carr-20240331
FALSE--12-312024Q10001783180http://fasb.org/us-gaap/2023#OtherAssetsCurrent http://fasb.org/us-gaap/2023#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2023#OtherAssetsCurrent http://fasb.org/us-gaap/2023#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrent http://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrent http://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrent http://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrent http://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrent00017831802024-01-012024-03-310001783180us-gaap:CommonStockMember2024-01-012024-03-310001783180carr:SeniorNotes4.375Due2025Member2024-01-012024-03-310001783180carr:SeniorNotes4125Due2028Member2024-01-012024-03-310001783180carr:SeniorNotes4500Due2032Member2024-01-012024-03-3100017831802024-04-15xbrli:shares0001783180us-gaap:ProductMember2024-01-012024-03-31iso4217:USD0001783180us-gaap:ProductMember2023-01-012023-03-310001783180us-gaap:ServiceMember2024-01-012024-03-310001783180us-gaap:ServiceMember2023-01-012023-03-3100017831802023-01-012023-03-31iso4217:USDxbrli:shares00017831802024-03-3100017831802023-12-310001783180us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001783180us-gaap:CommonStockMember2023-12-310001783180us-gaap:TreasuryStockCommonMember2023-12-310001783180us-gaap:AdditionalPaidInCapitalMember2023-12-310001783180us-gaap:RetainedEarningsMember2023-12-310001783180us-gaap:NoncontrollingInterestMember2023-12-310001783180us-gaap:RetainedEarningsMember2024-01-012024-03-310001783180us-gaap:NoncontrollingInterestMember2024-01-012024-03-310001783180us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001783180us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001783180us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001783180us-gaap:CommonStockMember2024-03-310001783180us-gaap:TreasuryStockCommonMember2024-03-310001783180us-gaap:AdditionalPaidInCapitalMember2024-03-310001783180us-gaap:RetainedEarningsMember2024-03-310001783180us-gaap:NoncontrollingInterestMember2024-03-310001783180us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001783180us-gaap:CommonStockMember2022-12-310001783180us-gaap:TreasuryStockCommonMember2022-12-310001783180us-gaap:AdditionalPaidInCapitalMember2022-12-310001783180us-gaap:RetainedEarningsMember2022-12-310001783180us-gaap:NoncontrollingInterestMember2022-12-3100017831802022-12-310001783180us-gaap:RetainedEarningsMember2023-01-012023-03-310001783180us-gaap:NoncontrollingInterestMember2023-01-012023-03-310001783180us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001783180us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001783180us-gaap:TreasuryStockCommonMember2023-01-012023-03-310001783180us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001783180us-gaap:CommonStockMember2023-03-310001783180us-gaap:TreasuryStockCommonMember2023-03-310001783180us-gaap:AdditionalPaidInCapitalMember2023-03-310001783180us-gaap:RetainedEarningsMember2023-03-310001783180us-gaap:NoncontrollingInterestMember2023-03-3100017831802023-03-31carr:segment0001783180us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMembercarr:AccessSolutionsMember2023-12-070001783180carr:CommercialRefrigerationBusinessMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2023-12-120001783180carr:IndustrialFireToSentinelCapitalPartnersMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2024-03-0500017831802020-04-032020-04-030001783180carr:HVACSegmentMember2023-12-310001783180carr:RefrigerationSegmentMember2023-12-310001783180carr:FireAndSecuritySegmentMember2023-12-310001783180carr:HVACSegmentMember2024-01-012024-03-310001783180carr:RefrigerationSegmentMember2024-01-012024-03-310001783180carr:FireAndSecuritySegmentMember2024-01-012024-03-310001783180carr:HVACSegmentMember2024-03-310001783180carr:RefrigerationSegmentMember2024-03-310001783180carr:FireAndSecuritySegmentMember2024-03-310001783180us-gaap:CustomerRelationshipsMember2024-03-310001783180us-gaap:CustomerRelationshipsMember2023-12-310001783180carr:PatentsAndTrademarksMember2024-03-310001783180carr:PatentsAndTrademarksMember2023-12-310001783180carr:ServicePortfoliosAndOtherMember2024-03-310001783180carr:ServicePortfoliosAndOtherMember2023-12-310001783180carr:TrademarksAndOtherMember2024-03-310001783180carr:TrademarksAndOtherMember2023-12-310001783180carr:SeniorNotes2242Due2025Memberus-gaap:UnsecuredDebtMember2024-03-31xbrli:pure0001783180carr:SeniorNotes2242Due2025Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes4.375Due2025Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes4.375Due2025Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes5.800Due2025Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes5.800Due2025Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes2493Due2027Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes2493Due2027Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes4125Due2028Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes4125Due2028Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes2722Due2030Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes2722Due2030Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes2700Due2031Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes2700Due2031Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes4500Due2032Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes4500Due2032Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes5.900Due2034Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes5.900Due2034Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes3377Due2040Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes3377Due2040Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes3577Due2050Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes3577Due2050Memberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:SeniorNotes6.200Due2054Memberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:SeniorNotes6.200Due2054Memberus-gaap:UnsecuredDebtMember2023-12-310001783180us-gaap:UnsecuredDebtMember2024-03-310001783180us-gaap:UnsecuredDebtMember2023-12-310001783180carr:DelayedDrawFacilityMemberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:DelayedDrawFacilityMemberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:TermLoanFacilityMemberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:TermLoanFacilityMemberus-gaap:UnsecuredDebtMember2023-12-310001783180carr:OtherDebtMember2024-03-310001783180carr:OtherDebtMember2023-12-310001783180carr:VCSBusinessMember2024-01-022024-01-020001783180us-gaap:UnsecuredDebtMembercarr:SeniorNotesIssuedNovember2023Member2023-11-30carr:tranche0001783180carr:SeniorNotes5.800Due2025Memberus-gaap:UnsecuredDebtMember2023-11-300001783180carr:SeniorNotes5.900Due2034Memberus-gaap:UnsecuredDebtMember2023-11-300001783180carr:SeniorNotes6.200Due2054Memberus-gaap:UnsecuredDebtMember2023-11-300001783180us-gaap:SeniorNotesMemberus-gaap:UnsecuredDebtMember2023-11-30iso4217:EUR0001783180carr:SeniorNotes4.375Due2025Memberus-gaap:UnsecuredDebtMember2023-11-300001783180carr:SeniorNotes4125Due2028Memberus-gaap:UnsecuredDebtMember2023-11-300001783180carr:SeniorNotes4500Due2032Memberus-gaap:UnsecuredDebtMember2023-11-300001783180carr:TermLoanMemberus-gaap:UnsecuredDebtMember2023-11-300001783180us-gaap:UnsecuredDebtMembercarr:BridgeTermLoanFacilityMember2023-04-250001783180us-gaap:BridgeLoanMembercarr:SecuredOvernightFinancingRateMembercarr:BridgeTermLoanFacilityMember2023-04-252023-04-250001783180us-gaap:BridgeLoanMembercarr:BridgeTermLoanFacilityMemberus-gaap:UnsecuredDebtMember2023-04-250001783180us-gaap:BridgeLoanMembercarr:BridgeTermLoanFacilityMemberus-gaap:UnsecuredDebtMember2023-04-252023-04-250001783180us-gaap:BridgeLoanMembercarr:BridgeTermLoanFacilityMemberus-gaap:UnsecuredDebtMember2024-01-022024-01-020001783180carr:BridgeTermLoanFacilityEuroDenominatedTranche1Memberus-gaap:BridgeLoanMemberus-gaap:UnsecuredDebtMember2024-01-020001783180carr:BridgeTermLoanFacilityUSDDenominatedTrancheMemberus-gaap:BridgeLoanMemberus-gaap:UnsecuredDebtMember2024-01-020001783180carr:DelayedDrawFacilityMemberus-gaap:LineOfCreditMembercarr:TheCreditAgreementMember2023-05-190001783180carr:DelayedDrawFacilityMembercarr:BridgeTermLoanFacilityEuroDenominatedTranche1Memberus-gaap:LineOfCreditMember2023-05-192023-05-190001783180carr:DelayedDrawFacilityMembercarr:BridgeTermLoanFacilityEuroDenominatedTranche1Memberus-gaap:LineOfCreditMember2023-05-190001783180carr:DelayedDrawFacilityMembercarr:BridgeTermLoanFacilityEuroDenominatedTranche2Memberus-gaap:LineOfCreditMember2023-05-192023-05-190001783180carr:DelayedDrawFacilityMembercarr:BridgeTermLoanFacilityEuroDenominatedTranche2Memberus-gaap:LineOfCreditMember2023-05-190001783180carr:DelayedDrawFacilityMemberus-gaap:LineOfCreditMembercarr:TheCreditAgreementMembercarr:SecuredOvernightFinancingRateMember2023-05-192023-05-190001783180carr:DelayedDrawFacilityMemberus-gaap:LineOfCreditMember2023-05-190001783180carr:A364DayRevolverMemberus-gaap:UnsecuredDebtMember2023-05-192023-05-190001783180carr:A364DayRevolverMemberus-gaap:UnsecuredDebtMember2023-05-190001783180carr:A364DayRevolverMembercarr:SecuredOvernightFinancingRateMemberus-gaap:UnsecuredDebtMember2023-05-192023-05-190001783180carr:A364DayRevolverMemberus-gaap:UnsecuredDebtMember2024-03-310001783180carr:TermLoanFacilityMemberus-gaap:UnsecuredDebtMember2022-07-152022-07-150001783180carr:TermLoanFacilityMemberus-gaap:UnsecuredDebtMember2022-07-15iso4217:JPY0001783180carr:TokyoTermRiskFreeRateMembercarr:TermLoanFacilityMemberus-gaap:UnsecuredDebtMember2022-07-152022-07-150001783180carr:TermLoanFacilityMemberus-gaap:UnsecuredDebtMember2022-07-252022-07-250001783180us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2023-05-190001783180us-gaap:RevolvingCreditFacilityMembercarr:SecuredOvernightFinancingRateMember2023-05-192023-05-190001783180us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-03-310001783180us-gaap:CommercialPaperMemberus-gaap:LineOfCreditMember2024-03-310001783180carr:ProjectFinancingArrangementsMembercarr:OtherDebtMember2024-01-012024-03-310001783180carr:ProjectFinancingArrangementsMembercarr:OtherDebtMember2023-01-012023-03-310001783180us-gaap:ForeignExchangeForwardMembercarr:VCSBusinessMember2023-12-310001783180us-gaap:ForeignExchangeForwardMembercarr:VCSBusinessMember2024-01-012024-03-310001783180carr:VCSBusinessMemberus-gaap:InterestRateSwapMember2023-12-310001783180carr:VCSBusinessMemberus-gaap:InterestRateSwapMember2023-11-012023-11-300001783180carr:VCSBusinessMemberus-gaap:InterestRateSwapMember2024-03-310001783180us-gaap:FairValueMeasurementsRecurringMember2024-03-310001783180us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-03-310001783180us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2024-03-310001783180us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2024-03-310001783180us-gaap:FairValueMeasurementsRecurringMember2023-12-310001783180us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-12-310001783180us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-12-310001783180us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-12-310001783180us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMember2024-03-310001783180us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMember2024-03-310001783180us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMember2023-12-310001783180us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMember2023-12-3100017831802021-02-2800017831802023-01-012023-12-310001783180us-gaap:AccumulatedTranslationAdjustmentMember2023-12-310001783180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-310001783180us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-310001783180us-gaap:AccumulatedTranslationAdjustmentMember2024-01-012024-03-310001783180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-01-012024-03-310001783180us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-01-012024-03-310001783180us-gaap:AccumulatedTranslationAdjustmentMember2024-03-310001783180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-310001783180us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-310001783180us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310001783180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-310001783180us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-310001783180us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-03-310001783180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-03-310001783180us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-01-012023-03-310001783180us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310001783180us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-03-310001783180us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-03-310001783180carr:HVACSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:ProductMember2024-01-012024-03-310001783180carr:HVACSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:ProductMember2023-01-012023-03-310001783180carr:HVACSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:ServiceMember2024-01-012024-03-310001783180carr:HVACSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:ServiceMember2023-01-012023-03-310001783180carr:HVACSegmentMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001783180carr:HVACSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001783180us-gaap:OperatingSegmentsMembercarr:RefrigerationSegmentMemberus-gaap:ProductMember2024-01-012024-03-310001783180us-gaap:OperatingSegmentsMembercarr:RefrigerationSegmentMemberus-gaap:ProductMember2023-01-012023-03-310001783180us-gaap:OperatingSegmentsMembercarr:RefrigerationSegmentMemberus-gaap:ServiceMember2024-01-012024-03-310001783180us-gaap:OperatingSegmentsMembercarr:RefrigerationSegmentMemberus-gaap:ServiceMember2023-01-012023-03-310001783180us-gaap:OperatingSegmentsMembercarr:RefrigerationSegmentMember2024-01-012024-03-310001783180us-gaap:OperatingSegmentsMembercarr:RefrigerationSegmentMember2023-01-012023-03-310001783180us-gaap:OperatingSegmentsMembercarr:FireAndSecuritySegmentMemberus-gaap:ProductMember2024-01-012024-03-310001783180us-gaap:OperatingSegmentsMembercarr:FireAndSecuritySegmentMemberus-gaap:ProductMember2023-01-012023-03-310001783180us-gaap:OperatingSegmentsMembercarr:FireAndSecuritySegmentMemberus-gaap:ServiceMember2024-01-012024-03-310001783180us-gaap:OperatingSegmentsMembercarr:FireAndSecuritySegmentMemberus-gaap:ServiceMember2023-01-012023-03-310001783180us-gaap:OperatingSegmentsMembercarr:FireAndSecuritySegmentMember2024-01-012024-03-310001783180us-gaap:OperatingSegmentsMembercarr:FireAndSecuritySegmentMember2023-01-012023-03-310001783180us-gaap:OperatingSegmentsMember2024-01-012024-03-310001783180us-gaap:OperatingSegmentsMember2023-01-012023-03-310001783180us-gaap:IntersegmentEliminationMember2024-01-012024-03-310001783180us-gaap:IntersegmentEliminationMember2023-01-012023-03-3100017831802024-04-012024-03-310001783180us-gaap:CorporateNonSegmentMember2024-01-012024-03-310001783180us-gaap:CorporateNonSegmentMember2023-01-012023-03-310001783180us-gaap:CostOfSalesMember2024-01-012024-03-310001783180us-gaap:CostOfSalesMember2023-01-012023-03-310001783180us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-310001783180us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-03-310001783180srt:MinimumMember2024-03-310001783180srt:MaximumMember2024-03-310001783180us-gaap:BridgeLoanMemberus-gaap:UnsecuredDebtMember2024-01-022024-01-020001783180carr:VCSBusinessMember2024-01-020001783180carr:VCSBusinessMemberus-gaap:CustomerRelationshipsMember2024-01-022024-01-020001783180carr:VCSBusinessMembersrt:MinimumMemberus-gaap:TechnologyBasedIntangibleAssetsMember2024-01-022024-01-020001783180carr:VCSBusinessMemberus-gaap:TechnologyBasedIntangibleAssetsMembersrt:MaximumMember2024-01-022024-01-020001783180carr:VCSBusinessMemberus-gaap:TechnologyBasedIntangibleAssetsMember2024-01-022024-01-020001783180us-gaap:TrademarksMembercarr:VCSBusinessMember2024-01-022024-01-020001783180carr:VCSBusinessMembercarr:BacklogMember2024-01-022024-01-020001783180carr:VCSBusinessMember2024-01-022024-03-310001783180carr:VCSBusinessMember2024-01-012024-03-310001783180carr:VCSBusinessMember2023-01-012023-12-310001783180carr:VCSBusinessMember2023-01-012023-03-310001783180carr:CommercialRefrigerationMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2024-03-310001783180us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMembercarr:AccessSolutionsMember2024-03-310001783180us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMembercarr:IndustrialFireMember2024-03-310001783180us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2024-03-310001783180carr:CommercialRefrigerationMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2023-12-310001783180us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMembercarr:AccessSolutionsMember2023-12-310001783180us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMembercarr:IndustrialFireMember2023-12-310001783180us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2023-12-310001783180country:US2024-01-012024-03-310001783180country:US2023-01-012023-03-310001783180srt:EuropeMember2024-01-012024-03-310001783180srt:EuropeMember2023-01-012023-03-310001783180srt:AsiaPacificMember2024-01-012024-03-310001783180srt:AsiaPacificMember2023-01-012023-03-310001783180carr:OtherGeographicalRegionMember2024-01-012024-03-310001783180carr:OtherGeographicalRegionMember2023-01-012023-03-310001783180us-gaap:ProductMemberus-gaap:RelatedPartyMember2024-01-012024-03-310001783180us-gaap:ProductMemberus-gaap:RelatedPartyMember2023-01-012023-03-310001783180us-gaap:RelatedPartyMember2024-03-310001783180us-gaap:RelatedPartyMember2023-12-310001783180carr:AsbestosMattersMember2024-03-310001783180carr:AsbestosMattersMember2023-12-310001783180carr:AqueousFilmFormingFoamMember2024-03-31carr:case00017831802023-05-1400017831802023-05-142023-05-14
Table of Contents             
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
 ____________________________________ 
FORM 10-Q
____________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-39220
____________________________________ 
CARRIER GLOBAL CORPORATION
(Exact name of registrant as specified in its charter)
____________________________________ 
Delaware 83-4051582
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
13995 Pasteur Boulevard, Palm Beach Gardens, Florida 33418
(Address of principal executive offices, including zip code)
(561) 365-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($0.01 par value)CARRNew York Stock Exchange
4.375% Notes due 2025CARR25New York Stock Exchange
4.125% Notes due 2028CARR28New York Stock Exchange
4.500% Notes due 2032CARR32New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of April 15, 2024, there were 901,012,491 shares of Common Stock outstanding.
1

Table of Contents             
CARRIER GLOBAL CORPORATION
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Three Months Ended March 31, 2024
Page

Carrier Global Corporation and its subsidiaries' names, abbreviations thereof, logos and product and service designators are all either the registered or unregistered trademarks or trade names of Carrier Global Corporation and its subsidiaries. Names, abbreviations of names, logos and products and service designators of other companies are either the registered or unregistered trademarks or trade names of their respective owners. As used herein, the terms "we," "us," "our," "the Company" or "Carrier," unless the context otherwise requires, mean Carrier Global Corporation and its subsidiaries. References to internet websites in this Form 10-Q are provided for convenience only. Information available through these websites is not incorporated by reference into this Form 10-Q.








2

Table of Contents             



PART I – FINANCIAL INFORMATION
Item 1.    Financial Statements

CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

 Three Months Ended March 31,
(In millions, except per share amounts)20242023
Net sales
Product sales$5,542 $4,686 
Service sales640 587 
Total Net sales6,182 5,273 
Costs and expenses
Cost of products sold(3,998)(3,458)
Cost of services sold(479)(437)
Research and development(224)(139)
Selling, general and administrative(985)(721)
Total Costs and expenses(5,686)(4,755)
Equity method investment net earnings31 44 
Other income (expense), net(27)(7)
Operating profit500 555 
Interest (expense) income, net(165)(46)
Income from operations before income taxes335 509 
Income tax (expense) benefit(46)(122)
Net income from operations289 387 
Less: Non-controlling interest in subsidiaries' earnings from operations20 14 
Net income attributable to common shareowners$269 $373 
Earnings per share
Basic$0.30 $0.45 
Diluted $0.29 $0.44 
Weighted-average number of shares outstanding
Basic899.2 835.0 
Diluted913.0 852.2 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

3

Table of Contents             

CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

 Three Months Ended March 31,
(In millions)20242023
Net income from operations$289 $387 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments arising during period(388)54 
Amortization of unrealized cash flow hedging gain (loss)(1) 
Other comprehensive income (loss), net of tax(389)54 
Comprehensive income (loss)(100)441 
Less: Comprehensive income (loss) attributable to non-controlling interest17 16 
Comprehensive income (loss) attributable to common shareowners$(117)$425 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

4

Table of Contents             
CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
As of
(In millions)March 31,
2024
December 31,
2023
Assets
Cash and cash equivalents$1,313 $10,015 
Accounts receivable, net3,156 2,481 
Contract assets, current320 306 
Inventories, net3,189 2,217 
Assets held for sale, current3,169 3,314 
Other assets, current568 447 
Total current assets11,715 18,780 
Future income tax benefits823 739 
Fixed assets, net3,179 2,293 
Operating lease right-of-use assets633 491 
Intangible assets, net7,351 1,028 
Goodwill15,366 7,989 
Pension and post-retirement assets78 32 
Equity method investments1,155 1,140 
Other assets510 330 
Total Assets$40,810 $32,822 
Liabilities and Equity
Accounts payable$3,074 $2,742 
Accrued liabilities2,994 2,811 
Contract liabilities, current501 425 
Liabilities held for sale, current820 862 
Current portion of long-term debt1,248 51 
Total current liabilities8,637 6,891 
Long-term debt15,647 14,242 
Future pension and post-retirement obligations259 155 
Future income tax obligations2,272 535 
Operating lease liabilities505 391 
Other long-term liabilities1,584 1,603 
Total Liabilities28,904 23,817 
Commitments and contingent liabilities (Note 19)
Equity
Common stock9 9 
Treasury stock(1,972)(1,972)
Additional paid-in capital8,536 5,535 
Retained earnings6,860 6,591 
Accumulated other comprehensive loss(1,872)(1,486)
Non-controlling interest345 328 
Total Equity11,906 9,005 
Total Liabilities and Equity$40,810 $32,822 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
5

Table of Contents             
CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)

(In millions)Accumulated Other Comprehensive Income (Loss)Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsNon-Controlling InterestTotal Equity
Balance as of December 31, 2023$(1,486)$9 $(1,972)$5,535 $6,591 $328 $9,005 
Net income— — — — 269 20 289 
Other comprehensive income (loss), net of tax(386)— — — — (3)(389)
Shares issued under incentive plans, net— — — (22)— — (22)
Stock-based compensation— — — 23 — — 23 
Acquisition of VCS Business— — — 3,000 — — 3,000 
Balance as of March 31, 2024$(1,872)$9 $(1,972)$8,536 $6,860 $345 $11,906 
(In millions)Accumulated Other Comprehensive Income (Loss)Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsNon-Controlling InterestTotal Equity
Balance as of December 31, 2022$(1,688)$9 $(1,910)$5,481 $5,866 $318 $8,076 
Net income— — — — 373 14 387 
Other comprehensive income (loss), net of tax52 — — — — 2 54 
Shares issued under incentive plans, net— — — (9)— — (9)
Stock-based compensation— — — 22 — — 22 
Treasury stock repurchase— — (62)— — — (62)
Balance as of March 31, 2023$(1,636)$9 $(1,972)$5,494 $6,239 $334 $8,468 

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
6

Table of Contents             
CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 Three Months Ended March 31,
(In millions)20242023
Operating Activities
Net income from operations$289 $387 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization314 136 
Deferred income tax provision(123)(24)
Stock-based compensation costs22 22 
Equity method investment net earnings(31)(44)
(Gain) loss on sale of investments / deconsolidation (16)
Changes in operating assets and liabilities
Accounts receivable, net(205)(157)
Contract assets, current(33)(28)
Inventories, net(72)(126)
Other assets, current(52)(60)
Accounts payable and accrued liabilities(195)(25)
Contract liabilities, current(18)64 
Defined benefit plan contributions(6)(6)
Distributions from equity method investments7 3 
Other operating activities, net143 (6)
Net cash flows provided by (used in) operating activities40 120 
Investing Activities
Capital expenditures(104)(70)
Investment in businesses, net of cash acquired(10,772)(52)
Dispositions of businesses 35 
Settlement of derivative contracts, net(209)(18)
Other investing activities, net4 5 
Net cash flows provided by (used in) investing activities(11,081)(100)
Financing Activities
Increase (decrease) in short-term borrowings, net19 10 
Issuance of long-term debt2,548 5 
Repayment of long-term debt(5)(2)
Repurchases of common stock (62)
Dividends paid on common stock(159)(154)
Dividends paid to non-controlling interest(2) 
Other financing activities, net(22)(10)
Net cash flows provided by (used in) financing activities2,379 (213)
Effect of foreign exchange rate changes on cash and cash equivalents(68)20 
Net increase (decrease) in cash and cash equivalents and restricted cash, including cash classified in current assets held for sale(8,730)(173)
Less: Change in cash balances classified as assets held for sale(30) 
Net increase (decrease) in cash and cash equivalents and restricted cash(8,700)(173)
Cash, cash equivalents and restricted cash, beginning of period10,017 3,527 
Cash, cash equivalents and restricted cash, end of period1,317 3,354 
Less: restricted cash4 7 
Cash and cash equivalents, end of period$1,313 $3,347 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
7

Table of Contents             
CARRIER GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1: DESCRIPTION OF THE BUSINESS

Carrier Global Corporation (the "Company") is a global leader in intelligent climate and energy solutions with a focus on providing differentiated, digitally-enabled lifecycle solutions to its customers. The Company's portfolio includes industry-leading brands such as Carrier, Viessmann, Toshiba, Automated Logic, Carrier Transicold, Kidde, Edwards and LenelS2 that offer innovative heating, ventilating, air conditioning ("HVAC"), refrigeration, fire, security and building automation technologies to help make the world safer and more comfortable. The Company also provides a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. The Company's operations are classified into three segments: HVAC, Refrigeration and Fire & Security.

In the opinion of management, the accompanying Unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments) necessary to state fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). The accompanying Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for 2023 filed with the SEC on February 6, 2024 (the "2023 Form 10-K").

NOTE 2: BASIS OF PRESENTATION

The Unaudited Condensed Consolidated Financial Statements include all accounts of the Company and its wholly-owned and majority-owned subsidiaries in which it has control. Inter-company accounts and transactions have been eliminated. Related party transactions between the Company and its equity method investees have not been eliminated. Non-controlling interest represents a non-controlling investor's interests in the results of subsidiaries that the Company controls and consolidates.

Acquisition of Viessmann Climate Solutions

On April 25, 2023, the Company announced that it entered into a Share Purchase Agreement (the “Agreement”) to acquire the climate solutions business (the "VCS Business") of Viessmann Group GmbH & Co. KG (“Viessmann”), a privately-held company. The VCS Business develops intelligent, integrated and sustainable technologies, including heat pumps, boilers, photovoltaic systems, home battery storage and digital solutions, primarily for residential customers in Europe. The acquisition was completed on January 2, 2024. As a result, the assets, liabilities and results of operations of the VCS Business are consolidated in the accompanying Unaudited Condensed Consolidated Financial Statements as of the date of acquisition and reported within the Company’s HVAC segment. See Note 15 Acquisitions for additional information.

Portfolio Transformation

On April 25, 2023, the Company announced plans to exit its Fire & Security and Commercial Refrigeration businesses over the course of 2024. On December 7, 2023, the Company entered into a stock purchase agreement to sell its Access Solutions business ("Access Solutions") to Honeywell International Inc. for an enterprise value of approximately $4.95 billion. Access Solutions, historically reported in the Company's Fire & Security segment, is a global supplier of physical security and digital access solutions supporting the hospitality, commercial, education and military markets. On December 12, 2023, the Company entered into a stock purchase agreement to sell its Commercial Refrigeration business ("CCR") to Haier Group Corporation for an enterprise value of approximately $775 million. CCR, historically reported in the Company's Refrigeration segment, is a global supplier of turnkey solutions for commercial refrigeration systems and services, with a primary focus on serving food retail customers, cold storage facilities and warehouses. As a result, the assets and liabilities of each business are presented as held for sale in the accompanying Unaudited Condensed Consolidated Balance Sheet as of March 31, 2024 and December 31, 2023, and recorded at the lower of their carrying value or fair value less estimated cost to sell. See Note 16 - Divestitures for additional information.

8

Table of Contents             
In addition, the net assets of the Company’s Industrial Fire business ("Industrial Fire") met the criteria to be classified as held for sale during the fourth quarter of 2023. Industrial Fire, historically reported in the Company's Fire & Security segment, is a leading manufacturer of a full spectrum of fire detection and suppression solutions and services in critical high-hazard environments, including oil and gas, power generation, marine and offshore facilities, automotive, data centers and aircraft hangars. As a result, the assets and liabilities of the business are presented as held for sale in the accompanying Unaudited Condensed Consolidated Balance Sheet as of March 31, 2024 and December 31, 2023, and recorded at the lower of their carrying value or fair value less estimated cost to sell. On March 5, 2024, the Company entered into a stock purchase agreement to sell Industrial Fire to Sentinel Capital Partners for an enterprise value of approximately $1.425 billion. See Note 16 - Divestitures for additional information.

Deconsolidation of Kidde-Fenwal, Inc.

On May 14, 2023, Kidde-Fenwal, Inc. ("KFI"), an indirect wholly-owned subsidiary of the Company, filed a petition for voluntary reorganization under Chapter 11 of the United States Bankruptcy Code ("Chapter 11") in the United States Bankruptcy Court for the District of Delaware. KFI, an industrial fire detection and suppression business historically reported in the Company's Fire & Security segment, has indicated that it intends to use the bankruptcy process to explore strategic alternatives, including the sale of KFI as a going concern. KFI has further stated that, during the Chapter 11 process, KFI expects that there will be no significant interruptions to its business operations. As of the petition date, KFI was deconsolidated and its respective assets and liabilities were derecognized from the Company's Unaudited Condensed Consolidated Financial Statements. See Note 19 - Commitments and Contingent Liabilities for additional information.

Separation from United Technologies

On April 3, 2020 (the Distribution Date"), United Technologies Corporation ("UTC"), since renamed RTX Corporation ("Raytheon Technologies Corporation" or "RTX"), completed the spin-off of Carrier into an independent, publicly traded company (the "Separation") through a pro-rata distribution (the "Distribution") on a one-for-one basis of all of the outstanding shares of common stock of Carrier to UTC shareowners who held shares of UTC common stock as of the close of business on March 19, 2020, the record date of the Distribution. Following the Separation and Distribution, the Company entered into several agreements with UTC and Otis Worldwide Corporation ("Otis") that govern various aspects of the relationship among the Company, UTC and Otis. As of March 31, 2024, only certain portions of the Tax Matters Agreement ("TMA") remain in effect.

Recently Issued and Adopted Accounting Pronouncements

The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the sole source of authoritative U.S. GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues Accounting Standards Updates ("ASU") to communicate changes to the codification. The Company considers the applicability and impact of all ASUs. ASUs pending adoption were assessed and determined to be either not applicable or are not expected to have a material impact on the accompanying Unaudited Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. In addition, the amendments clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and contain other disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently assessing the impact of this ASU on its financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires public entities to disclose disaggregated information about their effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently assessing the impact of this ASU on its financial statements.
9

Table of Contents             

On March 6, 2024, the SEC adopted new rules designed to enhance public company disclosures related to the risks and impacts of climate-related matters. The rules amend the provisions of both Regulation S-K and Regulation S-X and will be required in annual reports and registration statements. Amendments to Regulation S-K require disclosure of climate-related risks, transition plans, targets and goals, risk management and governance. Amendments to Regulation S-X require disclosure of the financial effects of severe weather events and other natural conditions as well as the use of carbon offsets or renewable energy credits. Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025, subject to legal challenges and the SEC's voluntary stay of the disclosure requirements. The Company will continue to assess the impact of these new rules on its financial statements while the stay is in place.

NOTE 3: INVENTORIES, NET

Inventories are stated at the lower of cost or estimated net realizable value. Cost is primarily determined based on the first-in, first-out inventory method ("FIFO") or average cost methods, which approximates current replacement cost. However, certain subsidiaries use the last-in, first-out inventory method ("LIFO").

Inventories, net consisted of the following:
(In millions)March 31,
2024
December 31,
2023
Raw materials$979 $695 
Work-in-process296 259 
Finished goods1,914 1,263 
Inventories, net$3,189 $2,217 

The Company performs periodic assessments utilizing customer demand, production requirements and historical usage rates to determine the existence of excess and obsolete inventory and records necessary provisions to reduce such inventories to the lower of cost or estimated net realizable value. Raw materials, work-in-process and finished goods are net of valuation reserves of $260 million and $223 million as of March 31, 2024 and December 31, 2023, respectively.

NOTE 4: GOODWILL AND INTANGIBLE ASSETS

The Company records goodwill as the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is tested and reviewed annually for impairment on July 1 or whenever there is a material change in events or circumstances that indicates that the fair value of the reporting unit may be less than its carrying value.

The changes in the carrying amount of goodwill were as follows:

(In millions)HVACRefrigerationFire & SecurityTotal
Balance as of December 31, 2023$6,407 $1,124 $458 $7,989 
Acquisitions (1)
7,576   7,576 
Reclassified to held for sale (2)
  25 25 
Foreign currency translation(253)(22)51 (224)
Balance as of March 31, 2024$13,730 $1,102 $534 $15,366 
(1) See Note 15 - Acquisitions for additional information.
(2) See Note 16 - Divestitures for additional information.

Indefinite-lived intangible assets are tested and reviewed annually for impairment on July 1 or whenever there is a material change in events or circumstances that indicates that the fair value of the asset may be less than the carrying amount of the asset. All other intangible assets with finite useful lives are amortized over their estimated useful lives.

10

Table of Contents             
Identifiable intangible assets consisted of the following:

March 31, 2024December 31, 2023
(In millions)Gross AmountAccumulated AmortizationNet AmountGross AmountAccumulated AmortizationNet Amount
Amortized:
Customer relationships$5,929 $(730)$5,199 $1,222 $(610)$612 
Patents and trademarks993 (175)818 332 (163)169 
Service portfolios and other1,831 (561)1,270 686 (503)183 
8,753 (1,466)7,287 2,240 (1,276)964 
Unamortized:
Trademarks and other64 — 64 64 — 64 
Intangible assets, net$8,817 $(1,466)$7,351 $2,304 $(1,276)$1,028 

Amortization of intangible assets was as follows:

 Three Months Ended March 31,
(In millions)20242023
Amortization expense of Intangible assets$212 $64 

Impairment Assessment

On January 1, 2024, the Company reorganized its HVAC segment reporting units due to the VCS Business acquisition. As a result, the Company performed a quantitative goodwill impairment test on its legacy Commercial HVAC, North America residential and light commercial and Global Comfort solutions reporting units prior to the reorganization which did not result in a goodwill impairment. The Company then reassigned goodwill among its new regional reporting units using a relative fair value approach and performed a goodwill impairment assessment which did not result in a goodwill impairment.

11

Table of Contents             
NOTE 5: BORROWINGS AND LINES OF CREDIT

Long-term debt consisted of the following:

(In millions)March 31,
2024
December 31,
2023
2.242% Notes due 2025 (1)
$1,200 $1,200 
4.375% Notes due 2025
812 830 
5.800% Notes due 2025
1,000 1,000 
2.493% Notes due 2027
900 900 
4.125% Notes due 2028
812 830 
2.722% Notes due 2030
2,000 2,000 
2.700% Notes due 2031
750 750 
4.500% Notes due 2032
921 941 
5.900% Notes due 2034
1,000 1,000 
3.377% Notes due 2040
1,500 1,500 
3.577% Notes due 2050
2,000 2,000 
6.200% Notes due 2054
1,000 1,000 
Total long-term notes13,895 13,951 
Delayed Draw Facility2,536  
Japanese Term Loan Facility357 379 
Other debt (including project financing obligations and finance leases)213 74 
Discounts and debt issuance costs(106)(111)
Total debt16,895 14,293 
Less: current portion of long-term debt1,248 51 
Long-term debt, net of current portion$15,647 $14,242 
(1) 2.242% Notes due February 15, 2025; reclassified to Current portion of long-term debt.

Acquisition Funding

On January 2, 2024, the Company completed the acquisition of the VCS Business for total consideration of $14.2 billion. Under the terms of the Agreement, 20% of the purchase price was paid in Carrier common stock, issued directly to Viessmann and subject to certain lock up provisions and 80% was paid in cash, subject to working capital and other adjustments. In order to fund the Euro-denominated cash portion of the purchase price, the Company used cash on hand, debt financing and various term loan facilities.

Debt Issuance

In November 2023, the Company issued $3.0 billion principal amount of USD-denominated notes in three tranches. The tranches consisted of $1.0 billion aggregate principal amount of 5.8% notes due 2025, $1.0 billion aggregate principal amount of 5.90% notes due 2034 and $1.0 billion aggregate principal amount of 6.2% notes due 2054 (collectively, the “USD Notes”). In addition, the Company issued €2.35 billion principal amount of Euro-denominated notes in three tranches. The tranches consisted of €750 million aggregate principal amount of 4.375% notes due 2025, €750 million aggregate principal amount of 4.125% notes due 2028 and €850 million aggregate principal amount of 4.5% notes due 2032 (collectively, the “Euro Notes”). The Company capitalized $51 million of deferred financing costs which are being amortized over the term of their related notes. The notes are subject to certain customary covenants and the Company has the option to redeem the notes in whole or in part at any time, prior to their stated maturity date at the redemption price set forth in the indenture agreements.

12

Table of Contents             
Bridge Loan

On April 25, 2023, the Company entered into commitment letters with JPMorgan Chase Bank, N.A., BofA Securities, Inc. and Bank of America, N.A. to provide a €8.2 billion aggregate principal, senior unsecured bridge term loan facility (the “Bridge Loan”). Euro-denominated borrowings bore interest at the EURIBOR Rate plus a ratings-based margin, USD-denominated borrowings bore interest at either a Term SOFR Rate plus 0.10% and a ratings-based margin or, alternatively, at a base rate plus a ratings-based margin. The Company capitalized $48 million of deferred financing costs associated with the Bridge Loan which were amortized over the commitment period. Upon entering into a senior unsecured delayed draw term loan facility and issuing the USD Notes and the Euro Notes, the Company reduced the Bridge Loan by €7.7 billion and accelerated the amortization on $25 million of deferred financing costs in Interest expense during 2023. On January 2, 2024, the Company entered into a 60-day senior unsecured term loan agreement consisting of a Euro-denominated tranche in an aggregate amount of €113 million and a USD-denominated tranche in an aggregate amount of $349 million (the “60-day Loan”). Upon entering into the 60-day Loan, the Company reduced the final portion of the Bridge Loan by €500 million and subsequently terminated the agreement. As of March 31, 2024, borrowings under the 60-day Loan have been fully repaid.

Delayed Draw Facility

On May 19, 2023, the Company entered into a senior unsecured delayed draw term loan credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and certain other lenders that permits aggregate borrowings of up to €2.3 billion (the "Delayed Draw Facility"). The facility consists of an 18-month, Euro-denominated tranche in an aggregate amount of €1.15 billion and a 3-year, Euro-denominated tranche in an aggregate amount of €1.15 billion. Euro-denominated borrowings bear interest at the EURIBOR Rate plus a ratings-based margin, USD-denominated borrowings bear interest at either a Term SOFR Rate plus 0.10% and a ratings-based margin or, alternatively, at a base rate plus a ratings-based margin. The Company capitalized $4 million of deferred financing costs which will be amortized over the respective term of the tranches. On January 2, 2024, the Company borrowed the full amount available under the Delayed Draw Facility in U.S. Dollars.

364 Day Revolver

On May 19, 2023, the Company entered into a 364-day, $500 million, senior unsecured revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and certain other lenders (the “Revolver”), the proceeds of which became available upon closing of the acquisition of the VCS Business. Borrowings bear interest at either a Term SOFR Rate plus 0.10% and a ratings-based margin or, alternatively, at a base rate plus a ratings-based margin. As of March 31, 2024, there were no borrowings outstanding under the Revolver.

Japanese Term Loan Facility

On July 15, 2022, the Company entered into a five-year, JPY 54 billion (approximately $400 million) senior unsecured term loan facility with MUFG Bank Ltd., as administrative agent and lender, and certain other lenders (the "Japanese Term Loan Facility"). Borrowings under the Japanese Term Loan Facility bear interest at a rate equal to the Tokyo Term Risk Free Rate plus 0.75%. The Company capitalized $2 million of deferred financing costs which are being amortized over its term. On July 25, 2022, the Company borrowed JPY 54 billion under the Japanese Term Loan Facility and used the proceeds to fund a portion of the Yen-denominated purchase price of Toshiba Carrier Corporation ("TCC") and to pay related fees and expenses.

Revolving Credit Facility

On May 19, 2023, the Company entered into a revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and certain other lenders, permitting aggregate borrowings of up to $2.0 billion pursuant to an unsecured, unsubordinated revolving credit facility that matures in May 2028 (the "Revolving Credit Facility"). The Revolving Credit Facility supports the Company's commercial paper program and can be used for other general corporate purposes. Borrowings are available in U.S. Dollars and Euros. U.S. Dollar borrowings can bear interest at either a Term SOFR Rate plus 0.10% and a ratings-based margin or, alternatively, at an alternate base rate plus a ratings-based margin. Euro borrowings bear interest at an adjusted EURIBOR rate plus a ratings-based margin. A ratings-based commitment fee is charged on unused commitments. Upon entering into the agreement, the Company terminated its existing revolving credit facility that was set to mature in April 2025. In addition, the Company capitalized $2 million of deferred financing costs which are being amortized over its term. As of March 31, 2024, there were no borrowings outstanding under the Revolving Credit Facility.

13

Table of Contents             
Commercial Paper Program

The Company has a $2.0 billion unsecured, unsubordinated commercial paper program, which can be used for general corporate purposes, including the funding of working capital and potential acquisitions. As of March 31, 2024, there were no borrowings outstanding under the commercial paper program.

Project Financing Arrangements

The Company is involved in long-term construction contracts in which it arranges project financing with certain customers. As a result, the Company issued $10 million and $5 million of debt during the three months ended March 31, 2024 and 2023, respectively. Long-term debt repayments associated with these financing arrangements during the three months ended March 31, 2024 and 2023 were $5 million and $2 million, respectively.

Debt Covenants

The Revolving Credit Facility, Revolver, the indenture for the long-term notes and the Japanese Term Loan Facility contain affirmative and negative covenants customary for financings of these types, which, among other things, limit the Company's ability to incur certain liens, to make certain fundamental changes and to enter into sale and leaseback transactions. As of March 31, 2024, the Company was in compliance with the covenants under the agreements governing its outstanding indebtedness.

NOTE 6: FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement ("ASC 820"), defines fair value as the price that would be received if an asset is sold or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors, including foreign currency and commodity price risk. These exposures are managed through operational strategies and the use of undesignated hedging contracts. The Company's derivative assets and liabilities are measured at fair value on a recurring basis using internal models based on observable market inputs, such as forward, interest, contract and discount rates with changes in fair value reported in Other income (expense), net in the accompanying Unaudited Condensed Consolidated Statement of Operations.

During 2022, the Company entered into cross currency swaps with various financial institutions to fund a portion of the Yen-denominated purchase price of TCC. The cross currency swaps are measured at fair value on a recurring basis using observable market inputs, such as forward, discount and interest rates as well as credit default swap spreads. The Company designated the cross currency swaps as a partial hedge of its investment in certain subsidiaries whose functional currency is the Japanese Yen in order to manage foreign currency translation risk. As a result, changes in the fair value of the swaps are recorded in Equity in the accompanying Unaudited Condensed Consolidated Balance Sheet. From time to time, the Company settles and enters into new cross currency swaps with the same purpose and characteristics as initially established.

14

Table of Contents             
The remaining portion of the Yen-denominated purchase price was funded by the Japanese Term Loan Facility. The carrying value of the facility is translated on a recurring basis using the exchange rate at the end of the applicable period and approximates its fair value. The Company designated the Japanese Term Loan Facility as a partial hedge of its investment in certain subsidiaries whose functional currency is the Japanese Yen in order to manage foreign currency translation risk. As a result, changes in the carrying value of the Japanese Term Loan Facility associated with foreign exchange rate movements are recorded in Equity in the Unaudited Condensed Consolidated Balance Sheet.

During 2023, the Company entered into window forward contracts with Bank of America N.A. and JPMorgan Chase Bank N.A. to mitigate the foreign currency risk of the expected cash outflows associated with the Euro-denominated purchase price of the VCS Business. The instruments had an aggregate notional amount of €7 billion and a settlement window between November 28, 2023 and February 27, 2024. The window forward contracts were measured at fair value on a recurring basis using observable market inputs, such as forward, discount and interest rates with changes in fair value reported in Other income (expense), net in the accompanying Unaudited Condensed Consolidated Statement of Operations. During the three months ended March 31, 2024, the Company recognized a $86 million loss on the mark-to-market valuation of its window forward contracts. The Company settled the window forward contracts on January 2, 2024 upon the acquisition of the VCS Business.

During 2023, the Company entered into several interest rate swap contracts to mitigate interest rate exposure on the forecasted issuance of long-term debt. The contracts had an aggregate notional amount of $1.525 billion and were designated as cash flow hedges with changes in fair value reported in Equity in the accompanying Unaudited Condensed Consolidated Balance Sheet. Fair value was measured on a recurring basis using observable market inputs, such as forward, discount and interest rates. In November 2023, the contracts were settled upon the issuance of the underlying debt. As a result, the Company deferred a net unrecognized gain of $58 million in Equity which will be subsequently recognized in Interest expense over the term of the related notes which range from 2034 to 2044. The amount expected to be amortized during 2024 is a net gain of $5 million.

The following tables provide the valuation hierarchy classification of assets and liabilities that are recorded at fair value and measured on a recurring basis in the accompanying Unaudited Condensed Consolidated Balance Sheet:

(In millions)TotalLevel 1Level 2Level 3
March 31, 2024
Derivative assets (1)(3)
$32 $ $32 $ 
Derivative liabilities (2)(3)
$(17)$ $(17)$ 
December 31, 2023
Derivative assets (1) (3)
$32 $ $32 $ 
Derivative liabilities (2) (3)
$(126)$ $(126)$ 
(1) Included in Other assets, current and Other assets on the accompanying Unaudited Condensed Consolidated Balance Sheet.
(2) Included in Accrued liabilities and Other long-term liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet.
(3) Includes cross currency swaps and window forward contracts (which were settled on January 2, 2024).

The following table provides the carrying amounts and fair values of the Company's long-term notes that are not recorded at fair value in the accompanying Unaudited Condensed Consolidated Balance Sheet:

March 31, 2024December 31, 2023
(In millions)Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Total long-term Notes (1)
$13,895 $12,873 $13,951 $13,194 
(1) Excludes debt discount and issuance costs.

The fair value of the Company's long-term debt is measured based on observable market inputs which are considered Level 1 within the fair value hierarchy. The carrying value of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings approximate fair value due to the short-term nature of these accounts and would be classified as Level 1 in the fair value hierarchy. The Company's financing leases and project financing obligations, included in Long-term debt and Current portion of long-term debt on the accompanying Unaudited Condensed Consolidated Balance Sheet, approximate fair value and are classified as Level 3 in the fair value hierarchy.

15

Table of Contents             
NOTE 7: EMPLOYEE BENEFIT PLANS

The Company sponsors U.S. and international defined benefit pension and defined contribution plans. In addition, the Company contributes to various U.S. and international multi-employer defined benefit pension plans.

Contributions to the plans were as follows:

 Three Months Ended March 31,
(In millions)20242023
Defined benefit plans$6 $6 
Defined contribution plans$39 $37 
Multi-employer pension plans$4 $4 

The components of net periodic pension expense (benefit) for the defined benefit pension plans are as follows:

 Three Months Ended March 31,
(In millions)20242023
Service cost$4 $4 
Interest cost7 8 
Expected return on plan assets(7)(8)
Net periodic pension expense (benefit)$4 $4 

NOTE 8: STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation plans in accordance with ASC 718, Compensation - Stock Compensation, which requires a fair-value based method for measuring the value of stock-based compensation. Fair value is measured at the date of grant and is generally not adjusted for subsequent changes. The Company's stock-based compensation plans include programs for stock appreciation rights, restricted stock units and performance share units.

Stock-based compensation expense, net of estimated forfeitures, is included in Cost of products sold, Selling, general and administrative and Research and development in the accompanying Unaudited Condensed Consolidated Statements of Operations.

Stock-based compensation cost by award type was as follows:
 Three Months Ended March 31,
(In millions)20242023
Equity compensation costs - equity settled$22 $22 
Equity compensation costs - cash settled (1)
 1 
Total stock-based compensation expense$22 $23 
(1) The cash settled awards are classified as liability awards and are measured at fair value at each balance sheet date.

NOTE 9: PRODUCT WARRANTIES

In the ordinary course of business, the Company provides standard warranty coverage on its products. Provisions for these amounts are established at the time of sale and estimated primarily based on product warranty terms and historical claims experience. In addition, the Company incurs discretionary costs to service its products in connection with specific product performance issues. Provisions for these amounts are established when they are known and estimable. The Company assesses the adequacy of its initial provisions and will make adjustments as necessary based on known or anticipated claims or as new information becomes available that suggests it is probable that future costs will be different than estimated amounts. Amounts associated with these provisions are classified on the accompanying Unaudited Condensed Consolidated Balance Sheet as Accrued liabilities or Other long-term liabilities based on their anticipated settlement date.
16

Table of Contents             

The changes in the carrying amount of warranty related provisions are as follows:
Three Months Ended March 31,
(In millions)20242023
Balance as of January 1,$570 $552 
Warranties, performance guarantees issued and changes in estimated liability91 54 
Settlements made(57)(45)
Other(4)2 
Acquisitions (1)
202  
Balance as of March 31,$802 $563 
(1) See Note 15 - Acquisitions for additional information.
NOTE 10: EQUITY

The authorized number of shares of common stock of Carrier is 4,000,000,000 shares of $0.01 par value. As of March 31, 2024 and December 31, 2023, 944,433,341 and 883,068,393 shares of common stock were issued, respectively, which includes 43,490,981 shares of treasury stock, for both periods respectively.

Share Repurchase Program

The Company may repurchase its outstanding common stock from time to time subject to market conditions and at the Company's discretion. Repurchases occur in the open market or through one or more other public or private transactions pursuant to plans complying with Rules 10b5-1 and 10b-18 under the Exchange Act. Shares acquired are recognized at cost and presented separately on the balance sheet as a reduction to Equity. Since the initial authorization in February 2021, the Company's Board of Directors authorized the repurchase of up to $4.1 billion of the Company's outstanding common stock.

As of December 31, 2023, the Company repurchased 43.5 million shares of common stock for an aggregate purchase price of $2.0 billion, including shares repurchased under an accelerated share repurchase agreement. As a result, the Company had approximately $2.1 billion remaining under the current authorization at December 31, 2023. Upon announcement of the proposed acquisition of the VCS Business, the Company temporarily paused its share repurchase program in order to advance its capital allocation strategy. As a result, there is no share repurchase activity during the three months ended March 31, 2024.

Accumulated Other Comprehensive Income (Loss)

A summary of changes in the components of Accumulated other comprehensive income (loss) for the three months ended March 31, 2024 is as follows:
(In millions)Foreign Currency TranslationDefined Benefit Pension and Post-retirement PlansUnrealized Hedging Gains (Losses)Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2023$(1,444)$(100)$58 $(1,486)
Other comprehensive income (loss) before reclassifications, net(385)  (385)
Amounts reclassified, pre-tax  (1)(1)
Balance as of March 31, 2024$(1,829)$(100)$57 $(1,872)

17

Table of Contents             
A summary of changes in the components of Accumulated other comprehensive income (loss) for the three months ended March 31, 2023 is as follows:
(In millions)Foreign Currency TranslationDefined Benefit Pension and Post-retirement PlansUnrealized Hedging Gains (Losses)Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2022$(1,604)$(84)$ $(1,688)
Other comprehensive income (loss) before reclassifications, net52   52 
Balance as of March 31, 2023$(1,552)$(84)$ $(1,636)

NOTE 11: REVENUE RECOGNITION

The Company accounts for revenue in accordance with ASC 606: Revenue from Contracts with Customers. Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A significant portion of the Company's performance obligations are recognized at a point-in-time when control of the product transfers to the customer, which is generally at the time of shipment. The remaining portion of the Company’s performance obligations are recognized over time as the customer simultaneously obtains control as the Company performs work under a contract, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment.

Sales disaggregated by product and service are as follows:

 Three Months Ended March 31,
(In millions)20242023
Sales Type
Product$4,073 $3,201 
Service468 421 
HVAC sales4,541 3,622 
Product772 787 
Service112 111 
Refrigeration sales884 898 
Product825 813 
Service62 56 
Fire & Security sales887 869 
Total segment sales6,312 5,389 
Eliminations and other(130)(116)
Net sales$6,182 $5,273 

18

Table of Contents             
Contract Balances

Total contract assets and contract liabilities consisted of the following:

(In millions)March 31,
2024
December 31,
2023
Contract assets, current$320 $306 
Contract assets, non-current (included within Other assets)
30 26 
Total contract assets350 332 
Contract liabilities, current(501)(425)
Contract liabilities, non-current (included within Other long-term liabilities)
(157)(160)
Total contract liabilities (658)(585)
Net contract assets (liabilities)$(308)$(253)

The timing of revenue recognition, billings and cash collections results in contract assets and contract liabilities. Contract assets relate to the conditional right to consideration for any completed performance under a contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Contract liabilities relate to payments received in advance of performance under a contract or when the Company has a right to consideration that is conditioned upon transfer of a good or service to a customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract.

The Company recognized revenue of $345 million during the three months ended March 31, 2024 that related to contract liabilities as of January 1, 2024. The Company expects a majority of its current contract liabilities at the end of the period to be recognized as revenue in the next 12 months.

NOTE 12: RESTRUCTURING COSTS

The Company incurs costs associated with restructuring initiatives intended to improve operating performance, profitability and working capital levels. Actions associated with these initiatives may include improving productivity, workforce reductions and the consolidation of facilities. Due to the size, nature and frequency of these discrete plans, they are fundamentally different from the Company's ongoing productivity actions.

The Company recorded net pre-tax restructuring costs for new and ongoing restructuring initiatives as follows:

 Three Months Ended March 31,
(In millions)20242023
HVAC$7 $(1)
Refrigeration 3 
Fire & Security7 13 
Total Segment14 15 
General corporate expenses1 2 
Total restructuring costs (1)
$15 $17 
Cost of sales$12 $6 
Selling, general and administrative3 11 
Total restructuring costs (1)
$15 $17 
(1) 2024 restructuring costs include period related charges.

19

Table of Contents             
The following table summarizes changes in the restructuring reserve, included in Accrued liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet:

Three Months Ended March 31,
(In millions)20242023
Balance as of January 1,$55 $24 
Net pre-tax restructuring costs12 17 
Acquisitions (1)
8  
Utilization, foreign exchange and other(24)(6)
Balance as of March 31,$51 $35 
(1) See Note 15 - Acquisitions for additional information.

As of March 31, 2024, the Company had $51 million accrued for costs associated with its announced restructuring initiatives. The balance relates to cost reduction efforts, primarily severance related across each of the Company's segments, along with reserves associated with the Company's planned portfolio transformation. The Company expects a majority of the balance to be utilized within one year.

NOTE 13: INCOME TAXES

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 13.7% for the three months ended March 31, 2024 compared with 24.0% for the three months ended March 31, 2023. The year-over-year decrease was primarily driven by a tax benefit of $21 million associated with the TMA and UTC's conclusion of certain income tax matters from their 2017 and 2018 tax audit with the U.S. Internal Revenue Service ("IRS"), a net tax benefit of $19 million related to adjustments to basis differences in certain companies presented as held-for-sale and a net tax benefit of $16 million related to the re-organization and disentanglement of certain Fire & Security industrial businesses in advance of the planned divestitures. These amounts were partially offset by a tax charge of $15 million related to a reduction of utilizable foreign tax credits.

The Company assesses the realizability of its deferred tax assets on a quarterly basis through an analysis of potential sources of future taxable income, including prior year taxable income that may be available to absorb a carryback of tax losses, reversals of existing taxable temporary differences, tax planning strategies and forecasts of taxable income. The Company considers all negative and positive evidence, including the weight of the evidence, to determine whether valuation allowances against deferred tax assets are required. The Company maintains valuation allowances against certain deferred tax assets.

The Company conducts business globally and files income tax returns in U.S. federal, state and foreign jurisdictions. In certain jurisdictions, the Company's operations were included in UTC's combined tax returns for the periods through the Distribution. The IRS has completed its audit of UTC's 2017 and 2018 tax years. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including Australia, Belgium, Canada, China, Czech Republic, France, Germany, Hong Kong, India, Italy, Mexico, the Netherlands, Singapore, the United Kingdom and the United States. The Company is no longer subject to U.S. federal income tax examination for years prior to 2020 and, with few exceptions, is no longer subject to state, local and foreign income tax examinations for tax years prior to 2013.

In the ordinary course of business, there is inherent uncertainty in quantifying the Company's income tax positions. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. The Company believes that it is reasonably possible that a net decrease in unrecognized tax benefits of $30 million to $45 million may occur within 12 months as a result of additional uncertain tax positions, the Separation, the revaluation of uncertain tax positions arising from examinations, appeals, court decisions and/or the expiration of tax statutes.

20

Table of Contents             
NOTE 14: EARNINGS PER SHARE

Earnings per share is computed by dividing Net income attributable to common shareowners by the weighted-average number of shares of common stock outstanding during the period (excluding treasury stock). Diluted earnings per share is computed by giving effect to all potentially dilutive stock awards that are outstanding. The computation of diluted earnings per share excludes the effect of the potential exercise of stock-based awards, including stock appreciation rights and stock options, when the effect of the potential exercise would be anti-dilutive.

The following table summarizes the weighted-average number of shares of common stock outstanding for basic and diluted earnings per share calculations:

 Three Months Ended March 31,
(In millions, except per share amounts)20242023
Net income attributable to common shareowners$269 $373 
Basic weighted-average number of shares outstanding899.2 835.0 
Stock awards and equity units (share equivalent)13.8 17.2 
Diluted weighted-average number of shares outstanding913.0 852.2 
Antidilutive shares excluded from computation of diluted earnings per share4.2 6.5 
Earnings Per Share
Basic$0.30 $0.45 
Diluted$0.29 $0.44 

NOTE 15: ACQUISITIONS

Acquisitions are recorded using the acquisition method of accounting in accordance with ASC 805, Business Combinations. As a result, the aggregate purchase price has been allocated to assets acquired and liabilities assumed based on the estimate of fair market value of such assets and liabilities at the date of acquisition.

Viessmann Climate Solutions

On January 2, 2024, the Company completed the acquisition of the VCS Business from Viessmann for total consideration of $14.2 billion. The purchase price consisted of (i) $11.2 billion in cash and (ii) 58,608,959 shares of the Company's common stock, subject to certain lock-up provisions and anti-dilution protection. The Company funded the cash portion of the purchase price with a combination of cash on hand, net proceeds from the USD Notes and Euro Notes and borrowings under the Delayed Draw Facility and the 60-day Loan.

The VCS Business develops intelligent, integrated and sustainable technologies, including heat pumps, boilers, photovoltaic systems, home battery storage and digital solutions, primarily for residential customers in Europe. The Company believes that secular trends in these areas will drive significant, sustained future growth. In addition, the Company anticipates realizing significant operational synergies including savings through supplier rationalization and leverage, reduced manufacturing costs and lower general and administrative costs. Longer term, the Company expects to benefit from synergies related to service revenue expansion, leverage of distribution channels and cross-selling opportunities.
21

Table of Contents             

The components of the purchase price is as follows:

(In millions)January 2, 2024
Cash$11,156 
Common shares (58,608,959 shares at $51.20 per share)
3,001 
Total consideration$14,157 

The preliminary allocation of the purchase price is as follows:

(In millions)January 2, 2024
Cash and cash equivalents$394 
Accounts receivable408 
Inventories948 
Other assets, current17 
Fixed assets913 
Intangible assets6,640 
Goodwill7,576 
Other assets284 
Accounts payable(288)
Other liabilities, current(626)
Future income tax obligations(1,825)
Other liabilities(284)
Net assets acquired$14,157 

The excess purchase price over the estimated fair value of the net identifiable assets acquired was recognized as goodwill and totaled $7.6 billion, which is not deductible for tax purposes. Accounts receivable and current liabilities were stated at their historical carrying value, which approximates fair value given the short-term nature of these assets and liabilities. The estimate of fair value for inventory and fixed assets was based on an assessment of the acquired assets' condition as well as an evaluation of the current market value of such assets.

The Company recorded intangible assets based on its estimate of fair value which consisted of the following:

(In millions)Estimated Useful Life (in years)Intangible Assets Acquired
Customer relationships17$4,787 
Technology
10 - 20
1,051 
Trademark40679 
Backlog1123 
Total intangible assets acquired$6,640 
22

Table of Contents             

The valuation of intangible assets was determined using an income approach methodology including the multi-period excess earnings method and the relief from royalty method. Key assumptions used in estimating future cash flows included projected revenue growth rates, EBITDA margins, discount rates, customer attrition rates and royalty rates among others. The projected future cash flows are discounted to present value using an appropriate discount rate. As of March 31, 2024, the Company is in the process of completing its valuation of tangible, intangible and tax-related assets relating to the VCS Business and the allocation of the purchase price to the assets acquired and liabilities assumed will be completed once the valuation process has been finalized.

The assets, liabilities and results of operations of the VCS Business are consolidated in the accompanying Unaudited Condensed Consolidated Financial Statements as of the date of acquisition and reported within the Company's HVAC segment. For the period from January 2, 2024 to March 31, 2024, revenues for the VCS Business were $875 million and its net loss was $124 million which included amortization of the step-up to fair value of inventory and backlog of $111 million as well as $139 million of intangible asset amortization.

During the three months ended March 31, 2024, the Company incurred $30 million of acquisition-related costs. During 2023, $80 million of acquisition-related costs were incurred, of which $12 million was recognized during the three months ended March 31, 2023. These acquisition costs are reflected within Selling, general and administrative in the Unaudited Condensed Consolidated Statement of Operations.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information is presented to illustrate the estimated effects of the acquisition of the VCS Business as if the business combination had occurred on January 1, 2023:

 Three Months Ended March 31,
(In millions)20242023
Revenue$6,182 $6,278 
Earnings343 79 

The pro forma amounts include the historical operating results of the Company and the VCS Business prior to the acquisition, with adjustments directly attributable to the acquisition including amortization of the step-up to fair value of inventory and amortization expense of acquired intangible assets. The unaudited pro forma financial information is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition of the VCS Business been consummated as of the dates indicated, nor is it indicative of any future results. In addition, the unaudited pro forma financial information does not reflect the expected realization of any synergies or cost savings associated with the acquisition.

NOTE 16: DIVESTITURES

Portfolio Transformation

On April 25, 2023, the Company announced plans to exit its Fire & Security and Commercial Refrigeration businesses over the course of 2024. On December 7, 2023, the Company entered into a stock purchase agreement to sell its Access Solutions business to Honeywell International Inc. for an enterprise value of approximately $4.95 billion. Access Solutions, historically reported in the Company's Fire & Security segment, is a global supplier of physical security and digital access solutions supporting the hospitality, commercial, education and military markets. On December 12, 2023, the Company entered into a stock purchase agreement to sell the CCR business to Haier Group Corporation for an enterprise value of approximately $775 million. CCR, historically reported in the Company's Refrigeration segment, is a global supplier of turnkey solutions for commercial refrigeration systems and services, with a primary focus on serving food retail customers, cold storage facilities and warehouses. As a result, the assets and liabilities of both businesses are presented as held for sale in the accompanying Unaudited Condensed Consolidated Balance Sheet as of March 31, 2024 and December 31, 2023, and recorded at the lower of their carrying value or fair value less estimated cost to sell. Both transactions are expected to close in 2024 and are subject to customary closing conditions.

23

Table of Contents             
In addition, the net assets of Industrial Fire met the criteria to be classified as held for sale during the fourth quarter of 2023. Industrial Fire, historically reported in the Company's Fire & Security segment, is a leading manufacturer of a full spectrum of fire detection and suppression solutions and services in critical high-hazard environments, including oil and gas, power generation, marine and offshore facilities, automotive, data centers and aircraft hangars. As a result, the assets and liabilities of the business are presented as held for sale in the accompanying Unaudited Condensed Consolidated Balance Sheet as of March 31, 2024 and December 31, 2023, and recorded at the lower of their carrying value or fair value less estimated cost to sell. On March 5, 2024, the Company entered into a stock purchase agreement to sell its Industrial Fire business to Sentinel Capital Partners for an enterprise value of approximately $1.425 billion. The transaction is expected to close in 2024 and is subject to customary closing conditions.

The following table summarizes assets and liabilities classified as held for sale:

March 31, 2024
(In millions)Commercial
 Refrigeration
Access
Solutions
Industrial
Fire
Total
Cash and cash equivalents$107 $10 $11 $128 
Accounts receivable, net189 85 96 370 
Inventories, net93 34 68 195 
Contract assets, current106 2 49 157 
Other assets, current16 4 5 25 
Fixed assets, net77 14 23 114 
Intangible assets, net 52 2 54 
Goodwill72 1,479 433 1,984 
Operating lease right-of-use assets49 14 26 89 
Other assets44 7 2 53 
Total assets held for sale$753 $1,701 $715 $3,169 
Accounts payable$123 $29 $43 $195 
Accrued liabilities156 20 50 226 
Contract liabilities, current25 57 17 99 
Long-term debt, including current portion7   7 
Future pension and post-retirement obligations198