Highlights (fourth-quarter 2024 versus fourth-quarter 2023,
unless otherwise noted):
- Reported revenues of $4.9 billion, up 10 percent; organic
revenues* up 10 percent
- GAAP operating margin up 110 bps; adjusted operating margin*
up 70 bps
- Adjusted EBITDA margin* of 18.3 percent, up 110 bps
- GAAP continuing EPS of $2.67; adjusted continuing EPS* of
$2.61, up 20 percent
- Organic bookings up 2 percent, led by Americas Commercial
HVAC, up high single-digits
Highlights (full-year 2024 versus full-year 2023, unless
otherwise noted):
- Reported revenues of $19.8 billion, up 12 percent; organic
revenues up 12 percent
- GAAP operating margin up 120 bps; adjusted operating margin
up 130 bps
- Adjusted EBITDA margin of 19.4 percent, up 140 bps
- GAAP continuing EPS of $11.35; adjusted continuing EPS of
$11.22, up 24 percent
- Strong free cash flow conversion* of 109 percent
- Bookings of $20.3 billion, up 11 percent, led by Americas
Commercial HVAC, up 14 percent
- $6.75 billion backlog, well positioned for growth in
2025
*This news release contains non-GAAP financial measures.
Definitions of the non-GAAP financial measures can be found in the
footnotes of this news release. See attached tables for additional
details and reconciliations.
Trane Technologies plc (NYSE:TT), a global climate innovator,
today reported diluted earnings per share (EPS) from continuing
operations of $2.67 for the fourth quarter of 2024. Adjusted
continuing EPS was $2.61, up 20 percent.
Fourth-Quarter 2024 Results
Financial Comparisons - Fourth-Quarter Continuing
Operations
$, millions except EPS
Q4 2024
Q4 2023
Y-O-Y Change
Organic Y-O-Y Change
Bookings
$4,659
$4,534
3%
2%
Net Revenues
$4,874
$4,424
10%
10%
GAAP Operating Income
$808
$688
17%
GAAP Operating Margin
16.6%
15.5%
110 bps
Adjusted Operating Income*
$794
$688
15%
Adjusted Operating Margin
16.3%
15.6%
70 bps
Adjusted EBITDA*
$894
$761
17%
Adjusted EBITDA Margin*
18.3%
17.2%
110 bps
GAAP Continuing EPS
$2.67
$2.23
20%
Adjusted Continuing EPS
$2.61
$2.17
20%
Pre-tax Non-GAAP Adjustments,
net**
$(13.2)
$0.7
$(13.9)
**For details see tables 2 and 3 of the
news release.
“I’m proud of our talented team for delivering another year of
standout financial performance in 2024,” said Dave Regnery, chair
and CEO, Trane Technologies. “We achieved record financial results
with strong organic revenue growth of 12%, powerful free cash flow
conversion of 109% and adjusted earnings per share growth of 24% –
our fourth consecutive year of earnings per share growth of 20% or
more.
Since launching Trane Technologies in 2020, we have delivered a
compound annual revenue growth rate of 12%, realized free cash flow
conversion of 108% of adjusted net earnings, expanded EBITDA
margins by 400 basis points and deployed approximately $12 billion
of capital. With our focused sustainability strategy, proven
business operating system, and relentless investment in future
growth and innovation, we expect continued strong performance in
2025 and are well positioned to deliver differentiated shareholder
returns over the long term.”
Highlights from the Fourth Quarter of 2024 (all comparisons
against fourth-quarter 2023 unless otherwise noted):
- Delivered strong revenue, operating income, EBITDA and EPS
growth.
- Strong bookings of $4.7 billion, up 3 percent; organic bookings
were up 2 percent.
- Enterprise reported revenues and organic revenues were both up
10 percent.
- GAAP operating margin was up 110 basis points, adjusted
operating margin was up 70 basis points and adjusted EBITDA margin
was up 110 basis points.
- Strong volume growth, positive price realization and
productivity more than offset inflation. The Company also continued
high levels of business reinvestment.
Fourth-Quarter Business Review (all comparisons against
fourth-quarter 2023 unless otherwise noted)
Americas Segment: innovates for customers in the North
America and Latin America regions. The Americas segment encompasses
commercial heating, cooling and ventilation systems, building
controls and solutions, energy services and solutions, residential
heating and cooling; and transport refrigeration systems and
solutions.
$, millions
Q4 2024
Q4 2023
Y-O-Y Change
Organic Y-O-Y Change
Bookings
$3,676.5
$3,625.2
1%
1%
Net Revenues
$3,802.5
$3,390.3
12%
11%
GAAP Operating Income
$685.0
$566.8
21%
GAAP Operating Margin
18.0%
16.7%
130 bps
Adjusted Operating Income
$669.3
$562.6
19%
Adjusted Operating Margin
17.6%
16.6%
100 bps
Adjusted EBITDA
$741.4
$613.5
21%
Adjusted EBITDA Margin
19.5%
18.1%
140 bps
- Bookings of $3.7 billion, up 1 percent. Strong Commercial HVAC
bookings, up high single-digits.
- Reported revenues were up 12 percent, including approximately 1
percentage point related to acquisitions. Organic revenues were up
11 percent.
- GAAP operating margin was up 130 basis points, adjusted
operating margin was up 100 basis points and adjusted EBITDA margin
was up 140 basis points.
- Strong volume growth, positive price realization and
productivity more than offset inflation. The Company also continued
high levels of business reinvestment.
Europe, Middle East and Africa (EMEA) Segment: innovates
for customers in the Europe, Middle East and Africa region. The
EMEA segment encompasses heating, cooling and ventilation systems,
services and solutions for commercial buildings and transport
refrigeration systems and solutions.
$, millions
Q4 2024
Q4 2023
Y-O-Y Change
Organic Y-O-Y Change
Bookings
$614.8
$570.2
8%
9%
Net Revenues
$690.3
$654.6
5%
7%
GAAP Operating Income
$119.8
$111.7
7%
GAAP Operating Margin
17.4%
17.1%
30 bps
Adjusted Operating Income
$119.1
$111.7
7%
Adjusted Operating Margin
17.3%
17.1%
20 bps
Adjusted EBITDA
$130.4
$122.4
7%
Adjusted EBITDA Margin
18.9%
18.7%
20 bps
- Strong bookings up 8 percent; organic bookings up 9
percent.
- Reported revenues were up 5 percent including approximately 2
percentage points of negative foreign exchange impact. Organic
revenues were up 7 percent.
- GAAP operating margin was up 30 basis points, adjusted
operating margin was up 20 basis points and adjusted EBITDA margin
was up 20 basis points.
- Strong volume growth, positive price realization and
productivity more than offset inflation. The Company also continued
high levels of business reinvestment.
Asia Pacific Segment: innovates for customers throughout
the Asia Pacific region. The Asia Pacific segment encompasses
heating, cooling and ventilation systems, services and solutions
for commercial buildings and transport refrigeration systems and
solutions.
$, millions
Q4 2024
Q4 2023
Y-O-Y Change
Organic Y-O-Y Change
Bookings
$367.8
$339.1
8%
8%
Net Revenues
$381.2
$379.2
1%
1%
GAAP Operating Income
$94.3
$85.7
10%
GAAP Operating Margin
24.7%
22.6%
210 bps
Adjusted Operating Income
$96.1
$84.9
13%
Adjusted Operating Margin
25.2%
22.4%
280 bps
Adjusted EBITDA
$100.9
$89.7
12%
Adjusted EBITDA Margin
26.5%
23.7%
280 bps
- Reported and organic bookings both up 8 percent.
- Reported and organic revenues were both up 1 percent.
- GAAP operating margin was up 210 basis points, adjusted
operating margin was up 280 basis points and adjusted EBITDA margin
was up 280 basis points.
- Positive price realization and productivity more than offset
inflation. The Company also continued high levels of business
reinvestment.
Full-Year 2024 Results (all comparisons against full-year
2023 unless otherwise noted)
Financial Comparisons - Full-year Continuing
Operations
$, millions except EPS
2024
2023
Y-O-Y Change
Organic Y-O-Y
Bookings
$20,286
$18,281
11%
11%
Net Revenues
$19,838
$17,678
12%
12%
GAAP Operating Income
$3,500
$2,894
21%
GAAP Operating Margin
17.6%
16.4%
120 bps
Adjusted Operating Income
$3,487
$2,888
21%
Adjusted Operating Margin
17.6%
16.3%
130 bps
Adjusted EBITDA
$3,846
$3,184
21%
Adjusted EBITDA Margin
19.4%
18.0%
140 bps
GAAP Continuing EPS
$11.35
$8.89
28%
Adjusted Continuing EPS
$11.22
$9.04
24%
- Strong bookings of $20.3 billion, up 11 percent.
- Reported and organic revenues were both up 12 percent.
- GAAP operating margin was up 120 basis points, adjusted
operating margin was up 130 basis points and adjusted EBITDA margin
was up 140 basis points.
- Strong volume, positive price realization and productivity more
than offset inflation. The Company also continued high levels of
business reinvestment.
Balance Sheet and Cash Flow
$, millions
2024
2023
Y-O-Y Change
Cash From Continuing Operating
Activities Y-T-D
$3,178
$2,427
$751
Free Cash Flow Y-T-D*
$2,789
$2,151
$638
Working Capital/Revenue*
0.8%
3.0%
220 bps decrease
Cash Balance 31 December
$1,590
$1,095
$495
Debt Balance 31 December
$4,770
$4,780
($10)
- Full-year 2024 cash flow from continuing operating activities
was $3.2 billion.
- Full-year 2024 free cash flow was $2.8 billion, 109 percent of
adjusted net earnings.
- For full-year 2024, the Company deployed or committed $2.5
billion including approximately $760 million for dividends,
approximately $470 million for M&A and $1.3 billion for share
repurchases.
- The Company expects to continue to pay a competitive and
growing dividend and to deploy 100 percent of excess cash to
shareholders over time.
Full-Year 2025 Guidance
- The Company expects full-year 2025 reported revenue growth of
approximately 6.5 percent to 7.5 percent; organic revenue growth of
approximately 7 percent to 8 percent versus full-year 2024.
- The Company expects GAAP and adjusted continuing EPS for
full-year 2025 of $12.70 to $12.90.
- Additional information regarding the Company's 2025 guidance is
included in the Company's earnings presentation found at
www.tranetechnologies.com in the Investor Relations section.
This news release includes “forward-looking" statements within
the meaning of securities laws, which are statements that are not
historical facts, including statements that relate to our future
financial performance and targets, including revenue, EPS, and
earnings; our business operations; demand for our products and
services, including bookings and backlog; capital deployment,
including the amount and timing of our dividends, our share
repurchase program, anticipated capital commitments for M&A
activity, and our capital allocation strategy; our available
liquidity; our anticipated revenue growth, and the performance of
the markets in which we operate.
These forward-looking statements are based on our current
expectations and are subject to risks and uncertainties, which may
cause actual results to differ materially from our current
expectations. Such factors include, but are not limited to, global
economic conditions, including recessions and economic downturns,
inflation, volatility in interest rates and foreign exchange; trade
protection measures such as import or export restrictions, tariffs,
or quotas; changing energy prices; worldwide geopolitical conflict;
financial institution disruptions; climate change and our
sustainability strategies and goals; future health care emergencies
on our business, our suppliers and our customers; commodity
shortages; price increases; government regulation; restructurings
activity and cost savings associated with such activity; secular
trends toward decarbonization, energy efficiency and internal air
quality, the outcome of any litigation, including the risks and
uncertainties associated with the Chapter 11 proceedings for our
deconsolidated subsidiaries Aldrich Pump LLC and Murray Boiler LLC;
cybersecurity risks; and tax audits and tax law changes and
interpretations. Additional factors that could cause such
differences can be found in our Form 10-K for the year ended
December 31, 2023, as well as our subsequent reports on Form 10-Q
and other SEC filings. New risks and uncertainties arise from time
to time, and it is impossible for us to predict these events and
how they may affect the Company. We assume no obligation to update
these forward-looking statements.
This news release also includes non-GAAP financial information,
which should be considered supplemental to, not a substitute for,
or superior to, the financial measure calculated in accordance with
GAAP. The definitions of our non-GAAP financial information and
reconciliation to GAAP are attached to this news release.
All amounts reported within the earnings release above related
to net earnings (loss), earnings (loss) from continuing operations,
earnings (loss) from discontinued operations, adjusted EBITDA and
per share amounts are attributed to Trane Technologies' ordinary
shareholders.
Trane Technologies (NYSE:TT) is a global climate innovator.
Through our strategic brands Trane® and Thermo King®, and our
portfolio of environmentally responsible products and services, we
bring efficient and sustainable climate solutions to buildings,
homes and transportation. For more information, visit
tranetechnologies.com.
# # #
1/30/25
(See Accompanying Tables)
- Table 1: Condensed Consolidated Income Statement
- Tables 2 - 7: Reconciliation of GAAP to Non-GAAP
- Table 8: Condensed Consolidated Balance Sheets
- Table 9: Condensed Consolidated Statement of Cash Flows
- Table 10: Balance Sheet Metrics and Free Cash Flow
*Q4 Year-to-date Non-GAAP measures definitions
Adjusted operating income in 2024 is defined as GAAP
operating income adjusted for restructuring costs, a non-cash
adjustment for contingent consideration, merger and acquisition
transaction costs, and legacy legal liability. Adjusted operating
income in 2023 is defined as GAAP operating income adjusted for
restructuring costs, transformation costs, a non-cash adjustment
for contingent consideration, merger and acquisition transaction
costs, and an insurance settlement on a property claim. Please
refer to the reconciliation of GAAP to non-GAAP measures on tables
2, 3 and 4 of the news release.
Adjusted operating margin is defined as the ratio of
adjusted operating income divided by net revenues.
Adjusted earnings from continuing operations attributable to
Trane Technologies plc (Adjusted net earnings) in 2024 is
defined as GAAP earnings from continuing operations attributable to
Trane Technologies plc adjusted for net of tax impacts of
restructuring costs, a non-cash adjustment for contingent
consideration, merger and acquisition transaction costs, legacy
legal liability, and a U.S. discrete tax benefit. Adjusted net
earnings in 2023 is defined as GAAP earnings from continuing
operations attributable to Trane Technologies plc adjusted for an
impairment of an equity investment and the net of tax impacts of
restructuring costs, transformation costs, merger and acquisition
transaction costs, a non-cash adjustment for contingent
consideration, an insurance settlement on a property claim and a
Brazil valuation allowance. Please refer to the reconciliation of
GAAP to non-GAAP measures on tables 2 and 3 of the news
release.
Adjusted continuing EPS in 2024 is defined as GAAP
continuing EPS adjusted for net of tax impacts of restructuring
costs, a non-cash adjustment for contingent consideration, merger
and acquisition transaction costs, legacy legal liability, and a
U.S. discrete tax benefit. Adjusted continuing EPS in 2023 is
defined as GAAP continuing EPS adjusted for an impairment of an
equity investment and the net of tax impacts of restructuring
costs, transformation costs, merger and acquisition transaction
costs, a non-cash adjustment for contingent consideration, an
insurance settlement on a property claim and a Brazil valuation
allowance. Please refer to the reconciliation of GAAP to non-GAAP
measures on tables 2 and 3 of the news release.
Adjusted EBITDA in 2024 is defined as adjusted operating
income adjusted to exclude depreciation and amortization expense
and include other income / (expense), net. Adjusted EBITDA in 2023
is defined as adjusted operating income adjusted for depreciation
and amortization expense, and other income / (expense), net, and an
impairment of an equity investment. Other income / (expense), net
mainly comprises interest income, foreign currency exchange gains
and losses and certain components pension and postretirement
benefit costs. Please refer to the reconciliation of GAAP to
non-GAAP measures on tables 4 and 5 of the news release.
Adjusted EBITDA margin is defined as the ratio of
adjusted EBITDA divided by net revenues.
Adjusted effective tax rate for 2024 is defined as the
ratio of income tax expense adjusted for a U.S. discrete tax
benefit and the net tax effect of adjustments for restructuring
costs, a non-cash adjustment for contingent consideration, merger
and acquisition transaction costs, and legacy legal liability
divided by adjusted net earnings. Adjusted effective tax rate for
2023 is defined as the ratio of income tax expense adjusted for the
net tax effect of adjustments restructuring costs, transformation
costs, merger and acquisition transaction costs, a non-cash
adjustment for contingent consideration, an insurance settlement on
a property claim and a Brazil valuation allowance divided by
adjusted net earnings. This measure allows for a direct comparison
of the effective tax rate between periods.
Free cash flow in 2024 is defined as net cash provided by
(used in) continuing operating activities adjusted for capital
expenditures, cash payments for restructuring costs, legacy legal
liability, and merger and acquisition transaction costs less an
adjustment for multi-year outperformance incentive compensation
program. Free cash flow in 2023 defined as net cash provided by
(used in) continuing operating activities adjusted for capital
expenditures, cash payments for restructuring costs, transformation
costs and merger and acquisition transaction costs, and an
insurance settlement on a property claim. Please refer to the free
cash flow reconciliation on table 10 of the news release.
- Free cash flow conversion is defined as the ratio of
free cash flow divided by adjusted net earnings.
Operating leverage is defined as the ratio of the change
in adjusted operating income for the current period (e.g. Q4 2024)
less the prior period (e.g. Q4 2023), divided by the change in net
revenues for the current period less the prior period.
Organic revenue is defined as GAAP net revenues adjusted
for the impact of currency, acquisitions and divestitures.
Organic bookings is defined as reported orders in the
current period adjusted for the impact of currency, acquisitions
and divestitures.
Working capital measures a firm’s operating liquidity
position and its overall effectiveness in managing the enterprise's
current accounts.
- Working capital is calculated by adding net accounts and
notes receivables and inventories and subtracting total current
liabilities that exclude short-term debt, dividend payables and
income tax payables.
- Working capital as a percent of revenue is calculated by
dividing the working capital balance (e.g. as of December 31) by
the annualized revenue for the period (e.g. reported revenues for
the three months ended December 31 multiplied by 4 to annualize for
a full year).
The Company reports its financial results in accordance with
generally accepted accounting principles in the United States
(GAAP). The following schedules provide non-GAAP financial
information and a quantitative reconciliation of the difference
between the non-GAAP financial measures and the financial measures
calculated and reported in accordance with GAAP.
The non-GAAP financial measures should be considered
supplemental to, not a substitute for or superior to, financial
measures calculated in accordance with GAAP. They have limitations
in that they do not reflect all of the costs associated with the
operations of our businesses as determined in accordance with GAAP.
In addition, these measures may not be comparable to non-GAAP
financial measures reported by other companies.
We believe the non-GAAP financial information provides important
supplemental information to both management and investors regarding
financial and business trends used in assessing our financial
condition and results of operations.
Non-GAAP financial measures assist investors with analyzing our
business results as well as with predicting future performance. In
addition, these non-GAAP financial measures are also reviewed by
management in order to evaluate the financial performance of each
segment. Presentation of these non-GAAP financial measures helps
investors and management to assess the operating performance of the
Company.
As a result, one should not consider these measures in isolation
or as a substitute for our results reported under GAAP. We
compensate for these limitations by analyzing results on a GAAP
basis as well as a non-GAAP basis, prominently disclosing GAAP
results and providing reconciliations from GAAP results to non-GAAP
results.
Table 1
TRANE TECHNOLOGIES PLC
Condensed Consolidated Income
Statement
(In millions, except per share
amounts)
UNAUDITED
For the quarter
For the year
ended December 31,
ended December 31,
2024
2023
2024
2023
Net revenues
$
4,874.0
$
4,424.1
$
19,838.2
$
17,677.6
Cost of goods sold
(3,163.1
)
(2,952.8
)
(12,757.7
)
(11,820.4
)
Selling and administrative expenses
(903.3
)
(783.6
)
(3,580.4
)
(2,963.2
)
Operating income
807.6
687.7
3,500.1
2,894.0
Interest expense
(59.9
)
(57.3
)
(238.4
)
(234.5
)
Other income/(expense), net
2.8
(15.6
)
(19.9
)
(92.2
)
Earnings before income taxes
750.5
614.8
3,241.8
2,567.3
Provision for income taxes
(135.2
)
(98.2
)
(627.6
)
(498.4
)
Earnings from continuing operations
615.3
516.6
2,614.2
2,068.9
Discontinued operations, net of tax
(3.4
)
(9.0
)
(24.7
)
(27.2
)
Net earnings
611.9
507.6
2,589.5
2,041.7
Less: Net earnings from continuing
operations attributable to noncontrolling interests
(7.6
)
(3.3
)
(21.6
)
(17.8
)
Net earnings attributable to Trane
Technologies plc
$
604.3
$
504.3
$
2,567.9
$
2,023.9
Amounts attributable
to Trane Technologies plc ordinary shareholders:
Continuing operations
$
607.7
$
513.3
$
2,592.6
$
2,051.1
Discontinued operations
(3.4
)
(9.0
)
(24.7
)
(27.2
)
Net earnings
$
604.3
$
504.3
$
2,567.9
$
2,023.9
Diluted earnings
(loss) per share attributable to Trane Technologies plc ordinary
shareholder:
Continuing operations
$
2.67
$
2.23
$
11.35
$
8.89
Discontinued operations
(0.01
)
(0.04
)
(0.11
)
(0.12
)
Net earnings
$
2.66
$
2.19
$
11.24
$
8.77
Weighted-average number of common shares
outstanding:
Diluted
227.3
229.9
228.4
230.7
Table 2
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions, except per share
amounts)
UNAUDITED
For the quarter ended December
31, 2024
For the year ended December 31,
2024
As
As
As
As
Reported
Adjustments
Adjusted
Reported
Adjustments
Adjusted
Net revenues
$
4,874.0
$
—
$
4,874.0
$
19,838.2
$
—
$
19,838.2
Operating income
807.6
(13.2
)
(a,b,c,d)
794.4
3,500.1
(13.3
)
(a,b,c,d)
3,486.8
Operating margin
16.6
%
16.3
%
17.6
%
17.6
%
Earnings from continuing operations before
income taxes
750.5
(13.2
)
(a,b,c,d)
737.3
3,241.8
(13.3
)
(a,b,c,d)
3,228.5
Provision for income taxes
(135.2
)
(1.6
)
(f)
(136.8
)
(627.6
)
(16.8
)
(e,f)
(644.4
)
Tax rate
18.0
%
18.6
%
19.4
%
20.0
%
Earnings from continuing operations
attributable to Trane Technologies plc
$
607.7
$
(14.8
)
(g)
$
592.9
$
2,592.6
$
(30.1
)
(g)
$
2,562.5
Diluted earnings per
common share
Continuing operations
$
2.67
$
(0.06
)
$
2.61
$
11.35
$
(0.13
)
$
11.22
Weighted-average number of common shares
outstanding:
Diluted
227.3
—
227.3
228.4
—
228.4
Detail of
Adjustments:
(a)
Restructuring costs (COGS &
SG&A)
$
1.5
$
5.1
(b)
Legacy legal liability (SG&A)
(1.1
)
2.4
(c)
M&A transaction costs (SG&A)
2.5
4.2
(d)
Non-cash adjustments for contingent
consideration (SG&A)
(16.1
)
(25.0
)
(e)
U.S. discrete tax benefit
—
(12.9
)
(f)
Tax impact of adjustments (a,b,c)
(1.6
)
(3.9
)
(g)
Impact of adjustments on earnings from
continuing operations attributable to Trane Technologies plc
$
(14.8
)
$
(30.1
)
Pre-tax impact of adjustments on cost of
goods sold
$
0.1
$
(1.0
)
Pre-tax impact of adjustments on selling
& administrative expenses
(13.3
)
(12.3
)
Pre-tax impact of adjustments on operating
income
$
(13.2
)
$
(13.3
)
Table 3
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions, except per share
amounts)
UNAUDITED
For the quarter ended December
31, 2023
For the year ended December 31,
2023
As
As
As
As
Reported
Adjustments
Adjusted
Reported
Adjustments
Adjusted
Net revenues
$
4,424.1
$
—
$
4,424.1
$
17,677.6
$
—
$
17,677.6
Operating income
687.7
0.7
(a,b,c,d)
688.4
2,894.0
(5.6
)
(a,b,c,d,e,f)
2,888.4
Operating margin
15.5
%
15.6
%
16.4
%
16.3
%
Earnings from continuing operations before
income taxes
614.8
0.7
(a,b,c,d)
615.5
2,567.3
46.6
(a,b,c,d,e,f,g)
2,613.9
Provision for income taxes
(98.2
)
(15.9
)
(h,i)
(114.1
)
(498.4
)
(13.1
)
(h,i)
(511.5
)
Tax rate
16.0
%
18.5
%
19.4
%
19.6
%
Earnings from continuing operations
attributable to Trane Technologies plc
$
513.3
$
(15.2
)
(j)
$
498.1
$
2,051.1
$
33.5
(j)
$
2,084.6
Diluted earnings per
common share
Continuing operations
$
2.23
$
(0.06
)
$
2.17
$
8.89
$
0.15
$
9.04
Weighted-average number of common shares
outstanding:
Diluted
229.9
—
229.9
230.7
—
230.7
Detail of
Adjustments:
(a)
Insurance settlement on a property claim
(COGS)
$
(10.0
)
$
(10.0
)
(b)
Restructuring costs (COGS &
SG&A)
5.0
15.1
(c)
Transformation costs (SG&A)
1.2
4.7
(d)
M&A transaction costs (SG&A)
4.5
15.4
(e)
Acquisition inventory step-up and backlog
amortization (COGS & SG&A)
—
18.5
(f)
Non-cash adjustments for contingent
consideration (SG&A)
—
(49.3
)
(g)
Impairment of Equity Investment (OIOE)
—
52.2
(h)
International discrete non-cash tax
benefit
(14.9
)
(14.9
)
(i)
Tax impact of adjustments
(a,b,c,d,e,f)
(1.0
)
1.8
(j)
Impact of adjustments on earnings from
continuing operations attributable to Trane Technologies plc
$
(15.2
)
$
33.5
Pre-tax impact of adjustments on cost of
goods sold
$
(5.1
)
$
9.6
Pre-tax impact of adjustments on selling
& administrative expenses
5.8
(15.2
)
Pre-tax impact of adjustments on operating
income
0.7
(5.6
)
Pre-tax impact of adjustments on other,
net
—
52.2
Pre-tax impact of adjustments on earnings
from continuing operations
$
0.7
$
46.6
Table 4
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions)
UNAUDITED
For the quarter ended December
31, 2024
For the quarter ended December
31, 2023
As Reported
Margin
As Reported
Margin
Americas
Net revenues
$
3,802.5
$
3,390.3
Segment operating income
$
685.0
18.0
%
$
566.8
16.7
%
Restructuring/Other(a)
(15.7
)
(0.4
)%
(4.2
)
(0.1
)%
Adjusted operating income *
669.3
17.6
%
562.6
16.6
%
Depreciation and amortization
76.0
2.0
%
67.7
2.0
%
Other income/(expense), net
(3.9
)
(0.1
)%
(16.8
)
(0.5
)%
Adjusted EBITDA *
$
741.4
19.5
%
$
613.5
18.1
%
Europe, Middle
East & Africa
Net revenues
$
690.3
$
654.6
Segment operating income
$
119.8
17.4
%
$
111.7
17.1
%
Restructuring/Other
(0.7
)
(0.1
)%
—
—
%
Adjusted operating income *
119.1
17.3
%
111.7
17.1
%
Depreciation and amortization
11.1
1.6
%
10.8
1.6
%
Other income/(expense), net
0.2
—
%
(0.1
)
—
%
Adjusted EBITDA *
$
130.4
18.9
%
$
122.4
18.7
%
Asia
Pacific
Net revenues
$
381.2
$
379.2
Segment operating income
$
94.3
24.7
%
$
85.7
22.6
%
Restructuring/Other
1.8
0.5
%
(0.8
)
(0.2
)%
Adjusted operating income *
96.1
25.2
%
84.9
22.4
%
Depreciation and amortization
4.6
1.2
%
4.4
1.2
%
Other income/(expense), net
0.2
0.1
%
0.4
0.1
%
Adjusted EBITDA *
$
100.9
26.5
%
$
89.7
23.7
%
Corporate
Unallocated corporate expense
$
(91.5
)
$
(76.5
)
Restructuring/Other (b)
1.4
5.7
Adjusted corporate expense *
(90.1
)
(70.8
)
Depreciation and amortization
5.1
5.0
Other income/(expense), net
6.3
0.9
Adjusted EBITDA *
$
(78.7
)
$
(64.9
)
Total
Company
Net revenues
$
4,874.0
$
4,424.1
Operating income
$
807.6
16.6
%
$
687.7
15.5
%
Restructuring/Other (a,b)
(13.2
)
(0.3
)%
0.7
0.1
%
Adjusted operating income
794.4
16.3
%
688.4
15.6
%
Depreciation and amortization
96.8
2.0
%
87.9
2.0
%
Other income/(expense), net
2.8
—
%
(15.6
)
(0.4
)%
Adjusted EBITDA *
$
894.0
18.3
%
$
760.7
17.2
%
*Represents a non-GAAP measure, refer to
pages 6-7 in the Earnings Release for definitions.
(a) Restructuring/Other within Americas in
2024 includes $16.1 million non-cash adjustment for contingent
consideration. Restructuring/Other with Americas in 2023 $10
million insurance settlement on a property claim.
(b) Restructuring/Other within Corporate
in 2024 includes $1.1M of legacy legal liability and $2.5M of
M&A transaction costs. Restructuring/Other within Corporate in
2023 includes $1.2M of transformation costs and $4.5M of M&A
transaction costs.
Table 5
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions)
UNAUDITED
For the year ended December 31,
2024
For the year ended December 31,
2023
As Reported
Margin
As Reported
Margin
Americas
Net revenues
$
15,903.2
$
13,832.0
Segment operating income
$
3,061.8
19.3
%
$
2,490.0
18.0
%
Restructuring/Other(a)
(22.7
)
(0.2
)%
(44.1
)
(0.3
)%
Adjusted operating income *
3,039.1
19.1
%
2,445.9
17.7
%
Depreciation and amortization(b)
299.8
1.9
%
258.8
1.9
%
Other income/(expense), net(c)
(20.6
)
(0.1
)%
(35.1
)
(0.3
)%
Adjusted EBITDA *
$
3,318.3
20.9
%
$
2,669.6
19.3
%
Europe, Middle
East & Africa
Net revenues
$
2,556.7
$
2,401.2
Segment operating income
$
472.4
18.5
%
$
408.3
17.0
%
Restructuring/Other(d)
0.4
—
%
16.2
0.7
%
Adjusted operating income *
472.8
18.5
%
424.5
17.7
%
Depreciation and amortization(e)
43.5
1.7
%
40.5
1.7
%
Other income/(expense), net
(11.2
)
(0.4
)%
(0.3
)
—
%
Adjusted EBITDA *
$
505.1
19.8
%
$
464.7
19.4
%
Asia
Pacific
Net revenues
$
1,378.3
$
1,444.4
Segment operating income
$
307.0
22.3
%
$
299.9
20.8
%
Restructuring/Other(f)
1.8
0.1
%
0.9
—
%
Adjusted operating income *
308.8
22.4
%
300.8
20.8
%
Depreciation and amortization(g)
17.9
1.3
%
18.3
1.3
%
Other income/(expense), net
2.6
0.2
%
2.2
0.1
%
Adjusted EBITDA *
$
329.3
23.9
%
$
321.3
22.2
%
Corporate
Unallocated corporate expense
$
(341.1
)
$
(304.2
)
Restructuring/Other (h)
7.2
21.4
Adjusted corporate expense *
(333.9
)
(282.8
)
Depreciation and amortization
18.2
18.4
Other income/(expense), net
9.3
(6.8
)
Adjusted EBITDA *
$
(306.4
)
$
(271.2
)
Total
Company
Net revenues
$
19,838.2
$
17,677.6
Operating income
$
3,500.1
17.6
%
$
2,894.0
16.4
%
Restructuring/Other (a,d,f,h)
(13.3
)
—
%
(5.6
)
(0.1
)%
Adjusted operating income
3,486.8
17.6
%
2,888.4
16.3
%
Depreciation and amortization(b,e,g)
379.4
1.9
%
336.0
1.9
%
Other income/(expense), net (c)
(19.9
)
(0.1
)%
(40.0
)
(0.2
)%
Adjusted EBITDA *
$
3,846.3
19.4
%
$
3,184.4
18.0
%
*Represents a non-GAAP measure, refer to
pages 6-7 in the Earnings Release for definitions.
(a) Restructuring/Other within Americas in
2024 includes $25.0M non cash adjustment for contingent
consideration. Restructuring/Other within Americas in 2023 includes
a $49.3M non cash adjustment for contingent consideration, a $10.0M
insurance settlement on a property claim and $1.2M of acquisition
inventory step-up and backlog amortization.
(b) Depreciation and amortization within
Americas in 2023 excludes $0.4M of acquisition backlog
amortization, which has been accounted for in the
Restructuring/Other line.
(c ) Other income/(expense), net with
Americas in 2023 excludes $52.2 million of an impairment of equity
investment.
(d) Other within EMEA in 2023 includes
$15.5M of acquisition inventory step-up and backlog
amortization.
(e) Depreciation and amortization within
EMEA in 2023 excludes $10.9M of acquisition backlog amortization,
which has been accounted for in the Restructuring/Other line.
(f) Other within Asia Pacific in 2023
includes $1.8M of acquisition inventory step-up and backlog
amortization.
(g) Depreciation and amortization within
Asia Pacific in 2023 excludes $0.8M of acquisition backlog
amortization, which has been accounted for in the
Restructuring/Other line.
(h) Other within Corporate in 2024
includes $2.4M of legacy legal liability and $4.2M of M&A
transaction costs. Other within Corporate in 2023 includes $4.7M of
transformation costs and $15.4M M&A transaction costs.
Table 6
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions)
UNAUDITED
For the quarter
ended December 31,
2024
2023
Total Company
Adjusted EBITDA *
$
894.0
$
760.7
Less: items to reconcile adjusted EBITDA
to net earnings attributable to Trane Technologies plc
Depreciation and amortization
(96.8
)
(87.9
)
Interest expense
(59.9
)
(57.3
)
Provision for income taxes
(135.2
)
(98.2
)
Restructuring
(1.5
)
(5.0
)
Transformation Costs
—
(1.2
)
M&A transaction costs
(2.5
)
(4.5
)
Non-cash adjustments for contingent
consideration
16.1
—
Insurance settlements on property
claims
—
10.0
Legacy legal liability
1.1
—
Discontinued operations, net of tax
(3.4
)
(9.0
)
Net earnings from continuing operations
attributable to noncontrolling interests
(7.6
)
(3.3
)
Net earnings attributable to Trane
Technologies plc
$
604.3
$
504.3
*Represents a non-GAAP measure, refer to
pages 6-7 in the Earnings Release for definitions.
Table 7
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions)
UNAUDITED
For the year
ended December 31,
2024
2023
Total Company
Adjusted EBITDA *
$
3,846.3
$
3,184.4
Less: items to reconcile adjusted EBITDA
to net earnings attributable to Trane Technologies plc
Depreciation and amortization(1)
(379.4
)
(336.0
)
Interest expense
(238.4
)
(234.5
)
Provision for income taxes
(627.6
)
(498.4
)
Restructuring
(5.1
)
(15.1
)
Transformation Costs
—
(4.7
)
M&A transaction costs
(4.2
)
(15.4
)
Non-cash adjustments for contingent
consideration
25.0
49.3
Acquisition inventory step-up and backlog
amortization
—
(18.5
)
Insurance settlements on property
claims
—
10.0
Impairment of equity investment
—
(52.2
)
Legacy legal liability
(2.4
)
—
Discontinued operations, net of tax
(24.7
)
(27.2
)
Net earnings from continuing operations
attributable to noncontrolling interests
(21.6
)
(17.8
)
Net earnings attributable to Trane
Technologies plc
$
2,567.9
$
2,023.9
(1) Depreciation and amortization in 2023
excludes acquisition backlog amortization of $12.1 million which
has been included in the acquisition inventory step-up and backlog
amortization line.
*Represents a non-GAAP measure, refer to
pages 6-7 in the Earnings Release for definitions.
Table 8
TRANE TECHNOLOGIES PLC
Condensed Consolidated Balance
Sheets
(In millions)
UNAUDITED
December 31,
December 31,
2024
2023
ASSETS
Cash and cash equivalents
$
1,590.1
$
1,095.3
Accounts and notes receivable, net
3,090.2
2,956.8
Inventories
1,971.5
2,152.1
Other current assets
686.0
665.7
Total current assets
7,337.8
6,869.9
Property, plant and equipment, net
2,024.5
1,772.2
Goodwill
6,127.9
6,095.3
Intangible assets, net
3,308.2
3,439.8
Other noncurrent assets
1,348.3
1,214.7
Total assets
$
20,146.7
$
19,391.9
LIABILITIES AND EQUITY
Accounts payable
$
2,148.0
$
2,025.2
Accrued expenses and other current
liabilities
3,468.7
3,226.4
Short-term borrowings and current
maturities of long-term debt
452.2
801.9
Total current liabilities
6,068.9
6,053.5
Long-term debt
4,318.1
3,977.9
Other noncurrent liabilities
2,272.8
2,343.5
Shareholders' Equity
7,486.9
7,017.0
Total liabilities and equity
$
20,146.7
$
19,391.9
Table 9
TRANE TECHNOLOGIES PLC
Condensed Consolidated
Statement of Cash Flows
(In millions)
UNAUDITED
For the year
ended December 31,
2024
2023
Operating Activities
Earnings from continuing operations
$
2,614.2
$
2,068.9
Depreciation and amortization
379.4
348.1
Changes in assets and liabilities and
other non-cash items
184.1
9.8
Net cash provided by (used in) continuing
operating activities
3,177.7
2,426.8
Net cash provided by (used in)
discontinued operating activities
(32.1
)
(37.2
)
Net cash provided by (used in) operating
activities
3,145.6
2,389.6
Investing Activities
Capital expenditures, net
(370.6
)
(300.7
)
Acquisition of businesses, net of cash
acquired
(180.3
)
(862.8
)
Other investing activities, net
(12.0
)
(8.7
)
Net cash provided by (used in) investing
activities
(562.9
)
(1,172.2
)
Financing Activities
Net proceeds from (payments of) debt
(9.0
)
(57.3
)
Dividends paid to ordinary
shareholders
(757.5
)
(683.7
)
Repurchase of ordinary shares
(1,280.8
)
(669.3
)
Other financing activities, net
26.7
60.0
Net cash provided by (used in) financing
activities
(2,020.6
)
(1,350.3
)
Effect of exchange rate changes on cash
and cash equivalents
(67.3
)
7.7
Net increase (decrease) in cash and cash
equivalents
494.8
(125.2
)
Cash and cash equivalents - beginning of
period
1,095.3
1,220.5
Cash and cash equivalents - end of
period
$
1,590.1
$
1,095.3
Table 10
TRANE TECHNOLOGIES PLC
Balance Sheet Metrics and Free
Cash Flow
($ in millions)
UNAUDITED
December 31,
December 31,
2024
2023
Net Receivables
$
3,090.2
$
2,956.8
Days Sales Outstanding
57.9
61.0
Net Inventory
$
1,971.5
$
2,152.1
Inventory Turns
6.4
5.5
Accounts Payable
$
2,148.0
$
2,025.2
Days Payable Outstanding
62.0
62.6
--------------------------------------------------------------------------------------------------------------------------------------------------------------------
Year ended
Year ended
December 31, 2024
December 31, 2023
Cash flow provided by continuing operating
activities
$
3,177.7
$
2,426.8
Capital expenditures
(370.6
)
(300.7
)
Cash payments for restructuring
8.6
12.3
Legacy legal liability
2.7
—
Transformation costs paid
—
3.9
M&A transaction costs
1.7
18.9
Insurance settlements on property
claims
—
(10.0
)
Adjustment for Outperformance Incentive
Program**
(31.1
)
—
Free cash flow*
$
2,789.0
$
2,151.2
Adjusted earnings from continuing
operations attributable to Trane Technologies plc*
$
2,562.5
$
2,084.6
Free cash flow conversion*
109
%
103
%
*Represents a non-GAAP measure, refer to
pages 6-7 in the Earnings Release for definitions.
**The Company implemented a special
three-year Outperformance Incentive Program during the year ended
December 31, 2024 that provides additional incentive-based cash
compensation to eligible participants based primarily on the
achievement of outsized revenue performance beyond what is
achievable under the Company’s existing short-term incentive
programs. Performance is measured over three annual periods
representing the years ended December 31, 2024, 2025 and 2026. Cash
payments related to performance achieved will be made in the
quarter ended March 31, 2027. This adjustment represents amounts
earned in the respective performance period that will be paid
during the quarter ended March 31, 2027.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250130035009/en/
Media: Travis Bullard 919-802-2593,
Travis.Bullard@tranetechnologies.com
Investors: Zac Nagle 704-990-3913,
InvestorRelations@tranetechnologies.com
Trane Technologies (NYSE:TT)
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