Business Segment Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Business Segment Information

BUSINESS SEGMENT INFORMATION

The Company operates under four regional operating segments designed to create deep customer focus and relevance in markets around the world. The Company determined that its two Europe, Middle East and Africa (EMEA) operating segments meet the aggregation criteria based on similar operating and economic characteristics, resulting in one reportable segment. Therefore, the Company has three regional reportable segments, Americas, EMEA and Asia Pacific. In January 2024, the Company aligned its operating segments with its three regional reportable segments. Intercompany sales between segments are immaterial.

•The Company's Americas segment innovates for customers in North America and Latin America. The Americas segment encompasses commercial heating, cooling and ventilation systems, building controls and solutions, and energy services and solutions; residential heating and cooling; and transport refrigeration systems and solutions.

•The Company's EMEA segment innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings, and transport refrigeration systems and solutions.

•The Company's Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings, and transport refrigeration systems and solutions.

Management measures segment operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, non-cash adjustment for contingent consideration, insurance settlements on property claims, merger and acquisition-related costs, impairment of an equity investment, unallocated corporate expenses and discontinued operations (Segment Adjusted EBITDA). Segment Adjusted EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results reported in accordance with GAAP. The Company believes Segment Adjusted EBITDA provides the most relevant measure of profitability as well as earnings power and the ability to generate cash. This measure is a useful financial metric to assess the Company's operating performance from period to period by excluding certain items that it believes are not representative of its core business and the Company uses this measure for business planning purposes. Segment Adjusted EBITDA also provides a useful tool for assessing the comparability between periods and the Company's ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates non-cash charges such as depreciation and amortization expense.

A summary of operations by reportable segment for the years ended December 31 were as follows:

In millions	2023		2022		2021
Net revenues
Americas	$	13,832.0	$	12,640.8	$	10,957.1
EMEA	2,401.2		2,034.5		1,944.9
Asia Pacific	1,444.4		1,316.4		1,234.4
Total Net revenues	$	17,677.6	$	15,991.7	$	14,136.4
Segment Adjusted EBITDA
Americas	$	2,669.6	2,326.3		2,008.8
EMEA	464.7		338.1		359.2
Asia Pacific	321.3		248.3		228.5
Total Segment Adjusted EBITDA	$	3,455.6	$	2,912.7	$	2,596.5
Reconciliation of Segment Adjusted EBITDA to earnings before income taxes
Total Segment Adjusted EBITDA	$	3,455.6	$	2,912.7	$	2,596.5
Interest expense	(234.5)		(223.5)		(233.7)
Depreciation and amortization	(348.1)		(323.6)		(299.4)
Restructuring costs	(15.1)		(20.7)		(27.0)
Non-cash adjustments for contingent consideration	49.3		46.9		—
Insurance settlements on property claims	10.0		25.0		—
Impairment of equity investment	(52.2)		—		—
Acquisition inventory step-up	(6.4)		(0.8)		—
Unallocated corporate expenses	(291.3)		(243.9)		(245.7)
Earnings before income taxes	$	2,567.3	$	2,172.1	$	1,790.7
Depreciation and Amortization
Americas	$	259.2	$	256.9	$	227.6
EMEA	51.4		28.8		33.3
Asia Pacific	19.1		17.6		16.5
Depreciation and amortization from reportable segments	$	329.7	$	303.3	$	277.4
Unallocated depreciation and amortization	18.4		20.3		22.0
Total depreciation and amortization	$	348.1	$	323.6	$	299.4
Capital Expenditures
Americas	$	217.2	$	230.5	$	148.7
EMEA	31.9		25.9		23.6
Asia Pacific	14.3		11.2		20.6
Capital expenditures from reportable segments	$	263.4	$	267.6	$	192.9
Corporate capital expenditures	37.3		24.2		30.1
Total capital expenditures	$	300.7	$	291.8	$	223.0

At December 31, a summary of long-lived assets by geographic area were as follows:

In millions	2023		2022
United States	$	1,618.6	$	1,413.8
Non-U.S.	666.7		584.8
Total	$	2,285.3	$	1,998.6