QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
x | Accelerated 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. ¨ | |||||||||||||||||||||||
Item 1 - | ||||||||
Item 2 - | ||||||||
Item 3 - | ||||||||
Item 4 - | ||||||||
Item 1 - | ||||||||
Item 1A - | ||||||||
Item 2 - | ||||||||
Item 6 - | ||||||||
TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||
(Unaudited) | |||||||||||
Three months ended | |||||||||||
March 31, | |||||||||||
In millions, except per share amounts | 2023 | 2022 | |||||||||
Net revenues | $ | $ | |||||||||
Cost of goods sold | ( | ( | |||||||||
Selling and administrative expenses | ( | ( | |||||||||
Operating income | |||||||||||
Interest expense | ( | ( | |||||||||
Other income/(expense), net | ( | ( | |||||||||
Earnings before income taxes | |||||||||||
Provision for income taxes | ( | ( | |||||||||
Earnings from continuing operations | |||||||||||
Discontinued operations, net of tax | ( | ( | |||||||||
Net earnings | |||||||||||
Less: Net earnings from continuing operations attributable to noncontrolling interests | ( | ( | |||||||||
Net earnings attributable to Trane Technologies plc | $ | $ | |||||||||
Amounts attributable to Trane Technologies plc ordinary shareholders: | |||||||||||
Continuing operations | $ | $ | |||||||||
Discontinued operations | ( | ( | |||||||||
Net earnings | $ | $ | |||||||||
Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders: | |||||||||||
Basic: | |||||||||||
Continuing operations | $ | $ | |||||||||
Discontinued operations | ( | ( | |||||||||
Net earnings | $ | $ | |||||||||
Diluted: | |||||||||||
Continuing operations | $ | $ | |||||||||
Discontinued operations | ( | ( | |||||||||
Net earnings | $ | $ | |||||||||
Weighted-average shares outstanding: | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
(Unaudited) | |||||||||||
Three months ended | |||||||||||
March 31, | |||||||||||
In millions | 2023 | 2022 | |||||||||
Net earnings | $ | $ | |||||||||
Other comprehensive income (loss): | |||||||||||
Currency translation | ( | ||||||||||
Cash flow hedges: | |||||||||||
Unrealized net gains (losses) arising during period | |||||||||||
Net (gains) losses reclassified into earnings | ( | ||||||||||
Tax (expense) benefit | ( | ( | |||||||||
Total cash flow hedges, net of tax | |||||||||||
Pension and OPEB adjustments: | |||||||||||
Amortization reclassified into earnings | |||||||||||
Net curtailment and settlement (gains) losses reclassified to earnings | |||||||||||
Currency translation and other | ( | ||||||||||
Tax (expense) benefit | ( | ||||||||||
Total pension and OPEB adjustments, net of tax | |||||||||||
Other comprehensive income (loss), net of tax | ( | ||||||||||
Comprehensive income, net of tax | |||||||||||
Less: Comprehensive income attributable to noncontrolling interests | ( | ( | |||||||||
Comprehensive income attributable to Trane Technologies plc | $ | $ |
(Unaudited) | |||||||||||
In millions | March 31, 2023 | December 31, 2022 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts and notes receivable, net | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Other noncurrent assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued compensation and benefits | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Short-term borrowings and current maturities of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Postemployment and other benefit liabilities | |||||||||||
Deferred and noncurrent income taxes | |||||||||||
Other noncurrent liabilities | |||||||||||
Total liabilities | |||||||||||
Equity: | |||||||||||
Trane Technologies plc shareholders’ equity: | |||||||||||
Ordinary shares | |||||||||||
Ordinary shares held in treasury, at cost | ( | ( | |||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Total Trane Technologies plc shareholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and 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 Interests | |||||||||||||||||||||||||||||||||||||||||||
Amount at par value | Shares | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Shares issued under incentive stock plans | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of ordinary shares | ( | ( | ( | — | ( | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared to noncontrolling interest | ( | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared to common shareholders | ( | — | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
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 Interests | |||||||||||||||||||||||||||||||||||||||||||
Amount at par value | Shares | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Shares issued under incentive stock plans | ( | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of ordinary shares | ( | ( | ( | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared to noncontrolling interest | ( | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared to common shareholders | ( | — | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Separation of Ingersoll Rand Industrial | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
Three months ended | |||||||||||
March 31, | |||||||||||
In millions | 2023 | 2022 | |||||||||
Cash flows from operating activities: | |||||||||||
Net earnings | $ | $ | |||||||||
Discontinued operations, net of tax | |||||||||||
Adjustments for non-cash transactions: | |||||||||||
Depreciation and amortization | |||||||||||
Pension and other postretirement benefits | |||||||||||
Stock settled share-based compensation | |||||||||||
Changes in assets and liabilities, net of the effects of acquisitions | ( | ( | |||||||||
Other non-cash items, net | ( | ( | |||||||||
Net cash provided by (used in) continuing operating activities | ( | ||||||||||
Net cash provided by (used in) discontinued operating activities | ( | ( | |||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Other investing activities, net | ( | ( | |||||||||
Net cash provided by (used in) continuing investing activities | ( | ( | |||||||||
Net cash provided by (used in) discontinued investing activities | ( | ||||||||||
Net cash provided by (used in) investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from long-term debt | |||||||||||
Payments of long-term debt | ( | ||||||||||
Net proceeds from (payments of) debt | ( | ||||||||||
Debt issuance costs | ( | ||||||||||
Dividends paid to ordinary shareholders | ( | ( | |||||||||
Dividends paid to noncontrolling interests | ( | ( | |||||||||
Proceeds (payments) from shares issued under incentive plans, net | ( | ||||||||||
Repurchase of ordinary shares | ( | ( | |||||||||
Other financing activities, net | ( | ||||||||||
Net cash provided by (used in) financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents - beginning of period | |||||||||||
Cash and cash equivalents - end of period | $ | $ |
In millions | March 31, 2023 | December 31, 2022 | |||||||||
Raw materials | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
LIFO reserve | ( | ( | |||||||||
Total | $ | $ |
In millions | Americas | EMEA | Asia Pacific | Total | |||||||||||||||||||
Net balance as of December 31, 2022 | $ | $ | $ | $ | |||||||||||||||||||
Measurement period adjustment | ( | ( | |||||||||||||||||||||
Currency translation | |||||||||||||||||||||||
Net balance as of March 31, 2023 | $ | $ | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
In millions | Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Other | ( | ( | ||||||||||||||||||||||||||||||||||||
Total finite-lived intangible assets | ( | ( | ||||||||||||||||||||||||||||||||||||
Trademarks (indefinite-lived) | — | — | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
In millions | March 31, 2023 | December 31, 2022 | |||||||||
Debentures with put feature | $ | $ | |||||||||
Other current maturities of long-term debt | |||||||||||
Total | $ | $ |
In millions | March 31, 2023 | December 31, 2022 | |||||||||
$ | $ | ||||||||||
Total | $ | $ |
In millions | Fair Value | Fair value measurements | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Derivative instruments | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivative instruments | |||||||||||||||||||||||
Contingent consideration | |||||||||||||||||||||||
In millions | Fair Value | Fair value measurements | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Derivative instruments | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivative instruments | |||||||||||||||||||||||
Contingent consideration |
In millions | March 31, 2023 | December 31, 2022 | ||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Change in fair value of contingent consideration | ( | |||||||||||||
Balance at end of period | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Discount rate | % | % | ||||||||||||
Volatility | % | % |
Three months ended | ||||||||||||||
In millions | 2023 | 2022 | ||||||||||||
Service cost | $ | $ | ||||||||||||
Interest cost | ||||||||||||||
Expected return on plan assets | ( | ( | ||||||||||||
Net amortization of: | ||||||||||||||
Prior service costs (benefits) | ||||||||||||||
Net actuarial (gains) losses | ||||||||||||||
Net periodic pension benefit cost | ||||||||||||||
Net curtailment and settlement losses | ||||||||||||||
Net periodic pension benefit cost after net curtailment and settlement losses | $ | $ | ||||||||||||
Amounts recorded in continuing operations: | ||||||||||||||
Operating income | $ | $ | ||||||||||||
Other income/(expense), net | ( | |||||||||||||
Amounts recorded in discontinued operations | ||||||||||||||
Total | $ | $ |
Three months ended | |||||||||||
In millions | 2023 | 2022 | |||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Net amortization of: | |||||||||||
Prior service costs (benefits) | |||||||||||
Net actuarial (gains) losses | ( | ( | |||||||||
Net periodic postretirement benefit cost | $ | $ | |||||||||
Amounts recorded in continuing operations: | |||||||||||
Operating income | $ | $ | |||||||||
Other income/(expense), net | |||||||||||
Amounts recorded in discontinued operations | ( | ||||||||||
Total | $ | $ |
In millions | Ordinary shares issued | Ordinary shares held in treasury | |||||||||
December 31, 2022 | |||||||||||
Shares issued under incentive plans, net | |||||||||||
Repurchase of ordinary shares | ( | ||||||||||
March 31, 2023 |
In millions | Derivative Instruments | Pension and OPEB | Foreign Currency Translation | Total | ||||||||||||||||||||||
Balance at December 31, 2022 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Other comprehensive income (loss) attributable to Trane Technologies plc | ||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | ( | $ | ( | $ | ( |
In millions | Derivative Instruments | Pension and OPEB | Foreign Currency Translation | Total | ||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Other comprehensive income (loss) attributable to Trane Technologies plc | ( | ( | ||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | ( | $ | ( | $ | ( |
Three months ended | |||||||||||
In millions | 2023 | 2022 | |||||||||
Americas | |||||||||||
Equipment | $ | $ | |||||||||
Services | |||||||||||
Total Americas | $ | $ | |||||||||
EMEA | |||||||||||
Equipment | $ | $ | |||||||||
Services | |||||||||||
Total EMEA | $ | $ | |||||||||
Asia Pacific | |||||||||||
Equipment | $ | $ | |||||||||
Services | |||||||||||
Total Asia Pacific | $ | $ | |||||||||
Total Net revenues | $ | $ |
In millions | Location on Condensed Consolidated Balance Sheets | March 31, 2023 | December 31, 2022 | |||||||||||
Contract assets- - current | Other current assets | $ | $ | |||||||||||
Contract assets - noncurrent | Other noncurrent assets | |||||||||||||
Contract liabilities - current | Accrued expenses and other current liabilities | |||||||||||||
Contract liabilities - noncurrent | Other noncurrent liabilities |
Three months ended | ||||||||||||||
In millions | 2023 | 2022 | ||||||||||||
Stock options | $ | $ | ||||||||||||
RSUs | ||||||||||||||
Performance shares | ||||||||||||||
Deferred compensation | ||||||||||||||
Pre-tax expense | ||||||||||||||
Tax benefit | ( | ( | ||||||||||||
After-tax expense | $ | $ | ||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Number granted | Weighted- average fair value per award | Number granted | Weighted- average fair value per award | ||||||||||||||||||||
Stock options | $ | $ | |||||||||||||||||||||
RSUs | $ | $ | |||||||||||||||||||||
Performance shares (1) | $ | $ |
2023 | 2022 | ||||||||||
Dividend yield | % | % | |||||||||
Volatility | % | % | |||||||||
Risk-free rate of return | % | % | |||||||||
Expected life in years |
Three months ended | |||||||||||
In millions | 2023 | 2022 | |||||||||
Interest income | $ | $ | |||||||||
Foreign currency exchange loss | ( | ( | |||||||||
Other components of net periodic benefit credit/(cost) | ( | ||||||||||
Other activity, net | ( | ||||||||||
Other income/(expense), net | $ | ( | $ | ( |
Three months ended | |||||||||||
In millions, except per share amounts | 2023 | 2022 | |||||||||
Weighted-average number of basic shares | |||||||||||
Shares issuable under incentive share plans | |||||||||||
Weighted-average number of diluted shares | |||||||||||
Anti-dilutive shares | |||||||||||
Dividends declared per ordinary share | $ | $ |
Three months ended | |||||||||||
In millions | 2023 | 2022 | |||||||||
Net revenues | |||||||||||
Americas | $ | $ | |||||||||
EMEA | |||||||||||
Asia Pacific | |||||||||||
Total Net revenues | $ | $ | |||||||||
Segment Adjusted EBITDA | |||||||||||
Americas | $ | $ | |||||||||
EMEA | |||||||||||
Asia Pacific | |||||||||||
Total Segment Adjusted EBITDA | $ | $ | |||||||||
Reconciliation of Segment Adjusted EBITDA to earnings before income taxes | |||||||||||
Total Segment Adjusted EBITDA | $ | $ | |||||||||
Interest expense | ( | ( | |||||||||
Depreciation and amortization | ( | ( | |||||||||
Restructuring costs | ( | ( | |||||||||
Non-cash adjustment for contingent consideration | ( | ||||||||||
Acquisition inventory step-up | ( | ||||||||||
Unallocated corporate expenses | ( | ( | |||||||||
Earnings before income taxes | $ | $ |
In millions | 2023 | ||||
Balance at beginning of period | $ | ||||
Reductions for payments | ( | ||||
Accruals for warranties issued during the current period | |||||
Changes to accruals related to preexisting warranties | ( | ||||
Translation | |||||
Balance at end of period | $ |
In millions | 2023 | ||||
Balance at beginning of period | $ | ||||
Amortization of deferred revenue for the period | ( | ||||
Additions for extended warranties issued during the period | |||||
Changes to accruals related to preexisting warranties | ( | ||||
Translation | |||||
Balance at end of period | $ |
Dollar amounts in millions | 2023 | 2022 | Period Change | 2023 % of revenues | 2022 % of revenues | ||||||||||||||||||||||||
Net revenues | $ | 3,665.8 | $ | 3,355.5 | $ | 310.3 | |||||||||||||||||||||||
Cost of goods sold | (2,522.3) | (2,366.5) | (155.8) | 68.8 | % | 70.5 | % | ||||||||||||||||||||||
Gross profit | 1,143.5 | 989.0 | 154.5 | 31.2 | % | 29.5 | % | ||||||||||||||||||||||
Selling and administrative expenses | (686.7) | (600.8) | (85.9) | 18.7 | % | 17.9 | % | ||||||||||||||||||||||
Operating income | 456.8 | 388.2 | 68.6 | 12.5 | % | 11.6 | % | ||||||||||||||||||||||
Interest expense | (57.6) | (56.0) | (1.6) | ||||||||||||||||||||||||||
Other income/(expense), net | (9.4) | (0.7) | (8.7) | ||||||||||||||||||||||||||
Earnings before income taxes | 389.8 | 331.5 | 58.3 | ||||||||||||||||||||||||||
Provision for income taxes | (73.2) | (61.1) | (12.1) | ||||||||||||||||||||||||||
Earnings from continuing operations | 316.6 | 270.4 | 46.2 | ||||||||||||||||||||||||||
Discontinued operations, net of tax | (5.5) | (7.0) | 1.5 | ||||||||||||||||||||||||||
Net earnings | $ | 311.1 | $ | 263.4 | $ | 47.7 |
Pricing | 6.6 | % | |||
Volume | 2.4 | % | |||
Acquisitions | 1.8 | % | |||
Currency translation | (1.6) | % | |||
Total | 9.2 | % |
In millions | 2023 | 2022 | |||||||||
Interest income | $ | 4.4 | $ | 1.3 | |||||||
Foreign currency exchange loss | (6.6) | (3.6) | |||||||||
Other components of net periodic benefit credit/(cost) | (5.6) | 1.2 | |||||||||
Other activity, net | (1.6) | 0.4 | |||||||||
Other income/(expense), net | $ | (9.4) | $ | (0.7) |
In millions | 2023 | 2022 | % change | ||||||||||||||
Americas | |||||||||||||||||
Net revenues | $ | 2,861.0 | $ | 2,633.2 | 8.7 | % | |||||||||||
Segment Adjusted EBITDA | 455.8 | 405.6 | 12.4 | % | |||||||||||||
Segment Adjusted EBITDA margin | 15.9 | % | 15.4 | % | |||||||||||||
EMEA | |||||||||||||||||
Net revenues | $ | 510.5 | $ | 441.3 | 15.7 | % | |||||||||||
Segment Adjusted EBITDA | 94.4 | 59.1 | 59.7 | % | |||||||||||||
Segment Adjusted EBITDA margin | 18.5 | % | 13.4 | % | |||||||||||||
Asia Pacific | |||||||||||||||||
Net revenues | $ | 294.3 | $ | 281.0 | 4.7 | % | |||||||||||
Segment Adjusted EBITDA | 57.2 | 43.5 | 31.5 | % | |||||||||||||
Segment Adjusted EBITDA margin | 19.4 | % | 15.5 | % | |||||||||||||
Total Net revenues | $ | 3,665.8 | $ | 3,355.5 | 9.2 | % | |||||||||||
Total Segment Adjusted EBITDA | 607.4 | 508.2 | 19.5 | % | |||||||||||||
Total Segment Adjusted EBITDA margin | 16.6 | % | 15.1 | % |
Pricing | 6.6 | % | |||
Volume | 1.5 | % | |||
Acquisitions | 1.0 | % | |||
Currency translation | (0.4) | % | |||
Total | 8.7 | % |
Pricing | 8.9 | % | |||
Volume | 6.5 | % | |||
Acquisitions | 6.2 | % | |||
Currency translation | (5.9) | % | |||
Total | 15.7 | % |
Pricing | 4.0 | % | |||
Volume | 4.4 | % | |||
Acquisitions | 2.6 | % | |||
Currency translation | (6.3) | % | |||
Total | 4.7 | % |
In millions | March 31, 2023 | December 31, 2022 | |||||||||
Cash and cash equivalents | $ | 692.9 | $ | 1,220.5 | |||||||
Short-term borrowings and current maturities of long-term debt | 348.3 | 1,048.0 | |||||||||
Long-term debt | 4,481.8 | 3,788.3 | |||||||||
Total debt | 4,830.1 | 4,836.3 | |||||||||
Total Trane Technologies plc shareholders’ equity | 6,036.1 | 6,088.6 | |||||||||
Total equity | 6,054.3 | 6,105.2 | |||||||||
Debt-to-total capital ratio | 44.4 | % | 44.2 | % |
In millions | 2023 | 2022 | |||||||||
Net cash provided by (used in) continuing operating activities | $ | 16.8 | $ | (3.9) | |||||||
Net cash provided by (used in) continuing investing activities | (91.0) | (82.7) | |||||||||
Net cash provided by (used in) continuing financing activities | (459.2) | (534.6) |
In millions | 2023 | 2022 | |||||||||
Net cash provided by continuing operating activities | $ | 16.8 | $ | (3.9) | |||||||
Capital expenditures | (77.1) | (74.8) | |||||||||
Cash payments for restructuring | 4.4 | 9.7 | |||||||||
Transformation costs paid | 0.8 | 4.5 | |||||||||
M&A transaction costs | 3.5 | — | |||||||||
QSF funding (continuing operations component) | — | 91.8 | |||||||||
Free cash flow (1) | $ | (51.6) | $ | 27.3 |
Parent, issuer or guarantors | Notes issued | Notes guaranteed | ||||||
Trane Technologies plc (Plc) | None | All registered notes and debentures | ||||||
Trane Technologies Irish Holdings Unlimited Company (TT Holdings) | None | All notes issued by TTFL and TTC HoldCo | ||||||
Trane Technologies Lux International Holding Company S.à.r.l. (TT International) | None | All notes issued by TTFL and TTC HoldCo | ||||||
Trane Technologies Global Holding Company Limited (TT Global) | None | All notes issued by TTFL and TTC HoldCo | ||||||
Trane Technologies Financing Limited (TTFL) | 3.550% Senior notes due 2024 3.500% Senior notes due 2026 3.800% Senior notes due 2029 5.250% Senior notes due 2033 4.650% Senior notes due 2044 4.500% Senior notes due 2049 | All notes and debentures issued by TTC HoldCo and TTC | ||||||
Trane Technologies HoldCo Inc. (TTC HoldCo) | 3.750% Senior notes due 2028 5.750% Senior notes due 2043 4.300% Senior notes due 2048 | All notes issued by TTFL | ||||||
Trane Technologies Company LLC (TTC) | 7.200% Debentures due 2023-2025 6.480% Debentures due 2025 Puttable debentures due 2027-2028 | All notes issued by TTFL and TTC HoldCo |
Three months ended March 31, 2023 | |||||||||||
In millions | Obligor group 1 | Obligor group 2 | |||||||||
Net revenues | $ | — | $ | — | |||||||
Gross profit (loss) | — | — | |||||||||
Intercompany interest and fees | (30.7) | 37.2 | |||||||||
Earnings (loss) from continuing operations | (76.0) | 8.3 | |||||||||
Discontinued operations, net of tax | (5.4) | (5.5) | |||||||||
Net earnings (loss) | (81.4) | 2.8 | |||||||||
Less: Net earnings attributable to noncontrolling interests | — | — | |||||||||
Net earnings (loss) attributable to Trane Technologies plc | $ | (81.4) | $ | 2.8 |
March 31, 2023 | |||||||||||
In millions | Obligor group 1 | Obligor group 2 | |||||||||
ASSETS | |||||||||||
Intercompany receivables | $ | 681.9 | $ | 1,504.2 | |||||||
Current assets | 905.9 | 1,719.8 | |||||||||
Intercompany notes receivable | 1,831.9 | 4,781.6 | |||||||||
Noncurrent assets | 2,568.1 | 5,380.3 | |||||||||
LIABILITIES | |||||||||||
Intercompany payables | 3,832.7 | 2,090.8 | |||||||||
Current liabilities | 4,640.0 | 2,798.8 | |||||||||
Intercompany notes payable | 2,400.0 | 2,400.0 | |||||||||
Noncurrent liabilities | 7,495.6 | 6,138.8 |
December 31, 2022 | |||||||||||
In millions | Obligor group 1 | Obligor group 2 | |||||||||
ASSETS | |||||||||||
Intercompany receivables | $ | 860.0 | $ | 1,092.1 | |||||||
Current assets | 1,011.6 | 1,231.7 | |||||||||
Intercompany notes receivable | 1,831.9 | 4,781.6 | |||||||||
Noncurrent assets | 2,582.3 | 5,383.1 | |||||||||
LIABILITIES | |||||||||||
Intercompany payables | 3,303.5 | 1,792.1 | |||||||||
Current liabilities | 4,851.8 | 2,611.9 | |||||||||
Intercompany notes payable | 2,400.0 | 2,400.0 | |||||||||
Noncurrent liabilities | 6,789.8 | 5,433.4 |
Period | Total number of shares purchased (000's) (a) (b) | Average price paid per share (a) (b) | Total number of shares purchased as part of program (000's) (a) | Approximate dollar value of shares still available to be purchased under the program ($000's) (a) | ||||||||||||||||||||||
January 1 - January 31 | 3.5 | $ | 168.09 | — | $ | 199,776 | ||||||||||||||||||||
February 1 - February 28 | 600.9 | 183.22 | 561.4 | 96,918 | ||||||||||||||||||||||
March 1 - March 31 | 1,148.0 | 185.11 | 1,065.3 | 2,899,773 | ||||||||||||||||||||||
Total | 1,752.4 | $ | 184.43 | 1,626.7 |
Exhibit No. | Description | Method of Filing | ||||||||||||
List of Guarantors and Subsidiary Issuers of Guaranteed Securities. | Filed herewith. | |||||||||||||
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | |||||||||||||
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | |||||||||||||
Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Furnished herewith. | |||||||||||||
101 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements. | Filed herewith. | ||||||||||||
104 | Cover Page Interactive Data File (embedded within the iXBRL document and contained in Exhibit 101). | Filed herewith. |
TRANE TECHNOLOGIES PLC (Registrant) | ||||||||
Date: | May 3, 2023 | /s/ Christopher J. Kuehn | ||||||
Christopher J. Kuehn, Executive Vice President and Chief Financial Officer Principal Financial Officer | ||||||||
Date: | May 3, 2023 | /s/ Mark A. Majocha | ||||||
Mark A. Majocha, Vice President and Chief Accounting Officer Principal Accounting Officer | ||||||||
Parent, issuer or guarantors | Notes issued | Notes guaranteed | ||||||
Trane Technologies plc (Plc) | None | All registered notes and debentures | ||||||
Trane Technologies Irish Holdings Unlimited Company (TT Holdings) | None | All notes issued by TTFL and TTC HoldCo | ||||||
Trane Technologies Lux International Holding Company S.à.r.l. (TT International) | None | All notes issued by TTFL and TTC HoldCo | ||||||
Trane Technologies Global Holding Company Limited (TT Global) | None | All notes issued by TTFL and TTC HoldCo | ||||||
Trane Technologies Financing Limited (TTFL) | 3.550% Senior notes due 2024 3.500% Senior notes due 2026 3.800% Senior notes due 2029 5.250% Senior notes due 2033 4.650% Senior notes due 2044 4.500% Senior notes due 2049 | All notes and debentures issued by TTC HoldCo and TTC | ||||||
Trane Technologies HoldCo Inc. (TTC HoldCo) | 3.750% Senior notes due 2028 5.750% Senior notes due 2043 4.300% Senior notes due 2048 | All notes issued by TTFL | ||||||
Trane Technologies Company LLC (TTC) | 7.200% Debentures due 2023-2025 6.480% Debentures due 2025 Puttable debentures due 2027-2028 | All notes issued by TTFL and TTC HoldCo |
Date: | May 3, 2023 | /s/ DAVID S. REGNERY | |||||||||
David S. Regnery | |||||||||||
Principal Executive Officer |
Date: | May 3, 2023 | /s/ CHRISTOPHER J. KUEHN | |||||||||
Christopher J. Kuehn | |||||||||||
Principal Financial Officer |
/s/ DAVID S. REGNERY | ||
David S. Regnery | ||
Principal Executive Officer | ||
May 3, 2023 | ||
/s/ CHRISTOPHER J. KUEHN | ||
Christopher J. Kuehn | ||
Principal Financial Officer | ||
May 3, 2023 |
Basis of Presentation |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Trane Technologies plc, a public limited company, incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively we, our, the Company or Trane Technologies) is a global climate innovator. The Company brings sustainable and efficient solutions to buildings, homes and transportation through the Company's strategic brands, Trane® and Thermo King®, and its environmentally responsible portfolio of products, services and connected intelligent controls. The Company generates revenue and cash primarily through the design, manufacture, sales and service of solutions for Heating, Ventilation and Air Conditioning (HVAC), transport refrigeration, and custom refrigeration solutions. The accompanying unaudited Condensed Consolidated Financial Statements of Trane Technologies 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, 2022. 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. 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. 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. 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 17, "Commitments and Contingencies," for more information regarding the status of Chapter 11 bankruptcy and asbestos-related matters.
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Recent Accounting Pronouncements |
3 Months Ended |
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Mar. 31, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Accounting Pronouncements | 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 September 2022, the FASB issued ASU 2022-04, “Liabilities - Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Program Finance Obligations”, which requires that a company that enters into a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. To achieve that objective, the company should disclose qualitative and quantitative information about its supplier finance programs. The Company adopted this standard on January 1, 2023, except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023. See Note 7, "Supplier Financing Arrangements" for more information regarding the Company's supplier financing program.
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Inventories |
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Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The major classes of inventory were as follows:
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 the lower of cost and net realizable value. Reserve balances, primarily related to obsolete and slow-moving inventories, were $102.8 million and $94.3 million at March 31, 2023 and December 31, 2022, respectively.
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Goodwill |
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Goodwill Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill The changes in the carrying amount of goodwill for the three months ended March 31, 2023 were as follows:
The net goodwill balances at March 31, 2023 and December 31, 2022 include $2,496.0 million of accumulated impairment, primarily related to the Americas segment. The accumulated impairment relates entirely to a charge recorded in 2008.
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Intangible Assets |
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Intangible Assets Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets The gross amount of the Company’s intangible assets and related accumulated amortization were as follows:
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Debt and Credit Facilities |
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Debt Credit Facilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Facilities | Debt and Credit Facilities Short-term borrowings and current maturities of long-term debt consisted of the following:
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. Under the commercial paper program, the Company may issue notes from time to time through Trane Technologies HoldCo Inc. or Trane Technologies Financing Limited. 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 Company LLC provided irrevocable and unconditional guarantees for any notes issued under the commercial paper program. In addition, Trane Technologies HoldCo Inc. and Trane Technologies Financing Limited provide irrevocable and unconditional guarantees for any notes issued by the other. The Company had no outstanding balance under its commercial paper program as of March 31, 2023 and December 31, 2022. Debentures with Put Feature At March 31, 2023 and December 31, 2022, the Company had $340.8 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 2023, subject to the notice requirement. No exercises were made. Long-term debt, excluding current maturities, consisted of the following:
Issuance of Senior Notes In March 2023, the Company, through its wholly-owned subsidiary Trane Technologies Financing Limited, issued $700.0 million aggregate principal amount of 5.250% senior notes due 2033. The notes are guaranteed by each of Trane Technologies plc, Trane Technologies Global Holding Company Limited, Trane Technologies Lux International Holding Company S.a.r.l., Trane Technologies Irish Holdings Unlimited Company, Trane Technologies Company LLC and Trane Technologies Holdco Inc. 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. The net proceeds from the offering were used to fund the redemption of the $700.0 million aggregate principal amount of the outstanding 4.250% senior notes due June 2023. Other Credit Facilities The Company maintains two $1.0 billion senior unsecured revolving credit facilities, one of which matures in June 2026 and the other which matures in April 2027 (collectively, the Facilities), through its wholly-owned subsidiaries, Trane Technologies HoldCo Inc., Trane Technologies Global Holding Company Limited and Trane Technologies Financing Limited (collectively, the Borrowers). Both Facilities include Environmental, Social, and Governance (ESG) metrics related to two of the Company’s sustainability commitments: a reduction in greenhouse gas intensity and an increase in the percentage of women in management. The Company's annual performance against these ESG metrics may result in price adjustments to the commitment fee and applicable interest rate. The Facilities provide 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, 2023 and December 31, 2022. Fair Value of Debt The fair value of the Company's debt instruments at March 31, 2023 and December 31, 2022 was $4.7 billion and $4.6 billion, respectively. The Company measures the fair value of its 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. See Note 8, “Fair Value Measurements” for information on the fair value hierarchy.
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Payables and Accruals |
3 Months Ended |
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Mar. 31, 2023 | |
Supplier Financing Arrangements [Abstract] | |
Supplier financing arrangements | Supplier Financing Arrangements The Company has an agreement with a U.S. financial institution that allows its suppliers to sell their receivables to the financial institution at the sole discretion of both the supplier and the financial institution on terms that are negotiated between them. The Company may not always notified when its suppliers sell receivables under this program. The Company’s obligations to its suppliers, including the amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to sell their receivables under the program. Outstanding invoices under the supplier financing program were $110.9 million and $110.6 million at March 31, 2023 and December 31, 2022, respectively, which are included within Accounts payable in the Condensed Consolidated Balance Sheet.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | Fair Value Measurements Fair value is 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. The fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability is 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. Observable market data is required to be used in making fair value measurements when available. 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 March 31, 2023:
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, 2022:
Derivative instruments include forward foreign currency contracts and instruments related to non-functional currency balance sheet exposures and commodity swaps. The fair value of the foreign exchange derivatives is 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 fair value of the commodity derivatives is valued under a market approach using publicized prices, where applicable, or dealer quotes. On October 15, 2021, the Company acquired 100% of Farrar Scientific Corporation's (Farrar Scientific) assets. In connection with the acquisition, the Company agreed to contingent consideration of up to $115.0 million to be paid in 2025, tied to the attainment of key financial targets during the period January 1, 2022 through December 31, 2024. This additional payment, to the extent earned, will be payable in cash. The fair value of the contingent consideration is determined using the Monte Carlo simulation model based on projections of revenues for Farrar Scientific during the period of January 1, 2022 through December 31, 2024, implied revenue volatility and a risk adjusted discount rate. Each quarter the Company is required to remeasure the fair value of the liability as assumptions change and such non-cash adjustments are recorded in Selling and administrative expenses in the Condensed Consolidated Statements of Earnings. Contingent consideration related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs. The changes in the fair value of the Company's Level 3 liabilities were as follows:
The fair value of the contingent consideration is measured on a recurring basis at each reporting date. The following inputs and assumptions were used in the Monte Carlo simulation model to estimate the fair value of the contingent consideration:
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.
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Pensions and Postretirement Benefits Other than Pensions |
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Retirement Benefits, Description [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pensions and Postretirement Benefits Other than Pensions | 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 non-contributory 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. The components of the Company’s net periodic pension benefit cost for the three months ended March 31 were as follows:
The Company made contributions to its defined benefit pension plans of $26.7 million and $4.1 million during the three months ended March 31, 2023 and 2022, respectively. The Company currently projects that it will contribute a total of approximately $70 million to its enterprise plans worldwide in 2023. 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:
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Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | 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, 2023 or December 31, 2022. Changes in ordinary shares and treasury shares for the three months ended March 31, 2023 were as follows:
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 February 2022, the Company's Board of Directors authorized a share repurchase program of up to $3.0 billion of its ordinary shares (2022 Authorization) upon the completion of its $2.0 billion ordinary share repurchase program authorized in 2021 (2021 Authorization). During the three months ended March 31, 2023, the Company repurchased and canceled approximately $300 million of its ordinary shares, thus completing the 2021 Authorization and initiating repurchases under the 2022 Authorization of approximately $100 million of its ordinary shares leaving $2.9 billion remaining under the 2022 Authorization. Accumulated Other Comprehensive Income (Loss) The changes in Accumulated other comprehensive income (loss) for the three months ended March 31, 2023 were as follows:
Other comprehensive income (loss) attributable to noncontrolling interests for the three months ended March 31, 2023 included a gain of $0.5 million related to currency translation. The changes in Accumulated other comprehensive income (loss) for the three months ended March 31, 2022 were as follows:
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Disaggregated Revenue Net revenues by geography and major type of good or service for the three months ended March 31 were as follows:
Revenue from goods and services transferred to customers at a point in time accounted for approximately 81% and 82% of the Company’s revenue for the three months ended March 31, 2023 and 2022, respectively. Contract Balances The opening and closing balances of contract assets and contract liabilities arising from contracts with customers for the period ended March 31, 2023 and December 31, 2022 were as follows:
The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets. 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 three months ended March 31, 2023, changes in contract asset and liability balances were not materially impacted by any other factors. Approximately 25% of the contract liability balance at December 31, 2022 was recognized as revenue during the three months ended March 31, 2023. Additionally, approximately 30% of the contract liability balance at March 31, 2023 was classified as noncurrent and not expected to be recognized as revenue in the next 12 months.
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Share-Based Compensation |
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Share-Based Compensation | Share-Based Compensation The Company accounts for share-based compensation plans under the fair value based method. 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. Share-based compensation expense related to continuing operations is included in Selling and administrative expenses. The expense recognized for the three months ended March 31 was as follows:
Grants issued during the three months ended March 31 were as follows:
(1) The number of performance shares represents the maximum award level. 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 three months ended March 31:
A description of the significant assumptions used to estimate the fair value of the stock option awards is as follows: •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 shares. •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 shares 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 in years - 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. 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. 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 Carlo simulation model in a risk-neutral framework based upon historical volatility, risk-free rates and correlation matrix. 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.
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Other Income/(Expense), Net |
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Other, Net | Other Income/(Expense), Net The components of Other income/(expense), net for the three months ended March 31 were as follows:
Other income/(expense), net includes the results from activities other than core 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 credit/(cost) for pension and postretirement obligations other than the service cost component. Other activity, net primarily includes items associated with certain legal matters, as well as activities related to Murray. Refer to Note 17, "Commitments and Contingencies," for more information regarding asbestos-related matters.
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Income Taxes |
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Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company accounts for its Provision for income taxes by applying an estimate of the annual effective income tax rate for the full year to the respective interim period, taking into account year-to-date amounts and projected results for the full year. For the three months ended March 31, 2023 and March 31, 2022, the Company’s effective income tax rate was 18.8% and 18.4%, respectively. The effective tax rate for the three months ended March 31, 2023 and March 31, 2022 was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate, partially offset by U.S. state and local taxes.Total unrecognized tax benefits for both March 31, 2023 and December 31, 2022 were $82.4 million. Although management believes its tax positions and related provisions reflected in the Condensed Consolidated Financial Statements are fully supportable, it recognizes that these tax positions and related provisions may be challenged by various tax authorities. These tax positions and related provisions are reviewed on an ongoing basis and are adjusted as additional facts and information become available, including progress on tax audits, changes in interpretations of tax laws, developments in case law and closing of statute of limitations. To the extent that the ultimate results differ from the original or adjusted estimates of the Company, the effect will be recorded in Provision for income taxes.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 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 Belgium, Brazil, Canada, China, France, Germany, Ireland, Italy, Luxembourg, Mexico, Singapore, 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 U.S. federal tax returns is complete or effectively settled for years prior to 2016. The Company’s U.S. federal returns for 2016 to 2018 are currently under examination by the Internal Revenue Service (IRS). Subsequent to the first quarter of 2023, the IRS has indicated their intention to add tax year 2019 to their review. In general, the examination of the Company’s material non-U.S. tax returns is complete or effectively settled for the years prior to 2013, with certain matters prior to 2013 being resolved through appeals and litigation and also unilateral procedures as provided for under double tax treaties. |
Earnings Per Share (EPS) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share (EPS) | Earnings Per Share 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 for the three months ended March 31:
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Business Segment Information |
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Business Segment Information | Business Segment Information The Company operates under four regional operating segments designed to create deep customer focus and relevance in markets around the world. The Company determined that its two Europe, Middle East and Africa (EMEA) operating segments meet the aggregation criteria based on similar operating and economic characteristics, resulting in one reportable segment. Therefore, the Company has three regional reportable segments, Americas, EMEA and Asia Pacific. Intercompany sales between segments are immaterial. •The Company’s Americas segment innovates for customers in North America and Latin America. The Americas segment encompasses commercial heating, cooling and ventilation 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, cooling and ventilation 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, cooling and ventilation systems, services and solutions for commercial buildings, and transport refrigeration systems and solutions. Management measures segment operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, non-cash adjustment for contingent consideration, merger and acquisition-related costs, 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. A summary of operations by reportable segment for the three months ended March 31 was as follows:
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Commitments and Contingencies |
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Commitments And Contingencies Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The Company is involved in various litigation, claims and administrative proceedings, including those related to the bankruptcy proceedings for Aldrich and Murray and environmental and product liability matters. The Company 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 have been 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 and to 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). On August 23, 2021, the Bankruptcy Court entered its findings of facts and conclusions of law and order declaring that the automatic stay applies to certain asbestos related claims against the Trane Companies and enjoining such actions. As a result, all asbestos-related lawsuits against Aldrich, Murray and the Trane Companies remain stayed. The goal of these Chapter 11 filings is to resolve equitably and permanently all current and future asbestos-related claims in a manner beneficial to claimants and to Aldrich and Murray through court approval of a plan of reorganization that would create a trust pursuant to section 524(g) of the Bankruptcy Code, establish claims resolution procedures for all current and future asbestos-related claims against Aldrich and Murray and channel such claims to the trust for resolution in accordance with those procedures. 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. 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 Condensed Consolidated Financial Statements. Amounts derecognized in the second quarter of 2020 primarily related to the legacy asbestos-related liabilities and asbestos-related insurance recoveries and $41.7 million of cash. Upon deconsolidation in the second quarter of 2020, the Company recorded its retained interest in Aldrich and Murray at fair value within Other noncurrent assets in the Condensed Consolidated Balance Sheet. In determining the fair value of its equity investment, the Company used a market-adjusted multiple of earnings valuation technique. As a result, the Company recorded an aggregate equity investment of $53.6 million as of the Petition Date. Simultaneously, the Company recognized a liability of $248.8 million within Other noncurrent liabilities in the Condensed Consolidated Balance Sheet related to its obligation under the Funding Agreements. The liability was based on asbestos related liabilities and insurance related assets balances previously recorded by the Company prior to the Petition Date. As a result of the deconsolidation, the Company recognized an aggregate loss of $24.9 million in its Condensed Consolidated Statements of Earnings during the year ended December 31, 2020. 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 Condensed Consolidated Statements of Cash Flows, of which $10.8 million was recorded within continuing operations during the year ended December 31, 2020. On August 26, 2021, the Company announced that Aldrich and Murray reached an agreement in principle with the court-appointed legal representative of future asbestos claimants (the FCR) in the bankruptcy proceedings. The agreement in principle includes the key terms for the permanent resolution of all current and future asbestos claims against Aldrich and Murray pursuant to a plan of reorganization (the Plan). Under the agreed terms, the Plan would create a trust pursuant to section 524(g) of the Bankruptcy Code and establish claims resolution procedures for all current and future claims against Aldrich and Murray (Asbestos Claims). On the effective date of the Plan, Aldrich and Murray would fund the trust with $545.0 million, comprised of $540.0 million in cash and a promissory note to be issued by Aldrich and Murray to the trust in the principal amount of $5.0 million, and the Asbestos Claims would be channeled to the trust for resolution in accordance with the claims resolution procedures. Following the effective date of the Plan, Aldrich and Murray would have no further obligations with respect to the Asbestos Claims. The FCR has agreed to support such Plan. The agreement in principle with the FCR is subject to final documentation and is conditioned on arrangements acceptable to Aldrich and Murray with respect to their asbestos insurance assets. It is currently contemplated that the asbestos insurance assets of Aldrich and Murray would be contributed to the trust, and that, in consideration of their cash contribution to the trust, Aldrich and Murray would have the exclusive right to pursue, collect and retain all insurance reimbursements available in connection with the resolution of Asbestos Claims by the trust. The committee representing current asbestos claimants (the ACC) is not a party to the agreement in principle. Any settlement and its implementation in a plan of reorganization is subject to the approval of the Bankruptcy Court, and there can be no assurance that the Bankruptcy Court will approve the agreement on the terms proposed. On September 24, 2021, Aldrich and Murray filed the Plan with the Bankruptcy Court. The Plan is supported by, and reflects the agreement in principle reached with the FCR. On the same date, in connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a "qualified settlement fund" within the meaning of the Treasury Regulations under Section 468B of the Internal Revenue Code (QSF). The funds held in the QSF would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan. During the third quarter of 2021, in connection with the agreement in principle reached by Aldrich and Murray with the FCR and the motion to create a $270.0 million QSF, the Company recorded a charge of $21.2 million to increase its Funding Agreement liability to $270.0 million. The corresponding charge was bifurcated between Other income / (expense), net of $7.2 million relating to Murray and discontinued operations of $14.0 million relating to Aldrich. On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF, which was funded on March 2, 2022, resulting in an operating cash outflow of $270.0 million in the Company’s Condensed Consolidated Statements of Cash Flows, of which $91.8 million was allocated to continuing operations and $178.2 million was allocated to discontinued operations for the three months ended March 31, 2022. On April 18, 2022, the Bankruptcy Court entered an order granting Aldrich and Murray's request to seek to estimate their aggregate liability for all current and future asbestos-related personal injury claims. Aldrich and Murray are pursuing discovery and related matters in connection with the estimation proceedings. On October 18, 2021, the ACC filed a motion seeking standing to pursue and investigate on behalf of the bankruptcy estates of Aldrich and Murray, claims arising from or related to the 2020 Corporate Restructuring. Also on October 18, 2021, the ACC filed a complaint seeking to substantively consolidate the bankruptcy estates of Aldrich and Murray with certain of the Company's subsidiaries. On December 20, 2021, Aldrich, Murray and certain of the Company's subsidiaries filed motions to dismiss the ACC's substantive consolidation complaint. On April 14, 2022, the Bankruptcy Court granted the ACC's standing motion and denied the motions to dismiss the substantive consolidation complaint. On June 18, 2022, the ACC filed complaints against the Company and other related parties asserting various claims and causes of action arising from or related to the 2020 Corporate Restructuring. Additionally, the Bankruptcy Court denied motions to dismiss the ACC's substantive consolidation complaint. While the Company is vigorously opposing and defending against these claims, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last. The Chapter 11 cases remain pending as of May 3, 2023. 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 Condensed Consolidated Statements of Earnings. Since the Petition Date, there were no material transactions between the Company and these entities other than as described above. 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 and off-site waste disposal facilities. It is the Company’s policy to establish environmental reserves for investigation and remediation activities when it is probable that a liability has been incurred and a reasonable estimate of the liability can be made. Estimated liabilities are determined based upon existing remediation laws and technologies. Inherent uncertainties exist in such evaluations due to unknown environmental conditions, changes in government laws and regulations, and changes in cleanup technologies. The environmental reserves are updated on a routine basis as remediation efforts progress and new information becomes available. 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 and international authorities. The Company 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. In most instances at multi-party sites, the Company’s share of the liability is not material. In estimating its liability at multi-party sites, 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. Reserves for environmental matters are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on their expected payment date. As of March 31, 2023 and December 31, 2022, the Company has recorded reserves for environmental matters of $43.1 million and $42.4 million, respectively. Of these amounts, $37.0 million and $36.5 million, respectively, relate to investigation and remediation of properties and multi-waste disposal sites related to businesses formerly owned 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 three months ended March 31 were as follows:
Standard product warranty liabilities are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on their expected payment date. The Company’s total current standard product warranty reserve at March 31, 2023 and December 31, 2022 was $122.6 million and $120.4 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 three months ended March 31 were as follows:
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 revenue. The Company’s total current extended warranty liability at March 31, 2023 and December 31, 2022 was $114.9 million and $110.5 million, respectively.
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Inventories (Tables) |
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MajorClassesOfInventory [Table Text Block] | The major classes of inventory were as follows:
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Goodwill (Tables) |
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Changes in Goodwill Carrying Amounts | The changes in the carrying amount of goodwill for the three months ended March 31, 2023 were as follows:
The net goodwill balances at March 31, 2023 and December 31, 2022 include $2,496.0 million of accumulated impairment, primarily related to the Americas segment. The accumulated impairment relates entirely to a charge recorded in 2008.
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Intangible Assets (Tables) |
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Schedule of Intangible Asset Net of Goodwill | The gross amount of the Company’s intangible assets and related accumulated amortization were as follows:
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Debt and Credit Facilities (Tables) |
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Short-Term Borrowings and Current Maturities of Long-Term Debt | Short-term borrowings and current maturities of long-term debt consisted of the following:
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Long-Term Debt Excluding Current Maturities | Long-term debt, excluding current maturities, consisted of the following:
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Fair Value Measurements (Tables) |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 |
Dec. 31, 2022 |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis | 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, 2023:
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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, 2022:
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The changes in the fair value of the Company's Level 3 liabilities were as follows:
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Fair Value Measurement Inputs and Valuation Techniques | The following inputs and assumptions were used in the Monte Carlo simulation model to estimate the fair value of the contingent consideration:
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Pensions and Postretirement Benefits Other than Pensions (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plan, Defined Benefit [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost | The components of the Company’s net periodic pension benefit cost for the three months ended March 31 were as follows:
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Other Postretirement Benefit Plan, Defined Benefit [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost | The components of net periodic postretirement benefit cost for the three months ended March 31 were as follows:
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Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Ordinary Shares | Changes in ordinary shares and treasury shares for the three months ended March 31, 2023 were as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in Accumulated other comprehensive income (loss) for the three months ended March 31, 2023 were as follows:
Other comprehensive income (loss) attributable to noncontrolling interests for the three months ended March 31, 2023 included a gain of $0.5 million related to currency translation. The changes in Accumulated other comprehensive income (loss) for the three months ended March 31, 2022 were as follows:
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Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenues | Net revenues by geography and major type of good or service for the three months ended March 31 were as follows:
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Schedule of assets and liabilities from contracts with customers | The opening and closing balances of contract assets and contract liabilities arising from contracts with customers for the period ended March 31, 2023 and December 31, 2022 were as follows:
The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets. 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 three months ended March 31, 2023, changes in contract asset and liability balances were not materially impacted by any other factors. Approximately 25% of the contract liability balance at December 31, 2022 was recognized as revenue during the three months ended March 31, 2023. Additionally, approximately 30% of the contract liability balance at March 31, 2023 was classified as noncurrent and not expected to be recognized as revenue in the next 12 months.
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Share-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Expense | The expense recognized for the three months ended March 31 was as follows:
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Grants of Stock Options and RSUs | Grants issued during the three months ended March 31 were as follows:
(1) The number of performance shares represents the maximum award level.
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Average fair value of stock options, assumptions | The following assumptions were used during the three months ended March 31:
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Other Income/(Expense), Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, Net | The components of Other income/(expense), net for the three months ended March 31 were as follows:
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Earnings Per Share (EPS) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted earnings per share calculations for the three months ended March 31:
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Business Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Operations by Reportable Segments | A summary of operations by reportable segment for the three months ended March 31 was as follows:
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability [Table Text Block] | The changes in the standard product warranty liability for the three months ended March 31 were as follows:
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Extended Warranty [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability [Table Text Block] | The changes in the extended warranty liability for the three months ended March 31 were as follows:
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Basis of Presentation (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Cash dividends declared | $ 171.7 | $ 156.7 |
Retained earnings | ||
Cash dividends declared | $ 171.7 | $ 156.7 |
Inventories (Schedule of Major Classes of Inventory) (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory Valuation Reserves | $ (102.8) | $ (94.3) |
Raw materials | 587.5 | 509.6 |
Work-in-process | 424.9 | 333.8 |
Finished goods | 1,467.8 | 1,280.3 |
Sub-total | 2,480.2 | 2,123.7 |
LIFO reserve | (136.5) | (129.9) |
Total | $ 2,343.7 | $ 1,993.8 |
Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Goodwill [Roll Forward] | ||
Accumulated Impairment | $ (2,496.0) | $ (2,496.0) |
Currency translation | 25.6 | |
Goodwill | 5,522.6 | 5,503.7 |
Goodwill, Purchase Accounting Adjustments | 6.7 | |
Americas [Member] | ||
Goodwill [Roll Forward] | ||
Currency translation | 1.6 | |
Goodwill | 4,228.4 | 4,226.8 |
Goodwill, Purchase Accounting Adjustments | 0.0 | |
EMEA [Member] | ||
Goodwill [Roll Forward] | ||
Currency translation | 17.5 | |
Goodwill | 725.6 | 714.9 |
Goodwill, Purchase Accounting Adjustments | (6.8) | |
Asia Pacific [Member] | ||
Goodwill [Roll Forward] | ||
Currency translation | 6.5 | |
Goodwill | 568.6 | $ 562.0 |
Goodwill, Purchase Accounting Adjustments | $ 0.1 |
Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Finite-lived intangible assets, gross | $ 2,465.7 | $ 2,445.4 | |
Accumulated amortization | (1,844.4) | (1,805.5) | |
Net finite-lived intangible assets | 621.3 | 639.9 | |
Intangible Assets, Gross (Excluding Goodwill) | 5,075.8 | 5,069.5 | |
Intangible assets, net | 3,231.4 | 3,264.0 | |
Amortization of intangible assets | 34.9 | $ 33.8 | |
Trademarks [Member] | |||
Trademarks (indefinite-lived) | 2,610.1 | 2,624.1 | |
Customer Relationships [Member] | |||
Finite-lived intangible assets, gross | 2,188.4 | 2,183.7 | |
Accumulated amortization | (1,626.9) | (1,592.1) | |
Net finite-lived intangible assets | 561.5 | 591.6 | |
Other Intangible Assets [Member] | |||
Finite-lived intangible assets, gross | 277.3 | 261.7 | |
Accumulated amortization | (217.5) | (213.4) | |
Net finite-lived intangible assets | $ 59.8 | $ 48.3 |
Debt and Credit Facilities (Short-Term Borrowings and Current Maturities of Long-Term Debt) (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Short-term borrowings and current maturities of long-term debt | $ 348.3 | $ 1,048.0 |
Long-term debt excluding current maturities | 4,481.8 | 3,788.3 |
Debentures With Put Feature [Member] | ||
Short-term borrowings and current maturities of long-term debt | 340.8 | 340.8 |
Commercial Paper [Member] | ||
Short-term borrowings and current maturities of long-term debt | 0.0 | 0.0 |
Current Maturities Of Long Term Debt [Member] | ||
Short-term borrowings and current maturities of long-term debt | 7.5 | $ 7.5 |
4.25% Senior notes due 2023 [Member] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | |
Long-term debt excluding current maturities | $ 0.0 | $ 699.7 |
Payables and Accruals (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Supplier Financing Arrangements [Abstract] | ||
Supplier Finance Program Financed Payment Obligations Liability | $ 110.9 | $ 110.6 |
Financial Instruments (Narrative) (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Deferred gain/loss, net of tax, included in accumulated other comprehensive income (AOCI) related to the fair value of the Company's currency derivatives designated as accounting hedges | $ (699.3) | $ (766.2) | $ (639.0) | $ (637.6) |
Financial Instruments Schedule of the Fair Values of Derivative Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | $ 4.9 | $ 5.1 |
Derivative liability fair value | 5.2 | 11.9 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 4.9 | 5.1 |
Derivative liability fair value | $ 5.2 | $ 11.9 |
Pensions and Postretirement Benefits Other than Pensions (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Company contributions | $ 26.7 | $ 4.1 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | (0.3) | (6.9) |
Pension Costs [Member] | ||
Actuarial gain (loss) | (4.0) | (5.9) |
Pension Plan, Defined Benefit [Member] | ||
Expected future employer contributions in 2017 | 70.0 | |
Postretirement Benefit Costs [Member] | ||
Actuarial gain (loss) | $ 3.3 | $ 1.4 |
Pensions and Postretirement Benefits Other than Pensions (Components of Net Periodic Postretirement Benefit Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Total | $ (5.6) | $ 1.2 |
Postretirement Benefit Costs [Member] | ||
Service cost | 0.4 | 0.5 |
Interest cost | 3.3 | 1.7 |
Net amortization of prior service gains | 0.2 | 0.0 |
Net amortization of plan net actuarial losses | (3.3) | (1.4) |
Total | 0.6 | 0.8 |
Postretirement Benefit Costs [Member] | Discontinued Operations [Member] | ||
Total | (0.1) | 0.0 |
Operating Income (Loss) [Member] | Postretirement Benefit Costs [Member] | Continuing Operations [Member] | ||
Total | 0.4 | 0.5 |
Other Nonoperating Income (Expense) [Member] | Postretirement Benefit Costs [Member] | Continuing Operations [Member] | ||
Total | $ 0.3 | $ 0.3 |
Equity (Reconciliation of Ordinary Shares) (Details) - USD ($) shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Stock Repurchased During Period, Value | $ 300,000,000 | |
Ordinary shares | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (shares) | 253.3 | 259.7 |
Shares issued under incentive plans, net | 0.8 | |
Repurchase of ordinary shares (shares) | (1.6) | (1.9) |
Ending balance (shares) | 252.5 | 258.3 |
Treasury Stock, Common | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (shares) | 24.5 | |
Shares issued under incentive plans, net | 0.0 | |
Repurchase of ordinary shares (shares) | 0.0 | |
Ending balance (shares) | 24.5 |
Revenue - Schedule of Assets and Liabilities (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Current Assets [Member] | ||
Revenue from Contract with Customer [Abstract] | ||
Contract assets - noncurrent | $ 216.0 | $ 201.2 |
Disaggregation of Revenue [Line Items] | ||
Contract assets - noncurrent | 216.0 | 201.2 |
Other Noncurrent Assets | ||
Revenue from Contract with Customer [Abstract] | ||
Contract assets - noncurrent | 238.9 | 239.6 |
Disaggregation of Revenue [Line Items] | ||
Contract assets - noncurrent | 238.9 | 239.6 |
Accrued Liabilities | ||
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities - current | 1,103.1 | 1,010.6 |
Disaggregation of Revenue [Line Items] | ||
Contract liabilities - current | 1,103.1 | 1,010.6 |
Other Noncurrent Liabilities | ||
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities - current | 478.6 | 471.4 |
Disaggregation of Revenue [Line Items] | ||
Contract liabilities - current | $ 478.6 | $ 471.4 |
Revenue - Contract liability balances to be recognized (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Liability, Revenue Recognized | $ 0.25 |
Contract with Customer, Liability, Noncurrent | $ 0.30 |
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Share based compensation expense | $ 25.0 | $ 22.0 |
Share based compensation expense, net of tax | $ 18.9 | 16.7 |
Percentage Of Awards Applied To Performance Condition | 50.00% | |
Percentage of Awards Applied to Market Condition | 50.00% | |
Stock options and Restricted Stock Units (RSUs) [Member] | ||
Vesting period, in years | 3 years | |
Share-based Payment Arrangement, Option [Member] | ||
Share based compensation expense | $ 9.0 | $ 7.8 |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 159,272 | 113,939 |
Share-based Payment Arrangement, Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 388,150 | 428,387 |
Share-Based Compensation (Share-Based Compensation Expense) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Share based compensation expense | $ 25.0 | $ 22.0 |
Tax benefit | (6.1) | (5.3) |
After-tax expense | (18.9) | (16.7) |
Stock Options [Member] | ||
Share based compensation expense | 9.0 | 7.8 |
Restricted Stock Units (RSUs) [Member] | ||
Share based compensation expense | 10.6 | 9.0 |
Phantom Share Units (PSUs) [Member] | ||
Share based compensation expense | 4.4 | 4.1 |
Deferred Compensation [Member] | ||
Share based compensation expense | $ 1.0 | $ 1.1 |
Share-Based Compensation (Grants of Stock Options and RSUs) (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Stock Options [Member] | ||
Equity awards, granted, in shares | 388,150 | 428,387 |
Weighted average fair value per award, in dollars per share | $ 46.71 | $ 35.98 |
RSUs [Member] | ||
Equity awards, granted, in shares | 159,272 | 113,939 |
Weighted average fair value per award, in dollars per share | $ 177.79 | $ 169.83 |
Phantom Share Units (PSUs) [Member] | ||
Equity awards, granted, in shares | 203,186 | 188,754 |
Weighted average fair value per award, in dollars per share | $ 207.41 | $ 170.60 |
Share-Based Compensation Share-Based Compensation (Average Fair Value of Stock Options Granted, Assumptions) (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Dividend yield | 1.50% | 1.60% |
Volatility | 29.35% | 28.23% |
Risk-free rate of return | 3.60% | 1.56% |
Expected life, in years | 4 years 9 months 18 days | 4 years 9 months 18 days |
Other, Net (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Jun. 30, 2020 |
Sep. 30, 2021 |
|
Deconsolidation, Gain (Loss), Amount | $ 24.9 | |||
Interest Income, Other | $ 4.4 | $ 1.3 | ||
Foreign Currency Transaction Gain (Loss), before Tax | 6.6 | 3.6 | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | (5.6) | 1.2 | ||
Other, net | (1.6) | 0.4 | ||
Other income/(expense), net | $ (9.4) | $ (0.7) | ||
Charge to increase Funding Liability | $ 21.2 | |||
Continuing Operations [Member] | ||||
Deconsolidation, Gain (Loss), Amount | $ 0.9 | |||
Charge to increase Funding Liability | $ 7.2 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Unrecognized Tax Benefits | $ 82.4 | $ 82.4 | |
Effective Income Tax Rate Reconciliation, Percent | 18.80% | 18.40% | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Effective Income Tax Rate Reconciliation, Percent | 18.80% | 18.40% | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||
Income Taxes | Income TaxesThe Company accounts for its Provision for income taxes by applying an estimate of the annual effective income tax rate for the full year to the respective interim period, taking into account year-to-date amounts and projected results for the full year. For the three months ended March 31, 2023 and March 31, 2022, the Company’s effective income tax rate was 18.8% and 18.4%, respectively. The effective tax rate for the three months ended March 31, 2023 and March 31, 2022 was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate, partially offset by U.S. state and local taxes.Total unrecognized tax benefits for both March 31, 2023 and December 31, 2022 were $82.4 million. Although management believes its tax positions and related provisions reflected in the Condensed Consolidated Financial Statements are fully supportable, it recognizes that these tax positions and related provisions may be challenged by various tax authorities. These tax positions and related provisions are reviewed on an ongoing basis and are adjusted as additional facts and information become available, including progress on tax audits, changes in interpretations of tax laws, developments in case law and closing of statute of limitations. To the extent that the ultimate results differ from the original or adjusted estimates of the Company, the effect will be recorded in Provision for income taxes.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 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 Belgium, Brazil, Canada, China, France, Germany, Ireland, Italy, Luxembourg, Mexico, Singapore, 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 U.S. federal tax returns is complete or effectively settled for years prior to 2016. The Company’s U.S. federal returns for 2016 to 2018 are currently under examination by the Internal Revenue Service (IRS). Subsequent to the first quarter of 2023, the IRS has indicated their intention to add tax year 2019 to their review. In general, the examination of the Company’s material non-U.S. tax returns is complete or effectively settled for the years prior to 2013, with certain matters prior to 2013 being resolved through appeals and litigation and also unilateral procedures as provided for under double tax treaties. |
Business Combinations and Asset Acquisitions (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Business Combination and Asset Acquisition [Abstract] | ||
Goodwill | $ 5,522.6 | $ 5,503.7 |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Goodwill | $ 5,522.6 | $ 5,503.7 |
Earnings Per Share (EPS) (Details) - $ / shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Weighted-average number of basic shares | 229.3 | 234.6 |
Shares issuable under incentive stock plans | 2.2 | 2.5 |
Weighted average number of diluted shares | 231.5 | 237.1 |
Anti-dilutive shares | 0.8 | 0.9 |
Dividends declared per ordinary share | $ 0.75 | $ 0.67 |
Business Segment Information (Summary of Operations by Reportable Segments) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Jun. 30, 2022 |
|
Net revenues | $ 3,665,800,000 | $ 3,355,500,000 | |
Segment Adjusted EBITDA | 607,400,000 | 508,200,000 | |
Interest Expense | (57,600,000) | (56,000,000.0) | |
Depreciation and amortization | (79,800,000) | (77,300,000) | |
Restructuring and Related Cost, Incurred Cost | (6,300,000) | (1,300,000) | |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | (2,700,000) | 6,500,000 | $ 46,900,000 |
Acquisition inventory step-up | (2,200,000) | 0 | |
Unallocated corporate expense | (69,000,000.0) | (48,600,000) | |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 389,800,000 | 331,500,000 | |
Americas [Member] | |||
Net revenues | 2,861,000,000 | 2,633,200,000 | |
Segment Adjusted EBITDA | 455,800,000 | 405,600,000 | |
EMEA [Member] | |||
Net revenues | 510,500,000 | 441,300,000 | |
Segment Adjusted EBITDA | 94,400,000 | 59,100,000 | |
Asia Pacific [Member] | |||
Net revenues | 294,300,000 | 281,000,000.0 | |
Segment Adjusted EBITDA | $ 57,200,000 | $ 43,500,000 |
Commitments and Contingencies (Product Warranty Liability) (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Balance at beginning of period | $ 323.6 |
Reductions for payments | (33.0) |
Accruals for warranties issued during the current period | 34.5 |
Changes to accruals related to preexisting warranties | (1.3) |
Translation | 0.9 |
Balance at end of period | $ 324.7 |
Commitments and Contingencies Commitments and Contingencies (Extended Warranty Accrual) (Details) - Extended Warranty [Member] $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Balance at beginning of period | $ 317.7 |
Amortization of deferred revenue for the period | (26.1) |
Additions for extended warranties issued during the period | 31.9 |
Changes to accruals related to preexisting warranties | (0.4) |
Translation | 0.5 |
Balance at end of period | $ 323.6 |
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