CARRIER GLOBAL Corp

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 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.

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. During the third quarter of 2026, we recognized a benefit of $133 million related to refunds of IEEPA tariffs previously paid that we determined are probable and estimable. The benefit was recorded primarily as a reduction to Cost of products sold on the accompanying Unaudited Condensed Consolidated Statement of Operations.

Previous wording

On April 2, 2026, updated Section 232 tariffs applicable to steel, aluminum and copper were announced. We expect to mitigate the 2026 impact by leveraging similar strategies deployed during 2025 including supply chain changes, operational cost reduction and pricing actions.

Current wording

On April 2, 2026, updated Section 232 tariffs applicable to steel, aluminum and copper were announced. We expect to partially mitigate the 2026 impact by leveraging similar strategies deployed during 2025 including supply chain changes, operational cost reduction and pricing actions. We will continue to monitor developments in U.S. tariff policy and assess the impact of any changes on our business and results of operations.

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 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.

Current wording

On July 1, 2026, we completed the sale of our Riello business ("Riello") for cash proceeds of $438 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 a gross loss on the sale of $48 million, which is recorded in Other income (expense), neton the accompanying Unaudited Condensed Consolidated Statement of Operations. The gross loss included a $46 million impairment in the second quarter of 2026 and an additional $2 million loss recognized upon completion of the sale in the third quarter of 2026. The net proceeds received are subject to working capital and other adjustments provided in the stock purchase agreement.

Previous wording

Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses. We believe that the most complex and sensitive judgments, because of their potential significance to the accompanying Unaudited Condensed Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. In "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our 2025 Form 10-K, wedescribe the significant accounting estimates and policies used in the preparation of the accompanying Unaudited Condensed Consolidated Financial Statements. There have been no significant changes in our critical accounting estimates.

Current wording

Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses. We believe that the most complex and sensitive judgments, because of their potential significance to the accompanying Unaudited Condensed Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. In "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our 2025 Form 10-K, wedescribe the significant accounting estimates and policies used in the preparation of the accompanying Unaudited Condensed Consolidated Financial Statements. Except as noted below, there have been no significant changes in our critical accounting estimates.

Previous 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.

Current wording

Organic sales for the three months ended September 30, 2026, increased by 15% compared with the same period of 2025. The organic increase was primarily due to our Climate Solutions Americas segment as end-market demand resulted in higher volumes. In addition, end-market demand in both our Climate Solutions Europe and Climate Solutions Asia Pacific, Middle East & Africa segments further benefited overall results. These results were partially offset by lower end-market demand in Climate Solutions Transportation. Refer to "Segment Review" below for a discussion of Net salesby segment.

Previous wording

For the three months ended June 30, 2026, gross margin was $1.7 billion, a 2% decrease compared with the same period of 2025. The components were as follows:

Current wording

For the three months ended September 30, 2026, gross margin was $1.7 billion, a 16% increase compared with the same period of 2025. The components were as follows:

Previous 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.

Current wording

Gross margin increased by $234 million compared with the three months ended September 30, 2025, primarily due to higher volume in certain end-markets and IEEPA tariff refunds. In addition, favorable productivity initiatives further benefited results. These amounts were partially offset by higher input costs and unfavorable business mix. As a result, gross margin as a percentage of Net sales increased by 90 basis points compared with the same period of 2025.

Previous 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:

Current wording

For the three months ended September 30, 2026, operating expenses, including Equity method investment net earnings, were $4.0 billion compared with $910 million in the same period of 2025. The components were as follows:

Previous wording

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 wording

For the three months ended September 30, 2026, Selling, general and administrative expenses were $758 million, a 6% decrease compared with the same period of 2025. The decrease primarily relates to savings from ongoing cost reduction initiatives partially offset by higher investment spending and incentive compensation costs.

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 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.

Current wording

Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the three months ended September 30, 2026, Equity method investment net earnings were $57 million, a 5% decrease compared with the same period of 2025. The decrease was primarily driven by lower earnings in joint ventures within our Climate Solutions Asia Pacific, Middle East & Africa segment partially offset by higher earnings within our Climate Solutions Americas segment.

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. 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 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.

Previous 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:

Current wording

For the three months ended September 30, 2026, Non-operating income (expense), net was $90 million, a 15% decrease 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 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 wording

Non-operating income (expense), net includes the results from activities other than normal business operations such as interest expense, interest income and the non-service components of pension and post-retirement obligations. Interest expense is affected by the amount of debt outstanding and the interest rates on that debt. For the three months ended September 30, 2026, Interest expensewas $116 million, flat compared with the same period of 2025. Results reflect consistent debt balances including commercial paper borrowings during the three months ended September 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 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.

Current wording

We account 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 negative 7.5% for the three months ended September 30, 2026, compared with negative 0.2% for the three months ended September 30, 2025. The negative effective tax rate in the current period reflected income tax expense recorded on a pretax loss, primarily driven by the non-deductible $3.1 billion goodwill impairment charge related to the Climate Solutions Europe reporting unit. In addition, the three months ended September 30, 2026, included a tax charge of $12 million related to the disposition of Riello. The negative effective tax rate for the three months ended September 30, 2025, included a net tax benefit of $64 million from changes to the German effective rate and a statutory reduction to the German corporate tax rate and a $49 million benefit from the re-organization of a Japanese subsidiary.

Previous wording

We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). In addition, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. Adjusted operating profit is a non-GAAP measure and defined as consolidated operating profit (a GAAP measure), excluding restructuring costs, amortization of acquired 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 wording

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

Previous wording

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 wording

Organic sales for the nine months ended September 30, 2026, increased by 6% compared with the same period of 2025. The organic increase was primarily due to improved end-market demand across all segments. Refer to "Segment Review" below for a discussion of Net salesby segment.

Previous wording

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 wording

Gross margin was primarily flat compared with the nine months ended September 30, 2025. Gross margin as a percentage of Net sales decreased by 170 basis points compared with the same period of 2025, primarily due to higher input costs, including the impact of tariffs and unfavorable business mix which were partially offset by higher volumes in certain end-markets, IEEPA tariff refunds and our continued focus on productivity initiatives.

Previous wording

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 wording

For the nine months ended September 30, 2026, operating expenses, including Equity method investment net earnings, were $5.8 billion, compared with $2.6 billion in the same period of 2025. The components were as follows:

Previous 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.

Current wording

For the nine months ended September 30, 2026, Selling, general and administrative expenses were $2.4 billion, a 4% increase compared with the same period of 2025. The increase primarily relates to an increase in incentive compensation and commissions. These costs were partially offset by savings from ongoing cost reduction initiatives and lower salaries and wages.

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 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 wording

Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. For the nine months ended September 30, 2026, Equity method investment net earnings were $146 million, a 20% 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.

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. 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.

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 nine months ended September 30, 2026, we completed the sale of Riello and recognized a gross loss of$48 million. During the nine months ended September 30, 2025, we finalized working capital and other adjustments provided in the stock purchase agreement governing the sale of CCR.

Previous wording

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 wording

For the nine months ended September 30, 2026, Non-operating income (expense), net was $283 million, a 2% 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 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.

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 nine months ended September 30, 2026, Interest expensewas $353 million, a 3% increase compared with the same period of 2025. The increase is a result of commercial paper borrowings during the nine months ended September 30, 2026.

Previous wording

We account for income tax expense in accordance with ASC 740, which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate 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 wording

We account for income tax expense in accordance with ASC 740, which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate for the nine months ended September 30, 2026, was negative 17.7% compared with positive 15.2% for the nine months ended September 30, 2025. The negative effective tax rate in the current period reflected income tax expense recorded on a pretax loss, primarily driven by the non-deductible $3.1 billion goodwill impairment charge related to the Climate Solutions Europe reporting unit and a $48 million non-deductible impairment charge on Riello. In addition, thenine months ended September 30, 2026, included a net $99 million tax benefit from the partial release of a valuation allowance associated with the Company's operations in a Swiss subsidiary, a favorable settlement of $18 million related to a state income tax audit, a tax charge of $12 million related to the disposition of Riello and a $10 million increase in tax expense associated with a higher German effective tax rate. The nine months ended September 30, 2025, included a net tax benefit of $64 million from changes to the German effective rate and a statutory reduction to the German corporate tax rate, a $49 million benefit from the re-organization of a Japanese subsidiary and a $16 million tax benefit generated by the purchase of investment tax credits from a third-party.

Previous wording

We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). In addition, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. Adjusted operating profit is a non-GAAP measure and defined as consolidated operating profit (a GAAP measure), excluding restructuring costs, amortization of acquired 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 wording

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

Previous wording

For the 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 wording

For the three months ended September 30, 2026, Net sales were $3.4 billion, a 24% increase compared with the same period of 2025. The components of the year-over-year change were as follows:

Previous 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.

Current wording

The organic increase in Net salesof 25% was driven by volume growth across end-markets compared with the prior year. Growth in our residential business (up 34%) was primarily driven by strong end-market demand and pricing improvements. In addition, our commercial business returned to growth (up 25%) as a result of strong end-market demand and pricing improvements. Higher volume in our light commercial business (up 7%) further benefited segment results.

Previous 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:

Current wording

For the three months ended September 30, 2026, Net sales were $1.3 billion, a 3% increase compared with the same period of 2025. The components of the year-over-year change were as follows:

Previous 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.

Current wording

The organic increase in Net salesof 12% was driven by improved demand across end-markets compared with the prior year. Results in our residential and light commercial business increased (up 13%) as a result of higher volumes and favorable mix. In addition, our commercial business returned to growth (up 8%) as a result of improved end-market demand.

Previous 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:

Current wording

For the three months ended September 30, 2026, Net sales were $726 million, a 3% decrease compared to the same period of 2025. The components of the year-over-year change were as follows:

Previous wording

The organic increase in Net sales of 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.

Current wording

Organic decrease in Net sales of 3% was driven by lower demand in certain end-markets compared with the prior year. Container results increased (up 4%) due to ongoing end-market demand. These results were more than offset by lower volume in our global truck and trailer business (down 6%) primarily due to lower end-market demand in North America and Europe partially offset by improvements in Asia.

Previous wording

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 wording

The segment operational profit decrease of 18% 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. Amounts in other represent IEEPA tariff refunds.

Previous wording

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 wording

For the nine months ended September 30, 2026, Net sales were $9.2 billion, an 8% 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 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 wording

The segment operational profit decrease of 11% was primarily attributable to higher input costs, including the impact of tariffs, and unfavorable product mix compared with the prior year. These amounts were partially offset by higher volumes across end-markets and pricing improvements. Amounts reported in other primarily represent IEEPA tariff refunds.

Previous wording

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 wording

The organic increase in Net salesof 5% was driven by 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. Results in our commercial business decreased (down 1%) due to lower volumes across the region.

Previous 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.

Current wording

Segment operational profit was flat primarily attributable to higher volumes in certain end-markets and favorable productivity initiatives partially offset by unfavorable product mix across end-markets compared with the prior year. In addition, higher selling, general and administrative expenses and higher warranty-related expenses further impacted the segment. Amounts reported in other represent the correction of a prior-period item partially offset by increases in certain inventory related reserves.

Previous wording

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 wording

The organic increase in Net salesof 2% was driven by volume improvements within certain end-markets compared with the prior year. Outside of China, sales growth was driven by ongoing end-market demand and improved price. These results were partially offset by China (down 10%) as end-markets experienced economic challenges impacting both demand and price.

Previous wording

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 wording

For the nine months ended September 30, 2026, Segment operating profit was $292 million, a 17% 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 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 wording

The segment operational profit decrease of 24% 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 primarily represent a gain on sale of land.

Previous wording

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:

Current wording

For the nine months ended September 30, 2026, Net sales were $2.2 billion, a 3% increase compared to the same period of 2025. The components of the year-over-year change were as follows: