Trane Technologies Reports Strong Fourth-Quarter and Full-Year 2024 Results; Robust Bookings and Backlog Provide Strong Visibility Entering 2025

Highlights (fourth-quarter 2024 versus fourth-quarter 2023, unless otherwise noted):

• Reported revenues of $4.9 billion, up 10 percent; organic revenues* up 10 percent
• GAAP operating margin up 110 bps; adjusted operating margin* up 70 bps
• Adjusted EBITDA margin* of 18.3 percent, up 110 bps
• GAAP continuing EPS of $2.67; adjusted continuing EPS* of $2.61, up 20 percent
• Organic bookings up 2 percent, led by Americas Commercial HVAC, up high single-digits

Highlights (full-year 2024 versus full-year 2023, unless otherwise noted):

• Reported revenues of $19.8 billion, up 12 percent; organic revenues up 12 percent
• GAAP operating margin up 120 bps; adjusted operating margin up 130 bps
• Adjusted EBITDA margin of 19.4 percent, up 140 bps
• GAAP continuing EPS of $11.35; adjusted continuing EPS of $11.22, up 24 percent
• Strong free cash flow conversion* of 109 percent
• Bookings of $20.3 billion, up 11 percent, led by Americas Commercial HVAC, up 14 percent
• $6.75 billion backlog, well positioned for growth in 2025

SWORDS, Ireland, Feb. 6, 2025 -- Trane Technologies plc (NYSE:TT), a global climate innovator, today reported diluted earnings per share (EPS) from continuing operations of $2.67 for the fourth quarter of 2024. Adjusted continuing EPS was $2.61, up 20 percent.

Fourth-Quarter 2024 Results

Financial Comparisons - Fourth-Quarter Continuing Operations

"I'm proud of our talented team for delivering another year of standout financial performance in 2024," said Dave Regnery, chair and CEO, Trane Technologies. "We achieved record financial results with strong organic revenue growth of 12%, powerful free cash flow conversion of 109% and adjusted earnings per share growth of 24% – our fourth consecutive year of earnings per share growth of 20% or more.

Since launching Trane Technologies in 2020, we have delivered a compound annual revenue growth rate of 12%, realized free cash flow conversion of 108% of adjusted net earnings, expanded EBITDA margins by 400 basis points and deployed approximately $12 billion of capital. With our focused sustainability strategy, proven business operating system, and relentless investment in future growth and innovation, we expect continued strong performance in 2025 and are well positioned to deliver differentiated shareholder returns over the long term."

Highlights from the Fourth Quarter of 2024 (all comparisons against fourth-quarter 2023 unless otherwise noted):

• Delivered strong revenue, operating income, EBITDA and EPS growth.
• Strong bookings of $4.7 billion, up 3 percent; organic bookings were up 2 percent.
• Enterprise reported revenues and organic revenues were both up 10 percent.
• GAAP operating margin was up 110 basis points, adjusted operating margin was up 70 basis points and adjusted EBITDA margin was up 110 basis points.
• Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.

Fourth-Quarter Business Review (all comparisons against fourth-quarter 2023 unless otherwise noted)

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

• Bookings of $3.7 billion, up 1 percent. Strong Commercial HVAC bookings, up high single-digits.
• Reported revenues were up 12 percent, including approximately 1 percentage point related to acquisitions. Organic revenues were up 11 percent.
• GAAP operating margin was up 130 basis points, adjusted operating margin was up 100 basis points and adjusted EBITDA margin was up 140 basis points.
• Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.

Europe, Middle East and Africa (EMEA) Segment: innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

• Strong bookings up 8 percent; organic bookings up 9 percent.
• Reported revenues were up 5 percent including approximately 2 percentage points of negative foreign exchange impact. Organic revenues were up 7 percent.
• GAAP operating margin was up 30 basis points, adjusted operating margin was up 20 basis points and adjusted EBITDA margin was up 20 basis points.
• Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.

Asia Pacific Segment: innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

• Reported and organic bookings both up 8 percent.
• Reported and organic revenues were both up 1 percent.
• GAAP operating margin was up 210 basis points, adjusted operating margin was up 280 basis points and adjusted EBITDA margin was up 280 basis points.
• Positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.

Full-Year 2024 Results (all comparisons against full-year 2023 unless otherwise noted)

Financial Comparisons - Full-year Continuing Operations

• Strong bookings of $20.3 billion, up 11 percent.
• Reported and organic revenues were both up 12 percent.
• GAAP operating margin was up 120 basis points, adjusted operating margin was up 130 basis points and adjusted EBITDA margin was up 140 basis points.
• Strong volume, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.

Balance Sheet and Cash Flow

• Full-year 2024 cash flow from continuing operating activities was $3.2 billion.
• Full-year 2024 free cash flow was $2.8 billion, 109 percent of adjusted net earnings.
• For full-year 2024, the Company deployed or committed $2.5 billion including approximately $760 million for dividends, approximately $470 million for M&A and $1.3 billion for share repurchases.
• The Company expects to continue to pay a competitive and growing dividend and to deploy 100 percent of excess cash to shareholders over time.

Full-Year 2025 Guidance

• The Company expects full-year 2025 reported revenue growth of approximately 6.5 percent to 7.5 percent; organic revenue growth of approximately 7 percent to 8 percent versus full-year 2024.
• The Company expects GAAP and adjusted continuing EPS for full-year 2025 of $12.70 to $12.90.
• Additional information regarding the Company's 2025 guidance is included in the Company's earnings presentation found at www.tranetechnologies.com in the Investor Relations section.

This news release includes "forward-looking" statements within the meaning of securities laws, which are statements that are not historical facts, including statements that relate to our future financial performance and targets, including revenue, EPS, and earnings; our business operations; demand for our products and services, including bookings and backlog; capital deployment, including the amount and timing of our dividends, our share repurchase program, anticipated capital commitments for M&A activity, and our capital allocation strategy; our available liquidity; our anticipated revenue growth, and the performance of the markets in which we operate.

These forward-looking statements are based on our current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations. Such factors include, but are not limited to, global economic conditions, including recessions and economic downturns, inflation, volatility in interest rates and foreign exchange; trade protection measures such as import or export restrictions, tariffs, or quotas; changing energy prices; worldwide geopolitical conflict; financial institution disruptions; climate change and our sustainability strategies and goals; future health care emergencies on our business, our suppliers and our customers; commodity shortages; price increases; government regulation; restructurings activity and cost savings associated with such activity; secular trends toward decarbonization, energy efficiency and internal air quality, the outcome of any litigation, including the risks and uncertainties associated with the Chapter 11 proceedings for our deconsolidated subsidiaries Aldrich Pump LLC and Murray Boiler LLC; cybersecurity risks; and tax audits and tax law changes and interpretations. Additional factors that could cause such differences can be found in our Form 10-K for the year ended December 31, 2023, as well as our subsequent reports on Form 10-Q and other SEC filings. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events and how they may affect the Company. We assume no obligation to update these forward-looking statements.

This news release also includes non-GAAP financial information, which should be considered supplemental to, not a substitute for, or superior to, the financial measure calculated in accordance with GAAP. The definitions of our non-GAAP financial information and reconciliation to GAAP are attached to this news release.

All amounts reported within the earnings release above related to net earnings (loss), earnings (loss) from continuing operations, earnings (loss) from discontinued operations, adjusted EBITDA and per share amounts are attributed to Trane Technologies' ordinary shareholders.

Trane Technologies (NYSE:TT) is a global climate innovator. Through our strategic brands Trane® and Thermo King®, and our portfolio of environmentally responsible products and services, we bring efficient and sustainable climate solutions to buildings, homes and transportation. For more information, visit tranetechnologies.com.

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2/6/2025

(See Accompanying Tables)

• Table 1: Condensed Consolidated Income Statement
• Tables 2 - 7: Reconciliation of GAAP to Non-GAAP
• Table 8: Condensed Consolidated Balance Sheets
• Table 9: Condensed Consolidated Statement of Cash Flows
• Table 10: Balance Sheet Metrics and Free Cash Flow

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