Chief Executive Officer at Trane Technologies
Thanks, Zac, and everyone, for joining us on today's call. Let's turn to slide number three. As we do each quarter, I'd like to spend a few minutes upfront on our focused sustainability strategy, the engine that enables us to deliver differentiated shareholder returns over time. Long-term sustainability megatrends continue to intensify, and our innovation leadership is transforming the climate industry as the world decarbonizes.
Our aggressive goals and bold actions can dramatically reduce carbon emissions and accelerate the world's progress. This is more critical every day as the clock is ticking on climate change. That's why we are calling for businesses and governments to take stronger action at COP26 and why we continue to set aggressive science-based emission reduction targets to push our innovation further and faster. That innovation also extends to emerging trends as we see heightened focus on indoor air quality and strong momentum in aging infrastructure in our schools.
We continue to make a difference consistently, relentlessly and over the long term. This unyielding approach drives market outgrowth over the long term, which in turn helps us drive strong margins and powerful free cash flow to deploy through our balanced capital allocation strategy. The end result is more value across the board for our customers, for our team, for our shareholders and for the planet. Moving to slide number four. Our global team delivered solid execution in the third quarter, and we continue to target top quartile EPS growth for 2021.
Bookings were once again exceptional in Q3, building on strong growth in both Q1 and Q2 and bringing our year-to-date organic bookings growth to over 25% for the enterprise. Underlying demand for our innovative products and services have never been stronger, and our Q3 ending backlog reflects this strength. In fact, Q3 ending backlog for the enterprise is up more than 70% or approximately $2 billion from year-end 2020 with all three of our business segments at record levels. Americas and EMEA have backlog that are up over 90% and 65%, respectively, from year-end 2020.
We're well positioned to close out 2021 on a strong note and to enter 2022 with unprecedented levels of backlog as well. As we highlighted on our second quarter earnings call and in subsequent forums, global supply chains, logistics systems and labor markets remain tight, and inflation is persistent. Our global teams are focused on meeting the unique needs of our wide-ranging customer base and helping them solve complex challenges on a daily basis as we navigate a challenging yet positive demand and supply environment.
Temporary supply chain delays on key materials impacted portions of our product portfolio, shifting the timing of approximately $150 million or 4% of our revenue out of the third quarter and into future periods. Working closely with our key suppliers and with our customers, we anticipate that between $50 million and $75 million or roughly 2% of the Q3 impact will shift into the fourth quarter, leaving our 2021 revenue guidance unchanged. We expect the remaining balance to shift into 2022.
We also highlighted on our second quarter earnings call that persistent inflation would require us to execute an incremental $150 million in pricing actions in the second half of the year in order to neutralize the impact. Strong execution of our business operating system has enabled us to keep pace with the inflationary curve. In the third quarter, we realized approximately $150 million or 4.3% incremental price, offsetting approximately $150 million of inflation. Leverage was negligible as you would expect on flat volume.
While adjusted operating income was modestly higher in the quarter, primarily reflecting nominal pull-through on M&A and FX growth, consistent with our expectations and our guidance. We continue to execute the business transformation projects we discussed in detail at our Investor Day in December and are on track to deliver approximately $90 million of incremental savings in 2021. These savings support leading innovation across our end markets through relentless high levels of business reinvestment.
They also enable us to stay on track to deliver incremental margins of approximately 30% organic for fiscal 2021 despite persistent inflation, tight logistics systems and supply chain challenges. We're also on track to deliver powerful free cash flow of equal to or greater than 100% of net earnings. This provides us with strong optionality to deploy significant cash to opportunities now and in the future, including M&A and share repurchases.
Lastly, we never lose sight of our long-term, purpose-driven strategy and the tremendous leadership role we can play in bending the curve on climate change. By changing the industry, we can change the world. Executing our purpose-driven strategy is how we will continue to deliver top-tier financial performance for our shareholders. Please turn to slide number five. While we're still in the midst of our planning process for 2022 and anticipate providing guidance in conjunction with our fourth quarter earnings call, we thought it might be constructive to spend a few minutes discussing our initial thoughts on 2022 and some of the key dynamics we believe will be in play.
While this is not a comprehensive list, it will highlight some of the key reasons why we're so excited about what the future holds for Trane Technologies as well as some of the key challenges we see on the road ahead. First, we expect to have strong fundamentals entering the year. Exiting Q3, backlog in our Americas and EMEA segments are both at unprecedented levels, up over 90% and up over 65% versus December of 2020, respectively.
Asia also has record backlog, up nearly 20%. If we very conservatively plot out bookings through the balance of 2021, we anticipate entering 2022 with at least 70% more backlog in the Americas and EMEA than we entered 2020. I've been in this business a long time, and I've never entered any year with a stronger backlog position, which bodes well for us in 2022. Another fundamental strength entering 2022 is the foundation of our business operating system. Strong execution of our business operating system has enabled us to stay ahead of the persistent inflation through 2021 and position us well to manage additional inflationary pressures and deliver strong price realization again in 2022.
And we'll continue to drive transformation savings in 2022 that will support high levels of business reinvestment and continued innovation. These savings will also support healthy incremental margins in what we expect to be another year of tight conditions for supply chain, labor markets and logistics systems. Looking out to 2022, we also expect to see continued acceleration of the strong secular sustainability megatrends that are so tightly aligned with our purpose-driven business strategy.
Decarbonization of the built environment is accelerating. U.S. education stimulus dollars are being put to good use, upgrading our aging infrastructure. And momentum around indoor air quality upgrades, retrofits and new projects continues. Additionally, the global economy is expected to continue to recover in 2022 with solid underlying GDP and other economic indicators driving broader expansion in the nonresidential markets. Lastly, we're excited about the future of transport refrigeration markets where ACT and IHS are plotting a steady growth path forward in both 2022 and 2023.
All in, we're exceptionally well positioned for strong performance in 2022 and beyond. Please turn to slide number six. Customer demand for our innovative climate control products and services continues to grow. We delivered another quarter of robust organic bookings growth, up 20% with growth across all segments and business units. Customer demand has been high all year, with organic bookings up over 25% year-to-date, driving record backlog in each segment. Organic revenues were also up 4%, driven by continued strong price execution.
Our Americas commercial HVAC business delivered robust bookings growth in the quarter with orders up over 30%. Strength was broad-based with applied and unitary bookings both up more than 50% and service bookings up high teens. Demand for system-focused indoor air quality solutions remain strong and contributed to our mid-single-digit revenue growth in commercial HVAC Americas. The residential HVAC markets continue to be strong, and our residential team delivered low single-digit bookings growth, building on nearly 40% growth in the third quarter of 2020.
Revenues were flat in the quarter as demand outpaced supply. And we entered the fourth quarter with record backlog, up more than 150% year-over-year and up from prior record backlog at the end of the second quarter. With year-to-date organic bookings up over 80% and year-to-date organic revenue up over 30%, our Americas transport refrigeration business is significantly outperforming the North America transport markets. During the third quarter, with most of 2021 orders already in the backlog, we opened up our 2022 order book solely for the first quarter of 2022, which drove bookings growth of more than 20%.
We are methodically managing our 2022 order book in order to mitigate inflationary risks. Organic revenues were also strong, up low to mid-teens. Turning to EMEA. We continue to see strong demand for our innovative products and services that help reduce energy intensity and greenhouse gas emissions for our customers. Our EMEA teams delivered 25% organic bookings growth in the quarter with strong growth in both commercial HVAC and transport refrigeration. Revenues were also strong, up 8%, led by high-teens organic revenue growth in transport refrigeration. Our Asia Pacific team delivered bookings growth of 11%. Revenue grew 1% in the quarter. Though we saw growth in China during the quarter, the impacts of the COVID-19 pandemic continue to be challenging in the region with low vaccination rates in some countries.
Now I'd like to turn the call over to Chris. Chris?