The Company completed the acquisition of BrainBox AI Inc. on January 2, 2025, enhancing its HVAC optimization capabilities with advanced artificial intelligence. Additionally, multiple distributors with sales and service businesses were acquired in Europe during the first half of 2025, contributing to incremental revenue and strategic market expansion.

Management emphasized investing substantial resources to innovate and develop new products and services, which are key factors in achieving strategic objectives as a leader in the climate sector. Research and development, along with sustaining costs, account for approximately two percent of annual Net revenues.

Organic revenue growth was primarily driven by higher volumes, particularly from strong demand within Commercial HVAC, reflecting the Company's strategic focus on energy-efficient products and decarbonizing the built environment. This aligns with its commitment to sustainable and efficient solutions.

Management's focus on gross productivity and price realization successfully offset inflationary pressures, leading to a 110 basis point increase in gross profit margin for the quarter. This demonstrates effective cost management and pricing strategies amidst a dynamic environment.

Selling and administrative expenses increased by 10.6% due to higher human capital costs related to investing in people, increased sales commissions, and incremental expenses from acquired businesses. This reflects management's deliberate reinvestment to support future growth and talent development.

Management continues to actively manage its business portfolio through acquisitions and R&D investments, aligning with its strategic objectives. The accelerated share repurchase program also signals confidence in future cash flow generation and shareholder value creation.

The Company remains involved in complex asbestos-related bankruptcy cases concerning Aldrich and Murray, which are subject to court approval and potential appeals. While management believes these matters will not materially impact financial condition, the protracted nature of the proceedings introduces ongoing legal and financial uncertainty.

The Company acknowledges that its performance may be impacted by uncertain future developments, including geopolitical risks, global trade policies, tariffs, supply chain challenges, and economic uncertainty. These factors could cause disruptions to operations and negatively impact business results.

New US legislation, the 'One Big Beautiful Bill Act' (OBBBA), is being evaluated for its impact, though not expected to materially affect 2025 financial results. Additionally, new data privacy regulations in the EU and Asia, and changes in tax laws, necessitate continuous monitoring and compliance efforts, potentially impacting future growth.

The Company asserts it has a solid foundation of global brands, Trane® and Thermo King®, that are highly differentiated across its major product lines. This diverse portfolio and geographic mix provide growth opportunities from replacement demand and service revenue streams.

Realization of price increases was a significant contributor to revenue growth (3.6% for Q2 2025 and 3.3% for YTD 2025) and gross margin expansion. This indicates the Company's ability to pass on higher costs and maintain profitability in a competitive market.

Commercial HVAC markets in Americas and EMEA remain strong, driven by demand for energy-efficient solutions. However, transport refrigeration markets, particularly in the United States, and China's overall market continue to experience soft demand, indicating varied competitive landscapes across segments.

Despite higher input costs and inflation, the Company improved its gross profit margin by 110 basis points to 37.6% in Q2 2025, primarily due to 'gross productivity' and 'price realization'. This suggests effective operational improvements and cost management strategies.

Selling and administrative expenses increased by $95.1 million (10.6%) in Q2 2025, primarily due to higher human capital costs, sales commissions, and 'higher levels of business reinvestment'. While increasing costs, this is framed as an investment in future growth and operational capabilities.

The Company acknowledges ongoing supply chain challenges and commodity cost volatility as risks. However, management believes its 'business operating system' and 'in-region for region strategy' enable it to navigate these potential risks, implying efforts to mitigate operational bottlenecks.

The acquisition of BrainBox AI Inc. on January 2, 2025, provides a building management platform utilizing 'advanced artificial intelligence technologies' for HVAC optimization. This highlights a direct investment in cutting-edge technology to enhance product offerings and capabilities.

The Company states it invests 'substantial resources to innovate and develop new products and services', recognizing them as 'key factors in achieving our strategic objectives'. Research and development and sustaining costs account for approximately two percent of annual Net revenues, indicating ongoing commitment.

Investments in new product development and new technology innovation are explicitly linked to achieving strategic objectives as a 'leader in the climate sector'. This demonstrates a clear strategic intent to use technology as a competitive differentiator and growth driver.

During the six months ended June 30, 2025, the Company repurchased and canceled approximately $880 million of ordinary shares. With $0.4 billion remaining under the 2022 Authorization and an additional $5.0 billion under the 2024 Authorization, this indicates strong management confidence in the Company's valuation and future cash flow generation.

The Company continues its policy of paying a 'competitive and growing dividend', having increased its quarterly dividend by 77% since March 2020, from $0.53 to $0.94 per ordinary share. This demonstrates a commitment to returning value to shareholders.

Net cash used in investing activities was $486.0 million for the six months ended June 30, 2025, primarily for capital expenditures ($208.8 million) and acquisitions ($275.5 million). The Company's cash balances and operating cash flows are deemed sufficient to fund U.S. and non-U.S. operating and capital needs.

The Company is actively progressing its 2030 Sustainability Commitments, including the Gigaton Challenge to reduce customer carbon emissions by a billion metric tons. This demonstrates a strong commitment to environmental impact reduction through its products and services.

Trane Technologies' 2030 emissions reduction targets have been validated by the Science Based Targets Initiative (SBTi), and it is one of few companies globally with validated 2050 net-zero targets. This is supported by efforts towards carbon-neutral operations, zero waste-to-landfill, and net positive water use.

The 'Opportunity for All' commitment focuses on investing in the Company's people, uplifting and inclusive culture, and broadening access to Science, Technology, Engineering and Math (STEM) education and careers in communities. This highlights a strong focus on social responsibility and workforce development.

Conditions remain mixed across served end markets and geographies. While Commercial HVAC markets in Americas and EMEA show strong demand, transport refrigeration markets, particularly in the United States, and China's market are experiencing soft demand due to weak macroeconomic conditions and higher interest rates.

The Company acknowledges that geopolitical risks, changes in global trade policies, tariffs, and other measures could cause disruptions. These factors are dynamic and contribute to supply chain challenges, commodity cost volatility, and overall economic uncertainty.

The recently enacted 'One Big Beautiful Bill Act' (OBBBA) in the United States is not anticipated to materially impact the Company's 2025 financial results but is expected to have 'favorable impacts to the Company's cash tax outflow' for the second half of 2025, primarily due to reinstated expensing of R&D and bonus depreciation.