Carrier Reports Third Quarter 2025 Results

PALM BEACH GARDENS, Fla., Oct. 28, 2025 /PRNewswire/ -- Carrier Global Corporation (NYSE: CARR), global leader in intelligent climate and energy solutions, today reported financial results for the third quarter of 2025.

"Our team drove continued double-digit aftermarket growth and strong performance in Commercial HVAC 1, which grew 30% in the Americas, both of which were more than offset by expected weakness in Residential in the Americas," said Chairman & CEO David Gitlin. "Our previously announced cost reduction actions and continued strength in our data center pipeline and backlog position us well for strong earnings growth in 2026. The $5 billion share repurchase authorization reflects confidence in our strategy and commitment to delivering superior value for our shareholders."

1. Excludes NORESCO

Third Quarter 2025 Results

Total Company

(Unaudited)

Three Months Ended

September 30

(In millions)

2025

2024

Change

Net sales

$ 5,579

$ 5,984

(7) %

Organic sales

(4) %

Operating profit

$ 539

$ 763

(29) %

Operating margin

9.7 %

12.8 %

(310) bps

Adjusted operating profit

$ 823

$ 1,044

(21) %

Adjusted operating margin

14.8 %

17.4 %

(260) bps

Diluted earnings per share:

Continuing operations

$ 0.47

$ 0.62

(24) %

Continuing operations - Adjusted

$ 0.67

$ 0.77

(13) %

Carrier's third-quarter sales of $5.6 billion decreased 7% compared to the prior year. An organic sales decline of 4% and a 4% headwind from net divestitures from the sale of Commercial Refrigeration in Q4 2024 were partially offset by a 1% tailwind from foreign currency translation.

GAAP operating profit of $539 million in the quarter declined 29% from last year reflecting weaker residential end-markets and distributor destocking in the Americas, partially offset by the absence of prior year backlog and inventory step-up amortization.

Adjusted operating profit of $823 million was down 21% primarily due to lower volume in our CSA Residential business. Net earnings from continuing operations were $407 million and adjusted net earnings from continuing operations were $576 million. GAAP EPS from continuing operations was $0.47 and adjusted EPS was $0.67, down 24% and 13% year-over-year, respectively. The declines were primarily driven by lower operating profit, partially offset by a lower tax rate and benefits of a lower share count.

Climate Solutions Americas (CSA)

(Unaudited)

Three Months Ended

September 30

(In millions)

2025

2024

Change

Net sales

$ 2,711

$ 2,961

(8) %

Organic sales

(8) %

Segment operating profit

$ 533

$ 750

(29) %

Segment operating margin

19.7 %

25.3 %

(560) bps

CSA segment sales declined 8%. Organic sales were down 8% with continued strength in Commercial 1 up 30%, more than offset by lower volumes in Residential, down about 30%, and Light Commercial down 4%.

Segment operating margin decreased 560 basis points, reflecting the significant volume decline in the Residential business.

Climate Solutions Europe (CSE)

(Unaudited)

Three Months Ended

September 30

(In millions)

2025

2024

Change

Net sales

$ 1,290

$ 1,246

4 %

Organic sales

(3) %

Segment operating profit

$ 120

$ 129

(7) %

Segment operating margin

9.3 %

10.4 %

(110) bps

CSE segment sales increased 4%. Organic sales were down 3% with Residential and Light Commercial down low-single digits and Commercial down mid-single digits.

Segment operating margin decreased 110 basis points driven by strong productivity, including cost synergies, more than offset by lower organic sales and mix.

1. Excludes NORESCO

Climate Solutions Asia Pacific, Middle East & Africa (CSAME)

(Unaudited)

Three Months Ended

September 30

(In millions)

2025

2024

Change

Net sales

$ 833

$ 840

(1) %

Organic sales

(2) %

Segment operating profit

$ 97

$ 106

(8) %

Segment operating margin

11.6 %

12.6 %

(100) bps

CSAME segment sales declined 1%. Organic sales were down 2% mainly driven by Residential and Light Commercial (RLC) in China, partially offset by continued strong growth in India and the Middle East.

Segment operating margin decreased 100 basis points with strong productivity more than offset by lower sales.

Climate Solutions Transportation (CST)

(Unaudited)

Three Months Ended

September 30

(In millions)

2025

2024

Change

Net sales

$ 745

$ 937

(20) %

Organic sales

6 %

Segment operating profit

$ 115

$ 137

(16) %

Segment operating margin

15.4 %

14.6 %

80 bps

CST sales declined 20% driven by the impact from the divestiture of Commercial Refrigeration. Organic sales increased 6% with 50% growth in Container, partially offset by a decline in Global Truck and Trailer, down mid-single digits.

Segment operating margin increased 80 basis points largely due to the Commercial Refrigeration exit during Q4 2024, partially offset by mix.

Cash Flow

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions)

2025

2024

2025

2024

Net cash flows provided by operating activities

$ 341

$ (269)

$ 1,473

$ 431

Less: Capital expenditures - continuing operations

(117)

(92)

(261)

(302)

Less: Capital expenditures - discontinued operations

—

(5)

—

(10)

Free cash flow

$ 224

$ (366)

$ 1,212

$ 119

Net cash flows generated from operating activities were $341 million and capital expenditures were $117 million, resulting in free cash flow of $224 million.

Full-Year 2025 Guidance**

Current Guidance**

Prior Guidance

Sales

~$22 billion

~$750 million revenue headwind from CCR exit

Organic* ~flat

FX 1%

Acquisitions 0%

Divestitures (3%)

~$23 billion

~$750 million revenue headwind from CCR exit

Organic* up MSD

FX 1%

Acquisitions 0%

Divestitures (3%)

Adjusted Operating

Margin*

15.0% – 15.5%

~(50) bps Y/Y

16.5% – 17.0%

+ ~100 bps Y/Y

Adjusted EPS*

~$2.65

+~4% Y/Y

$3.00 – $3.10

~17-21% Y/Y

Free Cash Flow*

~$2 billion

Includes the expected results of continuing and

discontinued operations

$2.4 – $2.6 billion

Includes the expected results of continuing and

discontinued operations

*Note: When the company provides expectations for organic sales, adjusted operating profit, adjusted operating margin, adjusted EPS and free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures generally is not available without unreasonable effort. See "Use and Definitions of Non-GAAP Financial Measures" below for additional information.

**As of October 28, 2025

Conference Call

Carrier will host a webcast of its earnings conference call today, Tuesday, October 28, at 7:30 a.m. ET. To access the webcast, visit the Events & Presentations section of the Carrier Investor Relations site at ir.carrier.com/news-and-events/events-and-presentations or to listen to the earnings call by phone, participants must pre-register at Carrier Earnings Call Registration. All registrants will receive dial-in information and a PIN allowing access to the live call.

Cautionary Statement

This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide management's current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "confident," "scenario" and other words of similar meaning in connection with a discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, share repurchases including the recent increase in Carrier's share repurchase authorization, tax rates and other measures of financial performance or potential future plans, strategies or transactions of Carrier, cost optimization actions, market conditions including with respect to residential end-markets, data center and otherwise, growth prospects for 2026 and beyond, Carrier's guidance for full-year 2025, Carrier's plans with respect to our indebtedness and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation, those described below and under the section titled "Risk Factors" in our most recent Annual Report on Form 10-K and in subsequent reports that we file with the SEC: the effect of economic conditions in the industries and markets in which Carrier and our businesses operate in the U.S. and globally and any changes therein, including financial market conditions, inflationary cost pressures, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction, the impact of weather conditions, pandemic health issues, natural disasters and the financial condition of our customers and suppliers; challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services; future levels of capital spending and research and development spending; future availability of credit and factors that may affect such availability, including credit market conditions and Carrier's capital structure and credit ratings; the timing and scope of future repurchases of Carrier's common stock, including market conditions and the level of other investing activities and uses of cash; delays and disruption in the delivery of materials and services from suppliers; cost reduction efforts and restructuring costs and savings and other consequences thereof; new business and investment opportunities; the outcome of legal proceedings, investigations and other contingencies; the impact of pension plan assumptions on future cash contributions and earnings; the impact of the negotiation of collective bargaining agreements and labor disputes; the effect of changes in political conditions in the U.S. and other countries in which Carrier and our businesses operate, including the effect of ongoing uncertainty and/or changes in U.S. trade policies, on general market conditions, global trade policies, the imposition of tariffs, and currency exchange rates in the near term and beyond; the effect of changes in tax, environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which we and our businesses operate; the ability of Carrier to retain and hire key personnel; the scope, nature, impact or timing of acquisition and divestiture activity, such as our portfolio transformation transactions, including among other things integration of acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs; a determination by the IRS and other tax authorities that the distribution of Carrier from RTX Corporation (f/k/a United Technologies Corporation or certain related transactions should be treated as taxable transactions; and risks associated with current and future indebtedness, as well as our ability to reduce indebtedness and the timing thereof. The forward-looking statements speak only as of the date of this communication. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings with the SEC.

About Carrier

Carrier Global Corporation, global leader in intelligent climate and energy solutions, is committed to creating innovations that bring comfort, safety and sustainability to life. Through cutting-edge advancements in climate solutions such as temperature control, air quality and transportation, we improve lives, empower critical industries and ensure the safe transport of food, life-saving medicines and more. Since inventing modern air conditioning in 1902, we lead with purpose: enhancing the lives we live and the world we share. We continue to lead because of our world-class, inclusive workforce that puts the customer at the center of everything we do. For more information, visit corporate.carrier.com or follow Carrier on social media at @Carrier.

Carrier. For the World We Share.

CARR-IR

Contact:

Investor Relations

Michael Rednor

561-365-2020

InvestorRelations@Carrier.com

Media Inquiries

Jason Shockley

561-542-0207

Jason.Shockley@Carrier.com

SELECTED FINANCIAL DATA, NON-GAAP MEASURES AND DEFINITIONS

Following are tables that present selected financial data of Carrier Global Corporation ("Carrier").

As a result of Carrier's portfolio transformation, Carrier revised its reportable segments during the first quarter of 2025 to better reflect its business strategy, align its management reporting and increase transparency for investors. In connection with the revised structure, the Chief Operating Decision Maker changed the measure used to evaluate segment profitability from Operating profit to Segment operating profit. It represents operating profit (a measure prepared in accordance with accounting principles generally accepted in the United States ("GAAP")) adjusted to exclude restructuring costs, amortization of acquired intangible assets and other significant items of a nonoperational nature. All prior period comparative information has been recast to reflect the revised segment structure.

Use and Definitions of Non-GAAP Financial Measures

Carrier reports its financial results in accordance with GAAP. We supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides investors with additional useful information, but should not be considered in isolation or as substitutes for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. We encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this Appendix. The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.

Organic sales, adjusted operating profit, adjusted operating margin, adjusted net income, adjusted earnings per share ("EPS"), adjusted effective tax rate and net debt are non-GAAP financial measures and are associated with Carrier's continuing operations unless specifically noted.

Organic sales represents consolidated net sales (a GAAP measure), excluding the impact of foreign currency translation, acquisitions and divestitures completed in the preceding twelve months and other significant items of a nonoperational nature (hereinafter referred to as "other significant items"). Adjusted operating profit represents consolidated operating profit (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items. Adjusted operating margin represents adjusted operating profit as a percentage of consolidated net sales (a GAAP measure). Adjusted net income represents net income attributable to common shareowners (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items. Adjusted EPS represents diluted earnings per share (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items. The adjusted effective tax rate represents the effective tax rate (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items. Net debt represents long-term debt (a GAAP measure) less cash and cash equivalents (a GAAP measure).

Free cash flow is a non-GAAP financial measure that represents net cash flows provided by continuing operating activities (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing Carrier's ability to fund its activities, including the financing of acquisitions, debt service, repurchases of Carrier's common stock and distribution of earnings to shareowners. Orders are contractual commitments with customers to provide specified goods or services for an agreed upon price and may not be subject to penalty if cancelled.

When Carrier provides our expectations for organic sales, adjusted operating profit, adjusted operating margin, adjusted effective tax rate, adjusted EPS and free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures generally is not available without unreasonable effort due to potentially high variability, complexity and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, future restructuring costs, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.

Carrier Global Corporation

Condensed Consolidated Statement of Operations

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions, except per share amounts)

2025

2024

2025

2024

Net sales

Product sales

$ 4,906

$ 5,307

$ 15,035

$ 15,460

Service sales

673

677

1,875

1,878

Total Net sales

5,579

5,984

16,910

17,338

Costs and expenses

Cost of products sold

(3,656)

(3,796)

(10,881)

(11,245)

Cost of services sold

(474)

(511)

(1,366)

(1,456)

Research and development

(151)

(172)

(465)

(524)

Selling, general and administrative

(803)

(799)

(2,345)

(2,394)

Total Costs and expenses

(5,084)

(5,278)

(15,057)

(15,619)

Equity method investment net earnings

182

187

Other income (expense), net

(16)

(9)

(34)

Operating profit

539

763

2,071

1,872

Non-service pension (expense) benefit

(9)

(1)

(8)

(1)

Interest (expense) income, net

(97)

(270)

(290)

Earnings before income taxes

433

770

1,793

1,581

Income tax (expense) benefit

(172)

(272)

(339)

Earnings from continuing operations

434

598

1,521

1,242

Discontinued operations, net of tax

(117)

1,897

Net earnings (loss)

455

481

1,525

3,139

Less: Non-controlling interest in subsidiaries'

Net earnings (loss) attributable to common shareowners

$ 428

$ 447

$ 1,431

$ 3,053

Amounts attributable to common shareowners:

Continuing operations

$ 407

$ 564

$ 1,427

$ 1,156

Discontinued operations

(117)

1,897

Net earnings (loss) attributable to common shareowners

$ 428

$ 447

$ 1,431

$ 3,053

Earnings per share

Basic:

Continuing operations

$ 0.48

$ 0.63

$ 1.67

$ 1.28

Discontinued operations

0.02

(0.13)

—

2.11

Net earnings (loss)

$ 0.50

$ 1.67

$ 3.39

Diluted:

Continuing operations

$ 0.47

$ 0.62

$ 1.64

$ 1.26

Discontinued operations

0.03

(0.13)

0.01

2.08

Net earnings (loss)

$ 0.50

$ 0.49

$ 1.65

$ 3.34

Weighted-average number of shares outstanding

Basic

848.8

901.2

856.8

900.9

Diluted

858.6

915.0

867.7

914.4

Carrier Global Corporation

Condensed Consolidated Balance Sheet

(Unaudited)

(In millions)

September 30, 2025

December 31, 2024

Assets

Cash and cash equivalents

$ 1,423

$ 3,969

Accounts receivable, net

3,129

2,651

Inventories, net

3,004

2,299

Other current assets

1,283

972

Total current assets

8,839

9,891

Future income tax benefits

1,199

1,131

Fixed assets, net

3,214

2,999

Operating lease right-of-use assets

558

554

Intangible assets, net

6,560

6,432

Goodwill

15,680

14,601

Pension and post-retirement assets

Equity method investments

1,381

1,194

Other assets

596

558

Total Assets

$ 38,077

$ 37,403

Liabilities and Equity

Accounts payable

$ 2,959

$ 2,458

Accrued liabilities

4,208

4,098

Short-term borrowings and current portion of long-term debt

580

1,336

Total current liabilities

7,747

7,892

Long-term debt

11,336

11,026

Future pension and post-retirement obligations

220

214

Future income tax obligations

1,943

2,015

Operating lease liabilities

424

432

Other long-term liabilities

1,568

1,429

Total Liabilities

23,238

23,008

Equity

Common stock

Treasury stock

(6,311)

(3,915)

Additional paid-in capital

8,646

8,610

Retained earnings

12,530

11,483

Accumulated other comprehensive loss

(365)

(2,106)

Non-controlling interest

330

314

Total Equity

14,839

14,395

Total Liabilities and Equity

$ 38,077

$ 37,403

Carrier Global Corporation

Condensed Consolidated Statement of Cash Flows

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions)

2025

2024

2025

2024

Operating Activities

Net earnings (loss)

$ 455

$ 481

$ 1,525

$ 3,139

Discontinued operations, net of tax

(21)

117

(4)

(1,897)

Adjustments for non-cash items, net:

Depreciation and amortization

325

312

945

914

Deferred income tax provision

(158)

(65)

(316)

(296)

Stock-based compensation costs

Equity method investment net earnings

(60)

(66)

(182)

(187)

(Gain) loss on extinguishment of debt

—

(88)

—

(88)

(Gain) loss on sale of investments

—

(2)

(17)

(2)

Changes in operating assets and liabilities

Accounts receivable, net

212

(490)

(135)

Inventories, net

(116)

(528)

Accounts payable and accrued liabilities

(208)

(260)

170

(258)

Distributions from equity method investments

105

Other operating activities, net

(140)

(45)

(187)

(159)

Net cash flows provided by (used in) continuing operating activities

324

599

1,076

1,208

Net cash flows provided by (used in) discontinued operating activities

(868)

397

(777)

Net cash flows provided by (used in) operating activities

341

(269)

1,473

431

Investing Activities

Capital expenditures

(117)

(92)

(261)

(302)

Investment in businesses, net of cash acquired

(31)

(94)

(92)

(10,873)

Dispositions of businesses

—

Settlement of derivative contracts, net

(2)

120

(187)

Other investing activities, net

(4)

(7)

Net cash flows provided by (used in) continuing investing activities

(119)

(184)

(232)

(11,331)

Net cash flows provided by (used in) discontinued investing activities

—

1,343

6,217

Net cash flows provided by (used in) investing activities

(119)

1,159

(197)

(5,114)

Financing Activities

Increase (decrease) in short-term borrowings, net

444

387

Issuance of long-term debt

2,586

Repayment of long-term debt

(1)

(988)

(1,209)

(4,530)

Repurchases of common stock

(785)

(431)

(2,413)

(431)

Dividends paid on common stock

(193)

(184)

(583)

(514)

Dividends paid to non-controlling interest

(72)

(5)

(81)

(72)

Other financing activities, net

(1)

(18)

(15)

Net cash flows provided by (used in) continuing financing activities

(591)

(1,548)

(3,885)

(2,939)

Net cash flows provided by (used in) discontinued financing activities

—

(11)

Net cash flows provided by (used in) financing activities

(591)

(1,544)

(3,885)

(2,950)

Effect of foreign exchange rate changes on cash and cash equivalents

(5)

(18)

Net increase (decrease) in cash and cash equivalents and

restricted cash, including cash classified in current assets held for sale

(374)

(590)

(2,546)

(7,651)

Less: Change in cash balances classified as assets held for sale

—

(70)

—

(36)

Net increase (decrease) in cash and cash equivalents and restricted cash

(374)

(520)

(2,546)

(7,615)

Cash, cash equivalents and restricted cash, beginning of period

1,800

2,758

3,972

9,853

Cash, cash equivalents and restricted cash, end of period

1,426

2,238

1,426

2,238

Less: restricted cash

Cash and cash equivalents, end of period

$ 1,423

$ 2,224

$ 1,423

$ 2,224

Carrier Global Corporation

Segment Summary

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions)

2025

2024

2025

2024

Segment net sales

Climate Solutions Americas

$ 2,711

$ 2,961

$ 8,535

$ 8,186

Climate Solutions Europe

1,290

1,246

3,712

3,732

Climate Solutions Asia Pacific, Middle East & Africa

833

840

2,541

2,626

Climate Solutions Transportation

745

937

2,122

2,794

Segment net sales

$ 5,579

$ 5,984

$ 16,910

$ 17,338

Segment operating profit

Climate Solutions Americas

$ 533

$ 750

$ 1,982

$ 1,888

Climate Solutions Europe

120

129

324

389

Climate Solutions Asia Pacific, Middle East & Africa

106

353

371

Climate Solutions Transportation

115

137

340

388

Segment operating profit

$ 865

$ 1,122

$ 2,999

$ 3,036

Segment operating margin

Climate Solutions Americas

19.7 %

25.3 %

23.2 %

23.1 %

Climate Solutions Europe

9.3 %

10.4 %

8.7 %

10.4 %

Climate Solutions Asia Pacific, Middle East & Africa

11.6 %

12.6 %

13.9 %

14.1 %

Climate Solutions Transportation

15.4 %

14.6 %

16.0 %

13.9 %

Components of Changes in Net Sales

Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024

(Unaudited)

Factors Contributing to Total % change in Net Sales

Organic

Translation

Acquisitions /

Divestitures, net

Other

Total

Climate Solutions Americas

(8) %

— %

(8) %

Climate Solutions Europe

(3) %

7 %

— %

4 %

Climate Solutions Asia Pacific, Middle East & Africa

(2) %

1 %

— %

(1) %

Climate Solutions Transportation

6 %

2 %

(28) %

— %

(20) %

Consolidated

(4) %

1 %

(4) %

— %

(7) %

Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024

(Unaudited)

Factors Contributing to Total % change in Net Sales

Organic

Translation

Acquisitions /

Divestitures, net

Other

Total

Climate Solutions Americas

4 %

— %

4 %

Climate Solutions Europe

(3) %

2 %

— %

(1) %

Climate Solutions Asia Pacific, Middle East & Africa

(4) %

1 %

— %

(3) %

Climate Solutions Transportation

2 %

1 %

(27) %

— %

(24) %

Consolidated

1 %

(4) %

— %

(2) %

Carrier Global Corporation

Reconciliations

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions)

2025

2024

2025

2024

Reconciliation to Earnings before income taxes

Segment operating profit

$ 865

$ 1,122

$ 2,999

$ 3,036

Corporate and other

(42)

(78)

(162)

(172)

Restructuring costs

(50)

(60)

(105)

(97)

Amortization of acquired intangibles

(221)

(175)

(636)

(517)

Acquisition step-up amortization

—

(31)

—

(251)

Acquisition/divestiture-related costs

(13)

(15)

(32)

(87)

CCR gain

—

Viessmann-related hedges

—

(86)

Gain on liability adjustment

—

Non-service pension (expense) benefit

(9)

(1)

(8)

(1)

Interest (expense) income, net

(97)

(270)

(290)

Earnings before income taxes

$ 433

$ 770

$ 1,793

$ 1,581

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions)

2025

2024

2025

2024

Reconciliation of Segment operating profit to Adjusted operating profit

Climate Solutions Americas

$ 533

$ 750

$ 1,982

$ 1,888

Climate Solutions Europe

120

129

324

389

Climate Solutions Asia Pacific, Middle East & Africa

106

353

371

Climate Solutions Transportation

115

137

340

388

Segment operating profit

$ 865

$ 1,122

$ 2,999

$ 3,036

Corporate and other

(42)

(78)

(162)

(172)

Adjusted operating profit

$ 823

$ 1,044

$ 2,837

$ 2,864

Carrier Global Corporation

Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results

Net Income, Earnings Per Share and Effective Tax Rate

(Unaudited)

Three Months Ended September 30, 2025

Nine Months Ended September 30, 2025

(In millions, except per share amounts)

Reported

Adjustments

Adjusted

Reported

Adjustments

Adjusted

Net sales

$ 5,579

$ —

$ 5,579

$ 16,910

$ —

$ 16,910

Operating profit

$ 539

284

$ 823

$ 2,071

766

$ 2,837

Operating margin

9.7 %

14.8 %

12.2 %

16.8 %

Earnings before income taxes

$ 433

295

a, b

$ 728

$ 1,793

777

a, b

$ 2,570

Income tax (expense) benefit

$ 1

(126)

$ (125)

$ (272)

(259)

$ (531)

Effective tax rate

(0.2) %

17.2 %

15.2 %

20.7 %

Earnings from continuing operations

attributable to common shareowners

$ 407

$ 169

$ 576

$ 1,427

$ 518

$ 1,945

Summary of Adjustments:

Restructuring costs

$ 50

$ 105

Amortization of acquired intangibles

221

636

Acquisition/divestiture-related costs

CCR gain

—

(7)

Defined benefit pension settlement

Total adjustments

$ 295

$ 777

Tax effect on adjustments above

$ (77)

$ (204)

Tax specific adjustments

(49)

(55)

Total tax adjustments

$ (126)

$ (259)

Diluted shares outstanding

858.6

867.7

Diluted earnings per share:

Continuing operations

$ 0.47

$ 0.67

$ 1.64

$ 2.24

Carrier Global Corporation

Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results

Net Income, Earnings Per Share and Effective Tax Rate

(Unaudited)

Three Months Ended September 30, 2024

Nine Months Ended September 30, 2024

(In millions, except per share amounts)

Reported

Adjustments

Adjusted

Reported

Adjustments

Adjusted

Net sales

$ 5,984

$ —

$ 5,984

$ 17,338

$ —

$ 17,338

Operating profit

$ 763

281

$ 1,044

$ 1,872

992

$ 2,864

Operating margin

12.8 %

17.4 %

10.8 %

16.5 %

Earnings before income taxes

$ 770

195

a, b

$ 965

$ 1,581

918

a, b

$ 2,499

Income tax (expense) benefit

$ (172)

(54)

$ (226)

$ (339)

(227)

$ (566)

Effective tax rate

22.2 %

23.3 %

21.4 %

22.6 %

Earnings from continuing operations

attributable to common shareowners

$ 564

$ 141

$ 705

$ 1,156

$ 691

$ 1,847

Summary of Adjustments:

Restructuring costs

Amortization of acquired intangibles

$ 175

$ 517

Acquisition/divestiture-related costs

Acquisition step-up amortization (1)

251

Viessmann-related hedges

—

Gain on liability adjustment (2)

—

(46)

Debt extinguishment (gain)

(97)

Debt prepayment costs

$ 11

$ 23

Total adjustments

$ 195

$ 918

Tax effect on adjustments above

$ (54)

$ (227)

Total tax adjustments

$ (54)

$ (227)

Diluted shares outstanding

915.0

914.4

Diluted earnings per share:

Continuing operations

$ 0.62

$ 0.77

$ 1.26

$ 2.02

(1) Amortization of the step-up to fair value of acquired inventory and backlog.

(2) Gain associated with an adjustment to our tax-related liability owed to UTC.

Free Cash Flow Reconciliation

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions)

2025

2024

2025

2024

Net cash flows provided by operating activities

$ 341

$ (269)

$ 1,473

$ 431

Less: Capital expenditures - continuing operations

(117)

(92)

(261)

(302)

Less: Capital expenditures - discontinued operations

—

(5)

—

(10)

Free cash flow

$ 224

$ (366)

$ 1,212

$ 119

Net Debt Reconciliation

(Unaudited)

(In millions)

September 30, 2025

December 31, 2024

Long-term debt

$ 11,336

$ 11,026

Short-term borrowings and current portion of long-term debt

580

1,336

Less: Cash and cash equivalents

1,423

3,969

Net debt

$ 10,493

$ 8,393

SOURCE Carrier Global Corporation