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~~June 30, ~~2021~~2022


☐			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~~July 22, ~~2021~~2022 was ~~237,540,178.~~231,717,363.

Table of Contents

TRANE TECHNOLOGIES PLC

FORM 10-Q

INDEX



PART I FINANCIAL INFORMATION		1

Item 1 -	Financial Statements	1

	Condensed Consolidated Statements of ~~Income (Loss)~~Earnings for the three and s ~~nine~~ix months ended ~~September~~June 30 , 2022 and 2021 ~~and 2020~~	1

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six ~~nine~~months ended ~~September~~June 30 ~~30,~~, 2022 and 2021 ~~and 2020~~	2

	Condensed Consolidated Balance Sheets at ~~September~~June 30 ~~30, 2021~~, 2022 and December 31, ~~2020~~2021	3

	Condensed Consolidated Statements of Equity for the three and s ~~nine~~ix months ended ~~September~~June 30 ~~30,~~, 2022 and 2021 ~~and 2020~~	4

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30 ~~30,~~, 2022 and 2021 ~~and 2020~~	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3027

Item 3 -	Quantitative and Qualitative Disclosures about Market Risk	4844

Item 4 -	Controls and Procedures	4844

PART II OTHER INFORMATION		4945

Item 1 -	Legal Proceedings	4945

Item 1A -	Risk Factors	5046

Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	5348

Item 5 -	Other Information	48

Item 6 -	Exhibits	5449

SIGNATURES		5550

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1.Financial Statements


TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS										TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
		Three months ended				Nine months ended					Three months ended				Six months ended
		September 30,				September 30,					June 30,				June 30,
In millions, except per share amounts	In millions, except per share amounts	2021		2020		2021		2020		In millions, except per share amounts	2022		2021		2022		2021
Net revenues	Net revenues	$	3,719.8	$	3,495.5	$	10,567.1	$	9,275.6	Net revenues	$	4,190.4	$	3,829.7	$	7,545.9	$	6,847.3
Cost of goods sold	Cost of goods sold	(2,515.6)		(2,360.8)		(7,139.0)		(6,420.1)		Cost of goods sold	(2,867.0)		(2,559.0)		(5,233.5)		(4,623.4)
Selling and administrative expenses	Selling and administrative expenses	(620.8)		(567.8)		(1,840.5)		(1,710.7)		Selling and administrative expenses	(612.8)		(619.7)		(1,213.6)		(1,219.7)
Operating income	Operating income	583.4		566.9		1,587.6		1,144.8		Operating income	710.6		651.0		1,098.8		1,004.2
Interest expense	Interest expense	(57.7)		(62.4)		(177.7)		(186.8)		Interest expense	(55.9)		(59.3)		(111.9)		(120.0)
Other income/(expense), net	Other income/(expense), net	(6.9)		(4.5)		(13.8)		7.6		Other income/(expense), net	(1.6)		0.3		(2.3)		(6.9)
Earnings before income taxes	Earnings before income taxes	518.8		500.0		1,396.1		965.6		Earnings before income taxes	653.1		592.0		984.6		877.3
Benefit (provision) for income taxes		(96.8)		(89.9)		(268.0)		(224.4)
Provision for income taxes										Provision for income taxes	(136.6)		(122.8)		(197.7)		(171.2)
Earnings from continuing operations	Earnings from continuing operations	422.0		410.1		1,128.1		741.2		Earnings from continuing operations	516.5		469.2		786.9		706.1
Discontinued operations, net of tax	Discontinued operations, net of tax	(13.3)		(5.5)		(12.6)		(120.4)		Discontinued operations, net of tax	(1.6)		(0.2)		(8.6)		0.7
Net earnings	Net earnings	408.7		404.6		1,115.5		620.8		Net earnings	514.9		469.0		778.3		706.8
Less: Net earnings from continuing operations attributable to noncontrolling interests	Less: Net earnings from continuing operations attributable to noncontrolling interests	(3.0)		(4.0)		(9.9)		(9.7)		Less: Net earnings from continuing operations attributable to noncontrolling interests	(5.6)		(4.3)		(8.8)		(6.9)
Less: Net earnings from discontinuing operations attributable to noncontrolling interests		—		—		—		(0.9)

Net earnings attributable to Trane Technologies plc	Net earnings attributable to Trane Technologies plc	$	405.7	$	400.6	$	1,105.6	$	610.2	Net earnings attributable to Trane Technologies plc	$	509.3	$	464.7	$	769.5	$	699.9

Amounts attributable to Trane Technologies plc ordinary shareholders:	Amounts attributable to Trane Technologies plc ordinary shareholders:									Amounts attributable to Trane Technologies plc ordinary shareholders:
Continuing operations	Continuing operations	$	419.0	$	406.1	$	1,118.2	$	731.5	Continuing operations	$	510.9	$	464.9	$	778.1	$	699.2
Discontinued operations	Discontinued operations	(13.3)		(5.5)		(12.6)		(121.3)		Discontinued operations	(1.6)		(0.2)		(8.6)		0.7
Net earnings	Net earnings	$	405.7	$	400.6	$	1,105.6	$	610.2	Net earnings	$	509.3	$	464.7	$	769.5	$	699.9
Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:	Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:									Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:
Basic:	Basic:									Basic:
Continuing operations	Continuing operations	$	1.76	$	1.69	$	4.68	$	3.05	Continuing operations	$	2.19	$	1.94	$	3.32	$	2.92
Discontinued operations	Discontinued operations	(0.06)		(0.02)		(0.06)		(0.51)		Discontinued operations	(0.01)		—		(0.03)		—
Net earnings	Net earnings	$	1.70	$	1.67	$	4.62	$	2.54	Net earnings	$	2.18	$	1.94	$	3.29	$	2.92
Diluted:	Diluted:									Diluted:
Continuing operations	Continuing operations	$	1.73	$	1.67	$	4.61	$	3.01	Continuing operations	$	2.17	$	1.91	$	3.29	$	2.87
Discontinued operations	Discontinued operations	(0.05)		(0.03)		(0.06)		(0.50)		Discontinued operations	(0.01)		—		(0.03)		0.01
Net earnings	Net earnings	$	1.68	$	1.64	$	4.55	$	2.51	Net earnings	$	2.16	$	1.91	$	3.26	$	2.88
Weighted-average shares outstanding:	Weighted-average shares outstanding:									Weighted-average shares outstanding:
Basic	Basic	238.2		240.4		239.2		240.0		Basic	233.8		239.9		234.2		239.6
Diluted	Diluted	241.7		243.7		242.8		242.7		Diluted	235.7		243.4		236.4		243.3

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents


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

		Three months ended				Nine months ended					Three months ended				Six months ended
		September 30,				September 30,					June 30,				June 30,
In millions	In millions	2021		2020		2021		2020		In millions	2022		2021		2022		2021
Net earnings	Net earnings	$	408.7	$	404.6	$	1,115.5	$	620.8	Net earnings	$	514.9	$	469.0	$	778.3	$	706.8
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Currency translation	Currency translation	(67.7)		111.3		(101.4)		107.4		Currency translation	(177.2)		48.8		(194.3)		(33.7)
Cash flow hedges:	Cash flow hedges:									Cash flow hedges:
Unrealized net gains (losses) arising during period	Unrealized net gains (losses) arising during period	5.1		1.5		1.3		1.7		Unrealized net gains (losses) arising during period	(34.1)		0.8		(21.6)		(3.8)
Net (gains) losses reclassified into earnings	Net (gains) losses reclassified into earnings	(7.9)		0.7		(5.1)		1.1		Net (gains) losses reclassified into earnings	(2.1)		1.9		(2.7)		2.8
Tax (expense) benefit	Tax (expense) benefit	0.5		(0.4)		1.9		0.4		Tax (expense) benefit	8.2		1.1		5.1		1.4
Total cash flow hedges, net of tax	Total cash flow hedges, net of tax	(2.3)		1.8		(1.9)		3.2		Total cash flow hedges, net of tax	(28.0)		3.8		(19.2)		0.4
Pension and OPEB adjustments:	Pension and OPEB adjustments:									Pension and OPEB adjustments:

Net actuarial gains (losses) for the period		—		—		—		(21.3)

Amortization reclassified into earnings	Amortization reclassified into earnings	9.7		10.5		29.1		32.7		Amortization reclassified into earnings	5.4		9.7		10.9		19.4
Net curtailment and settlement (gains) losses reclassified to earnings	Net curtailment and settlement (gains) losses reclassified to earnings	—		(0.1)		6.9		(3.7)		Net curtailment and settlement (gains) losses reclassified to earnings	—		—		—		6.9
Currency translation and other	Currency translation and other	4.6		(6.6)		4.9		(3.0)		Currency translation and other	10.0		(2.7)		12.6		0.3
Tax (expense) benefit	Tax (expense) benefit	(2.4)		(1.9)		(17.1)		(6.9)		Tax (expense) benefit	(1.6)		(10.3)		(2.8)		(14.7)
Total pension and OPEB adjustments, net of tax	Total pension and OPEB adjustments, net of tax	11.9		1.9		23.8		(2.2)		Total pension and OPEB adjustments, net of tax	13.8		(3.3)		20.7		11.9
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(58.1)		115.0		(79.5)		108.4		Other comprehensive income (loss), net of tax	(191.4)		49.3		(192.8)		(21.4)
Comprehensive income, net of tax	Comprehensive income, net of tax	$	350.6	$	519.6	$	1,036.0	$	729.2	Comprehensive income, net of tax	$	323.5	$	518.3	$	585.5	$	685.4
Less: Comprehensive income attributable to noncontrolling interests	Less: Comprehensive income attributable to noncontrolling interests	(1.9)		(3.9)		(8.1)		(12.7)		Less: Comprehensive income attributable to noncontrolling interests	(4.3)		(6.0)		(7.5)		(6.2)
Comprehensive income attributable to Trane Technologies plc	Comprehensive income attributable to Trane Technologies plc	$	348.7	$	515.7	$	1,027.9	$	716.5	Comprehensive income attributable to Trane Technologies plc	$	319.2	$	512.3	$	578.0	$	679.2

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, 2021		December 31, 2020		In millions	June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	2,738.8	$	3,289.9	Cash and cash equivalents	$	1,090.2	$	2,159.2
Accounts and notes receivable, net	Accounts and notes receivable, net	2,432.3		2,202.1		Accounts and notes receivable, net	2,758.2		2,429.4
Inventories	Inventories	1,482.8		1,189.2		Inventories	1,886.9		1,530.8
Other current assets	Other current assets	337.5		224.4		Other current assets	389.9		351.5
Total current assets	Total current assets	6,991.4		6,905.6		Total current assets	6,125.2		6,470.9
Property, plant and equipment, net	Property, plant and equipment, net	1,336.7		1,349.5		Property, plant and equipment, net	1,425.9		1,398.8
Goodwill	Goodwill	5,310.1		5,342.8		Goodwill	5,456.6		5,504.8
Intangible assets, net	Intangible assets, net	3,198.4		3,286.4		Intangible assets, net	3,282.5		3,305.6
Other noncurrent assets	Other noncurrent assets	1,365.6		1,272.4		Other noncurrent assets	1,390.6		1,379.7
Total assets	Total assets	$	18,202.2	$	18,156.7	Total assets	$	17,680.8	$	18,059.8
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,757.8	$	1,520.2	Accounts payable	$	2,000.2	$	1,787.3
Accrued compensation and benefits	Accrued compensation and benefits	462.4		451.1		Accrued compensation and benefits	458.9		544.8
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	1,742.9		1,592.0		Accrued expenses and other current liabilities	2,121.4		2,069.9
Short-term borrowings and current maturities of long-term debt	Short-term borrowings and current maturities of long-term debt	350.4		775.6		Short-term borrowings and current maturities of long-term debt	1,049.8		350.4
Total current liabilities	Total current liabilities	4,313.5		4,338.9		Total current liabilities	5,630.3		4,752.4
Long-term debt	Long-term debt	4,490.7		4,496.5		Long-term debt	3,786.7		4,491.7
Postemployment and other benefit liabilities	Postemployment and other benefit liabilities	977.1		1,024.6		Postemployment and other benefit liabilities	757.2		810.9
Deferred and noncurrent income taxes	Deferred and noncurrent income taxes	598.9		578.5		Deferred and noncurrent income taxes	616.5		581.5
Other noncurrent liabilities	Other noncurrent liabilities	1,334.3		1,291.1		Other noncurrent liabilities	1,150.8		1,150.2
Total liabilities	Total liabilities	11,714.5		11,729.6		Total liabilities	11,941.5		11,786.7
Equity:	Equity:					Equity:
Trane Technologies plc shareholders’ equity:	Trane Technologies plc shareholders’ equity:					Trane Technologies plc shareholders’ equity:
Ordinary shares	Ordinary shares	262.0		263.3		Ordinary shares	256.2		259.7
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	15.2		—		Capital in excess of par value	12.1		—
Retained earnings	Retained earnings	8,626.5		8,495.3		Retained earnings	8,003.7		8,353.2
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(709.2)		(631.5)		Accumulated other comprehensive income (loss)	(829.1)		(637.6)
Total Trane Technologies plc shareholders’ equity	Total Trane Technologies plc shareholders’ equity	6,475.1		6,407.7		Total Trane Technologies plc shareholders’ equity	5,723.5		6,255.9
Noncontrolling interests	Noncontrolling interests	12.6		19.4		Noncontrolling interests	15.8		17.2
Total equity	Total equity	6,487.7		6,427.1		Total equity	5,739.3		6,273.1
Total liabilities and equity	Total liabilities and equity	$	18,202.2	$	18,156.7	Total liabilities and equity	$	17,680.8	$	18,059.8

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, 2020				$	6,427.1			$	263.3		263.3			$	(1,719.4)				$	—				$		8,495.3			$	(631.5)		$	19.4
Balance at December 31, 2021																															Balance at December 31, 2021			$	6,273.1				$	259.7			259.7							$	(1,719.4)						$	—			$	8,353.2	$	(637.6)	$	17.2
Net earnings	Net earnings	237.8				—				—		—						—			235.2				—			2.6					Net earnings			263.4			—			—			—					—				260.2			—				3.2
Other comprehensive income (loss)	Other comprehensive income (loss)	(70.7)				—				—		—				—			—			(68.3)				(2.4)					Other comprehensive income (loss)			(1.4)			—				—		—					—				—			(1.4)				—
Shares issued under incentive stock plans	Shares issued under incentive stock plans	(7.0)				1.0				1.0		—				(8.0)			—			—				—					Shares issued under incentive stock plans			(24.2)			0.5				0.5		—					(24.7)				—			—				—
Repurchase of ordinary shares	Repurchase of ordinary shares	(104.2)				(0.7)				(0.7)		—				(16.7)			(86.8)			—				—					Repurchase of ordinary shares			(350.0)			(1.9)				(1.9)		—					3.3				(351.4)			—				—
Share-based compensation	Share-based compensation	24.2				—				—		—				24.7			(0.5)			—				—					Share-based compensation			21.4			—				—		—					21.3				0.1			—				—
Dividends declared to noncontrolling interest	Dividends declared to noncontrolling interest	(3.5)				—				—		—				—			—			—				(3.5)					Dividends declared to noncontrolling interest			(2.5)			—				—		—					—				—			—				(2.5)
Cash dividends declared		(141.0)				—				—		—				—			(141.0)			—				—
Dividends declared to common shareholders																															Dividends declared to common shareholders			(156.7)			—				—		—					—				(156.7)			—				—
Separation of Ingersoll Rand Industrial	Separation of Ingersoll Rand Industrial	(49.9)				—				—		—				—			(49.9)			—				—					Separation of Ingersoll Rand Industrial			(6.7)			—				—		—					—				(6.7)			—				—

Balance at March 31, 2021		$	6,312.8			$	263.6			263.6		$	(1,719.4)			$	—		$	8,452.3		$	(699.8)			$	16.1
Other																															Other			0.1			—				—		—					0.1				—			—				—
Balance at March 31, 2022																															Balance at March 31, 2022			$	6,016.5		$	258.3			258.3		$	(1,719.4)				$	—			$	8,098.7		$	(639.0)			$	17.9
Net earnings	Net earnings	469.0				—				—		—				—			464.7			—				4.3					Net earnings			514.9			—				—		—					—				509.3			—				5.6
Other comprehensive income (loss)	Other comprehensive income (loss)	49.3				—				—		—				—			—			47.6				1.7					Other comprehensive income (loss)			(191.4)			—				—		—					—				—			(190.1)				(1.3)
Shares issued under incentive stock plans	Shares issued under incentive stock plans	25.7				0.5				0.5		—				25.2			—			—				—					Shares issued under incentive stock plans			4.1			0.2				0.2		—					3.9				—			—				—
Repurchase of ordinary shares	Repurchase of ordinary shares	(250.0)				(1.4)				(1.4)		—				(40.0)			(208.6)			—				—					Repurchase of ordinary shares			(300.1)			(2.3)				(2.3)		—					(5.7)				(292.1)			—				—
Share-based compensation	Share-based compensation	13.9				—				—		—				14.8			(0.9)			—				—					Share-based compensation			13.1			—				—		—					13.9				(0.8)			—				—
Dividends declared to noncontrolling interest	Dividends declared to noncontrolling interest	(6.7)				—				—		—				—			—			—				(6.7)					Dividends declared to noncontrolling interest			(6.4)			—				—		—					—				—			—				(6.4)
Cash dividends declared		(281.4)				—				—		—				—			(281.4)			—				—
Dividends declared to common shareholders																															Dividends declared to common shareholders			(311.1)			—				—		—					—				(311.1)			—				—
Separation of Ingersoll Rand Industrial																															Separation of Ingersoll Rand Industrial			(0.3)			—				—		—					—				(0.3)			—				—

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

Other		0.2				—				—		—				0.1			0.1			—				—
Balance at September 30, 2021		$	6,487.7			$	262.0			262.0		$	(1,719.4)			$	15.2		$	8,626.5		$	(709.2)			$	12.6
Balance at June 30, 2022																															Balance at June 30, 2022			$	5,739.3		$	256.2			256.2		$	(1,719.4)				$	12.1			$	8,003.7		$	(829.1)			$	15.8

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, 2019				$	7,312.4			$	262.8		262.8			$	(1,719.4)				$	—				$		9,730.8			$	(1,006.6)		$	44.8
December 31, 2020																															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)				—			—				—

Repurchase of ordinary shares																															Repurchase of ordinary shares			(104.2)			(0.7)				(0.7)		—					(16.7)				(86.8)			—				—
Share-based compensation	Share-based compensation	27.6				—				—		—				29.0			(1.4)			—				—					Share-based compensation			24.2			—				—		—					24.7				(0.5)			—				—
Dividends declared to noncontrolling interest	Dividends declared to noncontrolling interest	(6.1)				—				—		—				—			—			—				(6.1)					Dividends declared to noncontrolling interest			(3.5)			—				—		—					—				—			—				(3.5)
Investment by joint venture partner		7.0				—				—		—				3.9			—			—				3.1
Cash dividends declared		(126.7)				—				—		—				—			(126.7)			—				—

Dividends declared to common shareholders																															Dividends declared to common shareholders			(141.0)			—				—		—					—				(141.0)			—				—
Separation of Ingersoll Rand Industrial	Separation of Ingersoll Rand Industrial	(1,334.3)				—				—		—				—			(1,445.6)			139.3				(28.0)					Separation of Ingersoll Rand Industrial			(49.9)			—				—		—					—				(49.9)			—				—
Balance at March 31, 2020		$	5,789.8			$	263.7			263.7		$	(1,719.4)			$	26.4		$	8,127.9		$	(926.0)			$	17.2

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	242.1				—				—		—				—			238.8			—				3.3					Net earnings			469.0			—				—		—					—				464.7			—				4.3
Other comprehensive income (loss)	Other comprehensive income (loss)	52.0				—				—		—				—			—			49.9				2.1					Other comprehensive income (loss)			49.3			—				—		—					—				—			47.6				1.7
Shares issued under incentive stock plans	Shares issued under incentive stock plans	3.7				0.1				0.1		—				3.6			—			—				—					Shares issued under incentive stock plans			25.7			0.5				0.5		—					25.2				—			—				—
Share-based compensation		16.0				—				—		—				16.5			(0.5)			—				—
Cash dividends declared		(254.0)				—				—		—				—			(254.0)			—				—
Separation of Ingersoll Rand Industrial		(17.2)				—				—		—				—			(17.2)			—				—
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		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			(250.0)			(1.4)				(1.4)		—					(40.0)				(208.6)			—				—
Share-based compensation	Share-based compensation	11.6				—				—		—				12.0			(0.4)			—				—					Share-based compensation			13.9			—				—		—					14.8				(0.9)			—				—
Dividends declared to noncontrolling interest	Dividends declared to noncontrolling interest	(12.2)				—				—		—				—			—			—				(12.2)					Dividends declared to noncontrolling interest			(6.7)			—				—		—					—				—			—				(6.7)

Separation of Ingersoll Rand Industrial		(5.9)				—				—		—				—			(5.9)			—				—
Dividends declared to common shareholders																															Dividends declared to common shareholders			(281.4)			—				—		—					—				(281.4)			—				—

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 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

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Nine months ended					Six months ended
		September 30,					June 30,
In millions	In millions	2021		2020		In millions	2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net earnings	Net earnings	$	1,115.5	$	620.8	Net earnings	$	778.3	$	706.8
Discontinued operations, net of tax	Discontinued operations, net of tax	12.6		120.4		Discontinued operations, net of tax	8.6		(0.7)
Adjustments for non-cash transactions:	Adjustments for non-cash transactions:					Adjustments for non-cash transactions:
Depreciation and amortization	Depreciation and amortization	223.0		223.7		Depreciation and amortization	157.1		150.8
Pension and other postretirement benefits	Pension and other postretirement benefits	40.4		49.6		Pension and other postretirement benefits	20.4		29.2
Stock settled share-based compensation	Stock settled share-based compensation	52.2		57.5		Stock settled share-based compensation	35.3		39.5
Changes in assets and liabilities, net of the effects of acquisitions	Changes in assets and liabilities, net of the effects of acquisitions	(258.9)		49.4		Changes in assets and liabilities, net of the effects of acquisitions	(560.4)		(167.2)
Other non-cash items, net	Other non-cash items, net	(22.2)		11.5		Other non-cash items, net	(21.6)		(6.6)
Net cash provided by (used in) continuing operating activities	Net cash provided by (used in) continuing operating activities	1,162.6		1,132.9		Net cash provided by (used in) continuing operating activities	417.7		751.8
Net cash provided by (used in) discontinued operating activities	Net cash provided by (used in) discontinued operating activities	(1.4)		(324.8)		Net cash provided by (used in) discontinued operating activities	(184.2)		(1.2)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	1,161.2		808.1		Net cash provided by (used in) operating activities	233.5		750.6
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(121.6)		(89.1)		Capital expenditures	(143.9)		(77.5)
Acquisitions of businesses, net of cash acquired	Acquisitions of businesses, net of cash acquired	(18.0)		(2.5)		Acquisitions of businesses, net of cash acquired	(109.6)		(12.8)

Deconsolidation of certain entities under Chapter 11		—		(10.8)

Other investing activities, net	Other investing activities, net	(69.2)		1.3		Other investing activities, net	(4.6)		(71.8)
Net cash provided by (used in) continuing investing activities	Net cash provided by (used in) continuing investing activities	(208.8)		(101.1)		Net cash provided by (used in) continuing investing activities	(258.1)		(162.1)
Net cash provided by (used in) discontinued investing activities	Net cash provided by (used in) discontinued investing activities	—		(37.7)		Net cash provided by (used in) discontinued investing activities	(0.6)		—
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(208.8)		(138.8)		Net cash provided by (used in) investing activities	(258.7)		(162.1)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Payments of long-term debt	Payments of long-term debt	(432.5)		(307.5)		Payments of long-term debt	(7.5)		(307.5)

Debt issuance costs	Debt issuance costs	(2.6)		(3.6)		Debt issuance costs	(2.1)		(2.6)
Dividends paid to ordinary shareholders	Dividends paid to ordinary shareholders	(421.9)		(380.3)		Dividends paid to ordinary shareholders	(310.9)		(281.6)
Dividends paid to noncontrolling interests	Dividends paid to noncontrolling interests	(14.9)		(18.3)		Dividends paid to noncontrolling interests	(8.9)		(10.2)

Proceeds (payments) from shares issued under incentive plans, net	Proceeds (payments) from shares issued under incentive plans, net	61.8		33.6		Proceeds (payments) from shares issued under incentive plans, net	(20.1)		18.7
Repurchase of ordinary shares	Repurchase of ordinary shares	(600.2)		—		Repurchase of ordinary shares	(650.1)		(354.2)
Receipt of / (Settlement related to) special cash payment		(49.5)		1,900.0

Other financing activities, net	Other financing activities, net	(5.2)		7.0		Other financing activities, net	(2.0)		(0.2)

Net cash provided by (used in) continuing financing activities		(1,465.0)		1,230.9
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	(1,001.6)		(937.6)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(38.5)		11.3		Effect of exchange rate changes on cash and cash equivalents	(42.2)		(28.4)
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	(551.1)		1,911.5		Net increase (decrease) in cash and cash equivalents	(1,069.0)		(377.5)
Cash and cash equivalents - beginning of period	Cash and cash equivalents - beginning of period	3,289.9		1,278.6		Cash and cash equivalents - beginning of period	2,159.2		3,289.9
Cash and cash equivalents - end of period	Cash and cash equivalents - end of period	$	2,738.8	$	3,190.1	Cash and cash equivalents - end of period	$	1,090.2	$	2,912.4

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, a public limited company, incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively, we, our, the ~~Company)~~Company or Trane Technologies), is a global climate ~~innovator that~~innovator. The Company brings ~~efficient~~sustainable and ~~sustainable climate~~efficient solutions to buildings, homes and transportation ~~driven by~~through the Company's strategic brands, Trane® and Thermo King®, and anits environmentally responsible portfolio of products, services and ~~services.~~ connected intelligent controls. The Company generates revenue and cash primarily through the design, manufacture, sale and service of solutions for Heating, Ventilation and Air Conditioning (HVAC) and transport refrigeration. As an industry leader with an extensive global install base, the Company’s growth strategy includes expanding recurring revenue through services and rental options. The Company’s unique business operating system, uplifting culture and highly engaged team around the world are also central to its earnings and cash flow growth.

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~~Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. 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.

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 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~~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.

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 and to 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. The Trane Companies are expected to continue to operate as usual, with no disruption to their employees, suppliers, or customers globally. ~~However, as~~As of the Petition Date, Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated and their respective assets and liabilities were derecognized from the Company's Condensed Consolidated Financial Statements. Refer to Note ~~20,~~18, "Commitments and Contingencies," for more information regarding the status of Chapter 11 bankruptcy and asbestos-related matters.

~~Revision for Correction of an Error in Previously Issued Interim Financial Statements~~

Cash dividends declared for the three months ended June 30, 2021, June 30, 2020 and September 30, 2020 have been revised by $140.1 million (from $141.3 million to $281.4 million), by $127.1 million (from $126.9 million to $254.0 million) and by $127.1 million (from $127.1 million to $0), respectively, in the Condensed Consolidated Statements of Equity to correct the accounting for cash dividends declared on June 3, 2021 and June 5, 2020 and paid on September 30, 2021 and 2020.

~~The revision had no impact on the Company’s Condensed Consolidated Statements of Cash Flows for any period and the revision had no impact on the ending~~ ~~Retained Earnings~~ ~~balance as of September 30, 2021 and 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 Inc. (Ingersoll Rand). Upon close of the Transaction, the Company’s existing shareholders received 50.1% of the shares of Ingersoll Rand common stock on a fully-diluted basis and Gardner Denver stockholders retained 49.9% of the shares of Ingersoll Rand on a fully diluted basis. As a result, the Company’s shareholders received .8824 shares of 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 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 no longer 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 Statements of Income (Loss) and Condensed Consolidated Statements of Cash Flows.

Note 3.2. 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 November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (ASU 2021-10), which requires additional disclosures regarding government grants and cash contributions. The additional disclosures required by this update include information about the nature of the transactions and the related accounting policy used to account for the transaction, the financial statement line items affected by the transactions and the amounts applicable to each financial statement line item and significant terms and conditions of the transactions, including commitments and contingencies. ASU 2021-10 is effective for annual periods beginning after December 15, 2021 with early adoption permitted. The Company adopted this standard on January 1, 2022 with no material impact on its financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (ASU 2021-08), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers” (ASC 606). ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 including interim periods therein with early adoption permitted. The Company early adopted this standard during the fourth quarter of 2021 and applied it retrospectively to all business combinations for which the acquisition date occurred on or after January 1, 2021 resulting in no material impact on its financial statements.

In December 2019, the FASB issued ASU 2019-12, ~~"Income~~“Income Taxes (Topic 740): Simplifying the Accounting for Income ~~Taxes"~~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 adopted this standard on January 1, 2021 with no material impact on its financial statements.

Note 4.3. 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 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 and NRV using the FIFO method.

The major classes of inventory were as follows:


In millions	In millions	September 30, 2021		December 31, 2020		In millions	June 30, 2022		December 31, 2021
Raw materials	Raw materials	$	417.2	$	305.0	Raw materials	$	536.6	$	404.6
Work-in-process	Work-in-process	204.8		163.9		Work-in-process	304.4		215.9
Finished goods	Finished goods	913.1		761.4		Finished goods	1,140.7		982.9
		1,535.1		1,230.3			1,981.7		1,603.4
LIFO reserve	LIFO reserve	(52.3)		(41.1)		LIFO reserve	(94.8)		(72.6)
Total	Total	$	1,482.8	$	1,189.2	Total	$	1,886.9	$	1,530.8

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 the lower of cost and NRV. Reserve balances, primarily related to obsolete and slow-moving inventories, were ~~$85.4~~$80.7 million and ~~$85.6~~$79.0 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Note 5.4. Goodwill

The changes in the carrying amount of goodwill for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 were as follows:


In millions	In millions	Americas		EMEA		Asia Pacific		Total		In millions	Americas		EMEA		Asia Pacific		Total
Net balance as of December 31, 2020		$	3,980.0	$	793.5	$	569.3	$	5,342.8
Net balance as of December 31, 2021										Net balance as of December 31, 2021	$	4,185.2	$	740.8	$	578.8	$	5,504.8
Acquisitions(1)	Acquisitions(1)	2.7		4.2		—		6.9		Acquisitions(1)	42.1		(1.0)		—		41.1

Currency translation	Currency translation	(0.7)		(41.4)		2.5		(39.6)		Currency translation	(0.1)		(61.8)		(27.4)		(89.3)
Net balance as of September 30, 2021		$	3,982.0	$	756.3	$	571.8	$	5,310.1
Net balance as of June 30, 2022										Net balance as of June 30, 2022	$	4,227.2	$	678.0	$	551.4	$	5,456.6

(1) Includes measurement period adjustment related to prior year acquisition.

The net goodwill balances at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 include $2,496.0 million of accumulated impairment, primarily related to the Americas segment. The accumulated impairment relates entirely to a charge recorded in 2008.

Note 6.5. Intangible Assets

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


		September 30, 2021						December 31, 2020							June 30, 2022						December 31, 2021
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	$	2,007.2	$	(1,446.1)	$	561.1	$	2,010.2	$	(1,362.4)	$	647.8	Customer relationships	$	2,145.2	$	(1,529.3)	$	615.9	$	2,110.8	$	(1,475.3)	$	635.5
Other	Other	210.7		(199.7)		11.0		210.7		(199.4)		11.3		Other	247.3		(204.6)		42.7		245.5		(201.3)		44.2
Total finite-lived intangible assets	Total finite-lived intangible assets	2,217.9		(1,645.8)		572.1		2,220.9		(1,561.8)		659.1		Total finite-lived intangible assets	2,392.5		(1,733.9)		658.6		2,356.3		(1,676.6)		679.7
Trademarks (indefinite-lived)	Trademarks (indefinite-lived)	2,626.3		—		2,626.3		2,627.3		—		2,627.3		Trademarks (indefinite-lived)	2,623.9		—		2,623.9		2,625.9		—		2,625.9
Total	Total	$	4,844.2	$	(1,645.8)	$	3,198.4	$	4,848.2	$	(1,561.8)	$	3,286.4	Total	$	5,016.4	$	(1,733.9)	$	3,282.5	$	4,982.2	$	(1,676.6)	$	3,305.6

Intangible asset amortization expense was ~~$29.0~~$36.0 million and ~~$29.9~~$30.9 million for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Intangible asset amortization expense was ~~$90.7~~$69.8 million and ~~$89.8~~$61.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

Note 7.6. Debt and Credit Facilities

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

In millions September 30,
2021 December 31,
2020
Debentures with put feature $ 342.9 $ 342.9
2.900% Senior notes due 2021 (1)
— 299.9
9.000% Debentures due 2021 (2)
— 125.0
Other current maturities of long-term debt 7.5 7.8
Total $ 350.4 $ 775.6

~~(1)~~ ~~The 2.900% Senior notes were repaid in February 2021.~~

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


In millions	June 30, 2022		December 31, 2021
Debentures with put feature	$	342.9	$	342.9

4.250% Senior notes due 2023	699.4		—
Other current maturities of long-term debt	7.5		7.5

Total	$	1,049.8	$	350.4

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 no outstanding balance under its commercial paper program as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Debentures with Put Feature

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had $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 ~~2021,~~2022, 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, 2021		December 31, 2020		In millions	June 30, 2022		December 31, 2021
4.250% Senior notes due 2023	4.250% Senior notes due 2023	$	698.9	$	698.4	4.250% Senior notes due 2023	$	—	$	699.1
7.200% Debentures due 2021-2025		22.4		29.9
7.200% Debentures due 2022-2025						7.200% Debentures due 2022-2025	14.9		22.4
3.550% Senior notes due 2024	3.550% Senior notes due 2024	497.8		497.3		3.550% Senior notes due 2024	498.4		498.0
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	397.7		397.3		3.500% Senior notes due 2026	398.1		397.8
3.750% Senior notes due 2028	3.750% Senior notes due 2028	546.1		545.6		3.750% Senior notes due 2028	546.5		546.2
3.800% Senior notes due 2029	3.800% Senior notes due 2029	744.9		744.4		3.800% Senior notes due 2029	745.4		745.0
5.750% Senior notes due 2043	5.750% Senior notes due 2043	494.9		494.7		5.750% Senior notes due 2043	495.1		495.0
4.650% Senior notes due 2044	4.650% Senior notes due 2044	296.2		296.1		4.650% Senior notes due 2044	296.3		296.3
4.300% Senior notes due 2048	4.300% Senior notes due 2048	296.3		296.2		4.300% Senior notes due 2048	296.4		296.3
4.500% Senior notes due 2049	4.500% Senior notes due 2049	345.8		345.7		4.500% Senior notes due 2049	345.9		345.9
Other loans and notes		—		1.2

Total	Total	$	4,490.7	$	4,496.5	Total	$	3,786.7	$	4,491.7

Other Credit Facilities

On ~~June 18, 2021,~~April 25, 2022, the Company entered into a new $1.0 billion senior unsecured revolving credit facility which matures in ~~June 2026 (2026~~April 2027 (2027 Credit Facility) and terminated its $1.0 billion ~~facility set to expire in March 2022. On September 24, 2021, the Company amended its other $1.0 billion senior unsecured revolving~~ credit facility ~~which matures~~that would have expired 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.~~2023. As a result, the Company maintains two $1.0 billion senior unsecured revolving credit facilities, one of which matures in June 2026 (2026 Credit Facility) and the other which matures in April 2027 (collectively, the Facilities) through its wholly-owned subsidiaries, Trane Technologies HoldCo Inc., Trane Technologies Global Holding Company Limited and Trane Technologies Financing Limited (collectively, the Borrowers). ~~The covenants under~~On June 30, 2022, the Company amended its 2026 Credit Facility to include a Secured Overnight Financing Rate (SOFR) borrowing index provision and to eliminate the London Interbank Offer Rate (LIBOR) index provision. These provisions are ~~substantially~~consistent with the ~~same as the covenants under the 2023~~2027 Credit Facility. ~~The terms of the 2026 Credit Facility~~Additionally, both Facilities 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~~The Facilities provide support for the ~~Company's~~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~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Fair Value of Debt

The fair value of the Company's debt instruments at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 was ~~$5.7~~$4.7 billion and ~~$6.3~~$5.6 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.

Note 8.7. 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 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 in the Condensed Consolidated Balance 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, 2021		December 31, 2020		September 30, 2021		December 31, 2020		In millions	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Derivatives designated as hedges:	Derivatives designated as hedges:									Derivatives designated as hedges:
Currency derivatives	Currency derivatives	$	0.1	$	0.7	$	2.2	$	1.7	Currency derivatives	$	—	$	0.1	$	6.0	$	2.7
Commodity derivatives	Commodity derivatives	6.6		—		0.1		—		Commodity derivatives	0.2		4.9		15.5		0.2

Derivatives not designated as hedges:	Derivatives not designated as hedges:									Derivatives not designated as hedges:
Currency derivatives	Currency derivatives	9.0		1.5		10.2		4.8		Currency derivatives	2.0		10.5		0.3		14.0

Total derivatives	Total derivatives	$	15.7	$	2.2	$	12.5	$	6.5	Total derivatives	$	2.2	$	15.5	$	21.8	$	16.9

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 $0.3 billion and $0.5 billion at ~~both September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, a net loss of ~~$1.8~~$5.6 million and ~~$0.7~~$2.2 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 ~~$1.8~~$5.6 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~~June 30, ~~2021,~~2022, the maximum term of the Company’s currency derivatives was ~~approximately~~ 12 months.

Commodity Derivative Instruments

At ~~September~~June 30, 2022 and December 31, 2021, a net loss of $11.5 million and net gain of ~~$4.9~~$3.5 million, net of tax, respectively, was included in 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~~loss of ~~$4.9~~$11.5 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~~June 30, ~~2021,~~2022, the Company has commodity contracts to hedge certain forecasted purchases ~~through June 2022.~~over the next 12 months.

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


	Volume outstanding as of
Commodity	~~September~~June 30, ~~2021~~2022	December 31, ~~2020~~2021
Aluminum	~~12,741~~ 22,791 metric tons	16,488 metric tons
— Copper	5,331,000 pounds	4,035,000 pounds

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 ~~$4.8~~$4.3 million at ~~September~~June 30, ~~2021~~2022 and ~~$5.3~~$4.7 million at December 31, ~~2020.~~2021. The net deferred gain at ~~September~~June 30, ~~2021~~2022 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~~$0.6 million. The Company has no forward-starting interest rate swaps or interest rate lock contracts outstanding at ~~September~~June 30, ~~2021~~2022 or December 31, ~~2020.~~2021.

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


	Amount of gain (loss) recognized in AOCI				Location of gain (loss) reclassified from AOCI and recognized into Net earnings	Amount of gain (loss) reclassified from AOCI and recognized into Net earnings
In millions	2022		2021			2022		2021
Currency derivatives designated as hedges (1)	$	(5.1)	$	(0.7)	Cost of goods sold	$	(2.7)	$	(2.0)
Commodity derivatives designated as hedges	(29.0)		1.5		Cost of goods sold	4.7		—
Interest rate swaps & locks	—		—		Interest expense	0.1		0.1
Total	$	(34.1)	$	0.8		$	2.1	$	(1.9)

(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 $0.1 million and $0.8 million for the three months ended June 30, 2022 and 2021, respectively.

The following table represents the amounts associated with derivatives not designated as hedges affecting Net earnings for the three months ended June 30:


		Location of gain (loss) recognized in Net earnings	Amount of gain (loss) recognized in Net earnings
In millions	2022				2021
Currency derivatives		Other income (expense), net	$	1.7		$	(3.4)


Total			$	1.7		$	(3.4)

The gains and losses associated with the Company’s undesignated currency derivatives are materially offset in Net earnings by changes in the fair value of the underlying transactions.

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

Amount of gain (loss)
recognized in AOCI Location of gain (loss) reclassified from
AOCI and recognized
into Net earnings Amount of gain (loss)
reclassified from AOCI and
recognized into Net earnings
In millions 2021 2020 2021 2020
Currency derivatives designated as hedges (1)
$ (0.9) $ 1.5 Cost of goods sold $ 7.5 $ (0.9)
Commodity derivatives designated as hedges 6.0 — Cost of goods sold 0.2 —
Interest rate swaps & locks — — Interest expense 0.2 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~~ ~~Net earnings~~ ~~for the three months ended September 30:~~

Location of gain (loss) recognized in Net earnings Amount of gain (loss)
recognized in Net earnings
In millions 2021 2020
Currency derivatives - continuing Other income (expense), net $ 0.9 $ 1.6
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	2021		2020			2021			2020		In millions		2022					2021							2022			2021
Currency derivatives designated as hedges (1)	Currency derivatives designated as hedges (1)	$	(6.2)	$	1.7		Cost of goods sold			$	4.4				$	(1.6)		Currency derivatives designated as hedges (1)	$	(8.1)			$	(5.3)		Cost of goods sold			$	(3.8)			$	(3.1)
Commodity derivatives designated as hedges	Commodity derivatives designated as hedges	7.5		—		Cost of goods sold		0.2				—			Commodity derivatives designated as hedges		(13.5)				1.5				Cost of goods sold		6.2				—
Interest rate swaps & locks	Interest rate swaps & locks	—		—		Interest expense		0.5				0.5			Interest rate swaps & locks		—				—				Interest expense		0.3				0.3
Total	Total	$	1.3	$	1.7			$	5.1			$	(1.1)		Total		$	(21.6)			$	(3.8)					$	2.7			$	(2.8)

(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~~$0.1 million and $1.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

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

Location of gain (loss)
recognized in Net earnings Amount of gain (loss)
recognized in Net earnings
In millions 2021 2020
Currency derivatives - continuing Other income (expense), net $ (5.0) $ 8.4
Currency derivatives - discontinued Discontinued operations — (0.4)
Total $ (5.0) $ 8.0

~~The gains and losses associated with the Company’s undesignated currency derivatives are materially offset in~~ ~~Net earnings~~ ~~by changes in the fair value of the underlying transactions.~~


	Location of gain (loss) recognized in Net earnings	Amount of gain (loss) recognized in Net earnings
In millions		2022		2021
Currency derivatives	Other income (expense), net	$	(5.7)	$	(5.9)


Total		$	(5.7)	$	(5.9)

Concentration of Credit Risk

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

Note 9.8. Fair Value Measurements

Fair value is 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. 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.

Observable market data is required to be used in making fair value 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~~June 30, ~~2021:~~2022:


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	$	15.7	$	—	$	15.7	$	—	Derivative instruments	$	2.2	$	—	$	2.2	$	—

Liabilities:	Liabilities:									Liabilities:
Derivative instruments	Derivative instruments	$	12.5	$	—	$	12.5	$	—	Derivative instruments	$	21.8	$	—	$	21.8	$	—
Contingent consideration										Contingent consideration	$	80.1	—		—		$	80.1

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, ~~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	$	2.2	$	—	$	2.2	$	—	Derivative instruments	$	15.5	$	—	$	15.5	$	—

Liabilities:	Liabilities:									Liabilities:
Derivative instruments	Derivative instruments	$	6.5	$	—	$	6.5	$	—	Derivative instruments	$	16.9	$	—	$	16.9	$	—
Contingent consideration										Contingent consideration	$	96.2	—		—		$	96.2

Derivative instruments include forward foreign currency contracts and instruments related to non-functional currency balance sheet exposures and commodity swaps. The fair value of the 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.

On October 15, 2021, the Company acquired 100% of Farrar Scientific Corporation's (Farrar Scientific) assets. In connection with the acquisition, the Company agreed to contingent consideration 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. The fair value of the contingent consideration is determined using the Monte Carlo simulation model based on projections of revenues for Farrar Scientific during the period of January 1, 2022 through December 31, 2024, implied revenue volatility and a risk adjusted discount rate. Each quarter the Company is required to remeasure the fair value of the liability as assumptions change and such non-cash adjustments are recorded in Selling and administrative expenses in the Condensed Consolidated Statements of Earnings.

Contingent consideration related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs. The changes in the fair value of the Company's Level 3 liabilities were as follows:


In millions	June 30, 2022		December 31, 2021
Balance at beginning of period	$	96.2	$	—
Fair value of contingent consideration recorded in connection with acquisition	—		98.7
Change in fair value of contingent consideration	(16.1)		(2.5)
Balance at end of period	$	80.1	$	96.2

The fair value of the contingent consideration is measured on a recurring basis at each reporting date. The following inputs and assumptions were used in the Monte Carlo simulation model to estimate the fair value of the contingent consideration:


	June 30, 2022		December 31, 2021
Discount rate	10.75	%	8.00	%
Volatility	20.00	%	20.00	%

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. There have been no transfers between levels of the fair value hierarchy.

Note ~~10.~~9. 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.

1415

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


		Three months ended				Nine months ended					Three months ended				Six months ended
In millions	In millions	2021		2020		2021		2020		In millions	2022		2021		2022		2021
Service cost	Service cost	$	12.6	$	10.3	$	38.2	$	44.0	Service cost	$	11.9	$	12.8	$	23.9	$	25.6
Interest cost	Interest cost	14.7		20.2		44.0		63.2		Interest cost	17.6		14.6		35.4		29.3
Expected return on plan assets	Expected return on plan assets	(26.5)		(29.8)		(79.7)		(91.3)		Expected return on plan assets	(26.0)		(26.6)		(52.3)		(53.2)
Net amortization of:	Net amortization of:									Net amortization of:
Prior service costs	Prior service costs	1.3		1.3		3.8		4.0		Prior service costs	1.0		1.2		2.0		2.5
Net actuarial (gains) losses	Net actuarial (gains) losses	8.9		11.4		26.8		33.0		Net actuarial (gains) losses	5.8		9.0		11.7		17.9
Net periodic pension benefit cost	Net periodic pension benefit cost	$	11.0	$	13.4	$	33.1	$	52.9	Net periodic pension benefit cost	$	10.3	$	11.0	$	20.7	$	22.1
Net curtailment and settlement (gains) losses	Net curtailment and settlement (gains) losses	—		(0.1)		6.9		(3.7)		Net curtailment and settlement (gains) losses	—		—		—		6.9
Net periodic pension benefit cost after net curtailment and settlement (gains) losses	Net periodic pension benefit cost after net curtailment and settlement (gains) losses	$	11.0	$	13.3	$	40.0	$	49.2	Net periodic pension benefit cost after net curtailment and settlement (gains) losses	$	10.3	$	11.0	$	20.7	$	29.0
Amounts recorded in continuing operations:	Amounts recorded in continuing operations:	0		0		0		0		Amounts recorded in continuing operations:	0		0		0		0
Operating income	Operating income	$	11.8	$	9.2	$	35.5	$	38.7	Operating income	$	10.7	$	11.8	$	21.7	$	23.7
Other income/(expense), net	Other income/(expense), net	(1.8)		3.7		1.4		6.8		Other income/(expense), net	(1.4)		(1.9)		(2.9)		3.2
Amounts recorded in discontinued operations	Amounts recorded in discontinued operations	1.0		0.4		3.1		3.7		Amounts recorded in discontinued operations	1.0		1.1		1.9		2.1
Total	Total	$	11.0	$	13.3	$	40.0	$	49.2	Total	$	10.3	$	11.0	$	20.7	$	29.0

The Company made contributions to its defined benefit pension plans of ~~$47.1~~$6.7 million and ~~$90.5~~$26.2 million during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~The 2020 contribution included $24.4 million to fund Ingersoll Rand Industrial plans prior to the completion of the 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 ~~$57~~$90 million to its enterprise plans worldwide in ~~2021.~~2022.

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.

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


		Three months ended				Nine months ended					Three months ended				Six months ended
In millions	In millions	2021		2020		2021		2020		In millions	2022		2021		2022		2021
Service cost	Service cost	$	0.6	$	0.7	$	1.6	$	1.8	Service cost	$	0.5	$	0.5	$	1.0	$	1.0
Interest cost	Interest cost	1.3		2.4		4.1		7.4		Interest cost	1.7		1.4		3.4		2.8

Net amortization of net actuarial (gains) losses	Net amortization of net actuarial (gains) losses	(0.5)		(2.2)		(1.5)		(4.3)		Net amortization of net actuarial (gains) losses	(1.4)		(0.5)		(2.8)		(1.0)
Net periodic postretirement benefit cost	Net periodic postretirement benefit cost	$	1.4	$	0.9	$	4.2	$	4.9	Net periodic postretirement benefit cost	$	0.8	$	1.4	$	1.6	$	2.8
Amounts recorded in continuing operations:	Amounts recorded in continuing operations:	0		0		0		0		Amounts recorded in continuing operations:	0		0		0		0
Operating income	Operating income	$	0.6	$	0.7	$	1.6	$	1.8	Operating income	$	0.5	$	0.5	$	1.0	$	1.0
Other income/(expense), net	Other income/(expense), net	0.6		0.3		1.9		2.3		Other income/(expense), net	0.3		0.7		0.6		1.3
Amounts recorded in discontinued operations	Amounts recorded in discontinued operations	0.2		(0.1)		0.7		0.8		Amounts recorded in discontinued operations	—		0.2		—		0.5
Total	Total	$	1.4	$	0.9	$	4.2	$	4.9	Total	$	0.8	$	1.4	$	1.6	$	2.8

1516

Note ~~11.~~10. 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 no Euro-denominated ordinary shares or preference shares outstanding at ~~September~~June 30, ~~2021~~2022 or December 31, ~~2020.~~2021.

Changes in ordinary shares and treasury shares for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 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, 2020		263.3	24.5
December 31, 2021				December 31, 2021	259.7	24.5
Shares issued under incentive plans, net	Shares issued under incentive plans, net	2.1	—	Shares issued under incentive plans, net	0.7	—

Repurchase of ordinary shares	Repurchase of ordinary shares	(3.4)	—	Repurchase of ordinary shares	(4.2)	—
September 30, 2021		262.0	24.5
June 30, 2022				June 30, 2022	256.2	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 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 2018 Authorization.~~. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company repurchased and canceled ~~$600.2 million of its ordinary shares thus completing the 2018 Authorization and initiating repurchases under the 2021 Authorization of $100.2~~$650.0 million of its ordinary shares leaving approximately ~~$1.9~~$750 million remaining under the 2021 Authorization. In February 2022, the Company's Board of Directors authorized the repurchase of up to $3.0 billion ~~remaining~~of its ordinary shares under a new share repurchase program (2022 Authorization) upon completion of the 2021 Authorization.

Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated other comprehensive income (loss) for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 were as follows:


In millions	In millions	Derivative Instruments		Pension and OPEB		Foreign Currency Translation		Total		In millions	Derivative Instruments		Pension and OPEB		Foreign Currency Translation		Total
Balance at December 31, 2020		$	10.8	$	(416.5)	$	(225.8)	$	(631.5)
Balance at December 31, 2021										Balance at December 31, 2021	$	7.1	$	(297.9)	$	(346.8)	$	(637.6)
Other comprehensive income (loss) attributable to Trane Technologies plc	Other comprehensive income (loss) attributable to Trane Technologies plc	(1.9)		23.8		(99.6)		(77.7)		Other comprehensive income (loss) attributable to Trane Technologies plc	(19.2)		20.7		(193.0)		(191.5)
Balance at September 30, 2021		$	8.9	$	(392.7)	$	(325.4)	$	(709.2)
Balance at June 30, 2022										Balance at June 30, 2022	$	(12.1)	$	(277.2)	$	(539.8)	$	(829.1)

Other comprehensive income (loss) attributable to noncontrolling interests for the six months ended June 30, 2022 included a loss of $1.3 million related to currency translation.

The changes in Accumulated other comprehensive income (loss) for the ~~nine~~six months ended ~~September~~June 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) 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)


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	0.4		11.9		(33.0)		(20.7)
Balance at June 30, 2021	$	11.2	$	(404.6)	$	(258.8)	$	(652.2)

Other comprehensive income (loss) attributable to noncontrolling interests for the six months ended June 30, 2021 included a loss of $0.7 million related to currency translation.

Note ~~12.~~11. 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~~six months ended ~~September~~June 30 were as follows:


		Three months ended				Nine months ended					Three months ended				Six months ended
In millions	In millions	2021		2020		2021		2020		In millions	2022		2021		2022		2021
Americas	Americas									Americas
Equipment	Equipment	$	1,878.6	$	1,837.0	$	5,458.0	$	4,893.6	Equipment	$	2,296.1	$	2,008.6	$	4,080.6	$	3,579.4
Services and parts		1,031.7		908.8		2,749.6		2,406.4

Services										Services	1,090.2		963.0		1,938.9		1,717.9
Total Americas	Total Americas	$	2,910.3	$	2,745.8	$	8,207.6	$	7,300.0	Total Americas	$	3,386.3	$	2,971.6	$	6,019.5	$	5,297.3
EMEA	EMEA									EMEA
Equipment	Equipment	$	322.7	$	295.6	$	996.7	$	792.6	Equipment	$	369.4	$	365.6	$	670.7	$	674.0
Services and parts		172.3		149.6		465.4		390.1
Services										Services	152.2		157.6		292.2		293.1
Total EMEA	Total EMEA	$	495.0	$	445.2	$	1,462.1	$	1,182.7	Total EMEA	$	521.6	$	523.2	$	962.9	$	967.1
Asia Pacific	Asia Pacific									Asia Pacific
Equipment	Equipment	$	218.9	$	208.6	$	619.7	$	545.5	Equipment	$	193.7	$	234.7	$	395.8	$	400.8
Services and parts		95.6		95.9		277.7		247.4
Services										Services	88.8		100.2		167.7		182.1
Total Asia Pacific	Total Asia Pacific	$	314.5	$	304.5	$	897.4	$	792.9	Total Asia Pacific	$	282.5	$	334.9	$	563.5	$	582.9

Total Net revenues	Total Net revenues	$	3,719.8	$	3,495.5	$	10,567.1	$	9,275.6	Total Net revenues	$	4,190.4	$	3,829.7	$	7,545.9	$	6,847.3

Revenue from goods and services transferred to customers at a point in time accounted for approximately ~~81%~~83% and 82% of the Company's revenue for ~~both~~ the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020.~~respectively.

Contract Balances

The opening and closing balances of contract assets and contract liabilities arising from contracts with customers for the period ended ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 were as follows:

In millions September 30,
2021 December 31, 2020
Contract assets $ 366.7 $ 255.4
Contract liabilities 1,179.0 1,077.0


In millions	Location on Condensed Consolidated Balance Sheets	June 30, 2022		December 31, 2021
Contract assets- - current	Other current assets	$	184.6	$	164.8
Contract assets - noncurrent	Other noncurrent assets	234.1		218.5
Contract liabilities - current	Accrued expenses and other current liabilities	887.4		805.4
Contract liabilities - noncurrent	Other noncurrent liabilities	456.8		446.6

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 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~~six months ended ~~September~~June 30, ~~2021,~~2022, changes in contract asset and liability balances were not materially impacted by any other factors.

Approximately 9%13% and ~~47%~~40% of the contract liability balance at December 31, ~~2020~~2021 was recognized as revenue during the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively. Additionally, approximately ~~38%~~34% of the contract liability balance at ~~September~~June 30, ~~2021~~2022 was classified as noncurrent and not expected to be recognized as revenue in the next 12 months.

Note ~~13.~~12. 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~~under the fair value based ~~method for measuring the value of stock-based compensation.~~method. 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 continue to vest over the original vesting period, which is generally three years from the grant date. At the Distribution Date, the Company incurred less than $0.1 million of incremental compensation costs related to the preservation of the 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~~six months ended ~~September~~June 30 was as follows:

Three months ended Nine months ended
In millions 2021 2020 2021 2020
Stock options $ 2.9 $ 2.6 $ 14.7 $ 15.7
RSUs 3.6 3.4 19.0 20.6
Performance shares 5.8 5.7 17.4 20.1
Deferred compensation 0.8 1.1 2.4 2.9
Other (1)
(0.7) 2.6 2.4 1.4
Pre-tax expense 12.4 15.4 55.9 60.7
Tax benefit (3.0) (3.7) (13.5) (14.7)
After-tax expense $ 9.4 $ 11.7 $ 42.4 $ 46.0
Amounts recorded in continuing operations 9.4 11.5 42.4 44.5
Amounts recorded in discontinued operations — 0.2 — 1.5
Total $ 9.4 $ 11.7 $ 42.4 $ 46.0

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


	Three months ended				Six months ended
In millions	2022		2021		2022		2021
Stock options	$	2.4	$	2.2	$	10.2	$	11.8
RSUs	4.7		4.8		13.7		15.4
Performance shares	6.3		7.5		10.4		11.6
Deferred compensation	(1.3)		1.0		(0.2)		1.6

Pre-tax expense	12.1		15.5		34.1		40.4
Tax benefit	(2.9)		(3.8)		(8.2)		(9.9)
After-tax expense	$	9.2	$	11.7	$	25.9	$	30.5
Amounts recorded in continuing operations	9.4		11.7		26.1		30.5
Amounts recorded in discontinued operations	(0.2)		—		(0.2)		—
Total	$	9.2	$	11.7	$	25.9	$	30.5

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


		2021			2020				2022			2021
		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	582,657	$	29.55	1,020,535	$	16.75	Stock options	429,596	$	35.97	563,223	$	29.29
RSUs	RSUs	149,214	$	153.53	211,307	$	104.09	RSUs	132,125	$	165.89	141,572	$	151.37
Performance shares (1)	Performance shares (1)	283,412	$	181.71	278,468	$	140.72	Performance shares (1)	190,516	$	170.43	264,830	$	178.03

(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~~six months ended ~~September~~June 30:


		2021		2020			2022		2021
Dividend yield	Dividend yield	1.60	%	2.01	%	Dividend yield	1.60	%	1.60	%
Volatility	Volatility	27.90	%	24.33	%	Volatility	28.23	%	27.89	%
Risk-free rate of return	Risk-free rate of return	0.45	%	0.56	%	Risk-free rate of return	1.56	%	0.45	%
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.

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~~simulation model 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 ~~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
In millions 2021 2020 2021 2020
Americas $ 0.8 $ 6.6 $ 3.9 $ 33.2
EMEA 1.1 0.7 2.2 7.2
Asia Pacific 1.4 0.8 1.2 3.3
Corporate and Other 4.6 0.1 12.4 27.6
Total $ 7.9 $ 8.2 $ 19.7 $ 71.3
Cost of goods sold $ 1.0 $ 3.3 $ 3.6 $ 21.9
Selling and administrative expenses 6.9 4.9 16.1 49.4
Total $ 7.9 $ 8.2 $ 19.7 $ 71.3

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

In millions Americas EMEA Asia Pacific Corporate
and Other Total
December 31, 2020 $ 12.6 $ 4.3 $ 2.0 $ 10.6 $ 29.5
Additions, net of reversals (1)
3.9 1.5 1.2 12.4 19.0
Cash paid/other (5.5) (2.2) (2.0) (17.7) (27.4)
September 30, 2021 $ 11.0 $ 3.6 $ 1.2 $ 5.3 $ 21.1

~~(1)~~ ~~Excludes the accelerated depreciation on buildings and equipment ($0.7 million).~~

~~During the nine months ended September 30, 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.~~

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, 2021, the Company had $21.1 million accrued for costs associated with its ongoing restructuring actions, of which a majority is expected to be paid within one year.

~~Note 15.~~13. Other Income/(Expense), Net

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


		Three months ended				Nine months ended					Three months ended				Six months ended
In millions	In millions	2021		2020		2021		2020		In millions	2022		2021		2022		2021
Interest income/(loss)		$	0.8	$	1.9	$	3.0	$	3.6
Interest income										Interest income	$	1.5	$	1.1	$	2.8	$	2.2
Foreign currency exchange loss	Foreign currency exchange loss	(2.2)		(2.5)		(8.9)		(8.5)		Foreign currency exchange loss	(4.0)		(3.0)		(7.6)		(6.7)
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 components of net periodic benefit credit/(cost)	1.1		1.2		2.3		(4.5)
Other activity, net	Other activity, net	(6.7)		—		(4.6)		21.5		Other activity, net	(0.2)		1.0		0.2		2.1
Other income/(expense), net	Other income/(expense), net	$	(6.9)	$	(4.5)	$	(13.8)	$	7.6	Other income/(expense), net	$	(1.6)	$	0.3	$	(2.3)	$	(6.9)

Other income/(expense), net includes the results from activities other than ~~normal~~core 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 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 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.Murray. Refer to Note ~~20,~~18, "Commitments and Contingencies," for more information regarding asbestos-related matters.

Note ~~16.~~14. Income Taxes

The Company accounts for its Provision for income taxes ~~in accordance with ASC 740, "Income Taxes" (ASC 740), which requires~~by applying 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~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~September~~June 30, ~~2020,~~2021, the Company's effective income tax rate was ~~19.2%~~20.1% and ~~23.2%~~19.5%, respectively. The effective income tax rate for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 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~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~higher~~lower than the U.S. statutory rate of 21% primarily due to a $37.0 million non-cash charge to 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~~rate, partially offset by the remeasurement of ~~the~~deferred taxes as a result of law changes in certain non-U.S. tax jurisdictions, primarily in the ~~valuation allowances increased the effective tax rate by 3.4%.~~United Kingdom and India, and U.S. state and local taxes.

Total unrecognized tax benefits as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 were ~~$66.0~~$62.9 million and ~~$65.4~~$65.2 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. The Company's U.S. federal returns for 2016 to 2018 are currently under examination by the Internal Revenue Service (IRS). 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,~~2013, with certain matters prior to ~~2011~~2013 being resolved through appeals and litigation and also unilateral procedures as provided for under double tax treaties.

Note ~~17. Acquisitions and Divestitures~~

15. Acquisitions

On ~~October 15, 2021,~~April 1, 2022, 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~~Commercial HVAC independent ~~dealers,~~dealer, 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~~$110.0 million and was financed through cash on hand. Intangible assets associated with these acquisitions totaled ~~$76.9~~$52.7 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~~$42.5 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 1615 years. The Company has not included pro forma financial information as the pro forma impact was deemed not material.

2221

~~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
In millions 2021 2020 2021 2020
Net revenues $ — $ — $ — $ 469.8
Cost of goods sold — — — (315.8)
Selling and administrative expenses (1.3) (0.3) (0.8) (234.4)
Operating income (loss) (1.3) (0.3) (0.8) (80.4)
Other income/ (expense), net (17.7) (7.4) (31.6) (50.7)
Pre-tax earnings (loss) from discontinued operations (19.0) (7.7) (32.4) (131.1)
Tax benefit (expense) 5.7 2.2 19.8 10.7
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.~~

~~Separation of Industrial Segment Businesses~~

On February 29, 2020, the Company completed the Transaction with Ingersoll Rand whereby the Company separated Ingersoll Rand Industrial which then merged with a wholly-owned subsidiary of Ingersoll Rand. In accordance with 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.

~~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
In millions 2021 2020 2021 2020
Net revenues $ — $ — $ — $ 469.8
Earnings (loss) attributable to Trane Technologies plc 0.3 (0.5) 4.2 (83.0)
Earnings (loss) attributable to noncontrolling interests — — — 0.9
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.

~~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.

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

Three months ended Nine months ended
In millions 2021 2020 2021 2020
Ingersoll Rand Industrial, net of tax $ 0.3 $ (0.5) $ 4.2 $ (82.1)
Other discontinued operations, net of tax (13.6) (5.0) (16.8) (38.3)
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 tax~~included 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 related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park, for the nine months ended September 30, 2020. Refer to Note ~~20, "Commitments and Contingencies," for more information regarding asbestos-related matters.~~

~~Note 18.~~16. 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~~six months ended ~~September~~June 30:


		Three months ended				Nine months ended					Three months ended				Six months ended
In millions, except per share amounts	In millions, except per share amounts	2021		2020		2021		2020		In millions, except per share amounts	2022		2021		2022		2021
Weighted-average number of basic shares	Weighted-average number of basic shares	238.2		240.4		239.2		240.0		Weighted-average number of basic shares	233.8		239.9		234.2		239.6
Shares issuable under incentive stock plans	Shares issuable under incentive stock plans	3.5		3.3		3.6		2.7		Shares issuable under incentive stock plans	1.9		3.5		2.2		3.7

Weighted-average number of diluted shares	Weighted-average number of diluted shares	241.7		243.7		242.8		242.7		Weighted-average number of diluted shares	235.7		243.4		236.4		243.3
Anti-dilutive shares	Anti-dilutive shares	—		0.6		0.3		0.8		Anti-dilutive shares	1.2		—		1.0		0.3

Dividends declared per ordinary share	Dividends declared per ordinary share	$	—	$	—	$	1.77	$	1.59	Dividends declared per ordinary share	$	1.34	$	1.18	$	2.01	$	1.77

Note ~~19.~~17. Business Segment Information

The Company operates under ~~three~~four regional operating segments designed to create deep customer focus and relevance in markets around the world. The Company determined that its two Europe, Middle East and Africa (EMEA) operating segments meet the aggregation criteria based on similar operating and economic characteristics, resulting in one reportable segment. Therefore, the Company has three regional reportable segments, Americas, EMEA and Asia Pacific. Intercompany sales between segments are immaterial.

•The Company's Americas segment innovates for customers in ~~the~~ North America and Latin ~~America regions.~~America. 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.

Management measures operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, non-cash adjustments for contingent consideration, 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~~six months ended ~~September~~June 30 was as follows:


		Three months ended				Nine months ended					Three months ended				Six months ended
In millions	In millions	2021		2020		2021		2020		In millions	2022		2021		2022		2021
Net revenues	Net revenues									Net revenues
Americas	Americas	$	2,910.3	$	2,745.8	$	8,207.6	$	7,300.0	Americas	$	3,386.3	$	2,971.6	$	6,019.5	$	5,297.3
EMEA	EMEA	495.0		445.2		1,462.1		1,182.7		EMEA	521.6		523.2		962.9		967.1
Asia Pacific	Asia Pacific	314.5		304.5		897.4		792.9		Asia Pacific	282.5		334.9		563.5		582.9
Total Net revenues	Total Net revenues	$	3,719.8	$	3,495.5	$	10,567.1	$	9,275.6	Total Net revenues	$	4,190.4	$	3,829.7	$	7,545.9	$	6,847.3

Segment Adjusted EBITDA	Segment Adjusted EBITDA									Segment Adjusted EBITDA
Americas	Americas	$	566.9	$	555.0	$	1,571.7	$	1,287.6	Americas	$	702.2	$	621.0	$	1,107.8	$	1,004.8
EMEA	EMEA	99.4		87.6		283.4		190.1		EMEA	92.4		107.3		151.5		184.0
Asia Pacific	Asia Pacific	57.3		58.5		163.8		129.2		Asia Pacific	43.2		63.0		86.7		106.5
Total Segment Adjusted EBITDA	Total Segment Adjusted EBITDA	$	723.6	$	701.1	$	2,018.9	$	1,606.9	Total Segment Adjusted EBITDA	$	837.8	$	791.3	$	1,346.0	$	1,295.3

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	$	723.6	$	701.1	$	2,018.9	$	1,606.9	Total Segment Adjusted EBITDA	$	837.8	$	791.3	$	1,346.0	$	1,295.3
Interest expense	Interest expense	(57.7)		(62.4)		(177.7)		(186.8)		Interest expense	(55.9)		(59.3)		(111.9)		(120.0)
Depreciation and amortization	Depreciation and amortization	(72.2)		(74.5)		(223.0)		(223.7)		Depreciation and amortization	(79.8)		(74.8)		(157.1)		(150.8)
Restructuring costs	Restructuring costs	(7.9)		(8.2)		(19.7)		(71.3)		Restructuring costs	(4.1)		(1.5)		(5.4)		(11.8)
Non-cash adjustments for contingent consideration										Non-cash adjustments for contingent consideration	9.6		—		16.1		—
Unallocated corporate expenses	Unallocated corporate expenses	(67.0)		(56.0)		(202.4)		(159.5)		Unallocated corporate expenses	(54.5)		(63.7)		(103.1)		(135.4)
Earnings before income taxes	Earnings before income taxes	$	518.8	$	500.0	$	1,396.1	$	965.6	Earnings before income taxes	$	653.1	$	592.0	$	984.6	$	877.3

Note ~~20.~~18. Commitments and Contingencies

The Company is involved in various litigation, claims and administrative proceedings, including those related to the bankruptcy proceedings for Aldrich and Murray and environmental and product liability matters. ~~In accordance with ASC 450, "Contingencies" (ASC 450), the~~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 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 and to 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.~~stayed.

The goal of these Chapter 11 filings is ~~an efficient~~to resolve equitably and ~~permanent resolution of~~permanently all current and future ~~asbestos~~asbestos-related claims in a manner beneficial to claimants and to Aldrich and Murray through court approval of a plan of reorganization ~~which~~that would ~~establish, in accordance with~~create a trust pursuant to section 524(g) of the Bankruptcy Code, ~~a trust to which~~establish claims resolution procedures for all ~~asbestos~~current and future asbestos-related claims ~~would be channeled for resolution. Further to this goal and as discussed more fully below,~~against Aldrich and Murray ~~have reached~~and channel such claims to the trust for resolution in accordance with those procedures. Aldrich and Murray intend to seek an agreement ~~in principle~~ with ~~the court-appointed legal representative~~representatives of ~~future~~the 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.

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 in the second quarter of 2020 primarily related to the legacy asbestos-related liabilities and asbestos-related insurance recoveries and $41.7 million of cash.

~~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 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~~Upon deconsolidation in the ~~future average settlement value~~second quarter 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 (projected through 2053).~~

Prior to the Petition Date, over 73 percent of the open and active claims against the Company were non-malignant or unspecified disease claims. In addition, the Company 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.

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 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.~~

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, the net income (expense) associated with these pre-Petition Date transactions was as follows:

Nine months ended
In millions 2021 2020
Continuing operations $ — $ 14.8
Discontinued operations — (11.2)
Total $ — $ 3.6

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets were based on 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 assets in the Condensed Consolidated Balance Sheet. In determining the fair value of its equity investment, the Company used a market-adjusted multiple of earnings valuation technique. As a result, the Company recorded an aggregate equity investment of $53.6 million as of the Petition Date.

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

As a result of the deconsolidation, the Company recognized an aggregate loss of ~~$22.7~~$24.9 million in its Condensed Consolidated Statements of ~~Income (Loss)~~Earnings during the ~~second quarter of~~year ended December 31, 2020. A gain of $0.9 million related to Murray and its wholly-owned subsidiary ClimateLabs was recorded within Other ~~income/~~income / (expense), net and a loss of ~~$23.6~~$25.8 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 during the ~~second quarter of~~year ended December 31, 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~~future asbestos claimants (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)~~"qualified settlement fund" within the meaning of the Treasury Regulations under Section 468B of the Internal Revenue Code (QSF). 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~~

During the third quarter of 2021, in connection with the agreement in principle reached by Aldrich and Murray with the FCR and the motion to create a $270.0 million QSF, 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.

On January 27, 2022, the Bankruptcy Court ~~and other conditions are satisfied,~~granted the request to fund the QSF, ~~Trust~~which was funded on March 2, 2022, resulting in an operating cash outflow of $270.0 million in the Company's Condensed Consolidated Statements of Cash Flows, of which $91.8 million was allocated to continuing operations and $178.2 million was allocated to discontinued operations for the six months ended June 30, 2022. The Bankruptcy Court also granted the ACC standing to investigate and pursue certain causes of action including fraudulent conveyance and certain other derivative causes of action. Additionally, the Bankruptcy Court denied motions to dismiss a complaint filed by the ACC seeking substantive consolidation. The Company is ~~expected to be funded prior to January 31, 2022.~~vigorously opposing and defending against these claims. 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 The Chapter 11 cases remain pending as 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.~~August 3, 2022.

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

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 and off-site waste disposal facilities.

It is the Company's policy to establish environmental reserves for investigation and remediation activities when it is probable that a liability has been incurred and a reasonable estimate of the liability can be made. Estimated liabilities are determined based upon existing remediation laws and technologies. Inherent uncertainties exist in such evaluations due to unknown environmental conditions, changes in government laws and regulations, and changes in cleanup technologies. The environmental reserves are updated on a routine basis as remediation efforts progress and new information becomes available.

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 and international authorities. ItThe Company 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~~In most instances at multi-party sites, the ~~Company’s involvement~~Company's share of the liability is ~~minimal.~~not material.

In estimating its liability at multi-party sites, 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~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company has recorded reserves for environmental matters of ~~$39.6~~$41.1 million and ~~$39.9~~$39.6 million, respectively. Of these amounts, ~~$36.5~~$36.4 million and ~~$37.5~~$36.3 million, respectively, relate to investigation and remediation of properties and multi-waste disposal sites ~~previously disposed of~~related to businesses formerly owned 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~~six months ended ~~September~~June 30 were as follows:


In millions	~~2021~~2022
Balance at beginning of period	$	~~282.7~~296.2
Reductions for payments	~~(89.8)~~(57.4)
Accruals for warranties issued during the current period	~~100.4~~66.9

Changes to accruals related to preexisting warranties	~~1.2~~0.3
Translation	~~(1.6)~~(2.7)
Balance at end of period	$	~~292.9~~303.3

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~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 was ~~$112.5~~$108.5 million and ~~$127.7~~$106.6 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~~six months ended ~~September~~June 30 were as follows:


In millions	~~2021~~2022
Balance at beginning of period	$	~~304.4~~311.7
Amortization of deferred revenue for the period	~~(89.8)~~(56.5)
Additions for extended warranties issued during the period	~~88.5~~58.5
Changes to accruals related to preexisting warranties	~~9.8~~0.3
Translation	~~(0.8)~~(1.6)
Balance at end of period	$	~~312.1~~312.4

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~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 was ~~$107.7~~$110.1 million and ~~$108.6~~$115.4 million, respectively.

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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, ~~2020.~~2021, as updated by any disclosures under Part II, Item 1A - Risk Factors in our Quarterly Reports on Form 10-Q. 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~~sustainable and ~~sustainable climate~~efficient solutions to buildings, homes and transportation ~~driven by~~through our strategic brands, Trane®and Thermo King®, and anour environmentally responsible portfolio of products, services and connected intelligent controls.

2030 Sustainability Commitments

Our commitment to sustainability extends to the environmental and social impacts of our people, operations, products and services.

~~Separation~~ We have announced ambitious sustainability commitments with a goal of ~~Industrial Segment Businesses~~

~~On February 29, 2020 (Distribution Date)~~achieving these commitments by 2030 (2030 Sustainability Commitments), ~~we completed~~including our ~~Reverse Morris Trust transaction (the Transaction) with Gardner Denver Holdings, Inc. (Gardner Denver, which changed its name~~Gigaton Challenge to ~~Ingersoll Rand Inc. (Ingersoll Rand) after~~reduce customers' carbon emissions by a billion metric tons. We are one of a handful of companies whose emissions reductions targets have been validated three times by the ~~Transaction) whereby we distributed Ingersoll-Rand U.S. HoldCo, Inc.~~Science Based Targets Initiative (SBTi), 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 Ingersoll Rand. Upon closeand one of the ~~Transaction,~~very few companies worldwide whose net-zero targets have also been validated. We are Leading by Example as we make progress toward carbon-neutral operations and zero waste-to-landfill across our ~~existing shareholders received approximately 50.1%~~global footprint and net positive water use in water-stressed locations. Our Opportunity for All commitment focuses on gender parity in leadership, workforce diversity reflective of ~~the shares of Ingersoll Rand common stock on~~our communities, and a ~~fully-diluted basis~~citizenship strategy that helps underserved communities through enhanced learning environments and Gardner Denver stockholders retained approximately 49.9% of the shares of Ingersoll Rand on a fully diluted basis. As a result, our shareholders received .8824 shares of Ingersoll Rand common stock with respectpathways 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 Ingersoll Rand.

~~During the nine months ended September 30, 2021, we paid Ingersoll Rand $49.5 million to settle certain items related to the Transaction. We 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~~green and ~~indebtedness amounts as of the Distribution Date, as well as funding levels related to pension plans, non-qualified deferred compensation plans~~Science, Technology, Engineering and ~~retiree health benefits.~~

After the Distribution Date, we do not beneficially own any Ingersoll Rand Industrial shares of common stock and no longer consolidate Ingersoll Rand Industrial in our financial statements. In accordance with accounting principles generally accepted in the 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.Math (STEM) careers.

Significant Events

~~COVID-19~~Coronavirus Disease 2019 (COVID-19) Global Pandemic

~~In March~~Since early 2020, we have closely monitored the ~~World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. During the first half~~impact of ~~2020,~~ the COVID-19 global pandemic ~~adversely impacted~~on all aspects of our business ~~globally~~and geographies, including ~~but not limited to, lower end customer demand, certain supply chain delays, temporary facility closures~~how it has and ~~limitations~~will impact our customers, team members, suppliers, vendors, business partners and distribution channels. Our main priority from the onset of our workforce to essential crews 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. Despite the challenges set forth by the COVID-19 global pandemic has been, and will continue to be, the health and safety of our employees and customers around the world. In addition, we ~~continued to sell, install~~remain focused on selling, installing and ~~service~~servicing our products, ~~invest~~investing in our businesses, ~~develop~~developing and ~~launch~~launching new products and ~~deliver~~delivering innovative customer solutions for ~~electrification of~~low-carbon, highly efficient heating, cooling and transport, ~~enhanced~~healthy and efficient indoor ~~air~~environmental quality, and precise temperature control along the full ~~vaccine~~ cold ~~chain.~~chain for food and medicines.

During the ~~nine~~six months ended ~~September~~June 30, ~~2021, we experienced significant increases in~~2022, overall end market demand ~~executed price increases~~remained healthy as we continued to cover rapidly increasing material, component and logistics costs, shifted to higher margin product sales and realized strong earnings growth as a result of strong execution across our organization. In addition, to meet our increased customer demand, we are proactively ~~managing industry-wide~~manage global supply chain and resource constraints ~~and are~~by working closely with our suppliers, customers and logistics providers to mitigate the impacts on our business as we continue to sell, install and service our products. However, localized shutdowns in China negatively impacted volumes within our Asia Pacific segment.

We will continue to monitor the ongoing COVID-19 global pandemic as it evolves and will assess any potential impacts to our business and financial statements as necessary.

Channel Acquisition

~~Table~~On April 1, 2022, we completed a channel acquisition of ~~Contents~~

a Commercial HVAC independent dealer to support our ongoing strategy to expand our distribution network and service area. The results of the channel acquisition are reported within the Americas segment.

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), our indirect wholly-owned subsidiaries, Aldrich and Murray each filed a voluntary ~~petitions~~petition for ~~relief~~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) ~~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~~

Table 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.Contents

The goal of these Chapter 11 filings is ~~an efficient~~to resolve equitably and ~~permanent resolution of~~permanently all current and future ~~asbestos~~asbestos-related claims in a manner beneficial to claimants and to Aldrich and Murray through court approval of a plan of reorganization ~~which~~that would ~~establish, in accordance with~~create a trust pursuant to section 524(g) of the Bankruptcy Code, ~~a trust to which~~establish claims resolution procedures for all ~~asbestos~~current and future asbestos-related claims ~~would be channeled for resolution. Further to this goal and as discussed more fully below,~~against 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~~and channel such ~~a trust.~~

~~Prior~~claims 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.trust for resolution in accordance with those procedures.

~~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. ~~Amounts derecognized primarily related to~~

During the ~~legacy asbestos-related liabilities and asbestos-related insurance recoveries and $41.7 million~~third quarter of ~~cash.~~

~~Upon deconsolidation, we recorded our retained interest~~2021, in connection with the agreement in principle reached by Aldrich and Murray ~~at fair value~~with the court-appointed legal representative of future asbestos claimants (the FCR) and the motion to create a $270.0 million trust intended to constitute a "qualified settlement fund" within the meaning of the Treasury Regulations under Section 468B of the Internal Revenue Code (QSF), 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 ~~noncurrent assets~~income / (expense), net of 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$7.2 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 relatedrelating to Murray and ~~its wholly-owned subsidiary ClimateLabs~~discontinued operations of $14.0 million relating to Aldrich.

On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF, which 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~~funded on March 2, 2022, resulting in an ~~investing~~operating cash outflow of ~~$41.7~~$270.0 million in our Condensed Consolidated Statements of Cash Flows, of which ~~$10.8~~$91.8 million was ~~recorded within~~allocated to continuing operations ~~during the second quarter of 2020.~~

~~Table of Contents~~

~~On August 26, 2021, we 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~~$178.2 million was allocated to discontinued operations 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,six months ended June 30, 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,~~a plan of reorganization (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 August 3, 2022.

~~During~~See also the ~~three and nine months ended September 30, 2021,~~discussion in ~~connection with~~Note 18 to 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, 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.~~Condensed Consolidated Financial Statements.

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 ~~have shown improvement but~~ remain mixed across our end markets. The COVID-19 global pandemic continues to impact both the global Heating, Ventilation and Air Conditioning (HVAC) and Transport end markets as ~~industry-wide~~global supply chain and resource constraints ~~exist. As vaccine distribution and administration expands, we~~exist as well as localized lockdowns in China. We expect market conditions to ~~continue improving~~remain mixed across the geographies where we serve our ~~customers.~~customers as the impact from COVID-19 decreases; however, macroeconomic events including the possibility of sustained high inflation and tightening financial conditions, including the potential for higher interest rates, could increase the likelihood of deteriorating economic conditions which could have a negative impact on our business.

Furthermore, since Russia invaded Ukraine in February 2022, we have halted new orders and shipments into and out of Russia and Belarus. After careful consideration, we have decided to suspend all business activities indefinitely. We are following due process to exit these markets, which will take place over the coming periods. As of June 30, 2022, there has been no material impact on our operations; however, the situation may impact other risks the company faces. Refer to Part II, Item 1A - Risk Factors within our Form 10-Q for the period ended March 31, 2022 for additional information.

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

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the Three Months Ended ~~September~~June 30, ~~2020~~2021 - Consolidated Results


Dollar amounts in millions	Dollar amounts in millions	2021		2020		Period Change		2021 % of revenues		2020 % of revenues		Dollar amounts in millions	2022		2021		Period Change		2022 % of revenues		2021 % of revenues
Net revenues	Net revenues	$	3,719.8	$	3,495.5	$	224.3					Net revenues	$	4,190.4	$	3,829.7	$	360.7
Cost of goods sold	Cost of goods sold	(2,515.6)		(2,360.8)		(154.8)		67.6	%	67.5	%	Cost of goods sold	(2,867.0)		(2,559.0)		(308.0)		68.4	%	66.8	%
Gross profit	Gross profit	1,204.2		1,134.7		69.5		32.4	%	32.5	%	Gross profit	1,323.4		1,270.7		52.7		31.6	%	33.2	%
Selling and administrative expenses	Selling and administrative expenses	(620.8)		(567.8)		(53.0)		16.7	%	16.3	%	Selling and administrative expenses	(612.8)		(619.7)		6.9		14.6	%	16.2	%
Operating income	Operating income	583.4		566.9		16.5		15.7	%	16.2	%	Operating income	710.6		651.0		59.6		17.0	%	17.0	%
Interest expense	Interest expense	(57.7)		(62.4)		4.7						Interest expense	(55.9)		(59.3)		3.4
Other income/(expense), net	Other income/(expense), net	(6.9)		(4.5)		(2.4)						Other income/(expense), net	(1.6)		0.3		(1.9)
Earnings before income taxes	Earnings before income taxes	518.8		500.0		18.8						Earnings before income taxes	653.1		592.0		61.1
Benefit (provision) for income taxes		(96.8)		(89.9)		(6.9)
Provision for income taxes												Provision for income taxes	(136.6)		(122.8)		(13.8)
Earnings from continuing operations	Earnings from continuing operations	422.0		410.1		11.9						Earnings from continuing operations	516.5		469.2		47.3
Discontinued operations, net of tax	Discontinued operations, net of tax	(13.3)		(5.5)		(7.8)						Discontinued operations, net of tax	(1.6)		(0.2)		(1.4)
Net earnings	Net earnings	$	408.7	$	404.6	$	4.1					Net earnings	$	514.9	$	469.0	$	45.9

Net Revenues

Net revenues for the three months ended ~~September~~June 30, ~~2021~~2022 increased by ~~6.4%~~9.4%, or ~~$224.3~~$360.7 million, compared with the same period in ~~2020,~~2021, which resulted from the following:



Pricing	~~4.3~~10.4	%
Volume	0.3	%
Acquisitions	~~1.5~~0.7	%
Currency translation	~~0.6~~	%
~~Volume~~	— (2.0)	%
Total	~~6.4~~9.4	%

The increase in Net revenues was primarily driven by ~~favorable pricing~~inflation-based price increases, incremental revenues from acquisitions and the completion of three channel acquisitions during the fourth quarter of 2020 and in the first quarter of 2021, two of which were completed in the Americas segment and the third which was completed within the EMEA segment.slightly higher volumes, partially offset by an unfavorable impact from foreign currency translation. Refer to the “Results by Segment” below for a discussion of Net revenues by segment.

Gross Profit Margin

Gross profit margin for the three months ended ~~September~~June 30, ~~2021~~2022 decreased 10160 basis points to ~~32.4%~~31.6% compared to ~~32.5%~~33.2% for the same period of ~~2020~~2021 primarily due to ~~increased~~significant direct material and ~~other~~freight inflation as well as unfavorable product mix, partially offset by inflation-based price ~~realization and productivity benefits.~~increases.

Selling and Administrative Expenses

Selling and administrative expenses for the three months ended ~~September~~June 30, ~~2021~~2022 ~~increased~~decreased by ~~9.3%~~1.1%, or ~~$53.0~~$6.9 million compared with the same period of ~~2020.~~2021. The ~~increase~~decrease in Selling and administrative expenses was primarily driven by ~~higher compensation~~lower marketing costs and ~~employee benefits due to prior year merit increases being delayed until the fourth quarter of 2020 and the completion of three channel acquisitions,~~a non-cash adjustment for contingent consideration, partially offset by ~~the realization of benefits from transformation savings. As a result,~~an increase in amortization due to acquisitions. Selling and administrative expenses as a percentage of Net revenues for the three months ended ~~September~~June 30, ~~2021 increased 40~~2022 decreased 160 basis points from ~~16.3%~~16.2% to ~~16.7% compared~~14.6% primarily due to higher revenues during the ~~same period of 2020.~~period.

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Interest Expense

Interest expense for the three months ended ~~September~~June 30, ~~2021~~2022 decreased by ~~7.5%~~5.7%, or $~~4.7~~3.4 million compared with the same period of ~~2020~~2021 primarily due to the repayment of $125.0 million of 9.000% Debentures in August 2021.

Other Income/(Expense), Net

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


In millions	2022		2021
Interest income	$	1.5	$	1.1
Foreign currency exchange loss	(4.0)		(3.0)
Other components of net periodic benefit credit/(cost)	1.1		1.2
Other activity, net	(0.2)		1.0
Other income/(expense), net	$	(1.6)	$	0.3

Other income/(expense), net includes the results from activities other than core 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 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 of Murray.

Provision for Income Taxes

For the three months ended June 30, 2022, our effective tax rate was 20.9% which was slightly lower than the U.S. statutory rate of 21% primarily due to 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 June 30, 2021 our effective tax rate was 20.7% 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 the remeasurement of deferred taxes as a result of law changes in certain non-U.S. tax jurisdictions, primarily in the United Kingdom and India, and U.S. state and local taxes.

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Six Months EndedJune 30, 2022 Compared to the Six Months EndedJune 30, 2021 - Consolidated Results


Dollar amounts in millions	2022		2021		Period Change		2022 % of revenues		2021 % of revenues
Net revenues	$	7,545.9	$	6,847.3	$	698.6
Cost of goods sold	(5,233.5)		(4,623.4)		(610.1)		69.4	%	67.5	%
Gross profit	2,312.4		2,223.9		88.5		30.6	%	32.5	%
Selling and administrative expenses	(1,213.6)		(1,219.7)		6.1		16.1	%	17.8	%
Operating income	1,098.8		1,004.2		94.6		14.6	%	14.7	%
Interest expense	(111.9)		(120.0)		8.1
Other income/(expense), net	(2.3)		(6.9)		4.6
Earnings before income taxes	984.6		877.3		107.3
Provision for income taxes	(197.7)		(171.2)		(26.5)
Earnings from continuing operations	786.9		706.1		80.8
Discontinued operations, net of tax	(8.6)		0.7		(9.3)
Net earnings	$	778.3	$	706.8	$	71.5

Net Revenues

Net revenues for the six months ended June 30, 2022 increased by 10.2%, or $698.6 million, compared with the same period in 2021, which resulted from the following:


Pricing	9.1	%
Volume	2.4	%
Acquisitions	0.4	%
Currency translation	(1.7)	%
Total	10.2	%

The increase in Net revenues was primarily driven by inflation-based price increases, higher volumes and incremental revenues from acquisitions, partially offset by an unfavorable impact from foreign currency translation. Refer to the “Results by Segment” below for a discussion of Net revenues by segment.

Gross Profit Margin

Gross profit margin for the six months ended June 30, 2022 decreased 190 basis points to 30.6% compared to 32.5% for the same period of 2021 primarily due to significant direct material and freight inflation and an unfavorable product mix, partially offset by inflation-based price increases.

Selling and Administrative Expenses

Selling and administrative expenses for the six months ended June 30, 2022 decreased by $6.1 million, or 0.5%, compared with the same period of 2021. The decrease in Selling and administrative expenses was primarily driven by a non-cash adjustment for contingent consideration and lower marketing costs, partially offset by an increase in labor costs and amortization due to acquisitions. Selling and administrative expenses as a percentage of Net revenues for the six months ended June 30, 2022 decreased 170 basis points from 17.8% to 16.1% primarily due to higher revenues during the period.

Interest Expense

Interest expense for the six months ended June 30, 2022 decreased by 6.8% or $8.1 million compared with the same period of 2021 primarily due to the repayments of $125.0 million of 9.000% Debentures in August 2021 and $300.0 million of 2.900% Senior notes in February 2021.

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Other Income/(Expense), Net

The components ofOther income/(expense), net for the ~~three~~six months ended ~~September~~June 30 ~~were~~are as follows:


In millions	In millions	2021		2020		In millions	2022		2021
Interest income/(loss)		$	0.8	$	1.9
Interest income						Interest income	$	2.8	$	2.2
Foreign currency exchange loss	Foreign currency exchange loss	(2.2)		(2.5)		Foreign currency exchange loss	(7.6)		(6.7)
Other components of net periodic benefit credit/(cost)	Other components of net periodic benefit credit/(cost)	1.2		(3.9)		Other components of net periodic benefit credit/(cost)	2.3		(4.5)
Other activity, net	Other activity, net	(6.7)		—		Other activity, net	0.2		2.1
Other income/(expense), net	Other income/(expense), net	$	(6.9)	$	(4.5)	Other income/(expense), net	$	(2.3)	$	(6.9)

Other income/(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, we include the components of net periodic benefit credit/(cost) for pension and post retirement obligations other than the service cost component. Other activity, net primarily includes ~~a charge of $7.2 million to increase our Funding Agreement liability from~~items associated with certain legal matters, as well as asbestos-related activities of Murray.

Provision for Income Taxes

For the ~~three~~six months ended ~~September~~June 30, ~~2021,~~2022, 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 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%.

~~Discontinued Operations~~

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

In millions 2021 2020
Net revenues $ — $ —
Pre-tax earnings (loss) from discontinued operations (19.0) (7.7)
Tax benefit (expense) 5.7 2.2
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. During the three 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 three months ended September 30, 2020 includes pre-tax Ingersoll Rand Industrial separation costs primarily related to legal, consulting and advisory fees of $2.3 million.

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

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

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~~Nine Months EndedSeptember 30, 2021 Compared to the Nine Months EndedSeptember 30, 2020 - Consolidated Results~~

Dollar amounts in millions 2021 2020 Period Change 2021
% of
revenues 2020
% of
revenues
Net revenues $ 10,567.1 $ 9,275.6 $ 1,291.5
Cost of goods sold (7,139.0) (6,420.1) (718.9) 67.6 % 69.2 %
Gross profit 3,428.1 2,855.5 572.6 32.4 % 30.8 %
Selling and administrative expenses (1,840.5) (1,710.7) (129.8) 17.4 % 18.5 %
Operating income 1,587.6 1,144.8 442.8 15.0 % 12.3 %
Interest expense (177.7) (186.8) 9.1
Other income/(expense), net (13.8) 7.6 (21.4)
Earnings before income taxes 1,396.1 965.6 430.5
Benefit (provision) for income taxes (268.0) (224.4) (43.6)
Earnings from continuing operations 1,128.1 741.2 386.9
Discontinued operations, net of tax (12.6) (120.4) 107.8
Net earnings $ 1,115.5 $ 620.8 $ 494.7

~~Net Revenues~~

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


~~Volume~~	~~8.0~~	%
~~Pricing~~	~~3.0~~	%
~~Acquisitions~~	~~1.6~~	%
~~Currency translation~~	~~1.3~~	%
~~Total~~	~~13.9~~	%

~~We were negatively impacted by the COVID-19 global pandemic in each of our 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 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 ~~Net revenues~~ ~~as compared to the prior year. Refer to the “Results by Segment” below for a discussion of~~ ~~Net revenues~~ ~~by segment.~~

~~Gross Profit Margin~~

~~Gross profit margin for the nine months ended September 30, 2021~~increased by 160 basis points to 32.4% compared to 30.8% for the same period of 2020 primarily due to price realization, productivity benefits and a favorable shift in product mix to higher margin products, partially offset by increased direct material and other inflation.

~~Selling and Administrative Expenses~~

~~Selling and administrative expenses~~ ~~for the nine months ended September 30, 2021 increased by 7.6%, or $129.8 million, compared with the same period of 2020. The increase in~~ ~~Selling and administrative expenses~~ was primarily driven by higher compensation and employee benefits due to prior year delays in merit increases and employee furloughs in certain regions and the completion of three channel acquisitions, partially offset by the realization of benefits from prior restructuring programs and transformation savings, cost containment actions and lower spending on restructuring and transformation initiatives.~~However,~~ ~~Selling and administrative expenses~~ ~~as a percentage of~~ ~~Net revenues~~ ~~for the nine months ended September 30, 2021 decreased 110 basis points from 18.5% to 17.4% primarily due to higher revenues during the period.~~

~~Interest Expense~~

~~Interest expense~~ for the nine months ended September 30, 2021 decreased by 4.9% or $9.1 million compared with the same period of 2020 primarily due to the repayments of $125.0 million of 9.000% Debentures in August 2021, $300.0 million of 2.900% Senior notes in February 2021 and $300.0 million of 2.625% Senior notes in April 2020.

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~~Other Income/(Expense), Net~~

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

In millions 2021 2020
Interest income/(loss) $ 3.0 $ 3.6
Foreign currency exchange loss (8.9) (8.5)
Other components of net periodic benefit credit/(cost) (3.3) (9.0)
Other activity, net
(4.6) 21.5
Other income/(expense), net $ (13.8) $ 7.6

~~Other income/(expense), net~~ includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, we include the components of net periodic benefit credit/(cost) for pension and post retirement obligations other than the service cost component. During the nine months ended September 30, 2021, other activity, net primarily includes a charge of $7.2 million to increase our Funding Agreement liability from asbestos-related activities of Murray. During the nine months ended September 30, 2020, 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, 2021, our effective tax rate was 19.2%~~20.1% 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~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~23.2%~~19.5% which was ~~higher~~lower than the U.S. statutory rate of 21% primarily due to a $37.0 million non-cash charge to 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~~rate, partially offset by the remeasurement of ~~the~~deferred taxes as a result of law changes in certain non-U.S. tax jurisdictions, primarily in the ~~valuation allowances increased the effective tax rate by 3.4%.~~

~~Discontinued Operations~~

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

In millions 2021 2020
Net revenues $ — $ 469.8
Pre-tax earnings (loss) from discontinued operations (32.4) (131.1)
Tax benefit (expense) 19.8 10.7
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~~United Kingdom and asbestos-related activities of Aldrich. During 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, consultingIndia, and ~~advisory fees of $113.9 million~~U.S. state and ~~a loss of $23.6 million related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park.~~

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

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

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local taxes.

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the Three Months Ended ~~September~~June 30, ~~2020~~2021 - Segment Results

We operate under ~~three~~four regional operating segments designed to create deep customer focus and relevance in markets around the world. We determined that our two EMEA operating segments meet the aggregation criteria based on similar operating and economic characteristics, resulting in one reportable segment. Therefore, we have three regional reportable segments, Americas, EMEA and Asia Pacific.

•Our Americas segment innovates for customers in ~~the~~ North America and Latin ~~America regions.~~America. 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 region. 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.

Management measures operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, non-cash adjustments for contingent consideration, 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.

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The following discussion compares our results for each of our three reportable segments for the three months ended ~~September~~June 30, ~~2021~~2022 compared to the three months ended ~~September~~June 30, ~~2020.~~2021.

In millions 2021 2020 % change
Americas
Net revenues $ 2,910.3 $ 2,745.8 6.0 %
Segment Adjusted EBITDA 566.9 555.0 2.1 %
Segment Adjusted EBITDA as a percentage of net revenues 19.5 % 20.2 %
EMEA
Net revenues $ 495.0 $ 445.2 11.2 %
Segment Adjusted EBITDA 99.4 87.6 13.5 %
Segment Adjusted EBITDA as a percentage of net revenues 20.1 % 19.7 %
Asia Pacific
Net revenues $ 314.5 $ 304.5 3.3 %
Segment Adjusted EBITDA 57.3 58.5 (2.1) %
Segment Adjusted EBITDA as a percentage of net revenues 18.2 % 19.2 %
Total Net revenues $ 3,719.8 $ 3,495.5 6.4 %
Total Segment Adjusted EBITDA 723.6 701.1 3.2 %

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In millions	2022			2021			% change

Americas
Net revenues	$	3,386.3		$	2,971.6		14.0	%
Segment Adjusted EBITDA	702.2			621.0			13.1	%
Segment Adjusted EBITDA as a percentage of net revenues	20.7		%	20.9		%

EMEA
Net revenues	$	521.6		$	523.2		(0.3)	%
Segment Adjusted EBITDA	92.4			107.3			(13.9)	%
Segment Adjusted EBITDA as a percentage of net revenues	17.7		%	20.5		%

Asia Pacific
Net revenues	$	282.5		$	334.9		(15.6)	%
Segment Adjusted EBITDA	43.2			63.0			(31.4)	%
Segment Adjusted EBITDA as a percentage of net revenues	15.3		%	18.8		%

Total Net revenues	$	4,190.4		$	3,829.7		9.4	%
Total Segment Adjusted EBITDA	837.8			791.3			5.9	%

Americas

Net revenues for the three months ended ~~September~~June 30, ~~2021~~2022 increased by ~~6.0%~~14.0% or ~~$164.5~~$414.7 million, compared with the same period of ~~2020.~~2021. The components of the period change were as follows:


Pricing	~~5.1~~11.8	%
Volume	1.5	%
Acquisitions	~~1.7~~0.9	%
Currency translation	~~0.1~~	%
~~Volume~~	~~(0.9)~~(0.2)	%
Total	~~6.0~~14.0	%

The increase in Net revenues was primarily 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~~inflation-based price increases, higher volumes driven by ~~lower volumes due to supply chain constraints.~~increased end-customer demand and incremental revenues from acquisitions.

Segment Adjusted EBITDA margin for the three months ended ~~September~~June 30, ~~2021~~2022 decreased by 7020 basis points to ~~19.5%~~20.7% compared to ~~20.2%~~20.9% for the same period in ~~2020~~2021 primarily due to ~~increased direct material~~inflation and ~~other inflation coupled with increased logistics costs linked to~~unfavorable productivity arising from supply chain, ~~constraints~~freight and ~~inefficiencies,~~logistics challenges, partially offset by inflation-based price ~~realization and productivity benefits.~~increases.

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EMEA

Net revenues for the three months ended ~~September~~June 30, ~~2021 increased~~2022 decreased by ~~11.2%~~0.3% or ~~$49.8~~$1.6 million, compared with the same period of ~~2020.~~2021. The components of the period change were as follows:


~~Volume~~Pricing	~~6.5~~6.9	%
~~Acquisitions~~Volume	~~1.7~~	%
~~Pricing~~	~~1.3~~3.9	%
Currency translation	~~1.2~~ (11.1)	%
~~Transfer of sales from Asia Pacific segment~~	~~0.5~~	%

Total	~~11.2~~ (0.3)	%

The ~~increase~~decrease in Net revenues was driven by ~~increased end customer demand, favorable pricing and favorable~~an unfavorable impact from foreign currency ~~translation, partially offset by supply chain constraints. Also, during~~translation. Excluding the ~~first quarter~~impact 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~~foreign currency translation, Net revenues ~~as compared to the prior year.~~increased by 10.8% driven by inflation-based price increases and higher volumes of products shipped.

Segment Adjusted EBITDA margin for the three months ended ~~September~~June 30, ~~2021~~2022 ~~increased~~decreased by 40280 basis points to ~~20.1%~~17.7% compared to ~~19.7%~~20.5% for the same period of ~~2020,~~2021, primarily due to ~~price realization, favorable product mix,~~inflation and unfavorable productivity ~~benefits and higher volumes despite~~arising from supply chain, ~~constraints, which outpaced direct material~~freight and ~~other inflation increases as compared to the prior period.~~logistics challenges and an unfavorable impact from foreign currency translation, partially offset by inflation-based price increases.

Asia Pacific

Net revenues for the three months ended ~~September~~June 30, ~~2021 increased~~2022 decreased by ~~3.3%~~15.6% or ~~$10.0~~$52.4 million, compared with the same period of ~~2020.~~2021. The components of the period change were as follows:


~~Currency translation~~	~~3.3~~	%
Pricing	~~2.1~~4.0	%
Volume	~~(1.4)~~(16.1)	%
~~Transfer of sales to EMEA segment~~Currency translation	~~(0.7)~~(3.5)	%
Total	~~3.3~~ (15.6)	%

The ~~increase~~decrease in Net revenueswas primarily driven by ~~favorable~~lower volumes as a result of localized shutdowns in China and an unfavorable impact from foreign currency translation, ~~and favorable pricing,~~ partially offset by ~~lower volumes driven primarily by supply chain constraints and the transfer of sales to the EMEA segment related to the channel acquisition.~~inflation-based price increases.

Segment Adjusted EBITDA margin for the three months ended ~~September~~June 30, ~~2021~~2022 decreased by ~~100~~350 basis points to ~~18.2%~~15.3% compared to ~~19.2%~~18.8% for the same period of ~~2020~~2021 primarily due to ~~increased direct material and other~~ inflation and unfavorable productivity arising from supply chain, freight and logistics challenges, lower volumes as a result of localized shutdowns in China and an unfavorable impact from foreign currency translation, partially offset by ~~productivity benefits and~~inflation-based price ~~realization.~~increases.

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~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the ~~Nine Months EndedSeptember~~Six months ended June 30, ~~2020~~2021 - Segment Results

The following discussion compares our results for each of our three reportable segments for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021.


In millions	In millions	2021			2020			% change		In millions	2022			2021			% change

Americas	Americas									Americas
Net revenues	Net revenues	$	8,207.6		$	7,300.0		12.4	%	Net revenues	$	6,019.5		$	5,297.3		13.6	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	1,571.7			1,287.6			22.1	%	Segment Adjusted EBITDA	1,107.8			1,004.8			10.3	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	19.1		%	17.6		%			Segment Adjusted EBITDA as a percentage of net revenues	18.4		%	19.0		%

EMEA	EMEA									EMEA
Net revenues	Net revenues	$	1,462.1		$	1,182.7		23.6	%	Net revenues	$	962.9		$	967.1		(0.4)	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	283.4			190.1			49.1	%	Segment Adjusted EBITDA	151.5			184.0			(17.7)	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	19.4		%	16.1		%			Segment Adjusted EBITDA as a percentage of net revenues	15.7		%	19.0		%

Asia Pacific	Asia Pacific									Asia Pacific
Net revenues	Net revenues	$	897.4		$	792.9		13.2	%	Net revenues	$	563.5		$	582.9		(3.3)	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	163.8			129.2			26.8	%	Segment Adjusted EBITDA	86.7			106.5			(18.6)	%
Segment Adjusted EBITDA as a percentage of net revenues	Segment Adjusted EBITDA as a percentage of net revenues	18.3		%	16.3		%			Segment Adjusted EBITDA as a percentage of net revenues	15.4		%	18.3		%

Total net revenues	Total net revenues	$	10,567.1		$	9,275.6		13.9	%	Total net revenues	$	7,545.9		$	6,847.3		10.2	%
Total Segment Adjusted EBITDA	Total Segment Adjusted EBITDA	2,018.9			1,606.9			25.6	%	Total Segment Adjusted EBITDA	1,346.0			1,295.3			3.9	%

Americas

Net revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 increased by ~~12.4%~~13.6% or ~~$907.6~~$722.2 million, compared with the same period of ~~2020.~~2021. The components of the period change were as follows:


~~Volume~~Pricing	~~6.9~~10.3	%
~~Pricing~~Volume	~~3.5~~2.9	%
Acquisitions	~~1.8~~0.5	%
Currency translation	~~0.2~~ (0.1)	%
Total	~~12.4~~13.6	%

The ~~Americas 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 inflation-based price increases, higher volumes driven by increased ~~end customer~~end-customer demand ~~in all of our businesses, favorable pricing~~ and ~~the completion of two channel acquisitions during the fourth quarter of 2020.~~incremental revenues from acquisitions.

Segment Adjusted EBITDA margin for the ~~nine~~six months ended ~~September~~June 30, ~~2021 increased~~2022 decreased by ~~150~~60 basis points to ~~19.1%~~18.4% compared to ~~17.6%~~19.0% for the same period of ~~2020~~2021 primarily due to ~~price realization, strong execution,~~inflation and unfavorable productivity ~~benefits, higher volumes~~arising from supply chain, freight and ~~favorable~~logistics challenges and an unfavorable product mix, ~~which outpaced direct material and other inflation increases as compared to the prior period.~~partially offset by inflation-based price increases.

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EMEA

Net revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2021 increased~~2022 decreased by ~~23.6%~~0.4% or ~~$279.4~~$4.2 million, compared with the same period of ~~2020.~~2021. The components of the period change were as follows:


Pricing	5.5	%
Volume	~~14.7~~3.2	%
Currency translation	~~5.9~~	%
~~Acquisitions~~	~~1.6~~	%
~~Pricing~~	~~0.8~~	%
~~Transfer of sales from Asia Pacific segment~~	~~0.6~~ (9.1)	%

Total	~~23.6~~ (0.4)	%

The ~~EMEA 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~~decrease in Net revenues was primarily driven by ~~increased end customer demand within both our businesses as well as favorable~~an unfavorable impact from foreign currency translation. ~~Also, during~~Excluding the ~~first quarter~~impact 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~~foreign currency translation, Net revenues ~~as compared to the prior year.~~increased by 8.7% driven by inflation-based price increases and higher volumes of products shipped.

Segment Adjusted EBITDA margin for the ~~nine~~six months ended ~~September~~June 30, ~~2021 increased~~2022 decreased by 330 basis points to ~~19.4%~~15.7% compared to ~~16.1%~~19.0% for the same period of ~~2020~~2021 primarily due to ~~higher volumes, strong execution,~~inflation and unfavorable productivity ~~benefits, favorable product mix~~arising from supply chain, freight and logistics challenges and an unfavorable impact from foreign currency translation, partially offset by inflation-based price ~~realization, which outpaced direct material and other inflation increases as compared to the prior period.~~increases.

Asia Pacific

Net revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2021 increased~~2022 decreased by ~~13.2%~~3.3% or ~~$104.5~~$19.4 million, compared with the same period of ~~2020.~~2021. The components of the period change were as follows:


Pricing	3.5	%
Volume	~~7.4~~ (4.1)	%
Currency translation	~~5.1~~	%
~~Pricing~~	~~1.6~~	%
~~Transfer of sales to EMEA segment~~	~~(0.9)~~(2.7)	%
Total	~~13.2~~ (3.3)	%

The ~~Asia Pacific 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~~decrease in Net revenues was primarily driven by ~~increased end customer demand~~lower volumes as a result of ~~improved economic conditions as it relates to the COVID-19 global pandemic within~~localized shutdowns in China and an unfavorable impact from foreign currency translation, partially offset by ~~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.~~inflation-based price increases.

Segment Adjusted EBITDA margin for the ~~nine~~six months ended ~~September~~June 30, ~~2021 increased~~2022 decreased by ~~200~~290 basis points to ~~18.3%~~15.4% compared to ~~16.3%~~18.3% for the same period of ~~2020. The increase was~~2021 primarily ~~driven by strong execution,~~due to inflation and unfavorable productivity ~~benefits, price realization~~arising from supply chain, freight and ~~higher volumes as a result of increased customer demand from improved economic conditions as compared to prior year driven by the COVID-19 global pandemic,~~logistics challenges and an unfavorable product mix, partially offset by ~~increased direct material and other inflation, unfavorable product mix and business reinvestment.~~inflation-based price increases.

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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

•Debt service requirements

•Funding of capital expenditures

•Dividend payments

•~~Debt service requirements~~Funding of acquisitions, joint ventures and equity investments

•Share repurchases

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~~Company had no outstanding balance as of ~~September~~June 30, ~~2021.~~2022.

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As of ~~September~~June 30, ~~2021,~~2022, we had ~~$2,738.8~~$1,090.2 million of cash and cash equivalents on hand, of which ~~$1,866.7~~$606.8 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~~June 30, ~~2021,~~2022, we currently have no plans to repatriate funds from subsidiaries for which we assert permanent reinvestment.

We expect to pay a competitive and growing dividend. Since the launch of Trane Technologies in March 2020, we have increased our quarterly share dividend by 26%, from $0.53 to $0.67 per ordinary share, or $2.12 to $2.68 per share annualized. The first and second quarter 2022 dividends were declared and paid during the six months ended June 30, 2022 and the third quarter 2022 dividend was declared in June 2022 to be paid in September 2022.

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 2018 Authorization.~~. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we repurchased and canceled ~~$600.2 million of our ordinary shares thus completing the 2018 Authorization and initiating repurchases under the 2021 Authorization of $100.2~~$650.0 million of our ordinary shares leaving approximately ~~$1.9 billion~~$750 million remaining under the 2021 Authorization.

~~We expect to pay a competitive and growing dividend.~~ In February 2022, our Board of Directors authorized the repurchase of up to $3.0 billion of our ordinary shares under a new share repurchase program (2022 Authorization) upon completion of the 2021 we announced an 11% increase in our quarterly share dividend from $0.53 to $0.59 per ordinary share, or $2.36 per share annualized. The first, second and third quarter 2021 dividend was paid during the nine months ended September 30, 2021 and the fourth quarter 2021 dividend was declared in October 2021.Authorization.

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 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 sustainingSustaining 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~~Our research and development and sustaining costs account for approximately two percent of annualNet ~~revenues~~revenues. .Each year, we make investments in new product development, new technology innovation and leaner manufacturing systems as they are key factors in achieving our strategic objectives as a leader in the climate sector. In addition, we make investments in renewable energy production and other carbon performance improvement projects. For example, during the six months ended June 30, 2022, we invested in onsite solar energy generation systems at our Pueblo, Colorado facility and ramped up operations of the onsite solar system at our Zhongshan, China facility. We also transitioned to a next generation refrigerant with low global warming potential (GWP) for transport equipment manufactured at our Arecibo, Puerto Rico facility and are actively working to transition to low GWP refrigerant on our first commercial product at our Pueblo, Colorado factory. These actions represent important steps to reduce our Scope 1 and Scope 2 carbon emissions and improve our customer's carbon performance over the operating life of Trane Technologies' cooling equipment. Furthermore, during the six months ended June 30, 2022, we also completed implementation of processing equipment for our Tyler, Texas facility to fully achieve zero waste to landfill. These Leading by Example successes did not result in material expenditures for the six months ended June 30, 2022.

~~Table~~We continue to look for similar improvement opportunities including, but not limited to, increasing energy efficiency, developing products that allow for use of ~~Contents~~

lower GWP refrigerants, reducing material content in products, and designing products for circularity. All new product development (NPD) programs must complete a Design for Sustainability module within our NPD process to ensure that every program has a positive impact on sustainability. We also focus on partnering with our suppliers and technology providers to align their investment decisions with our technical requirements.

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 ~~2019,~~2020, we acquired several businesses, entered into joint ventures and invested in companies that complement existing products and services further enhancing our product portfolio. 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 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 $114.2 million during the year ended December 31, 2020. These expenditures were incurred in order to facilitate the Transaction and are included within ~~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. On February 29, 2020, we completed our Reverse Morris Trust transaction with Ingersoll Rand Inc., where we separated our former Industrial segment through a pro rata distribution to shareholders of record as of February 24, 2020. Post separation, we ~~committed to reduce costs by~~achieved savings of $190 million through 2021 and expect to achieve an additional $110 million by 2023 for a total of $300 million in total annual savings under our transformation initiatives. In order to achieve these cost savings, we anticipate to incur costs up to $150 million through 2022. We currently have incurred approximately $128 million cumulatively through June 30, 2022. We believe that our existing cash flow, committed credit lines and access to the capital markets will be sufficient to fund share repurchases, dividends, research and development, sustaining activities, business portfolio changes and ongoing restructuring actions.

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Certain of our subsidiaries entered into ~~funding agreements~~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.~~QSF. 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~~On January 27, 2022, the Bankruptcy Court ~~and other conditions are satisfied,~~granted the request to fund the QSF, ~~Trust is expected to be~~which was funded ~~prior to January 31,~~on March 2, 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. See Part I, Item 1A – Risk Factors in the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 for more information.

Liquidity

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

In millions September 30,
2021 December 31,
2020
Cash and cash equivalents $ 2,738.8 $ 3,289.9
Short-term borrowings and current maturities of long-term debt (1)
350.4 775.6
Long-term debt 4,490.7 4,496.5
Total debt 4,841.1 5,272.1
Total Trane Technologies plc shareholders’ equity 6,475.1 6,407.7
Total equity 6,487.7 6,427.1
Debt-to-total capital ratio 42.7 % 45.1 %

~~(1)~~ ~~The $300.0 million of 2.900% Senior notes were repaid in February 2021. The $125.0 million of 9.000% Debentures were repaid in August 2021.~~

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In millions	June 30, 2022			December 31, 2021
Cash and cash equivalents	$	1,090.2		$	2,159.2
Short-term borrowings and current maturities of long-term debt	1,049.8			350.4
Long-term debt	3,786.7			4,491.7
Total debt	4,836.5			4,842.1
Total Trane Technologies plc shareholders’ equity	5,723.5			6,255.9
Total equity	5,739.3			6,273.1
Debt-to-total capital ratio	45.7		%	43.6		%

Debt and Credit Facilities

Our short-term obligations primarily consist of current maturities of long-term debt. ~~In addition, we~~We have outstanding $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~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. See Note 76 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 2023 and 2049. In addition, we maintain two $1.0 billion senior unsecured revolving credit facilities, one of which matures in ~~April 2023~~June 2026 and the other which matures in ~~June 2026.~~April 2027. 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~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. See Note 76 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~~six months ended ~~September~~June 30. For additional details, see the Condensed Consolidated Statements of Cash Flows in the Condensed Consolidated Financial Statements.


In millions	In millions	2021		2020		In millions	2022		2021
Net cash provided by (used in) continuing operating activities	Net cash provided by (used in) continuing operating activities	$	1,162.6	$	1,132.9	Net cash provided by (used in) continuing operating activities	$	417.7	$	751.8
Net cash provided by (used in) continuing investing activities	Net cash provided by (used in) continuing investing activities	(208.8)		(101.1)		Net cash provided by (used in) continuing investing activities	(258.1)		(162.1)
Net cash provided by (used in) continuing financing activities	Net cash provided by (used in) continuing financing activities	(1,465.0)		1,230.9		Net cash provided by (used in) continuing financing activities	(1,001.6)		(937.6)

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Operating Activities

Net cash provided by continuing operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$1,162.6~~$417.7 million, of which Net earnings provided ~~$1,421.5~~$978.1 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~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$1,132.9~~$751.8 million, of which Net earnings provided ~~$1,083.5~~$919.0 million after adjusting for non-cash transactions. ~~Changes in assets and liabilities, net~~ ~~provided $49.4 million.~~ The year-over-year ~~increase~~decrease in net cash ~~provided by~~from continuing operating activities was primarily ~~driven by higher net earnings, partially offset by~~due to higher working capital balances in the current ~~year.~~year and the funding of the continuing operations component of the QSF for $91.8 million, partially offset by higher net earnings.

Investing Activities

Cash flows from investing activities 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, investments in joint ventures and complementary businesses and divestitures. During the ~~nine~~six months ended ~~September~~June 30, 2022, net cash used in investing activities from continuing operations was $258.1 million. The primary drivers of the usage were attributable to capital expenditures of $143.9 million and acquisition of businesses for $109.6 million, net of cash acquired, primarily within the Americas segment. During the six months ended June 30, 2021 net cash used in investing activities from continuing operations was ~~$208.8~~$162.1 million. The primary drivers of the usage ~~was~~were attributable to capital expenditures of ~~$121.6~~$77.5 million and other investing activities of ~~$69.2~~$71.8 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 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.

Financing Activities

Cash flows from financing activities represent inflows and outflows that account for external activities affecting equity and debt. Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, issuing our own stock and debt transactions. During the ~~nine~~six months ended ~~September~~June 30, 2022, net cash used in financing activities from continuing operations was $1,001.6 million. The primary drivers of the outflow related to the repurchase of $650.1 million in ordinary shares and dividends paid to ordinary shareholders of $310.9 million. During the six months ended June 30, 2021, net cash used in financing activities from continuing operations was ~~$1,465.0~~$937.6 million. The primary drivers of the outflow related to the repurchase of ~~$600.2~~$354.2 million in ordinary shares, the repayment of ~~long term~~long-term debt of ~~$432.5~~$307.5 million and dividends paid to ordinary shareholders of ~~$421.9~~$281.6 million. During the nine months ended September 30, 2020, net cash provided by financing activities from continuing operations was $1,230.9 million. The primary driver of the inflow related to the receipt of a special cash payment of $1,900.0 million pursuant to 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.

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Free Cash Flow

Free cash flow is a non-GAAP measure and defined as Net cash provided by (used in) continuing operating activities, less capital expenditures, plus cash payments for restructuring, transformation costs and ~~transformation costs.~~thecontinuing operations component of the QSF funding. 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 cash provided by (used in) continuing operating 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 cash provided by (used in) continuing operating activities in accordance with GAAP.

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


In millions	In millions	2021		2020		In millions	2022		2021
Net cash provided by (used in) continuing operating activities	Net cash provided by (used in) continuing operating activities	$	1,162.6	$	1,132.9	Net cash provided by (used in) continuing operating activities	$	417.7	$	751.8
Capital expenditures	Capital expenditures	(121.6)		(89.1)		Capital expenditures	(143.9)		(77.5)
Cash payments for restructuring	Cash payments for restructuring	27.1		62.3		Cash payments for restructuring	14.2		15.7
Transformation costs paid	Transformation costs paid	13.5		22.4		Transformation costs paid	7.4		6.4
QSF funding (continuing operations component)						QSF funding (continuing operations component)	91.8		—
Free cash flow (1)	Free cash flow (1)	$	1,081.6	$	1,128.5	Free cash flow (1)	$	387.2	$	696.4

(1) Represents a non-GAAP measure.

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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.~~market volatility. The Company currently projects that it will contribute a total of approximately ~~$57~~$90.0 million to our enterprise plans worldwide in ~~2021.~~2022. For further details on pension plan activity, see Note 109 to the Condensed Consolidated Financial Statements.

Supplemental Guarantor Financial Information

Trane Technologies plc (Plc or Parent Company) and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of public debt issued by other 100% directly or indirectly owned subsidiaries of Plc. The following table shows our guarantor relationships as of ~~September~~June 30, ~~2021:~~2022:


Parent, issuer or guarantors	Notes issued	Notes guaranteed
Trane Technologies plc (Plc)	None	All registered notes and debentures
Trane Technologies Irish Holdings Unlimited Company (TT Holdings)	None	All notes issued by TTFL and TTC HoldCo
Trane Technologies Lux International Holding Company S.à.r.l. (TT International)	None	All notes issued by TTFL and TTC HoldCo
Trane Technologies Global Holding Company Limited (TT Global)	None	All notes issued by TTFL and TTC HoldCo
Trane Technologies Financing Limited (TTFL)~~(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)	4.250% Senior notes due 2023 3.750% Senior notes due 2028 5.750% Senior notes due 2043 4.300% Senior notes due 2048	All notes issued by TTFL
Trane Technologies Company LLC (TTC)	7.200% Debentures due 2022-2025 6.480% Debentures due 2025 Puttable debentures due 2027-2028	All notes issued by TTFL and TTC HoldCo

~~(1)~~ On April 30, 2021, Trane Technologies Luxembourg Finance S.A. (TT Lux) merged into TTFL, an Irish private limited company, and TTFL became the successor 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 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~~June 30, ~~2021.~~2022. Our obligor groups as of ~~September~~June 30, ~~2021~~2022 were as follows: obligor group 1 consists of Plc, TT Holdings, TT International, TT Global, TTFL, TTC HoldCo and TTC; obligor group 2 consists of Plc, TTFL and TTC.

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Summarized Statements of ~~Income (Loss)~~Earnings


		Nine months ended September 30, 2021					Six months ended June 30, 2022
In millions	In millions	Obligor group 1		Obligor group 2		In millions	Obligor group 1		Obligor group 2
Net revenues	Net revenues	$	—	$	—	Net revenues	$	—	$	—
Gross profit (loss)	Gross profit (loss)	—		—		Gross profit (loss)	—		—
Intercompany interest and fees	Intercompany interest and fees	(13.8)		170.2		Intercompany interest and fees	(22.6)		99.8
Earnings (loss) from continuing operations	Earnings (loss) from continuing operations	(242.4)		(75.9)		Earnings (loss) from continuing operations	(157.7)		6.6
Discontinued operations, net of tax	Discontinued operations, net of tax	(12.8)		(13.7)		Discontinued operations, net of tax	(8.9)		(9.6)
Net earnings (loss)	Net earnings (loss)	(255.2)		(89.6)		Net earnings (loss)	(166.6)		(3.0)
Less: Net earnings attributable to noncontrolling interests	Less: Net earnings attributable to noncontrolling interests	—		—		Less: Net earnings attributable to noncontrolling interests	—		—
Net earnings (loss) attributable to Trane Technologies plc	Net earnings (loss) attributable to Trane Technologies plc	$	(255.2)	$	(89.6)	Net earnings (loss) attributable to Trane Technologies plc	$	(166.6)	$	(3.0)

Summarized Balance Sheets


		September 30, 2021					June 30, 2022
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	$	116.5	$	505.5	Intercompany receivables	$	120.5	$	574.1
Current assets	Current assets	1,681.2		2,044.4		Current assets	610.2		1,047.2
Intercompany notes receivable	Intercompany notes receivable	1,831.9		5,531.6		Intercompany notes receivable	1,831.9		5,531.6
Noncurrent assets	Noncurrent assets	2,654.9		6,126.6		Noncurrent assets	2,627.2		6,090.0
LIABILITIES & EQUITY
LIABILITIES						LIABILITIES
Intercompany payables	Intercompany payables	4,866.7		3,374.5		Intercompany payables	4,876.8		3,117.4
Current liabilities	Current liabilities	5,676.3		4,153.3		Current liabilities	6,639.6		4,073.8
Intercompany notes payable	Intercompany notes payable	2,400.4		2,400.4		Intercompany notes payable	2,400.0		2,400.0
Noncurrent liabilities	Noncurrent liabilities	7,875.2		5,825.1		Noncurrent liabilities	6,841.0		5,493.6


		December 31, 2020					December 31, 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	$	458.4	$	1,254.7	Intercompany receivables	$	128.9	$	494.0
Current assets	Current assets	1,523.7		2,200.5		Current assets	1,348.3		1,623.4
Intercompany notes receivable	Intercompany notes receivable	1,331.9		1,331.9		Intercompany notes receivable	1,831.9		5,531.6
Noncurrent assets	Noncurrent assets	2,195.0		1,967.2		Noncurrent assets	2,662.9		6,135.7
LIABILITIES & EQUITY
LIABILITIES						LIABILITIES
Intercompany payables	Intercompany payables	5,572.2		3,599.6		Intercompany payables	4,160.1		2,452.0
Current liabilities	Current liabilities	6,880.3		4,539.1		Current liabilities	5,045.6		3,288.8
Intercompany notes payable	Intercompany notes payable	2,249.7		—		Intercompany notes payable	2,400.7		2,400.7
Noncurrent liabilities	Noncurrent liabilities	7,729.6		3,430.5		Noncurrent liabilities	7,758.7		5,712.6

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, ~~2020.~~2021.

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Commitments and Contingencies

We are involved in various litigation, claims and administrative proceedings, including those related to 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 2018 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.

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Critical Accounting ~~Policies~~Estimates

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~~six months ended ~~September~~June 30, ~~2021,~~2022, to the items that we disclosed as our critical accounting ~~policies~~estimates 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, ~~2020.~~2021.

Recent Accounting Pronouncements

See Note 32 to the Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements.

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~~statements related to the continued impact of the COVID-19 global pandemic; any statements regarding our sustainability commitments; 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;~~operate including recessions, economic downturns, price instability, slowing economic growth and social and political instability;

•commodity shortages, supply chain risks and price increases;

•national and international conflict, including war, civil disturbances and terrorist acts;

•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;

•competitive factors in the industries in which we compete;

•~~our ability to develop~~the development, commercialization and acceptance of new and enhanced products and ~~services and the acceptance of these products in the markets we serve;~~services;

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

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

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

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

•the impact of potential information technology system failures, vulnerabilities, 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 or divestiture 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); and

•work stoppages, union negotiations, labor disputes and 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 in this Quarterly Report on Form 10-Q, ~~and~~ in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021 and as further updated by the risk factors contained in our Form 10-Q for the period ended March 31, 2022. 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.

Available Information

We have used, and intend to continue to use, the homepage, the investor relations and the “News” section of our website (www.tranetechnologies.com), among other sources such as press releases, public conference calls and webcasts, as a means of disclosing additional information, which may include future developments regarding the Company and/or material non-public information. We 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

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, ~~2020.~~2021.

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~~June 30, ~~2021,~~2022, 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~~second quarter of ~~2021~~2022 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 and product defect 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

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.~~stayed. 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.

The goal of these Chapter 11 filings is ~~an efficient~~to resolve equitably and ~~permanent resolution of~~permanently all current and future ~~asbestos~~asbestos-related claims in a manner beneficial to claimants and to Aldrich and Murray through court approval of a plan of reorganization ~~which~~that would ~~establish, in accordance with~~create a trust pursuant to section 524(g) of the Bankruptcy Code, aestablish claims resolution procedures for all current and future asbestos-related claims against Aldrich and Murray and channel such claims to the trust ~~to pay all asbestos claims.~~for resolution in accordance with those procedures. 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.

On August 26, 2021, we announced that Aldrich and Murray reached an agreement in principle with the ~~FCR~~court-appointed legal representative of future asbestos claimants (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~~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 ~~QSF Trust.~~QSF. 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~~

On January 27, 2022, the Bankruptcy Court ~~and other conditions are satisfied,~~granted the request to fund the QSF, ~~Trust is expected to be~~which was funded ~~prior to January 31,~~on March 2, 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 Bankruptcy Court also granted the ACC standing to investigate and pursue certain causes of action including fraudulent conveyance and certain other derivative causes of action. The ACC filed complaints with respect to these and other causes of action on June 18, 2022. Additionally, the Bankruptcy Court denied motions to dismiss a complaint filed by the ACC seeking substantive consolidation. We are vigorously opposing and defending against these claims. The Chapter 11 cases remain pending as of ~~November~~August 3, ~~2021.~~2022.

Prior to the Petition Date, certain of our wholly-owned subsidiaries and former companies were named as defendants in asbestos-related lawsuits in state and federal courts. 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.

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See also the discussion contained in our Annual Report on Form 10-K for the period ended December 31, ~~2020~~2021 under Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and also Note 2018 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 Factors" contained in our Annual Report on Form 10-K for the period ended December 31, ~~2020~~2021 or as further updated by the risk factors contained in our Form 10-Q for the period ended March 31, 2022 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 and Murray each filed a voluntary petition for reorganization under the Bankruptcy Code in the Bankruptcy Court. The goal of these Chapter 11 filings is ~~an efficient~~to resolve equitably and ~~permanent resolution of~~permanently all current and future ~~asbestos~~asbestos-related claims in a manner beneficial to claimants, Aldrich and Murray through court approval of a plan of reorganization ~~which~~that would ~~establish, in accordance with~~create a trust pursuant to section 524(g) of the Bankruptcy Code, aestablish claims resolution procedures for all current and future asbestos-related claims against Aldrich and Murray and channel such claims to the trust ~~to pay all asbestos claims.~~for resolution in accordance with those procedures. 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 ~~November~~August 3, ~~2021.~~2022.

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 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~~we 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 (Asbestos Claims) pursuant to the Plan as described further in Note ~~20,~~21, “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~~current asbestos claimants (the ACC) are 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.~~QSF. 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~~

On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF. The QSF was funded on March 2, 2022. On April 18, 2022, the Bankruptcy Court entered an order granting the Debtors' request to seek to estimate their aggregate liability for all current and ~~other conditions~~future asbestos-related personal injury claims. The Debtors' are ~~satisfied,~~pursuing discovery and related matters in connection with the ~~QSF Trust is expected to be funded prior to January 31, 2022.~~estimation proceedings. 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.

On April 14, 2022, the Bankruptcy Court granted the ACC standing to pursue certain causes of action, including fraudulent conveyance and certain other derivative causes of action. On June 18, 2022, the ACC filed complaints against us and other related parties asserting various claims and causes of action arising from or related to our 2020 internal corporate restructuring. Additionally, the Bankruptcy Court denied motions to dismiss the ACC's substantive consolidation complaint. While the Company is vigorously opposing and defending against these claims, it is not possible to predict whether we will be successful.

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

•the outcome of negotiations with 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 the ~~filing~~ACC's pursuit of ~~a motion by the ACC seeking standing to pursue~~ certain causes of action against us, following the Bankruptcy Court's grant of the ACC's motion seeking standing to investigate and pursue

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certain causes of action at a hearing held on January 27, 2022, and other potential actions by the ACC in opposition to, or otherwise inconsistent with, the efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization;

•the decisions of the Bankruptcy Court relating to numerous substantive and procedural aspects of the Chapter 11 cases, including ~~the effort~~in connection with a proceeding by Aldrich and Murray ~~to conduct a proceeding~~ to estimate their aggregate liability for ~~certain~~ asbestos claims, following the Bankruptcy Court's grant of their motion seeking such a proceeding at a hearing held on January 27, 2022, and other efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization, whether such decisions are in response to actions of representatives of the asbestos claimants or otherwise;

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

•the risk that any orders approving a plan of reorganization and issuing the channeling injunction do not become final;

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

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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 and the risk that the ACC objects to the ~~Plan and/or the motion to establish the QSF Trust;~~Plan; and

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

The ability of Aldrich and Murray to successfully reorganize and resolve their asbestos liabilities will depend on various factors, including their ability to reach agreements with representatives of the asbestos claimants on the terms of a plan of reorganization that satisfies all applicable legal requirements and to obtain the requisite court approvals of such plan, and remains subject to the risks and uncertainties described above. We cannot ensure that Aldrich and Murray can successfully reorganize, nor can we give any assurances as to the amount of the ultimate obligations under the Funding Agreements or 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 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 successfully challenging the 2020 corporate restructuring, consolidating entities and/or raising allegations that we are liable for the asbestos-related liabilities of Aldrich and 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.~~successful.

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.

~~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 material adverse impact on our 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.

Our climate commitment requires us to offer a full line of next generation products by 2030 without compromising safety or energy efficiency. Additionally, in 2019, we announced our 2030 commitment which targets reducing one gigaton – one billion metric tons – of carbon emissions (CO2e) from our customers’ footprint by 2030. While we are committed to pursuing these sustainability objectives, there can be no assurance that we will successfully achieve our commitments. Failure to meet these commitments could result in reputational harm to our company and changes regarding climate risk management and practices may result in higher regulatory, compliance risks and costs.

~~Natural disasters, epidemics or other catastrophic events may disrupt our operations, adversely affect our results of operations and financial condition, and may not be fully covered by insurance.~~

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 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 prices of commodities and third-party parts and components or the impact of inflationary increases could increase the costs of our 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 cash flows. Conversely, in the 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 measures) to offset any such price concessions which could adversely impact results of operations and 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 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. If these suppliers encounter financial or operating difficulties, we might not be able to quickly establish or qualify replacement sources of supply.

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~~second quarter of ~~2021:~~2022:

Period Total number of shares purchased (000's) (a) (b) Average price paid per share (a) (b) Total number of shares purchased as part of program (000's) (a) Approximate dollar value of shares still available to be purchased under the program ($000's) (a)
July 1 - July 31 1,170.8 $ 191.84 1,170.8 $ 1,921,177
August 1 - August 31 106.3 202.17 105.8 1,899,788
September 1 - September 30 0.1 197.88 — 1,899,788
Total 1,277.2 $ 192.70 1,276.6


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)
April 1 - April 30	0.6	$	152.69	—	$	1,049,784
May 1 - May 31	970.9	133.62		970.9	920,054
June 1 - June 30	1,298.4	131.52		1,294.8	749,778
Total	2,269.9	$	132.43	2,265.7

(a) Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. ~~In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (2018 Authorization).~~ 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 ~~2018 Authorization.~~prior share repurchase program. During the three months ended ~~September~~June 30, ~~2021,~~2022, we repurchased and canceled ~~$246.0 million of our ordinary shares thus completing the 2018 Authorization and initiating repurchases under the 2021 Authorization of $100.2~~$300.0 million of our ordinary shares leaving approximately ~~$1.9~~$750 million remaining under the 2021 Authorization. In February 2022, our Board of Directors authorized the repurchase of up to $3.0 billion ~~remaining~~of our ordinary shares under a new share repurchase program (2022 Authorization) upon completion of the 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 ~~468~~650 shares in ~~August~~April and 783,596 shares in ~~September~~June in transactions outside of the repurchase programs.

Item 5 - Other Information

On August 2, 2022, each of Trane Technologies plc and Trane Technologies Lux International Holding Company S.à.r.l entered into deed poll indemnities as to the directors and officers and certain other specified functionaries as well as with individuals serving as directors, officers or other specified functionaries of Trane Technologies' subsidiaries providing for the indemnification of, and advancement of expenses to, such persons, to the fullest extent permitted by law.

The foregoing descriptions of the deed poll indemnities are qualified in their entirety by reference to the full text of such deed poll indemnities, copies of which are filed as Exhibit 10.1 and Exhibit 10.2 respectively and are incorporated herein by reference.

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Item 6 – Exhibits

(a) Exhibits

Exhibit No.

Description

Method of Filing

10.1

Deed Poll Indemnity of Trane Technologies plc dated August 2, 2022

Filed herewith

10.2

Deed Poll Indemnity of Trane Technologies Lux International Holding company S.à r.l. dated August 2, 2022

Filed herewith

10.3

First Amendment dated ~~September 24, 2021~~as of June 30, 2022, to the Credit ~~Facility date April 17, 2018 by and~~Agreement dated as of June 18, 2021, among Trane Technologies Holdco ~~Inc.,~~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.~~Administrative Agent.

~~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.~~Filed herewith

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~~June 30, ~~2021,~~2022, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of ~~Income (Loss)~~Earnings (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (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:	~~November~~August 3, ~~2021~~2022	/s/ Christopher J. Kuehn
		Christopher J. Kuehn, Executive Vice President and Chief Financial Officer Principal Financial Officer

Date:	~~November~~August 3, ~~2021~~2022	/s/ Heather R. Howlett
		Heather R. Howlett, Vice President and Chief Accounting Officer Principal Accounting Officer

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