Carrier Global posts Q3 loss with $3.1B impairment
Carrier's 2026 outlook calls for $23.8 billion to $24.0 billion in sales and adjusted EPS of $2.85 to $2.90.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Carrier Global Corporation (CARR) reported third-quarter 2026 net sales of $6.263 billion, up 12% year over year, with organic sales up 15%. Adjusted operating profit increased 33% to $1.091 billion, adjusted diluted EPS rose 30% to $0.87 from $0.67, and free cash flow was $674 million versus $224 million a year earlier.
GAAP results included a $3.1 billion non-cash goodwill impairment for the Climate Solutions Europe reporting unit. Carrier reported a $2.273 billion operating loss and diluted loss per share of $3.16, compared with $539 million of operating profit and $0.47 diluted EPS a year earlier. Operating cash flow was $813 million, compared with $341 million.
Carrier reported a record backlog of more than $8.5 billion, up 60% year over year, and signed long-term agreements valued at multiple billions of dollars with minimum volume commitments; those minimums are additive to backlog. For 2026, it expects sales of $23.8 billion to $24.0 billion, organic growth of approximately 10%, adjusted EPS of $2.85 to $2.90, and free cash flow of approximately $2 billion.
4 points · 0 major1 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter sales rose 12% to $6.263 billion.
- Moderate pointAdjusted operating profit rose 33% to $1.091 billion.
- Moderate pointAdjusted diluted EPS increased 30% to $0.87 in Q3 2026.
- Moderate pointThird-quarter free cash flow was $674 million, versus $224 million in 2025.
Negative
- Major pointA $3.1 billion goodwill impairment accompanied a $2.273 billion GAAP operating loss. 6.7% of market cap
Insights
Analyzing...
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net sales: $6.263 billion
Organic sales growth: 15%
Adjusted operating profit: $1.091 billion
+5 more
8 metrics
Net sales
$6.263 billion
Third quarter 2026; up 12% year over year
Organic sales growth
15%
Third quarter 2026
Adjusted operating profit
$1.091 billion
Third quarter 2026; up 33% year over year
Adjusted diluted EPS
$0.87 per share
Third quarter 2026; up 30% from $0.67
GAAP diluted EPS from continuing operations
($3.16) per share
Third quarter 2026; compared with $0.47 in third quarter 2025
Goodwill impairment
$3.1 billion
Non-cash charge related to the Climate Solutions Europe reporting unit in Q3 2026
Free cash flow
$674 million
Third quarter 2026; compared with $224 million in third quarter 2025
Backlog
More than $8.5 billion
Record backlog; up 60% versus the prior year
Key Terms
organic sales, adjusted operating profit, free cash flow, goodwill impairment, +1 more
5 terms
organic sales financial
"Organic sales increased 15%"
Organic sales are the change in a company’s revenue that comes from its existing business operations, excluding effects of acquisitions, divestitures, and currency swings. Think of it like measuring how much a garden grows from the plants you already tended, rather than adding new pots; investors use organic sales to judge whether demand and core business performance are genuinely improving or if growth is driven by one‑time deals or accounting shifts.
adjusted operating profit financial
"Adjusted operating profit of $1,091 million"
Adjusted operating profit is a measure of a company’s routine profit from its core business activities after removing one‑time events, unusual costs or non‑cash items so the result reflects ongoing operations. Think of it like judging a car’s normal fuel efficiency after ignoring a single visit to the body shop; investors use it to compare underlying profitability across periods or peers and to judge whether the business is sustainably earning money, but the specific exclusions can be subjective.
free cash flow financial
"Free cash flow of $674 million"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
goodwill impairment financial
"non-cash goodwill impairment charge of $3.1 billion"
Goodwill impairment occurs when a company’s valued reputation or brand strength, known as goodwill, is found to be worth less than previously recorded on its financial statements. This usually happens when the company's performance declines or market conditions change, signaling that the expected benefits from acquisitions or brand value are no longer as strong. It matters to investors because it can indicate that a company's assets are less valuable than initially thought, potentially affecting its overall financial health.
minimum volume commitments financial
"long-term agreements valued at multiple billions of dollars with minimum volume commitments"
Minimum volume commitments are contractual promises that one party will buy, sell or trade at least a set amount of a product, security or service over a defined period. For investors, these commitments matter because they create predictable baseline revenue or guaranteed demand — like a subscription minimum — but also can create liability or distort trading and liquidity if parties must meet the quota even when market conditions change.
Earnings Snapshot
Net sales: $6.263 billion · Guidance included
Third quarter 2026
Net sales
$6.263 billion
Up 12% year over year
Adjusted operating profit
$1.091 billion
Up 33% year over year
Adjusted diluted EPS
$0.87 per share
Up 30% from $0.67
GAAP diluted EPS from continuing operations
($3.16) per share
Compared with $0.47 in third quarter 2025
Free cash flow
$674 million
Compared with $224 million in third quarter 2025
Guidance
2026 sales of $23.8 billion to $24.0 billion; organic growth of approximately 10%; adjusted operating profit of ~$3.5 billion; adjusted EPS of $2.85 to $2.90; free cash flow of ~$2 billion.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were CARR's third-quarter 2026 sales and adjusted EPS?
Carrier Global Corporation (CARR) reported net sales of $6.263 billion, up 12% year over year, and organic sales increased 15%. Adjusted diluted EPS was $0.87, up 30% from $0.67.
Why did CARR report a GAAP loss in the third quarter of 2026?
Carrier reported a third-quarter diluted loss per share of $3.16 and a $2.273 billion operating loss. The quarter included a $3.1 billion non-cash goodwill impairment charge related to its Climate Solutions Europe reporting unit; diluted EPS was $0.47 in 2025.
What did CARR report about orders and backlog?
Carrier reported a record backlog of more than $8.5 billion, up 60% versus the prior year. Total-company orders were up approximately 35%, excluding NORESCO, and data center orders were up approximately 300%. The company also signed long-term agreements valued at multiple billions of dollars with minimum volume commitments that are additive to backlog.
What is CARR's 2026 financial outlook?
Carrier expects sales of $23.8 billion to $24.0 billion, organic growth of approximately 10%, adjusted operating profit of approximately $3.5 billion, adjusted EPS of $2.85 to $2.90, and free cash flow of approximately $2 billion.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2026
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Section 2—Financial Information
Item 2.02. Results of Operations and Financial Condition.
On October 29, 2026, Carrier Global Corporation (the “Company”) issued a press release announcing its third quarter 2026 results.
The press release issued October 29, 2026, is furnished herewith as Exhibit No. 99 to this Report, and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be deemed to be incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Section 9—Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit Number | Exhibit Description | ||||
| 99 | Press release, dated October 29, 2026, issued by Carrier Global Corporation (Earnings). | ||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CARRIER GLOBAL CORPORATION | ||||||||
(Registrant) | ||||||||
Date: October 29, 2026 | By: | /S/ PATRICK GORIS | ||||||
Patrick Goris | ||||||||
| Executive Vice President, Chief Financial & Strategy Officer | ||||||||
Exhibit 99
Carrier Reports Third Quarter 2026 Results
Signed LTAs valued at multiple billions of dollars with minimum volume commitments
•Total company orders1 up ~35%; Commercial HVAC1 up ~60%; data centers up ~300%
•Record >$8.5B backlog; LTA minimums additive to backlog
•Net sales up 12%; organic sales up 15%
•GAAP EPS2 of ($3.16); adjusted EPS2 of $0.87
•Net cash flows from operating activities of $813 million and free cash flow of $674 million
•Returned ~$600 million to shareowners through dividends and repurchases
PALM BEACH GARDENS, Fla., Oct. 29, 2026 – Carrier Global Corporation (NYSE: CARR), global leader in intelligent climate and energy solutions, today reported financial results for the third quarter of 2026.
“We delivered strong third quarter performance, with orders, sales and adjusted EPS all up between 15% and 35%, with very strong free cash flow,” said Chairman & CEO David Gitlin. "Organic orders were up ~35%, with data center orders up ~300%, resulting in over $8.5 billion of backlog, up 60% versus last year, reflecting continued strong demand for our differentiated solutions. We expect to deliver double-digit organic sales and adjusted EPS growth in 2026, while record backlog levels give us confidence to sustain this momentum into 2027 and beyond."
1 Excludes NORESCO
2 GAAP results include a goodwill impairment charge and IEEPA refunds; Adjusted EPS includes a ~$0.10 benefit from IEEPA refunds net of ~($0.02) NCI impact
1
Third Quarter 2026 Results
Total Company
| (Unaudited) | |||||||||||
| Three Months Ended September 30 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 6,263 | $ | 5,579 | 12 | % | |||||
| Organic sales | 15 | % | |||||||||
| Operating profit (loss) | $ | (2,273) | $ | 539 | n.m. | ||||||
| Operating margin | (36.3) | % | 9.7 | % | n.m. | ||||||
| Adjusted operating profit | $ | 1,091 | $ | 823 | 33 | % | |||||
| Adjusted operating margin | 17.4 | % | 14.8 | % | 260 bps | ||||||
| Diluted earnings (loss) per share: | |||||||||||
| Continuing operations | $ | (3.16) | $ | 0.47 | n.m. | ||||||
| Continuing operations - Adjusted | $ | 0.87 | $ | 0.67 | 30 | % | |||||
n.m. = not meaningful
Carrier’s third quarter sales of $6.3 billion increased 12% compared to the prior year. Organic sales increased 15%, and divestitures were a headwind of 3%.
GAAP operating loss of ($2,273) million in the quarter decreased from last year, with growth in all segments offset by a goodwill impairment charge.
Adjusted operating profit of $1,091 million in the quarter increased 33% with growth in all segments.
Adjusted operating margin of 17.4% was up 260 basis points from last year, predominantly due to favorable volume and price partially offset by the impact of increased input costs and tariffs.
The company recorded approximately $130 million of operating profit benefit from IEEPA refunds.
Net loss from continuing operations was ($2,593) million and adjusted net earnings from continuing operations were $713 million. GAAP EPS from continuing operations was ($3.16) and adjusted EPS was $0.87. The increase in adjusted EPS was primarily driven by higher operating profit and the benefits of a lower share count, partially offset by a higher effective tax rate and higher non-controlling interest related to the IEEPA refunds.
2
Climate Solutions Americas (CSA)
| (Unaudited) | |||||||||||
| Three Months Ended September 30 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 3,354 | $ | 2,711 | 24 | % | |||||
| Organic sales | 25 | % | |||||||||
| Segment operating profit | $ | 745 | $ | 533 | 40 | % | |||||
| Segment operating margin | 22.2 | % | 19.7 | % | 250 bps | ||||||
CSA segment sales grew 24%. Organic sales were up 25%, driven by strong Residential and Commercial1 performance, up over 30% and 25%, respectively.
Segment operating margin expanded 250 basis points from the benefit of ~$120 million of IEEPA refunds and organic growth, partially offset by increased input costs and tariffs.
Climate Solutions Europe (CSE)
| (Unaudited) | |||||||||||
| Three Months Ended September 30 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 1,335 | $ | 1,290 | 3 | % | |||||
| Organic sales | 12 | % | |||||||||
| Segment operating profit | $ | 168 | $ | 120 | 40 | % | |||||
| Segment operating margin | 12.6 | % | 9.3 | % | 330 bps | ||||||
CSE segment sales increased 3% with strong organic sales growth of 12% offset by a 7% net headwind from divestitures and a 2% headwind from currency. Residential and Light Commercial (RLC) sales increased low-teens and Commercial grew high-single digits. Strong demand in residential heat pumps and air conditioning continued, with sales up ~35% each, more than offsetting high-single digit declines in boilers.
1 Excludes NORESCO
3
Segment operating margin increased 330 basis points with strong organic revenue growth and a ~100 basis point net benefit from the correction of a prior period item offset by increases in inventory-related reserves.
Climate Solutions Asia Pacific, Middle East & Africa (CSAME)
| (Unaudited) | |||||||||||
| Three Months Ended September 30 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 848 | $ | 833 | 2 | % | |||||
| Organic sales | 3 | % | |||||||||
| Segment operating profit | $ | 103 | $ | 97 | 6 | % | |||||
| Segment operating margin | 12.1 | % | 11.6 | % | 50 bps | ||||||
CSAME segment sales increased 2%. Organic sales were up 3% driven by strong growth in Commercial, up 10%, partially offset by a mid-single digit decline in RLC.
Segment operating margin increased 50 basis points.
Climate Solutions Transportation (CST)
| (Unaudited) | |||||||||||
| Three Months Ended September 30 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 726 | $ | 745 | (3) | % | |||||
| Organic sales | (3) | % | |||||||||
| Segment operating profit | $ | 117 | $ | 115 | 2 | % | |||||
| Segment operating margin | 16.1 | % | 15.4 | % | 70 bps | ||||||
CST sales decreased 3% as continued growth in Container was more than offset by Truck and Trailer.
Segment operating margin increased 70 basis points driven by the benefits from IEEPA refunds partially offset by lower volumes.
4
Cash Flow
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net cash flows provided by operating activities | $ | 813 | $ | 341 | $ | 1,819 | $ | 1,473 | ||||||||||||||||||
| Less: Capital expenditures | (139) | (117) | (350) | (261) | ||||||||||||||||||||||
| Free cash flow | $ | 674 | $ | 224 | $ | 1,469 | $ | 1,212 | ||||||||||||||||||
Net cash flows generated from operating activities were $813 million, and capital expenditures were $139 million, resulting in free cash flow of $674 million.
Goodwill
During Q3, the company recorded a non-cash goodwill impairment charge of $3.1 billion related to its Climate Solutions Europe reporting unit.
5
Full-Year 2026 Guidance**
Supported by a differentiated product portfolio, record backlog, minimum volume commitments under long-term agreements, and continued recovery in RLC end markets, Carrier now expects sales of nearly $24 billion, with organic growth of approximately 10%. The company remains vigilant in navigating industry-wide macro pressures, including tariffs and increasing input costs, and expects to return to shareowners approximately $2.3 billion through dividends and share repurchases.
| Current Guidance** | Prior Guidance | |||||||
Sales | $23.8 to $24.0 billion Organic* up ~10% FX 1% Net, Acquisitions / Divestitures (2%) | ~$23 billion Organic* up ~M-HSD FX 1% Net, Acquisitions / Divestitures (2%) | ||||||
Adjusted Operating Profit* | ~$3.5 billion | ~$3.5 billion | ||||||
| Adjusted EPS* | $2.85 to $2.90 | ~$2.90 | ||||||
Free Cash Flow* | ~$2 billion | ~$2 billion | ||||||
Riello divestiture completed on July 1. NORESCO divestiture completed on August 3.
~$225 million and ~$125 million year-over-year revenue headwind from Riello and NORESCO exits, respectively.
*Note: When the company provides expectations for organic sales, adjusted operating profit, 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 29, 2026
Conference Call
Carrier will host a webcast of its earnings conference call today, Thursday, October 29, 2026, at 7:30 a.m. ET. To access the webcast, visit the Events & Presentations section of the Carrier Investor Relations site. For alternative dial-in information, please contact Carrier investor relations at InvestorRelations@Carrier.com.
6
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, expectations relating to our sales backlog, commitments by us and our customers under long-term agreements, share repurchases, tax rates and other measures of financial performance or potential future plans, strategies or transactions of Carrier, market conditions including with respect to residential end-markets, data center and otherwise, growth prospects for 2026 and beyond, expectations concerning the mitigation and net impact of tariffs during 2026, Carrier's guidance for full-year 2026, 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 acquisition of the VCS
7
business and 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 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
Kristina Pantelides
561-236-4241
Kristina.Pantelides@Carrier.com
8
SELECTED FINANCIAL DATA, NON-GAAP MEASURES AND DEFINITIONS
Following are tables that present selected financial data of Carrier Global Corporation (“Carrier”). Also included are reconciliations of non-GAAP measures to their most comparable GAAP measures.
Use and Definitions of Non-GAAP Financial Measures
Carrier reports its financial results in accordance with accounting principles generally accepted in the United States ("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 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 intangible assets and other significant items. Adjusted operating margin represents adjusted operating profit as a percentage of consolidated net sales (a GAAP measure). Adjusted EPS represents diluted earnings per share (a GAAP measure), excluding restructuring costs, amortization of acquired intangible assets and other significant items. The adjusted effective tax rate represents the effective tax rate (a GAAP measure), excluding restructuring costs, amortization of acquired intangible assets and other significant items. Net debt represents long-term debt (a GAAP measure) less cash and cash equivalents (a GAAP measure).
Segment operating profit is the measure of profit and loss that the Chief Operating Decision Maker uses to evaluate segment profitability. Segment operating profit represents operating profit (a GAAP measure) adjusted to exclude restructuring costs, amortization of acquired intangible assets and other significant items of a nonoperational nature.
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.
Price/cost represents the combined impact of realized pricing, cost inflation and productivity actions, including manufacturing efficiencies, sourcing initiatives and certain productivity measures.
When Carrier provides our expectations for organic sales, adjusted operating profit (including on a segment basis), adjusted operating margin (including on a segment basis), adjusted effective tax rate, adjusted EPS, free cash flow, and interest expense, net 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.
9
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) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||||
| Product sales | $ | 5,585 | $ | 4,906 | $ | 15,886 | $ | 15,035 | ||||||||||||||||||
| Service sales | 678 | 673 | 2,069 | 1,875 | ||||||||||||||||||||||
| Total Net sales | 6,263 | 5,579 | 17,955 | 16,910 | ||||||||||||||||||||||
| Costs and expenses | ||||||||||||||||||||||||||
| Cost of products sold | (4,083) | (3,656) | (11,755) | (10,881) | ||||||||||||||||||||||
| Cost of services sold | (497) | (474) | (1,545) | (1,366) | ||||||||||||||||||||||
| Research and development | (154) | (151) | (445) | (465) | ||||||||||||||||||||||
| Selling, general and administrative | (758) | (803) | (2,430) | (2,345) | ||||||||||||||||||||||
| Total Costs and expenses | (5,492) | (5,084) | (16,175) | (15,057) | ||||||||||||||||||||||
| Goodwill impairment | (3,100) | — | (3,100) | — | ||||||||||||||||||||||
| Equity method investment net earnings | 57 | 60 | 146 | 182 | ||||||||||||||||||||||
| Other income (expense), net | (1) | (16) | (16) | 36 | ||||||||||||||||||||||
| Operating profit (loss) | (2,273) | 539 | (1,190) | 2,071 | ||||||||||||||||||||||
| Non-service pension benefit (expense) | 3 | (9) | 5 | (8) | ||||||||||||||||||||||
| Interest (expense) income, net | (93) | (97) | (288) | (270) | ||||||||||||||||||||||
| Earnings (loss) before income taxes | (2,363) | 433 | (1,473) | 1,793 | ||||||||||||||||||||||
| Income tax (expense) benefit | (177) | 1 | (261) | (272) | ||||||||||||||||||||||
| Earnings (loss) from continuing operations | (2,540) | 434 | (1,734) | 1,521 | ||||||||||||||||||||||
| Discontinued operations, net of tax | — | 21 | — | 4 | ||||||||||||||||||||||
| Net earnings (loss) | (2,540) | 455 | (1,734) | 1,525 | ||||||||||||||||||||||
| Less: Non-controlling interest in subsidiaries' | 53 | 27 | 120 | 94 | ||||||||||||||||||||||
| Net earnings (loss) attributable to common shareowners | $ | (2,593) | $ | 428 | $ | (1,854) | $ | 1,431 | ||||||||||||||||||
| Amounts attributable to common shareowners: | ||||||||||||||||||||||||||
| Continuing operations | $ | (2,593) | $ | 407 | $ | (1,854) | $ | 1,427 | ||||||||||||||||||
| Discontinued operations | — | 21 | — | 4 | ||||||||||||||||||||||
| Net earnings (loss) attributable to common shareowners | $ | (2,593) | $ | 428 | $ | (1,854) | $ | 1,431 | ||||||||||||||||||
| Earnings (loss) per share | ||||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||||
| Continuing operations | $ | (3.16) | $ | 0.48 | $ | (2.24) | $ | 1.67 | ||||||||||||||||||
| Discontinued operations | — | 0.02 | — | — | ||||||||||||||||||||||
| Net earnings (loss) | $ | (3.16) | $ | 0.50 | $ | (2.24) | $ | 1.67 | ||||||||||||||||||
| Diluted: | ||||||||||||||||||||||||||
| Continuing operations | $ | (3.16) | $ | 0.47 | $ | (2.24) | $ | 1.64 | ||||||||||||||||||
| Discontinued operations | — | 0.03 | — | 0.01 | ||||||||||||||||||||||
| Net earnings (loss) | $ | (3.16) | $ | 0.50 | $ | (2.24) | $ | 1.65 | ||||||||||||||||||
| Weighted-average number of shares outstanding | ||||||||||||||||||||||||||
| Basic | 821.8 | 848.8 | 828.3 | 856.8 | ||||||||||||||||||||||
| Diluted | 821.8 | 858.6 | 828.3 | 867.7 | ||||||||||||||||||||||
10
Carrier Global Corporation
Condensed Consolidated Balance Sheet
| (Unaudited) | ||||||||||||||
| (In millions) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 1,354 | $ | 1,555 | ||||||||||
| Accounts receivable, net | 3,499 | 2,639 | ||||||||||||
| Inventories, net | 2,842 | 2,483 | ||||||||||||
| Assets held for sale | — | 592 | ||||||||||||
| Other current assets | 1,187 | 1,264 | ||||||||||||
| Total current assets | 8,882 | 8,533 | ||||||||||||
| Future income tax benefits | 1,190 | 1,074 | ||||||||||||
| Fixed assets, net | 3,153 | 3,165 | ||||||||||||
| Operating lease right-of-use assets | 532 | 546 | ||||||||||||
| Intangible assets, net | 5,536 | 6,326 | ||||||||||||
| Goodwill | 12,209 | 15,501 | ||||||||||||
| Pension and post-retirement assets | 65 | 56 | ||||||||||||
| Equity method investments | 1,390 | 1,321 | ||||||||||||
| Other assets | 637 | 668 | ||||||||||||
| Total Assets | $ | 33,594 | $ | 37,190 | ||||||||||
| Liabilities and Equity | ||||||||||||||
| Accounts payable | $ | 3,269 | $ | 2,702 | ||||||||||
| Accrued liabilities | 4,155 | 3,774 | ||||||||||||
| Liabilities held for sale | — | 170 | ||||||||||||
| Short-term borrowings and current portion of long-term debt | 1,482 | 468 | ||||||||||||
| Total current liabilities | 8,906 | 7,114 | ||||||||||||
| Long-term debt | 9,992 | 11,365 | ||||||||||||
| Future pension and post-retirement obligations | 184 | 192 | ||||||||||||
| Future income tax obligations | 1,584 | 1,833 | ||||||||||||
| Operating lease liabilities | 402 | 418 | ||||||||||||
| Other long-term liabilities | 2,105 | 2,140 | ||||||||||||
| Total Liabilities | 23,173 | 23,062 | ||||||||||||
| Equity | ||||||||||||||
| Common stock | 10 | 10 | ||||||||||||
| Treasury stock | (7,953) | (6,795) | ||||||||||||
| Additional paid-in capital | 8,694 | 8,665 | ||||||||||||
| Retained earnings | 9,942 | 12,193 | ||||||||||||
| Accumulated other comprehensive income (loss) | (639) | (269) | ||||||||||||
| Non-controlling interest | 367 | 324 | ||||||||||||
| Total Equity | 10,421 | 14,128 | ||||||||||||
| Total Liabilities and Equity | $ | 33,594 | $ | 37,190 | ||||||||||
11
Carrier Global Corporation
Condensed Consolidated Statement of Cash Flows
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Operating Activities | ||||||||||||||||||||||||||
| Net earnings (loss) | $ | (2,540) | $ | 455 | $ | (1,734) | $ | 1,525 | ||||||||||||||||||
| Discontinued operations, net of tax | — | (21) | — | (4) | ||||||||||||||||||||||
| Adjustments for non-cash items, net: | ||||||||||||||||||||||||||
| Depreciation and amortization | 324 | 325 | 953 | 945 | ||||||||||||||||||||||
| Deferred income tax provision | (105) | (158) | (347) | (316) | ||||||||||||||||||||||
| Stock-based compensation costs | 7 | 11 | 40 | 55 | ||||||||||||||||||||||
| Equity method investment net earnings | (57) | (60) | (146) | (182) | ||||||||||||||||||||||
| (Gain) loss on sale of investments and impairments, net | 8 | — | 45 | (17) | ||||||||||||||||||||||
| Goodwill impairment | 3,100 | — | 3,100 | — | ||||||||||||||||||||||
| Changes in operating assets and liabilities | ||||||||||||||||||||||||||
| Accounts receivable, net | (320) | 212 | (971) | (490) | ||||||||||||||||||||||
| Inventories, net | (68) | (116) | (403) | (528) | ||||||||||||||||||||||
| Accounts payable and accrued liabilities | 275 | (208) | 906 | 170 | ||||||||||||||||||||||
| Distributions from equity method investments | 16 | 24 | 67 | 105 | ||||||||||||||||||||||
| Other operating activities, net | 112 | (140) | 195 | (187) | ||||||||||||||||||||||
| Net cash flows provided by (used in) continuing operating activities | 752 | 324 | 1,705 | 1,076 | ||||||||||||||||||||||
| Net cash flows provided by (used in) discontinued operating activities | 61 | 17 | 114 | 397 | ||||||||||||||||||||||
| Net cash flows provided by (used in) operating activities | 813 | 341 | 1,819 | 1,473 | ||||||||||||||||||||||
| Investing Activities | ||||||||||||||||||||||||||
| Capital expenditures | (139) | (117) | (350) | (261) | ||||||||||||||||||||||
| Investment in businesses, net of cash acquired | (64) | (31) | (118) | (92) | ||||||||||||||||||||||
| Dispositions of businesses | 395 | — | 410 | 8 | ||||||||||||||||||||||
| Settlement of derivative contracts, net | 10 | 33 | 16 | 120 | ||||||||||||||||||||||
| Other investing activities, net | 19 | (4) | 28 | (7) | ||||||||||||||||||||||
| Net cash flows provided by (used in) continuing investing activities | 221 | (119) | (14) | (232) | ||||||||||||||||||||||
| Net cash flows provided by (used in) discontinued investing activities | — | — | — | 35 | ||||||||||||||||||||||
| Net cash flows provided by (used in) investing activities | 221 | (119) | (14) | (197) | ||||||||||||||||||||||
| Financing Activities | ||||||||||||||||||||||||||
| Increase (decrease) in short-term borrowings, net | (500) | 444 | (139) | 387 | ||||||||||||||||||||||
| Issuance of long-term debt | 14 | 17 | 53 | 32 | ||||||||||||||||||||||
| Repayment of long-term debt | (3) | (1) | (60) | (1,209) | ||||||||||||||||||||||
| Repurchases of common stock | (399) | (785) | (1,144) | (2,413) | ||||||||||||||||||||||
| Dividends paid on common stock | (198) | (193) | (598) | (583) | ||||||||||||||||||||||
| Dividends paid to non-controlling interest | (11) | (72) | (76) | (81) | ||||||||||||||||||||||
| Other financing activities, net | (1) | (1) | (35) | (18) | ||||||||||||||||||||||
| Net cash flows provided by (used in) continuing financing activities | (1,098) | (591) | (1,999) | (3,885) | ||||||||||||||||||||||
| Net cash flows provided by (used in) discontinued financing activities | — | — | — | — | ||||||||||||||||||||||
| Net cash flows provided by (used in) financing activities | (1,098) | (591) | (1,999) | (3,885) | ||||||||||||||||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | 3 | (5) | (7) | 63 | ||||||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash, including cash classified in current assets held for sale | (61) | (374) | (201) | (2,546) | ||||||||||||||||||||||
| Less: Change in cash balances classified as assets held for sale | (95) | — | (25) | — | ||||||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | 34 | (374) | (176) | (2,546) | ||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 1,347 | 1,800 | 1,557 | 3,972 | ||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | 1,381 | 1,426 | 1,381 | 1,426 | ||||||||||||||||||||||
| Less: restricted cash | 27 | 3 | 27 | 3 | ||||||||||||||||||||||
| Cash and cash equivalents, end of period | $ | 1,354 | $ | 1,423 | $ | 1,354 | $ | 1,423 | ||||||||||||||||||
12
Carrier Global Corporation
Segment Summary
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Segment net sales | ||||||||||||||||||||||||||
| Climate Solutions Americas | $ | 3,354 | $ | 2,711 | $ | 9,227 | $ | 8,535 | ||||||||||||||||||
| Climate Solutions Europe | 1,335 | 1,290 | 3,952 | 3,712 | ||||||||||||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 848 | 833 | 2,599 | 2,541 | ||||||||||||||||||||||
| Climate Solutions Transportation | 726 | 745 | 2,177 | 2,122 | ||||||||||||||||||||||
| Segment net sales | $ | 6,263 | $ | 5,579 | $ | 17,955 | $ | 16,910 | ||||||||||||||||||
| Segment operating profit | ||||||||||||||||||||||||||
| Climate Solutions Americas | $ | 745 | $ | 533 | $ | 1,941 | $ | 1,982 | ||||||||||||||||||
| Climate Solutions Europe | 168 | 120 | 352 | 324 | ||||||||||||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 103 | 97 | 292 | 353 | ||||||||||||||||||||||
| Climate Solutions Transportation | 117 | 115 | 336 | 340 | ||||||||||||||||||||||
| Segment operating profit | $ | 1,133 | $ | 865 | $ | 2,921 | $ | 2,999 | ||||||||||||||||||
| Segment operating margin | ||||||||||||||||||||||||||
| Climate Solutions Americas | 22.2 | % | 19.7 | % | 21.0 | % | 23.2 | % | ||||||||||||||||||
| Climate Solutions Europe | 12.6 | % | 9.3 | % | 8.9 | % | 8.7 | % | ||||||||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 12.1 | % | 11.6 | % | 11.2 | % | 13.9 | % | ||||||||||||||||||
| Climate Solutions Transportation | 16.1 | % | 15.4 | % | 15.4 | % | 16.0 | % | ||||||||||||||||||
13
Components of Changes in Net Sales
Three Months Ended September 30, 2026 Compared with Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| Factors Contributing to Total % change in Net Sales | |||||||||||||||||||||||||||||
| Organic | FX Translation | Acquisitions / Divestitures, net | Other | Total | |||||||||||||||||||||||||
| Climate Solutions Americas | 25 | % | — | % | (1) | % | — | % | 24 | % | |||||||||||||||||||
| Climate Solutions Europe | 12 | % | (2) | % | (7) | % | — | % | 3 | % | |||||||||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 3 | % | — | % | (1) | % | — | % | 2 | % | |||||||||||||||||||
| Climate Solutions Transportation | (3) | % | — | % | — | % | — | % | (3) | % | |||||||||||||||||||
| Consolidated | 15 | % | — | % | (3) | % | — | % | 12 | % | |||||||||||||||||||
Nine Months Ended September 30, 2026 Compared with Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| Factors Contributing to Total % change in Net Sales | |||||||||||||||||||||||||||||
| Organic | FX Translation | Acquisitions / Divestitures, net | Other | Total | |||||||||||||||||||||||||
| Climate Solutions Americas | 8 | % | — | % | — | % | — | % | 8 | % | |||||||||||||||||||
| Climate Solutions Europe | 5 | % | 4 | % | (3) | % | — | % | 6 | % | |||||||||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 2 | % | — | % | — | % | — | % | 2 | % | |||||||||||||||||||
| Climate Solutions Transportation | 1 | % | 2 | % | — | % | — | % | 3 | % | |||||||||||||||||||
| Consolidated | 6 | % | 1 | % | (1) | % | — | % | 6 | % | |||||||||||||||||||
14
Carrier Global Corporation
Reconciliations
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Reconciliation to Earnings before income taxes | ||||||||||||||||||||||||||
| Segment operating profit | $ | 1,133 | $ | 865 | $ | 2,921 | $ | 2,999 | ||||||||||||||||||
| Corporate and other | (42) | (42) | (141) | (162) | ||||||||||||||||||||||
| Restructuring costs | (45) | (50) | (161) | (105) | ||||||||||||||||||||||
| Amortization of acquired intangible assets | (210) | (221) | (636) | (636) | ||||||||||||||||||||||
| Acquisition/divestiture-related costs | (2) | (10) | (20) | (21) | ||||||||||||||||||||||
| Riello impairment and loss | (2) | — | (48) | — | ||||||||||||||||||||||
| Goodwill impairment | (3,100) | — | (3,100) | — | ||||||||||||||||||||||
| CCR gain | — | — | — | 7 | ||||||||||||||||||||||
| Other | (5) | (3) | (5) | (11) | ||||||||||||||||||||||
| Non-service pension (expense) benefit | 3 | (9) | 5 | (8) | ||||||||||||||||||||||
| Interest (expense) income, net | (93) | (97) | (288) | (270) | ||||||||||||||||||||||
| Earnings (loss) before income taxes | $ | (2,363) | $ | 433 | $ | (1,473) | $ | 1,793 | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Reconciliation of Segment operating profit to Adjusted operating profit | ||||||||||||||||||||||||||
| Climate Solutions Americas | $ | 745 | $ | 533 | $ | 1,941 | $ | 1,982 | ||||||||||||||||||
| Climate Solutions Europe | 168 | 120 | 352 | 324 | ||||||||||||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 103 | 97 | 292 | 353 | ||||||||||||||||||||||
| Climate Solutions Transportation | 117 | 115 | 336 | 340 | ||||||||||||||||||||||
| Segment operating profit | $ | 1,133 | $ | 865 | $ | 2,921 | $ | 2,999 | ||||||||||||||||||
| Corporate and other | (42) | (42) | (141) | (162) | ||||||||||||||||||||||
| Adjusted operating profit | $ | 1,091 | $ | 823 | $ | 2,780 | $ | 2,837 | ||||||||||||||||||
15
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, 2026 | Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||
| (In millions, except per share amounts) | Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | |||||||||||||||||||||||||||||
| Net sales | $ | 6,263 | $ | — | $ | 6,263 | $ | 17,955 | $ | — | $ | 17,955 | |||||||||||||||||||||||
| Operating profit (loss) | $ | (2,273) | 3,364 | a | $ | 1,091 | $ | (1,190) | 3,970 | a | $ | 2,780 | |||||||||||||||||||||||
| Operating margin | (36.3) | % | 17.4 | % | (6.6) | % | 15.5 | % | |||||||||||||||||||||||||||
| Earnings (loss) before income taxes | $ | (2,363) | 3,364 | a | $ | 1,001 | $ | (1,473) | 3,970 | a | $ | 2,497 | |||||||||||||||||||||||
| Income tax (expense) benefit | $ | (177) | (58) | b | $ | (235) | $ | (261) | (200) | b | $ | (461) | |||||||||||||||||||||||
| Effective tax rate | (7.5) | % | 23.5 | % | (17.7) | % | 18.5 | % | |||||||||||||||||||||||||||
| Earnings (loss) from continuing operations attributable to common shareowners | $ | (2,593) | $ | 3,306 | $ | 713 | $ | (1,854) | $ | 3,770 | $ | 1,916 | |||||||||||||||||||||||
| Summary of Adjustments: | |||||||||||||||||||||||||||||||||||
| Restructuring costs | $ | 45 | a | $ | 161 | a | |||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | 210 | a | 636 | a | |||||||||||||||||||||||||||||||
| Acquisition/divestiture-related costs | 2 | a | 20 | a | |||||||||||||||||||||||||||||||
| Riello impairment and loss | 2 | a | 48 | a | |||||||||||||||||||||||||||||||
| Goodwill impairment | 3,100 | a | 3,100 | a | |||||||||||||||||||||||||||||||
| Other | 5 | a | 5 | a | |||||||||||||||||||||||||||||||
| Total adjustments | $ | 3,364 | $ | 3,970 | |||||||||||||||||||||||||||||||
| Tax effect on adjustments above | $ | (58) | $ | (200) | |||||||||||||||||||||||||||||||
| Tax specific adjustments | — | — | |||||||||||||||||||||||||||||||||
| Total tax adjustments | $ | (58) | b | $ | (200) | b | |||||||||||||||||||||||||||||
Diluted shares outstanding (1) | 821.8 | 821.8 | 828.3 | 828.3 | |||||||||||||||||||||||||||||||
| Diluted earnings (loss) per share: | |||||||||||||||||||||||||||||||||||
| Continuing operations | $ | (3.16) | $ | 0.87 | $ | (2.24) | $ | 2.31 | |||||||||||||||||||||||||||
(1) During the three and nine months ended September 30, 2026, Carrier reported a net loss from continuing operations attributable to common shareowners. As a result, potentially dilutive shares were excluded from the computation of diluted loss per share because their inclusion would have reduced the loss per share. The inclusion of dilutive shares does not have a significant impact on adjusted diluted earnings per share.
16
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 (loss) | $ | 539 | 284 | a | $ | 823 | $ | 2,071 | 766 | a | $ | 2,837 | |||||||||||||||||||||||
| Operating margin | 9.7 | % | 14.8 | % | 12.2 | % | 16.8 | % | |||||||||||||||||||||||||||
| Earnings (loss) before income taxes | $ | 433 | 295 | a,b | $ | 728 | $ | 1,793 | 777 | a,b | $ | 2,570 | |||||||||||||||||||||||
| Income tax (expense) benefit | $ | 1 | (126) | c | $ | (125) | $ | (272) | (259) | c | $ | (531) | |||||||||||||||||||||||
| Effective tax rate | (0.2) | % | 17.2 | % | 15.2 | % | 20.7 | % | |||||||||||||||||||||||||||
| Earnings (loss) from continuing operations attributable to common shareowners | $ | 407 | $ | 169 | $ | 576 | $ | 1,427 | $ | 518 | $ | 1,945 | |||||||||||||||||||||||
| Summary of Adjustments: | |||||||||||||||||||||||||||||||||||
| Restructuring costs | $ | 50 | a | $ | 105 | a | |||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | 221 | a | 636 | a | |||||||||||||||||||||||||||||||
| Acquisition/divestiture-related costs | 10 | a | 21 | a | |||||||||||||||||||||||||||||||
| CCR gain | — | a | (7) | a | |||||||||||||||||||||||||||||||
| Other | 3 | a | 11 | a | |||||||||||||||||||||||||||||||
| Defined benefit pension settlement | 11 | b | 11 | b | |||||||||||||||||||||||||||||||
| Total adjustments | $ | 295 | $ | 777 | |||||||||||||||||||||||||||||||
| Tax effect on adjustments above | $ | (77) | $ | (204) | |||||||||||||||||||||||||||||||
| Tax specific adjustments | (49) | (55) | |||||||||||||||||||||||||||||||||
| Total tax adjustments | $ | (126) | c | $ | (259) | c | |||||||||||||||||||||||||||||
| Diluted shares outstanding | 858.6 | 858.6 | 867.7 | 867.7 | |||||||||||||||||||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||||||||||||||
| Continuing operations | $ | 0.47 | $ | 0.67 | $ | 1.64 | $ | 2.24 | |||||||||||||||||||||||||||
17
Free Cash Flow Reconciliation
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net cash flows provided by operating activities | $ | 813 | $ | 341 | $ | 1,819 | $ | 1,473 | ||||||||||||||||||
| Less: Capital expenditures | (139) | (117) | (350) | (261) | ||||||||||||||||||||||
| Free cash flow | $ | 674 | $ | 224 | $ | 1,469 | $ | 1,212 | ||||||||||||||||||
Net Debt Reconciliation
| (Unaudited) | ||||||||||||||
| (In millions) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Long-term debt | $ | 9,992 | $ | 11,365 | ||||||||||
| Short-term borrowings and current portion of long-term debt | 1,482 | 468 | ||||||||||||
| Less: Cash and cash equivalents | 1,354 | 1,555 | ||||||||||||
| Net debt | $ | 10,120 | $ | 10,278 | ||||||||||
18