified Settlement Fund (QSF Trust). The funds held in the QSF Trust would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan. If approved by the Bankruptcy Court and other conditions are satisfied, the QSF Trust is expected to be funded prior to January 31, 2022. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last.

During the three and nine months ended September 30, 2021, in connection with the above noted agreement in principle reached by Aldrich and Murray with the FCR and the motion to create a $270.0 million QSF Trust, the Company recorded a charge of $21.2 million to increase its Funding Agreement liability to $270.0 million. The corresponding charge was bifurcated between Other income/ (expense), net of$7.2 million relating to Murray and discontinued operations of $14.0 million relating to Aldrich.

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~~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 payment date. As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company has recorded reserves for environmental matters of ~~$39.3~~$39.6 million and ~~$40.2~~$39.9 million, respectively. Of these amounts, ~~$36.9~~$36.5 million and $37.5 million, respectively, relate to remediation of sites previously disposed of by the Company.

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 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


In millions	2021
Balance at beginning of period	$	282.7
Reductions for payments	(89.8)
Accruals for warranties issued during the current period	100.4

Changes to accruals related to preexisting warranties	1.2
Translation	(1.6)
Balance at end of period	$	292.9

Standard product warranty liabilities are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on their expected payment date. The Company's total current standard product warranty reserve at September 30, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$142.9~~$112.5 million and ~~$124.9~~$127.7 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 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


In millions	2021
Balance at beginning of period	$	304.4
Amortization of deferred revenue for the period	(89.8)
Additions for extended warranties issued during the period	88.5
Changes to accruals related to preexisting warranties	9.8
Translation	(0.8)
Balance at end of period	$	312.1

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, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$104.9~~$107.7 million and ~~$107.3~~$108.6 million, respectively.

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Table of Contents

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, ~~2019.~~2020. 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 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 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 create deep customer focus and relevance in markets around the world. All prior period comparative segment information has been recast to reflect the current reportable segments.

~~Significant Events~~

~~Reorganization of Aldrich and 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 Title 11 of 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). Only Aldrich and 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 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 as of September 30, 2020.

~~From an accounting perspective, we no longer have 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 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~~

~~Table of Contents~~

~~200 Park was recorded within~~ ~~Discontinued operations, net of tax~~. Additionally, the deconsolidation resulted in an investing cash 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)~~Denver, which changed its name to Ingersoll Rand Inc. (Ingersoll Rand) after the Transaction) whereby we ~~separated~~distributed Ingersoll-Rand U.S. HoldCo, Inc., which contained our former Industrial segment (Ingersoll Rand Industrial), through a pro rata distribution (the Distribution) to our 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.~~Ingersoll Rand. Upon close of the Transaction, our existing shareholders received approximately 50.1% of the shares of ~~Gardner Denver~~Ingersoll Rand common stock on a fully-diluted basis and Gardner Denver stockholders retained approximately 49.9% of the shares of ~~Gardner Denver~~Ingersoll Rand on a fully diluted basis. As a result, our shareholders received .8824 shares of ~~Gardner Denver~~Ingersoll Rand 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.~~Ingersoll Rand.

~~In connection with~~During the ~~Transaction,~~nine months ended September 30, 2021, we ~~entered into several agreements covering supply, administrative and tax matters~~paid Ingersoll Rand $49.5 million to ~~provide or obtain services on~~settle certain items related to the Transaction. We recorded the $49.5 million settlement as a ~~transitional basis for varying periods after~~reduction to Retained earnings during 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 adjustmentsfirst quarter of 2021. This payment was related 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

After the Distribution Date, we do not beneficially own any Ingersoll Rand Industrial shares of ~~September 30, 2020, both are ongoing~~common stock and no longer consolidate Ingersoll Rand Industrial in our financial statements. In accordance with ~~the timelines established~~accounting principles generally accepted in the ~~transaction-related agreements.~~United States of America (GAAP), the historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Condensed Consolidated Statements of Income (Loss) and Condensed Consolidated Statements of Cash Flows.

Significant Events

COVID-19 Global Pandemic

In March 2020, the World Health Organization declared ~~the outbreak of a 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~~During the first ~~quarter, many countries responded by implementing measures~~half of 2020, the COVID-19 global pandemic adversely impacted our business globally including, but not limited to, ~~combat the outbreak which impacted global business operations~~lower end customer demand, certain supply chain delays, temporary facility closures and ~~resulted in our decision to temporarily close or limit~~limitations of 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.only. In response, we proactively initiated cost cutting actions and actively managed our supply chain in an effort to mitigate the impact of the global pandemic on our business. ~~This included reducing discretionary spending, suspending our share repurchase program, restricting travel, delaying merit increases and implementing employee furloughs in certain markets.~~

~~We continue to navigate~~Despite the ~~new realities brought about~~challenges set forth by the COVID-19 global pandemic, we continued to sell, install and service our products, invest in our businesses, develop and launch new products and deliver innovative customer solutions for electrification of heating, cooling and transport, enhanced indoor air quality, and precise temperature control along the full vaccine cold chain.

During the nine months ended September 30, 2021, we experienced significant increases in end market demand, executed price increases to cover rapidly increasing material, component and logistics costs, shifted to higher margin product sales and realized strong earnings growth as ~~well as any impact~~a result of strong execution across our organization. In addition, to meet our increased customer demand, we are proactively managing industry-wide supply chain and resource constraints and are working closely with our suppliers, customers and logistics providers to mitigate the impacts on our ~~liquidity needs and ability to access capital markets. Despite these challenges, all production facilities remain open and~~business as we continue to sell, install and service our products. During the third quarter, we did not experience any major disruptions in our supply chain and continued to focus on 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~~COVID-19 global pandemic 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,necessary.

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~~while~~Reorganization of Aldrich and Murray

On May 1, 2020, certain subsidiaries of ours underwent an internal corporate restructuring that was effectuated through a series of transactions (2020 Corporate Restructuring). As a result, Aldrich Pump LLC (Aldrich) and Murray Boiler LLC (Murray), indirect wholly-owned subsidiaries of Trane Technologies plc, became solely responsible for the asbestos-related liabilities, and the beneficiaries of the asbestos-related insurance assets, of Trane Technologies Company LLC and Trane U.S. Inc, respectively. On a consolidated basis, the 2020 Corporate Restructuring did not have an impact on the Condensed Consolidated Financial Statements. However, in connection with the 2020 Corporate Restructuring, certain subsidiaries 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.

On June 18, 2020 (Petition Date), Aldrich and Murray filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the Western District of North Carolina (the Bankruptcy Court) 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. Only Aldrich and 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. However, in connection with the Chapter 11 filings, at the request of Aldrich and Murray, the Bankruptcy Court 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). On August 23, 2021, the Bankruptcy Court entered its findings of facts and conclusions of law and order declaring that the automatic stay applies to certain asbestos related claims against the Trane Companies and enjoining such actions. As a result, all asbestos-related lawsuits against Aldrich, Murray and the Trane Companies remain stayed due to the continuance of the statutory automatic stay applicable in Chapter 11 bankruptcy cases.

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. Further to this goal and as discussed more fully below, Aldrich and Murray have reached an agreement in principle with the court-appointed legal representative of future asbestos claimants (the FCR) on the terms of a plan for the establishment of such a trust.

From an accounting perspective, we no longer have 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 our ~~results~~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.

Upon deconsolidation, we recorded our 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, we used a market-adjusted multiple of earnings valuation technique. As a result, we recorded an aggregate equity investment of $53.6 million as of the Petition Date.

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 was based on asbestos related liabilities and insurance related assets balances previously recorded by us prior to the Petition Date.

As a result of the deconsolidation, we recognized an aggregate loss of $22.7 million in our Condensed Consolidated Statements of Income (Loss) during the second quarter of 2020. 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 ~~flows~~outflow of $41.7 million in our Condensed Consolidated Statements of Cash Flows, of which $10.8 million was recorded within continuing operations during the second quarter of 2020.

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On August 26, 2021, we announced that Aldrich and ~~financial condition could~~Murray reached an agreement in principle with the court-appointed legal representative of the FCR in the bankruptcy proceedings. The agreement in principle includes the key terms for the permanent resolution of all current and future asbestos claims against Aldrich and Murray pursuant to a plan of reorganization (the Plan). Under the agreed terms, the Plan would create a trust pursuant to section 524(g) of the Bankruptcy Code and establish claims resolution procedures for all current and future claims against Aldrich and Murray (Asbestos Claims). On the effective date of the Plan, Aldrich and Murray would fund the trust with $545.0 million, comprised of $540.0 million in cash and a promissory note to be ~~negatively impacted,~~issued by Aldrich and Murray to the trust in the principal amount of $5.0 million, and the Asbestos Claims would be channeled to the trust for resolution in accordance with the claims resolution procedures. Following the effective date of the Plan, Aldrich and Murray, would have no further obligations with respect to the Asbestos Claims. The FCR has agreed to support such Plan. The agreement in principle with the FCR is subject to final documentation and is conditioned on arrangements acceptable to Aldrich and Murray with respect to their asbestos insurance assets. It is currently contemplated that the asbestos insurance assets of Aldrich and Murray would be contributed to the trust, and that, in consideration of their cash contribution to the trust, Aldrich and Murray would have the exclusive right to pursue, collect and retain all insurance reimbursements available in connection with the resolution of Asbestos Claims by the trust. The committee representing current asbestos claimants (the ACC) is not a party to the agreement in principle. Any settlement and its implementation in a plan of reorganization is subject to the approval of the Bankruptcy Court, and there can be no assurance that the Bankruptcy Court will approve the agreement on the terms proposed.

On September 24, 2021, Aldrich and Murray filed the Plan with the Bankruptcy Court. The Plan is supported by, and reflects the previously announced agreement in principle reached with the FCR. In connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a Qualified Settlement Fund (QSF Trust). The funds held in the QSF Trust would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan. If approved by the Bankruptcy Court and other conditions are satisfied, the QSF Trust is expected to be funded prior to January 31, 2022. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the ~~impact cannot~~asbestos liability will be ~~estimated~~or how long the Chapter 11 cases will last.

During the three and nine months ended September 30, 2021, in connection with ~~certainty at this time~~

~~As part of~~ the ~~response to COVID-19 global pandemic, many countries implemented emergency economic relief plans as a way of minimizing~~above noted agreement in principle reached by Aldrich and Murray with the economic impact of this health crisis. We are evaluating the potential benefits from certain of these measures and will continue to 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 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, 2021FCR and the ~~other half owed on December 31, 2022.~~motion to create a $270.0 million QSF Trust, we recorded a charge of $21.2 million to increase our Funding Agreement liability to $270.0 million. The corresponding charge was bifurcated between Other income/ (expense), net of$7.2 million relating to Murray and discontinued operations of $14.0 million relating to Aldrich.

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. These factors include urbanization, resource constraints, climate change, workforce dynamics, indoor environmental quality and digital connectedness. As part of our long‑term sustainability strategy, we innovate to provide solutions for our customers to address the impacts of these factors. Our geographic diversity and the breadth of our product and services portfolios have helped mitigate the impact of any one industry or the economy of any single country on our consolidated operating results.

Given our broad range of products manufactured and geographic markets served, management uses a variety of factors to predict the outlook for 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.

Current economic conditions ~~are uncertain as a result of the~~have shown improvement but remain mixed across our end markets. The COVID-19 global pandemic ~~impacting~~continues to impact both the global Heating, Ventilation and Air Conditioning (HVAC) and Transport ~~end-markets~~end markets as ~~well as limiting visibility in~~industry-wide supply chain and resource constraints exist. As vaccine distribution and administration expands, we expect market conditions to continue improving across the ~~factors used to predict the outlook for~~geographies where we serve our ~~company. As a result, we have not reinstated financial guidance for 2020 but we remain confident in our sustainability strategy and remain in a strong financial position.~~ customers.

We believe we have a solid foundation of global brands that are highly differentiated in all of our major product lines. Our geographic and 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.

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Results of Operations

In connection with the completion of the Transaction, we do not beneficially own any Ingersoll Rand Industrial shares of common stock and no longer consolidate Ingersoll Rand Industrial in our financial statements. As a result, the following ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ presents the results of Ingersoll Rand Industrial as a discontinued operation for periods prior to the Distribution date. In addition, the assets and liabilities of Ingersoll Rand Industrial have been recast to held-for-sale at December 31, 2019.

Three Months Ended September 30, ~~2020~~2021 Compared to the Three Months Ended September 30, ~~2019~~2020 - Consolidated Results


Dollar amounts in millions	Dollar amounts in millions	2020		2019		Period Change		2020 % of revenues		2019 % of revenues		Dollar amounts in millions	2021		2020		Period Change		2021 % of revenues		2020 % of revenues
Net revenues	Net revenues	$	3,495.5	$	3,470.9	$	24.6					Net revenues	$	3,719.8	$	3,495.5	$	224.3
Cost of goods sold	Cost of goods sold	(2,360.8)		(2,366.6)		5.8		67.5	%	68.2	%	Cost of goods sold	(2,515.6)		(2,360.8)		(154.8)		67.6	%	67.5	%
Gross profit	Gross profit	1,134.7		1,104.3		30.4		32.5	%	31.8	%	Gross profit	1,204.2		1,134.7		69.5		32.4	%	32.5	%
Selling and administrative expenses	Selling and administrative expenses	(567.8)		(567.8)		—		16.3	%	16.3	%	Selling and administrative expenses	(620.8)		(567.8)		(53.0)		16.7	%	16.3	%
Operating income	Operating income	566.9		536.5		30.4		16.2	%	15.5	%	Operating income	583.4		566.9		16.5		15.7	%	16.2	%
Interest expense	Interest expense	(62.4)		(63.9)		1.5						Interest expense	(57.7)		(62.4)		4.7
Other income/(expense), net	Other income/(expense), net	(4.5)		(5.8)		1.3						Other income/(expense), net	(6.9)		(4.5)		(2.4)
Earnings before income taxes	Earnings before income taxes	500.0		466.8		33.2						Earnings before income taxes	518.8		500.0		18.8
Benefit (provision) for income taxes	Benefit (provision) for income taxes	(89.9)		(80.5)		(9.4)						Benefit (provision) for income taxes	(96.8)		(89.9)		(6.9)
Earnings from continuing operations	Earnings from continuing operations	410.1		386.3		23.8						Earnings from continuing operations	422.0		410.1		11.9
Discontinued operations, net of tax	Discontinued operations, net of tax	(5.5)		77.1		(82.6)						Discontinued operations, net of tax	(13.3)		(5.5)		(7.8)
Net earnings (loss)		$	404.6	$	463.4	$	(58.8)
Net earnings												Net earnings	$	408.7	$	404.6	$	4.1

Net Revenues

Net revenues for the three months ended September 30, ~~2020~~2021 increased by ~~0.7%~~6.4%, or ~~$24.6~~$224.3 million, compared with the same period in ~~2019,~~2020, which resulted from the following:


~~Volume~~	~~(0.5)~~	%

Pricing	~~1.0~~4.3	%
Acquisitions	1.5	%
Currency translation	~~0.2~~0.6	%
Volume	—	%
Total	~~0.7~~6.4	%

~~In light of the current economic environment resulting from the COVID-19 global pandemic, strong operational performance helped mitigate its impacts and increased~~ The increase in Net revenues was primarily driven by ~~70 basis points. Other key drivers included improved~~favorable pricing and ~~favorable foreign currency exchange rate movements, partially offset by lower volumes~~the completion of three channel acquisitions during the fourth quarter of 2020 and in ~~most~~the first quarter of ~~our businesses~~2021, two of which ~~continue to be impacted by~~were completed in the ~~COVID-19 global pandemic.~~Americas segment and the third which was completed within the EMEA segment. Refer to the “Results by Segment” below for a discussion of Net ~~Revenues~~revenues by segment.

Gross Profit Margin

Gross profit margin for the three months ended September 30, ~~2020 increased 70~~2021 decreased 10 basis points to ~~32.5%~~32.4% compared to ~~31.8%~~32.5% for the same period of ~~2019. The increase was~~2020 primarily ~~driven by improved pricing, cost containment initiatives~~due to increased direct material and ~~favorable foreign currency exchange rate movements. These increases were~~other inflation, partially offset by ~~unfavorable product mix due to lower volumes in higher margin products, the under absorption of fixed production overhead costs~~price realization and ~~inflation. Although we continue to be impacted by the COVID-19 global pandemic, mitigation actions supported modest revenue growth.~~

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productivity benefits.

Selling and Administrative Expenses

Selling and administrative expenses for the three months ended September 30, ~~2020~~2021 ~~remained flat at $567.8~~increased by 9.3%, or $53.0 million compared with the same period of ~~2019. Due~~2020. The increase in Selling and administrative expenses was primarily driven by higher compensation and employee benefits due to prior year merit increases being delayed until the ~~COVID-19 global pandemic, we initiated cost containment actions in order to mitigate its impacts on our business.~~fourth quarter of 2020 and the completion of three channel acquisitions, partially offset by the realization of benefits from transformation savings. 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 Transaction. Selling and administrative expenses as a percentage of ~~net~~Net revenues for the three months ended September 30, ~~2020 remained flat at~~2021 increased 40 basis points from 16.3% to 16.7% compared to the same period of ~~2019 primarily due to cost containment actions offset by higher restructuring and transformation spend during the period.~~2020.

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Interest Expense

Interest expense for the three months ended September 30, ~~2020~~2021 decreased by 7.5%, or $~~1.5~~4.7 million compared with the same period of ~~2019~~2020 primarily due to the ~~redemption~~repayments of ~~our~~$125.0 million of 9.000% Debentures in August 2021 and $300.0 million of ~~2.625%~~2.900% Senior notes in ~~April 2020 and repayment of $179.0 million of commercial paper during the third quarter of 2019.~~February 2021.

Other Income/(Expense), Net

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


In millions	In millions	2020		2019		In millions	2021		2020
Interest income/(loss)	Interest income/(loss)	$	1.9	$	(1.1)	Interest income/(loss)	$	0.8	$	1.9
Exchange gain/(loss)		(2.5)		(4.0)
Other components of net periodic benefit cost		(3.9)		(7.2)

Foreign currency exchange loss						Foreign currency exchange loss	(2.2)		(2.5)
Other components of net periodic benefit credit/(cost)						Other components of net periodic benefit credit/(cost)	1.2		(3.9)
Other activity, net	Other activity, net	—		6.5		Other activity, net	(6.7)		—
Other income/(expense), net	Other income/(expense), net	$	(4.5)	$	(5.8)	Other income/(expense), net	$	(6.9)	$	(4.5)

Provision for Income Taxes

For the three months ended September 30, 2021, our effective tax rate was 18.7% which was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments, the recognition of a claim for refund related to previously paid interest and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate, partially offset by U.S. state and local taxes. For the three months ended September 30, 2020 our effective tax rate was 18.0% which was lower than the U.S. ~~Statutory~~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 17.2% which 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 and local income taxes and certain non-deductible expenses.

Discontinued Operations

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


In millions	In millions	2020		2019		In millions	2021		2020
Net revenues	Net revenues	$	—	$	873.4	Net revenues	$	—	$	—
Pre-tax earnings (loss) from discontinued operations	Pre-tax earnings (loss) from discontinued operations	(7.7)		117.3		Pre-tax earnings (loss) from discontinued operations	(19.0)		(7.7)
Tax benefit (expense)	Tax benefit (expense)	2.2		(40.2)		Tax benefit (expense)	5.7		2.2
Discontinued operations, net of tax	Discontinued operations, net of tax	$	(5.5)	$	77.1	Discontinued operations, net of tax	$	(13.3)	$	(5.5)

Discontinued operations are retained obligations from previously sold businesses, including amounts related to Ingersoll Rand Industrial as part of the completion of the Transaction and asbestos-related activities of ~~Aldrich through the Petition Date. In addition,~~Aldrich. During the three months ended September 30, ~~2020 and~~2021, we recorded a charge of $14.0 million to increase our Funding Agreement liability from asbestos-related activities of Aldrich. The three months ended September 30, ~~2019~~2020 includes pre-tax Ingersoll Rand Industrial separation costs primarily related to legal, consulting and advisory fees of $2.3 ~~million and $29.0 million, respectively.~~

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million.

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


In millions	In millions	2020		2019		In millions	2021		2020
Ingersoll Rand Industrial, net of tax	Ingersoll Rand Industrial, net of tax	$	(0.5)	$	52.7	Ingersoll Rand Industrial, net of tax	$	0.3	$	(0.5)
Other discontinued operations, net of tax	Other discontinued operations, net of tax	(5.0)		24.4		Other discontinued operations, net of tax	(13.6)		(5.0)
Discontinued operations, net of tax	Discontinued operations, net of tax	$	(5.5)	$	77.1	Discontinued operations, net of tax	$	(13.3)	$	(5.5)

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Nine Months Ended September 30, ~~2020~~2021 Compared to the Nine Months Ended September 30, ~~2019~~2020 - Consolidated Results


Dollar amounts in millions	Dollar amounts in millions	2020		2019		Period Change		2020 % of revenues		2019 % of revenues		Dollar amounts in millions	2021		2020		Period Change		2021 % of revenues		2020 % of revenues
Net revenues	Net revenues	$	9,275.6	$	9,892.2	$	(616.6)					Net revenues	$	10,567.1	$	9,275.6	$	1,291.5
Cost of goods sold	Cost of goods sold	(6,420.1)		(6,818.6)		398.5		69.2	%	68.9	%	Cost of goods sold	(7,139.0)		(6,420.1)		(718.9)		67.6	%	69.2	%
Gross profit	Gross profit	2,855.5		3,073.6		(218.1)		30.8	%	31.1	%	Gross profit	3,428.1		2,855.5		572.6		32.4	%	30.8	%
Selling and administrative expenses	Selling and administrative expenses	(1,710.7)		(1,733.7)		23.0		18.5	%	17.6	%	Selling and administrative expenses	(1,840.5)		(1,710.7)		(129.8)		17.4	%	18.5	%
Operating income	Operating income	1,144.8		1,339.9		(195.1)		12.3	%	13.5	%	Operating income	1,587.6		1,144.8		442.8		15.0	%	12.3	%
Interest expense	Interest expense	(186.8)		(179.4)		(7.4)						Interest expense	(177.7)		(186.8)		9.1
Other income/(expense), net	Other income/(expense), net	7.6		(21.7)		29.3						Other income/(expense), net	(13.8)		7.6		(21.4)
Earnings before income taxes	Earnings before income taxes	965.6		1,138.8		(173.2)						Earnings before income taxes	1,396.1		965.6		430.5
Benefit (provision) for income taxes	Benefit (provision) for income taxes	(224.4)		(192.6)		(31.8)						Benefit (provision) for income taxes	(268.0)		(224.4)		(43.6)
Earnings from continuing operations	Earnings from continuing operations	741.2		946.2		(205.0)						Earnings from continuing operations	1,128.1		741.2		386.9
Discontinued operations, net of tax	Discontinued operations, net of tax	(120.4)		181.2		(301.6)						Discontinued operations, net of tax	(12.6)		(120.4)		107.8
Net earnings (loss)		$	620.8	$	1,127.4	$	(506.6)
Net earnings												Net earnings	$	1,115.5	$	620.8	$	494.7

Net Revenues

Net revenues for the nine months ended September 30, ~~2020 decreased~~2021 increased by ~~6.2%~~13.9%, or ~~$616.6~~$1,291.5 million, compared with the same period in ~~2019,~~2020, which resulted from the following:


~~Volume/product mix~~Volume	~~(6.7)~~8.0	%

Pricing	~~0.8~~3.0	%
Acquisitions	1.6	%
Currency translation	~~(0.3)~~1.3	%
Total	~~(6.2)~~13.9	%

We ~~continue to be~~were negatively impacted by ~~the economic environment resulting from~~ the COVID-19 global pandemic ~~but strong third quarter operational results helped mitigate a challenging first half of 2020. The decrease~~ in ~~Net revenues is primarily related to lower volumes across~~ each of our ~~segments. Temporary facility closures beginning~~segments during the nine months ended September 30, 2020, resulting in lower Net revenues in the comparable period. In addition, the increase in Net revenues was primarily driven by increased end customer demand within all of our segments, favorable pricing and a favorable impact from foreign currency translation. Also during the fourth quarter of 2020 and in the first quarter ~~disrupted results in the Asia Pacific region with impacts more widely felt throughout operations~~of 2021, we completed three channel acquisitions, two of which were completed in the Americas segment and the third which was completed within the EMEA segment, further driving an increase in ~~the months thereafter. Unfavorable foreign currency exchange rate movements further contributed~~Net revenues as compared to the ~~year-over-year decrease, partially offset by improved pricing.~~prior year. Refer to the “Results by Segment” below for a discussion of Net ~~Revenues~~revenues by segment.

Gross Profit Margin

Gross profit margin for the nine months ended September 30, ~~2020~~2021 ~~decreased~~increased by 30160 basis points to ~~30.8%~~32.4% compared to ~~31.1%~~30.8% for the same period of ~~2019. The decrease was~~2020 primarily ~~driven by unfavorable~~due to price realization, productivity benefits and a favorable shift in product mix ~~due~~ to ~~lower volumes on~~ higher margin products, ~~and the under absorption of fixed production overhead costs. These decreases were~~ partially offset by ~~cost containment initiatives, improved pricing~~increased direct material and ~~material deflation.~~other inflation.

~~Table of Contents~~

Selling and Administrative Expenses

Selling and administrative expenses for the nine months ended September 30, ~~2020 decreased~~2021 increased by ~~1.3%~~7.6%, or ~~$23.0~~$129.8 million, compared with the same period of ~~2019. Due~~2020. The increase in Selling and administrative expenses was primarily driven by higher compensation and employee benefits due to ~~the COVID-19 global pandemic, we initiated cost containment actions~~prior year delays in ~~order to mitigate its impacts on our business. As a result, we benefited from~~merit increases and employee furloughs in certain regions ~~delayed merit increases~~ and ~~reduced discretionary spending. These amounts were~~the completion of three channel acquisitions, partially offset by ~~higher~~the realization of benefits from prior restructuring programs and transformation savings, cost containment actions and lower spending on restructuring and transformation ~~initiatives associated with the completion of the Transaction.~~ initiatives.However, ~~selling~~Selling and administrative expenses as a percentage of ~~net~~Net revenues for the nine months ended September 30, ~~2020 increased 90~~2021 decreased 110 basis points from ~~17.6%~~18.5% to ~~18.5%~~17.4% primarily due to ~~lower comparable revenue year-over-year.~~higher revenues during the period.

Interest Expense

Interest expense for the nine months ended September 30, ~~2020 increased $7.4~~2021 decreased by 4.9% or $9.1 million compared with the same period of ~~2019~~2020 primarily due to the ~~$1.5 billion issuance~~repayments of $125.0 million of 9.000% Debentures in August 2021, $300.0 million of 2.900% Senior notes ~~during the first quarter of 2019. The increase was partially offset by the redemption of our~~in February 2021 and $300.0 million of 2.625% Senior notes in April ~~2020 and repayment~~2020.

Table of ~~commercial paper of $179.0 million during the third quarter of 2019.~~Contents

Other Income/(Expense), Net

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


In millions	In millions	2020		2019		In millions	2021		2020
Interest income/(loss)	Interest income/(loss)	$	3.6	$	0.4	Interest income/(loss)	$	3.0	$	3.6
Exchange gain/(loss)		(8.5)		(9.4)
Other components of net periodic benefit cost		(9.0)		(25.3)

Foreign currency exchange loss						Foreign currency exchange loss	(8.9)		(8.5)
Other components of net periodic benefit credit/(cost)						Other components of net periodic benefit credit/(cost)	(3.3)		(9.0)
Other activity, net	Other activity, net	21.5		12.6		Other activity, net	(4.6)		21.5
Other income/(expense), net	Other income/(expense), net	$	7.6	$	(21.7)	Other income/(expense), net	$	(13.8)	$	7.6

Other ~~income /(expense)~~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~~credit/(cost) for pension and post retirement obligations other than the service cost component. ~~Other~~During the nine months ended September 30, 2021, other activity, net primarily includes ~~items associated with certain legal matters as well as~~a charge of $7.2 million to increase our Funding Agreement liability from asbestos-related activities ~~through the Petition Date.~~of Murray. During the nine months ended September 30, 2020, ~~the Company~~we recorded a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years and a gain of $0.9 million related to the deconsolidation of Murray and its wholly-owned subsidiary ClimateLabs within other activity, net.

Provision for Income Taxes

For the nine months ended September 30, ~~2020,~~2021, our effective tax rate was 19.2% which was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate, partially offset by U.S. state and local taxes. The effective tax rate for the nine months ended September 30, 2020 was 23.2% which was higher than the U.S. ~~Statutory~~statutory rate of 21% due to a $37.0 million non-cash charge ~~related~~ to ~~the establishment of~~establish valuation allowances on net deferred tax assets, primarily net operating losses in certain tax jurisdictions as a result of the completion of the Transaction, U.S. state and local taxes and certain non-deductible employee expenses. These amounts were partially offset by excess tax benefits from employee share-based payments, a $3.9 million benefit primarily related to a reduction in valuation allowances on deferred taxes related to net operating losses as a result of a planned restructuring in a non-U.S. tax jurisdiction and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. The impact of the changes in the valuation allowances increased the effective tax rate by 3.4%. The effective tax rate for the nine months ended September 30, 2019 was 16.9% which was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments, a reduction in deferred tax asset valuation allowances for certain non-U.S. net deferred tax assets, a reduction in our unrecognized tax benefits due to the settlement of an audit in a major tax jurisdiction 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 and local taxes and certain non-deductible expenses.

~~Table of Contents~~

Discontinued Operations

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


In millions	In millions	2020		2019		In millions	2021		2020
Net revenues	Net revenues	$	469.8	$	2,555.8	Net revenues	$	—	$	469.8
Pre-tax earnings (loss) from discontinued operations	Pre-tax earnings (loss) from discontinued operations	(131.1)		273.4		Pre-tax earnings (loss) from discontinued operations	(32.4)		(131.1)
Tax benefit (expense)	Tax benefit (expense)	10.7		(92.2)		Tax benefit (expense)	19.8		10.7
Discontinued operations, net of tax	Discontinued operations, net of tax	$	(120.4)	$	181.2	Discontinued operations, net of tax	$	(12.6)	$	(120.4)

Discontinued operations are retained obligations from previously sold businesses, including amounts related to Ingersoll Rand Industrial as part of the completion of the Transaction and asbestos-related activities of ~~Aldrich through~~Aldrich. During the ~~Petition Date. In addition, the~~nine months ended September 30, 2021, we recorded a charge of $14.0 million to increase our Funding Agreement liability from asbestos-related activities of Aldrich. The nine months ended September 30, 2020 includes pre-tax Ingersoll Rand Industrial separation costs primarily related to legal, consulting and advisory fees of $113.9 million and a loss of $23.6 million related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park. ~~The nine months ended September 30, 2019includes $45.1 million of pre-tax Ingersoll Rand Industrial separation costs.~~

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


In millions	In millions	2020		2019		In millions	2021		2020
Ingersoll Rand Industrial, net of tax	Ingersoll Rand Industrial, net of tax	$	(82.1)	$	164.5	Ingersoll Rand Industrial, net of tax	$	4.2	$	(82.1)
Other discontinued operations, net of tax	Other discontinued operations, net of tax	(38.3)		16.7		Other discontinued operations, net of tax	(16.8)		(38.3)
Discontinued operations, net of tax	Discontinued operations, net of tax	$	(120.4)	$	181.2	Discontinued operations, net of tax	$	(12.6)	$	(120.4)

Table of Contents

Three Months Ended September 30, ~~2020~~2021 Compared to the Three Months Ended September 30, ~~2019~~2020 - Segment Results

We operate under three regional operating segments designed to create deep customer focus and relevance in markets around the world.

•Our EMEA segment innovates for customers in the Europe, Middle East and Africa region. The EMEA 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 Adjusted EBITDA is not defined under accounting principles generally accepted in the United States of America (GAAP) and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results reported in accordance with GAAP. We believe Segment Adjusted EBITDA provides the most relevant measure of profitability as well as earnings power and the ability to generate cash. This measure is a useful financial metric to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business and we use this measure for business planning purposes. Segment Adjusted EBITDA also provides a useful tool for assessing the comparability between periods and our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates non-cash charges such as depreciation and amortization expense.

~~Table of Contents~~

The following discussion compares our results for each of our three reportable segments for the three months ended September 30, ~~2020~~2021 compared to the three months ended September 30, ~~2019.~~2020.


In millions	In millions	2020			2019			% change		In millions	2021			2020			% change

Americas	Americas									Americas
Net revenues	Net revenues	$	2,745.8		$	2,707.5		1.4	%	Net revenues	$	2,910.3		$	2,745.8		6.0	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	555.0			529.9			4.7	%	Segment Adjusted EBITDA	566.9			555.0			2.1	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	20.2		%	19.6		%			Segment Adjusted EBITDA as a percentage of net revenues	19.5		%	20.2		%

EMEA	EMEA									EMEA
Net revenues	Net revenues	$	445.2		$	456.3		(2.4)	%	Net revenues	$	495.0		$	445.2		11.2	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	87.6			82.0			6.8	%	Segment Adjusted EBITDA	99.4			87.6			13.5	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	19.7		%	18.0		%			Segment Adjusted EBITDA as a percentage of net revenues	20.1		%	19.7		%

Asia Pacific	Asia Pacific									Asia Pacific
Net revenues	Net revenues	$	304.5		$	307.1		(0.8)	%	Net revenues	$	314.5		$	304.5		3.3	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	58.5			46.8			25.0	%	Segment Adjusted EBITDA	57.3			58.5			(2.1)	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	19.2		%	15.2		%			Segment Adjusted EBITDA as a percentage of net revenues	18.2		%	19.2		%

Total Net revenues	Total Net revenues	$	3,495.5		$	3,470.9		0.7	%	Total Net revenues	$	3,719.8		$	3,495.5		6.4	%
Total Segment Adjusted EBITDA	Total Segment Adjusted EBITDA	701.1			658.7			6.4	%	Total Segment Adjusted EBITDA	723.6			701.1			3.2	%

Table of Contents

Americas

Net revenues for the three months ended September 30, ~~2020~~2021 increased by ~~1.4%~~6.0% or ~~$38.3~~$164.5 million, compared with the same period of ~~2019.~~2020. The components of the period change were as follows:


Pricing	5.1	%
Acquisitions	1.7	%
Currency translation	0.1	%
Volume	(0.9)	%
Total	6.0	%

The increase in Net revenues was driven by favorable pricing in all of our businesses as well as the completion of two channel acquisitions during the fourth quarter of 2020, partially offset by lower volumes due to supply chain constraints.

Segment Adjusted EBITDA margin for the three months ended September 30, 2021 decreased by 70 basis points to 19.5% compared to 20.2% for the same period in 2020 primarily due to increased direct material and other inflation coupled with increased logistics costs linked to supply chain constraints and inefficiencies, partially offset by price realization and productivity benefits.

EMEA

Net revenues for the three months ended September 30, 2021 increased by 11.2% or $49.8 million, compared with the same period of 2020. The components of the period change were as follows:


Volume	~~0.8~~6.5	%
Acquisitions	1.7	%
Pricing	1.3	%
Currency translation	1.2	%
Transfer of sales from Asia Pacific segment	0.5	%

~~Pricing~~	~~1.0~~	%
~~Currency translation~~	~~(0.4)~~	%
Total	~~1.4~~11.2	%

The Americas region continued to be impacted by the economic environment resulting from the COVID-19 global pandemic. However, strong operating performance was primarily driven by our Residential and Commercial HVAC businesses. The increase in Net revenues ~~primarily related to improved~~ was driven by increased end customer demand, favorable pricing and ~~higher volumes,~~favorable impact from foreign currency translation, partially offset by ~~unfavorable foreign currency exchange rate movements.~~supply chain constraints. Also, during the first quarter of 2021, we completed a channel acquisition, which is managed in our EMEA segment, and includes sales formerly reported under our Asia Pacific segment, further driving an increase in Net revenues as compared to the prior year.

Segment Adjusted EBITDA margin for the three months ended September 30, ~~2020~~ 2021increased by 6040 basis points to ~~20.2%~~20.1% compared to ~~19.6%~~19.7% for the same period ~~in 2019. The increase was~~of 2020, primarily ~~driven by improved pricing, cost containment initiatives and strong productivity. These amounts were partially offset by unfavorable~~due to price realization, favorable product mix, ~~due~~productivity benefits and higher volumes despite supply chain constraints, which outpaced direct material and other inflation increases as compared to ~~lower volumes on higher margin products and~~ the ~~under absorption of fixed production overhead costs.~~prior period.

~~Table of Contents~~

~~EMEA~~Asia Pacific

Net revenues for the three months ended September 30, ~~2020 decreased~~2021 increased by ~~2.4%~~3.3% or ~~$11.1~~$10.0 million, compared with the same period of ~~2019.~~2020. The components of the period change were as follows:


~~Volume~~	~~(6.3)~~	%

~~Pricing~~	~~0.6~~	%
Currency translation	3.3	%

~~Total~~	~~(2.4)~~	%

The EMEA region continued to be impacted by the economic environment resulting from the COVID-19 global pandemic. The decrease in Net revenues primarily related to lower volumes in each of our businesses. These amounts were partially offset by favorable foreign currency exchange rate movements and improved pricing.

~~Segment Adjusted EBITDA margin for the three months ended September 30, 2020~~increased by 170 basis points to 19.7% compared to 18.0% for the same period of 2019. The increase was primarily driven by cost containment initiatives, favorable foreign currency exchange rate movements and improved pricing. These amounts were partially offset by material inflation, the under absorption of fixed production overhead costs and unfavorable product mix due to lower volumes on higher margin products.

~~Asia Pacific~~

~~Net revenues~~ ~~for the three months ended September 30, 2020 decreased by 0.8% or $2.6 million, compared with the same period of 2019. The components of the period change were as follows:~~


~~Volume~~	~~(3.5)~~	%

Pricing	~~1.8~~2.1	%
~~Currency translation~~Volume	~~0.9~~ (1.4)	%
Transfer of sales to EMEA segment	(0.7)	%
Total	~~(0.8)~~3.3	%

The ~~Asia Pacific region continued to be impacted by the economic environment resulting from the COVID-19 global pandemic. The decrease~~increase in Net revenues ~~primarily related to lower volumes in our Commercial HVAC business. This amount~~ was driven by favorable impact from foreign currency translation and favorable pricing, partially offset by ~~improved pricing~~lower volumes driven primarily by supply chain constraints and ~~favorable foreign currency exchange rate movements.~~the transfer of sales to the EMEA segment related to the channel acquisition.

Segment Adjusted EBITDA margin for the three months ended September 30, ~~2020 increased~~2021 decreased by ~~400~~100 basis points to ~~19.2%~~18.2% compared to ~~15.2%~~19.2% for the same period of ~~2019. The increase was~~2020 primarily ~~driven by cost containment initiatives, improved pricing~~due to increased direct material and ~~productivity. These amounts were~~other inflation and lower volumes, partially offset by ~~unfavorable product mix due to lower volumes on higher margin products~~productivity benefits and ~~unfavorable foreign currency exchange rate movements.~~price realization.

4338

Table of Contents

Nine Months Ended September 30, ~~2020~~2021 Compared to the Nine Months Ended September 30, ~~2019~~2020 - Segment Results

The following discussion compares our results for each of our three reportable segments for the nine months ended September 30, ~~2020~~2021 compared to the nine months ended September 30, ~~2019.~~2020.


In millions	In millions	2020			2019			% change		In millions	2021			2020			% change

Americas	Americas									Americas
Net revenues	Net revenues	$	7,300.0		$	7,685.5		(5.0)	%	Net revenues	$	8,207.6		$	7,300.0		12.4	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	1,287.6			1,388.3			(7.3)	%	Segment Adjusted EBITDA	1,571.7			1,287.6			22.1	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	17.6		%	18.1		%			Segment Adjusted EBITDA as a percentage of net revenues	19.1		%	17.6		%

EMEA	EMEA									EMEA
Net revenues	Net revenues	$	1,182.7		$	1,289.4		(8.3)	%	Net revenues	$	1,462.1		$	1,182.7		23.6	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	190.1			196.1			(3.1)	%	Segment Adjusted EBITDA	283.4			190.1			49.1	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	16.1		%	15.2		%			Segment Adjusted EBITDA as a percentage of net revenues	19.4		%	16.1		%

Asia Pacific	Asia Pacific									Asia Pacific
Net revenues	Net revenues	$	792.9		$	917.3		(13.6)	%	Net revenues	$	897.4		$	792.9		13.2	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	129.2			128.3			0.7	%	Segment Adjusted EBITDA	163.8			129.2			26.8	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	16.3		%	14.0		%			Segment Adjusted EBITDA as a percentage of net revenues	18.3		%	16.3		%

Total net revenues	Total net revenues	$	9,275.6		$	9,892.2		(6.2)	%	Total net revenues	$	10,567.1		$	9,275.6		13.9	%
Total Segment Adjusted EBITDA	Total Segment Adjusted EBITDA	1,606.9			1,712.7			(6.2)	%	Total Segment Adjusted EBITDA	2,018.9			1,606.9			25.6	%

Americas

Net revenues for the nine months ended September 30, ~~2020 decreased~~2021 increased by ~~5.0%~~12.4% or ~~$385.5~~$907.6 million, compared with the same period of ~~2019.~~2020. The components of the period change were as follows:


Volume	~~(5.7)~~6.9	%

Pricing	~~1.0~~3.5	%
Acquisitions	1.8	%
Currency translation	~~(0.3)~~0.2	%
Total	~~(5.0)~~12.4	%

The Americas ~~region continued to be~~segment was negatively impacted by ~~the economic environment resulting from~~ the COVID-19 global pandemic ~~however strong third quarter operational results helped mitigate a challenging first half. The decrease~~during the nine months ended September 30, 2020, resulting in lower Net revenues in the comparable period. In addition, the increase in Net revenues was primarily ~~related to lower volumes~~driven by increased end customer demand in ~~each~~all of our businesses, favorable pricing and the completion of two channel acquisitions during the ~~first half~~fourth quarter of 2020. ~~In addition, unfavorable foreign currency exchange rate movements further contributed to the year-over-year decrease, partially offset by favorable pricing.~~

Segment Adjusted EBITDA margin for the nine months ended September 30, ~~2020 decreased~~2021 increased by 50150 basis points to ~~17.6%~~19.1% compared to ~~18.1%~~17.6% for the same period of ~~2019. The decrease was~~2020 primarily ~~driven by unfavorable~~due to price realization, strong execution, productivity benefits, higher volumes and favorable product mix, ~~due~~which outpaced direct material and other inflation increases as compared to ~~lower volumes on higher margin products and~~ the ~~under absorption~~prior period.

Table of ~~fixed production overhead costs. These amounts were partially offset by improved pricing, cost containment initiatives and material deflation.~~Contents

EMEA

Net revenues for the nine months ended September 30, ~~2020 decreased~~2021 increased by ~~8.3%~~23.6% or ~~$106.7~~$279.4 million, compared with the same period of ~~2019.~~2020. The components of the period change were as follows:


Volume	~~(8.4)~~	%

~~Pricing~~	~~0.2~~14.7	%
Currency translation	~~(0.1)~~5.9	%
Acquisitions	1.6	%
Pricing	0.8	%
Transfer of sales from Asia Pacific segment	0.6	%

Total	~~(8.3)~~23.6	%

~~Table of Contents~~

The EMEA ~~region continued to be heavily~~segment was negatively impacted by the ~~economic environment resulting from the~~ COVID-19 global ~~pandemic. The decrease~~pandemic during the nine months ended September 30, 2020, resulting in lower Net revenues in the comparable period. In addition, the increase in Net revenues was primarily ~~related to lower volumes and unfavorable~~driven by increased end customer demand within both our businesses as well as favorable impact from foreign currency ~~exchange rate movements. These amounts were partially offset by improved pricing.~~translation. Also, during the first quarter of 2021, we completed a channel acquisition, which is managed in our EMEA segment, and includes sales formerly reported under our Asia Pacific segment, further driving an increase in Net revenues as compared to the prior year.

Segment Adjusted EBITDA margin for the nine months ended September 30, ~~2020~~2021 increased by 90330 basis points to ~~16.1%~~19.4% compared to ~~15.2%~~16.1% for the same period of ~~2019. The increase was~~2020 primarily ~~driven by cost containment initiatives,~~due to higher volumes, strong execution, productivity benefits, favorable ~~foreign currency exchange rate movements and improved pricing. These amounts were partially offset by unfavorable~~ product mix ~~due~~and price realization, which outpaced direct material and other inflation increases as compared to ~~lower volumes on higher margin products and~~ the ~~under absorption of fixed production overhead costs.~~prior period.

Asia Pacific

Net revenues for the nine months ended September 30, ~~2020 decreased~~2021 increased by ~~13.6%~~13.2% or ~~$124.4~~$104.5 million, compared with the same period of ~~2019.~~2020. The components of the period change were as follows:


Volume	~~(13.4)~~	%

~~Pricing~~	~~0.5~~7.4	%
Currency translation	~~(0.7)~~5.1	%
Pricing	1.6	%
Transfer of sales to EMEA segment	(0.9)	%
Total	~~(13.6)~~13.2	%

The Asia Pacific ~~region continued to be heavily~~segment was negatively impacted by the COVID-19 global pandemic during the nine months ended September 30, 2020, resulting in lower Net revenues in the comparable period. In addition, the increase in Net revenues was primarily driven by increased end customer demand as a result of improved economic ~~environment resulting from~~conditions as it relates to the COVID-19 global pandemic. The decrease in Net revenues primarily related to lower volumes since the beginning of the year. In addition, unfavorable foreign currency exchange rate movements further contributed to the year-over-year decrease,pandemic within China, partially offset by ~~improved pricing.~~mixed results in the rest of Asia. Net revenues also increased from favorable foreign currency translation and favorable pricing, partially offset by the transfer of sales to the EMEA segment related to the channel acquisition.

Segment Adjusted EBITDA margin for the nine months ended September 30, ~~2020~~2021 increased by ~~230~~200 basis points to ~~16.3%~~18.3% compared to ~~14.0%~~16.3% for the same period of ~~2019.~~2020. The increase was primarily driven by ~~cost containment initiatives,~~strong execution, productivity benefits, price realization and higher volumes as a result of increased customer demand from improved ~~pricing and material deflation. These amounts were~~economic conditions as compared to prior year driven by the COVID-19 global pandemic, partially offset by increased direct material and other inflation, unfavorable product mix ~~due to lower volumes on higher margin products~~ and ~~the under absorption~~business reinvestment.

Table of ~~fixed production overhead costs.~~Contents

Liquidity and Capital Resources

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. In doing so, we review and analyze our current cash on hand, the number of days our sales are outstanding, inventory turns, capital expenditure commitments and income tax payments. Our cash requirements primarily consist of the following:

•Funding of working capital

•Funding of capital expenditures

•Dividend payments

•Debt service requirements

Our primary sources of liquidity include cash balances on hand, cash flow from operations, proceeds from debt offerings, commercial paper, and borrowing availability under our existing credit facilities. We earn a significant amount of our operating income in jurisdictions where it is deemed to be permanently reinvested. Our most prominent jurisdiction of operation is the U.S. We expect existing cash and cash equivalents available to the U.S. operations, the cash generated by our U.S. operations, our committed credit lines as well as our expected ability to access the capital and debt markets will be sufficient to fund our U.S. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future. In addition, we expect existing non-U.S. cash and cash equivalents and the cash generated by our non-U.S. operations will be sufficient to fund our non-U.S. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future. The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $2.0 billion, of which the company had no outstanding balance as of September 30, ~~2020.~~2021.

As of September 30, ~~2020,~~2021, we had ~~$3,190.1~~$2,738.8 million of cash and cash equivalents on hand, of which ~~$2,465.2~~$1,866.7 million was held by non-U.S. subsidiaries. Cash and cash equivalents held by our non-U.S. subsidiaries are generally available for use in our U.S. operations via intercompany loans, equity infusions or via distributions from direct or indirectly owned non-U.S. subsidiaries for which we do not assert permanent reinvestment. As a result of the Tax Cuts and Jobs Act in 2017, additional repatriation opportunities to access cash and cash equivalents held by non-U.S. subsidiaries have been created. In general, repatriation of cash to the U.S. can be completed with no significant incremental U.S. tax. However, to the extent that we repatriate funds from non-U.S. subsidiaries for which we assert permanent reinvestment to fund our U.S. operations, we would be required to accrue and pay applicable non-U.S. taxes. As of September 30, ~~2020,~~2021, we currently have no plans to repatriate funds from subsidiaries for which we assert permanent reinvestment.

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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). In February 2021, our Board of Directors authorized the repurchase of up to $2.0 billion of our ordinary shares under a new share repurchase program (2021 Authorization) upon completion of the ~~prior authorized share repurchase program.~~2018 Authorization. During the nine months ended September 30, ~~2020, no amounts were~~2021, we repurchased ~~or cancelled~~and canceled $600.2 million of our ordinary shares thus completing the 2018 Authorization and initiating repurchases under the 2021 Authorization of $100.2 million of our ordinary shares leaving approximately ~~$750 million~~$1.9 billion remaining under the ~~2018 Authorization at September 30, 2020. In addition, we~~2021 Authorization.

We expect to ~~maintain the~~pay a competitive and growing dividend. In February 2021, we announced an 11% increase in our quarterly share dividend ~~at the current level of~~from $0.53 to $0.59 per ordinary share, or $2.36 per share ~~or $2.12 per share on an annualized basis, in 2020.~~annualized. The first, second and third quarter ~~2020~~2021 dividend was paid during the nine months ended September 30, ~~2020~~2021 and ~~our~~the fourth quarter 2021 dividend was declared in October ~~2020.~~2021.

We continue to actively manage and strengthen our business portfolio to meet the current and future needs of our customers. We achieve this partly through engaging in research and development and sustaining activities and partly through acquisitions. Each year, we make a significant investment in new product development and new technology innovation as they are key factors in achieving our strategic objectives as a leader in the climate sector. We ~~have increased our investments in research and development in each of the last three years and intensified our focus on key priorities in our business. We~~ also focus on partnering with our suppliers and technology providers to align their investment decisions with our technical requirements. In addition, we have a strong focus on sustaining activities, which include costs incurred to reduce production costs, improve existing products, create custom solutions for customers and provide support to our manufacturing facilities. Combined, these costs account for approximately two percent of ~~net~~annual Net revenues ~~each year.~~.

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In pursuing our business strategy, we routinely conduct discussions, evaluate targets and enter into agreements regarding possible acquisitions, divestitures, joint ventures and equity investments. Since ~~2018,~~2019, we ~~have~~ acquired several businesses, ~~and~~ entered into a joint ~~venture~~ventures and invested in companies that ~~complements~~complement existing products and services further enhancing our product portfolio. ~~Most recently,~~Through November 3, 2021, we deployed capital of approximately $340 million attributable to acquisitions and related investments. In addition, during 2020 we completed a Reverse Morris Trust transaction with ~~Gardner Denver~~Ingersoll Rand whereby we separated Ingersoll Rand Industrial from our business portfolio, transforming the Company into a global climate innovator. We recognized separation-related costs of ~~$113.9 million during the nine months ended September 30, 2020 and $94.6~~$114.2 million during the year ended December 31, ~~2019.~~2020. These expenditures were incurred in order to facilitate the ~~transaction~~Transaction and are included within ~~discontinued operations.~~Discontinued operations, net of tax.

We incur ongoing costs associated with restructuring initiatives intended to result in improved operating performance, profitability and working capital levels. Actions associated with these initiatives may include workforce reductions, improving manufacturing productivity, realignment of management structures and rationalizing certain assets. Post separation, we ~~intend~~committed to reduce costs by ~~$100~~$190 million ~~in 2020~~through 2021 and an additional ~~$40~~$110 million by 2023 for a total of $300 million in ~~2021. In order to realize~~total annual savings under our ~~cost savings target, we expect to incur expenses of approximately $100 million to $150 million using a combination of~~ transformation ~~activities and restructuring actions.~~initiatives. We believe that our existing cash flow, committed credit lines and access to the capital markets will be sufficient to fund share repurchases, dividends, research and development, sustaining activities, business portfolio changes and ongoing restructuring actions.

Certain of our subsidiaries entered into funding agreements with Aldrich and Murray 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. During the third quarter of 2021, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270 million QSF Trust. The funds held in the QSF Trust would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan. If approved by the Bankruptcy Court and other conditions are satisfied, the QSF Trust is expected to be funded prior to January 31, 2022. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last.

As the COVID-19 global pandemic impacts both the broader economy and our operations, we will continue to assess our liquidity needs and our ability to access capital markets. A continued worldwide disruption could materially affect economies and financial markets worldwide, resulting in an economic downturn that could affect demand for our products, our ability to obtain financing on favorable terms and otherwise adversely impact our business, financial condition and results of operations. ~~The COVID-19 global pandemic created substantial volatility~~See Part I, Item 1A – Risk Factors in the ~~short-term credit markets during~~Annual Report on Form 10-K for the first half of the year. Recurring volatility could impact the cost of our credit facilities, the cost of any borrowing we might make under those facilities or the cost of any commercial paper we may issue, to the extent we were to either draw on our facilities or issue commercial paper. See Part II, Item 1A. Risk Factorsfiscal year ended December 31, 2020 for more information.

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Liquidity

The following table contains several key measures of our financial condition and liquidity at the period ended:


In millions	In millions	September 30, 2020			December 31, 2019			In millions	September 30, 2021			December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	3,190.1		$	1,278.6		Cash and cash equivalents	$	2,738.8		$	3,289.9
Short-term borrowings and current maturities of long-term debt (1)	Short-term borrowings and current maturities of long-term debt (1)	775.1			650.3			Short-term borrowings and current maturities of long-term debt (1)	350.4			775.6
Long-term debt	Long-term debt	4,494.2			4,922.9			Long-term debt	4,490.7			4,496.5
Total debt	Total debt	5,269.3			5,573.2			Total debt	4,841.1			5,272.1
Total Trane Technologies plc shareholders’ equity	Total Trane Technologies plc shareholders’ equity	6,366.7			7,267.6			Total Trane Technologies plc shareholders’ equity	6,475.1			6,407.7
Total equity	Total equity	6,381.0			7,312.4			Total equity	6,487.7			6,427.1
Debt-to-total capital ratio	Debt-to-total capital ratio	45.2		%	43.3		%	Debt-to-total capital ratio	42.7		%	45.1		%

(1) The $300.0 million of ~~2.625% Senior notes due in May 2020 were redeemed in April 2020. The $300.0 million of~~ 2.900% Senior notes ~~are due~~were repaid in February 2021. The $125.0 million of 9.000% Debentures ~~are due~~were repaid in August 2021.

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Debt and Credit Facilities

Our short-term obligations primarily consist of current maturities of long-term debt. In addition, we have outstanding ~~$343.0~~$342.9 million of fixed rate debentures that contain a put feature that the holders may exercise on each anniversary of the issuance date. If exercised, we are obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount (plus accrued and unpaid interest) of the debentures held by the holder. We also maintain a commercial paper program which is used for general corporate purposes. Under the program, the maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, is $2.0 billion. We had no outstanding balance under our commercial paper program as of September 30, ~~2020~~2021 and December 31, ~~2019.~~2020. See Note 7 to the Condensed Consolidated Financial Statements for additional information regarding the terms of our short-term obligations.

Our long-term obligations primarily consist of long-term debt with final maturity dates ranging between ~~2021~~2023 and 2049. In addition, we maintain two $1.0 billion senior unsecured revolving credit facilities, one of which matures in ~~March 2022~~April 2023 and the other which matures in ~~April 2023.~~June 2026. The facilities provide support for our commercial paper program and can be used for working capital and other general corporate purposes. Total commitments of $2.0 billion were unused at September 30, ~~2020~~2021 and December 31, ~~2019.~~2020. See Note 7 to the Condensed Consolidated Financial Statements and further below in Supplemental Guarantor Financial Information for additional information regarding the terms of our long-term obligations and their related guarantees.

Cash Flows

The following table reflects the major categories of cash flows for the nine months ended September 30. For additional details, see the Condensed Consolidated Statements of Cash Flows in the Condensed Consolidated Financial Statements.


In millions	In millions	2020		2019		In millions	2021		2020
Net cash provided by (used in) continuing operating activities	Net cash provided by (used in) continuing operating activities	$	1,132.9	$	894.5	Net cash provided by (used in) continuing operating activities	$	1,162.6	$	1,132.9
Net cash provided by (used in) continuing investing activities	Net cash provided by (used in) continuing investing activities	(101.1)		(228.3)		Net cash provided by (used in) continuing investing activities	(208.8)		(101.1)
Net cash provided by (used in) continuing financing activities	Net cash provided by (used in) continuing financing activities	1,230.9		615.7		Net cash provided by (used in) continuing financing activities	(1,465.0)		1,230.9

Operating Activities

Net cash provided by continuing operating activities for the nine months ended September 30, 2021 was $1,162.6 million, of which Net earnings provided $1,421.5 million after adjusting for non-cash transactions. Changes in assets and liabilities, net used $258.9 million. Net cash provided by continuing operating activities for the nine months ended September 30, 2020 was $1,132.9 million, of which ~~net income~~Net earnings provided $1,083.5 million after adjusting for non-cash transactions. Changes in assets and liabilities, net provided $49.4 million. Net cash provided by continuing operating activities for the nine months ended September 30, 2019 was $894.5 million, of which net income provided $1,263.4 million after adjusting for non-cash transactions. ~~Changes in assets and liabilities, net~~ ~~used $368.9 million.~~ The year-over-year increase in net cash provided by continuing operating activities was primarily driven by ~~improved~~higher net earnings, partially offset by higher working capital ~~whereby lower inventory and higher outstanding accounts payable~~ balances ~~more than offset higher accounts receivable and lower earnings~~ in the current year.

Investing Activities

Cash flows from investing activities ~~represents~~represent inflows and outflows regarding the purchase and sale of assets. Primary activities associated with these items include capital expenditures, proceeds from the sale of property, plant and equipment, acquisitions, ~~investment~~investments in joint ventures and complementary businesses and divestitures. During the nine months ended September 30, 2021, net cash used in investing activities from continuing operations was $208.8 million. The primary drivers of the usage was attributable to capital expenditures of $121.6 million and other investing activities of $69.2 million primarily related to investment in companies that complement existing products and services further enhancing our product portfolio. During the nine months ended September 30, 2020 net cash used in investing activities from continuing operations was $101.1 million. The primary driver of the usage was attributable to capital

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expenditures, which totaled $89.1 million. In addition, as a result of the deconsolidation of Murray and its wholly-owned subsidiary ClimateLabs under the Chapter 11 bankruptcy filing, the assets and liabilities of these entities were derecognized, which resulted in a cash outflow of $10.8 million. During the nine months ended September 30, 2019 net cash used in investing activities from continuing operations was $228.3 million. The primary drivers of the usage was attributable to $151.6 million of capital expenditures and the acquisition of several businesses, which totaled $80.5 million, net of cash acquired.

Financing Activities

Cash flows from financing activities ~~represents~~represent inflows and outflows that account for external activities affecting equity and debt. Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, issuing our own stock and debt transactions. During the nine months ended September 30, 2021, net cash used in financing activities from continuing operations was $1,465.0 million. The primary drivers of the outflow related to the repurchase of $600.2 million in ordinary shares, the repayment of long term debt of $432.5 million and dividends paid to ordinary shareholders of $421.9 million. During the nine months ended September 30, 2020, net cash provided by financing activities from continuing operations was ~~$1.2 billion.~~$1,230.9 million. The primary driver of the inflow related to the receipt of a special cash payment of ~~$1.9 billion~~$1,900.0 million pursuant to ~~the~~ completion of the Transaction. This amount was partially offset by dividends paid to ordinary shareholders of $380.3 million and the repayment of long term debt of $307.5 million. ~~During the nine months ended September 30, 2019, net cash provided by financing activities from continuing operations was $615.7 million. The primary driver~~

Table of the inflow related to the issuance of $1.5 billion of senior notes during the period. This amount was partially offset by the repurchase of $500.1 million in ordinary shares and dividends paid to ordinary shareholders of $383.1 million.Contents

Free Cash Flow

Free cash flow is a non-GAAP measure and defined as ~~net~~Net cash provided by (used in) continuing operating activities, less capital expenditures, plus cash payments for restructuring and transformation costs. This measure is useful to management and investors because it is consistent with management's assessment of our operating cash flow performance. The most comparable GAAP measure to free cash flow is ~~net~~Net cash provided by (used in) continuing operating ~~activities.~~activities. Free cash flow may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for ~~net~~Net cash provided by (used in) continuing operating activities in accordance with GAAP.

A reconciliation of ~~net~~Net cash provided by (used in) continuing operating activities to free cash flow for the nine months ended September 30 is as follows:


In millions	In millions	2020		2019		In millions	2021		2020
Net cash provided by (used in) continuing operating activities	Net cash provided by (used in) continuing operating activities	$	1,132.9	$	894.5	Net cash provided by (used in) continuing operating activities	$	1,162.6	$	1,132.9
Capital expenditures	Capital expenditures	(89.1)		(151.6)		Capital expenditures	(121.6)		(89.1)
Cash payments for restructuring	Cash payments for restructuring	62.3		33.4		Cash payments for restructuring	27.1		62.3
Transformation costs paid	Transformation costs paid	22.4		—		Transformation costs paid	13.5		22.4
Free cash flow (1)	Free cash flow (1)	$	1,128.5	$	776.3	Free cash flow (1)	$	1,081.6	$	1,128.5

(1) Represents a non-GAAP measure.

Pensions

Our investment objective in managing defined benefit plan assets is to ensure that all present and future benefit obligations are met as they come due. We seek to achieve this goal while trying to mitigate volatility in plan funded status, contribution and expense by better matching the characteristics of the plan assets to that of the plan liabilities. We use a dynamic approach to asset allocation whereby a plan's allocation to fixed income assets increases as the plan's funded status improves. We monitor plan funded status and asset allocation regularly in addition to investment manager performance.

We monitor the impact of market conditions on our defined benefit plans on a regular basis. None of our defined benefit pension plans have experienced a significant impact on their liquidity due to the volatility in the markets. The Company currently projects that it will contribute a total of approximately ~~$99~~$57 million to our enterprise plans worldwide in ~~2020.~~2021. For further details on pension plan activity, see Note 1110 to the Condensed Consolidated Financial Statements.

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Supplemental Guarantor Financial Information

Trane Technologies plc (Plc or Parent Company) and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of public debt issued by other 100% directly or indirectly owned ~~subsidiaries.~~subsidiaries of Plc. The following table shows our guarantor relationships as of September 30, ~~2020:~~2021:


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~~TTFL and TTC HoldCo
Trane Technologies Lux International Holding Company S.à.r.l. (TT International)	None	All notes issued by ~~TT Lux~~TTFL and TTC HoldCo
Trane Technologies Global Holding Company Limited (TT Global)	None	All notes issued by ~~TT Lux~~TTFL and TTC HoldCo
Trane Technologies ~~Luxembourg Finance S.A. (TT Lux)~~Financing Limited (TTFL)(1)	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~~TTFL
Trane Technologies Company LLC (TTC)	~~9.000% Debentures due 2021~~ 7.200% Debentures due ~~2021-2025~~2022-2025 6.480% Debentures due 2025 Puttable debentures due 2027-2028	All notes issued by ~~TT Lux~~TTFL and TTC HoldCo

(1) ~~Plc is formerly known as Ingersoll-Rand plc~~

~~TT Holdings is formerly known as Ingersoll-Rand Irish Holdings Unlimited Company~~

~~TT International is formerly known as Ingersoll-Rand Lux International Holding Company S.à.r.l~~

~~TT Global is formerly known as Ingersoll-Rand Global Holding Company Limited~~

~~TT Lux is formerly known as Ingersoll-Rand~~On April 30, 2021, Trane Technologies Luxembourg Finance ~~S.A~~

~~TTC HoldCo is a new entity as of June 30, 2020~~

~~TTC is~~S.A. (TT Lux) merged into TTFL, an Irish private limited company, and TTFL became the successor ~~to Ingersoll-Rand Company~~issuer of certain notes and assumed the guarantees and other obligations previously held by TT Lux.

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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~~Parent Company by a subsidiary. The following tables present summarized financial information for the Parent Company and subsidiary debt issuers and guarantors on a combined basis (together, "obligor group") after elimination of intercompany transactions and balances based on the Company’s legal entity ownerships and guarantees outstanding at September 30, ~~2020.~~2021. Our obligor groups ~~are~~as of September 30, 2021 were as follows: obligor group 1 consists of Plc, TT Holdings, TT International, TT Global, ~~TT Lux,~~TTFL, TTC HoldCo and TTC; obligor group 2 consists of Plc, ~~TT Lux~~TTFL and TTC.

Summarized ~~Statement~~Statements of ~~Comprehensive~~ Income (Loss)

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)

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	Nine months ended September 30, 2021
In millions	Obligor group 1		Obligor group 2
Net revenues	$	—	$	—
Gross profit (loss)	—		—
Intercompany interest and fees	(13.8)		170.2
Earnings (loss) from continuing operations	(242.4)		(75.9)
Discontinued operations, net of tax	(12.8)		(13.7)
Net earnings (loss)	(255.2)		(89.6)
Less: Net earnings attributable to noncontrolling interests	—		—
Net earnings (loss) attributable to Trane Technologies plc	$	(255.2)	$	(89.6)

Summarized Balance Sheets


		September 30, 2020					September 30, 2021
In millions	In millions	Obligor group 1		Obligor group 2		In millions	Obligor group 1		Obligor group 2
ASSETS	ASSETS					ASSETS
Intercompany receivables	Intercompany receivables	$	102.5	$	1,151.3	Intercompany receivables	$	116.5	$	505.5
Current assets	Current assets	1,187.2		1,858.5		Current assets	1,681.2		2,044.4
Intercompany notes receivable	Intercompany notes receivable	1,331.9		—		Intercompany notes receivable	1,831.9		5,531.6
Noncurrent assets	Noncurrent assets	2,222.2		671.5		Noncurrent assets	2,654.9		6,126.6
LIABILITIES & EQUITY	LIABILITIES & EQUITY					LIABILITIES & EQUITY
Intercompany payables	Intercompany payables	4,876.3		1,914.4		Intercompany payables	4,866.7		3,374.5
Current liabilities	Current liabilities	6,105.8		2,801.9		Current liabilities	5,676.3		4,153.3
Intercompany notes payable	Intercompany notes payable	2,249.7		—		Intercompany notes payable	2,400.4		2,400.4
Noncurrent liabilities	Noncurrent liabilities	7,714.5		3,412.7		Noncurrent liabilities	7,875.2		5,825.1


		December 31, 2019					December 31, 2020
In millions	In millions	Obligor group 1		Obligor group 2		In millions	Obligor group 1		Obligor group 2
ASSETS	ASSETS					ASSETS
Intercompany receivables	Intercompany receivables	$	166.5	$	3,203.5	Intercompany receivables	$	458.4	$	1,254.7
Current assets	Current assets	605.1		3,600.3		Current assets	1,523.7		2,200.5
Intercompany notes receivable	Intercompany notes receivable	1,331.9		—		Intercompany notes receivable	1,331.9		1,331.9
Noncurrent assets	Noncurrent assets	2,449.6		905.8		Noncurrent assets	2,195.0		1,967.2
LIABILITIES & EQUITY	LIABILITIES & EQUITY					LIABILITIES & EQUITY
Intercompany payables	Intercompany payables	5,113.2		1,402.2		Intercompany payables	5,572.2		3,599.6
Current liabilities	Current liabilities	6,253.3		2,524.4		Current liabilities	6,880.3		4,539.1
Intercompany notes payable	Intercompany notes payable	2,249.7		—		Intercompany notes payable	2,249.7		—
Noncurrent liabilities	Noncurrent liabilities	8,280.6		3,698.1		Noncurrent liabilities	7,729.6		3,430.5

For a further discussion of Liquidity and Capital Resources, refer to the discussion under that heading herein and in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in our Annual Report on Form 10-K for the period ended December 31, ~~2019.~~2020.

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Commitments and Contingencies

We are involved in various ~~litigations,~~litigation, claims and administrative proceedings, including those related to ~~asbestos,~~the bankruptcy proceedings for Aldrich and Murray and environmental and product liability matters. 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 Note 2120 to the Condensed Consolidated Financial Statements, management believes that the liability which may result from these legal matters would not have a material adverse effect on our financial condition, results of operations, liquidity or cash flows.

Critical Accounting Policies

Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with those accounting principles 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 contingent assets and liabilities because they result primarily from the need to make estimates and assumptions on matters that are inherently uncertain. Actual results may differ from estimates.

Management believes there have been no significant policy changes during the nine months ended September 30, ~~2020,~~2021, to the items that we disclosed as our critical accounting policies in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Recent Accounting Pronouncements

See Note 3 to the Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements.

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Safe Harbor Statement

Certain statements in this report, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements.

Forward-looking statements may relate to such matters as projections of revenue, margins, expenses, tax provisions, earnings, cash flows, benefit obligations, share or debt repurchases or other financial items; any statements of the plans, strategies and objectives of management for future operations, including those relating to any statements concerning expected development, performance or market share relating to our products and services; any statements regarding future economic conditions or our performance including our future performance during the COVID-19 global pandemic; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on our forward-looking statements. You are advised to review any further disclosures we make on related subjects in materials we file with or furnish to the SEC. Forward-looking statements speak only as of the date they are made and are not guarantees of future performance. They are subject to future events, risks and uncertainties - many of which are beyond our control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from our expectations and projections. We do not undertake to update any forward-looking statements.

Factors that might affect our forward-looking statements include, among other things:

•impacts of the COVID-19 global pandemic on our business operations, financial results and financial position and on the world economy;

•overall economic, political and business conditions in the markets in which we operate;

•trade protection measures such as import or export restrictions and requirements, the ~~demand for our products~~imposition of tariffs and ~~services;~~quotas or revocation or material modification of trade agreements;

•competitive factors in the industries in which we compete;

•our ability to develop new products and services and the acceptance of these products in the markets we serve;

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•other capital market conditions, including availability of funding sources, interest rates fluctuations and other changes in borrowing costs;

•currency exchange rate fluctuations, exchange controls and currency devaluations;

•the outcome of any litigation, governmental investigations or proceedings;

•the outcome of Chapter 11 proceedings for our deconsolidated subsidiaries Aldrich and Murray;

•the impact of potential information technology, system failures, data security breaches or other cybersecurity issues;

•evolving data privacy and protection laws;

•intellectual property infringement claims and the inability to protect our intellectual property rights;

•changes in laws and regulations;

•health epidemics or pandemics or other contagious outbreaks;

•climate change, changes in weather patterns, natural disasters and seasonal fluctuations;

•availability of and fluctuations in the prices of key commodities;

•supply chain risks;

•the outcome of any income tax audits or settlements;

•the strategic acquisition of businesses, product lines and joint ventures;

•impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;

•changes in tax laws and requirements (including tax rate changes, new tax laws, new and/or revised tax law interpretations and any legislation that may limit or eliminate potential tax benefits resulting from our incorporation in a non-U.S. jurisdiction, such as Ireland);

•~~trade protection measures such as import or export restrictions and requirements, the imposition of tariffs and quotas or revocation or material modification of trade agreements;~~

•~~the outcome of any litigation, governmental investigations or proceedings;~~

•~~the outcome of any income tax audits or settlements;~~

•~~the outcome of Chapter 11 proceedings for our deconsolidated subsidiaries Aldrich and Murray;~~

•~~interest rate fluctuations and other changes in borrowing costs;~~

•~~other capital market conditions, including availability of funding sources;~~

•~~currency exchange rate fluctuations, exchange controls and currency devaluations;~~

•~~availability of and fluctuations in the prices of key commodities;~~

•~~impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;~~

•~~climate change, changes in weather patterns, natural disasters and seasonal fluctuations;~~

•~~the impact of potential information technology or data security breaches;~~ and

•~~the strategic acquisition of businesses, product lines~~work stoppages, union negotiations, labor disputes and ~~joint ventures;~~similar issues

Some of the significant risks and uncertainties that could cause actual results to differ materially from our expectations and projections are described more fully in the “Risk Factors” section ~~of our~~in this Quarterly ~~Reports~~Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020. There may also be other factors that have not been anticipated or that are not described in our periodic filings with the SEC, generally because we did not believe them to be significant at the time, which could cause results to differ materially from our expectations.

~~Table of Contents~~

Available Information

We have used, and intend to continue to use, the homepage, the investor relations and the “News” section of our website (www.tranetechnologies.com), among other sources such as press releases, public conference calls and webcasts, as a means of disclosing additional information, which may include future developments ~~related to~~regarding the ~~COVID-19 global pandemic~~Company and/or material non-public information. We encourage investors, the media, and others interested in our Company to review the information it makes public in these locations on its website.

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Item 3 – Quantitative and Qualitative Disclosures about Market Risk

The COVID-19 global pandemic created substantial volatility in the short-term credit markets during the first half of the year. Recurring volatility could impact the cost of our credit facilities, the cost of any borrowing we might make under those facilities or the cost of any commercial paper we may issue, to the extent we were to either draw on our facilities or issue commercial paper.

For a discussion of the Company’s exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020.

Item 4 – Controls and Procedures

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of September 30, ~~2020,~~2021, that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this Quarterly Report on Form 10-Q has been recorded, processed, summarized and reported when required and the information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting that occurred during the third quarter of ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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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 those related to the bankruptcy proceedings for Aldrich and Murray, 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~~On the Petition Date, Aldrich and Murray each filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. 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. Only Aldrich and Murray have filed for Chapter 11 relief. Neither Aldrich's wholly-owned subsidiary, 200 Park, Murray's wholly-owned subsidiary, ClimateLabs, Trane Technologies plc nor the Trane Companies are part of the Chapter 11 filings.

On August 26, 2021, we announced that Aldrich and Murray reached an agreement in principle with the FCR in the bankruptcy proceedings. The agreement includes the key terms for the permanent resolution of all current and future asbestos claims against Aldrich and Murray pursuant to the Plan. Under the agreed terms, the Plan would create a trust pursuant to section 524(g) of the Bankruptcy Code and establish claims resolution procedures for the Asbestos Claims. On the effective date of the Plan, Aldrich and Murray would fund the trust with $545.0 million, comprised of $540.0 million in cash and a promissory note to be issued by Aldrich and Murray to the trust in the principal amount of $5.0 million, and the Asbestos Claims would be channeled to the trust for resolution in accordance with the claims resolution procedures. Following the effective date of the Plan, Aldrich and Murray, would have no further obligations with respect to the Asbestos Claims. The FCR has agreed to support such Plan. The agreement in principle with the FCR is subject to final documentation and is conditioned on arrangements acceptable to Aldrich and Murray with respect to their asbestos insurance assets. It is currently contemplated that the asbestos insurance assets of Aldrich and Murray would be contributed to the trust, and that, in consideration of their cash contribution to the trust, Aldrich and Murray would have the exclusive right to pursue, collect and retain all insurance reimbursements available in connection with the resolution of Asbestos Claims by the trust. The ACC is not a party to the agreement in principle. Any settlement and its implementation in a plan of reorganization is subject to the approval of the Bankruptcy Court, and there can be no assurance that the Bankruptcy Court will approve the agreement on the terms proposed.

On September 24, 2021, Aldrich and Murray filed the Plan with the Bankruptcy Court. The Plan is supported by, and reflects the previously announced agreement in principle reached with the FCR. In connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a QSF Trust. The funds held in the QSF Trust would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan. If approved by the Bankruptcy Court and other conditions are satisfied, the QSF Trust is expected to be funded prior to January 31, 2022. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last. The Chapter 11 cases remain pending as of November 3, 2021.

Prior to the Petition Date, certain of our wholly-owned subsidiaries and former companies ~~are~~were 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, ~~2019~~2020 under Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and also Note 2120 to the Condensed Consolidated Financial Statements in this Form 10-Q.

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Item 1A – Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Item 1A.

~~"Risk~~ "Risk Factors" contained in our Annual Report on Form 10-K for the period ended December 31, ~~2019~~2020 and the risk factors 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~~Bankruptcy Code ~~(the Bankruptcy Code)~~ in the ~~United States~~ Bankruptcy ~~Court for the Western District of North Carolina in Charlotte (the Bankruptcy Court).~~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.~~pending as of November 3, 2021.

Certain of our subsidiaries have entered into ~~funding agreements~~Funding Agreements with Aldrich and Murray, ~~(collectively the Funding Agreements),~~ pursuant to which those subsidiaries are obligated, among other things, to ~~pay~~fund 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.

On August 26, 2021, the Company announced that Aldrich and Murray reached an agreement in principle with the court appointed legal representative of the FCR in the bankruptcy proceedings. The agreement in principle includes the key terms for the permanent resolution of all current and future asbestos claims against Aldrich and Murray pursuant to the Plan as described further in Note 20, “Commitments and Contingencies” and “Item 1- Legal Proceedings” in this report. The agreement in principle with the FCR is subject to final documentation and is conditioned on arrangements acceptable to Aldrich and Murray with respect to their asbestos insurance assets. The ACC is not a party to the agreement in principle. Any settlement and its implementation in a plan of reorganization is subject to the approval of the Bankruptcy Court, and there can be no assurance that the Bankruptcy Court will approve the agreement on the terms proposed.

On September 24, 2021, Aldrich and Murray filed the Plan with the Bankruptcy Court. The Plan is supported by and reflects the previously announced agreement in principle reached with the FCR. In connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a QSF Trust. The funds held in the QSF Trust would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan. If approved by the Bankruptcy Court and other conditions are satisfied, the QSF Trust is expected to be funded prior to January 31, 2022. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last.

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;~~plan and the ability to consummate the settlement reached with the FCR;

•the outcome of negotiations with ~~a committee of asbestos personal injury claimants, a future claimants' representative~~the ACC and the FCR and other participants in the Chapter 11 cases, including insurers, concerning, among other things, the size and structure of a potential section 524(g) trust to pay the asbestos liability of Aldrich and Murray and the means for funding that trust;

•the actions of representatives of the asbestos claimants, including ~~their~~the filing of a motion by the ACC seeking standing to pursue certain causes of action against us and other potential actions in opposition to, or otherwise inconsistent with, 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~~diligently prosecute the ~~Bankruptcy Court estimate their aggregate asbestos liability, potential actions by them seeking dismissal of~~ Chapter 11 cases and ~~potential efforts by them to~~ultimately seek ~~court~~Bankruptcy Court approval of ~~their own~~a plan of reorganization;

•the decisions of the Bankruptcy Court relating to numerous substantive and procedural aspects of the Chapter 11 ~~case,~~cases, including ~~with regard~~the effort by Aldrich and Murray to ~~the extension of the Bankruptcy Court order temporarily staying asbestos-related~~conduct a proceeding to estimate their aggregate liability for certain asbestos claims ~~against us,~~and other efforts by Aldrich and Murray to ~~have the Bankruptcy Court estimate their aggregate asbestos liability and the ultimate disposition of~~diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization, whether such decisions are in response to ~~action by~~actions of representatives of the asbestos claimants ~~seeking dismissal thereof, efforts by~~or otherwise;

• the risk that Aldrich and Murray may be unable to obtain the necessary approvals of the Bankruptcy Court or the United States District Court for the Western District of North Carolina (the District Court) or a plan of reorganization;

• the risk that any ~~party to confirm~~orders approving a plan of reorganization ~~or otherwise;~~ and issuing the channeling injunction do not become final;

• the terms and conditions of any plan of reorganization that is ultimately confirmed in the Chapter 11 cases;

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• delays in the confirmation or effective date of a plan of reorganization or the approval or funding of the QSF Trust due to factors beyond the Company’s control;

• the risk that the ultimate amount required under any final plan of reorganization may exceed the amounts agreed to with the FCR in the Plan;

• the risk that the insurance carriers do not support the Plan, the risk that the ACC objects to the Plan and/or the motion to establish the QSF Trust; and

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

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~~agreements 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, any plan of reorganization or the QSF Trust, or the resulting impact on our financial condition, results of operations or future prospects. We also 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 / will be successful in bringing claims against us and other related parties, including by raising allegations that we are liable for the asbestos-related liabilities of Aldrich and ~~Murray.~~Murray as set forth in certain pleadings filed by the ACC in the Chapter 11 cases. 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~~

Security breaches or disruptions of the technology systems, infrastructure or products of the Company or our vendors could negatively impact our business and financial results.

Our information technology systems, networks and infrastructure and technology embedded in certain of our control products have been and are vulnerable to cyber attacks and unauthorized security intrusions. From time to time, vulnerabilities in our products are discovered and updates are made available, but customers are vulnerable until those updates are applied or other mitigating actions are taken by customers to protect their systems and networks. Like other large companies, certain of our information technology systems and the systems of our vendors have been subject to computer viruses, malicious code, unauthorized access, phishing attempts, denial-of-service attacks and other cyber attacks and we expect that we and our vendors will be subject to similar attacks in the future.

The methods used to obtain unauthorized access, disable or degrade service, or sabotage information technology systems are constantly changing and evolving. Despite having instituted security policies and business continuity plans, and implementing and regularly reviewing and updating processes and procedures to protect against unauthorized access and requiring similar protections from our vendors, the ever-evolving threats mean we must continually evaluate and adapt our systems and processes and ask our vendors to do the same, and there is no guarantee that such steps will be adequate to safeguard against all data security breaches or misuses of data. Hardware, software or applications we develop or obtain from third parties may contain defects in design or deployment or other problems that could unexpectedly result in security breaches or disruptions. Our systems, networks and certain of our control products and those of our vendors are vulnerable to system damage, malicious attacks from hackers, employee errors or misconduct, viruses, power and utility outages, and other catastrophic events. Any of these incidents could cause significant harm to our business by negatively impacting our business operations, compromising the security of our proprietary information or the personally identifiable information of our customers, employees and business partners, exposing us to litigation or other legal actions against us or the imposition of penalties, fines, fees or liabilities. Such events could have a ~~more~~ material adverse impact on our ~~business,~~results of operations, financial condition and cash flows and could damage our reputation which could adversely affect our business. Our insurance coverage may not be adequate to cover all the costs related to a cybersecurity attack or disruptions resulting from such attacks. Customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands.

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Global climate change and related legal and regulatory developments could negatively affect our business.

Climate change presents immediate and long-term risks to Trane Technologies and to its customers, with the risks expected to increase over time. Our products and operations are subject to and affected by environmental regulation by federal, state and local authorities in the U.S. and regulatory authorities with jurisdiction over our international operations, including with respect to the use, storage, and dependence upon refrigerants which are considered greenhouse gases. Refrigerants are essential to many of our products and there is concern regarding the global warming potential of such materials. As such, national, regional and international regulations and policies are being implemented to curtail their use. Some of these regulations could have a negative competitive impact on our company by requiring us to make costly changes to our products. As regulations reduce the use of the current class of widely used refrigerants, we are developing and selling our next generation products that utilize lower global warming potential solutions. There can be no assurance that climate change or environmental regulation or deregulation will not have a negative competitive impact on our ability to sell these products or that economic returns will match the investment that we are making in new product development. We face increasing complexity related to product design, the use of regulated materials, the associated energy consumption and efficiency related to the use of products, the transportation and shipping of products, climate change regulations, and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life as we adjust to new and future requirements relating to our transition to a more circular economy. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty. Such regulatory uncertainty extends to future incentives for energy efficient buildings and vehicles and costs of compliance, which may impact the demand for our products, obsolescence of our products and our results of operations.

WeOur climate commitment requires us to offer a full line of next generation products by 2030 without compromising safety or energy efficiency. Additionally, in 2019, we announced our 2030 commitment which targets reducing one gigaton – one billion metric tons – of carbon emissions (CO2e) from our customers’ footprint by 2030. While we are ~~closely monitoring the impact of the COVID-19 global pandemic on all aspects of~~committed to pursuing these sustainability objectives, there can be no assurance that we will successfully achieve our ~~business~~commitments. Failure to meet these commitments could result in reputational harm to our company and ~~geographies, including how it has~~changes regarding climate risk management and ~~will impact~~practices may result in higher regulatory, compliance risks and costs.

Natural disasters, epidemics or other catastrophic events may disrupt 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.~~condition, and may not be fully covered by insurance.

~~While~~The occurrence of one or more catastrophic events including hurricanes, fires, earthquakes, floods and other forms of severe weather, health epidemics or pandemics or other contagious outbreaks or other catastrophic events in the U.S. or in other countries in which we operate or are located could adversely affect our operations and financial performance. Natural disasters, power outages, health epidemics or pandemics or other contagious outbreaks or other unexpected events could result in physical damage to and complete or partial closure of one or more of our plants, temporary or long-term disruption of our operations by causing business interruptions, material scarcity, price volatility or supply chain disruptions. Climate change is a risk multiplier with respect to these physical disasters in both frequency and severity and may affect our global business operations as a result. Existing insurance arrangements may not provide full protection for the costs that may arise from such events, particularly if such events are catastrophic in nature or occur in combination. The occurrence of any of these events could increase our insurance and other operating costs or harm our sales in affected areas.

Commodity shortages, supply chain risks and price increases could adversely affect our financial results.

We rely on suppliers to secure commodities, particularly steel and non-ferrous metals, and third-party parts and components required for the manufacture of our products. A disruption in deliveries from our suppliers or decreased availability of commodities and third-party parts and components could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs. Disruptions have occurred due to the COVID-19 pandemic, capacity constraints, labor shortages, port congestion, logistical problems and other issues. Some of these disruptions have resulted in supply chain constraints affecting our business ~~is largely categorized as “essential” by~~including our ability to timely produce and ship our products. The unavailability of some commodities and third-party parts and components could have a material adverse impact on our results of operations and cash flows.

Volatility in the ~~U.S. Department~~prices of ~~Homeland Security,~~commodities and third-party parts and components or the ~~COVID-19 global pandemic has caused certain disruptions to and shutdowns~~impact of inflationary increases could increase the costs of our ~~business~~products and services. We may not be able to pass on these costs to our customers and this could have a material adverse impact on our results of operations and ~~could cause material disruptions to and shutdowns of our business and operations~~cash flows. Conversely, in the ~~future as a result of, among other things, quarantines, worker absenteeism as a result of illness~~event there is deflation, we may experience pressure from our customers to reduce prices. There can be no assurance that we would be able to reduce our costs (through negotiations with suppliers 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~~measures) to ~~lower volume~~offset any such price concessions 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 tocould adversely impact ~~our suppliers~~results of operations and ~~their manufacturers~~cash flows. While we may use financial derivatives or supplier price locks to hedge against this volatility, by using these instruments we may potentially forego the benefits that might result from favorable fluctuations in prices and ~~our customers.~~ could experience lower margins in periods of declining commodity prices. In addition, while hedging activity may minimize near-term volatility of the commodity prices, it would not protect us from long-term commodity price increases.

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Some of our purchases are from sole or limited source suppliers for reasons of cost effectiveness, uniqueness of design, or product quality. ~~The effects~~If these suppliers encounter financial or operating difficulties, we might not be able to quickly establish or qualify replacement sources 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-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 ~~2020:~~2021:


Period	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)		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	July 1 - July 31	—	$	88.91	—	$	749,959	July 1 - July 31	1,170.8	$	191.84	1,170.8	$	1,921,177
August 1 - August 31	August 1 - August 31	3.6	112.11		—	749,959		August 1 - August 31	106.3	202.17		105.8	1,899,788
September 1 - September 30	September 1 - September 30	—	—		—	749,959		September 1 - September 30	0.1	197.88		—	1,899,788
Total	Total	3.6	$	111.73	—			Total	1,277.2	$	192.70	1,276.6

(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). In February 2021, our Board of Directors authorized the repurchase of up to $2.0 billion of our ordinary shares under a new share repurchase program (2021 Authorization) upon completion of the ~~prior authorized share repurchase program. There were no share~~2018 Authorization. During the three months ended September 30, 2021, we repurchased and canceled $246.0 million of our ordinary shares thus completing the 2018 Authorization and initiating repurchases under the ~~2018~~2021 Authorization ~~during~~of $100.2 million of our ordinary shares leaving approximately $1.9 billion remaining under the ~~third quarter.~~2021 Authorization.

(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 59468 shares in ~~July~~August and ~~3,585~~78 shares in ~~August~~September in transactions outside of the repurchase programs.

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Item 6 – Exhibits

(a) Exhibits

Exhibit No.

Description

Method of Filing

10.1

First Amendment dated September 24, 2021 to the Credit Facility date April 17, 2018 by and among Trane Technologies Holdco Inc., Trane Technologies Global Holding Company Limited and Trane Technologies Financing Limited, Trane Technologies plc, Trane Technologies Lux International Holding Company S.à r.l., Trane Technologies Irish Holdings Unlimited Company, Trane Technologies Company LLC, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, Bank of America, N.A., BNP Paribas, Goldman Sachs Bank USA, Mizuho Bank, Ltd., as Documentation Agents, and JPMorgan Chase Bank, N.A. and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunners, and certain lending institutions from time to time parties thereto.

Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on September 30, 2021.

22.1

List of Guarantors and Subsidiary Issuers of Guaranteed Securities.

Filed herewith.

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, ~~2020,~~2021, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income (Loss) (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), ~~(ii)~~(iii) the Condensed Consolidated Balance Sheets, ~~(iii)~~(iv) the Condensed Consolidated Statements of Equity, ~~(iv)~~(v) the Condensed Consolidated Statements of Cash Flows, and ~~(v)~~(vi) Notes to Condensed Consolidated Financial Statements.

Filed herewith.

104

Cover Page Interactive Data File (embedded within the iXBRL document and contained in Exhibit 101).

Filed herewith.

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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:	~~October 28, 2020~~November 3, 2021	/s/ Christopher J. Kuehn
		Christopher J. Kuehn, ~~Senior~~Executive Vice President and Chief Financial Officer Principal Financial Officer

Date:	~~October 28, 2020~~November 3, 2021	/s/ Heather R. Howlett
		Heather R. Howlett, Vice President and Chief Accounting Officer Principal Accounting Officer

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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	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	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


	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)