TT 10-K & 10-Q changes, risk factors and insider trading

Our global operations are dependent upon products manufactured, purchased and sold in the U.S. and internationally. Approximately 75% of our net revenues in 2025 were derived inside the U.S., and we sold products in approximately 100 countries. In addition, many of our customers, manufacturing operations and suppliers are located outside the U.S. These activities are subject to risks that are inherent in operating globally, including:

•trade protection measures such as import or export restrictions and requirements, the imposition of tariffs and quotasquotas, trade embargoes, or revocation or material modification of trade agreements;

•national and international conflict, including war, civil disturbances and terrorist acts or the threat thereof; and

We rely on suppliers to secure commodities, particularly steel and non-ferrous metals, and third-party parts and components, including electronic components, required for the manufacture of our products. A disruption in deliveries from our suppliers or decreased availability of commodities and third-party parts and components could adversely affect our ability to meet our commitments to customers, impact pricing, increase our operating costs, or impact timing and delivery of products and services. Disruptions have previously occurred and may occur in the future due to globalpublic pandemics,health crises, natural disasters, regulatory changes, geopolitical events, electronic component shortages, supplier capacity constraints, labor shortages, port congestion, logistical problems, political unrest, and other issues. Some of these disruptions have resulted in supply chain constraints affecting our business including our ability to timely produce and ship our products. The unavailability of some commodities and third-party parts and components could have a material adverse impact on our results of operations and cash flows.

The markets that we serve are highly competitive. We compete worldwide with a number of other manufacturers and distributors that produce and sell similar products. There has been consolidation and new entrants (including non-traditional competitors) within our industries and there may be future consolidation and new entrantsentrants, either of which could result in increased competition and pricing pressures and significantly alter the dynamics of the competitive landscape in which we operate. Due to our global footprint we are competing worldwide with large companies and with smaller, local operators who may have customer, regulatory or economic advantages in the geographies in which they are located. In addition, some of our competitors may employ pricing and other strategies that are not traditional. While we understand our markets and competitive landscape, there is always the risk of disruptive technologies coming from companies that are not traditionally manufacturers or service providers of our products. Refer to "Item 1. Business" for additional details. As we integrate acquisitions into our portfolio of solutions, we may face new competitors in our target markets and incur increased competition from alternative solutions.solutions, which could lead to decreased demand or reduced market share for our products and services. We must maintain the quality of our products, retain longstanding relationships with major customers, continue to grow our business by establishing relationships with new customers, and continually innovate new or enhanced products and services to maintain and expand our brand recognition and market leadership position to effectively compete in the markets that we serve. AI also presents emerging issues and the pace presents uncertainties, and we may experience competitive harm, harm to our reputation, or legal liability. A failure or inability to effectively address market trends, incorporate technology developments, adapt to changes in customer preferences, and compete in our market may adversely affect demand for our products and services, which may cause a material adverse effect on our financial condition.

We must efficiently and effectively innovate, develop and commercialize new and enhanced products and services in a rapidly changing technological and business environment in order to remain competitive in our current and future markets and in order to continue to grow our business. The timely development and commercialization of new products and services and the enhancement of existing products and services is required to meet our customer demands, market trends, and regulatory requirements. The ongoing refreshment of our product and service offerings portfolio requires strategic choices of a significant investment of resources, anticipation of the opportunity and risks of new technologies, and the ability to compete with others who may have superior resources in specific technology domains. We cannot provide any assurance that any new or enhanced product or service will be successfully commercialized in a timely manner, if ever, or, if commercialized, will result in returns greater than our investment. Investment in a product or service could divert our attention and resources from other projects that become more commercially viable in the market. We also cannot provide any assurance that any new or enhanced product or service will be accepted by our current and future markets. The accelerating pace of technological change increases the risk of shortened product lifecycles. The successful development and commercialization of products and services depends on attracting, retaining, and developing highly skilled talent in engineering, technology, and product management. Constraints in the labor market or increased competition for skilled professionals may delay innovation initiatives or increase costs, or require the company to accelerate automation. Failure to timely and accurately predict customer needs and preferences, anticipate regulatory conditions affecting current and future products, mitigate supply chain disruptions on new products, or our failure to develop new and enhanced products and services thatin area acceptedtimely byfashion, theseincluding marketsimplementing emerging technological changes such as integrated AI solutions in our products and services, could have a material adverse impact on our competitive position, operations, financial condition, and cash flows.

The performance of the financial markets and interest rates can also impact the value of our defined benefit pension plans and other post-retirement benefit programs. Significant decreases in discount rate or investmentthe lossesvalue onof plan assets may increase our funding obligations, which may adversely affect our financial results. See Note 11 – "Pensions and Postretirement Benefits Other Than Pensions."

We have operations throughout the world that manufacture and sell products in various international markets. We also have investments in our subsidiaries located in foreign countries. As a result, we are exposed to movements in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world.

Changes in U.S. or foreign trade policies and other factors beyond our control may adversely impact our business and operating resultsresults.

Changes in governmental policies on foreign trade, geopolitical tensionstensions, and trade disputes can disrupt supply chains and increase the cost of our products. This could cause our products to be more expensive for customers, which could reduce the demand for or the attractiveness of such products. The U.S. continues to implement certain trade actions, including imposing tariffs on certain goods imported from several countries, which has resulted in retaliatory tariffs by other countries. Additional tariffs have been proposed by the current U.S. administration and there are active negotiations for extending trade treaties. It is not possible to predict the extent or focus of any such tariffs at this time. In addition, a geopolitical conflict in a region where we operate could disrupt our ability to conduct business operations in that region. In addition to tariffs, duties, quotas, trade embargoes, and sanctions, countries also could adopt other measures, such as controls on imports or exports of goods, technology, or data, which could adversely affect our operations and supply chain and limit our ability to offer our products and services as intended. These kinds of restrictions could be adopted with little to no advancedadvance notice, and we may not be able to effectively mitigate the adverse impacts from such measures. Political uncertainty surrounding trade or other international disputes also could have a negative impact on customer confidence and willingness to spend money, which could impair our future growth.

The global economy has been negatively impacted by geopolitical conflicts, including the military conflict between Russia and Ukraine and conflictconflicts in the Middle East. Governments including the U.S., China, United Kingdom, and those of the European Union have imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia which has triggered retaliatory sanctions by the Russian government and its allies. The outcome and future impacts of these world conflicts remain highly uncertain, continue to evolve and may grow more severe the longer the military action and sanctions remain in effect. Risks associated with world geopolitical conflicts that have arisen or could arise in the future, include, but are not limited to, adverse effects on political developments and on general economic conditions, including inflation and consumer spending; disruptions to our supply chains; disruptions to our information systems, including through network failures, malicious or disruptive software, or cyberattacks; trade disruptions; additional tariffs; energy shortages or rationing that may adversely impact our manufacturing facilities and consumer spending, particularly in Europe; rising fuel and/or rising costs of producing, procuring and shipping our products; our exposure to foreign currency exchange rate fluctuations; and constraints, volatility or disruption in the financial markets.

We have no way to predict the progress or outcome of world geopolitical conflicts, including the situations in Ukraine and the Middle East. Although neither the Russia-Ukraine conflict nor the Middle East conflictconflicts have, to date, caused any material adverse effect on our business or financial performance, until there are peaceful resolutions, these conflicts could have a material adverse effect on our operations, results of operations, financial condition, liquidity, growth prospects and business outlook.

The full extent to which a pandemic, epidemic, or spread of infectious diseases or other public health crises will affect us will depend on future developments that are highly uncertain and cannot be accurately predicted.

PriorThe experienceglobal withspread of the Coronavirus Disease 2019 (COVID-19) pandemic demonstrated widespread, rapidly evolving and unpredictable impacts on global society, economics, financial markets and business practices. Government efforts to contain the pandemic included travel bans and restrictions, quarantines, shelter in place orders and shutdowns. Although our operations have stabilized since the peak of the COVID-19 pandemic, our business and global operations were impacted by supply chain delays, higher material costs and product prices, lower revenues for some quarters, unfavorable foreign currency exchange rates, and, at times, our abilities to obtain needed products and services, operate in certain locations, maintain our distribution channels, and attract and retain talent were affected. A resurgence or development of new strains of COVID-19, or other public health emergencies, could result in unpredictable responses by authorities around the world which could negatively impact our global operations, customers and suppliers.

Material adverse legal judgments, fines, penalties or settlements could adversely affect our results of operationsoperations, orand our financial condition.

We and certain of our subsidiaries are currently and may in the future become involved in legal and regulatory proceedings and disputes incidental to the operation of our business or the business operations of previously-owned entities. Our business may be adversely affected by the outcome of these proceedings and other contingencies (including, without limitation, contract claims or other commercial disputes, product liability, product defects, environmental matters, intellectual property claims, employment claims, and asbestos-related matters) that cannot be predicted with certainty. These lawsuits may include claims for compensatory damages, punitive and consequential damages, and/or injunctive relief. The defense of these lawsuits may divert our management's attention, we may incur significant expenses in defending these lawsuits, we may experience disruption in supply or sales, and we may be required to pay damage awards or settlements or become subject to equitable remedies that could adversely affect our operations or financial results. Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against the total aggregate amount of losses sustained as a result of such proceedings and contingencies. As required by generallyU.S. acceptedGenerally accountingAccepted principlesAccounting inPrinciples the United States,(GAAP), we establish reserves based on our assessment of contingencies. Subsequent developments in legal proceedings and other events could affect our assessment and estimates of the loss contingency recorded as a reserve and we may be required to make additional material payments, which could have a material adverse impact on our liquidity, results of operations, financial condition, and cash flows. See also Part I, Item 3, "Legal Proceedings," and Part II, Item 8, Consolidated Financial Statements Note 20, "Commitments and Contingencies."

•the actions of representatives of the asbestos claimants, including the ACC's pursuit of certain causes of action against us, following the Bankruptcy Court's grant of the ACC's motion seeking standing to investigate and pursue certain causes of action at a hearing held on January 27, 2022, and other potential actions by the ACC in opposition to, or otherwise inconsistent with, the efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization;

•the decisions of the Bankruptcy Court relating to numerous substantive and procedural aspects of the Chapter 11 cases, including in connection with a proceeding by Aldrich and Murray to estimate their aggregate liability for asbestos claims, following the Bankruptcy Court's grant of their motion seeking such a proceeding, and other efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization, whether such decisions are in response to actions of representatives of the asbestos claimants or otherwise;

The ability of Aldrich and Murray to successfully reorganize and resolve their asbestos liabilities will depend on various factors, including their ability to reach agreements with representatives of the asbestos claimants on the terms of a plan of reorganization that satisfies all applicable legal requirements and to obtain the requisite court approvals of such plan, and remains subject to the risks and uncertainties described above. We cannot ensure that Aldrich and Murray can successfully reorganize, nor can we give any assurances as to the amount of the ultimate obligations under the Funding Agreements pursuant to which certain subsidiaries are obligated, among other things, to pay the costs and expenses of Aldrich and Murray during the pendency of the Chapter 11 cases to the extent distributions from their respective subsidiaries are insufficient to do so and to provide an amount for the funding for a trust established pursuant to section 524(g) of the Bankruptcy Code, to the extent that the other assets of Aldrich and Murray are insufficient to provide the requisite trust funding or any plan of reorganization, or the resulting impact on our financial condition, results of operations or future prospects. We also are unable to predict the timing of any of the foregoing matters or the timing for a resolution of the Chapter 11 cases, all of which could have an impact on us.

We rely extensively on information technology systems, some of which are supported by third party vendors including cloud-based systems and managed service providers, to manage and operate our business. We invest in new information technology systems designed to improve our operations. These information technology systems can be damaged, disrupted, compromised, or shut down due to cyber attacks, malware, human error or malfeasance (including by employees), power and utility outages, hardware failures, telecommunication issues, or catastrophes or other unforeseen events. If these systems cease to function properly, if these systems experience security breaches or disruptions ordisruptions, if these systems do not provide the anticipated benefits or if we are unable to commit sufficient resources to maintain and enhance our information technology infrastructure to ensure data quality and to keep pace with continuous development in information processing technology, our ability to manage our operations could be impaired, which could have a material adverse impact on our results of operations, financial condition, and cash flows.

Our information technology systems, networks, connected services, and infrastructure and technology, including artificial intelligence (AI) technology, embedded in certain of our control products have been and are at risk to cyber attacks and unauthorized access. From time to time, vulnerabilities in our products are discovered and updates are made available, but customers are at risk until those updates are applied or other mitigating actions are taken by customers to protect their systems and networks. LikeAlthough we maintain processes and procedures designed to mitigate cybersecurity risk, like other large companies, certain of our information technology systems and the systems of our vendors have been subject to computer viruses, malicious code, unauthorized access, phishing attempts, denial-of-service attacks and other cyber attacks and we expect that we and our vendors will be subject to similar attacks in the future. We and some of our third-party suppliers have experienced cyber attacks, and, due to the evolving threat landscape, may continue to experience attacks, potentially with more frequency and severity. Certain of our business partners and third-party vendors may be granted access to our confidential information as well as confidential information about our customers, suppliers, employees, and others, which may be compromised by a cyber attack. WeIn addition, the rapid evolution and increased adoption of AI technologies may intensify our cybersecurity risks, including risks from malicious or misuse of AI to craft increasingly sophisticated cybersecurity attacks against us, our business partners, or our third-party vendors. While we continue to make investments and adopt measures designed to enhance our protection, detection, response, and recovery capabilities, and to mitigate potential risks to our technology, products, services and operations from potential cyber attacks.attacks, insufficient controls or other vulnerabilities in our systems and those of our business partners or third-party vendors could result in misappropriation, destruction, exfiltration, or unauthorized disclosure of our information.

The methods used to obtain unauthorized access, disable or degrade service, or sabotage information technology systems are constantly changing and evolving. Despite having instituted security policies and enhancing business continuity plans, and implementing and regularly reviewing and updating security controls and related processes and procedures to protect against unauthorized access and requiring similar protections from our vendors, the ever-evolving threats mean we are continually evaluating and adapting our systems and processes and ask our vendors to do the same, and there is no guarantee that such systems and processes will be adequate to safeguard against all data security breaches or misuses of data. Hardware, software, artificial intelligenceAI technology, or applications we develop or obtain from third parties sometimes contain defects in design or deployment or other problems that could unexpectedly result in security breaches or disruptions. Open source software components embedded into certain software that we use have in the past contained vulnerabilities and others may be discovered in the future. Such vulnerabilities can expose our systems to malware or allow unauthorized third-party access to data, including confidential information about our business, customers, dealers, and suppliers; personally identifiable data related to employees, customers, and other business partners; as well as other sensitive matters. While these issues are not specific to our Company, we are required to take action when such vulnerabilities are identified including patching and modification to certain of our products and enterprise systems. To date, there has been no material business impact from such vulnerabilities, but we continue to monitor these issues and our responses are ongoing. Our systems, networks and certain of our control products and those of our vendors are at risk to system damage, cyber attacks, human errors or misconduct, malware, power and utility outages, and other catastrophic events. Any of these incidents could cause significant harm to our business by negatively impacting our business operations, compromising the security of our proprietary information or the personally identifiable information of our customers, employees and business partners which may be subject to privacy and security laws, regulations and other controls. These events potentially expose us to litigation or other legal actions against us or the imposition of penalties, fines, fees or liabilities. Such events could have a material adverse impact on our results of operations, financial condition and cash flows and could damage our reputation which could adversely affect our business. Our insurance coverage may not be adequate to cover all the costs related to a cyber attack or disruptions resulting from such attacks. Customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands.

The regulatory environment surrounding data privacy and protection is increasingly demanding, with the frequent imposition of new and changing requirements across businesses and geographic areas. We are required to comply with complex regulations when collecting, transferring and using personal data, whichincluding the E.U. Global Data Protection Regulation (GDPR), the various state privacy laws, and other regulatory requirements. Compliance with these regulations increases our costs, affects our competitiveness and can expose us to substantial fines or other penalties.penalties, and/or additional reporting or other obligations.

Our reputation, ability to do business and results of operations could be impaired by improper conduct by any of our employees, agentsagents, business partners, or businessother partners.third parties.

We are subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies, including laws related to anti-corruption, anti-human trafficking, anti-bribery including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, export and import compliance, anti-trust, cybersecurity, data privacy, and money laundering, due to our global operations. We cannot provide assurance our internal controls will always protect us from the improper conduct of our employees, agents andagents, business partners.partners, or other third parties. Any violations of law or improper conduct could damage our reputation and, depending on the circumstances, subject us to, among other things, civil and criminal penalties, material fines, equitable remedies (including profit disgorgement and injunctions on future conduct), securities litigation and a general loss of investor confidence, any one of which could have a material adverse impact on our business prospects, financial condition, results of operations, cash flows, and the market value of our stock. We also rely on our suppliers to adhere to our Supplier Code of Conduct, violations of which could adversely affect our business and results of operations, financial condition and cash flows.

Climate change presents immediate and long-term risks to our Company and to our customers, with the risks expected to increase over time, including, among others, acute physical risks (such as flooding, hurricanes, or wildfires) or chronic physical risks (such as droughts, heat waves, or sea level changes). Our products and operations are subject to and affected by environmental regulation by federal, state and local authorities in the U.S. and regulatory authorities with jurisdiction over our international operations, including with respect to the use, storage, and dependence upon refrigerants which are considered greenhouse gases. Refrigerants are essential to many of our products and there is concern regarding the global warming potential of such materials. As such, national, regional and international regulations and policies have been implemented to curtail the use of certain refrigerants. Some of these regulations could have a negative competitive impact on our company by requiring us to make costly changes to our products, or could make some of our existing HVAC and refrigeration products non-compliant or obsolete. As regulations reduce the use and potential availability of the current class of widely used refrigerants, we are developing and selling our next generation products that utilize lower global warming potential solutions. There can be no assurance that climate change or environmental regulation or deregulation will not have a negative competitive impact on our ability to sell our products or that economic returns will match the investment that we are making in new product development. We face increasing complexity related to product design, the availability and use of materials, the associated energy consumption and efficiency related to the use of products, the transportation and shipping of products, climate change regulations, and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life as we adjust to new and future requirements relating to our transition to a more circular economy. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty. Such regulatory uncertainty extends to future incentives for energy efficient buildings and vehicles and costs of compliance, which may impact the demand for our products, obsolescence of our products and our results of operations. Changes regarding climate risk management and practices may result in higher regulatory, compliance risks and costs.

We have previously announced certain defined sustainability commitments with a goal of achieving these commitments by 2030. We also periodically announce new initiatives and product innovations that further our sustainability commitments. We are on track with our climate commitment to offer a full line of next generation products by 2030 without compromising safety or energy efficiency. Additionally, in 2019, we announced our 2030 commitment which targets reducing one gigaton – one billion metric tons – of carbon emissions (CO2e) from our customers' footprint by 2030. While we are committed to pursuing these sustainability objectives, our ability to achieve our sustainability objectives is subject to numerous risks and uncertainties, including increased operationoperating costs and future changes in regulation, and there can be no assurance that we will successfully achieve our commitments.commitments Failureor that any future investments we make in furtherance of achieving our sustainability targets and goals will meet investor expectations or any future legal requirements regarding sustainability performance. If we are unable to meet theseour commitmentstargets and goals, it could result in reputational and other harm to our company.company, Changesadverse publicity and reaction from investors, activist groups and other stakeholders, which could adversely impact our financial condition and results of operations. Stakeholders are increasingly scrutinizing sustainability practices, and stakeholders' expectations regarding climatethese riskpractices managementare diverse and practicesrapidly changing. Furthermore, many jurisdictions where we operate have enacted or are in the process of enacting legislation regarding sustainability reporting, monitoring, and other requirements. Failure to meet these evolving legal requirements may resultsubject inus higherto regulatory,fines, compliancepenalties, risksor andother costs.legal obligations.

Any acquisitions, divestitures, joint ventures or investments may ultimately harm our business, financial condition, results of operations andoperations, cash flows.flows, There are additional risks related toand/or our Reversestock Morris Trust transaction, see Part I, Item 1A, "Risk Factors - Risks Related to the Transactions" for more information.price.

Natural disasters or other unexpected catastrophic events may disrupt our operations,operations and our supply chain, and may adversely affect our results of operations and financial condition, and may not be fully covered by insurance.

The skills, experience, industry knowledge, and industryrelationships knowledgebuilt ofby our employees significantly benefit our operations and performance. The market for employees and leaders with certain skills and experiences is very competitive, and difficulty attracting, developing, and retaining members of our management team and key employeesemployees, or a failure to adequately ensure effective succession planning or knowledge transfer, could have a negative effect on our business, operating results, and financial condition. Maintaining a positive and inclusive culture and work environment, offering attractive compensation, benefits, and development opportunities, and effectively implementing processes and technology that enable our employees to work effectively and efficiently are important to our ability to attract and retain employees.

The taxes associated with our operations and corporate structure could be impacted by changes in tax or other laws, treaties or regulations or the interpretation or enforcement thereof by the U.S. or non-U.S. tax or other governmental authorities. Even after legislation is enacted, further guidance, regulations and technical corrections pertaining to the legislation continue to be issued by the tax authorities, some of which may have retroactive application.application (including regulations and other guidance promulgated under the One Big Beautiful Bill Act of 2025 (OBBBA)). We continue to monitor and review new guidance and regulations as they are issued, as any changes could have a material adverse effect on our financial statements. In addition, governmental authorities are actively engaged in formulating new legislative proposals. Any future legislative changes to the tax laws and judicial or regulatory interpretation thereof, the geographic mix of earnings, changes in overall profitability, and other factors could also materially impact our effective tax rate.

Our commitment to sustainability extends to the environmental and social impacts of our people, operations, products and services. We have announced ambitious 2030 Sustainability Commitments, including our Gigaton Challenge to reduce customers' carbon emissions by a billion metric tons through sustainable products and services. We are also Leading by Example as we work toward carbon-neutral operations, zero waste-to-landfill and net positive water use in water-stressed locations. We also committed to reducing embodied carbon in our products by 40%, while also designing products for circularity. Our 2030 emissions reduction targets have been validated by the Science Based Targets Initiative (SBTi), and we are one of very few companies worldwide with validated 2050 net-zero targets. Finally, our Opportunity for All commitment focuses on investing in our people and our uplifting and inclusive culture, and broadening access to Science, Technology, Engineering and Math (STEM) education and careers in our communities.

TheOn CompanyJanuary 2, 2025, we completed the acquisition of twoBrainBox businessesAI in January 2025. One acquisition is a Commercial HVAC distributor with sales and service business in Belgium and Luxembourg. The results of the acquisition will be reported within the EMEA segment. The second acquisition isInc., a building management platform for HVAC optimization, using advanced artificial intelligenceAI technologies. The results of the acquisition will beare reported within the Americas segment.segment Theand results of the acquisitions will beare included in our consolidated financial statements from the date of the acquisitions.acquisition.

InOn September 24, 2021, Aldrich and Murray reachedfiled anthe Plan with the Bankruptcy Court. The Plan is supported by and reflects the agreement in principle reached with the court-appointedFCR. legalOn representative of future asbestos claimants (the FCR)same date, in connection with the Plan, Aldrich and Murray filed a motion to create a $270.0 million trust intended to constitute a "qualified settlement fund" within the meaning of the Treasury Regulations under Section 468B of the Internal Revenue Code (QSF). On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF, which was funded on March 2, 2022, resulting in an operating cash outflow of $270.0 million reported in our Consolidated Statements of Cash Flows, of which $91.8 million was allocated to continuing operations and $178.2 million was allocated to discontinued operations for the year ended December 31, 2022.

OnCertain individual claimants and the ACC filed Motions to dismiss the bankruptcy proceedings on April 6, 2023 and May 15, 2023, respectively (the Motions to Dismiss). The Bankruptcy Court denied the Motions to Dismiss, and the District Court and the Fourth Circuit declined to review the Bankruptcy Court's ruling. In addition, on January 23, 2023, an individual claimant filed a motion to lift the automatic orderstay imposed by the Bankruptcy Code to pursue its asbestos suit against Aldrich and Murray notwithstanding the Chapter 11 cases (the Stay Relief Motion). Aldrich and Murray, the FCR, and certain non-debtor affiliates each opposed the Stay Relief Motion. The Bankruptcy Court denied the Stay Relief Motion after holding a hearing on March 30, 2023. The Bankruptcy Court entered an order memorializing its March oral ruling on November 13, 2024.Motion. The individual claimant filed a notice with the Bankruptcy Court appealing the order denying the Stay Relief Motion to the U.S. District Court onfor Novemberthe 27,Western 2024.District of North Carolina (the District Court). The District Court has entered an order staying all deadlines in the appeal of the order denying the Stay Relief Motion pending the outcome of a separate appeal before the Fourth Circuit in another bankruptcy case pending in the Bankruptcy Court.

It is not possible to predict how the District Court will rule on these pending motions, whether an appellate court will affirm or reverse the Bankruptcy Court orders denying the Motions to Dismiss and the Stay Relief Motion, whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last.Thelast. On December 17, 2025, the Bankruptcy Court granted the FCR's motion to streamline the Bankruptcy Court proceedings to estimate the Debtors' asbestos-related liabilities. The first phase of the estimation hearing will commence the week of August 10, 2026. The Chapter 11 cases remain pending as of February 6,5, 2025.2026.

Given our broad range of products manufactured and geographic markets served, management uses a variety of factors to predict the outlook for the 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 serve to proactively detect trends and to adapt our strategies accordingly, including potential triggers and actions to be taken under recessionary and other macroeconomic scenarios. In addition, we believe our backlog and order levels are indicative of future revenue and thus are a key measure of anticipated performance.

We expect conditions toConditions remain mixed across our served end markets and geographies. Overall Commercial HVAC markets in Americas and EMEA remain strong due to demand for our differentiated customer driven solutions and the benefits of installing energy efficient products and decarbonizing the built environment. In Asia, markets areremain more dynamic,dynamic with weakmixed macro-economic conditions driving soft demand in China and more stable macro-economic conditions driving modest demand inacross the rest of Asia.region. Transport refrigeration markets arecontinue experiencingto lowerexperience demandweaker as freight rates remain low,demand, particularly in the United States. Residential markets in the United States have improvedweakened inconsiderably 2024throughout but2025 aredue undergoingto navigating a regulatory refrigerant transition whichand couldsofter bring short-term variation inconsumer demand, andwhile uncertainties remain from economic risks and higher interest rates.

We continue to see material and wage inflation impact our cost structure. Our performance may be impacted by future developments that are uncertain. Geopolitical risks and macroeconomic eventsdevelopments, including changes in global trade policies, tariffs and other measures could cause disruptions to operations, supply chains, end markets, financial markets and overall economic conditions which could negatively impact our business.

We believe we have a solid foundation of global brands that are highly differentiated in all of our major product lines. Our geographic mix, diversityour of ourdiverse portfolio, and our large installed product base, provide growth opportunities from replacement demand and within our service revenue streams. Additionally, we are investing substantial resources to innovate and develop new products and services which we expect to drive future growth.

We define Segment Adjusted EBITDA as net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, non-cash adjustments for contingent consideration, merger and acquisition-relatedacquisition transaction costs, unallocated corporate expenses, discontinued operations and other significant non-recurring or non-cash items. Segment Adjusted EBITDA, and ratios based on it, are used in the development of annual operating plans, including capital expenditure and operational budgets, and in measuring performance against targets for purposes of incentive compensation. Segment Adjusted EBITDA also provides a useful tool for assessing the operating performance and comparability between periods and our ability to generate cash because it excludes the impact of certain non-cash or non-recurring items that can vary significantly from period to period. Segment Adjusted EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results as determined in accordance with GAAP.

We define Segment Adjusted Operating Income as operating income adjusted to exclude restructuring costs, merger and acquisition-relatedacquisition transaction costs, non-cash adjustments for contingent consideration and other significant non-recurring or non-cash items. Segment Adjusted Operating Income, and ratios based on it, are used to provide a comprehensive view of segment profitability and evaluate efficient returns on assets. Segment Adjusted Operating Income also provides a useful tool for assessing the comparability between periods because it eliminates non-recurring items that can vary from period to period. Segment Adjusted Operating Income is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results as determined in accordance with GAAP.

The increase in Net revenues was primarily driven by higher volumes as a result of stronger end-customer demand within our Americas and EMEA segments, realization of price increases and incremental revenue from acquisitions, partially offset by an unfavorable impact from foreign currency translation.acquisitions. Refer to "Results by Segment" below for a discussion of Net revenues by segment.

Selling and administrative expenses for the year ended December 31, 20242025 increased by 20.8%,4.5%, or $617.2$162.4 million, compared with the same period of 2023.2024. The increase in Selling and administrative expenses was primarily driven by an increase in human capital costs related to investing in our people, higher sales commissions, incremental selling and administrative expenses of acquired businesses and higher levels of business reinvestment. Additionally, non-cash adjustments to contingent consideration reduced Selling and administrative expenses for the years ended December 31, 20242025 and December 31, 20232024 by $25.0$61.2 million and $49.3$25.0 million, respectively. Selling and administrative expenses as a percentage of Net revenues for the year ended December 31, 20242025 increaseddecreased 14050 basis points from 16.7%18.1% to 18.1%.17.6%. Excluding the effect of contingent consideration adjustments, Selling and administrative expenses were 17.8% and 18.2% of Net revenues for the years ended December 31, 2025 and December 31, 2024, respectively.

The 20232025 and 2024 effective tax rate was 19.4%19.2% and 19.4%, respectively, which was lowerhigher than the U.S.Irish Statutorystatutory rate of 21%12.5% primarily due to aearnings $30.3 million reductionthat in valuationthe allowancesaggregate primarilyhave relateda tohigher deferredstatutory tax assetsrate, associatedU.S. withfederal, both foreign tax creditsstate and operationslocal ofincome internationaltaxes, subsidiaries.partially Additionaloffset items that impact the effective tax rate areby excess tax benefits from employee share-based paymentspayments, andrelease earningsof invaluation non-U.S.allowance jurisdictions,on whichcertain in aggregate have a lower effectiveincome tax rate offset by an impairment of an equity investment,credits and U.S. state and local taxes. Revenues from non-U.S. jurisdictions accounted for approximately 28% of our total 2023 revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. atResearch ratesand upDevelopment to 38%.credit. When comparing the results of multiple reporting periods, among other factors, the mix of earnings betweenamong U.S. and foreignglobal jurisdictions can cause variability in our overall effective tax rate.

•Our EMEA segment innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating, cooling and ventilation systems,systems and services, energy services and solutions for commercial buildings,solutions, and transport refrigeration systems and solutions.

The decreaseincrease in organic revenue was primarily driven by lower volumes in China, partially offset by realization of price increases and higher volumes led by strong demand within our Commercial HVAC businessbusiness, andwhich higherwas volumespartially offset by weaker volume in theour restResidential of Asia.business.

Segment Adjusted EBITDA margin for the year ended December 31, 20242025 increased by 17070 basis points to 23.9%21.6% compared to 22.2%20.9% for the same period of 20232024 primarily due to grossprice productivityrealization and pricegross realization,productivity, partially offset by lower volumes, inflation and continued business reinvestment.

Share repurchases are made in accordance with our balanced capital allocation strategy, subject to market conditions and regulatory requirements. In February 2022, our Board of Directors authorized the repurchase of up to $3.0 billion of our ordinary shares (2022 Authorization) and in December 2024, our Board of Directors authorized the repurchase of up to an additional $5.0 billion of our ordinary shares (2024 Authorization) upon the conclusion of the 2022 Authorization. During the year ended December 31, 2024,2025, we repurchased and canceled approximately $1.3$1.5 billion of ordinary shares, leavingwhich $1.2 billion remaining underexhausted the 2022 Authorization and $5.0left $4.8 billion remaining under the 2024 Authorization. Additionally, during the period after December 31, 20242025 through January 31,30, 2025,2026, we repurchased approximately $100$89 million of our ordinary shares under the 20222024 Authorization.

In pursuing our business strategy, we routinely conduct discussions, evaluate targets and enter into agreements regarding possible acquisitions, divestitures, joint ventures and equity investments. We have acquired several businesses, entered into joint ventures and invested in companies that complement existing products and services further enhancing our product portfolio. We deployed capital of approximately $197$278 million and $881$197 million to acquisitions and equity investments completed during the years ended December 31, 20242025 and December 31, 2023,2024, respectively. In 2024,2025 and through January 2026, we committed capital of approximately $470$720 million attributable to acquisitions and equity investments that were signed in 2024 and were closed in 20242025 or are expected to close in Januarythe 2025.first quarter of 2026.

As of December 31, 2024,2025, our short-term obligations of $693.0 million primarily consist of current maturities of $157.2$399.9 million that mature in JuneMarch 20252026 and $295.0$293.1 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 accordance with notice requirements as specified in the offering documents, holders had the option to exercise puts up to $37.2 million for settlement in February 20252026 but did not exercise such option. In accordance with notice requirements as specified in the offering documents, holders will have the option to exercise puts up to $257.8$256.0 million for settlement in November 2025.2026. We also maintain a commercial paper program which is used for general corporate purposes. Under the program, the maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, is $2.0 billion as of December 31, 2024.2025. We had no commercial paper outstanding at December 31, 20242025 and December 31, 2023.2024. See Note 7, "Debt and Credit Facilities," to the Consolidated Financial Statements for additional information regarding the terms of our short-term obligations.

Our long-term obligations primarily consist of long-term debt with final maturity dates ranging between 20262027 and 2049. In addition, we maintain two $1.0 billion senior unsecured revolving credit facilities, one of which matures in JuneApril 20262027 and the other which matures in AprilMay 2027.2030. The facilities provide support for our commercial paper program and can be used for working capital and other general corporate purposes. Total commitments of $2.0 billion were unused at December 31, 20242025 and December 31, 2023.2024. See Note 7, "Debt and Credit Facilities," to the Consolidated Financial Statements and further below in Supplemental Guarantor Financial Information for additional information regarding the terms of our long-term obligations and their related guarantees.

Net cash provided by continuing operating activities for the year ended December 31, 2025 was $3,220.4 million, of which net income provided $3,502.0 million after adjusting for non-cash transactions. Net cash provided by continuing operating activities for the year ended December 31, 2024 was $3,177.7 million, of which net income provided $2,938.8 million after adjusting for non-cash transactions. Net cash provided by continuing operating activities for the year ended December 31, 2023 was $2,426.8 million, of which net income provided $2,499.6 million after adjusting for non-cash transactions. The year-over-year increase in net cash from continuing operating activities was primarily due to higher net earnings and an improved cash conversion cycle.earnings.

Cash flows from investing activities represents inflows and outflows regarding the purchase and sale of assets. Primary activities associated with these items include capital expenditures, proceeds from the sale of property, plant and equipment, acquisitions, funding of joint ventures and other equity investments and purchases and sales of short-term investments. During the year ended December 31, 2025, net cash used in investing activities from continuing operations was $640.0 million. The primary drivers of the usage were attributable to capital expenditures of $383.0 million and acquisitions of businesses of $276.0 million, net of cash acquired. During the year ended December 31, 2024, net cash used in investing activities from continuing operations was $562.9 million. The primary drivers of the usage were attributable to capital expenditures of $370.6 million and acquisitions of businesses of $180.3 million, net of cash acquired. During the year ended December 31, 2023, net cash used in investing activities from continuing operations was $1,172.2 million. The primary drivers of the usage was attributable to acquisition of businesses, which totaled $862.8 million, net of cash acquired, and capital expenditures of $300.7 million.

Cash flows from financing activities represent inflows and outflows that account for external activities affecting equity and debt. Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, net proceeds from debt issuances and proceeds from shares issued in connection with incentive plans. During the year ended December 31, 2025, net cash used in financing activities from continuing operations was $2,495.8 million. The primary drivers of the outflow related to the repurchase of $1,481.3 million in ordinary shares, dividends paid to ordinary shareholders of $837.3 million, and the repayment of $157.3 million of Debentures that matured in June 2025. During the year ended December 31, 2024, net cash used in financing activities from continuing operations was $2,020.6 million. The primary drivers of the outflow related to the repurchase of $1,280.8 million in ordinary shares and dividends paid to ordinary shareholders of $757.5 million. In addition, we received $498.5 million in proceeds from the issuance of 5.100% Senior Notes due March 2034, which was offset by the redemption of $500.0 million of 3.550% Senior Notes that matured in November 2024. During the year ended December 31, 2023, net cash used in financing activities from continuing operations was $1,350.3 million. The primary drivers of the outflow related to dividends paid to ordinary shareholders of $683.7 million and the repurchase of $669.3 million in ordinary shares. In addition, we received $699.1 million in proceeds from the issuance of 5.250% Senior Notes due March 2033 which was offset by the redemption of $700.0 million of Senior Notes due June 2023.

Free cash flow is a non-GAAP measure and defined as Net cash provided by (used in) continuing operating activities adjusted for capital expenditures, cash payments for restructuring, legacy legal liability, transformation costs and merger and acquisition (M&A) relatedtransaction costs and proceeds from sale of corporate asset less insurance settlements on property claims and an adjustment for our special three-year Outperformance Incentive Program. This measure is useful to management and investors because it is consistent with management's assessment of our operating cash flow performance. The most comparable GAAP measure to free cash flow is Net cash provided by (used in) continuing operating activities. Free cash flow may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for Net cash provided by (used in) continuing operating activities in accordance with GAAP.

Financing rates and conditions associated with future borrowings under our commercial paper program or term debt offerings will be affected by general financing conditions and our credit ratings. On AprilDecember 10,22, 2024,2025, Moody'sStandard and Poor's announced that it upgraded our long-term credit rating fromof Baa1BBB+ to A3A- and putupgraded theour Companyshort-term oncredit positiverating outlook.of A-2 to A-1. On OctoberApril 31,7, 2024,2025, Standard and Poor's announced that itMoody's revised our long-term credit rating from BBB+A3 stable to BBB+A3 positive. As of December 31, 2024,2025, our credit ratings were as follows:

Our contractual cash obligations include required payments of long-term debt principal and interest, purchase obligations and expected obligations under our pension and postretirement benefit plans. In addition, we have required payments of operating leases, income taxes and expected obligations under the Funding agreement,Agreements, environmental and product liability matters. For additional information regarding leases, income taxes, including unrecognized tax benefits, and contingent liabilities, see Note 10 "Leases," Note 16 "Income Taxes" and Note 20 "Commitments and Contingencies," respectively, to the Consolidated Financial Statements. Our material cash requirements include the following contractual and other obligations.

It is our objective to contribute to the pension plans to ensure adequate funds are available in the plans to make benefit payments to plan participants and beneficiaries when required. We currently expect that we will contribute approximately $30$84 million to our enterprisepension plans worldwide in 2025.2026, a portion of which may be funded by assets held in an employer-owned trust. The timing and amounts of future contributions are dependent upon the funding status of the plans, which is expected to vary as a result of changes in interest rates, returns on underlying assets, and other factors. See Note 11, "Pensions and Postretirement Benefits Other Than Pensions," to the Consolidated Financial Statements for additional information regarding pensions.

Management's Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with those accounting principles requires management to use judgment in making estimates and assumptions based on the relevant information available at the end of each period. These estimates and assumptions have a significant effect on reported amounts of assets and liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities because they result primarily from the need to make estimates and assumptions on matters that are inherently uncertain. Actual results may differ from these estimates. If updated information or actual amounts are different from previous estimates, the revisions are included in our results for the period in which they become known.

Under the income approach, we assumed a forecasted cash flow period of five to ten years with discount rates ranging from 8.5%9.5% to 15.5%13.5% and a terminal growth rate of 3.5% to 4.0%. Under the guideline public company method, we used multiples of earnings before interest, taxes, depreciation and amortization (EBITDA) or revenues based on the market information of comparable companies. Additionally, we compared the estimated aggregate fair value of our reporting units to our overall market capitalization. The excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) for most reporting units exceeded 400%.300%. TheTwo reporting units had estimated fair valuevalues ofthat onedid reportingnot unitsignificantly formedexceed upon the acquisition of Nuvolo in November 2023 was approximately equal to itstheir carrying value. AsChanges in business or market conditions, valuation assumptions, or other relevant inputs could adversely impact the fair value estimates of these reporting units and lead to the recognition of an impairment loss. The combined goodwill of these two reporting units was $355.0 million as of December 31, 2024, this reporting unit had $313.0 million of goodwill. A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in our end markets and volume assumptions could have a negative impact on the estimated fair value of this reporting unit.2025.

•Business combinations - Acquisitions that meet the definition of a business combination are recorded using the acquisition method of accounting. We include the operating results of acquired entities from their respective dates of acquisition. We recognize and measure the identifiable assets acquired, liabilities assumed, including contingent consideration relating to potential earnout provisions and any non-controlling interest as of the acquisition date fair value. The valuation of intangible assets is determined using an income approach methodology. We use assumptions to value the intangible assets including projected cash flows, including revenue growth rates and margins, customer attrition rates, royalty rates, tax rates and discount rates. The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed, and any non-controlling interest is recognized as goodwill. Costs incurred as a result of a business combination other than costs related to the issuance of debt or equity securities are recorded in the period the costs are incurred.

•Revenue recognition – Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of our revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of our revenues are recognized over time as the customer simultaneously receives control as we perform work under a contract. For these arrangements, the cost-to-cost input method (percentage of completion) is used as it best depicts the transfer of control to the customer that occurs as we incur costs.

On February 17, 2026, we acquired Stellar Energy Americas, Inc., a leading provider of turnkey data center cooling solutions. The results of this acquisition are reported within the Americas segment as of the date of acquisition. Additionally, during the first quarterhalf of 2026, we completed several other acquisitions. We acquired all remaining interest in LiquidStack, a provider of advanced liquid cooling solutions for data centers, in which the Company previously held a minority interest, that is reported within the Americas segment as of the date of acquisition. We also acquired twoseveral Transport refrigeration distributors that are reported inwithin the Americas and EMEA segments, as applicable, as of their respective dates of acquisition. We also acquired an exclusive sales channel for Trane products reported in the EMEA segment as of the date of acquisition. We also acquired a 49% interest in Kieback&Peter, a provider of building automation hardware, software and solutions across the building lifecycle and energy management. Our minority interest is reported as an equity method investment within the EMEA segment.

Conditions remain mixed across our served end markets and geographies. Overall Commercial HVAC markets in Americas and Europe remain strong due to demand for our differentiated customer driven solutions and the benefits of installing energy efficient products and decarbonizing the built environment. In Asia, markets remain dynamic, with weak macro-economic conditions driving soft demand in China balanced by strong demand in the rest of Asia. Transport refrigeration markets continue to experience weaker demand. Residential markets continue to be weak followingin the regulatoryUnited refrigerantStates transitionare and softer consumer demand in 2025,improving, while uncertainties remain from economic risks and higher interest rates.

Our performance may be impacted by future developments that are uncertain. Geopolitical risks and macroeconomic developments, including changes in global trade policies, tariffs and the ongoing conflict in the Middle East could cause disruptions to operations, supply chains, end markets, financial markets and overall economic conditions which could negatively impact our business.

Three Months Ended MarchJune 31,30, 2026 Compared to the Three Months Ended MarchJune 31,30, 2025 - Consolidated Results

Net revenues for the three months ended MarchJune 31,30, 2026 increased by 6.0%,10.6%, or $280.9$607.1 million, compared with the same period in 2025, which resulted from the following:

The increase in Net revenues was primarily driven by higher volumes as a result of stronger end-customer demand within our Americas and Asia Pacific segments, realization of price increases, incremental revenue from acquisitions, and a favorable impact from foreign currency translation. Refer to the "Results by Segment" below for a discussion of Net revenues by segment.

Gross profit margin for the three months ended MarchJune 31,30, 2026 decreased 100200 basis points to 34.8%35.6% compared to 35.8%37.6% for the same period of 2025 primarily due to inflation,inflation and investments, partially offset by productivity and price realization.

Selling and administrative expenses for the three months ended MarchJune 31,30, 2026 increased by 10.9%,3.9%, or $93.4$39.0 million, compared with the same period of 2025. The increase was primarily driven by a non-cash adjustment in prior year of $61.2 million related to contingent consideration. The remaining increase was due to human capital costs related to investing in our people, higher sales commissions, incremental selling and administrative expenses of acquired businesses and higher levels of business reinvestment. Selling and administrative expenses as a percentage of Net revenues for the three months ended MarchJune 31,30, 2026 increaseddecreased 90100 basis points from 18.3%17.3% to 19.2%. Excluding the effect of the contingent consideration adjustment, Selling and administrative expenses were 19.6% of Net revenues for the three months ended March 31, 2025.16.3%.

For the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 our effective tax rate was 18.5%18.8% and 17.9%,19.8%, respectively. The effective tax rate for the three months ended MarchJune 31,30, 2026 was higher than the Irish statutory rate of 12.5% primarily due to earnings that in the aggregate have a higher statutory tax rate, U.S. federal, state and local income taxes, partially offset by excess tax benefits from employee share-based payments.payments, and U.S. federal research and development tax credits. The effective tax rate for the three months ended MarchJune 31,30, 2025 was higher than the Irish statutory rate of 12.5% primarily due to earnings that in the aggregate have a higher statutory tax rate, U.S. federal, state and local income taxes, partially offset by excess tax benefits from employee share-based payments and a non-taxable adjustment for contingent consideration.

Three Months Ended MarchJune 31,30, 2026 Compared to the Three Months Ended MarchJune 31,30, 2025 - Segment Results

•Our Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildingsbuildings, and transport refrigeration systems and solutions.

The following discussion compares our results for each of our three reportable segments for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.

Net revenues for the three months ended MarchJune 31,30, 2026 increased by 5.2%12.3% or $197.7$579.0 million, compared with the same period of 2025.

The increase in organic revenue was primarily driven by higher volumes led by strong demand within our Commercial HVAC businessand Residential businesses and realization of price increases.

Segment Adjusted EBITDA margin for the three months ended MarchJune 31,30, 2026 and 2025 remaineddecreased flatby at50 19.8%.basis points to 23.5% compared to 24.0% for the same period of 2025, primarily due to inflation and investments, partially offset by productivity and pricing.

Net revenues for the three months ended MarchJune 31,30, 2026 increaseddecreased by 11.5%1.5% or $66.0$10.3 million, compared with the same period of 2025.

The decrease in organic revenue was primarily driven by lower volumes within our Transport refrigeration business,business and from the conflict in the Middle East, partially offset by higher volumes within our Commercial HVAC business.business in Europe.

Segment Adjusted EBITDA margin for the three months ended MarchJune 31,30, 2026 decreased by 260360 basis points to 13.5%14.7% compared to 16.1%18.3% for the same period of 2025, primarily due to integration costs related to acquisitions, continued business reinvestment, inflation and lower volumes, partially offset by productivity and pricing.volumes.

Net revenues for the three months ended MarchJune 31,30, 2026 increased by 5.5%11.1% or $17.2$38.4 million, compared with the same period of 2025.

Segment Adjusted EBITDA margin for the three months ended MarchJune 31,30, 2026 increaseddecreased by 120150 basis points to 23.7%21.8% compared to 22.5%23.3% for the same period of 2025 primarily due to gross productivity,inflation, partially offset by inflationgross productivity and continuedhigher business reinvestment.volume.

Our primary sources of liquidity include cash balances on hand, cash flows from operations, proceeds from debt offerings, commercial paper, and borrowing availability under our existing credit facilities. We earn a significant amount of our operating income in jurisdictions where it is deemed to be permanently reinvested. Our most prominent jurisdiction of operation is the U.S. We expect existing cash and cash equivalents available to the U.S. operations, the cash generated by our U.S. operations, our committed credit lines as well as our expected ability to access the capital and debt markets will be sufficient to fund our U.S. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future. In addition, we expect existing non-U.S. cash and cash equivalents and the cash generated by our non-U.S. operations will be sufficient to fund our non-U.S. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future. The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $2.0 billion. As of MarchJune 31,30, 2026, we had $400.0 million of commercial paper outstanding used for the repayment of $400.0 million of 3.500% Senior Notes which matured in March 2026.outstanding.

As of MarchJune 31,30, 2026, we had $1,074.2$1,318.3 million of cash and cash equivalents on hand, of which $789.9$1,191.5 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. 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 MarchJune 31,30, 2026, we currently have no plans to repatriate funds from subsidiaries for which we assert permanent reinvestment.

Share repurchases are made in accordance with our balanced capital allocation strategy, subject to market conditions and regulatory requirements. In December 2024, our Board of Directors authorized the repurchase of up to $5.0 billion of our ordinary shares. During the threesix months ended MarchJune 31,30, 2026, we repurchased and canceled $287.3$756.4 million of our ordinary shares, which left $4.5$4.0 billion remaining under the program. Additionally, during the period after MarchJune 31,30, 2026 through AprilJuly 30, 2026, we repurchased approximately $102$172 million of our ordinary shares under the program.

We expect to pay a competitive and growing dividend. InStarting Februarywith 2026,the first quarter 2026 dividend, our Board of Directors declared an increase in our quarterly share dividend by 12%, from $0.94 to $1.05 per ordinary share, or $3.76 to $4.20 per share annualized,annualized. whichThe first and second quarter 2026 dividends were declared and paid during the six months ended June 30, 2026, and the third quarter 2026 dividend was declared on June 5, 2026 to be paid in theSeptember first quarter.2026. Since the launch of Trane Technologies in March 2020, we have increased our quarterly share dividend by 98%.

In pursuing our business strategy, we routinely conduct discussions, evaluate targets and enter into agreements regarding possible acquisitions, divestitures, joint ventures and equity investments. We have acquired several businesses, entered into joint ventures and invested in companies that complement existing products and services further enhancing our product portfolio. We paid approximately $668$742 million in cash for acquisitions and equity method investments completed during the threesix months ended MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, our short-term obligations of $693.1 million consist of $293.1 million of fixed rate debentures thatand commercial paper. The fixed rate debentures totaling $293.1 million 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 accordance with notice requirements as specified in the offering documents, holders had the option to exercise puts up to $37.2 million for settlement in February 2026 but did not exercise such option. In October 2026, in accordance with notice requirements as specified in the offering documents, holders will have the option to elect to exercise puts up to $256.0 million for settlement in November 2026. 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 $400.0 million of commercial paper outstanding at MarchJune 31, 2026, due to the repayment of $400.0 million of 3.500% Senior Notes which matured in March30, 2026. We had no commercial paper outstanding at December 31, 2025. See Note 6, "Debt and Credit Facilities," to the Condensed Consolidated Financial Statements for additional information regarding the terms of our short-term obligations.

Our long-term obligations primarily consist of long-term debt with final maturity dates ranging between 2027 and 2049. In addition, we maintain two $1.0 billion senior unsecured revolving credit facilities,facilities onetotaling $2.5 billion, consisting of a $1.0 billion facility maturing in May 2030 and a $1.5 billion facility maturing in April 2027 and the other maturing in May 2030.2031. The facilitiesFacilities provide support for our commercial paper program and can be used for working capital and other general corporate purposes. Total commitments of $2.5 billion were unused at June 30, 2026 and $2.0 billion were unused at March 31, 2026 and December 31, 2025. On April 23, 2026, the Company entered into a $1.5 billion senior unsecured revolving credit facility with a term that ends in April 2031 and terminated its $1.0 billion facility that would have expired in April 2027, increasing the total Facilities outstanding to $2.5 billion. See Note 6, "Debt and Credit Facilities," to the Condensed Consolidated Financial Statements and further below in Supplemental Guarantor Financial Information for additional information regarding the terms of our long-term obligations and their related guarantees.

The following table reflects the major categories of cash flows for the threesix months ended MarchJune 31.30. For additional details, see the Condensed Consolidated Statements of Cash Flows in the Condensed Consolidated Financial Statements.

Net cash provided by continuing operating activities for the threesix months ended MarchJune 31,30, 2026 was $636.2$1,734.6 million, of which Net earnings provided $728.7$1,797.6 million after adjusting for non-cash transactions. Net cash provided by continuing operating activities for the threesix months ended MarchJune 31,30, 2025 was $345.5$1,043.5 million, of which Net earnings provided $676.7$1,656.5 million after adjusting for non-cash transactions. The year-over-year increase in net cash from continuing operating activities was primarily due to lower working capital and timing of customer down payments.

Cash flows from investing activities represent inflows and outflows regarding the purchase and sale of assets. Primary activities associated with these items include capital expenditures, proceeds from the sale of property, plant and equipment, acquisitions, funding of joint ventures and other equity investments. During the threesix months ended MarchJune 31,30, 2026, net cash used in investing activities from continuing operations was $755.7$902.3 million. The primary drivers of the usage were attributable to capital expenditures of $79.7$156.1 million and acquisitions of businesses and equity method investments of $668.2$742.0 million, net of cash acquired. During the threesix months ended MarchJune 31,30, 2025, net cash used in investing activities from continuing operations was $385.1$486.0 million. The primary drivers of the usage were attributable to capital expenditures of $118.9$208.8 million and acquisitions of businesses of $265.3$277.2 million, net of cash acquired.

Cash flows from financing activities represent inflows and outflows that account for external activities affecting equity and debt. Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, net proceeds from debt issuances and proceeds from shares issued in connection with incentive plans. During the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities from continuing operations was $546.0$1,243.2 million. The primary drivers of the outflow related to the repurchase of $287.3$756.4 million in ordinary shares, dividends paid to ordinary shareholders of $231.5$463.2 million, and the repayment of $400.0 million of 3.500% Senior Notes which matured in March 2026, partially offset by borrowings from commercial paper, net of interest, during the period of $398.7$398.4 million. During the threesix months ended MarchJune 31,30, 2025, net cash used in financing activities from continuing operations was $723.1$1,480.9 million. The primary drivers of the outflow related to the repurchase of $477.5$879.6 million in ordinary shares andshares, dividends paid to ordinary shareholders of $209.9$420.0 million.million, and the repayment of $157.3 million of Debentures that matured in June 2025.

A reconciliation of Net cash provided by (used in) continuing operating activities to free cash flow for the threesix months ended MarchJune 3130 is as follows:

Trane Technologies plc (Plc or Parent Company) and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of public debt issued by other 100% directly or indirectly owned subsidiaries of Plc. The following table shows our guarantor relationships as of MarchJune 31,30, 2026: