AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Engineering, intellectual property and channel ownership establish capabilities, but their superiority and replication barriers are unproven. The moat verdict remains uncertain.
durability · — · Multiple years of successful operations do not establish how long a competitive advantage would persist. Brand differentiation is asserted, with no demonstrated protection from imitation.
customer dependency · — · The installed base creates potential service and replacement demand, but customer dependence, switching friction and repeat service capture are not demonstrated.
erosion resilience · — · Product launches and pricing achievements show adaptation, but cannot establish resilience of an unidentified structural advantage. Recent cost pressure alone does not prove moat erosion.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 2/4 · Pricing contributed to reported improvements in 2023–2024, and Americas pricing added 3.8% to 2025 revenue growth alongside higher volume. Outcomes are mixed across regions: 2025 EMEA pricing was negative, second-quarter 2026 consolidated pricing contributed only 0.3%, and Asia Pacific pricing was negative. This establishes realized pricing but limited recent breadth.
retention · 2/4 · Assessed indirectly from continued demand: equipment and contracting backlog increased in 2025, Americas volume rose alongside price increases, and second-quarter 2026 consolidated volume increased 8.7%. These support continuing customer acceptance, but do not identify repeat customers or quantify renewals; backlog can be revised, deferred or cancelled.
margin resilience · 2/4 · Gross margin improved in 2023, 2024 and 2025 with pricing and productivity contributing despite inflation. In second-quarter 2026 it fell 200 basis points as inflation and investments exceeded those offsets; operating margin also declined. The broader record is mixed, rather than uniformly weak or exceptionally resilient.
contractual freedom · — · Observed price realization shows commercial pricing activity, but the passages do not disclose contractual repricing rights, price restrictions or escalation terms. Order revision and cancellation provisions cannot establish this criterion.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 2.15
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.35
Financial strength79
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 90.84
- netDebtEbitGrade
- 85.62
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 40.06
- Debt / FCF (x)
- 1.64
- Net debt / operating income (x)
- 0.72
- Interest coverage (x)
- 17.50
- Current ratio (x)
- 1.25
Capital allocation100
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 32.32
- 3-year average dilution (%)
- -1.39
- 3-year average SBC / revenue (%)
- 0.40
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · 2025 operating cash generation of $3.22 billion covered $383 million of capital expenditures and supported $1.5 billion of completed share repurchases; first-half 2026 weighted-average shares also declined. Acquisition and investment spending reached approximately $742 million in first-half 2026, while EMEA incurred integration costs and margin pressure. Commercial paper refinanced matured debt. Actual funding and deployment are evidenced, but acquisition returns and repurchase value creation remain unestablished.
incentive alignment · 3/4 · Implemented equity awards, PSU metrics tied to cash returns on capital and relative shareholder returns, and a hedging and pledging prohibition demonstrate substantive alignment mechanisms. Actual 2025 incentive adjustments reduced payouts by 0.4%, supporting application of the framework. These are existing arrangements and actions, not assumed approval of meeting proposals; individual ownership compliance and exceptional long-term effectiveness remain unverified.
execution · 3/4 · Assessed from operating outcomes rather than management reputation: multi-year pricing and productivity gains, 2025 cash generation, product launches and continued 2026 volume growth demonstrate strong execution. Recent gross-margin compression and EMEA integration costs temper the assessment and preclude an exceptional grade. Performance does not by itself prove competitive superiority.
governance · 2/4 · Independent audit and compensation committees, defined Lead Independent Director powers and an actual downward incentive adjustment demonstrate functioning oversight. The combined Chair and CEO role and auditor tenure exceeding a century introduce counterweights. Disclosed structures support a mixed assessment; they do not establish exceptional board effectiveness or an observed governance failure.
Evidence
Patents and Licenses Our intellectual property rights are important to our business and include numerous patents, trademarks, copyrights, trade secrets, proprietary technology, technical data, business processes, and other confidential information.
Business / Patents and Licenses · Filed 05/02/2026
Although in aggregate the Company's intellectual property is important to its operations, the Company does not consider any single patent, trademark, copyright, trade secret, proprietary technology, technical data, business process or any other confidential information (or any related group of any such items) to be of material importance to any segment or to the business as a whole.
Business / Importance of individual intellectual property rights · Filed 05/02/2026
In our opinion, engineering, production skills and experience are more responsible for our market position than our intellectual property rights.
Business / Engineering and production experience · Filed 08/02/2024
We believe we have a solid foundation of global brands that are highly differentiated in all of our major product lines.
MD&A / Management's brand differentiation assertion · Filed 30/04/2026
Our geographic mix, our diverse portfolio, and our large installed product base, provide growth opportunities from replacement demand and within our service revenue streams.
MD&A / Installed-base replacement and service opportunities · Filed 30/04/2026
FINANCIAL PERFORMANCE HIGHLIGHTS Annual Revenue Adjusted EBITDA(a) Free Cash Flow(a) $21.3B $4.3B $2.9B Increase of 7% from 2024 Increase of 11% from 2024 Increase of 3.5% from 2024 The three core financial metrics laid out above are further modified (by up to +/-15%) based on our progress towards achieving our 2030 Sustainability Commitments as further described in the Annual Incentive Matrix ("AIM") Program section on page 46 3-Year Adjusted Cash Flow Return on Invested Capital (CROIC) (2023–2025)(a) 3-Year Total Shareholder Return (TSR) (2023-2025)(a) 36.1% 135.33% Ranks at the 83rd percentile of the companies in the S&P 500 Industrials Index Ranks at the 88th percentile of the companies in the S&P 500 Industrials Index SUSTAINABILITY PERFORMANCE HIGHLIGHTS Gigaton Challenge Leading by Example Opportunity for All •Reduced 331 million mtCO2e* from customers’ carbon footprints as part of our Gigaton Challenge •Launched 110 new products and services •Filed over 135 patents for new innovation •Invested $348M in sustainability-driven research and development** * compared to a 2019 baseline ** as reported in accordance with U.S.
Compensation Discussion and Analysis / Financial and innovation achievements · Filed 23/04/2026
The Company also acquired an exclusive sales channel for Trane products reported in the EMEA segment as of the date of acquisition.
Acquisitions / Exclusive sales channel · Filed 30/07/2026
We compete worldwide with a number of other manufacturers and distributors that produce and sell similar products.
Risk Factors / Manufacturers and distributors selling similar products · Filed 05/02/2026
There has been consolidation and new entrants (including non-traditional competitors) within our industries and there may be future consolidation and new entrants, either of which could result in increased competition and pricing pressures and significantly alter the dynamics of the competitive landscape in which we operate.
Risk Factors / Consolidation, entrants and potential pricing pressure · Filed 05/02/2026
The accelerating pace of technological change increases the risk of shortened product lifecycles.
Risk Factors / Technological change and product lifecycles · Filed 05/02/2026
Gross profit margin for the year ended December 31, 2023 increased 210 basis points to 33.1% compared to 31.0% for the same period of 2022 primarily due to price realization and gross productivity, partially offset by inflation and business reinvestment.
2023 MD&A / Gross margin, realized pricing and productivity · Filed 08/02/2024
Gross profit margin for the year ended December 31, 2024 increased 260 basis points to 35.7% compared to 33.1% for the same period of 2023 primarily due to gross productivity and price realization, partially offset by inflation.
2024 MD&A / Gross margin, realized pricing and productivity · Filed 06/02/2025
The components of the period change were as follows: Volume 3.6 % Pricing 3.8 % Organic revenue (1) 7.4 % Acquisitions 0.7 % Currency translation (0.1) % Total 8.0 % The increase in organic revenue was primarily driven by realization of price increases and higher volumes led by strong demand within our Commercial HVAC business, which was partially offset by weaker volume in our Residential business.
2025 Results by Segment / Americas volume and pricing · Filed 05/02/2026
The components of the period change were as follows: Volume 3.7 % Pricing (0.3) % Organic revenue (1) 3.4 % Acquisitions 2.2 % Currency translation 4.0 % Total 9.6 % The increase in organic revenue was driven by higher volumes within our Commercial HVAC and Transport refrigeration businesses.
2025 Results by Segment / EMEA volume and negative pricing · Filed 05/02/2026
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025 - Consolidated Results Dollar amounts in millions 2026 2025 Period Change 2026 % of revenues 2025 % of revenues Net revenues $ 6,353.5 $ 5,746.4 $ 607.1 Cost of goods sold (4,093.8) (3,585.8) (508.0) 64.4 % 62.4 % Gross profit 2,259.7 2,160.6 99.1 35.6 % 37.6 % Selling and administrative expenses (1,035.4) (996.4) (39.0) 16.3 % 17.3 % Operating income 1,224.3 1,164.2 60.1 19.3 % 20.3 % Interest expense (53.1) (57.4) 4.3 Other income/(expense), net (8.1) (14.1) 6.0 Earnings before income taxes 1,163.1 1,092.7 70.4 Provision for income taxes (218.2) (216.7) (1.5) Earnings from continuing operations 944.9 876.0 68.9 Discontinued operations, net of tax (9.6) 2.9 (12.5) Net earnings $ 935.3 $ 878.9 $ 56.4 27 Table of Contents Net Revenues Net revenues for the three months ended June 30, 2026 increased by 10.6%, or $607.1 million, compared with the same period in 2025, which resulted from the following: Volume 8.7 % Pricing 0.3 % Organic revenue (1) 9.0 % Acquisitions 1.2 % Currency translation 0.4 % Total 10.6 % (1) Represents a non-GAAP measure.
Second-quarter 2026 consolidated results / Volume, pricing and operating results · Filed 30/07/2026
Gross Profit Margin Gross profit margin for the three months ended June 30, 2026 decreased 200 basis points to 35.6% compared to 37.6% for the same period of 2025 primarily due to inflation and investments, partially offset by productivity and price realization.
Second-quarter 2026 MD&A / Gross margin contraction and causes · Filed 30/07/2026
The components of the period change were as follows: Volume 10.2 % Pricing (0.2) % Organic revenue (1) 10.0 % Currency translation 1.1 % Total 11.1 % The increase in organic revenue was primarily driven by higher volumes.
Second-quarter 2026 Results by Segment / Asia Pacific negative pricing · Filed 30/07/2026
Gross profit margin for the year ended December 31, 2025 increased 50 basis points to 36.2% compared to 35.7% for the same period of 2024 primarily due to gross productivity and price realization, partially offset by inflation.
2025 MD&A / Gross margin improvement and causes · Filed 05/02/2026
Risk Factors." 6 Table of Contents Backlog Our backlog of orders, believed to be firm, at December 31, was as follows: In millions 2025 2024 Americas $ 6,298.6 $ 5,323.1 EMEA 775.9 585.3 Asia Pacific 694.9 839.3 Total $ 7,769.4 $ 6,747.7 These backlog figures are based on orders received and only include amounts associated with our equipment and contracting and installation performance obligations.
Business / Equipment and contracting backlog · Filed 05/02/2026
However, orders for specialized equipment or specific customer applications are submitted with extended lead times and are subject to revision and deferral, and to a lesser extent cancellation or termination.
Business / Backlog revision, deferral and cancellation terms · Filed 05/02/2026
A reconciliation of Net cash provided by (used in) continuing operating activities to free cash flow the years ended December 31 is as follows: In millions 2025 2024 Net cash provided by (used in) continuing operating activities $ 3,220.4 $ 3,177.7 Capital expenditures (383.0) (370.6) Cash payments for restructuring 22.5 8.6 Legacy legal liability 0.6 2.7 M&A transaction costs 6.2 1.7 Proceeds from sale of corporate asset 20.6 — Adjustment for Outperformance Incentive Program(2) — (31.1) Free cash flow(1) $ 2,887.3 $ 2,789.0 (1) Represents a non-GAAP measure.
Liquidity and Capital Resources / Operating cash flow and capital expenditures · Filed 05/02/2026
During the year ended December 31, 2025, we repurchased and canceled $1.5 billion of ordinary shares, which exhausted the 2022 Authorization and left $4.8 billion remaining under the 2024 Authorization.
Capital Allocation / Completed 2025 share repurchases and cancellation · Filed 05/02/2026
We paid approximately $742 million in cash for acquisitions and equity method investments completed during the six months ended June 30, 2026.
Capital Allocation / First-half 2026 acquisition and investment spending · Filed 30/07/2026
Segment Adjusted EBITDA margin for the three months ended June 30, 2026 decreased by 360 basis points to 14.7% compared to 18.3% for the same period of 2025, primarily due to integration costs related to acquisitions, inflation and lower volumes.
Second-quarter 2026 Results by Segment / EMEA integration costs and margin contraction · Filed 30/07/2026
PSUs, which are granted under our Performance Share Program (“PSP”), are payable based on the Company’s CROIC and TSR performance relative to companies in the S&P 500 Industrials Index.
Executive Compensation / PSU return-on-capital and relative shareholder-return metrics · Filed 23/04/2026
These adjustments, reflecting both positive and negative impacts, resulted in a net 0.4% decrease to payout levels and were reviewed with the Audit Committee prior to approval by the HRCC.
Executive Compensation / Actual downward adjustment to 2025 incentive payouts · Filed 23/04/2026
No hedging or pledging of Company stock by directors and executive officers
Executive Compensation / Prohibition on hedging and pledging · Filed 23/04/2026
The expense recognized for the three and six months ended June 30 was as follows: Three months ended Six months ended In millions 2026 2025 2026 2025 Stock options $ 5.7 $ 5.4 $ 11.4 $ 10.7 RSUs 10.9 8.7 19.4 15.0 Performance shares 8.0 10.8 20.3 21.1 Deferred compensation 0.9 1.1 0.8 1.2 Pre-tax expense 25.5 26.0 51.9 48.0 Tax benefit (6.2) (6.3) (12.6) (11.6) After-tax expense $ 19.3 $ 19.7 $ 39.3 $ 36.4 Grants issued during the six months ended June 30 were as follows: 2026 2025 Number granted Weighted- average fair value per award Number granted Weighted- average fair value per award Stock options 194,767 $ 116.49 241,763 $ 101.73 RSUs 73,201 $ 436.49 101,742 $ 359.33 Performance shares (1) 116,252 $ 512.80 134,740 $ 374.20 (1) The number of performance shares represents the maximum award level.
Share-Based Compensation / Actual 2026 grants and expense · Filed 30/07/2026
In addition, each member of the Audit Committee qualifies as an independent director, meets the financial literacy and independence requirements of the SEC and the NYSE applicable to audit committee members and possesses the requisite competence in accounting or auditing in satisfaction of the requirements for audit committees prescribed by the Companies Act 2014.
Corporate Governance / Audit Committee independence and qualifications · Filed 23/04/2026
In addition to the duties of all directors, as set forth in the Company’s Governance Guidelines, the specific responsibilities of the Lead Independent Director are as follows: 2026 Proxy Statement 23 CORPORATE GOVERNANCE •Chair meetings of the independent directors; •Help ensure participation and engagement of Board members in deliberations; •Lead the Board in all deliberations involving the CEO’s employment, including hiring, employment negotiations, performance evaluations and separation, and in succession planning for the CEO; •Work with the Chair and CEO on issues of interest or concern of the independent directors, and encourage directors to engage directly with the Chair and CEO with their interests and concerns; •Work with the Chair and CEO to develop an appropriate schedule of Board meetings and approve such schedule, to ensure that the directors have sufficient time for discussion of all agenda items, while not interfering with the flow of Company operations; •Review the agendas for Board meetings as developed by the Chair and CEO; •Chair executive sessions of the Board’s independent directors; •Serve as liaison between the directors and the Chair and CEO, as required; •Provide advice and counsel to the Chair and CEO; •Keep abreast of key Company activities and, in collaboration with the Board, advise the Chair and CEO as to the quality, quantity and timeliness of the flow of information from management; •Engage consultants who report directly to the Board and assist in recommending consultants that work directly for Board committees; •Participate in the director recruitment process in conjunction with the Sustainability, Corporate Governance and Nominating Committee; •Work in conjunction with the Chair and CEO and the Chair of the Sustainability, Corporate Governance and Nominating Committee to identify for appointment the members of the various Board committees, as well as selection of the Committee chairs; •Be available for communication with major shareholders as requested by the Chair and CEO; and •Help set the tone and uphold the highest standards of ethics and integrity and encourage that throughout the Company.
Corporate Governance / Lead Independent Director responsibilities · Filed 23/04/2026
It is the Board of Directors’ view that the Company’s corporate governance principles, the quality, stature and substantive business knowledge of the members of the Board, as well as the Board’s culture of open communication with the CEO and senior management are conducive to Board effectiveness with a combined Chair and CEO position.
Corporate Governance / Combined Chair and CEO · Filed 23/04/2026
PwC has been acting continuously as our independent auditors for over one hundred years and, both by virtue of its familiarity with the Company’s affairs and its professional competencies and resources, is considered best qualified to perform this important function.
Independent Auditors / Auditor tenure · Filed 23/04/2026
Role of the Human Resources and Compensation Committee, Independent Advisor and Committee Actions The HRCC, which is composed solely of independent directors, oversees our compensation plans and policies and equity-based programs and reviews and approves all forms of compensation relating to our executive officers, including the NEOs.
Executive Compensation / Independent compensation committee oversight · Filed 23/04/2026
We had $400.0 million of commercial paper outstanding at March 31, 2026, due to the repayment of $400.0 million of 3.500% Senior Notes which matured in March 2026.
Liquidity / Commercial paper financing of matured senior notes · Filed 30/04/2026
Table of Contents TRANE TECHNOLOGIES PLC FORM 10-Q INDEX PART I FINANCIAL INFORMATION 1 Item 1 - Financial Statements 1 Condensed Consolidated Statements of Earnings for the three and six months ended June 30, 2026 and 2025 1 Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2026 and 2025 2 Condensed Consolidated Balance Sheets at June 30, 2026 and December 31, 2025 3 Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2026 and 2025 4 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 6 Notes to Condensed Consolidated Financial Statements 7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3 - Quantitative and Qualitative Disclosures about Market Risk 41 Item 4 - Controls and Procedures 41 PART II OTHER INFORMATION 42 Item 1 - Legal Proceedings 42 Item 1A - Risk Factors 42 Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 42 Item 5 - Other Information 43 Item 6 - Exhibits 44 43 SIGNATURES 45 Table of Contents PART I - FINANCIAL INFORMATION Item 1.Financial Statements TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) Three months ended Six months ended June 30, June 30, In millions, except per share amounts 2026 2025 2026 2025 Net revenues $ 6,353.5 $ 5,746.4 $ 11,322.9 $ 10,434.9 Cost of goods sold (4,093.8) (3,585.8) (7,335.1) (6,596.8) Selling and administrative expenses (1,035.4) (996.4) (1,987.4) (1,855.0) Operating income 1,224.3 1,164.2 2,000.4 1,983.1 Interest expense (53.1) (57.4) (108.7) (115.5) Other income/(expense), net (8.1) (14.1) 7.2 (22.0) Earnings before income taxes 1,163.1 1,092.7 1,898.9 1,845.6 Provision for income taxes (218.2) (216.7) (354.5) (351.6) Earnings from continuing operations 944.9 876.0 1,544.4 1,494.0 Discontinued operations, net of tax (9.6) 2.9 (19.6) (6.0) Net earnings 935.3 878.9 1,524.8 1,488.0 Less: Net earnings from continuing operations attributable to noncontrolling interests (9.6) (4.1) (14.7) (8.3) Net earnings attributable to Trane Technologies plc $ 925.7 $ 874.8 $ 1,510.1 $ 1,479.7 Amounts attributable to Trane Technologies plc ordinary shareholders: Continuing operations $ 935.3 $ 871.9 $ 1,529.7 $ 1,485.7 Discontinued operations (9.6) 2.9 (19.6) (6.0) Net earnings $ 925.7 $ 874.8 $ 1,510.1 $ 1,479.7 Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders: Basic: Continuing operations $ 4.23 $ 3.90 $ 6.91 $ 6.64 Discontinued operations (0.04) 0.02 (0.09) (0.03) Net earnings $ 4.19 $ 3.92 $ 6.82 $ 6.61 Diluted: Continuing operations $ 4.20 $ 3.87 $ 6.86 $ 6.58 Discontinued operations (0.04) 0.02 (0.08) (0.03) Net earnings $ 4.16 $ 3.89 $ 6.78 $ 6.55 Weighted-average shares outstanding: Basic 221.0 223.2 221.3 223.8 Diluted 222.5 225.1 222.8 225.8 See accompanying notes to Condensed Consolidated Financial Statements.
Condensed Consolidated Statements of Earnings / First-half results and weighted-average shares · Filed 30/07/2026
