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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20182021
or
—☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from     to  
Commission File No. 001-34400
INGERSOLL-RAND PUBLIC LIMITED COMPANYTRANE TECHNOLOGIES PLC
(Exact name of registrant as specified in its charter)
 
Ireland98-0626632
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer

Identification No.)
170/175 Lakeview Dr.
Airside Business Park
Swords Co. Dublin
Ireland
(Address of principal executive offices)
Registrant’s telephone number, including area code: +(353) (0) 18707400
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Ordinary Shares,New York Stock Exchange
Par Value $1.00 per ShareTTNew York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES   X       NOYes x    No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES    NO  X  Yes ☐    No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  X      NOYes x    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES  X      NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [   ]Yes x No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filerxAccelerated filer☐Emerging growth company☐
Non-accelerated filer☐Smaller reporting company☐
Large accelerated filer  X  
Accelerated filer   
Non-accelerated filer   
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark ifwhether the registrant has elected notfiled a report on and attestation to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)its management's assessment of the Exchange Act.effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes x No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES     NO  X  Yes ☐     No x

The aggregate market value of ordinary shares held by nonaffiliates on June 30, 20182021 was approximately $21.9$43.7 billion based on the closing price of such stock on the New York Stock Exchange.
The number of ordinary shares outstanding of Trane Technologies plc as of February 1, 20192022 was 242,168,631.233,538,091.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement to be filed within 120 days of the close of the registrant’s fiscal year in connection with the registrant’s Annual General Meeting of Shareholders to be held June 6, 20192, 2022 are incorporated by reference into Part II and Part III of this Form 10-K.




INGERSOLL-RAND
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TRANE TECHNOLOGIES PLC


Form 10-K
For the Fiscal Year Ended December 31, 20182021
TABLE OF CONTENTS
 
Page
Part IItem 1.
4
Page
Part IItem 1.1A.
313
Item 1A.1B.
9
Item 1B.
Unresolved Staff Comments
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Item 2.
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Item 3.
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Item 4.
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Part IIItem 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 9C.
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Part IIIItem 10.
3947
Item 11.
3947
Item 12.
3947
Item 13.
3947
Item 14.
3947
Part IVItem 15.
4048
Item 16.
5259
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CAUTIONARY STATEMENT FOR FORWARD LOOKING STATEMENTS
Certain statements in this report, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements.
Forward-looking statements may relate to such matters as projections of revenue, margins, expenses, tax provisions, earnings, cash flows, benefit obligations, share or debt repurchases or other financial items; any statements of the plans, strategies and objectives of management for future operations, including those relating to any statements concerning expected development, performance or market share relating to our products and services; any statements regarding future economic conditions or our performance;performance including our future performance statements related to the continued impact of the COVID-19 global pandemic; any statements regarding our sustainability commitments, pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on our forward-looking statements. You are advised to review any further disclosures we make on related subjects in materials we file with or furnish to the SEC.Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made and are not guarantees of future performance. They are subject to future events, risks and uncertainties - many of which are beyond our control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from our expectations and projections. We do not undertake to update any forward-looking statements.
Factors that might affect our forward-looking statements include, among other things:
•impacts of the COVID-19 global pandemic on our business operations, financial results and financial position and on the world economy;
•overall economic, political and business conditions in the markets in which we operate;
•commodity shortages, supply chain risks and price increases;
•trade protection measures such as import or export restrictions and requirements, the demand for our productsimposition of tariffs and services;quotas or revocation or material modification of trade agreements;
•competitive factors in the industries in which we compete;
•the development, commercialization and acceptance of new and enhanced products and services;
•other capital market conditions, including availability of funding sources, interest rate fluctuations and other changes in borrowing costs;
•currency exchange rate fluctuations, exchange controls and currency devaluations;
•the outcome of any litigation, governmental investigations, claims or proceedings;
•risks and uncertainties associated with the Chapter 11 proceedings for our deconsolidated subsidiaries Aldrich Pump LLC (Aldrich) and Murray Boiler LLC (Murray);
•the impact of potential information technology system failures, vulnerabilities, data security breaches or other cybersecurity issues;
•evolving data privacy and protection laws;
•intellectual property infringement claims and the inability to protect our intellectual property rights;
•changes in laws and regulations;
•health epidemics or pandemics or other contagious outbreaks;
•climate change, changes in weather patterns, natural disasters and seasonal fluctuations;
•the outcome of any tax audits or settlements;
•the strategic acquisition or divestiture of businesses, product lines and joint ventures;
•impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;
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•changes in tax laws and requirements (including tax rate changes, new tax laws, new and/or revised tax law interpretations and any legislation that may limit or eliminate potential tax benefits resulting from our incorporation in a non-U.S. jurisdiction, such as Ireland); and
trade protection measures such as import or export restrictions•work stoppages, union negotiations, labor disputes and requirements, the imposition of tariffs and quotas or revocation or material modification of trade agreements;
the outcome of any litigation, governmental investigations, claims or proceedings;
the outcome of any income tax audits or settlements;
interest rate fluctuations and other changes in borrowing costs;
other capital market conditions, including availability of funding sources;
currency exchange rate fluctuations, exchange controls and currency devaluations;
availability of and fluctuations in the prices of key commodities;
impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;
climate change, changes in weather patterns, natural disasters and seasonal fluctuations;
the impact of potential information technology or data security breaches; and
the strategic acquisition or divestiture of businesses, product lines and joint ventures;similar issues
Some of the significant risks and uncertainties that could cause actual results to differ materially from our expectations and projections are described more fully in Part I, Item 1A “Risk Factors.” You should read that information in conjunction with “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report and our Consolidated Financial Statements and related notes in Part II, Item 8 “Financial Statements and Supplementary Data”Statements" of this report. We note such information for investors as permitted by the Private Securities Litigation Reform Act of 1995.

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PART I
Item 1.BUSINESS
Overview
Ingersoll-Rand plc (Plc or Parent Company), aTrane Technologies, public limited company (plc), incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively we, our, the Company) is a diversified, global company that providesclimate 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 solutions to enhance the quality, energy efficiency and comfort of air in homes and buildings, transport and protect food and perishables and increase industrial productivity and efficiency. Our business segments consist of Climate and Industrial, both with strong brands and highly differentiated products within their respective markets.connected intelligent controls. We generate revenue and cash primarily through the design, manufacture, salesales and service of a diverse portfolio of industrialsolutions for Heating, Ventilation and commercial products that include well-recognized, premium brand names such as Ingersoll-Rand®, Trane®, Thermo King®, American Standard®, ARO®,Air Conditioning (HVAC) and Club Car®.
To achievetransport refrigeration. As an industry leader with an extensive global install base, our mission of being a world leader in creating comfortable, sustainable and efficient environments, we continue to focus on growth by increasing ourstrategy includes expanding recurring revenue stream from parts,through services controls, used equipment and rentals;rental options. Our unique business operating system, uplifting culture and to continuously improvehighly engaged team around the efficiencies and capabilities of the products and services of our businesses. Weworld are also continuecentral to focus on operational excellence strategies as a central theme to improving our earnings and cash flow.flow growth.
BusinessThrough 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 healthier, efficient indoor environments and safe, 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’ bold 2030 Sustainability Commitments have been verified by the Science Based Targets initiative (SBTi) and include our ‘Gigaton Challenge’ to reduce customer greenhouse gas emissions by a billion metric tons, ‘Leading by Example’ through carbon-neutral operations across our own footprint, and ‘Opportunity for All’ by building a diverse workforce reflective of our communities.
Reportable Segments
We have three regional operating segments which are also our reportable segments.
•Our business segments provide products, servicesAmericas segment innovates for customers in North America and solutions used to increase the efficiencyLatin America. The Americas segment encompasses commercial heating and productivity of both industrialcooling systems, building controls, and commercial operations and homes, as well as improve the health and comfort of people around the world.
Our business segments are as follows:
Climate
Our Climate segment delivers energy-efficient products and innovative energy services. It includes Trane® and American Standard® Heating & Air Conditioning which provide heating, ventilation and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; energy services and building automation through Trane Building Advantagesolutions; residential heating and Nexia;cooling; and Thermo King® transport temperature controlrefrigeration systems and solutions. This segment had 20182021 net revenues of $12,343.8 million.$11.0 billion.
Industrial
•Our IndustrialEMEA segment delivers productsinnovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating and cooling systems, services that enhance energy efficiency, productivity and operations. It includes compressed airsolutions for commercial buildings and gasindustrial processing, and transport refrigeration systems and services, power tools, material handling systems, ARO® fluid management equipment, as well as Club Car ® golf, utility and consumer low-speed vehicles.solutions. This segment had 20182021 net revenues of $3,324.4 million.$1.9 billion.

•Our Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating and cooling systems, services and solutions for commercial buildings and transport refrigeration systems and solutions. This segment had 2021 net revenues of $1.2 billion.

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Products and Services
Our principal products and services by business segment include the following:
Climate
Aftermarket and OEM parts and suppliesIce energy storage solutions
Air conditionersIndoor air quality assessments and related products for HVAC and Transport solutions
Air exchangersIndustrial refrigeration
Air handlersInstallation contracting
Airside and terminal devicesLarge commercial unitary
Auxiliary power units (electric and diesel)Light commercial unitary
Building management systemsMotor replacements
Bus and rail HVACair purification systemsMulti-pipe HVAC systems
ChillersPackage heating and cooling systems
Coils and condensersPerformance contractingParts and supplies (aftermarket and OEM)
Container refrigeration systems and gensetsPerformance contracting
Control systemsRail refrigeration systems
Control systemsRefrigerant reclamation
Cryogenic refrigeration systemsRate chambers
Diesel-powered refrigeration systemsRefrigerant reclamation
Ductless systemsRepair and maintenance services
Diesel-poweredElectric-powered trailer refrigeration systemsRental services
DuctlessElectric-powered truck refrigeration systemsSelf-powered truck refrigeration systems
Energy management servicesService agreements
Facility management servicesTemporary heating and cooling systems
FurnacesThermostats/controls
Geothermal systemsTrailer refrigeration systems
Heat pumpsTransport heater products
Home automationUltra-low temperature freezers
HumidifiersUnitary systems (light and large)
HumidifiersVehicle-powered truck refrigeration systems
Hybrid and non-diesel transport refrigeration solutionsVariable refrigerant flow
Hybrid-powered trailer refrigerationVehicle-powered truck refrigeration systems
Ice energy storage solutionsWater source heat pumps
Industrial
Air treatment and air separation systemsFluid power components
Aftermarket and OEM parts and suppliesInstallation contracting
Aftermarket controls, parts, accessories and consumablesPower tools (air, cordless and electric)
AirendsPrecision fastening systems
BlowersPumps (diaphragm and piston)
Compressors (centrifugal, reciprocating, and rotary)Rental services
DryersRough terrain (AWD) vehicles
Engine starting systemsService agreements
Ergonomic material handling systemsService break/fix
FiltersUtility and consumer low-speed vehicles
Fluid handling systemsVisage® mobile golf information systems
Golf vehiclesWinches (air, electric and hydraulic)
Hoists (air, electric and manual)
These products are sold primarily under our nametradenames including Trane® and under other names including American Standard, ARO, Club Car, Nexia, Thermo King and Trane.
Acquisitions and Equity Investments
In May 2018, we completed our investment of a 50% ownership interest in a joint venture with Mitsubishi Electric Corporation (Mitsubishi)®. The joint venture, reported within the Climate segment, focuses on marketing, selling and supporting variable refrigerant flow (VRF) and ductless heating and air conditioning systems through Trane, American Standard and Mitsubishi channels in the U.S. and select Latin American countries.

In January 2018, we acquired 100% of the outstanding stock of ICS Group Holdings Limited (ICS Cool Energy). The acquired business, reported within the Climate segment, specializes in the temporary rental of energy efficient chillers for commercial and industrial buildings across Europe. It also sells, permanently installs and services high performance temperature control systems for all types of industrial processes.
During 2017, we acquired several businesses, including channel acquisitions, that complement existing products and services. Acquisitions within the Climate segment primarily consisted of independent dealers which support the ongoing strategy to expand our distribution network in North America. Other acquisitions within the segment strengthen our product portfolio. Acquisitions within the Industrial segment primarily consisted of a telematics business which builds upon our growing portfolio of connected assets. In addition, other acquisitions within the segment expand sales and service channels across the globe.
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 believe that we are one of the leading manufacturers in the world of HVAC systems and services air compression systems,and transport temperature control products power tools, and golf, utility and consumer low-speed vehicles.services.
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 36%29% of our net revenues in 20182021 were derived outside the U.S. and we sold products in more thanapproximately 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.
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Customers
We have no customer that accounted for more than 10% of our consolidated net revenues in 2018, 20172021, 2020 or 2016.2019. 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.
Raw Materials
We manufacture many of the components included in our products, which requires us to employsource a wide variety of commodities. Principal commodities, such as steel, copper and aluminum, are purchased from a large number of independent sources around the world.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. There have been no commodity shortages which have had a material adverse effect on our businesses.
Working Capital
We manufacture products that must be readily available to meet our customers’ rapid delivery requirements. Therefore, we maintain an adequate level of working capital to support our business needs and our customers’ requirements. Such working capital requirements are not, however, in the opinion of management, materially different from those experienced by our major competitors. We believe our sales and payment terms are competitive in and appropriate for the markets in which we compete.
Seasonality
Demand for certain of our products and services is influenced by weather conditions. For instance, sales in our commercial and residential HVAC businesses historically tend to be seasonally 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 negativelypositively or positivelynegatively 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 addition,2021, we continually evaluatespent $193.5 million on research and development, focused on product and system sustainability improvements such as increasing energy efficiency, developing technologiesproducts that allow for use of lower global warming potential refrigerants, reducing material content in areasproducts, and designing products for circularity. All new product development (NPD) programs must complete a Design for Sustainability module within our NPD process to ensure that we believe will enhanceevery program has a positive impact on sustainability.
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 business for possible investment or acquisition.manufacturing facilities. We anticipate that we will continue to make significant expenditures for research and development and sustaining activities as we look to maintain and improve our competitive position.
Patents and Licenses
We ownOur intellectual property rights are important to our business and include numerous patents, trademarks, copyrights, trade secrets, proprietary technology, technical data, business processes, and patent applications, and are licensed under others.other confidential information. Although in aggregate we consider our patents and licensesintellectual property rights to be valuable to our operations, we do not believe that our business is materially dependent on a single patent or licenseintellectual property right or any group of them. In our opinion, engineering, production skills and experience are more responsible for our market position than our patents and/or licenses.intellectual property rights.
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Backlog
Our approximate backlog of orders, believed to be firm, at December 31,, was as follows:
In millions20212020
Americas$3,856.7 $1,788.0 
EMEA727.2 426.2 
Asia Pacific852.8 680.6 
Total$5,436.7 $2,894.8 
In millions 2018 2017
Climate $2,914.4
 $1,972.4
Industrial 514.8
 525.6
Total $3,429.2
 $2,498.0
These backlog figures are based on orders received. While thereceived 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,stock. As a result, we expect to ship a majority of the December 31, 2021 backlog during 2022. However, orders for specialized machinery or specific customer applicationapplications are submitted with extensive lead times and are often subject to revision and deferral, and to a lesser extent cancellation or termination. We expect to ship a majority ofDuring the year ended December 31, 20182021, we experienced significant increases in end market demand for our sustainability-focused products and services resulting in a higher backlog during 2019.of orders in the current year as compared to prior year. In addition, we are seeing industry-wide supply chain and resource constraints impacting our ability to produce and ship product which we are proactively managing. To the extent projects are delayed or there are additional supply chain and 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, and 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 and off-site waste disposal 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. For all such sites, there are other PRPs and, inIn most instances at multi-party sites, our involvementshare of the liability is minimal.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 per site basis. Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.
For a further discussion of our potential environmental liabilities, see Note 2021 to the Consolidated Financial Statements.
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Separation of Industrial Segment Businesses
On February 29, 2020 (Distribution Date), we completed our Reverse Morris Trust transaction (the Transaction) with Gardner Denver Holdings, Inc. (Gardner Denver, which changed its name to Ingersoll Rand Inc. (Ingersoll Rand) after the Transaction) whereby we distributed Ingersoll-Rand U.S. HoldCo, Inc., which contained our former Industrial segment (Ingersoll Rand Industrial) through a pro rata distribution (the Distribution) to shareholders of record as of February 24, 2020. Ingersoll Rand Industrial then merged into a wholly-owned subsidiary of Ingersoll Rand. Upon close of the Transaction, our existing shareholders received 50.1% of the shares of Ingersoll Rand common stock on a fully-diluted basis and Gardner Denver stockholders retained 49.9% of the shares of Ingersoll Rand on a fully diluted basis. As a result, our shareholders received .8824 shares of Ingersoll Rand common stock with respect to each share owned as of February 24, 2020. In connection with the Transaction, we received a special cash payment of $1.9 billion.
During the year ended December 31, 2021, we paid Ingersoll Rand $49.5 million to settle certain items related to the Transaction. This payment was related to working capital, cash and indebtedness amounts as of the Distribution Date, as well as funding levels related to pension plans, non-qualified deferred compensation plans and retiree health benefits. We recorded the settlement as a reduction to Retained earnings during the first quarter of 2021.
After the Distribution Date, we do not beneficially own any Ingersoll Rand Industrial shares of common stock and no longer consolidate Ingersoll Rand Industrial in our financial statements. The historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Consolidated Statements of Earnings and Consolidated Statements of Cash Flows.
Asbestos-Related Matters
CertainOn June 18, 2020 (Petition Date), our indirect wholly-owned subsidiaries Aldrich and 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.
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.
On September 24, 2021, Aldrich and Murray filed the plan of reorganization (the Plan) with the Bankruptcy Court. The Plan is supported by, and reflects the agreement in principle reached with the court-appointed legal representative of future asbestos claimants (the FCR). In connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a "qualified settlement fund" within the meaning of the Treasury Regulations under Section 468B of the Internal Revenue Code (QSF). The funds held in the QSF would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan.
On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF. The QSF is expected to be funded in the first quarter of 2022 shortly after the Bankruptcy Court enters an order reflecting such approval and such order becomes final and non-appealable. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last. The Chapter 11 cases remain pending as of February 7, 2022.
Prior to the Petition Date, certain of our wholly-owned subsidiaries and former companies arewere named as defendants in asbestos-related lawsuits in state and federal courts. In manyvirtually all of the lawsuits,suits, a large number of other companies have also been named as defendants. The vast majority of those claims allege injury caused by exposure to asbestos contained in certain historical products, primarily pumps, boilers and railroad brake shoes. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos.
See also the discussion under Part I, Item 3, "Legal Proceedings," and Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," "Contingent Liabilities," as well as further detail in Note 2021 to the Consolidated Financial Statements.
Employees
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Human Capital Management
Our people and culture are critical to achieving our operational, financial and strategic success.
As of December 31, 2018,2021, we employed approximately 49,00037,000 people throughoutin nearly 60 countries including approximately 13,000 outside of the world.United States. As of December 31, 2021, 25.5% of our global employees were women and 36.4% of our employees in the United States were racially and ethnically diverse. In 2021, 29.2% of our new hires globally were women and 44.2% of new hires in the United States were racially and ethnically diverse. Approximately 23.1% of leadership and management positions were held by women as of December 31, 2021. The diversity amounts included in this section exclude current year business acquisitions.

As a result of maintaining a consistent focus on an uplifting culture, our key talent (high performing and high potential salaried employees) retention rate excluding retirements in 2021 was 94.6%. Our company‑wide (all employees) voluntary retention rate excluding retirements was 89.5%.
Culture and Purpose
In 2021, we continued to execute on our purpose to boldly challenge what’s possible for a sustainable world. We are a diverse team of inventive, collaborative people who share a passion for making a difference and we believe our core Leadership Principles will help guide all employees to live our purpose.
Since its launch in 2006, our annual employee engagement survey has enabled employees to share their experiences and perceptions of our Company. Employees provided ratings and written comments for continuous improvement. In 2021, 89% of our workforce participated in our annual engagement survey and our overall employee engagement score remains high reflecting our great commitment to the pride, energy and optimism of our employees.
Diversity and Inclusion
Our commitment to Diversity and Inclusion is core to our purpose and our 2030 Sustainability Commitments. We are proud members of Paradigm for Parity (a coalition of more than 100 corporations who have committed to closing the gender gap in corporate leadership) and OneTen (a coalition dedicated to hiring one million Black Americans in the next ten years to achieve economic mobility). In addition, we are a 2017 signatory, renewed by Dave Regnery in 2021, to the CEO Action for Diversity and Inclusion pledge (the largest CEO-driven business commitment to advance diversity and inclusion within the workplace).
We offer company-sponsored forums to promote diversity and inclusion in the workplace including:
•Bridging Connections – a safe forum created to allow our employees to speak from the heart about a variety of topics without fear of retribution.
•Employee Resources Groups (ERGs) – we sponsor eight ERGs (the Women's Employee Network, the Black Employee Network, the Veterans Employee Resource Group, the Asian Employee Resource Group, the Global Organization of Latinos, the Lesbian, Gay, Bisexual, Transgender and Allies (LGBTA) Employee Resource Group, the InterGenerational Employee Network, and Visibility). All ERGs are voluntary, open and inclusive organizations that offer employees a sense of belonging, networking and learning opportunities.
•Women’s Leadership Development Programs
◦The Women in Action Leadership Program is a virtual, self-paced cohort program that provides women with access to content that promotes their leadership development skills.
◦The Women on the Rise (WOR) program is designed over eight-weeks to help empower, develop, connect and support emerging women leaders.
◦The Women’s Leadership Program (WLP) is a cohort program for high potential talent that provides an opportunity to network with other senior women leaders, gain individual insights through an executive mentoring partnership and build leadership skills and confidence through a variety of learning components, speakers, experiences and assessments.
•In 2021, we launched The Elevate Series which encompasses the belonging and advancement of the racial and ethnically diverse leaders in our company. This is an extension of the Black Leader Forum in 2019 which was an intensive day and a half session bringing together company leaders to learn, deepen a sense of community and build upon our strategic intent to advance Black leaders.
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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 – An eight-week experiential development program that engages, teaches and empowers front-line plant leaders to apply continuous improvement methods, make sound business decisions, solve problems, and serve as a coach of direct workers.
•Graduate Training Program (GTP) – A five-month development program designed to prepare university graduate engineers 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. GTP accelerates careers and provides the skills needed to help us to seek to lower the energy intensity of the world.
•Accelerated Development Program (ADP) – 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. Established in 1979, the ADP holds a rich history of developing early talent and spans six functions and four regions.
•Leadership Development - We invest in custom, key transition leadership development programs for our high potential talent from immersive experiential leader acceleration labs to innovative global cohort programs. We partner with best-in-class external leadership development experts such as INSEAD, Center for Creative Leadership, and the NeuroLeadership Institute to deliver these programs globally each year. Additionally, we offer to our Trane Technologies people leaders learning programs to develop their skills in leading their teams, such as building diverse and inclusive teams, increasing engagement, and coaching skills.
•Professional development – We have numerous online courses in professional development skills as varied as working virtually, resiliency, Microsoft Teams, unconscious bias, effective communication, alert driving, sustainability, and strategic capability initiatives such as product management and other programs that support our strategy of being a world class lean enterprise.
•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 Sexual Harassment and Human Trafficking Prevention. All salaried employees globally complete our annual compliance curriculum.
Employee Volunteerism
In 2021, due to the ongoing challenges connected to the COVID-19 global pandemic, our employees sought out creative alternatives to in-person volunteering, including coordinated virtual volunteering events, and digital mentoring. One of the year’s highlights was our support of a dynamic multi-state exhibition called Creators Wanted, that introduced thousands of junior and senior high school students in multiple U.S. states to the rewarding career pathways available in manufacturing. Our teams volunteered hundreds of hours, partnering with the National Association of Manufacturers, producing a unique and lasting experience.
Last year, we introduced a new Global Volunteer Time program to support salaried employees with a full eight-hour workday per calendar year to volunteer their time with eligible non-profit organizations. This program was made available for hourly employees at select locations. Through the Volunteer Time Off program and individual acts of volunteerism, our generous employees around the world contributed more than 10,000 hours of volunteerism in 2021. Our support for those in need also included our own colleagues support for one another. Due to the continued impacts of the COVID-19 pandemic, and an unforeseen weather event in our plant in Tyler, Texas, Trane Technologies employees and the Trane Technologies Foundation donated grants to employees facing extraordinary hardship through our Helping Hand Fund. These grants totaled approximately $0.6 million, providing approximately 400 employees with critical support for themselves and their families.
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Health, Safety and Well-Being
Trane Technologies believes in supporting the total health and safety of our employees. It is even more critical given the impact of COVID-19, and we continue to provide expanded support by:
•Providing 100% of our employees around the world access to at least one company-sponsored wellness activity, including implementing a holistic wellness engagement platform globally to support personal needs of employees and to provide mental health support resources.
•Initiating a global workstream to assess mental health, to identify areas of concerns and to implement programs and provide resources to support individuals’ mental health needs. Global ERGs sponsored mental health education sessions, which included raising awareness of mental health risks and patient health questionnaire (PHQ) assessment methods. Through our global Employee Assistance Program, employees received frequent communications on resources, targeted to crisis concerns such as mental health, childcare, and education.
•Accelerating our “Future of Work” initiative to create revised Flex Time and Flex Place policies and resources that vary by type of role, continued work-from-home arrangements, and other approaches to ensuring productivity while being supportive to employee needs.
•Providing global employees with up to 4 hours of paid time off per vaccine or booster dose to support and encourage all employees to be fully vaccinated for COVID-19.
•Facilitating the delivery of critical medical resources, including oxygen, to support employees in locations where essential supplies were in shortage.
In 2021 we continued our multi-year, world class safety record with a Lost-time Incident Rate below 0.10 and Recordable Rate below 1.00. In response to the pandemic, we continue to monitor, track and implement COVID-19 guidance based on World Health Organization (WHO), Centers for Disease Control and Prevention (CDC) and other local or country specific guidelines. We internally track the number of COVID-19 confirmed cases and keep close contact with those who quarantine. We compare these numbers to local community infection rates where available. In our factories, we reconfigured over 5,000 workstations to meet the social distancing guidelines. We also completed over 40,000 observations of our service technicians and manufacturing employees to ensure all employees were following our COVID-19 protocols.
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 will allow our employees to thrive at work and at home. In addition, the structure of our compensation programs balances incentive earnings for both long-term and short-term performance, with our annual incentive plan closely tied to our 2030 sustainability commitments, which includes environmental sustainability and workforce diversity goals, in addition to financial goals.
Trane Technologies’ benefits programs and policies are designed to support the wellbeing of employees so they can thrive at work and at home. Purpose-driven and locally relevant benefits programs are provided globally. In addition to core and competitive medical, welfare and retirement programs, benefit offerings include programs to support work-life balance, including:
•Expanded family support programs inclusive of child and elder back-up care programs;
•Enhanced parental leave programs; and
•Tuition reimbursement to support the ongoing growth and development of our employees.
Our proxy statement provides more detail on the competitive compensation and benefit programs we offer.
Available Information
We have used, and intend to continue to use, the homepage, the investor relations and the “News” section 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 it makes public in these locations on its website.
We file annual, quarterly, and current reports, proxy statements, and other documents with the SECSecurities and Exchange Commission under the Securities Exchange Act of 1934.
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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 of the foregoing reports, are made available free of charge on our Internet website (http://www.ingersollrand.com)(www.tranetechnologies.com) as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.Securities and Exchange Commission. The Board of Directors of theour Company hashave also adopted and posted in the Investor Relations section of the Company’sour website ourthe Corporate Governance Guidelines and charters for each of the Board’s standing committees. The contents of the Company’sour website are not incorporated by reference in this report.

Executive Officers of the Registrant
The following is a list of our executive officers of the Company as of February 12, 2019.
7, 2022.
Name and AgeDate of
Service as
an Executive
Officer		Principal Occupation and
Other Information for Past Five Years
Name and AgeDavid S. Regnery (59)
Date of
Service as
an Executive
Officer
8/5/2017
Principal Occupation and
Other Information for Past Five Years
Michael W. Lamach (55)2/16/2004ChairmanChair of the Board (since June 2010) andJanuary 2022); Chief Executive Officer and Director (since February 2010)
Susan K. Carter (60)10/2/2013Senior ViceJuly 2021); President and Chief FinancialOperating Officer (since October 2013)
David S. Regnery (56)9/5/2017(January 2020 to June 2021); Executive Vice President (since September 2017)(September 2017 to December 2019); Vice President, President of Commercial HVAC, North America and EMEA (2013 to 2017)(2013-2017)
Christopher J. Kuehn (49)6/1/2015Executive Vice President and Chief Financial Officer (since July 2021); Senior Vice President and Chief Financial Officer (March 2020 to June 2021); Vice President and Chief Accounting Officer (June 2015 to February 2020)
Marcia J. Avedon (57)(60)2/7/2007Executive Vice President (since January 2022); Executive Vice President, Chief Human Resources, Marketing and Communications Officer (since January 2020); Senior Vice President, Human Resources, Communications and Corporate Affairs (June 2013 to December 2019)
Mairéad A. Magner (44)1/6/2022Senior Vice President, Chief Human Resources Officer (since June 2013)January 2022); SeniorVice President, Talent and Organization Capability (January 2018 to January 2022); Vice President, Human Resources, and Communications (2007 - 2013)CTS (March 2015 to January 2018)
Paul A. Camuti (57)(60)8/1/2011Executive Vice President and Chief Technology and Strategy Officer (since January 2020); Senior Vice President, Innovation and Chief Technology Officer (since August 2011)(August 2011 to December 2019)
Maria C. Green (66)Raymond D. Pittard (56)11/2/20157/1/2021Executive Vice President, Supply Chain, Engineering and Information Technology (since July 2021); Transformation Office Leader (December 2019 to June 2021); Vice President, SBU President of Transport Solutions North America and EMEA (December 2013 to December 2019)
Evan M. Turtz (53)4/3/2019Senior Vice President and General Counsel (since November 2015)April 2019); Secretary (since October 2013); Vice President (2008-2019); Deputy General Counsel, Industrial, General Counsel, CTS (2016-2019)
Keith A. Sultana (52)
10/12/2015
Senior Vice President, General CounselSupply Chain and Secretary, Illinois Tool Works Inc. (a global manufacturer of a diversified range of industrial products and equipment), (2012-2015)
Keith A. Sultana (49)

10/12/2015

Operational Services (since January 2020); Senior Vice President, Global Operations and Integrated Supply Chain (since October 2015); Vice President, Global Procurement (January 2015 to October 2015); Vice President, Global Integrated Supply Chain (GISC) for Climate Solutions (May 2010 to December 2014)(October 2015-December 2019)
Christopher J. Kuehn (46)Heather R. Howlett (44)6/3/1/20152020
Vice President and Chief Accounting Officer (since June 2015)March 2020); Vice President and Corporate Controller (August 2019 to February 2020); Vice President and Chief Accounting Officer, Whirlpool Corporation (a global manufacturer and marketer of major home appliances), (2012-2015)
Corporate Controller, Catalent, Inc. (2015 to August 2019)
No family relationship exists between any of the above-listed executive officers of theour Company. All officers are elected to hold office for one year or until their successors are elected and qualified. Ms. Avedon has announced her intention to retire in April 2022.

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Item 1A.    RISK FACTORS
Our business, financial condition, results of operations, and cash flows are subject to a number of risks that could cause the actual results and conditions to differ materially from those projected in forward-looking statements contained in this Annual Report on Form 10-K. The risks set forth below are those we consider most significant. We face other risks, however, that we do not currently perceive to be material which could cause actual results and conditions to differ materially from our expectations. You should evaluate all risks before you invest in our securities. If any of the risks actually occur, our business, financial condition, results of operations or cash flows could be adversely impacted. In that case, the trading price of our ordinary shares could decline, and you may lose all or part of your investment.
Risks Related to Economic Conditions
The COVID-19 global pandemic and resulting adverse economic conditions have already adversely impacted our business and could have a more material adverse impact on our business, financial condition and results of operations.
We continue to closely monitor the impact of the COVID-19 global pandemic on all aspects of our business and geographies, including how it has and will impact our customers, team members, suppliers, vendors, business partners and distribution channels. The COVID-19 global pandemic has created significant volatility, uncertainty and economic disruption, which may continue to affect our business operations and may materially and adversely affect our results of operations, cash flows and financial position.
The COVID-19 global pandemic has caused certain disruptions to and shutdowns of our business and operations and could cause material disruptions to and shutdowns of our business and operations in the future as a result of, among other things, quarantines, worker absenteeism as a result of illness or other factors, social distancing measures and other travel, health-related, business or other restrictions. These effects of the pandemic have created and exacerbated issues concerning the attraction and retention of talent globally. Our business and operations have been impacted globally, resulting in lower revenues for some quarters, supply chain delays and unfavorable foreign currency exchange rate movements from time to time. The COVID-19 global pandemic has also adversely impacted, and may continue to adversely impact, our suppliers and their manufacturers and our customers. Some of our purchases are from sole or limited source suppliers for reasons of cost effectiveness, uniqueness of design, or product quality. The effects of the COVID-19 global pandemic have exacerbated supply chain issues with these suppliers. Any delay in receiving critical supplies could have a material adverse effect on our results of operations, financial condition and cash flows.
As a result of the effects of the COVID-19 global pandemic, our costs have increased (including the costs to address the health and safety of our employees), our ability to obtain products or services from suppliers has been and may be adversely impacted, and our ability to operate at certain locations has been and may be impacted, and, as a result, our business, financial condition and results of operations have been adversely impacted and could be materially adversely affected if the COVID-19 global pandemic continues or there are resurgences of COVID-19 and its variants.
The COVID-19 global pandemic also resulted in severe disruptions and volatility in financial markets which had a material adverse impact on some of our customers and suppliers. A recurrence in volatility due to a resurgence in the COVID-19 global pandemic could impact our access to capital and credit markets. Notwithstanding the introduction of vaccines to combat the COVID-19 global pandemic and measures taken by governments to provide economic stimulus, the severity of the pandemic’s impact on economies in the United States and around the world, the potential length of the economic recovery and the longer-term economic impacts are uncertain. The current and potential further outbreaks and spread of the COVID-19 global pandemic or other future pandemics could cause a delayed recovery, a prolonged recession or future economic disruptions, which could have a further adverse impact on our financial condition and operations.
Vaccine mandates and testing requirements have been announced in jurisdictions where we operate. Our efforts to comply with these requirements could result in attrition and could impact our ability to successfully compete for talent, our ability to operate our manufacturing facilities and our ability to service our customers. In addition, compliance and monitoring costs associated with these mandates could be significant.
The impact of the COVID-19 global pandemic may also exacerbate other risks discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K, any of which could have a material effect on us. This situation is continuing to evolve rapidly and additional impacts may arise that we are not aware of currently.
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Our global operations subject us to economic risks.
Our global operations are dependent upon products manufactured, purchased and sold in the U.S. and internationally. These activities are subject to risks that are inherent in operating globally, including:
•changes in local laws and regulations orincluding potential imposition of currency restrictions, new or changing tax laws and other restraints;
•limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings;
•sovereign debt crises and currency instability in developed and developing countries;
•trade protection measures such as import or export restrictions and requirements, the imposition of burdensome tariffs and quotas or revocation or material modification of trade agreements;
•difficulty in staffing and managing global operations;operations including supply chain disruptions which may be exacerbated by pandemics or other events affecting the supply of labor, materials and components;
•difficulty of enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems;
•national and international conflict, including war, civil disturbances and terrorist acts; and
•recessions, economic downturns, price instability, slowing economic growth and social and political instability.
These risks could increase our cost of doing business internationally, increase our counterparty risk, disrupt our operations, disrupt the ability of suppliers and customers to fulfill their obligations, limit our ability to sell products in certain markets and have a material adverse impact on our results of operations, financial condition, and cash flows.
We face significant competition in the markets that we serve and our growth is dependent, in part, on the development, commercialization and acceptance of new products and services.
The markets that we serve are highly competitive. We compete worldwide with a number of other manufacturers and distributors that produce and sell similar products. There has been consolidation and new entrants (including non-traditional competitors) within our industries and there may be future consolidation and new entrants which could result in increased competition and significantly alter the dynamics of the competitive landscape in which we operate. Due to our global footprint we are competing worldwide with large companies and with smaller, local operators who may have customer, regulatory or economic advantages in the geographies in which they are located. In addition, some of our competitors may employ pricing and other strategies that are not traditional.
In addition, we must develop and commercialize new products and services in a rapidly changing technological and business environment in order to remain competitive in our current and future markets and in order to continue to grow our business. The development and commercialization of new products and services require a significant investment of resources and an anticipation of the impact of new technologies and the ability to compete with others who may have superior resources. We cannot provide any assurance that any new product or service will be successfully commercialized in a timely manner, if ever, or, if commercialized, will result in returns greater than our investment. Investment in a product or service could divert our attention and resources from other projects that become more commercially viable in the market. We also cannot provide any assurance that any new product or service will be accepted by our current and future markets.  Failure to develop new products and services that are accepted by these markets could have a material adverse impact on our competitive position, results of operations, financial condition, and cash flows.
The capital and credit markets are important to our business.
Instability in U.S. and global capital and credit markets, including market disruptions, limited liquidity and interest rate volatility, or reductions in the credit ratings assigned to us by independent rating agencies could reduce our access to capital markets or increase the cost of funding our short and long term credit requirements. In particular, if we are unable to access capital and credit markets on terms that are acceptable to us, we may not be able to make certain investments or fully execute our business plans and strategies.
Our suppliers and customers are also dependent upon the capital and credit markets. Limitations on the ability of customers, suppliers or financial counterparties to access credit at interest rates and on terms that are acceptable to them could lead to

insolvencies of key suppliers and customers, limit or prevent customers from obtaining credit to finance purchases of our products and services and cause delays in the delivery of key products from suppliers.
Currency exchange rate fluctuations and other related risks may adversely affect our results.
We are exposed to a variety of market risks, including the effects of changes in currency exchange rates. See Part II Item 7A, "Quantitative and Qualitative Disclosure About Market Risk."
We have operations throughout the world that manufacture and sell products in various international markets. As a result, we are exposed to movements in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world.
Many of our non-U.S. operations have a functional currency other than the U.S. dollar, and their results are translated into U.S. dollars for reporting purposes. Therefore, our reported results will be higher or lower depending on the weakening or strengthening of the U.S. dollar against the respective foreign currency.
We use derivative instruments to hedge those material exposures that cannot be naturally offset. The instruments utilized are viewed as risk management tools, involve little complexity and are not used for trading or speculative purposes. To minimize the risk of counter party non-performance, derivative instrument agreements are made only through major financial institutions with significant experience in such derivative instruments.
We also face risks arising from the imposition of exchange controls and currency devaluations. Exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls. Currency devaluations result in a diminished value of funds denominated in the currency of the country instituting the devaluation.
Material adverse legal judgments, fines, penalties or settlements could adversely affect our results of operations or financial condition.
We are currently and may in the future become involved in legal proceedings and disputes incidental to the operation of our business or the business operations of previously-owned entities. Our business may be adversely affected by the outcome of these proceedings and other contingencies (including, without limitation, contract claims or other commercial disputes, product liability, product defects and asbestos-related matters) that cannot be predicted with certainty. Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against the total aggregate amount of losses sustained as a result of such proceedings and contingencies. As required by generally accepted accounting principles in the United States, we establish reserves based on our assessment of contingencies. Subsequent developments in legal proceedings and other events could affect our assessment and estimates of the loss contingency recorded as a reserve and we may be required to make additional material payments, which could have a material adverse impact on our liquidity, results of operations, financial condition, and cash flows.
Our reputation, ability to do business and results of operations could be impaired by improper conduct by any of our employees, agents or business partners.
We are subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies, including laws related to anti-corruption, anti-bribery, export and import compliance, anti-trust and money laundering, due to our global operations. We cannot provide assurance our internal controls will always protect us from the improper conduct of our employees, agents and business partners. Any violations of law or improper conduct could damage our reputation and, depending on the circumstances, subject us to, among other things, civil and criminal penalties, material fines, equitable remedies (including profit disgorgement and injunctions on future conduct), securities litigation and a general loss of investor confidence, any one of which could have a material adverse impact on our business prospects, financial condition, results of operations, cash flows, and the market value of our stock.
We may be subject to risks relating to our information technology systems.
We rely extensively on information technology systems, some of which are supported by third party vendors including cloud services, to manage and operate our business. We are also investing in new information technology systems that are designed to continue improving our operations. If these systems cease to function properly, if these systems experience security breaches or disruptions or if these systems do not provide the anticipated benefits, our ability to manage our operations could be impaired, which could have a material adverse impact on our results of operations, financial condition, and cash flows.

Security breaches or disruptions of our technology systems, infrastructure or products could negatively impact our business and financial results.
Our information technology systems, networks and infrastructure and technology embedded in certain of our control products may be subject to cyber attacks and unauthorized security intrusions. It is possible for such vulnerabilities to remain undetected for an extended period. Like other large companies, certain of our information technology systems have been subject to computer viruses, malicious codes, unauthorized access, phishing efforts, denial-of-service attacks and other cyber attacks and we expect to be subject to similar attacks in the future. The methods used to obtain unauthorized access, disable or degrade service, or sabotage systems are constantly changing and evolving. Despite having instituted security policies and business continuity plans, and implementing and regularly reviewing and updating processes and procedures to protect against unauthorized access, the ever-evolving threats mean we must continually evaluate and adapt our systems and processes, and there is no guarantee that they will be adequate to safeguard against all data security breaches or misuses of data. Hardware, software or applications we develop or obtain from third parties may contain defects in design or manufacture or other problems that could unexpectedly result in security breaches or disruptions. Our systems, networks and certain of our control products may also be vulnerable to system damage, malicious attacks from hackers, employee errors or misconduct, viruses, power and utility outages, and other catastrophic events. Any of these incidents could cause significant harm to our business by negatively impacting our business operations, compromising the security of our proprietary information or the personally identifiable data relating to our customers, employees and business partners and exposing us to litigation or other legal actions against us or the imposition of penalties, fines, fees or liabilities. Such events could have a material adverse impact on our results of operations, financial condition and cash flows and could damage our reputation which could adversely affect our business. Our insurance coverage may not be adequate to cover all the costs related to a cybersecurity attack or disruptions resulting from such attacks. Customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. In addition, data privacy and protection laws are evolving and present increasing compliance challenges, which increase our costs, affect our competitiveness and can expose us to substantial fines or other penalties.
Commodity shortages, supply chain risks and price increases could adversely affect our financial results.
We rely on suppliers to secure commodities, particularly steel and non-ferrous metals, and third-party parts and components required for the manufacture of our products. A disruption in deliveries from our suppliers or decreased availability of commodities and third-party parts and components could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs. We believe that available sourcesDisruptions have occurred due to the COVID-19 pandemic, capacity constraints, labor shortages, port congestion, logistical problems and other issues. Some of these disruptions have resulted in supply will generally be sufficient forchain constraints affecting our needs for the foreseeable future. Nonetheless, thebusiness including our ability to timely produce and ship our products. The unavailability of some commodities and third-party parts and components could have a material adverse impact on our results of operations and cash flows.
Volatility in the prices of these commodities and third-party parts and components or the impact of inflationary increases could increase the costs of our products and services. We may not be able to pass on these costs to our customers and this could have a material adverse impact on our results of operations and cash flows. Conversely, in the event there is deflation, we may experience pressure from our customers to reduce prices. There can be no assurance that we would be able to reduce our costs (through negotiations with suppliers or other measures) to offset any such price concessions which could adversely impact results of operations and cash flows. While we may use financial derivatives or supplier price locks to hedge against this volatility, by using these instruments we may potentially forego the benefits that might result from favorable fluctuations in prices and could experience lower margins in periods of declining commodity prices. In addition, while hedging activity may minimize near-term volatility of the commodity prices, it would not protect us from long-term commodity price increases.
Some of our purchases are from sole or limited source suppliers for reasons of cost effectiveness, uniqueness of design, or product quality. If these suppliers encounter financial or operating difficulties, we might not be able to quickly establish or qualify replacement sources of supply.
We face significant competition in the markets that we serve.
The markets that we serve are highly competitive. We compete worldwide with a number of other manufacturers and distributors that produce and sell similar products. There has been consolidation and new entrants (including non-traditional competitors) within our industries and there may be future consolidation and new entrants which could result in increased competition and significantly alter the dynamics of the competitive landscape in which we operate. Due to our global footprint we are competing worldwide with large companies and with smaller, local operators who may have customer, regulatory or economic advantages in the geographies in which they are located. In addition, some of our competitors may employ pricing and other strategies that are not traditional. While we understand our markets and competitive landscape, there is always the risk of disruptive technologies coming from companies that are not traditionally manufacturers or service providers of our products.
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Our growth is dependent, in part, on the timely development, commercialization and acceptance of new and enhanced products and services.
We must timely develop and commercialize new and enhanced products and services in a rapidly changing technological and business environment in order to remain competitive in our current and future markets and in order to continue to grow our business. The development and commercialization of new products and the modification of existing products and services to meet customer demands require a significant investment of resources and an anticipation of the impact of new technologies and the ability to compete with others who may have superior resources in specific technology domains. We cannot provide any assurance that any new or enhanced product or service will be successfully commercialized in a timely manner, if ever, or, if commercialized, will result in returns greater than our investment. Investment in a product or service could divert our attention and resources from other projects that become more commercially viable in the market. We also cannot provide any assurance that any new or enhanced product or service will be accepted by our current and future markets. Failure to timely develop new and enhanced products and services that are accepted by these markets could have a material adverse impact on our competitive position, results of operations, financial condition, and cash flows.
The capital and credit markets are important to our business.
Instability in U.S. and global capital and credit markets, including market disruptions, limited liquidity and interest rate volatility, or reductions in the credit ratings assigned to us by independent rating agencies could reduce our access to capital markets or increase the cost of funding our short and long term credit requirements. In particular, if we are unable to access capital and credit markets on terms that are acceptable to us, we may not be able to make certain investments or fully execute our business plans and strategies.
Our suppliers and customers are also dependent upon the capital and credit markets. Limitations on the ability of customers, suppliers or financial counterparties to access credit at interest rates and on terms that are acceptable to them could lead to insolvencies of key suppliers and customers, limit or prevent customers from obtaining credit to finance purchases of our products and services and cause delays in the delivery of key products from suppliers.
Currency exchange rate fluctuations and other related risks may adversely affect our results.
We are exposed to a variety of market risks, including the effects of changes in currency exchange rates. See Part II Item 7A, "Quantitative and Qualitative Disclosure About Market Risk."
We have operations throughout the world that manufacture and sell products in various international markets. As a result, we are exposed to movements in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world.
Many of our non-U.S. operations have a functional currency other than the U.S. dollar, and their results are translated into U.S. dollars for reporting purposes. Therefore, our reported results will be higher or lower depending on the weakening or strengthening of the U.S. dollar against the respective foreign currency.
We use derivative instruments to hedge those material exposures that cannot be naturally offset. The instruments utilized are viewed as risk management tools, and are not used for trading or speculative purposes. To minimize the risk of counter party non-performance, derivative instrument agreements are made only through major financial institutions with significant experience in such derivative instruments.
We also face risks arising from the imposition of exchange controls and currency devaluations. Exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls. Currency devaluations result in a diminished value of funds denominated in the currency of the country instituting the devaluation.
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Risks Related to Litigation
Material adverse legal judgments, fines, penalties or settlements could adversely affect our results of operations or financial condition.
We are currently and may in the future become involved in legal proceedings and disputes incidental to the operation of our business or the business operations of previously-owned entities. Our business may be adversely affected by the outcome of these proceedings and other contingencies (including, without limitation, contract claims or other commercial disputes, product liability, product defects and asbestos-related matters) that cannot be predicted with certainty. Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against the total aggregate amount of losses sustained as a result of such proceedings and contingencies. As required by generally accepted accounting principles in the United States, we establish reserves based on our assessment of contingencies. Subsequent developments in legal proceedings and other events could affect our assessment and estimates of the loss contingency recorded as a reserve and we may be required to recognize impairment chargesmake additional material payments, which could have a material adverse impact on our liquidity, results of operations, financial condition, and cash flows.
The Aldrich and Murray Chapter 11 cases involve various risks and uncertainties that could have a material effect on us.
On June 18, 2020, our indirect wholly-owned subsidiaries Aldrich and Murray each filed a voluntary petition for reorganization under the Bankruptcy Code in the Bankruptcy Court. 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. Such a resolution, if achieved, would likely include a channeling injunction to enjoin asbestos claims resolved in the Chapter 11 cases from being filed or pursued against us or our goodwillaffiliates. The Chapter 11 cases remain pending as of February 7, 2022.
Certain of our subsidiaries have entered into funding agreements with Aldrich and Murray (collectively the Funding Agreements), pursuant to which those subsidiaries are obligated, among other things, to fund the costs and expenses of Aldrich and Murray during the pendency of the Chapter 11 cases to the extent distributions from their respective subsidiaries are insufficient to do so and to provide an amount for the funding for a trust established pursuant to section 524(g) of the Bankruptcy Code, to the extent that the other assets of Aldrich and Murray are insufficient to provide the requisite trust funding.
On August 26, 2021, we announced that Aldrich and Murray reached an agreement in principle with the court appointed legal representative of the FCR in the bankruptcy proceedings. The agreement in principle includes the key terms for the permanent resolution of all current and future asbestos claims against Aldrich and Murray (Asbestos Claims) pursuant to the Plan as described further in Note 21, “Commitments and Contingencies” and “Item 1- Legal Proceedings” in this report. The agreement in principle with the FCR is subject to final documentation and is conditioned on arrangements acceptable to Aldrich and Murray with respect to their asbestos insurance assets. The current asbestos claimants (the ACC) are not a party to the agreement in principle. Any settlement and its implementation in a plan of reorganization is subject to the approval of the Bankruptcy Court, and there can be no assurance that the Bankruptcy Court will approve the agreement on the terms proposed.
On September 24, 2021, Aldrich and Murray filed the Plan with the Bankruptcy Court. The Plan is supported by and reflects the agreement in principle reached with the FCR. In connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a QSF. The funds held in the QSF would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan.
On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF. The QSF is expected to be funded in the first quarter of 2022 shortly after the Bankruptcy Court enters an order reflecting such approval and such order becomes final and non-appealable. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last.
There are a number of risks and uncertainties associated with these Chapter 11 cases, including, among others, those related to:
•the ultimate determination of the asbestos liability of Aldrich and Murray to be satisfied under a Chapter 11 plan and the ability to consummate the settlement reached with the FCR;
•the outcome of negotiations with the ACC and the FCR and other indefinite-lived intangible assets.participants in the Chapter 11 cases, including insurers, concerning, among other things, the size and structure of a potential section 524(g) trust to pay the asbestos liability of Aldrich and Murray and the means for funding that trust;
At December 31, 2018, •the net carrying valueactions of our goodwillrepresentatives of the asbestos claimants, including the ACC's pursuit of certain causes of action against us, following the Bankruptcy Court's grant of the ACC's motion seeking standing to investigate and pursue
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certain causes of action at a hearing held on January 27, 2022, and other indefinite-lived intangible assets totaled $6.0 billionpotential actions by the ACC in opposition to, or otherwise inconsistent with, the efforts by Aldrich and $2.7 billion, respectively. Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization;
•the decisions of the Bankruptcy Court relating to numerous substantive and procedural aspects of the Chapter 11 cases, including in connection with a proceeding by Aldrich and Murray to estimate their aggregate liability for asbestos claims, following the Bankruptcy Court's grant of their motion seeking such a proceeding at a hearing held on January 27, 2022, and other efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization, whether such decisions are in response to actions of representatives of the asbestos claimants or otherwise;
•the risk that Aldrich and Murray may be unable to obtain the necessary approvals of the Bankruptcy Court or the United States District Court for the Western District of North Carolina (the District Court) of a plan of reorganization;
•the risk that any orders approving a plan of reorganization and issuing the channeling injunction do not become final;
•the terms and conditions of any plan of reorganization that is ultimately confirmed in the Chapter 11 cases;
•delays in the confirmation or effective date of a plan of reorganization or the funding of the QSF due to factors beyond the Company’s control;
•the risk that the ultimate amount required under any final plan of reorganization may exceed the amounts agreed to with the FCR in the Plan;
•the risk that the insurance carriers do not support the Plan, the risk that the ACC objects to the Plan and/or the motion to establish the QSF; and
•the decisions of appellate courts regarding approval of a plan of reorganization or relating to orders of the Bankruptcy Court or the District Court that may be appealed.
The ability of Aldrich and Murray to successfully reorganize and resolve their asbestos liabilities will depend on various factors, including their ability to reach agreements with representatives of the asbestos claimants on the terms of a plan of reorganization that satisfies all applicable legal requirements and to obtain the requisite court approvals of such plan, and remains subject to the risks and uncertainties described above. We cannot ensure that Aldrich and Murray can successfully reorganize, nor can we give any assurances as to the amount of the ultimate obligations under the Funding Agreements or any plan of reorganization, or the resulting impact on our financial condition, results of operations or future prospects. We also are unable to predict the timing of any of the foregoing matters or the timing for a resolution of the Chapter 11 cases, all of which could have an impact on us.
It also is possible that, in the Chapter 11 cases, various parties will seek to bring and will be successful in bringing claims against us and other related parties, including by raising allegations that we are liable for the asbestos-related liabilities of Aldrich and Murray as set forth in certain pleadings filed by the ACC in the Chapter 11 cases. Although we believe we have no such responsibility for liabilities of Aldrich and Murray, except indirectly through our obligation to provide funding to Aldrich and Murray under the terms of the Funding Agreements, we cannot provide assurances that such claims will not be pursued.
In accordance with generally accepted accounting principles,sum, the outcome of the Chapter 11 cases is uncertain and there is uncertainty as to what extent we periodically assess these assetsmay have to determine if theycontribute to a section 524(g) trust under the Funding Agreements.
Risks Related to Cybersecurity and Technology
We are impaired. Significant negative industry or economic trends, disruptionssubject to risks relating to our business, unexpected significant changesinformation technology systems.
We rely extensively on information technology systems, some of which are supported by third party vendors including cloud-based systems and managed service providers, to manage and operate our business. We invest in new information technology systems designed to improve our operations. We have had failures of these systems in the past and may have failures of these systems in the future. If these systems cease to function properly, if these systems experience security breaches or planned changes in use ofdisruptions or if these systems do not provide the assets, divestitures and sustained market capitalization declines may result in recognition of impairmentsanticipated benefits, our ability to goodwill or other indefinite-lived assets. Any charges relating to such impairmentsmanage our operations could be impaired, which could have a material adverse impact on our results of operations, financial condition, and cash flows.
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Security breaches or disruptions of the technology systems, infrastructure or products of the Company or our vendors could negatively impact our business and financial results.
Our information technology systems, networks and infrastructure and technology embedded in certain of our control products have been and are vulnerable to cyber attacks and unauthorized security intrusions. From time to time, vulnerabilities in our products are discovered and updates are made available, but customers are vulnerable until those updates are applied or other mitigating actions are taken by customers to protect their systems and networks. Like other large companies, certain of our information technology systems and the systems of our vendors have been subject to computer viruses, malicious code, unauthorized access, phishing attempts, denial-of-service attacks and other cyber attacks and we expect that we and our vendors will be subject to similar attacks in the periods recognized.
Global climate changefuture. For example, in the fourth quarter of 2021 a third-party provider that we use for time and related regulations could negativelyattendance tracking experienced a ransomware event that affected our access to this software solution. We activated our crisis management team and business continuity processes and were able to employ alternate methods for tracking time and attendance. While the issue did not directly affect our business.operations or IT systems, the issue caused and continues to cause disruption and a reallocation of management’s time and attention to address the problem.
RefrigerantsThe methods used to obtain unauthorized access, disable or degrade service, or sabotage information technology systems are essentialconstantly changing and evolving. Despite having instituted security policies and business continuity plans, and implementing and regularly reviewing and updating processes and procedures to manyprotect against unauthorized access and requiring similar protections from our vendors, the ever-evolving threats mean we are continually evaluating and adapting our systems and processes and ask our vendors to do the same, and there is no guarantee that such systems and processes will be adequate to safeguard against all data security breaches or misuses of data. Hardware, software or applications we develop or obtain from third parties sometimes contain defects in design or deployment or other problems that could unexpectedly result in security breaches or disruptions. Open source software components embedded into certain software that we use has in the past contained vulnerabilities and others may be discovered in the future. Such vulnerabilities can expose our systems to malware or allow third party access to data. While these issues are not specific to our Company, we are required to take action when such vulnerabilities are identified including patching and modification to certain of our products and enterprise systems. To date, there is a growing awarenesshas been no material business impact from such vulnerabilities, but we continue to monitor these issues and concern regardingour responses are ongoing. Our systems, networks and certain of our control products and those of our vendors are vulnerable to system damage, malicious attacks from hackers, employee errors or misconduct, viruses, power and utility outages, and other catastrophic events. Any of these incidents could cause significant harm to our business by negatively impacting our business operations, compromising the global warming potentialsecurity of such materials. As such, national, regionalour proprietary information or the personally identifiable information of our customers, employees and international regulations and policies are being considered to curtail their use. As regulations reduce the use of the current class of widely used refrigerants, our next generation solutions are being adopted globally, with sales in 32 countries to date. Our climate commitment requiresbusiness partners, exposing us to fully transition out of current refrigerants

by 2030 without compromising safety or energy efficiency. Additionally, we committed to increase energy efficiency and reduce the greenhouse gas footprint of our operations by 35 percent by 2020, which we achieved in 2018, two years early. While we are committed to pursuing these sustainable solutions, there can be no assurance that our commitments will be successful, that our products will be accepted by the market, that proposed regulation or deregulation will not have a negative competitive impact or that economic returns will match the investment that we are making in new product development.
Concerns regarding global climate change have resulted in the Kigali amendment to the Montreal Protocol, pursuant to which countries have agreed to a scheduled phase down of certain high global warming potential refrigerants. Industrial countries may pass regulations that are even more restrictive than these international accords. Some countries, including the U.S., have not yet ratified the amendment and there could be lower customer demand for next generation products in these countries. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty. In addition, the U.S. withdrawal from the Paris Accord could affect our competitiveness in certain markets. Such regulatory uncertainty extends to future incentives for energy efficient buildings and vehicles and costs of compliance, which may impact the demand for our products, obsolescence of our products and our results of operations.
Natural disasterslitigation or other unexpectedlegal actions against us or the imposition of penalties, fines, fees or liabilities. Such events may disrupt our operations, adversely affect our results of operations and financial condition, and may not be fully covered by insurance.
The occurrence of one or more unexpected events, including hurricanes, fires, earthquakes, floods and other forms of severe weather in the U.S. or in other countries in which we operate or are located could adversely affect our operations and financial performance. Natural disasters, power outages or other unexpected events could result in physical damage to and complete or partial closure of one or more of our plants, temporary or long-term disruption of our operations by causing business interruptions or by impacting the availability and cost of materials needed for manufacturing. Existing insurance arrangements may not provide full protection for the costs that may arise from such events, particularly if such events are catastrophic in nature or occur in combination. The occurrence of any of these events could increase our insurance and other operating costs.
Some of the markets in which we operate are cyclical and seasonal and demand for our products and services could be adversely affected by downturns in these industries.
Demand for most of our products and services depends on the level of new capital investment and planned maintenance expenditures by our customers. The level of capital expenditures by our customers fluctuates based on planned expansions, new builds, repairs, commodity prices, general economic conditions, availability of credit, inflation, interest rates, market forecasts, tax and regulatory developments, trade policies, fiscal spending and sociopolitcal factors among others.
Our commercial and residential HVAC businesses provide products and services to a wide range of markets, including significant sales to the commercial and residential construction markets. Weakness in either or both of these construction markets may negatively impact the demand for our products and services.
Demand for our commercial and residential HVAC business is also influenced by weather conditions. For instance, sales in our commercial and residential HVAC businesses historically tend to be seasonally higher in the second and third quarters of the year because, in the U.S. and other northern hemisphere markets, spring and summer are the peak seasons for sales of air conditioning systems and services. The results of any quarterly period may not be indicative of expected results for a full year and unusual weather patterns or events could negatively or positively affect our business and impact overall results of operations.
The business of many of our industrial customers, particularly oil and gas companies are to varying degrees cyclical and have experienced periodic downturns. During such economic downturns, customers in these industries historically have tended to delay major capital projects, maintenance projects and upgrades.
Decrease in the demand for our products and services could have a material adverse impact on our results of operations, financial condition and cash flow.

Our business strategy includes acquiring companies, product lines, plantsflows and assets, entering into joint ventures and making investments that complementcould damage our existing businesses. We also occasionally divest businesses that we own. We may not identify acquisition or joint venture candidates at the same rate as the past. Acquisitions, dispositions, joint ventures and investments that we identify could be unsuccessful or consume significant resources,reputation which could adversely affect our operating results.business. Our insurance coverage may not be adequate to cover all the costs related to a cybersecurity attack or disruptions resulting from such attacks. Customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands.
Data privacy and protection laws are evolving and present increasing compliance challenges.
The regulatory environment surrounding data privacy and protection is increasingly demanding, with the frequent imposition of new and changing requirements across businesses and geographic areas. We are required to comply with complex regulations when collecting, transferring and using personal data, which increases our costs, affects our competitiveness and can expose us to substantial fines or other penalties.
Intellectual property infringement claims of others and the inability to protect our intellectual property rights could harm our competitive position.
Our intellectual property (IP) 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 we consider our intellectual property rights to be valuable to our operations, we do not believe that our business is materially dependent on a single intellectual property right or any group of them. In our opinion, engineering, production skills and experience are more responsible for our market position than our patents and/or licenses.
Nonetheless, this intellectual property may be subject to challenge, infringement, invalidation or circumvention by third parties. Despite extensive security measures, our intellectual property may be subject to misappropriation through unauthorized access of our information technology systems, employee theft, or theft by private parties or foreign actors, including those affiliated with or controlled by state actors. Our business and competitive position could be harmed by such events. Our ability to protect our intellectual property rights by legal recourse or otherwise may be limited, particularly in countries where laws or enforcement practices are inadequate or undeveloped. Our inability to enforce our IP rights under any of these circumstances could have an impact on our competitive position and business.
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Risks Related to Regulatory Matters
Our reputation, ability to do business and results of operations could be impaired by improper conduct by any of our employees, agents or business partners.
We continueare subject to analyzeregulation under a wide variety of U.S. federal and evaluatestate and non-U.S. laws, regulations and policies, including laws related to anti-corruption, anti-human trafficking, anti-bribery, export and import compliance, anti-trust and money laundering, due to our global operations. We cannot provide assurance our internal controls will always protect us from the acquisitionimproper conduct of our employees, agents and divestiturebusiness partners. Any violations of strategic businesseslaw or improper conduct could damage our reputation and, product lines, technologiesdepending on the circumstances, subject us to, among other things, civil and capabilities, plantscriminal penalties, material fines, equitable remedies (including profit disgorgement and assets, joint venturesinjunctions on future conduct), securities litigation and investments with the potential to strengthen our industry position, to enhance our existing seta general loss of product and services offerings, to increase productivity and efficiencies, to grow revenues, earnings and cash flow, to help us stay competitive or to reduce costs. There can be no assurance that we will identify or successfully complete transactions with suitable candidates in the future, that we will consummate these transactions at rates similar to the past or that completed transactions will be successful. Strategic transactions may involve significant cash expenditures, debt incurrence, operating losses and expenses thatinvestor confidence, any one of which could have a material adverse effectimpact on our business prospects, financial condition, results of operations, cash flows, and cash flows. Such transactions involve numerous other risks, including:
diversion of management time and attention from daily operations;
difficulties integrating acquired businesses, technologies and personnel into our business;
difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;
inability to obtain required regulatory approvals and/or required financing on favorable terms;
potential loss of key employees, key contractual relationships or key customers of either acquired businesses or our business;
assumption of the liabilities and exposure to unforeseen or undisclosed liabilities of acquired businesses and exposure to regulatory sanctions;
inheriting internal control deficiencies;
dilution of interests of holdersmarket value of our common shares through the issuance of equity securities or equity-linked securities; and
in the case of joint ventures and other investments, interests that diverge from those of our partners without the ability to direct the management and operations of the joint venture or investment in the manner we believe most appropriate to achieve the expected value.
It may be difficult for us to complete transactions quickly without high costs and to integrate acquired operations efficiently into our business operations. Any acquisitions, divestitures, joint ventures or investments may ultimately harm our business, financial condition, results of operations and cash flows.stock.
Our operations are subject to regulatory risks.
Our U.S. and non-U.S. operations are subject to a number of laws and regulations, including among others, laws related to the environment and health and safety. We have made, and will be required to continue to make, significant expenditures to comply with these laws and regulations. Any violations of applicable laws and regulations could lead to significant penalties, fines or other sanctions. Changes in current laws and regulations could require us to increase our compliance expenditures, cause us to significantly alter or discontinue offering existing products and services or cause us to develop new products and services. Altering current products and services or developing new products and services to comply with changes in the applicable laws and regulations could require significant research and development investments, increase the cost of providing the products and services and adversely affect the demand for our products and services. The U.S. federal government and various states and municipalities have enacted or may enact legislation intended to deny government contracts to U.S. companies that reincorporate outside of the U.S. or have reincorporated outside of the U.S or may take other actions negatively impacting such companies. If we are unable to effectively respond to changes to applicable laws and regulations, interpretations of applicable laws and regulations, or comply with existing and future laws and regulations, our competitive position, results of operations, financial condition and cash flows could be materially adversely impacted.
Global climate change and related regulations could negatively affect our business.
Climate change presents immediate and long-term risks to our Company and to our customers, with the risks expected to increase over time. Our products and operations are subject to and affected by environmental regulation by federal, state and local authorities in the U.S. and regulatory authorities with jurisdiction over our international operations, including with respect to the use, storage, and dependence upon refrigerants which are considered greenhouse gases. Refrigerants are essential to many of our products and there is concern regarding the global warming potential of such materials. As such, national, regional and international regulations and policies are being implemented to curtail their use. Some of these regulations could have a negative competitive impact on our company by requiring us to make costly changes to our products. As regulations reduce the use of the current class of widely used refrigerants, we are developing and selling our next generation products that utilize lower global warming potential solutions. There can be no assurance that climate change or environmental regulation or deregulation will not have a negative competitive impact on our ability to sell these products or that economic returns will match the investment that we are making in new product development. We face increasing complexity related to product design, the use of regulated materials, the associated energy consumption and efficiency related to the use of products, the transportation and shipping of products, climate change regulations, and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life as we adjust to new and future requirements relating to our transition to a more circular economy. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty. Such regulatory uncertainty extends to future incentives for energy efficient buildings and vehicles and costs of compliance, which may impact the demand for our products, obsolescence of our products and our results of operations.
Our climate commitment requires us to offer a full line of next generation products by 2030 without compromising safety or energy efficiency. Additionally, in 2019, we announced our 2030 commitment which targets reducing one gigaton – one billion metric tons – of carbon emissions (CO2e) from our customers’ footprint by 2030. While we are committed to pursuing these sustainability objectives, there can be no assurance that we will successfully achieve our commitments. Failure to meet these commitments could result in reputational harm to our company. Changes regarding climate risk management and practices may result in higher regulatory, compliance risks and costs.
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Risks Related to Our Business Operations
Our business strategy includes acquiring businesses, product lines, technologies and capabilities, plants and other assets, entering into joint ventures and making investments that complement our existing businesses. We also occasionally divest businesses that we own. We may not identify acquisition or joint venture candidates or investment opportunities at the same rate as the past. Acquisitions, dispositions, joint ventures and investments that we identify could be unsuccessful or consume significant resources, which could adversely affect our operating results.
We continue to analyze and evaluate the acquisition and divestiture of strategic businesses and product lines, technologies and capabilities, plants and other assets, joint ventures and investments with the potential to, among other things, strengthen our industry position, to enhance our existing set of product and services offerings, to increase productivity and efficiencies, to grow revenues, earnings and cash flow, to help us stay competitive or to reduce costs. There can be no assurance that we will identify or successfully complete transactions with suitable candidates in the future, that we will consummate these transactions at rates similar to the past or that completed transactions will be successful. Strategic transactions may involve significant cash expenditures, debt incurrence, operating losses and expenses that could have a material adverse effect on our business, financial condition, results of operations and cash flows. Such transactions involve numerous other risks, including:
•diversion of management time and attention from daily operations;
•difficulties integrating acquired businesses, technologies and personnel into our business, including doing so without high costs;
•difficulties in obtaining and verifying the financial statements and other business and other due diligence information of acquired businesses;
•inability to obtain required regulatory approvals and/or required financing on favorable terms;
•potential loss of key employees, key contractual relationships or key customers of either acquired businesses or our business;
•assumption of the liabilities and exposure to unforeseen or undisclosed liabilities of acquired businesses and exposure to regulatory sanctions;
•inheriting internal control deficiencies;
•dilution of interests of holders of our common shares through the issuance of equity securities or equity-linked securities; and
•in the case of joint ventures and other investments, interests that diverge from those of our partners without the ability to direct the management and operations of the joint venture or investment in the manner we believe most appropriate to achieve the expected value.
Any acquisitions, divestitures, joint ventures or investments may ultimately harm our business, financial condition, results of operations and cash flows. There are additional risks related to our Reverse Morris Trust transaction, see "Risks Related to the Transactions" for more information.
Natural disasters, epidemics or other unexpected events may disrupt our operations, adversely affect our results of operations and financial condition, and may not be fully covered by insurance.
The occurrence of one or more catastrophic events including hurricanes, fires, earthquakes, floods and other forms of severe weather, health epidemics or pandemics or other contagious outbreaks or other catastrophic events in the U.S. or in other countries in which we operate or are located could adversely affect our operations and financial performance. Natural disasters, power outages, health epidemics or pandemics or other contagious outbreaks or other unexpected events could result in physical damage to and complete or partial closure of one or more of our plants, temporary or long-term disruption of our operations by causing business interruptions, material scarcity, price volatility or supply chain disruptions. Climate change is a risk multiplier with respect to these physical disasters in both frequency and severity and may affect our global business operations as a result. Existing insurance arrangements may not provide full protection for the costs that may arise from such events, particularly if such events are catastrophic in nature or occur in combination. The occurrence of any of these events could increase our insurance and other operating costs or harm our sales in affected areas.
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Our business may be adversely affected by temporary work stoppages, union negotiations, labor disputes and other matters associated with our labor force.
Certain of our employees are covered by collective bargaining agreements or works councils. We experience from time-to-time temporary work stoppages, union negotiations, labor disputes and other matters associated with our labor force and some of these events could result in significant increases in our cost of labor, impact our productivity or damage our reputation. Additionally, a work stoppage at one of our suppliers could materially and adversely affect our operations if an alternative source of supply were not readily available. Stoppages by employees of our customers could also result in reduced demand for our products. Some of these issues have been and may in the future be exacerbated by effects of the COVID-19 global pandemic as described in our risk factor - "The COVID-19 global pandemic and resulting adverse economic conditions have already adversely impacted our business and could have a more material adverse impact on our business, financial condition and results of operations".
Risks Relating to Our Operations and Corporate Structure
Our corporate structure has resulted from prior corporate reorganizations and related transactions. These various transactions exposed us and our shareholders to the risks described below. In addition, we cannot be assured that all of the anticipated benefits of our operations and corporate structure will be realized.

Tax Matters
Changes in tax or other laws, regulations or treaties, including the enactment of the U.S. Tax Cuts and Jobs Act, changes in our status under U.S. or non-U.S. laws or adverse determinations by taxing or other governmental authorities could increase our tax burden or otherwise affect our financial condition or operating results, as well as subject our shareholders to additional taxes.
The realization of any tax benefit related totaxes associated with our operations and corporate structure could be impacted by changes in tax or other laws, treaties or regulations or the interpretation or enforcement thereof by the U.S. or non-U.S. tax or other governmental authorities. Enacted comprehensive tax reform legislation in December 2017 known asWhile the Tax Cuts and Jobs Act (the Act) made broad(TCJA) was passed in the U.S. in 2017, further guidance, regulations, and complextechnical corrections pertaining to TCJA continue to be issued by the tax authorities, some of which may have retroactive application. We continue to monitor and review new guidance and regulations as they are issued, as any changes could have a material adverse effect on our financial statements. In addition, the U.S. Congress is actively engaged in formulating new legislative proposals. Any future legislative changes to the U.S. tax code. As part oflaws and judicial or regulatory interpretation thereof, the migration from a worldwide system of taxation to a modified territorial system for corporations, the Act imposed a transition tax on certain unrepatriated earnings of non-U.S. subsidiaries. We recorded certain charges and benefits in connection with the Act and have taken a charge in connection with the mandatory deemed repatriationgeographic mix of earnings, of certain ofchanges in overall profitability, and other factors could also materially impact our Non-U.S. subsidiaries, and we have recorded other charges and benefits, set forth in greater detail in Note 16 to the Consolidated Financial Statements. Any additional impacts from the Act will be determined as the U.S. Department of Treasury and/or the IRS continue to release proposed and final guidance on certain relevant provisions of the Act which should provide better clarity regarding the interpretation, interaction and application of these rules; the new law’s substantial limitations on, and/or elimination of, certaineffective tax deductions and the introduction of new taxing provisions, among other items, may increase our overall tax burden or otherwise negatively impact the Company. Moreover, our overall tax burden may also be adversely impacted by any tax law changes implemented by other countries.rate.
Notwithstanding this change in U.S. tax law, weWe continue to monitor for other tax changes, U.S. (including state and local) and non-U.S. related.related, which can also adversely impact our overall tax burden. From time to time, proposals have been made and/or legislation has been introduced to change the tax laws, regulations or interpretations thereof of various jurisdictions or limit tax treaty benefits that if enacted or implemented could materially increase our tax burden and/or effective tax rate and could have a material adverse impact on our financial condition and results of operations. Moreover, the Organisation for Economic Co-operation and Development (OECD) has released proposals to create an agreed set of international rules for fighting base erosion and profit shifting, including Pillar One and Pillar Two, such that tax laws in countries in which we do business could change on a prospective or retroactive basis, and any such changes could adversely impact us. The OECD (and the European Commission) have also committed to implementing a global minimum tax rate (proposed 15% minimum tax rate, agreed upon by over 135 jurisdictions, including Ireland). Full details are uncertain and timing is currently proposed to be January 1, 2023. As a consequence, our global effective tax rate could be materially impacted by such legislation, or any resulting local country legislation enacted in response to any potential global minimum tax rates.
Finally, the European Commission has been very active in investigating whether various tax regimes or private tax rulings provided by a country to particular taxpayers may constitute State Aid. We cannot predict the outcome of any of these potential changes or investigations in any of the jurisdictions, but if any of the above occurs and impacts us, this could materially increase our tax burden and/or effective tax rate and could have a material adverse impact on our financial condition and results of operations.
While we monitor proposals and other developments that would materially impact our tax burden and/or effective tax rate and investigate our options, we could still be subject to increased taxation on a going forward basis no matter what action we undertake if certain legislative proposals or regulatory changes are enacted, certain tax treaties are amended and/or our interpretation of applicable tax or other laws is challenged and determined to be incorrect. In particular, any changes and/or differing interpretations of applicable tax law that have the effect of disregarding the shareholders' decision to reorganize in Ireland, limiting our ability to take advantage of tax treaties between jurisdictions, modifying or eliminating the deductibility of various currently deductible payments, or increasing the tax burden of operating or being resident in a particular country could subject us to increased taxation.
In addition, tax authorities periodically review income tax returns filed by us and can raise issues regarding our filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which we operate. These examinations on their own, or any subsequent litigation related to the examinations, may result in additional taxes or penalties against us. If the ultimate result of these audits differdiffers from our original or adjusted estimates, they could have a material impact on our tax provision.
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Risks Related to our Reverse Morris Trust Transaction
On the Distribution Date, we completed the Transaction with Gardner Denver, which changed its name to Ingersoll Rand after the Transaction whereby we distributed Ingersoll-Rand U.S. Holdco, Inc., which contained Ingersoll Rand Industrial, through the Distribution to our shareholders of record as of February 24, 2020. Ingersoll Rand Industrial then merged with a wholly-owned subsidiary of Ingersoll Rand. Upon close of the Transaction, our existing shareholders received approximately 50.1% of the shares of Ingersoll Rand common stock on a fully-diluted basis and Gardner Denver stockholders retained approximately 49.9% of the shares of Ingersoll Rand on a fully diluted basis. As a result, our shareholders received 0.8824 shares of Ingersoll Rand common stock with respect to each share of our stock owned as of February 24, 2020. In connection with the Transaction, we received a special cash payment of $1.9 billion.
If the Distribution as part of our Reverse Morris Trust Transaction is determined to be taxable for Irish tax purposes, significant Irish tax liabilities may arise for our shareholders.
We received an opinion from Irish Revenue regarding certain tax matters associated with the Distribution, as well as a legal opinion from our Irish counsel Arthur Cox, regarding certain Irish tax consequences for shareholders of the Distribution. For our shareholders that are not resident or ordinarily resident in Ireland for Irish tax purposes and that do not hold their shares in connection with a trade or business carried on by such shareholders through an Irish branch or agency, we consider, based on both opinions taken together, that no adverse Irish tax consequences for such shareholders should have arisen. These opinions relied on certain facts and assumptions and certain representations. Notwithstanding the opinion from Irish Revenue, Irish Revenue could ultimately determine on audit that the Distribution is taxable for Irish tax purposes, for example, if it determines that any of these facts, assumptions or representations are not correct or have been violated. A legal opinion represents the tax adviser’s best legal judgment and is not binding on Irish Revenue or the courts and Irish Revenue or the courts may not agree with the legal opinion. In addition, the legal opinion is based on current law and cannot be relied upon if current law changes with retroactive effect. If the Distribution ultimately is determined to be taxable for Irish tax purposes, certain of our shareholders and we could have significant Irish tax liabilities as a result of the Distribution, and there could be a material adverse impact on our business, financial condition, results of operations and cash flows in future reporting periods.
If the Distribution together with certain related transactions do not qualify as tax-free under Sections 355 and 368(a) of the Code, including as a result of subsequent acquisitions of stock of the Company or Ingersoll Rand Inc., then the Company and our shareholders may be required to pay substantial U.S. federal income taxes, and Ingersoll Rand Inc. may be obligated to indemnify the Company for such taxes imposed on the Company.
We received an opinion from our U.S. tax counsel Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul Weiss) substantially to the effect that, for U.S. federal income tax purposes, the Distribution together with certain related transactions undertaken in anticipation of the Distribution and taking into account the merger of Ingersoll Rand Industrial with the wholly-owned subsidiary of Ingersoll Rand will qualify as a tax-free transaction under Sections 368(a), 361 and 355 of the Code, with the result that we and our shareholders will not recognize any gain or loss for U.S. federal income tax purposes as a result of the spin-off. The opinion of our counsel was based on, among other things, certain representations and assumptions as to factual matters made by Ingersoll Rand, Ingersoll Rand Industrial and the Company. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the opinion of counsel. An opinion of counsel represents counsel’s best legal judgment, is not binding on the Internal Revenue Service (IRS) or the courts, and the IRS or the courts may not agree with the opinion. In addition, the opinion will be based on current law, and cannot be relied upon if current law changes with retroactive effect. If the Distribution, and/or related internal transactions in anticipation of the Distribution ultimately are determined to be taxable, we could incur significant U.S. federal income tax liabilities, which could cause a material adverse impact on our business, financial condition, results of operations and cash flows in future reporting periods, although if this determination resulted from certain actions taken by Ingersoll Rand Industrial or Ingersoll Rand Inc., Ingersoll Rand Inc. would be required to bear the cost of any resultant tax liability pursuant to the terms of the Tax Matters Agreement.
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The Distribution will be taxable to the Company pursuant to Section 355(e) of the Code if there is a 50% or greater change in ownership of either the Company or Ingersoll Rand Industrial, directly or indirectly (including through such a change in ownership of Ingersoll Rand Inc.), as part of a plan or series of related transactions that include the Distribution. A Section 355(e) change of ownership would not make the Distribution taxable to our shareholders, but instead may result in corporate-level taxable gain to certain of our subsidiaries. Because our shareholders will collectively be treated as owning more than 50% of the Ingersoll Rand Inc. common stock following the merger, the merger alone should not cause the Distribution to be taxable to our subsidiaries under Section 355(e). However, Section 355(e) might apply if other acquisitions of stock of the Company before or after the merger, or of Ingersoll Rand Inc. before or after the merger, are considered to be part of a plan or series of related transactions that include the Distribution together with certain related transactions. If Section 355(e) applied, certain of our subsidiaries might recognize a very substantial amount of taxable gain, although if this applied as a result of certain actions taken by Ingersoll Rand Industrial, Ingersoll Rand Inc. or certain specified Ingersoll Rand Inc. stockholders, Ingersoll Rand Inc. would be required to bear the cost of any resultant tax liability under Section 355(e) pursuant to the terms of the Tax Matters Agreement.
If the merger does not qualify as a tax-free reorganization under Section 368(a) of the Code, our shareholders may be required to pay substantial U.S. federal income taxes.
We have received an opinion from Paul Weiss, and Ingersoll Rand Inc. has received an opinion from their counsel Simpson Thacher & Bartlett LLP, substantially to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code with the result that U.S. holders of Ingersoll Rand Industrial common stock who received Ingersoll Rand common stock in the merger will not recognize any gain or loss for U.S. federal income tax purposes (except with respect to cash received in lieu of fractional shares of Ingersoll Rand common stock). These opinions were based upon, among other things, certain representations and assumptions as to factual matters made by Ingersoll Rand Inc., the Company, Ingersoll Rand Industrial and the merger subsidiary used by Ingersoll Rand Inc. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the opinions. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the opinions will be based on current law, and cannot be relied upon if current law changes with retroactive effect. If the merger were taxable, U.S. holders of Ingersoll Rand Industrial would be considered to have made a taxable sale of their Ingersoll Rand Industrial common stock to Ingersoll Rand Inc., and such U.S. holders of Ingersoll Rand Industrial would generally recognize taxable gain or loss on their receipt of Ingersoll Rand Inc. common stock in the merger.
Risks Related to Our Irish Domicile
Irish law differs from the laws in effect in the United States and may afford less protection to holders of our securities.
The United States currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As such, there is some uncertainty as to whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on U.S. federal or state civil liability laws, including the civil liability provisions of the U.S. federal or state securities laws, or hear actions against us or those persons based on those laws.
As an Irish company, we are governed by the Irish Companies Act, which differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including, among others, differences relating to interested director and officer transactions, indemnification of directors and shareholder lawsuits. Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances. Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the United States.

In addition, Irish law does not allow for any form of legal proceedings directly equivalent to the class action available in the United States.
Irish law allows shareholders to authorize share capital which then can be issued by a board of directors without shareholder approval. Also, subject to specified exceptions, Irish law grants statutory pre-emptive rights to existing shareholders to subscribe for new issuances of shares for cash but allows shareholders to authorize the waiver of the statutory pre-emptive rights with respect to any particular allotment of shares. Under Irish law, we must have authority from our shareholders to issue any shares, including shares that are part of the Company’s authorized but unissued share capital. In addition, unless otherwise authorized by its shareholders, when an Irish company issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing shareholders on a pro-rata basis. If we are unable to obtain these authorizations from our shareholders or are otherwise limited by the terms of our authorizations, our ability to issue shares or otherwise raise capital could be adversely affected.
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Dividends received by our shareholders may be subject to Irish dividend withholding tax.
In certain circumstances, we are required to deduct Irish dividend withholding tax (currently at the rate of 20%25%) from dividends paid to our shareholders. In the majority of cases, shareholders resident in the United States will not be subject to Irish withholding tax, and shareholders resident in a number of other countries will not be subject to Irish withholding tax provided that they complete certain Irish dividend withholding tax forms. However, some shareholders may be subject to withholding tax, which could have an adverse impact on the price of our shares.
Dividends received by our shareholders could be subject to Irish income tax.
Dividends paid in respect of our shares will generally not be subject to Irish income tax where the beneficial owner of these dividends is exempt from dividend withholding tax, unless the beneficial owner of the dividend has some connection with Ireland other than his or her shareholding in Ingersoll-RandTrane Technologies plc.
Our shareholders who receive their dividends subject to Irish dividend withholding tax will generally have no further liability to Irish income tax on the dividends unless the beneficial owner of the dividend has some connection with Ireland other than his or her shareholding in Ingersoll-RandTrane Technologies plc.
Item 1B.UNRESOLVED STAFF COMMENTS
None.
Item 2.PROPERTIES
As of December 31, 2018,2021, we owned or leased a total of approximately 3227 million square feet of space worldwide. Manufacturing and assembly operations are conducted in 5235 plants across the world. We also maintain various warehouses, offices and repair centers throughout the world. The majority of our plant facilities are owned by us with the remainder under long-term lease arrangements. We believe that our plants have been well maintained, are generally in good condition and are suitable for the conduct ofconducting our business.

The locations by segment of our principal plant facilities at December 31, 20182021 were as follows:
ClimateAmericasEMEAAsia Pacific
AmericasEurope and Middle EastAsia Pacific and India
Arecibo, Puerto RicoBarcelona, SpainBangkok, Thailand
Brampton, OntarioBari, ItalyTaicang, China
Charlotte, North CarolinaBari, ItalyCharmes, FrancePenang, MalaysiaWujiang, China
Clarksville, TennesseeCharmes, FranceEssen, GermanyTaicang,Zhongshan, China
Columbia, South CarolinaEssen, GermanyGalway, IrelandZhongshan, China
Curitiba, BrazilGalway, IrelandGolbey, France
Fairlawn, New JerseyGolbey, France
Fort Smith, ArkansasKing Abdullah Economic City, Saudi Arabia
Grand Rapids, MichiganFort Smith, ArkansasKolin, Czech Republic
Hastings, Nebraska
La Crosse, Wisconsin
Lexington, Kentucky
Lynn Haven, Florida
Monterrey, Mexico
Pueblo, Colorado
Rushville, Indiana
St. Paul, Minnesota
Trenton, New Jersey
Tyler, Texas
Vidalia, Georgia
Waco, Texas
Fremont, Ohio
IndustrialGrand Rapids, Michigan
AmericasHastings, NebraskaEurope and Middle EastAsia Pacific and India
Augusta, GeorgiaLa Crosse, WisconsinFogliano Redipuglia, ItalyChangzhou, China
Buffalo, New YorkLynn Haven, FloridaLogatec, SloveniaGuilin, China
Campbellsville, KentuckyMarietta, OhioOberhausen, GermanyNaroda, India
Dorval, CanadaMonterrey, MexicoSin le Noble, FranceSahibabad, India
Kent, WashingtonNewberry, South CarolinaVignate, ItalyWujiang, China
Mocksville, North CarolinaPueblo, ColoradoWasquehal, France
Sarasota, FloridaRushville, Indiana
Southern Pines, North CarolinaSt. Paul, Minnesota
West Chester, PennsylvaniaTrenton, New Jersey
Tyler, Texas
Vidalia, Georgia
Waco, Texas
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Item 3.LEGAL PROCEEDINGS
In the normal course of business, we are involved in a variety of lawsuits, claims and legal proceedings, including those related to the bankruptcy proceedings for Aldrich and Murray, commercial and contract disputes, employment matters, product liability and product defect claims, asbestos-related claims, environmental liabilities, intellectual property disputes, and tax-related matters. In our opinion, pending legal matters are not expected to have a material adverse impact on our results of operations, financial condition, liquidity or cash flows.
Asbestos-Related Matters
CertainOn the Petition Date, Aldrich and Murray each filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. As a result of the Chapter 11 filings, all asbestos-related lawsuits against Aldrich and Murray have been stayed. Only Aldrich and Murray have filed for Chapter 11 relief. Neither Aldrich's wholly-owned subsidiary, 200 Park, Murray's wholly-owned subsidiary, ClimateLabs, Trane Technologies plc nor the Trane Companies are part of the Chapter 11 filings.
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. Such a resolution, if achieved, would likely include a channeling injunction to enjoin asbestos claims resolved in the Chapter 11 cases from being filed or pursued against us or our affiliates.
On August 26, 2021, we announced that Aldrich and Murray reached an agreement in principle with the FCR in the bankruptcy proceedings. The agreement includes the key terms for the permanent resolution of all current and future asbestos claims against Aldrich and Murray pursuant to the Plan. Under the agreed terms, the Plan would create a trust pursuant to section 524(g) of the Bankruptcy Code and establish claims resolution procedures for the Asbestos Claims. On the effective date of the Plan, Aldrich and Murray would fund the trust with $545.0 million, comprised of $540.0 million in cash and a promissory note to be issued by Aldrich and Murray to the trust in the principal amount of $5.0 million, and the Asbestos Claims would be channeled to the trust for resolution in accordance with the claims resolution procedures. Following the effective date of the Plan, Aldrich and Murray, would have no further obligations with respect to the Asbestos Claims. The FCR has agreed to support such Plan. The agreement in principle with the FCR is subject to final documentation and is conditioned on arrangements acceptable to Aldrich and Murray with respect to their asbestos insurance assets. It is currently contemplated that the asbestos insurance assets of Aldrich and Murray would be contributed to the trust, and that, in consideration of their cash contribution to the trust, Aldrich and Murray would have the exclusive right to pursue, collect and retain all insurance reimbursements available in connection with the resolution of Asbestos Claims by the trust. The ACC is not a party to the agreement in principle. Any settlement and its implementation in a plan of reorganization is subject to the approval of the Bankruptcy Court, and there can be no assurance that the Bankruptcy Court will approve the agreement on the terms proposed.
On September 24, 2021, Aldrich and Murray filed the Plan with the Bankruptcy Court. The Plan is supported by, and reflects the agreement in principle reached with the FCR. In connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a QSF. The funds held in the QSF would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan.
On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF. The QSF is expected to be funded in the first quarter of 2022 shortly after the Bankruptcy Court enters an order reflecting such approval and such order becomes final and non-appealable. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last. The Chapter 11 cases remain pending as of February 7, 2022.
Prior to the Petition Date, certain of our wholly-owned subsidiaries and former companies arewere named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims allege injury caused by exposure to asbestos contained in certain historical products, primarily pumps, boilers and railroad brake shoes. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos.
See also the discussion under Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," "Contingent Liabilities," and alsoin Note 2021 to the Consolidated Financial Statements.

Item 4.MINE SAFETY DISCLOSURES

None.
Not applicable.
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PART II
 
Item 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Information regarding the principal market for our ordinary shares and related shareholder matters is as follows:
Our ordinary shares are traded on the New York Stock Exchange under the symbol IR.TT. As of February 1, 2019,2022, the approximate number of record holders of ordinary shares was 2,931.2,533.
Issuer Purchases of Equity Securities
The following table provides information with respect to purchases by us of our ordinary shares during the quarter ended December 31, 2018:2021:
Period Total number of shares purchased (000's) (a) (b) Average price paid per share (a) (b) Total number of shares purchased as part of program (000's) (a) Approximate dollar value of shares still available to be purchased under the program ($000's) (a)PeriodTotal number of shares purchased (000's) (a) (b)Average price paid per share (a) (b)Total number of shares purchased as part of program (000's) (a)Approximate dollar value of shares still available to be purchased under the program ($000's) (a)
October 1 - October 31 840.8
 $94.54
 840.3
 $306,617
October 1 - October 310.7 $174.74 — $1,899,788 
November 1 - November 30 2,542.6
 100.88
 2,542.6
 $50,118
November 1 - November 301,195.8 191.14 1,195.8 1,671,215 
December 1 - December 31 485.4
 103.60
 484.0
 $—
December 1 - December 311,384.3 196.32 1,382.6 1,399,785 
Total 3,868.8
 $99.84
 3,866.9
  Total2,580.8 $193.91 2,578.4 
(a) Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. In February 2017,2021, our Board of Directors authorized the repurchase of up to $1.5$2.0 billion of our ordinary shares under a new share repurchase program (the 2017(2021 Authorization) upon completion of the prior authorized share repurchase program. Repurchases underDuring the 2017 Authorization began in May 2017fourth quarter of 2021, we repurchased and ended in December 2018, completing the program. In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billioncanceled $500.0 million of our ordinary shares upon completion of the 2017 Authorization. The authorized sharesleaving approximately $1.4 billion remaining under the new share repurchase program are not included in the approximate dollar value2021 Authorization as of shares still available to be purchased in the table above.December 31, 2021.
(b) We may also reacquire shares outside of the repurchase program from time to time in connection with the surrender of shares to cover taxes on vesting of share based awards. We reacquired 456681 shares in October and 1,4251,686 shares in December in transactions outside the repurchase programs.





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Performance Graph
The following graph compares the cumulative total shareholder return on our ordinary shares with the cumulative total return on (i) the Standard & Poor’s 500 Stock Index and (ii) the Standard & Poor’s 500 Industrial Index for the five years ended December 31, 2018.2021. The graph assumes an investment of $100 in our ordinary shares (adjusted for the Transaction), the Standard & Poor’s 500 Stock Index and the Standard & Poor’s 500 Industrial Index on December 31, 20132016 and assumes the reinvestment of dividends.
chart-de0d0a165afc51709d4.jpgtt-20211231_g1.jpg
Company/Index201620172018201920202021
Trane Technologies100121127188269380
S&P 500100122116153181233
S&P 500 Industrials Index100121105136151182
Item 6.   [Reserved]

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Company/Index201320142015201620172018
Ingersoll Rand10010593129156163
S&P 500100114115129157150
S&P 500 Industrials Index100110107127154133

Item 6.SELECTED FINANCIAL DATA
In millions, except per share amounts:
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At and for the years ended December 31, 2018 2017 2016 2015 2014
           
Net revenues $15,668.2
 $14,197.6
 $13,508.9
 $13,300.7
 $12,891.4
           
Net earnings (loss) attributable to Ingersoll-Rand plc ordinary shareholders:          
Continuing operations 1,359.1
 1,328.0
 1,443.3
 688.9
 897.0
Discontinued operations (21.5) (25.4) 32.9
 (24.3) 34.7
           
Total assets 17,914.9
 18,173.3
 17,397.4
 16,717.6
 17,274.6
           
Total debt 4,091.3
 4,064.0
 4,070.2
 4,217.8
 4,200.5
           
Total Ingersoll-Rand plc shareholders’ equity 7,022.7
 7,140.3
 6,643.8
 5,816.7
 5,987.4
           
Earnings (loss) per share attributable to Ingersoll-Rand plc ordinary shareholders:          
Basic:          
Continuing operations $5.50
 $5.21
 $5.57
 $2.60
 $3.32
Discontinued operations (0.09) (0.10) 0.13
 (0.09) 0.12
           
Diluted:          
Continuing operations $5.43
 $5.14
 $5.52
 $2.57
 $3.27
Discontinued operations (0.08) (0.09) 0.13
 (0.09) 0.13
           
Dividends declared per ordinary share $1.96
 $1.70
 $1.36
 $1.16
 $1.00


Item 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed under Item 1A. Risk Factors in this Annual Report on Form 10-K. The following section is qualified in its entirety by the more detailed information, including our financial statements and the notes thereto, which appears elsewhere in this Annual Report.
This section discusses 2021 and 2020 significant items affecting our consolidated operating results, financial condition and liquidity and provides a year-to-year comparison between 2021 and 2020. Discussions of 2019 significant items and year-to-year comparisons between 2020 and 2019 have been excluded in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for year ended December 31, 2020.
Overview
OrganizationOrganizational
Trane Technologies, plc, is a global climate innovator. We are a diversified, global company that providesbring 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 solutionsconnected intelligent controls.
2030 Sustainability Commitments
Our commitment to enhancesustainability extends to the quality, energy efficiencyenvironmental and comfortsocial impacts of airour people, operations, products and services. Our 2030 Sustainability Commitments have been verified by the SBTi and include our pledge to reduce customer greenhouse gas emissions by one gigaton (one billion metric tons). We are also ‘Leading by Example’ as we make progress toward carbon-neutral operations and zero waste-to-landfill across our global footprint and net positive water use in homeswater-stressed locations. Our ‘Opportunity for All’ commitment focuses on gender parity in leadership, workforce diversity reflective of our communities, and buildings, transporta citizenship strategy that helps underserved communities through enhanced learning environments and protect foodpathways to green and perishablesScience, Technology, Engineering and increase industrial productivity and efficiency. Our business segments consistMath (STEM) careers.
Separation of Climate and Industrial bothSegment Business
On the Distribution Date, we completed the Transaction with strong brands and highly differentiated products within their respective markets. We generate revenue and cash primarilyGardner Denver, which changed its name to Ingersoll Rand after the Transaction, whereby we distributed Ingersoll-Rand U.S. HoldCo, Inc., which contained Ingersoll Rand Industrial, through the design, manufacture, saleDistribution to our shareholders of record as of February 24, 2020. Ingersoll Rand Industrial then merged into a wholly-owned subsidiary of Ingersoll Rand. Upon close of the Transaction, our existing shareholders received 50.1% of the shares of Ingersoll Rand common stock on a fully-diluted basis and Gardner Denver stockholders retained 49.9% of the shares of Ingersoll Rand on a fully diluted basis. As a result, our shareholders received .8824 shares of Ingersoll Rand common stock with respect to each share owned as of February 24, 2020. In connection with the Transaction, we received a special cash payment of $1.9 billion.
During the year ended December 31, 2021, we paid Ingersoll Rand $49.5 million to settle certain items related to the Transaction. This payment was related to working capital, cash and indebtedness amounts as of the Distribution Date, as well as funding levels related to pension plans, non-qualified deferred compensation plans and retiree health benefits. We recorded the settlement as a reduction to Retained earnings during the first quarter of 2021.
After the Distribution Date, we do not beneficially own any Ingersoll Rand Industrial shares of common stock and no longer consolidate Ingersoll Rand Industrial in our financial statements. The historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Consolidated Statements of Earnings and Consolidated Statements of Cash Flows.
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Significant Events
COVID-19 Global Pandemic
In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. During the first half of 2020, the COVID-19 global pandemic adversely impacted our business globally including, but not limited to, lower end customer demand, certain supply chain delays, temporary facility closures and limitations of our workforce to essential crews only. In response, we proactively initiated cost cutting actions and actively managed our supply chain in an effort to mitigate the impact of the global pandemic on our business. Despite the challenges set forth by the COVID-19 global pandemic, we continued to sell, install and service our products, invest in our businesses, develop and launch new products and deliver innovative customer solutions for electrification of heating, cooling and transport, enhanced indoor air quality, and precise temperature control along the full vaccine cold chain.
During the year ended December 31, 2021, we experienced significant increases in end market demand, executed price increases to cover rapidly increasing material, component and logistics costs and realized strong earnings growth as a diverse portfolioresult of industrialstrong execution across our organization. In addition, to meet our increased customer demand, we are proactively managing industry-wide supply chain and commercial products that include well-recognized, premium brand names suchresource constraints and are working closely with our suppliers, customers and logistics providers to mitigate the impacts on our business as Ingersoll-Rand®, Trane®, Thermo King®, American Standard®, ARO®,and Club Car®.
To achieve our mission of being a world leader in creating comfortable, sustainable and efficient environments, we continue to focus on growth by increasingsell, install and service our recurring revenue stream from parts, service, controls, used equipmentproducts.
We will continue to monitor the ongoing COVID-19 global pandemic as it evolves and rentals;will assess any potential impacts to our business and to continuously improvefinancial statements as necessary.
Reorganization of Aldrich and Murray
On the efficienciesPetition Date, our indirect wholly-owned subsidiaries, Aldrich and capabilitiesMurray each filed a voluntary petition for reorganization under the Bankruptcy Code. As a result of the productsChapter 11 filings, all asbestos-related lawsuits against Aldrich and servicesMurray 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, Murray's wholly-owned subsidiary, ClimateLabs, nor the Trane Companies are part of the Chapter 11 filings.
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.
Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated as of the Petition Date and their respective assets and liabilities were derecognized from our businesses. WeConsolidated Financial Statements. Amounts derecognized in 2020 primarily related to the legacy asbestos-related liabilities and asbestos-related insurance recoveries and $41.7 million of cash.
As a result of the deconsolidation, we recognized an aggregate loss of $24.9 million in our Consolidated Statements of Earnings during the year ended December 31, 2020. A gain of $0.9 million related to Murray and its wholly-owned subsidiary ClimateLabs was recorded within Other income/ (expense), net and a loss of $25.8 million related to Aldrich and its wholly-owned subsidiary 200 Park was recorded within Discontinued operations, net of tax. Additionally, the deconsolidation resulted in an investing cash outflow of $41.7 million in our Consolidated Statements of Cash Flows, of which $10.8 million was recorded within continuing operations during the year ended December 31, 2020.
During the year ended December 31, 2021, in connection with the agreement in principle reached by Aldrich and Murray with the FCR and the motion to create a $270.0 million QSF, we recorded a charge of $21.2 million to increase our Funding Agreement liability to $270.0 million. The corresponding charge was bifurcated between Other income/ (expense), net of$7.2 million relating to Murray and discontinued operations of $14.0 million relating to Aldrich.
On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF, which is expected to be funded in the first quarter of 2022 shortly after the Bankruptcy Court enters an order reflecting such approval and such order becomes final and non-appealable. Therefore, as we expect to fund the QSF shortly after the Bankruptcy Court enters the order reflecting its approval, we reclassified our $270.0 million Funding Agreement liability to Accrued expenses and other current liabilities at December 31, 2021. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last. The Chapter 11 cases remain pending as of February 7, 2022.
See also continuethe discussion in Note 21 to focus on operational excellence strategies as a central theme to improving our earnings and cash flows.the Consolidated Financial Statements.
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Trends and Economic Events
We are a global corporation with worldwide operations. As a global business, our operations are affected by worldwide, regional and industry-specific economic factors as well as political and social factors wherever we operate or do business. Our geographic and industry diversity and the breadth of our product and services portfolios have helped mitigate the impact of any one industry or the economy of any single country on our consolidated operating results.
Given theour broad range of products manufactured and geographic markets served, management uses a variety of factors to predict the outlook for the Company.our company. We monitor key competitors and customers in order to gauge relative performance and the outlook for the future. We regularly perform detailed evaluations of the different market segments we are serving to proactively detect trends and to adapt our strategies accordingly. In addition, we believe our order rates are indicative of future revenue and thus are a key measure of anticipated performance. In those industry segments where we are a capital equipment provider, revenues depend on the capital expenditure budgets and spending patterns of our customers, who may delay or accelerate purchases in reaction to changes in their businesses and in the economy.
Current economic conditions are showing positive trends in each ofhave shown improvement but remain mixed across our end markets. The COVID-19 global pandemic continues to impact both the segments in which we participate. Heating, Ventilation,global HVAC and Air Conditioning (HVAC) equipment replacement, services, controlsTransport end markets as industry-wide supply chain and aftermarket continue to experience strong demand. In addition, Residentialresource constraints exist. As vaccine distribution and Commercial markets have seen continued momentum in the United States, positively impacting the results of our HVAC businesses. Global Industrial markets remain largely supportive of continued growth in both equipment and services. While geopolitical uncertainty exists in markets such as Europe, Asia and Latin America, we are confident we will continue our strong performance globally. In 2019,administration expands, we expect positive growth in bothmarket conditions to continue improving across the geographies where we serve our Climate and Industrial segments, each benefiting from operational excellence initiatives, new product launches and continued productivity programs.customers.
We believe we have a solid foundation of global brands that are highly differentiated in all of our major product lines. Our growing geographic and industryproduct diversity coupled with our large installed product base provides growth opportunities within our service and corresponding parts and replacement revenue streams. In addition, we are investing substantial resources to innovate and develop new products and services which we expect will drive our future growth.
Significant Events
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Acquisitions and Equity Investments
We continue to be active with strategic acquisitions and investments. During 2018, acquisitions and equity method investments, net
Table of cash acquired totaled $285.2 million. Related amounts in 2017 and 2016 were $157.6 million and $9.2 million, respectively.Contents
In May 2018, we completed our investment of a 50% ownership interest in a joint venture with Mitsubishi Electric Corporation (Mitsubishi). The joint venture, reported within the Climate segment, focuses on marketing, selling and supporting variable refrigerant flow (VRF) and ductless heating and air conditioning systems through Trane, American Standard and Mitsubishi channels in the U.S. and select Latin American countries.

In January 2018, we acquired 100% of the outstanding stock of ICS Group Holdings Limited (ICS Cool Energy). The acquired business, reported within the Climate segment, specializes in the temporary rental of energy efficient chillers for commercial and industrial buildings across Europe. It also sells, permanently installs and services high performance temperature control systems for all types of industrial processes.
During 2017, we acquired several businesses, including channel acquisitions, that complement existing products and services. Acquisitions within the Climate segment primarily consisted of independent dealers which support the ongoing strategy to expand our distribution network in North America. Other acquisitions within the segment strengthen our product portfolio. Acquisitions within the Industrial segment primarily consisted of a telematics business which builds upon our growing portfolio of connected assets. In addition, other acquisitions within the segment expand sales and service channels across the globe.
On February 6, 2019, we entered into a final, binding and irrevocable offer letter with Silver II GP Holdings S.C.A., an affiliate of BC Partners Advisors L.P. and The Carlyle Group (the Seller) pursuant to which we made a binding offer to acquire the precision flow systems management business (the Business) for approximately $1.45 billion in cash, subject to working capital and certain other adjustments (the Acquisition). The Business is a manufacturer of precision flow control equipment including electric diaphragm pumps and controls that serve the global water, oil and gas, agriculture, industrial and specialty market segments. The offer is subject to completion of information and consultation processes with employee representative bodies of the Business in applicable jurisdictions. If the offer is accepted, completion of the Acquisition would be subject to customary closing conditions and expected to close mid-year 2019 subject to regulatory approvals. The results of the Business will be included in our consolidated financial statements as of the date of acquisition and reported within the Industrial segment.
Share Repurchase Program and Dividends
Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. In February 2017, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (the 2017 Authorization) upon completion of the prior authorized share repurchase program. Repurchases under the 2017 Authorization began in May 2017 and ended in December 2018, completing the program. In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares upon completion of the 2017 Authorization. However, no material amounts were repurchased under this program during 2018.
In June 2018, we announced an increase in our quarterly share dividend from $0.45 to $0.53 per ordinary share. This reflects an 18% increase that began with our September 2018 payment and an 83% increase since the beginning of 2016.
Issuance and Redemption of Senior Notes
In February 2018, we issued $1.15 billion principal amount of senior notes in three tranches through an indirect, wholly-owned subsidiary. The tranches consist of $300 million aggregate principal amount of 2.900% senior notes due 2021, $550 million aggregate principal amount of 3.750% senior notes due 2028 and $300 million aggregate principal amount of 4.300% senior notes due 2048. In March 2018, we used the proceeds to fund the redemption of $750 million aggregate principal amount of 6.875% senior notes due 2018 and $350 million aggregate principal amount of 2.875% senior notes due 2019, with the remainder used for general corporate purposes.
Tax Cuts and Job Act
In December 2017, the U.S. enacted the Tax Cuts and Jobs Act (the Act) which made widespread changes to the Internal Revenue Code. The Act, among other things, reduced the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a transition tax on earnings of certain foreign subsidiaries that were previously not subject to U.S. tax and creates new income taxes on certain foreign sourced earnings. The SEC issued Staff Accounting Bulletin No. 118 (SAB 118) which provided guidance on accounting for the tax effects of the Act and allowed for adjustments to provisional amounts during a measurement period of up to one year.  In accordance with SAB 118, we made reasonable estimates related to (1) the remeasurement of U.S. deferred tax balances for the reduction in the tax rate (2) the liability for the transition tax and (3) the taxes accrued relating to the change in permanent reinvestment assertion for unremitted earnings of certain foreign subsidiaries. As a result, we recognized a net provisional income tax benefit of $21.0 million associated with these items in the fourth quarter of 2017. We completed the accounting for the income tax effects of the Act during 2018 and recorded $9.0 million of net measurement period adjustments as a component of Provision for income taxes during the year to increase the net provisional income tax benefit recorded as of December 31, 2017.
Sale of Hussmann Equity Investment
During 2011, we completed the sale of a controlling interest of our Hussmann refrigerated display case business (Hussmann) to a newly-formed affiliate of private equity firm Clayton Dubilier & Rice, LLC (CD&R).  Per the terms of the agreement, CD&R’s ownership interest in Hussmann at the acquisition date was 60% with the remaining 40% being retained by us. As a result, we accounted for our interest in Hussmann using the equity method of accounting.

On December 21, 2015, we announced we would sell our remaining equity interest in Hussmann as part of a transaction in which Panasonic Corporation would acquire 100 percent of Hussmann's outstanding shares. The transaction was completed on April 1, 2016. We received net proceeds of $422.5 million for our interest and recognized a gain of $397.8 million on the sale.
Results of Operations
Our Climate segment delivers energy-efficient products and innovative energy services. It includes Trane® and American Standard® Heating & Air Conditioning which provide heating, ventilation and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; energy services and building automation through Trane Building Advantage and Nexia; and Thermo King® transport temperature control solutions.
Our Industrial segment delivers products and services that enhance energy efficiency, productivity and operations. It includes compressed air and gas systems and services, power tools, material handling systems, ARO® fluid management equipment, as well as Club Car ® golf, utility and consumer low-speed vehicles.
Segment operating income is the measure of profit and loss that our chief operating decision maker uses to evaluate the financial performance of the business and as the basis for performance reviews, compensation and resource allocation. For these reasons, we believe that Segment operating income represents the most relevant measure of segment profit and loss. We define Segment operating margin as Segment operating income as a percentage of Net revenues.
On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers" (ASC 606), which created a comprehensive, five-step model for revenue recognition that requires a company to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. We adopted this standard on January 1, 2018 using the modified retrospective approach and recorded a cumulative effect adjustment to increase Retained earnings by $2.4 million. Related amounts did not materially impact Net revenues, Operating income or the Balance Sheet.
On January 1, 2017, we adopted Accounting Standards Update (ASU) No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" (ASU 2016-09) which simplified several aspects of the accounting for employee share-based payment transactions. The standard made several modifications to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. In addition, ASU 2016-09 clarified the statement of cash flows presentation for certain components of share-based awards. We applied the cash flow presentation requirements retrospectively.
On January 1, 2017, we adopted ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" (ASU 2017-07) which required a company to present the service cost component of net periodic benefit cost in the same income statement line as other employee compensation costs with the remaining components of net periodic benefit cost presented separately from the service cost component and outside of any subtotal of operating income. We applied the presentation requirements retrospectively.
Year Ended December 31, 20182021 Compared to the Year Ended December 31, 20172020 - Consolidated Results
Dollar amounts in millions 2018 2017 Period Change 
2018
 % of Revenues
 
2017
 % of Revenues
Dollar amounts in millions20212020Period Change2021
 % of revenues		2020
 % of revenues
Net revenues $15,668.2
 $14,197.6
 $1,470.6
 Net revenues$14,136.4 $12,454.7 $1,681.7 
Cost of goods sold (10,847.6) (9,811.6) (1,036.0) 69.2% 69.1%Cost of goods sold(9,666.8)(8,651.3)(1,015.5)68.4%69.5%
Gross profitGross profit4,469.6 3,803.4 666.2 31.6%30.5%
Selling and administrative expenses (2,903.2) (2,720.7) (182.5) 18.5% 19.2%Selling and administrative expenses(2,446.3)(2,270.6)(175.7)17.3%18.2%
Operating income 1,917.4
 1,665.3
 252.1
 12.2% 11.7%Operating income2,023.3 1,532.8 490.5 14.3%12.3%
Interest expense (220.7) (215.8) (4.9) Interest expense(233.7)(248.7)15.0 
Other income/(expense), net (36.4) (31.6) (4.8)    Other income/(expense), net1.1 4.1 (3.0)  
Earnings before income taxes 1,660.3
 1,417.9
 242.4
 Earnings before income taxes1,790.7 1,288.2 502.5 
Provision for income taxes (281.3) (80.2) (201.1)    Provision for income taxes(333.5)(296.8)(36.7)  
Earnings from continuing operations 1,379.0
 1,337.7
 41.3
 Earnings from continuing operations1,457.2 991.4 465.8 
Discontinued operations, net of tax (21.5) (25.4) 3.9
    Discontinued operations, net of tax(20.6)(121.4)100.8   
Net earnings $1,357.5
 $1,312.3
 $45.2
 Net earnings$1,436.6 $870.0 $566.6 
Net Revenues

Net revenues for the year ended December 31, 20182021 increased by 10.4%13.5%, or $1,470.6$1,681.7 million, compared with the same period of 2017.2020. The components of the period change arewere as follows:
Volume/product mixVolume7.37.5 %
AcquisitionsPricing1.13.6 %
PricingAcquisitions1.6%
Currency translation0.40.8 %
Total10.413.5 %
The increase in Net revenues was primarily driven by higher volumes in both our Climate and Industrial segments. Improved pricing, along with incremental revenues from acquisitions, further contributedincreased end customer demand as a result of improved economic conditions as it relates to the year-over-year increase. In addition, each segment benefitedCOVID-19 global pandemic compared to the full year of 2020, coupled with pricing increases within all of our segments to offset significant material and freight inflation, and a favorable impact from favorable foreign currency exchange rate movements.
Our Revenues bytranslation. Also, during the fourth quarter of 2020 and the first quarter of 2021, we completed three channel acquisitions, two were completed in the Americas segment are as follows:
Dollar amounts in millions2018 2017 % change
Climate$12,343.8
 $11,167.5
 10.5%
Industrial3,324.4
 3,030.1
 9.7%
Total$15,668.2
 $14,197.6
  
Climate
and the third was completed within the EMEA segment, further driving an increase in Net revenues as compared to the prior year. Refer to “Results by Segment” below for a discussion of Net revenues by segment.
Gross Profit Margin
Gross profit margin for the year ended December 31, 20182021 increased 110 basis points to 31.6% compared to 30.5% for the same period of 2020 primarily due to price realization and productivity benefits, partially offset by increased direct material, freight and other inflation.
Selling and Administrative Expenses
Selling and administrative expenses for the year ended December 31, 2021 increased by 10.5%7.7%, or $1,176.3$175.7 million, compared with the same period of 2017.2020. The componentsincrease in Selling and administrative expenses was primarily driven by higher compensation and employee benefits due to headcount growth, higher incentive compensation and lower cost in the prior year due to delays in merit increases and employee furloughs in certain regions, partially offset by lower spending on restructuring and transformation initiatives. However, Selling and administrative expenses as a percentage of the period change are as follows:
Volume/product mix7.6%
Acquisitions1.1%
Pricing1.5%
Currency translation0.3%
Total10.5%
Industrial
Net revenues for the year ended December 31, 2018 increased2021 decreased 90 basis points from 18.2% to 17.3% primarily due to higher revenues year-over-year.
Interest Expense
Interest expense for the year ended December 31, 2021 decreased by 9.7%6.0% or $294.3$15.0 million compared with the same period of 2017. 2020 primarily due to the repayments of $125.0 million of 9.000% Debentures in August 2021, $300.0 million of 2.900% Senior notes in February 2021 and 2020 interest costs related to the $300.0 million of 2.625% Senior notes which were repaid in April 2020.
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Other Income/(Expense), Net
The components of the period change are as follows:
Volume/product mix6.3%
Acquisitions0.9%
Pricing1.6%
Currency translation0.9%
Total9.7%
Operating Income/Margin
Operating margin increased to 12.2% for the year ended December 31, 2018, compared with 11.7% for the same period of 2017. The increase was primarily driven by higher volumes and favorable product mix (0.9%) as well as pricing improvements in excess of material inflation (0.1%). These amounts were partially offset by investments and restructuring spending (0.5%).

Our Operating income and Operating margin by segment are as follows:
Dollar amounts in millions 2018 Operating Income (Expense) 2017 Operating Income (Expense) Period Change2018 Operating Margin 2017 Operating Margin
Climate $1,766.2
 $1,572.7
 $193.5
14.3% 14.1%
Industrial 405.3
 357.6
 47.7
12.2% 11.8%
Unallocated corporate expense (254.1) (265.0) 10.9
N/A
 N/A
Total $1,917.4
 $1,665.3
 $252.1
12.2% 11.7%
Climate
Operating margin increased to 14.3% for the year ended December 31, 2018, compared with 14.1% for the same period of 2017. The increase was primarily driven by higher volumes and favorable product mix. Other inflation in excess of productivity benefits, investments and restructuring spending partially offset the benefits.
Industrial
Operating margin increased to 12.2% for the year ended December 31, 2018 compared with 11.8% for the same period of 2017. The increase was primarily driven by higher volumes and favorable product mix, productivity benefits in excess of other inflation and pricing improvements in excess of material inflation. These amounts were partially offset by investments and restructuring spending.
Unallocated Corporate Expense
Unallocated corporate expense for the year ended December 31, 2018 decreased by 4.1% or $10.9 million, compared with the same period of 2017. Lower functional costs from productivity projects more than offset compensation and benefit charges related to variable compensation.
Interest Expense
Interest expense for the year ended December 31, 2018 increased by $4.9 million compared with the same period of 2017. During 2018, we issued $1.15 billion of senior notes and redeemed $1.1 billion of senior notes. The increase primarily relates to the redemption of the senior notes in which we recognized $15.4 million of premium expense and $1.2 million of unamortized costs in Interest expense. This amount was partially offset by lower interest rates on the new senior notes issued during the period.
Other income/(expense), net
The components of Other income/(expense), net, for the years ended December 31 arewere as follows:
In millions20212020
Interest income$4.0 $4.5 
Foreign currency exchange loss(10.7)(10.0)
Other components of net periodic benefit credit/(cost)(1.6)(14.7)
Other activity, net9.4 24.3 
Other income/(expense), net$1.1 $4.1 
In millions 2018 2017 Period Change
Interest income $6.4
 $9.4
 $(3.0)
Exchange gain (loss) (17.6) (8.8) (8.8)
Other components of net periodic benefit cost (21.9) (31.0) 9.1
Other activity, net (3.3) (1.2) (2.1)
Other income/(expense), net $(36.4) $(31.6) $(4.8)
Other income /(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, we include the components of net periodic benefit costcredit/(cost) for pension and post retirement obligations other than the service cost component. During the year ended December 31, 2021, other activity, net primarily includes a gain of $12.8 million related to the release of a pension indemnification liability, partially offset by a charge of $7.2 million to increase our Funding Agreement liability from asbestos-related activities of Murray. Other activity, net include costs associated with Trane U.S. Inc. (Trane) for the settlementyear ended December 31, 2020, primarily includes a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years and defensea gain of asbestos-related claims, insurance settlements on asbestos-related matters$0.9 million related to the deconsolidation of Murray and the revaluation of its liability for potential future claims.wholly-owned subsidiary ClimateLabs within other activity, net.
Provision for Income Taxes
The 20182021 effective tax rate was 16.9%18.6% which iswas lower than the U.S. Statutory rate of 21% primarily due to the measurement period adjustmenta $21.4 million reduction in valuation allowances on deferred tax assets primarily related to the changeforeign tax credits as a result of an increase in permanent reinvestment assertion on unremitted earnings of certaincurrent year foreign subsidiaries, the deduction for Foreign Derived Intangible Income, the recognition ofsource income, excess tax benefits from employee share basedshare-based payments, and a reduction in a valuation allowance for certain state net deferred tax assets. This decrease was partially offset by the measurement period adjustment related to a valuation allowance on excess foreign tax credits, U.S. state and local income taxes

and certain non-deductible employee expenses. In addition, the reduction was also driven by earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. These amounts were partially offset by the recognition of a net $11.6 million tax expense related to a prepayment of an intercompany obligation, U.S. state and local taxes and certain non-deductible employee expenses. Revenues from non-U.S. jurisdictions accountsaccounted for approximately 36%29% of our total 2021 revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates ranging from 0% to 38%. When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate.
The 20172020 effective tax rate was 5.7%23.0% which is lowerwas higher than the U.S. Statutory rate of 35% primarily21% due to the remeasurement of our net U.S. deferred tax liabilities, the premium paid related to the early retirement of certain intercompany debt obligations, the recognition of a claim for refund related to previously paid interest and the recognition of excess tax benefits from employee shared based payments. In the aggregate, these items decreased the effective tax rate by 37.9%. This decrease was partially offset by the transition tax cost, a change in permanent reinvestment assertion on the unremitted earnings of certain foreign subsidiaries and a$36.5 million non-cash charge related to the establishment of a valuation allowanceallowances on certain net deferred tax assets, primarily net operating losses in Brazil. Incertain tax jurisdictions and the aggregate these items increasedwrite-off of a carryforward tax attribute as a result of the effectivecompletion of the Transaction, U.S. state and local taxes and certain non-deductible employee expenses. These amounts were partially offset by excess tax rate by 13.7%. In addition, thebenefits from employee share-based payments, a $14.0 million benefit primarily related to a reduction was also driven byin valuation allowances on deferred taxes related to net operating losses as a result of a planned restructuring in a non-U.S. tax jurisdiction and foreign tax credits as a result of revised projections of future foreign source income and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. The impact of the changes in the valuation allowances and the write-off of the carryforward tax attribute increased the effective tax rate by 1.7%. Revenues from non-U.S. jurisdictions accountsaccounted for approximately 35%28% of our total 2020 revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates ranging from 0% to 38%. When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate.
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Discontinued Operations
The components of Discontinued operations, net of tax for the years ended December 31 arewere as follows:
In millions 2018 2017 Period ChangeIn millions20212020
Net revenuesNet revenues$— $469.8 
Pre-tax earnings (loss) from discontinued operations $(85.5) $(34.0) $(51.5)Pre-tax earnings (loss) from discontinued operations(39.3)(136.3)
Tax benefit (expense) 64.0
 8.6
 55.4
Tax benefit (expense)18.7 14.9 
Discontinued operations, net of tax $(21.5) $(25.4) $3.9
Discontinued operations, net of tax$(20.6)$(121.4)
Discontinued operations are retained costsobligations from previously sold businesses, including postretirement benefits, productamounts related to Ingersoll Rand Industrial as part of the completion of the Transaction and asbestos-related activities of Aldrich. During the year ended December 31, 2021, we recorded a charge of $14.0 million to increase our Funding Agreement liability from asbestos-related activities of Aldrich as well as pension and post retirement obligations and environmental costs related to our formerly owned businesses. The year ended December 31, 2020 includes pre-tax Ingersoll Rand Industrial separation costs primarily related to legal, costs. In addition, we include costs associated with Ingersoll-Rand Companyconsulting and advisory fees of $114.2 million and a loss of $25.8 million related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park.
The components of Discontinued operations, net of tax for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of our liability for potential future claims. A portion of the tax benefit (expense) in each period represents adjustments for certain tax matters associated with the 2013 spin-off of our commercial and residential security business, now an independent public company operating under the name of Allegion plc (Allegion).years ended December 31 were as follows:

In millions20212020
Ingersoll Rand Industrial, net of tax$0.1 $(84.9)
Asbestos-related activities of Aldrich (post-Petition Date)(13.3)(19.1)
Other discontinued operations, net of tax(7.4)(17.4)
Discontinued operations, net of tax$(20.6)$(121.4)
Year Ended December 31, 20172021 Compared to the Year Ended December 31, 20162020 - Segment Results
We operate under three regional operating segments designed to create deep customer focus and relevance in markets around the world.
•Our 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.
•Our 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.
•Our Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating and cooling systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.
Management measures operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, unallocated corporate expenses and discontinued operations (Segment Adjusted EBITDA). Segment Adjusted EBITDA is not defined under accounting principles generally accepted in the United States of America (GAAP) and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results reported in accordance with GAAP. We believe Segment Adjusted EBITDA provides the most relevant measure of profitability as well as earnings power and the ability to generate cash. This measure is a useful financial metric to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business and we use this measure for business planning purposes. Segment Adjusted EBITDA also provides a useful tool for assessing the comparability between periods and our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates non-cash charges such as depreciation and amortization expense.
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Dollar amounts in millions 2017 2016 Period Change 
2017
 % of Revenues
 
2016
 % of Revenues
Net revenues $14,197.6
 $13,508.9
 $688.7
    
Cost of goods sold (9,811.6) (9,307.9) (503.7) 69.1% 68.9%
Selling and administrative expenses (2,720.7) (2,597.8) (122.9) 19.2% 19.2%
Operating income 1,665.3
 1,603.2
 62.1
 11.7% 11.9%
Interest expense (215.8) (221.5) 5.7
    
Other income/(expense), net (31.6) 359.6
 (391.2)    
Earnings before income taxes 1,417.9
 1,741.3
 (323.4)    
Provision for income taxes (80.2) (281.5) 201.3
    
Earnings from continuing operations 1,337.7
 1,459.8
 (122.1)    
Discontinued operations, net of tax (25.4) 32.9
 (58.3)    
Net earnings $1,312.3
 $1,492.7
 $(180.4)    

Net Revenues
Net revenuesThe following discussion compares our results for each of our three reportable segments for the year ended December 31, 20172021 compared to the year ended December 31, 2020.
Dollar amounts in millions20212020% Change
Americas
Net revenues$10,957.1 $9,685.9 13.1 %
Segment Adjusted EBITDA2,008.8 1,677.7 19.7 %
Segment Adjusted EBITDA as a percentage of net revenues18.3 %17.3 %
EMEA
Net revenues$1,944.9 $1,648.1 18.0 %
Segment Adjusted EBITDA359.2 265.7 35.2 %
Segment Adjusted EBITDA as a percentage of net revenues18.5 %16.1 %
Asia Pacific
Net revenues$1,234.4 $1,120.7 10.1 %
Segment Adjusted EBITDA228.5 188.8 21.0 %
Segment Adjusted EBITDA as a percentage of net revenues18.5 %16.8 %
Total Net revenues$14,136.4 $12,454.7 13.5 %
Total Segment Adjusted EBITDA2,596.5 2,132.2 21.8 %
Americas
Net revenues for the year ended December 31, 2021 increased by 5.1%,13.1% or $688.7$1,271.2 million, compared with the same period of 2016.2020. The components of the period change arewere as follows:
Volume/product mixVolume4.47.0 %
Pricing0.34.3 %
Currency translationAcquisitions0.41.8 %
Total5.1
Total13.1 %
The increase in Net revenues was primarily driven by higher volumesincreased end customer demand in bothall of our Climate and Industrial segments. Additionally,businesses as a result of improved pricing and favorable foreign currency exchange rate movements further contributedeconomic conditions as it relates to the year-over-year increase.COVID-19 global pandemic compared to the full year of 2020, favorable pricing to offset significant material and freight inflation and the completion of two channel acquisitions during the fourth quarter of 2020.
Our Revenues by segment are as follows:
Dollar amounts in millions 2017 2016 % change
Climate $11,167.5
 $10,545.0
 5.9%
Industrial 3,030.1
 2,963.9
 2.2%
Total $14,197.6
 $13,508.9
  
Climate
Net revenuesSegment Adjusted EBITDA margin for the year ended December 31, 20172021 increased by 5.9%100 basis points to 18.3% compared to 17.3% for the same period of 2020 primarily due to price realization, productivity benefits and higher volumes, which outpaced direct material, freight and other costs driven by inflation and inefficiencies from strained supply chains.
EMEA
Net revenues for the year ended December 31, 2021 increased by 18.0% or $622.5$296.8 million, compared with the same period of 2016.2020. The components of the period change arewere as follows:
Volume/product mixVolume5.411.6 %
PricingCurrency translation0.23.1 %
Currency translationAcquisitions0.31.6 %
TotalPricing5.91.1 %
Transfer of sales from Asia Pacific segment0.6 %
Total18.0 %
Industrial
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The increase in Net revenueswas primarily driven by increased end customer demand as a result of improved economic conditions as it relates to the COVID-19 global pandemic compared to the full year of 2020, a favorable impact from foreign currency translation and favorable pricing to offset significant material and freight inflation. Also, during the first quarter of 2021, we completed a channel acquisition, which is managed in our EMEA segment, and includes sales formerly reported under our Asia Pacific segment, further driving an increase in Net revenues as compared to the prior year.
Segment Adjusted EBITDA margin for the year ended December 31, 20172021 increased by 2.2%,240 basis points to 18.5% compared to 16.1% for the same period of 2020 primarily due to productivity benefits, higher volumes, favorable pricing and favorable product mix, which outpaced direct material, freight and other costs driven by inflation and inefficiencies from strained supply chains.
Asia Pacific
Net revenues for the year ended December 31, 2021 increased by 10.1% or $66.2$113.7 million, compared with the same period of 2016.2020. The components of the period change arewere as follows:
Volume/product mixVolume0.75.5 %
PricingCurrency translation1.03.6 %
Currency translationPricing0.52.0 %
TotalTransfer of sales to EMEA segment2.2(1.0)%
Total10.1 %
Operating Income/MarginThe increase in Net revenues was primarily driven by increased end customer demand as a result of improved economic conditions as it relates to the COVID-19 global pandemic compared to the full year of 2020, a favorable impact from foreign currency translation and favorable pricing to offset significant material and freight inflation, partially offset by the transfer of sales to the EMEA segment related to the channel acquisition.
OperatingSegment Adjusted EBITDA margin decreased to 11.7% for the year ended December 31, 2017,2021 increased by 170 basis points to 18.5% compared with 11.9%to 16.8% for the same period of 2016. The decrease was primarily driven by material inflation in excess of pricing improvements (0.7%) investments and restructuring spending (0.7%). These amounts were partially offset by productivity benefits in excess of other inflation (0.6%) and higher volumes and favorable product mix (0.6%).

Our Operating income and Operating margin by segment are as follows:
Dollar amounts in millions 2017 Operating Income (Expense) 2016 Operating Income (Expense) Period Change2017 Operating Margin 2016 Operating Margin
Climate $1,572.7
 $1,537.5
 $35.2
14.1% 14.6%
Industrial 357.6
 300.3
 57.3
11.8% 10.1%
Unallocated corporate expense (265.0) (234.6) $(30.4)N/A
 N/A
Total $1,665.3
 $1,603.2
 $62.1
11.7% 11.9%
Climate
Operating margin decreased to 14.1% for the year ended December 31, 2017, compared with 14.6% for the same period of 2016. The decrease was primarily driven by material inflation in excess of pricing improvements, investments and restructuring spending. These amounts were partially offset by productivity benefits in excess of other inflation and higher volumes and favorable product mix.
Industrial
Operating margin increased to 11.8% for the year ended December 31, 2017, compared with 10.1% for the same period of 2016.2020. The increase was primarily driven by productivity benefits, favorable pricing and higher volumes and favorable product mix. In addition,as a result of increased customer demand from improved economic conditions driven by the segment benefited from productivity benefits in excess of other inflation, the non-recurrence of capitalized costs related to new product engineering and development that were reclassified to the income statement, pricing improvements in excess of material inflation and favorable foreign currency exchange rate movements. These amounts wereCOVID-19 global pandemic, partially offset by investments and restructuring spending.
Unallocated Corporate Expense
Unallocated corporate expense for the year ended December 31, 2017 increased by 13.0% or $30.4 million, compared with the same period of 2016. The increase in expense primarily relates to costs associated with acquisition efforts, higher employee benefit costs and stock-based compensation as well as planned incubator investments in technologies that benefit our business.
Interest Expense
Interest expense for the year ended December 31, 2017 decreased by $5.7 million compared with the same period of 2016. The decrease relates primarily to changes in short-term financing arrangementsdirect material, freight and other items.
Other income/(expense), net
The components of Other income/(expense), net, for the years ended December 31 are as follows:
In millions 2017 2016 Period Change
Interest income $9.4
 $8.0
 $1.4
Exchange gain (loss) (8.8) (2.0) (6.8)
Other components of net periodic benefit cost (31.0) (30.1) (0.9)
Income (loss) from equity investment —
 (0.8) 0.8
Gain on sale of Hussmann equity investment —
 397.8
 (397.8)
Other activity, net (1.2) (13.3) 12.1
Other income/(expense), net $(31.6) $359.6
 $(391.2)
Other income /(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, we include the components of net periodic benefit cost for pension and post retirement obligations other than the service cost component. Other activity, net include costs associated with Trane for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims. Other activity, net for the year ended December 31, 2016 includes a charge of $16.4 million for the settlement of a lawsuit originally filed by a customer in 2012. The lawsuit related to a commercial HVAC contract entered into in 2001, prior to our acquisition of Trane. The charge represents the settlement and related legal costs recognized during the fourth quarter of 2016.

Provision for Income Taxes
The 2017 effective tax rate was 5.7% which is lower than the U.S. Statutory rate of 35% primarily due to the remeasurement of our net U.S. deferred tax liabilities, the premium paid related to the early retirement of certain intercompany debt obligations, the recognition of a claim for refund related to previously paid interest and the recognition of excess tax benefits from employee shared based payments. In the aggregate, these items decreased the effective tax rate by 37.9%. This decrease was partially offset by the transition tax cost, a change in permanent reinvestment assertion on the unremitted earnings of certain foreign subsidiaries and a non-cash charge related to the establishment of a valuation allowance on certain net deferred tax assets in Brazil. In the aggregate these items increased the effective tax rate by 13.7%. In addition, the reduction was also driven by earnings in non-U.S. jurisdictions, which in aggregate, have a lower effective tax rate. Revenuesinflation and inefficiencies from non-U.S. jurisdictions accounts for approximately 35% of our total revenues, such that a material portion of our pretax income was earnedstrained supply chains, and taxed outside the U.S. at rates ranging from 0% to 38%. When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate.unfavorable product mix.
The 2016 effective tax rate was 16.2% which is lower than the U.S. Statutory rate of 35% primarily due to the tax treatment of the Hussmann gain. The gain, which is not subject to tax under the relevant local tax laws, decreased the effective tax rate by 4.8%. In addition, the reduction was also driven by earnings in non-U.S. jurisdictions, which in aggregate, have a lower effective tax rate. Revenues from non-U.S. jurisdictions accounts for approximately 35% of our total revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates ranging from 0% to 38%. When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate.
Discontinued Operations
The components of Discontinued operations, net of tax for the years ended December 31 are as follows:
In millions 2017 2016 Period Change
Pre-tax earnings (loss) from discontinued operations $(34.0) $28.1
 $(62.1)
Tax benefit (expense) 8.6
 4.8
 3.8
Discontinued operations, net of tax $(25.4) $32.9
 $(58.3)
Discontinued operations are retained costs from previously sold businesses including postretirement benefits, product liability and legal costs. In addition, we include costs associated with Ingersoll-Rand Company for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims. For the year ended December 31, 2016, ongoing costs were more than offset by asbestos-related settlements with various insurance carriers. A portion of the tax benefit (expense) in each period represents adjustments for certain tax matters associated with the 2013 spin-off of our commercial and residential security business, now an independent public company operating under the name of Allegion.
Liquidity and Capital Resources
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. In doing so, we review and analyze our current cash on hand, the number of days our sales are outstanding, inventory turns, capital expenditure commitments and income tax payments. Our cash requirements primarily consist of the following:

•Funding of working capital
•Debt service requirements
•Funding of capital expenditures
•Dividend payments
Debt service requirements•Funding of acquisitions, joint ventures and equity investments

•Share repurchases
Our primary sources of liquidity include cash balances on hand, cash flows from operations, proceeds from debt offerings, commercial paper, and borrowing availability under our existing credit facilities. We earn a significant amount of our operating income in jurisdictions where it is deemed to be permanently reinvested. Our most prominent jurisdiction of operation is the U.S. We expect existing cash and cash equivalents available to the U.S. operations, the cash generated by our U.S. operations, our committed credit lines as well as our expected ability to access the capital and debt markets will be sufficient to fund our U.S. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future. In addition, we expect existing non-U.S. cash and cash equivalents and the cash generated by our non-U.S. operations will be sufficient to fund our non-U.S. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future. The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $2.0 billion, of which we had no outstanding balance as of December 31, 2021.
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As of December 31, 2018,2021, we had $903.4$2,159.2 million of cash and cash equivalents on hand, of which $689.7$1,461.8 million was held by non-U.S. subsidiaries. Cash and cash equivalents held by our non-U.S. subsidiaries are generally available for use in our U.S. operations

via intercompany loans, equity infusions or via distributions from direct or indirectly owned non-U.S. subsidiaries for which we do not assert permanent reinvestment. As a result of the Tax Cuts and Jobs Act in 2017, additional repatriation opportunities to access cash and cash equivalents held by non-U.S. subsidiaries have been created. In general, repatriation of cash to the U.S. can be completed with no significant incremental U.S. tax. However, to the extent that we repatriate funds from non-U.S. subsidiaries for which we assert permanent reinvestment to fund our U.S. operations, we would be required to accrue and pay applicable non-U.S. taxes. As of December 31, 2018,2021, we currently have no plans to repatriate funds from subsidiaries for which we assert permanent reinvestment.
Share repurchases are made from time to time in accordance with management's balanced capital allocation strategy, subject to market conditions and regulatory requirements. In February 2017,2021, our Board of Directors authorized the repurchase of up to $2.0 billion of our ordinary shares under the 2021 Authorization upon completion of the prior share repurchase program which authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (the 2017(2018 Authorization) upon completion. During the year ended December 31, 2021, we repurchased and canceled $1.1 billion of our ordinary shares thus completing the prior authorized share repurchase program. Repurchases2018 Authorization and initiated repurchases under the 20172021 Authorization began in May 2017 and ended in December 2018, completingof $600.2 million of our ordinary shares leaving approximately $1.4 billion remaining under the program.2021 Authorization. Additionally, through January 31, 2022, we repurchased approximately $350 million of our ordinary shares under the 2021 Authorization. In October 2018,February 2022, our Board of Directors authorized the repurchase of up to $1.5$3.0 billion of our ordinary shares under a new share repurchase program (2022 Authorization) upon completion of the 20172021 Authorization. However, no material amounts were repurchased under this program during 2018.
We expect to pay a competitive and growing dividend. In June 2018,February 2021, we announced an 11% increase in our quarterly share dividend from $0.53 to $0.59 per ordinary share, or $2.36 per share annualized. All four 2021 quarterly dividends were paid during the year ended December 31, 2021. In February 2022, our Board of Directors declared an increase in our quarterly share dividend by 14%, from $0.45$0.59 to $0.53$0.67 per ordinary share. This reflects an 18% increase that began with our September 2018 payment and an 83% increase sinceshare, or $2.36 to $2.68 per share annualized starting in the beginningfirst quarter of 2016. 2022.
We continue to be activeactively manage and strengthen our business portfolio to meet the current and future needs of our customers. We achieve this partly through engaging in research and development and sustaining activities and partly through acquisitions. Sustaining activities include costs incurred to reduce production costs, improve existing products, create custom solutions for customers and provide support to our manufacturing facilities. Our research and development and sustaining costs account for approximately two percent of annual Net revenues. Each year, we make investments in new product development and new technology innovation as they are key factors in achieving our strategic objectives as a leader in the climate sector. In addition, we make investments in renewable energy production. For example, we invested in on-site solar energy generation at three of our facilities - Trenton, NJ, Columbia, SC, and Taicang, China - to benefit from operational and cost consistency, which is especially important in parts of the world with uncertain electricity prices and availability. During the fourth quarter of 2021, we completed installation of a photovoltaic (PV) system at our Zhongshan, China facility, which will begin generating solar electricity in 2022. These projects did not result in material expenditures for the year ended December 31, 2021. We continue to look for similar improvement opportunities including, but not limited to, 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. All NPD programs must complete a Design for Sustainability module within our NPD process to ensure that every program has a positive impact on sustainability. We also focus on partnering with our suppliers and technology providers to align their investment decisions with our technical requirements.
In pursuing our business strategy, we routinely conduct discussions, evaluate targets and enter into agreements regarding possible acquisitions, divestitures, joint ventures and joint venture activity.equity investments. Since the beginning of 2017,2019, we entered into a joint venture andhave acquired several businesses, including channel acquisitions,entered into joint ventures and invested in companies that complement existing products and services further growingenhancing our product portfolio. During the year ended December 31, 2021, we deployed capital of approximately $340 million attributable to acquisitions and equity investments. In addition, during the year ended December 31, 2020, we completed a Reverse Morris Trust transaction with Ingersoll Rand whereby we separated Ingersoll Rand Industrial from our business portfolio, transforming the Company into a global climate innovator. We recognized separation-related costs of $114.2 million during the year ended December 31, 2020. These expenditures were incurred in order to facilitate the transaction and are included within Discontinued operations, net of tax.
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We incur ongoing costs associated with restructuring initiatives intended to result in improved operating performance, profitability and working capital levels. Actions associated with these initiatives may include workforce reductions, improving manufacturing productivity, realignment of management structures and rationalizing certain assets. Post separation, we committed to reduce costs by $190 million through 2021 and an additional $110 million by 2023 for a total of $300 million in total annual savings under our transformation initiatives. In order to achieve these cost savings, we anticipate to incur costs up to $150 million through 2022. We expectcurrently have incurred approximately $126 million cumulatively through December 31, 2021. We believe that our availableexisting cash flow, committed credit lines and access to the capital markets will be sufficient to fund share repurchases, dividends, research and development, sustaining activities,business portfolio changes and ongoing restructuring actions, acquisitionsactions.
Certain of our subsidiaries entered into Funding Agreements with Aldrich and joint venture activity.Murray pursuant to which those subsidiaries are obligated, among other things, to pay the costs and expenses of Aldrich and Murray during the pendency of the Chapter 11 cases to the extent distributions from their respective subsidiaries are insufficient to do so and to provide an amount for the funding for a trust established pursuant to section 524(g) of the Bankruptcy Code, to the extent that the other assets of Aldrich and Murray are insufficient to provide the requisite trust funding. During the third quarter of 2021, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270 million QSF. The funds held in the QSF would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan. On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF. The QSF is expected to be funded in the first quarter of 2022 shortly after the Bankruptcy Court enters an order reflecting such approval and such order becomes final and non-appealable. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last.
As the COVID-19 global pandemic impacts both the broader economy and our operations, we will continue to assess our liquidity needs and our ability to access capital markets. A continued worldwide disruption could materially affect economies and financial markets worldwide, resulting in an economic downturn that could affect demand for our products, our ability to obtain financing on favorable terms and otherwise adversely impact our business, financial condition and results of operations. See Part I, Item 1A Risk Factors for more information.
Liquidity
The following table contains several key measures of our financial condition and liquidity at the periods ended December 31:
In millions20212020
Cash and cash equivalents$2,159.2 $3,289.9 
Short-term borrowings and current maturities of long-term debt (1)
350.4 775.6 
Long-term debt4,491.7 4,496.5 
Total debt4,842.1 5,272.1 
Total Trane Technologies plc shareholders’ equity6,255.9 6,407.7 
Total equity6,273.1 6,427.1 
Debt-to-total capital ratio43.6 %45.1 %
In millions 2018 2017 2016
Cash and cash equivalents $903.4
 $1,549.4
 $1,714.7
Short-term borrowings and current maturities of long-term debt (1)
 350.6
 1,107.0
 360.8
Long-term debt (1)
 3,740.7
 2,957.0
 3,709.4
Total debt 4,091.3
 4,064.0
 4,070.2
Total Ingersoll-Rand plc shareholders’ equity 7,022.7
 7,140.3
 6,643.8
Total equity 7,064.8
 7,206.9
 6,718.3
Debt-to-total capital ratio 36.7% 36.1% 37.7%
(1) During the first quarterThe $300.0 million of 2018, the Company redeemed its 6.875% senior2.900% Senior notes due 2018 and its 2.875% senior notes due 2019. In addition, the Company issued $1.15 billion principal amountwere repaid in February 2021. The $125.0 million of senior notes during February 2018.9.000% Debentures were repaid in August 2021.
Debt and Credit Facilities
Our short-term obligations primarily consistsconsist of debentures with put features and current maturities of long-term debt. In addition, weWe have outstanding $343.0$342.9 million of fixed rate debentures that contain a put feature that the holders may exercise on each anniversary of the issuance date. If exercised, we are obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount (plus accrued and unpaid interest) of the debentures held by the holder. We also maintain a commercial paper program which is used for general corporate purposes. Under the program, the maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, is $2.0 billion as of December 31, 2018.2021. We had no commercial paper outstanding at December 31, 20182021 and December 31, 2017.2020. See Note 7 to the Consolidated Financial Statements for additional information regarding the terms of our short-term obligations.
Our long-term obligations primarily consist of long-term debt with final maturity dates ranging between 20202023 and 2048.2049. In addition, we maintain two 5-year, $1.0 billion senior unsecured revolving credit facilities.  Each senior unsecured credit facility,facilities, one of which matures in March 2021April 2023 and the other in April 2023, providesJune 2026. The facilities provide support for our commercial paper program and can be used for working capital and other general corporate purposes. Total commitments of $2.0 billion were unused at December 31, 20182021 and December 31, 2017.2020. See Note 7 and Note 21 to the Consolidated Financial Statements and further below in Supplemental Guarantor Financial Information for additional information regarding the terms of our long-term obligations and their related guarantees.

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Cash Flows
The following table reflects the major categories of cash flows for the years ended December 31, respectively. For additional details, please see the Consolidated Statements of Cash Flows in the Consolidated Financial Statements.
In millions20212020
Net cash provided by (used in) continuing operating activities$1,594.4 $1,766.2 
Net cash provided by (used in) continuing investing activities(545.7)(338.5)
Net cash provided by (used in) continuing financing activities(2,127.6)884.3 
Operating Activities
Net cash provided by continuing operating activities for the year ended December 31, 2021 was $1,594.4 million, of which net income provided $1,837.5 million after adjusting for non-cash transactions. Net cash provided by continuing operating activities for the year ended December 31, 2020 was $1,766.2 million, of which net income provided $1,422.5 million after adjusting for non-cash transactions. The year-over-year decrease in net cash provided by continuing operating activities was primarily due to higher working capital balances in the current year, partially offset by higher net earnings.
Investing Activities
Cash flows from investing activities represents inflows and outflows regarding the purchase and sale of assets. Primary activities associated with these items include capital expenditures, proceeds from the sale of property, plant and equipment, acquisitions, investments in joint ventures and divestitures. During the year ended December 31, 2021, net cash used in investing activities from continuing operations was $545.7 million. The primary drivers of the usage was attributable to the acquisition of businesses, which totaled $269.2 million, net of cash acquired, $223.0 million of capital expenditures and other investing activities of $68.6 million primarily related to investment in several companies that complement existing products and services further enhancing our product portfolio. During the year ended December 31, 2020, net cash used in investing activities from continuing operations was $338.5 million. The primary drivers of the usage was attributable to the acquisition of businesses, which totaled $182.8 million, net of cash acquired and $146.2 million of capital expenditures. In addition, as a result of the deconsolidation of Murray and its wholly-owned subsidiary ClimateLabs under the Chapter 11 bankruptcy filing, the assets and liabilities of these entities were derecognized, which resulted in a cash outflow of $10.8 million.
Financing Activities
Cash flows from financing activities represent inflows and outflows that account for external activities affecting equity and debt. Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, issuing our stock and debt transactions. During the year ended December 31, 2021, net cash used in financing activities from continuing operations was $2,127.6 million. The primary drivers of the outflow related to the the repurchase of $1,100.3 million in ordinary shares, dividends paid to ordinary shareholders of $561.1 million and the repayment of long-term debt of $432.5 million. During the year ended December 31, 2020, net cash provided by financing activities from continuing operations was $884.3 million. The primary driver of the inflow related to the receipt of a special cash payment of $1,900.0 million pursuant to the completion of the Transaction. This amount was partially offset by dividends paid to ordinary shareholders of $507.3 million, the repayment of long-term debt of $307.5 million and the repurchase of $250.0 million in ordinary shares.
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Free Cash Flow
Free cash flow is a non-GAAP measure and defined as Net cash provided by (used in) continuing operating activities, less capital expenditures, plus cash payments for restructuring and transformation costs. This measure is useful to management and investors because it is consistent with management's assessment of our operating cash flow performance. The most comparable GAAP measure to free cash flow is Net cash provided by (used in) continuing operating activities. Free cash flow may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for Net cash provided by (used in) continuing operating activities in accordance with GAAP.
A reconciliation of Net cash provided by (used in) continuing operating activities to free cash flow the years ended December 31 is as follows:
In millions20212020
Net cash provided by (used in) continuing operating activities$1,594.4 $1,766.2 
Capital expenditures(223.0)(146.2)
Cash payments for restructuring38.1 68.9 
Transformation costs paid21.4 25.4 
Free cash flow (1)
$1,430.9 $1,714.3 
(1) Represents a non-GAAP measure.
Pension Plans
Our investment objective in managing defined benefit plan assets is to ensure that all present and future benefit obligations are met as they come due. We seek to achieve this goal while trying to mitigate volatility in plan funded status, contribution and expense by better matching the characteristics of the plan assets to that of the plan liabilities. Our approach to asset allocation is to increase fixed income assets as the plan's funded status improves. We monitor plan funded status and asset allocation regularly in addition to investment manager performance. In addition, we monitor the impact of market conditions on our defined benefit plans on a regular basis. None of our defined benefit pension plans have experienced a significant impact on their liquidity due to the volatility in the markets.market volatility. See Note 1011 to the Consolidated Financial Statements for additional information regarding pensions.
Cash Flows
The following table reflects the major categories of cash flows for the years ended December 31, respectively. For additional details, please see the Consolidated Statements of Cash Flows in the Consolidated Financial Statements.
In millions 2018 2017 2016
Net cash provided by (used in) continuing operating activities $1,474.5
 $1,561.6
 $1,433.0
Net cash provided by (used in) investing activities (629.4) (374.7) 240.1
Net cash provided by (used in) financing activities (1,378.8) (1,432.5) (726.9)
Operating Activities
Net cash provided by continuing operating activities for the year ended December 31, 2018 was $1,474.5 million, of which net income provided $1,662.0 million after adjusting for non-cash transactions. Changes in other assets and liabilities used $187.5 million. Improvements in accounts payable were offset by higher accounts receivable and inventory balances. Net cash provided by continuing operating activities for the year ended December 31, 2017 was $1,561.6 million, of which net income provided $1,642.1 million after adjusting for non-cash transactions. Changes in other assets and liabilities used $80.5 million. Improvements in accounts payable were offset by higher accounts receivable and inventory balances. Net cash provided by continuing operating activities for the year ended December 31, 2016 was $1,433.0 million, of which net income provided $1,449.8 million after adjusting for non-cash transactions. Changes in other assets and liabilities used $16.8 million. Improvements in accounts payable were offset by higher accounts receivable balances.
Investing Activities
Cash flows from investing activities represents inflows and outflows regarding the purchase and sale of assets.  Primary activities associated with these items include capital expenditures, proceeds from the sale of property, plant and equipment, acquisitions, investments in joint ventures and divestitures. During the year ended December 31, 2018, net cash used in investing activities from continuing operations was $629.4 million. The primary driver of the usage is attributable to the acquisition of several businesses and the investment of a 50% ownership interest in a joint venture with Mitsubishi. The total outflow, net of cash acquired, was $285.2 million. Other outflows included capital expenditures which totaled $365.6 million. Net cash used in investing activities from continuing operations for the year ended December 31, 2017 was $374.7 million. The primary driver of the outflow is attributable to capital expenditures of $221.3 million. In addition, we acquired several businesses that complement existing products and services. Cash paid for acquisitions, net of cash acquired, was $157.6 million during the year. During the year ended December 31, 2016, net cash provided by investing activities from continuing operations was $240.1 million. The primary driver of the inflow is attributable to the proceeds of $422.5 million received from the sale of our Hussmann equity interest. This amount was partially offset by capital expenditures during the year.
Financing Activities
Cash flows from financing activities represent inflows and outflows that account for external activities affecting equity and debt.  Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, issuing our stock and debt transactions. During the year ended December 31, 2018, net cash used in financing activities from continuing operations was $1,378.8 million. Primary drivers of the cash outflow related to the repurchase of 9.7 million ordinary shares totaling $900.2 million and $479.5 million of dividends paid to ordinary shareholders. In addition, we issued $1.15 billion of senior notes which was predominately offset by the redemption of $1.1 billion of senior notes. During the year ended December 31, 2017, net cash used in financing activities from continuing operations was $1,432.5 million. Primary drivers of the cash outflow related to the repurchase of 11.8 million ordinary shares totaling $1,016.9 million and $430.1 million of dividends paid to ordinary shareholders. Net cash used in financing activities from continuing operations for the year ended December 31, 2016 was $726.9 million. Primary drivers of the cash outflow related to the repurchase of 4.9 million ordinary shares totaling $250.1 million and $348.6 million of dividends paid to ordinary shareholders. In addition, we repaid our outstanding commercial paper balance during the year. 

Discontinued Operations
Cash flows from discontinued operations primarily represent ongoing costs associated with postretirement benefits, product liability and legal costs from previously sold businesses. Net cash used in discontinued operating activities during the year ended December 31, 2018 was $66.7 million and primarily related to ongoing costs. Net cash used in discontinued operating activities for the year ended December 31, 2017 was $38.1 million. Ongoing costs were partially offset by asbestos-related settlements reached with various insurance carriers during the year. Net cash provided by discontinued operating activities during the year ended December 31, 2016 was $88.9 million and included asbestos-related settlements reached with various insurance carriers during the year as well as cash proceeds on the sale of property related to a previously sold business. These amounts more than offset ongoing costs.
Capital Resources
Based on historical performance and current expectations, we believe our cash and cash equivalents balance, the cash generated from our operations, our committed credit lines and our expected ability to access capital markets will satisfy our working capital needs, capital expenditures, dividends, share repurchases, upcoming debt maturities, and other liquidity requirements associated with our operations for the foreseeable future.
Capital expenditures were $365.6$223.0 million, $221.3$146.2 million and $182.7$205.4 million for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. Our investments continue to improve manufacturing productivity, reduce costs, provide environmental enhancements, upgrade information technology infrastructure and security and advanced technologies for existing facilities. The capital expenditure program for 20192022 is estimated to be approximately $300 million,two percent of revenues, including amounts approved in prior periods. Many of these projects are subject to review and cancellation at our option without incurring substantial charges.
For financial market risk impacting the Company, see Item 7A. "Quantitative and Qualitative Disclosure About Market Risk."
Capitalization
In addition to cash on hand and operating cash flow, we maintain significant credit availability under our Commercial Paper Program. Our ability to borrow at a cost-effective rate under the Commercial Paper Program is contingent upon maintaining an investment-grade credit rating. As of December 31, 2018,2021, our credit ratings were as follows:
follows, remaining unchanged from 2020:
Short-termLong-term
Moody’sP-2Baa2
Standard and Poor’sA-2BBB
The credit ratings set forth above are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal by the assigning rating organization. Each rating should be evaluated independently of any other rating.
Our public debt does not contain financial covenants and our revolving credit lines have a debt-to-total capital covenant of 65%. As of December 31, 2018,2021, our debt-to-total capital ratio was 36.7% and significantly beneath this limit.
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Contractual Obligations
The following table summarizes ourOur contractual cash obligations byinclude required payment period:
In millions 
Less than
1 year
 
1 - 3
years
 
3 - 5
years
 
More than
5 years
 Total
Short-term debt $—
  $—
 $—
 $—
 $—
Long-term debt 350.6
(a) 
740.2
 715.0
 2,314.7
 $4,120.5
Interest payments on long-term debt 186.5
 355.1
 298.6
 1,394.0
 2,234.2
Purchase obligations 946.0
  —
 —
 —
 946.0
Operating leases 197.1
 259.4
 110.6
 42.7
 609.8
Total contractual cash obligations $1,680.2
  $1,354.7
 $1,124.2
 $3,751.4
 $7,910.5
(a)Includes $343.0 million of debt redeemable at the option of the holder. The scheduled maturities of these bonds range between 2027payments of long-term debt principal and interest, purchase obligations and 2028.
Future expected obligations under our pension and postretirement benefit plans,plans. In addition, we have required payments of operating leases, income taxes and expected obligations under the Funding agreement, environmental asbestos-related, and product liability matters have not been included inmatters. For additional information regarding leases, income taxes, including unrecognized tax benefits, and contingent liabilities, see Note 10, Note 17 and Note 21, respectively, to the Consolidated Financial Statements. Our material cash requirements include the following contractual cash obligations table above.and other obligations.

PensionsDebt
At December 31, 2018,2021, we had a net unfunded liabilityoutstanding aggregate long-term debt principal payments of $698.4$4,872.6 million, with $350.4 million payable within 12 months. The amount payable within 12 months includes $342.9 million of debt redeemable at the option of the holder. The scheduled maturities of these bonds range between 2027 and 2028. Future interest payments on long-term debt total $2,402.4 million, with $215.2 million payable within 12 months. See Note 7 to the Consolidated Financial Statements for additional information regarding debt.
Purchase Obligations
Purchase obligations include commitments under legally enforceable contracts or purchase orders. At December 31, 2021, we had purchase obligations of $1,225.0 million, which consists of noncurrent pension assets of $49.9 million and current and non-current pension benefit liabilities of $748.3 million. are primarily payable within 12 months.
Pensions
It is our objective to contribute to the pension plans to ensure adequate funds are available in the plans to make benefit payments to plan participants and beneficiaries when required. We currently projectexpect that we will contribute approximately $104$82 million to our enterprise plans worldwide in 2019.2022. The timing and amounts of future contributions are dependent upon the funding status of the plan, which is expected to vary as a result of changes in interest rates, returns on underlying assets, and other factors. Therefore, pension contributions have been excluded from the preceding table. See Note 1011 to the Consolidated Financial Statements for additional information regarding pensions.
Postretirement Benefits Other than Pensions
At December 31, 2018, we had postretirement benefit obligations of $442.7 million. We fund postretirement benefit costs principally on a pay-as-you-go basis as medical costs are incurred by covered retiree populations. Benefit payments, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be approximately $46$34 million in 2019. Because benefit payments are not required to be funded in advance, and the timing and amounts of future payments are dependent on the cost of benefits for retirees covered by the plan, they have been excluded from the preceding table.2022. See Note 1011 to the Consolidated Financial Statements for additional information regarding postretirement benefits other than pensions.
Income Taxes
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Supplemental Guarantor Financial Information
Trane Technologies plc (Plc or Parent Company) and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of public debt issued by other 100% directly or indirectly owned subsidiaries of Plc. The following table shows our guarantor relationships as of December 31, 2018, we have total unrecognized tax benefits for uncertain tax positions2021:
Parent, issuer or guarantorsNotes issuedNotes guaranteed
Trane Technologies plc (Plc)NoneAll registered notes and debentures
Trane Technologies Irish Holdings Unlimited Company (TT Holdings)NoneAll notes issued by TTFL and TTC HoldCo
Trane Technologies Lux International Holding Company S.à.r.l. (TT International)NoneAll notes issued by TTFL and TTC HoldCo
Trane Technologies Global Holding Company Limited (TT Global)NoneAll notes issued by TTFL and TTC HoldCo
Trane Technologies Financing Limited
(TTFL)(1)
3.550% Senior notes due 2024
3.500% Senior notes due 2026
3.800% Senior notes due 2029
4.650% Senior notes due 2044
4.500% Senior notes due 2049		All notes and debentures issued by TTC HoldCo and TTC
Trane Technologies HoldCo Inc. (TTC HoldCo)4.250% Senior notes due 2023
3.750% Senior notes due 2028
5.750% Senior notes due 2043
4.300% Senior notes due 2048		All notes issued by TTFL
Trane Technologies Company LLC (TTC)
7.200% Debentures due 2022-2025
6.480% Debentures due 2025
Puttable debentures due 2027-2028
All notes issued by TTFL and TTC HoldCo
(1) On April 30, 2021, Trane Technologies Luxembourg Finance S.A. (TT Lux) merged into TTFL, an Irish private limited company, and TTFL became the successor issuer of $83.0 millioncertain notes and $20.7 millionassumed the guarantees and other obligations previously held by TT Lux.
Each subsidiary debt issuer and guarantor is owned 100% directly or indirectly by the Parent Company. Each guarantee is full and unconditional, and provided on a joint and several basis. There are no significant restrictions of related accrued interest and penalties, net of tax. The liability has been excludedthe Parent Company, or any guarantor, to obtain funds from the preceding tableits subsidiaries, such as we are unable to reasonably estimate the amount and periodprovisions in which these liabilities might be paid. See Note 16debt agreements that prohibit dividend payments, loans or advances to the Consolidated Financialparent by a subsidiary. The following tables present summarized financial information for the Parent Company and subsidiary debt issuers and guarantors on a combined basis (together, "obligor group") after elimination of intercompany transactions and balances based on the Company’s legal entity ownerships and guarantees outstanding at December 31, 2021. Our obligor groups as of December 31, 2021 were as follows: obligor group 1 consists of Plc, TT Holdings, TT International, TT Global, TTFL, TTC HoldCo and TTC; obligor group 2 consists of Plc, TTFL and TTC.
Summarized Statements for additional information regarding income taxes, including unrecognized tax benefits.of Earnings
Contingent Liabilities
Year ended December 31, 2021
In millionsObligor group 1Obligor group 2
Net revenues$— $— 
Gross profit (loss)— — 
Intercompany interest and fees27.0 270.5 
Earnings (loss) from continuing operations(269.3)(29.7)
Discontinued operations, net of tax(18.1)(30.6)
Net earnings (loss)(287.4)(60.3)
Less: Net earnings attributable to noncontrolling interests— — 
Net earnings (loss) attributable to Trane Technologies plc$(287.4)$(60.3)
We are involved in various litigation, claims and administrative proceedings, including those related to environmental, asbestos-related, and product liability matters. We believe that these liabilities are subject to the uncertainties inherent in estimating future costs for contingent liabilities, and will likely be resolved over an extended period
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Table of time. Because the timing and amounts of potential future cash flows are uncertain, they have been excluded from the preceding table. See Note 20 to the Consolidated Financial Statements for additional information regarding contingent liabilities.Contents
Summarized Balance Sheet
December 31, 2021
In millionsObligor group 1Obligor group 2
ASSETS
Intercompany receivables$128.9 $494.0 
Current assets1,348.3 1,623.4 
Intercompany notes receivable1,831.9 5,531.6 
Noncurrent assets2,662.9 6,135.7 
LIABILITIES
Intercompany payables4,160.1 2,452.0 
Current liabilities5,045.6 3,288.8 
Intercompany notes payable2,400.7 2,400.7 
Noncurrent liabilities7,758.7 5,712.6 
Critical Accounting PoliciesEstimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of financial statements in conformity with those accounting principles requires management to use judgment in making estimates and assumptions based on the relevant information available at the end of each period. These estimates and assumptions have a significant effect on reported amounts of assets and liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities because they result primarily from the need to make estimates and assumptions on matters that are inherently uncertain. Actual results may differ from these estimates. If updated information or actual amounts are different from previous estimates, the revisions are included in our results for the period in which they become known.
The following is a summary of certain accounting estimates and assumptions made by management that we consider critical.
Allowance for doubtful accounts – We maintain an allowance for doubtful accounts receivable which represents our best estimate of probable loss inherent in our accounts receivable portfolio. This estimate is based upon our two step policy that results in the total recorded allowance for doubtful accounts. The first step is to record a portfolio reserve based on the aging of the outstanding accounts receivable portfolio and our historical experience with our end markets, customer base and products. The second step is to create a specific reserve for significant accounts as to which the customer's ability to satisfy their financial obligation to us is in doubt due to circumstances such as bankruptcy, deteriorating operating results or financial position. In these circumstances, management uses its judgment to record an allowance based on the best estimate of probable loss, factoring in such considerations as the market value of collateral, if applicable. Actual results could differ from those estimates. These estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the statement of operations in the period that they are determined.
•Goodwill and indefinite-lived intangible assets – We have significant goodwill and indefinite-lived intangible assets on our balance sheet related to acquisitions. These assets are tested and reviewed annually during the fourth quarter for impairment or when there is a significant change in events or circumstances that indicate that the fair value of an asset is more likely than not less than the carrying amount of the asset. In addition, an interim impairment test is completed upon a triggering event or when there is a reorganization of reporting structure or disposal of all or a portion of a reporting unit.

The determination of estimated fair value requires us to make assumptions about estimated cash flows, including profit margins, long-term forecasts, discount rates and terminal growth rates. We developed these assumptions based on the market and geographic risks unique to each reporting unit. The estimates of fair value are based on the best information available as of the date of the assessment, which primarily incorporates management assumptions about expected future cash flows.
Annual Goodwill Impairment Test
Impairment of goodwill is assessed at the reporting unit level and begins with a qualitative assessment to determine if it is more likely than not that the fair value of each reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test under ASC 350, "Intangibles-Goodwill and Other," (ASC 350).test. For those reporting units that bypass or fail the qualitative assessment, the test compares the carrying amount of the reporting unit to its estimated fair value. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. To the extent that the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss would be recognized for the amount by which the reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.
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As quoted market prices are not available for our reporting units, the calculation of their estimated fair value is determined using three valuation techniques: a discounted cash flow model (an income approach), a market-adjusted multiple of earnings and revenues (a market approach), and a similar transactions method (also a market approach). The discounted cash flow approach relies on our estimates of future cash flows and explicitly addresses factors such as timing, growth and margins, with due consideration given to forecasting risk. The multiple of earnings and revenue multiplerevenues approach reflects the market's expectations for future growth and risk, with adjustments to account for differences between the guideline publicly traded companies and the subject reporting units. The similar transactions method considers prices paid in transactions that have recently occurred in our industry or in related industries. These valuation techniques are weighted 50%, 40% and 10%, respectively.
Other Indefinite-lived intangible assets
Impairment of other intangible assets with indefinite useful lives is first assessed using a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. This assessment is used as a basis for determining whether it is necessary to calculate the fair value of an indefinite-lived intangible asset. For those indefinite-lived assets where it is required, a fair value is determined on a relief from royalty methodology (income approach) which is based on the implied royalty paid, at an appropriate discount rate, to license the use of an asset rather than owning the asset. The present value of the after-tax cost savings (i.e., royalty relief) indicates the estimated fair value of the asset. Any excess of the carrying value over the estimated fair value would be recognized as an impairment loss equal to that excess.
The determination•Business combinations - Acquisitions that meet the definition of a business combination are recorded using the acquisition method of accounting. We include the operating results of acquired entities from their respective dates of acquisition. We recognize and measure the identifiable assets acquired, liabilities assumed, including contingent consideration relating to potential earnout provisions. and any non-controlling interest as of the estimatedacquisition date fair value. The valuation of intangible assets is determined using an income approach methodology. We use assumptions to value the intangible assets including projected future revenues, customer attrition rates, royalty rates, tax rates and discount rates. The excess, if any, of total consideration transferred in a business combination over the implied fair value of goodwillidentifiable assets acquired, liabilities assumed, and any non-controlling interest is recognized as goodwill. Costs incurred as a result of a business combination other indefinite-lived intangible assets requires usthan costs related to make assumptions about estimated cash flows, including profit margins, long-term forecasts, discountthe issuance of debt or equity securities are recorded in the period the costs are incurred.
Contingent consideration
We assess any contingent consideration included in the consideration paid of a business combination. The value recorded is based on estimates of future financial projections on revenue under various potential scenarios, in which a Monte Carlo simulation model runs many iterations based on comparable companies' revenue growth rates and terminal growth rates. We developed these assumptions based on the market and geographic risks unique to each reporting unit. For our annual impairment testing performed during the fourththeir implied revenue volatilities. These cash flow projections are discounted with a risk adjusted rate. Each quarter of 2018, we calculated the fair value for each of the reporting units and indefinite-lived intangibles. Based on the results of these calculations and further outlined below, we determined thatuntil such contingent amounts are earned, the fair value of the liability is remeasured at each reporting unitsperiod and indefinite-lived intangible assets exceeded their respective carrying values.adjusted as a component of operating expenses based on changes to the underlying assumptions. The estimates of fair value are based on the best information available as of the date of the assessment, which primarily incorporates management assumptions about expected future cash flows.
Goodwill - Under the income approach, we assumed a forecasted cash flow period of five years with discount rates ranging from 11.0%used to 14.0% and terminal growth rates ranging from 3.0% to 4.5%. Under the guideline public company method, we used an adjusted multiple ranging from 6.5 to 13.5 of projected earnings before interest, taxes, depreciation and amortization (EBITDA) based on the market information of comparable companies. Additionally, we compared the estimated aggregate fair value of our reporting units to our overall market capitalization. For all reporting units except one in Latin America, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) was a minimum of 75%. A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in our end markets and volume assumptions could have a negative impact on the estimated fair value of these reporting units. The one reporting unit with a percentage of carrying value less than 75% exceeded its carrying value by 1.1%. The reporting unit, reported within the Climate segment, has approximately $190 million of goodwill at the testing date. With all other assumptions and trends remaining constant for each independent variable, a 0.5% increase in the discount rate combined with a 0.5% decrease in the long-term growth rate would result in an approximate $15 million impairment for this reporting unit.
Other Indefinite-lived intangible assets - In testing our other indefinite-lived intangible assets for impairment, we assumed forecasted revenues for a period of five years with discount rates ranging from 11.0% to 15.5%, terminal growth rates of 3.0%, and royalty rates ranging from 0.5% to 4.5%. For all tradenames, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) was a minimum of 74%, with the exception of one. The tradename, reported within our Climate segment, had an excess of the estimated fair value over carrying value of approximately 19% (9% in 2017) and an approximate carrying value of $15 million at December 31, 2018. A significant increase in the discount rate, decrease in the long-term growth rate, decrease in the royalty rate or substantial reductions in our end markets and volume assumptions could have a negative impact on the estimated fair values of any of our tradenames. In addition, the Company has three recently acquired tradenames now subject to our annual impairment test. Combined, these tradenames have a carrying value of approximately $14 million, each with an estimated fair value over carrying value of under 10%

as expected. Due to their recent valuation upon acquisition, small variations in our estimates and assumptions could impact their fair value.
Long-lived assets and finite-lived intangibles – Long-lived assets and finite-lived intangibles are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. Assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows can be generated. Impairment in the carrying value of an asset would be recognized whenever anticipated future undiscounted cash flows from an asset are less than its carrying value. The impairment is measured as the amount by which the carrying value exceedsdetermine the fair value of the asset as determined by an estimate of discounted cash flows. Changes in business conditions could potentially require future adjustmentscontingent consideration liability are subject to these valuations.significant judgment, specifically revenue growth rates, implied revenue volatilities and discount rates.
Loss contingencies – Liabilities are recorded for various contingencies arising in the normal course of business, including litigation and administrative proceedings, environmental and asbestos matters and product liability, product warranty, worker’s compensation and other claims. We have recorded reserves in the financial statements related to these matters, which are developed using input derived from actuarial estimates and historical and anticipated experience data depending on the nature of the reserve, and in certain instances with consultation of legal counsel, internal and external consultants and engineers. Subject to the uncertainties inherent in estimating future costs for these types of liabilities, we believe our estimated reserves are reasonable and do not believe the final determination of the liabilities with respect to these matters would have a material effect on our financial condition, results of operations, liquidity or cash flows for any year.
•Asbestos matters – CertainPrior to the Petition Date, certain of our wholly-owned subsidiaries and former companies arewere named as defendants in asbestos-related lawsuits in state and federal courts. We recordrecorded a liability for our actual and anticipated future claims as well as an asset for anticipated insurance settlements. We performed a detailed analysis and projected an estimated range of the total liability for pending and unasserted future asbestos-related claims. We recorded the liability at the low end of the range as we believed that no amount within the range is a better estimate than any other amount. Our key assumptions underlying the estimated asbestos-related liabilities included the number of people occupationally exposed and likely to develop asbestos-related diseases such as mesothelioma and lung cancer, the number of people likely to file an asbestos-related personal injury claim against us, the average settlement and resolution of each claim and the percentage of claims resolved with no payment. Asbestos-related defense costs arewere excluded from the asbestos claims liability and arewere recorded separately as services arewere incurred. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos. We recordrecorded certain income and expenses associated with our asbestos liabilities and corresponding insurance recoveries within Discontinued operations, net of tax, as they relaterelated to previously divested businesses, except for amounts associated with Trane’s asbestos liabilities and corresponding insurance recoveries of Murray and its predecessors, which arewere recorded within continuing operations. See Note 20 to the Consolidated Financial Statements for further information regarding asbestos-related matters.
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•Revenue recognition – Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of our revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of our revenues are recognized over time as the customer simultaneously receives control as we perform work under a contract. We adopted ASC 606 on January 1, 2018 usingFor these arrangements, the modified retrospective approach. Refer to Note 2, "Summarycost-to-cost input method is used as it best depicts the transfer of Significant Accounting Policies" and Note 11, "Revenue" for additional information relatedcontrol to the adoption of ASC 606.customer that occurs as we incur costs.
The transaction price allocated to performance obligations reflects our expectations about the consideration we will be entitled to receive from a customer. To determine the transaction price, variable and noncash consideration are assessed as well as whether a significant financing component exists. Our contracts with customers, dealers and distributorsWe include several forms of sales incentive programs (variable consideration) which are estimated and includedvariable consideration in the estimated transaction price. They include, but are not limited to, discounts, coupons, and rebates where the customer does not have to provide any additional requirements to receive the discount. We record an accrual (contra receivable) and a sales deduction for our best estimate determined using the expected value method. In addition, sales returns and customer disputes involving a question of quantity or price are also accounted for as variable consideration. All other incentives or incentive programs where the customerwhen it is required to reach a certain sales level, remain a customer for a certain period of time, provide a rebate form or is subject to additional requirements are accounted for as a reductionprobable that significant reversal of revenue and establishment of a liability for our best estimate determined usingrecognized would not occur when the expected value method.uncertainty associated with variable consideration is subsequently resolved. We consider historical data in determining our best estimates of variable consideration. These estimatesconsideration, and the related accruals are reviewed regularly for appropriateness, considering also whetherrecorded using the estimates should be constrained in order to avoid a significant reversal of revenue recognition in a future period. If updated information or actual amounts are different from previous estimates of variable consideration, the revisions are included in the results for the period in which they become known through a cumulative effect adjustment to revenue.expected value method.
We enter into sales arrangements that contain multiple goods and services, such as equipment, installation and extended warranties.services. For these arrangements, each good or service is evaluated to determine whether it represents a distinct performance obligation. The total transactionobligation and whether the sales price for each obligation is then allocated to the distinct performance obligations based on their relativerepresentative of standalone selling price at the inception of the arrangement.price. If available, we utilize observable prices for goods or services sold separately to similar customers in similar circumstances to determine itsevaluate relative standalone selling price. Otherwise, listList prices are used if they are determined to be representative of standalone selling prices. If neitherWhere necessary, we ensure that the total transaction price is then allocated to the distinct performance obligations based on the determination of these items are available at contract inception, judgment may be required and we will estimatetheir relative standalone selling price based on our best estimate. at the inception of the arrangement.
We recognize revenue for delivered goods or services when the delivered good or service is distinct,

control of the good or service has transferred to the customer, and only customary refund or return rights related to the goods or services exist. For extended warranties and long-term service agreements, revenue for these distinct performance obligations are recognized over time on a straight-line basis over the respective contract term.
•Income taxes – Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. We recognize future tax benefits, such as net operating losses and tax credits, to the extent that realizing these benefits is considered in our judgment to be more likely than not. We regularly review the recoverability of our deferred tax assets considering our historic profitability, projected future taxable income, timing of the reversals of existing temporary differences and the feasibility of our tax planning strategies. Where appropriate, we record a valuation allowance with respect to a future tax benefit.
The provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which we operate. Future changes in applicable laws, projected levels of taxable income, and tax planning could change the effective tax rate and tax balances recorded by us. In addition, tax authorities periodically review income tax returns filed by us and can raise issues regarding our filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which we operate. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. We believe that we have adequately provided for any reasonably foreseeable resolution of these matters. We will adjust our estimate if significant events so dictate. To the extent that the ultimate results differ from our original or adjusted estimates, the effect will be recorded in the provision for income taxes in the period that the matter is finally resolved.
•Employee benefit plans – We provide a range of benefits to eligible employees and retirees, including pensions, postretirement and postemployment benefits. Determining the cost associated with such benefits is dependent on various actuarial assumptions including discount rates, expected return on plan assets, compensation increases, mortality, turnover rates and healthcare cost trend rates. Actuarial valuations are performed to determine expense in accordance with GAAP. Actual results may differ from the actuarial assumptions and are generally accumulated and amortized into earnings over future periods. We review our actuarial assumptions at each measurement date and make modifications to the assumptions based on current rates and trends, if appropriate. The discount rate, the rate of compensation increase and the expected long-term rates of return on plan assets are determined as of each measurement date.
The rate of compensation increase is dependent on expected future compensation levels. The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan’s investment policy, the types of assets held and the target asset allocation. The expected long-term rate of return is determined as of each measurement date. We believe that the assumptions utilized in recording our obligations under our plans are reasonable based on input from our actuaries, outside investment advisors and information as to assumptions used by plan sponsors.
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Changes in any of the assumptions can have an impact on the net periodic pension cost or postretirement benefit cost. Estimated sensitivities to the expected 20192022 net periodic pension cost of a 0.25% rate decline in the two basic assumptions are as follows: the decline in the discount rate would increase expense by approximately $7.2$4.2 million and the decline in the estimated return on assets would increase expense by approximately $6.7$7.2 million. A 0.25% rate decrease in the discount rate for postretirement benefits would increase expected 20192022 net periodic postretirement benefit cost by $0.7 million and a 1.0% increase in the healthcare cost trend rate would increase the service and interest cost by approximately $0.4$0.5 million.
Recent Accounting Pronouncements
See Note 2 to the Consolidated Financial Statements for a discussion of recent accounting pronouncements.
Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are exposed to fluctuations in currency exchange rates, interest rates and commodity prices which could impact our results of operations and financial condition.
Foreign Currency Exposures
We have operations throughout the world that manufacture and sell products in various international markets. As a result, we are exposed to movements in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world.
Many of our non-U.S. operations have a functional currency other than the U.S. dollar, and their results are translated into U.S. dollars for reporting purposes. Therefore, our reported results will be higher or lower depending on the weakening or strengthening of the U.S. dollar against the respective foreign currency. Our largest concentration of revenues from non-U.S. operations as of

December 31, 20182021 are in Euros and Chinese Yuan. A hypothetical 10% unfavorable change in the average exchange rate used to translate Net revenues for the year ended December 31, 20182021 from either Euros or Chinese Yuan-based operations into U.S. dollars would not haveresult in a material impact on our financial statements.decline of approximately $135 million and $70 million, respectively.
We use derivative instruments to hedge those material exposures that cannot be naturally offset. The instruments utilized are viewed as risk management tools, primarily involve little complexity and are not used for trading or speculative purposes. To minimize the risk of counter partycounterparty non-performance, derivative instrument agreements are made only through major financial institutions with significant experience in such derivative instruments.
We evaluate our exposure to changes in currency exchange rates on our foreign currency derivatives using a sensitivity analysis. The sensitivity analysis is a measurement of the potential loss in fair value based on a percentage change in exchange rates. Based on the firmly committed currency derivative instruments in place at December 31, 2018,2021, a hypothetical change in fair value of those derivative instruments assuming a 10% adverse change in exchange rates would result in an unrealized loss of approximately $17.6$18.1 million, as compared with $58.3$22.3 million at December 31, 2017.2020. These amounts, when realized, would be offset by changes in the fair value of the underlying transactions.
Commodity Price Exposures
We are exposed to volatility in the prices of commodities used in some of our products and we use commodity hedge contracts in the financial derivatives market and fixed price purchase contracts to manage this exposure. We do not have committedCommodity risks are systematically managed pursuant to policy guidelines. As a cash flow hedge, gains and losses resulting from the hedging instruments mitigate a portion of our exposures to changes in commodity prices. The maturities of the commodity hedge contracts coincide with the expected purchase of the commodities. Based on the commodity derivative instruments in place at December 31, 2018.2021, a hypothetical change in fair value of those derivative instruments assuming a 10% decrease in commodity prices would result in an unrealized loss of approximately $7.5 million. These amounts, when realized, would be offset by changes in the fair value of the underlying commodity purchases.
Interest Rate Exposure
Our debt portfolio mainly consists of fixed-rate instruments, and therefore any fluctuation in market interest rates is not expected to have a material effect on our results of operations.

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Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(a)The following Consolidated Financial Statements and the report thereon of PricewaterhouseCoopers LLP dated February 7, 2022, are presented in this Annual Report on Form 10-K beginning on page F-1.
(a)
The following Consolidated Financial Statements and Financial Statement Schedules and the report thereon of PricewaterhouseCoopers LLP dated February 12, 2019, are presented under Item 16 of this Annual Report on Form 10-K.
Consolidated Financial Statements:
Report of independent registered public accounting firmIndependent Registered Public Accounting Firm
Consolidated Statements of comprehensive incomeEarnings for the years ended December 31, 2018, 20172021, 2020 and 20162019
Consolidated balance sheets at December 31, 2018 and 2017
ForStatements of Comprehensive Income for the years ended December 31, 2018, 20172021, 2020 and 2016:2019
Consolidated statements of equityBalance Sheets at December 31, 2021 and 2020
Consolidated statementsStatements of cash flowsEquity for the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019
Notes to Consolidated Financial Statements
Financial Statement Schedule:
Schedule II – Valuation and Qualifying Accounts for the years ended December 31, 2018, 2017 and 2016
(b)
The unaudited selected quarterly financial data for the two years ended December 31, is as follows:

  2018
In millions, except per share amounts 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
Net revenues $3,384.5
 $4,357.7
 $4,030.9
 $3,895.1
Cost of goods sold (2,420.2) (2,964.1) (2,718.3) (2,745.0)
Operating income 243.4
 640.3
 587.0
 446.7
Net earnings 124.1
 452.6
 519.4
 261.4
Net earnings attributable to Ingersoll-Rand plc 120.4
 448.1
 515.1
 254.0
Earnings per share attributable to Ingersoll-Rand plc ordinary shareholders:        
Basic $0.48
 $1.81
 $2.09
 $1.04
Diluted $0.48
 $1.79
 $2.06
 $1.03
  2017
  
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
Net revenues $3,000.6
 $3,908.4
 $3,670.5
 $3,618.1
Cost of goods sold (2,126.1) (2,653.1) (2,489.9) (2,542.5)
Operating income 215.0
 557.6
 506.1
 386.6
Net earnings 121.1
 362.2
 371.9
 457.1
Net earnings attributable to Ingersoll-Rand plc 117.1
 358.6
 367.0
 459.9
Earnings per share attributable to Ingersoll-Rand plc ordinary shareholders:        
Basic $0.45
 $1.40
 $1.45
 $1.84
Diluted $0.45
 $1.38
 $1.43
 $1.81



Item 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
Item 9A.CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures
The Company's management, including its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2018,2021, that the Company's disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act has been recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and that such information has been accumulated and communicated to the Company's management including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
(b)Management's Report on Internal Control Over Financial Reporting
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer and effected by the Company's Board of Directors to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management has assessed the effectiveness of internal control over financial reporting as of December 31, 2018.2021. In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control - Integrated Framework (2013). Management concluded that based on its assessment, the Company's internal control over financial reporting was effective as of December 31, 2018.2021.
The effectiveness of the Company's internal control over financial reporting as of December 31, 20182021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
(c)Changes in Internal Control Over Financial Reporting
There were no changes in internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 20182021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B.OTHER INFORMATION
On February 6, 2019, the BoardNone.
Item 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
46
Table of Directors of Ingersoll-Rand plc terminated the Company's Senior Executive Performance Plan effective immediately.Contents


PART III
Item 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information regarding our executive officers is included in Part I under the caption “Executive Officers of Registrant.”
The other information required by this item is incorporated herein by reference to the information contained under the headings “Item 1. Election of Directors”, “Section“Delinquent Section 16(a) Beneficial Ownership Reporting Compliance”Reports” and “Corporate Governance” in our definitive proxy statement for the 20192022 annual general meeting of shareholders (2019(2022 Proxy Statement).
Item 11.EXECUTIVE COMPENSATION
The other information required by this item is incorporated herein by reference to the information contained under the headings “Compensation Discussion and Analysis,” “Compensation of Directors,” “Executive Compensation,” “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation” in our 20192022 Proxy Statement.
Item 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The other information required by this item is incorporated herein by reference to the information contained under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” ofin our 20192022 Proxy Statement.
Item 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The other information required by this item is incorporated herein by reference to the information contained under the headings “Corporate Governance” and “Certain Relationships and Related Person Transactions” ofin our 20192022 Proxy Statement.
Item 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated herein by reference to the information contained under the caption “Fees of the Independent Auditors” in our 20192022 Proxy Statement.

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PART IV
Item 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. and 2.
Financial statements and financial statement scheduleStatements
See Item 8.
3.2.ExhibitsFinancial Statement Schedules
Schedules have been omitted because the required information is not applicable or because the required information is included elsewhere in this Annual Report on Form 10-K.
3.Exhibits
The exhibits listed on the accompanying index to exhibits are filed as part of this Annual Report on Form 10-K.

48
INGERSOLL-RAND
Table of Contents
TRANE TECHNOLOGIES PLC
INDEX TO EXHIBITS
(Item 15(a))
Description
Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), Ingersoll-RandTrane Technologies plc (the “Company”) has filed certain agreements as exhibits to this Annual Report on Form 10-K. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in our public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe our actual state of affairs at the date hereof and should not be relied upon.
On July 1, 2009, Ingersoll-Rand Company Limited, a Bermuda company, completed a reorganization to change the jurisdiction of incorporation of the parent company from Bermuda to Ireland. As a result, Ingersoll-Rand plc replaced Ingersoll-Rand Company Limited as the ultimate parent company effective July 1, 2009. All references related to the Company prior to July 1, 2009 relate to Ingersoll-Rand Company Limited. On March 2, 2020, Ingersoll-Rand plc changed its name to Trane Technologies plc.
(a) Exhibits
Exhibit No.DescriptionMethod of Filing
2.1


Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on December 2, 2013.


3.12.2Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on May 6, 2019.
2.3Incorporated by reference to Exhibit 2.2 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on May 6, 2019).
3.1Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on June 7, 2016.
3.2Incorporated by reference to Exhibit 3.2 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
The Company and its subsidiaries are parties to several long-term debt instruments under which, in each case, the total amount of securities authorized does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis.
Pursuant to paragraph 4 (iii)(A) of Item 601 (b) of Regulation S-K, the Company agrees to furnish a copy of such instruments to the Securities and Exchange Commission upon request.


4.1
Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on June 26, 2013.


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4.2Exhibit No.DescriptionMethod of Filing
4.2
Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on June 26, 2013.



Exhibit No.4.3DescriptionMethod of Filing
4.3Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on June 26, 2013.
4.4
Incorporated by reference to Exhibit 4.4 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on June 26, 2013.


4.5
Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on November 26, 2013.


4.6
Incorporated by reference to Exhibit 4.5 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014.



Exhibit No.4.7DescriptionMethod of Filing
4.7
Incorporated by reference to Exhibit 4.21 to the Company's Form 10-K for the fiscal year ended 2015 (File No. 001-34400) filed with the SEC on February 12, 2016.


4.8


Incorporated by reference to Exhibit 4.19 to the Company’s Form 10-K for the fiscal year ended 2016 (File No. 001-34400) filed with the SEC on February 13, 2017.

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Exhibit No.DescriptionMethod of Filing
4.9
4.9Incorporated by reference to Exhibit 4.9 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.10Incorporated by reference to Exhibit 4.10 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.11Incorporated by reference to Exhibit 4.11 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.12Incorporated by reference to Exhibit 4.12 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.13Filed herewith.
4.14
Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014


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4.10Exhibit No.DescriptionMethod of Filing
4.15
Incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014.



Exhibit No.4.16DescriptionMethod of Filing
4.11
Incorporated by reference to Exhibit 4.3 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014.


4.124.17Incorporated by reference to Exhibit 4.34.4 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014.
4.134.18Incorporated by reference to Exhibit 4.27 to the Company's Form 10-K for the fiscal year ended 2015 (File No. 001-34400) filed with the SEC on February 12, 2016.
4.144.19

Incorporated by reference to Exhibit 4.25 to the Company’s Form 10-K for the fiscal year ended 2016 (File No. 001-34400) filed with the SEC on February 13, 2017.
4.20Incorporated by reference to Exhibit 4.19 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.21Incorporated by reference to Exhibit 4.20 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.

52
Table of Contents
Exhibit No.DescriptionMethod of Filing
4.154.22Incorporated by reference to Exhibit 4.21 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.23Incorporated by reference to Exhibit 4.22 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.24Filed herewith.
4.25Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 26, 2018.
4.164.26Incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 26, 2018.
4.174.27Incorporated by reference to Exhibit 4.4 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 26, 2018.
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Table of Contents
4.18Exhibit No.DescriptionMethod of Filing
4.28Incorporated by reference to Exhibit 4.6 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 26, 2018.
4.264.29Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on March 26, 2019.
4.30Incorporated by reference to Exhibit 4.3 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on March 26, 2019.
4.31Incorporated by reference to Exhibit 4.5 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on March 26, 2019.
4.32Incorporated by reference to Exhibit 4.30 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.33Incorporated by reference to Exhibit 4.31 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
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Table of Contents
Exhibit No.DescriptionMethod of Filing
4.34Incorporated by reference to Exhibit 4.32 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.35Incorporated by reference to Exhibit 4.33 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
4.36Filed herewith.
4.37Incorporated by reference to Exhibit 4.6 to the Company’s Form S-3 (File No. 333-161334) filed with the SEC on August 13, 2009.
10.1*4.38Filed herewith.
10.1*Incorporated by reference to Exhibit 10.1 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
10.2*Incorporated by reference to Exhibit 10.2 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
10.3*Incorporated by reference to Exhibit 10.3 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
10.4
Credit Agreement dated June 18, 2021 among Trane Technologies Holdco Inc., Trane Technologies Global Holding Company Limited and Trane Technologies Financing Limited, Trane Technologies plc, Trane Technologies Lux International Holding Company S.à r.l., Trane Technologies Irish Holdings Unlimited Company, Trane Technologies Company LLC, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, J.P. Morgan Securities LLC and BNP Paribas, as Sustainability Structuring Agents, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, MUFG Bank, Ltd. and U.S. Bank National Association as Documentation Agents, and JPMorgan Chase Bank, N.A., Citibank, N.A., BofA Securities, Inc., BNP Securities Corp. and Mizuho Bank, Ltd., as joint lead arrangers and joint bookrunners, and certain lending institutions from time to time parties thereto.
Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on June 12, 2018.

24, 2021.

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Table of Contents
Exhibit No.DescriptionMethod of Filing
10.5
10.2*Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on June 12, 2018.
10.3*
Form of Global Performance Stock Unit Award Agreement (June 2018).
Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on June 12, 2018.
10.4
Credit Agreement dated March 15, 2016June 4, 2020 among Ingersoll-RandTrane Technologies Holdco Inc., Trane Technologies Global Holding Company Limited Ingersoll-Rand plc, Ingersoll-Randand Trane Technologies Luxembourg Finance S.A., Ingersoll-RandTrane Technologies plc, Trane Technologies Lux International Holding Company S.à r.l. (“TT Lux Holding Company”), Ingersoll-Rand InternationalTrane Technologies Irish Holdings Unlimited Company (“Irish Holdings”), Trane Technologies Company LLC (“TTC” and, together with TT Parent, Irish Holdings and TT Lux Holding Limited, Ingersoll-Rand Company, the “Guarantors”), JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, Bank of America, N.A., BNP Paribas, Deutsche Bank Securities Inc., Goldman Sachs Bank USA Mizuhoand MUFG Bank, Ltd., and The Bank of Tokyo-Mitsubishi UFJ, Ltd. as Documentation Agents, and JPMorgan Chase Bank, N.A., Citibank, N.A., BofA Securities, Inc., BNP Securities Corp. and Citigroup Global Markets Inc.Mizuho Bank, Ltd., as joint lead arrangers and joint bookrunners, and certain lending institutions from time to time parties thereto.
Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on March 17, 2016.
10.5
Supplemental Guarantee dated as of April 5, 2016 made by Ingersoll-Rand Irish Holdings Unlimited Company in favor of JPMorgan Chase Bank, N.A., as Administrative Agent for the Banks that are parties to the Credit Agreement dated as of March 15, 2016.
Incorporated by reference to Exhibit 10.8 to the Company’s Form 10-K for the fiscal year ended 2017 (File No. 001-34400) filed with the SEC on February 13, 2017.

June 10, 2020.
Exhibit No.10.6DescriptionMethod of Filing
10.6

.
Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on April 19, 2018.September 30, 2021.
10.7


Incorporated by reference to Exhibit 10.5 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.
10.8


Incorporated by reference to Exhibit 10.1 to Trane Inc.’s Form 8-K (File No. 001-11415) filed with the SEC on July 20, 2007.
10.9Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on December 2, 2013.
10.10*Incorporated by reference to Exhibit 4.510.9 to the Company'sCompany’s 2020 Form S-810-K (File No. 333-189446)001-34400) filed with the SEC on June 19, 2013.February 9, 2021.
10.11*Incorporated by reference to Exhibit 4.310.10 to the Company’s 2020 Form S-810-K (File No. 333-225575)001-34400) filed with the SEC on June 12, 2018.February 9, 2021.
10.12*Incorporated by reference to Exhibit 10.110.11 to the Company’s 2020 Form 10-Q for the quarter ended June 30, 201710-K (File No. 001-34400) filed with the SEC on July 26, 2017.

February 9, 2021.
Exhibit No.10.13*DescriptionMethod of Filing
10.13*Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended June 30, 2017 (File No. 001-34400) filed with the SEC on July 26, 2017.Filed herewith.
10.14*Incorporated by reference to Exhibit 10.19 to the Company’s Form 10-K for the fiscal year ended 2011 (File No. 001-34400) filed with the SEC on February 21, 2012.
10.15*
Second Amendment to IR Executive Deferred Compensation Plan II (dated December 23, 2010).
Incorporated by reference to Exhibit 10.20 to the Company’s Form 10-K for the fiscal year ended 2011 (File No. 001-16831) filed with the SEC on February 21, 2012.
10.16*
IR-plcTrane Technologies Director Deferred Compensation and Stock Award Plan (as amended and restated effective July 1, 2009)March 2, 2020).
Incorporated by reference to Exhibit 10.1110.13 to the Company’s 2020 Form 8-K10-K (File No. 001-34400) filed with the SEC on July 1, 2009.February 9, 2021.
10.17*10.15*Incorporated by reference to Exhibit 10.1210.14 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.
10.18*
Ingersoll-Rand Company Supplemental Employee Savings Plan (amended and restated effective October 1, 2012).
Incorporated by reference to exhibit 10.23 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.
10.19*
Amendment to the Ingersoll-Rand Company Supplemental Employee Savings Plan dated April 6, 2017.
Incorporated by reference to Exhibit 10.21 to the Company’s2020 Form 10-K (File No. 001-34400) filed with the SEC on February 12, 2018.9, 2021.
10.20*10.16*Incorporated by reference to Exhibit 10.15 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
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Exhibit No.DescriptionMethod of Filing
10.17*Incorporated by reference to exhibit 10.24 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.
10.21*
Amendment to the Ingersoll-Rand Company Supplemental Employee Savings Plan II dated April 6, 2017.
Incorporated by reference to Exhibit 10.2310.16 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 12, 2018.9, 2021.
10.22*10.18*Incorporated by reference to Exhibit 10.1910.17 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.
10.23*
Amendment to Trane Inc. Deferred Compensation Plan dated April 6, 2017.
Incorporated by reference to Exhibit 10.25 to the Company’s2020 Form 10-K (File No. 001-34400) filed with the SEC on February 12, 2018.9, 2021.
10.24*10.19*Incorporated by reference to Exhibit 10.2810.18 to the Company’s 2020 Form 10-K for the fiscal year ended 2008 (File No. 001-16831) filed with the SEC on March 2, 2009.

Exhibit No.DescriptionMethod of Filing
10.25*
First Amendment to the Ingersoll-Rand Company Supplemental Pension Plan, dated as of July 1, 2009.
Incorporated by reference to Exhibit 10.21 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.February 9, 2021.
10.26*10.20*Incorporated by reference to Exhibit 10.19 to the Company’s 2020 Form 10-K (File No. 001-34400) filed with the SEC on February 9, 2021.
10.21*Incorporated by reference to exhibit 10.32Exhibit 10.20 to the Company'sCompany’s 2020 Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.9, 2021.
10.27*10.22*Filed herewith.
10.28*10.23*Filed herewith.
10.29*
Description of Annual Incentive Matrix Program.
Incorporated by reference to Exhibit 10.30 to the Company’s Form 10-K (File No. 001-34400) filed with the SEC on February 12, 2018.Filed herewith.
10.30*10.24*


Incorporated by reference to Exhibit 99.1 to the Company's Form 8-K (File No. 001-16831) filed with the SEC on December 4, 2006.
10.31*10.25*Incorporated by reference to Exhibit 99.2 to the Company’s Form 8-K (File No. 001-16831) filed with the SEC on December 4, 2006.
10.32*10.26*Incorporated by reference to Exhibit 10.32 to the Company’s Form 10-Q for the period ended June 30, 2009 (File No. 001-34400) filed with the SEC on August 6, 2009.
10.33*10.27*Incorporated by reference to Exhibit 10.33 to the Company’s Form 10-Q for the period ended June 30, 2009 (File No. 001-34400) filed with the SEC on August 6, 2009.
10.34*10.28*Incorporated by reference to Exhibit 10.3510.27 to the Company’s 2020 Form 10-K for the fiscal year ended 2014 (File No. 001-34400) filed with the SEC on February 13, 2015.9, 2021.
10.35*10.29*Incorporated by reference to Exhibit 10.35 to the Company’s Form 10-K for the fiscal year ended 2003 (File No. 001-16831) filed with the SEC on February 27, 2004.
10.36*10.30*Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 001-16831) filed with the SEC on June 10, 2008.

Exhibit No.10.31*DescriptionMethod of Filing
10.37*Incorporated by reference to Exhibit 10.43 to the Company’s Form 10-K for the fiscal year ended 2008 (File No. 001-16831) filed with the SEC on March 2, 2009.
10.38*10.32*Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 5, 2010.
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10.39*Exhibit No.DescriptionMethod of Filing
10.33*Incorporated by reference to exhibitExhibit 10.48 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.
10.40*10.34Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on June 4, 2021.
10.35*Incorporated by reference to Exhibit 10.45 to the Company's Form 10-K for the fiscal year ended December 31, 2006 (File No. 001-16831) filed with the SEC on March 1, 2007.
10.41*10.36*Incorporated by reference to exhibitExhibit 10.53 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.
10.42*10.37*Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on October 2, 2013.January 6, 2022.
10.43*10.38*

Filed herewith.
10.44*
DaveDavid S. Regnery Letter, dated as of September 1, 2017.
Filed herewith.Incorporated by reference to Exhibit 10.44 to the Company’s Form 10-K for the year ended December 31, 2018 (File No. 001-34400) filed with the SEC on February 12, 2019.
10.45*10.39*Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on December 11, 2019.
10.40*Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (Filed No. 001-34400) filed with the SEC on June 4, 2021.
10.41*Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on December 10, 2019.
10.42*Filed herewith.
10.43*Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on December 2, 2013.
21Filed herewith.
23.122.1Filed herewith.
23.1Filed herewith.
31.1Filed herewith.
31.2Filed herewith.

Exhibit No.32DescriptionMethod of Filing
32Furnished herewith.
58
Table of Contents
101Exhibit No.DescriptionMethod of Filing
101The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2018,2021, formatted in XBRL (ExtensibleiXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Earnings, (ii) the Consolidated Statements of Comprehensive Income, (ii)(iii) the Consolidated Balance Sheets, (iii)(iv) the Consolidated Statements of Equity, (iv)(v) the Consolidated Statements of Cash Flows, and (v)(vi) Notes to Consolidated Financial Statements.Furnished herewith.
104Cover Page Interactive Data File (embedded within the iXBRL document and contained in Exhibit 101).Filed herewith.
* Management contract or compensatory plan or arrangement.

Item 16.FORM 10-K SUMMARY
Not applicable.

59
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INGERSOLL-RANDTRANE TECHNOLOGIES PLC
(Registrant)
 
By:/s/ Michael W. LamachDavid S. Regnery
Michael W. LamachDavid S. Regnery
ChairmanChair of the Board and Chief Executive Officer (Principal Executive Officer)
Date:February 12, 20197, 2022

60
Table of Contents
Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
SignatureTitleDate
SignatureTitleDate
/s/ Michael W. LamachDavid S. RegneryChairmanChair of the Board and Chief Executive Officer (Principal Executive Officer)February 12, 20197, 2022
(Michael W. Lamach)David S. Regnery)
/s/ Susan K. CarterChristopher J. KuehnSeniorExecutive Vice President and Chief Financial Officer (Principal Financial Officer)February 12, 20197, 2022
(Susan K. Carter)Christopher J. Kuehn)
/s/ Christopher J. KuehnHeather R. HowlettVice President and Chief Accounting Officer (Principal Accounting Officer)February 12, 20197, 2022
(Christopher J. Kuehn)Heather R. Howlett)
/s/ Kirk E. ArnoldDirectorFebruary 12, 20197, 2022
(Kirk E. Arnold)
/s/ Ann C. BerzinDirectorFebruary 12, 20197, 2022
(Ann C. Berzin)
/s/ April Miller BoiseDirectorFebruary 7, 2022
(April Miller Boise)
/s/ John BrutonDirectorFebruary 12, 20197, 2022
(John Bruton)
/s/ Jared L. CohonDirectorFebruary 12, 20197, 2022
(Jared L. Cohon)
/s/ Gary D. ForseeDirectorFebruary 12, 20197, 2022
(Gary D. Forsee)
/s/ Linda P. HudsonDirectorFebruary 12, 20197, 2022
(Linda P. Hudson)
/s/ Myles P. LeeDirectorFebruary 12, 20197, 2022
(Myles P. Lee)
/s/ Karen B. PeetzDirectorFebruary 12, 20197, 2022
(Karen B. Peetz)
/s/ John P. SurmaDirectorFebruary 12, 20197, 2022
 (John P. Surma)
/s/ Richard J. SwiftDirectorFebruary 12, 2019
(Richard J. Swift)
/s/ Tony L. WhiteDirectorFebruary 12, 20197, 2022
(Tony L. White)

61

Table of Contents
INGERSOLL-RANDTRANE TECHNOLOGIES PLC
Index to Consolidated Financial Statements
 
F-F-22
F-4
F-F-35
F-F-56
F-F-67
F-F-78
F-F-89
Schedule II – Valuation and Qualifying Accounts
F-55

F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors and Shareholders of Ingersoll-RandTrane Technologies plc
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Ingersoll-RandTrane Technologies plc and its subsidiaries(the (the “Company”)as of December 31, 20182021 and 2017,2020, and the related consolidated statements of earnings, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2018,2021, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2018 appearing under Item 16 (collectively referred to as the “consolidated financial statements”).We also have audited the Company'sCompany’s internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework(2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidatedfinancial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20182021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework(2013)issued by the COSO.
Basis for Opinions
The Company'sCompany’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control overOver Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company'sCompany’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
F-2
Table of Contents
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Fair Value Measurements of the Contingent Consideration for Farrar Scientific Corporation Acquisition
As described in Note 18 to the consolidated financial statements, the Company acquired 100% of Farrar Scientific Corporation’s (Farrar Scientific) assets. The purchase price for the acquisition was expected to be $349.9 million, comprised of the upfront cash consideration of $251.2 million and the fair value of the contingent consideration relating to an earnout payment at the time of closing the acquisition of $98.7 million. The contingent consideration is payable in 2025 based on the achievement of certain revenue targets by Farrar Scientific from January 1, 2022 through December 31, 2024. Management determines the estimated fair value of the contingent consideration liability using a Monte Carlo simulation model, which runs many iterations based on comparable companies’ revenue growth rates and their implied revenue volatilities. The estimates used to determine the fair value of the contingent consideration liability are subject to significant judgment, specifically revenue growth rates and implied revenue volatilities.
The principal considerations for our determination that performing procedures relating to the fair value measurement of the contingent consideration for the Farrar Scientific acquisition is a critical audit matter are (i) the significant judgment by management when developing the fair value of the contingent consideration; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to management's Monte Carlo simulation model and significant assumptions related to revenue growth rates and implied revenue volatilities; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s fair value of the contingent consideration, including controls over the development of significant assumptions related to revenue growth rates and implied revenue volatilities. These procedures also included, among others, (i) reading the purchase agreement, (ii) testing management’s process for developing the fair value estimate of the contingent consideration, (iii) evaluating the appropriateness of the Monte Carlo simulation model, (iv) testing the completeness and accuracy of underlying data used in the model, and (v) evaluating the significant assumptions used by management related to revenue growth rates and implied revenue volatilities. Evaluating management's assumptions related to revenue growth rates involved assessing whether the assumptions used by management were reasonable considering current and past performance of the acquired business, consistency with external market data, and whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the Monte Carlo simulation model and evaluating the appropriateness of the implied revenue volatilities assumption.
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina    
February 12, 20197, 2022
We have served as the Company’s auditor since at least 1906. We have not been able to determine the specific year we began serving as auditor of the Company.



F-3
Ingersoll-Rand plc
Consolidated Statements of Comprehensive Income
In millions, except per share amounts
For the years ended December 31, 2018 2017 2016
Net revenues $15,668.2
 $14,197.6
 $13,508.9
Cost of goods sold (10,847.6) (9,811.6) (9,307.9)
Selling and administrative expenses (2,903.2) (2,720.7) (2,597.8)
Operating income 1,917.4
 1,665.3
 1,603.2
Interest expense (220.7) (215.8) (221.5)
Other income/(expense), net (36.4) (31.6) 359.6
Earnings before income taxes 1,660.3
 1,417.9
 1,741.3
Provision for income taxes (281.3) (80.2) (281.5)
Earnings from continuing operations 1,379.0
 1,337.7
 1,459.8
Discontinued operations, net of tax (21.5) (25.4) 32.9
Net earnings 1,357.5
 1,312.3
 1,492.7
Less: Net earnings attributable to noncontrolling interests (19.9) (9.7) (16.5)
Net earnings attributable to Ingersoll-Rand plc $1,337.6
 $1,302.6
 $1,476.2
Amounts attributable to Ingersoll-Rand plc ordinary shareholders:      
Continuing operations $1,359.1
 $1,328.0
 $1,443.3
Discontinued operations (21.5) (25.4) 32.9
Net earnings $1,337.6
 $1,302.6
 $1,476.2
Earnings (loss) per share attributable to Ingersoll-Rand plc ordinary shareholders:      
Basic:      
Continuing operations $5.50
 $5.21
 $5.57
Discontinued operations (0.09) (0.10) 0.13
Net earnings $5.41
 $5.11
 $5.70
Diluted: 
 
  
Continuing operations $5.43
 $5.14
 $5.52
Discontinued operations (0.08) (0.09) 0.13
Net earnings $5.35
 $5.05
 $5.65

Table of Contents
Ingersoll-Rand plc
Consolidated Statements of Comprehensive Income (continued)
In millions, except per share amounts
For the years ended December 31, 2018 2017 2016
Net earnings $1,357.5
 $1,312.3
 $1,492.7
Other comprehensive income (loss):      
Currency translation (230.6) 450.3
 (233.8)
Cash flow hedges      
Unrealized net gains (losses) arising during period 1.2
 (1.8) 2.2
Net gains (losses) reclassified into earnings 0.9
 3.6
 (4.8)
Tax (expense) benefit (0.1) —
 0.4
Total cash flow hedges, net of tax 2.0
 1.8
 (2.2)
Pension and OPEB adjustments:      
Prior service costs for the period (16.0) (3.8) (6.2)
Net actuarial gains (losses) for the period 12.8
 39.6
 23.6
Amortization reclassified into earnings 50.7
 52.1
 57.5
Settlements/curtailments reclassified to earnings 2.5
 7.7
 2.1
Currency translation and other 7.5
 (15.4) 22.5
Tax (expense) benefit (17.2) (20.1) (23.5)
Total pension and OPEB adjustments, net of tax 40.3
 60.1
 76.0
Other comprehensive income (loss), net of tax (188.3) 512.2
 (160.0)
Comprehensive income, net of tax $1,169.2
 $1,824.5
 $1,332.7
Less: Comprehensive income attributable to noncontrolling interests (16.9) (10.2) (26.1)
Comprehensive income attributable to Ingersoll-Rand plc $1,152.3
 $1,814.3
 $1,306.6
Trane Technologies plc
Consolidated Statements of Earnings
In millions, except per share amounts
For the years ended December 31,202120202019
Net revenues
Products$9,498.8 $8,372.5 $8,968.1 
Services4,637.6 4,082.2 4,107.8 
14,136.4 12,454.7 13,075.9 
Costs and expenses
Cost of products sold(6,843.1)(6,146.3)(6,541.7)
Cost of services sold(2,823.7)(2,505.0)(2,543.8)
Selling and administrative expenses(2,446.3)(2,270.6)(2,320.3)
Operating income2,023.3 1,532.8 1,670.1 
Interest expense(233.7)(248.7)(242.8)
Other income/(expense), net1.1 4.1 (28.4)
Earnings before income taxes1,790.7 1,288.2 1,398.9 
Provision for income taxes(333.5)(296.8)(238.6)
Earnings from continuing operations1,457.2 991.4 1,160.3 
Discontinued operations, net of tax(20.6)(121.4)268.2 
Net earnings1,436.6 870.0 1,428.5 
Less: Net earnings from continuing operations attributable to noncontrolling interests(13.2)(14.2)(15.2)
Less: Net earnings from discontinuing operations attributable to noncontrolling interests— (0.9)(2.4)
Net earnings attributable to Trane Technologies plc$1,423.4 $854.9 $1,410.9 
Amounts attributable to Trane Technologies plc ordinary shareholders:
Continuing operations$1,444.0 $977.2 $1,145.1 
Discontinued operations(20.6)(122.3)265.8 
Net earnings$1,423.4 $854.9 $1,410.9 
Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:
Basic:
Continuing operations$6.05 $4.07 $4.74 
Discontinued operations(0.09)(0.51)1.10 
Net earnings$5.96 $3.56 $5.84 
Diluted:
Continuing operations$5.96 $4.02 $4.69 
Discontinued operations(0.09)(0.50)1.08 
Net earnings$5.87 $3.52 $5.77 
See accompanying notes to Consolidated Financial Statements.




Ingersoll-Rand
F-4
Table of Contents
Trane Technologies plc
Consolidated Statements of Comprehensive Income
In millions
For the years ended December 31,202120202019
Net earnings$1,436.6 $870.0 $1,428.5 
Other comprehensive income (loss):
Currency translation(122.7)261.5 (37.1)
Cash flow hedges
Unrealized net gains (losses) arising during period1.6 3.3 (2.7)
Net (gains) losses reclassified into earnings(6.4)1.9 0.7 
Tax (expense) benefit1.1 — 0.9 
Total cash flow hedges, net of tax(3.7)5.2 (1.1)
Pension and OPEB adjustments:
Prior service costs for the period0.3 (1.9)(5.7)
Net actuarial gains (losses) for the period111.4 (52.5)(41.9)
Amortization reclassified into earnings38.6 43.4 48.1 
Net curtailment and settlement (gains) losses reclassified to earnings8.0 (1.8)2.2 
Currency translation and other5.2 (10.4)(1.4)
Tax (expense) benefit(43.7)(0.7)(4.7)
Total pension and OPEB adjustments, net of tax119.8 (23.9)(3.4)
Other comprehensive income (loss), net of tax(6.6)242.8 (41.6)
Comprehensive income, net of tax$1,430.0 $1,112.8 $1,386.9 
Less: Comprehensive income attributable to noncontrolling interests(12.7)(17.8)(18.5)
Comprehensive income attributable to Trane Technologies plc$1,417.3 $1,095.0 $1,368.4 
See accompanying notes to Consolidated Financial Statements.
F-5
Table of Contents
Trane Technologies plc
Consolidated Balance Sheets
In millions, except share amounts
December 31, 2018 2017December 31,20212020
ASSETS    ASSETS
Current assets:    Current assets:
Cash and cash equivalents $903.4
 $1,549.4
Cash and cash equivalents$2,159.2 $3,289.9 
Accounts and notes receivable, net 2,679.2
 2,477.4
Accounts and notes receivable, net2,429.4 2,202.1 
Inventories, net 1,677.8
 1,555.4
InventoriesInventories1,530.8 1,189.2 
Other current assets 471.6
 536.9
Other current assets351.5 224.4 
Total current assets 5,732.0
 6,119.1
Total current assets6,470.9 6,905.6 
Property, plant and equipment, net 1,730.8
 1,551.3
Property, plant and equipment, net1,398.8 1,349.5 
Goodwill 5,959.5
 5,935.7
Goodwill5,504.8 5,342.8 
Intangible assets, net 3,634.7
 3,742.9
Intangible assets, net3,305.6 3,286.4 
Other noncurrent assets 857.9
 824.3
Other noncurrent assets1,379.7 1,272.4 
Total assets $17,914.9
 $18,173.3
Total assets$18,059.8 $18,156.7 
LIABILITIES AND EQUITY    LIABILITIES AND EQUITY
Current liabilities:    Current liabilities:
Accounts payable $1,705.3
 $1,556.1
Accounts payable$1,787.3 $1,520.2 
Accrued compensation and benefits 531.6
 509.7
Accrued compensation and benefits544.8 451.1 
Accrued expenses and other current liabilities 1,728.2
 1,655.2
Accrued expenses and other current liabilities2,069.9 1,592.0 
Short-term borrowings and current maturities of long-term debt 350.6
 1,107.0
Short-term borrowings and current maturities of long-term debt350.4 775.6 
Total current liabilities 4,315.7
 4,828.0
Total current liabilities4,752.4 4,338.9 
Long-term debt 3,740.7
 2,957.0
Long-term debt4,491.7 4,496.5 
Postemployment and other benefit liabilities 1,192.9
 1,285.3
Postemployment and other benefit liabilities810.9 1,024.6 
Deferred and noncurrent income taxes 538.4
 757.5
Deferred and noncurrent income taxes581.5 578.5 
Other noncurrent liabilities 1,062.4
 1,138.6
Other noncurrent liabilities1,150.2 1,291.1 
Total liabilities 10,850.1
 10,966.4
Total liabilities11,786.7 11,729.6 
Equity:    Equity:
Ingersoll-Rand plc shareholders’ equity    
Ordinary shares, $1 par value (266,405,347 and 273,980,824 shares issued at December 31, 2018 and 2017, respectively) 266.4
 274.0
Ordinary shares held in treasury, at cost (24,500,054 and 24,501,667 shares at December 31, 2018 and 2017, respectively) (1,719.4) (1,719.4)
Capital in excess of par value —
 461.3
Trane Technologies plc shareholders’ equityTrane Technologies plc shareholders’ equity
Ordinary shares, $1.00 par value (259,695,768 and 263,309,250 shares issued at December 31, 2021 and 2020, respectively)Ordinary shares, $1.00 par value (259,695,768 and 263,309,250 shares issued at December 31, 2021 and 2020, respectively)259.7 263.3 
Ordinary shares held in treasury, at cost (24,500,935 and 24,500,862 shares at December 31, 2021 and 2020, respectively)Ordinary shares held in treasury, at cost (24,500,935 and 24,500,862 shares at December 31, 2021 and 2020, respectively)(1,719.4)(1,719.4)
Retained earnings 9,439.8
 8,903.2
Retained earnings8,353.2 8,495.3 
Accumulated other comprehensive loss (964.1) (778.8)
Total Ingersoll-Rand plc shareholders’ equity 7,022.7
 7,140.3
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)(637.6)(631.5)
Total Trane Technologies plc shareholders’ equityTotal Trane Technologies plc shareholders’ equity6,255.9 6,407.7 
Noncontrolling interest 42.1
 66.6
Noncontrolling interest17.2 19.4 
Total equity 7,064.8
 7,206.9
Total equity6,273.1 6,427.1 
Total liabilities and equity $17,914.9
 $18,173.3
Total liabilities and equity$18,059.8 $18,156.7 
See accompanying notes to Consolidated Financial Statements.



Ingersoll-Rand
F-6

Trane Technologies plc
Consolidated Statements of Equity
Trane Technologies plc shareholders’ equity
In millions, except per share amountsTotal
equity		Ordinary sharesOrdinary shares held in treasury, at costCapital in
excess of
par value		Retained
earnings		Accumulated  other
comprehensive
income (loss)		Noncontrolling Interest
Amount at par valueShares
Balance at December 31, 2018$7,064.8 $266.4 266.4 $(1,719.4)$— $9,439.8 $(964.1)$42.1 
Net earnings1,428.5 — — — — 1,410.9 — 17.6 
Other comprehensive income (loss)(41.6)— — — — — (42.5)0.9 
Shares issued under incentive stock plans72.5 2.8 2.8 — 69.7 — — — 
Repurchase of ordinary shares(750.1)(6.4)(6.4)— (136.1)(607.6)— — 
Share-based compensation63.5 — — — 66.4 (2.9)— — 
Dividends declared to noncontrolling interest(15.8)— — — — — — (15.8)
Cash dividends declared ($2.12 per share)(509.5)— — — — (509.5)— — 
Other0.1 — — — — 0.1 — — 
Balance at December 31, 2019$7,312.4 $262.8 262.8 $(1,719.4)$— $9,730.8 $(1,006.6)$44.8 
Net earnings870.0 — — — — 854.9 — 15.1 
Other comprehensive income (loss)242.8 — — — — — 240.1 2.7 
Shares issued under incentive stock plans64.5 2.3 2.3 — 62.2 — — — 
Repurchase of ordinary shares(250.0)(1.8)(1.8)— (135.6)(112.6)— — 
Share-based compensation66.3 — — — 69.5 (3.2)— — 
Dividends declared to noncontrolling interest(18.3)— — — — — — (18.3)
Investment by joint venture partner7.0 — — — 3.9 — — 3.1 
Cash dividends declared ($2.12 per share)(507.7)— — — — (507.7)— — 
Separation of Ingersoll Rand Industrial(1,359.9)— — — — (1,466.9)135.0 (28.0)
Balance at December 31, 2020$6,427.1 $263.3 263.3 $(1,719.4)$— $8,495.3 $(631.5)$19.4 
Net earnings1,436.6 — — — — 1,423.4 — 13.2 
Other comprehensive income (loss)(6.6)— — — — — (6.1)(0.5)
Shares issued under incentive stock plans78.3 2.3 2.3 — 76.0 — — — 
Repurchase of ordinary shares(1,100.3)(5.9)(5.9)— (142.5)(951.9)— — 
Share-based compensation63.6 — — — 66.4 (2.8)— — 
Dividends declared to noncontrolling interest(14.9)— — — — — — (14.9)
Cash dividends declared ($2.36 per share)(561.8)— — — — (561.8)— — 
Separation of Ingersoll Rand Industrial(49.0)— — — — (49.0)— — 
Other0.1 — — — 0.1 — — — 
Balance at December 31, 2021$6,273.1 $259.7 259.7 $(1,719.4)$— $8,353.2 $(637.6)$17.2 
    Ingersoll-Rand plc shareholders’ equity  
In millions, except per share amounts 
Total
equity
 Ordinary shares Ordinary shares held in treasury, at cost 
Capital in
excess of
par value
 
Retained
earnings
 
Accumulated  other
comprehensive
income (loss)
 Noncontrolling Interest
  Amount Shares     
Balance at December 31, 2015 $5,879.2
 $269.0
 269.0
 $(452.6) $223.3
 $6,897.9
 $(1,120.9) $62.5
Net earnings 1,492.7
 —
 —
 —
 —
 1,476.2
 —
 16.5
Other comprehensive income (loss) (160.0) —
 —
 —
 —
 —
 (169.6) 9.6
Shares issued under incentive stock plans 60.4
 2.7
 2.7
 —
 57.7
 —
 —
 —
Repurchase of ordinary shares (250.1) —
 —
 (250.1) —
 —
 —
 —
Share-based compensation 61.6
 —
 —
 —
 66.0
 (4.4) —
 —
Dividends declared to noncontrolling interest (14.1) —
 —
 —
 —
 —
 —
 (14.1)
Cash dividends declared ($1.36 per share) (351.0) —
 —
 —
 —
 (351.0) —
 —
Other (0.4) —
 —
 —
 (0.5) 0.1
 —
 —
Balance at December 31, 2016 $6,718.3
 $271.7
 271.7
 $(702.7) $346.5
 $8,018.8
 $(1,290.5) $74.5
Net earnings 1,312.3
 —
 —
 —
 —
 1,302.6
 —
 9.7
Other comprehensive income (loss) 512.2
 —
 —
 —
 —
 —
 511.7
 0.5
Shares issued under incentive stock plans 51.2
 2.3
 2.3
 —
 48.9
 —
 —
 —
Repurchase of ordinary shares (1,016.9) —
 —
 (1,016.9) —
 —
 —
 —
Share-based compensation 67.9
 —
 —
 —
 70.8
 (2.9) —
 —
Dividends declared to noncontrolling interest (15.8) —
 —
 —
 —
 —
 —
 (15.8)
Adoption of ASU 2016-09 (See Note 2) 15.1
 —
 —
 —
 —
 15.1
 —
 —
Acquisition/divestiture of noncontrolling interest (7.3) —
 —
 —
 (5.0) —
 —
 (2.3)
Cash dividends declared ($1.70 per share) (430.2) —
 —
 —
 —
 (430.2) —
 —
Other 0.1
 —
 —
 0.2
 0.1
 (0.2) —
 —
Balance at December 31, 2017 $7,206.9
 $274.0
 274.0
 $(1,719.4) $461.3
 $8,903.2
 $(778.8) $66.6
Net earnings 1,357.5
 —
 —
 —
 —
 1,337.6
 —
 19.9
Other comprehensive income (loss) (188.3) —
 —
 —
 —
 —
 (185.3) (3.0)
Shares issued under incentive stock plans 43.1
 2.1
 2.1
 —
 41.0
 —
 —
 —
Repurchase of ordinary shares (900.2) (9.7) (9.7) —
 (581.2) (309.3) —
 —
Share-based compensation 74.7
 —
 —
 —
 78.8
 (4.1) —
 —
Dividends declared to noncontrolling interest (41.4) —
 —
 —
 —
 —
 —
 (41.4)
Adoption of ASU 2014-09 (See Note 2) 2.4
 —
 —
 —
 —
 2.4
 —
 —
Adoption of ASU 2016-16 (See Note 2) (9.1) —
 —
 —
 —
 (9.1) —
 —
Cash dividends declared ($1.96 per share) (480.8) —
 —
 —
 —
 (480.8) —
 —
Other —
 —
 —
 —
 0.1
 (0.1) —
 —
Balance at December 31, 2018 $7,064.8
 $266.4
 266.4
 $(1,719.4) $—
 $9,439.8
 $(964.1) $42.1
See accompanying notes to Consolidated Financial Statements.

F-7
Ingersoll-Rand
Table of Contents
Trane Technologies plc
Consolidated Statements of Cash Flows
In millions

For the years ended December 31, 2018 2017 2016For the years ended December 31,202120202019
Cash flows from operating activities:      Cash flows from operating activities:
Net earnings $1,357.5
 $1,312.3
 $1,492.7
Net earnings$1,436.6 $870.0 $1,428.5 
Discontinued operations, net of tax 21.5
 25.4
 (32.9)Discontinued operations, net of tax20.6 121.4 (268.2)
Adjustments for non-cash transactions:      Adjustments for non-cash transactions:
Asset impairment —
 8.4
 —
Depreciation and amortization 361.5
 353.3
 352.2
Depreciation and amortization299.4 294.3 288.8 
Gain on sale of Hussmann equity investment —
 —
 (397.8)
Gain on sale of joint venture —
 (1.5) —
Pension and other postretirement benefitsPension and other postretirement benefits50.8 68.8 96.3 
Stock settled share-based compensationStock settled share-based compensation66.5 69.5 66.4 
Other non-cash items, net (78.5) (55.8) 35.6
Other non-cash items, net(36.4)(1.5)(17.8)
Changes in other assets and liabilities      
Changes in other assets and liabilities, net of the effects of acquisitions:Changes in other assets and liabilities, net of the effects of acquisitions:
Accounts and notes receivable (236.0) (156.7) (101.3)Accounts and notes receivable(265.4)5.9 (77.8)
Inventories (169.9) (112.4) 26.8
Inventories(348.8)109.0 3.9 
Other current and noncurrent assets 35.3
 (206.8) (24.5)Other current and noncurrent assets(153.8)29.7 (245.8)
Accounts payable 120.7
 167.2
 103.6
Accounts payable275.3 75.8 93.2 
Other current and noncurrent liabilities 62.4
 228.2
 (21.4)Other current and noncurrent liabilities249.6 123.3 156.2 
Net cash provided by (used in) continuing operating activities 1,474.5
 1,561.6
 1,433.0
Net cash provided by (used in) continuing operating activities1,594.4 1,766.2 1,523.7 
Net cash provided by (used in) discontinued operating activities (66.7) (38.1) 88.9
Net cash provided by (used in) discontinued operating activities(6.1)(331.2)395.8 
Net cash provided by (used in) operating activities 1,407.8
 1,523.5
 1,521.9
Net cash provided by (used in) operating activities1,588.3 1,435.0 1,919.5 
Cash flows from investing activities:      Cash flows from investing activities:
Capital expenditures (365.6) (221.3) (182.7)Capital expenditures(223.0)(146.2)(205.4)
Acquisitions and equity method investments, net of cash acquired (285.2) (157.6) (9.2)Acquisitions and equity method investments, net of cash acquired(269.2)(182.8)(83.4)
Proceeds from sale of property, plant and equipment 22.1
 1.5
 9.5
Proceeds from sale of property, plant and equipment15.1 0.1 2.2 
Proceeds from sale of Hussmann equity investment —
 —
 422.5
Deconsolidation of certain entities under Chapter 11Deconsolidation of certain entities under Chapter 11— (10.8)— 
Other investing activities, net (0.7) 2.7
 —
Other investing activities, net(68.6)1.2 4.8 
Net cash provided by (used in) continuing investing activitiesNet cash provided by (used in) continuing investing activities(545.7)(338.5)(281.8)
Net cash provided by (used in) discontinued investing activitiesNet cash provided by (used in) discontinued investing activities— (37.7)(1,498.2)
Net cash provided by (used in) investing activities (629.4) (374.7) 240.1
Net cash provided by (used in) investing activities(545.7)(376.2)(1,780.0)
Cash flows from financing activities:      Cash flows from financing activities:
Short-term borrowings (payments), net (6.4) (4.0) (150.7)
Proceeds from long-term debt 1,147.0
 —
 —
Proceeds from long-term debt— — 1,497.9 
Payments of long-term debt (1,123.0) (7.7) —
Payments of long-term debt(432.5)(307.5)(7.5)
Net proceeds (repayments) of debt 17.6
 (11.7) (150.7)
Net proceeds from (payments of) debtNet proceeds from (payments of) debt(432.5)(307.5)1,490.4 
Debt issuance costs (12.0) (0.2) (2.1)Debt issuance costs(2.7)(3.6)(13.1)
Dividends paid to ordinary shareholders (479.5) (430.1) (348.6)Dividends paid to ordinary shareholders(561.1)(507.3)(510.1)
Dividends paid to noncontrolling interests (41.4) (15.8) (14.1)Dividends paid to noncontrolling interests(14.9)(18.3)(15.8)
Acquisition of noncontrolling interest —
 (6.8) —
Proceeds from shares issued under incentive plans 68.9
 76.7
 62.9
Proceeds (payments) from shares issued under incentive plans, netProceeds (payments) from shares issued under incentive plans, net78.3 64.5 72.5 
Repurchase of ordinary shares (900.2) (1,016.9) (250.1)Repurchase of ordinary shares(1,100.3)(250.0)(750.1)
Receipt of / (Settlement related to) special cash paymentReceipt of / (Settlement related to) special cash payment(49.5)1,900.0 — 
Other financing activities, net (32.2) (27.7) (24.2)Other financing activities, net(44.9)6.5 (1.8)
Net cash provided by (used in) continuing financing activitiesNet cash provided by (used in) continuing financing activities(2,127.6)884.3 272.0 
Net cash provided by (used in) discontinued financing activitiesNet cash provided by (used in) discontinued financing activities— — (1.5)
Net cash provided by (used in) financing activities (1,378.8) (1,432.5) (726.9)Net cash provided by (used in) financing activities(2,127.6)884.3 270.5 
Effect of exchange rate changes on cash and cash equivalents (45.6) 118.4
 (57.2)Effect of exchange rate changes on cash and cash equivalents(45.7)68.2 (9.8)
Net increase (decrease) in cash and cash equivalents (646.0) (165.3) 977.9
Net increase (decrease) in cash and cash equivalents(1,130.7)2,011.3 400.2 
Cash and cash equivalents – beginning of period 1,549.4
 1,714.7
 736.8
Cash and cash equivalents – beginning of period3,289.9 1,278.6 878.4 
Cash and cash equivalents – end of period $903.4
 $1,549.4
 $1,714.7
Cash and cash equivalents – end of period$2,159.2 $3,289.9 $1,278.6 
Cash paid during the year for:      Cash paid during the year for:
Interest $200.6
 $210.0
 $209.3
Interest$234.9 $243.5 $220.9 
Income taxes, net of refunds $375.4
 $286.7
 $334.3
Income taxes, net of refunds$356.9 $151.6 $425.3 
See accompanying notes to Consolidated Financial Statements.

F-8
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF COMPANY
Ingersoll-Rand plc (Plc or Parent Company), aTrane Technologies, public limited company (plc), incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively we, our, the Company) is a diversified, global company that providesclimate innovator. The Company brings sustainable and efficient solutions to buildings, homes and transportation through the Company's strategic brands, Trane® and Thermo King®, and its environmentally responsible portfolio of products, services and solutions to enhance the quality, energy efficiency and comfort of air in homes and buildings, transport and protect food and perishables and increase industrial productivity and efficiency. The Company's business segments consist of Climate and Industrial, both with strong brands and highly differentiated products within their respective markets.connected intelligent controls. The Company generates revenue and cash primarily through the design, manufacture, salesales and service of solutions for Heating, Ventilation and Air Conditioning (HVAC) and transport refrigeration. As an industry leader with an extensive global install base, the Company's growth strategy includes expanding recurring revenue through services and rental options.
COVID-19 Global Pandemic
In March 2020, the World Health Organization declared COVID-19 a diverse portfolioglobal pandemic and recommended containment and mitigation measures worldwide. During the first half of industrial2020, the COVID-19 global pandemic adversely impacted the Company's business globally including, but not limited to, lower end customer demand, certain supply chain delays, temporary facility closures and commerciallimitations of the Company's workforce to essential crews only. In response, the Company proactively initiated cost cutting actions and actively managed its supply chain in an effort to mitigate the impact of the global pandemic on its business. Despite the challenges set forth by the COVID-19 global pandemic, the Company continued to sell, install and service its products, invest in its businesses, develop and launch new products and deliver innovative customer solutions for electrification of heating, cooling and transport, enhanced indoor air quality, and precise temperature control along the full vaccine cold chain.
During the year ended December 31, 2021, the Company experienced significant increases in end market demand, executed price increases to cover rapidly increasing material, component and logistics costs and realized strong earnings growth as a result of strong execution across its organization. In addition, to meet the Company's increased customer demand, the Company is proactively managing industry-wide supply chain and resource constraints and is working closely with its suppliers, customers and logistics providers to mitigate the impacts on its business as the Company continues to sell, install and service its products.
The Company will continue to monitor the ongoing COVID-19 global pandemic as it evolves and will assess any potential impacts to its business and financial statements as necessary.
Completion of Reverse Morris Trust Transaction
On February 29, 2020 (Distribution Date), the Company completed its Reverse Morris Trust transaction (the Transaction) with Gardner Denver Holdings, Inc. (Gardner Denver) whereby the Company separated its former Industrial segment (Ingersoll Rand Industrial) through a pro rata distribution to shareholders of record as of February 24, 2020. Ingersoll Rand Industrial then merged into a wholly-owned subsidiary of Gardner Denver, which changed its name to Ingersoll Rand Inc. (Ingersoll Rand). Upon close of the Transaction, the Company’s existing shareholders received 50.1% of the shares of Ingersoll Rand common stock on a fully-diluted basis and Gardner Denver stockholders retained 49.9% of the shares of Ingersoll Rand on a fully diluted basis. As a result, the Company’s shareholders received .8824 shares of Ingersoll Rand common stock with respect to each share owned as of February 24, 2020. In connection with the Transaction, the Company received a special cash payment of $1.9 billion.
During the year ended December 31, 2021, the the Company paid Ingersoll Rand $49.5 million to settle certain items related to the Transaction. This payment was related to working capital, cash and indebtedness amounts as of the Distribution Date, as well as funding levels related to pension plans, non-qualified deferred compensation plans and retiree health benefits. The Company recorded the settlement as a reduction to Retained earnings during the first quarter of 2021.
Discontinued Operations
After the Distribution Date, the Company does not beneficially own any Ingersoll Rand Industrial shares of common stock and no longer consolidates Ingersoll Rand Industrial in its financial statements. The historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Consolidated Statements of Earnings and Consolidated Statements of Cash Flows.
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Table of Contents
Reorganization of Aldrich and Murray
On May 1, 2020, certain subsidiaries of the Company underwent an internal corporate restructuring that include well-recognized, premium brand names such as Ingersoll-Rand®was effectuated through a series of transactions (2020 Corporate Restructuring). As a result, Aldrich Pump LLC (Aldrich) and Murray Boiler LLC (Murray), indirect wholly-owned subsidiaries of Trane Technologies plc, became solely responsible for the asbestos-related liabilities, and the beneficiaries of the asbestos-related insurance assets, of Trane Technologies Company LLC and Trane U.S. Inc, respectively. On a consolidated basis, the 2020 Corporate Restructuring did not have an impact on the Consolidated Financial Statements. In connection with the 2020 Corporate Restructuring, certain subsidiaries of the Company entered into funding agreements with Aldrich and Murray (collectively the Funding Agreements), pursuant to which those subsidiaries are obligated, among other things, to pay the costs and expenses of Aldrich and Murray during the pendency of the Chapter 11 cases to the extent distributions from their respective subsidiaries are insufficient to do so and to provide an amount for the funding for a trust established pursuant to section 524(g) of the Bankruptcy Code, to the extent that the other assets of Aldrich and Murray are insufficient to provide the requisite trust funding.
On June 18, 2020 (Petition Date), Aldrich and Murray filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the Western District of North Carolina (the Bankruptcy Court) to resolve equitably and permanently all current and future asbestos related claims in a manner beneficial to claimants, Aldrich and Murray. As a result of the Chapter 11 filings, all asbestos-related lawsuits against Aldrich and Murray have been stayed due to the imposition of a statutory automatic stay applicable in Chapter 11 bankruptcy cases. Only Aldrich and Murray have filed for Chapter 11 relief. Neither Aldrich's wholly-owned subsidiary, 200 Park, Inc. (200 Park), Murray's wholly-owned subsidiary, ClimateLabs LLC (ClimateLabs), Trane®, Thermo King®, American Standard®, ARO®, Technologies plc nor its other subsidiaries (the Trane Companies) are part of the Chapter 11 filings. The Trane Companies are expected to continue to operate as usual, with no disruption to their employees, suppliers, or customers globally. However, as of thePetition Date, Aldrich and Club Car®.its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated and their respective assets and liabilities were derecognized from the Company's Consolidated Financial Statements. Refer to Note 21, "Commitments and Contingencies," for more information regarding the Chapter 11 bankruptcy and asbestos-related matters.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies used in the preparation of the accompanying Consolidated Financial Statements follows:
Basis of Presentation:  The accompanying Consolidated Financial Statements reflect the consolidated operations of the Company and have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) as defined by the Financial Accounting Standards Board (FASB) within the FASB Accounting Standards Codification (ASC). Intercompany accounts and transactions have been eliminated. The assets, liabilities, results of operations and cash flows of all discontinued operations have been separately reported as discontinued operations for all periods presented. Certain reclassificationsNet revenues and cost of amountsgoods sold reported in prior periodson the Consolidated Statements of Earnings have been maderevised for the years ended December 31, 2020 and 2019 to conform with the current period presentation. The Company has revised its supplemental cash flow information in prior years to properly reflect cash paid during the year for interest.separately present net revenues of products and services and cost of products and services. These presentation adjustments had no impact on Earnings from continuing operations or Net earnings.
The Consolidated Financial Statements include all majority-owned subsidiaries of the Company. A noncontrolling interest in a subsidiary is considered an ownership interest in a majority-owned subsidiary that is not attributable to the parent. The Company includes Noncontrolling interest as a component of Total equity in the Consolidated Balance SheetSheets and the Net earnings attributable to noncontrolling interests are presented as an adjustment from Net earnings used to arrive at Net earnings attributable to Ingersoll-RandTrane Technologies plc in the Consolidated StatementStatements of Comprehensive Income. Partially-owned equity affiliates represent 20-50% ownership interests in investments where the Company demonstrates significant influence, but does not have a controlling financial interest. Partially-owned equity affiliates are accounted for under the equity method.Earnings.
Use of Estimates:  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates are based on several factors including the facts and circumstances available at the time the estimates are made, historical experience, risk of loss, general economic conditions and trends, and the assessment of the probable future outcome. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the statementConsolidated Statements of operationsEarnings in the period that they are determined.
Currency Translation:  Assets and liabilities of non-U.S. subsidiaries, where the functional currency is not the U.S. dollar, have been translated at year-end exchange rates, and income and expense accounts have been translated using average exchange rates throughout the year. Adjustments resulting from the process of translating an entity’s financial statements into the U.S. dollar have been recorded in the equity section of the Consolidated Balance SheetSheets within Accumulated other comprehensive income (loss). Transactions that are denominated in a currency other than an entity’s functional currency are subject to changes in exchange rates with the resulting gains and losses recorded within Net earnings.Other income/(expense), net.
F-10
Table of Contents
Cash and Cash Equivalents:  Cash and cash equivalents include cash on hand, demand deposits and all highly liquid investments with original maturities at the time of purchase of three months or less. The Company maintains amounts on deposit at various financial institutions, which may at times exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions and has not experienced any losses on such deposits.
Allowance for Doubtful AccountsCredit Losses: The Company maintains an allowance for doubtful accounts receivablecredit losses which represents the best estimate of probableexpected loss inherent in the Company's accounts receivable portfolio. This estimate is based upon a two-step policy that results in the total recorded allowance for doubtful accounts.credit losses. The first step is to record a portfolio reserve based on the aging of the outstanding accounts receivable portfolio and the Company's historical experience with the Company's end markets, customer base and products. The second step is to create a specific reserve for significant accounts as to which the customer's ability to satisfy their financial obligation to the Company is in doubt due to circumstances such as bankruptcy, deteriorating operating results or financial position. In these circumstances, management uses its judgment to record an allowance based on the best estimate of probableexpected loss, factoring in such considerations as the market value of collateral, if applicable. Actual results could differ from those estimates. These estimates and assumptions are reviewed periodically, and the effects of changes, if any, are

reflected in the Consolidated StatementStatements of Comprehensive IncomeEarnings in the period that they are determined. The Company reserved $32.7Company's allowance for credit losses was $39.9 million and $26.9$40.0 million for doubtful accounts as of December 31, 20182021 and 2017,2020, respectively.
Inventories:  Depending on the business, U.S. inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method or the lower of cost or marketand net realizable value (NRV) using the first-in, first-out (FIFO) method. Non-U.S. inventories are primarily stated at the lower of cost or marketand NRV using the FIFO method. At December 31, 20182021 and 2017,2020, approximately 56%54% and 51%60%, respectively, of all inventory utilized the LIFO method.
Property, Plant and Equipment:  Property, plant and equipment are stated at cost, less accumulated depreciation. Assets placed in service are recorded at cost and depreciated using the straight-line method over the estimated useful life of the asset except for leasehold improvements, which are depreciated over the shorter of their economic useful life or their lease term. The range of useful lives used to depreciate property, plant and equipment is as follows:
Buildings10to50years
Machinery and equipment2to12years
Software2to7years
Major expenditures for replacements and significant improvements that increase asset values and extend useful lives are also capitalized. Capitalized costs are amortized over their estimated useful lives using the straight-line method. Repairs and maintenance expenditures that do not extend the useful life of the asset are charged to expense as incurred. The carrying amounts of assets that are sold or retired and the related accumulated depreciation are removed from the accounts in the year of disposal, and any resulting gain or loss is reflected within current earnings.
Per ASC 360, "Property, Plant, and Equipment," (ASC 360) theThe Company assesses the recoverability of the carrying value of its property, plant and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset group to the future net undiscounted cash flows expected to be generated by the asset group. If the undiscounted cash flows are less than the carrying amount of the asset group, an impairment loss is recognized for the amount by which the carrying value of the asset group exceeds the fair value of the asset group.
Goodwill and Intangible Assets:  The Company records as goodwill the excess of the purchase price over the fair value of the net assets acquired in a business combination. In accordance with ASC 350, "Intangibles-Goodwill and Other," (ASC 350) goodwillMeasurement period adjustments may be recorded once a final valuation has been performed. Goodwill and other indefinite-lived intangible assets are tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset is more likely than not less than the carrying amount of the asset. In addition, an interim impairment test is completed upon a triggering event or when there is a reorganization of reporting structure or disposal of all or a portion of a reporting unit.
Impairment of goodwill is assessed at the reporting unit level and begins with an optional qualitative assessment to determine if it is more likely than not that the fair value of each reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test under ASC 350.test. For those reporting units that bypass or fail the qualitative assessment, the test compares the carrying amount of the reporting unit to its estimated fair value. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. To the extent that the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss will be recognized for the amount by which the reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.
F-11
Table of Contents
Intangible assets such as patents, customer-related intangible assets and other intangible assets with finite useful lives are amortized on a straight-line basis over their estimated economic lives. The weighted-average useful lives approximate the following:
Customer relationships16years
Customer relationshipsOther208years
Completed technology/patents10years
Other20years
The Company assesses the recoverability of the carrying value of its intangible assets with finite useful lives whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset group to the future net undiscounted cash flows expected to be generated by the asset group. If the undiscounted cash flows are less than the carrying amount of the asset group, an impairment loss is recognized for the amount by which the carrying value of the asset group exceeds the fair value of the asset group.
Business Combinations: Acquisitions that meet the definition of a business combination are recorded using the acquisition method of accounting. The Company includes the operating results of acquired entities from their respective dates of acquisition. The Company recognizes and measures the identifiable assets acquired, liabilities assumed, including contingent consideration relating to earnout provisions, and any non-controlling interest as of the acquisition date fair value. The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed and any non-controlling interest is recognized as goodwill. Costs incurred as a result of a business combination other than costs related to the issuance of debt or equity securities are recorded in the period the costs are incurred. Additionally, at each reporting period, contingent consideration is remeasured to fair value, with changes recorded in Selling and administrative expenses in the Consolidated Statements of Earnings.
Equity Investments: Partially-owned equity affiliates generally represent 20-50% ownership interests in equity investments where the Company demonstrates significant influence, but does not have a controlling financial interest. Partially-owned equity affiliates are accounted for under the equity method.
The Company invests in companies that complement existing products and services further enhancing its product portfolio. The Company records equity investments for which it does not have significant influence and without a readily determinable fair value at cost with adjustments for observable changes in price or impairment as permitted by the measurement alternative. Investments for which the measurement alternative has been elected are assessed for impairment upon a triggering event. Equity investments without a readily determinable fair value were $115.6 million and $54.1 million for the years ended December 31, 2021 and December 31, 2020, respectively.
Employee Benefit Plans: The Company provides a range of benefits, including pensions, postretirement and postemployment benefits to eligible current and former employees. Determining the cost associated with such benefits is dependent on various actuarial assumptions, including discount rates, expected return on plan assets, compensation increases, mortality, turnover rates, and healthcare cost trend rates. Actuaries perform the required calculations to determine expense in accordance with GAAP. Actual results may differ from the actuarial assumptions and are generally accumulated into Accumulated other comprehensive income

(loss) and amortized into Net earnings over future periods. The Company reviews its actuarial assumptions at each measurement date and makes modifications to the assumptions based on current rates and trends, if appropriate.
Loss Contingencies:  Liabilities are recorded for various contingencies arising in the normal course of business, including litigation and administrative proceedings, environmental matters, product liability, product warranty, worker’s compensation and other claims.business. The Company has recorded reserves in the financial statements related to these matters, which are developed using input derived from actuarial estimates and historical and anticipated experience data depending on the nature of the reserve, and in certain instances with consultation of legal counsel, internal and external consultants and engineers. Subject to the uncertainties inherent in estimating future costs for these types of liabilities, the Company believes its estimated reserves are reasonable and does not believe the final determination of the liabilities with respect to these matters would have a material effect on the financial condition, results of operations, liquidity or cash flows of the Company for any year.
Environmental Costs:  The Company is subject to laws and regulations relating to protecting the environment. Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and can be reasonably estimated, generally no later than the completion of feasibility studies or the Company’s commitment to a plan of action. The assessment of this liability, which is calculated based on existing remediation technology, does not reflect any offset for possible recoveries from insurance companies, and is not discounted.
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Asbestos Matters:  CertainPrior to the Petition Date, certain of the Company's wholly-owned subsidiaries and former companies arewere named as defendants in asbestos-related lawsuits in state and federal courts. The Company recordsrecorded a liability for actual and anticipated future claims as well as an asset for anticipated insurance settlements. Asbestos-related defense costs arewere excluded from the asbestos claims liability and arewere recorded separately as services arewere incurred. None of the Company's existing or previously-owned businesses were a producer or manufacturer of asbestos. The Company recordsrecorded certain income and expenses associated with asbestos liabilities and corresponding insurance recoveries within discontinuedDiscontinued operations, net of tax, as they relaterelated to previously divested businesses, except for amounts associated with Trane U.S. Inc.’sthe predecessor of Murray's asbestos liabilities and corresponding insurance recoveries, which arewere recorded within continuing operations.
Product Warranties:  Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. The Company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available. The Company's extended warranty liability represents the deferred revenue associated with its extended warranty contracts and is amortized into Revenuerevenue on a straight-line basis over the life of the contract, unless another method is more representative of the costs incurred. The Company assesses the adequacy of its liability by evaluating the expected costs under its existing contracts to ensure these expected costs do not exceed the extended warranty liability.
Income Taxes:  Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. The Company recognizes future tax benefits, such as net operating losses and tax credits, to the extent that realizing these benefits is considered in its judgment to be more likely than not. The Company regularly reviews the recoverability of its deferred tax assets considering its historic profitability, projected future taxable income, timing of the reversals of existing temporary differences and the feasibility of its tax planning strategies. Where appropriate, the Company records a valuation allowance with respect to a future tax benefit.
Revenue Recognition:  Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of the Company's revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of the Company's revenues are recognized over time as the customer simultaneously receives control as the Company performs work under a contract. For these arrangements, the cost-to-cost input method is used as it best depicts the transfer of control to the customer that occurs as the Company incurs costs. See Note 1112 to the Consolidated Financial Statements for additional information regarding revenue recognition.
Research and Development Costs: The Company conducts research and development activities focused on product and system sustainability improvements such as increasing energy efficiency, developing products that allow for the purposeuse of developing and improving newlower global warming potential refrigerants, reducing material content in products, and services.designing products for circularity. These expenditures are expensed when incurred. For the years ended December 31, 2018, 20172021, 2020 and 2016,2019, these expenditures amounted to $228.7$193.5 million, $210.8$165.0 million and $207.9$174.2 million, respectively.
Recent Accounting Pronouncements
The FASB ASC is the sole source of authoritative GAAP other than the Securities and Exchange Commission (SEC) issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting StandardsStandard Update (ASU) to communicate changes to the codification. The Company considers the applicability and impact of all ASU's. ASU's not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements.

Recently Adopted Accounting Pronouncements
In August 2017,October 2021, the FASB issued ASU 2017-12, "Derivatives2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and hedging (Topic 815): Targeted improvementsContract Liabilities from Contracts with Customers” (ASU 2021-08), which requires contract assets and contract liabilities acquired in a business combination to accountingbe recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers” (ASC 606). ASU 2021-08 is effective for hedging activities" (ASU 2017-12). Thisfiscal years beginning after December 15, 2022 including interim periods therein with early adoption permitted. The Company early adopted this standard more closely alignsduring the resultsfourth quarter of cash flow2021 and fair value hedge accounting with risk management activities through changesapplied it retrospectively to both the designation and measurement guidanceall business combinations for qualifying hedging relationships and the presentation of hedge results in the financial statements. This standard also addresses specific limitations in current GAAP by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. Additionally, by aligning the timing of recognition of hedge results with the earnings effect of the hedged item for cash flow and net investment hedges, and by including the earnings effect of the hedging instrument in the same income statement line item in which the earnings effectacquisition date occurred on or after January 1, 2021 resulting in no material impact on its financial statements.
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In December 2019, the hedged item isFASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" (ASU 2019-12), which simplifies certain aspects of income tax accounting guidance in ASC 740, reducing the complexity of its application. Certain exceptions to ASC 740 presented within the results of an entity’s hedging program and the cost of executing that program will be more visibleASU include: intraperiod tax allocation, deferred tax liabilities related to users of financial statements.outside basis differences, year-to-date loss in interim periods, among others. ASU 2017-122019-12 is effective for annual reporting periods beginning after December 15, 20182020 including interim periods therein with early adoption permitted. The Company adopted this standard on OctoberJanuary 1, 20182021 with no material impact to theon its financial statements.
In October 2016,2020, the FASB issued ASU 2016-16, “Income Taxes2020-09, "Debt (Topic 740)470): Intra-Entity TransfersAmendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762" (ASU 2020-09), which amends Topic 470 and certain other topics to conform to disclosure rules on guaranteed debt offerings in SEC Release No.33-10762. The SEC adopted amendments to the financial disclosure requirements for guarantors and issuers of Assets Other Than Inventory” (ASU 2016-16) which removed the prohibitionguaranteed securities registered or being registered in Topic 740 against the immediate recognitionRule 3-10 of the currentRegulations S-X, and deferred income tax effectsaffiliates whose securities registered or being registered in Rule 3-16 of intra-entity transfers of assets other than inventory. As a result, the income tax consequences of an intra-entity transfer of assets other than inventory will be recognized in the current period income statement rather than being deferred until the assets leave the consolidated group.Regulation S-X. The amended rules aim to improve disclosure, reduce compliance burdens for issuers and increase investor protection. ASU 2020-09 is effective on January 4, 2021, pursuant to SEC Release No. 33-10762 with early application permitted. The Company applied ASU 2016-16 on a modified retrospective basis through a cumulative-effect adjustment which reduced Retained earnings by $9.1 million as of January 1, 2018.
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" (ASC 606), which created a comprehensive, five-step model for revenue recognition that requires a company to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Under ASC 606, a company will be required to use more judgment and make more estimates when considering contract terms as well as relevant facts and circumstances when identifying performance obligations, estimating the amount of variable consideration in the transaction price and allocating the transaction price to each separate performance obligation. The Companyearly adopted this standard on January 1, 2018 usingduring the modified retrospective approachfirst quarter of 2020 and recorded a cumulative effect adjustmentelected to increase Retained earnings by $2.4 million with related amounts not materially impacting the Balance Sheet. Refer to Note 11, “Revenue,” for a further discussion on the adoption of ASC 606.
In March 2017, the FASB issued ASU 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" (ASU 2017-07) which changes the way employers that sponsor defined benefit pension and/or postretirement benefit plans reflect net periodic benefit costs in the income statement. Under the previous standard, the multiple components of net periodic benefit costs are aggregated and reported within the operating sectiondisclose summarized financial information of the income statement or capitalized into assets when appropriate. The new standard requires a company to present the service cost component of net periodic benefit cost in the same income statement line as other employee compensation costs with the remaining components of net periodic benefit cost presented separately from the service cost componentissuers and outside of any subtotal of operating income, if one is presented. In addition, only the service cost component will be eligible for capitalization in assets. The Company adopted this standard on January 1, 2017 applying the presentation requirements retrospectively.
In March 2016, the FASB issued ASU No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" (ASU 2016-09) which simplifies several aspects of the accounting for employee share-based payment transactions. The standard makes several modifications to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. In addition, ASU 2016-09 clarifies the statement of cash flows presentation for certain components of share-based awards. The Company adopted this standard on January 1, 2017 and prospectively presented any excess tax benefits or deficiencies in the income statement as a component of Provision for income taxes rather than in the Equity section of the Balance Sheet. As part of the adoption, the Company reclassified $15.1 million of excess tax benefits previously unrecognizedguarantors on a modified retrospectivecombined basis through a cumulative-effect adjustment to increase Retained earnings aswithin Management's Discussion and Analysis of January 1, 2017. In addition, the statementFinancial Condition and Results of cash flows for the twelve months ended December 31, 2016 was retrospectively adjusted to present $21.7 million of excess tax benefits as an operating activity rather than a financing activity.
Recently Issued Accounting PronouncementsOperations.
In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract" (ASU 2018-15), which aligns the requirements for capitalizing implementation costs in a cloud-computing arrangement service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. In addition, the guidance also clarifies the presentation requirements for reporting such costs in the financial statements. ASU 2018-15 is effective for annual reporting periods beginning after December 15, 2019 with early adoption permitted. The Company is currently assessing theadopted this standard on January 1, 2020 on a prospective basis with no material impact of the ASU on its financial statements.

In February 2018, the FASB issued ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02), which allows companies to reclassify stranded tax effects in Accumulated other comprehensive income (loss) that have been caused by the Tax Cuts and Jobs Act of 2017 (the Act) to Retained earnings for each period in which the effect of the change in the U.S. federal corporate income tax rate is recorded. ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. However, the FASB has made the reclassification optional. As a result, the Company assessed the impact of the ASU on its financial statements and will not exercise the option to reclassify the stranded tax effects caused by the Act.
In FebruaryJune 2016, the FASB issued ASU 2016-02, "Leases"2016-13, which changes the impairment model for most financial assets and certain other instruments from an incurred loss model to an expected loss model. In addition, the guidance also requires incremental disclosures regarding allowances and credit quality indicators. ASU 2016-13 was adopted using the modified-retrospective approach and is effective in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard on January 1, 2020 with no material impact on its financial statements.
Recently Issued Accounting Pronouncements
In November 2021, the FASB issued ASU 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance" (ASU 2016-02)2021-10), which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. The standard also requires additional disclosures regarding government grants and cash contributions. The additional disclosures required by lesseesthis update include information about the nature of the transactions and contains targeted changesthe related accounting policy used to accountingaccount for the transaction, the financial statement line items affected by lessors.the transactions and the amounts applicable to each financial statement line item and significant terms and conditions of the transactions, including commitments and contingencies. ASU 2016-022021-10 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods,2021 with early adoption permitted. The FASB allows the option to adopt the standard using a modified retrospective approach through a cumulative-effect adjustment to retained earnings applied either to the beginning of the earliest period presented or the beginning of the period of adoption. The Company will adopt the new guidance effective January 1, 2019 using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company expects the estimated right-of-use asset and related lease liability recognized on the Balance Sheet to approximate $500 million. However, the Company does not expect the adoptionthis ASU to have a material impact toon its Statement of Cash Flows or Statement of Comprehensive Income.financial statements.
NOTE 3. INVENTORIES
Depending on the business, U.S. inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method or the lower of cost or market using the first-in, first-out (FIFO) method. Non-U.S. inventories are primarily stated at the lower of cost or market using the FIFO method.
At December 31, the major classes of inventory were as follows:
In millions 2018 2017In millions20212020
Raw materials $550.5
 $502.8
Raw materials$404.6 $305.0 
Work-in-process 182.0
 180.5
Work-in-process215.9 163.9 
Finished goods 1,028.8
 941.0
Finished goods982.9 761.4 
 1,761.3
 1,624.3
1,603.4 1,230.3 
LIFO reserve (83.5) (68.9)LIFO reserve(72.6)(41.1)
Total $1,677.8
 $1,555.4
Total$1,530.8 $1,189.2 
The Company performs periodic assessments to determine the existence of obsolete, slow-moving and non-saleable inventories and records necessary provisions to reduce such inventories to net realizable value.the lower of cost and NRV. Reserve balances, primarily related to obsolete and slow-moving inventories, were $119.9$79.0 million and $120.3$85.6 million at December 31, 20182021 and December 31, 2017,2020, respectively.
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NOTE 4. PROPERTY, PLANT AND EQUIPMENT
At December 31, the major classes of property, plant and equipment were as follows:
In millions20212020
Land$35.1 $40.7 
Buildings708.0 676.7 
Machinery and equipment1,824.9 1,749.3 
Software648.1 638.0 
3,216.1 3,104.7 
Accumulated depreciation(1,817.3)(1,755.2)
Total$1,398.8 $1,349.5 
In millions 2018 2017
Land $53.2
 $52.0
Buildings 870.7
 770.1
Machinery and equipment 2,079.9
 2,019.5
Software 831.4
 822.7
  3,835.2
 3,664.3
Accumulated depreciation (2,104.4) (2,113.0)
Total $1,730.8
 $1,551.3
Depreciation expense for the years ended December 31, 2018, 20172021, 2020 and 20162019 was $217.4$170.5 million,, $217.3 $172.8 million and $216.7$167.2 million,, which include amounts for software amortization of $25.7$45.7 million,, $28.6 $50.2 million and $35.9$55.4 million,, respectively.

NOTE 5. GOODWILL
The Company records as goodwill the excess of the purchase price over the fair value of the net assets acquired in a business combination. Measurement period adjustments may be recorded once a final valuation has been performed. Goodwill is tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset may be less than the carrying amount of the asset.
The changes in the carrying amount of Goodwillgoodwill are as follows:
In millionsAmericasEMEAAsia PacificTotal
Net balance as of December 31, 2019$3,858.8 $731.1 $535.8 $5,125.7 
Acquisitions (1)
130.1 — — 130.1 
Deconsolidation of certain entities under Chapter 11 (2)
(9.2)— — (9.2)
Currency translation0.3 62.4 33.5 96.2 
Net balance as of December 31, 20203,980.0 793.5 569.3 5,342.8 
Acquisitions (1)
206.3 4.6 — 210.9 
Currency translation(1.1)(57.3)9.5 (48.9)
Net balance as of December 31, 2021$4,185.2 $740.8 $578.8 $5,504.8 
In millions Climate Industrial Total
Net balance as of December 31, 2016 $4,879.1
 $779.3
 $5,658.4
Acquisitions (1)
 26.3
 60.5
 86.8
Currency translation 159.7
 30.8
 190.5
Net balance as of December 31, 2017 5,065.1
 870.6
 5,935.7
Acquisitions (1)
 118.1
 1.8
 119.9
Currency translation (84.0) (12.1) (96.1)
Net balance as of December 31, 2018 5,099.2
 860.3
 5,959.5
(1) Refer to Note 17,18, "Acquisitions and Divestitures" for more information regarding acquisitions.
(2) Refer to Note 21, "Commitments and Contingencies" for more information regarding the Chapter 11 bankruptcy and asbestos-related matters.
The net goodwill balances at December 31, 2018, 20172021, 2020 and 20162019 include $2,496.0 million of accumulated impairment.impairment, primarily related to the Americas segment. The accumulated impairment relates entirely to a charge recorded in the fourth quarter of 2008 associated with the Climate segment.2008.
The Company performed its annual goodwill impairment test during the fourth quarter of 2018 and determined that the estimated fair value of each reporting unit exceeded their respective carrying value. As a result, no impairment charges were recorded during the year. However, the Climate Latin America reporting unit is at risk of impairment as its estimated fair value exceeded its carrying value by 1.1%. The reporting unit has approximately $190 million of goodwill as of December 31, 2018. A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in end markets and volume assumptions could have a negative impact on its estimated fair value. With all other assumptions and trends remaining constant for each independent variable, a 0.5% increase in the discount rate combined with a 0.5% decrease in the long-term growth rate would result in an approximate $15 million impairment for this reporting unit.
NOTE 6. INTANGIBLE ASSETS
Indefinite-lived intangible assets are tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset may be less than the carrying amount of the asset. All other intangible assets with finite useful lives are being amortized on a straight-line basis over their estimated useful lives.
The following table sets forth the gross amount and related accumulated amortization of the Company’s intangible assets at December 31:
20212020
In millionsGross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Customer relationships$2,110.8 $(1,475.3)$635.5 $2,010.2 $(1,362.4)$647.8 
Other245.5 (201.3)44.2 210.7 (199.4)11.3 
Total finite-lived intangible assets$2,356.3 $(1,676.6)$679.7 $2,220.9 $(1,561.8)$659.1 
Trademarks (indefinite-lived)2,625.9 — 2,625.9 2,627.3 — 2,627.3 
Total$4,982.2 $(1,676.6)$3,305.6 $4,848.2 $(1,561.8)$3,286.4 
  2018 2017
In millions Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount
Completed technologies/patents $206.6
 $(182.0) $24.6
 $209.4
 $(177.3) $32.1
Customer relationships 2,086.8
 (1,176.3) 910.5
 2,068.9
 (1,056.9) 1,012.0
Other 84.5
 (54.4) 30.1
 93.9
 (52.7) 41.2
Total finite-lived intangible assets $2,377.9
 $(1,412.7) $965.2
 $2,372.2
 $(1,286.9) $1,085.3
Trademarks (indefinite-lived) 2,669.5
 —
 2,669.5
 2,657.6
 —
 2,657.6
Total $5,047.4
 $(1,412.7) $3,634.7
 $5,029.8
 $(1,286.9) $3,742.9
Intangible asset amortization expense for 2018, 20172021, 2020 and 20162019 was $139.3$123.6 million,, $132.0 $115.7 million and $132.0$116.7 million,, respectively.
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Future estimated amortization expense on existing intangible assets in each of the next five years as of December 31, 2021 amounts to approximately $139 million for 2019, $137 million for 2020, $137 million for 2021, $137 million for 2022, and $135 million for 2023.approximately:

In millions
2022$137.0 
2023135.0 
2024134.0 
2025103.0 
202649.0 
NOTE 7. DEBT AND CREDIT FACILITIES
At December 31, Short-term borrowings and current maturities of long-term debt consisted of the following:
In millions20212020
Debentures with put feature$342.9 $342.9 
2.900% Senior notes due 2021 (1)
— 299.9 
9.000% Debentures due 2021 (2)
— 125.0 
Other current maturities of long-term debt7.5 7.8 
Total$350.4 $775.6 
In millions 2018 2017
Debentures with put feature $343.0
 $343.0
6.875% Senior notes due 2018 (1)
 —
 749.6
Other current maturities of long-term debt 7.6
 7.7
Short-term borrowings —
 6.7
Total $350.6
 $1,107.0
(1) During the first quarter of 2018, the Company redeemed its 6.875% The 2.900% Senior notes due 2018.were repaid in February 2021.
(2) The 9.000% Debentures were repaid in August 2021.
The Company's short-term obligations primarily consist of debentures with put features and current maturities of long-term debt. Other obligations relate to short-term lines of credit used to fund working capital requirements in certain non U.S. countries. The weighted-average interest rate for Short-term borrowings and current maturities of long-term debt at December 31, 20182021 and 20172020 was 6.3% and 6.7%5.4%, respectively.
Commercial Paper Program
The Company uses borrowings under its commercial paper program for general corporate purposes. The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $2.0 billion as of December 31, 2018.2021. Under the commercial paper program, the Company may issue notes from time to time through Ingersoll-Rand Global Holding Company LimitedTrane Technologies HoldCo Inc. or Ingersoll-Rand Luxembourg Finance S.A.Trane Technologies Financing Limited. Each of Ingersoll-RandTrane Technologies plc, Ingersoll-RandTrane Technologies Irish Holdings Unlimited Company, Ingersoll-RandTrane Technologies Lux International Holding Company S.à.r.l., Ingersoll-RandTrane Technologies Global Holding Company Limited, Trane Technologies Company LLC, Trane Technologies HoldCo Inc. and Ingersoll-Rand CompanyTrane Technologies Financing Limited provided irrevocable and unconditional guarantees for any notes issued under the commercial paper program. The Company had no outstanding balance under its commercial paper program as of December 31, 20182021 and December 31, 2017.2020.
Debentures with Put Feature
At December 31, 20182021 and December 31, 2017,2020, the Company had $343.0$342.9 million of fixed rate debentures outstanding which contain a put feature that the holders may exercise on each anniversary of the issuance date. If exercised, the Company is obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount of the debentures plus accrued interest. If these options are not exercised, the final contractual maturity dates would range between 2027 and 2028. Holders of these debentures had the option to exercise the put feature on each of the outstanding debentures in 2018,2021, subject to the notice requirement. No material exercises were made.made in 2021 or 2020.
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At December 31, long-term debt excluding current maturities consisted of:
In millions20212020
4.250% Senior notes due 2023699.1 698.4 
7.200% Debentures due 2022-202522.4 29.9 
3.550% Senior notes due 2024498.0 497.3 
6.480% Debentures due 2025149.7 149.7 
3.500% Senior notes due 2026397.8 397.3 
3.750% Senior notes due 2028546.2 545.6 
3.800% Senior notes due 2029745.0 744.4 
5.750% Senior notes due 2043495.0 494.7 
4.650% Senior notes due 2044296.3 296.1 
4.300% Senior notes due 2048296.3 296.2 
4.500% Senior notes due 2049345.9 345.7 
Other loans and notes— 1.2 
Total$4,491.7 $4,496.5 
In millions 2018 2017
2.875% Senior notes due 2019 (1)
 $—
 $349.4
2.625% Senior notes due 2020 299.4
 298.9
2.900% Senior notes due 2021 298.3
 —
9.000% Debentures due 2021 124.9
 124.9
4.250% Senior notes due 2023 697.1
 696.5
7.200% Debentures due 2019-2025 44.8
 52.3
3.550% Senior notes due 2024 495.9
 495.2
6.480% Debentures due 2025 149.7
 149.7
3.750% Senior notes due 2028 544.5
 —
5.750% Senior notes due 2043 494.3
 494.0
4.650% Senior notes due 2044 295.8
 295.6
4.300% Senior notes due 2048 295.9
 —
Other loans and notes, at end-of-year average interest rates of 7.0% in 2018 and
5.71% in 2017, maturing in various amounts to 2023
 0.1
 0.5
Total $3,740.7
 $2,957.0
(1) During the first quarter of 2018, the Company redeemed its 2.875% Senior notes due 2019.

Scheduled maturities of long-term debt, including current maturities, as of December 31, 20182021 are as follows:
In millions  
2019$350.6
2020307.0
2021430.7
20227.5
2023704.6
Thereafter2,290.9
Total$4,091.3
Issuance and Redemption of Senior Notes
In February 2018, the Company issued $1.15 billion principal amount of senior notes in three tranches through an indirect, wholly-owned subsidiary. The tranches consist of $300 million aggregate principal amount of 2.900% senior notes due 2021, $550 million aggregate principal amount of 3.750% senior notes due 2028 and $300 million aggregate principal amount of 4.300% senior notes due 2048. The notes are fully and unconditionally guaranteed by each of Ingersoll Rand plc, Ingersoll-Rand Irish Holdings Unlimited Company, Ingersoll-Rand Lux International Holding Company S.à.r.l, Ingersoll-Rand Company and Ingersoll-Rand Luxembourg Finance S.A. The Company has the option to redeem the notes in whole or in part at any time, prior to their stated maturity date at redemption prices set forth in the indenture agreement. The notes are subject to certain customary covenants, however, none of these covenants are considered restrictive to the Company’s operations. In March 2018, the Company used the proceeds to fund the redemption of $750 million aggregate principal amount of 6.875% senior notes due 2018 and $350 million aggregate principal amount of 2.875% senior notes due 2019, with the remainder used for general corporate purposes. As a result of the early redemption, the Company recognized $15.4 million of premium expense and $1.2 million of unamortized costs in Interest expense in 2018.
In millions  
2022$350.4 
2023706.6 
2024505.5 
2025157.1 
2026397.8 
Thereafter2,724.7 
Total$4,842.1 
Other Credit Facilities
TheOn June 18, 2021, the Company entered into a new $1.0 billion senior unsecured revolving credit facility which matures in June 2026 (2026 Credit Facility) and terminated its $1.0 billion facility set to expire in March 2022. On September 24, 2021, the Company amended its other $1.0 billion senior unsecured revolving credit facility which matures in April 2023 (2023 Credit Facility) primarily to conform the interest rate provisions in the 2023 Credit Facility to the terms included in the 2026 Credit Facility. As a result, the Company maintains two 5-year, $1.0 billion senior unsecured revolving credit facilities (the(collectively, the Facilities) through its wholly-owned subsidiaries, Ingersoll-RandTrane Technologies HoldCo Inc., Trane Technologies Global Holding Company Limited and Ingersoll-Rand Luxembourg Finance S.A.Trane Technologies Financing Limited (collectively, the Borrowers). The covenants under the 2026 Credit Facility are substantially the same as the covenants under the 2023 Credit Facility. The terms of the 2026 Credit Facility include Environmental, Social, and Governance (ESG) metrics related to two of the Company’s sustainability commitments: a reduction in greenhouse gas intensity and an increase in the percentage of women in management. The Company's annual performance against these ESG metrics may result in price adjustments to the commitment fee and applicable interest rate.
Each senior unsecured credit facility provides support for the Company's commercial paper program and can be used for working capital and other general corporate purposes. Ingersoll-RandTrane Technologies plc, Ingersoll-RandTrane Technologies Irish Holdings Unlimited Company, Ingersoll-RandTrane Technologies Lux International Holding Company S.à.r.l. and Ingersoll-RandTrane Technologies Company LLC each provide irrevocable and unconditional guarantees for these Facilities. In addition, each Borrower will guarantee the obligations under the Facilities of the other Borrower. Total commitments of $2.0 billion were unused at December 31, 20182021 and December 31, 2017. On April 17, 2018, the Company entered into a new 5-year, $1.0 billion senior unsecured credit facility and terminated its 5-year, $1.0 billion facility set to expire in March 2019. As a result, the current maturity dates of the Facilities are March 2021 and April 2023.2020.
Fair Value of Debt
The carrying value of the Company's short-term borrowings is a reasonable estimate of fair value due to the short-term nature of the instruments. The fair value of the Company's debt instruments at December 31, 20182021 and December 31, 20172020 was $4,244.0 million$5.6 billion and $4,462.2 million,$6.3 billion, respectively. The Company measures the fair value of its long-term debt instruments for disclosure purposes based upon observable market prices quoted on public exchanges for similar assets. These fair value inputs are considered Level 2 within the fair value hierarchy. The methodologies used by the Company to determine the fair value
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Table of its long-term debt instruments at December 31, 2018 are the same as those used at December 31, 2017.Contents
Guarantees
Along with Ingersoll-Rand plc, certain of the Company's 100% directly or indirectly owned subsidiaries have fully and unconditionally guaranteed, on a joint and several basis, public debt issued by other 100% directly or indirectly owned subsidiaries. Refer to Note 21 for the Company's current guarantor structure.
NOTE 8. FINANCIAL INSTRUMENTS
In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors. These fluctuations can increase the cost of financing, investing and operating the business. The Company may useuses various financial instruments, including derivative instruments, to manage the risks associated with interest rate, commodity price and foreign currency exposures. These financial instruments are not used for trading or speculative purposes. The Company recognizes all derivatives on the Consolidated Balance SheetSheets at their fair value as either assets or liabilities.
On the date a derivative contract is entered into, the Company designates the derivative instrument as a cash flow hedge of a forecasted transaction or as an undesignated derivative. The Company formally documents its hedge relationships, including identification of the derivative instruments and the hedged items, as well as its risk management objectives and strategies for

undertaking the hedge transaction. This process includes linking derivative instruments that are designated as hedges to specific assets, liabilities or forecasted transactions.
The Company assesses at inception and at least quarterly thereafter, whether the derivatives used in cash flow hedging transactions are highly effective in offsetting the changes in the cash flows of the hedged item. To the extent the derivative is deemed to be a highly effective hedge, the fair market value changes of the instrument are recorded to Accumulated other comprehensive income (loss) (AOCI). If the hedging relationship ceases to be highly effective, or it becomes probable that a forecasted transaction is no longer expected to occur, the hedging relationship will be undesignated and any future gains and losses on the derivative instrument will be recorded in Net earnings.
The fair values of derivative instruments included within the Consolidated Balance SheetSheets as of December 31 were as follows:
 Derivative assetsDerivative liabilities
In millions2021202020212020
Derivatives designated as hedges:
Currency derivatives$0.1 $0.7 $2.7 $1.7 
Commodity derivatives4.9 — 0.2 — 
Derivatives not designated as hedges:
Currency derivatives10.5 1.5 14.0 4.8 
Total derivatives$15.5 $2.2 $16.9 $6.5 
  Derivative assets Derivative liabilities
In millions 2018 2017 2018 2017
Derivatives designated as hedges:        
Currency derivatives $1.3
 $—
 $0.7
 $1.3
Derivatives not designated as hedges:        
Currency derivatives 0.9
 7.2
 0.6
 1.2
Total derivatives $2.2
 $7.2
 $1.3
 $2.5
Asset and liability derivatives included in the table above are recorded within Other current assets and Accrued expenses and other current liabilities, respectively.
Currency HedgingDerivative Instruments
The notional amount of the Company’s currency derivatives was $0.6 billion and $0.7$0.5 billion at both December 31, 20182021 and 2017, respectively.2020. At December 31, 20182021 and 2017, a net gain of $0.5 million and2020, a net loss of $1.2$2.2 million and $0.7 million, net of tax, respectively, was included in AOCI related to the fair value of the Company’s currency derivatives designated as accounting hedges. The amount expected to be reclassified into Net earnings over the next twelve months is a gainloss of $0.5$2.2 million. The actual amounts that will be reclassified to Net earnings may vary from this amount as a result of changes in market conditions. Gains and losses associated with the Company’s currency derivatives not designated as hedges are recorded in Net earnings as changes in fair value occur. At December 31, 2018,2021, the maximum term of the Company’s currency derivatives was approximately 12 months, except for currency derivativesmonths.
Commodity Derivative Instruments
At December 31, 2021, a net gain of $3.5 million, net of tax, was included in placeAOCI related to the fair market value of the Company's commodity derivatives designated as accounting hedges. A change in fair value of commodity derivative instruments deemed highly effective is included in AOCI and is reclassified to Cost of goods sold in the period the purchase of the commodity impacts Net earnings. The amount expected to be reclassified into Net earnings over the next twelve months is a gain of $3.5 million. The actual amounts that will be reclassified to Net earnings may vary from this amount as a result of changes in market conditions. At December 31, 2021, the Company has commodity contracts to hedge certain long-term contract.forecasted purchases over the next 12 months.
The Company had the following outstanding contracts to hedge forecasted commodity purchases:
Volume Outstanding as of
CommodityDecember 31,
2021		December 31,
2020
Aluminum16,488 metric tons— 
Copper4,035,000 pounds— 
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Other Derivative Instruments
Prior to 2005,2015, the Company utilized forward-starting interest rate swaps and interest rate locks to manage interest rate exposure in periods prior to the anticipated issuance of certain fixed-rate debt. These instruments were designated as cash flow hedges and had a notional amount of $1.3 billion. Consequently, when the contracts were settled upon the issuance of the underlying debt, any realized gains or losses in the fair values of the instruments were deferred into AOCI. These deferred gains or losses are subsequently recognized in Interest expense over the term of the related notes. The net unrecognized gain in AOCI was $6.7$4.7 million and $6.6$5.3 million at December 31, 20182021 and at December 31, 2017.2020. The net deferred gain at December 31, 20182021 will continue to be amortized over the term of notes with maturities ranging from 20182023 to 2044. The amount expected to be amortized over the next twelve months is a net gain of $0.7 million. The Company has no0 forward-starting interest rate swaps or interest rate lock contracts outstanding at December 31, 20182021 or 2017.2020.

The following table represents the amounts associated with derivatives designated as hedges affecting Net earnings and AOCI for the years ended December 31:
 
Amount of gain (loss)
recognized in AOCI
Location of gain (loss) reclassified from AOCI and recognized into Net earningsAmount of gain (loss) reclassified from AOCI and recognized into Net earnings
In millions202120202019202120202019
Currency derivatives - continuing (1)
$(4.1)$3.3 $(2.5)Cost of goods sold$3.7 $(2.6)$(1.5)
Currency derivatives - discontinued— — (0.2)Discontinued operations— — 0.1 
Commodity derivatives5.7 — — Cost of goods sold2.0 — — 
Interest rate swaps & locks— — — Interest expense0.7 0.7 0.7 
Total$1.6 $3.3 $(2.7) $6.4 $(1.9)$(0.7)
(1) Amounts excluded from effectiveness testing and recognized into Cost of goods sold based on changes in fair value and amortization was a loss of $0.7 million, $2.1 million and $3.0 million for the years ended December 31,: 2021,2020 and 2019, respectively.
  
Amount of gain (loss)
recognized in AOCI
 Location of gain (loss) reclassified from AOCI and recognized into Net earnings Amount of gain (loss) reclassified from AOCI and recognized into Net earnings
In millions 2018 2017 2016  2018 2017 2016
Currency derivatives designated as hedges $1.2
 $(1.8) $2.2
 Cost of goods sold $(0.8) $(3.1) $5.3
Interest rate swaps & locks —
 —
 —
 Interest expense (0.1) (0.5) (0.5)
Total $1.2
 $(1.8) $2.2
   $(0.9) $(3.6) $4.8
The following table represents the amounts associated with derivatives not designated as hedges affecting Net earnings for the years ended December 31:31:
In millionsLocation of gain (loss) recognized in Net earningsAmount of gain (loss) recognized in Net earnings
202120202019
Currency derivatives - continuingOther income (expense), net$7.9 $7.5 $(5.2)
Currency derivatives - discontinuedDiscontinued operations— (0.4)(1.2)
Total$7.9 $7.1 $(6.4)
In millions Location of gain (loss) recognized in Net earnings Amount of gain (loss) recognized in Net earnings
2018 2017 2016
Currency derivatives Other income/(expense), net $(29.6) $58.0
 $(39.2)
Total   $(29.6) $58.0

$(39.2)
The gains and losses associated with the Company’s undesignated currency derivatives are materially offset in Other income/(expense), netNet earnings by changes in the fair value of the underlying transactions.
The following table presents the effects of the Company's designated financial instruments on the associated financial statement line item within the Consolidated Statement of Comprehensive Income where the financial instrument are recorded:
  Classification and amount of gain (loss) recognized in income on cash flow hedging relationships
  2018
In millions Cost of goods sold Interest expense
Total amounts presented in the Consolidated Statements of Comprehensive Income $(10,847.6) $(220.7)
Gain (loss) on cash flow hedging relationships    
Currency derivatives:    
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings $(0.8) $—
Amount excluded from effectiveness testing recognized in net earnings based on changes in fair value and amortization $(0.1) $—
Interest rate swaps & locks:    
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings $—
 $(0.1)
Concentration of Credit Risk
The counterparties to the Company’s forward contracts consist of a number of investment grade major international financial institutions. The Company could be exposed to losses in the event of nonperformance by the counterparties. However, the credit ratings and the concentration of risk in these financial institutions are monitored on a continuous basis and present no significant credit risk to the Company.
NOTE 9. FAIR VALUE MEASUREMENTS
ASC 820, "Fair Value Measurement," (ASC 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:
•Level 1: Observable inputs such as quoted prices in active markets;
•Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
•Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.
ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

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The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2018:2021:
In millionsIn millionsFair ValueFair value measurements
Level 1Level 2Level 3
Assets:Assets:
Derivative instrumentsDerivative instruments$15.5 $— $15.5 $— 
Liabilities:Liabilities:
Derivative instrumentsDerivative instruments$16.9 $— $16.9 $— 
Earnout paymentEarnout payment96.2 — — 96.2 
In MillionsFair Value Fair value measurements
Level 1 Level 2 Level 3
Assets:       
Derivative instruments$2.2
 $—
 $2.2
 $—
Liabilities:       
Derivative instruments$1.3
 $—
 $1.3
 $—
The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2017:2020:
In MillionsFair Value Fair value measurementsIn MillionsFair ValueFair value measurements
Level 1 Level 2 Level 3Level 1Level 2Level 3
Assets:       Assets:
Derivative instruments$7.2
 $—
 $7.2
 $—
Derivative instruments$2.2 $— $2.2 $— 
Liabilities:       Liabilities:
Derivative instruments$2.5
 $—
 $2.5
 $—
Derivative instruments$6.5 $— $6.5 $— 
Derivative instruments include forward foreign currency contracts and instruments related to non-functional currency balance sheet exposures. The fair value of the derivative instruments are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily accessible and observable. The fair value of the commodity derivatives is valued under a market approach using publicized prices, where applicable, or dealer quotes.
Earnout payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs. The changes in the fair value of the Company's Level 3 liabilities during the year ended December 31, 2021 are as follows:
In millions2021
Balance at beginning of period$— 
Fair value of earnout payment recorded in connection with acquisition98.7 
Change in fair value of earnout(2.5)
Balance at end of period$96.2 
The fair value of the earnout payment is measured on a recurring basis at each reporting date. The following inputs and assumptions were used in the Monte Carlo simulation model to estimate the fair value of the earnout payment at December 31, 2021:
2021
Discount rate8.00%
Volatility20.00%
Refer to Note 18, "Acquisitions and Divestitures" for more information regarding the earnout payment.
The carrying values of cash and cash equivalents, accounts receivable and accounts payable are a reasonable estimate of their fair value due to the short-term nature of these instruments. These methodologies used by the Company to determine the fair value of its financial assets and liabilities at December 31, 2018 are the same as those used at December 31, 2017. There have been no transfers between levels of the fair value hierarchy.
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NOTE 10. LEASES
The Company’s lease portfolio includes various contracts for real estate, vehicles, information technology and other equipment. At contract inception, the Company determines a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as the right to direct the use of that asset. If a contract is considered to be a lease, the Company recognizes a lease liability based on the present value of the future lease payments, with an offsetting entry to recognize a right-of-use asset. Options to extend or terminate a lease are included when it is reasonably certain an option will be exercised. As a majority of the Company’s leases do not provide an implicit rate within the lease, an incremental borrowing rate is used which is based on information available at the commencement date.
The following table includes a summary of the Company's lease portfolio and Balance Sheet classification:
In millionsClassificationDecember 31,
2021		December 31,
2020
Assets
Operating lease right-of-use assets (1)
Other noncurrent assets$436.8 $409.0 
Liabilities
Operating lease currentOther current liabilities147.3 138.8 
Operating lease noncurrentOther noncurrent liabilities296.0 276.5 
Weighted average remaining lease term3.9 years4.0 years
Weighted average discount rate2.3 %3.3 %
(1) Prepaid lease payments and lease incentives are recorded as part of the right-of-use asset. The net impact was $6.5 million and $6.3 million at December 31, 2021 and December 31, 2020, respectively.
The Company accounts for each separate lease component of a contract and its associated non-lease component as a single lease component. In addition, the Company utilizes a portfolio approach for the vehicle, information technology and equipment asset classes as the application of the lease model to the portfolio would not differ materially from the application of the lease model to the individual leases within the portfolio.
The following table includes lease costs and related cash flow information for the year ended December 31:
In millions20212020
Operating lease expense$168.3 $173.0 
Variable lease expense24.5 24.9 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases167.9 172.2 
Right-of-use assets obtained in exchange for new operating lease liabilities163.2 114.6 
Operating lease expense is recognized on a straight-line basis over the lease term. In addition, the Company has certain leases that contain variable lease payments which are based on an index, a rate referenced in the lease or on the actual usage of the leased asset. These payments are not included in the right-of-use asset or lease liability and are expensed as incurred as variable lease expense.
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Maturities of lease obligations were as follows:
In millionsDecember 31,
2021
Operating leases:
2022$159.2 
2023125.2 
202487.9 
202553.7 
202633.9 
After 202635.3 
Total lease payments$495.2 
Less: Interest(51.9)
Present value of lease liabilities$443.3 
NOTE 10.11. PENSIONS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company sponsors several U.S. defined benefit and defined contribution plans covering substantially all of the Company's U.S. employees. Additionally, the Company has many non-U.S. defined benefit and defined contribution plans covering eligible non-U.S. employees. Postretirement benefits other than pensions (OPEB) provide healthcare benefits, and in some instances, life insurance benefits for certain eligible employees.
Pension Plans
The noncontributory defined benefit pension plans covering non-collectively bargained U.S. employees provide benefits on a final average pay formula while plans for most collectively bargained U.S. employees provide benefits on a flat dollar benefit formula or a percentage of pay formula. The non-U.S. pension plans generally provide benefits based on earnings and years of service. The Company also maintains additional other supplemental plans for officers and other key or highly compensated employees.

In connection with completion of the Transaction, the Company transferred certain pension obligations for current and former employees of Ingersoll Rand Industrial to Ingersoll Rand. The transfer of these obligations reduced pension liabilities by $486.2 million, pension assets by $351.7 million and AOCI by $111.3 million.
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The following table details information regarding the Company’s pension plans at December 31:
In millions20212020
Change in benefit obligations:
Benefit obligation at beginning of year$3,662.8 $3,851.2 
Service cost50.9 58.3 
Interest cost58.6 83.8 
Employee contributions0.9 1.0 
Amendments(0.3)1.9 
Actuarial (gains) losses (1)
(121.9)317.7 
Benefits paid(200.6)(189.2)
Currency translation(28.4)43.8 
Curtailments, settlements and special termination benefits(20.0)(7.8)
Impact of the Transaction— (486.2)
Other, including expenses paid(7.5)(11.7)
Benefit obligation at end of year$3,394.5 $3,662.8 
Change in plan assets:
Fair value at beginning of year$3,114.6 $3,136.8 
Actual return on assets73.5 395.6 
Company contributions55.9 99.7 
Employee contributions0.9 1.0 
Benefits paid(200.6)(189.2)
Currency translation(21.8)39.5 
Settlements(20.5)(7.8)
Impact of the Transaction— (351.7)
Other, including expenses paid(8.2)(9.3)
Fair value of assets end of year$2,993.8 $3,114.6 
Net unfunded liability$(400.7)$(548.2)
Amounts included in the balance sheet:
Other noncurrent assets$82.2 $72.8 
Accrued compensation and benefits(56.4)(22.9)
Postemployment and other benefit liabilities(426.5)(598.1)
Net amount recognized$(400.7)$(548.2)
In millions 2018 2017
Change in benefit obligations:    
Benefit obligation at beginning of year $3,742.2
 $3,531.9
Service cost 75.0
 70.8
Interest cost 109.7
 109.0
Employee contributions 1.1
 1.1
Amendments 16.1
 3.8
Actuarial (gains) losses (224.8) 175.8
Benefits paid (218.9) (194.8)
Currency translation (34.8) 69.6
Curtailments, settlements and special termination benefits (4.6) (13.1)
Other, including expenses paid 4.3
 (11.9)
Benefit obligation at end of year $3,465.3
 $3,742.2
Change in plan assets:    
Fair value at beginning of year $3,063.1
 $2,797.1
Actual return on assets (125.9) 326.9
Company contributions 86.9
 101.4
Employee contributions 1.1
 1.1
Benefits paid (218.9) (194.8)
Currency translation (32.8) 59.0
Settlements (9.8) (13.5)
Other, including expenses paid 3.2
 (14.1)
Fair value of assets end of year $2,766.9
 $3,063.1
Net unfunded liability $(698.4) $(679.1)
Amounts included in the balance sheet:    
Other noncurrent assets $49.9
 $61.7
Accrued compensation and benefits (25.9) (15.3)
Postemployment and other benefit liabilities (722.4) (725.5)
Net amount recognized $(698.4) $(679.1)
(1) Actuarial (gains) losses primarily resulted from changes in discount rates
It is the Company’s objective to contribute to the pension plans to ensure adequate funds, and no less than required by law, are available in the plans to make benefit payments to plan participants and beneficiaries when required. However, certain plans are not or cannot be funded due to either legal, accounting, or tax requirements in certain jurisdictions. As of December 31, 2018,2021, approximately seven7 percent of the Company's projected benefit obligation relates to plans that cannot be funded.

The pretax amounts recognized in Accumulated other comprehensive income (loss) are were as follows:
In millionsPrior service benefit (cost)Net actuarial gains (losses)Total
December 31, 2020$(28.3)$(701.3)$(729.6)
Current year changes recorded to AOCI0.3 89.2 89.5 
Amortization reclassified to earnings5.0 35.6 40.6 
Settlements/curtailments reclassified to earnings(0.2)8.2 8.0 
Currency translation and other(3.1)8.5 5.4 
December 31, 2021$(26.3)$(559.8)$(586.1)
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In millions Prior service benefit (cost) Net actuarial gains (losses) Total
December 31, 2017 $(20.2) $(833.5) $(853.7)
Current year changes recorded to AOCI (16.0) (47.6) (63.6)
Amortization reclassified to earnings 4.2
 51.3
 55.5
Settlements/curtailments reclassified to earnings (1)
 0.2
 2.3
 2.5
Currency translation and other 0.6
 6.9
 7.5
December 31, 2018 $(31.2) $(820.6) $(851.8)
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(1) Includes $0.2 million recorded in restructuring charges.
Weighted-average assumptions used to determine the benefit obligation at December 31 arewere as follows:
20212020
Discount rate:
U.S. plans2.88 %2.52 %
Non-U.S. plans1.74 %1.27 %
Rate of compensation increase:
U.S. plans4.00 %4.00 %
Non-U.S. plans4.00 %3.75 %
  2018 2017
Discount rate:    
U.S. plans 4.21% 3.54%
Non-U.S. plans 2.47% 2.29%
Rate of compensation increase:    
U.S. plans 4.00% 4.00%
Non-U.S. plans 4.00% 4.00%
The accumulated benefit obligation for all defined benefit pension plans was $3,364.6$3,311.0 million and $3,626.7$3,566.4 million at December 31, 20182021 and 2017,2020, respectively. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations more than plan assets were $3,075.2$2,906.5 million,, $2,992.0 $2,831.5 million and $2,330.4$2,424.6 million,, respectively, as of December 31, 2018,2021, and $3,291.4$3,128.7 million,, $3,194.7 $3,043.9 million and $2,554.0$2,510.9 million,, respectively, as of December 31, 2017.2020.
Pension benefit payments are expected to be paid as follows:
In millions  
2022$243.3 
2023213.3 
2024203.8 
2025193.9 
2026193.3 
2027-2031949.5 
In millions  
2019$232.2
2020220.7
2021219.6
2022226.3
2023229.1
2024 — 20281,125.4



The components of the Company’s net periodic pension benefit costs for the years ended December 31 include the following:
In millions202120202019
Service cost$50.9 $58.3 $73.6 
Interest cost58.6 83.8 119.1 
Expected return on plan assets(106.2)(121.1)(138.5)
Net amortization of:
Prior service costs (benefits)5.0 5.3 5.0 
Plan net actuarial (gains) losses35.6 43.7 54.3 
Net periodic pension benefit cost43.9 70.0 113.5 
Net curtailment, settlement, and special termination benefits (gains) losses8.0 (1.8)4.5 
Net periodic pension benefit cost after net curtailment and settlement (gains) losses$51.9 $68.2 $118.0 
Amounts recorded in continuing operations:
   Operating income$47.1 $51.7 $58.8 
   Other income/(expense), net(0.9)11.7 31.8 
Amounts recorded in discontinued operations5.7 4.8 27.4 
Total$51.9 $68.2 $118.0 
In millions 2018 2017 2016
Service cost $75.0
 $70.8
 $72.1
Interest cost 109.7
 109.0
 110.2
Expected return on plan assets (146.6) (141.7) (146.1)
Net amortization of:      
Prior service costs (benefits) 4.2
 3.8
 4.7
Plan net actuarial (gains) losses 51.3
 56.8
 61.6
Net periodic pension benefit cost 93.6
 98.7
 102.5
Net curtailment, settlement, and special termination benefits (gains) losses 2.3
 5.6
 2.1
Net periodic pension benefit cost after net curtailment and settlement (gains) losses $95.9
 $104.3
 $104.6
Amounts recorded in continuing operations:      
   Operating income $72.7
 $68.2
 $69.3
   Other income/(expense), net 14.6
 25.4
 25.5
Amounts recorded in discontinued operations 8.6
 10.7
 9.8
Total $95.9
 $104.3
 $104.6
Net periodic pensionPension benefit cost for 20192022 is projected to be approximately $113$57 million. The amounts expected to be recognized in net periodic pension benefit cost during 2019 for prior service cost and plan net actuarial losses are approximately $5 million and $54 million, respectively.
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Weighted-average assumptions used to determine net periodic pension cost for the years ended December 31 arewere as follows:
 2018 2017 2016202120202019
Discount rate:      Discount rate:
U.S. plans      U.S. plans
Service cost 3.70% 4.18% 4.25%Service cost2.75 %3.36 %4.24 %
Interest cost 3.24% 3.36% 3.29%Interest cost1.82 %2.78 %3.88 %
Non-U.S. plans 

 

 

Non-U.S. plans
Service cost 2.52% 2.66% 3.05%Service cost1.56 %1.87 %2.81 %
Interest cost 2.46% 2.50% 3.18%Interest cost1.09 %1.51 %2.83 %
Rate of compensation increase:      Rate of compensation increase:
U.S. plans 4.00% 4.00% 4.00%U.S. plans4.00 %4.00 %4.00 %
Non-U.S. plans 4.00% 4.00% 4.00%Non-U.S. plans4.00 %3.75 %4.00 %
Expected return on plan assets:      Expected return on plan assets:
U.S. plans 5.50% 5.50% 5.75%U.S. plans4.00 %4.75 %5.75 %
Non-U.S. plans 3.25% 3.25% 3.75%Non-U.S. plans2.25 %2.75 %3.25 %
The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan’s investment policy, the types of assets held and target asset allocations. The expected long-term rate of return is determined as of the measurement date. The Company reviews each plan and its historical returns and target asset allocations to determine the appropriate expected long-term rate of return on plan assets to be used.
The Company's objective in managing its defined benefit plan assets is to ensure that all present and future benefit obligations are met as they come due. It seeks to achieve this goal while trying to mitigate volatility in plan funded status, contribution, and expense by better matching the characteristics of the plan assets to that of the plan liabilities. The Company utilizes a dynamic approach to asset allocation whereby a plan's allocation to fixed income assets increases as the plan's funded status improves. The Company monitors plan funded status and asset allocation regularly in addition to investment manager performance.

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Table of Contents
The fair values of the Company’s pension plan assets at December 31, 20182021 by asset category arewere as follows:
 Fair value measurements Net asset value 
Total
fair value
 Fair value measurementsNet asset valueTotal
fair value
In millions Level 1 Level 2 Level 3  In millionsLevel 1Level 2Level 3
Cash and cash equivalents $4.0
 $26.8
 $—
 $—
 $30.8
Cash and cash equivalents$1.6 $50.5 $— $— $52.1 
Equity investments:          Equity investments:
Registered mutual funds – equity specialty —
 —
 —
 51.1
 51.1
Registered mutual funds – equity specialty— — — 107.5 107.5 
Commingled funds – equity specialty —
 —
 —
 520.7
 520.7
Commingled funds – equity specialty— — — 362.5 362.5 
 —
 —
 —
 571.8
 571.8
— — — 470.0 470.0 
Fixed income investments:          Fixed income investments:
U.S. government and agency obligations —
 476.2
 —
 —
 476.2
U.S. government and agency obligations— 551.4 — — 551.4 
Corporate and non-U.S. bonds(a)
 —
 1,225.8
 —
 —
 1,225.8
Corporate and non-U.S. bonds(a)
— 1,453.6 — — 1,453.6 
Asset-backed and mortgage-backed securities —
 67.3
 —
 —
 67.3
Asset-backed and mortgage-backed securities— 63.7 — — 63.7 
Registered mutual funds – fixed income specialty —
 —
 —
 135.1
 135.1
Registered mutual funds – fixed income specialty— — — 191.4 191.4 
Commingled funds – fixed income specialty —
 —
 —
 117.7
 117.7
Commingled funds – fixed income specialty— — — 77.7 77.7 
Other fixed income(b)
 —
 —
 24.8
 —
 24.8
Other fixed income(b)
— — 32.0 — 32.0 
 —
 1,769.3
 24.8
 252.8
 2,046.9
— 2,068.7 32.0 269.1 2,369.8 
Derivatives —
 (0.4) —
 —
 (0.4)Derivatives— (0.5)— — (0.5)
Real estate(c)
 —
 —
 4.1
 —
 4.1
Real estate(c)
— — 2.1 — 2.1 
Other(d)
 —
 —
 101.6
 —
 101.6
Other(d)
— — 106.1 — 106.1 
Total assets at fair value $4.0
 $1,795.7
 $130.5
 $824.6
 $2,754.8
Total assets at fair value$1.6 $2,118.7 $140.2 $739.1 $2,999.6 
Receivables and payables, net         12.1
Receivables and payables, net(5.8)
Net assets available for benefits         $2,766.9
Net assets available for benefits   $2,993.8 
The fair values of the Company’s pension plan assets at December 31, 20172020 by asset category arewere as follows:
 Fair value measurementsNet asset valueTotal
fair value
In millionsLevel 1Level 2Level 3
Cash and cash equivalents$3.1 $34.2 $— $— $37.3 
Equity investments:
Registered mutual funds – equity specialty— — — 65.1 65.1 
Commingled funds – equity specialty— — — 622.0 622.0 
— — — 687.1 687.1 
Fixed income investments:
U.S. government and agency obligations— 504.7 — — 504.7 
Corporate and non-U.S. bonds(a)
— 1,424.2 — — 1,424.2 
Asset-backed and mortgage-backed securities— 48.4 — — 48.4 
Registered mutual funds – fixed income specialty— — — 118.3 118.3 
Commingled funds – fixed income specialty— — — 153.3 153.3 
Other fixed income(b)
— — 28.3 — 28.3 
— 1,977.3 28.3 271.6 2,277.2 
Derivatives— 0.3 — — 0.3 
Real estate(c)
— — 2.8 — 2.8 
Other(d)
— — 112.3 — 112.3 
Total assets at fair value$3.1 $2,011.8 $143.4 $958.7 $3,117.0 
Receivables and payables, net(2.4)
Net assets available for benefits   $3,114.6 
(a)This class includes state and municipal bonds.
(b)This class includes group annuity and guaranteed interest contracts.
(c)This class includes a private equity fund that invests in real estate.
(d)This investment comprises the Company's non-significant, non-US pension plan assets. It primarily includes insurance contracts.

F-26
  Fair value measurements Net asset value 
Total
fair value
In millions Level 1 Level 2 Level 3 
Cash and cash equivalents $4.8
 $35.4
 $—
 $—
 $40.2
Equity investments:          
Registered mutual funds – equity specialty —
 —
 —
 77.6
 77.6
Commingled funds – equity specialty —
 —
 —
 674.7
 674.7
  —
 —
 —
 752.3
 752.3
Fixed income investments:          
U.S. government and agency obligations —
 517.5
 —
 —
 517.5
Corporate and non-U.S. bonds(a)
 —
 1,336.8
 —
 —
 1,336.8
Asset-backed and mortgage-backed securities —
 69.0
 —
 —
 69.0
Registered mutual funds – fixed income specialty —
 —
 —
 111.0
 111.0
Commingled funds – fixed income specialty —
 —
 —
 131.8
 131.8
Other fixed income(b)
 —
 —
 26.3
 —
 26.3
  —
 1,923.3
 26.3
 242.8
 2,192.4
Derivatives —
 (0.3) —
 —
 (0.3)
Real estate(c)
 —
 —
 4.9
 —
 4.9
Other(d)
 —
 —
 79.0
 —
 79.0
Total assets at fair value $4.8
 $1,958.4
 $110.2
 $995.1
 $3,068.5
Receivables and payables, net         (5.4)
Net assets available for benefits         $3,063.1
Table of Contents
(a)This class includes state and municipal bonds.
(b)This class includes group annuity and guaranteed interest contracts.
(c)This class includes a private equity fund that invests in real estate.
(d)This investment comprises the Company's non-significant, non-US pension plan assets. It primarily includes insurance contracts.

Cash equivalents are valued using a market approach with inputs including quoted market prices for either identical or similar instruments. Fixed income securities are valued through a market approach with inputs including, but not limited to, benchmark yields, reported trades, broker quotes and issuer spreads. Commingled funds are valued at their daily net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient. NAVs are calculated by the investment manager or sponsor of the fund. Private real estate fund values are reported by the fund manager and are based on valuation or appraisal of the underlying investments. Refer to Note 9, "Fair Value Measurements" for additional information related to the fair value hierarchy defined by ASC 820. There have been no significant transfers between levels of the fair value hierarchy.
The Company made required and discretionary contributions to its pension plans of $86.9$55.9 million in 2018, $101.42021, $99.7 million in 2017,2020, and $56.4$83.1 million in 20162019 and currently projects that it will contribute approximately $104$82 million to its plans worldwide in 2019.2022. The contribution in 2020 included $24.4 million to fund Ingersoll Rand Industrial plans prior to the completion of the Transaction. The Company’s policy allows it to fund an amount, which could be in excess of or less than the pension cost expensed, subject to the limitations imposed by current tax regulations. However, the Company anticipates funding the plans in 20192022 in accordance with contributions required by funding regulations or the laws of each jurisdiction.
Most of the Company’s U.S. employees are covered by defined contribution plans. Employer contributions are determined based on criteria specific to the individual plans and amounted to approximately $131.9$125.8 million, $118.7$111.0 million, and $108.3$140.2 million in 2018, 20172021, 2020 and 2016,2019, respectively. The Company’s contributions relating to non-U.S. defined contribution plans and other non-U.S. benefit plans were $52.0$34.9 million, $47.7$19.2 million and $39.9$56.7 million in 2018, 20172021, 2020 and 2016,2019, respectively.
Multiemployer Pension Plans
The Company also participates in a number of multiemployer defined benefit pension plans related to collectively bargained U.S. employees of Trane. The Company's contributions, and the administration of the fixed retirement payments, are determined by the terms of the related collective-bargaining agreements. These multiemployer plans pose different risks to the Company than single-employer plans, including:
1.The Company's contributions to multiemployer plans may be used to provide benefits to all participating employees of the program, including employees of other employers.
2.In the event that another participating employer ceases contributions to a plan, the Company may be responsible for any unfunded obligations along with the remaining participating employers.
3.If the Company chooses to withdraw from any of the multiemployer plans, the Company may be required to pay a withdrawal liability, based on the underfunded status of the plan.
1.The Company's contributions to multiemployer plans may be used to provide benefits to all participating employees of the program, including employees of other employers.
2.In the event that another participating employer ceases contributions to a plan, the Company may be responsible for any unfunded obligations along with the remaining participating employers.
3.If the Company chooses to withdraw from any of the multiemployer plans, the Company may be required to pay a withdrawal liability, based on the underfunded status of the plan.
As of December 31, 2018,2021, the Company does not participate in any plans that are individually significant, nor is the Company an individually significant participant to any of these plans. Total contributions to multiemployer plans for the years ended December 31 were as follows:
In millions 2018 2017 2016
Total contributions $9.8
 $9.0
 $7.7
Contributions to these plans may increase in the event that any of these plans are underfunded.
Postretirement Benefits Other Than Pensions
The Company sponsors several postretirement plans that provide for healthcare benefits, and in some instances, life insurance benefits that cover certain eligible employees. These plans are unfunded and have no plan assets, but are instead funded by the Company on a pay-as-you-go basis in the form of direct benefit payments. Generally, postretirement health benefits are contributory with contributions adjusted annually. Life insurance plans for retirees are primarily noncontributory.

In connection with the completion of the Transaction, the Company transferred certain postretirement benefit obligations for current and former employees of Ingersoll Rand Industrial to Ingersoll Rand. The transfer of these obligations reduced postretirement plan liabilities by $28.7 million and increased AOCI by $5.5 million.


F-27
Table of Contents
The following table details changes in the Company’s postretirement plan benefit obligations for the years ended December 31:
In millions20212020
Benefit obligation at beginning of year$389.1 $428.8 
Service cost2.1 2.4 
Interest cost5.5 9.7 
Plan participants’ contributions5.6 8.2 
Actuarial (gains) losses (1)
(22.2)9.3 
Benefits paid, net of Medicare Part D subsidy (2)
(37.8)(39.9)
Impact of the Transaction— (28.7)
Other(0.1)(0.7)
Benefit obligations at end of year$342.2 $389.1 
In millions 2018 2017
Benefit obligation at beginning of year $528.0
 $578.6
Service cost 2.8
 3.1
Interest cost 14.4
 15.7
Plan participants’ contributions 9.1
 9.8
Actuarial (gains) losses (60.4) (30.2)
Benefits paid, net of Medicare Part D subsidy (1)
 (50.2) (55.4)
Special termination benefits recorded in restructuring —
 5.9
Other (1.0) 0.5
Benefit obligations at end of year $442.7
 $528.0
(1) Net actuarial losses primarily resulted from losses driven by changes in discount rates offset by gains driven by changes in per capita cost assumptions.
(1) (2) Amounts are net of Medicare Part D subsidy of $0.9$0.5 million and $1.1$0.7 million in 20182021 and 2017, respectively2020, respectively.

The benefit plan obligations are reflected in the Consolidated Balance Sheets as follows:
In millionsIn millionsDecember 31, 2021December 31, 2020
In millions December 31, 2018 December 31, 2017
Accrued compensation and benefits $(45.1) $(48.5)Accrued compensation and benefits$(33.8)$(37.1)
Postemployment and other benefit liabilities (397.6) (479.5)Postemployment and other benefit liabilities(308.4)(352.0)
Total $(442.7) $(528.0)Total$(342.2)$(389.1)
The pre-tax amounts recognized in Accumulated other comprehensive income (loss) were as follows:
In millions Prior service benefit (cost) Net actuarial gains (losses) Total
Balance at December 31, 2017 $4.1
 $31.0
 $35.1
Gain (loss) in current period —
 60.4
 60.4
Amortization reclassified to earnings (3.8) (1.0) (4.8)
Balance at December 31, 2018 $0.3
 $90.4
 $90.7
In millionsNet actuarial gains (losses)
Balance at December 31, 2020$52.4 
Gain (loss) in current period22.2 
Amortization reclassified to earnings(2.0)
Currency translation and other(0.2)
Balance at December 31, 2021$72.4 
The components of net periodic postretirement benefit (income) cost for the years ended December 31 were as follows:
In millions202120202019
Service cost$2.1 $2.4 $2.6 
Interest cost5.5 9.7 14.8 
Net amortization of:
Prior service costs (benefits)— — (0.3)
Net actuarial (gains) losses(2.0)(5.6)(10.9)
Net periodic postretirement benefit cost$5.6 $6.5 $6.2 
Amounts recorded in continuing operations:000
   Operating income$2.1 $2.4 $2.5 
   Other income/(expense), net2.5 3.0 3.1 
Amounts recorded in discontinued operations1.0 1.1 0.6 
Total$5.6 $6.5 $6.2 
In millions 2018 2017 2016
Service cost $2.8
 $3.1
 $3.7
Interest cost 14.4
 15.7
 17.5
Net amortization of:      
Prior service costs (benefits) (3.8) (8.6) (8.9)
Net actuarial (gains) losses (1.0) 0.1
 0.1
Net periodic postretirement benefit cost $12.4
 $10.3
 $12.4
Amounts recorded in continuing operations: 

 

 

   Operating income $2.8
 $3.1
 $3.7
   Other income/(expense), net 7.3
 5.6
 4.6
Amounts recorded in discontinued operations 2.3
 1.6
 4.1
Total $12.4
 $10.3
 $12.4
Postretirement cost for 20192022 is projected to be approximately $11 million.$3 million. The amount expected to be recognized in net periodic postretirement benefits cost in 20192022 for prior service gains and net actuarial gains areis approximately $1 million and $7 million, respectively.$6 million.

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Table of Contents
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31 arewere as follows:
  2018 2017 2016
Discount rate:      
Benefit obligations at December 31 4.05% 3.38% 3.73%
Net periodic benefit cost      
Service cost 3.47% 3.82% 3.97%
Interest cost 2.94% 2.99% 2.99%
Assumed health-care cost trend rates at December 31:      
Current year medical inflation 6.45% 6.85% 7.25%
Ultimate inflation rate 5.00% 5.00% 5.00%
Year that the rate reaches the ultimate trend rate 2023
 2023
 2023
A 1% change in the assumed medical trend rate would have the following effects as of and for the year ended December 31, 2018:
In millions 
1%
Increase
 
1%
Decrease
Effect on total of service and interest cost components of current year benefit cost $0.4
 $(0.4)
Effect on benefit obligation at year-end 12.2
 (11.0)
202120202019
Discount rate:
Benefit obligations at December 312.73 %2.25 %2.99 %
Net periodic benefit cost
Service cost2.40 %3.18 %4.13 %
Interest cost1.84 %2.73 %3.67 %
Assumed health-care cost trend rates at December 31:
Current year medical inflation6.25 %6.50 %6.75 %
Ultimate inflation rate4.75 %4.75 %4.75 %
Year that the rate reaches the ultimate trend rate202820282028
Benefit payments for postretirement benefits, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be paid as follows:
In millions  
2022$33.9 
202332.5 
202430.8 
202529.1 
202627.5 
2027 — 2031112.1 
In millions  
2019$45.9
202045.0
202143.0
202240.9
202338.4
2024 — 2027158.5
NOTE 11.12. REVENUE
The Company recognizes revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of the Company's revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of the Company's revenues are recognized over time as the customer simultaneously receives control as the Company performs work under a contract. For these arrangements, the cost-to-cost input method is used as it best depicts the transfer of control to the customer that occurs as the Company incurs costs.
Performance Obligations
A performance obligation is a distinct good, service or a bundle of goods and services promised in a contract. The Company identifies performance obligations at the inception of a contract and allocates the transaction price to individual performance obligations to faithfully depict the Company’s performance in transferring control of the promised goods or services to the customer.
The following are the primary performance obligations identified by the Company:
Equipment and parts. The Company principally generates revenue from the sale of equipment and parts to customers and recognizes revenue at a point in time when control transfers to the customer. Transfer of control is generally determined based on the shipping terms of the contract. However, certain transactions within the Industrial segment include contracts to design, deliver and build highly engineered or customized equipment which have no alternative use for the Company in the event the customer cancels the contract. In addition, the Company has the right to payment for performance completed to date. As a result, revenues related to these contracts are recognized over time with progress towards completion measured using an input method as the basis to recognize revenue and an estimated profit. To-date efforts for work performed corresponds with and faithfully depicts transfer of control to the customer.
Contracting and Installationinstallation. The Company enters into various construction-type contracts to design, deliver and build integrated solutions to meet customer specifications. These transactions primarily included within the Climate segment, provide services that range from the development and installation of new HVAC systems to the design and integration of critical building systems

to optimize energy efficiency and overall performance. These contracts have a typical term of less than one year and are considered a single performance obligation as multiple combined goods and services promised in the contract represent a single output delivered to the customer. Revenues associated with contracting and installation contracts are recognized over time with progress towards completion measured using an input method as the basis to recognize revenue and an estimated profit. To-date efforts for work performed corresponds with and faithfully depicts transfer of control to the customer. 
F-29
Table of Contents
Services and Maintenancemaintenance. The Company provides various levels of preventative and/or repair and maintenance type service agreements for its customers. The typical length of a contract is 12 months but can be as long as 60 months. Revenues associated with these performance obligations are primarily recognized over time on a straight-line basis over the life of the contract as the customer simultaneously receives and consumes the benefit provided by the Company. However, if historical evidence indicates that the cost of providing these services on a straight-line basis is not appropriate, revenue is recognized over the contract period in proportion to the costs expected to be incurred while performing the service. CertainRevenues for certain repair services that do not meet the definition ofcriteria for over time revenue recognition as the Company does not transfer control to the customer until the service is completed. As a result, revenue related to these services isand sales of parts are recognized at a point in time.
Extended warranties. The Company enters into various warranty contracts with customers related to its products. A standard warranty generally warrants that a product is free from defects in workmanship and materials under normal use and conditions for a certain period of time. The Company’s standard warranty is not considered a distinct performance obligation as it does not provide services to customers beyond assurance that the covered product is free of initial defects. An extended warranty provides a customer with additional time that the Company is liable for covered incidents associated with its products. Extended warranties are purchased separately and can last up to five years. As a result, they are considered separate performance obligations for the Company. Revenue associated with these performance obligations areis primarily recognized over time on a straight-line basis over the life of the contract as the customer simultaneously receives and consumes the benefit provided by the Company. However, if historical evidence indicates that the cost of providing these services on a straight-line basis is not appropriate, revenue is recognized over the contract period in proportion to the costs expected to be incurred while performing the service. Refer to Note 20,21, "Commitments and Contingencies," for more information related to product warranties.
The transaction price allocated to performance obligations reflects the Company’s expectations about the consideration it will be entitled to receive from a customer. To determine the transaction price, variable and noncash consideration are assessed as well as whether a significant financing component exists. The Company’s contracts with customers, dealers and distributors include several forms of sales incentive programs (variable consideration) which are estimated and includedCompany includes variable consideration in the estimated transaction price. They include, but are not limited to, discounts, coupons, and rebates where the customer does not have to provide any additional requirements to receive the discount. The Company records an accrual (contra receivable) and a sales deduction for its best estimate determined using the expected value method. In addition, sales returns and customer disputes involving a question of quantity or price are also accounted for as variable consideration. All other incentives or incentive programs where the customerwhen it is required to reach a certain sales level, remain a customer for a certain period of time, provide a rebate form or is subject to additional requirements are accounted for as a reductionprobable that significant reversal of revenue and establishment of a liability for its best estimate determined usingrecognized would not occur when the expected value method.uncertainty associated with variable consideration is subsequently resolved. The Company considers historical data in determining its best estimates of variable consideration. These estimatesconsideration, and the related accruals are reviewed regularly for appropriateness, considering also whetherrecorded using the estimates should be constrained in order to avoid a significant reversal of revenue recognition in a future period. If updated information or actual amounts are different from previous estimates of variable consideration, the revisions are included in the results for the period in which they become known through a cumulative effect adjustment to revenue.expected value method. The Company has performance guarantees related to energy savings contracts that are provided under the maintenance portion of contracting and installation agreements extending from 2019-2047.2022-2048. These performance guarantees represent variable consideration and are estimated as part of the overall transaction price. The Company has not recognized any significant adjustments to the transaction price due to variable consideration.
The Company enters into sales arrangements that contain multiple goods and services, such as equipment, installation and extended warranties.services. For these arrangements, each good or service is evaluated to determine whether it represents a distinct performance obligation. The total transactionobligation and whether the sales price for each obligation is then allocated to the distinct performance obligations based on their relativerepresentative of standalone selling price at the inception of the arrangement.price. If available, the Company utilizes observable prices for goods or services sold separately to similar customers in similar circumstances to determine itsevaluate relative standalone selling price. Otherwise, listList prices are used if they are determined to be representative of standalone selling prices. If neither of these items are available at contract inception, judgment may be required andWhere necessary, the Company will estimateensures that the total transaction price is then allocated to the distinct performance obligations based on the determination of their relative standalone selling price based on its best estimate. at the inception of the arrangement.
The Company recognizes revenue for delivered goods or services when the delivered good or service is distinct, control of the good or service has transferred to the customer, and only customary refund or return rights related to the goods or services exist. The Company excludes from revenues taxes it collects from a customer that are assessed by a government authority. Excluding noncurrent contract liabilities, unsatisfied (or partially unsatisfied) performance obligations as
F-30
Table of the end of the reporting period are expected to be recognized as revenue within the next 12 months.Contents

Disaggregated Revenue
A summary of Net revenues by destination for the year ended at December 31 is as follows:
In millions2018
Climate 
     United States$8,285.4
     Non-U.S.4,058.4
Total Climate$12,343.8
Industrial 
     United States$1,763.6
     Non-U.S.1,560.8
Total Industrial$3,324.4
A summary of Net revenues bygeography and major type of good or service for the year ended at December 31 iswere as follows:
In millions2018
Climate 
     Equipment$8,425.6
     Services and parts3,918.2
Total Climate$12,343.8
Industrial 
     Equipment$2,023.3
     Services and parts1,301.1
Total Industrial$3,324.4
In millions202120202019
Americas
     Equipment$7,319.8 $6,479.0 $6,880.4 
     Services3,637.3 3,206.9 3,179.1 
Total Americas$10,957.1 $9,685.9 $10,059.5 
EMEA
Equipment$1,328.0 $1,119.9 $1,208.0 
Services616.9 528.2 554.6 
Total EMEA$1,944.9 $1,648.1 $1,762.6 
Asia Pacific
     Equipment$851.0 $773.6 $879.7 
     Services383.4 347.1 374.1 
Total Asia Pacific$1,234.4 $1,120.7 $1,253.8 
Total Net revenues$14,136.4 $12,454.7 $13,075.9 
Revenue from goods and services transferred to customers at a point in time accounted for approximately 84%82%, 81% and 82% of the Company's revenue for the yearyears ended December 31, 2018.2021, 2020 and 2019, respectively.
Contract Balances
The opening and closing balances of contract assets and contract liabilities arising from contracts with customers for the period ended December 31, 20182021 and December 31, 20172020 were as follows:
In millions2018 2017
Contract assets$210.9
 $166.0
Contract liabilities846.2
 814.2
In millionsLocation on Consolidated Balance Sheet20212020
Contract assets - currentOther current assets$164.8 $92.5 
Contract assets - noncurrentOther noncurrent assets218.5 162.9 
Contract liabilities - currentAccrued expenses and other current liabilities805.4 643.0 
Contract liabilities - noncurrentOther noncurrent liabilities446.6 434.0 
The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In general, the Company receives payments from customers based on a billing schedule established in its contracts. Contract assets relate to the conditional right to consideration for any completed performance under the contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities relate to payments received in advance of performance under the contract or when the Company has a right to consideration that is unconditional before it transfers a good or service to the customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. During the yearyears ended December 31, 2018,2021 and 2020, changes in contract asset and liability balances were not materially impacted by any other factors.
During the year ended December 31, 2018, approximately 55%Approximately 49% of the contract liability balance at the beginning of the periodDecember 31, 2020 was recognized as revenue. The remaining 45% isrevenue during the year ended December 31, 2021. Additionally, approximately 36% of the contract liability balance at December 31, 2021 was classified as noncurrent and not expected to be recognized as revenue during 2019 or thereafter.
ASC 606 adoption impact
Under ASC 606,in the majority of the Company’s revenue continues to be recognized on a similar basis as previous accounting standards. However, certain highly engineered products sold to customers within the Industrial segment for which revenue was previously recognized at a point in time meet the criteria of a performance obligation satisfied over time. These contracts consist

of equipment that is highly engineered or customized to meet the customer’s requirements. In the event the customer cancels the contract, the Company will have no alternative use for the equipment as well as the right to payment for performance completed to date. This change results in accelerated recognition of revenue and increases the balance of contract assets compared to the previous revenue recognition standard.
The Company adopted ASC 606 on January 1, 2018 using the modified retrospective approach with a cumulative effect adjustment to increase Retained earnings by $2.4 million. As a result, the Company applied ASC 606 only to contracts that were not completed as of January 1, 2018. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods presented. The Company elected to reflect the aggregate effect of all contract modifications that occurred before the beginning of the earliest period presented in determining the transaction price, identifying the satisfied and unsatisfied performance obligations and allocating the transaction price to the satisfied and unsatisfied performance obligations for the modified contract at transition. The effects of this relief are immaterial.
The following table summarizes the impact of adopting ASC 606 on the Company’s Consolidated Statements of Comprehensive Income:next 12 months.
F-31
 Year Ended December 31, 2018
In millionsAs Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower)
Net revenues$15,668.2
 $15,651.0
 $17.2
Cost of goods sold(10,847.6) (10,831.7) 15.9
Selling and administrative expenses(2,903.2) (2,903.2) —
Operating income1,917.4
 1,916.1
 1.3
Interest expense(220.7) (220.7) —
Other income/(expense), net(36.4) (36.4) —
Earnings before income taxes1,660.3
 1,659.0
 1.3
Provision for income taxes(281.3) (281.0) 0.3
Earnings from continuing operations$1,379.0
 $1,378.0
 $1.0
The following table summarizes the impact
Table of adopting ASC 606 on the Company’s Balance Sheet:Contents
 December 31, 2018
In millionsAs Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower)
Assets     
Accounts and notes receivable, net$2,679.2
 $2,681.2
 $(2.0)
Inventories, net1,677.8
 1,693.7
 (15.9)
Other current assets471.6
 454.2
 17.4
Other noncurrent assets857.9
 857.9
 —
      
Liabilities     
Accrued expenses and other current liabilities$1,728.2
 $1,729.7
 $(1.5)
Deferred and noncurrent income taxes538.4
 538.4
 —
Other noncurrent liabilities1,062.4
 1,062.4
 —
      
Equity     
Retained earnings$9,439.8
 $9,438.8
 $1.0
NOTE 12.13. EQUITY
The authorized share capital of Ingersoll RandTrane Technologies plc is 1,185,040,000 shares, consisting of (1) 1,175,000,000 ordinary shares, par value $1.00 per share, (2) 40,000 ordinary shares, par value EUR 1.00 and (3) 10,000,000 preference shares, par value $0.001 per share. There were no0 preference shares or Euro-denominated ordinary shares outstanding at December 31, 20182021 or 2017.

2020.
The changes in ordinary shares and treasury shares for the year ended December 31, 2018 are2021 were as follows:
In millionsOrdinary shares issuedOrdinary shares held in treasury
December 31, 2020263.3 24.5 
Shares issued under incentive plans2.3 — 
Repurchase of ordinary shares(5.9)— 
December 31, 2021259.7 24.5 
In millionsOrdinary shares issued Ordinary shares held in treasury
December 31, 2017274.0
 24.5
Shares issued under incentive plans2.1
 —
Repurchase of ordinary shares(9.7) —
December 31, 2018266.4
 24.5
Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. Shares acquired and canceled upon repurchase are accounted for as a reduction of Ordinary Shares and Capital in excess of par value, or Retained earnings to the extent Capital in excess of par value is exhausted. Shares acquired and held in treasury are presented separately on the balance sheet as a reduction to Equity and recognized at cost.
In February 2017,2021, the Company's Board of Directors authorized the repurchase of up to $2.0 billion of its ordinary shares under a new share repurchase program (2021 Authorization) upon completion of the prior share repurchase program which authorized the repurchase of up to $1.5 billion of its ordinary shares under a share repurchase program (2017(2018 Authorization) upon completion of. During the prior authorized share repurchase program. Repurchases under the 2017 Authorization, which began in May 2017, totaled approximately $600 million atyear ended December 31, 2017 and were held in Treasury. The remaining $900 million of ordinary shares were2021, the Company repurchased and canceled during 2018.$1.1 billion of its ordinary shares thus completing the 2018 Authorization and initiated repurchases under the 2021 Authorization of $600.2 million of its ordinary shares leaving approximately $1.4 billion remaining under the 2021 Authorization as of December 31, 2021. Additionally, through January 31, 2022, we repurchased approximately $350 million of our ordinary shares under the 2021 Authorization. In October 2018,February 2022, the Company's Board of Directors authorized the repurchase of up to $1.5$3.0 billion of its ordinary shares under a new share repurchase program (2022 Authorization) upon completion of the 20172021 Authorization. However, no material amounts were repurchased under this program during 2018.
Accumulated Other Comprehensive Income (Loss)
The changes in Accumulated other comprehensive income (loss) arewere as follows:
In millionsDerivative InstrumentsPension and OPEB ItemsForeign Currency TranslationTotal
December 31, 2019$5.6 $(457.4)$(554.8)$(1,006.6)
Separation of Ingersoll Rand Industrial, net of tax— 64.8 70.2 135.0 
Other comprehensive income (loss) attributable to Trane Technologies plc5.2 (23.9)258.8 240.1 
December 31, 2020$10.8 $(416.5)$(225.8)$(631.5)
Other comprehensive income (loss) attributable to Trane Technologies plc(3.7)118.6 (121.0)(6.1)
December 31, 2021$7.1 $(297.9)$(346.8)$(637.6)
In millions Derivative Instruments Pension and OPEB Items Foreign Currency Translation Total
December 31, 2016 $2.9
 $(554.4) $(739.0) $(1,290.5)
Other comprehensive income (loss) attributable to Ingersoll-Rand plc 1.8
 60.1
 449.8
 511.7
December 31, 2017 $4.7
 $(494.3) $(289.2) $(778.8)
Other comprehensive income (loss) attributable to Ingersoll-Rand plc 2.0
 40.3
 (227.6) (185.3)
December 31, 2018 $6.7
 $(454.0) $(516.8) $(964.1)
The amounts of Other comprehensive income (loss) attributable to noncontrolling interests for 2018, 20172021, 2020 and 20162019 were $(3.0)$(1.7) million, $0.5$2.7 million and $9.6$0.9 million, respectively, related to currency translation. Additionally, Other comprehensive income (loss) attributable to noncontrolling interests for 2021 includes $1.2 million related to pension and postretirement obligation adjustments.
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NOTE 13.14. SHARE-BASED COMPENSATION
The Company accounts for stock-based compensation plans in accordance with ASC 718, "Compensation - Stock Compensation" (ASC 718), which requires aunder the fair-value based method for measuring the value of stock-based compensation.method. Fair value is measured once at the date of grant and is not adjusted for subsequent changes. The Company’s share-based compensation plans include programs for stock options, restricted stock units (RSUs), performance share units (PSUs), and deferred compensation. Under the Company's incentive stock plan, the total number of ordinary shares authorized by the shareholders is 23.0 million, of which 22.913.7 million remains available as of December 31, 20182021 for future incentive awards.

In connection with the completion of the Transaction, the provisions of the Company's existing share-based compensation plans required adjustment to the terms of outstanding awards in order to preserve the intrinsic value of the awards immediately before and after the separation. The outstanding awards will continue to vest over the original vesting period, which is generally three years from the grant date. At the Distribution Date, the Company incurred less than $0.1 million of incremental compensation costs related to the preservation of the stock-based compensation intrinsic value post-separation.
Compensation Expense
Share-based compensation expense related to continuing operations is included in Selling and administrative expenses. The following table summarizes the expenses recognized:
In millions202120202019
Stock options$16.7 $17.9 $20.2 
RSUs21.9 23.3 26.5 
PSUs26.1 26.7 17.9 
Deferred compensation3.0 3.9 3.1 
Other (1)
4.4 3.3 3.5 
Pre-tax expense72.1 75.1 71.2 
Tax benefit(17.4)(18.2)(17.3)
After-tax expense$54.7 $56.9 $53.9 
Amounts recorded in continuing operations54.7 55.2 46.5 
Amounts recorded in discontinued operations— 1.7 7.4 
Total$54.7 $56.9 $53.9 
In millions 2018 2017 2016
Stock options $23.5
 $19.5
 $18.1
RSUs 30.4
 26.4
 26.3
PSUs 23.0
 23.0
 19.9
Deferred compensation 3.4
 3.1
 3.2
Other 0.5
 1.6
 2.1
Pre-tax expense 80.8
 73.6
 69.6
Tax benefit 19.6
 28.2
 26.6
After-tax expense $61.2
 $45.4
 $43.0
Amounts recorded in continuing operations $61.2
 $45.4
 $43.0
Amounts recorded in discontinued operations —
 —
 —
Total $61.2
 $45.4
 $43.0
(1) Includes certain plans that have a market-based component.
Grants issued during the year ended December 31 were as follows:
202120202019
Number GrantedWeighted-average fair value per awardNumber GrantedWeighted-average fair value per awardNumber GrantedWeighted-average fair value per award
Stock options589,417 $29.62 1,021,628 $16.75 1,286,857 $17.17 
RSUs153,806 $154.33 213,142 $104.76 268,465 $102.98 
Performance shares (1)
284,300 $181.84 278,468 $140.72 312,362 $111.12 
 2018 2017 2016
 Number Granted Weighted-average fair value per award Number Granted Weighted-average fair value per award Number Granted Weighted-average fair value per award
Stock options1,541,025
 $15.51
 1,518,335
 $13.46
 1,958,476
 $9.42
RSUs327,411
 $90.07
 372,443
 $81.09
 486,401
 $51.28
Performance shares (1)
363,342
 $106.31
 419,404
 $93.68
 597.088
 $53.82
(1) The number of performance shares represents the maximum award level.
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Stock Options / RSUs
Eligible participants may receive (i) stock options, (ii) RSUs or (iii) a combination of both stock options and RSUs. The fair value of each of the Company’s stock option and RSU awards is expensed on a straight-line basis over the required service period, which is generally the 3-year3-year vesting period. However, for stock options and RSUs granted to retirement eligible employees, the Company recognizes expense for the fair value at the grant date.
The average fair value of the stock options granted is determined using the Black Scholes option pricing model. The following assumptions were used during the year ended December 31:
 2018 2017 2016202120202019
Dividend yield 2.00% 2.00% 2.55%Dividend yield1.60 %2.01 %2.06 %
Volatility 21.64% 22.46% 28.60%Volatility27.90 %24.33 %21.46 %
Risk-free rate of return 2.48% 1.80% 1.12%Risk-free rate of return0.45 %0.56 %2.46 %
Expected life in years 4.8
 4.8
 4.8
Expected life in years4.84.84.8
A description of the significant assumptions used to estimate the fair value of the stock option awards is as follows:
•Dividend yield - The Company determines the dividend yield based upon the expected quarterly dividend payments as of the grant date and the current fair market value of the Company’s stock.
•Volatility - The expected volatility is based on a weighted average of the Company’s implied volatility and the most recent historical volatility of the Company’s stock commensurate with the expected life.
•Risk-free rate of return -The Company applies a yield curve of continuous risk-free rates based upon the published US Treasury spot rates on the grant date.
•Expected lifein years - The expected life of the Company’s stock option awards represents the weighted-average of the actual period since the grant date for all exercised or canceled options and an expected period for all outstanding options.
Dividend yield - The Company determines the dividend yield based upon the expected quarterly dividend payments as of the grant date and the current fair market value of the Company’s stock.

Forfeiture Rate - The Company analyzes historical data of forfeited options to develop a reasonable expectation of the number of options to forfeit prior to vesting per year. This expected forfeiture rate is applied to the Company’s ongoing compensation expense; however, all expense is adjusted to reflect actual vestings and forfeitures.
Changes in options outstanding under the plans for the years 2018, 20172021, 2020 and 2016 are2019 were as follows:
Shares
subject
to option		Weighted-
average
exercise price		Aggregate
intrinsic
value (millions)		Weighted-
average
remaining life (years)
December 31, 20186,285,351 $66.95 
Granted1,286,857 101.42 
Exercised(2,076,338)56.17 
Cancelled(76,624)92.38   
December 31, 20195,419,246 78.91 
Granted1,021,628 105.29 
Exercised(1,767,782)58.27 
Cancelled(49,539)88.12   
Adjustment due to the Transaction1,095,805 n/a
December 31, 20205,719,358 70.53 
Granted589,417 150.34 
Exercised(1,872,069)64.74 
Cancelled(25,706)115.33   
Outstanding December 31, 20214,411,000 $83.39 $523.3 5.7
Exercisable December 31, 20212,748,061 $64.86 $377.0 4.5
F-34
  
Shares
subject
to option
 
Weighted-
average
exercise price
 
Aggregate
intrinsic
value (millions)
 
Weighted-
average
remaining life (years)
December 31, 2015 6,836,029
 $43.46
    
Granted 1,958,476
 50.04
    
Exercised (1,854,058) 33.71
    
Cancelled (93,552) 56.22
    
December 31, 2016 6,846,895
 47.81
    
Granted 1,518,335
 80.27
    
Exercised (1,789,615) 42.79
    
Cancelled (220,733) 61.91
    
December 31, 2017 6,354,882
 56.49
    
Granted 1,541,025
 89.71
    
Exercised (1,515,955) 45.44
    
Cancelled (94,601) 79.53
    
Outstanding December 31, 2018 6,285,351
 $66.95
 $152.8
 6.7
Exercisable December 31, 2018 3,262,865
 $55.76
 $115.7
 5.3
Table of Contents
The following table summarizes information concerning currently outstanding and exercisable options:
  Options outstandingOptions exercisable
Range of
exercise price		Number
outstanding at
December 31,
2021		Weighted-
average
remaining
life (years)		Weighted-
average
exercise
price		Number
exercisable at
December 31,
2021		Weighted-
average
remaining
life (years)		Weighted-
average
exercise
price
$25.01 —$50.00 639,441 2.8$39.56 639,441 2.8$39.56 
50.01 —75.00 1,434,031 4.565.24 1,380,815 4.465.01 
75.01 —100.00 897,717 6.079.32 513,773 5.979.04 
100.01 —125.00 858,516 7.5105.25 213,475 7.3105.28 
125.01 —150.00 554,261 8.4148.71 557 6.8145.95 
150.01 —175.00 3,900 9.3166.50 — 0.0— 
175.01 —200.00 23,134 9.6186.90 — 0.0— 
$25.28 —$190.56 4,411,000 5.7$83.39 2,748,061 4.5$64.86 
       Options outstanding Options exercisable
Range of
exercise price
 
Number
outstanding at
December 31,
2018
 
Weighted-
average
remaining
life (years)
 
Weighted-
average
exercise
price
 
Number
outstanding at
December 31,
2018
 
Weighted-
average
remaining
life (years)
 
Weighted-
average
exercise
price
$10.01
 — $20.00
 34,551
 0.1 $13.49
 34,551
 0.1
 $13.49
20.01
 — 30.00
 78,051
 1.7 24.95
 78,051
 1.7
 24.95
30.01
 — 40.00
 265,557
 2.7 34.41
 265,557
 2.7
 34.41
40.01
 — 50.00
 1,764,942
 6.0 47.97
 1,189,081
 5.6
 46.98
50.01
 — 60.00
 586,455
 4.9 59.57
 572,668
 4.9
 59.69
60.01
 — 70.00
 743,796
 5.7 67.04
 743,796
 5.7
 67.04
70.01
 — 80.00
 14,031
 8.0 75.67
 —
 —
 —
80.01
 — 90.00
 1,440,841
 7.8 80.75
 375,001
 7.6
 80.31
90.01
 — 100.00
 1,340,727
 8.9 90.07
 4,160
 2.3
 90.07
100.01
 — 110.00
 16,400
 9.9 101.21
 —
 —
 —
$13.49
 — $101.21
 6,285,351
 6.7 $66.95
 3,262,865
 5.3
 $55.76
At December 31, 2018,2021, there was $11.5$8.5 million of total unrecognized compensation cost from stock option arrangements granted under the plan, which is primarily related to unvested shares of non-retirement eligible employees. The aggregate intrinsic value of options exercised during the year ended December 31, 20182021 and 20172020 was $74.1$212.6 million and $72.7$120.5 million,, respectively. Generally, stock options expire ten years from their date of grant.

The following table summarizes RSU activity for the years 2018, 20172021, 2020 and 2016:2019:
RSUsWeighted-
average grant
date fair value
Outstanding and unvested at December 31, 2018721,639 $78.40 
Granted268,465 102.98 
Vested(364,817)70.26 
Cancelled(20,947)89.64 
Outstanding and unvested at December 31, 2019604,340 $93.56 
Granted213,142 104.76 
Vested(338,952)86.62 
Cancelled(11,356)84.38 
Adjustment due to the Transaction22,348 n/a
Outstanding and unvested at December 31, 2020489,522 $87.75 
Granted153,806 154.33 
Vested(266,041)82.18 
Cancelled(6,257)115.11 
Outstanding and unvested at December 31, 2021371,030 $118.88 
  RSUs 
Weighted-
average grant
date fair value
Outstanding and unvested at December 31, 2015 922,611
 $58.14
Granted 486,401
 51.28
Vested (545,437) 53.84
Cancelled (27,826) 58.19
Outstanding and unvested at December 31, 2016 835,749
 $56.95
Granted 372,443
 81.09
Vested (370,397) 58.56
Cancelled (34,096) 63.79
Outstanding and unvested at December 31, 2017 803,699
 $67.09
Granted 327,411
 90.07
Vested (389,285) 64.88
Cancelled (20,186) 77.95
Outstanding and unvested at December 31, 2018 721,639
 $78.40
At December 31, 2018,2021, there was $16.8$12.5 million of total unrecognized compensation cost from RSU arrangements granted under the plan, which is related to unvested shares of non-retirement eligible employees.
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Performance Shares
The Company has a Performance Share Program (PSP) for key employees. The program provides awards in the form of PSUs based on performance against pre-established objectives. The annual target award level is expressed as a number of the Company's ordinary shares based on the fair market value of the Company's stock on the date of grant. All PSUs are settled in the form of ordinary shares.
Beginning with the 2018 grant year, PSU awards are earned based 50% upon a performance condition, measured by relative Cash Flow Return on Invested Capital (CROIC) growth to the industrial group of companies in the S&P 500 Industrials Index over a 3-year performance period, and 50% upon a market condition, measured by the Company's relative total shareholder return (TSR) as compared to the TSR of the industrial group of companies in the S&P 500 Industrials Index over a 3-year performance period. The fair value of the market condition is estimated using a Monte Carlo Simulation approachsimulation model in a risk-neutral framework based upon historical volatility, risk-free rates and correlation matrix. Awards granted prior to 2018 were earned based 50% upon a performance condition, measured by relative earnings-per-share (EPS) growth to the industrial group of companies in the S&P 500 Industrials Index over a 3-year performance period, and 50% upon a market condition measured by the Company's relative TSR as compared to the TSR of the industrial group of companies in the S&P 500 Industrials Index over a 3-year performance period.

The following table summarizes PSU activity for the maximum number of shares that may be issued for the years 2018, 20172021, 2020 and 2016:2019:
PSUsWeighted-average grant date fair value
 PSUs Weighted-average grant date fair value
Outstanding and unvested at December 31, 2015 1,448,232
 $63.18
Outstanding and unvested at December 31, 2018Outstanding and unvested at December 31, 20181,246,164 $79.83 
Granted 597,088
 53.82
Granted312,362 111.12 
Vested (462,035) 46.81
Vested(539,402)53.76 
Forfeited (159,489) 56.25
Forfeited(34,194)106.14 
Outstanding and unvested at December 31, 2016 1,423,796
 $65.34
Outstanding and unvested at December 31, 2019Outstanding and unvested at December 31, 2019984,930 $103.12 
Granted 419,404
 93.68
Granted278,468 140.72 
Vested (353,834) 65.35
Vested(340,400)93.63 
Forfeited (124,830) 73.40
Forfeited(56,430)89.94 
Outstanding and unvested at December 31, 2017 1,364,536
 $73.31
Adjustment due to the TransactionAdjustment due to the Transaction151,904 n/a
Outstanding and unvested at December 31, 2020Outstanding and unvested at December 31, 20201,018,472 $99.53 
Granted 363,342
 106.31
Granted284,300 181.84 
Vested (309,306) 76.00
Vested(419,088)82.93 
Forfeited (172,408) 90.89
Forfeited(81,728)160.86 
Outstanding and unvested at December 31, 2018 1,246,164
 $79.83
Outstanding and unvested at December 31, 2021Outstanding and unvested at December 31, 2021801,956 $131.14 
At December 31, 2018,2021, there was $18.6$17.4 million of total unrecognized compensation cost from PSU arrangements based on current performance, which is related to unvested shares. This compensation will be recognized over the required service period, which is generally the three-year vesting period.
Deferred Compensation
The Company allows key employees to defer a portion of their eligible compensation into a number of investment choices, including its ordinary share equivalents. Any amounts invested in ordinary share equivalents will be settled in ordinary shares of the Company at the time of distribution.
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NOTE 14.15. RESTRUCTURING ACTIVITIES
The Company incurs costs associated with restructuring initiatives intended to result in improved operating performance, profitability and working capital levels. Actions associated with these initiatives include workforce reduction, improving manufacturing productivity, realignment of management structures and rationalizing certain assets. Restructuring charges recorded during the years ended December 31 were as follows:
In millions 2018 2017 2016In millions202120202019
Climate $34.1
 $42.3
 $6.2
Industrial 49.9
 14.5
 20.5
AmericasAmericas$6.8 $35.3 $39.0 
EMEAEMEA2.6 7.4 5.1 
Asia PacificAsia Pacific1.4 5.1 6.7 
Corporate and Other 9.4
 4.9
 8.8
Corporate and Other16.2 27.9 1.8 
Total $93.4
 $61.7
 $35.5
Total$27.0 $75.7 $52.6 
      
Cost of goods sold $72.3
 $46.8
 $9.8
Cost of goods sold$7.5 $24.1 $37.3 
Selling and administrative expenses 21.1
 14.9
 25.7
Selling and administrative expenses19.5 51.6 15.3 
Total $93.4
 $61.7
 $35.5
Total$27.0 $75.7 $52.6 
The changes in the restructuring reserve were as follows:
In millionsAmericasEMEAAsia PacificCorporate
and Other		Total
December 31, 2019$11.9 $2.8 $9.1 $1.6 $25.4 
Additions, net of reversals (1)
31.3 7.4 5.1 27.9 71.7 
Cash paid/Other(30.6)(5.9)(12.2)(18.9)(67.6)
December 31, 202012.6 4.3 2.0 10.6 29.5 
Additions, net of reversals (2)
6.2 1.9 1.4 16.2 25.7 
Cash paid/Other(12.2)(3.1)(2.4)(20.8)(38.5)
December 31, 2021$6.6 $3.1 $1.0 $6.0 $16.7 
In millions Climate Industrial 
Corporate
and Other
 Total
December 31, 2016 $3.4
 $4.3
 $0.6
 $8.3
Additions, net of reversals (1)
 25.6
 14.5
 4.9
 45.0
Cash paid/Other (21.6) (12.7) (3.0) (37.3)
December 31, 2017 7.4
 6.1
 2.5
 16.0
Additions, net of reversals (2)
 16.3
 49.9
 9.4
 75.6
Cash paid/Other (4.8) (26.1) (9.3) (40.2)
December 31, 2018 $18.9
 $29.9
 $2.6
 $51.4
(1) Excludes the non-cash costs of asset rationalizationsaccelerated depreciation on equipment ($8.44.0 million) and pension-related impacts ($8.3 million).
(2) Excludes the accelerated depreciation on buildings and equipment and other non-cash charges ($1.3 million).
During the year ended December 31, 2021, costs of asset rationalizations ($12.3 million) and pension-related impacts ($5.5 million).
Currentassociated with announced restructuring actions include generalprimarily included the following:
•costs related to workforce reductions as well asand the closure and consolidationreorganization of certain manufacturing facilitiesresources in an effort to improve the Company's cost structure. structure and other functional transformation initiatives;
•the plan to close a U.S. manufacturing facility and relocate production to another existing U.S. facility announced in 2018; and
•costs related to the reorganization of resources and facilities in response to the completion of the Transaction and separation of Ingersoll Rand Industrial.
Amounts recognized primarily relate to severance and exit costs. However,In addition, the Company does includealso includes costs that are directly attributable to the restructuring activity but do not fall into the severance, exit or disposal categories. During the year ended December 31, 2018, costs associated with announced restructuring actions primarily included the following:
the plan to close a Non-U.S. manufacturing facility within the Industrial segment and relocate production to other U.S. and Non-U.S. facilities; and
the plan to close two U.S. manufacturing facilities within the Climate segment and relocate production to another existing U.S. facility.
As of December 31, 2018,2021, the Company had $51.4$16.7 million accrued for costs associated with its ongoing restructuring actions, of which a majority is expected to be paid within one year. These actions primarily relate to workforce reduction benefits.
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NOTE 15.16. OTHER INCOME/(EXPENSE), NET
The components of Other income/(expense), net for the years ended December 31, 2018, 20172021, 2020 and 2016 are2019 were as follows:
In millions202120202019
Interest income$4.0 $4.5 $0.6 
Foreign currency exchange loss(10.7)(10.0)(9.5)
Other components of net periodic benefit credit/(cost)(1.6)(14.7)(34.9)
Other activity, net9.4 24.3 15.4 
Other income/(expense), net$1.1 $4.1 $(28.4)
In millions 2018 2017 2016
Interest income $6.4
 $9.4
 $8.0
Exchange gain (loss) (17.6) (8.8) (2.0)
Other components of net periodic benefit cost (21.9) (31.0) (30.1)
Income (loss) from equity investment —
 —
 (0.8)
Gain on sale of Hussmann equity investment —
 —
 397.8
Other activity, net (3.3) (1.2) (13.3)
Other income/(expense), net $(36.4) $(31.6) $359.6
Other income /(expense)income/(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, the Company includes the components of net periodic benefit costcredit/(cost) for pension and post retirement obligations other than the service cost component. Other activity, net include costsprimarily includes items associated with Trane U.S. Inc. (Trane)certain legal matters, as well as asbestos-related activities. During the year ended December 31, 2021, the Company recorded a gain of $12.8 million related to the release of a pension indemnification liability, partially offset by a charge of $7.2 million to increase its Funding Agreement liability from asbestos-related activities of Murray within other activity, net. Other activity, net for the settlementyear ended December 31, 2020, primarily includes a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years and defensea gain of asbestos-related claims, insurance settlements on asbestos-related matters$0.9 million related to the deconsolidation of Murray and the revaluation of its liability for potential future claims.wholly-owned subsidiary ClimateLabs within other activity, net. Refer to Note 20,21, "Commitments and Contingencies," for more information regarding asbestos-related matters. In addition, other activity, net for the year ended December 31, 2016 includes $16.4 million for the settlement of a lawsuit originally filed by a customer in 2012. The lawsuit related to a commercial HVAC contract entered into in 2001, prior to our acquisition of Trane. The charge represents the settlement and related legal costs recognized during 2016.
Sale of Hussmann Equity Investment
During 2011, the Company completed the sale of a controlling interest of its Hussmann refrigerated display case business (Hussmann) to a newly-formed affiliate of private equity firm Clayton Dubilier & Rice, LLC (CD&R).  Per the terms of the agreement, CD&R’s ownership interest in Hussmann at the acquisition date was 60% with the remaining 40% being retained by the Company.  As a result, the Company accounted for its interest in Hussmann using the equity method of accounting.

On December 21, 2015, the Company announced it would sell its remaining equity interest in Hussmann as part of a transaction in which Panasonic Corporation would acquire 100 percent of Hussmann's outstanding shares. The transaction was completed on April 1, 2016. The Company received net proceeds of$422.5 million, for its interest and recognized a gain of $397.8 million on the sale.
NOTE 16.17. INCOME TAXES
In December 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which makes widespread changes to the Internal Revenue Code. The Act, among other things, reduced the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a transition tax on earnings of certain foreign subsidiaries that were previously not subject to U.S. tax and creates new income taxes on certain foreign sourced earnings.
The SEC issued Staff Accounting Bulletin No. 118 (SAB 118) which provides guidance on accounting for the tax effects of the Act and allows for adjustments to provisional amounts during a measurement period of up to one year. In accordance with SAB 118, the Company has made reasonable estimates related to (1) the remeasurement of U.S. deferred tax balances for the reduction in the tax rate (2) the liability for the transition tax and (3) the taxes accrued relating to the change in permanent reinvestment assertion for unremitted earnings of certain foreign subsidiaries. As a result, the Company recognized a net provisional income tax benefit of $21.0 million associated with these items in 2017.
During 2018, the Company recognized measurement period adjustments for (1) the remeasurement of U.S. deferred tax balances for the reduction in the tax rate, (2) the liability for the transition tax and (3) the taxes accrued relating to the change in permanent reinvestment assertion for unremitted earnings of certain foreign subsidiaries. In determining the measurement period adjustments, the Company assessed regulatory guidance that was issued to determine the impact on the provisional estimates recognized in 2017. In addition, the Company gathered information and performed additional analysis on these estimates, including, but not limited to, the amount of earnings and profits subject to the transition tax, the calculation of foreign tax credits, the local tax treatment of future distributions of unremitted earnings and in regard to the remeasurement of U.S. deferred taxes, the filing of its 2017 federal and state income tax returns. Measurement period adjustments were reported as a component of Provision for income taxes in the reporting period the amounts were determined. As of December 31, 2018, the Company finalized its provisional accounting under SAB 118.
A reconciliation of the provisional amounts reported to the final tax effect of the Act is as follows:
In millions2017
Provisional Amounts Reported		 
2018
Measurement Period Adjustments
 
Final Tax
Effects of
the Act
Remeasurement of deferred tax balances$(300.6) $4.8
 $(295.8)
Transition tax160.7
 24.6
 185.3
Change in permanent reinvestment assertion118.9
 (38.4) 80.5
Income tax benefit, net$(21.0) $(9.0) $(30.0)
Current and deferred provision for income taxes
Earnings before income taxes for the years ended December 31 were taxed within the following jurisdictions:
In millions202120202019
United States$995.5 $653.9 $837.4 
Non-U.S.795.2 634.3 561.5 
Total$1,790.7 $1,288.2 $1,398.9 
In millions2018 2017 2016
United States (1)
$971.6
 $(17.6) $419.8
Non-U.S.688.7
 1,435.5
 1,321.5
Total$1,660.3
 $1,417.9
 $1,741.3
(1) Amount reported in 2017 includes the impact of a premium paid of approximately $520 million related to the early retirement of certain intercompany debt obligations

The components of the Provision for income taxes for the years ended December 31 were as follows:
In millions202120202019
Current tax expense (benefit):
United States$247.0 $168.3 $181.8 
Non-U.S.111.7 106.3 77.4 
Total:358.7 274.6 259.2 
Deferred tax expense (benefit):
United States(42.5)11.2 2.2 
Non-U.S.17.3 11.0 (22.8)
Total:(25.2)22.2 (20.6)
Total tax expense (benefit):
United States204.5 179.5 184.0 
Non-U.S.129.0 117.3 54.6 
Total$333.5 $296.8 $238.6 
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In millions 2018 2017 2016
Current tax expense (benefit):      
United States $231.9
 $102.2
 $179.6
Non-U.S. 193.2
 95.4
 135.7
Total: 425.1
 197.6
 315.3
Deferred tax expense (benefit):      
United States (83.2) (234.7) (6.7)
Non-U.S. (60.6) 117.3
 (27.1)
Total: (143.8) (117.4) (33.8)
Total tax expense (benefit):      
United States 148.7
 (132.5) 172.9
Non-U.S. 132.6
 212.7
 108.6
Total $281.3
 $80.2
 $281.5
The Provision for income taxes differs from the amount of income taxes determined by applying the applicable U.S. statutory income tax rate to pretax income, as a result of the following differences:
 Percent of pretax income
202120202019
Statutory U.S. rate21.0 %21.0 %21.0 %
Increase (decrease) in rates resulting from:
Non-U.S. tax rate differential(2.8)(1.1)(2.8)
Tax on U.S. subsidiaries on non-U.S. earnings (a)
(0.3)0.3 (0.2)
State and local income taxes (b)
2.0 4.3 3.0 
Valuation allowances (c)
(1.1)(1.1)(2.9)
Stock based compensation(1.8)(1.7)(1.7)
Expiration of carryforward tax attributes— 1.1 — 
Reserves for uncertain tax positions0.1 (0.1)(0.5)
Provision to return and other true-up adjustments(0.2)(0.2)0.1 
Other adjustments1.7 0.5 1.1 
Effective tax rate18.6 %23.0 %17.1 %
  Percent of pretax income
  2018 2017 2016
Statutory U.S. rate 21.0 % 35.0 % 35.0 %
Increase (decrease) in rates resulting from:      
Non-U.S. tax rate differential (a)
 (1.8) (28.8) (14.7)
Tax on U.S. subsidiaries on non-U.S. earnings (d)
 0.7
 0.8
 0.9
State and local income taxes (b)
 0.1
 1.2
 1.4
Valuation allowances (c)
 0.7
 2.8
 0.1
Change in permanent reinvestment assertion (d), (f)
 (2.3) 8.4
 —
Transition tax (f)
 1.5
 11.3
 —
Remeasurement of deferred tax balances (f)
 0.3
 (21.2) —
Stock based compensation (0.9) (1.7) —
Foreign derived intangible income (1.1) —
 —
Reserves for uncertain tax positions (0.8) (0.9) 0.1
Hussmann gain (e)
 —
 —
 (5.7)
Provision to return and other true-up adjustments (0.7) (1.7) (0.6)
Other adjustments 0.2
 0.5
 (0.3)
Effective tax rate 16.9 % 5.7 % 16.2 %
(a)Net of foreign tax credits
(a)Amount reported in 2017 includes the impact of a premium paid of approximately $520 million related to the early retirement of certain intercompany debt obligations
(b)Net of changes in state valuation allowances
(c)Primarily federal and non-U.S., excludes state valuation allowances
(d)Net of foreign tax credits
(e)Gain from sale of Hussmann equity investment
(f)Provisional amounts reported under SAB 118 were finalized in 2018

(b)Net of changes in state valuation allowances
(c)Primarily federal and non-U.S., excludes state valuation allowances
Tax incentives, in the form of tax holidays, have been granted to the Company in certain jurisdictions to encourage industrial development. The expiration of these tax holidays varies by country. The tax holidays are conditional on the Company meeting certain employment and investment thresholds. The most significant tax holidays relate to the Company’s qualifying locations in China, Puerto Rico Panama and Singapore.Panama. The benefit for the tax holidays for the years ended December 31, 2018, 20172021, 2020 and 20162019 was $25.4$32.6 million, $19.7$24.6 million and $23.3$28.3 million, respectively.

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Deferred tax assets and liabilities
A summary of the deferred tax accounts at December 31 arewere as follows:
In millions 2018 2017In millions20212020
Deferred tax assets:    Deferred tax assets:
Inventory and accounts receivable $20.3
 $17.4
Inventory and accounts receivable$11.0 $11.7 
Fixed assets and intangibles 39.2
 10.4
Fixed assets and intangibles5.6 9.5 
Operating lease liabilitiesOperating lease liabilities106.0 101.0 
Postemployment and other benefit liabilities 386.1
 396.5
Postemployment and other benefit liabilities285.7 323.5 
Product liability 95.1
 95.4
Product liability4.6 4.8 
Funding liabilityFunding liability73.7 71.8 
Other reserves and accruals 153.9
 134.8
Other reserves and accruals171.2 164.8 
Net operating losses and credit carryforwards 589.9
 589.0
Net operating losses and credit carryforwards453.3 509.0 
Other 28.6
 22.7
Other29.0 58.5 
Gross deferred tax assets 1,313.1
 1,266.2
Gross deferred tax assets1,140.1 1,254.6 
Less: deferred tax valuation allowances (332.2) (344.6)Less: deferred tax valuation allowances(258.6)(320.5)
Deferred tax assets net of valuation allowances $980.9
 $921.6
Deferred tax assets net of valuation allowances$881.5 $934.1 
Deferred tax liabilities:    Deferred tax liabilities:
Inventory and accounts receivable $(18.6) $(24.1)Inventory and accounts receivable$(18.6)$(22.3)
Fixed assets and intangibles (1,220.9) (1,237.4)Fixed assets and intangibles(1,135.4)(1,186.0)
Operating lease right-of-use assetsOperating lease right-of-use assets(104.4)(99.5)
Postemployment and other benefit liabilities (9.7) (9.6)Postemployment and other benefit liabilities(21.3)(14.1)
Other reserves and accruals (11.8) (1.5)Other reserves and accruals(5.2)(7.2)
Product liability (1.2) (1.4)Product liability— (0.2)
Undistributed earnings of foreign subsidiaries (39.5) (137.7)Undistributed earnings of foreign subsidiaries(27.8)(22.4)
Other (10.6) (11.1)Other(6.9)(3.2)
Gross deferred tax liabilities (1,312.3) (1,422.8)Gross deferred tax liabilities(1,319.6)(1,354.9)
Net deferred tax assets (liabilities) $(331.4) $(501.2)Net deferred tax assets (liabilities)$(438.1)$(420.8)
At December 31, 2018,2021, no deferred taxes have been provided for earnings of certain of the Company’s subsidiaries, since these earnings have been and under current plans will continue to be permanently reinvested in these subsidiaries. These earnings amount to approximately $3.2$2.5 billion which if distributed would result in additional taxes, which may be payable upon distribution, of approximately $400.0$300.0 million.
At December 31, 2018,2021, the Company had the following operating loss, capital loss and tax credit carryforwards available to offset taxable income in prior and future years:
In millions Amount 
Expiration
Period
U.S. Federal net operating loss carryforwards $680.2
 2020-2036
U.S. Federal credit carryforwards 127.9
 2022-Unlimited
U.S. State net operating loss carryforwards 3,317.0
 2019-Unlimited
U.S. State credit carryforwards 30.4
 2019-Unlimited
Non-U.S. net operating loss carryforwards 752.9
 2019-Unlimited
Non-U.S. credit carryforwards 7.1
 Unlimited
In millionsAmountExpiration
Period
U.S. Federal net operating loss carryforwards$611.0 2022-2036
U.S. Federal credit carryforwards119.8 2022-2030
U.S. State net operating loss carryforwards2,776.3 2022-Unlimited
U.S. State credit carryforwards29.4 2022-Unlimited
Non-U.S. net operating loss carryforwards530.7 2022-Unlimited
Non-U.S. credit carryforwards11.0 Unlimited
The U.S. state net operating loss carryforwards were incurred in various jurisdictions. The non-U.S. net operating loss carryforwards were incurred in various jurisdictions, predominantly in Belgium, Brazil, China, India, Luxembourg, Spain and the United Kingdom.

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Activity associated with the Company’s valuation allowance is as follows:
In millions 2018 2017 2016In millions202120202019
Beginning balance $344.6
 $184.5
 $213.1
Beginning balance$320.5 $309.4 $310.3 
Increase to valuation allowance 54.9
 176.5
 19.4
Increase to valuation allowance86.5 38.9 44.0 
Decrease to valuation allowance (55.1) (19.1) (43.5)Decrease to valuation allowance(113.5)(22.8)(43.6)
Other deductionsOther deductions— (0.1)— 
Write off against valuation allowance (4.6) —
 —
Write off against valuation allowance(33.0)(3.7)— 
Accumulated other comprehensive income (loss) (7.6) 2.7
 (4.5)Accumulated other comprehensive income (loss)(1.9)(1.2)(1.3)
Ending balance $332.2
 $344.6
 $184.5
Ending balance$258.6 $320.5 $309.4 
During 2018,2021, the Company recorded a net addition to the$21.4 million reduction in valuation allowance on deferred tax assets primarily related to excess foreign tax credits as a result of an increase in current year foreign source income.
During 2020, the amountCompany recorded a $22.3 million increase in valuation allowance on deferred tax assets primarily related to certain state net deferred tax assets as a result of $17.3 million.the Transaction. In addition, the Company recorded a $35$16.0 million reduction in valuation allowances related to non-U.S. net operating losses, primarily as a result of a planned restructuring in a non-U.S. tax jurisdiction, and foreign tax credits as a result of revised projections of future foreign source income.
During 2019, the Company recorded a $43.6 million reduction in valuation allowance on deferred tax assets primarily related to
non-U.S. net operating losses. In addition, the Company recorded a $19.3 million increase in a valuation allowance for certain state net deferred tax assets. The reduction in certain state net deferred tax assets is primarily theas a result of revised projections of future state taxable income during the carryforward period.
During 2017, the Company recorded a valuation allowance of approximately $30 million on certain net deferred tax assets in Brazil that were no longer expected to be realized. In addition, the Company recorded a valuation allowance of approximately $100 million related to excess foreign tax credits generated as a result of the Act.
Unrecognized tax benefits
The Company has total unrecognized tax benefits of $83.0$65.2 million and $120.5$65.4 million as of December 31, 2018,2021, and December 31, 2017,2020, respectively. The amount of unrecognized tax benefits that, if recognized, would affect the continuing operations effective tax rate are $60.8$39.1 million as of December 31, 2018.2021. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
In millions202120202019
Beginning balance$65.4 $63.7 $68.7 
Additions based on tax positions related to the current year1.0 1.0 1.2 
Additions based on tax positions related to prior years5.1 2.1 9.3 
Reductions based on tax positions related to prior years(2.4)(1.5)(13.1)
Reductions related to settlements with tax authorities(0.1)(0.7)(0.9)
Reductions related to lapses of statute of limitations(1.0)(1.7)(0.6)
Translation (gain) loss(2.8)2.5 (0.9)
Ending balance$65.2 $65.4 $63.7 
In millions 2018 2017 2016
Beginning balance $120.5
 $107.1
 $174.9
Additions based on tax positions related to the current year 3.4
 6.2
 5.9
Additions based on tax positions related to prior years 23.5
 16.8
 29.1
Reductions based on tax positions related to prior years (47.2) (8.6) (37.6)
Reductions related to settlements with tax authorities (14.2) (4.8) (60.9)
Reductions related to lapses of statute of limitations (0.9) (1.3) (2.8)
Translation (gain) loss (2.1) 5.1
 (1.5)
Ending balance $83.0
 $120.5
 $107.1
The Company records interest and penalties associated with the uncertain tax positions within its Provision for income taxes. The Company had reserves associated with interest and penalties, net of tax, of $20.7$7.1 million and $35.0$14.6 million at December 31, 20182021 and December 31, 2017,2020, respectively. For the year ended December 31, 20182021 and December 31, 2017,2020, the Company recognized a $13.4$0.7 million tax benefit and a $1.9$0.1 million tax expense, respectively, in interest and penalties, net of tax in continuing operations related to these uncertain tax positions.
The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits, excluding interest and penalties, could potentially be reduced by up to approximately $4$3.2 million during the next 12 months.
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The provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by the Company. In addition, tax authorities periodically review income tax returns filed by the Company and can raise issues regarding its filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which the Company operates. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Belgium, Brazil, Canada, China, France, Germany, Ireland, Italy, Mexico, Spain, the Netherlands, the United Kingdom and the United States. These examinations on their own, or any subsequent litigation related to the examinations, may result in additional taxes or penalties against the Company. If the ultimate result of these audits differ from

original or adjusted estimates, they could have a material impact on the Company’s tax provision. In general, the examination of the Company’s materialU.S. federal tax returns areis complete or effectively settled for years prior to 2016. In general, the examination of the Company’s material non-U.S. tax returns is complete or effectively settled for the years prior to 2008,2013, with certain matters prior to 20082013 being resolved through appeals and litigation and also unilateral procedures as provided for under double tax treaties.
In connection with the Transaction, the Company and Ingersoll Rand entered into a tax sharing agreement for the allocation of taxes. The Company has an indemnity payable to Ingersoll Rand, included within other non-current liabilities, in the amount of $8.0 million of tax and interest primarily related to open audit years in non-U.S. tax jurisdictions.
NOTE 17.18. ACQUISITIONS AND DIVESTITURES
Acquisitions and Equity Method Investments
During 2018,On October 15, 2021, the Company acquired several businesses100% of Farrar Scientific Corporation's (Farrar Scientific) assets, including its patented ultra-low temperature control technologies, a development and entered intoassembly operation in Marietta, Ohio, and a joint venture.specialized team of engineers, sales engineers, operators, and technicians. Farrar Scientific is a leader in ultra-low temperature control for biopharmaceutical and other life science applications. The aggregateresults of Farrar Scientific are reported within the Americas segment from the date of acquisition.
The Company paid $251.2 million in initial cash paid, net of cash acquired, totaled $285.2 million and was fundedconsideration, financed through cash on hand. Acquisitions are recordedhand, and agreed to contingent consideration relating to an earnout payment of up to $115.0 million to be paid in 2025, tied to the attainment of key revenue targets during the period of January 1, 2022 through December 31, 2024. This additional payment, to the extent earned, will be payable in cash. The purchase price for the acquisition was expected to be $349.9 million, comprised of the upfront cash consideration of $251.2 million paid on October 15, 2021 and the fair value of the earnout payment at the time of closing the acquisition of $98.7 million. The fair value of the earnout payment is determined using the acquisition methodMonte Carlo simulation model based on projections of accountingrevenues for Farrar Scientific during the period of January 1, 2022 through December 31, 2024, implied revenue volatility and a risk adjusted discount rate. Each quarter the Company is required to remeasure the fair value of the liability as assumptions change and such adjustments will be recorded in accordance with ASC 805 "Business Combinations."Selling and administrative expenses in the Consolidated Statements of Earnings. As a result,of December 31, 2021, the fair value of the earnout payment was $96.2 million.
The aggregate purchase price has been allocated to the assets acquired and liabilities assumed based on the estimate of fair market value of such assets and liabilities at the date of acquisition. Ownership interestsIntangible assets associated with the acquisition totaled $140.7 million and primarily relate to customer relationships. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $203.6 million.
The Company recorded intangible assets based on their preliminary estimate of fair value, which consisted of the following:
In millionsWeighted-average useful life (in years)October 15, 2021
Customer relationships14$105.2 
Other635.5 
Total intangible assets$140.7 
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The valuation of intangible assets was determined using an income approach methodology. The fair values of the customer relationship intangible assets were determined using the multi-period excess earnings method based on discounted projected net cash flows associated with the net earnings attributable to the acquired customer relationships. These projected cash flows are estimated over the remaining economic life of the intangible asset and are considered from a market participant perspective. Key assumptions used in a joint ventureestimating future cash flows included projected revenue growth rates and customer attrition rates. The projected future cash flows are accounteddiscounted to present value using an appropriate discount rate. Any excess of the purchase price over the estimated fair value of net assets was recognized as goodwill. The goodwill is primarily attributable to the fair value of market share and revenue growth from Farrar Scientific. The benefit of access to the workforce is an additional element of goodwill. For income tax purposes, the acquisition was an asset purchase and the goodwill will be deductible for undertax purposes. The Company has not included pro forma financial information as the equity method whenpro forma impact was deemed not material.
During 2020, the Company does not have a controlling financial interest and reported within Other noncurrent assets on the Balance Sheet.
Primary activity during 2018 relates to the acquisition of ICS Group Holdings Limited in January 2018. The business,acquired two independent dealers, reported within the ClimateAmericas segment, specializes into support the temporary rental of energy efficient chillers for commercial and industrial buildings across Europe. In addition, the Company continues to acquire independent dealersCompany's ongoing strategy to expand its distribution network.network and service area. The aggregate cash paid, net of cash acquired, totaled $182.8 million and was financed through cash on hand. Intangible assets associated with these acquisitions totaled $45.2$76.9 million and primarily relate to customer relationships. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $131.8 million.
The fair values of the customer relationship intangible assets were determined using the multi-period excess earnings method based on discounted projected net cash flows associated with the net earnings attributable to the acquired customer relationships. These projected cash flows are estimated over the remaining economic life of the intangible asset and are considered from a market participant perspective. Key assumptions used in estimating future cash flows included projected revenue growth rates and customer attrition rates. The projected future cash flows are discounted to present value using an appropriate discount rate. The customer relationships had a weighted-average useful life of 16 years. The Company has not included pro forma financial information as the pro forma impact was deemed not material.
During 2019, the Company acquired several businesses including independent dealers to support its ongoing strategy to expand its distribution network and service area as well as other businesses that strengthen the Company's product portfolios. The aggregate cash paid, net of cash acquired, totaled $83.4 million and was funded through cash on hand. Intangible assets associated with these acquisitions totaled $25.5 million and primarily relate to trademarks and customer relationships. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $119.9$45.3 million. These acquisitions were not material to the Company's financial statements and were reported in the Americas segment.
Divestitures
The components of Discontinued operations, net of tax for the years ended December 31 were as follows:
In millions202120202019
Net revenues$— $469.8 $3,523.0 
Cost of goods sold— (315.8)(2,366.0)
Selling and administrative expenses(3.0)(234.4)(809.5)
Operating income (loss)(3.0)(80.4)347.5 
Other income/ (expense), net(36.3)(55.9)50.0 
Pre-tax earnings (loss) from discontinued operations(39.3)(136.3)397.5 
Tax benefit (expense)18.7 14.9 (129.3)
Discontinued operations, net of tax$(20.6)$(121.4)$268.2 
The table above presents the financial statement line items that support amounts included in Discontinued operations, net of tax. For the year ended December 31, 2021, Other income/(expense), net included a charge of $14.0 million to increase the Company's Funding Agreement liability from asbestos-related activities of Aldrich as well as pension and post retirement obligations and environmental costs related to businesses formerly owned by the Company. For the year ended December 31, 2020, Selling and administrative expenses included pre-tax Ingersoll Rand Industrial separation costs of $114.2 million, which are primarily related to legal, consulting and advisory fees. In addition, for the year ended December 31, 2020, Other income/ (expense), net included a loss of $25.8 million related to the deconsolidation of Aldrich and its wholly-owned subsidiary 200 Park. The year ended December 31, 2019included $94.6 million of pre-tax Ingersoll Rand Industrial separation costs within Selling and administrative expenses.
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Separation of Industrial Segment Businesses
On February 29, 2020, the Company completed the Transaction with Ingersoll Rand whereby the Company separated Ingersoll Rand Industrial which then merged with a wholly-owned subsidiary of Ingersoll Rand. In accordance with GAAP, the historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Consolidated Statements of Earnings and Consolidated Statements of Cash Flows.
Net revenues and earnings from operations, net of tax of Ingersoll Rand Industrial for the years ended December 31 were as follows:
In millions202120202019
Net revenues$— $469.8 $3,523.0 
Earnings (loss) attributable to Trane Technologies plc0.1 (85.8)225.2 
Earnings (loss) attributable to noncontrolling interests— 0.9 2.4 
Earnings (loss) from operations, net of tax$0.1 $(84.9)$227.6 
Earnings (loss) attributable to Trane Technologies plc includes Ingersoll Rand Industrial separation costs, net of tax primarily related to legal, consulting and advisory fees of $96.2 million during the year ended December 31, 2020. In addition, the Company completed its investmentyear ended December 31, 2019 includes $89.4 million of a 50% ownership interest in a joint venture with Mitsubishi Electric Corporation (Mitsubishi) in May 2018. The joint venture, reported within the Climate segment, will focus on marketing, selling and supporting variable refrigerant flow (VRF) and ductless heating and air conditioning systems through Trane, American Standard and Mitsubishi channels in the U.S. and select Latin American countries. Ongoing results since the date of investment are accounted for under the equity method and are not considered material to the Company’s results of operations.
During 2017, the Company acquired several businesses, including channel acquisitions, that complement existing products and services. The aggregate cash paid,Ingersoll Rand Industrial separation costs, net of cash acquired, totaled $157.6 million and was funded through cash on hand. These acquisitions were recorded using the acquisition methodtax.
Other Discontinued Operations
Other discontinued operations, net of accounting in accordance with the accounting guidance for business acquisitions. As a result, the aggregate price has been allocatedtax related to assets acquired and liabilities assumed based on the estimate of fair market value of such assets and liabilities at the date of acquisition.
Divestitures
The Company has retained costsobligations from previously sold businesses that primarily include ongoing expenses related tofor postretirement benefits, product liability and legal costs. In addition, the Company includes amounts related to the 2013 spin-offasbestos-related activities of our commercial and residential security business, now an independent public company operating under the name of Allegion plc (Allegion). Aldrich.
The components of Discontinued operations, net of taxfor the years ended December 31 arewere as follows:
In millions202120202019
Ingersoll Rand Industrial, net of tax$0.1 $(84.9)$227.6 
Asbestos-related activities of Aldrich (post-Petition Date)(13.3)(19.1)— 
Other discontinued operations, net of tax(7.4)(17.4)40.6 
Discontinued operations, net of tax$(20.6)$(121.4)$268.2 
In millions 2018 2017 2016
Pre-tax earnings (loss) from discontinued operations $(85.5) $(34.0) $28.1
Tax benefit (expense) 64.0
 8.6
 4.8
Discontinued operations, net of tax $(21.5) $(25.4) $32.9
Pre-tax earnings (loss) from discontinued operations includes costs associated with Ingersoll Rand Company for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims. Refer to Note 20,21, "Commitments and Contingencies," for more information related to asbestos. A portion ofregarding the tax benefit (expense) in each period represent adjustments for certain tax matters associated with Allegion.deconsolidation and asbestos-related matters.

NOTE 18.19. EARNINGS PER SHARE (EPS)
Basic EPS is calculated by dividing Net earnings attributable to Ingersoll-RandTrane Technologies plc by the weighted-average number of ordinary shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potentially dilutive ordinary shares, which in the Company’s case, includes shares issuable under share-based compensation plans. The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted earnings per share calculations:
In millions202120202019
Weighted-average number of basic shares outstanding238.7 240.1 241.6 
Shares issuable under incentive stock plans3.6 3.0 2.8 
Weighted-average number of diluted shares outstanding242.3 243.1 244.4 
Anti-dilutive shares— 0.6 — 
Dividends declared per ordinary share$2.36 $2.12 $2.12 
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In millions 2018 2017 2016
Weighted-average number of basic shares outstanding 247.2
 254.9
 259.2
Shares issuable under incentive stock plans 2.9
 3.2
 2.5
Weighted-average number of diluted shares outstanding 250.1
 258.1
 261.7
Anti-dilutive shares 1.5
 1.6
 1.2
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NOTE 19.20. BUSINESS SEGMENT INFORMATION
The accounting policies of theCompany operates under three regional operating segments aredesigned to create deep customer focus and relevance in markets around the same as those described in the summary of significant accounting policies except that the operating segments’ results are prepared on a management basis that is consistent with the manner in which the Company prepares financial information for internal review and decision making. The Company largely evaluates performance based on Segment operating income and Segment operating margins.world. Intercompany sales between segments are considered immaterial.
•The Company's ClimateAmericas segment delivers energy-efficient productsinnovates for customers in North America and innovative energy services. It includes Trane® Latin America. The Americas segment encompasses commercial heating and American Standard® Heating & Air Conditioning which provide heating, ventilationcooling systems, building controls, and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; energy services and building automation through Trane Building Advantagesolutions; residential heating and Nexia;cooling; and Thermo King® transport temperature controlrefrigeration systems and solutions.
•The Company's IndustrialEMEA segment delivers productsinnovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating and cooling systems, services that enhance energy efficiency, productivity and operations. It includes compressed airsolutions for commercial buildings and gasindustrial processing, and transport refrigeration systems and solutions.
•The Company's Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating and cooling systems, services power tools, material handlingand solutions for commercial buildings and transport refrigeration systems ARO® fluid management equipment, as well as Club Car ® golf, utility and rough terrain vehicles.solutions.
Management measures operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, unallocated corporate expenses and discontinued operations (Segment Adjusted EBITDA). Segment operating incomeAdjusted EBITDA is the measure of profitnot defined under GAAP and loss that the Company's chief operating decision maker usesmay not be comparable to evaluate the financial performance of the businesssimilarly-titled measures used by other companies and as the basisshould not be considered a substitute for performance reviews, compensation and resource allocation. For these reasons, thenet earnings or other results reported in accordance with GAAP. The Company believes that Segment operating income representsAdjusted EBITDA provides the most relevant measure of segment profitprofitability as well as earnings power and loss.the ability to generate cash. This measure is a useful financial metric to assess the Company's operating performance from period to period by excluding certain items that it believes are not representative of its core business and the Company uses this measure for business planning purposes. Segment Adjusted EBITDA also provides a useful tool for assessing the comparability between periods and the Company's ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates non-cash charges such as depreciation and amortization expense.

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A summary of operations by reportable segmentssegment for the years ended December 31 were as follows:
Dollar amounts in millions 2018 2017 2016
Climate      
Net revenues $12,343.8
 $11,167.5
 $10,545.0
Segment operating income 1,766.2
 1,572.7
 1,537.5
Segment operating income as a percentage of revenues 14.3% 14.1% 14.6%
Depreciation and amortization 252.0
 247.6
 225.2
Capital expenditures 217.3
 103.8
 78.2
Industrial      
Net revenues 3,324.4
 3,030.1
 2,963.9
Segment operating income 405.3
 357.6
 300.3
Segment operating income as a percentage of revenues 12.2% 11.8% 10.1%
Depreciation and amortization 79.2
 77.3
 67.2
Capital expenditures 80.9
 57.4
 36.3
       
Total net revenues $15,668.2
 $14,197.6
 $13,508.9
       
Reconciliation to Operating Income      
Segment operating income from reportable segments 2,171.5
 1,930.3
 1,837.8
Unallocated corporate expense (254.1) (265.0) (234.6)
Total operating income $1,917.4
 $1,665.3
 $1,603.2
Total operating income as a percentage of revenues 12.2% 11.7% 11.9%
Depreciation and Amortization      
Depreciation and amortization from reportable segments 331.2
 324.9
 292.4
Unallocated depreciation and amortization 30.3
 28.4
 59.8
Total depreciation and amortization $361.5

$353.3

$352.2
Capital Expenditures      
Capital expenditures from reportable segments 298.2
 161.2
 114.5
Corporate capital expenditures 67.4
 60.1
 68.2
Total capital expenditures $365.6
 $221.3
 $182.7
In millions202120202019
Net revenues
Americas$10,957.1 $9,685.9 $10,059.5 
EMEA1,944.9 1,648.1 1,762.6 
Asia Pacific1,234.4 1,120.7 1,253.8 
Total Net revenues$14,136.4 $12,454.7 $13,075.9 
Segment Adjusted EBITDA
Americas$2,008.8 $1,677.7 $1,742.1 
EMEA359.2 265.7 267.7 
Asia Pacific228.5 188.8 182.8 
Total Segment Adjusted EBITDA$2,596.5 $2,132.2 $2,192.6 
Reconciliation of Segment Adjusted EBITDA to earnings before income taxes
Total Segment Adjusted EBITDA$2,596.5 $2,132.2 $2,192.6 
Interest expense(233.7)(248.7)(242.8)
Depreciation and amortization(299.4)(294.3)(288.8)
Restructuring costs(27.0)(75.7)(52.6)
Unallocated corporate expenses(245.7)(225.3)(209.5)
Earnings before income taxes$1,790.7 $1,288.2 $1,398.9 
Depreciation and Amortization
Americas$227.6 $224.0 $213.6 
EMEA33.3 32.6 31.0 
Asia Pacific16.5 11.6 13.4 
Depreciation and amortization from reportable segments$277.4 $268.2 $258.0 
Unallocated depreciation and amortization22.0 26.1 30.8 
Total depreciation and amortization$299.4 $294.3 $288.8 
Capital Expenditures
Americas$148.7 $98.2 $146.8 
EMEA23.6 24.7 30.0 
Asia Pacific20.6 7.7 11.3 
Capital expenditures from reportable segments$192.9 $130.6 $188.1 
Corporate capital expenditures30.1 15.6 17.3 
Total capital expenditures$223.0 $146.2 $205.4 
At December 31, a summary of long-lived assets by geographic area were as follows:
In millions20212020
United States$1,287.5 $1,219.4 
Non-U.S.548.1 539.1 
Total$1,835.6 $1,758.5 
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In millions 2018
2017 (1)
United States $1,914.7
 $1,878.1
Non-U.S. 781.3
 758.5
Total $2,696.0
 $2,636.6
(1) In the Company's Annual Report on Form 10-K for the year ended December 31, 2017, the amounts disclosed for long-lived assets by geographic area at December 31, 2017 were inadvertently misstated. Management determined the disclosure error was not material to the 2017 financial statements. The revised amounts have been included in table above.
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NOTE 20.21. COMMITMENTS AND CONTINGENCIES
The Company is involved in various litigations,litigation, claims and administrative proceedings, including those related to the bankruptcy proceedings for Aldrich and Murray and environmental asbestos, and product liability matters. In accordance with ASC 450, "Contingencies" (ASC 450), theThe Company records accruals for loss contingencies when it is both probable that a liability will be incurred and the amount of the loss can be reasonably estimated. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

Asbestos-Related Matters
Certain wholly-owned subsidiaries and former companies of the Company were named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims were filed against predecessors of Aldrich and Murray and generally allege injury caused by exposure to asbestos contained in certain historical products sold by predecessors of Aldrich or Murray, primarily pumps, boilers and railroad brake shoes. None of the Company's existing or previously-owned businesses were a producer or manufacturer of asbestos.
On June 18, 2020, Aldrich and Murray filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code to resolve equitably and permanently all current and future asbestos related claims in a manner beneficial to claimants, Aldrich and Murray. As a result of the Chapter 11 filings, all asbestos-related lawsuits against Aldrich and Murray have been stayed due to the imposition of a statutory automatic stay applicable in Chapter 11 bankruptcy cases. In addition, at the request of Aldrich and Murray, the Bankruptcy Court has entered an order temporarily staying all asbestos-related claims against the Trane Companies that relate to claims against Aldrich or Murray (except for asbestos-related claims for which the exclusive remedy is provided under workers' compensation statutes or similar laws). On August 23, 2021, the Bankruptcy Court entered its findings of facts and conclusions of law and order declaring that the automatic stay applies to certain asbestos related claims against the Trane Companies and enjoining such actions. As a result, all asbestos-related lawsuits against Aldrich, Murray and the Trane Companies remain stayed.
The goal of these Chapter 11 filings is to resolve equitably and permanently all current and future asbestos-related claims in a manner beneficial to claimants, Aldrich and Murray through court approval of a plan of reorganization that would create a trust pursuant to section 524(g) of the Bankruptcy Code, establish claims resolution procedures for all current and future asbestos-related claims against Aldrich and Murray and channel such claims to the trust for resolution in accordance with those procedures. Aldrich and Murray intend to seek an agreement with representatives of the asbestos claimants on the terms of a plan for the establishment of such a trust.
Prior to the Petition Date, predecessors of each of Aldrich and Murray had been litigating asbestos-related claims brought against them. No such claims have been paid since the Petition Date, and it is not contemplated that any such claims will be paid until the end of the Chapter 11 cases.
From an accounting perspective, the Company no longer has control over Aldrich and Murray as of the Petition Date as their activities are subject to review and oversight by the Bankruptcy Court. Therefore, Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated as of the Petition Date and their respective assets and liabilities were derecognized from the Company's Consolidated Financial Statements. Amounts derecognized in 2020 primarily related to the legacy asbestos-related liabilities and asbestos-related insurance recoveries and $41.7 million of cash.
Accounting Treatment Prior to the Petition Date
Historically, the Company performed a detailed analysis and projected an estimated range of the Company’s total liability for pending and unasserted future asbestos-related claims. The Company recorded the liability at the low end of the range as it believed that no amount within the range was a better estimate than any other amount. Asbestos-related defense costs were excluded from the liability and were recorded separately as services were incurred. The methodology used to prepare estimates relied upon and included the following factors, among others:
•the interpretation of a widely accepted forecast of the population likely to have been occupationally exposed to asbestos;
•epidemiological studies estimating the number of people likely to develop asbestos-related diseases such as mesothelioma and lung cancer;
•the Company’s historical experience with the filing of non-malignancy claims and claims alleging other types of malignant diseases filed against the Company relative to the number of lung cancer claims filed against the Company;
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•the analysis of the number of people likely to file an asbestos-related personal injury claim against the Company based on such epidemiological and historical data and the Company’s claims history;
•an analysis of the Company’s pending cases, by type of disease claimed and by year filed;
•an analysis of the Company’s history to determine the average settlement and resolution value of claims, by type of disease claimed;
•an adjustment for inflation in the future average settlement value of claims, at a 2.5% annual inflation rate, adjusted downward to 1.0% to take account of the declining value of claims resulting from the aging of the claimant population; and
•an analysis of the period over which the Company has and is likely to resolve asbestos-related claims against it in the future (currently projected through 2053).
Prior to the Petition Date, over 73 percent of the open and active claims against the Company were non-malignant or unspecified disease claims. In addition, the Company had a number of claims which had been placed on inactive or deferred dockets and expected to have little or no settlement value against the Company.
Prior to the Petition Date, the costs associated with the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of the Company's liability for potential future claims and recoveries were included in the Consolidated Statements of Earnings within continuing operations or discontinued operations depending on the business to which they relate. Income and expenses associated with asbestos-related matters of Aldrich and its predecessors were recorded within discontinued operations as they related to previously divested businesses, primarily Ingersoll-Dresser Pump, which was sold by the Company in 2000. Income and expenses associated with asbestos-related matters for Murray and its predecessors were recorded within continuing operations. The year ended December 31, 2020 includes a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years.
The net income (expense) associated with these pre-Petition Date transactions for the years ended December 31, 2020 and 2019 were as follows:
In millions20202019
Continuing operations$14.8 $7.0 
Discontinued operations(11.2)68.2 
Total$3.6 $75.2 
The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on currently available information. Key assumptions underlying the estimated asbestos-related liabilities include the number of people occupationally exposed and likely to develop asbestos-related diseases such as mesothelioma and lung cancer, the number of people likely to file an asbestos-related personal injury claim against the Company, the average settlement and resolution of each claim and the percentage of claims resolved with no payment. Furthermore, predictions with respect to estimates of the liability are subject to greater uncertainty as the projection period lengthens. Other factors that may affect the Company’s liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts, and the passage of state or federal tort reform legislation.
The aggregate amount of the stated limits in insurance policies available to Aldrich and Murray for asbestos-related claims acquired, over many years and from many different carriers, is substantial. However, as a result of limitations in that coverage, the projected total liability to claimants substantially exceeds the probable insurance recovery.
Accounting Treatment After the Petition Date
Upon deconsolidation in 2020, the Company recorded its retained interest in Aldrich and Murray at fair value within Other noncurrent assets in the Consolidated Balance Sheet. In determining the fair value of its equity investment, the Company used a market-adjusted multiple of earnings valuation technique. As a result, the Company recorded an aggregate equity investment of $53.6 million as of the Petition Date.
Simultaneously, the Company recognized a liability of $248.8 million within Other noncurrent liabilities in the Consolidated Balance Sheet related to its obligation under the Funding Agreements. The liability was based on asbestos-related liabilities and insurance-related assets balances previously recorded by the Company prior to the Petition Date.
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As a result of the deconsolidation, the Company recognized an aggregate loss of $24.9 million in its Consolidated Statements of Earnings during the year ended December 31, 2020. A gain of $0.9 million related to Murray and its wholly-owned subsidiary ClimateLabs was recorded within Other income/ (expense), net and a loss of $25.8 million related to Aldrich and its wholly-owned subsidiary 200 Park was recorded within Discontinued operations, net of tax. Additionally, the deconsolidation resulted in an investing cash outflow of $41.7 million in the Company's Consolidated Statements of Cash Flows, of which $10.8 million was recorded within continuing operations during the year ended December 31, 2020.
On August 26, 2021, the Company announced that Aldrich and Murray reached an agreement in principle with the court-appointed legal representative of future asbestos claimants (the FCR) in the bankruptcy proceedings. The agreement in principle includes the key terms for the permanent resolution of all current and future asbestos claims against Aldrich and Murray pursuant to a plan of reorganization (the Plan). Under the agreed terms, the Plan would create a trust pursuant to section 524(g) of the Bankruptcy Code and establish claims resolution procedures for all current and future claims against Aldrich and Murray (Asbestos Claims). On the effective date of the Plan, Aldrich and Murray would fund the trust with $545.0 million, comprised of $540.0 million in cash and a promissory note to be issued by Aldrich and Murray to the trust in the principal amount of $5.0 million, and the Asbestos Claims would be channeled to the trust for resolution in accordance with the claims resolution procedures. Following the effective date of the Plan, Aldrich and Murray, would have no further obligations with respect to the Asbestos Claims. The FCR has agreed to support such Plan. The agreement in principle with the FCR is subject to final documentation and is conditioned on arrangements acceptable to Aldrich and Murray with respect to their asbestos insurance assets. It is currently contemplated that the asbestos insurance assets of Aldrich and Murray would be contributed to the trust, and that, in consideration of their cash contribution to the trust, Aldrich and Murray would have the exclusive right to pursue, collect and retain all insurance reimbursements available in connection with the resolution of Asbestos Claims by the trust. The committee representing current asbestos claimants (the ACC) is not a party to the agreement in principle. Any settlement and its implementation in a plan of reorganization is subject to the approval of the Bankruptcy Court, and there can be no assurance that the Bankruptcy Court will approve the agreement on the terms proposed.
On September 24, 2021, Aldrich and Murray filed the Plan with the Bankruptcy Court. The Plan is supported by, and reflects the agreement in principle reached with the FCR. In connection with the Plan, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million trust intended to constitute a "qualified settlement fund" within the meaning of the Treasury Regulations under Section 468B of the Internal Revenue Code (QSF). The funds held in the QSF would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan.
During the year ended December 31, 2021, in connection with the agreement in principle reached by Aldrich and Murray with the FCR and the motion to create a $270.0 million QSF, the Company recorded a charge of $21.2 million to increase its Funding Agreement liability to $270.0 million. The corresponding charge was bifurcated between Other income/ (expense), net of$7.2 million relating to Murray and discontinued operations of $14.0 million relating to Aldrich.
On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF. The QSF is expected to be funded in the first quarter of 2022 shortly after the Bankruptcy Court enters an order reflecting such approval and such order becomes final and non-appealable. Therefore, as the Company expects to fund the QSF shortly after the Bankruptcy Court enters the order reflecting its approval, the Company reclassified its $270.0 million Funding Agreement liability to Accrued expenses and other current liabilities at December 31, 2021. At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last. The Chapter 11 cases remain pending as of February 7, 2022.
Furthermore, in connection with the 2020 Corporate Restructuring, Aldrich, Murray and their respective subsidiaries entered into several agreements with subsidiaries of the Company to ensure they each have access to services necessary for the effective operation of their respective businesses and access to capital to address any liquidity needs that arise as a result of working capital requirements or timing issues. In addition, the Company regularly transacts business with Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs. As of the Petition Date, these entities are considered related parties and post deconsolidation activity between the Company and them are reported as third party transactions and are reflected within the Company's Consolidated Statements of Earnings. Since the Petition Date, there were no material transactions between the Company and these entities.
Environmental Matters
The Company continues to be dedicated to environmental and sustainability programs to minimize the use of natural resources, and reduce the utilization and generation of hazardous materials from our manufacturing processes and to remediate identified environmental concerns. As to the latter, the Company is currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former manufacturing facilities and off-site waste disposal facilities.
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It is the Company's policy to establish environmental reserves for investigation and remediation activities when it is probable that a liability has been incurred and a reasonable estimate of the liability can be made. Estimated liabilities are determined based upon existing remediation laws and technologies. Inherent uncertainties exist in such evaluations due to unknown environmental conditions, changes in government laws and regulations, and changes in cleanup technologies. The environmental reserves are updated on a routine basis as remediation efforts progress and new information becomes available.
The Company is sometimes a party to environmental lawsuits and claims and has received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state and international authorities. It has also been identified as a potentially responsible party (PRP) for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites. For all such sites, there are other PRPs and, inIn most instances at multi-party sites, the Company’s involvementCompany's share of the liability is minimal.not material.
In estimating its liability at multi-party sites, the Company has assumed it will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable. The ability of other PRPs to participate has been taken into account, based on the Company's understanding of the parties’ financial condition and probable contributions on a per site basis. Additional lawsuits and claims involving
Reserves for environmental matters are likely to arise from time to time in the future.
classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on their expected term. As of December 31, 20182021 and 2017,2020, the Company has recorded reserves for environmental matters of $41.2$39.6 million and $41.9$39.9 million, respectively. Of these amounts, $36.1$36.3 million and $36.8$37.5 million, respectively, relate to investigation and remediation of properties and multi-waste disposal sites previously disposedrelated to businesses formerly owned by the Company.
Asbestos-Related Matters
Certain wholly-owned subsidiaries and former companies of ours are named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims have been filed against either Ingersoll-Rand Company or Trane U.S. Inc. (Trane) and generally allege injury caused by exposure to asbestos contained in certain historical products sold by Ingersoll-Rand Company or Trane, primarily pumps, boilers and railroad brake shoes. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos.
The Company engages an outside expert to perform a detailed analysis and project an estimated range of the Company’s total liability for pending and unasserted future asbestos-related claims. In accordance with ASC 450, the Company records the liability at the low end of the range as it believes that no amount within the range is a better estimate than any other amount. Asbestos-related defense costs are excluded from the liability and are recorded separately as services are incurred. The methodology used to prepare estimates relies upon and includes the following factors, among others:
the outside expert’s interpretation of a widely accepted forecast of the population likely to have been occupationally exposed to asbestos;
epidemiological studies estimating the number of people likely to develop asbestos-related diseases such as mesothelioma and lung cancer;
the Company’s historical experience with the filing of non-malignancy claims and claims alleging other types of malignant diseases filed against the Company relative to the number of lung cancer claims filed against the Company;
the outside expert’s analysis of the number of people likely to file an asbestos-related personal injury claim against the Company based on such epidemiological and historical data and the Company’s claims history;
an analysis of the Company’s pending cases, by type of disease claimed and by year filed;
an analysis of the Company’s history to determine the average settlement and resolution value of claims, by type of disease claimed;
an adjustment for inflation in the future average settlement value of claims, at a 2.5% annual inflation rate, adjusted downward to 1.0% to take account of the declining value of claims resulting from the aging of the claimant population; and
an analysis of the period over which the Company has and is likely to resolve asbestos-related claims against it in the future (currently projected through 2053).
At December 31, 2018, over 75 percent of the open and active claims against the Company are non-malignant or unspecified disease claims. In addition, the Company has a number of claims which have been placed on inactive or deferred dockets and expected to have little or no settlement value against the Company.
The Company’s liability for asbestos-related matters and the asset for probable asbestos-related insurance recoveries are included in the following balance sheet accounts:

In millionsDecember 31,
2018		 December 31,
2017
Accrued expenses and other current liabilities$63.3
 $48.2
Other noncurrent liabilities548.3
 556.6
Total asbestos-related liabilities$611.6
 $604.8
    
Other current assets$69.2
 $56.1
Other noncurrent assets199.0
 210.3
Total asset for probable asbestos-related insurance recoveries$268.2
 $266.4
The Company's asbestos insurance receivable related to Ingersoll-Rand Company and Trane was $141.7 million and $126.5 million at December 31, 2018, and $138.5 million and $127.9 million at December 31, 2017, respectively. The receivable attributable to Trane for probable insurance recoveries as of December 31, 2018 is entirely supported by settlement agreements between Trane and the respective insurance carriers. Most of these settlement agreements constitute “coverage-in-place” arrangements, in which the insurer signatories agree to reimburse Trane for specified portions of its costs for asbestos bodily injury claims and Trane agrees to certain claims-handling protocols and grants to the insurer signatories certain releases and indemnifications.
The costs associated with the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of the Company's liability for potential future claims are included in the income statement within continuing operations or discontinued operations depending on the business to which they relate. Income and expenses associated with Ingersoll-Rand Company's asbestos-related matters are recorded within discontinued operations as they relate to previously divested businesses, primarily Ingersoll-Dresser Pump, which was sold by the Company in 2000. Income and expenses associated with Trane’s asbestos-related matters are recorded within Other income/(expense), net as part of continuing operations.
The income (expense) associated with these transactions for the years ended December 31, were as follows:
In millions 2018 2017 2016
Continuing operations $(10.4) $(3.1) $2.7
Discontinued operations (56.5) (11.9) 46.3
Total $(66.9) $(15.0) $49.0
During the year ended December 31, 2018, the Company's valuation model was updated to address a change in potential future claims. The adjustment, which increased the asbestos-related liability for both Ingersoll-Rand Company and Trane, was partially offset by asbestos-related receivables from insurance carriers. During the year ended December 31, 2017, the Company recorded an adjustment to update its liability for potential future claims. This amount was partially offset by asbestos-related settlements reached with various insurance carriers. Amounts recorded during the year ended December 31, 2016 included asbestos-related settlements with various insurance carriers.
In 2012 and 2013, Ingersoll-Rand Company filed actions in the Superior Court of New Jersey, Middlesex County, seeking a declaratory judgment and other relief regarding the Company's rights to defense and indemnity for asbestos claims. The defendants were several dozen solvent insurance companies, including companies that had been paying a portion of Ingersoll-Rand Company's asbestos claim defense and indemnity costs. The responding defendants generally challenged the Company's right to recovery, and raised various coverage defenses. Since filing the actions, Ingersoll Rand Company has settled with approximately two-thirds of the insurer defendants, and has dismissed one of the actions in its entirety.
The Company continually monitors the status of pending litigation that could impact the allocation of asbestos claims against the Company's various insurance policies. The Company has concluded that its Ingersoll-Rand Company insurance receivable is probable of recovery because of the following factors:
Ingersoll-Rand Company has reached favorable settlements regarding asbestos coverage claims for the majority of its recorded asbestos-related insurance receivable;
a review of other companies in circumstances comparable to Ingersoll-Rand Company, including Trane, and the success of other companies in recovering under their insurance policies, including Trane's favorable settlement discussed above;
the Company's confidence in its right to recovery under the terms of its policies and pursuant to applicable law; and
the Company's history of receiving payments under the Ingersoll-Rand Company insurance program, including under policies that had been the subject of prior litigation.
The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on currently available information. The Company’s actual liabilities or insurance recoveries could be significantly higher or lower than those recorded

if assumptions used in the calculations vary significantly from actual results. Key variables in these assumptions include the number and type of new claims to be filed each year, the average cost of resolution of each such new claim, the resolution of coverage issues with insurance carriers, and the solvency risk with respect to the Company’s insurance carriers. Furthermore, predictions with respect to these variables are subject to greater uncertainty as the projection period lengthens. Other factors that may affect the Company’s liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts, and the passage of state or federal tort reform legislation.
The aggregate amount of the stated limits in insurance policies available to the Company for asbestos-related claims acquired, over many years and from many different carriers, is substantial. However, limitations in that coverage, primarily due to the considerations described above, are expected to result in the projected total liability to claimants substantially exceeding the probable insurance recovery.
Warranty Liability
Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. The Company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available.
The changes in the standard product warranty liability for the year ended December 31, were as follows:
In millions20212020
Balance at beginning of period$282.7 $251.4 
Reductions for payments(119.7)(130.5)
Accruals for warranties issued during the current period133.7 144.6 
Changes to accruals related to preexisting warranties1.3 14.9 
Translation(1.8)2.3 
Balance at end of period$296.2 $282.7 
In millions2018 2017
Balance at beginning of period$270.5
 $261.6
Reductions for payments(159.0) (140.5)
Accruals for warranties issued during the current period158.2
 141.9
Changes to accruals related to preexisting warranties11.5
 2.2
Translation(2.3) 5.3
Balance at end of period$278.9
 $270.5
Standard product warranty liabilities are classified as Accrued expenses and other current liabilities, or Other noncurrent liabilities based on their expected term. The Company's total current standard product warranty reserve at December 31, 20182021 and December 31, 20172020 was $149.5$106.6 million and $144.5$127.7 million,, respectively.
Warranty Deferred Revenue
The Company's extended warranty liability represents the deferred revenue associated with its extended warranty contracts and is amortized into Net revenues on a straight-line basis over the life of the contract, unless another method is more representative of the costs incurred. The Company assesses the adequacy of its liability by evaluating the expected costs under its existing contracts to ensure these expected costs do not exceed the extended warranty liability.
The changes in the extended warranty liability for the year ended December 31, were as follows:
In millions20212020
Balance at beginning of period$304.4 $302.8 
Amortization of deferred revenue for the period(121.5)(123.6)
Additions for extended warranties issued during the period119.4 123.7 
Changes to accruals related to preexisting warranties10.7 — 
Translation(1.3)1.5 
Balance at end of period$311.7 $304.4 
In millions2018 2017
Balance at beginning of period$293.0
 $295.9
Amortization of deferred revenue for the period(115.0) (107.2)
Additions for extended warranties issued during the period116.1
 100.8
Changes to accruals related to preexisting warranties(0.5) 1.3
Translation(1.4) 2.2
Balance at end of period$292.2
 $293.0
The extended warranty liability is classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on the timing of when the deferred revenue is expected to be amortized into Net revenues. The Company's total current
F-50
Table of Contents
extended warranty liability at December 31, 20182021 and December 31, 20172020 was $103.1$115.4 million and $100.0$108.6 million, respectively. For the years ended December 31, 20182021, 2020 and 2017,2019, the Company incurred costs of $63.2$58.5 million, $61.0 million and $60.7$62.8 million,, respectively, related to extended warranties.
Other Commitments and Contingencies
Certain office and warehouse facilities, transportation vehicles and data processing equipment are leased by the Company. Total rental expense was $261.3 million in 2018, $241.8 million in 2017 and $230.4 million in 2016. Minimum lease payments required under non-cancelable operating leases with terms in excess of one year for the next five years amounts to approximately: $197 million in 2019, $152 million in 2020, $107 million in 2021, $68 million in 2022, and $42 million in 2023.
Refer to Note 16 for a discussion of income tax-related contingencies.

NOTE 21. GUARANTOR FINANCIAL INFORMATION
Ingersoll-Rand plc (Plc or Parent Company) and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of public debt issued by other 100% directly or indirectly owned subsidiaries. The following condensed consolidating financial information is provided so that separate financial statements of these subsidiary issuer and guarantors are not required to be filed with the U.S. Securities and Exchange Commission.
The following table shows the Company’s guarantor relationships as of December 31, 2018:
F-51
Parent, issuer or guarantorsNotes issued
Notes guaranteed (1)
Ingersoll-Rand plc (Plc)NoneAll registered notes and debentures
Ingersoll-Rand Irish Holdings Unlimited Company (Irish Holdings)NoneAll notes issued by Global Holding and Lux Finance
Ingersoll-Rand Lux International Holding Company S.a.r.l. (Lux International)NoneAll notes issued by Global Holding and Lux Finance
Ingersoll-Rand Global Holding Company Limited (Global Holding)
2.900% Senior notes due 2021
4.250% Senior notes due 2023
3.750% Senior notes due 2028
5.750% Senior notes due 2043
4.300% Senior notes due 2048
All notes issued by Lux Finance
Ingersoll-Rand Company (New Jersey)
9.000% Debentures due 2021
7.200% Debentures due 2019-2025
6.480% Debentures due 2025
Puttable debentures due 2027-2028
All notes issued by Global Holding and Lux Finance
Ingersoll-Rand Luxembourg Finance S.A. (Lux Finance)
2.625% Notes due 2020
3.550% Notes due 2024
4.650% Notes due 2044
All notes and debentures issued by Global Holding and New Jersey
(1) All subsidiary issuers and guarantors provide irrevocable guarantees of borrowings, if any, made under revolving credit facilities
Each subsidiary debt issuer and guarantor is owned 100% directly or indirectly by the Parent Company. Each guarantee is full and unconditional, and provided on a joint and several basis. There are no significant restrictions of the Parent Company, or any guarantor, to obtain funds from its subsidiaries, such as provisions in debt agreements that prohibit dividend payments, loans or advances to the parent by a subsidiary.
Basis of presentation
The following Condensed Consolidating Financial Statements present the financial position, results of operations and cash flows of each issuer or guarantor on a legal entity basis. The financial information for all periods has been presented based on the Company’s legal entity ownerships and guarantees outstanding at December 31, 2018. Assets and liabilities are attributed to each issuer and guarantor generally based on legal entity ownership. Investments in subsidiaries of the Parent Company, subsidiary guarantors and issuers represent the proportionate share of their subsidiaries’ net assets. Certain adjustments are needed to consolidate the Parent Company and its subsidiaries, including the elimination of investments in subsidiaries and related activity that occurs between entities in different columns. These adjustments are presented in the Consolidating Adjustments column. This basis of presentation is intended to comply with the specific reporting requirements for subsidiary issuers and guarantors, and is not intended to present the Company’s financial position or results of operations or cash flows for any other purpose.

Condensed Consolidating Statement of Comprehensive Income
For the year ended December 31, 2018

In millionsPlc Irish Holdings Lux International Global
Holding		 New
Jersey		 Lux
Finance		 Other
Subsidiaries		 Consolidating
Adjustments		 
Consolidated
Net revenues$—
 $—
 $—
 $—
 $1,414.5
 $—
 $14,658.2
 $(404.5) $15,668.2
Cost of goods sold—
 —
 —
 —
 (1,044.0) —
 (10,208.1) 404.5
 (10,847.6)
Selling and administrative expenses(39.5) —
 (0.4) (0.3) (391.5) (0.3) (2,471.2) —
 (2,903.2)
Operating income (loss)(39.5)
—

(0.4)
(0.3)
(21.0)
(0.3)
1,978.9

—

1,917.4
Equity earnings (loss) in subsidiaries, net of tax1,460.8
 1,458.6
 1,183.7
 1,190.7
 1,074.3
 195.6
 —
 (6,563.7) —
Interest expense—
 —
 0.4
 (130.3) (46.8) (43.0) (1.0) —
 (220.7)
Intercompany interest and fees(92.7) —
 41.1
 (196.5) 122.8
 (11.2) 136.5
 —
 —
Other income/(expense), net—
 —
 (48.8) 0.7
 (17.3) 0.1
 28.9
 —
 (36.4)
Earnings (loss) before income taxes1,328.6

1,458.6

1,176.0

864.3

1,112.0

141.2

2,143.3

(6,563.7)
1,660.3
Benefit (provision) for income taxes9.0
 —
 —
 86.2
 98.5
 —
 (475.0) —
 (281.3)
Earnings (loss) from continuing operations1,337.6

1,458.6

1,176.0

950.5

1,210.5

141.2

1,668.3

(6,563.7)
1,379.0
Gain (loss) from discontinued operations, net of tax—
 —
 —
 —
 (20.1) —
 (1.4) —
 (21.5)
Net earnings (loss)1,337.6

1,458.6

1,176.0

950.5

1,190.4

141.2

1,666.9

(6,563.7)
1,357.5
Less: Net earnings attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 (19.9) —
 (19.9)
Net earnings attributable to Ingersoll-Rand plc$1,337.6

$1,458.6

$1,176.0

$950.5

$1,190.4

$141.2

$1,647.0

$(6,563.7)
$1,337.6
                  
Other comprehensive income (loss), net of tax(185.3) (184.7) (173.7) (85.7) (85.7) (83.5) (256.2) 869.5
 (185.3)
Comprehensive income attributable to Ingersoll-Rand plc$1,152.3
 $1,273.9
 $1,002.3
 $864.8
 $1,104.7
 $57.7
 $1,390.8
 $(5,694.2) $1,152.3

Condensed Consolidating Statement of Comprehensive Income
For the year ended December 31, 2017

In millionsPlc Irish Holdings Lux International Global
Holding		 New
Jersey		 Lux
Finance		 Other
Subsidiaries		 Consolidating
Adjustments		 
Consolidated
Net revenues$—
 $—
 $—
 $—
 $1,336.6
 $—
 $13,216.7
 $(355.7) $14,197.6
Cost of goods sold—
 —
 —
 —
 (957.9) —
 (9,209.4) 355.7
 (9,811.6)
Selling and administrative expenses(15.6) —
 (0.1) (1.2) (401.7) (0.2) (2,301.9) —
 (2,720.7)
Operating income (loss)(15.6)
—

(0.1)
(1.2)
(23.0)
(0.2)
1,705.4

—

1,665.3
Equity earnings (loss) in subsidiaries, net of tax1,349.2
 1,334.7
 982.3
 565.3
 1,212.5
 107.9
 —
 (5,551.9) —
Interest expense—
 —
 —
 (127.0) (47.2) (41.0) (0.6) —
 (215.8)
Intercompany interest and fees(33.1) —
 253.0
 (493.9) (500.9) (8.2) 783.1
 —
 —
Other income/(expense), net—
 —
 0.1
 —
 (5.8) —
 (25.9) —
 (31.6)
Earnings (loss) before income taxes1,300.5

1,334.7

1,235.3

(56.8)
635.6

58.5

2,462.0

(5,551.9)
1,417.9
Benefit (provision) for income taxes2.1
 —
 —
 247.2
 (42.4) —
 (287.1) —
 (80.2)
Earnings (loss) from continuing operations1,302.6

1,334.7

1,235.3

190.4

593.2

58.5

2,174.9

(5,551.9)
1,337.7
Gain (loss) from discontinued operations, net of tax—
 —
 —
 —
 (27.9) —
 2.5
 —
 (25.4)
Net earnings (loss)1,302.6

1,334.7

1,235.3

190.4

565.3

58.5

2,177.4

(5,551.9)
1,312.3
Less: Net earnings attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 (9.7) —
 (9.7)
Net earnings attributable to Ingersoll-Rand plc$1,302.6

$1,334.7

$1,235.3

$190.4

$565.3

$58.5

$2,167.7

$(5,551.9)
$1,302.6
                  
Other comprehensive income (loss), net of tax511.7
 510.3
 472.5
 369.3
 368.8
 102.1
 499.0
 (2,322.0) 511.7
Comprehensive income attributable to Ingersoll-Rand plc$1,814.3
 $1,845.0
 $1,707.8
 $559.7
 $934.1
 $160.6
 $2,666.7
 $(7,873.9) $1,814.3



Condensed Consolidating Statement of Comprehensive Income
For the year ended December 31, 2016

In millionsPlc Irish Holdings Lux International Global
Holding		 New
Jersey		 Lux
Finance		 Other
Subsidiaries		 Consolidating
Adjustments		 
Consolidated
Net revenues$—
 $—
 $—
 $—
 $1,327.2
 $—
 $12,533.9
 $(352.2) $13,508.9
Cost of goods sold—
 —
 —
 —
 (982.2) —
 (8,677.9) 352.2
 (9,307.9)
Selling and administrative expenses(16.9) —
 (0.2) (0.1) (352.5) (0.5) (2,227.6) —
 (2,597.8)
Operating income (loss)(16.9)
—

(0.2)
(0.1)
(7.5)
(0.5)
1,628.4

—

1,603.2
Equity earnings (loss) in subsidiaries, net of tax1,559.7
 1,544.0
 1,463.4
 609.4
 808.7
 1,521.1
 —
 (7,506.3) —
Interest expense—
 —
 —
 (127.0) (47.9) (42.6) (4.0) —
 (221.5)
Intercompany interest and fees(69.2) —
 (46.4) (164.5) (277.2) (6.8) 564.1
 —
 —
Other income/(expense), net0.9
 —
 —
 —
 (13.8) —
 372.5
 —
 359.6
Earnings (loss) before income taxes1,474.5

1,544.0

1,416.8

317.8

462.3

1,471.2

2,561.0

(7,506.3)
1,741.3
Benefit (provision) for income taxes1.7
 —
 3.0
 115.6
 117.3
 —
 (519.1) —
 (281.5)
Earnings (loss) from continuing operations1,476.2

1,544.0

1,419.8

433.4

579.6

1,471.2

2,041.9

(7,506.3)
1,459.8
Gain (loss) from discontinued operations, net of tax—
 —
 —
 —
 30.4
 —
 2.5
 —
 32.9
Net earnings (loss)1,476.2

1,544.0

1,419.8

433.4

610.0

1,471.2

2,044.4

(7,506.3)
1,492.7
Less: Net earnings attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 (16.5) —
 (16.5)
Net earnings attributable to Ingersoll-Rand plc$1,476.2

$1,544.0

$1,419.8

$433.4

$610.0

$1,471.2

$2,027.9

$(7,506.3)
$1,476.2
                  
Other comprehensive income (loss), net of tax(169.6) (168.5) (166.8) (161.1) (161.5) 5.0
 33.3
 619.6
 (169.6)
Comprehensive income attributable to Ingersoll-Rand plc$1,306.6

$1,375.5

$1,253.0

$272.3

$448.5

$1,476.2

$2,061.2

$(6,886.7)
$1,306.6


Condensed Consolidating Balance Sheet
December 31, 2018

In millionsPlc Irish Holdings Lux International Global
Holding		 New
Jersey		 Lux
Finance		 Other
Subsidiaries		 Consolidating
Adjustments		 
Consolidated
ASSETS                 
Current assets:                 
Cash and cash equivalents$—
 $0.1
 $0.2
 $—
 $363.5
 $—
 $539.6
 $—
 $903.4
Accounts and notes receivable, net—
 —
 0.1
 —
 183.4
 —
 2,495.7
 —
 2,679.2
Inventories, net—
 —
 —
 —
 146.6
 —
 1,531.2
 —
 1,677.8
Other current assets0.2
 —
 7.8
 —
 101.0
 —
 363.4
 (0.8) 471.6
Intercompany receivables59.5
 —
 3.9
 —
 3,851.0
 0.1
 3,838.0
 (7,752.5) —
Total current assets59.7
 0.1
 12.0
 —
 4,645.5
 0.1
 8,767.9
 (7,753.3) 5,732.0
Property, plant and equipment, net—
 —
 0.1
 —
 314.6
 —
 1,416.1
 —
 1,730.8
Goodwill and other intangible assets, net—
 —
 —
 —
 432.1
 —
 9,162.1
 —
 9,594.2
Other noncurrent assets—
 —
 8.0
 180.0
 498.1
 —
 610.6
 (438.8) 857.9
Investments in consolidated subsidiaries9,308.9
 9,267.8
 3,935.4
 11,743.2
 9,923.2
 1,264.2
 —
 (45,442.7) —
Intercompany notes receivable—
 —
 —
 —
 —
 —
 2,249.7
 (2,249.7) —
Total assets$9,368.6
 $9,267.9
 $3,955.5
 $11,923.2
 $15,813.5
 $1,264.3
 $22,206.4
 $(55,884.5) $17,914.9
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
Current liabilities:                 
Accounts payable and accrued expenses$11.3
 $—
 $0.1
 $41.7
 $599.6
 $6.9
 $3,306.3
 $(0.8) $3,965.1
Short-term borrowings and current maturities of long-term debt—
 —
 —
 —
 350.4
 —
 0.2
 —
 350.6
Intercompany payables2,334.6
 —
 132.9
 3,518.7
 1,700.9
 0.2
 65.2
 (7,752.5) —
Total current liabilities2,345.9
 —
 133.0
 3,560.4
 2,650.9
 7.1
 3,371.7
 (7,753.3) 4,315.7
Long-term debt—
 —
 —
 2,330.0
 319.5
 1,091.0
 0.2
 —
 3,740.7
Other noncurrent liabilities—
 —
 —
 5.5
 1,100.5
 —
 2,126.5
 (438.8) 2,793.7
Intercompany notes payable—
 —
 —
 2,249.7
 —
 —
 —
 (2,249.7) —
Total liabilities2,345.9
 —
 133.0
 8,145.6
 4,070.9
 1,098.1
 5,498.4
 (10,441.8) 10,850.1
Equity:                 
Total equity7,022.7
 9,267.9
 3,822.5
 3,777.6
 11,742.6
 166.2
 16,708.0
 (45,442.7) 7,064.8
Total liabilities and equity$9,368.6
 $9,267.9
 $3,955.5
 $11,923.2
 $15,813.5
 $1,264.3
 $22,206.4
 $(55,884.5) $17,914.9


Condensed Consolidating Balance Sheet
December 31, 2017

In millionsPlc Irish Holdings Lux International Global
Holding		 New
Jersey		 Lux
Finance		 Other
Subsidiaries		 Consolidating
Adjustments		 
Consolidated
ASSETS                 
Current assets:                 
Cash and cash equivalents$—
 $—
 $0.6
 $—
 $359.3
 $—
 $1,189.5
 $—
 $1,549.4
Accounts and notes receivable, net—
 —
 —
 —
 166.5
 —
 2,310.9
 —
 2,477.4
Inventories, net—
 —
 —
 —
 168.5
 —
 1,386.9
 —
 1,555.4
Other current assets0.2
 —
 5.7
 112.6
 76.2
 —
 342.2
 —
 536.9
Intercompany receivables1,819.1
 9,912.2
 2,036.8
 —
 1,849.9
 —
 5,014.8
 (20,632.8) —
Total current assets1,819.3
 9,912.2
 2,043.1
 112.6
 2,620.4
 —
 10,244.3
 (20,632.8) 6,119.1
Property, plant and equipment, net—
 —
 —
 —
 310.6
 —
 1,240.7
 —
 1,551.3
Goodwill and other intangible assets, net—
 —
 —
 —
 436.0
 —
 9,242.6
 —
 9,678.6
Other noncurrent assets—
 —
 —
 185.4
 471.1
 —
 550.8
 (383.0) 824.3
Investments in consolidated subsidiaries7,318.1
 1,684.2
 2,953.9
 10,480.3
 10,923.7
 1,150.9
 —
 (34,511.1) —
Total assets$9,137.4
 $11,596.4
 $4,997.0
 $10,778.3
 $14,761.8
 $1,150.9
 $21,278.4
 $(55,526.9) $18,173.3
LIABILITIES AND EQUITY                 
Current liabilities:                 
Accounts payable and accrued expenses$8.5
 $—
 $0.2
 $27.3
 $572.3
 $6.9
 $3,105.8
 $—
 $3,721.0
Short-term borrowings and current maturities of long-term debt—
 —
 —
 749.6
 350.4
 —
 7.0
 —
 1,107.0
Intercompany payables1,988.3
 —
 9,316.7
 5,481.1
 1,790.0
 523.3
 1,533.4
 (20,632.8) —
Total current liabilities1,996.8
 —
 9,316.9
 6,258.0
 2,712.7
 530.2
 4,646.2
 (20,632.8) 4,828.0
Long-term debt—
 —
 —
 1,539.9
 326.8
 1,089.7
 0.6
 —
 2,957.0
Other noncurrent liabilities0.3
 —
 —
 92.4
 1,251.8
 —
 2,219.9
 (383.0) 3,181.4
Total liabilities1,997.1
 —
 9,316.9
 7,890.3
 4,291.3
 1,619.9
 6,866.7
 (21,015.8) 10,966.4
Equity:                 
Total equity7,140.3
 11,596.4
 (4,319.9) 2,888.0
 10,470.5
 (469.0) 14,411.7
 (34,511.1) 7,206.9
Total liabilities and equity$9,137.4
 $11,596.4
 $4,997.0
 $10,778.3
 $14,761.8
 $1,150.9
 $21,278.4
 $(55,526.9) $18,173.3



Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2018

In millionsPlc Irish Holdings Lux International Global
Holding		 New
Jersey		 Lux
Finance		 Other
Subsidiaries		 Consolidating
Adjustments		 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:                 
Net cash provided by (used in) continuing operating activities$78.8
 $(2.7) $31.5
 $(217.6) $1,544.4
 $(52.0) $92.1
 $—
 $1,474.5
Net cash provided by (used in) discontinued operating activities—
 —
 —
 —
 (65.3) —
 (1.4) —
 (66.7)
Net cash provided by (used in) operating activities78.8

(2.7)
31.5

(217.6)
1,479.1

(52.0)
90.7

—

1,407.8
CASH FLOWS FROM INVESTING ACTIVITIES:                 
Capital expenditures—
 —
 —
 —
 (87.7) —
 (277.9) —
 (365.6)
Acquisitions and equity method investments, net of cash acquired—
 —
 —
 —
 —
 —
 (285.2) —
 (285.2)
Proceeds from sale of property, plant and equipment—
 —
 —
 —
 9.0
 —
 13.1
 —
 22.1
Other investing activities, net—
 —
 (7.9) —
 3.0
 —
 4.2
 —
 (0.7)
Intercompany investing activities, net1,058.7
 (481.2) 545.4
 9.5
 287.1
 —
 2,641.1
 (4,060.6) —
Net cash provided by (used in) investing activities1,058.7

(481.2)
537.5

9.5

211.4

—

2,095.3

(4,060.6)
(629.4)
CASH FLOWS FROM FINANCING ACTIVITIES:                 
Net proceeds (repayments) of debt—
 —
 —
 31.6
 (7.5) —
 (6.5) —
 17.6
Debt issuance costs—
 —
 —
 (12.0) —
 —
 —
 —
 (12.0)
Dividends paid to ordinary shareholders(479.5) —
 —
 —
 —
 —
 —
 —
 (479.5)
Dividends paid to noncontrolling interests—
 —
 —
 —
 —
 —
 (41.4) —
 (41.4)
Proceeds from shares issued under incentive plans68.9
 —
 —
 —
 —
 —
 —
 —
 68.9
Repurchase of ordinary shares(900.2) —
 —
 —
 —
 —
 —
 —
 (900.2)
Other financing activities, net(25.8) —
 —
 —
 (1.5) —
 (4.9) —
 (32.2)
Intercompany financing activities, net199.1
 484.0
 (569.4) 188.5
 (1,677.3) 52.0
 (2,737.5) 4,060.6
 —
Net cash provided by (used in) financing activities(1,137.5)
484.0

(569.4)
208.1

(1,686.3)
52.0

(2,790.3)
4,060.6

(1,378.8)
Effect of exchange rate changes on cash and cash equivalents—
 —
 —
 —
 —
 —
 (45.6) —
 (45.6)
Net increase (decrease) in cash and cash equivalents—

0.1

(0.4)
—

4.2

—

(649.9)
—

(646.0)
Cash and cash equivalents - beginning of period—
 —
 0.6
 —
 359.3
 —
 1,189.5
 —
 1,549.4
Cash and cash equivalents - end of period$—

$0.1

$0.2

$—

$363.5

$—

$539.6

$—

$903.4


Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2017
In millionsPlc Irish Holdings Lux International Global
Holding		 New
Jersey		 Lux
Finance		 Other
Subsidiaries		 Consolidating
Adjustments		 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:                 
Net cash provided by (used in) continuing operating activities$83.8
 $—
 $(42.8) $(284.9) $438.4
 $(48.0) $1,415.1
 $—
 $1,561.6
Net cash provided by (used in) discontinued operating activities—
 —
 —
 —
 (36.9) —
 (1.2) —
 (38.1)
Net cash provided by (used in) operating activities83.8

—

(42.8)
(284.9)
401.5

(48.0)
1,413.9

—

1,523.5
CASH FLOWS FROM INVESTING ACTIVITIES:                 
Capital expenditures—
 —
 —
 —
 (74.2) —
 (147.1) —
 (221.3)
Acquisitions and equity method investments, net of cash acquired—
 —
 —
 —
 (2.7) —
 (154.9) —
 (157.6)
Proceeds from sale of property, plant and equipment—
 —
 —
 —
 —
 —
 1.5
 —
 1.5
Other investing activities, net—
 —
 —
 —
 —
 —
 2.7
 —
 2.7
Intercompany investing activities, net285.1
 285.2
 2,050.2
 270.1
 4,899.4
 11.7
 6,788.3
 (14,590.0) —
Net cash provided by (used in) investing activities285.1

285.2

2,050.2

270.1

4,822.5

11.7

6,490.5

(14,590.0)
(374.7)
CASH FLOWS FROM FINANCING ACTIVITIES:                 
Net proceeds (repayments) of debt—
 —
 —
 —
 (7.5) —
 (4.2) —
 (11.7)
Debt issuance costs—
 —
 —
 (0.2) —
 —
 —
 —
 (0.2)
Dividends paid to ordinary shareholders(430.1) —
 —
 —
 —
 —
 —
 —
 (430.1)
Dividends paid to noncontrolling interests—
 —
 —
 —
 —
 —
 (15.8) —
 (15.8)
Acquisition of noncontrolling interest—
 —
 —
 —
 —
 —
 (6.8) —
 (6.8)
Proceeds from shares issued under incentive plans76.7
 —
 —
 —
 —
 —
 —
 —
 76.7
Repurchase of ordinary shares(1,016.9) —
 —
 —
 —
 —
 —
 —
 (1,016.9)
Other financing activities, net(25.4) —
 —
 —
 (1.7) —
 (0.6) —
 (27.7)
Intercompany financing activities, net1,026.8
 (285.2) (2,006.8) 15.0
 (5,490.1) 36.3
 (7,886.0) 14,590.0
 —
Net cash provided by (used in) financing activities(368.9)
(285.2)
(2,006.8)
14.8

(5,499.3)
36.3

(7,913.4)
14,590.0

(1,432.5)
Effect of exchange rate changes on cash and cash equivalents—
 —
 —
 —
 —
 —
 118.4
 —
 118.4
Net increase (decrease) in cash and cash equivalents—

—

0.6

—

(275.3)
—

109.4

—

(165.3)
Cash and cash equivalents – beginning of period—
 —
 —
 —
 634.6
 —
 1,080.1
 —
 1,714.7
Cash and cash equivalents – end of period$—

$—

$0.6

$—

$359.3

$—

$1,189.5

$—

$1,549.4


Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2016

In millionsPlc Irish Holdings Lux International Global
Holding		 New
Jersey		 Lux
Finance		 Other
Subsidiaries		 Consolidating
Adjustments		 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:                 
Net cash provided by (used in) continuing operating activities$(80.4) $—
 $(42.0) $(276.6) $823.4
 $(47.3) $1,055.9
 $—
 $1,433.0
Net cash provided by (used in) discontinued operating activities—
 —
 —
 —
 86.4
 —
 2.5
 —
 88.9
Net cash provided by (used in) operating activities(80.4)
—

(42.0)
(276.6)
909.8

(47.3)
1,058.4

—

1,521.9
CASH FLOWS FROM INVESTING ACTIVITIES:                 
Capital expenditures—
 —
 —
 —
 (73.7) —
 (109.0) —
 (182.7)
Acquisitions and equity method investments, net of cash acquired—
 —
 —
 —
 (9.2) —
 —
 —
 (9.2)
Proceeds from sale of property, plant and equipment—
 —
 —
 —
 —
 —
 9.5
 —
 9.5
Proceeds from sale of Hussmann equity investment—
 —
 —
 —
 —
 —
 422.5
 —
 422.5
Intercompany investing activities, net(90.1) (19,465.7) 6,181.4
 (172.9) 65.8
 336.1
 (2,226.8) 15,372.2
 —
Net cash provided by (used in) investing activities(90.1)
(19,465.7)
6,181.4

(172.9)
(17.1)
336.1

(1,903.8)
15,372.2

240.1
CASH FLOWS FROM FINANCING ACTIVITIES:                 
Net proceeds (repayments) of debt—
 —
 —
 —
 (7.7) (143.0) —
 —
 (150.7)
Debt issuance costs—
 —
 —
 (2.1) —
 —
 —
 —
 (2.1)
Dividends paid to ordinary shareholders(348.6) —
 —
 —
 —
 —
 —
 —
 (348.6)
Dividends paid to noncontrolling interests—
 —
 —
 —
 —
 —
 (14.1) —
 (14.1)
Proceeds from shares issued under incentive plans62.9
 —
 —
 —
 —
 —
 —
 —
 62.9
Repurchase of ordinary shares(250.1) —
 —
 —
 —
 —
 —
 —
 (250.1)
Other financing activities, net(24.2) —
 —
 —
 —
 —
 —
 —
 (24.2)
Intercompany financing activities, net730.5
 19,465.7
 (6,139.4) 440.2
 (250.4) (145.9) 1,271.5
 (15,372.2) —
Net cash provided by (used in) financing activities170.5

19,465.7

(6,139.4)
438.1

(258.1)
(288.9)
1,257.4

(15,372.2)
(726.9)
Effect of exchange rate changes on cash and cash equivalents—
 —
 —
 —
 —
 —
 (57.2) —
 (57.2)
Net increase (decrease) in cash and cash equivalents—

—

—

(11.4)
634.6

(0.1)
354.8

—

977.9
Cash and cash equivalents – beginning of period—
 —
 —
 11.4
 —
 0.1
 725.3
 —
 736.8
Cash and cash equivalents – end of period$—

$—

$—

$—

$634.6

$—

$1,080.1

$—

$1,714.7


NOTE 22. SUBSEQUENT EVENTS
On February 6, 2019, the Company entered into a final, binding and irrevocable offer letter with Silver II GP Holdings S.C.A., an affiliate of BC Partners Advisors L.P. and The Carlyle Group (the Seller) pursuant to which the Company made a binding offer to acquire the precision flow systems management business (the Business) for approximately $1.45 billion in cash, subject to working capital and certain other adjustments (the Acquisition). The Business is a manufacturer of precision flow control equipment including electric diaphragm pumps and controls that serve the global water, oil and gas, agriculture, industrial and specialty market segments. The offer is subject to completion of information and consultation processes with employee representative bodies of the Business in applicable jurisdictions. If the offer is accepted, completion of the Acquisition would be subject to customary closing conditions and expected to close mid-year 2019 subject to regulatory approvals. The results of the Business will be included in the Company’s consolidated financial statements as of the date of acquisition and reported within the Industrial segment.

SCHEDULE II
INGERSOLL-RAND PLC
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED December 31, 2018, 2017 AND 2016
(Amounts in millions)
Allowances for Doubtful Accounts: 
  
Balance December 31, 2015$28.3
Additions charged to costs and expenses7.9
Deductions (a)
(9.5)
Business acquisitions and divestitures, net—
Currency translation(0.7)
  
Balance December 31, 201626.0
Additions charged to costs and expenses9.7
Deductions (a)
(9.7)
Business acquisitions and divestitures, net—
Currency translation1.3
  
Balance December 31, 201726.9
Additions charged to costs and expenses15.3
Deductions (a)
(9.1)
Business acquisitions and divestitures, net0.5
Currency translation(0.9)
Balance December 31, 2018$32.7
(a)“Deductions” include accounts and advances written off, less recoveries.




F-55