Trane Technologies plc (NYSE:TT)

The analysis of the financial data reveals the following trends and insights regarding the company's current assets over the five-year period ending December 31, 2022.

Current Assets

The current assets show an overall increasing trend from 2018 to 2020, rising from approximately US$5.73 billion to nearly US$6.91 billion. This growth phase was followed by a decline in 2021, where current assets decreased to approximately US$6.47 billion, and remained relatively stable through 2022 with a slight dip to about US$6.38 billion. The initial growth period might reflect expansion or improved working capital, while the subsequent decrease suggests a potential shift in asset composition or operational adjustments.

Adjusted Current Assets

Adjusted current assets, which likely account for certain refinements or adjustments to the raw current asset figures, follow a similar pattern. From 2018 to 2020, there is a steady increase from approximately US$5.85 billion to US$6.99 billion. A decline is observed in 2021 to about US$6.58 billion, with a minor decrease continuing into 2022 reaching roughly US$6.55 billion. The adjusted values consistently exceed the unadjusted current assets each year, indicating the adjustments add value or recognize additional components not captured in the standard measure.

Overall, the data indicates a phase of growth in asset holdings during the earlier years, potentially supporting business expansion or increased liquidity. The decline starting in 2021 could suggest strategic asset reallocation, efficiency improvements, or responses to external economic conditions impacting liquidity levels. The stability in 2022 after the decrease may reflect an adaptation to a new operational baseline.

Total Assets

The total assets showed an overall upward trend from 2018 to 2019, increasing from approximately 17.9 billion US dollars to about 20.5 billion US dollars. However, from 2019 onwards, the total assets exhibited a decline, falling to around 18.2 billion US dollars in 2020. Following that, the total assets remained relatively stable through 2021 and 2022, with minor fluctuations, ending near 18.1 billion US dollars.

Adjusted Total Assets

The adjusted total assets followed a similar pattern as total assets, increasing from about 18.6 billion US dollars in 2018 to approximately 20.6 billion US dollars in 2019. From 2019 to 2020, there was a decline to roughly 18.2 billion US dollars. In the subsequent years, 2021 and 2022, the adjusted total assets stabilized with slight increases, concluding near 18.3 billion US dollars.

General Observations

The data indicates a peak in asset figures in 2019, followed by a significant drop in 2020. Post-2020, the asset base shows stability without major growth or decline. This may suggest consolidation or possibly an adjustment phase following the 2019 peak. The adjusted total assets consistently remain marginally higher than total assets, reflecting adjustments made to the accounting values, but both maintain close alignment in their trends.

Current liabilities

The current liabilities exhibited a fluctuating yet generally increasing trend over the five-year period. Starting at 4,315,700 thousand US dollars in 2018, the amount rose to a peak of 4,861,900 thousand US dollars in 2019. This was followed by a decline in 2020 to 4,338,900 thousand US dollars, then an increase again during 2021 and 2022, reaching the highest level of 5,686,800 thousand US dollars by the end of 2022.

Adjusted current liabilities

Adjusted current liabilities mirrored a similar pattern to the unadjusted current liabilities with overall growth across the period under review. The values started at 4,063,100 thousand US dollars in 2018, increased to 4,597,000 thousand US dollars in 2019, then decreased notably in 2020 to 4,102,600 thousand US dollars. It rose steadily once more in the subsequent years, reaching 5,455,900 thousand US dollars at the close of 2022.

Trend Analysis

Both current liabilities and adjusted current liabilities display volatility with decreases in 2020, likely reflective of external pressures that could have impacted short-term obligations. The subsequent recovery and growth in 2021 and 2022 indicate an increase in short-term financial commitments or operational scale. The consistent gap between current liabilities and adjusted current liabilities suggests certain items are excluded or adjusted for, but the overall movement is consistently upward for both metrics.

Total liabilities

The total liabilities exhibited an overall upward trend from 2018 to 2022. Starting at approximately 10.85 billion US dollars in 2018, the value increased significantly to nearly 13.18 billion in 2019. However, in the subsequent years, there was a noticeable decline in 2020 to around 11.73 billion, followed by a relatively stable plateau through 2021 and 2022, with values closely hovering around 11.78 billion and 11.98 billion respectively.

Adjusted total liabilities

The adjusted total liabilities showed a similar pattern but with lower absolute values compared to total liabilities, indicating some form of refinement or exclusion in this calculation. Starting at roughly 10.49 billion US dollars in 2018, there was a peak in 2019 near 12.13 billion. Following that, adjusted liabilities experienced a decline in 2020 to approximately 10.72 billion. From 2020 onwards through 2022, the adjusted total liabilities remained relatively consistent, with slight increases each year, reaching about 10.81 billion by 2022.

Comparative Insights

The divergence between total liabilities and adjusted total liabilities suggests adjustments removed or accounted for nearly 3 to 5 percent of the total liabilities across the periods, maintaining a consistent proportion. The peak in 2019 followed by a 2020 reduction in both metrics could indicate a strategic shift or impact from external economic conditions during that period. The stabilization observed in the following years suggests that the company managed to maintain its liability levels without significant increases or decreases.

The financial data reveals a consistent downward trend in total shareholders’ equity over the five-year period. Specifically, total equity decreased from approximately 7.02 billion US dollars at the end of 2018 to about 6.09 billion US dollars by the end of 2022. The decline is relatively steady, with minor fluctuations, reflecting a reduction of roughly 13% over the timeframe.

In contrast, the adjusted total equity figures exhibit a somewhat different pattern. Adjusted equity started at around 8.08 billion US dollars at the end of 2018 and peaked in 2019 at approximately 8.49 billion US dollars. Subsequently, there was a notable decrease to about 7.52 billion US dollars by the end of 2020, followed by a more gradual decline and stabilization around 7.44 billion US dollars through 2021 and 2022.

Total Shareholders’ Equity

This metric experienced a persistent decline each year except for a slight decrease in 2021 and 2022 but with a downward momentum since 2019. The data suggests ongoing challenges in maintaining or growing net equity, which could be influenced by factors such as net losses, dividends, or other equity-related transactions.

Adjusted Total Equity

The adjusted measure of equity generally follows a similar downward trend but shows a peak in 2019 before decreasing in 2020 and then stabilizing through the subsequent years. The adjustment appears to moderate the decline seen in total equity, which might indicate that certain adjustments normalize the equity position by accounting for non-recurring items or valuation changes.

Overall, both equity metrics show signs of decline with the adjusted total equity being consistently higher than the unadjusted total shareholders’ equity. The data may imply financial pressures affecting the company’s net worth, though the adjustment mitigates some of the declines, suggesting consideration of different accounting treatments or financial restructuring effects during this period.

Total Reported Debt

The total reported debt increased significantly from 4,091,300 thousand US$ at the end of 2018 to a peak of 5,573,400 thousand US$ at the end of 2019. Following this peak, the debt decreased steadily over the next two years, reaching 4,842,100 thousand US$ by the end of 2021 and remaining relatively stable in 2022 at 4,836,300 thousand US$.

Total Shareholders’ Equity

Total reported shareholders’ equity showed an initial increase from 7,022,700 thousand US$ in 2018 to 7,267,600 thousand US$ in 2019. Afterward, equity declined each year, dropping to 6,407,700 thousand US$ in 2020, 6,255,900 thousand US$ in 2021, and further to 6,088,600 thousand US$ in 2022. This indicates a gradual reduction in equity over the recent years.

Total Reported Capital

Total reported capital, which aggregates debt and equity, increased from 11,114,000 thousand US$ in 2018 to a high of 12,841,000 thousand US$ in 2019. Subsequently, it declined each year to 11,679,800 thousand US$ in 2020, then to 11,098,000 thousand US$ in 2021, and further down to 10,924,900 thousand US$ in 2022. This reflects the combined effect of debt reduction and equity decrease after 2019.

Adjusted Total Debt

Adjusted total debt followed a similar trajectory to total reported debt, increasing from 4,637,219 thousand US$ in 2018 to a peak of 6,139,800 thousand US$ in 2019. It then declined to 5,687,400 thousand US$ in 2020 and further to 5,285,400 thousand US$ in 2021. The level remained fairly flat in 2022 at 5,305,600 thousand US$.

Adjusted Total Equity

Adjusted total equity increased from 8,083,500 thousand US$ in 2018 to 8,493,600 thousand US$ in 2019 but declined to 7,516,100 thousand US$ in 2020 and continued a slight downward trend to 7,431,600 thousand US$ in 2021. Interestingly, adjusted equity stabilized in 2022, showing a marginal increase to 7,446,700 thousand US$.

Adjusted Total Capital

Adjusted total capital, the sum of adjusted debt and adjusted equity, rose from 12,720,719 thousand US$ in 2018 to 14,633,400 thousand US$ in 2019. It then decreased to 13,203,500 thousand US$ in 2020 and further to 12,717,000 thousand US$ in 2021. In 2022, adjusted capital slightly increased to 12,752,300 thousand US$, suggesting a mild recovery or stabilization after previous declines.

Summary of Trends

The data suggest a peak in both reported and adjusted debt and capital levels in 2019, followed by a gradual reduction through 2021 and stabilization thereafter. Equity components show a contrasting pattern, rising initially in 2019 before declining in subsequent years, with adjusted equity demonstrating signs of stabilization in 2022. Overall, the company appears to be managing a reduction in leverage post-2019, balancing debt decreases with equity declines, resulting in an overall moderate contraction in total capital base, particularly evident in the reported metrics.

Net Revenues

Net revenues experienced a general upward trend from 2018 to 2019, increasing from $15,668.2 million to $16,598.9 million. However, in 2020, there was a significant decline to $12,454.7 million, which could indicate the impact of adverse conditions during that period. The figure partially recovered in 2021, rising to $14,136.4 million, and continued to improve in 2022, reaching $15,991.7 million. Although the 2022 figure has not yet returned to the 2019 peak, the overall pattern demonstrates resilience and a trajectory toward recovery.

Adjusted Net Revenues

The adjusted net revenues closely track the net revenues across all years, with marginal differences. Starting at $15,667.4 million in 2018, adjusted net revenues peaked at $16,610.8 million in 2019. Similar to net revenues, there was a sharp drop in 2020 to $12,456.3 million, followed by a rebound to $14,143.7 million in 2021 and further improvement to $15,997.7 million in 2022. The close alignment of the adjusted figures to the net revenues suggests limited extraordinary or one-time items affecting the revenue trends.

Net Earnings Attributable to Trane Technologies plc

The net earnings show a fluctuating trend over the analyzed period. Beginning at approximately 1.338 billion USD in 2018, there was a slight increase to about 1.411 billion USD in 2019. However, in 2020, net earnings declined significantly to roughly 854.9 million USD. This decrease was followed by a recovery in 2021, reaching approximately 1.423 billion USD, and the upward trend continued into 2022, with net earnings increasing further to about 1.756 billion USD. Overall, the net earnings depict volatility, with a steep fall in 2020 likely influenced by external factors, followed by strong growth in subsequent years.

Adjusted Net Earnings

Adjusted net earnings demonstrate a more consistent upward trajectory compared to net earnings. The figures rose from approximately 1.072 billion USD in 2018 to about 1.393 billion USD in 2019. Unlike net earnings, adjusted net earnings saw a milder decline in 2020, decreasing slightly to approximately 1.307 billion USD. The upward momentum resumed in 2021, reaching close to 1.477 billion USD, and continued into 2022 with a further increase to approximately 1.827 billion USD. This pattern suggests that the adjustments applied help smooth out some volatility observed in reported net earnings, highlighting underlying business performance improvements especially in the last two years.