Carrier Global · Earnings release

Carrier Reports Strong First Quarter 2025 Results

•Net sales down 4% given prior year divestiture; organic sales up 2%

•GAAP operating margin up 500 bps; adjusted operating margin up 210 bps

•Net cash flows from operating activities were $483 million and free cash flow was $420 million

•Returned $1.5 billion to shareholders through share repurchases and dividends and paid down $1.2 billion in debt

•Fully mitigating impact of tariffs in effect today

•Increasing full-year 2025 adjusted earnings per share guidance

•Transitioned to new segment reporting

PALM BEACH GARDENS, Fla., May 1, 2025 – Carrier Global Corporation (NYSE:CARR), global leader in intelligent climate and energy solutions, today reported strong financial results for the first quarter of 2025 and increased its full year guidance.

“We delivered another quarter of strong financial performance," said Carrier Chairman & CEO David Gitlin. “Adjusted EPS grew 27% with adjusted operating margins expanding 210 basis points on 2% organic sales growth. Sales for the Commercial1 and Residential businesses within Climate Solutions Americas were each up about 20%. Total company orders were up high-single-digits, backlogs increased over 15% sequentially and about 10% year-over-year, positioning us for accelerated growth further fueled by differentiated products, aftermarket offerings and system solutions. We are increasing our full-year commitments as we proactively manage this dynamic environment."

1.Excludes NORESCO

1

Total Company

(Unaudited)

Three Months Ended

(In millions)

Change

Net sales

$

$

(4)

%

Organic sales

2

%

Operating profit

$

$

%

Operating margin

%

%

Adjusted operating profit

$

$

%

Adjusted operating margin

%

%

Diluted earnings per share:

Continuing operations

$

$

%

Continuing operations - Adjusted

$

$

%

Carrier’s first quarter sales of $5.2 billion were down 4% compared to the prior year. Organic sales growth of 2% was offset by a 5% headwind from net acquisitions and divestitures, driven by the sale of Commercial Refrigeration in Q4 2024. Foreign currency translation was a 1% headwind to sales growth.

GAAP operating profit in the quarter of $629 million was up 63% from last year driven by operational performance, the absence of VCS backlog and inventory step-up amortization and decrease in acquisition and divestiture-related costs. Adjusted operating profit of $843 million was up 10%, mostly driven by strong productivity and price. Net income from continuing operations was $412 million and adjusted net earnings from continuing operations was $569 million. GAAP EPS from continuing operations was $0.47 and adjusted EPS from continuing operations was $0.65 from higher operating profit, lower net interest expense and benefits of a lower share count.

2

Climate Solutions Americas (CSA)

(Unaudited)

Three Months Ended

(In millions)

Change

Net sales

$

$

9

%

Organic sales

9

%

Segment operating profit

$

$

%

Segment operating margin

%

%

CSA segment sales increased 9%. Organic sales were up 9%, driven by continued strength in Commercial1 and Residential, each up about 20% more than offsetting a decline in Light Commercial.

Segment operating margin increased 420 basis points driven by strong organic sales growth and productivity.

Climate Solutions Europe (CSE)

(Unaudited)

Three Months Ended

(In millions)

Change

Net sales

$

$

%

Organic sales

(7)

%

Segment operating profit

$

$

%

Segment operating margin

%

%

CSE segment sales declined 10%. Organic sales were down 7%, with Commercial up mid-single digits offsetting a low-double-digit decline in Residential and Light Commercial.

Segment operating margin decreased 390 basis points, driven by lower volume, mix and investments partially offset by cost synergies.

1.Excludes NORESCO

3

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

(Unaudited)

Three Months Ended

(In millions)

Change

Net sales

$

$

(7)

%

Organic sales

(6)

%

Segment operating profit

$

$

%

Segment operating margin

%

%

CSAME segment sales declined 7%. Organic sales were down 6%, mainly driven by declines in Residential Light Commercial in China, partially offset by strength in other countries.

Segment operating margin increased 240 basis points driven by productivity and the absence of a prior year unfavorable currency impact, partially offset by lower volume.

Climate Solutions Transportation (CST)

(Unaudited)

Three Months Ended

(In millions)

Change

Net sales

$

$

%

Organic sales

2

%

Segment operating profit

$

$

%

Segment operating margin

%

%

CST sales declined 26% driven by the impact from the divestiture of Commercial Refrigeration. Organic sales growth increased 2% driven by 20% growth in Container, partially offset by declines in Europe and North America Truck and Trailer.

Segment operating margin increased 210 basis points mainly due to the Commercial Refrigeration exit.

4

Cash Flow

(Unaudited)

Three Months Ended March 31,

(In millions)

Net cash flows provided by operating activities

$

$

Less: Capital expenditures - continuing operations

Less: Capital expenditures - discontinued operations

—

(2)

Free cash flow

$

$

Net cash flows generated from operating activities were $483 million and capital expenditures were $63 million, resulting in free cash flow of $420 million. The increase in free cash flow was driven by higher net income, working capital improvements and lower capital expenditures.

Carrier repurchased $1.3 billion in shares, paid $200 million in dividends and paid down $1.2 billion in debt.

Current Guidance**

Prior Guidance

G1Sales

~$750 million revenue headwind from CCR exit

Organic* up MSD

FX 1%

Acquisitions 0%

Divestitures (3%)

~$750 million revenue headwind from CCR exit

Organic* up MSD

FX (1%)

Acquisitions 0%

Divestitures (3%)

G2Adjusted Operating Margin*

G3Adjusted EPS*

G4Free Cash Flow*

Includes the expected results of continuing and discontinued operations

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.

5

Conference Call

Carrier will host a webcast of its earnings conference call today, Thursday, May 1, 2025, 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, tax rates and other measures of financial performance or potential future plans, strategies or transactions of Carrier, 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;

6

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 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 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 solutions that matter for people and our planet for generations to come. From the beginning, we've led in inventing new technologies and entirely new industries. Today, we continue to lead because we have a world-class, diverse 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.

CARR-IR

Contact:

Investor Relations

Michael Rednor

InvestorRelations@Carrier.com

Media Inquiries

Jason Shockley

Jason.Shockley@Carrier.com

7

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.

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 GAAP measure) 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 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 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.

8

Carrier Global Corporation

Condensed Consolidated Statement of Operations

(Unaudited)

Three Months Ended March 31,

(In millions, except per share amounts)

Net sales

Product sales

$

$

Service sales

Total Net sales

Costs and expenses

Cost of products sold

Cost of services sold

Research and development

Selling, general and administrative

Total Costs and expenses

Equity method investment net earnings

Other income (expense), net

Operating profit

Non-service pension (expense) benefit

1

—

Interest (expense) income, net

Earnings before income taxes

Income tax (expense) benefit

Earnings from continuing operations

Discontinued operations, net of tax

—

Net earnings (loss)

Less: Non-controlling interest in subsidiaries'

Net earnings (loss) attributable to common shareowners

$

$

Amounts attributable to common shareowners:

Continuing operations

$

$

Discontinued operations

—

Net earnings (loss) attributable to common shareowners

$

$

Earnings per share

Basic:

Continuing operations

$

$

Discontinued operations

—

Net earnings (loss)

$

$

Diluted:

Continuing operations

$

$

Discontinued operations

—

Net earnings (loss)

$

$

Weighted-average number of shares outstanding

Basic

Diluted

9

Carrier Global Corporation

Condensed Consolidated Balance Sheet

(Unaudited)

(In millions)

Assets

Cash and cash equivalents

$

$

Accounts receivable, net

Inventories, net

Other current assets

Total current assets

Future income tax benefits

Fixed assets, net

Operating lease right-of-use assets

Intangible assets, net

Goodwill

Pension and post-retirement assets

Equity method investments

Other assets

Total Assets

$

$

Liabilities and Equity

Accounts payable

$

$

Accrued liabilities

Current portion of long-term debt

Total current liabilities

Long-term debt

Future pension and post-retirement obligations

Future income tax obligations

Operating lease liabilities

Other long-term liabilities

Total Liabilities

Equity

Common stock

9

9

Treasury stock

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

Non-controlling interest

Total Equity

Total Liabilities and Equity

$

$

Carrier Global Corporation

Condensed Consolidated Statement of Cash Flows

(Unaudited)

Three Months Ended March 31,

(In millions)

Operating Activities

Net earnings (loss)

$

$

Discontinued operations, net of tax

—

Adjustments for non-cash items, net:

Depreciation and amortization

Deferred income tax provision

Stock-based compensation costs

Equity method investment net earnings

(Gain) loss on sale of investments / deconsolidation

(5)

—

Changes in operating assets and liabilities

Accounts receivable, net

Inventories, net

Accounts payable and accrued liabilities

Distributions from equity method investments

7

Other operating activities, net

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

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

(5)

(5)

Net cash flows provided by (used in) operating activities

Investing Activities

Capital expenditures

Investment in businesses, net of cash acquired

Dispositions of businesses

8

—

Settlement of derivative contracts, net

Other investing activities, net

1

3

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

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

7

(1)

Net cash flows provided by (used in) investing activities

Financing Activities

Increase (decrease) in short-term borrowings, net

Issuance of long-term debt

9

Repayment of long-term debt

(5)

Repurchases of common stock

—

Dividends paid on common stock

Dividends paid to non-controlling interest

—

(2)

Other financing activities, net

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

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

—

(4)

Net cash flows provided by (used in) financing activities

Effect of foreign exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents and restricted cash, including cash classified in current assets held for sale

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

—

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

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

Less: restricted cash

4

2

Cash and cash equivalents, end of period

$

$

Carrier Global Corporation

Segment Summary

(Unaudited)

Three Months Ended March 31,

(In millions)

Segment net sales

Climate Solutions Americas

$

$

Climate Solutions Europe

Climate Solutions Asia Pacific, Middle East & Africa

Climate Solutions Transportation

Segment net sales

$

$

Segment operating profit

Climate Solutions Americas

$

$

Climate Solutions Europe

Climate Solutions Asia Pacific, Middle East & Africa

Climate Solutions Transportation

Segment operating profit

$

$

Segment operating margin

Climate Solutions Americas

%

%

Climate Solutions Europe

%

%

Climate Solutions Asia Pacific, Middle East & Africa

%

%

Climate Solutions Transportation

%

%

Components of Changes in Net Sales

Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

(Unaudited)

Factors Contributing to Total % change in Net Sales

Organic

FX Translation

Acquisitions / Divestitures, net

Other

Total

Climate Solutions Americas

9

%

—

%

—

%

—

%

9

%

Climate Solutions Europe

(7)

%

(3)

%

—

%

—

%

%

Climate Solutions Asia Pacific, Middle East & Africa

(6)

%

(1)

%

—

%

—

%

(7)

%

Climate Solutions Transportation

2

%

(1)

%

%

—

%

%

Consolidated

2

%

(1)

%

(5)

%

—

%

(4)

%

Carrier Global Corporation

Reconciliations

(Unaudited)

Three Months Ended March 31,

(In millions)

Reconciliation to Earnings before income taxes

Segment operating profit

$

$

Corporate and other

Restructuring costs

(8)

(8)

Amortization of acquired intangibles

Acquisition on step-up amortization

—

Acquisition/divestiture-related costs

(5)

Viessmann-related hedges

—

Gain on liability adjustment

—

Non-service pension (expense) benefit

1

—

Interest (expense) income, net

Earnings before income taxes

$

$

(Unaudited)

Three Months Ended March 31,

(In millions)

Reconciliation of Segment operating profit to Adjusted operating profit

Climate Solutions Americas

$

$

Climate Solutions Europe

Climate Solutions Asia Pacific, Middle East & Africa

Climate Solutions Transportation

Segment operating profit

$

$

Corporate and other

Adjusted operating profit

$

$

Carrier Global Corporation

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

Net Income, Earnings Per Share and Effective Tax Rate

(Unaudited)

(In millions, except per share amounts)

Reported

Adjustments

Adjusted

Net sales

$

$

—

$

Operating profit

$

a

$

Operating margin

%

%

Earnings before income taxes

$

a

$

Income tax (expense) benefit

$

c

$

Effective tax rate

%

%

Earnings from continuing operations attributable to common shareowners

$

$

$

Summary of Adjustments:

Amortization of acquired intangibles

$

a

Restructuring costs

8

a

Acquisition/divestiture-related costs

5

a

Total adjustments

$

Tax effect on adjustments above

$

Total tax adjustments

$

c

Diluted shares outstanding

Diluted earnings per share:

Continuing operations

$

$

Carrier Global Corporation

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

Net Income, Earnings Per Share and Effective Tax Rate

(Unaudited)

(In millions, except per share amounts)

Reported

Adjustments

Adjusted

Net sales

$

$

—

$

Operating profit

$

a

$

Operating margin

%

%

Earnings before income taxes

$

a

$

Income tax (expense) benefit

$

c

$

Effective tax rate

%

%

Earnings from continuing operations attributable to common shareowners

$

$

$

Summary of Adjustments:

Amortization of acquired intangibles

$

a

Restructuring costs

8

a

Acquisition/divestiture-related costs

a

Acquisition on step-up amortization (1)

a

Viessmann-related hedges

a

Gain on liability adjustment (2)

a

Total adjustments

$

Tax effect on adjustments above

$

Total tax adjustments

$

c

Diluted shares outstanding

Diluted earnings per share:

Continuing operations

$

$

(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 March 31,

(In millions)

Net cash flows provided by operating activities

$

$

Less: Capital expenditures - continuing operations

Less: Capital expenditures - discontinued operations

—

(2)

Free cash flow

$

$

Net Debt Reconciliation

(Unaudited)

(In millions)

Long-term debt

$

$

Current portion of long-term debt

Less: Cash and cash equivalents

Net debt

$

$