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Trane Technologies Luxembourg Finance S.A. -- Moody's announces completion of a periodic review for a group of Manufacturing issuers

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Announcement of Periodic Review: Moody's announces completion of a periodic review for a group of Manufacturing issuersGlobal Credit Research - 30 Mar 2022New York, March 30, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.The review was conducted through a portfolio review discussion held on 23 March 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.Key Rating ConsiderationsThe principal methodology used for these rated entities was Manufacturing published in September 2021. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.ManufacturingScale: Scale is a consideration because it is an indicator of the overall depth of a company's business and its success in attracting a variety of customers, as well as its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Larger manufacturing companies typically attract a greater breadth of customers and can better withstand cyclicality resulting from economic conditions and product cycles. A larger revenue base also generally leads to important economies of scale in raw material purchases and corporate functions, particularly important given the need for global supply chain management to control costs for most manufacturing companies. Larger manufacturers also tend to generate higher cash flow for capital reinvestment and debt reduction. In addition, they generally have greater access to the capital markets, which can reduce the cost of capital. Revenue is an indicator of scale.Business Profile: The business profile of a manufacturing company is important because it greatly influences its ability to generate sustainable earnings and operating cash flows. Core aspects of a manufacturing company's business profile are its market position, the breadth and stability of the end-markets it serves, the diversity of its product offerings, as well as the effectiveness of the company's cost structure.Profitability and Efficiency: Profits are considered because they are needed to generate sustainable cash flow and maintain a competitive position, which includes an ability to invest in marketing, research, factories, and personnel. High profitability sustained over time is generally an indicator of operating efficiency and competitive advantage. EBITA Margin is an indicator of profitability and efficiency.Leverage and Coverage: Leverage and cash flow coverage measures provide indications of a company's financial flexibility and ability to sustain its competitive position, as well as how much financial risk a manufacturer is willing to undertake. A manufacturer with strong financial flexibility is better able to invest in product innovation and adapt to changing customer preferences and competitive challenges than a manufacturer with a constrained capital structure. The capital intensity of the manufacturing sector also makes financial flexibility critical to absorbing unexpected costs and withstanding industry cyclicality. Indicators of leverage and coverage include ratios such as: Debt/ EBITDA, EBITA/ Interest Expense, Free Cash Flow/ Debt, and Retained Cash Flow/ Net Debt.Financial Policy: Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is an important rating determinant because it directly affects debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Financial risk tolerance serves as a guidepost to investment and capital allocation. Liquidity management is an important aspect of overall risk management and can provide insight into risk tolerance.Other Rating Considerations: Other considerations may include but are not limited to: financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance, as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk, as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends, are also considered. • 3M Company • Corning Incorporated • CPM Holdings, Inc. • Dover Corporation • Eaton Corporation • Emerson Electric Company • Engineered Components & Systems LLC• Engineered Machinery Holdings, Inc. • EXC Holdings III Corp. • Fortive Corporation • Gardner Denver, Inc. • Honeywell International Inc. • Hubbell Incorporated • Illinois Tool Works Inc. • ITT Inc. • Madison IAQ LLC • Pentair Finance S.a.r.l. • Plaze, Inc. • Pro Mach Group, Inc. • Rockwell Automation, Inc. • Safe Fleet Holdings LLC • Tank Holding Corp. • Toro Company (The) • Trane Technologies HoldCo Inc. • Valmont Industries, Inc. • Vector WP Holdco, Inc. • Vontier Corporation • Xylem Inc. The principal methodology used for these rated entities was Semiconductors published in September 2021. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.Semiconductor MethodologyScale: Scale is a consideration because it is an indicator of the overall breadth and depth of a company's business, its pricing power, and its success in attracting a variety of customers, as well as its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Scale also can be an indicator of a semiconductor company's research and development capabilities and its negotiating leverage with customers and suppliers. Scale is measured using total reported revenue.Business Profile: The business profile of a semiconductor company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. Key aspects of a semiconductor company's business profile include its revenue stability and its visibility, or insight into demand; the diversity or concentration of its end markets, customers, and products; its market position; and barriers to entry into a market or a business segment.Profitability: Profits are considered because they are needed to generate sustainable cash flow and maintain a competitive position, which includes making sufficient investment in research and development and in capital expenditures to maintain market position through ongoing technological shifts. A semiconductor company's level of profitability, and the sustainability of those profits, may also provide important indications about the value of its products. Indicators of profitability include EBITDA Margin and (EBITDA minus Capex) / Revenue.Leverage and Coverage: Leverage and cash flow coverage measures provide important indications of financial flexibility and long-term viability, including a semiconductor company's ability to adapt to changes in the economic and business environment. Key metrics for leverage and coverage are Debt/ EBITDA, Free Cash Flow/ Debt and EBIT/ Interest Expense.Financial Policy: Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is an important rating determinant, because it directly affects debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Financial risk tolerance serves as a guidepost to investment and capital allocation. Liquidity management is an important aspect of overall risk management and can provide insight into risk tolerance.Other Rating Considerations: Other considerations may include but are not limited to: financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.• Altar BidCo, Inc.This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.Please see the Issuer page on www.moodys.com, for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. 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