Trane Technologies PLC (NYSE:TT) Q3 2023 Earnings Conference Call November 1, 2023 10:00 AM ET Company Participants Zachary Nagle - VP, IR David Regnery - Chairman & CEO Christopher Kuehn - EVP & CFO Conference Call Participants Scott Davis - Melius Research Julian Mitchell - Barclays Bank Andrew Kaplowitz - Citigroup Charles Tusa - JPMorgan Chase & Co. Andrew Obin - Bank of America Merrill Lynch Gautam Khanna - TD Cowen Christopher Snyder - UBS Jeffrey Sprague - Vertical Research Partners Deane Dray - RBC ...

Financial Performance & Guidance - The company reported strong organic revenue growth of 9% and adjusted EPS growth of 23%[7] - Bookings reached an all-time high, exceeding $4.9 billion, with strong growth across all segments[7] - The company is raising its 2023 revenue and EPS guidance, expecting organic revenue growth of 8% to 9% and adjusted EPS of approximately $9.00[7] - The company expects to deploy approximately $2.5 billion in capital in 2023, including $513 million in dividends, $550 million in share repurchases, and $535 million in M&A[7] Segment Performance - Americas Commercial HVAC (CHVAC) bookings were up mid-teens, with a 3-year stack up approximately 65%[10] - EMEA CHVAC bookings were up low-teens, with a 2-year stack up approximately 25%[10] - Asia Pacific CHVAC bookings were up low-teens, with a 3-year stack up approximately 35%[10] Backlog & Market Position - The company's backlog is strong, ending Q3 at $6.9 billion, which is 2.5 times historical norms[7,8] - Global CHVAC backlog is approximately 3 times historical norms[7] - The company anticipates a robust backlog entering 2024, greater than $6 billion[7] Capital Allocation & Transformation Savings - The company is targeting approximately $300 million in total transformation savings by year-end[55] - The company expects to deliver free cash flow equal to or greater than 100% of adjusted net earnings[7]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________ FORM 10-Q _______________________________ ☐ 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 _____________________________ TRANE TECHNOLOGIES PLC (Exact name of registrant as specified in its charter) _______________________________ (State or other jurisdiction of incorporation or ...

Second-Quarter 2023 Results August 2, 2023 TECHNOLOGIES Forward-Looking Statements This news release includes "forward-looking" statements within the meaning of securities laws, which are statements that are not historical facts, including statements that relate to our future financial performance and targets, including revenue, EPS, operating income, operation margin and earnings; our business operations; demand for our products and services, including bookings and backlog; capital deployment, including th ...

Trane Technologies plc (NYSE:TT) Q2 2023 Earnings Conference Call August 2, 2023 10:00 AM ET Company Participants Zac Nagle - Head of Investor Relations Dave Regnery - Chair & Chief Executive Officer Chris Kuehn - Executive Vice President & Chief Financial Officer Conference Call Participants Andy Kaplowitz - Citigroup Julian Mitchell - Barclays Josh Pokrzywinski - Morgan Stanley Chris Snyder - UBS Joe Ritchie - Goldman Sachs Steve Tusa - JPMorgan Jeff Sprague - Vertical Research Nigel Coe - Wolfe Research ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________ Commission File Number 001-34400 _____________________________ TRANE TECHNOLOGIES PLC (Exact name of registrant as specified in its charter) _______________________________ (State or other jurisdiction of incorporation or organization) FORM 10-Q _______________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly per ...

Trane Technologies plc (NYSE:TT) Q1 2023 Results Conference Call May 3, 2023 10:00 AM ET Company Participants Zac Nagle - Head of IR Dave Regnery - Chair and CEO Chris Kuehn - Executive Vice President and CFO Conference Call Participants Scott Davis - Melius Andy Kaplowitz - Citigroup Julian Mitchell - Barclays Gautam Khanna - TD Cowen Josh Pokrzywinski - Morgan Stanley Chris Snyder - UBS Joe Ritchie - Goldman Sachs Steve Tusa - JPMorgan Jeff Sprague - Vertical Research Nigel Coe - Wolfe Research Deane Dray ...

PART I FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201%20-%20Financial%20Statements) Presents unaudited Q1 2023 and 2022 Condensed Consolidated Financial Statements, detailing earnings, balance sheets, and cash flows [Condensed Consolidated Statements of Earnings](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) | Indicator | Q1 2023 (in millions) | Q1 2022 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Net revenues | $3,665.8 | $3,355.5 | +9.2% | | Operating income | $456.8 | $388.2 | +17.7% | | Earnings from continuing operations | $316.6 | $270.4 | +17.1% | | Net earnings | $311.1 | $263.4 | +18.1% | | Diluted EPS (Continuing operations) | $1.35 | $1.13 | +19.5% | | Diluted EPS (Net earnings) | $1.33 | $1.10 | +20.9% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Account | March 31, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $692.9 | $1,220.5 | | Total current assets | $6,074.8 | $6,379.2 | | Total assets | $17,897.4 | $18,081.6 | | Total current liabilities | $4,831.4 | $5,686.8 | | Long-term debt | $4,481.8 | $3,788.3 | | Total liabilities | $11,843.1 | $11,976.4 | | Total equity | $6,054.3 | $6,105.2 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Q1 2023 (in millions) | Q1 2022 (in millions) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $8.5 | $(188.2) | | Net cash provided by (used in) investing activities | $(91.0) | $(83.3) | | Net cash provided by (used in) financing activities | $(459.2) | $(534.6) | | Net increase (decrease) in cash | $(527.6) | $(810.8) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Explains accounting policies and specific financial statement items, including debt, equity, revenue, segment performance, and asbestos-related contingencies [Note 6. Debt and Credit Facilities](index=10&type=section&id=Note%206.%20Debt%20and%20Credit%20Facilities) - In March 2023, the company issued **$700.0 million** of 5.250% senior notes due 2033, using proceeds to redeem **$700.0 million** of 4.250% senior notes due June 2023[40](index=40&type=chunk) - The company maintains two **$1.0 billion** senior unsecured revolving credit facilities, maturing in June 2026 and April 2027, which were unused as of March 31, 2023, supporting the **$2.0 billion** commercial paper program with no outstanding balance[36](index=36&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [Note 10. Equity](index=15&type=section&id=Note%2010.%20Equity) - During Q1 2023, the company repurchased and canceled approximately **$300 million** of its ordinary shares, completing the 2021 share repurchase authorization and initiating the 2022 authorization, under which approximately **$100 million** was repurchased, leaving **$2.9 billion** remaining[56](index=56&type=chunk) [Note 11. Revenue](index=16&type=section&id=Note%2011.%20Revenue) | Revenue by Geography & Type (Q1 2023) | Equipment (in millions) | Services (in millions) | Total (in millions) | | :--- | :--- | :--- | :--- | | Americas | $1,900.6 | $960.4 | $2,861.0 | | EMEA | $365.1 | $145.4 | $510.5 | | Asia Pacific | $201.7 | $92.6 | $294.3 | | **Total** | **$2,467.4** | **$1,198.4** | **$3,665.8** | [Note 16. Business Segment Information](index=19&type=section&id=Note%2016.%20Business%20Segment%20Information) | Segment Performance (Q1 2023 vs Q1 2022) | Net Revenues 2023 (in millions) | Net Revenues 2022 (in millions) | Segment Adjusted EBITDA 2023 (in millions) | Segment Adjusted EBITDA 2022 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Americas | $2,861.0 | $2,633.2 | $455.8 | $405.6 | | EMEA | $510.5 | $441.3 | $94.4 | $59.1 | | Asia Pacific | $294.3 | $281.0 | $57.2 | $43.5 | | **Total** | **$3,665.8** | **$3,355.5** | **$607.4** | **$508.2** | [Note 17. Commitments and Contingencies](index=21&type=section&id=Note%2017.%20Commitments%20and%20Contingencies) - On June 18, 2020, subsidiaries Aldrich and Murray filed for Chapter 11 bankruptcy to permanently resolve all current and future asbestos-related claims, resulting in a stay of all asbestos-related lawsuits against them and other Trane companies[81](index=81&type=chunk) - An agreement in principle was reached with the future asbestos claimants' representative to establish a trust funded with **$545.0 million** to resolve all claims, with a **$270.0 million** Qualified Settlement Fund (QSF) funded in March 2022, while Chapter 11 cases remained pending as of May 3, 2023[88](index=88&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202%20-%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 performance, covering revenue growth, segment results, liquidity, capital allocation, and economic trends [Results of Operations](index=27&type=section&id=Results%20of%20Operations) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net Revenues | $3,665.8M | $3,355.5M | | Gross Profit Margin | 31.2% | 29.5% | | Operating Margin | 12.5% | 11.6% | - The **9.2%** increase in net revenues was driven by pricing (**+6.6%**), volume (**+2.4%**), and acquisitions (**+1.8%**), partially offset by unfavorable currency translation (**-1.6%**)[119](index=119&type=chunk) - Gross profit margin increased by **170 basis points** to **31.2%**, primarily due to price realization and productivity, which offset material and other inflation[120](index=120&type=chunk) [Segment Results](index=28&type=section&id=Segment%20Results) - **Americas:** Net revenues grew **8.7%** to **$2,861.0 million**, driven by pricing (**+6.6%**) and volume (**+1.5%**), with Segment Adjusted EBITDA margin increasing **50 basis points** to **15.9%**[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - **EMEA:** Net revenues grew **15.7%** to **$510.5 million**, driven by pricing (**+8.9%**), volume (**+6.5%**), and acquisitions (**+6.2%**), with Segment Adjusted EBITDA margin significantly increasing by **510 basis points** to **18.5%**[128](index=128&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - **Asia Pacific:** Net revenues grew **4.7%** to **$294.3 million**, driven by volume (**+4.4%**) and pricing (**+4.0%**), with Segment Adjusted EBITDA margin increasing by **390 basis points** to **19.4%**[128](index=128&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) | Metric | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $692.9M | $1,220.5M | | Total debt | $4,830.1M | $4,836.3M | | Debt-to-total capital ratio | 44.4% | 44.2% | - The company repurchased **$300.0 million** of ordinary shares and paid **$170.3 million** in dividends to ordinary shareholders during Q1 2023[153](index=153&type=chunk) | Free Cash Flow Reconciliation (Q1) | 2023 (in millions) | 2022 (in millions) | | :--- | :--- | :--- | | Net cash provided by continuing operating activities | $16.8 | $(3.9) | | Capital expenditures | $(77.1) | $(74.8) | | Adjustments (Restructuring, M&A, etc.) | $8.7 | $106.0 | | **Free cash flow (Non-GAAP)** | **$(51.6)** | **$27.3** | [Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Refers to the Annual Report on Form 10-K for detailed discussion of market risks, such as interest rate and foreign currency fluctuations - The company's disclosure on market risk refers back to the discussion in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022[175](index=175&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204%20-%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal financial reporting controls - Based on an evaluation as of March 31, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures are effective[176](index=176&type=chunk) - No changes occurred in the first quarter of 2023 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[177](index=177&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=Item%201%20-%20Legal%20Proceedings) The company is involved in various legal proceedings, with no expected material adverse impact, except for ongoing asbestos-related bankruptcy cases of subsidiaries - The company states that pending legal matters are not expected to have a material adverse impact on its financial condition or results[180](index=180&type=chunk) - The most significant legal matter is the asbestos-related bankruptcy cases of subsidiaries Aldrich and Murray, which are discussed in detail in Part I of the report[181](index=181&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A%20-%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K for the period ended December 31, 2022[182](index=182&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202%20-%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details Q1 2023 share repurchase activities, completing the 2021 authorization and initiating the 2022 program with $2.9 billion remaining | Period (2023) | Total Shares Purchased (000's) | Average Price Paid per Share | Value of Shares Remaining for Purchase ($000's) | | :--- | :--- | :--- | :--- | | January | 3.5 | $168.09 | $199,776 | | February | 600.9 | $183.22 | $96,918 | | March | 1,148.0 | $185.11 | $2,899,773 | | **Total Q1** | **1,752.4** | **$184.43** | **-** | - During Q1 2023, the company repurchased approximately **$300 million** of its shares, completing the 2021 authorization and initiating the 2022 authorization, with **$2.9 billion** remaining available for repurchase under the 2022 program[183](index=183&type=chunk) [Exhibits](index=40&type=section&id=Item%206%20-%20Exhibits) Lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and financial statements formatted in iXBRL - Lists exhibits filed with the report, including CEO/CFO certifications (Exhibits 31.1, 31.2, 32) and iXBRL data files (Exhibit 101)[186](index=186&type=chunk)

Investor Presentation February 2023 TECHNOLOGIES Forward-Looking Statements 2 This presentation includes "forward-looking statements" which are statements that are not historical facts, including statements that relate to our future financial performance and targets, including revenue, EPS and operating income; our business operations; demand for our products and services including bookings and backlogs; capital deployment, including the amount and timing of our dividends and our share repurchase program, i ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Trane Technologies, a global climate innovator, provides sustainable HVAC and transport refrigeration solutions, managing strong demand, supply chain issues, and asbestos liabilities - Trane Technologies is a global climate innovator providing sustainable and efficient solutions via its Trane® and Thermo King® brands[17](index=17&type=chunk) 2022 Net Revenues by Reportable Segment (in millions) | Segment | 2022 Net Revenues (in millions) | | :--- | :--- | | Americas | $12,640.8 | | EMEA | $2,034.5 | | Asia Pacific | $1,316.4 | Order Backlog (in millions) | Segment | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Americas | $5,325.2 | $3,856.7 | | EMEA | $616.1 | $727.2 | | Asia Pacific | $941.8 | $852.8 | | **Total** | **$6,883.1** | **$5,436.7** | - The company's backlog significantly increased in 2022 due to strong demand for sustainability-focused products, despite supply chain and resource constraints impacting production[34](index=34&type=chunk) - Research and development expenses totaled **$211.2 million** in 2022, focusing on sustainability improvements like energy efficiency and lower global warming potential refrigerants[30](index=30&type=chunk) - Indirect subsidiaries Aldrich Pump LLC and Murray Boiler LLC filed for Chapter 11 bankruptcy in June 2020 to resolve asbestos-related claims via a trust[44](index=44&type=chunk)[45](index=45&type=chunk) Human Capital Metrics (as of Dec 31, 2022) | Metric | Value | | :--- | :--- | | Total Employees | ~39,000 | | Women in Global Workforce | 25.7% | | Racially/Ethnically Diverse (U.S.) | 37.4% | | Women in Leadership/Management | 24.2% | | Key Talent Retention Rate (2022) | 93.1% | | Voluntary Retention Rate (2022) | 86.3% | [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from economic conditions, supply chain disruptions, inflation, geopolitical conflicts, asbestos litigation, cybersecurity, and regulatory and tax changes - Economic risks include pandemic impacts, commodity shortages, supply chain disruptions, inflation, and geopolitical conflicts, leading to the company's exit from Russian and Belarusian markets[67](index=67&type=chunk)[70](index=70&type=chunk)[82](index=82&type=chunk) - Significant litigation risk arises from the Chapter 11 bankruptcy cases of Aldrich and Murray subsidiaries, with uncertainties regarding final asbestos liability and trust establishment[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - The company is vulnerable to cybersecurity risks, including attacks on IT systems and products, potentially compromising data, leading to litigation, harming reputation, and increasing compliance challenges from evolving data privacy laws[92](index=92&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Regulatory risks include compliance with complex environmental laws, especially those concerning refrigerants and climate change, potentially requiring costly product changes and impacting competitiveness, with failure to meet 2030 sustainability commitments posing reputational risk[99](index=99&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Tax-related risks include potential changes in U.S. or foreign tax laws, such as the OECD's Pillar Two global minimum tax, which could materially increase the tax burden, and risks that the 2020 Reverse Morris Trust transaction could be deemed taxable[110](index=110&type=chunk)[111](index=111&type=chunk)[118](index=118&type=chunk) - Risks related to the company's Irish domicile include differences in corporate law offering less shareholder protection than the U.S., and potential Irish dividend withholding tax on dividends paid[121](index=121&type=chunk)[122](index=122&type=chunk)[124](index=124&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None [Properties](index=26&type=section&id=Item%202.%20Properties) As of December 31, 2022, Trane Technologies owned or leased approximately **28 million** square feet globally, operating **38** manufacturing plants worldwide - The company operates **38** manufacturing and assembly plants worldwide, located across the Americas, EMEA, and Asia Pacific regions[129](index=129&type=chunk)[130](index=130&type=chunk) [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, most significantly asbestos-related bankruptcy cases of subsidiaries Aldrich and Murray - The company's most significant legal matter involves the asbestos-related bankruptcy cases of its subsidiaries, Aldrich and Murray[132](index=132&type=chunk) - In the normal course of business, the company is involved in various lawsuits, claims, and legal proceedings not expected to have a material adverse impact[131](index=131&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports no mine safety disclosures - None Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Trane Technologies' shares trade on NYSE under 'TT'; the company repurchased **$300.0 million** in Q4 2022 and authorized a new **$3.0 billion** buyback, outperforming market indices Issuer Purchases of Equity Securities (Q4 2022) | Period | Total Shares Purchased (000's) | Average Price Paid per Share | Total Shares Purchased as part of Program (000's) | | :--- | :--- | :--- | :--- | | Oct 2022 | 0.2 | $153.71 | — | | Nov 2022 | 1,536.9 | $173.50 | 1,536.9 | | Dec 2022 | 191.1 | $175.00 | 190.5 | | **Total** | **1,728.2** | **N/A** | **1,727.4** | - In February 2022, the Board authorized a new **$3.0 billion** share repurchase program, commencing after the 2021 authorization, which had approximately **$200 million** remaining as of December 31, 2022[136](index=136&type=chunk) Five-Year Cumulative Total Shareholder Return (2017-2022) | Company/Index | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Trane Technologies | $100 | $104 | $155 | $222 | $313 | $265 | | S&P 500 | $100 | $96 | $126 | $149 | $191 | $157 | | S&P 500 Industrials Index | $100 | $87 | $112 | $124 | $151 | $142 | [Reserved](index=28&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved - None [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Trane Technologies achieved **$16.0 billion** net revenue, a **13.1%** increase, and **$2.4 billion** operating income, while managing asbestos liabilities and capital allocation Consolidated Results of Operations (in millions) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Net revenues | $15,991.7 | $14,136.4 | 13.1% | | Gross profit | $4,964.8 | $4,469.6 | 11.1% | | Operating income | $2,418.9 | $2,023.3 | 19.6% | | Earnings from continuing operations | $1,796.2 | $1,457.2 | 23.3% | | Net earnings | $1,774.7 | $1,436.6 | 23.5% | - The **13.1%** increase in 2022 net revenues was driven by **9.6%** pricing and **4.9%** volume growth, plus **0.8%** from acquisitions, partially offset by **2.2%** unfavorable currency translation[159](index=159&type=chunk) - Gross profit margin decreased by **60 basis points** to **31.0%** in 2022, primarily due to significant material and freight inflation and supply chain productivity challenges, partially offset by price increases[160](index=160&type=chunk) Segment Performance (in millions) | Segment | Net Revenues 2022 | % Change vs 2021 | Segment Adjusted EBITDA 2022 | % Change vs 2021 | | :--- | :--- | :--- | :--- | :--- | | Americas | $12,640.8 | 15.4% | $2,326.3 | 15.8% | | EMEA | $2,034.5 | 4.6% | $338.1 | (5.9)% | | Asia Pacific | $1,316.4 | 6.6% | $248.3 | 8.7% | - The company funded a **$270.0 million** Qualified Settlement Fund (QSF) on March 2, 2022, related to the asbestos-claim bankruptcy proceedings of its subsidiaries Aldrich and Murray[150](index=150&type=chunk) Free Cash Flow Reconciliation (in millions) | Description | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by continuing operating activities | $1,698.7 | $1,594.4 | | Capital expenditures | (291.8) | (223.0) | | Adjustments (Restructuring, QSF funding, etc.) | 158.6 | 59.5 | | **Free cash flow (Non-GAAP)** | **$1,565.5** | **$1,430.9** | - The company repurchased **$1.2 billion** of ordinary shares in 2022 and increased its quarterly dividend by **12%** to **$0.75** per share, effective Q1 2023[180](index=180&type=chunk)[181](index=181&type=chunk) - Critical accounting estimates include goodwill impairment testing, where reporting unit fair values exceeded carrying values by over **200%**, using discount rates of **10.0%-12.0%** and a terminal growth rate of **3.0%**[215](index=215&type=chunk)[218](index=218&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=44&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company manages market risks from foreign currency, commodity prices, and interest rates using derivatives, with Euro and Chinese Yuan as largest currency exposures and minimal interest rate risk - The company's largest foreign currency exposures are to the Euro and Chinese Yuan; a hypothetical **10%** unfavorable change would decrease 2022 net revenues by approximately **$140 million** (Euro) and **$60 million** (Yuan)[229](index=229&type=chunk) - A sensitivity analysis indicated a hypothetical **10%** adverse change in exchange rates would result in an unrealized loss of approximately **$7.5 million** on currency derivative instruments at year-end 2022[231](index=231&type=chunk) - The company hedges commodity price volatility for materials like aluminum and copper; a hypothetical **10%** decrease in commodity prices would result in an unrealized loss of approximately **$9.0 million** on derivative instruments at year-end 2022[232](index=232&type=chunk) - Interest rate exposure is limited as the debt portfolio primarily consists of fixed-rate instruments[233](index=233&type=chunk) [Financial Statements](index=45&type=section&id=Item%208.%20Financial%20Statements) The company's Consolidated Financial Statements and the Report of Independent Registered Public Accounting Firm are included in the Form 10-K, starting on page F-1 - The Consolidated Financial Statements and the report from PricewaterhouseCoopers LLP are presented starting on page F-1 of the report[234](index=234&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=45&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None [Controls and Procedures](index=45&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes reported in Q4 2022 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[236](index=236&type=chunk) - Management assessed internal control over financial reporting using the COSO framework and concluded it was effective as of December 31, 2022, with this assessment audited by PricewaterhouseCoopers LLP[239](index=239&type=chunk)[240](index=240&type=chunk) - There were no material changes in internal control over financial reporting during the fourth quarter of 2022[241](index=241&type=chunk) [Other Information](index=45&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=45&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company's filing - Not Applicable Part III [Directors, Executive Officers and Corporate Governance](index=47&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2023 proxy statement - Information required by this item is incorporated by reference from the company's 2023 Proxy Statement[245](index=245&type=chunk) [Executive Compensation](index=47&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation, including Compensation Discussion and Analysis, is incorporated by reference from the company's 2023 Proxy Statement - Information required by this item is incorporated by reference from the company's 2023 Proxy Statement[246](index=246&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=47&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership by beneficial owners and management, and equity compensation plans, is incorporated by reference from the company's 2023 Proxy Statement - Information required by this item is incorporated by reference from the company's 2023 Proxy Statement[247](index=247&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=47&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related person transactions, and director independence is incorporated by reference from the company's 2023 Proxy Statement - Information required by this item is incorporated by reference from the company's 2023 Proxy Statement[248](index=248&type=chunk) [Principal Accountant Fees and Services](index=47&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding fees paid to and services provided by the principal independent auditors is incorporated by reference from the company's 2023 Proxy Statement - Information required by this item is incorporated by reference from the company's 2023 Proxy Statement[249](index=249&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=48&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, providing a detailed index of all filed exhibits - This section provides an index of all exhibits filed as part of the Form 10-K[252](index=252&type=chunk)[254](index=254&type=chunk) [Form 10-K Summary](index=58&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company's filing - Not applicable