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 and Carrier Transicold that offer innovative heating, ventilating, air conditioning ("HVAC") and cold chain transportation solutions to enhance the lives we live and the world we share. 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 four segments: Climate Solutions Americas, Climate Solutions Europe, Climate Solutions Asia Pacific, Middle East & Africa and Climate Solutions Transportation.

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, cooling and cold chain solutions to enhance the lives we live and the world we share. 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 four segments: Climate Solutions Americas, Climate Solutions Europe, Climate Solutions Asia Pacific, Middle East & Africa and Climate Solutions Transportation.

Previous wording

Through our performance-driven culture, we anticipate creating long-term shareowner value by investing strategically to strengthen our product position in homes, buildings and across the cold chain in order to drive profitable growth. We believe our business segments are well positioned to benefit from favorable secular trends, including the mega-trends of urbanization, population growth and demographic shifts, food security and safety, digitalization, global connectivity and energy efficiency. Coupled with our industry-leading brands and track record of innovation, we continue to provide market-leading solutions for our customers.

Current wording

Through our performance-driven culture, we anticipate creating long-term shareowner value by investing strategically to strengthen our product position in homes, buildings and across the cold chain in order to drive profitable growth. We believe our business segments are well positioned to benefit from favorable secular trends, including the mega-trends of urbanization, population growth and demographic shifts, food security and safety, electrification, increasing demand for climate control and accelerated digitalization. Coupled with our industry-leading brands and track record of innovation, we continue to provide market-leading solutions for our customers.

Previous wording

Organic sales for the three months ended September 30, 2025, decreased by 4% compared with the same period of 2024. The organic decrease was primarily due to our Climate Solutions Americas segment as reduced end-market demand and distributor destocking in our residential business impacted the segment. In addition, lower end-market demand in both our Climate Solutions Europe and Climate Solutions Asia Pacific, Middle East & Africa segments further impacted overall results. These results were partially offset by improved end-market demand in Climate Solutions Transportation. Refer to "Segment Review" below for a discussion of Net salesby segment.

Current wording

Organic sales for the three months ended March 31, 2026, decreased by 1% compared with the same period of 2025. The organic decrease was primarily due to our Climate Solutions Americas segment as reduced end-market demand in our residential business impacted the segment. In addition, lower end-market demand in both our Climate Solutions Europe and Climate Solutions Asia Pacific, Middle East & Africa segments further impacted overall results. These results were partially offset by improved end-market demand in Climate Solutions Transportation. Refer to "Segment Review" below for a discussion of Net salesby segment.

Previous wording

For the three months ended September 30, 2025, gross margin was $1.4 billion, a 14% decrease compared with the same period of 2024. The components were as follows:

Current wording

For the three months ended March 31, 2026, gross margin was $1.2 billion, a 14% decrease compared with the same period of 2025. The components were as follows:

Previous wording

For the three months ended September 30, 2025, operating expenses, including Equity method investment net earnings, were $910 million, flat compared with the same period of 2024. The components were as follows:

Current wording

For the three months ended March 31, 2026, operating expenses, including Equity method investment net earnings, were $985 million, a 20.7% increase compared with the same period of 2025. The components were as follows:

Previous wording

For the three months ended September 30, 2025, Selling, general and administrative expenses were $803 million, a 1% increase compared with the same period of 2024. The increase primarily relates to foreign currency translation. In addition, employee-related costs associated with our portfolio transformation further impacted results. These costs were partially offset by lower compensation costs and synergies associated with the integration of the VCS Business. The current period also included $13 million of acquisition and divestiture-related costs compared with $15 million during the three months ended September 30, 2024.

Current wording

For the three months ended March 31, 2026, Selling, general and administrative expenses were $861 million, an 18% increase compared with the same period of 2025. The increase primarily relates to an increase in costs associated with announced restructuring initiatives. In addition, higher compensation, commission and employee-related costs further impacted our results. These costs were partially offset by lower consulting and other managed expenses. The current period also included $14 million of acquisition and divestiture-related costs compared with $6 million during the three months ended March 31, 2025.

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 September 30, 2025, Equity method investment net earnings were $60 million, a 9% decrease compared with the same period of 2024. The decrease was primarily driven by lower earnings in joint ventures within Climate Solutions Americas.

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 March 31, 2026, Equity method investment net earnings were $31 million, a 30% decrease compared with the same period of 2025. The decrease was primarily driven by lower earnings in joint ventures within Climate Solutions Americas.

Previous wording

For the three months ended September 30, 2025, Non-operating income (expense), net was $106 million, a 1,614% decrease compared with the same period of 2024. The components were as follows:

Current wording

For the three months ended March 31, 2026, Non-operating income (expense), net was $89 million, a 10% increase compared with the same period of 2025. 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 September 30, 2025, Interest expensewas $116 million, an 11% 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. During thethree months ended September 30, 2024, our debt repayments resulted in an $11 million write off of unamortized deferred financing costs in Interest expense and recognition of a net gain of $97 million in Interest income.

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 March 31, 2026, Interest expensewas $111 million, a 1% decrease compared with the same period of 2025. During the three months ended March 31, 2025, we repaid $1.2 billion, consistent with our capital allocation strategy.

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 15.2% for thenine months ended September 30, 2025, compared with 21.4% for thenine months ended September 30, 2024. The year-over-year decrease was primarily driven by a net tax benefit of$64 million from changes to the German effective rate and a statutory reduction to the German corporate tax rate enacted during the current period, a tax benefit of$49 million from the re-organization of a Japanese subsidiary and a$16 million tax benefit generated by the purchase of investment tax credits from a third-party. 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 thenine months ended September 30, 2024.

Current wording

The Company accounts for income tax expense in accordance with ASC 740, Income Taxes("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 (56.5)% for the three months ended March 31, 2026, compared with 20.3% for the three months ended March 31, 2025. The year-over-year decrease was primarily driven by a net$99 million tax benefit from the partial release of a valuation allowance associated with our operations in a Swiss subsidiary and a favorable settlement of$18 million related toa state income tax audit, both in the current period. 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.

Previous wording

We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). In addition, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. Adjusted operating profit is a non-GAAP measure and defined as consolidated operating profit (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items of a nonoperational nature. This measure is useful to investors because it is how management assesses the operating performance of the business. A reconciliation of the amounts prepared in accordance with GAAP to the corresponding non-GAAP measure appears below and provides additional information as to the items and amounts that have been excluded from the adjusted measure.

Current wording

We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). In addition, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. Adjusted operating profit is a non-GAAP measure and defined as consolidated operating profit (a GAAP measure), excluding restructuring costs, amortization of acquired intangible assets and other significant items of a nonoperational nature. This measure is useful to investors because it is how management assesses the operating performance of the business. A reconciliation of the amounts prepared in accordance with GAAP to the corresponding non-GAAP measure appears below and provides additional information as to the items and amounts that have been excluded from the adjusted measure.

Previous wording

For the nine months ended September 30, 2025, Net sales were $2.5 billion, a 3% 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 March 31, 2026, Net sales were $2.5 billion, a 3% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:

Previous wording

The segment operational profit decrease of 29% was primarily attributable to volume reductions in certain end-markets compared with the prior year. In addition, unfavorable productivity, higher selling, general and administrative expenses and lower earnings from equity method investments further impacted the segment. These amounts were partially offset by favorable mix and improved price.

Current wording

The segment operational profit decrease of 35% was primarily attributable to volume reductions in certain end-markets compared with the prior year. The associated under-absorption, in addition to higher selling, general and administrative expenses and lower earnings from equity method investments, further impacted the segment. These amounts were partially offset by favorable productivity initiatives.

Previous wording

For the three months ended September 30, 2025, Net sales were $1.3 billion, a 4% increase 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 March 31, 2026, Net sales were $1.3 billion, an 11% increase compared with the same period of 2025. The components of the year-over-year change were as follows:

Previous wording

The organic decrease in Net salesof 3% was driven by ongoing challenges in certain end-markets compared with the prior year. Results in our residential and light commercial business decreased (down 5%) 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 growth in our commercial business (up 1%) as a result of end-market demand and improved price.

Current wording

Organic Net sales were flat as a result of ongoing challenges in certain end-markets compared with the prior year. Results in our residential and light commercial business increased (up 2%) as a result of higher volumes across the region partially offset by targeted pricing promotions. Results in our commercial business decreased (down 5%) due to lower volumes across the region.

Previous wording

For the nine months ended September 30, 2025, gross margin was $4.7 billion, a 1% increase compared with the same period of 2024. The components were as follows:

Current wording

For the three months ended March 31, 2026, Net sales were $834 million, a 1% increase compared with the same period of 2025. The components of the year-over-year change were as follows:

Previous wording

The organic decrease in Net salesof 2% was driven by volume reductions within certain end-markets compared with the prior year. Results in China decreased (down 8%) as residential end-markets experienced economic challenges impacting both demand and price. These results were partially offset by growth within commercial end-markets in China. In addition, ongoing end-market demand and improved price in the region's remaining geographies further benefitted the segment.

Current wording

The organic decrease in Net salesof 1% was driven by volume reductions within certain end-markets compared with the prior year. Results in China decreased (down 13%) as end-markets experienced economic challenges impacting both demand and price. These results were predominantly offset by end-market demand and improved price in the region's remaining geographies.

Previous wording

The segment operational profit decrease of 8% was primarily attributable to volume reductions within certain end-markets compared with the prior year. In addition, unfavorable price and product mix further impacted segment results. These reductions were partially offset by favorable productivity initiatives and lower selling, general and administrative expenses.

Current wording

The segment operational profit decrease of 36% was primarily attributable to volume reductions in certain end-markets compared with the prior year. The associated under-absorption, in addition to unfavorable product mix and higher selling, general and administrative expenses, further impacted segment results. These reductions were partially offset by favorable productivity initiatives.

Previous wording

For the three months ended September 30, 2025, Net sales were $745 million, a 20% 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 March 31, 2026, Net sales were $713 million, a 10% increase compared to the same period of 2025. The components of the year-over-year change were as follows:

Previous wording

The organic increase in Net sales of 6% was primarily driven by volume growth within certain end-markets compared with the prior year. Container results increased (up 50%) due to ongoing end-market demand and improved price. These results were partially offset by lower volume in our global truck and trailer business (down 4%) primarily due to reduced end-market demand.

Current wording

The organic increase in Net sales of 5% was primarily driven by volume growth within certain end-markets compared with the prior year. Container results increased (up 38%) due to ongoing end-market demand. These results were partially offset by lower volume in our global truck and trailer business (down 7%) primarily due to reduced end-market demand in all regions.

Previous wording

For the nine months ended September 30, 2025, Net sales were $8.5 billion, a 4% increase 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 March 31, 2026, Segment operating profit was $101 million, a 4% increase compared with the same period of 2025. The components of the year-over-year change were as follows:

Previous wording

The segment operational profit decrease of 12% was primarily driven by lower volumes in certain end-markets compared with the prior year. In addition, costs associated with warranty-related issues further impacted the segment. These amounts were partially offset by favorable productivity initiatives, lower selling, general and administrative costs and higher volumes in certain end-markets. However, the higher volumes led to an unfavorable mix in the segment.

Current wording

The segment operational profit decrease of 1% was primarily driven by lower volumes in certain end-markets compared with the prior year. In addition, costs associated with warranty-related issues and higher selling, general and administrative costs further impacted the segment. These amounts were partially offset by favorable productivity initiatives. In addition, higher volumes in certain end-markets provided additional benefit in the segment but led to unfavorable mix.

Previous wording

As of September 30, 2025, we had cash and cash equivalents of $1.4 billion, of which approximately 94% 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, 2025 and December 31, 2024, the amount of such restricted cash was approximately $3 million and $3 million, respectively.

Current wording

As of March 31, 2026, we had cash and cash equivalents of $1.4 billion, of which approximately 94% 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, 2026, and December 31, 2025, the amount of such restricted cash was approximately $3 million and $2 million, respectively.

Previous wording

We maintain a $2.0 billion USD-denominated facility and a $500 million Euro-denominated facility as part of an 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 September 30, 2025, we had $415 million and zero borrowings outstanding under our commercial paper program and our Revolving Credit Facility, respectively.

Current wording

We maintain a $2.0 billion USD-denominated facility and a $500 million Euro-denominated facility as part of an 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 facility 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, 2026, we had $708 million and zero borrowings outstanding under our commercial paper program and our Revolving Credit Facility, respectively.

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 $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.

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 $406 million per year, reflecting an approximate weighted-average interest rate of 3.65%. 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

We may repurchase our outstanding common stock from time to time subject to market conditions and at our discretion. Repurchases occur in the open market or through one or more other public or private transactions pursuant to plans complying with Rules 10b5-1 and 10b-18 under the Exchange Act. Since the initial authorization in February 2021, our Board of Directors authorized the repurchase of up to $7.1 billion of our outstanding common stock.

Current wording

We may repurchase our outstanding common stock from time to time subject to market conditions and at our discretion. Repurchases occur in the open market or through one or more other public or private transactions pursuant to plans complying with Rules 10b5-1 and 10b-18 under the Exchange Act. Since the initial authorization in February 2021, our Board of Directors authorized the repurchase of up to $12.1 billion of our outstanding common stock.

Previous wording

During the nine months ended September 30, 2025, we repurchased 36.3 million shares of common stock for an aggregate purchase price of $2.4 billion, which included shares repurchased from Viessmann. As a result, we had approximately $811 million remaining under the current authorization at September 30, 2025. In October 2025, our Board of Directors approved a $5 billion increase to our existing share repurchase program.

Current wording

During the three months ended March 31, 2026, we repurchased 5.0 million shares of common stock for an aggregate purchase price of $306 million. As a result, we had approximately $5.0 billion remaining under the current authorization at March 31, 2026.

Previous wording

We paid dividends on common stock during the nine months ended September 30, 2025, totaling $583 million. In October 2025, the Board of Directors declared a dividend of $0.225 per share of common stock payable on November 18, 2025, to shareowners of record at the close of business on October 29, 2025.

Current wording

We paid dividends on common stock during the three months ended March 31, 2026, totaling $201 million. In April 2026, the Board of Directors declared a dividend of $0.24 per share of common stock payable on May 22, 2026, to shareowners of record at the close of business on May 4, 2026.

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 decrease in net cash provided by continuing operating activities was primarily driven by an increase in working capital balances compared with the prior period. Higher accounts receivable and inventory balances were partially offset by higher accounts payable 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 decrease in net cash provided by continuing operating activities was primarily driven by lower net earnings and higher 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 nine months ended September 30, 2025, net cash used in continuing investing activities was $232 million. The primary driver of the outflow related to $261 million of capital expenditures which was partially offset by $120 million of cash inflow related to settlement of derivatives. During the nine months ended September 30, 2024, net cash used in continuing investing activities was $11.3 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 $187 million related to settlement of derivatives and $302 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 three months ended March 31, 2026, net cash used in continuing investing activities was $65 million. The primary driver of the outflow related to $94 million of capital expenditures which was partially offset by $35 million of cash inflow related to settlement of derivatives. 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 of cash inflow related to settlement of derivatives.

Previous wording

Cash flows from continuing financing activities primarily represent inflows and outflows associated with equity or borrowings. During the nine months ended September 30, 2025, net cash used in continuing financing activities was $3.9 billion. The primary driver of the outflow was related to repurchases of our common stock totaling $2.4 billion. In addition, we made long-term debt repayments of $1.2 billion and payments of $583 million in dividends to our common shareowners. During the nine months ended September 30, 2024, net cash used in continuing financing activities was $2.9 billion. The primary driver of the outflow is due to repayment of long-term debt totaling $4.5 billion. In addition, we made dividend payments of $514 million and share repurchases of $431 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.

Current wording

Cash flows from continuing financing activities primarily represent inflows and outflows associated with equity or borrowings. During the three months ended March 31, 2026, net cash used in continuing financing activities was $141 million. The primary driver of the outflow was related to repurchases of our common stock totaling $306 million. In addition, we paid $201 million in dividends to our common shareowners. These outflows were partially offset by short-term borrowings of $371 million. 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.