CARRIER GLOBAL Corp
For the period ended Jun 30, 2026. Filed Jul 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 28, 2026
CARR$52.38-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0001783180-26-000026
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0001783180-26-000032
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 135 current paragraphs.
52 unchanged; 33 reworded; 34 added; 5 removed; 0 previous and 16 current paragraphs rearranged.
Tables are not compared: 20 previous and 37 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
For the three months ended June 30, 2026, Net sales were $6.4 billion, a 4% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
For the three months ended June 30, 2026, Selling, general and administrative expenses were $810 million, primarily flat compared with the same period of 2025. Results include savings from cost reduction initiatives and lower managed expenses. These benefits were largely offset by higher investment spending and incentive compensation costs.
Current report
Six Months Ended June 30, 2026 Compared with the Six Months Ended June 30, 2025
Current report
Net Sales
Current report
For the six months ended June 30, 2026, Net sales were $11.7 billion, a 3% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
Gross Margin
Current report
For the six months ended June 30, 2026, gross margin was $3.0 billion, an 8% decrease compared with the same period of 2025. The components were as follows:
Current report
Operating Expenses
Current report
For the six months ended June 30, 2026, operating expenses, including Equity method investment net earnings, were $1.9 billion, a 12% increase compared with the same period of 2025. The components were as follows:
Current report
Non-Operating Income (Expense), net
Current report
For the six months ended June 30, 2026, Non-operating income (expense), net was $193 million, a 12% increase compared with the same period of 2025. The components were as follows:
Current report
Income Taxes
Current report
Adjusted Operating Profit
Current report
For the three months ended June 30, 2026, Net sales were $3.4 billion, a 4% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
For the three months ended June 30, 2026, Segment operating profit was $823 million, a 6% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
The segment operational profit decrease of 10% was primarily attributable to higher input costs, including the impact of tariffs, and unfavorable product mix compared with the prior year. In addition, higher selling, general and administrative expenses and lower earnings from equity method investments further impacted the segment. These amounts were partially offset by favorable productivity initiatives, improved price and higher volumes in certain end-markets. Amounts reported in other represent adjustments related to the timing and classification of amounts recognized in operating profit.
Current report
For the three months ended June 30, 2026, Segment operating profit was $95 million, a 4% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
For the three months ended June 30, 2026, Net sales were $917 million, a 4% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
For the three months ended June 30, 2026, Segment operating profit was $108 million, a 20% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
For the three months ended June 30, 2026, Segment operating profit was $118 million, an 8% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
The segment operational profit decrease of 10% was primarily driven by unfavorable product mix and lower volumes in certain end-markets compared with the prior year. These amounts were partially offset by favorable productivity initiatives and higher volumes in certain end-markets.
Current report
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
Current report
Climate Solutions Americas
Current report
The organic increase in Net salesof 1% was driven by volume growth within certain end-markets compared with the prior year. Higher volume in our light commercial business (up 9%) was primarily driven by ongoing end-market demand. Results in our residential business (flat) was primarily driven by reduced end-market demand offset by product mix. These results were partially offset by our commercial business (down 2%) primarily driven by lower end-market demand.
Current report
For the six months ended June 30, 2026, Segment operating profit was $1,196 million, a 17% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
The segment operational profit decrease of 20% was primarily attributable to higher input costs, including the impact of tariffs, and unfavorable product mix compared with the prior year. In addition, higher selling, general and administrative expenses and lower earnings from equity method investments further impacted the segment. These amounts were partially offset by favorable productivity initiatives and higher volumes in certain end-markets. Amounts reported in other represent adjustments related to the timing and classification of amounts recognized in operating profit.
Current report
Climate Solutions Europe
Current report
For the six months ended June 30, 2026, Net sales were $2.6 billion, an 8% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
For the six months ended June 30, 2026, Segment operating profit was $184 million, a 10% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
For the six months ended June 30, 2026, Net sales were $1.8 billion, a 3% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
For the six months ended June 30, 2026, Segment operating profit was $189 million, a 26% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Current report
The segment operational profit decrease of 36% was primarily attributable to unfavorable product mix and volume reductions within certain end-markets compared with the prior year. In addition, higher selling, general and administrative expenses and lower earnings from equity method investments further impacted the segment. These reductions were partially offset by favorable productivity initiatives and higher volumes in certain end-markets. Amounts reported in other represent a gain on sale of land.
Current report
Climate Solutions Transportation
Current report
For the six months ended June 30, 2026, Net sales were $1,451 million, a 5% increase compared to the same period of 2025. The components of the year-over-year change were as follows:
Removed paragraphs (5)
Previous report
For the three months ended March 31, 2026, Net sales were $5.3 billion, a 2% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Previous report
For the three months ended March 31, 2026, Segment operating profit was $373 million, a 35% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Previous report
For the three months ended March 31, 2026, Segment operating profit was $89 million, a 15% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Previous report
For the three months ended March 31, 2026, Segment operating profit was $81 million, a 33% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Previous report
For the three months ended March 31, 2026, Segment operating profit was $101 million, a 4% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Reworded paragraphs (33)
Previous wording
In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were unauthorized. We were the importer of record for certain products previously subject to IEEPA tariffs. In March 2026, the U.S. Court of International Trade ordered U.S. Customs and Border Protection to refund IEEPA tariffs collected; however, the refund process and timing remain uncertain, and the order may be subject to further government action or challenge. Accordingly, as of March 31, 2026, we have not recorded any benefit related to potential refunds of IEEPA tariffs paid.
Current wording
In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were unauthorized. We were the importer of record for certain products previously subject to IEEPA tariffs. In March 2026, the U.S. Court of International Trade ordered U.S. Customs and Border Protection to refund IEEPA tariffs previously collected. As of June 30, 2026, we have not recorded any benefit related to potential refunds of IEEPA tariffs paid, as such amounts were not considered probable and reasonably estimable.
Previous wording
On December 16, 2025, we entered into a purchase agreement to sell our Riello business ("Riello") to Ariston Group with expected gross proceeds of approximately $430 million. Riello, predominantly reported in our Climate Solutions Europe segment, is a leading international manufacturer that designs, produces and integrates a comprehensive portfolio of thermal solutions including burners, boilers, heat pumps, cooling systems and aftermarket services for residential, commercial and industrial applications, with a strong focus on energy efficiency, innovation and a global distribution network. This transaction is expected to close in the first half of 2026 and is subject to customary closing conditions and regulatory approvals.
Current wording
On December 16, 2025, we entered into a purchase agreement to sell our Riello business ("Riello") to Ariston Group with expected gross proceeds of approximately $430 million. Riello, predominantly reported in our Climate Solutions Europe segment, is a leading international manufacturer that designs, produces and integrates a comprehensive portfolio of thermal solutions including burners, boilers, heat pumps, cooling systems and aftermarket services for residential, commercial and industrial appl ications, with a strong focus on energy efficiency, innovation and a global distribution network. We recognized an impairment charge of $46 million recorded in Other income (expense), neton the accompanying Unaudited Condensed Consolidated Statement of Operations during the three months ended June 30, 2026. The sale of Riello was completed on July 1, 2026.
Previous wording
Organic sales for the three months ended March 31, 2026, decreased by 1% compared with the same period of 2025. The organic decrease was primarily due to our Climate Solutions Americas segment as reduced end-market demand in our residential business impacted the segment. In addition, lower end-market demand in both our Climate Solutions Europe and Climate Solutions Asia Pacific, Middle East & Africa segments further impacted overall results. These results were partially offset by improved end-market demand in Climate Solutions Transportation. Refer to "Segment Review" below for a discussion of Net salesby segment.
Current wording
Organic sales for the three months ended June 30, 2026, increased by 3% compared with the same period of 2025. The organic increase was primarily due to our Climate Solutions Americas segment as improved end-market demand resulted in higher volumes. In addition, improved end-market demand in both our Climate Solutions Europe and Climate Solutions Asia Pacific, Middle East & Africa segments further benefited overall results. Results in Climate Solutions Transportation were flat. Refer to "Segment Review" below for a discussion of Net salesby segment.
Previous wording
For the three months ended March 31, 2026, gross margin was $1.2 billion, a 14% decrease compared with the same period of 2025. The components were as follows:
Current wording
For the three months ended June 30, 2026, gross margin was $1.7 billion, a 2% decrease compared with the same period of 2025. The components were as follows:
Previous wording
For the three months ended March 31, 2026, operating expenses, including Equity method investment net earnings, were $985 million, a 20.7% increase compared with the same period of 2025. The components were as follows:
Current wording
For the three months ended June 30, 2026, operating expenses, including Equity method investment net earnings, were $903 million, a 4% increase compared with the same period of 2025. The components were as follows:
Previous wording
Other income (expense), net primarily includes the impact of gains and losses related to the sale of businesses or interests in our equity method investments, foreign currency gains and losses on transactions that are denominated in a currency other than an entity's functional currency and hedging-related activities.
Current wording
Other income (expense), net primarily includes the impact of gains and losses related to the sale of businesses or interests in our equity method investments, foreign currency gains and losses on transactions that are denominated in a currency other than an entity's functional currency and hedging-related activities. During the three months ended June 30, 2026, our Climate Solutions Europe segment recorded a $46 million impairment on its Riello business. During the three months ended June 30, 2025, we finalized working capital and other adjustments provided in the stock purchase agreement governing the sale of CCR.
Previous wording
For the three months ended March 31, 2026, Non-operating income (expense), net was $89 million, a 10% increase compared with the same period of 2025. The components were as follows:
Current wording
For the three months ended June 30, 2026, Non-operating income (expense), net was $104 million, a 14% increase compared with the same period of 2025. The components were as follows:
Previous wording
Non-operating income (expense), net includes the results from activities other than normal business operations such as interest expense, interest income and the non-service components of pension and post-retirement obligations. Interest expense is affected by the amount of debt outstanding and the interest rates on that debt. For the three months ended March 31, 2026, Interest expensewas $111 million, a 1% decrease compared with the same period of 2025. During the three months ended March 31, 2025, we repaid $1.2 billion, consistent with our capital allocation strategy.
Current wording
Non-operating income (expense), net includes the results from activities other than normal business operations such as interest expense, interest income and the non-service components of pension and post-retirement obligations. Interest expense is affected by the amount of debt outstanding and the interest rates on that debt. For the three months ended June 30, 2026, Interest expensewas $126 million, a 10% increase compared with the same period of 2025. The increase is a result of commercial paper borrowings outstanding during the three months ended June 30, 2026.
Previous wording
The Company accounts for income tax expense in accordance with ASC 740, Income Taxes("ASC 740"), which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate was (56.5)% for the three months ended March 31, 2026, compared with 20.3% for the three months ended March 31, 2025. The year-over-year decrease was primarily driven by a net$99 million tax benefit from the partial release of a valuation allowance associated with our operations in a Swiss subsidiary and a favorable settlement of$18 million related toa state income tax audit, both in the current period. In addition, the three months ended March 31, 2025, included an $8 million tax benefit generated by the purchase of investment tax credits from a third-party.
Current wording
The Company accounts for income tax expense in accordance with ASC 740, Income Taxes("ASC 740"), which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate was 25.0% for the three months ended June 30, 2026, compared with 20.0% for the three months ended June 30, 2025. The year-over-year increase was primarily driven by the$46 million non-deductible impairment charge on Riello and a $10 million increase in tax expense associated with a higher German effective tax rate during thethree months ended June 30, 2026. The three months ended June 30, 2025, included a state tax benefit of$6 million related to the utilization of a capital loss and a tax benefit of $6 million from the conclusion of the UTC 2020 U.S. Internal Revenue Service ("IRS") tax audit.
Previous wording
Gross margin decreased by $201 million compared with the three months ended March 31, 2025, primarily due to lower volumes in certain end-markets within each of our segments. The associated under-absorption, in addition to an increase in costs associated with announced restructuring initiatives, further impacted our results. These amounts were partially offset by higher volumes in certain end-markets, pricing improvements and our continued focus on productivity initiatives. As a result, gross margin as a percentage of Net sales decreased by 440 basis points compared with the same period of 2025.
Current wording
Gross margin decreased by $242 million compared with the six months ended June 30, 2025, primarily due to higher input costs, including the impact of tariffs, and unfavorable business mix. In addition, an increase in costs associated with announced restructuring initiatives further impacted our results. These amounts were partially offset by higher volumes in certain end-markets and our continued focus on productivity initiatives. As a result, gross margin as a percentage of Net sales decreased by 300 basis points compared with the same period of 2025.
Previous wording
For the three months ended March 31, 2026, Selling, general and administrative expenses were $861 million, an 18% increase compared with the same period of 2025. The increase primarily relates to an increase in costs associated with announced restructuring initiatives. In addition, higher compensation, commission and employee-related costs further impacted our results. These costs were partially offset by lower consulting and other managed expenses. The current period also included $14 million of acquisition and divestiture-related costs compared with $6 million during the three months ended March 31, 2025.
Current wording
For the six months ended June 30, 2026, Selling, general and administrative expenses were $1.7 billion, an 8% increase compared with the same period of 2025. The increase primarily relates to an increase in costs associated with announced restructuring initiatives. In addition, higher compensation, commission and employee-related costs further impacted our results. These costs were partially offset by lower consulting and other managed expenses.
Previous wording
Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the three months ended March 31, 2026, Equity method investment net earnings were $31 million, a 30% decrease compared with the same period of 2025. The decrease was primarily driven by lower earnings in joint ventures within Climate Solutions Americas.
Current wording
Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the six months ended June 30, 2026, Equity method investment net earnings were $89 million, a 27% decrease compared with the same period of 2025. The decrease was primarily driven by lower earnings in joint ventures within Climate Solutions Americas.
Previous wording
The organic decrease in Net salesof 3% was driven by volume reductions within certain end-markets compared with the prior year. Lower volume in our residential business (down 12%) was primarily driven by reduced end-market demand. These results were partially offset by growth in our commercial business (up 4%) primarily driven by ongoing customer demand and improved price. In addition, higher volume in our light commercial business (up 9%) further benefited segment results.
Current wording
The organic increase in Net salesof 4% was driven by volume growth within certain end-markets compared with the prior year. Growth in our residential business (up 9%) was primarily driven by improvements in end-market demand and pricing. In addition, higher volume in our light commercial business (up 10%) further benefited segment results. These results were partially offset by volume reductions in our commercial business (down 6%) driven by timing of customer deliveries offset by improved price.
Previous wording
For the three months ended March 31, 2026, Net sales were $1.3 billion, an 11% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Current wording
For the three months ended June 30, 2026, Net sales were $1.3 billion, a 6% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Previous wording
Organic Net sales were flat as a result of ongoing challenges in certain end-markets compared with the prior year. Results in our residential and light commercial business increased (up 2%) as a result of higher volumes across the region partially offset by targeted pricing promotions. Results in our commercial business decreased (down 5%) due to lower volumes across the region.
Current wording
The organic increase in Net salesof 3% was a result of mixed demand across end-markets compared with the prior year. Results in our residential and light commercial business increased (up 7%) as a result of higher volumes across the region partially offset by pricing promotions. Results in our commercial business decreased (down 6%) due to lower volumes across the region.
Previous wording
The segment operational profit decrease of 36% was primarily attributable to volume reductions in certain end-markets compared with the prior year. The associated under-absorption, in addition to unfavorable product mix and higher selling, general and administrative expenses, further impacted segment results. These reductions were partially offset by favorable productivity initiatives.
Current wording
The segment operational profit decrease of 7% was primarily attributable to product mix in certain end-markets compared with the prior year. In addition, price promotions and higher selling, general and administrative expenses further impacted the segment. These amounts were partially offset by favorable productivity initiatives and higher volumes in certain end-markets.
Previous wording
The segment operational profit decrease of 35% was primarily attributable to volume reductions in certain end-markets compared with the prior year. The associated under-absorption, in addition to higher selling, general and administrative expenses and lower earnings from equity method investments, further impacted the segment. These amounts were partially offset by favorable productivity initiatives.
Current wording
The segment operational profit decrease of 36% was primarily attributable to unfavorable product mix and volume reductions in certain end-markets compared with the prior year. In addition, higher selling, general and administrative expenses and lower earnings from equity method investments further impacted the segment. These reductions were partially offset by favorable productivity initiatives and higher volumes in certain end-markets. Amounts reported in other represent a gain on sale of land.
Previous wording
For the three months ended March 31, 2026, Net sales were $713 million, a 10% increase compared to the same period of 2025. The components of the year-over-year change were as follows:
Current wording
For the three months ended June 30, 2026, Net sales were $738 million, a 2% increase compared to the same period of 2025. The components of the year-over-year change were as follows:
Previous wording
For the three months ended March 31, 2026, Net sales were $834 million, a 1% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Current wording
For the six months ended June 30, 2026, Net sales were $5.9 billion, a 1% increase compared with the same period of 2025. The components of the year-over-year change were as follows:
Previous wording
The segment operational profit decrease of 29% was primarily attributable to volume reductions and associated under-absorption in certain end-markets compared with the prior year. In addition, price promotions, higher selling, general and administrative expenses as well as warranty-related charges further impacted the segment. These amounts were partially offset by continued productivity initiatives and higher volume in certain end-markets. Amounts reported in other represent the benefit of a legal reserve no longer required.
Current wording
The segment operational profit decrease of 18% was primarily attributable to unfavorable product mix in certain end-markets compared with the prior year. In addition, price promotions, higher selling, general and administrative expenses as well as higher warranty-related expenses further impacted the segment. These amounts were partially offset by favorable productivity initiatives and higher volumes in certain end-markets. Amounts reported in other represent the benefit of a legal reserve no longer required.
Previous wording
The organic decrease in Net salesof 1% was driven by volume reductions within certain end-markets compared with the prior year. Results in China decreased (down 13%) as end-markets experienced economic challenges impacting both demand and price. These results were predominantly offset by end-market demand and improved price in the region's remaining geographies.
Current wording
The organic increase in Net salesof 1% was driven by volume improvements within certain end-markets compared with the prior year. Results in China decreased (down 13%) as end-markets experienced economic challenges impacting both demand and price. These results were more than offset by ongoing end-market demand and improved price in the region's remaining geographies.
Previous wording
The organic increase in Net sales of 5% was primarily driven by volume growth within certain end-markets compared with the prior year. Container results increased (up 38%) due to ongoing end-market demand. These results were partially offset by lower volume in our global truck and trailer business (down 7%) primarily due to reduced end-market demand in all regions.
Current wording
The organic increase in Net sales of 2% was primarily driven by volume growth within certain end-markets compared with the prior year. Container results increased (up 39%) due to ongoing end-market demand. These results were partially offset by lower volume in our global truck and trailer business (down 10%) primarily due to reduced end-market demand across all regions.
Previous wording
For the three months ended March 31, 2026, Net sales were $2.5 billion, a 3% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Current wording
For the six months ended June 30, 2026, Segment operating profit was $219 million, a 3% decrease compared with the same period of 2025. The components of the year-over-year change were as follows:
Previous wording
The segment operational profit decrease of 1% was primarily driven by lower volumes in certain end-markets compared with the prior year. In addition, costs associated with warranty-related issues and higher selling, general and administrative costs further impacted the segment. These amounts were partially offset by favorable productivity initiatives. In addition, higher volumes in certain end-markets provided additional benefit in the segment but led to unfavorable mix.
Current wording
The segment operational profit decrease of 6% was primarily driven by unfavorable product mix and lower volumes in certain end-markets compared with the prior year. In addition, higher selling, general and administrative costs further impacted the segment. These amounts were partially offset by favorable productivity initiatives and higher volumes in certain end-markets.
Previous wording
As of March 31, 2026, we had cash and cash equivalents of $1.4 billion, of which approximately 94% was held by our foreign subsidiaries. We manage our worldwide cash requirements by reviewing available funds and the cost effectiveness with which we can access funds held by foreign subsidiaries. On occasion, we are required to maintain cash deposits in connection with contractual obligations related to acquisitions, divestitures or other legal obligations. As of March 31, 2026, and December 31, 2025, the amount of such restricted cash was approximately $3 million and $2 million, respectively.
Current wording
As of June 30, 2026, we had cash and cash equivalents of $1.3 billion, of which approximately 95% was held by our foreign subsidiaries. We manage our worldwide cash requirements by reviewing available funds and the cost effectiveness with which we can access funds held by foreign subsidiaries. On occasion, we are required to maintain cash deposits in connection with contractual obligations related to acquisitions, divestitures or other legal obligations. As of June 30, 2026 and December 31, 2025, the amount of such restricted cash was approximately $3 million and $2 million, respectively.
Previous wording
We maintain a $2.0 billion USD-denominated facility and a $500 million Euro-denominated facility as part of an unsecured, unsubordinated commercial paper program which we can use for general corporate purposes, including the funding of working capital and potential acquisitions. In addition, we maintain a$2.5 billion revolving credit facility with various banks (the "Revolving Credit Facility")that matures in December 2029 which supports our commercial paper borrowing program and can be used for general corporate purposes. A ratings-based commitment fee is charged on unused commitments. As of March 31, 2026, we had $708 million and zero borrowings outstanding under our commercial paper program and our Revolving Credit Facility, respectively.
Current wording
We maintain a $2.0 billion USD-denominated facility and a $500 million Euro-denominated facility as part of an unsecured, unsubordinated commercial paper program which we can use for general corporate purposes, including the funding of working capital and potential acquisitions. In addition, we maintain a$2.5 billion revolving credit facility with various banks (the "Revolving Credit Facility")that matures in December 2029 which supports our commercial paper borrowing program and can be used for general corporate purposes. A ratings-based commitment fee is charged on unused commitments. As of June 30, 2026, we had $685 million and zero borrowings outstanding under our commercial paper program and our Revolving Credit Facility, respectively.
Previous wording
Our short-term obligations primarily consist of current maturities of long-term debt. Our long-term obligations primarily consist of long-term notes with maturity dates ranging between 2027 and 2054. Interest payments related to long-term notes are expected to approximate $406 million per year, reflecting an approximate weighted-average interest rate of 3.65%. Any borrowings from the Revolving Credit Facility are subject to variable interest rates. See Note 5 – Borrowings and Lines of Credit in the Notes to the accompanying Unaudited Condensed Consolidated Financial Statements for additional information regarding the terms of our long-term debt obligations.
Current wording
Our short-term obligations primarily consist of current maturities of long-term debt. Our long-term obligations primarily consist of long-term notes with maturity dates ranging between 2027 and 2054. Interest payments related to long-term notes are expected to approximate $405 million per year, reflecting an approximate weighted-average interest rate of 3.65%. Any borrowings from the Revolving Credit Facility are subject to variable interest rates. See Note 5 – Borrowings and Lines of Credit in the Notes to the accompanying Unaudited Condensed Consolidated Financial Statements for additional information regarding the terms of our long-term debt obligations.
Previous wording
On December 16, 2025, we entered into a purchase agreement to sell our Riello business with expected gross proceeds of approximately $430 million. The transaction is expected to close in the first half of 2026 and is subject to customary closing conditions and regulatory approvals.
Current wording
On December 16, 2025, we entered into a purchase agreement to sell our Riello business with expected gross proceeds of approximately $430 million. The sale was completed on July 1, 2026.
Previous wording
During the three months ended March 31, 2026, we repurchased 5.0 million shares of common stock for an aggregate purchase price of $306 million. As a result, we had approximately $5.0 billion remaining under the current authorization at March 31, 2026.
Current wording
During the six months ended June 30, 2026, we repurchased 12.0 million shares of common stock for an aggregate purchase price of $748 million. As a result, we had approximately $4.6 billion remaining under the current authorization at June 30, 2026.
Previous wording
We paid dividends on common stock during the three months ended March 31, 2026, totaling $201 million. In April 2026, the Board of Directors declared a dividend of $0.24 per share of common stock payable on May 22, 2026, to shareowners of record at the close of business on May 4, 2026.
Current wording
We paid dividends on common stock during the six months ended June 30, 2026, totaling $400 million. In June 2026, the Board of Directors declared a dividend of $0.24 per share of common stock payable on August 10, 2026, to shareowners of record at the close of business on July 21, 2026.
Previous wording
Cash flows from continuing operating activities primarily represent inflows and outflows associated with our continuing operations. Primary activities include net earnings from continuing operations adjusted for non-cash transactions, working capital changes and changes in other assets and liabilities. The year-over-year decrease in net cash provided by continuing operating activities was primarily driven by lower net earnings and higher working capital balances compared with the prior period.
Current wording
Cash flows from continuing operating activities primarily represent inflows and outflows associated with our continuing operations. Primary activities include net earnings from continuing operations adjusted for non-cash transactions, working capital changes and changes in other assets and liabilities. The year-over-year increase in net cash provided by continuing operating activities was primarily driven by favorable changes in working capital balances partially offset by lower net earnings compared with the prior period.
Previous wording
Cash flows from continuing investing activities primarily represent inflows and outflows associated with long-term assets. Primary activities include capital expenditures, acquisitions, divestitures and proceeds from the sale of fixed assets. During the three months ended March 31, 2026, net cash used in continuing investing activities was $65 million. The primary driver of the outflow related to $94 million of capital expenditures which was partially offset by $35 million of cash inflow related to settlement of derivatives. During the three months ended March 31, 2025, net cash used in continuing investing activities was $30 million. The primary driver of the outflow related to $63 million of capital expenditures which was partially offset by $36 million of cash inflow related to settlement of derivatives.
Current wording
Cash flows from continuing investing activities primarily represent inflows and outflows associated with long-term assets. Primary activities include capital expenditures, acquisitions, divestitures and proceeds from the sale of fixed assets. During the six months ended June 30, 2026, net cash used in continuing investing activities was $235 million. The primary driver of the outflow related to $211 million of capital expenditures. During the six months ended June 30, 2025, net cash used in continuing investing activities was $113 million. The primary driver of the outflow related to $144 million of capital expenditures which was partially offset by $87 million of cash inflow related to settlement of derivatives.
Previous wording
Cash flows from continuing financing activities primarily represent inflows and outflows associated with equity or borrowings. During the three months ended March 31, 2026, net cash used in continuing financing activities was $141 million. The primary driver of the outflow was related to repurchases of our common stock totaling $306 million. In addition, we paid $201 million in dividends to our common shareowners. These outflows were partially offset by short-term borrowings of $371 million. During the three months ended March 31, 2025, net cash used in continuing financing activities was $2.7 billion. The primary driver of the outflow was related to repurchases of our common stock totaling $1.3 billion. In addition, we made long-term debt repayments of $1.2 billion and the payment of $198 million in dividends to our common shareowners.
Current wording
Cash flows from continuing financing activities primarily represent inflows and outflows associated with equity or borrowings. During the six months ended June 30, 2026, net cash used in continuing financing activities was $901 million. The primary driver of the outflow was related to repurchases of our common stock totaling $745 million. In addition, we paid $400 million in dividends to our common shareowners. These outflows were partially offset by short-term borrowings of $361 million. During the six months ended June 30, 2025, net cash used in continuing financing activities was $3.3 billion. The primary driver of the outflow was related to repurchases of our common stock totaling $1.6 billion. In addition, we made long-term debt repayments of $1.2 billion and the payment of $390 million in dividends to our common shareowners.
Rearranged current paragraphs (16)
Current report — wording carried from elsewhere
Gross margin decreased by $41 million compared with the three months ended June 30, 2025, primarily due to higher input costs, including the impact of tariffs, and unfavorable business mix. These amounts were partially offset by higher volumes in certain end-markets and our continued focus on productivity initiatives. As a result, gross margin as a percentage of Net sales decreased by 170 basis points compared with the same period of 2025.
Current report — wording carried from elsewhere
Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the three months ended June 30, 2026, Equity method investment net earnings were $58 million, a 26% decrease compared with the same period of 2025. The decrease was primarily driven by lower earnings in joint ventures within our Climate Solutions Americas and Climate Solutions Asia Pacific, Middle East & Africa segments.
Current report — wording carried from elsewhere
The following represents our consolidated net sales and operating results:
Current report — wording carried from elsewhere
Organic sales for the six months ended June 30, 2026, increased by 1% compared with the same period of 2025. The organic increase was primarily due to improved end-market demand across our Climate Solutions Americas, Climate Solutions Europe and Climate Solutions Asia Pacific, Middle East & Africa segments. In addition, continued end-market demand in Climate Solutions Transportation segment further benefited results. Refer to "Segment Review" below for a discussion of Net salesby segment.
Current report — wording carried from elsewhere
Research and development costs relate to new product development and new technology innovation. Due to the variable nature of program development schedules, year-over-year spending levels can fluctuate. In addition, we continue to invest to prepare for future product innovations and digital controls technologies.
Current report — wording carried from elsewhere
Other income (expense), net primarily includes the impact of gains and losses related to the sale of businesses or interests in our equity method investments, foreign currency gains and losses on transactions that are denominated in a currency other than an entity's functional currency and hedging-related activities. During the six months ended June 30, 2026, our Climate Solutions Europe segment recorded a $46 million impairment on its Riello business. During the six months ended June 30, 2025, we finalized working capital and other adjustments provided in the stock purchase agreement governing the sale of CCR.
Current report — wording carried from elsewhere
Non-operating income (expense), net includes the results from activities other than normal business operations such as interest expense, interest income and the non-service components of pension and post-retirement obligations. Interest expense is affected by the amount of debt outstanding and the interest rates on that debt. For the six months ended June 30, 2026, Interest expensewas $237 million, a 4% increase compared with the same period of 2025. The increase is a result of commercial paper borrowings outstanding during the six months ended June 30, 2026.
Current report — wording carried from elsewhere
We account for income tax expense in accordance with ASC 740, which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate for thesix months ended June 30, 2026, was 9.4% compared with 20.1% for the six months ended June 30, 2025. The year-over-year decrease was primarily driven by a net$99 milliontax benefit from the partial release of a valuation allowance associated with our operations in a Swiss subsidiary and a favorable settlement of$18 million related to a state income tax audit during the six months ended June 30, 2026. These benefits were partially offset bythe$46 million non-deductible impairment charge on Riello and a $10 million increase in tax expense associated with a higher German effective tax rate. The six months ended June 30, 2025, included a $12 million tax benefit generated by the purchase of investment tax credits from a third-party, a state tax benefit of$6 million related to the utilization of a capital loss, and a tax benefit of $6 million from the conclusion of the UTC 2020 U.S. Internal Revenue Service ("IRS") tax audit.
Current report — wording carried from elsewhere
We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). In addition, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. Adjusted operating profit is a non-GAAP measure and defined as consolidated operating profit (a GAAP measure), excluding restructuring costs, amortization of acquired intangible assets and other significant items of a nonoperational nature. This measure is useful to investors because it is how management assesses the operating performance of the business. A reconciliation of the amounts prepared in accordance with GAAP to the corresponding non-GAAP measure appears below and provides additional information as to the items and amounts that have been excluded from the adjusted measure.
Current report — wording carried from elsewhere
Adjusted operating profit may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for Operating profit in accordance with GAAP. The non-GAAP information presented provides investors with additional useful information, but should not be considered in isolation or as a substitute for the related GAAP measure. 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.
Current report — wording carried from elsewhere
The organic increase in Net salesof 4% was driven by volume improvements within certain end-markets compared with the prior year. Results in China decreased (down 14%) as end-markets experienced economic challenges impacting both demand and price. These results were more than offset by ongoing end-market demand and improved price in the region's remaining geographies.
Current report — wording carried from elsewhere
Organic Net sales were flat primarily driven by mixed end-market demand compared with the prior year. Container results increased (up 39%) due to ongoing end-market demand. These results were partially offset by lower volume in our global truck and trailer business (down 13%) primarily due to reduced end-market demand in North America and Europe partially offset by improvements in Asia.
Current report — wording carried from elsewhere
Summary performance for each of our segments is as follows:
Current report — wording carried from elsewhere
A reconciliation of Segment operating profit to Adjusted operating profit is as follows:
Current report — wording carried from elsewhere
The organic increase in Net salesof 1% was driven by mixed demand across end-markets compared with the prior year. Results in our residential and light commercial business increased (up 4%) as a result of higher volumes across the region offset by pricing promotions. Results in our commercial business decreased (down 6%) due to lower volumes across the region.
Current report — wording carried from elsewhere
Climate Solutions Asia Pacific, Middle East & Africa