Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

5c94c74bca754850f327f4d4fbf38b781b200248ac04c1724405b36bd432df87

- **Trane Technologies is experiencing strong and broad-based growth in their Commercial HVAC business**, with **high single-digit order growth** in the Americas and a robust pipeline, driven by growth in **13 of the 14 verticals**, including data centers and education.  **[TT_3413748_11]** **[TT_3413748_8]**
- **Applied systems revenues are up over 120% in the Americas over the last three years**, contributing to a **strong installed base** that will drive future high-margin service revenues.  **[TT_3413748_8]** **[TT_3413748_7]**
- **Service revenues are up low teens**, now reaching **$6.5 billion**, growing at around **10% per year**, providing a resilient and higher-margin revenue stream expected to continue due to the increasing complexity of their applied solutions.  **[TT_3413748_7]**

aaad2d2deaa5c54d461d881223801619c24b0ec3a5ca5f7577a21e59f961e944

- **First half of 2025 is expected to face headwinds in transport markets**, with transport revenues anticipated to be down, potentially impacting overall growth and earnings. The company expects a recovery starting in the second half, but the initial impact could pressure results.  **[TT_3413748_27]** ,  **[TT_3413748_16]**
- **Residential segment will experience headwinds due to pre-buying in Q3 and Q4 of 2024**, leading to a potential decline in demand in the first quarter of 2025. This pre-buy effect may extend into the second quarter, affecting revenue and profitability in the residential market.  **[TT_3413748_27]** ,  **[TT_3413748_22]**
- **Ongoing credit tightening policies in China could negatively impact business in Asia**, with the impact expected to extend into the first half of 2025. This could limit revenue growth in the Asia-Pacific region, particularly in China, which represents about 4% of the company's revenue.  **[TT_3413748_27]** ,  **[TT_3413748_12]**

ce299ef1303a4f794f298d27da763a0f0acbe720db67a67bdcf86eb4cead8e1a

1. **Organic Sales Guidance Stability**  
   **Q:** Why is organic growth guidance steady throughout the year?  
   **A:** Despite anticipated headwinds in residential HVAC due to a prebuy impact of **$75 million to $100 million**  **[TT_3413748_9]**  and transport markets bottoming in the first half  **[TT_3413748_9]** , strong growth in Commercial HVAC, expected to be up high single digits to **10%** in Q1  **[TT_3413748_9]** , supports a steady organic growth guidance of **7% to 8%** for the full year.  **[TT_3413748_9]** 

2. **Price Contribution to Sales Growth**  
   **Q:** What is the expected price impact on organic sales growth?  
   **A:** Pricing is expected to contribute about **1 to 1.5 points** to revenue growth in 2025  **[TT_3413748_10]** , mainly due to new price increases. The transition to the new **454B refrigerant** in residential HVAC will result in high single-digit price increases, but these will be reported as volume, not price.  **[TT_3413748_10]** 

3. **Service Business Growth and Outlook**  
   **Q:** What's the outlook for the Service business growth?  
   **A:** The Service business grew in the low teens in Q4 and for the full year  **[TT_3413748_7]** , reaching revenues of **$6.5 billion** and growing close to **10%** per year recently.  **[TT_3413748_7]**  Management maintains a high single-digit growth outlook  **[TT_3413748_7]** , emphasizing its resilience and strong operating performance.

4. **Commercial HVAC Growth Across Verticals**  
   **Q:** How are Commercial HVAC bookings across different verticals?  
   **A:** Orders for Commercial HVAC in the Americas were up high single digits  **[TT_3413748_8]** , with revenue up over **20%**.  **[TT_3413748_8]**  Growth occurred in **13 of 14** verticals  **[TT_3413748_8]** , including data centers and education.  **[TT_3413748_11]**  The only challenged vertical was life sciences  **[TT_3413748_8]** , but optimism remains for its future.

5. **Data Centers and Growth Prospects**  
   **Q:** What is the outlook for the data center business?  
   **A:** Data centers have been a strong and growing vertical, and are expected to remain so.  **[TT_3413748_16]**  Pipeline activity is robust  **[TT_3413748_16]** , with continued investment from companies like Meta building out infrastructure.  **[TT_3413748_16]** 

6. **Impact of Prebuy and Refrigerant Transition**  
   **Q:** How does the prebuy and refrigerant transition affect residential HVAC?  
   **A:** The estimated prebuy impact of **$75 million to $100 million** is expected to largely affect Q1  **[TT_3413748_9]** , possibly extending beyond.  **[TT_3413748_9]**  Residential revenues are expected to grow mid-single digits  **[TT_3413748_18]** , with the new refrigerant transition contributing about **4 points** of growth  **[TT_3413748_18]** , reported as volume.

7. **Margins and Investments**  
   **Q:** What's the outlook on margins, especially regarding investments?  
   **A:** Asia delivered strong margins, outperforming expectations.  **[TT_3413748_12]**  While tightened credit policies in China may impact the first half of 2025  **[TT_3413748_12]** , overall margins are expected to grow, aiming for **25% or better** leverage in 2025.  **[TT_3413748_12]**  Investments are accelerating across all regions.

8. **Service Business Margin Opportunity**  
   **Q:** What's the margin opportunity in the Service business over time?  
   **A:** The Service business enjoys higher margins  **[TT_3413748_13]** , evolving from reactive repairs to optimizing equipment performance.  **[TT_3413748_13]**  With Service making up **1/3** of enterprise revenues  **[TT_3413748_13]** , investments in technology, including AI and diagnostics, are expected to enhance margins and growth.  **[TT_3413748_13]** 

9. **BrainBox AI Acquisition Impact**  
   **Q:** How will the BrainBox AI acquisition impact the business?  
   **A:** The acquisition of BrainBox AI will boost the Service business by leveraging AI to optimize building performance  **[TT_3413748_13]** , using data from over **42,000** connected buildings and **2 million** assets  **[TT_3413748_13]** , unlocking significant efficiency and decarbonization opportunities.

10. **Backlog Elevation and Visibility**  
    **Q:** Is the backlog still elevated, and what does it imply?  
    **A:** The backlog remains highly elevated  **[TT_3413748_16]** , providing strong visibility into 2025.  **[TT_3413748_16]**  Adjustments were made due to currency effects, China credit policies, and transport business normalization  **[TT_3413748_16]** , but the pipeline remains robust.

11. **Tariff Exposure and Manufacturing Strategy**  
    **Q:** How might tariffs impact the business?  
    **A:** The company's in-region, for-region manufacturing strategy reduces tariff exposure  **[TT_3413748_17]** , with plants across Americas, Europe, and Asia.  **[TT_3413748_17]**  While tariffs could affect the supply chain, management is prepared to act quickly to stay margin neutral.  **[TT_3413748_17]** 

12. **Use of AI and Digital Twins**  
    **Q:** How is AI being used to improve operations?  
    **A:** AI, including through BrainBox AI, is enhancing capabilities like digital twins, improving speed and efficiency.  **[TT_3413748_15]**  Visual tools and constant monitoring lead to compelling results for customers by ensuring equipment operates at peak performance.  **[TT_3413748_15]** 

13. **Energy Audits as Leading Indicators**  
    **Q:** Do energy audits serve as a leading indicator for sales?  
    **A:** Management tracks energy audits among many leading metrics  **[TT_3413748_15]** , which help demonstrate value to customers and drive the sales cycle, though specific figures are not disclosed.  **[TT_3413748_15]** 

14. **China Credit Policies and Impact**  
    **Q:** How is the tightened credit policy in China affecting business?  
    **A:** The tightened credit policy requires down payments on orders  **[TT_3413748_26]** , leading to adjustments in backlog.  **[TT_3413748_16]**  The policy may create headwinds in the first half of 2025  **[TT_3413748_12]** , but the China team is executing well, and the rest of Asia is showing strong growth.  **[TT_3413748_12]** 

15. **Transport Markets Outlook**  
    **Q:** What's the expectation for transport markets?  
    **A:** Transport markets are expected to bottom out in the first half  **[TT_3413748_9]** , with recovery beginning in the second half, potentially leading to flattish growth for the full year.  **[TT_3413748_27]** 

769f2d12108e1edb988c719303095e45536f09be435aad9e9edcf0b76be7d92e

Trane Tech Q4: Commercial HVAC soared (orders +high single digits, revenue +20% in Americas, 13/14 verticals up). Service hit $6.5B (+10% YoY), boosting margins. Despite 1H transport headwinds, full-year organic growth stays at 7–8%.

999be64a5639994c144c9295c27001ed5ab4f21e88f028a5877e2e52c72b668c

**Quarterly guidance for Q1 2025:**
- **Organic Revenue Growth**: 6% to 7%  **[TT_3413748_5]**  (no prior guidance)  
- **Adjusted EPS**: $2.15 to $2.20  **[TT_3413748_5]**  (no prior guidance)

**Annual guidance for FY 2025:**
- **Organic Revenue Growth**: 7% to 8%  **[TT_3413748_5]**  (lowered from 11%  **[TT_3404669_5]** )  
- **Adjusted Earnings Per Share (EPS)**: $12.70 to $12.90  **[TT_3413748_5]**  (raised from $11.10  **[TT_3404669_5]** )  
- **Foreign Exchange (FX) Impact**: ~100 basis points negative  **[TT_3413748_5]**  (lowered from less than 1 point negative  **[TT_3404669_5]** )  
- **Free Cash Flow Conversion**: 100% or greater  **[TT_3413748_5]**  (no change from prior guidance  **[TT_3404669_5]** )  
- **Organic Leverage**: 25% or higher  **[TT_3413748_5]**  (lowered from ~30%  **[TT_3404669_5]** )  
- **M&A Contribution to Revenue Growth**: ~50 basis points  **[TT_3413748_5]**  (lowered from 50 to 100 basis points  **[TT_3404669_5]** )  
- **Capital Deployment**: $2.5 billion to $3 billion  **[TT_3413748_5]**  (raised from ~$2.5 billion  **[TT_3404669_5]** )

385668f8ac61430e1d226c5a453a7d18b7a45595f97333214e885754add9a4b5

0e3148f425a8d700eff3c3e1a5a432d3a54fba61eaa669ea34d3ba90c609ecb3

Americas

- Equipment

- Services

- Services and Parts

EMEA

Asia Pacific

Products

Services

Climate Segment

Industrial Segment

Total Revenue

a42e6e9c0a4ab76a2298a4aacf4409b9cb677c97080722edfbfd6c4be7a50d8e

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

baf6496ab6c3b1d67a3918c33bdd27b6012a4fe47bc4a8ec187b308aacff8251

Trane Technologies plc is a global climate innovator specializing in sustainable and efficient solutions for buildings, homes, and transportation through its strategic brands, Trane® and Thermo King® **[0001466258-24-000047_tt-20231231.htm:5]** **[0001466258-24-000163_conflictmineralsfy2023-ex1.htm:0]**. The company primarily generates revenue through the design, manufacture, sales, and service of solutions for Heating, Ventilation, and Air Conditioning (HVAC), transport refrigeration, and custom refrigeration solutions **[0001466258-24-000047_tt-20231231.htm:5]** **[0001466258-24-000163_conflictmineralsfy2023-ex1.htm:0]**. Trane Technologies operates in highly competitive markets worldwide, distributing its products through branch sales offices, distributors, and dealers in the U.S., and subsidiary sales and service companies internationally **[0001466258-24-000047_tt-20231231.htm:6]**.

1. **Americas Segment** - Offers commercial heating, cooling, ventilation systems, building controls, energy services, residential heating and cooling, and transport refrigeration systems.
2. **EMEA Segment** - Provides similar products and services as the Americas segment, focusing on the Europe, Middle East, and Africa regions.
3. **Asia Pacific Segment** - Delivers HVAC systems, transport refrigeration, and custom refrigeration solutions tailored for the Asia Pacific market.
4. **Air Conditioners** - Designs and manufactures air conditioning units for residential and commercial use.
5. **Building Management Systems** - Develops systems for managing and optimizing building operations and energy efficiency.
6. **Energy Efficiency Programs** - Offers programs aimed at improving energy efficiency in buildings and transportation.

bc60f55512b3cd5d51ddf63ff56a521d176ff062f08e51a56b2d3fd44d7f34c0

1. Given that your Thermo King Americas transport business is expected to be down low double digits this year, and your internal models suggest the trailer market could be down even more than ACT's projection of mid-teens decline, what specific measures are you taking to mitigate these impacts and outperform the market in such a challenging environment?  **[TT_3395302_23]** 

2. With a competitor announcing plans to push into the emergency replacement unitary market where they currently have little share, how do you anticipate this affecting competitive dynamics, and what strategies are you implementing to defend your market position and margins in this critical segment?  **[TT_3395302_24]** 

3. Considering that your investment in immersion cooling is still facing hurdles and is not yet mainstream, how are you addressing these challenges, and what is your strategy to capitalize on the growing demand for efficient cooling solutions in data centers?  **[TT_3395302_15]** 

4. You've highlighted demand side management as a massive opportunity, noting that buildings operate up to 30% inefficiently and that you're in the early stages of leveraging AI and connected solutions to address this; can you quantify the potential impact on your bookings and revenue, and what is your timeline for making this a significant contributor to your financial performance?  **[TT_3395302_26]** **[TT_3395302_15]** 

5. With over 300 mega projects being tracked, many still in the pipeline, and recognizing the complexity and multiple decision-makers involved, how confident are you in converting these into bookings, and how do you expect these mega projects to influence your growth trajectory in the near and long term?  **[TT_3395302_25]** 

a5a9cb336a96d6ceeac865d21b2036077f6f78e57e10196832e26f52ec8354fb

709d67224e70c0e75d8300747d8925aadd568c217066d4aa650139f237966e05

ce477ee091aeac204a1b59b580f286ce30d32467c1198d1207135b3011e83302

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Organic Revenue Growth**: Approximately **10%**  **[TT_3395302_5]** .
  - **Adjusted Earnings Per Share (EPS)**: Approximately **$10.80**  **[TT_3395302_5]** .
  - **M&A Impact**: About **1 point of growth**; negative impact of approximately **$30 million** to adjusted operating income  **[TT_3395302_5]** .
  - **Foreign Exchange (FX) Impact**: About **1 point of negative FX impact**  **[TT_3395302_5]** .
  - **Free Cash Flow Conversion**: **100% or greater**  **[TT_3395302_5]** .
  - **Third Quarter Revenue Growth**: Approximately **8.5%**  **[TT_3395302_5]** .
  - **Third Quarter Adjusted EPS**: Approximately **$3.15 to $3.20**  **[TT_3395302_5]** .
  - **Capital Deployment**: Approximately **$2.5 billion**  **[TT_3395302_5]** .
  - **Organic Leverage Target**: **25% plus**  **[TT_3395302_5]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Organic Revenue Growth**: **8% to 9%**  **[TT_3381501_5]** .
  - **Adjusted Earnings Per Share (EPS)**: **$10.40 to $10.50**  **[TT_3381501_5]** .
  - **M&A Impact**: About **1 point of growth**; negative impact of approximately **$30 million** to adjusted operating income  **[TT_3381501_5]** .
  - **Foreign Exchange (FX) Impact**: Negative impact of about **1 percentage point**  **[TT_3381501_5]** .
  - **Organic Leverage Target**: **25% plus**  **[TT_3381501_5]** .
  - **Free Cash Flow Conversion**: **100% or greater**  **[TT_3381501_5]** .
  - **Second Quarter Revenue Growth**: Approximately **8.5%**  **[TT_3381501_5]** .
  - **Second Quarter Adjusted EPS**: Approximately **$3.05**  **[TT_3381501_5]** .
  - **Capital Deployment**: Approximately **$2.5 billion**  **[TT_3381501_5]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Organic Revenue Growth**: **6% to 7%**  **[TT_3371564_5]** .
  - **Adjusted Earnings Per Share (EPS)**: **$10 to $10.30**  **[TT_3371564_5]** .
  - **Free Cash Flow Conversion**: **100% or greater**  **[TT_3371564_5]** .
  - **Organic Leverage**: **25%-plus**  **[TT_3371564_5]** .
  - **Impact from M&A**: Approximately **1 point of growth**; **$30 million negative impact** on operating income  **[TT_3371564_5]** .
  - **First Quarter 2024 Guidance**:
    - **Organic Revenue Growth**: Approximately **7%**  **[TT_3371564_5]** .
    - **Adjusted EPS**: Between **$1.60 and $1.65**  **[TT_3371564_5]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: N/A
- **Guidance**: The documents do not contain information from the Q3 2024 earnings call for Trane Technologies. Therefore, guidance details for this period are unavailable.

32b795d6c69ea53103897c895b350bd3cdc22244946945112c63ae625859ade3

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

**Quarterly guidance for Q4 2024:**
- **Organic revenue growth**: 7%  **[TT_3404669_5]**  (lowered from 8.5%  **[TT_3395302_5]** )  
- **Adjusted EPS**: $2.50  **[TT_3404669_5]**  (lowered from $3.15–$3.20  **[TT_3395302_5]** )  
- **Americas Commercial HVAC**: 3-year stacked revenue growth ~50%  **[TT_3404669_4]**  (no prior guidance)  
- **Asia Pacific**: Modest growth  **[TT_3404669_4]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Organic revenue growth**: 11%  **[TT_3404669_5]**  (raised from 10%  **[TT_3395302_5]** )  
- **Adjusted EPS**: $11.10  **[TT_3404669_5]**  (raised from $10.80  **[TT_3395302_5]** )  
- **Free cash flow conversion**: 100% or greater  **[TT_3404669_5]**  (no change from prior guidance  **[TT_3395302_5]** )  
- **Absolute free cash flow**: Expected to be higher  **[TT_3404669_5]**  (no prior guidance)  
- **Organic operating leverage**: 30%  **[TT_3404669_5]**  (raised from 25%+  **[TT_3395302_5]** )  
- **Foreign exchange (FX) impact**: <1 point negative  **[TT_3404669_5]**  (raised from ~1 point negative  **[TT_3395302_5]** )  
- **M&A contribution to revenue**: 50–100 basis points  **[TT_3404669_5]**  (no change from ~1 point  **[TT_3395302_5]** )  
- **Residential business revenue growth**: High single digits  **[TT_3404669_4]**  (no prior guidance)  
- **Americas transport business**: ACT forecasts transport markets down mid-teens  **[TT_3404669_4]**  (no prior guidance)  
- **Capital deployment**: $2.5 billion  **[TT_3404669_5]**  (no change from prior guidance  **[TT_3395302_5]** )

87b0514c9203d4b8dec341487a16c9e810d7fe2128d176a8053b95d8ca7d800c

| Name                  | Position                                                      | Start Date         | Short Bio                                                                                                                                                                                                 |
|-----------------------|---------------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| David S. Regnery      | Chair of the Board, Chief Executive Officer, and Director     | July 1, 2021       | David S. Regnery has been with Trane Technologies for his entire career. He was appointed as CEO and Director on **July 1, 2021**, and became Chair of the Board on **January 1, 2022**  **[0001466258-24-000155_tt-20240424.htm:15]** **[0001466258-24-000047_tt-20231231.htm:14]** .                                               |
| Christopher J. Kuehn  | Executive Vice President and Chief Financial Officer          | July 2021          | Christopher J. Kuehn has been serving as the Executive Vice President and CFO since **July 2021**. He was previously the Senior Vice President and CFO from March 2020 to June 2021  **[0001466258-24-000047_tt-20231231.htm:14]** .                                                        |
| Paul A. Camuti        | Executive Vice President, Chief Technology Officer and Sustainability Officer | January 2024       | Paul A. Camuti has been serving in his current role since **January 2024**. He joined the company as an executive officer on **August 1, 2011**  **[0001466258-24-000047_tt-20231231.htm:14]** **[0001466258-24-000248_tt-20241120.htm:1]** .                                                                                         |
| Raymond D. Pittard    | Executive Vice President, Chief Integrated Supply Chain Officer | January 2024       | Raymond D. Pittard has been serving in his current role since **January 2024**. He previously held the position of Executive Vice President, Supply Chain, Engineering, and IT from July 2021 to January 2024  **[0001466258-24-000047_tt-20231231.htm:14]** .                               |
| Evan M. Turtz         | Senior Vice President and General Counsel                     | April 2019         | Evan M. Turtz has been serving as the Senior Vice President and General Counsel since **April 2019**. He has also been Secretary since **October 2013**  **[0001466258-24-000047_tt-20231231.htm:14]** .                                                                                   |
| Keith A. Sultana      | Senior Vice President, Supply Chain and Operational Services  | January 2020       | Keith A. Sultana has been serving as the Senior Vice President, Supply Chain and Operational Services since **January 2020**  **[0001466258-24-000047_tt-20231231.htm:14]** .                                                                                                               |
| Mairéad A. Magner     | Senior Vice President, Chief Human Resources Officer          | January 2022       | Mairéad A. Magner has been serving as the Senior Vice President and Chief Human Resources Officer since **January 2022**  **[0001466258-24-000047_tt-20231231.htm:14]** .                                                                                                                   |
| Donald E. Simmons     | Group President, Americas                                     | January 2024       | Donald E. Simmons has been serving as the Group President, Americas since **January 2024**. He was previously the Americas Segment Leader and CHVAC Americas President from January 2022 to December 2023  **[0001466258-24-000047_tt-20231231.htm:14]** .                                  |
| Mark A. Majocha       | Vice President and Chief Accounting Officer                   | December 2022      | Mark A. Majocha has been serving as the Vice President and Chief Accounting Officer since **December 2022**. He was previously the Vice President, Finance CHVAC Americas from April 2020 to November 2022  **[0001466258-24-000047_tt-20231231.htm:14]** **[0001466258-23-000058_tt-20221231.htm:16]** .                              |

af2a7e08e11de435026b3d4ed4093cc72400c5646f28ab211912be384fe93118

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | February 2022  **[0001466258-24-000243_tt-20240930.htm:14]**  |
| End Date/Duration        | N/A             |
| Total additional amount  | **$3.0 billion**  **[0001466258-24-000243_tt-20240930.htm:14]**  |
| Remaining authorization amount | **$1.6 billion** (as of September 30, 2024)  **[0001466258-24-000243_tt-20240930.htm:14]** **[0001466258-24-000243_tt-20240930.htm:54]** **[0001466258-24-000243_tt-20240930.htm:41]**  |
| Details                  | Part of capital allocation strategy; no prescribed expiration date  **[0001466258-24-000047_exhibit444descriptionofreg.htm:4]** **[0001466258-23-000058_exhibit437descriptionofreg.htm:4]**  |

9df2ee50e390d863234580d6a083020870d659b32557a2cfe26d81d6fc5550b8

- United States

- Non-U.S.

3a68b2b50854e74d5b58592bb2498736be95c90e7cb3663c4cb6666a64d3c43f

| Name                        | Start Date | End Date | Reason for Change |
|-----------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP  | At least 1906  **[0001466258-24-000047_tt-20231231.htm:103]**  | Present  | Current auditor   |

d979ed9693a669868a4d1e880ababf05dcaec8f81c26ff8fd1aacb8b45c2f052

9e7661b40e7b29f236e68c3b8c9baef2649a9b03f8a1422152d6e8e5336f58b7

- Total Revenue: $5,441.2 million (+11% YoY)  **[0001466258-23-000209_tt-20230930.htm:24]** **[0001466258-24-000243_tt-20240930.htm:15]**   
- Americas: $4,474.9 million (**+15%** YoY)  **[0001466258-23-000209_tt-20230930.htm:24]** **[0001466258-24-000243_tt-20240930.htm:15]**   
- EMEA: $667.8 million (+8% YoY)  **[0001466258-23-000209_tt-20230930.htm:24]** **[0001466258-24-000243_tt-20240930.htm:15]**   
- Asia Pacific: $298.5 million (**-21%** YoY)  **[0001466258-23-000209_tt-20230930.htm:24]** **[0001466258-24-000243_tt-20240930.htm:15]**   
- Operating Income (EBIT): $1,024.5 million (+19% YoY)  **[0001466258-23-000209_tt-20230930.htm:2]** **[0001466258-24-000243_tt-20240930.htm:2]**   
- Net Income: $772 million (**+25%** YoY)  **[0001466258-23-000209_tt-20230930.htm:2]** **[0001466258-24-000243_tt-20240930.htm:2]**   
- Basic EPS: $3.42 (+25% YoY)  **[0001466258-23-000209_tt-20230930.htm:2]** **[0001466258-24-000243_tt-20240930.htm:2]**   

c4b52ea93bd5bf73806b8e39996fe914a9905427d31eb8da3d3f1b58d036c1db

0887fc113bf0e4419cd0f480677bc75d981dd33e94527d9ca45c96b4caa453c9

733935590d8bfe3e62eb31d62cd9013e0fb76011ccb97f2cfa1fb7210a76ab5a

c8c4b8232cd0ad81419c78d2c578985aa44841d66d23c831886bcc5dd3572981

| Year | Amount Due (in millions) | Debt Type           | Interest Rate (%) | % of Total Debt |
|----------|------------------------------|-------------------------|-----------------------|---------------------|
| 2024     | $500.0                       | Senior Notes           | 3.550                | 9.5% = (500.0 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:43]** **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2025     | $149.7                       | Debentures             | 6.480                | 2.8% = (149.7 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:43]** **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2026     | $399.2                       | Senior Notes           | 3.500                | 7.6% = (399.2 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2028     | $547.8                       | Senior Notes           | 3.750                | 10.4% = (547.8 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2029     | $746.9                       | Senior Notes           | 3.800                | 14.2% = (746.9 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2033     | $693.8                       | Senior Notes           | 5.250                | 13.2% = (693.8 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2034     | $494.1                       | Senior Notes           | 5.100                | 9.4% = (494.1 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2043     | $495.6                       | Senior Notes           | 5.750                | 9.4% = (495.6 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2044     | $296.7                       | Senior Notes           | 4.650                | 5.6% = (296.7 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2048     | $296.7                       | Senior Notes           | 4.300                | 5.6% = (296.7 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |
| 2049     | $346.3                       | Senior Notes           | 4.500                | 6.6% = (346.3 / 5269.3) * 100 **[0001466258-24-000243_tt-20240930.htm:10]** |

b37b8685b4338150a7ad3145b7ee841f95411374e578819dbf59ae7f5d7f5cb5

- **The company is experiencing a down cycle in its transport business in 2024**, which could negatively impact near-term financial performance.  **[TT_3395302_6]**
- **Investments in emerging growth opportunities, such as Immersion Cooling, are facing hurdles**, and initiatives like demand side management are still in early stages, potentially delaying expected benefits.  **[TT_3395302_15]** ,  **[TT_3395302_26]**
- **The Residential HVAC market has been challenging for the past 1 to 1.5 years**, with future growth uncertain and dependent on weather and refrigerant transition impacts.  **[TT_3395302_12]**

f4629f5c1782ea6602d422d375e821c580af321945322a5e52f9777b2f5beac2

- The company's residential business is expected to decline modestly due to continued destocking, and early positive results in Q1 may not be indicative of performance for the rest of the year.  **[TT_3381501_4]**
- The transport segment is facing a downturn in 2024, with a soft first half expected and mid-teens revenue declines in Q1, impacted by tough comparisons with 2023 and affecting near-term optics.  **[TT_3381501_2]**
- Despite some improvements, the company acknowledges they are "not there yet" on productivity, indicating ongoing challenges in achieving desired efficiency levels and potential impacts on margins.  **[TT_3381501_8]**

f416b548135a7e68e77a611198511e57b91f77d16afb42ad44be756e4dd39135

1. **Organic Growth Outlook**  
   **Q:** Is the growth guidance 9%-10% in commercial HVAC, flat in resi, down in TK?  
   **A:** Management confirmed that their **6%-7% organic growth guidance** includes approximately **9%-10% growth in commercial HVAC**, **flat residential performance**, and **single-digit declines in Thermo King globally**.  **[TT_3371564_10]** 

2. **Operating Leverage and Investment**  
   **Q:** Why is operating leverage stepping down to 25%-plus in 2024?  
   **A:** Management explained that the **25%-plus operating leverage** is part of their long-term target, providing flexibility to invest in areas like **electrification**, **factory automation**, **digital services (including the Nuvolo acquisition)**, and **sales and service**.  **[TT_3371564_11]**  They expect increased investments in 2024 similar to 2023, aiming to drive market outgrowth while maintaining strong profitability.  **[TT_3371564_11]** 

3. **M&A Pipeline**  
   **Q:** Do you have an active M&A pipeline to put capital to work?  
   **A:** Management stated that their **M&A pipeline is strong**, having closed **five deals in 2023**, including **MTA, AL-KO, and Nuvolo**.  **[TT_3371564_9]**  They are always looking for opportunities to expand their technology and channel offerings but are also pleased with their current portfolio.  **[TT_3371564_9]** 

4. **Cost Savings Program Completion**  
   **Q:** Is the $60M cost savings to reset cost base or structural?  
   **A:** The **$60 million** represents the final year of their **$300 million cost takeout program**, completed by the end of 2023.  **[TT_3371564_8]**  Although the discrete program is complete, they remain focused on cost structure and continuously seek opportunities to streamline operations.  **[TT_3371564_8]** 

5. **Transport Sales Outlook Timing**  
   **Q:** Is transport sales decline worse in first half than second?  
   **A:** Management expects the **first half to be tougher** than the second half due to comparisons.  **[TT_3371564_12]**  In the Americas, markets are projected to be down **around 10%**, but they plan to **outperform** that.  **[TT_3371564_12]**  They anticipate improvement in the second half and are optimistic about long-term growth, citing market recovery projected into 2025 and growth through 2028.  **[TT_3371564_12]** 

d24be7b0f6b41c30ca70c2aa428dbeae70a2e7b3906357b66592386bc7d6f913

- **Expected decline of approximately 10% in the Americas transport markets in 2024**, which could negatively impact revenues in that segment.  **[TT_3371564_8]** **[TT_3371564_21]**
- **Continued weakness in the office market through 2024**, which may act as a drag on growth in that vertical.  **[TT_3371564_16]**
- **Residential markets are expected to remain flat in 2024**, limiting growth prospects in that segment.  **[TT_3371564_10]** **[TT_3371564_21]**

20e780eafe836542a094e76db013573e535329a9047db0b61c66b121b51d79d4

- **Trane Technologies** is leveraging **demand side management** to help customers reduce energy consumption, as buildings can waste up to **30%** of energy. Their connected solutions and AI tools provide significant energy savings, which presents a **massive opportunity** in a market of **400 billion square feet**.  **[TT_3395302_15]** **[TT_3395302_26]**
- The company is experiencing **broad-based strength** across almost all verticals, with a robust backlog that is **2x normal**. They are tracking over **300 mega projects**, including in high-growth areas like data centers, which plays to their strengths in sophisticated engineered products and their direct sales force.  **[TT_3395302_25]** **[TT_3395302_9]**
- Positive developments in the **residential** and **unitary** businesses, including clarification on refrigerant transition, normalized inventory levels, and a **very warm start to the cooling season**, are leading to improved performance and a cautiously optimistic outlook.  **[TT_3395302_12]** **[TT_3395302_24]**

cb7bada79e75a8197613f07857147f664ad0afb30df5834df174f29255342955

1. **China Sales Weakness**  
   **Q:** Why did China sales decline this quarter?  
   **A:** China revenues declined due to tightened credit policies requiring down and progress payments before accepting orders or shipping products. This prudent decision impacted short-term sales but is expected to benefit long-term performance. Management confirmed no material write-downs or increased reserves have been necessary.  **[TT_3404669_9]** ,  **[TT_3404669_15]** ,  **[TT_3404669_18]** ,  **[TT_3404669_20]** ,  **[TT_3404669_21]** ,  **[TT_3404669_22]** 

2. **2025 Outlook and Operating Leverage**  
   **Q:** What is the expected operating leverage for 2025?  
   **A:** Management targets operating leverage of **25% or better** for 2025, aiming for top quartile financial performance with strong top-line growth, margins, and cash conversion. They anticipate tailwinds from commercial HVAC strength and improving transport markets, while continuing to invest in the business.  **[TT_3404669_12]** ,  **[TT_3404669_19]** 

3. **Residential HVAC Market and A2L Transition**  
   **Q:** How is the residential HVAC market performing and impact of A2L transition?  
   **A:** The residential HVAC business is operating at full capacity with strong demand, aided by a hot summer and normalized channel inventory. Management expects the A2L refrigerant transition to have minimal prebuy impact, anticipating about **75-80%** of 2025 residential sales to be with the new refrigerants, with pricing up in the **high single-digit** range to remain margin neutral.  **[TT_3404669_13]** ,  **[TT_3404669_17]** ,  **[TT_3404669_22]** 

4. **Data Centers' Importance**  
   **Q:** How significant are data centers to growth?  
   **A:** Data centers have been a strong vertical for decades, projected to grow at mid-teens rates. Trane Technologies expects to continue its strength in this complex, high-growth area, contributing significantly to bookings and overall business performance.  **[TT_3404669_8]** ,  **[TT_3404669_10]** ,  **[TT_3404669_11]** 

5. **Services Business Growth**  
   **Q:** What's driving growth in the services business?  
   **A:** The services business, comprising **one-third** of the company, continues to grow at high single digits over the past seven years. Growth is fueled by increased installed base, especially from applied products, and investments in capacity, digital connected solutions, and sales and service teams. Service margins are higher than average, contributing positively to overall profitability.  **[TT_3404669_10]** 

6. **Other Verticals and Mega Projects**  
   **Q:** How are other verticals like office and mega projects performing?  
   **A:** The office vertical showed strong orders, with year-to-date increases, driven by Class A buildings and efforts to help customers attract tenants. Mega projects in sectors like semiconductors and EV batteries are dynamic, with some delays or cancellations but overall continued activity and success in winning projects.  **[TT_3404669_14]** ,  **[TT_3404669_16]** ,  **[TT_3404669_26]** 

7. **Policy Impacts on Business**  
   **Q:** What is the impact of policies like ESSER, CHIPS, IRA?  
   **A:** While policy tailwinds like ESSER funding have contributed to backlog, especially in education, Trane Technologies emphasizes that their solutions offer attractive paybacks regardless of policy incentives, supporting long-term growth independent of government programs.  **[TT_3404669_27]** 

8. **Liquid Cooling Investment**  
   **Q:** What's the update on the liquid cooling investment in Liquid Stack?  
   **A:** The company continues to work with Liquid Stack, with activity starting to pick up. However, no significant orders have been announced, and they are still working through certain hurdles.  **[TT_3404669_20]** 

562c4b9124a559f3a92baa53716ffeabf1a2b2f91b1eeb8957e32c7985192f25

- **Strong Backlog in Commercial HVAC**: Trane Technologies has a robust backlog of **$6.9 billion** entering 2024, matching the elevated levels from the previous year. The backlog has shifted to over **90%** in commercial HVAC, particularly in long-cycle applied systems with extended service opportunities. This strong backlog provides visibility and positions the company well for sustained growth in key markets.  **[TT_3371564_30]** ,  **[TT_3371564_14]**
- **Accelerating Growth in High-Margin Service Business**: The company's service business represents about **one-third of enterprise revenues** and is experiencing double-digit growth, up **mid-teens** in 2023. With a high single-digit compound annual growth rate over the past six years, the expanding installed base, especially in applied systems, is creating a "flywheel" effect that enhances recurring, higher-margin revenue streams.  **[TT_3371564_15]** ,  **[TT_3371564_16]** ,  **[TT_3371564_13]**
- **Capitalizing on High-Growth Vertical Markets**: Trane Technologies is successfully leveraging opportunities in strong verticals such as data centers, high-tech industries, education, and healthcare. The data center market, in particular, is projected to grow at a **compound annual growth rate of mid to high teens** over the next five years. The company is well-positioned in this sector, offering innovative solutions like immersion cooling technology, and expects continued strength and growth in these markets.  **[TT_3371564_24]** ,  **[TT_3371564_14]** ,  **[TT_3371564_13]** ,  **[TT_3371564_10]**

cd2c7e3ab3b3e6cc3c4de65e74b5fb0b4cd6b779eb1b9ee5410fc444af7117e9

1. **Order Momentum and Data Centers**  
   **Q:** What's driving order momentum and backlog growth, data centers' impact?  
   **A:** Orders experienced broad-based growth across multiple verticals, including **data centers, education, healthcare, and high-tech industrials**. Strength wasn't concentrated in any single area, and the pipeline remains **very strong**.  **[TT_3381501_7]** 

2. **Margin Expectations and Investments**  
   **Q:** Why not raise margin incrementals above 25% given strong performance?  
   **A:** Despite achieving higher incremental margins recently, they prefer to guide to **25% or better** incrementals as they ramp up investments in innovation, sales, service, capacity, and digital initiatives. Productivity is improving but there's still more opportunity ahead.  **[TT_3381501_8]** 

3. **Data Center Capabilities and Growth**  
   **Q:** How is Trane positioned in data center cooling capabilities?  
   **A:** Trane is deeply involved in data center cooling, focusing on entire systems including **direct chip cooling, immersion cooling, sophisticated air handling, and high-efficiency chillers**. They are also exploring repurposing waste heat. Data centers are a **growing vertical**, and Trane is at the forefront of technological advances.  **[TT_3381501_9]** 

4. **Organic Sales Guidance and Second-Half Outlook**  
   **Q:** Why is second-half organic growth lower in guidance?  
   **A:** Due to tough comparisons—commercial HVAC growth last year increased throughout the year, making second-half comps more challenging. They remain confident in their full-year guidance, anticipating **high single-digit** growth, with confidence in meeting or exceeding it.  **[TT_3381501_11]** 

5. **Pricing Outlook and Refrigerant Changes**  
   **Q:** What's the pricing outlook and impact of refrigerant changes?  
   **A:** Delivered about **3 points** of price in Q1; guiding to **2 points** for the full year. Confident in delivering **20–30 basis points** or better in price over inflation. Minimal impact from refrigerant changes like **454B** in 2024, with more impact expected in 2025.  **[TT_3381501_12]** **[TT_3381501_13]** 

6. **Mega Projects and Pipeline**  
   **Q:** What's the outlook for mega projects and the pipeline?  
   **A:** Tracking over **300 mega projects**, with some orders received but most still in the pipeline due to longer durations. ESSER funding remains available until September, supporting the education vertical, which is expected to stay strong with additional funding sources.  **[TT_3381501_15]** 

7. **Services Business Growth**  
   **Q:** How is the services mix performing and expectations?  
   **A:** Services business grew **low teens globally** and over **15%** in the Americas. This marks the sixth consecutive year of high single-digit growth, now comprising **one-third** of the business. The service segment is very resilient and benefits from installed base growth.  **[TT_3381501_20]** 

8. **M&A Pipeline and Capital Allocation**  
   **Q:** What's the outlook for M&A and ability to pursue targets?  
   **A:** The M&A pipeline remains **very active**, with a disciplined approach to valuations. They are pleased with recent acquisitions and will consider **share repurchases** if M&A opportunities aren't available at acceptable valuations.  **[TT_3381501_24]** 

9. **Residential HVAC Performance**  
   **Q:** How did residential HVAC perform this quarter?  
   **A:** Residential revenues were up **low single digits**, with minimal price impact and volume up around **1%**. Performance exceeded expectations due to EPA's clarification on refrigerant sell-through, boosting distributor confidence.  **[TT_3381501_17]** 

10. **China Sales Growth**  
    **Q:** How did China perform and what's the outlook?  
    **A:** Strong performance in China, especially in **pharmaceuticals, healthcare, high-tech, and data centers** where their applied systems excel. Although China represents about **5%** of the enterprise, the growth is encouraging.  **[TT_3381501_19]** 

11. **Applied vs. Light Commercial Orders**  
    **Q:** How are orders in applied vs. light commercial?  
    **A:** In the Americas, equipment orders were up over **40%**, with strong growth in both **applied** and **unitary** segments. Previously, applied was stronger but this time they were close, indicating broad-based demand.  **[TT_3381501_16]** 

12. **Complexity in Applied Systems**  
    **Q:** How does increasing complexity enhance customer value proposition?  
    **A:** The complexity allows Trane to leverage their **highly technical direct sales force**, offering custom solutions and integrating sophisticated products. Their global reach enables them to serve decision-makers worldwide, and complexity leads to ongoing OEM service opportunities.  **[TT_3381501_25]** 

13. **Resilience of HVAC Backlog**  
    **Q:** What's driving the resilience in commercial HVAC backlog?  
    **A:** Despite mixed macro indicators, they see a **strong pipeline** with a lot of activity across verticals. Broad-based demand continues, and they're not seeing a slowdown in orders.  **[TT_3381501_21]** 

14. **Quarter's Upside Surprises**  
    **Q:** What drove upside surprises this quarter?  
    **A:** The commercial HVAC business in the Americas performed **better than expectations**, driven by demand for innovative products and strong execution. Additionally, the **residential business** did better than anticipated due to the EPA's clarification on refrigerant sell-through.  **[TT_3381501_20]** 

01c4cfb50f1fbf053a96888d3c83bb15e2dda5933b39d4073a59c434a51f611e

1. **Organic Sales Growth Guidance**  
   **Q:** Why does sales guidance imply flat or declining sales ahead?  
   **A:** Management raised the full-year organic revenue growth target to **10%**, up **1.5 points**.  **[TT_3395302_7]**  They expect strong performance in Commercial HVAC Americas, with second-half growth of **10–12%** despite tougher comparisons.  **[TT_3395302_7]**  Transport markets are expected to decline mid-20%, and Residential is planned for mid-single-digit growth in the second half.  **[TT_3395302_7]**  They are confident in the full-year guidance and note that things could improve further.  **[TT_3395302_7]** 

2. **Operating Margin Outlook**  
   **Q:** What affects operating margins in the second half?  
   **A:** Higher investments are pushing full-year leverage into the mid-20s after a **30%** leverage in the first half.  **[TT_3395302_8]**  It's less about mix and more about advancing investments with high returns.  **[TT_3395302_8]**  They remain confident in achieving **25% or better** organic leverage for the full year.  **[TT_3395302_8]** 

3. **Backlog and Demand**  
   **Q:** Why is backlog double the normal levels, and will strong bookings continue?  
   **A:** The backlog is about **2×** normal due to strong demand across almost all verticals.  **[TT_3395302_9]**  Data center customers provide visibility well in advance.  **[TT_3395302_9]**  Management expects a strong backlog going into 2025, with **$2.8 billion** already booked for 2025 and beyond.  **[TT_3395302_11]** 

4. **Residential HVAC Outlook**  
   **Q:** Is mid-single-digit growth the minimum for Residential HVAC?  
   **A:** Mid-single-digit growth is likely the floor; it could be better.  **[TT_3395302_12]**  Three reasons for strong Q2 performance: clarification on the refrigerant transition, inventory levels normalizing, and a very warm start to the cooling season.  **[TT_3395302_12]**  They are cautiously optimistic.  **[TT_3395302_12]** 

5. **Transport Markets Downturn**  
   **Q:** How will Thermo King Americas perform amid trailer declines?  
   **A:** Thermo King Americas is expected to decline, with trailer markets projected to drop mid-teens or possibly more.  **[TT_3395302_23]**  They expect to outperform the market and are managing decrementals while continuing to invest in innovation.  **[TT_3395302_23]** 

6. **Data Centers Growth and Margins**  
   **Q:** Are there constraints on data center bookings, and what are margins like?  
   **A:** There are no capacity constraints; units are getting bigger and more complex.  **[TT_3395302_16]**  Margins in this space are very attractive, and they value the service opportunities it provides.  **[TT_3395302_16]** 

7. **Services Growth Drivers**  
   **Q:** What's driving strong services growth?  
   **A:** Services revenue grew **mid-teens** in the quarter.  **[TT_3395302_20]**  Growth is driven by expanding the applied installed base and focusing on asset performance and energy efficiency.  **[TT_3395302_20]** 

8. **China Sales Outlook**  
   **Q:** Has China sales bottomed?  
   **A:** Revenues in Asia were flat, with some choppiness in China late in the quarter.  **[TT_3395302_10]**  It's too early to say China has bottomed.  **[TT_3395302_10]** 

9. **Competition in Unitary HVAC**  
   **Q:** How might competitive dynamics change in Unitary HVAC?  
   **A:** Management is very strong in unitary HVAC and emphasizes the importance of having available units on hand, especially during peak seasons.  **[TT_3395302_24]**  They cannot comment on competitors' plans.  **[TT_3395302_24]** 

10. **Emerging Growth Opportunities**  
    **Q:** How are emerging growth initiatives progressing?  
    **A:** Immersion Cooling faces some hurdles, but they are bullish on AI tools like the Nuvolo acquisition.  **[TT_3395302_15]**  These advancements enhance their connected solutions and demand-side management capabilities.  **[TT_3395302_15]** 

11. **Megaprojects Update**  
    **Q:** Are there updates on mega projects?  
    **A:** Teams are tracking over **300** mega projects; some have been closed, and many remain in the pipeline.  **[TT_3395302_25]**  They feel well-positioned due to their direct sales force and ability to manage complex projects.  **[TT_3395302_25]** 

12. **Market Share in Residential HVAC**  
    **Q:** Did you gain market share in Residential HVAC?  
    **A:** Management is pleased with their results but emphasizes looking at market share over a longer period than a quarter.  **[TT_3395302_17]**  They are cautiously optimistic.  **[TT_3395302_17]** 

13. **Applied vs. Unitary Performance**  
    **Q:** Can you break down applied vs. unitary equipment performance?  
    **A:** Both applied and unitary were up strongly; equipment revenue increased **30%**, with unitary slightly stronger than applied.  **[TT_3395302_18]**  They expect both segments to perform similarly in the second half.  **[TT_3395302_19]** 

14. **Refrigerant Transition Impact**  
    **Q:** Are you expecting a pre-buy due to the refrigerant transition?  
    **A:** Not anticipating a large pre-buy; the focus is on helping distributors transition inventory properly.  **[TT_3395302_13]** 

15. **Demand-Side Management Expansion**  
    **Q:** How meaningful is demand-side management becoming?  
    **A:** They are in the early stages but see a massive opportunity.  **[TT_3395302_26]**  For example, they helped a customer save **$120,000** in energy costs by optimizing building performance.  **[TT_3395302_26]** 

16. **Constraints on Data Center Bookings**  
    **Q:** Are data center bookings constrained?  
    **A:** There are no constraints; capacity has been expanded over several years.  **[TT_3395302_16]** 

17. **Asia Revenue Performance**  
    **Q:** How did Asia, specifically China, perform this quarter?  
    **A:** Asia accounts for less than **10%** of revenue; they saw flat revenues and some choppiness in China.  **[TT_3395302_10]** 

18. **Order Rate Expectations**  
    **Q:** Will you maintain a book-to-bill over 1x?  
    **A:** Management won't forecast order rates but expects a strong backlog going into 2025.  **[TT_3395302_11]** 

19. **Unitary HVAC Business Outlook**  
    **Q:** How is the unitary HVAC business expected to perform?  
    **A:** Unitary grew slightly more than applied in the quarter.  **[TT_3395302_18]**  Both are expected to perform closely in the second half.  **[TT_3395302_19]** 

20. **Services Growth Sustainability**  
    **Q:** Why are services growth rates unusually high?  
    **A:** Growth is driven by investments and expanding the applied installed base.  **[TT_3395302_20]**  They utilize a mindset focusing on asset performance and energy efficiency.  **[TT_3395302_20]** 

23ea49d00f1a1a65cf4e07b5ed62cacc52a2cb2a3e198feece64712c0c12c035

- **Strong pipeline and backlog in high-margin applied systems**, particularly in growth verticals like data centers, education, high tech, health care, and life sciences, indicating continued robust demand and future revenue growth.  **[TT_3363272_21]** ,  **[TT_3363272_12]** ,  **[TT_3363272_10]** ,  **[TT_3363272_24]**
- **Emphasis on innovation in energy-efficient and greener products**, leading to increased customer appreciation and potential market share gains as global emissions targets and higher electricity prices drive demand.  **[TT_3363272_16]**
- **High visibility into future growth with elevated backlog levels and mega projects over $1 billion**, providing confidence in strong performance in 2024 and beyond, with customers locking in long-term commitments, especially in data centers.  **[TT_3363272_12]** ,  **[TT_3363272_18]** ,  **[TT_3363272_24]**

a7b8b95ae7b454ea3c54ff98edfd38327c6b2642d62c82eef92538125e4a7d77

- **Flat to declining revenues in Asia Pacific despite bookings growth:** Despite strong bookings growth in Asia Pacific (orders up **12%**, with China high single digits), revenues were **flat to down** due to tough prior-year comparisons of **30% growth**.  **[TT_3363272_28]**  This may indicate challenges in converting bookings to revenues in the region.
- **Weakness in certain verticals impacting unitary equipment:** The company noted **weaker performance** in verticals such as traditional office, warehousing, and retail, which tend to favor **unitary equipment over applied systems**.  **[TT_3363272_10]**  This could negatively affect future sales in these sectors.
- **Gross margins at risk of normalization:** While gross margins are at **all-time highs**, there are concerns whether this is sustainable or due to timing effects between price and cost.  **[TT_3363272_30]**  **Wage and energy inflation** are impacting the business, and gross margins may normalize going forward.

85b695b5dc58286e03aaf0f062b9b4b85b09fc02f294d618abc419a3aee607e6

- Trane Technologies reported **exceptional 40% order growth** in its Americas commercial HVAC business in Q1, with growth being **broad-based across various verticals**, indicating strong demand and market share gains.  **[TT_3381501_16]** **[TT_3381501_20]**
- The company's applied HVAC systems have an **8 to 10x multiplier of services revenue over the life of the equipment**, and increasing complexity is leading to higher services attach rates and demand for connected solutions, driving long-term revenue growth.  **[TT_3381501_26]** **[TT_3381501_23]**
- Trane is experiencing **strong performance in China**, particularly in **pharmaceutical, healthcare, high-tech, and data centers** verticals, despite mixed market signals, showcasing competitive strength and execution in high-growth markets.  **[TT_3381501_18]**

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Trane Technologies PLC (TT)

Financials