Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Trane Technologies plc, consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net earnings	1,774,700)	1,436,600)	870,000)	1,428,500)	1,357,500)
Discontinued operations, net of tax	21,500)	20,600)	121,400)	(40,600)	21,500)
Depreciation and amortization	323,600)	299,400)	294,300)	397,400)	361,500)
Pension and other postretirement benefits	55,600)	50,800)	68,800)	110,200)	104,200)
Stock settled share-based compensation	56,300)	66,500)	69,500)	66,400)	78,800)
Other non-cash items, net	17,100)	(36,400)	(1,500)	54,000)	(129,200)
Accounts and notes receivable	(345,400)	(265,400)	5,900)	(53,200)	(236,000)
Inventories	(466,700)	(348,800)	109,000)	18,400)	(169,900)
Other current and noncurrent assets	(116,800)	(153,800)	29,700)	(229,500)	35,300)
Accounts payable	317,900)	275,300)	75,800)	80,600)	120,700)
Other current and noncurrent liabilities	60,900)	249,600)	123,300)	124,100)	(69,900)
Changes in other assets and liabilities, net of the effects of acquisitions	(550,100)	(243,100)	343,700)	(59,600)	(319,800)
Adjustments for non-cash transactions	(97,500)	137,200)	774,800)	568,400)	95,500)
Net cash provided by operating activities	1,698,700)	1,594,400)	1,766,200)	1,956,300)	1,474,500)
Capital expenditures	(291,800)	(223,000)	(146,200)	(254,100)	(365,600)
Acquisitions and equity method investments, net of cash acquired	(234,700)	(269,200)	(182,800)	(1,539,700)	(285,200)
Proceeds from sale of property, plant and equipment	9,700)	15,100)	100)	3,800)	22,100)
Deconsolidation of certain entities under Chapter 11	—)	—)	(10,800)	—)	—)
Other investing activities, net	(23,000)	(68,600)	1,200)	10,000)	(700)
Net cash used in investing activities	(539,800)	(545,700)	(338,500)	(1,780,000)	(629,400)
Short-term payments, net	—)	—)	—)	—)	(6,400)
Proceeds from long-term debt	—)	—)	—)	1,497,900)	1,147,000)
Payments of long-term debt	(9,600)	(432,500)	(307,500)	(7,500)	(1,123,000)
Net proceeds from (payments of) debt	(9,600)	(432,500)	(307,500)	1,490,400)	17,600)
Debt issuance costs	(2,100)	(2,700)	(3,600)	(13,100)	(12,000)
Dividends paid to ordinary shareholders	(620,200)	(561,100)	(507,300)	(510,100)	(479,500)
Dividends paid to noncontrolling interests	(14,500)	(14,900)	(18,300)	(15,800)	(41,400)
Proceeds from shares issued under incentive plans	2,600)	78,300)	64,500)	116,800)	68,900)
Repurchase of ordinary shares	(1,200,200)	(1,100,300)	(250,000)	(750,100)	(900,200)
Receipt of (settlement related to) special cash payment	(6,200)	(49,500)	1,900,000)	—)	—)
Other financing activities, net	(2,000)	(44,900)	6,500)	(47,600)	(32,200)
Net cash provided by (used in) financing activities	(1,852,200)	(2,127,600)	884,300)	270,500)	(1,378,800)
Net cash used in discontinued operating activities	(194,700)	(6,100)	(331,200)	(36,800)	(66,700)
Net cash used in discontinued investing activities	(600)	—)	(37,700)	—)	—)
Net cash used in discontinued activities	(195,300)	(6,100)	(368,900)	(36,800)	(66,700)
Effect of exchange rate changes on cash and cash equivalents	(50,100)	(45,700)	68,200)	(9,800)	(45,600)
Net increase (decrease) in cash and cash equivalents	(938,700)	(1,130,700)	2,011,300)	400,200)	(646,000)
Cash and cash equivalents, beginning of period	2,159,200)	3,289,900)	1,278,600)	903,400)	1,549,400)
Cash and cash equivalents, end of period	1,220,500)	2,159,200)	3,289,900)	1,303,600)	903,400)

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).

Net Earnings Trend: Net earnings experienced fluctuations over the period. After a rise from 1,357,500 thousand US dollars in 2018 to 1,428,500 thousand in 2019, earnings declined sharply in 2020 to 870,000 thousand, followed by a strong recovery to 1,436,600 thousand in 2021, and further growth reaching 1,774,700 thousand in 2022.
Discontinued Operations: Discontinued operations showed volatility with a significant negative impact in 2019 (-40,600 thousand) and positive spikes in 2020 (121,400 thousand). In other years, figures remained comparatively moderate, suggesting some irregular or one-time effects on discontinued businesses.
Depreciation and Amortization: Depreciation and amortization steadily declined from 361,500 thousand in 2018 to 294,300 thousand in 2020, then stabilized around 300,000 thousand in 2021 and 323,600 thousand in 2022, indicating consistent asset utilization with slight variations.
Pension and Other Postretirement Benefits: These costs decreased notably from 104,200 thousand in 2018 to 50,800 thousand in 2021, before a slight increase to 55,600 thousand in 2022, reflecting reductions in associated obligations or expense recognition over time.
Stock Settled Share-Based Compensation: This expense gradually decreased from 78,800 thousand in 2018 to 56,300 thousand in 2022, indicating a reduction in share-based remuneration or changes in compensation structures.
Other Non-Cash Items: Other non-cash items were negative in 2018 (-129,200 thousand), turned positive in 2019 (54,000 thousand), and fluctuated in subsequent years, ending at 17,100 thousand in 2022, showing inconsistent impact from non-cash adjustments.
Working Capital Items: Accounts and notes receivable exhibited mixed trends with a strong negative impact in 2018 (-236,000 thousand) and a significant negative change again in 2022 (-345,400 thousand), indicating collection or sales fluctuations.; Inventories showed positive changes in 2019 and 2020 but experienced substantial decreases in 2021 and 2022 (-348,800 thousand and -466,700 thousand respectively), potentially reflecting inventory reduction or sales strategy adjustments.; Other current and noncurrent assets fluctuated, with notable negative changes in 2019 (-229,500 thousand) and 2021 (-153,800 thousand), hinting at asset revaluations or disposals.; Accounts payable increased steadily over the years, reaching 317,900 thousand in 2022, consistent with higher operational activity or delayed payments.; Other liabilities showed irregular movements with a peak in 2021 (249,600 thousand) and a decrease to 60,900 thousand in 2022.
Changes in Other Assets and Liabilities: Net changes in other assets and liabilities were negative in most years except 2020 (343,700 thousand), indicating varying balance sheet adjustments impacting cash flow.
Adjustments for Non-Cash Transactions: Non-cash transaction adjustments were substantial and highly variable, peaking at 774,800 thousand in 2020 and declining to -97,500 thousand in 2022, influencing cash flow reconciliation.
Operating Cash Flow: Net cash provided by operating activities was robust throughout the period, rising from 1,474,500 thousand in 2018 to a peak of 1,956,300 thousand in 2019. Despite a dip in 2021, operating cash flow remained strong at 1,698,700 thousand in 2022, confirming operational cash generation capability.
Investing Activities: Capital expenditures varied, decreasing from -365,600 thousand in 2018 to -146,200 thousand in 2020, then rising again to -291,800 thousand in 2022, signaling fluctuating investment levels in property and equipment.; Acquisitions and equity investments were substantial in 2019 (-1,539,700 thousand) with lower but consistent outflows in other years, reflecting active investment and acquisition strategy.; Proceeds from asset sales were minimal but positive across all years.; Net cash used in investing activities was highest in 2019 (-1,780,000 thousand) primarily due to acquisitions, with relatively moderate outflows in other years.
Financing Activities: Debt activity shows significant proceeds from long-term debt in 2019, followed by consistent payments, leading to net negative debt cash flow in the later years.; Dividends paid to shareholders increased steadily from -479,500 thousand in 2018 to -620,200 thousand in 2022, indicating commitment to returning capital.; Repurchase of shares fluctuated with a large buyback in 2018 (-900,200 thousand), followed by reductions and an increase again in 2021 and 2022, reflecting active capital management.; Net cash provided by financing activities was positive only in 2019 and 2020 but showed significant outflows in 2021 and 2022, influenced by large debt repayments, dividends, and buybacks.
Discontinued Activities: Cash flows from discontinued operations and investing activities were generally negative, with a major cash outflow in 2020 (-368,900 thousand), highlighting ongoing effects from divested segments.
Cash Position and Exchange Effects: Cash and cash equivalents fluctuated notably, with decreases in 2018, 2021, and 2022, and a significant increase in 2020. Exchange rate changes had a small but negative effect on cash balance in most years except 2020.
Overall Financial Position: The data reveals a company maintaining strong operating cash flow despite volatile net earnings and sizable investing and financing activities. There is clear evidence of active investment, acquisition, dividend distribution, and share repurchase policies. Working capital components show volatility, likely reflecting changes in operational and market conditions. The trends exhibit resilience and strategic capital allocation over the reviewed periods.

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Trane Technologies plc (NYSE:TT)

Cash Flow Statement