UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2019~~2020



o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-34400

_____________________________

~~INGERSOLL-RAND PUBLIC LIMITED COMPANY~~TRANE TECHNOLOGIES PLC

(Exact name of registrant as specified in its charter)



Ireland	98-0626632
(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, including zip code)

+~~(353)~~(353) (0) 18707400

(Registrant’s telephone number, including area code)



Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Ordinary Shares, Par Value $1.00 per Share	TT	New York Stock Exchange

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~~ Yesx NO 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~~ Yesx NO 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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large ~~accelerated filer~~Accelerated Filer	x	Accelerated filer	¨	Emerging growth company	☐

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 whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~YES~~ ¨ NO Yes☐ No x

The number of ordinary shares outstanding of ~~Ingersoll-Rand~~Trane Technologies plc as of April ~~19, 2019~~17, 2020 was ~~241,158,226.~~239,207,928.

~~INGERSOLL-RAND~~TRANE TECHNOLOGIES PLC

FORM 10-Q

INDEX




PART I FINANCIAL INFORMATION		1

Item 1 -	Financial Statements	1

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019	1

	Condensed Consolidated Balance Sheets at March 31, ~~2019~~2020 and December 31, ~~2018~~	2

	~~Condensed Consolidated Statements of Equity for the three months ended March 31,~~ 2019 ~~and 2018~~	3

	Condensed Consolidated Statements of ~~Cash Flows~~Equity for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019	4

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019	5

	Notes to Condensed Consolidated Financial Statements	56

Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3430

Item 3 -	Quantitative and Qualitative Disclosures about Market Risk	42

Item 4 -	Controls and Procedures	42

PART II OTHER INFORMATION		43

Item 41 -	~~Controls and Procedures~~Legal Proceedings	43

Item 1A -	~~PART II OTHER INFORMATION~~Risk Factors	43

Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 16 -	~~Legal Proceedings~~Exhibits	44

~~Item 1A -~~		~~Risk Factors~~	44

~~Item 2 -~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~SIGNATURES	45

~~Item 6 -~~	~~Exhibits~~	46

~~SIGNATURES~~		47

PART I - FINANCIAL INFORMATION


Item 1.	Financial Statements

~~INGERSOLL-RAND PLC~~

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

	Three months ended
	March 31,
In millions, except per share amounts	2020			2019
Net revenues	$	2,641.3		$	2,803.7
Cost of goods sold	(1,898.8		)	(1,989.2		)
Selling and administrative expenses	(588.1		)	(578.0		)
Operating income	154.4			236.5
Interest expense	(63.1		)	(51.0		)
Other income/(expense), net	12.5			(18.0		)
Earnings before income taxes	103.8			167.5
Benefit (provision) for income taxes	(51.0		)	(20.2		)
Earnings from continuing operations	52.8			147.3
Discontinued operations, net of tax	(78.7		)	56.4
Net earnings (loss)	(25.9		)	203.7
Less: Net earnings from continuing operations attributable to noncontrolling interests	(2.8		)	(3.1		)
Less: Net earnings from discontinuing operations attributable to noncontrolling interests	(0.5		)	(0.7		)
Net earnings (loss) attributable to Trane Technologies plc	$	(29.2	)	$	199.9

Amounts attributable to Trane Technologies plc ordinary shareholders:
Continuing operations	$	50.0		$	144.2
Discontinued operations	(79.2		)	55.7
Net earnings (loss)	$	(29.2	)	$	199.9
Earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders:
Basic:
Continuing operations	$	0.21		$	0.59
Discontinued operations	(0.33		)	0.23
Net earnings (loss)	$	(0.12	)	$	0.82
Diluted:
Continuing operations	$	0.21		$	0.59
Discontinued operations	(0.33		)	0.23
Net earnings (loss)	$	(0.12	)	$	0.82
Weighted-average shares outstanding:
Basic	239.5			242.5
Diluted	242.3			245.2

~~(Unaudited)~~

Three months ended
March 31,
In millions, except per share amounts 2019 2018
Net revenues $ 3,575.9
$ 3,384.5
Cost of goods sold (2,517.3 ) (2,420.2 )
Selling and administrative expenses (740.1 ) (720.9 )
Operating income 318.5
243.4
Interest expense (50.9 ) (72.9 )
Other income/(expense), net (18.8 ) (4.0 )
Earnings before income taxes 248.8
166.5
Provision for income taxes (43.0 ) (33.0 )
Earnings from continuing operations 205.8
133.5
Discontinued operations, net of tax (2.1 ) (9.4 )
Net earnings 203.7
124.1
Less: Net earnings attributable to noncontrolling interests (3.8 ) (3.7 )
Net earnings attributable to Ingersoll-Rand plc $ 199.9
$ 120.4
Amounts attributable to Ingersoll-Rand plc ordinary shareholders:
Continuing operations $ 202.0
$ 129.8
Discontinued operations (2.1 ) (9.4 )
Net earnings $ 199.9
$ 120.4
Earnings (loss) per share attributable to Ingersoll-Rand plc
ordinary shareholders:

Basic:
Continuing operations $ 0.83
$ 0.52
Discontinued operations (0.01 ) (0.04 )
Net earnings $ 0.82
$ 0.48
Diluted:
Continuing operations $ 0.82
$ 0.51
Discontinued operations —
(0.03 )
Net earnings $ 0.82
$ 0.48
Weighted-average shares outstanding:
Basic 242.5
250.4
Diluted 245.2
253.0

Total comprehensive income $ 209.6
$ 276.6
Less: Total comprehensive income attributable to noncontrolling interests 4.2
4.1
Total comprehensive income attributable to Ingersoll-Rand plc $ 205.4
$ 272.5

TRANE TECHNOLOGIES PLC CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (continued) (Unaudited)

	Three months ended
	March 31,
In millions, except per share amounts	2020			2019
Net earnings (loss)	$	(25.9	)	$	203.7
Other comprehensive income (loss):
Currency translation	(48.0		)	(2.0		)
Cash flow hedges:
Unrealized net gains (losses) arising during period	0.3			(1.4		)
Net gains (losses) reclassified into earnings	0.3			0.1
Tax (expense) benefit	(0.2		)	(0.5		)
Total cash flow hedges, net of tax	0.4			(1.8		)
Pension and OPEB adjustments:
Net actuarial gains (losses) for the period	(21.3		)	—
Amortization reclassified into earnings	11.5			12.9
Settlements/curtailments reclassified to earnings	(3.6		)	1.7
Currency translation and other	5.2			(1.4		)
Tax (expense) benefit	(2.8		)	(3.5		)
Total pension and OPEB adjustments, net of tax	(11.0		)	9.7
Other comprehensive income (loss), net of tax	(58.6		)	5.9
Comprehensive income (loss), net of tax	$	(84.5	)	$	209.6
Less: Comprehensive income (loss) attributable to noncontrolling interests	(3.4		)	(4.2		)
Comprehensive income (loss) attributable to Trane Technologies plc	$	(87.9	)	$	205.4

See accompanying notes to Condensed Consolidated Financial Statements.

~~INGERSOLL-RAND~~TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	(Unaudited)
In millions	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	1,907.4		$	903.4		$	2,647.7		$	1,278.6
Accounts and notes receivable, net	2,710.3			2,679.2			2,091.8			2,184.6
Inventories, net	1,983.7			1,677.8
Inventories							1,463.7			1,278.6
Other current assets	483.3			471.6			356.6			344.8
Assets held-for-sale							—			4,207.2
Total current assets	7,084.7			5,732.0			6,559.8			9,293.8
Property, plant and equipment, net	1,738.4			1,730.8			1,326.2			1,352.0
Goodwill	5,968.6			5,959.5			5,082.3			5,125.7
Intangible assets, net	3,608.5			3,634.7			3,289.0			3,323.6
Other noncurrent assets	1,380.8			857.9			1,378.3			1,397.2
Total assets	$	19,781.0		$	17,914.9		$	17,635.6		$	20,492.3
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,800.1		$	1,705.3		$	1,446.7		$	1,381.3
Accrued compensation and benefits	363.4			531.6			316.0			442.4
Accrued expenses and other current liabilities	1,950.6			1,728.2			1,528.4			1,564.2
Short-term borrowings and current maturities of long-term debt	374.4			350.6			949.7			650.3
Liabilities held-for-sale							—			1,200.4
Total current liabilities	4,488.5			4,315.7			4,240.8			5,238.6
Long-term debt	5,226.5			3,740.7			4,624.8			4,922.9
Postemployment and other benefit liabilities	1,191.4			1,192.9			1,008.2			1,048.2
Deferred and noncurrent income taxes	527.2			538.4			561.2			572.0
Other noncurrent liabilities	1,424.6			1,062.4			1,410.8			1,398.2
Total liabilities	12,858.2			10,850.1			11,845.8			13,179.9
Equity:
Ingersoll-Rand plc shareholders’ equity:
Trane Technologies plc shareholders’ equity:
Ordinary shares	265.5			266.4			263.7			262.8
Ordinary shares held in treasury, at cost	(1,719.4		)	(1,719.4		)	(1,719.4		)	(1,719.4		)
Capital in excess of par value							26.4			—
Retained earnings	9,298.3			9,439.8			8,127.9			9,730.8
Accumulated other comprehensive income (loss)	(958.6		)	(964.1		)	(926.0		)	(1,006.6		)
Total Ingersoll-Rand plc shareholders’ equity	6,885.8			7,022.7
Total Trane Technologies plc shareholders’ equity							5,772.6			7,267.6
Noncontrolling interests	37.0			42.1			17.2			44.8
Total equity	6,922.8			7,064.8			5,789.8			7,312.4
Total liabilities and equity	$	19,781.0		$	17,914.9		$	17,635.6		$	20,492.3

See accompanying notes to Condensed Consolidated Financial Statements.

~~INGERSOLL-RAND~~TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Ordinary shares held

See accompanying notes to Condensed Consolidated Financial Statements.

~~INGERSOLL-RAND~~TRANE TECHNOLOGIES PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to Condensed Consolidated Financial Statements.

~~INGERSOLL-RAND~~TRANE TECHNOLOGIES PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

~~The accompanying unaudited condensed consolidated financial statements of Ingersoll-Rand~~Trane Technologies plc ~~(Plc or Parent Company)~~(formerly known as Ingersoll Rand plc), a public limited company incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively, the Company), ~~reflect~~is a global climate innovator that brings efficient and sustainable climate solutions to buildings, homes and transportation driven by strategic brands Trane^® and Thermo King^®and an environmentally responsible portfolio of products and services. The accompanying unaudited Condensed Consolidated Financial Statements of Trane Technologies plc reflects the consolidated operations of the Company and have been prepared in accordance with United States Securities and Exchange Commission (SEC) interim reporting requirements. Accordingly, the accompanying ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP) for full financial statements and should be read in conjunction with the consolidated financial statements included in the ~~Ingersoll-Rand plc~~Company's Annual Report on Form 10-K for the year ended December 31, ~~2018~~.2019. In the opinion of management, the accompanying ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements contain all adjustments, which include only normal recurring adjustments, necessary to fairly state the condensed consolidated results for the interim periods presented.

Prior to the separation of the Company's Industrial segment on February 29, 2020, the Company announced a new organizational model and business segment structure designed to enhance its regional go-to-market capabilities, aligning the structure with the Company's strategy and increased focus on climate innovation. Under the revised structure, the Company created three new regional operating segments from the former climate segment, which also serve as the Company's reportable segments.

This model is designed to create deep customer focus and relevance in markets around the world. Each segment reports through separate management teams and regularly reviews their operating results with the Chief Executive Officer, the Company's Chief Operating Decision Maker (CODM) determined in accordance with applicable accounting guidance. All prior period comparative segment information has been recast to reflect the current reportable segments.

Note 2. 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. Upon close of the Transaction, the Company’s existing shareholders received 50.1% of the shares of Gardner Denver common stock on a fully-diluted basis and Gardner Denver stockholders retained 49.9% of the shares of Gardner Denver on a fully diluted basis. As a result, the Company’s shareholders received .8824 shares of Gardner Denver common stock with respect to each share owned as of February 24, 2020. In connection with the Transaction, Ingersoll-Rand Services Company, an affiliate of Ingersoll Rand Industrial, borrowed an aggregate principal amount of $1.9 billion under a senior secured first lien term loan facility (Term Loan), the proceeds of which were used to make a special cash payment of $1.9 billion to a subsidiary of the Company. The obligations under the Term Loan were retained by Ingersoll-Rand Services Company, which following the Transaction is a wholly-owned subsidiary of Gardner Denver.

Discontinued Operations

After the Distribution Date, the Company does not beneficially own any Ingersoll Rand Industrial shares of common stock and will no longer consolidate Ingersoll Rand Industrial in its financial statements. In accordance with GAAP, the historical results of Ingersoll Rand Industrial are presented as a discontinued operation in the Condensed Consolidated Statement of Comprehensive Income and Condensed Consolidated Statement of Cash Flows. In addition, the assets and liabilities of Ingersoll Rand Industrial have been recast to held-for-sale at December 31, 2019. In connection with the Transaction, the Company entered into several agreements with Gardner Denver covering supply, administrative and tax matters to provide or obtain services on a transitional basis for varying periods after the Distribution Date. The agreements cover services such as manufacturing, information technology, human resources and finance. Income and expenses under these agreements are not expected to be material. In addition, the Company expects to pay Gardner Denver in order to meet minimum funding requirements for certain pensions, postretirement benefits other than pensions and deferred compensation plan liabilities as required by the employee matter agreement. Furthermore, in accordance with the merger agreement, within ninety days of the Distribution Date, the Company will provide the final working capital adjustment to Gardner Denver.

Note 2.3. Recent Accounting Pronouncements

The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update (ASU) to communicate changes to the codification. The Company considers the applicability and impact of all ASU's. ASU's not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the ~~consolidated financial statements.~~Condensed Consolidated Financial Statements.

Recently Adopted ~~Accounting Pronouncements~~

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 made the reclassification optional. As a result, the Company assessed the impact of the ASU on its financial statements and did not exercise the option to reclassify the stranded tax effects caused by the Act.

In February 2016, the FASB issued ASU 2016-02, “Leases” (ASC 842), 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 Company adopted this standard using a modified-retrospective approach as of January 1, 2019. Under this approach, the Company recognized and recorded a right-of-use (ROU) asset and related lease liability on the Condensed Consolidated Balance Sheet of $521 million with no impact to ~~Retained earnings~~. Reporting periods prior to January 1, 2019 continue to be presented in accordance with previous lease accounting guidance under GAAP. As part of the adoption, the Company elected the package of practical expedients permitted under the transition guidance which includes the ability to carry forward historical lease classification. Refer to Note 9, “Leases,” for a further discussion on the adoption of ASC 842.

~~Recently Issued~~ Accounting Pronouncements

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 adopted this standard on January 1, 2020 on a prospective basis with no material impact on its financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses” (ASU 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 is required to be 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 December 2019, the FASB 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 ASU include: intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date loss in interim periods, among others. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020 including interim periods therein with early adoption permitted. The Company is currently assessing the impact of the ASU on its financial statements.

Note 3.4. 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.

The major classes of inventory were as follows:



In millions	March 31, 2020			December 31, 2019
Raw materials	$	348.8		$	333.5
Work-in-process	173.8			173.7
Finished goods	973.4			804.9
	1,496.0			1,312.1
LIFO reserve	(32.3		)	(33.5		)
Total	$	1,463.7		$	1,278.6

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. Reserve balances, primarily related to obsolete and slow-moving inventories, were ~~$121.5~~$67.6 million and ~~$119.9~~$66.1 million at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

The Company records goodwill 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~~reporting unit may be less than its carrying value.

In connection with the ~~carrying amount~~new organizational model and business segment structure, the Company performed a goodwill impairment assessment immediately prior to the reorganization becoming effective, the results of which did not indicate any goodwill impairment. The Company then reassigned its goodwill between the ~~asset.~~newly designated reporting units using a relative fair value approach. Subsequent to the reassignment, the Company performed a second goodwill impairment assessment under the new reporting structure, the results of which also did not indicate any goodwill impairment.

The reassigned amounts of goodwill as of December 31, 2019 and the changes in the carrying amount of goodwill for the three months ended March 31, ~~2019~~2020 were as follows:

The net goodwill balances at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 include $2,496.0 million of accumulated impairment. The accumulated impairment relates entirely to a charge recorded in ~~the fourth quarter of 2008 associated with the Climate segment.~~2008.

Note 5.6. 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 amortized on a straight-line basis over their estimated useful lives.

The gross amount of the Company’s intangible assets and related accumulated amortization were as follows:



	March 31, 2020							December 31, 2019
In millions	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Customer relationships	$	1,919.6	$	(1,262.9	)	$	656.7	$	1,928.5	$	(1,239.2	)	$	689.3
Patents	164.4		(162.8		)	1.6		171.8		(169.7		)	2.1
Other	40.3		(34.3		)	6.0		40.4		(33.7		)	6.7
Total finite-lived intangible assets	2,124.3		(1,460.0		)	664.3		2,140.7		(1,442.6		)	698.1
Trademarks (indefinite-lived)	2,624.7		—			2,624.7		2,625.5		—			2,625.5
Total	$	4,749.0	$	(1,460.0	)	$	3,289.0	$	4,766.2	$	(1,442.6	)	$	3,323.6

Intangible asset amortization expense was ~~$34.7~~$30.3 million and ~~$35.2~~$29.1 million for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

Note 6.7. Debt and Credit Facilities

Short-term borrowings and current maturities of long-term debt consisted of the following:



In millions	March 31, 2020		December 31, 2019
Debentures with put feature	$	343.0	$	343.0
2.625% Senior notes due 2020 ⁽¹⁾	299.9		299.8
2.900% Senior notes due 2021 ⁽²⁾	299.3		—
Other current maturities of long-term debt	7.5		7.5
Total	$	949.7	$	650.3

In millions March 31,
2019 December 31,
2018
Debentures with put feature $ 343.0
$ 343.0
Commercial Paper 23.9

—
Other current maturities of long-term debt 7.5
7.6
Total $ 374.4
$ 350.6
⁽¹⁾ The 2.625% Senior notes due in May 2020 were redeemed in April 2020.

⁽²⁾ The 2.900% Senior notes are due in February 2021.

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. The Company had an0 outstanding balance ~~of $23.9 million~~ under its commercial paper program as of March 31, ~~2019. However, no amounts were outstanding at~~2020 and December 31, ~~2018.~~2019.

Debentures with Put Feature

At March 31, ~~2019~~2020 and December 31, ~~2018~~2019, the Company had $343.0 million of fixed rate debentures outstanding which contain a put feature that the holders may exercise on each anniversary of the issuance date. If exercised, the Company is obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount of the debentures plus accrued interest. If these options are not exercised, the final contractual maturity dates would range between 2027 and 2028. Holders of these debentures had the option to exercise the put feature on $37.2 million of the outstanding debentures in February ~~2019,~~2020, subject to the notice requirement. No ~~material~~ exercises were made.

Long-term debt, excluding current maturities, consisted of the following:



In millions	March 31, 2020		December 31, 2019
2.900% Senior notes due 2021 ⁽¹⁾	—		299.1
9.000% Debentures due 2021	124.9		124.9
4.250% Senior notes due 2023	697.9		697.8
7.200% Debentures due 2020-2025	37.3		37.3
3.550% Senior notes due 2024	496.8		496.6
6.480% Debentures due 2025	149.7		149.7
3.500% Senior notes due 2026	396.9		396.8
3.750% Senior notes due 2028	545.2		545.1
3.800% Senior notes due 2029	743.7		743.6
5.750% Senior notes due 2043	494.6		494.5
4.650% Senior notes due 2044	296.0		295.9
4.300% Senior notes due 2048	296.0		296.0
4.500% Senior notes due 2049	345.5		345.5
Other loans and notes	0.3		0.1
Total	$	4,624.8	$	4,922.9

In millions March 31,
2019 December 31,
2018
2.625% Senior notes due 2020 $ 299.5
$ 299.4
2.900% Senior notes due 2021 298.5
298.3
9.000% Debentures due 2021 124.9
124.9
4.250% Senior notes due 2023 697.3
697.1
7.200% Debentures due 2020-2025 44.8
44.8
3.550% Senior notes due 2024 496.1
495.9
6.480% Debentures due 2025 149.7
149.7
3.500% Senior notes due 2026 396.4
—
3.750% Senior notes due 2028 544.6
544.5
3.800% Senior notes due 2029 743.0
—
5.750% Senior notes due 2043 494.3
494.3
4.650% Senior notes due 2044 295.8
295.8
4.300% Senior notes due 2048 295.9
295.9
4.500% Senior notes due 2049 345.4
—
Other loans and notes 0.3
0.1
Total $ 5,226.5
$ 3,740.7
⁽¹⁾The 2.900% Senior notes are due in February 2021.

Issuance of Senior Notes

In March 2019, the Company issued $1.5 billion principal amount of senior notes in three tranches through Trane Technologies Luxembourg Finance S.A., an indirect, wholly-owned subsidiary. The tranches consist of $400 million aggregate principal amount of 3.500% senior notes due 2026, $750 million aggregate principal amount of 3.800% senior notes due 2029 and $350 million aggregate principal amount of 4.500% senior notes due 2049. The notes are fully and unconditionally guaranteed by each of ~~Ingersoll Rand~~Trane Technologies plc, Ingersoll-Rand Global Holding Company Limited, ~~Ingersoll-Rand~~Trane Technologies Lux International Holding Company S.à.r.l, ~~Ingersoll-Rand~~Trane Technologies Irish Holdings Unlimited Company, and ~~Ingersoll-Rand Company.~~Trane Technologies Company LLC. The Company has the option to redeem the notes in whole or in part at any time, prior to their stated maturity date at redemption prices set forth in the indenture agreement. The notes are subject to certain customary covenants, however, none of these covenants are considered restrictive to the Company’s operations. The Company intends to use the net proceeds to finance a pending acquisition (Refer to Note 17, "Acquisitions and Divestitures" for a further discussion on the pending acquisition). During the three months ended March 31, 2019, the Company capitalized $13.1 million of debt issuance costs which will be amortized over the remaining life of the debt.

Other Credit Facilities

The Company maintains two 5-year, $1.0 billion revolving credit facilities (the Facilities) through its wholly-owned subsidiaries, Ingersoll-Rand Global Holding Company Limited and ~~Ingersoll-Rand~~Trane Technologies Luxembourg Finance S.A. (collectively, the Borrowers). Each senior unsecured credit facility, one of which matures in March 2021 and the other in April 2023, provides support for the Company's commercial paper program and can be used for working capital and other general corporate purposes. ~~Ingersoll-Rand~~Trane Technologies plc, ~~Ingersoll-Rand~~Trane Technologies Irish Holdings Unlimited Company, ~~Ingersoll-Rand~~Trane Technologies Lux International Holding Company S.à.r.l. and ~~Ingersoll-Rand~~Trane Technologies Company LLC each provide irrevocable and unconditional guarantees for these Facilities. In addition, each Borrower will guarantee the obligations under the Facilities of the other Borrower. Total commitments of $2.0 billion were unused at March 31, ~~2019~~2020 and December 31, ~~2018.~~2019.

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 March 31, ~~2019~~2020 and December 31, ~~2018~~2019 was $5.9 billion and ~~$4.2~~$6.2 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 of its long-term debt instruments at March 31, ~~2019~~2020 are the same as those used at December 31, ~~2018.~~2019.

Note 7.8. 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 use 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 Condensed Consolidated Balance Sheet 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 Condensed Consolidated Balance Sheets were as follows:

Asset and liability derivatives included in the table above are recorded within Other current assets and Accrued expensesandother current liabilities, respectively.

Currency Derivative Instruments

The notional amount of the Company’s currency derivatives was ~~$0.4 billion and $0.6~~$0.5 billion at both March 31, ~~2019~~2020 and December 31, ~~2018, respectively.~~2019. At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, a net loss of ~~$1.0~~$2.7 million and ~~a net gain of $0.5~~$2.9 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 loss of ~~$1.0~~$1.3 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 March 31, ~~2019,~~2020, the maximum term of the Company’s currency derivatives was approximately 12 months, except for currency derivatives in place related to a certain long-term contract.

Other Derivative Instruments

Prior to 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 $~~6.5~~5.8 million at March 31, ~~2019~~2020 and ~~$6.7~~$6.0 million at December 31, ~~2018~~2019. The net deferred gain at March 31, ~~2019~~2020 will continue to be amortized over the term of notes with maturities ranging from 2023 to 2044. The amount expected to be amortized over the next twelve months is a net gain of $0.7 million. The Company has no forward-starting interest rate swaps or interest rate lock contracts outstanding at March 31, ~~2019~~2020 or December 31, ~~2018.~~2019.

The following table represents the amounts associated with derivatives designated as hedges affecting Net earnings and AOCI for the three months ended March 31:



	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	2020		2019				2020			2019
Currency derivatives designated as hedges	$	0.3	$	(1.4	)	Cost of goods sold	$	(0.5	)	$	(0.3	)
Interest rate swaps & locks	—		—			Interest expense	0.2			0.2
Total	$	0.3	$	(1.4	)		$	(0.3	)	$	(0.1	)

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 2019 2018 2019 2018
Currency derivatives designated as hedges $ (1.5 ) $ 2.1
Cost of goods sold $ (0.3 ) $ (0.4 )
Interest rate swaps & locks —
—
Interest expense 0.2
(0.6 )
Total $ (1.5 ) $ 2.1
$ (0.1 ) $ (1.0 )

The following table represents the amounts associated with derivatives not designated as hedges affecting Other income/(expense), net for the three months ended March 31:



	Amount of gain (loss) recognized in Net earnings
In millions	2020		2019
Currency derivatives not designated as hedges	$	8.3	$	(3.0	)
Total	$	8.3	$	(3.0	)

Amount of gain (loss)
recognized in Net earnings
In millions 2019 2018
Currency derivatives not designated as hedges $ (3.1 ) $ 9.7
Total $ (3.1 ) $ 9.7

The gains and losses associated with the Company’s undesignated currency derivatives are materially offset in Other income/(expense), net 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~~instruments are recorded for the three months ended March 31:

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 8.9. 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.~~


•	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.

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of March 31, ~~2019:~~2020:



In millions	Fair Value		Fair value measurements
In millions	Fair Value		Level 1		Level 2		Level 3
Assets:
Derivative instruments	$	6.4	$	—	$	6.4	$	—
Liabilities:
Derivative instruments	$	6.0	$	—	$	6.0	$	—

In millions Fair Value Fair value measurements
Level 1 Level 2 Level 3
Assets:
Derivative instruments $ 1.4
$ —
$ 1.4
$ —
Liabilities:
Derivative instruments $ 3.3
$ —
$ 3.3
$ —

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, ~~2018:~~2019:



In millions	Fair Value		Fair value measurements
In millions	Fair Value		Level 1		Level 2		Level 3
Assets:
Derivative instruments	$	1.1	$	—	$	1.1	$	—
Liabilities:
Derivative instruments	$	7.2	$	—	$	7.2	$	—

In millions Fair Value Fair value measurements
Level 1 Level 2 Level 3
Assets:
Derivative instruments $ 2.2
$ —
$ 2.2
$ —
Liabilities:
Derivative instruments $ 1.3
$ —
$ 1.3
$ —

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 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 March 31, ~~2019~~2020 are the same as those used at December 31, ~~2018.~~2019. There have been no transfers between levels of the fair value hierarchy.

Note 9.10. 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 millions	Classification	March 31, 2019		January 1, 2019
In millions (except lease term and discount rate)						Classification	March 31, 2020			December 31, 2019
Assets
Operating lease right-of-use assets ⁽¹⁾	Other noncurrent assets	$	526.6	$	517.1	Other noncurrent assets	$	453.7		$	469.4
Liabilities
Operating lease current	Other current liabilities	163.7		160.3		Other current liabilities	143.4			145.0
Operating lease noncurrent	Other noncurrent liabilities	367.9		360.5		Other noncurrent liabilities	315.9			329.9

Weighted average remaining lease term							4.3 years			4.3 years
Weighted average discount rate							3.5		%	3.6		%

⁽¹⁾ Per ASC 842, prepaid lease payments and lease incentives are recorded as part of the right-of-use asset. The net impact was ~~$5.0~~$5.6 million and ~~$3.7~~$5.5 million at March 31, ~~2019~~2020 and ~~January 1,~~December 31, 2019, respectively.

The Company ~~elected the practical expedient as an accounting policy election by class of underlying asset to account~~accounts for each separate lease component of a contract and its associated non-lease component as a single lease component. ~~This practical expedient was applied to all underlying asset classes.~~ In addition, the Company ~~elected the practical expedient to utilize~~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 three months ended March 31:



	Three months ended
In millions	2020		2019
Operating lease expense	$	42.9	$	38.7
Variable lease expense	6.2		6.4
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	42.7		38.3
Right-of-use assets obtained in exchange for new operating lease liabilities	43.5		38.5

Three months ended
In millions 2019
Operating lease expense $ 49.7
Variable lease expense 7.4
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases 49.4
Right-of-use assets obtained in exchange for new operating lease liabilities 57.8

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-to-use asset or lease liability and are expensed as incurred as variable lease expense. The Company elected the practical expedient as an accounting policy election by class of underlying asset to not apply the balance sheet recognition criteria required in ASC 842 to leases with an initial lease term of twelve months or less. Payments for these leases are recognized on a straight-line basis over the lease term.

Maturities of lease obligations were as follows:



In millions	March 31, 2020
Operating leases:
Remaining nine months of 2020	$	121.1
2021	130.2
2022	93.2
2023	64.3
2024	37.5
After 2024	51.6
Total lease payments	$	497.9
Less: Interest	(38.6		)
Present value of lease liabilities	$	459.3

In millions March 31,
2019
Operating leases
Remaining nine months of 2019 $ 139.9
2020 152.7
2021 112.4
2022 66.9
2023 40.7
After 2023 78.4
Total lease payments $ 591.0
Less: Interest (59.4 )
Present value of lease liabilities $ 531.6

~~At March 31, 2019, the weighted average remaining lease term was 4.7 years with a weighted average discount rate of 3.8%.~~

~~Prior Period Disclosures~~

As a result of adopting ASC 842 on January 1, 2019, the Company is required to present future minimum lease commitments for operating leases having initial or noncancellable lease terms in excess of one year that were previously disclosed in our 2018 Annual Report on Form 10-K and accounted for under previous lease guidance. Commitments as of December 31, 2018 were as follows:

In millions December 31,
2018
Operating leases
2019 $ 197.1
2020 152.0
2021 107.4
2022 68.4
2023 42.2
After 2023 42.7
Total $ 609.8

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 Gardner Denver. The transfer of these obligations reduced pension liabilities by $488.7 million, pension assets by $351.3 million and AOCI by $114.2 million.

The components of the Company’s net periodic pension benefit cost for the three months ended March 31 were as follows:



	Three months ended
In millions	2020			2019
Service cost	$	17.7		$	18.1
Interest cost	22.5			29.8
Expected return on plan assets	(31.9		)	(34.6		)
Net amortization of:
Prior service costs	1.3			1.2
Net actuarial (gains) losses	11.3			13.4
Net periodic pension benefit cost	$	20.9		$	27.9
Net curtailment and settlement (gains) losses	(3.6		)	1.6
Net periodic pension benefit cost after net curtailment and settlement (gains) losses	$	17.3		$	29.5
Amounts recorded in continuing operations:
Operating income	$	14.8		$	14.3
Other income/(expense), net	0.7			8.3
Amounts recorded in discontinued operations	1.8			6.9
Total	$	17.3		$	29.5

Three months ended
In millions 2019 2018
Service cost $ 18.1
$ 17.9
Interest cost 29.8
27.0
Expected return on plan assets (34.6 ) (36.9 )
Net amortization of:
Prior service costs 1.2
1.1
Net actuarial (gains) losses 13.4
12.5
Net periodic pension benefit cost $ 27.9
$ 21.6
Net curtailment and settlement (gains) losses 1.6
—
Net periodic pension benefit cost after net curtailment and settlement (gains) losses $ 29.5
$ 21.6
Amounts recorded in continuing operations:

Operating income $ 17.1
$ 17.6
Other income/(expense), net 9.4
1.9
Amounts recorded in discontinued operations 3.0
2.1
Total $ 29.5
$ 21.6

The Company made contributions to its defined benefit pension plans of $~~18.6~~$50.0 million and $~~10.9~~$18.6 million during the three months ended March 31, ~~2019~~2020 and ~~2018~~,2019, respectively. The current year contribution includes $24.4 million to fund Ingersoll Rand Industrial plans prior to the completion of the Transaction. The Company currently projects that it will contribute approximately ~~$104~~$91 million to its enterprise plans worldwide in ~~2019.~~2020.

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 Gardner Denver. The transfer of these obligations reduced postretirement plan liabilities by $29.8 million and increased AOCI by $4.1 million.

The components of net periodic postretirement benefit cost for the three months ended March 31 were as follows:



	Three months ended
In millions	2020			2019
Service cost	$	0.6		$	0.6
Interest cost	2.6			3.9
Net amortization of:
Prior service gains	—			(0.1		)
Net actuarial (gains) losses	(1.1		)	(1.6		)
Net periodic postretirement benefit cost	$	2.1		$	2.8
Amounts recorded in continuing operations:
Operating income	$	0.6		$	0.6
Other income/(expense), net	1.0			1.5
Amounts recorded in discontinued operations	0.5			0.7
Total	$	2.1		$	2.8

Three months ended
In millions 2019 2018
Service cost $ 0.6
$ 0.7
Interest cost 3.9
3.8
Net amortization of:
Prior service gains (0.1 ) (1.0 )
Net actuarial (gains) losses (1.6 ) —
Net periodic postretirement benefit cost $ 2.8
$ 3.5
Amounts recorded in continuing operations:

Operating income $ 0.6
$ 0.7
Other income/(expense), net 1.7
2.0
Amounts recorded in discontinued operations 0.5
0.8
Total $ 2.8
$ 3.5

Note ~~11.~~12. Equity

The authorized share capital of ~~Ingersoll-Rand~~Trane Technologies plc is 1,185,040,000 shares, consisting of (1) 1,175,000,000 ordinary shares, par value $1.00 per share, (2) 40,000 ordinary shares, par value EUR 1.00 and (3) 10,000,000 preference shares, par value $0.001 per share. There were no Euro-denominated ordinary shares or preference shares outstanding at March 31, ~~2019~~2020 or December 31, ~~2018.~~2019.

Changes in ordinary shares and treasury shares for the three months ended March 31, ~~2019~~2020 were as follows:



In millions	Ordinary shares issued	Ordinary shares held in treasury
December 31, 2019	262.8	24.5
Shares issued under incentive plans, net	0.9	—
March 31, 2020	263.7	24.5

In millions Ordinary shares issued Ordinary shares held in treasury
December 31, 2018 266.4
24.5
Shares issued under incentive plans, net 1.5
—
Repurchase of ordinary shares (2.4 ) —
March 31, 2019 265.5
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~~cancelled 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 October 2018, the Company's Board of Directors authorized the repurchase of up to $1.5 billion of its ordinary shares under a share repurchase program (2018 Authorization) upon completion of the prior authorized share repurchase program. During the three months ended March 31, ~~2019, the Company~~2020, 0 amounts were repurchased ~~and canceled approximately $250 million of its ordinary shares~~or cancelled leaving approximately ~~$1.25 billion~~$750 million remaining under the 2018 ~~Authorization.~~Authorization at March 31, 2020.

Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated other comprehensive income (loss) for the three months ended March 31, ~~2019~~2020 was as follows:


In millions	Derivative Instruments			Pension and OPEB			Foreign Currency Translation			Total			Derivative Instruments			Pension and OPEB			Foreign Currency Translation			Total
Balance at December 31, 2018	$	6.7		$	(454.0	)	$	(516.8	)	$	(964.1	)
Balance at December 31, 2019													$	5.6		$	(457.4	)	$	(554.8	)	$	(1,006.6	)
Other comprehensive income (loss) before reclassifications	(1.5		)	0.3			(2.4		)	(3.6		)	0.3			(19.7		)	(48.1		)	(67.5		)
Amounts reclassified from AOCI	0.1			12.9			—			13.0			0.3			11.5			—			11.8
Provision for income taxes	(0.4		)	(3.5		)	—			(3.9		)
Separation of Ingersoll Rand Industrial, net of tax													—			69.1			70.2			139.3
Benefit (provision) for income taxes													(0.2		)	(2.8		)	—			(3.0		)
Net current period other comprehensive income (loss)	$	(1.8	)	$	9.7		$	(2.4	)	$	5.5		$	0.4		$	58.1		$	22.1		$	80.6
Balance at March 31, 2019	$	4.9		$	(444.3	)	$	(519.2	)	$	(958.6	)
Balance at March 31, 2020													$	6.0		$	(399.3	)	$	(532.7	)	$	(926.0	)

The changes in Accumulated other comprehensive income (loss) for the three months ended March 31, ~~2018~~2019 was as follows:

In millions Derivative Instruments Pension and OPEB Foreign Currency Translation Total
Balance at December 31, 2017 $ 4.7
$ (494.3 ) $ (289.2 ) $ (778.8 )
Other comprehensive income (loss) before reclassifications 2.1
(4.6 ) 143.9
141.4
Amounts reclassified from AOCI 1.0
12.6
—
13.6
Provision for income taxes (0.3 ) (2.6 ) —
(2.9 )
Net current period other comprehensive income (loss) $ 2.8
$ 5.4
$ 143.9
$ 152.1
Balance at March 31, 2018 $ 7.5
$ (488.9 ) $ (145.3 ) $ (626.7 )

Reclassifications of deferred (gains) losses ⁽¹⁾

Amortization of service costs ⁽²⁾

Amortization of actuarial losses ⁽²⁾

~~(1) Reclassifications of interest rate swaps and locks are reflected within~~ ~~Interest expense; reclassifications of currency derivatives designated as hedges are reflected in~~ ~~Cost of goods sold~~.

~~(2) Reclassifications of the service cost component of pension and postretirement benefit costs are reflected within~~ ~~Operating income; the remaining components are included within~~ ~~Other income/(expense), net~~.

Note ~~12.~~13. 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.

Disaggregated Revenue

Net revenues by ~~destination for the three months ended March 31 were as follows:~~

~~Net revenues~~ bygeography and major type of good or service for the three months ended March 31 were as follows:



	Three months ended
In millions	2020		2019
Americas
Equipment	$	1,392.6	$	1,483.2
Services and parts	705.2		661.1
Total Americas	$	2,097.8	$	2,144.3
EMEA
Equipment	$	248.8	$	262.3
Services and parts	115.5		121.5
Total EMEA	$	364.3	$	383.8
Asia Pacific
Equipment	$	111.0	$	192.8
Services and parts	68.2		82.8
Total Asia Pacific	$	179.2	$	275.6

Total net revenues	$	2,641.3	$	2,803.7

Revenue from goods and services transferred to customers at a point in time accounted for approximately ~~85%~~81% and 83% of the Company's revenue for the three months ended March 31, ~~2019.~~2020 and 2019, respectively.

The opening and closing balances of contract assets and contract liabilities arising from contracts with customers for the period ended March 31, ~~2019~~2020 and December 31, ~~2018~~2019 were as follows:



In millions	March 31, 2020		December 31, 2019
Contract assets	$	204.5	$	172.6
Contract liabilities	979.4		941.9

The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance 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 three months ended March 31, ~~2019,~~2020, changes in contract asset and liability balances were not materially impacted by any other factors.

Approximately ~~30%~~29% of the contract liability balance at December 31, ~~2018~~2019 was recognized as revenue during the three months ended March 31, ~~2019.~~2020. Additionally, approximately ~~27%~~37% of the contract liability balance at March 31, ~~2019~~2020 was classified as noncurrent and not expected to be recognized as revenue in the next 12 months.

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 a fair-value based method for measuring the value of stock-based compensation. 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.

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.

The stock awards held as of February 29, 2020 were adjusted as follows:

Vested stock options - Outstanding stock options that were vested and exercisable at the time of the transaction were converted into vested and exercisable stock options of the Company. The number of underlying shares and exercise price for each award was adjusted to preserve the overall intrinsic value of the awards immediately prior to the separation.

Unvested stock options - Unvested stock options held at the time of the transaction were converted into stock options of the participants employer following the separation. The number of underlying shares and exercise price for each award was adjusted to preserve the overall intrinsic value of the awards immediately prior to the separation.

Restricted stock units - Outstanding RSUs held at the time of the transaction were converted into RSUs of the participants employer following the separation. The number of underlying shares was adjusted to preserve the overall intrinsic value of the awards immediately prior to the separation.

Performance share units - Active and outstanding PSU awards held at the time of the transaction were converted into active and outstanding PSUs of the Company. Post-transaction, the Company's employees will continue to participate in the plan at target levels with payout based on actual performance at the end of the respective three-year performance period for each award. Post-transaction, Ingersoll Rand Industrial employees will continue to participate in the plan with the target number of PSUs prorated based on the portion of the performance cycle completed as of the transaction date with payout based on actual performance at the end of the respective three year performance period for each award. The number of underlying shares was adjusted to preserve the overall intrinsic value of the awards immediately prior to the separation.

Per ASC 718, an adjustment to the terms of a stock-based compensation award to preserve its value after an equity restructuring may result in significant incremental compensation cost if there was no requirement to make such an adjustment based on the awards existing terms. The Company reviewed the provisions of its existing share-based compensation plans and determined the Transaction required modification to the terms of outstanding awards. As a result, the Company incurred less than $0.1 million of incremental compensation costs during the three months ended March 31, 2020.

Compensation Expense

Share-based compensation expense is related to continuing operations ~~and~~ is included in Selling and administrative expenses. The expense recognized for the three months ended March 31 was as follows:

Grants issued during the three months ended March 31 were as follows:



	2020			2019
	Number granted	Weighted- average fair value per award		Number granted	Weighted- average fair value per award
Stock options	1,020,535	$	16.75	1,259,344	$	17.09
RSUs	189,546	$	104.80	242,104	$	100.70
Performance shares ⁽¹⁾	259,920	$	141.88	306,352	$	110.57

2019 2018

Number
granted

Weighted-
average fair
value per award

Number
granted

Weighted-
average fair
value per award
Stock options 1,259,344
$ 17.09
1,414,411
$ 15.57
RSUs 242,104
$ 100.70
279,901
$ 89.97
Performance shares ⁽¹⁾
306,352
$ 110.57
352,794
$ 106.09

⁽¹⁾ The number of performance shares represents the maximum award level.

For stock options, RSUs and PSUs granted prior to the completion of the Transaction, the number granted and weighted average fair value reflect historical information.

Stock Options / RSUs

Eligible participants may receive (i) stock options, (ii) RSUs or (iii) a combination of both stock options and RSUs. The fair value of each of the Company’s stock option and RSU awards is expensed on a straight-line basis over the required service period, which is generally the 3-year vesting period. However, for stock options and RSUs granted to retirement eligible employees, the Company recognizes an expense for the entire fair value at the grant date.

The average fair value of the stock options granted is determined using the Black-Scholes option-pricing model. The following assumptions were used during the three ~~the~~ months ended March 31:



	2020		2019
Dividend yield	2.01	%	2.09	%
Volatility	24.33	%	21.46	%
Risk-free rate of return	0.56	%	2.49	%
Expected life in years	4.8		4.8

A description of the significant assumptions used to estimate the fair value of the stock option awards is as follows:

~~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 U.S. Treasury spot rates on the grant date.~~

~~Expected life~~ - 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.

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 U.S. Treasury spot rates on the grant date.

Expected life - 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 cancelled 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.

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) to the industrial group of companies in the S&P 500 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 Index over a 3-year performance period. The fair value of the market condition is estimated using a Monte Carlo Simulation approach in a risk-neutral framework based upon historical volatility, risk-free rates and correlation matrix. Awards granted prior to 2018 ~~are~~were earned based 50% upon a performance condition, measured

by relative EPS growth as compared to the industrial group of companies in the S&P 500 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 Index over a 3-year performance 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.

Note ~~14.~~15. Restructuring Activities

The Company incurs costs associated with announced restructuring initiatives intended to result in improved operating performance, profitability and working capital levels. Actions associated with these initiatives may include workforce reduction, improving manufacturing productivity, realignment of management structures and rationalizing certain assets. The following table details restructuring charges recorded during the three months ended March 31:



	Three months ended
In millions	2020		2019
Americas	$	20.8	$	3.4
EMEA	0.6		0.5
Asia Pacific	1.1		1.3
Corporate and Other	3.1		0.9
Total	$	25.6	$	6.1

Cost of goods sold	$	10.3	$	3.4
Selling and administrative expenses	15.3		2.7
Total	$	25.6	$	6.1

The changes in the restructuring reserve for the three months ended March 31, ~~2019~~2020 were as follows:



In millions	Americas			EMEA			Asia Pacific			Corporate and Other			Total
December 31, 2019	$	11.9		$	2.8		$	9.1		$	1.6		$	25.4
Additions, net of reversals ⁽¹⁾	16.8			0.6			1.1			3.1			21.6
Cash paid/other	(11.9		)	(1.2		)	(9.1		)	(1.4		)	(23.6		)
March 31, 2020	$	16.8		$	2.2		$	1.1		$	3.3		$	23.4

In millions Climate Industrial
Corporate
and Other
Total
December 31, 2018 $ 18.9
$ 29.9
$ 2.6
$ 51.4
Additions, net of reversals ⁽¹⁾
5.2
5.4
0.9
11.5
Cash paid/other (7.2 ) (12.4 ) (1.2 ) (20.8 )
March 31, 2019 $ 16.9
$ 22.9
$ 2.3
$ 42.1

⁽¹⁾ Excludes the non-cash costs of asset rationalizations ($~~5.6~~4.0 million).

~~Current restructuring actions include general workforce reductions as well as the closure and consolidation of certain manufacturing facilities in an effort to improve the Company's cost structure.~~ During the three months ended March 31, ~~2019,~~2020, costs associated with announced restructuring actions primarily included the following:

Amounts recognized primarily relate to severance and exit costs. In addition, the Company also includes costs that are directly attributable to the restructuring activity but do not fall into the severance, exit or disposal categories. As of March 31, ~~2019,~~2020, the Company had ~~$42.1~~$23.4 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.~~

Note ~~15.~~16. Other Income/(Expense), Net

The components of Other income/(expense), net for the three months ended March 31 are as follows:

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, the Company includes the components of net periodic benefit cost for pension and post retirement obligations other than the service cost component. Other activity, net includes items associated with Trane U.S. Inc. for the settlement ~~and defense~~ of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of ~~asbestos~~its liability for potential future claims and recoveries. In addition, the three months ended March 31, 2020 includes a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years. Refer to Note ~~20,~~21, "Commitments and Contingencies," for more information regarding asbestos-related matters.

Note ~~16.~~17. Income Taxes

The Company accounts for its Provision for income taxes in accordance with ASC 740, "Income Taxes" (ASC 740), which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. For the three months ended March 31, ~~2019~~2020 and March 31, ~~2018,~~2019, the Company's effective income tax rate was ~~17.3%~~49.1% and ~~19.8%~~12.1%, respectively. The effective income tax rate for the three months ended March 31, 2020 was higher than the U.S. statutory rate of 21% due to a $37.0 million non-cash charge related to the establishment of valuation allowances on net deferred tax assets, primarily net operating losses in certain tax jurisdictions, as a result of the completion of the Transaction, U.S. state and local taxes and certain non-deductible employee expenses. These amounts were partially offset by excess tax benefits from employee share-based payments, the deduction for Foreign Derived Intangible Income (FDII) and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. The establishment of the valuation allowances increased the effective tax rate by 35.7%. The effective tax rate for the three months ended March 31, 2019 was lower than the U.S. statutory rate of 21% ~~primarily~~ due to excess tax benefits from employee share-based payments, the deduction for ~~Foreign Derived Intangible Income~~FDII and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. These amounts were partially offset by U.S. state and local taxes and certain non-deductible employee expenses. The effective tax rate for the three months ended March 31, 2018 was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. These amounts were partially offset by U.S. state and local income taxes.

Total unrecognized tax benefits as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 were ~~$87.3~~$63.7 million and ~~$83.0~~$63.5 million, respectively. Although management believes its tax positions and related provisions reflected in the Condensed Consolidated Financial Statements are fully supportable, it recognizes that these tax positions and related provisions may be challenged by various tax authorities. These tax positions and related provisions are reviewed on an ongoing basis and are adjusted as additional facts and information become available, including progress on tax audits, changes in interpretations of tax laws, developments in case law and closing of statute of limitations. To the extent that the ultimate results differ from the original or adjusted estimates of the Company, the effect will be recorded in Provision for income taxes.

The Provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by the Company. In addition, tax authorities periodically review income tax returns filed by the Company and can raise issues regarding its filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which the Company operates. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as 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 material tax returns is complete or effectively settled for the years prior to ~~2008,~~2011, with certain matters prior to ~~2008~~2011 being resolved through appeals and litigation and also unilateral procedures as provided for under double tax treaties.

Note ~~17. Acquisitions and Divestitures~~18. Discontinued Operations

~~During~~The components of Discontinued operations, net of tax for the three months ended March 31 ~~2019,~~were as follows:



In millions	2020			2019
Net revenues	$	469.8		$	772.2
Cost of goods sold	(315.8		)	(528.1		)
Selling and administrative expenses ⁽¹⁾	(221.4		)	(162.1		)
Operating income	(67.4		)	82.0
Pre-tax earnings (loss) from discontinued operations	(75.5		)	79.4
Tax benefit (expense)	(3.2		)	(23.0		)
Discontinued operations, net of tax	$	(78.7	)	$	56.4

⁽¹⁾ Includes pre-tax separation costs of $99.1 million ($83.4 million net of tax), primarily related to legal, consulting and advisory fees, during the three months ended March 31, 2020.

Separation of Industrial Segment Businesses

On February 29, 2020, the Company ~~entered into a final, binding and irrevocable offer letter~~completed the Transaction 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~~Gardner Denver whereby the Company ~~made~~separated Ingersoll Rand Industrial which then merged with a ~~binding offer to acquire~~wholly-owned subsidiary of Gardner Denver. In accordance with GAAP, the precision flow systems management business (PFS) for approximately $1.45 billion in cash, subject to working capital and certain other adjustments (the Acquisition). PFS is a manufacturer of precision flow control equipment including precision dosing pumps and controls that serve the global water, oil and gas, agriculture, industrial and specialty market segments. The offer was subject to completion of the information and consultation processes with employee representative bodies of PFS in applicable jurisdictions. The process was completed in April 2019 and the Seller accepted the offer. Completion of the Acquisition is subject to customary closing conditions and is expected to close mid-year 2019 subject to regulatory approvals. Thehistorical results of ~~PFS will be included~~Ingersoll Rand Industrial are presented as a discontinued operation in the ~~Company’s consolidated financial statements~~Condensed Consolidated Statement of Comprehensive Income and Condensed Consolidated Statement of Cash Flows. In addition, the assets and liabilities of Ingersoll Rand Industrial have been recast to held-for-sale at December 31, 2019.

Net revenues and earnings from operations, net of tax of Ingersoll Rand Industrial for the three months ended March 31 were as follows:

Earnings (loss) attributable to Trane Technologies plc ⁽¹⁾

Earnings (loss) from operations, net of tax ⁽¹⁾

⁽¹⁾ Includes pre-tax separation costs of $99.1 million ($83.4 million net of tax), primarily related to legal, consulting and advisory fees, during the ~~date~~three months ended March 31, 2020.

The components of ~~acquisition~~Ingersoll Rand Industrial's assets and ~~reported within~~liabilities recorded as held-for-sale on the ~~Industrial segment.~~Condensed Consolidated Balance Sheet at December 31, 2019 were as follows:

Current assets⁽¹⁾

⁽¹⁾ Includes $25 million cash and cash equivalents in accordance with the merger agreement.

Other Discontinued Operations

Other discontinued operations, net of tax related to retained ~~costs~~obligations from previously sold businesses that primarily include ongoing expenses for postretirement benefits, product liability and legal costs. In addition, the Company includes ~~amounts related to the 2013 spin-off of our commercial and residential security business, now an independent public company operating under the name of Allegion plc (Allegion). The components of~~ ~~Discontinued operations, net of tax~~ ~~for the three months ended March 31 were as follows:~~

~~Pre-tax earnings (loss) from discontinued operations includes~~ costs associated with ~~Ingersoll Rand~~Trane Technologies Company LLC 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, "Commitments~~claims and ~~Contingencies,"~~recoveries.

The components of Discontinued operations, net of tax for ~~more information related to asbestos.~~the three months ended March 31 were as follows:



In millions	2020			2019
Ingersoll Rand Industrial, net of tax	$	(71.1	)	$	58.5
Other discontinued operations, net of tax	(7.6		)	(2.1		)
Discontinued operations, net of tax	$	(78.7	)	$	56.4

Note ~~18.~~19. Earnings Per Share (EPS)

Basic EPS is calculated by dividing Net earnings attributable to ~~Ingersoll-Rand~~Trane Technologies plc by the weighted-average number of ordinary shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potentially dilutive ordinary shares, which in the Company’s case, includes shares issuable under share-based compensation plans. The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted earnings per share calculations for the three months ended March 31:31:



	Three months ended
In millions, except per share amounts	2020		2019
Weighted-average number of basic shares	239.5		242.5
Shares issuable under incentive stock plans	2.8		2.7
Weighted-average number of diluted shares	242.3		245.2
Anti-dilutive shares	0.5		1.4

Dividends declared per ordinary share	$	0.53	$	0.53

Three months ended
In millions, except per share amounts 2019 2018
Weighted-average number of basic shares 242.5
250.4
Shares issuable under incentive stock plans 2.7
2.6
Weighted-average number of diluted shares 245.2
253.0
Anti-dilutive shares 1.4
1.7

Dividends declared per ordinary share $ 0.53
$ 0.45

Note ~~19.~~20. Business Segment Information

The ~~accounting policies of the~~Company operates under three regional operating segments ~~are~~designed 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 ~~Climate~~Americas segment ~~delivers energy-efficient products~~innovates for customers in the North America and ~~innovative energy services. It includes Trane~~^®Latin America regions. The Americas segment encompasses commercial heating and ~~American Standard~~^®~~Heating & Air Conditioning which provide heating, ventilation~~cooling 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 Advantage~~solutions; residential heating and ~~Nexia;~~cooling; and ~~Thermo King~~^®transport ~~temperature control~~refrigeration systems and solutions.

The Company's ~~Industrial~~EMEA segment ~~delivers products~~innovates 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 air~~solutions for commercial buildings, and ~~gas~~transport refrigeration systems and solutions.

The Company's Asia Pacific segment innovates for customers throughout the Asia Pacific region and India. The Asia Pacific segment encompasses heating and cooling systems, services ~~power tools, material handling~~and solutions for commercial buildings and transport refrigeration systems ~~ARO~~^®~~fluid management equipment,~~and solutions.

Beginning in 2020, the Company’s CODM measures profit or loss using segment adjusted EBITDA, or GAAP net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, unallocated corporate expenses and discontinued operations. The Company believes that segment adjusted EBITDA provides profitability as well as ~~Club Car~~ ^®~~golf, utility~~earnings power and ~~consumer low-speed vehicles.~~

~~Segment operating income is~~ the ~~measure of profit and loss that~~ability to generate cash. As a result, the Company's ~~chief operating decision maker uses to evaluate~~CODM evaluates the financial performance of the business ~~and as the basis~~segments based on segment adjusted EBITDA. Segment adjusted EBITDA is a key component for consideration in performance reviews, compensation and resource allocation. For these reasons, the Company believes that ~~Segment operating income~~segment adjusted EBITDA represents the most relevant measure of segment profit and loss. Segment adjusted EBITDA 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.

A summary of operations by reportable segment for the three months ended March 31 was as follows:



	Three months ended
In millions	2020			2019
Net revenues
Americas	$	2,097.8		$	2,144.3
EMEA	364.3			383.8
Asia Pacific	179.2			275.6
Total net revenues	$	2,641.3		$	2,803.7

Segment adjusted EBITDA
Americas	$	262.1		$	297.8
EMEA	43.2			44.7
Asia Pacific	10.6			27.5
Total segment adjusted EBITDA	$	315.9		$	370.0

Reconciliation of segment adjusted EBITDA to earnings before income taxes
Total segment adjusted EBITDA	$	315.9		$	370.0
Interest expense	(63.1		)	(51.0		)
Depreciation and amortization	(75.0		)	(70.9		)
Restructuring costs	(25.6		)	(6.1		)
Unallocated corporate expenses	(48.4		)	(74.5		)
Earnings before income taxes	$	103.8		$	167.5

Three months ended
In millions 2019 2018
Net revenues
Climate $ 2,803.7
$ 2,609.8
Industrial 772.2
774.7
Total $ 3,575.9
$ 3,384.5
Segment operating income
Climate $ 313.1
$ 260.4
Industrial 83.9
59.9
Unallocated corporate expense (78.5 ) (76.9 )
Operating income $ 318.5
$ 243.4

Note ~~20.~~21. Commitments and Contingencies

The Company is involved in various litigations, claims and administrative proceedings, including those related to asbestos, environmental, ~~asbestos,~~ and product liability matters. In accordance with ASC 450, "Contingencies" (ASC 450), the Company records accruals for loss contingencies when it is both probable that a liability will be incurred and the amount of the loss can be reasonably estimated. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from these

legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

~~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.

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 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, in most instances, the Company’s involvement is minimal.

In estimating its liability, 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 environmental matters are likely to arise from time to time in the future.

~~Reserves for environmental matters are classified as~~ ~~Accrued expensesandother current liabilities~~ or ~~Other noncurrent liabilities~~ based on their expected term. As of March 31, 2019 and December 31, 2018, the Company has recorded reserves for environmental matters of $42.0 million and $41.2 million, respectively. Of these amounts, $36.8 million and $36.1 million, respectively, relate to remediation of sites previously disposed of 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 Trane Technologies Company LLC, formerly known as 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~~Trane Technologies Company LLC 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 March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, over 7573 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 were included in the following balance sheet accounts:



In millions	March 31, 2020		December 31, 2019
Accrued expenses and other current liabilities	$	64.0	$	63.0
Other noncurrent liabilities	468.6		484.4
Total asbestos-related liabilities	$	532.6	$	547.4

Other current assets	$	48.7	$	66.2
Other noncurrent assets	229.0		237.8
Total asset for probable asbestos-related insurance recoveries	$	277.7	$	304.0

In millions March 31,
2019 December 31,
2018
Accrued expenses and other current liabilities $ 65.5
$ 63.3
Other noncurrent liabilities 526.8
548.3
Total asbestos-related liabilities $ 592.3
$ 611.6

Other current assets $ 70.0
$ 69.2
Other noncurrent assets 191.2
199.0
Total asset for probable asbestos-related insurance recoveries $ 261.2
$ 268.2

The Company's asbestos insurance ~~receivables~~receivable related to ~~Ingersoll-Rand~~Trane Technologies Company LLC and Trane were ~~$139.6~~$166.6 million and ~~$121.6~~$111.1 million, respectively, at March 31, ~~2019,~~2020, and ~~$141.7~~$188.7 million and $~~126.5~~$115.3 million, respectively, at December 31, ~~2018. The receivable~~2019. These receivables attributable to Trane Technologies Company LLC and Trane for probable insurance recoveries as of March 31, ~~2019 is~~2020 are entirely supported by settlement agreements between Trane Technologies Company LLC and ~~the~~Trane and their respective

insurance carriers. Most of these settlement agreements constitute “coverage-in-place” arrangements, in which the insurer signatories agree to reimburse Trane Technologies Company LLC or Trane, as applicable, for specified portions of ~~its~~their respective costs for asbestos bodily injury claims and Trane Technologies Company LLC or Trane, as applicable, 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 and recoveries 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~~Trane Technologies Company LLC'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 three months ended March 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 transactions, for the three months ended March 31, were as follows:



	Three months ended
In millions	2020			2019
Continuing operations	$	15.6		$	(1.8	)
Discontinued operations	(4.9		)	(3.0		)
Total	$	10.7		$	(4.8	)

Three months ended
In millions 2019 2018
Continuing operations $ (1.8 ) $ 1.5
Discontinued operations (3.0 ) (7.2 )
Total $ (4.8 ) $ (5.7 )

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 underlying the estimated asbestos-related liabilities include the number of people occupationally exposed and ~~type~~likely to develop asbestos-related diseases such as mesothelioma and lung cancer, the number of ~~new claims~~people likely to ~~be filed each year,~~file an asbestos-related personal injury claim against the Company, the average ~~cost of~~settlement and resolution of each ~~such new~~ claim ~~the resolution of coverage issues with insurance carriers,~~ and the ~~solvency risk~~percentage of claims resolved with ~~respect to the Company’s insurance carriers.~~no payment. Furthermore, predictions with respect to ~~these variables~~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 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.

Environmental Matters

Reserves for environmental matters are classified as Accrued expensesandother current liabilities or Other noncurrent liabilities based on their expected term. As of March 31, 2020 and December 31, 2019, the Company has recorded reserves for environmental matters of $40.4 million and $40.2 million, respectively. Of these amounts, $37.8 million and $37.5 million, respectively, relate to remediation of sites previously disposed of by the Company.

Warranty Liability

Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. The Company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available.

The changes in the standard product warranty liability for the three months ended March 31 were as follows:



In millions	2020			2019
Balance at beginning of period	$	251.4		$	245.6
Reductions for payments	(32.7		)	(31.2		)
Accruals for warranties issued during the current period	30.1			33.5
Changes to accruals related to preexisting warranties	(5.7		)	(1.0		)
Translation	(0.9		)	(0.3		)
Balance at end of period	$	242.2		$	246.6

In millions 2019 2018
Balance at beginning of period $ 278.9
$ 270.5
Reductions for payments (33.8 ) (35.5 )
Accruals for warranties issued during the current period 36.9
34.0
Changes to accruals related to preexisting warranties (1.1 ) 1.0
Translation (0.4 ) 1.5
Balance at end of period $ 280.5
$ 271.5

Standard product warranty liabilities are classified as Accrued expensesandother current liabilities or Other noncurrent liabilities based on their expected term. The Company's total current standard product warranty reserve at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 was ~~$152.5~~$118.8 million and ~~$149.5~~$124.9 million, respectively.

The Company's extended warranty liability represents the deferred revenue associated with its extended warranty contracts and is amortized into Net revenues on a straight-line basis over the life of the contract, unless another method is more representative of the costs incurred. The Company assesses the adequacy of its liability by evaluating the expected costs under its existing contracts to ensure these expected costs do not exceed the extended warranty liability.

The changes in the extended warranty liability for the three months ended March 31 were as follows:



In millions	2020			2019
Balance at beginning of period	$	302.8		$	290.6
Amortization of deferred revenue for the period	(28.8		)	(27.1		)
Additions for extended warranties issued during the period	30.9			28.4
Changes to accruals related to preexisting warranties	(0.2		)	(0.2		)
Translation	(0.9		)	—
Balance at end of period	$	303.8		$	291.7

In millions 2019 2018
Balance at beginning of period $ 292.2
$ 293.0
Amortization of deferred revenue for the period (27.2 ) (26.0 )
Additions for extended warranties issued during the period 28.4
23.8
Changes to accruals related to preexisting warranties (0.2 ) (0.3 )
Translation —
0.4
Balance at end of period $ 293.2
$ 290.9

The extended warranty liability is classified as Accrued expensesandother current liabilities or Other noncurrent liabilities based on the timing of when the deferred revenue is expected to be amortized into revenue. The Company's total current extended warranty liability at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 was ~~$103.4~~$107.1 million and ~~$103.1~~$107.3 million, respectively.

Note ~~21. Guarantor Financial Information~~22. COVID-19 Global Pandemic

~~Ingersoll-Rand plc (Plc~~On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a newly discovered coronavirus, known now as COVID-19, as a global pandemic and recommended containment and mitigation measures worldwide. In response, many countries have implemented measures to combat the outbreak which impacted global business operations and resulted in a Company decision to temporarily close or ~~Parent Company) and certain of~~limit its ~~100% directly or indirectly owned subsidiaries provide guarantees of public debt issued~~workforce to essential crews within many facilities throughout the world in order to ensure employee safety. In compliance with government protocols with respect to stay-in-place procedures, the Company's non-essential employees were instructed to work from home. Within the United States, the Company has been designated as an essential service provider 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~~Department of Homeland Security and ~~Exchange Commission.~~will continue operating its plants, installing and servicing its products.

~~The following table shows the Company’s guarantor relationships as of March 31, 2019:~~



~~Parent, issuer or guarantors~~	~~Notes issued~~	~~Notes guaranteed~~ ⁽¹⁾
~~Ingersoll-Rand plc (Plc)~~	~~None~~	~~All registered notes and debentures~~
~~Ingersoll-Rand Irish Holdings Unlimited Company (Irish Holdings)~~	~~None~~	~~All notes issued by Global Holding and Lux Finance~~
~~Ingersoll-Rand Lux International Holding Company S.à.r.l. (Lux International)~~	~~None~~	~~All 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~~ ~~3.500% Notes due 2026~~ ~~3.800% Notes due 2029~~ ~~4.650% Notes due 2044~~ ~~4.500% Notes due 2049~~	~~All notes and debentures issued by Global Holding and New Jersey~~

~~(1) All subsidiary issuers and all 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 March 31, 2019. 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~~During the three months ended March 31, ~~2019~~

In millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
Net revenues $ —
$ —
$ —
$ —
$ 325.4
$ —
$ 3,340.4
$ (89.9 ) $ 3,575.9
Cost of goods sold —
—
—
—
(251.8 ) —
(2,355.4 ) 89.9
(2,517.3 )
Selling and administrative expenses (1.7 ) —
(0.2 ) (0.1 ) (108.7 ) (0.1 ) (629.3 ) —
(740.1 )
Operating income (loss) (1.7 ) —
(0.2 ) (0.1 ) (35.1 ) (0.1 ) 355.7
—
318.5
Equity earnings (loss) in subsidiaries, net of tax 229.0
229.1
142.5
161.2
162.3
43.1
—
(967.2 ) —
Interest expense —
—
—
(26.6 ) (11.6 ) (12.7 ) —
—
(50.9 )
Intercompany interest and fees (29.0 ) —
9.0
(61.3 ) 49.5
1.4
30.4
—
—
Other income/(expense), net —
—
59.1
—
(7.3 ) —
(70.6 ) —
(18.8 )
Earnings (loss) before income taxes 198.3
229.1
210.4
73.2
157.8
31.7
315.5
(967.2 ) 248.8
Benefit (provision) for income taxes 1.6
—
—
20.5
9.9
—
(75.0 ) —
(43.0 )
Earnings (loss) from continuing operations 199.9
229.1
210.4
93.7
167.7
31.7
240.5
(967.2 ) 205.8
Discontinued operations, net of tax —
—
—
—
(6.3 ) —
4.2
—
(2.1 )
Net earnings (loss) 199.9
229.1
210.4
93.7
161.4
31.7
244.7
(967.2 ) 203.7
Less: Net earnings attributable to noncontrolling interests —
—
—
—
—
—
(3.8 ) —
(3.8 )
Net earnings (loss) attributable to Ingersoll-Rand plc $ 199.9
$ 229.1
$ 210.4
$ 93.7
$ 161.4
$ 31.7
$ 240.9
$ (967.2 ) $ 199.9

Other comprehensive income (loss), net of tax 5.5
5.6
3.8
0.6
0.8
2.8
0.8
(14.4 ) 5.5
Comprehensive income (loss) attributable to Ingersoll-Rand plc $ 205.4
$ 234.7
$ 214.2
$ 94.3
$ 162.2
$ 34.5
$ 241.7
$ (981.6 ) $ 205.4

~~Condensed Consolidating Statement~~2020, the Company was adversely impacted by the COVID-19 global pandemic. Temporary facility closures during January and February disrupted results in the Asia Pacific region. Commencing in March and through the date of ~~Comprehensive Income~~

~~For~~this filing, impacts were more widely felt throughout operations in the ~~three months ended March 31, 2018~~

in millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
Net revenues $ —
$ —
$ —
$ —
$ 347.6
$ —
$ 3,140.7
$ (103.8 ) $ 3,384.5
Cost of goods sold —
—
—
—
(253.8 ) —
(2,270.2 ) 103.8
(2,420.2 )
Selling and administrative expenses (1.7 ) —
—
(0.1 ) (136.3 ) —
(582.8 ) —
(720.9 )
Operating income (loss) (1.7 ) —
—
(0.1 ) (42.5 ) —
287.7
—
243.4
Equity earnings (loss) in subsidiaries, net of tax 124.2
123.5
110.9
118.3
162.7
39.2
—
(678.8 ) —
Interest expense —
—
—
(50.3 ) (11.8 ) (10.6 ) (0.2 ) —
(72.9 )
Intercompany interest and fees (1.0 ) —
4.0
(27.8 ) 6.3
(2.4 ) 20.9
—
—
Other income/(expense), net —
—
—
0.7
(3.6 ) 0.1
(1.2 ) —
(4.0 )
Earnings (loss) before income taxes 121.5
123.5
114.9
40.8
111.1
26.3
307.2
(678.8 ) 166.5
Benefit (provision) for income taxes (1.1 ) —
0.3
17.7
16.4
—
(66.3 ) —
(33.0 )
Earnings (loss) from continuing operations 120.4
123.5
115.2
58.5
127.5
26.3
240.9
(678.8 ) 133.5
Discontinued operations, net of tax —
—
—
—
(9.3 ) —
(0.1 ) —
(9.4 )
Net earnings (loss) 120.4
123.5
115.2
58.5
118.2
26.3
240.8
(678.8 ) 124.1
Less: Net earnings attributable to noncontrolling interests —
—
—
—
—
—
(3.7 ) —
(3.7 )
Net earnings (loss) attributable to Ingersoll-Rand plc $ 120.4
$ 123.5
$ 115.2
$ 58.5
$ 118.2
$ 26.3
$ 237.1
$ (678.8 ) $ 120.4

Other comprehensive income (loss), net of tax 152.1
151.9
144.2
105.8
105.2
37.3
145.8
(690.2 ) 152.1
Comprehensive income (loss) attributable to Ingersoll-Rand plc $ 272.5
$ 275.4
$ 259.4
$ 164.3
$ 223.4
$ 63.6
$ 382.9
$ (1,369.0 ) $ 272.5

~~Condensed Consolidating Balance Sheet~~

~~March 31, 2019~~

In millions Plc Irish
Holdings Lux International Global
Holding New
Jersey Lux
Finance Other
Subsidiaries Consolidating
Adjustments
Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ —
$ 0.1
$ 0.1
$ —
$ —
$ 1,207.3
$ 699.9
$ —
$ 1,907.4
Accounts and notes receivable, net —
—
0.2
—
167.0
—
2,543.1
—
2,710.3
Inventories, net —
—
—
—
159.7
—
1,824.0
—
1,983.7
Other current assets 2.0
—
7.7
—
113.4
—
360.9
(0.7 ) 483.3
Intercompany receivables 98.0
—
27.1
—
4,148.8
304.5
5,237.9
(9,816.3 ) —
Total current assets 100.0

0.1

35.1

—

4,588.9

1,511.8

10,665.8

(9,817.0 )
7,084.7
Property, plant and equipment, net —
—
0.1
—
304.0
—
1,434.3
—
1,738.4
Goodwill and other intangible assets, net —
—
—
—
430.1
—
9,147.0
—
9,577.1
Other noncurrent assets —
—
8.0
179.7
782.8
—
746.4
(336.1 ) 1,380.8
Investments in consolidated subsidiaries 9,452.4
9,410.9
4,011.7
11,886.6
10,158.5
1,309.7
—
(46,229.8 ) —
Intercompany notes receivable —
—
1,331.9
—
—
—
2,249.7
(3,581.6 ) —
Total assets $ 9,552.4

$ 9,411.0

$ 5,386.8

$ 12,066.3

$ 16,264.3

$ 2,821.5

$ 24,243.2

$ (59,964.5 )
$ 19,781.0
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 10.3
$ —
$ —
$ 77.4
$ 641.6
$ 20.6
$ 3,364.9
$ (0.7 ) $ 4,114.1
Short-term borrowings and current maturities of long-term debt —
—
—
—
350.3
23.9
0.2
—
374.4
Intercompany payables 2,656.3
—
1,419.9
3,601.1
1,783.4
0.4
355.2
(9,816.3 ) —
Total current liabilities 2,666.6

—

1,419.9

3,678.5

2,775.3

44.9

3,720.3

(9,817.0 )
4,488.5
Long-term debt —
—
—
2,330.6
319.5
2,576.2
0.2
—
5,226.5
Other noncurrent liabilities —
—
—
5.9
1,283.5
—
2,189.9
(336.1 ) 3,143.2
Intercompany notes payable —
—
—
2,249.7
—
—
1,331.9
(3,581.6 ) —
Total liabilities 2,666.6

—

1,419.9

8,264.7

4,378.3

2,621.1

7,242.3

(13,734.7 )
12,858.2
Equity:
Total equity 6,885.8
9,411.0
3,966.9
3,801.6
11,886.0
200.4
17,000.9
(46,229.8 ) 6,922.8
Total liabilities and equity $ 9,552.4

$ 9,411.0

$ 5,386.8

$ 12,066.3

$ 16,264.3

$ 2,821.5

$ 24,243.2

$ (59,964.5 )
$ 19,781.0

Americas and EMEA. As a result, COVID-19 impacted the Company's business globally, including, but not limited to, lower revenue volumes, temporary facility closures, supply chain disruptions and unfavorable foreign currency exchange rate movements. The Company will continue to monitor its liquidity needs and ability to access capital markets. Operationally, the Company’s financial reporting systems, internal

~~Condensed Consolidating Balance Sheet~~control over financial reporting and disclosure controls and procedures continue to operate effectively despite a remote workforce. The Company will continue to monitor the ongoing situation.

Through the date of issuance of this report, management did not identify any impairment charges in long-lived tangible or intangible assets (including goodwill) as a result of the global pandemic. However, due to significant uncertainty surrounding the COVID-19 global pandemic, management's judgment regarding this could change in the future. In addition, while the Company's results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be estimated with certainty at this time.

As part of the response to COVID-19 global pandemic, many countries are implementing emergency economic relief plans as a way of minimizing the economic impact of this health crisis. The Company is evaluating the potential benefits from certain of these measures and will continue to monitor the plans as they are finalized and implemented. In the United States, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted on March 27, 2020 providing numerous tax provisions and other stimulus measures. The Company is currently anticipating an impact of the CARES Act, which includes the deferral of employer social security payroll tax payments under the CARES Act until January 1, 2021, with 50 percent owed on December 31, ~~2018~~2021 and the other half owed on December 31, 2022.

In millions Plc 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 assets 0.2
—
7.8
—
101.0
—
363.4
(0.8 ) 471.6
Intercompany receivables 59.5
—
3.9
—
3,851.0
0.1
3,838.0
(7,752.5 ) —
Total current assets 59.7
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 subsidiaries 9,308.9
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 payables 2,334.6
—
132.9
3,518.7
1,700.9
0.2
65.2
(7,752.5 ) —
Total current liabilities 2,345.9
—
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 liabilities 2,345.9
—
133.0
8,145.6
4,070.9
1,098.1
5,498.4
(10,441.8 ) 10,850.1
Equity:
Total equity 7,022.7
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 Statement of Cash Flows~~

~~For the three months ended~~ ~~March 31, 2019~~

in millions Plc 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 $ 92.9
$ —
$ (0.1 ) $ (21.2 ) $ (346.8 ) $ (1.0 ) $ 239.1
$ —
$ (37.1 )
Net cash provided by (used in) discontinued operating activities —
—
—
—
(19.7 ) —
4.2
—
(15.5 )
Net cash provided by (used in) operating activities 92.9

—

(0.1 )
(21.2 )
(366.5 )
(1.0 )
243.3

—

(52.6 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures —
—
—
—
(6.7 ) —
(54.1 ) —
(60.8 )
Acquisitions of businesses, net of cash acquired —
—
—
—
—
—
(22.0 ) —
(22.0 )
Other investing activities, net —
—
—
—
1.0
—
5.4
—
6.4
Intercompany investing activities, net —
—
0.6
—
2.5
(303.1 ) 66.1
233.9
—
Net cash provided by (used in) continuing investing activities —

—

0.6

—

(3.2 )
(303.1 )
(4.6 )
233.9

(76.4 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments of) debt —
—
—
—
—
1,521.8
—
—
1,521.8
Debt issuance costs —
—
—
—
(0.2 ) (10.4 ) —
—
(10.6 )
Dividends paid to ordinary shareholders (127.7 ) —
—
—
—
—
—
—
(127.7 )
Dividends paid to noncontrolling interests —
—
—
—
—
—
(9.3 ) —
(9.3 )
Repurchase of ordinary shares (250.0 ) —
—
—
—
—
—
—
(250.0 )
Other financing activities, net 6.3
—
—
—
(0.4 ) —
—
—
5.9
Intercompany financing activities, net 278.5
—
(0.6 ) 21.2
6.8
—
(72.0 ) (233.9 ) —
Net cash provided by (used in) continuing financing activities (92.9 )
—

(0.6 )
21.2

6.2

1,511.4

(81.3 )
(233.9 )
1,130.1
Effect of exchange rate changes on cash and cash equivalents —
—
—
—
—
—
2.9
—
2.9
Net increase (decrease) in cash and cash equivalents —

—

(0.1 )
—

(363.5 )
1,207.3

160.3

—

1,004.0
Cash and cash equivalents - beginning of period —
0.1
0.2
—
363.5
—
539.6
—
903.4
Cash and cash equivalents - end of period $ —
$ 0.1
$ 0.1
$ —
$ —
$ 1,207.3
$ 699.9
$ —
$ 1,907.4

~~Condensed Consolidating Statement of Cash Flows~~

~~For the three months ended~~ ~~March 31, 2018~~

in millions Plc 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 $ 102.6
$ —
$ —
$ (32.2 ) $ 19.6
$ (0.3 ) $ (135.5 ) $ —
$ (45.8 )
Net cash provided by (used in) discontinued operating activities —
—
—
—
(20.3 ) —
(0.1 ) —
(20.4 )
Net cash provided by (used in) operating activities 102.6
—
—
(32.2 ) (0.7 ) (0.3 ) (135.6 ) —
(66.2 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures —
—
—
—
(8.8 ) —
(44.0 ) —
(52.8 )
Acquisitions of businesses, net of cash acquired —
—
—
—
—
—
(201.6 ) —
(201.6 )
Other investing activities, net —
—
(4.0 ) —
—
—
0.7
—
(3.3 )
Intercompany investing activities, net —
—
(0.5 ) —
(208.8 ) —
287.0
(77.7 ) —
Net cash provided by (used in) continuing investing activities —
—
(4.5 ) —
(217.6 ) —
42.1
(77.7 ) (257.7 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments of) debt —
—
—
31.6
—
247.9
—
—
279.5
Debt issuance costs —
—
—
(8.5 ) —
—
—
—
(8.5 )
Dividends paid to ordinary shareholders (111.6 ) —
—
—
—
—
—
—
(111.6 )
Dividends paid to noncontrolling interests —
—
—
—
—
—
(11.0 ) —
(11.0 )
Repurchase of ordinary shares (250.0 ) —
—
—
—
—
—
—
(250.0 )
Other financing activities, net 6.6
—
—
—
(0.4 ) —
(1.0 ) —
5.2
Intercompany financing activities, net 252.4
—
4.0
9.1
(105.0 ) (247.5 ) 9.3
77.7
—
Net cash provided by (used in) continuing financing activities (102.6 ) —
4.0
32.2
(105.4 ) 0.4
(2.7 ) 77.7
(96.4 )
Effect of exchange rate changes on cash and cash equivalents —
—
—
—
—
—
46.0
—
46.0
Net increase (decrease) in cash and cash equivalents —
—
(0.5 ) —
(323.7 ) 0.1
(50.2 ) —
(374.3 )
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
$ —
$ 35.6
$ 0.1
$ 1,139.3
$ —
$ 1,175.1

~~Note 22. Proposed Reverse Morris Trust Transaction~~

In April 2019, the Company and Gardner Denver Inc. (GDI) announced that they had entered into definitive agreements pursuant to which the Company will separate its Industrial segment businesses (IR Industrial) by way of spin-off to the Company’s shareholders and then combine it with GDI. The combined company (IndustrialCo) will be composed of the entirety of IR Industrial and GDI, including, subject to closing, the Company’s pending acquisition of PFS, which is expected to close mid-2019. The Company’s HVAC and transport refrigeration businesses, reported under the Climate segment, will focus on climate control solutions for buildings, homes and transportation (ClimateCo).

The transaction will be effected through a “Reverse Morris Trust” transaction, pursuant to which IR Industrial is expected to be spun-off to the Company’s shareholders and simultaneously merged with and surviving as a wholly-owned subsidiary of GDI. At the time of close, ClimateCo will receive $1.9 billion in cash from GDI. In the merger, existing shareholders of the Company will receive 50.1% of the shares of IndustrialCo on a fully diluted basis. Existing GDI shareholders will receive 49.9% of the shares of IndustrialCo on a fully diluted basis. The transaction is expected to be tax-free to the Company’s and GDI’s respective shareholders for U.S. federal income tax purposes.

~~The transaction is expected to close by early 2020, subject to approval by GDI’s shareholders, regulatory approvals and customary closing conditions.~~

Item 2 – 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 Part II, Item 1A – Risk Factors in this Quarterly Report on Form 10-Q; and under Part I, Item 1A – Risk Factors in the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018~~.2019. 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 Quarterly Report.

Overview

Organizational

Trane Technologies plc is a global climate innovator. We ~~are~~bring efficient and sustainable climate solutions to buildings, homes and transportation driven by strategic brands Trane^®and Thermo King^® and an environmentally responsible portfolio of products and services. Prior to the separation of our Industrial segment on February 29, 2020, we announced a ~~diversified, global company that provides products,~~new organizational model and business segment structure designed to enhance our regional go-to-market capabilities, aligning the structure with our strategy and increased focus on climate innovation. Under the revised structure, we created three new regional operating segments from the former climate segment, which also serve as our reportable segments.

Our Americas segment innovates for customers in the North America and Latin America regions. 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 and India. The Asia Pacific segment encompasses heating and cooling systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

This model is designed to ~~enhance~~create deep customer focus and relevance in markets around the ~~quality, energy efficiency~~world. All prior period comparative segment information has been recast to reflect the current reportable segments.

Significant Events

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) whereby we separated our 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. Upon close of the Transaction, our existing shareholders received 50.1% of the shares of Gardner Denver common stock on a fully-diluted basis and ~~comfort~~Gardner Denver stockholders retained 49.9% of ~~air~~the shares of Gardner Denver on a fully diluted basis. As a result, our shareholders received .8824 shares of Gardner Denver common stock with respect to each share owned as of February 24, 2020. In connection with the Transaction, Ingersoll-Rand Services Company, an affiliate of Ingersoll Rand Industrial, borrowed an aggregate principal amount of $1.9 billion under a senior secured first lien term loan facility (Term Loan), the proceeds of which were used to make a special cash payment of $1.9 billion to a subsidiary of ours. The obligations under the Term Loan were retained by Ingersoll-Rand Services Company, which following the Transaction is a wholly-owned subsidiary of Gardner Denver.

In connection with the Transaction, we entered into several agreements covering supply, administrative and tax matters to provide or obtain services on a transitional basis for varying periods after the Distribution Date. The agreements cover services such as manufacturing, information technology, human resources and finance. Income and expenses under these agreements are not expected to be material. In addition, we expect to pay Gardner Denver in ~~homes~~order to meet minimum funding requirements for certain pensions, postretirement benefits other than pensions and ~~buildings, transport~~deferred compensation plan liabilities as required by the employee matter agreement. Furthermore, in accordance the merger agreement, within ninety days of the Distribution Date, we will provide the final working capital adjustment to Gardner Denver.

COVID-19 Global Pandemic

On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a newly discovered coronavirus, known now as COVID-19, as a global pandemic and ~~protect food~~recommended containment and ~~perishables~~mitigation measures worldwide. In response, many countries have implemented measures to combat the outbreak which impacted global business operations and ~~increase industrial productivity~~resulted in our decision to temporarily close or limit our workforce to essential crews within many facilities throughout the world

in order to ensure employee safety. In compliance with government protocols with respect to stay-in-place procedures, our non-essential employees were instructed to work from home. Within the United States, we have been designated as an essential service provider by the U.S. Department of Homeland Security and ~~efficiency. Our business segments consist of Climate~~will continue operating our plants, installing and ~~Industrial, both with strong brands~~servicing our products.

During the three months ended March 31, 2020, we were adversely impacted by the COVID-19 global pandemic. Temporary facility closures during January and ~~highly differentiated products within their respective markets. We generate revenue~~February disrupted results in the Asia Pacific region. Commencing in March and ~~cash primarily~~ through the ~~design, manufacture, sale~~date of this filing, impacts were more widely felt throughout operations in the Americas and ~~service of~~EMEA. As a ~~diverse portfolio of industrial~~result, COVID-19 impacted our business globally, including, but not limited to, lower revenue volumes, temporary facility closures, supply chain disruptions and ~~commercial products that include well-recognized, premium brand names such 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~~unfavorable foreign currency exchange rate movements. We will continue to ~~focus on growth by increasing~~monitor our ~~recurring revenue stream from parts, service,~~liquidity needs and ability to access capital markets. Operationally, our financial reporting systems, internal control over financial reporting and disclosure controls ~~used equipment~~ and ~~rentals; and~~procedures continue to ~~continuously improve~~operate effectively despite a remote workforce. We will continue to monitor the ~~efficiencies and capabilities~~ongoing situation.

Through the date of issuance of this report, management did not identify any impairment charges in long-lived tangible or intangible assets (including goodwill) as a result of the ~~products~~global pandemic. However, due to significant uncertainty surrounding the COVID-19 global pandemic, management's judgment regarding this could change in the future. In addition, while our results of operations, cash flows and ~~services~~financial condition could be negatively impacted, the extent of ~~our businesses.~~the impact cannot be estimated with certainty at this time.

As part of the response to COVID-19 global pandemic, many countries are implementing emergency economic relief plans as a way of minimizing the economic impact of this health crisis. We ~~also~~are evaluating the potential benefits from certain of these measures and will continue to ~~focus~~monitor the plans as they are finalized and implemented. In the United States, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted on ~~operational excellence strategies as a central theme to improving our earnings~~March 27, 2020 providing numerous tax provisions and ~~cash flows.~~other stimulus measures. We are currently anticipating an impact of the CARES Act, which includes the deferral of employer social security payroll tax payments under the CARES Act until January 1, 2021, with 50 percent owed on December 31, 2021 and the other half owed on December 31, 2022.

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 ~~the~~our 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~~uncertain as a result of the ~~segments in which we participate.~~COVID-19 global pandemic, impacting both the global Heating, Ventilation and Air Conditioning (HVAC) ~~equipment replacement, services, controls~~ and ~~aftermarket continue to experience strong demand. In addition, Residential and Commercial markets have seen continued momentum~~Transport end-markets as well as limiting visibility in the ~~United States, positively impacting~~factors used to predict the ~~results of~~outlook for our ~~HVAC businesses. Global Industrial markets~~company. As a result, we suspended our 2020 guidance in May 2020 and intend to reevaluate it in our second quarter 2020 earnings call. However, we remain ~~largely supportive of continued growth~~confident in ~~both equipment~~our sustainability strategy and ~~services. While geopolitical uncertainty exists~~remain in ~~markets such as Europe, Asia and Latin America, we are confident we will continue our~~a strong performance globally. In 2019, we expect positive growth in both our Climate and Industrial segments, each benefiting from operational excellence initiatives, new product launches and continued productivity programs.financial position.

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 ~~industry~~product diversity coupled with our large installed product base provides growth opportunities within our service, 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~~Results of Operations

~~Pending Acquisition~~

~~During~~In connection with the three months ended March 31, 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 (PFS) for approximately $1.45 billion in cash, subject to working capital and certain other adjustments (the Acquisition). PFS is a manufacturer of precision flow control equipment including precision dosing pumps and controls that serve the global water, oil and gas, agriculture, industrial and specialty market segments. The offer was subject to completion of the ~~information~~Transaction, we do not beneficially own any Ingersoll Rand Industrial shares of common stock and ~~consultation processes with employee representative bodies~~no longer consolidate Ingersoll Rand Industrial in our financial statements. As a result, the following Management’s Discussion and Analysis of ~~PFS in applicable jurisdictions. The process was completed in April 2019~~Financial Condition and ~~the Seller accepted the offer. Completion~~Results of Operations presents the ~~Acquisition is subject to customary closing conditions and is expected to close mid-year 2019 subject to regulatory approvals. The~~ results of ~~PFS will be included in our consolidated financial statements as of the date of acquisition and reported within the~~Ingersoll Rand Industrial ~~segment.~~

~~Issuance of Senior Notes~~

In March 2019, we issued $1.5 billion principal amount of senior notes in three tranches through an indirect, wholly-owned subsidiary. The tranches consist of $400 million aggregate principal amount of 3.500% senior notes due 2026, $750 million aggregate principal amount of 3.800% senior notes due 2029 and $350 million aggregate principal amount of 4.500% senior notes due 2049. We intend to use the net proceeds to finance the pending acquisition of PFS.

~~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 October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (2018 Authorization) upon completion of the prior authorized share repurchase program. During the three months ended March 31, 2019, we repurchased and canceled approximately $250 million of our ordinary shares leaving approximately $1.25 billion remaining under the 2018 Authorization at March 31, 2019. 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 dividend payment.

~~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~~discontinued operation for periods prior to the Distribution date. In addition, the assets and liabilities of ~~Net revenues~~.Ingersoll Rand Industrial have been recast to held-for-sale at December 31, 2019.

Three Months EndedMarch 31, ~~2019~~2020 Compared to the Three Months EndedMarch 31, ~~2018~~2019- Consolidated Results


Dollar amounts in millions	2019			2018			Period Change			2019 % of revenues		2018 % of revenues		2020			2019			Period Change			2020 % of revenues		2019 % of revenues
Net revenues	$	3,575.9		$	3,384.5		$	191.4						$	2,641.3		$	2,803.7		$	(162.4	)
Cost of goods sold	(2,517.3		)	(2,420.2		)	(97.1		)	70.4	%	71.5	%	(1,898.8		)	(1,989.2		)	90.4			71.9	%	70.9	%
Gross profit														742.5			814.5			(72.0		)	28.1	%	29.1	%
Selling and administrative expenses	(740.1		)	(720.9		)	(19.2		)	20.7	%	21.3	%	(588.1		)	(578.0		)	(10.1		)	22.3	%	20.7	%
Operating income	318.5			243.4			75.1			8.9	%	7.2	%	154.4			236.5			(82.1		)	5.8	%	8.4	%
Interest expense	(50.9		)	(72.9		)	22.0							(63.1		)	(51.0		)	(12.1		)
Other income/(expense), net	(18.8		)	(4.0		)	(14.8		)					12.5			(18.0		)	30.5
Earnings before income taxes	248.8			166.5			82.3							103.8			167.5			(63.7		)
Provision for income taxes	(43.0		)	(33.0		)	(10.0		)
Benefit (provision) for income taxes														(51.0		)	(20.2		)	(30.8		)
Earnings from continuing operations	205.8			133.5			72.3							52.8			147.3			(94.5		)
Discontinued operations, net of tax	(2.1		)	(9.4		)	7.3							(78.7		)	56.4			(135.1		)
Net earnings	$	203.7		$	124.1		$	79.6
Net earnings (loss)														$	(25.9	)	$	203.7		$	(229.6	)

Net Revenues

Net revenues for the three months ended March 31, ~~2019 increased~~2020 decreased by ~~5.7%~~5.8%, or ~~$191.4~~$162.4 million, compared with the same period in ~~2018,~~2019, which resulted from the following:



~~Volume/product mix~~Volume	~~5.8~~(5.9	)%
Pricing	~~2.3~~0.7	%
Currency translation	(~~2.4~~0.6	)%
Total	~~5.7~~(5.8	)%

The decrease was primarily related to lower volumes across each of our segments due to the COVID-19 global pandemic. Temporary facility closures during January and February disrupted results in the Asia Pacific region. Commencing in March, impacts were more widely felt throughout operations in the Americas and EMEA. Unfavorable foreign currency exchange rate movements further contributed to the year-over-year decrease. These amounts were partially offset by improved pricing. Refer to the “Results by Segment” below for a discussion of Net Revenues by segment.

Gross Profit/Margin

Gross profit for the three months ended March 31, 2020 decreased by 8.8% or $72.0 million compared with the same period in 2019. The decrease was primarily driven by lower volumes and corresponding under absorption of fixed production overhead costs during the period related to global temporary facility closures in response to the COVID-19 global pandemic. In addition, higher spending on restructuring actions and unfavorable foreign currency exchange rate movements further contributed to the decrease. These decreases were partially offset by improved pricing and productivity benefits. Gross profit margindecreased 100 basis points to 28.1% for the three months ended March 31, 2020 compared to 29.1% for the same period of 2019.

Selling and Administrative Expenses

Selling and administrative expenses for the three months ended March 31, 2020 increased by 1.7%, or $10.1 million, compared with the same period of 2019. The increase in selling and administrative expenses was primarily driven by higher ~~volumes~~spending on restructuring actions and transformation initiatives. These increases were partially offset by decreases in ~~both our Climate~~compensation and ~~Industrial segments. Improved pricing further contributed~~benefit charges related to variable compensation, reduced business travel as a result of the ~~year-over-year increase. However, each segment was impacted by unfavorable~~COVID-19 global pandemic and favorable foreign currency exchange rate movements. Selling and administrative expenses as a percentage of net revenues for the three months ended March 31, 2020 increased 160 basis points from 20.7% to 22.3% primarily due to higher spending on restructuring and transformation initiatives.

Interest Expense

~~Our revenues~~Interest expense for the three months ended March 31, 2020increased by ~~segment~~$12.1 million compared with the same period of 2019 due to the $1.5 billion issuance of senior notes in March 2019.

Other Income/(Expense), Net

The components of Other income/(expense), net for the three months ended March 31 were as follows:

Dollar amounts in millions 2019 2018 % change
Climate $ 2,803.7
$ 2,609.8
7.4 %
Industrial 772.2
774.7
(0.3 )%
Total $ 3,575.9
$ 3,384.5



In millions	2020			2019
Interest income/(loss)	$	(0.1	)	$	(1.1	)
Exchange gain/(loss)	(4.2		)	(4.3		)
Other components of net periodic benefit cost	(1.7		)	(9.8		)
Other activity, net	18.5			(2.8		)
Other income/(expense), net	$	12.5		$	(18.0	)

~~Climate~~

~~Net revenues~~ ~~for the three months ended March 31, 2019 increased by 7.4% or $193.9 million, compared with the same period of 2018.The components of the period change were as follows:~~



~~Volume/product mix~~	~~7.1~~	%
~~Pricing~~	~~2.4~~	%
~~Currency translation~~	~~(2.1~~	)%
~~Total~~	~~7.4~~	%

~~Industrial~~

~~Net revenues~~ ~~for the three months ended March 31, 2019 decreased by 0.3% or $2.5 million, compared with the same period of 2018. The components of the period change were as follows:~~



~~Volume/product mix~~	~~1.5~~	%
~~Pricing~~	~~1.4~~	%
~~Currency translation~~	~~(3.2~~	)%
~~Total~~	~~(0.3~~	)%

~~Operating Income/Margin~~

Operating margin increased to 8.9% for the three months ended March 31, 2019 compared to 7.2% for the same period of 2018. The increase was primarily driven by pricing improvements in excess of material inflation (0.7%) , productivity benefits in excess of other inflation (0.5%) as well as higher volume/product mix (0.3%). In addition, lower spending on restructuring actions more than offset unfavorable foreign currency exchange rate movements (0.2%).

~~Our~~ ~~Operating income~~ ~~and Operating margin by segment were as follows:~~

Dollar amounts in millions 2019 Operating Income (Expense) 2018 Operating Income (Expense) Period Change 2019 Operating Margin 2018 Operating Margin
Climate $ 313.1
$ 260.4
$ 52.7
11.2 % 10.0 %
Industrial 83.9
59.9
24.0
10.9 % 7.7 %
Unallocated corporate expenses (78.5 ) (76.9 ) (1.6 ) N/A
N/A
Total $ 318.5
$ 243.4
$ 75.1
8.9 % 7.2 %

~~Climate~~

Operating margin increased to 11.2% for the three months ended March 31, 2019 compared to 10.0% for the same period of 2018. The increase was primarily driven by pricing improvements in excess of material inflation and productivity benefits in excess of other inflation. Year-over-year impacts of volume/product mix, foreign currency exchange rate movements and investment spending remained relatively flat.

~~Industrial~~

Operating margin increased to 10.9% for the three months ended March 31, 2019 compared to 7.7% for the same period of 2018. The increase was primarily the result of lower spending on restructuring actions and productivity benefits in excess of other inflation. These amounts were partially offset by material inflation in excess of pricing improvements and unfavorable foreign currency exchange rate movements.

~~Unallocated Corporate Expenses~~

Unallocated corporate expense for the three months ended March 31, 2019 increased by $1.6 million compared with the same period of 2018. Higher compensation and benefit charges related to variable compensation and transaction costs associated with the pending acquisition of PFS more than offset lower functional costs.

~~Interest Expense~~

~~Interest expense~~ ~~for the three months ended March 31, 2019decreased by~~$22.0 million compared with the same period of 2018. The decrease primarily relates to the redemption of $1.1 billion of senior notes during the first quarter of 2018 in which we recognized $15.4 million of premium expense and $1.2 million of unamortized costs in ~~Interest expense. In addition, lower interest rates on new debt issuances contributed to the year-over-year reduction.~~

~~Other Income/(Expense), Net~~

~~The components of~~ ~~Other income/(expense), net~~ ~~for the three months ended March 31 were as follows:~~

In millions 2019 2018
Interest income (loss) $ (0.6 ) $ 3.6
Exchange gain (loss) (4.3 ) (7.3 )
Other components of net periodic benefit cost (11.1 ) (3.9 )
Other activity, net (2.8 ) 3.6
Other income/(expense), net $ (18.8 ) $ (4.0 )

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 includes items associated with Trane U.S. Inc. (Trane) for the settlement ~~and defense~~ of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability and corresponding insurance asset for potential future ~~claims.~~claims and recoveries. The three months ended March 31, 2020 includes a $17.4 million adjustment to correct an overstatement of a legacy legal liability that originated in prior years.

Provision for Income Taxes

For the three months ended March 31, ~~2019,~~2020, our effective tax rate was ~~17.3%~~49.1% which ~~is lower~~was higher than the U.S. Statutory rate of 21% ~~primarily~~ due to a $37.0 million non-cash charge related to the establishment of valuation allowances on net deferred tax assets, primarily net operating losses in certain tax jurisdictions, as a result of the completion of the Transaction, U.S. state and local taxes and certain non-deductible employee expenses. These amounts were partially offset by excess tax benefits from employee share-based payments, the deduction for Foreign Derived Intangible Income (FDII) and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. The establishment of the valuation allowances increased the effective tax rate by 35.7%. For the three months ended March 31, 2019 our effective tax rate was 12.1% which is lower than the U.S. Statutory rate of 21% due to excess tax benefits from employee share-based payments, the deduction for FDII and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. These amounts were partially offset by U.S. state and local ~~income~~ taxes and certain non-deductible employee expenses. The effective tax rate for the three months ended March 31, 2018 was 19.8% which is lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate. These amounts were partially offset by U.S. state and local income taxes.

Discontinued Operations

The components of Discontinued operations, net of tax for the three months ended March 31 were as follows:


In millions	2019			2018			2020			2019
Net revenues							$	469.8		$	772.2
Pre-tax earnings (loss) from discontinued operations	$	(1.9	)	$	(12.1	)	(75.5		)	79.4
Tax benefit (expense)	(0.2		)	2.7			(3.2		)	(23.0		)
Discontinued operations, net of tax	$	(2.1	)	$	(9.4	)	$	(78.7	)	$	56.4

Discontinued operations are retained ~~costs~~obligations from previously sold businesses, ~~that primarily include ongoing expenses for postretirement benefits, product liability and legal costs.~~including amounts related to Ingersoll Rand Industrial as part of the completion of the Transaction. In addition, we include costs associated with ~~Ingersoll-Rand~~Trane Technologies Company LLC 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~~claims and recoveries. The three months ended March 31, 2020 includes pre-tax Ingersoll Rand Industrial separation costs of $99.1 million ($83.4 million, net of tax) primarily related to legal, consulting and advisory fees.

The components of Discontinued operations, net of tax for the three months ended March 31 were as follows:

Three Months EndedMarch 31, 2020 Compared to the Three Months EndedMarch 31, 2019- Segment Results

We operate under three regional operating segments designed to create deep customer focus and relevance in markets around the world.

Beginning in 2020, our Chief Operating Decision Maker (CODM) measures profit or loss using segment adjusted EBITDA, or accounting principles generally accepted in the United States of America (GAAP) net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, unallocated corporate expenses and discontinued operations. We believe that segment adjusted EBITDA provides profitability as well as earnings power and the ability to generate cash. As a result, our CODM evaluates the financial performance of the ~~tax benefit (expense)~~business segments based on segment adjusted EBITDA. Segment adjusted EBITDA is a key component for consideration in performance reviews, compensation and resource allocation. For these reasons, we believe that segment adjusted EBITDA represents the most relevant measure of segment profit and loss. Segment adjusted EBITDA may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results reported in accordance with GAAP.

The following discussion compares our results for each ~~period represents adjustments~~of our three reportable segments for ~~certain tax matters associated~~the three months ended March 31, 2020 compared to the three months ended March 31, 2019.

Net revenues for the three months ended March 31, 2020 decreased by 2.2% or $46.5 million, compared with the ~~2013 spin-off~~same period of ~~our commercial~~2019. The components of the period change were as follows:

The decrease was primarily related to lower volumes which were impacted by the COVID-19 global pandemic. In addition, unfavorable foreign currency exchange rate movements further contributed to the year-over-year decrease. These amounts were partially offset by improved pricing.

Segment adjusted EBITDA for the three months ended March 31, 2020 decreased by 12.0% or $35.7 million, compared with the same period in 2019. The decrease was primarily driven by lower volumes and ~~residential security business, now an independent public company operating~~corresponding under absorption of fixed production overhead costs due to the ~~name~~COVID-19 global pandemic. In addition, inflation and higher tariffs also contributed to the year-over-year decrease. These amounts were partially offset by improved pricing, productivity benefits, lower spending on investments, favorable foreign currency exchange rate movements and other income.

Net revenues for the three months ended March 31, 2020 decreased by 5.1% or $19.5 million, compared with the same period of ~~Allegion plc (Allegion).~~2019. The components of the period change were as follows:

Segment adjusted EBITDA for the three months ended March 31, 2020 decreased by 3.4% or $1.5 million compared with the same period in 2019. The decrease was primarily driven by lower volumes, inflation and unfavorable foreign currency exchange rate movements. These amounts were partially offset by productivity benefits, improved pricing, and lower spending on investments.

Net revenues for the three months ended March 31, 2020 decreased by 35.0% or $96.4 million, compared with the same period of 2019. The components of the period change were as follows:

The decrease was primarily related to lower volumes which were significantly impacted by the COVID-19 global pandemic as temporary closures to our Asia Pacific facilities were required. These closures, as well as unfavorable foreign currency exchange rate movements, impacted a majority of the period presented.

Segment adjusted EBITDA for the three months ended March 31, 2020 decreased by 61.5% or $16.9 million, compared with the same period in 2019. The decrease was primarily driven by lower volumes and corresponding under absorption of fixed production overhead costs. The decrease was partially offset by productivity benefits in excess of other inflation, lower cost of materials, lower spending on investments, and favorable foreign currency exchange rate movements.

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:

Our primary sources of liquidity include cash balances on hand, cash flow 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 the company had no outstanding balance as of March 31, 2020.

As of March 31, ~~2019,~~2020, we had ~~$1,907.4~~$2,647.7 million of cash and cash equivalents on hand, of which ~~$1,833.4~~$2,628.8 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 March 31, ~~2019,~~2020, 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 capital allocation strategy, subject to market conditions and regulatory requirements. In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (2018 Authorization) upon completion of the prior authorized share repurchase program. During the three months ended March 31, ~~2019, we~~2020, no amounts were repurchased ~~and canceled approximately $250 million of our ordinary shares~~or cancelled leaving approximately ~~$1.25 billion~~$750 million remaining under the 2018 Authorization at March 31, ~~2019.~~2020. In ~~June 2018,~~addition, we ~~announced an increase in our quarterly share~~expect to maintain the dividend ~~from $0.45 to~~at the current level of $0.53 per ~~ordinary share. This reflects~~share, or $2.12 per share on an ~~18% increase that began with our September 2018~~annualized basis, in 2020. The first quarter 2020 dividend ~~payment.~~was paid in March and the second quarter 2020 dividend was approved by the Board of Directors in April to be paid in June.

We continue to ~~be active with acquisitions and joint venture activity.~~actively manage our business portfolio. Since ~~the beginning of~~ 2018, we have acquired several businesses and entered into a joint venture ~~and acquired several businesses, including channel acquisitions,~~ that ~~complement~~complements existing products and services further ~~growing~~enhancing our product portfolio. Most recently, we completed a Reverse Morris Trust transaction with Gardner Denver whereby we separated Ingersoll Rand Industrial from our business portfolio, transforming the Company into a global climate innovator. We incurred $99.1 million during the quarter ended March 31, 2020 and $94.6 million during the year ended December 31 2019 in order to facilitate the separation. These amounts were included within discontinued operations. In addition, we incurred $10.9 million related to transformation activities, included within continuing operations, during the three months ended March 31, 2020. Post separation through 2021, we expect to ~~close on our pending acquisition~~reduce stranded costs by $100 million and expect to incur expenses of ~~PFS mid-year 2019 and utilize~~$100 million to $150 million in order to realize the ~~$1.5 billion proceeds of our debt issuance completed during the period to fund the transaction. Lastly,~~stranded cost savings. In addition, 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. We expect that our ~~available~~existing cash flow, committed credit lines and access to the capital markets will be sufficient to fund share repurchases, dividends, business portfolio changes and ongoing restructuring ~~actions, acquisitions~~actions.

As the COVID-19 global pandemic impacts both the broader economy and ~~joint venture activity.~~

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. The COVID-19 global pandemic created substantial volatility in the short-term credit markets and could impact the cost of our credit facilities, the cost of any borrowing we might make under those facilities or the cost of any commercial paper we may issue, to the extent we were to either draw on our facilities or issue commercial paper. See Part II, Item 1A. Risk Factors for more information.

The following table contains several key measures of our financial condition and liquidity at the period ended:

⁽¹⁾The $299.9 million of 2.625% Senior notes due in May 2020 were redeemed in April 2020. The $299.3 million of 2.900% Senior notes are due in February 2021.

Debt and Credit Facilities

Our short-term obligations primarily consist of current maturities of long-term ~~debt and commercial paper. We~~debt. In addition, we have outstanding $343.0 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. ~~In addition, we~~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. We had anno outstanding balance ~~of $23.9 million~~ under our commercial paper program atas of March 31, ~~2019. However, no amounts were outstanding at~~2020 and December 31, ~~2018.~~2019. See Note 67 to the Condensed Consolidated Financial Statements for additional information regarding the terms of our short-term obligations.



In millions	Americas			EMEA			Asia Pacific			Total
Net balance as of December 31, 2019	$	3,858.8		$	731.1		$	535.8		$	5,125.7
Currency translation	(12.1		)	(24.3		)	(7.0		)	(43.4		)
Net balance as of March 31, 2020	$	3,846.7		$	706.8		$	528.8		$	5,082.3



	March 31, 2019							December 31, 2018
In millions	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Completed technologies/patents	$	207.7	$	(183.5	)	$	24.2	$	206.6	$	(182.0	)	$	24.6
Customer relationships	2,094.0		(1,207.3		)	886.7		2,086.8		(1,176.3		)	910.5
Other	84.4		(55.9		)	28.5		84.5		(54.4		)	30.1
Total finite-lived intangible assets	2,386.1		(1,446.7		)	939.4		2,377.9		(1,412.7		)	965.2
Trademarks (indefinite-lived)	2,669.1		—			2,669.1		2,669.5		—			2,669.5
Total	$	5,055.2	$	(1,446.7	)	$	3,608.5	$	5,047.4	$	(1,412.7	)	$	3,634.7



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
In millions, except per share amounts	Total equity			Amount			Shares		Ordinary shares held in treasury, at cost			Capital in excess of par value			Retained earnings			Accumulated other comprehensive income (loss)			Noncontrolling Interest
Balance at December 31, 2018	$	7,064.8		$	266.4		266.4		$	(1,719.4	)	$	—		$	9,439.8		$	(964.1	)	$	42.1
Net earnings	203.7			—			—		—			—			199.9			—			3.8
Other comprehensive income (loss)	5.9			—			—		—			—			—			5.5			0.4
Shares issued under incentive stock plans	6.3			1.5			1.5		—			4.8			—			—			—
Repurchase of ordinary shares	(250.0		)	(2.4		)	(2.4	)	—			(34.6		)	(213.0		)	—			—
Share-based compensation	29.0			—			—		—			29.7			(0.7		)	—			—
Dividends declared to noncontrolling interest	(9.3		)	—			—		—			—			—			—			(9.3		)
Cash dividends declared	(127.7		)	—			—		—			—			(127.7		)	—			—
Other	0.1			—			—		—			0.1			—			—			—
Balance at March 31, 2019	$	6,922.8		$	265.5		265.5		$	(1,719.4	)	$	—		$	9,298.3		$	(958.6	)	$	37.0



In millions	Climate			Industrial			Total
Net balance as of December 31, 2018	$	5,099.2		$	860.3		$	5,959.5
Acquisitions	14.6			—			14.6
Currency translation	(2.8		)	(2.7		)	(5.5		)
Net balance as of March 31, 2019	$	5,111.0		$	857.6		$	5,968.6


	Derivative assets				Derivative liabilities				Derivative assets				Derivative liabilities
In millions	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018		March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019
Derivatives designated as hedges:
Currency derivatives designated as hedges	$	0.9	$	1.3	$	2.5	$	0.7
Currency derivatives									$	0.6	$	0.1	$	4.2	$	3.9
Derivatives not designated as hedges:
Currency derivatives not designated as hedges	0.5		0.9		0.8		0.6
Currency derivatives									5.8		1.0		1.8		3.3
Total derivatives	$	1.4	$	2.2	$	3.3	$	1.3	$	6.4	$	1.1	$	6.0	$	7.2


	Classification and amount of gain (loss) recognized in income on cash flow hedging relationships												Classification and amount of gain (loss) recognized in income on cash flow hedging relationships
	2019						2018						2020						2019
In millions	Cost of goods sold			Interest expense			Cost of goods sold			Interest expense			Cost of goods sold			Interest expense			Cost of goods sold			Interest expense
Total amounts presented in the Consolidated Statements of Comprehensive Income	$	(2,517.3	)	$	(50.9	)	$	(2,420.2	)	$	(72.9	)	$	(1,898.8	)	$	(63.1	)	$	(1,989.2	)	$	(51.0	)
Gain (loss) on cash flow hedging relationships
Currency derivatives:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	$	(0.3	)	$	—		$	(0.4	)	$	—		$	(0.5	)	$	—		$	(0.3	)	$	—
Amount excluded from effectiveness testing recognized in net earnings based on changes in fair value and amortization	$	(0.6	)	$	—		$	—		$	—		$	(0.6	)	$	—		$	(0.6	)	$	—
Interest rate swaps & locks:
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	$	—		$	0.2		$	—		$	(0.6	)	$	—		$	0.2		$	—		$	0.2



In millions	March 31, 2019
Operating leases
Remaining nine months of 2019	$	139.9
2020	152.7
2021	112.4
2022	66.9
2023	40.7
After 2023	78.4
Total lease payments	$	591.0
Less: Interest	(59.4		)
Present value of lease liabilities	$	531.6



In millions	Plc			Irish Holdings		Lux International			Global Holding			New Jersey			Lux Finance			Other Subsidiaries			Consolidating Adjustments			Consolidated
Net revenues	$	—		$	—	$	—		$	—		$	325.4		$	—		$	3,340.4		$	(89.9	)	$	3,575.9
Cost of goods sold	—			—		—			—			(251.8		)	—			(2,355.4		)	89.9			(2,517.3		)
Selling and administrative expenses	(1.7		)	—		(0.2		)	(0.1		)	(108.7		)	(0.1		)	(629.3		)	—			(740.1		)
Operating income (loss)	(1.7		)	—		(0.2		)	(0.1		)	(35.1		)	(0.1		)	355.7			—			318.5
Equity earnings (loss) in subsidiaries, net of tax	229.0			229.1		142.5			161.2			162.3			43.1			—			(967.2		)	—
Interest expense	—			—		—			(26.6		)	(11.6		)	(12.7		)	—			—			(50.9		)
Intercompany interest and fees	(29.0		)	—		9.0			(61.3		)	49.5			1.4			30.4			—			—
Other income/(expense), net	—			—		59.1			—			(7.3		)	—			(70.6		)	—			(18.8		)
Earnings (loss) before income taxes	198.3			229.1		210.4			73.2			157.8			31.7			315.5			(967.2		)	248.8
Benefit (provision) for income taxes	1.6			—		—			20.5			9.9			—			(75.0		)	—			(43.0		)
Earnings (loss) from continuing operations	199.9			229.1		210.4			93.7			167.7			31.7			240.5			(967.2		)	205.8
Discontinued operations, net of tax	—			—		—			—			(6.3		)	—			4.2			—			(2.1		)
Net earnings (loss)	199.9			229.1		210.4			93.7			161.4			31.7			244.7			(967.2		)	203.7
Less: Net earnings attributable to noncontrolling interests	—			—		—			—			—			—			(3.8		)	—			(3.8		)
Net earnings (loss) attributable to Ingersoll-Rand plc	$	199.9		$	229.1	$	210.4		$	93.7		$	161.4		$	31.7		$	240.9		$	(967.2	)	$	199.9

Other comprehensive income (loss), net of tax	5.5			5.6		3.8			0.6			0.8			2.8			0.8			(14.4		)	5.5
Comprehensive income (loss) attributable to Ingersoll-Rand plc	$	205.4		$	234.7	$	214.2		$	94.3		$	162.2		$	34.5		$	241.7		$	(981.6	)	$	205.4



Dollar amounts in millions	2019 Operating Income (Expense)			2018 Operating Income (Expense)			Period Change			2019 Operating Margin		2018 Operating Margin
Climate	$	313.1		$	260.4		$	52.7		11.2	%	10.0	%
Industrial	83.9			59.9			24.0			10.9	%	7.7	%
Unallocated corporate expenses	(78.5		)	(76.9		)	(1.6		)	N/A		N/A
Total	$	318.5		$	243.4		$	75.1		8.9	%	7.2	%



Volume	(2.8	)%
Pricing	0.9	%
Currency translation	(0.3	)%
Total	(2.2	)%



Parent, issuer or guarantors ⁽¹⁾	Notes issued	Notes guaranteed
Trane Technologies plc (Plc)	None	All registered notes and debentures
Trane Technologies Irish Holdings Unlimited Company (Irish Holdings)	None	All notes issued by Global Holding and Lux Finance
Trane Technologies Lux International Holding Company S.à.r.l. (Lux International)	None	All 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
Trane Technologies Company LLC (TTC)	9.000% Debentures due 2021 7.200% Debentures due 2020-2025 6.480% Debentures due 2025 Puttable debentures due 2027-2028	All notes issued by Global Holding and Lux Finance
Trane Technologies Luxembourg Finance S.A. (Lux Finance)	2.625% Notes due 2020 3.550% Notes due 2024 3.500% Notes due 2026 3.800% Notes due 2029 4.650% Notes due 2044 4.500% Notes due 2049	All notes and debentures issued by Global Holding and TTC



	Three Months Ended March 31, 2020
In millions	Obligor group 1			Obligor group 2
Net revenues	$	—		$	—
Gross profit	(10.6		)	(10.6		)
Intercompany interest and fees	(50.3		)	4.2
Earnings (loss) from continuing operations	(172.1		)	(114.2		)
Discontinued operations, net of tax	(89.1		)	(88.4		)
Net earnings (loss)	(261.2		)	(202.6		)
Less: Net earnings attributable to noncontrolling interests	—			—
Net earnings (loss) attributable to Trane Technologies plc	$	(261.2	)	$	(202.6	)


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)		Total number of shares purchased (000's) (a) (b)	Average price paid per share (a) (b)		Total number of shares purchased as part of program (000's) (a)	Approximate dollar value of shares still available to be purchased under the program ($000's) (a)
January 1 - January 31	6.2	$	91.97	—	$	1,499,967	8.2	$	132.94	—	$	749,959
February 1 - February 28	2,235.7	103.30		1,924.9	1,301,501
February 1 - February 29							199.9	143.86		—	749,959
March 1 - March 31	485.7	106.10		485.7	1,249,967		0.2	86.91		—	749,959
Total	2,727.6	$	103.77	2,410.6			208.3	$	143.39	—



Exhibit No.	Description	Method of Filing


31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

32	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith.

101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2019,~~2020, formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Comprehensive Income (Loss), (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated ~~Statement~~Statements of Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and ~~(iv)~~(v) Notes to Condensed Consolidated Financial Statements.	Filed herewith.



		~~INGERSOLL-RAND~~TRANE TECHNOLOGIES PLC (Registrant)

Date:	~~April 30, 2019~~May 5, 2020	/s/ ~~Susan K. Carter~~Christopher J. Kuehn
		~~Susan K. Carter,~~Christopher J. Kuehn, Senior Vice President and Chief Financial Officer Principal Financial Officer

Date:	~~April 30, 2019~~May 5, 2020	/s/ ~~Christopher J. Kuehn~~Heather R. Howlett
		~~Christopher J. Kuehn,~~Heather R. Howlett, Vice President and Chief Accounting Officer Principal Accounting Officer