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TT, Trane Technologies plc

We generate revenue and cash primarily through the design, manufacture, sales and service of solutions for Heating, Ventilation and Air Conditioning, transport refrigeration, and custom refrigeration solutions.

We bring sustainable and efficient solutions to buildings, homes and transportation through our strategic brands, Trane and Thermo King , and our environmentally responsible portfolio of products, services and connected intelligent controls.

As an industry leader with an extensive global install base, our growth strategy includes expanding recurring revenue through services and rental options.

Latest annual: FY2025 10-K

TT · Trane Technologies plc

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$21.3B

+7.5% YoY · 11% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $22.2B 5-yr avg $17.8B

Gross margin 61%

Operating margin 17.9% 5-yr avg 16.4%

ROIC 28% 5-yr avg 23%

Owner-earnings margin 16% 5-yr avg 11%

Free cash flow margin 16% 5-yr avg 11%

Next report Est. 10/27–11/2 · the 10-Q for the quarter ended late September · due within 40 days of period end · has filed ~30 days after · the wire records it on arrival

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Products (66%) and Services (34%).
What moves the needle: Gross margin has run about 31% and operating margin about 14% through the cycle, a solid spread between what it charges and what the product costs to make. Read this kind of business on the installed base and the upgrade cycle. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run in the teens (median 17%, above 15% in 6 of 10 years). Owner earnings agree: roughly 10% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Products is 66% of revenue, with Services the other meaningful line at 34%.

Revenue by product line, FY2025

Products66%$14.0B
Services34%$7.3B

By geographyAmericas81%EMEA13%Asia Pacific6%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMJun 2026
											Income statement
$13.5B	$14.2B	$12.3B	$13.1B	$12.5B	$14.1B	$16.0B	$17.7B	$19.8B	$21.3B	$22.2B	RevenueRevenue
$4.2B	$4.4B	$3.8B	$4.0B	$3.8B	—	—	—	—	—	$13.6B	Gross profitGross prof.
31%	31%	30%	31%	31%	—	—	—	—	—	61%	Gross marginGross mgn
19%	19%	18%	18%	18%	17%	16%	17%	18%	18%	17%	SG&A / revenueSG&A/rev
2%	1%	1%	1%	1%	1%	1%	1%	2%	2%	2%	R&D / revenueR&D/rev
$1.6B	$1.7B	$1.5B	$1.7B	$1.5B	$2.0B	$2.4B	$2.9B	$3.5B	$4.0B	$4.0B	Operating incomeOp. inc.
11.9%	11.7%	12.2%	12.8%	12.3%	14.3%	15.1%	16.4%	17.6%	18.6%	17.9%	Operating marginOp. mgn
$1.7B	$1.4B	$1.3B	$1.4B	$1.3B	$1.8B	$2.2B	$2.6B	$3.2B	$3.7B	—	Pretax incomePretax
$1.5B	$1.3B	$1.3B	$1.4B	$855M	$1.4B	$1.8B	$2.0B	$2.6B	$2.9B	$2.9B	Net incomeNet inc.
16%	6%	19%	17%	23%	19%	17%	19%	19%	19%	19%	Effective tax rateTax rate
											Cash flow & returns
$1.5B	$1.5B	$1.4B	$1.9B	$1.4B	$1.6B	$1.5B	$2.4B	$3.1B	$3.2B	$3.9B	Operating cash flowOp. cash
$352M	$353M	$362M	$397M	$294M	$299M	$324M	$348M	$379M	$376M	$390M	Depreciation & amortizationD&A
($307M)	($203M)	($370M)	$45M	$216M	($201M)	($632M)	($47M)	$115M	($187M)	$447M	Working capital & otherWC & other
$183M	$221M	$285M	$205M	$146M	$223M	$292M	$301M	$371M	$383M	$330M	CapexCapex
1.4%	1.6%	2.3%	1.6%	1.2%	1.6%	1.8%	1.7%	1.9%	1.8%	1.5%	Capex / revenueCapex/rev
$1.3B	$1.3B	$1.1B	$1.7B	$1.3B	$1.4B	$1.2B	$2.1B	$2.8B	$2.8B	$3.5B	Owner earningsOwner earn.
9.9%	9.2%	9.1%	13.1%	10.3%	9.7%	7.6%	11.8%	14.0%	13.2%	16.0%	Owner earnings marginOE mgn
$1.3B	$1.3B	$1.1B	$1.7B	$1.3B	$1.4B	$1.2B	$2.1B	$2.8B	$2.8B	$3.5B	Free cash flowFCF
9.9%	9.2%	9.1%	13.1%	10.3%	9.7%	7.6%	11.8%	14.0%	13.2%	16.0%	Free cash flow marginFCF mgn
$9M	$158M	$286M	$83M	$183M	$269M	$235M	$863M	$180M	$276M	$741M	AcquisitionsAcquis.
$349M	$430M	$480M	$510M	$507M	$561M	$620M	$684M	$758M	$837M	$881M	Dividends paidDiv. paid
$250M	$1.0B	$900M	$750M	$250M	$1.1B	$1.2B	$669M	$1.3B	$1.5B	—	BuybacksBuybacks
$240M	($375M)	($629M)	($1.8B)	($376M)	($546M)	($540M)	($1.2B)	($563M)	($640M)	—	Investing cash flowInv. cash
($727M)	($1.4B)	($1.4B)	$271M	$884M	($2.1B)	($1.9B)	($1.4B)	($2.0B)	($2.5B)	—	Financing cash flowFin. cash
($57M)	$118M	($46M)	($10M)	$68M	($46M)	($50M)	$8M	($67M)	$115M	—	Exchange-rate effectFX
$978M	($165M)	($646M)	$400M	$2.0B	($1.1B)	($939M)	($125M)	$495M	$173M	—	Change in cashΔ cash
15%	16%	13%	12%	14%	18%	21%	22%	26%	28%	28%	ROICROIC
22%	18%	19%	19%	13%	23%	29%	29%	34%	34%	34%	Return on equityROE
17%	12%	12%	12%	5%	14%	19%	19%	24%	24%	24%	Retained to equityRetained/eq
											Balance sheet
$1.7B	$1.5B	$878M	$1.3B	$3.3B	$2.2B	$1.2B	$1.1B	$1.6B	$1.8B	$1.8B	Cash & investmentsCash+inv
$2.2B	$2.5B	$2.7B	$2.2B	$2.2B	$2.4B	$2.8B	$3.0B	$3.1B	$3.2B	$4.2B	ReceivablesReceiv.
$1.4B	$1.6B	$1.7B	$1.3B	$1.2B	$1.5B	$2.0B	$2.2B	$2.0B	$2.1B	$2.6B	InventoryInvent.
$1.3B	$1.6B	$1.7B	$1.4B	$1.5B	$1.8B	$2.1B	$2.0B	$2.1B	$2.2B	$3.0B	Accounts payablePayables
$2.3B	$2.5B	$2.7B	$2.1B	$1.9B	$2.2B	$2.7B	$3.1B	$2.9B	$3.2B	$3.9B	Operating working capitalOper. WC
$5.6B	$6.1B	$5.7B	$9.3B	$6.9B	$6.5B	$6.4B	$6.9B	$7.3B	$7.9B	$9.0B	Current assetsCur. assets
$3.6B	$4.8B	$4.3B	$5.2B	$4.3B	$4.8B	$5.7B	$6.1B	$6.1B	$6.3B	$8.4B	Current liabilitiesCur. liab.
1.6×	1.3×	1.3×	1.8×	1.6×	1.4×	1.1×	1.1×	1.2×	1.3×	1.1×	Current ratioCurr. ratio
$1.5B	$1.6B	$1.7B	$1.4B	$1.3B	$1.4B	$1.5B	$1.8B	$2.0B	$2.3B	—	Net PP&ENet PP&E
$5.7B	$5.9B	$5.1B	$5.1B	$5.3B	$5.5B	$5.5B	$6.1B	$6.1B	$6.5B	$7.0B	GoodwillGoodwill
$17.4B	$18.2B	$17.9B	$20.5B	$18.2B	$18.1B	$18.1B	$19.4B	$20.1B	$21.4B	$23.9B	Total assetsAssets
$4.1B	$4.1B	$4.1B	$5.6B	$5.3B	$4.8B	$4.8B	$4.8B	$4.8B	$4.6B	$4.6B	Total debtDebt
$2.4B	$2.5B	$3.2B	$4.3B	$2.0B	$2.7B	$3.6B	$3.7B	$3.2B	$2.9B	$2.9B	Net debt / (cash)Net debt
7.2×	7.7×	6.8×	6.9×	6.2×	8.7×	10.8×	12.3×	14.7×	17.5×	18.1×	Interest coverageInt. cov.
$10.7B	$11.0B	$10.9B	$13.2B	$11.7B	$11.8B	$12.0B	$12.4B	$12.7B	$12.8B	—	Total liabilitiesTotal liab.
$75M	$67M	$42M	$45M	$19M	$17M	$17M	$22M	$30M	$22M	—	Noncontrolling interestsNCI
$6.6B	$7.1B	$7.0B	$7.3B	$6.4B	$6.3B	$6.1B	$7.0B	$7.5B	$8.6B	$8.6B	Shareholders’ equityEquity
—	0.5%	0.6%	0.5%	0.6%	0.5%	0.4%	0.4%	0.4%	0.4%	0.4%	Stock comp / revenueSBC/rev
											Per share
262M	258M	250M	244M	243M	242M	235M	231M	228M	225M	223M	Shares out (diluted)Shares
$51.62	$55.01	$49.36	$53.50	$51.23	$58.34	$68.08	$76.63	$86.86	$94.81	$99.69	Revenue / shareRev/sh
$5.64	$5.05	$5.35	$5.77	$3.52	$5.87	$7.48	$8.77	$11.24	$12.98	$13.24	EPS (diluted)EPS
$5.12	$5.05	$4.49	$7.01	$5.30	$5.63	$5.16	$9.05	$12.15	$12.50	$15.92	Owner earnings / shareOE/sh
$5.12	$5.05	$4.49	$7.01	$5.30	$5.63	$5.16	$9.05	$12.15	$12.50	$15.92	Free cash flow / shareFCF/sh
$1.33	$1.67	$1.92	$2.09	$2.09	$2.32	$2.64	$2.96	$3.32	$3.72	$3.95	Dividends / shareDiv/sh
$0.70	$0.86	$1.14	$0.84	$0.60	$0.92	$1.24	$1.30	$1.62	$1.70	$1.48	Cap. spending / shareCapex/sh
$25.39	$27.66	$28.08	$29.74	$26.36	$25.82	$25.92	$30.32	$32.65	$38.15	$38.70	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+7.0%/yr	+13.1%/yr
Owner earnings / share	+10.4%/yr	+18.7%/yr
EPS	+9.7%/yr	+29.8%/yr
Dividends / share	+12.1%/yr	+12.3%/yr
Capital spending / share	+10.4%/yr	+23.1%/yr
Book value / share	+4.6%/yr	+7.7%/yr

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $2.9B of profit but $2.8B of owner earnings: $107M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$2.9B

Owner earnings$2.8B · 13% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$2.9B	$2.6B	$2.0B	$1.8B	$1.4B
Depreciation & amortizationnon-cash charge added back	+$376M	+$379M	+$348M	+$324M	+$299M
Stock-based compensationreal costnon-cash, but a real cost	+$87M	+$83M	+$64M	+$56M	+$67M
Working capital & othertiming of cash in and out, other non-cash items	−$187M	+$115M	−$47M	−$632M	−$201M
Cash from operations	$3.2B	$3.1B	$2.4B	$1.5B	$1.6B
Capital expenditurecash put back in to keep running and to grow	−$383M	−$371M	−$301M	−$292M	−$223M
Owner earnings	$2.8B	$2.8B	$2.1B	$1.2B	$1.4B
Owner-earnings marginowner earnings ÷ revenue	13%	14%	12%	8%	10%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $87M), owner earnings is nearer $2.7B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 17.5×

Comfortable

Operating income $4.0B ÷ interest expense $227M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $2.9B · 0.7× operating profit

Modest net debt

Cash $1.8B − debt $4.6B

What this means
Netting $1.8B of cash and short-term investments against $4.6B of debt leaves $2.9B owed, about 0.7× a year's operating profit (1.2× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 17%

High through the cycle

10-yr median, range 12%–28%; 28% latest = NOPAT $3.2B ÷ invested capital $11.4B

Industry peers: median 8%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 28% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 10%

Solid through the cycle

10-yr median margin, range 8%–14%; latest $2.8B = operating cash $3.2B − maintenance capex $383M

Industry peers: median 6%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 13% of revenue this year, a 10% median across 10 years. Treating stock comp as the real expense it is (less $87M of SBC) leaves $2.7B.
Are earnings backed by cash? 1.09×

Cash-backed

Cash from ops $3.2B ÷ net income $2.9B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 82%

Returns about half

Dividends + buybacks $2.3B ÷ Owner Earnings $2.8B — this fiscal year

What this means
Of $2.8B Owner Earnings, $2.3B (82%) went back to shareholders, $837M dividends, $1.5B buybacks. Net of $87M stock comp, the real buyback was about $1.4B. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does. This year's proportion is 82%; across the record (2016–2025) it is 86%, the capital-allocation section below.
Investing or harvesting? 1.02×

Maintaining

Capex $383M ÷ depreciation & amortization as filed $376M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

The promise and the pay packet

Is the buyback buying ownership, or mopping up? 0.4%

The count is edging down

Stock compensation $87M (fiscal 2025), 0.4% of revenue · repurchases $1.5B · diluted shares -4.3% since 2022

What this means
Stock handed to employees is a real cost paid in the owner's own currency: it is charged against profit, but the shares it creates are permanent. Many companies repurchase stock at the same time, which looks like a return of capital and often is not — if the count barely moves, the cash merely cancelled the pay packet and bought the owner nothing. The three states worth telling apart are a count genuinely shrinking, a count standing still despite large repurchases, and a count rising because the issuance was never offset at all.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $21.3B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.25×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $4.6B vs $1.6B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +82%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $11.38/share (latest year $13.26), the averaged base the calculator's gate runs on, and book value is $38.99/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 6 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 12% → 18% (3-yr avg ends)

In the filing’s words The words confirm the number: the filing says price increases held their volume, and the margin widened with them — Buffett’s strongest mark of pricing power.

What this means
Through the cycle the operating margin widened — about 12% early to 18% lately, median 13% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +9%/yr

What this means
Owner earnings grew about 9% a year over the record.
Worst year 2017 · 11.7% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −1.7%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.
How management talks about it Owner’s terms

What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Jun 30, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$9.0B

Cash & short-term investments$1.8B
Receivables$4.2B
Inventory$2.6B
Other current assets$392M

Current liabilities$8.4B

Debt due within a year$693M
Accounts payable$3.0B
Other current liabilities$4.7B

Current ratio1.07×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.76×stricter: inventory excluded

Cash ratio0.21×strictest: cash alone against what's due

Working capital$616Mthe cushion left after near-term bills

Debt due this year vs. cash$693M due · $1.8B cash covered by cash on hand, no refinancing forced · both figures from the Jun 30, 2026 balance sheet

Revenue, latest quarter vs. a year ago+10.6%the freshest read on whether the business is still growing

Current ratio, recent quarters1.2× → 1.1×

Deeper floors

Tangible book value($1.9B)equity stripped of goodwill & intangibles

Net current asset value($6.3B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$4.6Bno operating-lease liability tagged this quarter, so debt alone; with finance leases, “total fixed claims” below reaches $5.4B (annual-report basis)

Deferred revenue$2.2Bcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$693M

'27$0

'28$549M

'29$748M

'30$0

later$2.6B

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$693Mthe first rung: what must be repaid or rolled over within the year

Within two years$693Mthe near wall, the part most exposed to today’s credit conditions

Biggest single year$748Min 2029the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$4.6Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Jun 30, 2026$1.8B

One year of owner earnings (FY2025)$2.8B

Together, against $693M due next year6.6×

Cash on hand as of Jun 30, 2026 plus a year’s owner earnings comes to $4.6B against the $693M due in the twelve months after the Dec 31, 2025 schedule: 6.6 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the total the table states.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, and what it adds to the debt on the page above.

'26$260M

'27$213M

'28$167M

'29$123M

'30$69M

later$118M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$260Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$950Mevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$825Mthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$4.6B

Lease obligations (present value)$825M

Total fixed claims on the business$5.4B

Counting the leases the way Buffett does, the fixed claims on this business come to $5.4B, of which the leases are 15%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Dec 31, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2016–2025

Over the record, the business generated $19.6B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$2.6B · 13%
Dividends$5.7B · 29%
Buybacks$8.9B · 45%
Retained (debt / cash)$2.4B · 12%

Returned to owners$14.6B
86% of the owner earnings the business produced over the span, $5.7B as dividends and $8.9B as buybacks.
Average price paid for buybacks—
Buybacks ran $8.9B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−14.9%
The diluted count fell from 262M to 223M, so the buybacks outran the stock issued to staff.
Dividend record$3.72/sh
Paid in 10 of the years on record, the per-share dividend growing about 12% a year. It was never cut over the span.
Return on what it retained53%
Of the earnings it kept rather than paid out ($2.4B over the span), annual owner earnings (first three years vs last three) grew $1.3B, so each retained $1 added about 0.53 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$9.7B45% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity75%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$10.7Bover 19 years since fiscal 2007 buying other businesses, against $2.6B of capital spent building over the 10-year record

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Beside that spending sits $2.6B of cumulative amortization of acquired intangibles charged against earnings since fiscal 2008 — the purchase price of past deals, expensed over time.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and amortization summed across the company's full tagged history, write-downs across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Owner earnings
2021	$18.3M	$46.0M	$1.4B
2021	$12.9M	$20.4M	$1.4B
2022	$12.8M	$9.0M	$1.2B
2023	$22.9M	$39.5M	$2.1B
2024	$28.2M	$60.8M	$2.8B
2025	$27.3M	$28.1M	$2.8B
2025	$27.3M	$28.1M	$2.8B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

CEO pay ratio402:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$87M
The slice of the business handed to employees in shares in fiscal 2025, 0.4% of revenue, equal to 2.2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Peers, Building Products

The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.

Company	Revenuelatest FY, USD	Gross marginmedian over the record	Op. marginmedian over the record	ROICmedian over the record	Owner earn. marginmedian over the record
6367Daikin Industries	$31.6B	35%4y	9.9%	12%	6%
JCIJohnson Controls International PLC	$23.6B	34%	9.2%	7%	5%
CARRCarrier Global Corporation Common Stock	$21.7B	27%3y	13.1%	14%	9%
TTTrane Technologies plc	$21.3B	31%	13.5%	17%	10%
ASSABASSA ABLOY AB	$15.9B	40%	15.3%	12%	13%
SWKStanley Black & Decker Inc.	$15.1B	33%	11.9%	2%	5%
5201AGC	$13.0B	25%4y	6.3%	6%	4%
OCOwens Corning Inc Common Stock New	$10.1B	25%	12.4%	8%	11%
Group median	—	32%	12.2%	10%	8%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Trane Technologies plc has delivered.

Trane Technologies plc’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Trane Technologies plc earns about $2.2B on its 10.1% median owner-earnings margin. This year’s 13.2% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($2.2B) Net of stock comp (−$91M TTM)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.71% 10-year Treasury (Aug 18, 2026) + 4.29 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+21%/yr

Owner-earnings growth · ’16→’25+9%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.71%, as of Aug 18, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $3.5B on 220M shares outstanding, per the 10-Q cover, as of 2026-07-24; net debt $2.9B. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh TT against another business →

The owners of TT: the meeting and the votes →

Cite: Owner Scorecard, "Trane Technologies plc (TT), the owner's record," https://ownerscorecard.com/c/TT, data as of 2026-08-17.

Manual order: ← TSSI its page in the Manual TTAN →

Industry order: ← TREX the Building Products chapter VMI →