Trane Technologies Reports Strong Fourth-Quarter and Full-Year 2021 Results; Begins 2022 with Record Backlog

Highlights(fourth-quarter2021versusfourth-quarter2020,unlessotherwisenoted):

Record reported bookings of $4.1 billion; up 28 percent; organic bookings* up 27 percent

Reported revenues of $3.6 billion; up 12 percent; organic revenues* up 11 percent

GAAP continuing EPS of $1.35; adjusted continuing EPS* of $1.36,up 32 percent

Record backlog of $5.4 billion,up 88 percent year-over-year,positions the Company well for 2022 and 2023

Highlights(full-year2021versusfull-year2020,unlessotherwisenoted):

Record reported bookings of $16.8 billion; up 29 percent; organic bookings* up 27 percent

Reported revenues of $14.1 billion; up 13 percent; organic revenues* up 11 percent

GAAP operating margin up 200 basis points and adjusted operating margin* up 140 basis points

GAAP continuing EPS of $5.96; adjusted continuing EPS* of $6.09,up 37 percent

*

This news release contains non-GAAP financial measures. Definitions of the non-GAAP financial measures can be found in the footnotes of this news release. See attached tables for additional details and reconciliations.

SWORDS,Ireland,Feb. 2,2022 --On Jan. 31,Trane Technologies plc (NYSE:TT),a global climate innovator,reported diluted earnings per share (EPS) from continuing operations of $1.35 for the fourth quarter of 2021. Adjusted continuing EPS was $1.36,up 32 percent,which excludes $11.2 million related to planned restructuring and transformation costs offset by the release of a pension indemnification.

Fourth-Quarter2021Results

FinancialComparisons-Fourth-QuarterContinuingOperations

$,millionsexceptEPS

Q42021

Q42020

Y-O-Y

Change

OrganicY-O-Y

Change

Bookings

$4,060

$3,168

28%

27%

NetRevenues

$3,569

$3,179

12%

11%

GAAPOperatingIncome

$436

$388

12%

GAAPOperatingMargin

12.2%

12.2%

flat

AdjustedOperatingIncome*

$447

$394

13%

AdjustedOperatingMargin*

12.5%

12.4%

10bps

AdjustedEBITDA*

$525

$459

14%

AdjustedEBITDAMargin*

14.7%

14.4%

30bps

GAAPContinuingEPS

$1.35

$1.01

34%

AdjustedContinuingEPS

$1.36

$1.03

32%

RestructuringandTransformationCosts

($11.2)

($5.9)

($5.3)

"We delivered another year of strong performance in 2021 through our unwavering focus on our purpose-driven strategy and despite unprecedented inflationary and supply chain challenges," said Dave Regnery,chair and CEO of Trane Technologies. "Our global teams delivered record bookings,revenue,operating margins and earnings per share. Our strong free cash flow enabled ongoing investment in business innovation,decarbonization and expanded plant capacity,while returning $1.7 billion to shareholders. We are entering 2022 with record backlog of $5.4 billion,up 88 percent from the prior year.

"Wecontinuetoaggressivelymanageglobalinflationaryandsupplychainchallenges.Withhealthyend markets,record customer demand for sustainable solutions and historic levels of backlog,we are well positioned to deliver another strong year of financial performance in 2022 and differentiated profitable growth and shareholder returns over the long term."

HighlightsfromFourth-Quarter2021(allcomparisonsagainstfourth-quarter2020unless otherwise noted)

Robust demand drove record fourth-quarter revenue,strong operating income and EPS growth.

Enterprise reported bookings and revenues were up 28 percent and 12 percent,respectively. Organic bookings and revenues were up 27 percent and 11 percent,respectively,driven by growth in all segments.

Enterprise reported revenue growth included approximately 2 percentage points from acquisitions offset by approximately 1 percentage point of foreign exchange impact.

GAAP operating margin was flat,adjusted operating margin was up 10 basis points,and adjusted EBITDA margin was up 30 basis points. Volume growth and positive price versus cost was offset by negative impacts on productivity versus other inflation,arising from supply chain,freight and logistics challenges.

Fourth-QuarterBusinessReview(allcomparisonsagainstfourth-quarter2020unless otherwise noted)

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

$,millions

Q42021

Q42020

Y-O-Y

Change

OrganicY-O-Y

Change

Bookings

$3,172.2

$2,393.0

33%

31%

NetRevenues

$2,749.5

$2,385.9

15%

14%

GAAPOperatingIncome

$371.1

$332.6

12%

GAAPOperatingMargin

13.5%

13.9%

(40bps)

AdjustedOperatingIncome

$374.0

$334.7

12%

AdjustedOperatingMargin

13.6%

14.0%

(40bps)

AdjustedEBITDA

$437.1

$387.7

13%

AdjustedEBITDAMargin

15.9%

16.2%

(30bps)

Americas delivered record fourth-quarter revenue and bookings as customer demand for the Company's innovative products and services remained strong.

Americas reported bookings and revenues were up 33 percent and 15 percent,respectively. Organic bookings and revenues were up 31 percent and 14 percent,respectively. Americas also delivered record backlog exiting the fourth quarter of 2021.

Americas reported revenue growth included approximately 1 percentage point from acquisitions.

GAAP operating margin was down 40 basis points,adjusted operating margin was down 40 basis points and adjusted EBITDA margin was down 30 basis points. Volume growth and positive price

versus cost was offset by negative impacts on productivity versus other inflation,freight and logistics challenges.

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

$,millions

Q42021

Q42020

Y-O-YChange

OrganicY-O-Y

Change

Bookings

$510.3

$454.0

12%

13%

NetRevenues

$482.8

$465.4

4%

5%

GAAPOperatingIncome

$67.2

$67.6

(1)%

GAAPOperatingMargin

13.9%

14.5%

(60bps)

AdjustedOperatingIncome

$67.6

$67.8

flat

AdjustedOperatingMargin

14.0%

14.6%

(60bps)

AdjustedEBITDA

$75.8

$75.6

flat

AdjustedEBITDAMargin

15.7%

16.2%

(50bps)

EMEA delivered record fourth-quarter revenues and bookings as customer demand for the Company's innovative products and services remained strong.

EMEA reported bookings and revenues were up 12 percent and 4 percent,respectively. Organic bookings and revenues were up 13 percent and 5 percent,respectively. EMEA also delivered record backlog exiting the fourth quarter of 2021.

EMEA reported revenue growth included approximately 2 percentage points from acquisitions offset by approximately 3 percentage points of foreign exchange impact.

GAAP operating margin was down 60 basis points,adjusted operating margin was down 60 basis points and adjusted EBITDA margin was down 50 basis points. Volume growth and price was offset by material inflation and negative impacts on productivity versus other inflation,freight and logistics challenges.

Asia Pacific Segment: innovates for customers throughout the Asia Pacific region. The Asia Pacific segmentencompassesheatingandcoolingsystems,servicesandsolutionsforcommercialbuildingsand transport refrigeration systems and solutions.

$,millions

Q42021

Q42020

Y-O-Y

Change

Organic

Y-O-Y Change

Bookings

$377.1

$320.6

18%

18%

NetRevenues

$337.0

$327.8

3%

4%

GAAPOperatingIncome

$60.3

$56.2

7%

GAAPOperatingMargin

17.9%

17.1%

80bps

AdjustedOperatingIncome

$60.5

$58.0

4%

AdjustedOperatingMargin

18.0%

17.7%

30bps

AdjustedEBITDA

$64.7

$59.6

9%

AdjustedEBITDAMargin

19.2%

18.2%

100bps

Asia Pacific delivered strong fourth-quarter revenues and record bookings as customer demand for the Company's innovative products and services remained strong.

Asia Pacific reported bookings and revenues were up 18 percent and 3 percent,respectively. Organic bookings and revenues were up 18 percent and 4 percent,respectively. Asia Pacific also delivered record backlog exiting the fourth quarter of 2021.

GAAP operating margin was up 80 basis points,adjusted operating margin was up 30 basis points,and adjusted EBITDA margin was up 100 basis points. Volume growth,price and productivity offset material and other inflation and impacts arising from supply chain,freight and logistics challenges.

Full-Year2021Results(allcomparisonsagainstfull-year2020unlessotherwisenoted)

FinancialComparisons-Full-yearContinuingOperations

$,millionsexceptEPS

2021

2020

Y-O-Y Change

OrganicY-O-Y

Bookings

$16,829

$13,000

29%

27%

NetRevenues

$14,136

$12,455

13%

11%

GAAPOperatingIncome

$2,023

$1,533

32%

GAAPOperatingMargin

14.3%

12.3%

200bps

AdjustedOperatingIncome

$2,069

$1,641

26%

AdjustedOperatingMargin

14.6%

13.2%

140bps

AdjustedEBITDA

$2,364

$1,918

23%

AdjustedEBITDAMargin

16.7%

15.4%

130bps

GAAPContinuingEPS

$5.96

$4.02

48%

AdjustedContinuingEPS

$6.09

$4.46

37%

For the full year 2021,the Company reported record bookings and revenues up 29 percent and 13 percent,as the Company outgrew end markets despite significant supply chain and inflationary impacts.

GAAP operating margins were up 200 basis points,adjusted operating margins up 140 basis points and adjusted EBITDA margins were up 130 basis points in 2021 due to strong execution,productivity and price offsetting unprecedented supply chain impacts. The Company delivered organic leverage of 29 percent,exceeding the Company's long-term target of 25 percent.

BalanceSheetandCashFlow

$,millions

2021

2020

Y-O-Y Change

CashFromContinuingOperatingActivitiesY-T-D

$1,594

$1,766

($172)

FreeCashFlowY-T-D*

$1,431

$1,714

($283)

WorkingCapital/Revenue*

1.4%

1.1%

30bpsincrease

CashBalance31December

$2,159

$3,290

($1,131)

DebtBalance31December

$4,842

$5,272

($430)

For the full year 2021,the Company generated cash flow from operating activities of $1.6 billion and free cash flow of $1.4 billion.

For the full year 2021,the Company deployed $2.4 billion including $561 million in dividends,$340 million for acquisitions and related investments,$1.1 billion in share repurchases and $425 million for debt retirement. During January 2022,the Company repurchased approximately $350 million of its ordinary shares.

The Company expects to continue to pay a competitive and growing dividend and to deploy 100 percent of excess cash to shareholders over time. The Company recently announced its intention to increase its annual dividend by 14 percent,to $2.68 per share annualized,starting in the first quarter of 2022. When combined with the dividend increase of 11 percent in the first quarter of 2021,the annual dividend is expected to be up 26 percent since launching Trane Technologies in March of 2020.

Full-Year2022Guidance

GAAP continuing EPS of $6.88 to $7.08,including EPS of $(0.07) for transformation and other restructuring costs; adjusted EPS of $6.95 to $7.15,up 14 percent to 17 percent.

Additional information regarding the Company's 2022 guidance is included in the Company's earnings presentation found at www.tranetechnologies.com in the Investor Relations section.