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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
_______________________________
FORM 10-Q
_______________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number 001-34400
_____________________________ 
TRANE TECHNOLOGIES PLC
(Exact name of registrant as specified in its charter)
_______________________________
Ireland98-0626632
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
170/175 Lakeview Dr.
Airside Business Park
Swords Co. Dublin
Ireland
(Address of principal executive offices, including zip code)
+(353) (0) 18707400
(Registrant’s telephone number, including area code)
_______________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Ordinary Shares, Par Value $1.00 per ShareTTNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x   No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerxAccelerated filer¨Emerging growth company
Non-accelerated filer¨Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  x
The number of ordinary shares outstanding of Trane Technologies plc as of April 23, 2021 was 239,147,507.


TRANE TECHNOLOGIES PLC
FORM 10-Q
INDEX

Item 1 -
Item 2 -
Item 3 -
Item 4 -
Item 1 -
Item 1A -
Item 2 -
Item 6 -



PART I - FINANCIAL INFORMATION

Item 1.Financial Statements

TRANE TECHNOLOGIES PLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three months ended
 March 31,
In millions, except per share amounts20212020
Net revenues$3,017.6 $2,641.3 
Cost of goods sold(2,064.4)(1,898.8)
Selling and administrative expenses(600.0)(588.1)
Operating income353.2 154.4 
Interest expense(60.7)(63.1)
Other income/(expense), net(7.2)12.5 
Earnings before income taxes285.3 103.8 
Provision for income taxes(48.4)(51.0)
Earnings from continuing operations236.9 52.8 
Discontinued operations, net of tax0.9 (78.7)
Net earnings (loss)237.8 (25.9)
Less: Net earnings from continuing operations attributable to noncontrolling interests(2.6)(2.8)
Less: Net earnings from discontinuing operations attributable to noncontrolling interests (0.5)
Net earnings (loss) attributable to Trane Technologies plc$235.2 $(29.2)
Amounts attributable to Trane Technologies plc ordinary shareholders:
Continuing operations$234.3 $50.0 
Discontinued operations0.9 (79.2)
Net earnings (loss)$235.2 $(29.2)
Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:
Basic:
Continuing operations$0.98 $0.21 
Discontinued operations (0.33)
Net earnings (loss)$0.98 $(0.12)
Diluted:
Continuing operations$0.96 $0.21 
Discontinued operations0.01 (0.33)
Net earnings (loss)$0.97 $(0.12)
Weighted-average shares outstanding:
Basic239.4 239.5 
Diluted243.1 242.3 
See accompanying notes to Condensed Consolidated Financial Statements.

1

TRANE TECHNOLOGIES PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three months ended
March 31,
In millions20212020
Net earnings (loss)$237.8 $(25.9)
Other comprehensive income (loss):
Currency translation(82.5)(48.0)
Cash flow hedges:
Unrealized net gains (losses) arising during period(4.6)0.3 
Net gains (losses) reclassified into earnings0.9 0.3 
Tax (expense) benefit0.3 (0.2)
Total cash flow hedges, net of tax(3.4)0.4 
Pension and OPEB adjustments:
Net actuarial gains (losses) for the period (21.3)
Amortization reclassified into earnings9.7 11.5 
Net curtailment and settlement (gains) losses reclassified to earnings6.9 (3.6)
Currency translation and other3.0 5.2 
Tax (expense) benefit(4.4)(2.8)
Total pension and OPEB adjustments, net of tax15.2 (11.0)
Other comprehensive income (loss), net of tax(70.7)(58.6)
Comprehensive income (loss), net of tax$167.1 $(84.5)
Less: Comprehensive (income) loss attributable to noncontrolling interests(0.2)(3.4)
Comprehensive income (loss) attributable to Trane Technologies plc$166.9 $(87.9)
See accompanying notes to Condensed Consolidated Financial Statements.



2

TRANE TECHNOLOGIES PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
In millionsMarch 31,
2021
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents$2,838.0 $3,289.9 
Accounts and notes receivable, net2,159.4 2,202.1 
Inventories1,373.1 1,189.2 
Other current assets251.6 224.4 
Total current assets6,622.1 6,905.6 
Property, plant and equipment, net1,327.7 1,349.5 
Goodwill5,311.2 5,342.8 
Intangible assets, net3,256.9 3,286.4 
Other noncurrent assets1,306.9 1,272.4 
Total assets$17,824.8 $18,156.7 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$1,608.9 $1,520.2 
Accrued compensation and benefits368.8 451.1 
Accrued expenses and other current liabilities1,721.5 1,592.0 
Short-term borrowings and current maturities of long-term debt475.4 775.6 
Total current liabilities4,174.6 4,338.9 
Long-term debt4,496.3 4,496.5 
Postemployment and other benefit liabilities1,008.2 1,024.6 
Deferred and noncurrent income taxes563.0 578.5 
Other noncurrent liabilities1,269.9 1,291.1 
Total liabilities11,512.0 11,729.6 
Equity:
Trane Technologies plc shareholders’ equity:
Ordinary shares263.6 263.3 
Ordinary shares held in treasury, at cost(1,719.4)(1,719.4)
Retained earnings8,452.3 8,495.3 
Accumulated other comprehensive income (loss)(699.8)(631.5)
Total Trane Technologies plc shareholders’ equity6,296.7 6,407.7 
Noncontrolling interests16.1 19.4 
Total equity6,312.8 6,427.1 
Total liabilities and equity$17,824.8 $18,156.7 
See accompanying notes to Condensed Consolidated Financial Statements.

3

TRANE TECHNOLOGIES PLC
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)

In millions, except per share amountsTotal
equity
Ordinary sharesOrdinary shares held
 in treasury,
at cost
Capital in
excess of
par value
Retained
earnings
Accumulated  other
comprehensive
income (loss)
Noncontrolling Interests
Amount at par valueShares
Balance at December 31, 2020$6,427.1 $263.3 263.3 $(1,719.4)$ $8,495.3 $(631.5)$19.4 
Net earnings237.8 — — — — 235.2 — 2.6 
Other comprehensive income (loss)(70.7)— — — — — (68.3)(2.4)
Shares issued under incentive stock plans(7.0)1.0 1.0 — (8.0)— — — 
Repurchase of ordinary shares(104.2)(0.7)(0.7) (16.7)(86.8)  
Share-based compensation24.2 — — — 24.7 (0.5)— — 
Dividends declared to noncontrolling interest(3.5)— — — — — — (3.5)
Cash dividends declared(141.0)— — — — (141.0)— — 
Separation of Ingersoll Rand Industrial(49.9)— — — — (49.9)  
Balance at March 31, 2021$6,312.8 $263.6 263.6 $(1,719.4)$ $8,452.3 $(699.8)$16.1 
In millions, except per share amountsTotal
equity
Ordinary sharesOrdinary shares held
 in treasury,
at cost
Capital in
excess of
par value
Retained
earnings
Accumulated  other
comprehensive
income (loss)
Noncontrolling Interests
Amount at par valueShares
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(25.9)— — — — (29.2)— 3.3 
Other comprehensive income (loss)(58.6)— — — — — (58.7)0.1 
Shares issued under incentive stock plans(5.6)0.9 0.9 — (6.5)— — — 
Share-based compensation27.6 — — — 29.0 (1.4)— — 
Dividends declared to noncontrolling interest(6.1)— — — — — — (6.1)
Investment by joint venture partner7.0 — — — 3.9 — — 3.1 
Cash dividends declared(126.7)— — — — (126.7)— — 
Separation of Ingersoll Rand Industrial(1,334.3)— — — — (1,445.6)139.3 (28.0)
Balance at March 31, 2020$5,789.8 $263.7 263.7 $(1,719.4)$26.4 $8,127.9 $(926.0)$17.2 
See accompanying notes to Condensed Consolidated Financial Statements.

4

TRANE TECHNOLOGIES PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
 March 31,
In millions20212020
Cash flows from operating activities:
Net earnings (loss)$237.8 $(25.9)
Discontinued operations, net of tax(0.9)78.7 
Adjustments for non-cash transactions:
Depreciation and amortization76.0 75.0 
Pension and other postretirement benefits17.4 17.1 
Stock settled share-based compensation24.7 29.0 
Changes in assets and liabilities, net of the effects of acquisitions(104.6)(295.8)
Other non-cash items, net12.5 (7.4)
Net cash provided by (used in) continuing operating activities262.9 (129.3)
Net cash provided by (used in) discontinued operating activities(2.8)(198.3)
Net cash provided by (used in) operating activities260.1 (327.6)
Cash flows from investing activities:
Capital expenditures(43.9)(34.7)
Acquisitions of businesses, net of cash acquired(12.8)1.0 
Other investing activities, net(57.0) 
Net cash provided by (used in) continuing investing activities(113.7)(33.7)
Net cash provided by (used in) discontinued investing activities (6.8)
Net cash provided by (used in) investing activities(113.7)(40.5)
Cash flows from financing activities:
Payments of long-term debt(300.0) 
Dividends paid to ordinary shareholders(140.2)(125.9)
Dividends paid to noncontrolling interests(3.5)(6.1)
Proceeds (payments) from shares issued under incentive plans, net(7.0)(5.6)
Repurchase of ordinary shares(104.2) 
Receipt of a special cash payment 1,900.0 
Other financing activities, net 7.0 
Net cash provided by (used in) continuing financing activities(554.9)1,769.4 
Effect of exchange rate changes on cash and cash equivalents(43.4)(32.2)
Net increase (decrease) in cash and cash equivalents(451.9)1,369.1 
Cash and cash equivalents - beginning of period3,289.9 1,278.6 
Cash and cash equivalents - end of period$2,838.0 $2,647.7 
See accompanying notes to Condensed Consolidated Financial Statements.
5

TRANE TECHNOLOGIES PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
Trane Technologies plc, a public limited company incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively, 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. The accompanying unaudited Condensed Consolidated Financial Statements of Trane Technologies plc reflects the consolidated operations of the Company and have been prepared in accordance with United States Securities and Exchange Commission (SEC) interim reporting requirements. Accordingly, the accompanying Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP) for full financial statements and should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments, which include only normal recurring adjustments, necessary to fairly state the condensed consolidated results for the interim periods presented.
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 and Trane U.S. Inc, respectively. On a consolidated basis, the 2020 Corporate Restructuring did not have an impact on the Condensed 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 Condensed Consolidated Financial Statements. Refer to Note 20, "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) whereby the Company separated its former Industrial segment (Ingersoll Rand Industrial) through a pro rata distribution to shareholders of record as of February 24, 2020. Ingersoll Rand Industrial then merged into a wholly-owned subsidiary of Gardner Denver, which changed its name to Ingersoll-Rand Inc. Upon close of the Transaction, the Company’s existing shareholders received 50.1% of the shares of Gardner Denver common stock on a fully-diluted basis and Gardner Denver stockholders retained 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.
6


As of March 31, 2021, the Company recorded an accrual and corresponding reduction to Retained earnings of $49.5 million relating to the agreement in principle with Gardner Denver to settle remaining transaction-related items. These adjustments are related to working capital, cash and indebtedness amounts as of the Distribution Date, as well as funding levels related to pension plans, non-qualified deferred compensation plans and retiree health benefits.
Discontinued Operations
After the Distribution Date, the Company does not beneficially own any Ingersoll Rand Industrial shares of common stock and no longer consolidates 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 Condensed Consolidated Statements of Income (Loss) and Condensed Consolidated Statements of Cash Flows.
Note 3. Recent Accounting Pronouncements
The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update (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 Condensed Consolidated Financial Statements.
Recently Adopted 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 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.
The major classes of inventory were as follows:
In millionsMarch 31,
2021
December 31,
2020
Raw materials$351.0 $305.0 
Work-in-process184.3 163.9 
Finished goods871.1 761.4 
1,406.4 1,230.3 
LIFO reserve(33.3)(41.1)
Total$1,373.1 $1,189.2 
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 $87.9 million and $85.6 million at March 31, 2021 and December 31, 2020, respectively.
7


Note 5. Goodwill
The changes in the carrying amount of goodwill for the three months ended March 31, 2021 were as follows:
In millionsAmericasEMEAAsia PacificTotal
Net balance as of December 31, 2020$3,980.0 $793.5 $569.3 $5,342.8 
Acquisitions2.1 3.7  5.8 
Currency translation(0.1)(32.3)(5.0)(37.4)
Net balance as of March 31, 2021$3,982.0 $764.9 $564.3 $5,311.2 
The net goodwill balances at March 31, 2021 and December 31, 2020 include $2,496.0 million of accumulated impairment. The accumulated impairment relates entirely to a charge recorded in 2008.
Note 6. Intangible Assets
The gross amount of the Company’s intangible assets and related accumulated amortization were as follows:
March 31, 2021December 31, 2020
In millionsGross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Customer relationships$2,008.7 $(1,388.7)$620.0 $2,010.2 $(1,362.4)$647.8 
Other208.5 (198.2)10.3 210.7 (199.4)11.3 
Total finite-lived intangible assets2,217.2 (1,586.9)630.3 2,220.9 (1,561.8)659.1 
Trademarks (indefinite-lived)2,626.6 — 2,626.6 2,627.3 — 2,627.3 
Total$4,843.8 $(1,586.9)$3,256.9 $4,848.2 $(1,561.8)$3,286.4 
Intangible asset amortization expense was $30.8 million and $30.3 million for the three months ended March 31, 2021 and 2020, respectively.
Note 7. Debt and Credit Facilities
Short-term borrowings and current maturities of long-term debt consisted of the following:
In millionsMarch 31,
2021
December 31,
2020
Debentures with put feature$342.9 $342.9 
2.900% Senior notes due 2021 (1)
 299.9 
9.000% Debentures due 2021 (2)
125.0 125.0 
Other current maturities of long-term debt7.5 7.8 
Total$475.4 $775.6 
(1) The 2.900% Senior notes were repaid in February 2021.
(2) The 9.000% Debentures are due in August 2021.
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. The Company had no outstanding balance under its commercial paper program as of March 31, 2021 and December 31, 2020.
8


Debentures with Put Feature
At March 31, 2021 and December 31, 2020, the Company had $342.9 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 $37.2 million of the outstanding debentures in February 2021, subject to the notice requirement. No exercises were made.
Long-term debt, excluding current maturities, consisted of the following:
In millionsMarch 31,
2021
December 31,
2020
4.250% Senior notes due 2023
$698.6 $698.4 
7.200% Debentures due 2021-2025
29.9 29.9 
3.550% Senior notes due 2024
497.5 497.3 
6.480% Debentures due 2025
149.7 149.7 
3.500% Senior notes due 2026
397.5 397.3 
3.750% Senior notes due 2028
545.8 545.6 
3.800% Senior notes due 2029
744.5 744.4 
5.750% Senior notes due 2043
494.8 494.7 
4.650% Senior notes due 2044
296.1 296.1 
4.300% Senior notes due 2048
296.2 296.2 
4.500% Senior notes due 2049
345.7 345.7 
Other loans and notes 1.2 
Total$4,496.3 $4,496.5 
Other Credit Facilities
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 (TT Lux) (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 Borrowers. Total commitments of $2.0 billion were unused at March 31, 2021 and December 31, 2020. On April 30, 2021, Trane Technologies Financing Limited, an Irish private limited company (TTFL) became an additional borrower under the credit facilities and TT Lux merged into TTFL.
Fair Value of Debt
The carrying value of the Company's short-term borrowings is a reasonable estimate of fair value due to the short-term nature of the instruments. The fair value of the Company's debt instruments at March 31, 2021 and December 31, 2020 was $5.7 billion and $6.3 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.
9


Note 8. 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 Condensed 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 Condensed Consolidated Balance Sheets were as follows:
 Derivative assetsDerivative liabilities
In millionsMarch 31,
2021
December 31,
2020
March 31,
2021
December 31,
2020
Derivatives designated as hedges:
Currency derivatives$ $0.7 $5.3 $1.7 
Derivatives not designated as hedges:
Currency derivatives6.0 1.5 6.5 4.8 
Total derivatives$6.0 $2.2 $11.8 $6.5 
Asset and liability derivatives included in the table above are recorded within Other current assets and Accrued expenses and other current liabilities, respectively.
Currency Derivative Instruments
The notional amount of the Company’s currency derivatives was $0.5 billion at both March 31, 2021 and December 31, 2020, respectively. At March 31, 2021 and December 31, 2020, a net loss of $4.3 million and $0.7 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 $4.3 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 March 31, 2021, the maximum term of the Company’s currency derivatives was approximately 12 months, except for currency derivatives in place related to a certain long-term contract.
Other Derivative Instruments
Prior to 2015, 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 $5.2 million at March 31, 2021 and $5.3 million at December 31, 2020. The net deferred gain at March 31, 2021 will continue to be amortized over the term of notes with maturities ranging from 2023 to 2044. The amount expected to be 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 March 31, 2021 or December 31, 2020.
10


The following table represents the amounts associated with derivatives designated as hedges affecting Net earnings and AOCI for the three months ended March 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 millions2021202020212020
Currency derivatives designated as hedges (1)
$(4.6)$0.3 Cost of goods sold$(1.1)$(0.5)
Interest rate swaps & locks  Interest expense0.2 0.2 
Total$(4.6)$0.3 $(0.9)$(0.3)
(1) Amounts excluded from effectiveness testing and recognized into Cost of goods sold based on changes in fair value and amortization was a loss of $0.8 million and $0.6 million for the three months ended March 31, 2021 and 2020, respectively.
The following table represents the amounts associated with derivatives not designated as hedges affecting Net earnings for the three months ended March 31:
  Location of gain (loss) recognized in Net earningsAmount of gain (loss)
recognized in Net earnings
In millions20212020
Currency derivatives - continuingOther income (expense), net$(2.5)$8.3 
Currency derivatives - discontinuedDiscontinued operations (0.4)
Total$(2.5)$7.9 
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.
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.
Note 9. 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.
11


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 March 31, 2021:
In millionsFair ValueFair value measurements
Level 1Level 2Level 3
Assets:
Derivative instruments$6.0 $ $6.0 $ 
Liabilities:
Derivative instruments$11.8 $ $11.8 $ 
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 millionsFair ValueFair value measurements
Level 1Level 2Level 3
Assets:
Derivative instruments$2.2 $ $2.2 $ 
Liabilities:
Derivative instruments$6.5 $ $6.5 $ 
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 10. 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.
12


The components of the Company’s net periodic pension benefit cost for the three months ended March 31 were as follows:
Three months ended
In millions20212020
Service cost$12.8 $17.7 
Interest cost14.7 22.5 
Expected return on plan assets(26.6)(31.9)
Net amortization of:
Prior service costs1.3 1.3 
Net actuarial (gains) losses8.9 11.3 
Net periodic pension benefit cost$11.1 $20.9 
Net curtailment and settlement (gains) losses6.9 (3.6)
Net periodic pension benefit cost after net curtailment and settlement (gains) losses$18.0 $17.3 
Amounts recorded in continuing operations:
      Operating income$11.9 $14.8 
      Other income/(expense), net5.1 0.7 
Amounts recorded in discontinued operations1.0 1.8 
Total$18.0 $17.3 
The Company made contributions to its defined benefit pension plans of $14.5 million and $50.0 million during the three months ended March 31, 2021 and 2020, respectively. The 2020 contribution included $24.4 million to fund Ingersoll Rand Industrial plans prior to the completion of the Transaction which was included within Net cash provided by (used in) discontinued operating activities on the Condensed Consolidated Statements of Cash Flows. The Company currently projects that it will contribute approximately $56 million to its enterprise plans worldwide in 2021.
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.
The components of net periodic postretirement benefit cost for the three months ended March 31 were as follows:
Three months ended
In millions20212020
Service cost$0.5 $0.6 
Interest cost1.4 2.6 
Net amortization of net actuarial (gains) losses(0.5)(1.1)
Net periodic postretirement benefit cost$1.4 $2.1 
Amounts recorded in continuing operations:
     Operating income$0.5 $0.6 
     Other income/(expense), net0.6 1.0 
Amounts recorded in discontinued operations0.3 0.5 
Total$1.4 $2.1 
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Note 11. 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 Euro-denominated ordinary shares or preference shares outstanding at March 31, 2021 or December 31, 2020.
Changes in ordinary shares and treasury shares for the three months ended March 31, 2021 were as follows:
In millionsOrdinary shares issuedOrdinary shares held in treasury
December 31, 2020263.3 24.5 
Shares issued under incentive plans, net1.0  
Repurchase of ordinary shares(0.7) 
March 31, 2021263.6 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 cancelled 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). During the three months ended March 31, 2021, the Company repurchased and canceled $104.2 million of its ordinary shares leaving $395.8 million remaining under the 2018 Authorization at March 31, 2021. In February 2021, the Company's Board of Directors authorized the repurchase of up to $2.0 billion of its 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) for the three months ended March 31, 2021 were as follows:
In millionsDerivative InstrumentsPension and OPEBForeign Currency TranslationTotal
Balance at December 31, 2020$10.8 $(416.5)$(225.8)$(631.5)
Other comprehensive income (loss) attributable to Trane Technologies plc(3.4)15.2 (80.1)(68.3)
Balance at March 31, 2021$7.4 $(401.3)$(305.9)$(699.8)
The changes in Accumulated other comprehensive income (loss) for the three months ended March 31, 2020 were as follows:
In millionsDerivative InstrumentsPension and OPEBForeign Currency TranslationTotal
Balance at December 31, 2019$5.6 $(457.4)$(554.8)$(1,006.6)
Other comprehensive income (loss) attributable to Trane Technologies plc0.4 (11.0)(48.1)(58.7)
Separation of Ingersoll Rand Industrial, net of tax 69.1 70.2 139.3 
Balance at March 31, 2020$6.0 $(399.3)$(532.7)$(926.0)

14


Note 12. 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.
Disaggregated Revenue
Net revenues by geography and major type of good or service for the three months ended March 31 were as follows:
Three months ended
In millions20212020
Americas
     Equipment$1,570.8 $1,392.6 
     Services and parts754.9 705.2 
Total Americas$2,325.7 $2,097.8 
EMEA
     Equipment$