Name: Trane Technologies plc (NYSE:TT) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Trane Technologies plc, consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Products	10,930,800)	9,498,800)	8,372,500)	—)	—)
Services	5,060,900)	4,637,600)	4,082,200)	—)	—)
Net revenues (legacy)	—)	—)	—)	16,598,900)	15,668,200)
Net revenues	15,991,700)	14,136,400)	12,454,700)	16,598,900)	15,668,200)
Cost of products sold	(7,935,200)	(6,843,100)	(6,146,300)	—)	—)
Cost of services sold	(3,091,700)	(2,823,700)	(2,505,000)	—)	—)
Cost of goods sold (lagacy)	—)	—)	—)	(11,451,500)	(10,847,600)
Cost of goods sold	(11,026,900)	(9,666,800)	(8,651,300)	(11,451,500)	(10,847,600)
Gross profit	4,964,800)	4,469,600)	3,803,400)	5,147,400)	4,820,600)
Selling and administrative expenses	(2,545,900)	(2,446,300)	(2,270,600)	(3,129,800)	(2,903,200)
Operating income	2,418,900)	2,023,300)	1,532,800)	2,017,600)	1,917,400)
Interest expense	(223,500)	(233,700)	(248,700)	(243,000)	(220,700)
Interest income	9,200)	4,000)	4,500)	3,100)	6,400)
Foreign currency exchange loss	(17,900)	(10,700)	(10,000)	(12,300)	(17,600)
Other components of net periodic benefit cost	(10,600)	(1,600)	(14,700)	(39,300)	(21,900)
Other activity, net	(4,000)	9,400)	24,300)	15,500)	(3,300)
Other income (expense), net	(23,300)	1,100)	4,100)	(33,000)	(36,400)
Earnings before income taxes	2,172,100)	1,790,700)	1,288,200)	1,741,600)	1,660,300)
Provision for income taxes	(375,900)	(333,500)	(296,800)	(353,700)	(281,300)
Earnings from continuing operations	1,796,200)	1,457,200)	991,400)	1,387,900)	1,379,000)
Discontinued operations, net of tax	(21,500)	(20,600)	(121,400)	40,600)	(21,500)
Net earnings	1,774,700)	1,436,600)	870,000)	1,428,500)	1,357,500)
Net earnings attributable to noncontrolling interests	(18,200)	(13,200)	(15,100)	(17,600)	(19,900)
Net earnings attributable to Trane Technologies plc	1,756,500)	1,423,400)	854,900)	1,410,900)	1,337,600)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial performance between 2018 and 2022 is characterized by a significant revenue contraction in 2020 followed by a robust recovery. Net revenues declined from 16.59 billion USD in 2019 to 12.45 billion USD in 2020, before rebounding to 15.99 billion USD by the end of 2022. This recovery was driven by steady growth in both product and service segments; product revenues grew from 8.37 billion USD in 2020 to 10.93 billion USD in 2022, while service revenues increased from 4.08 billion USD to 5.06 billion USD over the same period.

Gross Profitability and Cost Management: Gross profit margins remained remarkably stable throughout the five-year period, fluctuating narrowly around 31%. Despite the volatility in total revenue, the cost of goods sold scaled proportionally with sales. In 2022, gross profit reached 4.96 billion USD, nearly returning to the 5.15 billion USD peak observed in 2019.
Operating Efficiency: A notable expansion in operating margins is observed from 2020 onward. Operating income grew from 1.53 billion USD in 2020 to 2.42 billion USD in 2022. This growth outperformed the rate of revenue recovery, largely due to disciplined management of selling and administrative expenses, which remained lower in 2022 (2.55 billion USD) than they were in 2019 (3.13 billion USD) despite higher sales volumes.
Net Earnings Trends: Net earnings attributable to the parent company followed a V-shaped trajectory, dropping to 854.9 million USD in 2020 before climbing to a period high of 1.76 billion USD in 2022. This bottom-line growth was supported by steady interest expenses and a recovery in earnings from continuing operations, which reached 1.80 billion USD in 2022.
Non-Operating Factors: Interest expenses remained relatively flat, ranging between 220 million USD and 249 million USD annually, indicating a stable debt service requirement. Other income and expenses showed higher volatility, with foreign currency exchange losses remaining a consistent drag on earnings, peaking at 17.9 million USD in 2022.

Overall, the period concludes with the company in a stronger operational position than at the start of the analysis. The ability to increase operating income to 2.42 billion USD in 2022, exceeding 2019 levels while maintaining a leaner expense structure, suggests improved operational leverage and efficiency.

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