Item 16. FORM 10-K SUMMARY

Not applicable.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TRANE TECHNOLOGIES PLC

(Registrant)

By:						/s/ Michael W. Lamach
						Michael W. Lamach
						Chairman of the Board and Chief Executive Officer
Date:						February 9, 2021

Table of Contents

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature						Title						Date
/s/ Michael W. Lamach						Chairman of the Board and Chief Executive Officer (Principal Executive Officer)						February 9, 2021
(Michael W. Lamach)
/s/ Christopher J. Kuehn						Senior Vice President and Chief Financial Officer (Principal Financial Officer)						February 9, 2021
(Christopher J. Kuehn)
/s/ Heather R. Howlett						Vice President and Chief Accounting Officer (Principal Accounting Officer)						February 9, 2021
(Heather R. Howlett)
/s/ Kirk E. Arnold						Director						February 9, 2021
(Kirk E. Arnold)
/s/ Ann C. Berzin						Director						February 9, 2021
(Ann C. Berzin)
/s/ John Bruton						Director						February 9, 2021
(John Bruton)
/s/ Jared L. Cohon						Director						February 9, 2021
(Jared L. Cohon)
/s/ Gary D. Forsee						Director						February 9, 2021
(Gary D. Forsee)
/s/ Linda P. Hudson						Director						February 9, 2021
(Linda P. Hudson)
/s/ Myles P. Lee						Director						February 9, 2021
(Myles P. Lee)
/s/ April Miller Boise						Director						February 9, 2021
(April Miller Boise)
/s/ Karen B. Peetz						Director						February 9, 2021
(Karen B. Peetz)
/s/ John P. Surma						Director						February 9, 2021
(John P. Surma)
/s/ Richard J. Swift						Director						February 9, 2021
(Richard J. Swift)
/s/ Tony L. White						Director						February 9, 2021
(Tony L. White)

Table of Contents

TRANE TECHNOLOGIES PLC

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm			F-2
Consolidated Statements of Comprehensive Income			F-5
Consolidated Balance Sheets			F-7
Consolidated Statements of Equity			F-8
Consolidated Statements of Cash Flows			F-9
Notes to Consolidated Financial Statements			F-10

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Trane Technologies plc

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Trane Technologies plc and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019**,** and the results of its operations and its cash flows for each of the three years in the period ended December, 31 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-2

Table of Contents

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Tax-Free Determination of the Reverse Morris Trust Transaction

As described in Notes 2, 18 and 19 to the consolidated financial statements, on February 29, 2020, the Company completed its Reverse Morris Trust transaction (the Transaction) with Gardner Denver Holdings, Inc. (Gardner Denver, which changed its name to Ingersoll Rand, Inc. after the Transaction) whereby the Company distributed Ingersoll-Rand U.S. Holdco, Inc., which contained the Company's former Industrial segment (Ingersoll Rand Industrial), through a pro rata distribution (the Distribution) to shareholders of record as of February 24, 2020. Ingersoll Rand Industrial then merged into a wholly-owned subsidiary of Gardner Denver. As disclosed by management, the Transaction was determined to qualify for tax-free treatment under certain sections of the Internal Revenue Code. The determination of the Transaction as tax-free requires management to make significant judgments about the interpretation of tax laws and regulations. This determination is the subject of periodic audits by U.S. tax authorities. Unfavorable audit findings and tax rulings may have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

The principal considerations for our determination that performing procedures relating to the tax-free determination of the Reverse Morris Trust transaction is a critical audit matter are (i) the significant judgment by management regarding the Transaction and application of U.S. tax laws and regulations in determining that the Transaction would qualify as tax-free, (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to the tax-free determination, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the determination of the tax-free treatment of the Transaction. These procedures also included, among others (i) testing management’s process in determining the tax-free treatment of the Transaction, (ii) testing the information used in management’s determination, including opinions of third-party tax advisors, tax laws and regulations, and (iii) evaluating the reasonableness of management’s interpretation of the tax laws and regulations and determinations reached for the tax treatment of each component of the Transaction. Professionals with specialized skill and knowledge were used to assist in the evaluation of the tax-free treatment of the Transaction, including evaluating certain representations from management, and management’s application of the relevant tax laws and regulations.

Reassignment of Goodwill to Newly Designated Reporting Units

As described in Note 6 to the consolidated financial statements, in connection with the new organizational model and business segment structure, the Company reassigned its goodwill among the newly designated reporting units using a relative fair value approach. As disclosed by management, because quoted market prices are not available for their reporting units, the calculation of their estimated fair value was determined using the guideline public company method specifically a market-adjusted multiple of earnings and revenues (a market approach). The earnings and revenues multiple approach reflects the market's expectations for future growth and risk, with adjustments to account for differences between the guideline publicly traded companies and the subject reporting units. Total goodwill amounts to $5.3 billion as of December 31, 2020.

The principal considerations for our determination that performing procedures relating to the reassignment of goodwill to the newly designated reporting units is a critical audit matter are (i) the significant judgment by management in developing the relative fair value of the reporting units; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the multiples of earnings and revenues used in the market approach; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to developing the fair value of the reporting units, including controls over the multiples of earnings and revenues utilized within the valuations. These procedures also included, among others, testing management’s process for developing the fair value estimate, evaluating the reasonableness of the market approach, and evaluating the reasonableness of the significant

F-3

Table of Contents

assumptions used by management related to the multiples of earnings and revenues used in the market approach. Evaluating the reasonableness of management’s significant assumptions related to the multiples of earnings and revenues involved (i) comparing the multiples to peer groups, (ii) verifying the multiples are within the range identified by the valuation specialists engaged by the Company, and (iii) testing the completeness and accuracy of underlying data used in the model. Professionals with specialized skill and knowledge were used to assist in the evaluation of management's market approach.

/s/ PricewaterhouseCoopers LLP

Charlotte, North Carolina

February 9, 2021

We have served as the Company’s auditor since at least 1906. We have not been able to determine the specific year we began serving as auditor of the Company.

F-4

Table of Contents

Trane Technologies plc
Consolidated Statements of Comprehensive Income
In millions, except per share amounts
For the years ended December 31,						2020						2019						2018
Net revenues						$	12,454.7					$	13,075.9					$	12,343.8
Cost of goods sold						(8,651.3)						(9,085.5)						(8,582.5)
Selling and administrative expenses						(2,270.6)						(2,320.3)						(2,249.2)
Operating income						1,532.8						1,670.1						1,512.1
Interest expense						(248.7)						(242.8)						(221.0)
Other income/(expense), net						4.1						(28.4)						(33.3)
Earnings before income taxes						1,288.2						1,398.9						1,257.8
Benefit (provision) for income taxes						(296.8)						(238.6)						(234.9)
Earnings from continuing operations						991.4						1,160.3						1,022.9
Discontinued operations, net of tax						(121.4)						268.2						334.6
Net earnings						870.0						1,428.5						1,357.5
Less: Net earnings from continuing operations attributable to noncontrolling interests						(14.2)						(15.2)						(15.1)
Less: Net earnings from discontinuing operations attributable to noncontrolling interests						(0.9)						(2.4)						(4.8)
Net earnings attributable to Trane Technologies plc						$	854.9					$	1,410.9					$	1,337.6
Amounts attributable to Trane Technologies plc ordinary shareholders:
Continuing operations						$	977.2					$	1,145.1					$	1,007.8
Discontinued operations						(122.3)						265.8						329.8
Net earnings						$	854.9					$	1,410.9					$	1,337.6
Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:
Basic:
Continuing operations						$	4.07					$	4.74					$	4.08
Discontinued operations						(0.51)						1.10						1.33
Net earnings						$	3.56					$	5.84					$	5.41
Diluted:
Continuing operations						$	4.02					$	4.69					$	4.03
Discontinued operations						(0.50)						1.08						1.32
Net earnings						$	3.52					$	5.77					$	5.35

F-5

Table of Contents

Trane Technologies plc
Consolidated Statements of Comprehensive Income (continued)
In millions, except per share amounts
For the years ended December 31,						2020						2019						2018
Net earnings						$	870.0					$	1,428.5					$	1,357.5
Other comprehensive income (loss):
Currency translation						261.5						(37.1)						(230.6)
Cash flow hedges
Unrealized net gains (losses) arising during period						3.3						(2.7)						1.2
Net gains (losses) reclassified into earnings						1.9						0.7						0.9
Tax (expense) benefit						—						0.9						(0.1)
Total cash flow hedges, net of tax						5.2						(1.1)						2.0
Pension and OPEB adjustments:
Prior service costs for the period						(1.9)						(5.7)						(16.0)
Net actuarial gains (losses) for the period						(52.5)						(41.9)						12.8
Amortization reclassified into earnings						43.4						48.1						50.7
Settlements/curtailments reclassified to earnings						(1.8)						2.2						2.5
Currency translation and other						(10.4)						(1.4)						7.5
Tax (expense) benefit						(0.7)						(4.7)						(17.2)
Total pension and OPEB adjustments, net of tax						(23.9)						(3.4)						40.3
Other comprehensive income (loss), net of tax						242.8						(41.6)						(188.3)
Comprehensive income, net of tax						$	1,112.8					$	1,386.9					$	1,169.2
Less: Comprehensive income attributable to noncontrolling interests						(17.8)						(18.5)						(16.9)
Comprehensive income attributable to Trane Technologies plc						$	1,095.0					$	1,368.4					$	1,152.3

See accompanying notes to Consolidated Financial Statements.

F-6

Table of Contents

Trane Technologies plc

Consolidated Balance Sheets

In millions, except share amounts

December 31,						2020						2019
ASSETS
Current assets:
Cash and cash equivalents						$	3,289.9					$	1,278.6
Accounts and notes receivable, net						2,202.1						2,184.6
Inventories						1,189.2						1,278.6
Other current assets						224.4						344.8
Assets held-for-sale						—						4,207.2
Total current assets						6,905.6						9,293.8
Property, plant and equipment, net						1,349.5						1,352.0
Goodwill						5,342.8						5,125.7
Intangible assets, net						3,286.4						3,323.6
Other noncurrent assets						1,272.4						1,397.2
Total assets						$	18,156.7					$	20,492.3
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable						$	1,520.2					$	1,381.3
Accrued compensation and benefits						451.1						442.4
Accrued expenses and other current liabilities						1,592.0						1,564.2
Short-term borrowings and current maturities of long-term debt						775.6						650.3
Liabilities held-for-sale						—						1,200.4
Total current liabilities						4,338.9						5,238.6
Long-term debt						4,496.5						4,922.9
Postemployment and other benefit liabilities						1,024.6						1,048.2
Deferred and noncurrent income taxes						578.5						572.0
Other noncurrent liabilities						1,291.1						1,398.2
Total liabilities						11,729.6						13,179.9
Equity:
Trane Technologies plc shareholders’ equity
Ordinary shares, $1.00 par value (263,309,250 and 262,804,939 shares issued at December 31, 2020 and 2019, respectively)						263.3						262.8
Ordinary shares held in treasury, at cost (24,500,862 and 24,499,897 shares at December 31, 2020 and 2019, respectively)						(1,719.4)						(1,719.4)
Retained earnings						8,495.3						9,730.8
Accumulated other comprehensive (loss)						(631.5)						(1,006.6)
Total Trane Technologies plc shareholders’ equity						6,407.7						7,267.6
Noncontrolling interest						19.4						44.8
Total equity						6,427.1						7,312.4
Total liabilities and equity						$	18,156.7					$	20,492.3

See accompanying notes to Consolidated Financial Statements.

F-7

Trane Technologies plc

Consolidated Statements of Equity

												Trane Technologies plc shareholders’ equity
In millions, except per share amounts						Total equity						Ordinary shares												Ordinary shares held in treasury, at cost						Capital in excess of par value						Retained earnings						Accumulated other comprehensive income (loss)						Noncontrolling Interest
						Amount at par value						Shares
Balance at December 31, 2017						$	7,206.9					$	274.0					274.0						$	(1,719.4)					$	461.3					$	8,903.2					$	(778.8)					$	66.6
Net earnings						1,357.5						—						—						—						—						1,337.6						—						19.9
Other comprehensive income (loss)						(188.3)						—						—						—						—						—						(185.3)						(3.0)
Shares issued under incentive stock plans						43.1						2.1						2.1						—						41.0						—						—						—
Repurchase of ordinary shares						(900.2)						(9.7)						(9.7)						—						(581.2)						(309.3)						—						—
Share-based compensation						74.7						—						—						—						78.8						(4.1)						—						—
Dividends declared to noncontrolling interest						(41.4)						—						—						—						—						—						—						(41.4)
Adoption of ASU 2014-09 (Revenue Recognition)						2.4						—						—						—						—						2.4						—						—
Adoption of ASU 2016-16 (Intra-Entity Transfers)						(9.1)						—						—						—						—						(9.1)						—						—
Cash dividends declared ($1.96 per share)						(480.8)						—						—						—						—						(480.8)						—						—
Other						—						—						—						—						0.1						(0.1)						—						—
Balance at December 31, 2018						$	7,064.8					$	266.4					266.4						$	(1,719.4)					$	—					$	9,439.8					$	(964.1)					$	42.1
Net earnings						1,428.5						—						—						—						—						1,410.9						—						17.6
Other comprehensive income (loss)						(41.6)						—						—						—						—						—						(42.5)						0.9
Shares issued under incentive stock plans						72.5						2.8						2.8						—						69.7						—						—						—
Repurchase of ordinary shares						(750.1)						(6.4)						(6.4)						—						(136.1)						(607.6)						—						—
Share-based compensation						63.5						—						—						—						66.4						(2.9)						—						—
Dividends declared to noncontrolling interest						(15.8)						—						—						—						—						—						—						(15.8)
Cash dividends declared ($2.12 per share)						(509.5)						—						—						—						—						(509.5)						—						—
Other						0.1						—						—						—						—						0.1						—						—
Balance at December 31, 2019						$	7,312.4					$	262.8					262.8						$	(1,719.4)					$	—					$	9,730.8					$	(1,006.6)					$	44.8
Net earnings						870.0						—						—						—						—						854.9						—						15.1
Other comprehensive income (loss)						242.8						—						—						—						—						—						240.1						2.7
Shares issued under incentive stock plans						64.5						2.3						2.3						—						62.2						—						—						—
Repurchase of ordinary shares						(250.0)						(1.8)						(1.8)						—						(135.6)						(112.6)						—						—
Share-based compensation						66.3						—						—						—						69.5						(3.2)						—						—
Dividends declared to noncontrolling interest						(18.3)						—						—						—						—						—						—						(18.3)
Investment by joint venture partner						7.0						—						—						—						3.9						—						—						3.1
Cash dividends declared ($2.12 per share)						(507.7)						—						—						—						—						(507.7)						—						—
Separation of Ingersoll Rand Industrial						(1,359.9)						—						—						—						—						(1,466.9)						135.0						(28.0)
Balance at December 31, 2020						$	6,427.1					$	263.3					263.3						$	(1,719.4)					$	—					$	8,495.3					$	(631.5)					$	19.4

See accompanying notes to Consolidated Financial Statements.

F-8

Trane Technologies plc

Consolidated Statements of Cash Flows

In millions

For the years ended December 31,						2020						2019						2018
Cash flows from operating activities:
Net earnings						$	870.0					$	1,428.5					$	1,357.5
Discontinued operations, net of tax						121.4						(268.2)						(334.6)
Adjustments for non-cash transactions:
Depreciation and amortization						294.3						288.8						282.3
Pension and other postretirement benefits						68.8						96.3						85.0
Stock settled share-based compensation						69.5						66.4						78.8
Other non-cash items, net						(1.5)						(17.8)						(99.2)
Changes in other assets and liabilities, net of the effects of acquisitions:
Accounts and notes receivable						5.9						(77.8)						(213.5)
Inventories						109.0						3.9						(186.9)
Other current and noncurrent assets						29.7						(245.8)						55.3
Accounts payable						75.8						93.2						99.6
Other current and noncurrent liabilities						123.3						156.2						(127.0)
Net cash provided by (used in) continuing operating activities						1,766.2						1,523.7						997.3
Net cash provided by (used in) discontinued operating activities						(331.2)						395.8						410.5
Net cash provided by (used in) operating activities						1,435.0						1,919.5						1,407.8
Cash flows from investing activities:
Capital expenditures						(146.2)						(205.4)						(284.7)
Acquisitions and equity method investments, net of cash acquired						(182.8)						(83.4)						(285.7)
Proceeds from sale of property, plant and equipment						0.1						2.2						9.7
Deconsolidation of certain entities under Chapter 11						(10.8)						—						—
Other investing activities, net						1.2						4.8						(1.2)
Net cash provided by (used in) continuing investing activities						(338.5)						(281.8)						(561.9)
Net cash provided by (used in) discontinued investing activities						(37.7)						(1,498.2)						(67.5)
Net cash provided by (used in) investing activities						(376.2)						(1,780.0)						(629.4)
Cash flows from financing activities:
Short-term borrowings (payments), net						—						—						(6.4)
Proceeds from long-term debt						—						1,497.9						1,147.0
Payments of long-term debt						(307.5)						(7.5)						(1,123.0)
Net proceeds from (payments of) debt						(307.5)						1,490.4						17.6
Debt issuance costs						(3.6)						(13.1)						(12.0)
Dividends paid to ordinary shareholders						(507.3)						(510.1)						(479.5)
Dividends paid to noncontrolling interests						(18.3)						(15.8)						(41.4)
Proceeds (payments) from shares issued under incentive plans, net						64.5						72.5						43.1
Repurchase of ordinary shares						(250.0)						(750.1)						(900.2)
Receipt of special cash payment						1,900.0						—						—
Other financing activities, net						6.5						(1.8)						(3.5)
Net cash provided by (used in) continuing financing activities						884.3						272.0						(1,375.9)
Net cash provided by (used in) discontinued financing activities						—						(1.5)						(2.9)
Net cash provided by (used in) financing activities						884.3						270.5						(1,378.8)
Effect of exchange rate changes on cash and cash equivalents						68.2						(9.8)						(45.6)
Net increase (decrease) in cash and cash equivalents						2,011.3						400.2						(646.0)
Cash and cash equivalents – beginning of period						1,278.6						878.4						1,524.4
Cash and cash equivalents – end of period						$	3,289.9					$	1,278.6					$	878.4
Cash paid during the year for:
Interest						$	243.5					$	220.9					$	200.6
Income taxes, net of refunds						$	151.6					$	425.3					$	375.4

See accompanying notes to Consolidated Financial Statements.

F-9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF COMPANY

Trane Technologies plc (formerly known as Ingersoll-Rand plc), a public limited company incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively, we, our, the Company) is a global climate innovator that brings efficient and sustainable climate solutions to buildings, homes and transportation driven by strategic brands Trane® and Thermo King® and an environmentally responsible portfolio of products and services.

Reportable Segments

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

• The Company's Americas segment innovates for customers in the North America and Latin America regions. The Americas segment encompasses commercial heating and cooling systems, building controls, and energy services and solutions; residential heating and cooling; and transport refrigeration systems and solutions.

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

• The Company's Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating and cooling systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

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

COVID-19 Global Pandemic

In March 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a newly discovered coronavirus, known now as COVID-19, as a global pandemic and recommended containment and mitigation measures worldwide. Beginning in the first quarter of 2020, many countries responded by implementing measures to combat the outbreak which impacted global business operations and resulted in a Company decision to temporarily close or limit its workforce to essential crews within many facilities throughout the world in order to ensure employee safety. In addition, the Company's non-essential employees were instructed to work from home in compliance with global government stay-in-place protocols.

The Company has been adversely impacted by the COVID-19 global pandemic. Temporary facility closures beginning in the first quarter of 2020 disrupted results in the Asia Pacific region with impacts more widely felt throughout operations in the Americas and EMEA in the months thereafter. During the second quarter of 2020, the Company began to reopen facilities while maintaining appropriate health and safety precautions. However, the challenges in connection with the pandemic continued as the Company experienced lower volume, which negatively impacted revenue, and certain supply chain delays. In response, the Company proactively initiated cost cutting actions in an effort to mitigate the impact of the pandemic on its business. This included reducing discretionary spending, restricting travel, delaying merit-based salary increases and implementing employee furloughs in certain markets.

The Company continues to navigate the new realities brought about by the COVID-19 global pandemic. Despite these challenges, all production facilities remain open and the Company continues to sell, install and service its products. During the second half of 2020, the Company did not experience any major delays in its supply chain and continued to focus on health and safety precautions to protect its employees and customers. In addition, during the fourth quarter of 2020, the Company completed several restorative actions including the reinstatement of annual merit-based salary increases and resuming all aspects of our balanced capital allocation strategy which included acquisitions and share repurchases.

The preparation of financial statements requires management to use judgments in making estimates and assumptions based on the relevant information available at the end of each period. These estimates and assumptions have a significant effect on reported amounts of assets and liabilities, revenue and expenses, as well as the disclosure of contingencies because they may arise from matters that are inherently uncertain. The financial statements reflect the Company's best estimates as of December 31, 2020 (including as it relates to the actual and potential future impacts of the global pandemic) with respect to the recoverability of its assets, including its receivables and long-lived assets such as goodwill and intangibles. However, due to

F-10

significant uncertainty surrounding the COVID-19 global pandemic, management's judgment regarding this could change in the future. In addition, while the Company's results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be estimated with certainty at this time.

Reorganization of Aldrich and Murray

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

On June 18, 2020 (Petition Date), Aldrich and Murray filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the Western District of North Carolina (the Bankruptcy Court) to resolve equitably and permanently all current and future asbestos related claims in a manner beneficial to claimants, Aldrich and Murray. As a result of the Chapter 11 filings, all asbestos-related lawsuits against Aldrich and Murray have been stayed due to the imposition of a statutory automatic stay applicable in Chapter 11 bankruptcy cases. Only Aldrich and Murray have filed for Chapter 11 relief. Neither Aldrich's wholly-owned subsidiary, 200 Park, Inc. (200 Park), Murray's wholly-owned subsidiary, ClimateLabs LLC (ClimateLabs), Trane Technologies plc nor its other subsidiaries (the Trane Companies) are part of the Chapter 11 filings. The Trane Companies are expected to continue to operate as usual, with no disruption to their employees, suppliers, or customers globally. However, as of the Petition Date, Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated and their respective assets and liabilities were derecognized from the Company's Consolidated Financial Statements. Refer to Note 22, "Commitments and Contingencies," for more information regarding the Chapter 11 bankruptcy and asbestos-related matters.

NOTE 2. COMPLETION OF REVERSE MORRIS TRUST TRANSACTION

On February 29, 2020 (Distribution Date), the Company completed its Reverse Morris Trust transaction (the Transaction) with Gardner Denver Holdings, Inc. (Gardner Denver, which changed its name to Ingersoll Rand, Inc. after the Transaction) whereby the Company distributed Ingersoll-Rand U.S. HoldCo, Inc., which contained the Company's former Industrial segment (Ingersoll Rand Industrial), through a pro rata distribution (the Distribution) to shareholders of record as of February 24, 2020. Ingersoll Rand Industrial then merged into a wholly-owned subsidiary of Gardner Denver. Upon close of the Transaction, the Company’s existing shareholders received approximately 50.1% of the shares of Gardner Denver common stock on a fully-diluted basis and Gardner Denver stockholders retained approximately 49.9% of the shares of Gardner Denver on a fully diluted basis. As a result, the Company’s shareholders received .8824 shares of Gardner Denver common stock with respect to each share owned as of February 24, 2020. In connection with the Transaction, Ingersoll-Rand Services Company, an affiliate of Ingersoll Rand Industrial, borrowed an aggregate principal amount of $1.9 billion under a senior secured first lien term loan facility (Term Loan), the proceeds of which were used to make a special cash payment of $1.9 billion to a subsidiary of the Company. The obligations under the Term Loan were retained by Ingersoll-Rand Services Company, which following the Transaction is a wholly-owned subsidiary of Gardner Denver.

Discontinued Operations

After the Distribution Date, the Company does not beneficially own any Ingersoll Rand Industrial shares of common stock and will no longer consolidate Ingersoll Rand Industrial in its financial statements. In accordance with GAAP, the historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Consolidated Statement of Comprehensive Income (Loss) and Consolidated Statement of Cash Flows. In addition, the assets and liabilities of Ingersoll Rand Industrial have been recast to held-for-sale at December 31, 2019. In connection with the Transaction, the Company entered into several agreements with Gardner Denver covering supply, administrative and tax matters to provide or obtain services on a transitional basis for varying periods after the Distribution Date. The agreements cover services such as manufacturing, information technology, human resources and finance. Income and expenses under these agreements were not material. In accordance with several customary transaction-related agreements between the Company and Gardner Denver, the parties are in a process to determine final adjustments to working capital, cash and indebtedness amounts as of the Distribution Date, as well as another process to determine funding levels related to pension plans, non-qualified deferred compensation plans and retiree health benefits. As of December 31, 2020, both are ongoing in accordance with the transaction-related agreements. Upon finalization of these agreements, any adjustments will be recognized within Retained earnings.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting policies used in the preparation of the accompanying Consolidated Financial Statements follows:

F-11

Basis of Presentation: The accompanying Consolidated Financial Statements reflect the consolidated operations of the Company and have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) as defined by the Financial Accounting Standards Board (FASB) within the FASB Accounting Standards Codification (ASC). Intercompany accounts and transactions have been eliminated. The assets, liabilities, results of operations and cash flows of all discontinued operations have been separately reported as discontinued operations for all periods presented.

The Consolidated Financial Statements include all majority-owned subsidiaries of the Company. A noncontrolling interest in a subsidiary is considered an ownership interest in a majority-owned subsidiary that is not attributable to the parent. The Company includes Noncontrolling interest as a component of Total equity in the Consolidated Balance Sheet and the Net earnings attributable to noncontrolling interests are presented as an adjustment from Net earnings used to arrive at Net earnings attributable to Trane Technologies plc in the Consolidated Statement of Comprehensive Income. Partially-owned equity affiliates represent 20-50% ownership interests in investments where the Company demonstrates significant influence, but does not have a controlling financial interest. Partially-owned equity affiliates are accounted for under the equity method.

Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates are based on several factors including the facts and circumstances available at the time the estimates are made, historical experience, risk of loss, general economic conditions and trends, and the assessment of the probable future outcome. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the statement of operations in the period that they are determined.

Currency Translation: Assets and liabilities of non-U.S. subsidiaries, where the functional currency is not the U.S. dollar, have been translated at year-end exchange rates, and income and expense accounts have been translated using average exchange rates throughout the year. Adjustments resulting from the process of translating an entity’s financial statements into the U.S. dollar have been recorded in the equity section of the Consolidated Balance Sheet within Accumulated other comprehensive income (loss). Transactions that are denominated in a currency other than an entity’s functional currency are subject to changes in exchange rates with the resulting gains and losses recorded within Net earnings.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, demand deposits and all highly liquid investments with original maturities at the time of purchase of three months or less. The Company maintains amounts on deposit at various financial institutions, which may at times exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions and has not experienced any losses on such deposits.

Allowance for Doubtful Accounts: In accordance with Accounting Standard Update (ASU) 2016-13, “Financial Instruments - Credit Losses” (ASU 2016-13), the Company maintains an allowance for doubtful accounts receivable which represents the best estimate of probable loss inherent in the Company's accounts receivable portfolio. This estimate is based upon a two-step policy that results in the total recorded allowance for doubtful accounts. The first step is to record a portfolio reserve based on the aging of the outstanding accounts receivable portfolio and the Company's historical experience with the Company's end markets, customer base and products. The second step is to create a specific reserve for significant accounts as to which the customer's ability to satisfy their financial obligation to the Company is in doubt due to circumstances such as bankruptcy, deteriorating operating results or financial position. In these circumstances, management uses its judgment to record an allowance based on the best estimate of probable loss, factoring in such considerations as the market value of collateral, if applicable. Actual results could differ from those estimates. These estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the Consolidated Statement of Comprehensive Income in the period that they are determined. The Company reserved $40.0 million and $32.2 million for doubtful accounts as of December 31, 2020 and 2019, respectively.

Inventories: Depending on the business, U.S. inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method or the lower of cost or market using the first-in, first-out (FIFO) method. Non-U.S. inventories are primarily stated at the lower of cost or market using the FIFO method. At December 31, 2020 and 2019, approximately 60% and 62%, respectively, of all inventory utilized the LIFO method.

Property, Plant and Equipment: Property, plant and equipment are stated at cost, less accumulated depreciation. Assets placed in service are recorded at cost and depreciated using the straight-line method over the estimated useful life of the asset except for leasehold improvements, which are depreciated over the shorter of their economic useful life or their lease term. The range of useful lives used to depreciate property, plant and equipment is as follows:

Buildings			10			to			50			years
Machinery and equipment			2			to			12			years
Software			2			to			7			years

F-12

Major expenditures for replacements and significant improvements that increase asset values and extend useful lives are also capitalized. Capitalized costs are amortized over their estimated useful lives using the straight-line method. Repairs and maintenance expenditures that do not extend the useful life of the asset are charged to expense as incurred. The carrying amounts of assets that are sold or retired and the related accumulated depreciation are removed from the accounts in the year of disposal, and any resulting gain or loss is reflected within current earnings.

Per ASC 360, "Property, Plant, and Equipment" (ASC 360), the Company assesses the recoverability of the carrying value of its property, plant and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset group to the future net undiscounted cash flows expected to be generated by the asset group. If the undiscounted cash flows are less than the carrying amount of the asset group, an impairment loss is recognized for the amount by which the carrying value of the asset group exceeds the fair value of the asset group.

Goodwill and Intangible Assets: The Company records as goodwill the excess of the purchase price over the fair value of the net assets acquired in a business combination. In accordance with ASC 350, "Intangibles-Goodwill and Other" (ASC 350), goodwill and other indefinite-lived intangible assets are tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset is more likely than not less than the carrying amount of the asset. In addition, an interim impairment test is completed upon a triggering event or when there is a reorganization of reporting structure or disposal of all or a portion of a reporting unit.

Impairment of goodwill is assessed at the reporting unit level and begins with an optional qualitative assessment to determine if it is more likely than not that the fair value of each reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test under ASC 350. For those reporting units that bypass or fail the qualitative assessment, the test compares the carrying amount of the reporting unit to its estimated fair value. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. To the extent that the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss will be recognized for the amount by which the reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.

Intangible assets such as patents, customer-related intangible assets and other intangible assets with finite useful lives are amortized on a straight-line basis over their estimated economic lives. The weighted-average useful lives approximate the following:

Customer relationships			17			years
Other			10			years

The Company assesses the recoverability of the carrying value of its intangible assets with finite useful lives whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset group to the future net undiscounted cash flows expected to be generated by the asset group. If the undiscounted cash flows are less than the carrying amount of the asset group, an impairment loss is recognized for the amount by which the carrying value of the asset group exceeds the fair value of the asset group.

Business Combinations: In accordance with ASC 805, "Business Combinations" (ASC 805), acquisitions are recorded using the acquisition method of accounting. The Company includes the operating results of acquired entities from their respective dates of acquisition. The Company recognizes and measures the identifiable assets acquired, liabilities assumed, and any non-controlling interest as of the acquisition date fair value. The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed and any non-controlling interest is recognized as goodwill. Costs incurred as a result of a business combination other than costs related to the issuance of debt or equity securities are recorded in the period the costs are incurred.

Employee Benefit Plans: The Company provides a range of benefits, including pensions, postretirement and postemployment benefits to eligible current and former employees. Determining the cost associated with such benefits is dependent on various actuarial assumptions, including discount rates, expected return on plan assets, compensation increases, mortality, turnover rates, and healthcare cost trend rates. Actuaries perform the required calculations to determine expense in accordance with GAAP. Actual results may differ from the actuarial assumptions and are generally accumulated into Accumulated other comprehensive income (loss) and amortized into Net earnings over future periods. The Company reviews its actuarial assumptions at each measurement date and makes modifications to the assumptions based on current rates and trends, if appropriate.

Loss Contingencies: Liabilities are recorded for various contingencies arising in the normal course of business. The Company has recorded reserves in the financial statements related to these matters, which are developed using input derived from actuarial estimates and historical and anticipated experience data depending on the nature of the reserve, and in certain instances

F-13

with consultation of legal counsel, internal and external consultants and engineers. Subject to the uncertainties inherent in estimating future costs for these types of liabilities, the Company believes its estimated reserves are reasonable and does not believe the final determination of the liabilities with respect to these matters would have a material effect on the financial condition, results of operations, liquidity or cash flows of the Company for any year.

Environmental Costs: The Company is subject to laws and regulations relating to protecting the environment. Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and can be reasonably estimated, generally no later than the completion of feasibility studies or the Company’s commitment to a plan of action. The assessment of this liability, which is calculated based on existing remediation technology, does not reflect any offset for possible recoveries from insurance companies, and is not discounted.

Asbestos Matters: Prior to the Petition Date, certain of the Company's wholly-owned subsidiaries and former companies were named as defendants in asbestos-related lawsuits in state and federal courts. The Company recorded a liability for actual and anticipated future claims as well as an asset for anticipated insurance settlements. Asbestos-related defense costs were excluded from the asbestos claims liability and were recorded separately as services were incurred. None of the Company's existing or previously-owned businesses were a producer or manufacturer of asbestos. The Company recorded certain income and expenses associated with asbestos liabilities and corresponding insurance recoveries within discontinued operations, net of tax, as they related to previously divested businesses, except for amounts associated with the predecessor of Murray's asbestos liabilities and corresponding insurance recoveries, which were recorded within continuing operations.

Product Warranties: Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. The Company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available. The Company's extended warranty liability represents the deferred revenue associated with its extended warranty contracts and is amortized into revenue on a straight-line basis over the life of the contract, unless another method is more representative of the costs incurred. The Company assesses the adequacy of its liability by evaluating the expected costs under its existing contracts to ensure these expected costs do not exceed the extended warranty liability.

Income Taxes: Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. The Company recognizes future tax benefits, such as net operating losses and tax credits, to the extent that realizing these benefits is considered in its judgment to be more likely than not. The Company regularly reviews the recoverability of its deferred tax assets considering its historic profitability, projected future taxable income, timing of the reversals of existing temporary differences and the feasibility of its tax planning strategies. Where appropriate, the Company records a valuation allowance with respect to a future tax benefit.

Revenue Recognition: Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of the Company's revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of the Company's revenues are recognized over time as the customer simultaneously receives control as the Company performs work under a contract. For these arrangements, the cost-to-cost input method is used as it best depicts the transfer of control to the customer that occurs as the Company incurs costs. See Note 13 to the Consolidated Financial Statements for additional information regarding revenue recognition.

Research and Development Costs: The Company conducts research and development activities for the purpose of developing and improving new products and services. These expenditures are expensed when incurred. For the years ended December 31, 2020, 2019 and 2018, these expenditures amounted to $165.0 million, $174.2 million and $166.7 million, respectively.

Recent Accounting Pronouncements

The FASB ASC is the sole source of authoritative GAAP other than the Securities and Exchange Commission (SEC) issued rules and regulations that apply only to SEC registrants. The FASB issues an ASU to communicate changes to the codification. The Company considers the applicability and impact of all ASU's. ASU's not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements.

F-14

Recently Adopted Accounting Pronouncements

In October 2020, the FASB issued ASU 2020-09, "Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762" (ASU 2020-09), which amends Topic 470 and certain other topics to conform to disclosure rules on guaranteed debt offerings in SEC Release No.33-10762. The SEC adopted amendments to the financial disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered in Rule 3-10 of Regulations S-X, and affiliates whose securities registered or being registered in Rule 3-16 of Regulation S-X. The amended rules aim to improve disclosure, reduce compliance burdens for issuers and increase investor protection. ASU 2020-09 is effective on January 4, 2021, pursuant to SEC Release No. 33-10762 with early application permitted. The Company early adopted this standard during the first quarter of 2020 and elected to disclose summarized financial information of the issuers and guarantors on a combined basis within Management's Discussion and Analysis of Financial Condition and Results of Operations.

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

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

In February 2016, the FASB issued ASU 2016-02, “Leases” (ASC 842), which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. The Company adopted this standard using a modified-retrospective approach as of January 1, 2019. Under this approach, the Company recognized and recorded a right-of-use (ROU) asset and related lease liability on the Consolidated Balance Sheet of $521 million with no impact to Retained earnings. Reporting periods prior to January 1, 2019 continue to be presented in accordance with previous lease accounting guidance under GAAP. As part of the adoption, the Company elected the package of practical expedients permitted under the transition guidance which includes the ability to carry forward historical lease classification. Refer to Note 11, “Leases,” for a further discussion on the adoption of ASC 842.

In August 2017, the FASB issued ASU 2017-12, "Derivatives and hedging (Topic 815): Targeted improvements to accounting for hedging activities" (ASU 2017-12). This standard more closely aligns the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This standard also addresses specific limitations in current GAAP by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. Additionally, by aligning the timing of recognition of hedge results with the earnings effect of the hedged item for cash flow and net investment hedges, and by including the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is presented, the results of an entity’s hedging program and the cost of executing that program will be more visible to users of financial statements. ASU 2017-12 is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company adopted this standard on October 1, 2018 with no material impact to the financial statements.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (ASU 2016-16) which removed the prohibition in Topic 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. As a result, the income tax consequences of an intra-entity transfer of assets other than inventory will be recognized in the current period income statement rather than being deferred until the assets leave the consolidated group. The Company applied ASU 2016-16 on a modified retrospective basis through a cumulative effect adjustment which reduced Retained earnings by $9.1 million as of January 1, 2018.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" (ASC 606), which created a comprehensive, five-step model for revenue recognition that requires a company to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Under ASC 606, a company will be required to use more judgment and make more estimates when considering contract terms as well as relevant facts and circumstances when identifying performance obligations, estimating the amount of variable consideration in the transaction price and allocating the transaction price to each separate performance

F-15

obligation. The Company adopted this standard on January 1, 2018 using the modified retrospective approach and recorded a cumulative effect adjustment to increase Retained earnings by $2.4 million with related amounts not materially impacting the Balance Sheet. Refer to Note 13, “Revenue,” for a further discussion on the adoption of ASC 606.

Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" (ASU 2019-12), which simplifies certain aspects of income tax accounting guidance in ASC 740, reducing the complexity of its application. Certain exceptions to ASC 740 presented within the ASU include: intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date loss in interim periods, among others. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020 including interim periods therein with early adoption permitted. The Company adopted this standard on January 1, 2021 with no material impact on its financial statements.

NOTE 4. INVENTORIES

Depending on the business, U.S. inventories are stated at the lower of cost or market using the LIFO method or the lower of cost or market using the FIFO method. Non-U.S. inventories are primarily stated at the lower of cost or market using the FIFO method.

At December 31, the major classes of inventory were as follows:

In millions						2020						2019
Raw materials						$	305.0					$	333.5
Work-in-process						163.9						173.7
Finished goods						761.4						804.9
						1,230.3						1,312.1
LIFO reserve						(41.1)						(33.5)
Total						$	1,189.2					$	1,278.6

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

NOTE 5. PROPERTY, PLANT AND EQUIPMENT

At December 31, the major classes of property, plant and equipment were as follows:

In millions						2020						2019
Land						$	40.7					$	40.1
Buildings						676.7						660.0
Machinery and equipment						1,749.3						1,600.2
Software						638.0						655.2
						3,104.7						2,955.5
Accumulated depreciation						(1,755.2)						(1,603.5)
Total						$	1,349.5					$	1,352.0

Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was $172.8 million, $167.2 million and $160.7 million, which include amounts for software amortization of $50.2 million, $55.4 million and $51.6 million, respectively.

NOTE 6. GOODWILL

The Company records as goodwill the excess of the purchase price over the fair value of the net assets acquired in a business combination. Measurement period adjustments may be recorded once a final valuation has been performed. Goodwill is tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the reporting unit may be less than its carrying value. In addition, an interim impairment test is completed upon a triggering event or when there is a reorganization of reporting structure or disposal of all or a portion of a reporting unit.

In connection with the new organizational model and business segment structure, the Company performed a goodwill impairment assessment immediately prior to the reorganization becoming effective, the results of which did not indicate any

F-16

goodwill impairment. The Company then reassigned its goodwill between the newly designated reporting units using a relative fair value approach. Subsequent to the reassignment, the Company performed a second goodwill impairment assessment under the new reporting structure, the results of which also did not indicate any goodwill impairment.

The reassigned amounts of goodwill as of December 31, 2018 and the changes in the carrying amount of goodwill are as follows:

In millions						Americas						EMEA						Asia Pacific						Total
Net balance as of December 31, 2018						$	3,809.4					$	747.3					$	542.5					$	5,099.2
Acquisitions (1)						45.3						—						—						45.3
Currency translation						4.1						(16.2)						(6.7)						(18.8)
Net balance as of December 31, 2019						3,858.8						731.1						535.8						5,125.7
Acquisitions (1)						130.1						—						—						130.1
Deconsolidation of certain entities under Chapter 11 (2)						(9.2)						—						—						(9.2)
Currency translation						0.3						62.4						33.5						96.2
Net balance as of December 31, 2020						$	3,980.0					$	793.5					$	569.3					$	5,342.8

(1) Refer to Note 19, "Acquisitions and Divestitures" for more information regarding acquisitions.

(2) Refer to Note 22, "Commitments and Contingencies", for more information regarding the Chapter 11 bankruptcy and asbestos-related matters.

The net goodwill balances at December 31, 2020, 2019 and 2018 include $2,496.0 million of accumulated impairment. The accumulated impairment relates entirely to a charge recorded in 2008.

NOTE 7. INTANGIBLE ASSETS

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

The following table sets forth the gross amount and related accumulated amortization of the Company’s intangible assets at December 31:

						2020																		2019
In millions						Gross carrying amount						Accumulated amortization						Net carrying amount						Gross carrying amount						Accumulated amortization						Net carrying amount
Customer relationships						$	2,010.2					$	(1,362.4)					$	647.8					$	1,928.5					$	(1,239.2)					$	689.3
Other						210.7						(199.4)						11.3						212.2						(203.4)						8.8
Total finite-lived intangible assets						$	2,220.9					$	(1,561.8)					$	659.1					$	2,140.7					$	(1,442.6)					$	698.1
Trademarks (indefinite-lived)						2,627.3						—						2,627.3						2,625.5						—						2,625.5
Total						$	4,848.2					$	(1,561.8)					$	3,286.4					$	4,766.2					$	(1,442.6)					$	3,323.6

Intangible asset amortization expense for 2020, 2019 and 2018 was $115.7 million, $116.7 million and $116.8 million, respectively. Future estimated amortization expense on existing intangible assets in each of the next five years amounts to approximately $122 million for 2021, $122 million for 2022, $121 million for 2023, $120 million for 2024, and $89 million for 2025.

F-17

NOTE 8. DEBT AND CREDIT FACILITIES

At December 31, Short-term borrowings and current maturities of long-term debt consisted of the following:

In millions						2020						2019
Debentures with put feature						$	343.0					$	343.0
2.625% Senior notes due 2020 (1)						—						299.8
2.900% Senior notes due 2021 (2)						299.9						—
9.000% Debentures due 2021 (3)						125.0						—
Other current maturities of long-term debt						7.7						7.5
Total						$	775.6					$	650.3

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

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

(3) The 9.000% Debentures are due in August 2021.

The Company's short-term obligations primarily consist of current maturities of long-term debt. The weighted-average interest rate for Short-term borrowings and current maturities of long-term debt at December 31, 2020 and 2019 was 5.4% and 4.6%, respectively.

Commercial Paper Program

The Company uses borrowings under its commercial paper program for general corporate purposes. The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $2.0 billion as of December 31, 2020. Under the commercial paper program, the Company may issue notes from time to time through Trane Technologies Global Holding Company Limited or Trane Technologies Luxembourg Finance S.A. Each of Trane Technologies plc, Trane Technologies Irish Holdings Unlimited Company, Trane Technologies Lux International Holding Company S.à.r.l., Trane Technologies Global Holding Company Limited and Trane Technologies Company LLC provided irrevocable and unconditional guarantees for any notes issued under the commercial paper program. The Company had no outstanding balance under its commercial paper program as of December 31, 2020 and December 31, 2019.

Debentures with Put Feature

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

F-18

At December 31, long-term debt excluding current maturities consisted of:

In millions						2020						2019
2.900% Senior notes due 2021 (1)						—						299.1
9.000% Debentures due 2021 (2)						—						124.9
4.250% Senior notes due 2023						698.4						697.8
7.200% Debentures due 2020-2025						29.9						37.3
3.550% Senior notes due 2024						497.3						496.6
6.480% Debentures due 2025						149.7						149.7
3.500% Senior notes due 2026						397.3						396.8
3.750% Senior notes due 2028						545.6						545.1
3.800% Senior notes due 2029						744.4						743.6
5.750% Senior notes due 2043						494.7						494.5
4.650% Senior notes due 2044						296.1						295.9
4.300% Senior notes due 2048						296.2						296.0
4.500% Senior notes due 2049						345.7						345.5
Other loans and notes						1.2						0.1
Total						$	4,496.5					$	4,922.9

(1) The 2.900% Senior notes are due in February 2021 and have been reclassified from noncurrent to current.

(2) The 9.000% Debentures are due in August 2021 and have been reclassified from noncurrent to current.

Scheduled maturities of long-term debt, including current maturities, as of December 31, 2020 are as follows:

In millions
2021			$	775.6
2022			7.9
2023			706.3
2024			505.1
2025			157.2
Thereafter			3,120.0
Total			$	5,272.1

Issuance of Senior Notes

In March 2019, the Company issued $1.5 billion principal amount of senior notes in three tranches through Trane Technologies Luxembourg Finance S.A., an indirect, wholly-owned subsidiary. The tranches consist of $400 million aggregate principal amount of 3.500% senior notes due 2026, $750 million aggregate principal amount of 3.800% senior notes due 2029 and $350 million aggregate principal amount of 4.500% senior notes due 2049. The notes are fully and unconditionally guaranteed by each of Trane Technologies plc, Trane Technologies Irish Holdings Unlimited Company, Trane Technologies Lux International Holding Company S.à.r.l, Trane Technologies Global Holding Company Limited, Trane Technologies HoldCo Inc. and Trane Technologies Company LLC. The Company has the option to redeem the notes in whole or in part at any time, prior to their stated maturity date at redemption prices set forth in the indenture agreement. The notes are subject to certain customary covenants, however, none of these covenants are considered restrictive to the Company’s operations.

Other Credit Facilities

On June 4, 2020, the Company entered into a new $1.0 billion senior unsecured revolving credit facility which matures in March 2022 and terminated its $1.0 billion facility set to expire in March 2021. As a result, the Company maintains two $1.0 billion senior unsecured revolving credit facilities, one of which matures in March 2022 and the other in April 2023 (the Facilities) through its wholly-owned subsidiaries, Trane Technologies HoldCo Inc., Trane Technologies Global Holding Company Limited and Trane Technologies Luxembourg Finance S.A. (collectively, the Borrowers). Each senior unsecured credit facility provides support for the Company's commercial paper program and can be used for working capital and other general corporate purposes. Trane Technologies plc, Trane Technologies Irish Holdings Unlimited Company, Trane Technologies Lux International Holding Company S.à.r.l. and Trane Technologies Company LLC each provide irrevocable and unconditional guarantees for these Facilities. In addition, each Borrower will guarantee the obligations under the Facilities of the other Borrower. Total commitments of $2.0 billion were unused at December 31, 2020 and December 31, 2019.

F-19

Fair Value of Debt

The Company considers the carrying value of short-term borrowings to be a reasonable estimate of the fair value due to the short-term nature of the instruments. The fair value of the Company's debt instruments at December 31, 2020 and December 31, 2019 was $6.3 billion and $6.2 billion, respectively. The Company measures the fair value of its long-term debt instruments for disclosure purposes based upon observable market prices quoted on public exchanges for similar assets. These fair value inputs are considered Level 2 within the fair value hierarchy.

NOTE 9. FINANCIAL INSTRUMENTS

In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors. These fluctuations can increase the cost of financing, investing and operating the business. The Company may use various financial instruments, including derivative instruments, to manage the risks associated with interest rate, commodity price and foreign currency exposures. These financial instruments are not used for trading or speculative purposes. The Company recognizes all derivatives on the Consolidated Balance Sheet at their fair value as either assets or liabilities.

On the date a derivative contract is entered into, the Company designates the derivative instrument as a cash flow hedge of a forecasted transaction or as an undesignated derivative. The Company formally documents its hedge relationships, including identification of the derivative instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. This process includes linking derivative instruments that are designated as hedges to specific assets, liabilities or forecasted transactions.

The Company assesses at inception and at least quarterly thereafter, whether the derivatives used in cash flow hedging transactions are highly effective in offsetting the changes in the cash flows of the hedged item. To the extent the derivative is deemed to be a highly effective hedge, the fair market value changes of the instrument are recorded to Accumulated other comprehensive income (loss) (AOCI). If the hedging relationship ceases to be highly effective, or it becomes probable that a forecasted transaction is no longer expected to occur, the hedging relationship will be undesignated and any future gains and losses on the derivative instrument will be recorded in Net earnings.

The fair values of derivative instruments included within the Consolidated Balance Sheet as of December 31 were as follows:

						Derivative assets												Derivative liabilities
In millions						2020						2019						2020						2019
Derivatives designated as hedges:
Currency derivatives						$	0.7					$	0.1					$	1.7					$	3.9
Derivatives not designated as hedges:
Currency derivatives						1.5						1.0						4.8						3.3
Total derivatives						$	2.2					$	1.1					$	6.5					$	7.2

Asset and liability derivatives included in the table above are recorded within Other current assets and Accrued expenses and other current liabilities, respectively.

Currency Hedging Instruments

The notional amount of the Company’s currency derivatives was $0.5 billion at both December 31, 2020 and 2019, respectively. At December 31, 2020 and 2019, a net loss of $0.7 million and $2.9 million, net of tax, respectively, was included in AOCI related to the fair value of the Company’s currency derivatives designated as accounting hedges. The amount expected to be reclassified into Net earnings over the next twelve months is a loss of $0.6 million. The actual amounts that will be reclassified to Net earnings may vary from this amount as a result of changes in market conditions. Gains and losses associated with the Company’s currency derivatives not designated as hedges are recorded in Net earnings as changes in fair value occur. At December 31, 2020, the maximum term of the Company’s currency derivatives was approximately 12 months, except for currency derivatives in place related to a long-term contract.

Other Derivative Instruments

In the past, the Company utilized forward-starting interest rate swaps and interest rate locks to manage interest rate exposure in periods prior to the anticipated issuance of certain fixed-rate debt. These instruments were designated as cash flow hedges and had a notional amount of $1.3 billion. Consequently, when the contracts were settled upon the issuance of the underlying debt, any realized gains or losses in the fair values of the instruments were deferred into AOCI. These deferred gains or losses are subsequently recognized in Interest expense over the term of the related notes. The net unrecognized gain in AOCI was $5.3 million and $6.0 million at December 31, 2020 and at December 31, 2019. The net deferred gain at December 31, 2020 will continue to be amortized over the term of notes with maturities ranging from 2023 to 2044. The amount expected to be

F-20

amortized over the next twelve months is a net gain of $0.7 million. The Company has no forward-starting interest rate swaps or interest rate lock contracts outstanding at December 31, 2020 or 2019.

The following table represents the amounts associated with derivatives designated as hedges affecting Net earnings and AOCI for the years ended December 31:

						Amount of gain (loss) recognized in AOCI																		Location of gain (loss) reclassified from AOCI and recognized into Net earnings						Amount of gain (loss) reclassified from AOCI and recognized into Net earnings
In millions						2020						2019						2018									2020						2019						2018
Currency derivatives - continuing						$	3.3					$	(2.5)					$	0.7					Cost of goods sold						$	(2.6)					$	(1.5)					$	(1.0)
Currency derivatives - discontinued						—						(0.2)						0.5						Discontinued operations						—						0.1						0.2
Interest rate swaps & locks						—						—						—						Interest expense						0.7						0.7						(0.1)
Total						$	3.3					$	(2.7)					$	1.2											$	(1.9)					$	(0.7)					$	(0.9)

The following table represents the amounts associated with derivatives not designated as hedges affecting Net earnings for the years ended December 31:

In millions						Location of gain (loss) recognized in Net earnings						Amount of gain (loss) recognized in Net earnings
			2020						2019						2018
Currency derivatives - continuing						Other income (expense), net						$	7.5					$	(5.2)					$	(30.0)
Currency derivatives - discontinued						Discontinued operations						(0.4)						(1.2)						0.4
Total												$	7.1					$	(6.4)					$	(29.6)

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

The following table presents the effects of the Company's designated financial instruments on the associated financial statement line item within the Consolidated Statement of Comprehensive Income where the financial instrument are recorded for the years ended December 31:

						Classification and amount of gain (loss) recognized in income on cash flow hedging relationships
						2020												2019												2018
In millions						Cost of goods sold						Interest expense						Cost of goods sold						Interest expense						Cost of goods sold						Interest expense
Total amounts presented in the Consolidated Statements of Comprehensive Income						$	(8,651.3)					$	(248.7)					$	(9,085.5)					$	(242.8)					$	(8,582.5)					$	(221.0)
Gain (loss) on cash flow hedging relationships
Currency derivatives:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings						$	(2.6)					$	—					$	(1.5)					$	—					$	(1.0)					$	—
Amount excluded from effectiveness testing recognized in net earnings based on changes in fair value and amortization						$	(2.1)					$	—					$	(3.0)					$	—					$	(0.1)					$	—
Interest rate swaps & locks:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings						$	—					$	0.7					$	—					$	0.7					$	—					$	(0.1)

For the years ended December 31, 2019 and 2018*,* the amount of gain (loss) reclassified from AOCI and recognized into Net earnings also included a gain of $0.1 million and $0.2 million, respectively, related to the historical results of Ingersoll Rand Industrial. The gains were recorded within Discontinued operations, net of tax.

Concentration of Credit Risk

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

F-21

NOTE 10. FAIR VALUE MEASUREMENTS

ASC 820, "Fair Value Measurement," (ASC 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

• Level 1: Observable inputs such as quoted prices in active markets;

• Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2020:

In millions			Fair Value						Fair value measurements
			Level 1						Level 2						Level 3
Assets:
Derivative instruments			$	2.2					$	—					$	2.2					$	—
Liabilities:
Derivative instruments			$	6.5					$	—					$	6.5					$	—

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2019:

In Millions			Fair Value						Fair value measurements
			Level 1						Level 2						Level 3
Assets:
Derivative instruments			$	1.1					$	—					$	1.1					$	—
Liabilities:
Derivative instruments			$	7.2					$	—					$	7.2					$	—

Derivative instruments include forward foreign currency contracts and instruments related to non-functional currency balance sheet exposures. The fair value of the derivative instruments are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily accessible and observable.

The carrying values of cash and cash equivalents, accounts receivable and accounts payable are a reasonable estimate of their fair value due to the short-term nature of these instruments. There have been no transfers between levels of the fair value hierarchy.

NOTE 11. LEASES

The Company’s lease portfolio includes various contracts for real estate, vehicles, information technology and other equipment. At contract inception, the Company determines a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as the right to direct the use of that asset. If a contract is considered to be a lease, the Company recognizes a lease liability based on the present value of the future lease payments, with an offsetting entry to recognize a right-of-use asset. Options to extend or terminate a lease are included when it is reasonably certain an option will be exercised. As a majority of the Company’s leases do not provide an implicit rate within the lease, an incremental borrowing rate is used which is based on information available at the commencement date.

F-22

The following table includes a summary of the Company's lease portfolio and Balance Sheet classification:

In millions			Classification						December 31, 2020						December 31, 2019
Assets
Operating lease right-of-use assets (1)			Other noncurrent assets						$	409.0					$	469.4
Liabilities
Operating lease current			Other current liabilities						138.8						145.0
Operating lease noncurrent			Other noncurrent liabilities						276.5						329.9
Weighted average remaining lease term									4.0 years						4.3 years
Weighted average discount rate									3.3		%				3.6		%

(1) Prepaid lease payments and lease incentives are recorded as part of the right-of-use asset. The net impact was $6.3 million and $5.5 million at December 31, 2020 and December 31, 2019, respectively.

The Company accounts for each separate lease component of a contract and its associated non-lease component as a single lease component. In addition, the Company utilizes a portfolio approach for the vehicle, information technology and equipment asset classes as the application of the lease model to the portfolio would not differ materially from the application of the lease model to the individual leases within the portfolio.

The following table includes lease costs and related cash flow information for the year ended December 31:

In millions			2020						2019
Operating lease expense			$	173.0					$	163.5
Variable lease expense			24.9						19.9
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			172.2						161.5
Right-of-use assets obtained in exchange for new operating lease liabilities			114.6						162.9

Operating lease expense is recognized on a straight-line basis over the lease term. In addition, the Company has certain leases that contain variable lease payments which are based on an index, a rate referenced in the lease or on the actual usage of the leased asset. These payments are not included in the right-of-use asset or lease liability and are expensed as incurred as variable lease expense.

Maturities of lease obligations were as follows:

In millions			December 31, 2020
Operating leases:
2021			$	152.0
2022			114.1
2023			78.2
2024			46.8
2025			22.8
After 2025			34.5
Total lease payments			$	448.4
Less: Interest			(33.1)
Present value of lease liabilities			$	415.3

F-23

NOTE 12. PENSIONS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

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

Pension Plans

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

In connection with completion of the Transaction, the Company transferred certain pension obligations for current and former employees of Ingersoll Rand Industrial to Gardner Denver. The transfer of these obligations reduced pension liabilities by $486.2 million, pension assets by $351.7 million and AOCI by $111.3 million.

F-24

The following table details information regarding the Company’s pension plans at December 31:

In millions						2020						2019
Change in benefit obligations:
Benefit obligation at beginning of year						$	3,851.2					$	3,465.3
Service cost						58.3						73.6
Interest cost						83.8						119.1
Employee contributions						1.0						1.1
Amendments						1.9						5.7
Actuarial (gains) losses (1)						317.7						422.8
Benefits paid						(189.2)						(225.3)
Currency translation						43.8						9.0
Curtailments, settlements and special termination benefits						(7.8)						(3.1)
Impact of the Transaction						(486.2)						—
Other, including expenses paid						(11.7)						(17.0)
Benefit obligation at end of year						$	3,662.8					$	3,851.2
Change in plan assets:
Fair value at beginning of year						$	3,136.8					$	2,766.9
Actual return on assets						395.6						526.1
Company contributions						99.7						83.1
Employee contributions						1.0						1.1
Benefits paid						(189.2)						(225.3)
Currency translation						39.5						12.0
Settlements						(7.8)						(5.3)
Impact of the Transaction						(351.7)						—
Other, including expenses paid						(9.3)						(21.8)
Fair value of assets end of year						$	3,114.6					$	3,136.8
Net unfunded liability						$	(548.2)					$	(714.4)
Amounts included in the balance sheet:
Other noncurrent assets						$	72.8					$	50.0
Assets held-for-sale						—						0.3
Accrued compensation and benefits						(22.9)						(7.2)
Postemployment and other benefit liabilities						(598.1)						(617.3)
Liabilities held-for-sale						—						(140.2)
Net amount recognized						$	(548.2)					$	(714.4)

(1) Actuarial (gains) losses primarily resulted from changes in discount rates

It is the Company’s objective to contribute to the pension plans to ensure adequate funds, and no less than required by law, are available in the plans to make benefit payments to plan participants and beneficiaries when required. However, certain plans are not or cannot be funded due to either legal, accounting, or tax requirements in certain jurisdictions. As of December 31, 2020, approximately seven percent of the Company's projected benefit obligation relates to plans that cannot be funded.

F-25

The pretax amounts recognized in Accumulated other comprehensive income (loss) were as follows:

In millions						Prior service benefit (cost)						Net actuarial gains (losses)						Total
December 31, 2019						$	(32.4)					$	(800.2)					$	(832.6)
Current year changes recorded to AOCI						(1.9)						(43.2)						(45.1)
Amortization reclassified to earnings						5.3						43.7						49.0
Settlements/curtailments reclassified to earnings						—						(1.8)						(1.8)
Impact of the Transaction						1.3						110.0						111.3
Currency translation and other						(0.6)						(9.8)						(10.4)
December 31, 2020						$	(28.3)					$	(701.3)					$	(729.6)

Weighted-average assumptions used to determine the benefit obligation at December 31 were as follows:

						2020						2019
Discount rate:
U.S. plans						2.52		%				3.22		%
Non-U.S. plans						1.27		%				1.66		%
Rate of compensation increase:
U.S. plans						4.00		%				4.00		%
Non-U.S. plans						3.75		%				3.75		%

The accumulated benefit obligation for all defined benefit pension plans was $3,566.4 million and $3,734.5 million at December 31, 2020 and 2019, respectively. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations more than plan assets were $3,128.7 million, $3,043.9 million and $2,510.9 million, respectively, as of December 31, 2020, and $3,405.7 million, $3,308.2 million and $2,645.1 million, respectively, as of December 31, 2019.

Pension benefit payments are expected to be paid as follows:

In millions
2021			$	210.7
2022			204.5
2023			207.1
2024			200.7
2025			246.6
2026-2030			960.9

F-26

The components of the Company’s net periodic pension benefit costs for the years ended December 31 include the following:

In millions						2020						2019						2018
Service cost						$	58.3					$	73.6					$	75.0
Interest cost						83.8						119.1						109.7
Expected return on plan assets						(121.1)						(138.5)						(146.6)
Net amortization of:
Prior service costs (benefits)						5.3						5.0						4.2
Plan net actuarial (gains) losses						43.7						54.3						51.3
Net periodic pension benefit cost						70.0						113.5						93.6
Net curtailment, settlement, and special termination benefits (gains) losses						(1.8)						4.5						2.3
Net periodic pension benefit cost after net curtailment and settlement (gains) losses						$	68.2					$	118.0					$	95.9
Amounts recorded in continuing operations:
Operating income						$	51.7					$	58.8					$	61.0
Other income/(expense), net						11.7						31.8						14.2
Amounts recorded in discontinued operations						4.8						27.4						20.7
Total						$	68.2					$	118.0					$	95.9

Pension benefit cost for 2021 is projected to be approximately $51 million.

Weighted-average assumptions used to determine net periodic pension cost for the years ended December 31 were as follows:

						2020						2019						2018
Discount rate:
U.S. plans
Service cost						3.36		%				4.24		%				3.70		%
Interest cost						2.78		%				3.88		%				3.24		%
Non-U.S. plans
Service cost						1.87		%				2.81		%				2.52		%
Interest cost						1.51		%				2.83		%				2.46		%
Rate of compensation increase:
U.S. plans						4.00		%				4.00		%				4.00		%
Non-U.S. plans						3.75		%				4.00		%				4.00		%
Expected return on plan assets:
U.S. plans						4.75		%				5.75		%				5.50		%
Non-U.S. plans						2.75		%				3.25		%				3.25		%

The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan’s investment policy, the types of assets held and target asset allocations. The expected long-term rate of return is determined as of the measurement date. The Company reviews each plan and its historical returns and target asset allocations to determine the appropriate expected long-term rate of return on plan assets to be used.

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

F-27

The fair values of the Company’s pension plan assets at December 31, 2020 by asset category were as follows:

						Fair value measurements																		Net asset value						Total fair value
In millions						Level 1						Level 2						Level 3
Cash and cash equivalents						$	3.1					$	34.2					$	—					$	—					$	37.3
Equity investments:
Registered mutual funds – equity specialty						—						—						—						65.1						65.1
Commingled funds – equity specialty						—						—						—						622.0						622.0
						—						—						—						687.1						687.1
Fixed income investments:
U.S. government and agency obligations						—						504.7						—						—						504.7
Corporate and non-U.S. bonds(a)						—						1,424.2						—						—						1,424.2
Asset-backed and mortgage-backed securities						—						48.4						—						—						48.4
Registered mutual funds – fixed income specialty						—						—						—						118.3						118.3
Commingled funds – fixed income specialty						—						—						—						153.3						153.3
Other fixed income(b)						—						—						28.3						—						28.3
						—						1,977.3						28.3						271.6						2,277.2
Derivatives						—						0.3						—						—						0.3
Real estate(c)						—						—						2.8						—						2.8
Other(d)						—						—						112.3						—						112.3
Total assets at fair value						$	3.1					$	2,011.8					$	143.4					$	958.7					$	3,117.0
Receivables and payables, net																														(2.4)
Net assets available for benefits																														$	3,114.6

The fair values of the Company’s pension plan assets at December 31, 2019 by asset category were as follows:

						Fair value measurements																		Net asset value						Total fair value
In millions						Level 1						Level 2						Level 3
Cash and cash equivalents						$	7.0					$	26.3					$	—					$	—					$	33.3
Equity investments:
Registered mutual funds – equity specialty						—						—						—						61.5						61.5
Commingled funds – equity specialty						—						—						—						665.2						665.2
						—						—						—						726.7						726.7
Fixed income investments:
U.S. government and agency obligations						—						528.5						—						—						528.5
Corporate and non-U.S. bonds(a)						—						1,393.0						0.4						—						1,393.4
Asset-backed and mortgage-backed securities						—						70.9						—						—						70.9
Registered mutual funds – fixed income specialty						—						—						—						103.3						103.3
Commingled funds – fixed income specialty						—						—						—						127.6						127.6
Other fixed income(b)						—						—						26.0						—						26.0
						—						1,992.4						26.4						230.9						2,249.7
Derivatives						—						0.4						—						—						0.4
Real estate(c)						—						—						3.4						—						3.4
Other(d)						—						—						114.1						—						114.1
Total assets at fair value						$	7.0					$	2,019.1					$	143.9					$	957.6					$	3,127.6
Receivables and payables, net																														9.2
Net assets available for benefits																														$	3,136.8

(a)This class includes state and municipal bonds.

(b)This class includes group annuity and guaranteed interest contracts.

(c)This class includes a private equity fund that invests in real estate.

(d)This investment comprises the Company's non-significant, non-US pension plan assets. It primarily includes insurance contracts.

F-28

Cash equivalents are valued using a market approach with inputs including quoted market prices for either identical or similar instruments. Fixed income securities are valued through a market approach with inputs including, but not limited to, benchmark yields, reported trades, broker quotes and issuer spreads. Commingled funds are valued at their daily net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient. NAVs are calculated by the investment manager or sponsor of the fund. Private real estate fund values are reported by the fund manager and are based on valuation or appraisal of the underlying investments. Refer to Note 10, "Fair Value Measurements" for additional information related to the fair value hierarchy defined by ASC 820. There have been no significant transfers between levels of the fair value hierarchy.

The Company made required and discretionary contributions to its pension plans of $99.7 million in 2020, $83.1 million in 2019, and $86.9 million in 2018 and currently projects that it will contribute approximately $56 million to its plans worldwide in 2021. The contribution in 2020 included $24.4 million to fund Ingersoll Rand Industrial plans prior to the completion of the Transaction. The Company’s policy allows it to fund an amount, which could be in excess of or less than the pension cost expensed, subject to the limitations imposed by current tax regulations. However, the Company anticipates funding the plans in 2021 in accordance with contributions required by funding regulations or the laws of each jurisdiction.

Most of the Company’s U.S. employees are covered by defined contribution plans. Employer contributions are determined based on criteria specific to the individual plans and amounted to approximately $111.0 million, $140.2 million and $131.9 million in 2020, 2019 and 2018, respectively. The Company’s contributions relating to non-U.S. defined contribution plans and other non-U.S. benefit plans were $19.2 million, $56.7 million and $52.0 million in 2020, 2019 and 2018, respectively.

Multiemployer Pension Plans

The Company also participates in a number of multiemployer defined benefit pension plans related to collectively bargained U.S. employees of Trane. The Company's contributions, and the administration of the fixed retirement payments, are determined by the terms of the related collective-bargaining agreements. These multiemployer plans pose different risks to the Company than single-employer plans, including:

1.The Company's contributions to multiemployer plans may be used to provide benefits to all participating employees of the program, including employees of other employers.

2.In the event that another participating employer ceases contributions to a plan, the Company may be responsible for any unfunded obligations along with the remaining participating employers.

3.If the Company chooses to withdraw from any of the multiemployer plans, the Company may be required to pay a withdrawal liability, based on the underfunded status of the plan.

As of December 31, 2020, the Company does not participate in any plans that are individually significant, nor is the Company an individually significant participant to any of these plans.

Postretirement Benefits Other Than Pensions

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

In connection with the completion of the Transaction, the Company transferred certain postretirement benefit obligations for current and former employees of Ingersoll Rand Industrial to Gardner Denver. The transfer of these obligations reduced postretirement plan liabilities by $28.7 million and increased AOCI by $5.5 million.

F-29

The following table details changes in the Company’s postretirement plan benefit obligations for the years ended December 31:

In millions						2020						2019
Benefit obligation at beginning of year						$	428.8					$	442.7
Service cost						2.4						2.6
Interest cost						9.7						14.8
Plan participants’ contributions						8.2						7.7
Actuarial (gains) losses (1)						9.3						6.7
Benefits paid, net of Medicare Part D subsidy (2)						(39.9)						(45.6)
Impact of the Transaction						(28.7)						—
Other						(0.7)						(0.1)
Benefit obligations at end of year						$	389.1					$	428.8

(1) Net actuarial losses primarily resulted from losses driven by changes in discount rates offset by gains driven by changes in per capita cost assumptions.

(2) Amounts are net of Medicare Part D subsidy of $0.7 million and $0.8 million in 2020 and 2019, respectively.

The benefit plan obligations are reflected in the Consolidated Balance Sheets as follows:

In millions						December 31, 2020						December 31, 2019
Accrued compensation and benefits						$	(37.1)					$	(38.3)
Postemployment and other benefit liabilities						(352.0)						(361.3)
Liabilities held-for-sale						—						(29.2)
Total						$	(389.1)					$	(428.8)

The pre-tax amounts recognized in Accumulated other comprehensive income (loss) were as follows:

In millions												Net actuarial gains (losses)
Balance at December 31, 2019												$	72.8
Gain (loss) in current period												(9.3)
Amortization reclassified to earnings												(5.6)
Impact of the Transaction												(5.5)
Balance at December 31, 2020												$	52.4

The components of net periodic postretirement benefit (income) cost for the years ended December 31 were as follows:

In millions						2020						2019						2018
Service cost						$	2.4					$	2.6					$	2.8
Interest cost						9.7						14.8						14.4
Net amortization of:
Prior service costs (benefits)						—						(0.3)						(3.8)
Net actuarial (gains) losses						(5.6)						(10.9)						(1.0)
Net periodic postretirement benefit cost						$	6.5					$	6.2					$	12.4
Amounts recorded in continuing operations:
Operating income						$	2.4					$	2.5					$	2.8
Other income/(expense), net						3.0						3.1						6.9
Amounts recorded in discontinued operations						1.1						0.6						2.7
Total						$	6.5					$	6.2					$	12.4

Postretirement cost for 2021 is projected to be approximately $6 million. The amount expected to be recognized in net periodic postretirement benefits cost in 2021 for net actuarial gains is approximately $2 million.

F-30

Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31 were as follows:

						2020						2019						2018
Discount rate:
Benefit obligations at December 31						2.25		%				2.99		%				4.05		%
Net periodic benefit cost
Service cost						3.18		%				4.13		%				3.47		%
Interest cost						2.73		%				3.67		%				2.94		%
Assumed health-care cost trend rates at December 31:
Current year medical inflation						6.50		%				6.75		%				6.45		%
Ultimate inflation rate						4.75		%				4.75		%				5.00		%
Year that the rate reaches the ultimate trend rate						2028						2028						2023

Benefit payments for postretirement benefits, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be paid as follows:

In millions
2021			$	37.1
2022			35.8
2023			33.7
2024			31.7
2025			29.9
2026 — 2030			121.7

NOTE 13. REVENUE

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

Performance Obligations

A performance obligation is a distinct good, service or a bundle of goods and services promised in a contract. The Company identifies performance obligations at the inception of a contract and allocates the transaction price to individual performance obligations to faithfully depict the Company’s performance in transferring control of the promised goods or services to the customer.

The following are the primary performance obligations identified by the Company:

Equipment and parts. The Company principally generates revenue from the sale of equipment and parts to customers and recognizes revenue at a point in time when control transfers to the customer. Transfer of control is generally determined based on the shipping terms of the contract.

Contracting and Installation. The Company enters into various construction-type contracts to design, deliver and build integrated solutions to meet customer specifications. These transactions provide services that range from the development and installation of new HVAC systems to the design and integration of critical building systems to optimize energy efficiency and overall performance. These contracts have a typical term of less than one year and are considered a single performance obligation as multiple combined goods and services promised in the contract represent a single output delivered to the customer. Revenues associated with contracting and installation contracts are recognized over time with progress towards completion measured using an input method as the basis to recognize revenue and an estimated profit. To-date efforts for work performed corresponds with and faithfully depicts transfer of control to the customer.

Services and Maintenance. The Company provides various levels of preventative and/or repair and maintenance type service agreements for its customers. The typical length of a contract is 12 months but can be as long as 60 months. Revenues associated with these performance obligations are primarily recognized over time on a straight-line basis over the life of the

F-31

contract as the customer simultaneously receives and consumes the benefit provided by the Company. However, if historical evidence indicates that the cost of providing these services on a straight-line basis is not appropriate, revenue is recognized over the contract period in proportion to the costs expected to be incurred while performing the service. Certain repair services do not meet the definition of over time revenue recognition as the Company does not transfer control to the customer until the service is completed. As a result, revenue related to these services is recognized at a point in time.

Extended warranties. The Company enters into various warranty contracts with customers related to its products. A standard warranty generally warrants that a product is free from defects in workmanship and materials under normal use and conditions for a certain period of time. The Company’s standard warranty is not considered a distinct performance obligation as it does not provide services to customers beyond assurance that the covered product is free of initial defects. An extended warranty provides a customer with additional time that the Company is liable for covered incidents associated with its products. Extended warranties are purchased separately and can last up to five years. As a result, they are considered separate performance obligations for the Company. Revenue associated with these performance obligations are primarily recognized over time on a straight-line basis over the life of the contract as the customer simultaneously receives and consumes the benefit provided by the Company. However, if historical evidence indicates that the cost of providing these services on a straight-line basis is not appropriate, revenue is recognized over the contract period in proportion to the costs expected to be incurred while performing the service. Refer to Note 22, "Commitments and Contingencies," for more information related to product warranties.

The transaction price allocated to performance obligations reflects the Company’s expectations about the consideration it will be entitled to receive from a customer. To determine the transaction price, variable and noncash consideration are assessed as well as whether a significant financing component exists. The Company includes variable consideration in the estimated transaction price when it is probable that significant reversal of revenue recognized would not occur when the uncertainty associated with variable consideration is subsequently resolved. The Company considers historical data in determining its best estimates of variable consideration, and the related accruals are recorded using the expected value method. The Company has performance guarantees related to energy savings contracts that are provided under the maintenance portion of contracting and installation agreements extending from 2021-2047. These performance guarantees represent variable consideration and are estimated as part of the overall transaction price. The Company has not recognized any significant adjustments to the transaction price due to variable consideration.

The Company enters into sales arrangements that contain multiple goods and services, such as equipment, installation and extended warranties. For these arrangements, each good or service is evaluated to determine whether it represents a distinct performance obligation and whether the sales price for each obligation is representative of standalone selling price. If available, the Company utilizes observable prices for goods or services sold separately to similar customers in similar circumstances to evaluate relative standalone selling price. List prices are used if they are determined to be representative of standalone selling prices. Where necessary, the Company ensures that the total transaction price is then allocated to the distinct performance obligations based on the determination of their relative standalone selling price at the inception of the arrangement.

The Company recognizes revenue for delivered goods or services when the delivered good or service is distinct, control of the good or service has transferred to the customer, and only customary refund or return rights related to the goods or services exist. The Company excludes from revenues taxes it collects from a customer that are assessed by a government authority.

F-32

Disaggregated Revenue

Net revenues by geography and major type of good or service for the year ended at December 31 were as follows:

In millions			2020						2019						2018
Americas
Equipment			$	6,479.0					$	6,880.4					$	6,236.6
Services and parts			3,206.9						3,179.1						2,982.8
Total Americas			$	9,685.9					$	10,059.5					$	9,219.4
EMEA
Equipment			$	1,119.9					$	1,208.0					$	1,271.7
Services and parts			528.2						554.6						559.4
Total EMEA			$	1,648.1					$	1,762.6					$	1,831.1
Asia Pacific
Equipment			$	773.6					$	879.7					$	917.3
Services and parts			347.1						374.1						376.0
Total Asia Pacific			$	1,120.7					$	1,253.8					$	1,293.3
Total Net revenues			$	12,454.7					$	13,075.9					$	12,343.8

Revenue from goods and services transferred to customers at a point in time accounted for approximately 81%, 82% and 82% of the Company's revenue for the years ended December 31, 2020, 2019 and 2018, respectively.

Contract Balances

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

In millions			2020						2019
Contract assets			$	255.4					$	172.6
Contract liabilities			1,077.0						941.9

The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In general, the Company receives payments from customers based on a billing schedule established in its contracts. Contract assets relate to the conditional right to consideration for any completed performance under the contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities relate to payments received in advance of performance under the contract or when the Company has a right to consideration that is unconditional before it transfers a good or service to the customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. During the years ended December 31, 2020 and 2019, changes in contract asset and liability balances were not materially impacted by any other factors.

Approximately 55% of the contract liability balance at December 31, 2019 was recognized as revenue during the year ended December 31, 2020. Additionally, approximately 40% of the contract liability balance at December 31, 2020 was classified as noncurrent and not expected to be recognized as revenue in the next 12 months.

NOTE 14. EQUITY

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

F-33

The changes in ordinary shares and treasury shares for the year ended December 31, 2020 were as follows:

In millions			Ordinary shares issued						Ordinary shares held in treasury
December 31, 2019			262.8						24.5
Shares issued under incentive plans			2.3						—
Repurchase of ordinary shares			(1.8)						—
December 31, 2020			263.3						24.5

Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. Shares acquired and canceled upon repurchase are accounted for as a reduction of Ordinary Shares and Capital in excess of par value, or Retained earnings to the extent Capital in excess of par value is exhausted. Shares acquired and held in treasury are presented separately on the balance sheet as a reduction to Equity and recognized at cost.

In October 2018, the Company's Board of Directors authorized the repurchase of up to $1.5 billion of its ordinary shares under a share repurchase program (2018 Authorization) upon completion of the prior authorized share repurchase program. No material amounts were repurchased under this program in 2018. During the year ended December 31, 2019, the Company repurchased and canceled approximately $750 million of its ordinary shares leaving approximately $750 million remaining under the 2018 Authorization. During the year ended December 31, 2020, the Company repurchased and canceled approximately $250 million of our ordinary shares leaving approximately $500 million remaining under the 2018 Authorization. Additionally, through February 9, 2021, we repurchased approximately $100 million of our ordinary shares under the 2018 Authorization. In February 2021, our Board of Directors authorized the repurchase of up to $2.0 billion of our ordinary shares under a new share repurchase program (2021 Authorization) upon completion of the 2018 Authorization.

Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated other comprehensive income (loss) were as follows:

In millions						Derivative Instruments						Pension and OPEB Items						Foreign Currency Translation						Total
December 31, 2018						$	6.7					$	(454.0)					$	(516.8)					$	(964.1)
Other comprehensive income (loss) attributable to Trane Technologies plc						(1.1)						(3.4)						(38.0)						(42.5)
December 31, 2019						$	5.6					$	(457.4)					$	(554.8)					$	(1,006.6)
Separation of Ingersoll Rand Industrial, net of tax						—						64.8						70.2						135.0
Other comprehensive income (loss) attributable to Trane Technologies plc						5.2						(23.9)						258.8						240.1
December 31, 2020						$	10.8					$	(416.5)					$	(225.8)					$	(631.5)

The amounts of Other comprehensive income (loss) attributable to noncontrolling interests for 2020, 2019 and 2018 were $2.7 million, $0.9 million and $(3.0) million, respectively, related to currency translation.

NOTE 15. SHARE-BASED COMPENSATION

The Company accounts for stock-based compensation plans in accordance with ASC 718, "Compensation - Stock Compensation" (ASC 718), which requires a fair-value based method for measuring the value of stock-based compensation. Fair value is measured once at the date of grant and is not adjusted for subsequent changes. The Company’s share-based compensation plans include programs for stock options, restricted stock units (RSUs), performance share units (PSUs), and deferred compensation. Under the Company's incentive stock plan, the total number of ordinary shares authorized by the shareholders is 23.0 million, of which 15.7 million remains available as of December 31, 2020 for future incentive awards.

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

F-34

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

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

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

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

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

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

Compensation Expense

Share-based compensation expense related to continuing operations is included in Selling and administrative expenses. The following table summarizes the expenses recognized:

In millions						2020						2019						2018
Stock options						$	17.9					$	20.2					$	23.5
RSUs						23.3						26.5						30.4
PSUs						26.7						17.9						23.0
Deferred compensation						3.9						3.1						3.4
Other (1)						3.3						3.5						0.5
Pre-tax expense						75.1						71.2						80.8
Tax benefit						(18.2)						(17.3)						(19.6)
After-tax expense						$	56.9					$	53.9					$	61.2
Amounts recorded in continuing operations						55.2						46.5						52.5
Amounts recorded in discontinued operations						1.7						7.4						8.7
Total						$	56.9					$	53.9					$	61.2

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

Grants issued during the year ended December 31 were as follows:

			2020												2019												2018
			Number Granted						Weighted-average fair value per award						Number Granted						Weighted-average fair value per award						Number Granted						Weighted-average fair value per award
Stock options			1,021,628						$	16.75					1,286,857						$	17.17					1,541,025						$	15.51
RSUs			213,142						$	104.76					268,465						$	102.98					327,411						$	90.07
Performance shares (1)			278,468						$	140.72					312,362						$	111.12					363,342						$	106.31

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

F-35

Stock Options / RSUs

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

The average fair value of the stock options granted is determined using the Black Scholes option pricing model. The following assumptions were used during the year ended December 31:

						2020						2019						2018
Dividend yield						2.01		%				2.06		%				2.00		%
Volatility						24.33		%				21.46		%				21.64		%
Risk-free rate of return						0.56		%				2.46		%				2.48		%
Expected life in years						4.8						4.8						4.8

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

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

*•*Risk-free rate of return -The Company applies a yield curve of continuous risk-free rates based upon the published US Treasury spot rates on the grant date.

*•*Expected life - The expected life of the Company’s stock option awards represents the weighted-average of the actual period since the grant date for all exercised or canceled options and an expected period for all outstanding options.

*•*Dividend yield - The Company determines the dividend yield based upon the expected quarterly dividend payments as of the grant date and the current fair market value of the Company’s stock.

*•*Forfeiture Rate - The Company analyzes historical data of forfeited options to develop a reasonable expectation of the number of options to forfeit prior to vesting per year. This expected forfeiture rate is applied to the Company’s ongoing compensation expense; however, all expense is adjusted to reflect actual vestings and forfeitures.

Changes in options outstanding under the plans for the years 2020, 2019 and 2018 were as follows:

						Shares subject to option						Weighted- average exercise price						Aggregate intrinsic value (millions)						Weighted- average remaining life (years)
December 31, 2017						6,354,882						$	56.49
Granted						1,541,025						89.71
Exercised						(1,515,955)						45.44
Cancelled						(94,601)						79.53
December 31, 2018						6,285,351						66.95
Granted						1,286,857						101.42
Exercised						(2,076,338)						56.17
Cancelled						(76,624)						92.38
December 31, 2019						5,419,246						78.91
Granted						1,021,628						105.29
Exercised						(1,767,782)						58.27
Cancelled						(49,539)						88.12
Adjustment due to the Transaction						1,095,805						n/a
Outstanding December 31, 2020						5,719,358						$	70.53					$	426.9					6.2
Exercisable December 31, 2020						3,352,349						$	58.77					$	289.6					5.0

F-36

The following table summarizes information concerning currently outstanding and exercisable options:

																		Options outstanding																		Options exercisable
Range of exercise price																		Number outstanding at December 31, 2020						Weighted- average remaining life (years)						Weighted- average exercise price						Number exercisable at December 31, 2020						Weighted- average remaining life (years)						Weighted- average exercise price
$	15.01					—						$	30.00					91,434						0.9						$	26.16					91,434						0.9						$	26.16
30.01						—						40.00						682,984						4.0						37.95						682,984						4.0						37.95
40.01						—						50.00						232,405						3.0						46.56						232,405						3.0						46.56
50.01						—						60.00						328,001						3.7						52.28						328,001						3.7						52.28
60.01						—						70.00						939,243						5.6						63.19						776,864						5.2						62.66
70.01						—						80.00						2,430,895						6.8						74.53						1,207,923						6.4						73.38
80.01						—						90.00						1,667						8.3						86.31						555						8.3						86.31
90.01						—						100.00						19,921						8.6						94.50						1,369						8.7						92.92
100.01						—						110.00						991,715						8.9						105.25						30,814						3.5						105.28
110.01						—						145.00						1,093						9.9						144.34						—						0.0						—
$	18.90					—						$	144.34					5,719,358						6.2						$	70.53					3,352,349						5.0						$	58.77

At December 31, 2020, there was $8.3 million of total unrecognized compensation cost from stock option arrangements granted under the plan, which is primarily related to unvested shares of non-retirement eligible employees. The aggregate intrinsic value of options exercised during the year ended December 31, 2020 and 2019 was $120.5 million and $124.5 million, respectively. Generally, stock options expire ten years from their date of grant.

The following table summarizes RSU activity for the years 2020, 2019 and 2018:

						RSUs						Weighted- average grant date fair value
Outstanding and unvested at December 31, 2017						803,699						$	67.09
Granted						327,411						90.07
Vested						(389,285)						64.88
Cancelled						(20,186)						77.95
Outstanding and unvested at December 31, 2018						721,639						$	78.40
Granted						268,465						102.98
Vested						(364,817)						70.26
Cancelled						(20,947)						89.64
Outstanding and unvested at December 31, 2019						604,340						$	93.56
Granted						213,142						104.76
Vested						(338,952)						86.62
Cancelled						(11,356)						84.38
Adjustment due to the Transaction						22,348						n/a
Outstanding and unvested at December 31, 2020						489,522						$	87.75

At December 31, 2020, there was $11.5 million of total unrecognized compensation cost from RSU arrangements granted under the plan, which is related to unvested shares of non-retirement eligible employees.

Performance Shares

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

Beginning with the 2018 grant year, PSU awards are earned based 50% upon a performance condition, measured by relative Cash Flow Return on Invested Capital (CROIC) to the S&P 500 Industrials Index over a 3-year performance period, and 50% upon a market condition, measured by the Company's relative total shareholder return (TSR) as compared to the TSR of the S&P 500 Industrials Index over a 3-year performance period. The fair value of the market condition is estimated using a Monte

F-37

Carlo Simulation approach in a risk-neutral framework based upon historical volatility, risk-free rates and correlation matrix. Awards granted prior to 2018 were earned based 50% upon a performance condition, measured by relative earnings-per-share (EPS) growth to the industrial group of companies in the S&P 500 Index over a 3-year performance period, and 50% upon a market condition measured by the Company's relative TSR as compared to the TSR of the industrial group of companies in the S&P Index over a 3-year performance period.

The following table summarizes PSU activity for the maximum number of shares that may be issued for the years 2020, 2019 and 2018:

						PSUs						Weighted-average grant date fair value
Outstanding and unvested at December 31, 2017						1,364,536						$	73.31
Granted						363,342						106.31
Vested						(309,306)						76.00
Forfeited						(172,408)						90.89
Outstanding and unvested at December 31, 2018						1,246,164						$	79.83
Granted						312,362						111.12
Vested						(539,402)						53.76
Forfeited						(34,194)						106.14
Outstanding and unvested at December 31, 2019						984,930						$	103.12
Granted						278,468						140.72
Vested						(340,400)						93.63
Forfeited						(56,430)						89.94
Adjustment due to the Transaction						151,904						n/a
Outstanding and unvested at December 31, 2020						1,018,472						$	99.53

At December 31, 2020, there was $18.0 million of total unrecognized compensation cost from PSU arrangements based on current performance, which is related to unvested shares. This compensation will be recognized over the required service period, which is generally the three-year vesting period.

Deferred Compensation

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

NOTE 16. RESTRUCTURING ACTIVITIES

The Company incurs costs associated with restructuring initiatives intended to result in improved operating performance, profitability and working capital levels. Actions associated with these initiatives include workforce reduction, improving manufacturing productivity, realignment of management structures and rationalizing certain assets. Restructuring charges recorded during the years ended December 31 were as follows:

In millions						2020						2019						2018
Americas						$	35.3					$	39.0					$	27.5
EMEA						7.4						5.1						4.6
Asia Pacific						5.1						6.7						2.0
Corporate and Other						27.9						1.8						9.4
Total						$	75.7					$	52.6					$	43.5
Cost of goods sold						$	24.1					$	37.3					$	25.2
Selling and administrative expenses						51.6						15.3						18.3
Total						$	75.7					$	52.6					$	43.5

F-38

The changes in the restructuring reserve were as follows:

In millions						Americas												EMEA						Asia Pacific												Corporate and Other						Total
December 31, 2018						$	15.3											$	1.7					$	1.9											$	2.6					$	21.5
Additions, net of reversals (1)						36.3												5.1						6.7												1.8						49.9
Cash paid/Other						(39.7)												(4.0)						0.5												(2.8)						(46.0)
December 31, 2019						11.9												2.8						9.1												1.6						25.4
Additions, net of reversals (2)						31.3												7.4						5.1												27.9						71.7
Cash paid/Other						(30.6)												(5.9)						(12.2)												(18.9)						(67.6)
December 31, 2020						$	12.6											$	4.3					$	2.0											$	10.6					$	29.5

(1) Excludes the non-cash costs of asset rationalizations ($2.7 million).

(2) Excludes the non-cash costs of asset rationalizations ($4.0 million).

During the year ended December 31, 2020, costs associated with announced restructuring actions primarily included the following:

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

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

Amounts recognized primarily relate to severance and exit costs. In addition, the Company also includes costs that are directly attributable to the restructuring activity but do not fall into the severance, exit or disposal categories. As of December 31, 2020, the Company had $29.5 million accrued for costs associated with its ongoing restructuring actions, of which a majority is expected to be paid within one year.

NOTE 17. OTHER INCOME/(EXPENSE), NET

The components of Other income/(expense), net for the years ended December 31, 2020, 2019 and 2018 were as follows:

In millions						2020						2019						2018
Interest income/(loss)						$	4.5					$	0.6					$	2.4
Foreign currency exchange gain (loss)						(10.0)						(9.5)						(12.8)
Other components of net periodic benefit cost						(14.7)						(34.9)						(21.1)
Other activity, net						24.3						15.4						(1.8)
Other income/(expense), net						$	4.1					$	(28.4)					$	(33.3)

Other income /(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, the Company includes the components of net periodic benefit cost for pension and post retirement obligations other than the service cost component. Other activity, net includes items associated with certain legal matters as well as asbestos-related activities through the Petition Date. During the year ended December 31, 2020, the Company recorded a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years and a gain of $0.9 million related to the deconsolidation of Murray and its wholly-owned subsidiary ClimateLabs within other activity, net. Refer to Note 22, "Commitments and Contingencies," for more information regarding asbestos-related matters.

NOTE 18. INCOME TAXES

Current and deferred provision for income taxes

Earnings before income taxes for the years ended December 31 were taxed within the following jurisdictions:

In millions			2020						2019						2018
United States			$	653.9					$	837.4					$	728.2
Non-U.S.			634.3						561.5						529.6
Total			$	1,288.2					$	1,398.9					$	1,257.8

F-39

The components of the Provision for income taxes for the years ended December 31 were as follows:

In millions						2020						2019						2018
Current tax expense (benefit):
United States						$	168.3					$	181.8					$	201.0
Non-U.S.						106.3						77.4						131.7
Total:						274.6						259.2						332.7
Deferred tax expense (benefit):
United States						11.2						2.2						(50.2)
Non-U.S.						11.0						(22.8)						(47.6)
Total:						22.2						(20.6)						(97.8)
Total tax expense (benefit):
United States						179.5						184.0						150.8
Non-U.S.						117.3						54.6						84.1
Total						$	296.8					$	238.6					$	234.9

The Provision for income taxes differs from the amount of income taxes determined by applying the applicable U.S. statutory income tax rate to pretax income, as a result of the following differences:

						Percent of pretax income
						2020						2019						2018
Statutory U.S. rate						21.0		%				21.0		%				21.0		%
Increase (decrease) in rates resulting from:
Non-U.S. tax rate differential						(1.1)						(2.8)						(2.6)
Tax on U.S. subsidiaries on non-U.S. earnings (a)						0.3						(0.2)						(0.6)
State and local income taxes (b)						4.3						3.0						2.1
Valuation allowances (c)						(1.1)						(2.9)						0.7
Change in permanent reinvestment assertion (a), (d)						—						—						(3.1)
Transition tax (d)						—						—						2.0
Remeasurement of deferred tax balances (d)						—						—						0.4
Stock based compensation						(1.7)						(1.7)						(1.0)
Expiration of carryforward tax attributes						1.1						—						—
Reserves for uncertain tax positions						(0.1)						(0.5)						0.5
Provision to return and other true-up adjustments						(0.2)						0.1						(0.8)
Other adjustments						0.5						1.1						0.1
Effective tax rate						23.0		%				17.1		%				18.7		%

(a)Net of foreign tax credits

(b)Net of changes in state valuation allowances

(c)Primarily federal and non-U.S., excludes state valuation allowances

(d)Provisional amounts reported under SAB 118 were finalized in 2018

Tax incentives, in the form of tax holidays, have been granted to the Company in certain jurisdictions to encourage industrial development. The expiration of these tax holidays varies by country. The tax holidays are conditional on the Company meeting certain employment and investment thresholds. The most significant tax holidays relate to the Company’s qualifying locations in China, Puerto Rico and Panama. The benefit for the tax holidays for the years ended December 31, 2020, 2019 and 2018 was $24.6 million, $28.3 million and $21.3 million, respectively.

F-40

Deferred tax assets and liabilities

A summary of the deferred tax accounts at December 31 were as follows:

In millions						2020						2019
Deferred tax assets:
Inventory and accounts receivable						$	11.7					$	13.3
Fixed assets and intangibles						9.5						9.7
Operating lease liabilities						101.0						117.6
Postemployment and other benefit liabilities						323.5						340.6
Product liability						4.8						68.9
Funding liability						71.8						—
Other reserves and accruals						164.8						143.6
Net operating losses and credit carryforwards						509.0						562.6
Other						58.5						33.6
Gross deferred tax assets						1,254.6						1,289.9
Less: deferred tax valuation allowances						(320.5)						(309.4)
Deferred tax assets net of valuation allowances						$	934.1					$	980.5
Deferred tax liabilities:
Inventory and accounts receivable						$	(22.3)					$	(25.3)
Fixed assets and intangibles						(1,186.0)						(1,184.7)
Operating lease right-of-use assets						(99.5)						(117.6)
Postemployment and other benefit liabilities						(14.1)						(10.9)
Other reserves and accruals						(7.2)						(12.4)
Product liability						(0.2)						(0.7)
Undistributed earnings of foreign subsidiaries						(22.4)						(22.1)
Other						(3.2)						(18.7)
Gross deferred tax liabilities						(1,354.9)						(1,392.4)
Net deferred tax assets (liabilities)						$	(420.8)					$	(411.9)

At December 31, 2020, no deferred taxes have been provided for earnings of certain of the Company’s subsidiaries, since these earnings have been, and under current plans will continue to be permanently reinvested in these subsidiaries. These earnings amount to approximately $1.6 billion which if distributed would result in additional taxes, which may be payable upon distribution, of approximately $260.0 million.

At December 31, 2020, the Company had the following operating loss, capital loss and tax credit carryforwards available to offset taxable income in prior and future years:

In millions						Amount						Expiration Period
U.S. Federal net operating loss carryforwards						$	611.8					2021-2036
U.S. Federal credit carryforwards						138.6						2022-2030
U.S. State net operating loss carryforwards						2,898.4						2021-Unlimited
U.S. State credit carryforwards						31.7						2021-Unlimited
Non-U.S. net operating loss carryforwards						490.8						2021-Unlimited
Non-U.S. credit carryforwards						9.3						Unlimited

The U.S. state net operating loss carryforwards were incurred in various jurisdictions. The non-U.S. net operating loss carryforwards were incurred in various jurisdictions, predominantly in Belgium, Brazil, India, Luxembourg, Spain and the United Kingdom.

F-41

Activity associated with the Company’s valuation allowance is as follows:

In millions						2020						2019						2018
Beginning balance						$	309.4					$	310.3					$	320.6
Increase to valuation allowance						38.9						44.0						54.6
Decrease to valuation allowance						(22.8)						(43.6)						(52.8)
Other deductions						(0.1)						—						—
Write off against valuation allowance						(3.7)						—						(4.6)
Accumulated other comprehensive income (loss)						(1.2)						(1.3)						(7.5)
Ending balance						$	320.5					$	309.4					$	310.3

During 2020, the Company recorded a $22.3 million increase in valuation allowance on deferred tax assets primarily related to certain state net deferred tax assets as a result of the Transaction. In addition, the Company recorded a $16.0 million reduction in valuation allowances related to non-U.S. net operating losses, primarily as a result of a planned restructuring in a non-U.S. tax jurisdiction, and foreign tax credits as a result of revised projections of future foreign source income.

During 2019, the Company recorded a $43.6 million reduction in valuation allowance on deferred tax assets primarily related to non-U.S. net operating losses. In addition, the Company recorded a $19.3 million increase in a valuation allowance for certain state net deferred tax assets as a result of revised projections of future state taxable income during the carryforward period.

During 2018, the Company recorded a net addition to the valuation allowance related to excess foreign tax credits in the amount of $17.3 million. In addition, the Company recorded a $35.0 million reduction in a valuation allowance for certain state net deferred tax assets primarily the result of revised projections of future state taxable income during the carryforward period.

Unrecognized tax benefits

The Company has total unrecognized tax benefits of $65.4 million and $63.7 million as of December 31, 2020, and December 31, 2019, respectively. The amount of unrecognized tax benefits that, if recognized, would affect the continuing operations effective tax rate are $36.8 million as of December 31, 2020. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

In millions						2020						2019						2018
Beginning balance						$	63.7					$	68.7					$	108.4
Additions based on tax positions related to the current year						1.0						1.2						1.1
Additions based on tax positions related to prior years						2.1						9.3						23.0
Reductions based on tax positions related to prior years						(1.5)						(13.1)						(47.3)
Reductions related to settlements with tax authorities						(0.7)						(0.9)						(14.2)
Reductions related to lapses of statute of limitations						(1.7)						(0.6)						(0.6)
Translation (gain) loss						2.5						(0.9)						(1.7)
Ending balance						$	65.4					$	63.7					$	68.7

The Company records interest and penalties associated with the uncertain tax positions within its Provision for income taxes. The Company had reserves associated with interest and penalties, net of tax, of $14.6 million and $16.0 million at December 31, 2020 and December 31, 2019, respectively. For the year ended December 31, 2020 and December 31, 2019, the Company recognized a $0.1 million tax expense and a $0.7 million tax benefit, respectively, in interest and penalties, net of tax in continuing operations related to these uncertain tax positions.

The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits, excluding interest and penalties, could potentially be reduced by up to approximately $4.7 million during the next 12 months.

The provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by the Company. In addition, tax authorities periodically review income tax returns filed by the Company and can raise issues regarding its filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which the Company operates. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an

F-42

issue raised by a revenue authority with respect to that return. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Brazil, Canada, China, France, Germany, Ireland, Italy, Mexico, Spain, the Netherlands, the United Kingdom and the United States. These examinations on their own, or any subsequent litigation related to the examinations, may result in additional taxes or penalties against the Company. If the ultimate result of these audits differ from original or adjusted estimates, they could have a material impact on the Company’s tax provision. In general, the examination of the Company’s material tax returns are complete or effectively settled for the years prior to 2011, with certain matters prior to 2011 being resolved through appeals and litigation and also unilateral procedures as provided for under double tax treaties.

In connection with the Transaction, the Company and Gardner Denver entered into a tax sharing agreement for the allocation of taxes. The Company has an indemnity payable to Gardner Denver, included within other non-current liabilities, in the amount of $13.5 million of tax and interest primarily related to open audit years in non-U.S. tax jurisdictions.

NOTE 19. ACQUISITIONS AND DIVESTITURES

Acquisitions and Equity Method Investments

Acquisitions are recorded using the acquisition method of accounting in accordance with ASC 805, "Business Combinations" (ASC 805). As a result, the aggregate purchase price has been allocated to assets acquired and liabilities assumed based on the estimate of fair market value of such assets and liabilities at the date of acquisition. The valuation of intangible assets are determined using an income approach methodology.

During 2020, the Company acquired independent dealers, reported within the Americas segment, to support the Company's ongoing strategy to expand its distribution network and service area. The aggregate cash paid, net of cash acquired, totaled $182.8 million and was financed through cash on hand. Intangible assets associated with these acquisitions totaled $78.9 million and primarily relate to customer relationships. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $130.1 million.

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

During 2019, the Company acquired several businesses including independent dealers to support its ongoing strategy to expand its distribution network and service area as well as other businesses that strengthen the Company's product portfolios. The aggregate cash paid, net of cash acquired, totaled $83.4 million and was funded through cash on hand. Intangible assets associated with these acquisitions totaled $25.5 million and primarily relate to trademarks and customer relationships. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $45.3 million. These acquisitions were not material to the Company's financial statements and were reported in the Americas segment.

During 2018, the Company acquired several businesses and entered into a joint venture. The aggregate cash paid, net of cash acquired, totaled $285.7 million and was funded through cash on hand. Primary activity during 2018 related to the acquisition of ICS Group Holdings Limited in January 2018. The business, reported within the EMEA segment, specializes in the temporary rental of energy efficient chillers for commercial and industrial buildings across Europe. In addition, the Company acquired independent dealers to expand its distribution network and service area. Intangible assets associated with these acquisitions totaled $45.2 million and primarily relate to trademarks and customer relationships. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $118.0 million.

In addition, the Company completed its investment of a 50% ownership interest in a joint venture with Mitsubishi Electric Corporation (Mitsubishi) in May 2018. The joint venture, reported within the Americas segment, focuses on marketing, selling and supporting variable refrigerant flow (VRF) and ductless heating and air conditioning systems through Trane, American Standard and Mitsubishi channels in the U.S. and select Latin American countries. Ownership interests in a joint venture are accounted for under the equity method when the Company does not have a controlling financial interest and reported within Other noncurrent assets on the Balance Sheet. Ongoing results since the date of investment are accounted for under the equity method and are not considered material to the Company’s results of operations.

F-43

Divestitures

The components of Discontinued operations, net of tax for the years ended December 31 were as follows:

In millions						2020						2019						2018
Net revenues						$	469.8					$	3,523.0					$	3,324.4
Cost of goods sold						(315.8)						(2,366.0)						(2,265.1)
Selling and administrative expenses						(234.4)						(809.5)						(654.0)
Operating income (loss)						(80.4)						347.5						405.3
Other income/ (expense), net						(55.9)						50.0						(88.3)
Pre-tax earnings (loss) from discontinued operations						(136.3)						397.5						317.0
Benefit (provision) for income taxes						14.9						(129.3)						17.6
Discontinued operations, net of tax						$	(121.4)					$	268.2					$	334.6

The table above presents the financial statement line items that support amounts included in Discontinued operations, net of tax. For the year ended December 31, 2020, Selling and administrative expenses included pre-tax Ingersoll Rand Industrial separation costs of $114.2 million, which are primarily related to legal, consulting and advisory fees. In addition, for the year ended December 31, 2020*, Other income/ (expense), net* included a loss of $25.8 million related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park. The year ended December 31, 2019 includes $94.6 million of pre-tax Ingersoll Rand Industrial separation costs within Selling and administrative expenses.

Separation of Industrial Segment Businesses

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

Net revenues and earnings from operations, net of tax of Ingersoll Rand Industrial for the years ended December 31 were as follows:

In millions						2020						2019						2018
Net revenues						$	469.8					$	3,523.0					$	3,324.4
Earnings (loss) attributable to Trane Technologies plc						(85.8)						225.2						351.3
Earnings (loss) attributable to noncontrolling interests						0.9						2.4						4.8
Earnings (loss) from operations, net of tax						$	(84.9)					$	227.6					$	356.1

Earnings (loss) attributable to Trane Technologies plc includes Ingersoll Rand Industrial separation costs, net of tax primarily related to legal, consulting and advisory fees of $96.2 million during the year ended December 31, 2020. In addition, the year ended December 31, 2019 includes $89.4 million of Ingersoll Rand Industrial separation costs, net of tax.

F-44

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

In millions						December 31, 2019
Assets
Current assets(1)						$	1,130.6
Property, plant and equipment, net						454.3
Goodwill						1,657.4
Intangible assets, net						825.2
Other noncurrent assets						139.7
Assets held-for-sale						$	4,207.2
Liabilities
Current liabilities						$	823.7
Noncurrent liabilities						376.7
Liabilities held-for-sale						$	1,200.4

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

Other Discontinued Operations

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

The components of Discontinued operations, net of tax for the years ended December 31 were as follows:

In millions						2020						2019						2018
Ingersoll Rand Industrial, net of tax						$	(84.9)					$	227.6					$	356.1
Other discontinued operations, net of tax						(36.5)						40.6						(21.5)
Discontinued operations, net of tax						$	(121.4)					$	268.2					$	334.6

In addition, other discontinued operations, net of tax includes a loss of $25.8 million related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park, for the year ended December 31, 2020. Refer to Note 22, "Commitments and Contingencies," for more information regarding the deconsolidation and asbestos-related matters.

NOTE 20. EARNINGS PER SHARE (EPS)

Basic EPS is calculated by dividing Net earnings attributable to Trane Technologies plc by the weighted-average number of ordinary shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potentially dilutive ordinary shares, which in the Company’s case, includes shares issuable under share-based compensation plans. The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted earnings per share calculations:

In millions						2020						2019						2018
Weighted-average number of basic shares outstanding						240.1						241.6						247.2
Shares issuable under incentive stock plans						3.0						2.8						2.9
Weighted-average number of diluted shares outstanding						243.1						244.4						250.1
Anti-dilutive shares						0.6						—						1.5
Dividends declared per ordinary share						$	2.12					$	2.12					$	1.96

NOTE 21. BUSINESS SEGMENT INFORMATION

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

F-45

• The Company's Americas segment innovates for customers in the North America and Latin America regions. The Americas segment encompasses commercial heating and cooling systems, building controls, and energy services and solutions; residential heating and cooling; and transport refrigeration systems and solutions.

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

• The Company's Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating and cooling systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

Management measures operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, unallocated corporate expenses and discontinued operations (Segment Adjusted EBITDA). Segment Adjusted EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results reported in accordance with GAAP. The Company believes Segment Adjusted EBITDA provides the most relevant measure of profitability as well as earnings power and the ability to generate cash. This measure is a useful financial metric to assess the Company's operating performance from period to period by excluding certain items that it believes are not representative of its core business and the Company uses this measure for business planning purposes. Segment Adjusted EBITDA also provides a useful tool for assessing the comparability between periods and the Company's ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates non-cash charges such as depreciation and amortization expense.

F-46

A summary of operations by reportable segment for the years ended December 31 were as follows:

In millions						2020						2019						2018
Net revenues
Americas						$	9,685.9					$	10,059.5					$	9,219.4
EMEA						1,648.1						1,762.6						1,831.1
Asia Pacific						1,120.7						1,253.8						1,293.3
Total Net revenues						$	12,454.7					$	13,075.9					$	12,343.8
Segment Adjusted EBITDA
Americas						$	1,677.7					$	1,742.1					$	1,565.5
EMEA						265.7						267.7						302.7
Asia Pacific						188.8						182.8						173.2
Total Segment Adjusted EBITDA						$	2,132.2					$	2,192.6					$	2,041.4
Reconciliation of Segment Adjusted EBITDA to earnings before income taxes
Total Segment Adjusted EBITDA						$	2,132.2					$	2,192.6					$	2,041.4
Interest expense						(248.7)						(242.8)						(221.0)
Depreciation and amortization						(294.3)						(288.8)						(282.3)
Restructuring costs						(75.7)						(52.6)						(43.5)
Unallocated corporate expenses						(225.3)						(209.5)						(236.8)
Earnings before income taxes						$	1,288.2					$	1,398.9					$	1,257.8
Depreciation and Amortization
Americas						$	224.0					$	213.6					$	208.8
EMEA						32.6						31.0						30.0
Asia Pacific						11.6						13.4						13.2
Depreciation and amortization from reportable segments						$	268.2					$	258.0					$	252.0
Unallocated depreciation and amortization						26.1						30.8						30.3
Total depreciation and amortization						$	294.3					$	288.8					$	282.3
Capital Expenditures
Americas						$	98.2					$	146.8					$	195.3
EMEA						24.7						30.0						14.5
Asia Pacific						7.7						11.3						7.5
Capital expenditures from reportable segments						$	130.6					$	188.1					$	217.3
Corporate capital expenditures						15.6						17.3						67.4
Total capital expenditures						$	146.2					$	205.4					$	284.7

At December 31, a summary of long-lived assets by geographic area were as follows:

In millions						2020						2019
United States						$	1,219.4					$	1,346.3
Non-U.S.						539.1						475.1
Total						$	1,758.5					$	1,821.4

NOTE 22. COMMITMENTS AND CONTINGENCIES

The Company is involved in various litigations, claims and administrative proceedings, including those related to environmental, asbestos, and product liability matters. In accordance with ASC 450, "Contingencies" (ASC 450), the Company

F-47

records accruals for loss contingencies when it is both probable that a liability will be incurred and the amount of the loss can be reasonably estimated. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

Asbestos-Related Matters

Certain wholly-owned subsidiaries and former companies of the Company were named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims were filed against predecessors of Aldrich and Murray and generally allege injury caused by exposure to asbestos contained in certain historical products sold by predecessors of Aldrich or Murray, primarily pumps, boilers and railroad brake shoes. None of the Company's existing or previously-owned businesses were a producer or manufacturer of asbestos.

On June 18, 2020, Aldrich and Murray filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code to resolve equitably and permanently all current and future asbestos related claims in a manner beneficial to claimants, Aldrich and Murray. As a result of the Chapter 11 filings, all asbestos-related lawsuits against Aldrich and Murray have been stayed due to the imposition of a statutory automatic stay applicable in Chapter 11 bankruptcy cases. In addition, at the request of Aldrich and Murray, the Bankruptcy Court has entered an order temporarily staying all asbestos-related claims against the Trane Companies that relate to claims against Aldrich or Murray (except for asbestos-related claims for which the exclusive remedy is provided under workers' compensation statutes or similar laws).

The goal of these Chapter 11 filings is an efficient and permanent resolution of all current and future asbestos claims through court approval of a plan of reorganization, which would establish, in accordance with section 524(g) of the Bankruptcy Code, a trust to which all asbestos claims would be channeled for resolution. Aldrich and Murray intend to seek an agreement with representatives of the asbestos claimants on the terms of a plan for the establishment of such a trust.

Prior to the Petition Date, predecessors of each of Aldrich and Murray had been litigating asbestos-related claims brought against them. No such claims have been paid since the Petition Date, and it is not contemplated that any such claims will be paid until the end of the Chapter 11 cases. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether or how long the Bankruptcy Court order temporarily staying asbestos-related claims against the Trane Companies will be extended, whether or when any agreement with representatives of the asbestos claimants on the terms of a plan for the establishment of a trust will be reached, what the terms of any plan of reorganization or the extent of the asbestos liability will be or how long the Chapter 11 cases will last.

From an accounting perspective, the Company no longer has control over Aldrich and Murray as of the Petition Date as their activities are subject to review and oversight by the Bankruptcy Court. Therefore, Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated as of the Petition Date and their respective assets and liabilities were derecognized from the Company's Consolidated Financial Statements. Amounts derecognized primarily related to the legacy asbestos-related liabilities and asbestos-related insurance recoveries and $41.7 million of cash. However, in connection with the 2020 Corporate Restructuring, certain subsidiaries of the Company entered into funding agreements with Aldrich and Murray (collectively the Funding Agreements), pursuant to which those subsidiaries are obligated, among other things, to pay the costs and expenses of Aldrich and Murray during the pendency of the Chapter 11 cases to the extent distributions from their respective subsidiaries are insufficient to do so and to provide an amount for the funding for a trust established pursuant to section 524(g) of the Bankruptcy Code, to the extent that the other assets of Aldrich and Murray are insufficient to provide the requisite trust funding.

Accounting Treatment Prior to the Petition Date

Historically, the Company performed a detailed analysis and projected an estimated range of the Company’s total liability for pending and unasserted future asbestos-related claims. In accordance with ASC 450, the Company recorded the liability at the low end of the range as it believed that no amount within the range was a better estimate than any other amount. Asbestos-related defense costs were excluded from the liability and were recorded separately as services were incurred. The methodology used to prepare estimates relied upon and included the following factors, among others:

• the interpretation of a widely accepted forecast of the population likely to have been occupationally exposed to asbestos;

• epidemiological studies estimating the number of people likely to develop asbestos-related diseases such as mesothelioma and lung cancer;

F-48

• the Company’s historical experience with the filing of non-malignancy claims and claims alleging other types of malignant diseases filed against the Company relative to the number of lung cancer claims filed against the Company;

• the analysis of the number of people likely to file an asbestos-related personal injury claim against the Company based on such epidemiological and historical data and the Company’s claims history;

• an analysis of the Company’s pending cases, by type of disease claimed and by year filed;

• an analysis of the Company’s history to determine the average settlement and resolution value of claims, by type of disease claimed;

• an adjustment for inflation in the future average settlement value of claims, at a 2.5% annual inflation rate, adjusted downward to 1.0% to take account of the declining value of claims resulting from the aging of the claimant population; and

• an analysis of the period over which the Company has and is likely to resolve asbestos-related claims against it in the future (currently projected through 2053).

Prior to the Petition Date and at December 31, 2019, over 73 percent of the open and active claims against the Company were non-malignant or unspecified disease claims. In addition, the Company had a number of claims which had been placed on inactive or deferred dockets and expected to have little or no settlement value against the Company.

At June 17, 2020, immediately prior to the Petition Date, and at December 31, 2019, the Company’s liability for asbestos-related matters and the asset for probable asbestos-related insurance recoveries were included in the following accounts within the Consolidated Balance Sheet:

In millions			June 17, 2020						December 31, 2019
Accrued expenses and other current liabilities			$	57.1					$	63.0
Other noncurrent liabilities			451.0						484.4
Total asbestos-related liabilities			$	508.1					$	547.4
Other current assets			$	50.3					$	66.2
Other noncurrent assets			220.6						237.8
Total asset for probable asbestos-related insurance recoveries			$	270.9					$	304.0

The Company's asbestos insurance receivable related to the predecessors of Aldrich and Murray were $160.4 million and $110.5 million, respectively, at June 17, 2020 and $188.7 million and $115.3 million, respectively, at December 31, 2019. These receivables attributable to the predecessors of each of Aldrich and Murray for probable insurance recoveries as of June 17, 2020 and December 31, 2019 are entirely supported by settlement agreements between them and their respective insurance carriers. Most of these settlement agreements constitute “coverage-in-place” arrangements, in which the insurer signatories agree to reimburse the predecessors of Aldrich and Murray, as applicable, for specified portions of their respective costs for asbestos bodily injury claims and the predecessors of Aldrich and Murray, as applicable, agree to certain claims-handling protocols and grants to the insurer signatories certain releases and indemnifications.

Prior to the Petition Date, the costs associated with the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of the Company's liability for potential future claims and recoveries were included in the Consolidated Statement of Comprehensive Income within continuing operations or discontinued operations depending on the business to which they relate. Income and expenses associated with asbestos-related matters of Aldrich and its predecessors were recorded within discontinued operations as they related to previously divested businesses, primarily Ingersoll-Dresser Pump, which was sold by the Company in 2000. Income and expenses associated with asbestos-related matters for Murray and its predecessors were recorded within continuing operations. The year ended December 31, 2020 includes a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years.

The net income (expense) associated with these pre-Petition Date transactions for the years ended December 31, were as follows:

In millions						2020						2019						2018
Continuing operations						$	14.8					$	7.0					$	(10.4)
Discontinued operations						(11.2)						68.2						(56.5)
Total						$	3.6					$	75.2					$	(66.9)

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on currently available information. Key assumptions underlying the estimated asbestos-related liabilities include the number of people

F-49

occupationally exposed and likely to develop asbestos-related diseases such as mesothelioma and lung cancer, the number of people likely to file an asbestos-related personal injury claim against the Company, the average settlement and resolution of each claim and the percentage of claims resolved with no payment. Furthermore, predictions with respect to estimates of the liability are subject to greater uncertainty as the projection period lengthens. Other factors that may affect the Company’s liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts, and the passage of state or federal tort reform legislation.

The aggregate amount of the stated limits in insurance policies available to Aldrich and Murray for asbestos-related claims acquired, over many years and from many different carriers, is substantial. However, as a result of limitations in that coverage, the projected total liability to claimants substantially exceeds the probable insurance recovery.

Accounting Treatment After the Petition Date

Upon deconsolidation, the Company recorded its retained interest in Aldrich and Murray at fair value within Other noncurrent assets in the Consolidated Balance Sheet. In determining the fair value of its equity investment, the Company used a market-adjusted multiple of earnings valuation technique (a market approach). Under the market approach, the Company used an adjusted multiple ranging from 11.0 to 12.5 of projected earnings before interest, taxes, depreciation and amortization (EBITDA) based on the market information of comparable companies. As a result, the Company recorded an aggregate equity investment of $53.6 million as of the Petition Date. Subsequent to deconsolidation, the Company will account for its equity investment in Aldrich and Murray at cost less impairment under the measurement alternative election in ASC 321, "Investments - Equity Securities".

Simultaneously, the Company recognized a liability of $248.8 million within Other noncurrent liabilities in the Consolidated Balance Sheet related to its obligation under the Funding Agreements. Although the amounts that Aldrich and Murray may ultimately require under the Funding Agreements are unknown, the Company believes that an estimate of $248.8 million in the aggregate is reasonable at this time as the Company has no better estimate for the amounts that may ultimately be required under the Funding Agreement. The liability is based on asbestos-related liabilities and insurance-related assets balances previously recorded by the Company prior to the Petition Date and may be subject to change based on the facts and circumstances of the Chapter 11 proceedings.

As a result of these actions, the Company recognized an aggregate loss of $24.9 million in its Consolidated Statements of Comprehensive Income. A gain of $0.9 million related to Murray and its wholly-owned subsidiary ClimateLabs was recorded within Other income/ (expense), net and a loss of $25.8 million related to Aldrich and its wholly-owned subsidiary 200 Park was recorded within Discontinued operations, net of tax. Additionally, the deconsolidation resulted in an investing cash outflow of $41.7 million in the Company's Consolidated Statements of Cash Flows, of which $10.8 million was recorded within continuing operations.

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

Environmental Matters

The Company continues to be dedicated to environmental and sustainability programs to minimize the use of natural resources, and reduce the utilization and generation of hazardous materials from our manufacturing processes and to remediate identified environmental concerns. As to the latter, the Company is currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former manufacturing facilities.

The Company is sometimes a party to environmental lawsuits and claims and has received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state authorities. It has also been identified as a potentially responsible party (PRP) for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites. For all such sites, there are other PRPs and, in most instances, the Company’s involvement is minimal.

In estimating its liability, the Company has assumed it will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable. The ability of other PRPs to participate has been taken into account, based on the Company's understanding of the parties’ financial condition and probable contributions on a per site basis. Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.

F-50

Reserves for environmental matters are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on their expected term. As of December 31, 2020 and 2019, the Company has recorded reserves for environmental matters of $39.9 million and $40.2 million, respectively. Of these amounts $37.5 million relate to remediation of sites previously disposed by the Company.

Warranty Liability

Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. The Company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available.

The changes in the standard product warranty liability for the year ended December 31, were as follows:

In millions			2020						2019
Balance at beginning of period			$	251.4					$	245.6
Reductions for payments			(130.5)						(142.8)
Accruals for warranties issued during the current period			144.6						144.1
Changes to accruals related to preexisting warranties			14.9						5.1
Translation			2.3						(0.6)
Balance at end of period			$	282.7					$	251.4

Standard product warranty liabilities are classified as Accrued expenses and other current liabilities, or Other noncurrent liabilities based on their expected term. The Company's total current standard product warranty reserve at December 31, 2020 and December 31, 2019 was $127.7 million and $124.9 million, respectively.

Warranty Deferred Revenue

The Company's extended warranty liability represents the deferred revenue associated with its extended warranty contracts and is amortized into Net revenues on a straight-line basis over the life of the contract, unless another method is more representative of the costs incurred. The Company assesses the adequacy of its liability by evaluating the expected costs under its existing contracts to ensure these expected costs do not exceed the extended warranty liability.

The changes in the extended warranty liability for the year ended December 31, were as follows:

In millions			2020						2019
Balance at beginning of period			$	302.8					$	290.6
Amortization of deferred revenue for the period			(123.6)						(120.9)
Additions for extended warranties issued during the period			123.7						133.5
Changes to accruals related to preexisting warranties			—						(0.4)
Translation			1.5						—
Balance at end of period			$	304.4					$	302.8

The extended warranty liability is classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on the timing of when the deferred revenue is expected to be amortized into Net revenues. The Company's total current extended warranty liability at December 31, 2020 and December 31, 2019 was $108.6 million and $107.3 million, respectively. For the years ended December 31, 2020, 2019 and 2018, the Company incurred costs of $61.0 million, $62.8 million and $63.8 million, respectively, related to extended warranties.

F-51