Highlights (third-quarter 2024 versus third-quarter 2023,
unless otherwise noted):
- Reported revenues of $5.4 billion, up 11 percent; organic
revenues* up 11 percent
- GAAP operating margin up 110 bps; adjusted operating margin*
up 90 bps
- Adjusted EBITDA margin* of 20.7 percent, up 120 bps
- GAAP continuing EPS of $3.43; adjusted continuing EPS* of
$3.37, up 21 percent
- Continued strong bookings of $5.2 billion, up 5
percent
*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 $3.43 for the third quarter of 2024. Adjusted
continuing EPS was $3.37, up 21 percent.
Third-Quarter 2024 Results
Financial Comparisons - Third-Quarter Continuing
Operations
$, millions except EPS
Q3 2024
Q3 2023
Y-O-Y Change
Organic Y-O-Y Change
Bookings
$5,213
$4,946
5%
5%
Net Revenues
$5,441
$4,883
11%
11%
GAAP Operating Income
$1,025
$864
19%
GAAP Operating Margin
18.8%
17.7%
110 bps
Adjusted Operating Income*
$1,026
$879
17%
Adjusted Operating Margin*
18.9%
18.0%
90 bps
Adjusted EBITDA*
$1,127
$954
18%
Adjusted EBITDA Margin*
20.7%
19.5%
120 bps
GAAP Continuing EPS
$3.43
$2.74
25%
Adjusted Continuing EPS
$3.37
$2.79
21%
Pre-Tax Non-GAAP Adjustments,
net**
$1.2
$15.0
$(13.8)
**For details see table 2 and 3
of the news release.
“The third quarter continues our track record of delivering
leading revenue and earnings per share growth,” said Dave Regnery,
chair and CEO, Trane Technologies. “Customers continue to choose
our sustainable solutions. With bookings near an all-time high and
a strong project pipeline, particularly in commercial HVAC, we are
raising our full-year revenue and adjusted EPS guidance for 2024
and expect 2025 to be another strong year.
“Our purpose-driven strategy, proven business operating system
and uplifting culture, combined with the resilience of our
diversified global portfolio, position us to deliver leading growth
and differentiated shareholder returns over the long term.”
Highlights from the Third Quarter of 2024 (all comparisons
against third-quarter 2023 unless otherwise noted)
- Delivered strong revenue, operating income, EBITDA and EPS
growth.
- Strong bookings of $5.2 billion, up 5 percent.
- Backlog of $7.2 billion, up from $6.9 billion at year-end
2023.
- Enterprise reported revenues and organic revenues were both up
11 percent.
- GAAP operating margin was up 110 basis points, adjusted
operating margin was up 90 basis points and adjusted EBITDA margin
was up 120 basis points.
- Strong volume growth, positive price realization and
productivity more than offset inflation. The Company also continued
high levels of business reinvestment.
Third-Quarter Business Review (all comparisons against
third-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
Q3 2024
Q3 2023
Y-O-Y Change
Organic Y-O-Y Change
Bookings
$4,296.9
$3,960.3
8%
8%
Net Revenues
$4,474.9
$3,888.0
15%
15%
GAAP Operating Income
$922.3
$748.3
23%
GAAP Operating Margin
20.6%
19.2%
140 bps
Adjusted Operating Income
$920.7
$750.6
23%
Adjusted Operating Margin
20.6%
19.3%
130 bps
Adjusted EBITDA
$993.9
$809.0
23%
Adjusted EBITDA Margin
22.2%
20.8%
140 bps
- Strong bookings of $4.3 billion, up 8 percent.
- Reported and organic revenues were both up 15 percent.
- GAAP operating margin was up 140 basis points, adjusted
operating margin was up 130 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
Q3 2024
Q3 2023
Y-O-Y Change
Organic Y-O-Y Change
Bookings
$637.0
$585.6
9%
9%
Net Revenues
$667.8
$618.6
8%
8%
GAAP Operating Income
$137.4
$110.1
25%
GAAP Operating Margin
20.6%
17.8%
280 bps
Adjusted Operating Income
$137.1
$118.4
16%
Adjusted Operating Margin
20.5%
19.1%
140 bps
Adjusted EBITDA
$144.3
$130.4
11%
Adjusted EBITDA Margin
21.6%
21.1%
50 bps
- Strong bookings, up 9 percent.
- Reported and organic revenues were both up 8 percent.
- GAAP operating margin was up 280 basis points; adjusted
operating margin was up 140 basis points and adjusted EBITDA margin
was up 50 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
Q3 2024
Q3 2023
Y-O-Y Change
Organic Y-O-Y Change
Bookings
$279.0
$400.2
(30)%
(31)%
Net Revenues
$298.5
$376.3
(21)%
(21)%
GAAP Operating Income
$56.9
$82.6
(31)%
GAAP Operating Margin
19.1%
22.0%
(290) bps
Adjusted Operating Income
$56.9
$82.6
(31)%
Adjusted Operating Margin
19.1%
22.0%
(290) bps
Adjusted EBITDA
$62.7
$87.7
(29)%
Adjusted EBITDA Margin
21.0%
23.3%
(230) bps
- Bookings were down 30 percent. Organic bookings were down 31
percent.
- Reported and organic revenues were both down 21 percent led by
lower volumes.
- GAAP operating margin was down 290 basis points, adjusted
operating margin was down 290 basis points and adjusted EBITDA
margin was down 230 basis points.
Balance Sheet and Cash Flow
$, millions
Q3 2024
Q3 2023
Y-O-Y Change
Cash From Continuing Operating
Activities Y-T-D
$2,272
$1,483
$789
Free Cash Flow Y-T-D*
$2,038
$1,288
$750
Working Capital/Revenue*
2.2%
4.8%
(260) bps
Cash Balance September 30**
$1,928
$960
$968
Debt Balance September 30
$5,269
$4,825
$444
**Includes short-term investments of $458
million as of September 30, 2024.
- Through September 30, 2024, cash flow from continuing operating
activities was $2.3 billion and free cash flow was $2 billion.
- Year-to-date through October, the Company deployed or committed
approximately $2.0 billion of capital including approximately $800
million for dividends, approximately $230 million for M&A and
approximately $1 billion for share repurchases.
- The Company expects to pay a competitive and growing dividend
and to deploy 100 percent of excess cash to shareholders over
time.
Raising Full-Year 2024 Revenue and EPS Guidance
- The Company expects full-year reported and organic revenue
growth of approximately 11 percent.
- The Company expects GAAP and adjusted continuing EPS for
full-year 2024 of approximately $11.10.
- Additional information regarding the Company's 2024 guidance is
included in the Company's third-quarter 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;
changing energy prices; national and international conflict;
impacts of global health crises, epidemics, pandemics, or other
contagious outbreaks on our business operations, financial results
and financial position and on the world economy; financial
institution disruptions; climate change and our sustainability
strategies and goals; commodity shortages; supply chain constraints
and 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.
# # #
10/30/2024
(See Accompanying Tables)
- Table 1: Condensed Consolidated Income Statement
- Tables 2 - 5: Reconciliation of GAAP to Non-GAAP
- Table 6: Condensed Consolidated Balance Sheets
- Table 7: Condensed Consolidated Statement of Cash Flows
- Table 8: Balance Sheet Metrics and Free Cash Flow
*Q3 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
related 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 and merger and acquisition related
costs. 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 related 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 equity investment and the net of tax impacts of restructuring
costs, transformation costs, a non-cash adjustment for contingent
consideration, and merger and acquisition related costs. 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 related costs, legacy legal liability, and a U.S.
discrete tax benefit. Adjusted continuing EPS in 2023 is defined as
GAAP continuing operations attributable to Trane Technologies plc
adjusted for an impairment of equity investment and the net of tax
impacts of restructuring costs, transformation costs, a non-cash
adjustment for contingent consideration, and merger and acquisition
related costs. 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 to exclude
depreciation and amortization expense, include other income /
(expense), net and exclude the 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 related 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 for restructuring costs, transformation
costs, a non-cash adjustment for contingent consideration, and
merger and acquisition related costs 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 related costs. Free cash flow
in 2023 is 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 related costs. Please refer to the free cash flow
reconciliation on table 8 of the news release.
Operating leverage is defined as the ratio of the change
in adjusted operating income for the current period (e.g. Q3 2024)
less the prior period (e.g. Q3 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
to eliminate currency fluctuations and the impact of
acquisitions.
Organic bookings is defined as reported orders in the
current period adjusted to eliminate currency fluctuations and the
impact of acquisitions.
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 payable and
income tax payables.
- Working capital as a percent of revenue is calculated by
dividing the working capital balance (e.g. as of September 30) by
the annualized revenue for the period (e.g. reported revenues for
the three months ended September 30 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 nine months
ended September 30,
ended September 30,
2024
2023
2024
2023
Net revenues
$
5,441.2
$
4,882.9
$
14,964.2
$
13,253.5
Cost of goods sold
(3,466.8
)
(3,224.8
)
(9,594.5
)
(8,867.6
)
Selling and administrative expenses
(949.8
)
(793.9
)
(2,677.2
)
(2,179.5
)
Operating income
1,024.6
864.2
2,692.5
2,206.4
Interest expense
(63.0
)
(57.9
)
(178.5
)
(177.1
)
Other income/(expense), net
6.3
(10.0
)
(22.8
)
(76.8
)
Earnings before income taxes
967.9
796.3
2,491.2
1,952.5
Provision for income taxes
(181.1
)
(157.5
)
(492.3
)
(400.2
)
Earnings from continuing operations
786.8
638.8
1,998.9
1,552.3
Discontinued operations, net of tax
(8.9
)
(6.5
)
(21.3
)
(18.2
)
Net earnings
777.9
632.3
1,977.6
1,534.1
Less: Net earnings from continuing
operations attributable to noncontrolling interests
(5.9
)
(6.0
)
(14.0
)
(14.5
)
Net earnings attributable to Trane
Technologies plc
$
772.0
$
626.3
$
1,963.6
$
1,519.6
Amounts attributable
to Trane Technologies plc ordinary shareholders:
Continuing operations
$
780.9
$
632.8
$
1,984.9
$
1,537.8
Discontinued operations
(8.9
)
(6.5
)
(21.3
)
(18.2
)
Net earnings
$
772.0
$
626.3
$
1,963.6
$
1,519.6
Diluted earnings
(loss) per share attributable to Trane Technologies plc ordinary
shareholders:
Continuing operations
$
3.43
$
2.74
$
8.68
$
6.66
Discontinued operations
(0.04
)
(0.02
)
(0.09
)
(0.08
)
Net earnings
$
3.39
$
2.72
$
8.59
$
6.58
Weighted-average number of common shares
outstanding:
Diluted
228.0
230.6
228.8
230.9
Table 2
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions, except per share
amounts)
UNAUDITED
For the quarter ended September
30, 2024
For the nine months ended
September 30, 2024
As
As
As
As
Reported
Adjustments
Adjusted
Reported
Adjustments
Adjusted
Net revenues
$
5,441.2
$
—
$
5,441.2
$
14,964.2
$
—
$
14,964.2
Operating income
1,024.6
1.2
(a,b,c)
1,025.8
2,692.5
(0.1
)
(a,b,c,d)
2,692.4
Operating margin
18.8
%
18.9
%
18.0
%
18.0
%
Earnings from continuing operations before
income taxes
967.9
1.2
(a,b,c)
969.1
2,491.2
(0.1
)
(a,b,c,d)
2,491.1
Provision for income taxes
(181.1
)
(13.5
)
(e,f)
(194.6
)
(492.3
)
(15.2
)
(e,f)
(507.5
)
Tax rate
18.7
%
20.1
%
19.8
%
20.4
%
Earnings from continuing operations
attributable to Trane Technologies plc
$
780.9
$
(12.3
)
(g)
$
768.6
$
1,984.9
$
(15.3
)
(g)
$
1,969.6
Diluted earnings per
common share
Continuing operations
$
3.43
$
(0.06
)
$
3.37
$
8.68
$
(0.07
)
$
8.61
Weighted-average number of common shares
outstanding:
Diluted
228.0
—
228.0
228.8
—
228.8
Detail of
Adjustments:
(a)
Restructuring costs / (income) (COGS &
SG&A)
$
(1.9
)
$
3.6
(b)
Legacy legal liability (SG&A)
1.8
3.5
(c)
M&A transaction costs (SG&A)
1.3
1.7
(d)
Non-cash adjustment for contingent
consideration (SG&A)
—
(8.9
)
(e)
U.S. discrete tax benefit
(12.9
)
(12.9
)
(f)
Tax impact of adjustments (a,b,c)
(0.6
)
(2.3
)
(g)
Impact of adjustments on earnings from
continuing operations attributable to Trane Technologies plc
$
(12.3
)
$
(15.3
)
Pre-tax impact of adjustments on cost of
goods sold
$
(1.7
)
$
(1.1
)
Pre-tax impact of adjustments on selling
& administrative expenses
2.9
1.0
Pre-tax impact of adjustments on operating
income
$
1.2
$
(0.1
)
Table 3
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions, except per share
amounts)
UNAUDITED
For the quarter ended September
30, 2023
For the nine months ended
September 30, 2023
As
As
As
As
Reported
Adjustments
Adjusted
Reported
Adjustments
Adjusted
Net revenues
$
4,882.9
$
—
$
4,882.9
$
13,253.5
$
—
$
13,253.5
Operating income
864.2
15.0
(b,c,d,e)
879.2
2,206.4
(6.3
)
(a,b,c,d,e)
2,200.1
Operating margin
17.7
%
18.0
%
16.6
%
16.6
%
Earnings from continuing operations before
income taxes
796.3
15.0
(b,c,d,e)
811.3
1,952.5
45.9
(a,b,c,d,e,f)
1,998.4
Benefit (Provision) for income taxes
(157.5
)
(3.5
)
(g)
(161.0
)
(400.2
)
2.8
(g)
(397.4
)
Tax rate
19.8
%
19.8
%
20.5
%
19.9
%
Earnings from continuing operations
attributable to Trane Technologies plc
$
632.8
$
11.5
(h)
$
644.3
$
1,537.8
$
48.7
(h)
$
1,586.5
Diluted earnings per
common share
Continuing operations
$
2.74
$
0.05
$
2.79
$
6.66
$
0.21
$
6.87
Weighted-average number of common shares
outstanding:
Diluted
230.6
—
230.6
230.9
—
230.9
Detail of
Adjustments:
(a)
Non-cash adjustment for contingent
consideration (SG&A)
$
—
$
(49.3
)
(b)
Acquisition inventory step-up and backlog
amortization (COGS & SG&A)
8.4
18.5
(c)
Restructuring costs (COGS &
SG&A)
2.3
10.1
(d)
Transformation costs (SG&A)
1.1
3.5
(e)
M&A transaction costs (SG&A)
3.2
10.9
(f)
Impairment of equity investment (OIOE)
—
52.2
(g)
Tax impact of adjustments (a,b,c,d,e)
(3.5
)
2.8
(h)
Impact of adjustments on earnings from
continuing operations attributable to Trane Technologies plc
$
11.5
$
48.7
Pre-tax impact of adjustments on cost of
goods sold
$
2.5
$
14.7
Pre-tax impact of adjustments on selling
& administrative expenses
12.5
(21.0
)
Pre-tax impact of adjustments on operating
income
15.0
(6.3
)
Pre-tax impact of adjustments on other
income / (expense), net
—
52.2
Pre-tax impact of adjustments on earnings
from continuing operations
$
15.0
$
45.9
Table 4
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions)
UNAUDITED
For the quarter ended September
30, 2024
For the quarter ended September
30, 2023
As Reported
Margin
As Reported
Margin
Americas
Net revenues
$
4,474.9
$
3,888.0
Segment operating income
$
922.3
20.6
%
$
748.3
19.2
%
Restructuring/Other (a)
(1.6
)
0.0
%
2.3
0.1
%
Adjusted operating income *
920.7
20.6
%
750.6
19.3
%
Depreciation and amortization (b)
75.1
1.7
%
65.2
1.7
%
Other income/(expense), net
(1.9
)
(0.1
)%
(6.8
)
(0.2
)%
Adjusted EBITDA *
$
993.9
22.2
%
$
809.0
20.8
%
Europe, Middle
East & Africa
Net revenues
$
667.8
$
618.6
Segment operating income
$
137.4
20.6
%
$
110.1
17.8
%
Restructuring/Other (c)
(0.3
)
(0.1
)%
8.3
1.3
%
Adjusted operating income *
137.1
20.5
%
118.4
19.1
%
Depreciation and amortization (d)
10.8
1.6
%
11.2
1.9
%
Other income/(expense), net
(3.6
)
(0.5
)%
0.8
0.1
%
Adjusted EBITDA *
$
144.3
21.6
%
$
130.4
21.1
%
Asia
Pacific
Net revenues
$
298.5
$
376.3
Segment operating income
$
56.9
19.1
%
$
82.6
22.0
%
Restructuring/Other
—
—
%
—
—
%
Adjusted operating income *
56.9
19.1
%
82.6
22.0
%
Depreciation and amortization
4.4
1.4
%
4.4
1.2
%
Other income/(expense), net
1.4
0.5
%
0.7
0.1
%
Adjusted EBITDA *
$
62.7
21.0
%
$
87.7
23.3
%
Corporate
Unallocated corporate expense
$
(92.0
)
$
(76.8
)
Restructuring/Other (e)
3.1
4.4
Adjusted corporate expense *
(88.9
)
(72.4
)
Depreciation and amortization
4.7
4.4
Other income/(expense), net
10.4
(4.7
)
Adjusted EBITDA *
$
(73.8
)
$
(72.7
)
Total
Company
Net revenues
$
5,441.2
$
4,882.9
Operating income
$
1,024.6
18.8
%
$
864.2
17.7
%
Restructuring/Other (a,c,e)
1.2
0.1
%
15.0
0.3
%
Adjusted operating income *
1,025.8
18.9
%
879.2
18.0
%
Depreciation and amortization (b,d)
95.0
1.7
%
85.2
1.7
%
Other income/(expense), net
6.3
0.1
%
(10.0
)
(0.2
)%
Adjusted EBITDA *
$
1,127.1
20.7
%
$
954.4
19.5
%
*Represents a non-GAAP measure, refer to
pages 5-6 in the Earnings Release for definitions.
(a) Restructuring/Other within Americas in
2023 includes acquisition inventory step-up and backlog
amortization of $0.2 million.
(b) Depreciation and amortization within
Americas in 2023 excludes $0.3 million of acquisition backlog
amortization, which has been accounted for in the
Restructuring/Other line.
(c) Restructuring/Other within EMEA in
2023 includes acquisition inventory step-up and backlog
amortization of $8.2 million.
(d) Depreciation and amortization within
EMEA in 2023 excludes acquisition backlog amortization of $6.5
million, which has been accounted for in the Restructuring/Other
line.
(e) Other within Corporate in 2024
includes $1.8 million of legacy legal liability and $1.3 million of
M&A transaction costs. Other within Corporate in 2023 includes
$1.1 million of transformation costs and $3.2 million of M&A
transaction costs.
Table 5
TRANE TECHNOLOGIES PLC
Reconciliation of GAAP to
non-GAAP
(In millions)
UNAUDITED
For the quarter
ended September 30,
2024
2023
Total Company
Adjusted EBITDA *
$
1,127.1
$
954.4
Less: items to reconcile adjusted EBITDA
to net earnings attributable to Trane Technologies plc
Depreciation and amortization (1)
(95.0
)
(85.2
)
Interest expense
(63.0
)
(57.9
)
Provision for income taxes
(181.1
)
(157.5
)
Restructuring costs / (income)
1.9
(2.3
)
Transformation costs
—
(1.1
)
M&A transaction costs
(1.3
)
(3.2
)
Legacy legal liability
(1.8
)
—
Acquisition inventory step-up and backlog
amortization
—
(8.4
)
Impairment of equity investment
—
—
Discontinued operations, net of tax
(8.9
)
(6.5
)
Net earnings from continuing operations
attributable to noncontrolling interests
(5.9
)
(6.0
)
Net earnings attributable to Trane
Technologies plc
$
772.0
$
626.3
(1) Depreciation and amortization in 2023
excludes acquisition backlog amortization of $6.8 million which has
been included in the acquisition inventory step-up and backlog
amortization line.
*Represents a non-GAAP measure, refer to
pages 5-6 in the Earnings Release for definitions.
Table 6
TRANE TECHNOLOGIES PLC
Condensed Consolidated Balance
Sheets
(In millions)
UNAUDITED
September 30,
December 31,
2024
2023
ASSETS
Cash and cash equivalents
$
1,470.0
$
1,095.3
Short-term investments
457.6
—
Accounts and notes receivable, net
3,393.4
2,956.8
Inventories
2,033.4
2,152.1
Other current assets
745.3
665.7
Total current assets
8,099.7
6,869.9
Property, plant and equipment, net
1,906.6
1,772.2
Goodwill
6,214.3
6,095.3
Intangible assets, net
3,364.6
3,439.8
Other noncurrent assets
1,318.5
1,214.7
Total assets
$
20,903.7
$
19,391.9
LIABILITIES AND EQUITY
Accounts payable
$
2,194.8
$
2,025.2
Accrued expenses and other current
liabilities
3,481.9
3,226.4
Short-term borrowings and current
maturities of long-term debt
952.2
801.9
Total current liabilities
6,628.9
6,053.5
Long-term debt
4,317.1
3,977.9
Other noncurrent liabilities
2,343.4
2,343.5
Shareholders' Equity
7,614.3
7,017.0
Total liabilities and equity
$
20,903.7
$
19,391.9
Table 7
TRANE TECHNOLOGIES PLC
Condensed Consolidated
Statement of Cash Flows
(In millions)
UNAUDITED
For the nine months
ended September 30,
2024
2023
Operating Activities
Earnings from continuing operations
$
1,998.9
$
1,552.3
Depreciation and amortization
282.7
260.2
Changes in assets and liabilities and
other non-cash items
(9.4
)
(329.9
)
Net cash provided by (used in) continuing
operating activities
2,272.2
1,482.6
Net cash provided by (used in)
discontinued operating activities
(26.5
)
(27.8
)
Net cash provided by (used in) operating
activities
2,245.7
1,454.8
Investing Activities
Capital expenditures, net
(245.0
)
(217.2
)
Acquisition of businesses, net of cash
acquired
(179.6
)
(510.2
)
Purchases of short-term investments,
net
(450.0
)
—
Other investing activities, net
(12.0
)
(8.7
)
Net cash provided by (used in) investing
activities
(886.6
)
(736.1
)
Financing Activities
Net proceeds from (payments of) debt
491.0
(11.6
)
Dividends paid to ordinary
shareholders
(568.8
)
(513.0
)
Repurchase of ordinary shares
(926.1
)
(459.8
)
Other financing activities, net
13.7
32.3
Net cash provided by (used in) financing
activities
(990.2
)
(952.1
)
Effect of exchange rate changes on cash
and cash equivalents
5.8
(27.1
)
Net increase (decrease) in cash and cash
equivalents
374.7
(260.5
)
Cash and cash equivalents - beginning of
period
1,095.3
1,220.5
Cash and cash equivalents - end of
period
$
1,470.0
$
960.0
Table 8
TRANE TECHNOLOGIES PLC
Balance Sheet Metrics and Free
Cash Flow
($ in millions)
UNAUDITED
September 30,
September 30,
December 31,
2024
2023
2023
Net Receivables
$
3,393.4
$
3,142.5
$
2,956.8
Days Sales Outstanding
56.9
58.7
61.0
Net Inventory
$
2,033.4
$
2,191.8
$
2,152.1
Inventory Turns
6.8
5.9
5.5
Accounts Payable
$
2,194.8
$
2,093.3
$
2,025.2
Days Payable Outstanding
57.8
59.2
62.6
-------------------------------------------------------------------------------------------------------------------------------------------------------
Nine months ended
Nine months ended
September 30, 2024
September 30, 2023
Net cash flow provided by continuing
operating activities
$
2,272.2
$
1,482.6
Capital expenditures, net
(245.0
)
(217.2
)
Cash payments for restructuring
7.2
8.8
Legacy legal liability
2.2
—
M&A transaction costs
0.9
10.7
Transformation costs paid
—
3.5
Free cash flow *
$
2,037.5
$
1,288.4
*Represents a non-GAAP measure, refer to
pages 5-6 in the Earnings Release for definitions.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030812535/en/
Media: Travis Bullard 919-802-2593
Media@tranetechnologies.com
Investors: Zac Nagle 704-990-3913
InvestorRelations@tranetechnologies.com
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