CARRIER GLOBAL Corp

Previous wording

Carrier Global Corporation ("we" or "our") is a global leader in intelligent climate and energy solutions with a focus on providing differentiated, digitally-enabled lifecycle solutions to our customers. Our portfolio includes industry-leading brands such as Carrier, Viessmann, Toshiba, Automated Logic, Carrier Transicold, Kidde and Edwards that offer innovative heating, ventilating and air conditioning ("HVAC"), refrigeration, fire and building automation technologies to help make the world safer and more comfortable. We also provide a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. Our operations are classified into three segments: HVAC, Refrigeration and Fire & Security.

Current wording

Carrier Global Corporation ("we" or "our") is a global leader in intelligent climate and energy solutions with a focus on providing differentiated, digitally-enabled lifecycle solutions to our customers. Our portfolio includes industry-leading brands such as Carrier, Viessmann, Toshiba, Automated Logic and Carrier Transicold that offer innovative heating, ventilating and air conditioning ("HVAC"), refrigeration, and cold chain transportation solutions to help make the world safer and more comfortable. We also provide a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. Our operations are classified into two segments: HVAC and Refrigeration.

Previous wording

On June 2, 2024, we completed the sale of our Access Solutions business ("Access Solutions") to Honeywell International Inc. ("Honeywell") for cash proceeds of $5.0 billion. Access Solutions, historically reported in our Fire & Security segment, is a global supplier of physical security and digital access solutions supporting the hospitality, commercial, education and military markets. We recognized a gain on the sale of $2.9 billion, which is included in Other income (expense), net on the accompanying Unaudited Condensed Consolidated Statement of Operations. The net proceeds received are subject to working capital and other adjustments provided in the stock purchase agreement.

Current wording

On June 2, 2024, we completed the sale of our Access Solutions business ("Access Solutions") to Honeywell International Inc. ("Honeywell") for cash proceeds of $5.0 billion. Access Solutions, historically reported in our Fire & Security segment, is a global supplier of physical security and digital access solutions supporting the hospitality, commercial, education and military markets. We recognized a net gain on the sale of $1.8 billion, which is included in Discontinued operations, net of tax on the accompanying Unaudited Condensed Consolidated Statement of Operations. The net proceeds received are subject to working capital and other adjustments provided in the stock purchase agreement.

Previous wording

On March 5, 2024, we entered into a stock purchase agreement to sell our Industrial Fire business ("Industrial Fire") to Sentinel Capital Partners for an enterprise value of approximately $1.425 billion. Industrial Fire, historically reported in our Fire & Security segment, is a leading manufacturer of a full spectrum of fire detection and suppression solutions and services in critical high-hazard environments, including oil and gas, power generation, marine and offshore facilities, automotive, data centers and aircraft hangars. The sale of Industrial Fire was completed on July 1, 2024.

Current wording

On July 1, 2024, we completed the sale of our Industrial Fire business ("Industrial Fire") for cash proceeds of $1.4 billion. Industrial Fire, historically reported in our Fire & Security segment, is a leading manufacturer of a full spectrum of fire detection and suppression solutions and services in critical high-hazard environments, including oil and gas, power generation, marine and offshore facilities, automotive, data centers and aircraft hangars. We recognized a net gain on the sale of $310 million, which is included in Discontinued operations, net of tax on the accompanying Unaudited Condensed Consolidated

Previous wording

On December 12, 2023, we entered into a stock purchase agreement to sell our Commercial Refrigeration business ("CCR") to Haier Group Corporation for an enterprise value of approximately $775 million. CCR, historically reported in our Refrigeration segment, is a global supplier of turnkey solutions for commercial refrigeration systems and services, with a primary focus on serving food retail customers, cold storage facilities and warehouses. The transaction is expected to close in 2024.

Current wording

On December 12, 2023, we entered into a stock purchase agreement to sell our Commercial Refrigeration business ("CCR") to Haier Group Corporation for an enterprise value of approximately $775 million. CCR, historically reported in our Refrigeration segment, is a global supplier of turnkey solutions for commercial refrigeration systems and services, with a primary focus on serving food retail customers, cold storage facilities and warehouses. The sale of CCR was completed on October 1, 2024.

Previous wording

The announced plan to exit our Fire & Security segment represents a single disposal plan to separately divest multiple businesses. As such, at the time that the remaining significant business in the segment, Commercial and Residential Fire, qualifies as held for sale, the Fire & Security segment in aggregate will likely be presented in discontinued operations. We expect this to occur in 2024.

Current wording

In 2023, we announced plans to exit our Fire & Security and Commercial Refrigeration businesses over the course of 2024. The announced plan to exit the Fire & Security segment represents a single disposal plan to separately divest multiple businesses over different reporting periods. Upon the CRF Business qualifying as held for sale during the three months ended September 30, 2024, the components of the Fire & Security segment in aggregate met the criteria to be presented as discontinued operations. In addition, the assets and liabilities of the CRF Business have been reclassified to held for sale at December 31, 2023. The results of CCR did not meet the criteria to be presented in discontinued operations.

Previous wording

For the six months ended June 30, 2024, Net sales in our HVAC segment were $9.5 billion, a 21% increase compared with the same period of 2023. The components of the year-over-year change were as follows:

Current wording

For the three months ended September 30, 2024, Net sales were $6.0 billion, a 21% increase compared with the same period of 2023. The components of the year-over-year change were as follows:

Previous wording

Organic sales for the three months ended June 30, 2024, increased by 2% compared with the same period of 2023. The organic increase was primarily driven by our HVAC segment due to improved end-markets in the Americas and EMEA, which more than offset reduced end-market demand in Asia. In addition, our Fire & Security segment benefited from volume growth and price improvements in both the Commercial and Residential fire and Industrial fire businesses. Results in our Refrigeration segment were mixed as growth in Transport refrigeration was partially offset by challenges in Commercial refrigeration end-markets. Refer to "Segment Review" below for a discussion of Net salesby segment.

Current wording

Organic sales for the three months ended September 30, 2024, increased by 4% compared with the same period of 2023. The organic increase was primarily driven by our HVAC segment due to improved end-markets in the Americas and EMEA, which more than offset reduced end-market demand in Asia. Results in our Refrigeration segment were mixed as growth in Transport refrigeration was partially offset by challenges in Commercial refrigeration end-markets. Refer to "Segment Review" below for a discussion of Net salesby segment.

Previous wording

For the three months ended June 30, 2024, gross margin was $1.9 billion, a 7% increase compared with the same period of 2023. The components were as follows:

Current wording

For the three months ended September 30, 2024, gross margin was $1.7 billion, a 13% increase compared with the same period of 2023. The components were as follows:

Previous wording

Gross margin increased by $123 million compared with the three months ended June 30, 2023. The main driver of the increase related to ongoing customer demand, pricing improvements and our continued focus on productivity initiatives. Operating results associated with the VCS Business since the date of acquisition further benefited gross margin during the period. However, the results of the VCS Business included inventory step-up, backlog amortization and intangible asset amortization resulting from the recognition of acquired assets at fair value. These costs had a 300 basis point unfavorable impact on gross margin as a percentage of Net sales. As a result, gross margin as a percentage of Net sales decreased by 120 basis points compared with the same period of 2023.

Current wording

Gross margin increased by $191 million compared with the three months ended September 30, 2023. The main driver of the increase related to ongoing customer demand, pricing improvements and our continued focus on productivity initiatives. Operating results associated with the VCS Business since the date of acquisition further benefited gross margin during the period. However, the results of the VCS Business included inventory step-up, backlog amortization and intangible asset amortization resulting from the recognition of acquired assets at fair value. These costs had a 220 basis point unfavorable impact on gross margin as a percentage of Net sales. As a result, gross margin as a percentage of Net sales decreased by 210 basis points compared with the same period of 2023.

Previous wording

For the three months ended June 30, 2024, operating expenses, including Equity method investment net earnings, were a benefit of $1.8 billion, a 243% decrease compared with the same period of 2023. The components were as follows:

Current wording

For the three months ended September 30, 2024, operating expenses, including Equity method investment net earnings, were a benefit of $0.9 billion, a 6% decrease compared with the same period of 2023. The components were as follows:

Previous wording

For the three months ended June 30, 2024, Selling, general and administrative expenses were $975 million, a 24% increase compared with the same period of 2023. The increase is primarily due to incremental expenses associated with the VCS Business since the date of acquisition. In addition, the current period also included $92 million of acquisition and divestiture-related costs compared with $14 million during the three months ended June 30, 2023.

Current wording

For the three months ended September 30, 2024, Selling, general and administrative expenses were $799 million, a 20% increase compared with the same period of 2023. The increase is primarily due to incremental expenses associated with the VCS Business since the date of acquisition. In addition, the current period also included $15 million of acquisition and divestiture-related costs compared with $35 million during the three months ended September 30, 2023.

Previous wording

Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the three months ended June 30, 2024, Equity method investment net earnings were $90 million, a 73% increase compared with the same period of 2023. The increase was primarily driven by higher earnings in HVAC joint ventures across all regions.

Current wording

Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the three months ended September 30, 2024, Equity method investment net earnings were $66 million, a 12% decrease compared with the same period of 2023. The decrease was primarily driven by the absence of a $16 million benefit recognized in connection with a favorable tax ruling at a minority owned joint venture in the prior year. As a result, we reported higher earnings in HVAC joint ventures across all regions.

Previous wording

Other income (expense), net primarily includes the impact of gains and losses related to the sale of businesses or interests in our equity method investments, foreign currency gains and losses on transactions that are denominated in a currency other than an entity's functional currency and hedging-related activities. During the three months ended June 30, 2024, we completed the sale of Access Solutions and recognized a gain on the sale of $2.9 billion.

Current wording

Other income (expense), net primarily includes the impact of gains and losses related to the sale of businesses or interests in our equity method investments, foreign currency gains and losses on transactions that are denominated in a currency other than an entity's functional currency and hedging-related activities. During the three months ended September 30, 2023, we recognized a $257 million loss on the mark-to-market valuation of our window forward contracts associated with the expected cash outflows of the Euro-denominated purchase price of the VCS Business.

Previous wording

For the three months ended June 30, 2024, Non-operating income (expense), net was $167 million, a 149% increase compared with the same period of 2023. The components were as follows:

Current wording

For the three months ended September 30, 2024, Non-operating income (expense), net was $7 million, a 118% decrease compared with the same period of 2023. The components were as follows:

Previous wording

Non-operating income (expense), net includes the results from activities other than normal business operations such as interest expense, interest income and the non-service components of pension and post-retirement obligations. Interest expense is affected by the amount of debt outstanding and the interest rates on that debt. For the three months ended June 30, 2024, Interest expensewas $185 million, a 97% increase compared with the same period of 2023. In connection with the acquisition of the VCS Business, we entered into several financing arrangements to fund the cash portion of the Euro-denominated purchase price. In addition, we incurred a make-whole premium of $8 million and wrote off $4 million of unamortized deferred financing costs associated with the redemption of our $1.0 billion aggregate principal amount of 5.80% notes due in 2025. During the three months ended June 30, 2023, we amortized $21 million of deferred financing cost in Interest expense, of which $19 million related to our senior unsecured bridge term loan facility (the "Bridge Loan").

Current wording

Non-operating income (expense), net includes the results from activities other than normal business operations such as interest expense, interest income and the non-service components of pension and post-retirement obligations. Interest expense is affected by the amount of debt outstanding and the interest rates on that debt. For the three months ended September 30, 2024, Interest expensewas $131 million, a 79% increase compared with the same period of 2023. In connection with the acquisition of the VCS Business, we entered into several financing arrangements to fund the cash portion of the Euro-denominated purchase price. In July 2024, we completed tender offers to repurchase approximately $1.0 billion aggregate principal which included $125 million of notes due 2034, $350 million of notes due 2054 and approximately $600 million of notes due 2050. Upon settlement, we wrote off $11 million of unamortized deferred financing costs in Interest expense and recognized a net gain of $97 million in Interest income. During the three months ended September 30, 2023, we amortized $12 million of deferred financing cost in Interest expense, of which $11 million related to our senior unsecured bridge term loan facility (the "Bridge Loan").

Previous wording

We account for income tax expense in accordance with ASC 740, which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate was 32.8% for the three months ended June 30, 2024, compared with 44.8% for the three months ended June 30, 2023. The year-over-year decrease was primarily driven by the absence of the non-deductible loss of $293 million on the deconsolidation of KFI due to its Chapter 11 filing and the $111 million loss on the mark-to-market valuation of our window forward contracts associated with the expected cash outflows of the Euro-denominated purchase price of the VCS Business recognized during the three months ended June 30, 2023. These amounts were partially offset by the $1.1 billion tax on the $2.9 billion gain on the sale of Access Solutions and a held-for-sale tax benefit of $43 million related to adjustments to basis differences in certain companies recognized during thethree months ended June 30, 2024.

Current wording

We account for income tax expense in accordance with ASC 740, which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate was 22.3% for the three months ended September 30, 2024 compared with 37.6% for the three months ended September 30, 2023. The year-over-year decrease was primarily driven by the absence of the non-deductible loss of $257 million on the mark-to-market valuation of the Company's window forward contracts associated with the expected cash outflows of the Euro-denominated purchase price of the VCS Business and a tax charge of $19 million related to the Company's intention to no longer permanently reinvest historical earnings from certain jurisdictions.

Previous wording

For the three months ended June 30, 2024, Net sales in our HVAC segment were $5.0 billion, a 18% increase compared with the same period of 2023. The components of the year-over-year change were as follows:

Current wording

For the nine months ended September 30, 2024, Net sales were $17.3 billion, a 18% increase compared with the same period of 2023. The components of the year-over-year change were as follows:

Previous wording

Organic sales for the six months ended June 30, 2024 increased by 2% compared with the same period of 2023. The organic increase was primarily driven by our HVAC segment due to improved end-markets in the Americas, which more than offset reduced end-markets in EMEA and Asia. In addition, our Fire & Security segment benefited from volume growth and price improvements in both the Commercial and Residential fire and Industrial fire businesses. Refrigeration results decreased as each of the segment's businesses experienced challenges in certain end-markets. Refer to "Segment Review" below for a discussion of Net sales by segment.

Current wording

Organic sales for the nine months ended September 30, 2024 increased by 2% compared with the same period of 2023. The organic increase was primarily driven by our HVAC segment due to improved end-markets in the Americas, which more than offset reduced end-markets in EMEA and Asia. Results in Refrigeration were flat compared to the prior year as each of the segment's businesses experienced challenges in certain end-markets. Refer to "Segment Review" below for a discussion of Net sales by segment.

Previous wording

For the six months ended June 30, 2024, gross margin was $3.6 billion, a 14% increase compared with the same period of 2023. The components were as follows:

Current wording

For the nine months ended September 30, 2024, gross margin was $4.6 billion, a 15% increase compared with the same period of 2023. The components were as follows:

Previous wording

Gross margin increased by $450 million compared with the six months ended June 30, 2023. The main driver of the increase related to ongoing customer demand, pricing improvements and our continued focus on productivity initiatives. Operating results associated with the VCS Business since the date of acquisition further benefited gross margin during the period. However, the results of the VCS Business included inventory step-up, backlog amortization and intangible asset amortization resulting from the recognition of acquired assets at fair value. These costs had a 260 basis point unfavorable impact on gross margin as a percentage of Net sales. As a result, gross margin as a percentage of Net sales was flat compared with the same period of 2023.

Current wording

Gross margin increased by $592 million compared with the nine months ended September 30, 2023. The main driver of the increase related to ongoing customer demand, pricing improvements and our continued focus on productivity initiatives. Operating results associated with the VCS Business since the date of acquisition further benefited gross margin during the period. However, the results of the VCS Business included inventory step-up, backlog amortization and intangible asset amortization resulting from the recognition of acquired assets at fair value. These costs had a 270 basis point unfavorable impact on gross margin as a percentage of Net sales. As a result, gross margin as a percentage of Net sales decreased by 90 basis points compared with the same period of 2023.

Previous wording

For the six months ended June 30, 2024, operating expenses, including Equity method investment net earnings, were a benefit of $0.6 billion, a 129% decrease compared with the same period of 2023. The components were as follows:

Current wording

For the nine months ended September 30, 2024, operating expenses, including Equity method investment net earnings, were a benefit of $2.8 billion, a 14% increase compared with the same period of 2023. The components were as follows:

Previous wording

For the six months ended June 30, 2024, Selling, general and administrative expenses were $2.0 billion, a 30% increase compared with the same period of 2023. The increase is primarily due to incremental expenses associated with the VCS Business since the date of acquisition. In addition, higher compensation and other employee-related costs further contributed to the increase. The current period also included $181 million of acquisition and divestiture-related costs compared with $26 million during the six months ended June 30, 2023.

Current wording

For the nine months ended September 30, 2024, Selling, general and administrative expenses were $2.4 billion, a 28% increase compared with the same period of 2023. The increase is primarily due to incremental expenses associated with the VCS Business since the date of acquisition. In addition, higher compensation and other employee-related costs further contributed to the increase. The current period also included $87 million of acquisition and divestiture-related costs compared with $58 million during the nine months ended September 30, 2023.

Previous wording

Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the six months ended June 30, 2024, Equity method investment net earnings were $121 million, a 26% increase compared with the same period of 2023. The increase was primarily driven by higher earnings in HVAC joint ventures across all regions. The increase was partially offset by a $23 million charge associated with the devaluation of U.S. Dollar denominated balances at an HVAC equity investment in Egypt.

Current wording

Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the nine months ended September 30, 2024, Equity method investment net earnings were $187 million, a 9% increase compared with the same period of 2023. The increase was primarily driven by higher earnings in HVAC joint ventures across all regions. The increase was partially offset by a $23 million charge associated with the devaluation of U.S. Dollar denominated balances at an HVAC equity investment in Egypt. In addition, prior year results include a $16 million benefit recognized in connection with a favorable tax ruling at a minority owned joint venture.

Previous wording

Other income (expense), net primarily includes the impact of gains and losses related to the sale of businesses or interests in our equity method investments, foreign currency gains and losses on transactions that are denominated in a currency other than an entity's functional currency and hedging-related activities. During the six months ended June 30, 2024, we completed the sale of Access Solutions and recognized a gain on the sale of $2.9 billion. In addition, we recognized a $46 million gain associated with our share of United Technologies Corporation's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the Internal Revenue Service ("IRS"). In connection with the acquisition of the VCS Business, we recognized an $86 million loss on the mark-to-market valuation of our window forward contracts associated with the cash outflows of the Euro-denominated purchase price.

Current wording

Other income (expense), net primarily includes the impact of gains and losses related to the sale of businesses or interests in our equity method investments, foreign currency gains and losses on transactions that are denominated in a currency other than an entity's functional currency and hedging-related activities. During the nine months ended September 30, 2024, we recognized a $46 million gain associated with our share of United Technologies Corporation's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the Internal Revenue Service ("IRS"). In connection with the acquisition of the VCS Business, we recognized an $86 million loss on the mark-to-market valuation of our window forward contracts associated with the cash outflows of the Euro-denominated purchase price. During the nine months ended September 30, 2023, we recognized a $368 million loss on the mark-to-market valuation of our window forward contracts associated with the expected cash outflows of the Euro-denominated purchase price of the VCS Business.

Previous wording

For the six months ended June 30, 2024, Non-operating income (expense), net was $332 million, a 194% increase compared with the same period of 2023. The components were as follows:

Current wording

For the nine months ended September 30, 2024, Non-operating income (expense), net was $291 million, a 131% increase compared with the same period of 2023. The components were as follows:

Previous wording

Non-operating income (expense), net includes the results from activities other than normal business operations such as interest expense, interest income and the non-service components of pension and post-retirement obligations. Interest expense is affected by the amount of debt outstanding and the interest rates on that debt. For the six months ended June 30, 2024, Interest expensewas $365 million, a 121% increase compared with the same period of 2023. In connection with the acquisition of the VCS Business, we entered into several financing arrangements to fund the Euro-denominated purchase price. In addition, we incurred a make-whole premium of $8 million and wrote off $4 million of unamortized deferred financing costs associated with the redemption of our $1.0 billion aggregate principal amount of 5.80% notes due in 2025. During the six months ended June 30, 2023, we amortized $22 million of deferred financing cost in Interest expense, of which $19 million related to our Bridge Loan.

Current wording

Non-operating income (expense), net includes the results from activities other than normal business operations such as interest expense, interest income and the non-service components of pension and post-retirement obligations. Interest expense is affected by the amount of debt outstanding and the interest rates on that debt. For the nine months ended September 30, 2024, Interest expensewas $462 million, a 121% increase compared with the same period of 2023. In connection with the acquisition of the VCS Business, we entered into several financing arrangements to fund the Euro-denominated purchase price. We also redeemed $1.0 billion aggregate principal amount of 5.80% notes due in 2025 and completed tender offers to repurchase approximately $1.0 billion aggregate principal which included $125 million of notes due 2034, $350 million of notes due 2054 and approximately $600 million of notes due 2050. Upon settlement, we incurred a make-whole premium of $8 million in Interest expense, wrote off $11 million of unamortized deferred financing costs in Interest expense and recognized a net gain of $97 million in Interest income. During the nine months ended September 30, 2023, we amortized $34 million of deferred financing cost in Interest expense, of which $30 million related to our Bridge Loan.

Previous wording

We account for income tax expense in accordance with ASC 740, which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate was 31.1% for the six months ended June 30, 2024 compared with 33.4% for the six months ended June 30, 2023. The year-over-year decrease was primarily driven by the absence of thenon-deductible loss of $293 million on the deconsolidation of KFI due to its Chapter 11 filing recognized during the six months ended June 30, 2023. This amount was partially offset by the $1.1 billion tax on the $2.9 billion gain on the sale of Access Solutions and a held-for-sale tax benefit of $62 million related to adjustments to basis differences in certain companies recognized during the six months ended June 30, 2024. In addition, we recognized a tax benefit of$21 million associated with the TMA and UTC's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the U.S. Internal Revenue Service ("IRS"), a net tax benefit of $16 million related to the re-organization and disentanglement of certain Fire & Security industrial businesses in advance of their planned divestitures and a tax charge of $15 million related to a reduction of utilizable foreign tax credits during the six months ended June 30, 2024.

Current wording

We account for income tax expense in accordance with ASC 740, which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate was 21.4% for thenine months ended September 30, 2024, compared with 30.3% for thenine months ended September 30, 2023. The year-over-year decrease was primarily driven by the$368 million loss on the mark-to-market valuation of the Company's window forward contracts associated with the expected cash outflows of the Euro-denominated purchase price of the VCS Business during the nine months ended September 30, 2023. In addition, the Company recognized a tax benefit of$21 million associated with the TMA and UTC's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the U.S. Internal Revenue Service ("IRS") during the nine months ended September 30, 2024.

Previous wording

The organic increase in Net salesof 2% was driven by continued strong results in the segment. Growth in the Americas (up 5%) was primarily driven by our Commercial and Light Commercial businesses which benefited from ongoing customer demand and pricing improvements. In addition, volume increases in residential markets further benefited results. Growth in EMEA (up 2%) was primarily driven by ongoing customer demand and pricing improvements in our Commercial business. Residential markets continue to be impacted by reduced volume compared with the prior year. Results in Asia (down 7%) were impacted by lower demand in the region, primarily in China.

Current wording

The organic increase in Net salesof 6% was driven by continued strong results in the segment. Growth in the Americas (up 9%) was primarily driven by our Commercial and Residential businesses which benefited from strong customer demand and pricing improvements. This was partially offset by lower volumes in our Light Commercial business. Growth in EMEA (up 3%) was primarily driven by ongoing customer demand and pricing improvements in our Commercial business. Residential markets continue to be impacted by reduced volume compared with the prior year. Results in Asia (down 3%) were impacted by lower demand in the region, primarily in China.

Previous wording

On January 2, 2024, we acquired the VCS Business, a leading manufacturer of high efficiency heating and renewable energy systems in Europe. The results of the VCS Business have been included in our Unaudited Condensed Consolidated Financial Statements since the date of acquisition. The transaction added 17% to Net sales during the three months ended June 30, 2024 and is included in Acquisitions and divestitures, net.

Current wording

On January 2, 2024, we acquired the VCS Business, a leading manufacturer of high efficiency heating and renewable energy systems in Europe. The results of the VCS Business have been included in our Unaudited Condensed Consolidated Financial Statements since the date of acquisition. The transaction added 20% to Net sales during the three months ended September 30, 2024, and is included in Acquisitions and divestitures, net.

Previous wording

The operational profit increase of 16% was primarily attributable to ongoing customer demand and pricing improvements in certain end-markets compared with the prior year. In addition, favorable material and logistics costs drove productivity benefits in the segment. These benefits more than offset volume reductions in certain end-markets. Higher earnings from equity method investments further benefited operational profit in the segment.

Current wording

The operational profit increase of 11% was primarily attributable to ongoing customer demand and pricing improvements in certain end-markets compared with the prior year. In addition, favorable material costs drove productivity benefits in the segment. These benefits more than offset volume reductions in certain end-markets and lower earnings from equity method investments. However, the prior year included a $16 million benefit recognized in connection with a favorable tax ruling at a minority owned joint venture.

Previous wording

For the three months ended June 30, 2024, Operating profit in our Refrigeration segment was $113 million, a 1% increase compared with the same period of 2023. The components of the year-over-year change were as follows:

Current wording

For the three months ended September 30, 2024, Net sales in our Refrigeration segment were $938 million, a 1% increase compared to the same period of 2023. The components of the year-over-year change were as follows:

Previous wording

The organic increase in Net Sales of 1% was primarily driven by volume growth and price improvements within certain end-markets compared with the prior year. Transport refrigeration results increased (up 3%) compared to the prior year primarily due to strong container end-markets. In addition, higher volumes in Europe and Asia further benefited results but were more than offset by lower end-market demand in North America. Results for Commercial refrigeration decreased (down 5%) compared with the prior year, primarily driven by lower volumes in Europe as economic conditions and inflationary cost pressures impacted end-market demand. In addition, Asia was impacted by reduced end-market demand in China.

Current wording

The organic increase in Net Sales of 1% was primarily driven by volume growth and price improvements within certain end-markets compared with the prior year. Transport refrigeration results increased (up 4%) compared to the prior year primarily due to strong container end-markets. In addition, higher volumes in Asia further benefited results but were more than offset by lower end-market demand in North America and Europe. Results for Commercial refrigeration decreased (down 3%) compared with the prior year, primarily driven by reduced end-market demand in China. In addition, economic conditions and inflationary cost pressures impacted end-market demand in Europe.

Previous wording

The increase in operational profit of 1% was primarily driven by favorable productivity initiatives and price improvements compared with the prior year. In addition, volume growth in certain end-markets further benefited the segment. These amounts were partially offset by volume reductions in certain other end-markets. Inflationary cost pressures are moderating but continue to impact our operating profit. Amounts reported in Other represent $4 million of divestiture-related costs associated with the announced sale of CCR.

Current wording

The increase in operational profit of 7% was primarily driven by favorable productivity initiatives and price improvements compared with the prior year. In addition, volume growth in certain end-markets further benefited the segment. These amounts were partially offset by volume reductions in certain other end-markets. Inflationary cost pressures are moderating but continue to impact our operating profit. Amounts reported in Other represent $3 million of divestiture-related costs associated with the sale of CCR.

Previous wording

The organic increase in Net salesof 2% was driven by continued strong results in the segment. Growth in the Americas (up 5%) was primarily driven by our Commercial and Light Commercial businesses which benefited from ongoing customer demand and pricing improvements. Moderate growth in our residential business due to price improvements was impacted by lower volumes compared with the prior year. EMEA (down 4%) continues to be impacted by reduced volumes in residential markets. The reduction was partially offset by ongoing customer demand and pricing improvements in our Commercial business. Results in Asia (down 4%) were impacted by lower demand in the region, primarily in China.

Current wording

The organic increase in Net salesof 3% was driven by continued strong results in the segment. Growth in the Americas (up 7%) was primarily driven by our Commercial and Light Commercial businesses which benefited from ongoing customer demand and pricing improvements. Moderate growth in our Residential business was due to higher volumes compared with the prior year. EMEA (down 2%) continues to be impacted by reduced volumes in residential markets. The reduction was partially offset by ongoing customer demand and pricing improvements in our Commercial business. Results in Asia (down 3%) were impacted by lower demand in the region, primarily in China.

Previous wording

On January 2, 2024, we acquired the VCS Business, a leading manufacturer of high efficiency heating and renewable energy systems in Europe. The results of the VCS Business have been included in our Unaudited Condensed Consolidated Financial Statements since the date of acquisition. The transaction added 20% to Net sales during the six months ended June 30, 2024 and is included in Acquisitions and divestitures, net.

Current wording

On January 2, 2024, we acquired the VCS Business, a leading manufacturer of high efficiency heating and renewable energy systems in Europe. The results of the VCS Business have been included in our Unaudited Condensed Consolidated Financial Statements since the date of acquisition. The transaction added 20% to Net sales during the nine months ended September 30, 2024 and is included in Acquisitions and divestitures, net.

Previous wording

The operational profit increase of 21% was primarily attributable to ongoing customer demand and pricing improvements in certain end-markets compared with the prior year. In addition, favorable material and logistics costs drove productivity benefits in the segment. These benefits more than offset volume reductions in certain end-markets. Higher earnings from equity method investments further benefited operational profit in the segment. The increase was partially offset by a $23 million charge associated with the devaluation of U.S. Dollar denominated balances at an HVAC equity investment in Egypt.

Current wording

The operational profit increase of 17% was primarily attributable to ongoing customer demand and pricing improvements in certain end-markets compared with the prior year. In addition, favorable material and logistics costs drove productivity benefits in the segment. These benefits more than offset volume reductions in certain end-markets. Higher earnings from equity method investments further benefited operational profit in the segment. The increase was partially offset by a $23 million charge associated with the devaluation of U.S. Dollar denominated balances at an HVAC equity investment in Egypt.

Previous wording

Organic Net sales decreased 1% compared to the prior year as the segment experienced challenges in certain end-markets during the period. Results for Commercial refrigeration decreased (down 4%) compared with the prior year, primarily driven by lower volumes in Europe as economic conditions and inflationary cost pressures impacted end-market demand. In addition, Asia results were impacted by reduced end-market demand in China. Transport refrigeration sales were flat compared to the prior year as lower end-market demand in North America offset improved results in Europe and Asia. However, the decrease was offset by strong container end-markets.

Current wording

Organic Net sales was flat compared to the prior year as the segment experienced challenges in certain end-markets during the period. Transport refrigeration results increased (up 1%) compared to the prior year primarily due to strong container markets. In addition, higher volumes in Asia and Europe further benefited results but were more than offset by lower end-market demand in North America. Results for Commercial refrigeration decreased (down 4%) compared with the prior year, primarily driven by lower volumes in Europe as economic conditions and inflationary cost pressures impacted end-market demand. In addition, Asia results were impacted by reduced end-market demand in China.

Previous wording

For the six months ended June 30, 2024, Net sales in our Fire & Security segment were $1.8 billion, a 2% decrease compared with the same period of 2023. The components of the year-over-year change were as follows:

Current wording

For the nine months ended September 30, 2024, Operating profit in our Refrigeration segment was $319 million, a 2% decrease compared with the same period of 2023. The components of the year-over-year change were as follows:

Previous wording

The increase in operational profit of 6% was primarily driven by favorable productivity initiatives and price improvements compared with the prior year. In addition, volume growth in certain end-markets further benefited the segment. These amounts were partially offset by volume reductions in certain other end-markets. Inflationary cost pressures are moderating but continue to impact our operating profit. Amounts reported in Other represent $6 million of divestiture-related costs associated with the announced sale of CCR. In addition, the prior year includes a $24 million gain on the sale of a business within Transport refrigeration.

Current wording

The increase in operational profit of 6% was primarily driven by favorable productivity initiatives and price improvements compared with the prior year. In addition, volume growth in certain end-markets further benefited the segment. These amounts were partially offset by volume reductions in certain other end-markets. Inflationary cost pressures are moderating but continue to impact our operating profit. Amounts reported in Other represent $11 million of divestiture-related costs associated with the sale of CCR. In addition, the prior year includes a $24 million gain on the sale of a business within Transport refrigeration.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $2.9 billion, of which approximately 52% was held by our foreign subsidiaries. We manage our worldwide cash requirements by reviewing available funds and the cost effectiveness with which we can access funds held by foreign subsidiaries. On occasion, we are required to maintain cash deposits in connection with contractual obligations related to acquisitions, divestitures or other legal obligations. As of June 30, 2024 and December 31, 2023, the amount of such restricted cash was approximately $3 million and $2 million, respectively.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $2.2 billion, of which approximately 68% was held by our foreign subsidiaries. We manage our worldwide cash requirements by reviewing available funds and the cost effectiveness with which we can access funds held by foreign subsidiaries. On occasion, we are required to maintain cash deposits in connection with contractual obligations related to acquisitions, divestitures or other legal obligations. As of September 30, 2024 and December 31, 2023, the amount of such restricted cash was approximately $14 million and $2 million, respectively.