Trane Technologies plc (TT) Business

Item 1.      BUSINESS

Overview

Trane Technologies plc, a public limited company, incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively we, us, our, the Company) is a global climate innovator. We bring sustainable and efficient solutions to buildings, homes and transportation through our strategic brands, Trane® and Thermo King®, and our environmentally responsible portfolio of products, services and connected intelligent controls. We generate 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. As an industry leader with an extensive global install base, our growth strategy includes expanding recurring revenue through services and rental options. Our unique business operating system, uplifting culture and highly engaged team around the world are also central to our earnings and cash flow growth.

Through our sustainability-focused strategy and purpose to boldly challenge what's possible for a sustainable world, we meet critical needs and growing global demand for innovation that reduces greenhouse gas emissions while enabling more efficient buildings and industry, and reliable delivery of essential temperature-controlled cargo. We have announced certain defined sustainability commitments with a goal of achieving these commitments by 2030 (2030 Sustainability Commitments). Trane Technologies' 2030 Sustainability Commitments include our 'Gigaton Challenge' to reduce customer greenhouse gas emissions by a billion metric tons; 'Leading by Example' through reducing embodied carbon by 40%, and designing products for circularity; and creating 'Opportunity for All' by investing in our people and our communities.

Reportable Segments

We operate under three reportable segments.

•Our Americas segment innovates for customers in North America and Latin America. The Americas segment encompasses commercial heating, cooling and ventilation systems, building controls and solutions, and energy services and solutions; residential heating and cooling; and transport refrigeration systems and solutions. This segment had 2025 net revenues of $17,168.8 million.

•Our EMEA segment innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating, cooling and ventilation systems and services, energy services and solutions, and transport refrigeration systems and solutions. This segment had 2025 net revenues of $2,802.1 million.

•Our 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. This segment had 2025 net revenues of $1,351.0 million.

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Products and Services

Our principal products and services include the following:

These products are sold primarily under our tradenames including Trane® and Thermo King®.

Competitive Conditions

Our products and services are sold in highly competitive markets throughout the world. Due to the diversity of these products and services and the variety of markets served, we encounter a wide variety of competitors that vary by product line and services. They include well-established regional or specialized competitors, as well as larger U.S. and non-U.S. corporations or divisions of larger companies.

The principal methods of competition in these markets relate to price, quality, delivery, service and support, technology and innovation. We are one of the leading manufacturers in the world of HVAC systems and services and transport temperature control products and services.

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Distribution

Our products are distributed by a number of methods, which we believe are appropriate to the type of product. U.S. sales are made through branch sales offices, distributors and dealers across the country. Non-U.S. sales are made through numerous subsidiary sales and service companies with a supporting chain of distributors throughout the world.

Operations by Geographic Area

Approximately 25% of our net revenues in 2025 were derived outside the U.S. and we sold products in approximately 100 countries. Therefore, the attendant risks of manufacturing or selling in a particular country, such as currency devaluation, nationalization and establishment of common markets, may have an adverse impact on our non-U.S. operations.

Customers

We have no single external customer that accounted for more than 10% of our consolidated net revenues in 2025, 2024 or 2023. No material part of our business is dependent upon a single customer or a small group of customers; therefore, the loss of any one customer would not have a material adverse effect on our results of operations or cash flows.

Materials

We both manufacture and procure many of the components included in our products. For components we manufacture, we are required to source a wide variety of commodities such as steel, copper, and aluminum. These principal commodities are purchased from a large number of independent sources around the world, primarily within the region where the products are manufactured. We believe that available sources of supply will generally be sufficient for the foreseeable future.

For many components we procure, we have an effective supply chain resiliency plan and capable sources to ensure sufficient supply, however there are certain categories of components that could occasionally see limited availability or shortages.

Seasonality

Demand for certain products and services is influenced by weather conditions. For instance, sales in our commercial and residential HVAC businesses historically tend to be higher in the second and third quarters of the year because this represents spring and summer in the U.S. and other northern hemisphere markets, which are the peak seasons for sales of air conditioning systems and services. Therefore, results of any quarterly period may not be indicative of expected results for a full year and unusual weather patterns or events could positively or negatively affect certain segments of our business and impact overall results of operations.

Research and Development

We engage in research and development activities in an effort to introduce new products, enhance existing product effectiveness, improve ease of use and reliability as well as expand the various applications for which our products may be appropriate. In 2025, we spent $347.6 million on research and development, focused on product and system sustainability improvements such as increasing energy efficiency, developing products that allow for use of lower global warming potential refrigerants, reducing material content in products, and designing products for circularity. New product development (NPD) programs complete a Design for Sustainability module within our NPD process to ensure that programs consider environmental impact.

We also have a strong focus on sustaining activities, which include costs incurred to reduce production costs, improve existing products, create custom solutions for customers and provide support to our manufacturing facilities. We anticipate that we will continue to make significant expenditures for research and development and sustaining activities to maintain and improve our competitive position.

Patents and Licenses

Our intellectual property rights are important to our business and include numerous patents, trademarks, copyrights, trade secrets, proprietary technology, technical data, business processes, and other confidential information. Although in aggregate the Company's intellectual property is important to its operations, the Company does not consider any single patent, trademark, copyright, trade secret, proprietary technology, technical data, business process or any other confidential information (or any related group of any such items) to be of material importance to any segment or to the business as a whole. From time to time the Company engages in litigation to protect its intellectual property rights. For a discussion of risks related to the Company's intellectual property, refer to "Item 1A. Risk Factors."

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Backlog

Our backlog of orders, believed to be firm, at December 31, was as follows:

These backlog figures are based on orders received and only include amounts associated with our equipment and contracting and installation performance obligations. A major portion of our residential products are built in advance of order and either shipped or assembled from stock. We expect to ship a majority of the December 31, 2025 backlog during 2026. However, orders for specialized equipment or specific customer applications are submitted with extended lead times and are subject to revision and deferral, and to a lesser extent cancellation or termination. To the extent projects are delayed or there are resource constraints, the timing of our revenue could be affected.

Environmental Matters

We continue to be dedicated to environmental and sustainability programs to minimize the use of natural resources, reduce the utilization and generation of hazardous materials from our manufacturing processes and to remediate identified environmental concerns. As to the latter, we are currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former manufacturing facilities.

It is our 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.

We are sometimes a party to environmental lawsuits and claims and have received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state and international authorities. We have 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, our share of the liability is not material.

In estimating our liability at multi-party sites, we have assumed that we 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 our understanding of the parties' financial condition and probable contributions on a site-by-site basis.

For a further discussion of our potential environmental liabilities, see Note 20 "Commitments and Contingencies" to the Consolidated Financial Statements.

Asbestos-Related Matters

We are involved in a number of asbestos-related lawsuits, claims and legal proceedings. In June 2020, our indirect wholly-owned subsidiaries Aldrich Pump LLC (Aldrich) and Murray Boiler LLC (Murray) each filed a voluntary petition for reorganization 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 in Charlotte (the Bankruptcy Court). 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. 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).

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, 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.

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For detailed information on the bankruptcy cases of Aldrich and Murray, see:

•Part I, Item 1A, "Risk Factors - Risks Related to Litigation,"

•Part I, Item 3, "Legal Proceedings,"

•Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Matters," and

•Part II, Item 8, Consolidated Financial Statements and Note 20, "Commitments and Contingencies."

Human Capital Management

Our people and culture are critical to achieving our operational, financial and strategic success.

As of December 31, 2025, we employed approximately, 44,000 people in 62 countries including over 16,000 employees outside of the United States. Our Trane Technologies EEO-1 Report published on our website outlines additional details on our U.S. workforce composition.

Our continued focus on building an uplifting culture, where our employees can be at their best, has positively contributed to retaining employees at strong levels. The 2025 retention rate of our key talent, those with the highest potential rating, was 96.4%, excluding retirements. Our company‑wide (all employees) voluntary retention rate excluding retirements was 92.1%.

Culture and Purpose

In 2025, we continued to drive our purpose to boldly challenge what's possible for a sustainable world with a sharp focus on our strategic priorities and 2030 Sustainability Commitments. As part of our commitment to people and culture, we strive to create a work environment where our people uplift each other, make a positive impact on the planet and thrive at work and at home. We do that through embedding our leadership principles across our people practices such as onboarding, learning and performance management. We also focus on ongoing manager development and the important role people leaders play in our uplifting, inclusive culture.

Our annual employee engagement survey enables employees to share their experiences and perceptions of our Company. Employees provide ratings and written comments celebrating what we're doing well and recommending areas where we can do better. In 2025, 91% of our workforce participated in our annual engagement survey, and our overall employee engagement score remains high relative to external benchmarks. While our work on culture is never done, our scores indicate that we continue to raise the bar to increase pride, energy and optimism and help create the best employee experience as a destination employer.

Opportunity for All

We are committed to creating Opportunity for All by uplifting our people and communities. We invest in our people and an inclusive culture where everyone can grow and thrive; and we give back to our communities supporting the next generation of the workforce with the potential to transform our world.

Our aspiration is a workforce that cultivates belonging, embeds inclusion creating organizational purpose and opportunity for all in the communities where we live and work. This helps us to reach a broader talent pool, drive innovation and meet the needs of our global customer base. We work closely with external organizations to help us bridge the growing skilled labor gap, create a pipeline of highly skilled talent, and support industry career development. In 2025, we partnered with Opportunity at Work, a non-profit coalition dedicated to hiring skilled talent through alternative routes (STARs), which prioritizes skills and experience for workforce entry and removes the requirement of degrees where unnecessary. We also collaborate with organizations such as National Association of Manufacturers, Society for Women Engineers, National Society of Black Engineers, and Society of Hispanic Professional Engineers, that help us recruit qualified talent from varied backgrounds.

To help promote inclusion and belonging in the workplace, we offer voluntary company forums such as:

•Bridging Connection Sessions – Bridging Connections means bringing people and ideas together by respecting differences and making everyone feel included. When we connect with openness and kindness, we help everyone understand and learn from each other. By letting each person share their best, we make the most of our differences and give everyone a chance to succeed.

•Business Resource Groups (BRGs) – All BRGs are voluntary, open to all employees and offer a sense of belonging, networking and learning opportunities. Our BRGs also play an important role in our business through community involvement, brand advocacy, recruiting, and business and target market insights.

•Being at my Best – A leader development program that contributes to building an inclusive and psychologically safe workplace focused on resilience and resourcefulness.

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•The Work of the Inclusive Leader course – This course equips our employees with the skills to create an environment where people feel respected, valued, and empowered to contribute their best. It turns intention into action and shapes behaviors that drive our leadership principles.

Our corporate citizenship strategy, Sustainable Futures, focuses on expanding access to science, technology, engineering, and mathematics (STEM) education and career opportunities. This strategy supports our efforts to create opportunity for all by providing under-served communities and schools with a range of resources, from classroom curriculum that introduces them to careers at a climate innovation company, to soft-skill development for landing a STEM job.

Learning and Development

We offer learning and career development opportunities that enhance our employees' skills and abilities and ensure contemporary technical and functional skills and competencies such as innovation, collaboration and leadership. Examples of these programs include:

•Team Leader Development Program – A seven-week experiential development program that engages, teaches and empowers hourly team leaders in our manufacturing facilities to apply continuous improvement methods, make sound business decisions, solve problems, and serve as a coach to their teams.

•Group Leader Development Program – A three-week cohort program for salaried, front-line leaders in our manufacturing facilities that focuses on enhancing knowledge, skills and capabilities required to lead front-line workers within a world class lean enterprise.

•Graduate Training Program – A 14-week development program designed to prepare university graduates for a rewarding career in technical sales. The program prepares sales engineers to sell Trane's complex HVAC systems and energy services. The program, started in 1926, is recognized as the industry's most comprehensive training program and provides intensive technical, business, sales, and leadership training.

•Accelerated Development Program – An early career rotational program focused on both functional and leadership development, designed to build a pipeline of strong talent for key roles in the organization. Participants rotate to multiple geographic locations and business units during the 2.5-year program, while completing diverse assignments, and receiving dedicated functional training and developmental experiences.

•Leadership Development – We invest in custom, key transition leadership development programs for our high potential talent. We partner with best-in-class external leadership development experts such as INSEAD, Center for Creative Leadership, and the NeuroLeadership Institute to deliver programs such as our Executive Leadership Program, Leading for Impact, and Leaders on the Rise globally each year. Additionally, we offer our Trane Technologies people leaders learning programs to develop their skills in leading their teams, such as delivering effective feedback, increasing employee engagement, and coaching.

•Professional Development – We have numerous online courses in professional development skills as varied as business communication, resiliency, and artificial intelligence (AI), as well as strategic capability initiatives such as product management and other programs that support our strategy of being a world class lean enterprise.

•Tuition Advancement Program – We provide financial assistance to qualified employees for associate, undergraduate, graduate and post-graduate degree programs, as well as certain technical trade certifications. To eliminate financial barriers, the program covers tuition costs in advance.

•Dependent Scholarships – To support learning in our employees' families, we offer $2,500 scholarships to support their dependent children's pursuits beyond high school, whether for a traditional degree or a trade certification.

•Compliance Training – Our Compliance Training curriculum covers key topics that are important to protect our Company, our people and our customers. Topics include certification in our Code of Conduct, Information Security, Understanding and Preventing Workplace Harassment, and Expense Management. All salaried employees and service technicians globally complete our compliance curriculum annually, while hourly production employees complete Code of Conduct and Preventing Workplace Harassment training every other year.

•Sustainability Learning – We offer sustainability learning that is available to everyone in the organization in our Learning Management System starting with the Sustainability Starts with Us course that provides a foundational understanding of how our purpose connects to every role. In addition, a comprehensive learning path is available to all around understanding emissions including the following courses: The Greenhouse Gas Effect, Carbon Intensity of the Electric Grid, and Carbon Neutrality in the Built Environment.

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Employee Volunteerism

In 2025, Trane Technologies hosted a Global Time of Service when thousands of our team members banded together in a global show of commitment to community uplift. Teams around the world identified needs in their local communities and lent their time and resources to help more than 50 non-profit organizations enhance programs and create more opportunity.

Additionally, local philanthropic efforts take place throughout the year led by a network of approximately 50 "Purple Teams" around the world that fuel the spirit of volunteerism and ensure local alignment with our Sustainable Futures strategy.

Employee Well-being

Trane Technologies believes employees that can thrive at work, at home and in their communities are our greatest strength. We integrate well-being into our culture through core global resources that support physical, social, emotional, and financial well-being. Several elements of our holistic well-being actions include:

•Giving 100% of our team members access to company-sponsored wellness offerings, including a global Employee Assistance Program and a global wellness platform. These resources provide education and individual support covering an array of topics, including mental health, nutrition, fitness, dependent care, financial and retirement planning, and legal, among other topics.

•Offering financial relief through the Helping Hand Fund, an employee-funded program created to help associates facing financial hardship immediately after a qualified disaster or an unforeseen personal hardship.

We recognize the pervasiveness of mental health challenges facing employees and their families. We continue efforts to overcome stigma and promote a culture that encourages and supports open discussion about mental health issues. We implemented a global mental health training program, offered in 10 languages, targeted towards people leaders and available to all employees. This program highlights how to recognize and react to mental health concerns and leverage support resources. To date more than 10,400 employees have voluntarily completed this training program.

Our enterprise Mental Well-Being Hub is a global employee resource that provides access to self-help information, team member stories, trainings, and guidance for supporting others, all in one place.

To further support employee well-being, we implemented Inflection, a program that provides locally relevant information and support for Fertility, Family Building and Menopause in the U.S. in 2025, with global rollout in January 2026. In the U.S., we also increased the parental leave for non-birth parents to 4 weeks, which aligns with the leave provided to birth parents.

Competitive Pay and Benefits

Trane Technologies' compensation programs and policies are designed to align the compensation of our employees with the Company's performance and strategy, to attract and retain a talented workforce and to meet the needs of employees globally. We are committed to providing competitive and equitable wages and benefits that allow our employees to thrive at work and at home. In addition, the structure of our compensation programs balance incentive earnings for both long-term and short-term performance with our annual incentive plan closely tied to our financial goals as well as progress toward our 2030 Sustainability Commitments. We further align our leadership globally, fostering collaboration to drive profitable, market-leading revenue growth.

Trane Technologies provides purpose-driven and locally relevant benefit programs and policies that are designed to support the well-being of employees and their families. In addition to core and competitive medical, welfare and retirement programs, we offer programs to support work-life balance and to deliver benefits access and opportunity to all. We structure our benefit offerings with a focus on access to affordable benefits based on employee need.

Our proxy statement provides more detail on the competitive compensation and benefit programs we offer.

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Employee Safety

In 2025, we continued our multi-year, world class safety record with a Lost-time Incident Rate of 0.06 and Recordable Rate below 0.60. We refreshed our behavior-based and ergonomics programs and had a major focus on leading indicators, which has been very impactful for all employees across the globe. In 2025, this included a global safety campaign within our manufacturing locations and field operations.

We also continue to maintain all our locations globally as tobacco free workplaces.

Available Information

We have used, and intend to continue to use, the homepage, the Investor Relations and the "News" sections of our website (www.tranetechnologies.com), among other sources such as press releases, public conference calls and webcasts, as a means of disclosing additional information, which may include future developments regarding the Company and/or material non-public information. We encourage investors, the media, and others interested in our Company to review the information we make public in these locations on our website.

We file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission under the Securities Exchange Act of 1934.

This Annual Report on Form 10-K, as well as our quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to all the foregoing reports, are made available free of charge on our Internet website (www.tranetechnologies.com) as soon as reasonably practicable after such reports are electronically filed with or furnished to the Securities and Exchange Commission. The Board of Directors of our Company has also adopted and posted in the Investor Relations section of our website the Corporate Governance Guidelines and charters for each of the Board's standing committees. The contents of our website are not incorporated by reference in this report.

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Executive Officers of the Registrant

The following is a list of our executive officers as of February 5, 2026.

No family relationship exists between any of the above-listed executive officers of our Company. All officers are elected to hold office for one year or until their successors are elected and qualified.