CARRIER GLOBAL Corp

Previous wording

We are actively monitoring evolving macroeconomic conditions and recent trade policy announcements. Based on our preliminary analysis, we expect to fully mitigate our expected 2025 impact from tariffs announced to date through supply chain and productivity actions as well as approximately $300 million of incremental product pricing actions. To date, tariffs have not had a material impact on our business and we are deploying additional strategies, including cost containment measures, to limit future exposure in this current market environment.

Current wording

We continue to actively monitor evolving macroeconomic conditions and recent trade policy announcements. Based on our updated analysis, we expect to fully mitigate our expected 2025 impact from tariffs announced to date through supply chain and productivity actions as well as approximately $200 million of incremental product pricing actions. To date, tariffs have not had a material impact on our business and we are deploying additional strategies, including cost containment measures, to limit future exposure in this current market environment.

Previous wording

During 2024, we completed several activities designed to simplify our business portfolio, transforming it into a pure-play climate and energy solutions provider. On January 2, 2024, we acquired the climate solutions business (the "VCS Business") of Viessmann Group GmbH & Co. KG (“Viessmann”). The VCS Business, primarily reported in the Climate Solutions Europe segment, is a premier residential and light commercial HVAC provider in Europe that expanded our portfolio to offer a global, comprehensive suite of sustainable and innovative building and cold-chain solutions. In addition, we divested our Commercial and Residential Fire, Access Solutions and Industrial Fire businesses which were historically reported in our Fire & Security segment. The transactions represented a single disposal plan to separately divest multiple businesses over different reporting periods and met the criteria to be presented as discontinued operations. We also divested our Commercial Refrigeration business (“CCR”) during 2024. CCR, which was historically reported in the Climate Solutions Transportation segment (previously named Refrigeration), did not meet the criteria to be presented as discontinued operations.

Current wording

During 2024, we completed several activities designed to simplify our business portfolio, transforming it into a pure-play climate and energy solutions provider. On January 2, 2024, we acquired the climate solutions business (the "VCS Business") of Viessmann Group GmbH & Co. KG (together with its affiliates, “Viessmann”). The VCS Business, primarily reported in the Climate Solutions Europe segment, is a premier residential and light commercial HVAC provider in Europe that expanded our portfolio to offer a global, comprehensive suite of sustainable and innovative building and cold-chain solutions. In addition, we divested our Commercial and Residential Fire, Access Solutions and Industrial Fire businesses which were historically reported in our Fire & Security segment. The transactions represented a single disposal plan to separately divest multiple businesses over different reporting periods and met the criteria to be presented as discontinued operations. We also divested our Commercial Refrigeration business (“CCR”) during 2024. CCR, which was historically reported in the Climate Solutions Transportation segment (previously named Refrigeration), did not meet the criteria to be presented as discontinued operations.

Previous wording

As a result of our portfolio transformation, we revised our reportable segments during the first quarter to better reflect our business strategy, align our management reporting and increase transparency for investors. Under the revised segment structure, we have three new regional HVAC operating segments. Combined with the existing Climate Solutions Transportation operating segment, the four operating segments also serve as our reportable segments. This model is designed to create a simplified, more focused and customer-centric organization across the globe. Each segment reports through separate management teams which regularly review their operating results with our Chief Operating Decision Maker (the "CODM") determined in accordance with applicable accounting guidance. In connection with the revised structure, the CODM changed the measure used to evaluate segment profitability from Operating profit to Segment operating profit. All prior period comparative information has been recast to reflect the revised segment structure.

Current wording

As a result of our portfolio transformation, we revised our reportable segments during the first quarter of 2025 to better reflect our business strategy, align our management reporting and increase transparency for investors. Under the revised segment structure, we have three new regional HVAC operating segments. Combined with the existing Climate Solutions Transportation operating segment, the four operating segments also serve as our reportable segments. This model is designed to create a simplified, more focused and customer-centric organization across the globe. Each segment reports through separate management teams which regularly review their operating results with our Chief Operating Decision Maker (the "CODM") determined in accordance with applicable accounting guidance. In connection with the revised structure, the CODM changed the measure used to evaluate segment profitability from Operating profit to Segment operating profit. All prior period comparative information has been recast to reflect the revised segment structure.

Previous wording

For the three months ended March 31, 2025, gross margin was $1.4 billion, a 4% increase compared with the same period of 2024. The components were as follows:

Current wording

For the three months ended June 30, 2025, gross margin was $1.8 billion, a 12% increase compared with the same period of 2024. The components were as follows:

Previous wording

Gross margin increased by $60 million compared with the three months ended March 31, 2024. As a result, gross margin as a percentage of Net sales increased by 210 basis points compared with the same period of 2024. The prior period included inventory step-up and backlog amortization resulting from the recognition of acquired assets of the VCS Business at fair value which are now fully amortized. These costs had a 200 basis point unfavorable impact on the prior period gross margin as a percentage of Net sales. In addition, ongoing customer demand, pricing improvements and our continued focus on productivity initiatives further benefited gross margin.

Current wording

Gross margin increased by $194 million compared with the three months ended June 30, 2024. As a result, gross margin as a percentage of Net sales increased by 240 basis points compared with the same period of 2024. The prior period included inventory step-up and backlog amortization resulting from the recognition of acquired assets of the VCS Business at fair value which are now fully amortized. These costs had a 190 basis point unfavorable impact on the prior period gross margin as a percentage of Net sales. In addition, ongoing customer demand and our continued focus on productivity initiatives further benefited gross margin.

Previous wording

For the three months ended March 31, 2025, operating expenses, including Equity method investment net earnings, were $816 million, an 18% decrease compared with the same period of 2024. The components were as follows:

Current wording

For the three months ended June 30, 2025, operating expenses, including Equity method investment net earnings, were $866 million, a 2% increase compared with the same period of 2024. The components were as follows:

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 March 31, 2025, Equity method investment net earnings were $44 million, a 42% increase compared with the same period of 2024. The increase was primarily due to a $23 million non-recurring charge in the prior year associated with the devaluation of U.S. Dollar denominated balances at an 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 three months ended June 30, 2025, Equity method investment net earnings were $78 million, a 13% decrease compared with the same period of 2024. The decrease was primarily driven by lower earnings in joint ventures in the Asia Pacific region.

Previous wording

For the three months ended March 31, 2025, Non-operating income (expense), net was $81 million, a 43% decrease compared with the same period of 2024. The components were as follows:

Current wording

For the three months ended June 30, 2025, Non-operating income (expense), net was $91 million, a 42% decrease compared with the same period of 2024. 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 March 31, 2025, Interest expensewas $112 million, a 28% decrease compared with the same period of 2024. Consistent with our capital allocation strategy, we reduced our outstanding debt by approximately $3 billion over the course of 2024 and repaid an additional $1.2 billion during the current period.

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 June 30, 2025, Interest expensewas $115 million, a 34% decrease compared with the same period of 2024. Consistent with our capital allocation strategy, we reduced our outstanding debt by approximately $3 billion over the course of 2024 and repaid an additional $1.2 billion in 2025.

Previous wording

Organic sales for the three months ended March 31, 2025 increased by 2% compared with the same period of 2024. The organic increase was primarily due to our Climate Solutions Americas segment as strong end-market demand continued to drive higher volumes. In addition, higher volumes benefited our Climate Solutions Transportation segment. These results were partially offset by lower end-market demand in both Climate Solutions Europe and Climate Solutions Asia Pacific, Middle East & Africa. Refer to "Segment Review" below for a discussion of Net salesby segment.

Current wording

Organic sales for the six months ended June 30, 2025 increased by 4% compared with the same period of 2024. The organic increase was primarily due to our Climate Solutions Americas segment as strong end-market demand continued to drive higher volumes. In addition, results were flat in our Climate Solutions Transportation segment due to mixed end-market demand. These results were partially offset by lower end-market demand in both Climate Solutions Europe and Climate Solutions Asia Pacific, Middle East & Africa. Refer to "Segment Review" below for a discussion of Net salesby segment.

Previous wording

For the three months ended March 31, 2025, Net sales were $2.6 billion, a 9% increase compared with the same period of 2024. The components of the year-over-year change were as follows:

Current wording

For the six months ended June 30, 2025, gross margin was $3.2 billion, a 9% increase compared with the same period of 2024. The components were as follows:

Previous wording

For the three months ended March 31, 2025, Selling, general and administrative expenses were $729 million, a 10% decrease compared with the same period of 2024. The decrease relates to productivity initiatives associated with our portfolio transformation and synergies associated with the integration of the VCS Business. These benefits were partially offset by higher compensation and other employee-related costs. In addition, the current period also included $6 million of acquisition and divestiture-related costs compared with $48 million during the three months ended March 31, 2024.

Current wording

For the six months ended June 30, 2025, Selling, general and administrative expenses were $1.5 billion, a 3% decrease compared with the same period of 2024. The decrease relates to productivity initiatives associated with our portfolio transformation and synergies associated with the integration of the VCS Business. These benefits were partially offset by higher foreign currency translation, compensation and other employee-related costs. In addition, the current period also included $20 million of acquisition and divestiture-related costs compared with $72 million during the six months ended June 30, 2024.

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. In connection with the acquisition of the VCS Business, we recognized an $86 million loss during the three months ended March 31, 2024, 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. In addition, we recognized a $46 million gain associated with the TMA and UTC's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the Internal Revenue Service ("IRS").

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 six months ended June 30, 2025, we finalized the working capital and other adjustments provided in the stock purchase agreement governing the sale of CCR. In connection with the acquisition of the VCS Business, we recognized an $86 million loss during the six months ended June 30, 2024 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. In addition, we recognized a $46 million gain associated with the TMA and UTC's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the Internal Revenue Service ("IRS").

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 20.3% for the three months ended March 31, 2025, compared with 19.3% for the three months ended March 31, 2024. The year-over-year increase was primarily driven by the absence of a$21 million tax benefit associated with the TMA and UTC's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the IRS recognized during the three months ended March 31, 2024. In addition, the three months ended March 31, 2025 included an$8 million tax benefit generated by the purchase of investment tax credits from a third-party.

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 20.1% for thesix months ended June 30, 2025, compared with 20.6% for thesix months ended June 30, 2024. The year-over-year decrease was primarily driven by a$12 million tax benefit generated by the purchase of investment tax credits from a third-party, a state tax benefit of$6 million related to the utilization of a capital loss, a tax benefit of $6 million from the conclusion of the UTC 2020 IRS tax audit, a reduction in non-deductible interest expense and lower income tax costs associated with U.S. tax on international operations. These amounts were partially offset by the absence of a$21 million tax benefit associated with the TMA and UTC's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the IRS recognized during the six months ended June 30, 2024.

Previous wording

The segment operational profit increase of 10% was primarily attributable to higher earnings from equity method investments compared with the prior year. The increase was driven by the absence of a $23 million non-recurring charge in the prior year associated with the devaluation of U.S. Dollar denominated balances at an equity investment in Egypt. In addition, the segment benefited from favorable productivity initiatives and lower selling, general and administrative expenses. These benefits more than offset volume reductions in certain end-markets.

Current wording

The segment operational profit increase of 24% was primarily attributable to ongoing customer demand in certain end-markets compared with the prior year. In addition, favorable productivity initiatives and pricing improvements further benefited segment results. These benefits more than offset volume reductions in certain end-markets and higher selling, general and administrative expenses.

Previous wording

The organic decrease in Net salesof 6% was driven by volume reductions within certain end-markets compared with the prior year. Results in China decreased (down 11%) as both commercial and residential end-markets experienced economic challenges impacting demand. These results were partially offset by improved end-market demand in the remaining region.

Current wording

The organic decrease in Net salesof 4% was driven by volume reductions within certain end-markets compared with the prior year. Results in China decreased (down 11%) as residential end-markets experienced economic challenges impacting demand. These results were partially offset by growth within commercial end-markets in China and improved end-market demand in the remaining geographies in the region.

Previous wording

For the three months ended March 31, 2025, Net sales were $651 million, a 26% decrease compared to the same period of 2024. The components of the year-over-year change were as follows:

Current wording

For the three months ended June 30, 2025, Net sales were $726 million, a 25% decrease compared to the same period of 2024. The components of the year-over-year change were as follows:

Previous wording

The organic increase in Net sales of 2% was primarily driven by volume growth within certain end-markets compared with the prior year. Container results increased (up 20%) due to improved end-market demand and pricing improvements. These results were partially offset by our transport refrigeration business (down 3%) as lower end-market demand in Europe and North America more than offset improved end-market demand in Asia.

Current wording

The organic decrease in Net sales of 1% was primarily driven by volume reductions within certain end-markets compared with the prior year. Container results increased (up 6%) due to improved end-market demand and pricing improvements. These results were more than offset by our global truck and trailer business (down 4%) as lower end-market demand in Europe and Asia more than offset improved end-market demand in North America.

Previous wording

For the three months ended March 31, 2025, Net sales were $826 million, a 7% decrease compared with the same period of 2024. The components of the year-over-year change were as follows:

Current wording

For the three months ended June 30, 2025, Segment operating profit was $128 million, a 7% decrease compared with the same period of 2024. The components of the year-over-year change were as follows:

Previous wording

The decrease in segment operational profit of 9% was primarily driven by higher costs associated with warranty-related issues. In addition, unfavorable mix further impacted the segment. These amounts were partially offset by higher volumes and pricing improvements compared with the prior year. In addition, the segment benefited from lower selling, general and administrative expenses.

Current wording

The decrease in segment operational profit of 9% was primarily driven by volume reductions with certain end-markets compared with the prior year. In addition, unfavorable mix further impacted the segment. These amounts were partially offset by higher volumes in certain end-markets, favorable productivity initiatives and lower selling, general and administrative expenses.

Previous wording

The organic increase in Net salesof 9% was driven by continued strong results in the segment. Growth in our residential business (up 20%) was primarily driven by strong end-market demand and pricing improvements compared to the prior year. In addition, ongoing customer demand in our commercial business (up 15%) further benefited segment results. These amounts were partially offset by reduced end-market demand in our light commercial business (down 34%).

Current wording

The organic increase in Net salesof 11% was driven by continued strong results in the segment. Growth in our residential business (up 15%) was primarily driven by pricing improvements and favorable mix compared to the prior year. In addition, ongoing customer demand in our commercial business (up 27%) further benefited segment results. These amounts were partially offset by reduced end-market demand in our light commercial business (down 28%).

Previous wording

The segment operational profit increase of 36% was primarily attributable to ongoing customer demand in certain end-markets compared with the prior year. In addition, favorable productivity initiatives and higher earnings from equity method investments further benefited segment results. These benefits more than offset volume reductions in certain end-markets and higher selling, general and administrative expenses.

Current wording

The segment operational profit increase of 28% was primarily attributable to ongoing customer demand in certain end-markets compared with the prior year. In addition, favorable productivity initiatives, pricing improvements and higher earnings from equity method investments further benefited segment results. These benefits more than offset volume reductions in certain end-markets and higher selling, general and administrative expenses.

Previous wording

The organic decrease in Net salesof 7% was driven by ongoing challenges in certain end-markets compared with the prior year. Results in our residential and light commercial business decreased (down 11%) due to lower volumes across the region as economic conditions, inflationary cost pressures and regulatory uncertainty impacted end-market demand. The reduction was partially offset by continued growth in our commercial business (up 5%) as a result of strong end-market demand and pricing improvements.

Current wording

The organic decrease in Net salesof 4% was driven by ongoing challenges in certain end-markets compared with the prior year. Results in our residential and light commercial business decreased (down 6%) due to lower volumes across the region as economic conditions, inflationary cost pressures and regulatory uncertainty impacted end-market demand. These results were partially offset by continued growth in our commercial business (up 3%) as a result of strong end-market demand and pricing improvements.

Previous wording

The segment operational profit decrease of 35% was primarily attributable to volume reductions in certain end-markets compared with the prior year. Volume reductions were partially offset by favorable material costs, business integration synergies associated with the acquisition of the VCS Business and lower selling, general and administrative expenses.

Current wording

The segment operational profit decrease of 22% was primarily attributable to volume reductions in certain end-markets compared with the prior year. These amounts were partially offset by favorable material costs, business integration synergies associated with the acquisition of the VCS Business and lower selling, general and administrative expenses. In addition, ongoing end-market demand in certain markets further benefited the segment.

Previous wording

For the three months ended March 31, 2025, Net sales were $5.2 billion, a 4% decrease compared with the same period of 2024. The components of the year-over-year change were as follows:

Current wording

For the six months ended June 30, 2025, Net sales were $1.7 billion, a 4% decrease compared with the same period of 2024. The components of the year-over-year change were as follows:

Previous wording

For the three months ended March 31, 2025, Net sales were $1.2 billion, a 10% decrease compared with the same period of 2024. The components of the year-over-year change were as follows:

Current wording

For the six months ended June 30, 2025, Segment operating profit was $225 million, a 10% decrease compared with the same period of 2024. The components of the year-over-year change were as follows:

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $1.7 billion, of which approximately 85% 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 March 31, 2025 and December 31, 2024, the amount of such restricted cash was approximately $4 million and $3 million, respectively.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $1.8 billion, of which approximately 82% 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, 2025 and December 31, 2024, the amount of such restricted cash was approximately $3 million and $3 million, respectively.

Previous wording

We maintain a $2.0 billion unsecured, unsubordinated commercial paper program which we can use for general corporate purposes, including the funding of working capital and potential acquisitions. In addition, we maintain a$2.5 billion revolving credit agreement with various banks (the "Revolving Credit Facility")that matures in December 2029 which supports our commercial paper borrowing program and can be used for general corporate purposes. A ratings-based commitment fee is charged on unused commitments. As of March 31, 2025, we had no borrowings outstanding under our commercial paper program or our Revolving Credit Facility.

Current wording

We maintain a $2.0 billion USD-denominated unsecured, unsubordinated commercial paper program which we can use for general corporate purposes, including the funding of working capital and potential acquisitions. In addition, we maintain a$2.5 billion revolving credit agreement with various banks (the "Revolving Credit Facility")that matures in December 2029 which supports our commercial paper borrowing program and can be used for general corporate purposes. A ratings-based commitment fee is charged on unused commitments. As of June 30, 2025, we had no borrowings outstanding under our commercial paper program or our Revolving Credit Facility.

Previous wording

Our short-term obligations primarily consist of current maturities of long-term debt. Our long-term obligations primarily consist of long-term notes with maturity dates ranging between 2027 and 2054. Interest payments related to long-term notes are expected to approximate $398 million per year, reflecting an approximate weighted-average interest rate of 3.63%. Any borrowings from the Revolving Credit Facility are subject to variable interest rates. See Note 5 – Borrowings and Lines of Credit in the Notes to the accompanying Unaudited Condensed Consolidated Financial Statements for additional information regarding the terms of our long-term debt obligations.

Current wording

Our short-term obligations primarily consist of current maturities of long-term debt. Our long-term obligations primarily consist of long-term notes with maturity dates ranging between 2027 and 2054. Interest payments related to long-term notes are expected to approximate $407 million per year, reflecting an approximate weighted-average interest rate of 3.64%. Any borrowings from the Revolving Credit Facility are subject to variable interest rates. See Note 5 – Borrowings and Lines of Credit in the Notes to the accompanying Unaudited Condensed Consolidated Financial Statements for additional information regarding the terms of our long-term debt obligations.

Previous wording

Our credit ratings are periodically reviewed by the major independent debt-rating agencies. As of March 31, 2025, Standards & Poor's Global Inc., Moody’s Investor Service Inc. and Fitch Ratings Inc. have ratings on our debt set forth in the table below:

Current wording

Our credit ratings are periodically reviewed by the major independent debt-rating agencies. As of June 30, 2025, Standards & Poor's Global Inc. and Moody’s Investor Service Inc. have ratings on our debt set forth in the table below:

Previous wording

On June 2, 2024, we completed the divestiture of our Access Solutions business for cash proceeds of $5.0 billion. On July 1, 2024, we completed the divestiture of our Industrial Fire business for cash proceeds of $1.4 billion. On October 1, 2024, we completed the divestiture of CCR for cash proceeds of $679 million, subject to customary working capital and other adjustments. On December 2, 2024, we completed the divestiture of the Commercial and Residential Fire business for cash proceeds of $2.9 billion, subject to customary working capital and other adjustments. Consistent with our capital allocation strategy, the net proceeds were used to fund repayment of debt, invest in organic and inorganic growth initiatives, capital returns to shareowners as well as for general corporate purposes.

Current wording

On June 2, 2024, we completed the divestiture of our Access Solutions business for cash proceeds of $5.0 billion. On July 1, 2024, we completed the divestiture of our Industrial Fire business for cash proceeds of $1.4 billion. On October 1, 2024, we completed the divestiture of CCR for cash proceeds of $679 million. On December 2, 2024, we completed the divestiture of the Commercial and Residential Fire business for cash proceeds of $2.9 billion. Consistent with our capital allocation strategy, the net proceeds were used to fund repayment of debt, invest in organic and inorganic growth initiatives, capital returns to shareowners as well as for general corporate purposes.

Previous wording

During the three months ended March 31, 2025, we repurchased 19.0 million shares of common stock for an aggregate purchase price of $1.3 billion. As a result we had approximately $1.9 billion remaining under the current authorization at March 31, 2025.

Current wording

During the six months ended June 30, 2025, we repurchased 28.8 million shares of common stock for an aggregate purchase price of $1.9 billion, which included shares repurchased from Viessmann. As a result, we had approximately $1.3 billion remaining under the current authorization at June 30, 2025.

Previous wording

We paid dividends on common stock during the three months ended March 31, 2025, totaling $198 million. In April 2025, the Board of Directors declared a dividend of $0.23 per share of common stock payable on May 22, 2025, to shareowners of record at the close of business on May 2, 2025.

Current wording

We paid dividends on common stock during the six months ended June 30, 2025, totaling $390 million. In June 2025, the Board of Directors declared a dividend of $0.23 per share of common stock payable on August 8, 2025, to shareowners of record at the close of business on July 21, 2025.

Previous wording

Cash flows from continuing operating activities primarily represent inflows and outflows associated with our continuing operations. Primary activities include net earnings from continuing operations adjusted for non-cash transactions, working capital changes and changes in other assets and liabilities. The year-over-year increase in net cash provided by continuing operating activities was primarily driven by higher net earnings and a decrease in working capital balances compared with the prior period. Higher accounts payable balances more than offset higher accounts receivable and inventory balances.

Current wording

Cash flows from continuing operating activities primarily represent inflows and outflows associated with our continuing operations. Primary activities include net earnings from continuing operations adjusted for non-cash transactions, working capital changes and changes in other assets and liabilities. The year-over-year increase in net cash provided by continuing operating activities was primarily driven by higher net earnings partially offset by working capital balances compared with the prior period.

Previous wording

Cash flows from continuing investing activities primarily represent inflows and outflows associated with long-term assets. Primary activities include capital expenditures, acquisitions, divestitures and proceeds from the sale of fixed assets. During the three months ended March 31, 2025, net cash used in continuing investing activities was $30 million. The primary driver of the outflow related to $63 million of capital expenditures which was partially offset by $36 million cash inflow related to settlement of derivatives. During the three months ended March 31, 2024, net cash used in continuing investing activities was $11.1 billion. The primary driver of the outflow related to the acquisition of the VCS Business, which totaled $10.8 billion, net of cash acquired. Additional investing outflows include $209 million related to settlement of derivatives and $102 million of capital expenditures.

Current wording

Cash flows from continuing investing activities primarily represent inflows and outflows associated with long-term assets. Primary activities include capital expenditures, acquisitions, divestitures and proceeds from the sale of fixed assets. During the six months ended June 30, 2025, net cash used in continuing investing activities was $113 million. The primary driver of the outflow related to $144 million of capital expenditures which was partially offset by $87 million cash inflow related to settlement of derivatives. During the six months ended June 30, 2024, net cash used in continuing investing activities was $11.1 billion. The primary driver of the outflow related to the acquisition of the VCS Business, which totaled $10.8 billion, net of cash acquired. Additional investing outflows include $185 million related to settlement of derivatives and $210 million of capital expenditures.

Previous wording

Cash flows from continuing financing activities primarily represent inflows and outflows associated with equity or borrowings. During the three months ended March 31, 2025, net cash used in continuing financing activities was $2.7 billion. The primary driver of the outflow was related to repurchases of our common stock totaling $1.3 billion. In addition, we made long-term debt repayments of $1.2 billion and the payment of $198 million in dividends to our common shareowners. During the three months ended March 31, 2024, net cash provided by continuing financing activities was $2.4 billion. The primary driver of the inflow related to proceeds of long-term debt of $2.5 billion used to fund the cash portion of the acquisition of the VCS Business. This amount was partially offset by the outflow related to the payment of $159 million in dividends to our common shareowners.

Current wording

Cash flows from continuing financing activities primarily represent inflows and outflows associated with equity or borrowings. During the six months ended June 30, 2025, net cash used in continuing financing activities was $3.3 billion. The primary driver of the outflow was related to repurchases of our common stock totaling $1.6 billion. In addition, we made long-term debt repayments of $1.2 billion and the payment of $390 million in dividends to our common shareowners. During the six months ended June 30, 2024, net cash used in continuing financing activities was $1.4 billion. The primary driver of the outflow is due to repayment of long-term debt totaling $3.5 billion. In addition, we made dividend payments of $330 million. These outflows were partially offset by the proceeds of long-term debt used to fund the cash portion of the acquisition of the VCS Business.