Core Insights - The individual has extensive experience in the energy industry, having worked for 22 years in various roles including engineering, planning, and financial analysis [1] - The investment strategy focuses on achieving returns that match the S&P 500 with lower volatility and higher income, emphasizing long-term holdings unless compelling reasons to sell arise [1] - The approach to investment is agnostic to asset class, market cap, sector, or yield, prioritizing total return by purchasing undervalued assets [1] Company and Industry Insights - The individual has been managing their own investment portfolio since 1998, indicating a long-term commitment to investment strategies [1] - There is a beneficial long position in the shares of CARR, suggesting confidence in the company's future performance [2] - The article reflects personal opinions and does not represent any business relationship with the mentioned company, ensuring an independent perspective [2]

Core Viewpoint - Carrier Global (NYSE: CARR) was assigned a 'Strong Buy' rating in May 2025 due to its ability to mitigate tariff impacts despite a stock price drop of over 10% following its Q2 FY25 earnings report [1]. Group 1 - The company has demonstrated resilience in managing tariff-related challenges, which is a key factor for its investment appeal [1]. - Following the Q2 FY25 earnings report, the stock experienced a significant decline, indicating potential market concerns or reactions to the earnings results [1].

Core Insights - Carrier Global (CARR) reported second-quarter 2025 adjusted earnings of 92 cents per share, exceeding the Zacks Consensus Estimate by 1.10% and representing a 26% year-over-year increase [2] - Net sales reached $6.11 billion, surpassing the Zacks Consensus Estimate by 0.87% and increasing by 3% year over year [2] - The company has consistently beaten earnings estimates in the past four quarters, with an average surprise of 5.69% [3] Financial Performance - Product sales, accounting for 89.6% of net sales, amounted to $5.48 billion, reflecting a 3.1% year-over-year increase [2] - Service sales, making up 10.4% of net sales, were $636 million, up 2.1% year over year [2] - Climate Solutions Americas (CSA) revenues were $3.25 billion, contributing 53.2% to net sales and increasing 13.5% year over year, driven by a 45% rise in Commercial sales [4] - Climate Solutions Europe (CSE) revenues reached $1.25 billion, contributing 20.5% to net sales with a 4.9% year-over-year increase [5] - Climate Solutions Asia Pacific, Middle East & Africa (CSAME) revenues were $882 million, contributing 14.4% to net sales but declining 2.2% year over year [6] - Climate Solutions Transportation (CST) revenues were $726 million, contributing 11.9% to net sales and decreasing 25.4% year over year [7] Expenses and Margins - Research & development (R&D) expenses increased by 0.6% year over year to $161 million, with R&D expenses as a percentage of revenues declining by 10 basis points [7] - Selling, general & administrative (SG&A) expenses rose 3% year over year to $813 million, remaining unchanged as a percentage of revenues [8] - Adjusted operating margin expanded by 130 basis points year over year to 19.1%, with significant contributions from CSA and CST segments [11] Balance Sheet and Cash Flow - As of June 30, 2025, Carrier had cash and cash equivalents of $1.8 billion, up from $1.69 billion as of March 31, 2025 [10] - Total debt increased to $11.44 billion from $11.18 billion in the previous quarter [12] - The company generated $649 million in cash from operations, compared to $483 million in the previous quarter, and free cash flow was $568 million, up from $420 million [12] Future Outlook - For 2025, Carrier expects sales of $23 billion, reflecting mid-single-digit organic growth [13] - Adjusted operating margin is projected to be between 16.5% and 17%, an increase of 100 basis points from 2024 [13] - The company anticipates adjusted earnings between $3 per share and $3.10, representing a mid to high-teens growth [13]

PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's Q2 2025 financial statements report a 3% net sales increase and strong operating profit growth, offset by a net earnings decrease due to a prior-year discontinued operations gain, alongside increased assets and improved operating cash flow [Condensed Consolidated Statement of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) Q2 2025 net sales increased 3% to **$6.11 billion**, with operating profit up 25% to **$903 million**, though net earnings attributable to common shareowners significantly decreased due to a prior-year gain from discontinued operations Consolidated Statement of Operations Highlights (Q2 & H1 2025 vs 2024) | Metric (In millions, except EPS) | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Net Sales** | $6,113 | $5,934 | +3.0% | $11,331 | $11,354 | -0.2% | | **Operating Profit** | $903 | $724 | +24.7% | $1,532 | $1,109 | +38.1% | | **Earnings from Continuing Operations** | $650 | $447 | +45.4% | $1,087 | $644 | +68.8% | | **Net Earnings Attributable to Common Shareowners** | $591 | $2,337 | -74.7% | $1,003 | $2,606 | -61.5% | | **Diluted EPS (Continuing Operations)** | $0.70 | $0.45 | +55.6% | $1.17 | $0.65 | +80.0% | | **Diluted EPS (Net Earnings)** | $0.68 | $2.55 | -73.3% | $1.15 | $2.85 | -59.6% | [Condensed Consolidated Balance Sheet](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, total assets grew to **$38.49 billion** driven by goodwill, while cash and cash equivalents decreased significantly, and total equity increased to **$15.01 billion** Balance Sheet Summary (As of June 30, 2025 vs. Dec 31, 2024) | Account (In millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,797 | $3,969 | | Goodwill | $15,672 | $14,601 | | Total Assets | $38,493 | $37,403 | | Long-term debt | $11,336 | $11,026 | | Total Liabilities | $23,479 | $23,008 | | Total Equity | $15,014 | $14,395 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For H1 2025, net cash from continuing operating activities increased to **$752 million**, while investing activities used significantly less cash, and financing activities saw increased outflows due to share repurchases and debt repayments Cash Flow Summary (Six Months Ended June 30) | Cash Flow Category (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from continuing operating activities | $752 | $609 | | Net cash from continuing investing activities | $(113) | $(11,147) | | Net cash from continuing financing activities | $(3,294) | $(1,391) | | Net (decrease) in cash and cash equivalents | $(2,172) | $(7,095) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's 2024 portfolio transformation, including the VCS acquisition and segment reorganization, alongside information on goodwill, debt, new segment revenues, restructuring, and AFFF litigation settlement - Completed a major portfolio transformation in 2024, acquiring the Viessmann Climate Solutions (VCS) Business and divesting the Fire & Security and Commercial Refrigeration businesses to become a pure-play climate and energy solutions provider[20](index=20&type=chunk) - Revised its reportable segments in Q1 2025 to Climate Solutions Americas, Climate Solutions Europe, Climate Solutions Asia Pacific, Middle East & Africa, and Climate Solutions Transportation to reflect the new business strategy[21](index=21&type=chunk) - Goodwill increased to **$15.67 billion** as of June 30, 2025, up from **$14.60 billion** at year-end 2024, primarily due to foreign currency translation effects[30](index=30&type=chunk) - Entered into a settlement agreement related to Aqueous Film Forming Foam (AFFF) litigation, recording a liability of **$565 million** in Q3 2024, in addition to a **$50 million** liability from the deconsolidation of its subsidiary KFI[106](index=106&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transformation into a pure-play climate and energy solutions provider, highlighting Q2 2025 net sales growth of 3% (6% organic), improved gross margin, increased adjusted operating profit, active portfolio management, and strong liquidity [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q2 2025 net sales increased 3% to **$6.1 billion** (6% organic), with gross margin expanding to **28.9%** and operating profit rising 25% to **$903 million**, while H1 2025 operating profit grew 38% Q2 2025 vs Q2 2024 Performance | Metric (In millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $6,113 | $5,934 | 3% | | Gross margin | $1,769 | $1,575 | 12% | | Operating profit | $903 | $724 | 25% | | Adjusted operating profit | $1,166 | $1,056 | 10.4% | Net Sales Change Breakdown (Q2 2025) | Component | % Change | | :--- | :--- | | Organic | 6% | | Foreign currency translation | 1% | | Acquisitions and divestitures, net | (4)% | | **Total % change** | **3%** | [Segment Review](index=39&type=section&id=Segment%20Review) In Q2 2025, Climate Solutions Americas led with **14% organic sales growth** and **23% profit increase**, while Europe saw flat organic sales, Asia Pacific/MEA declined, and Transportation's organic sales dipped 1% Segment Performance (Q2 2025 vs Q2 2024) | Segment | Net Sales (M) | YoY Change | Organic Change | Segment Operating Profit (M) | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Climate Solutions Americas | $3,252 | +14% | +14% | $879 | +23% | | Climate Solutions Europe | $1,253 | +5% | 0% | $99 | +6% | | Climate Solutions Asia Pacific, MEA | $882 | -2% | -4% | $135 | -14% | | Climate Solutions Transportation | $726 | -25% | -1% | $128 | -7% | [Liquidity and Financial Condition](index=46&type=section&id=Liquidity%20and%20Financial%20Condition) The company maintains strong liquidity with **$1.8 billion** cash and a **$2.5 billion** credit facility, while total debt is **$11.4 billion**, and **$1.9 billion** in common stock was repurchased in H1 2025 Key Financial Condition Metrics | Metric (In millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,797 | $3,969 | | Total debt | $11,443 | $12,278 | | Net debt | $9,646 | $8,309 | | Total debt to total capitalization | 43% | 46% | - Repurchased **28.8 million shares** of common stock for an aggregate price of **$1.9 billion** during the six months ended June 30, 2025[185](index=185&type=chunk) - Maintains a **$2.5 billion** revolving credit facility and a **$2.0 billion** commercial paper program, with no borrowings outstanding under either as of June 30, 2025[179](index=179&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no significant changes in its market risk exposure during the first six months of 2025, referring to its 2024 Form 10-K for detailed discussion - There has been no significant change in the company's exposure to market risk during the three and six months ended June 30, 2025[191](index=191&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, the CEO and CFO concluded the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting in Q2 2025 - Management, including the CEO and CFO, concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[192](index=192&type=chunk) - No changes in internal control over financial reporting occurred during Q2 2025 that have materially affected, or are reasonably likely to materially affect, these controls[193](index=193&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 19 for legal proceedings information, reporting no other material developments since its 2024 Form 10-K filing - For information regarding legal proceedings, the company directs readers to Note 19 – Commitments and Contingent Liabilities in the financial statements[198](index=198&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to its risk factors from those disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes in the Company's risk factors from those disclosed in the 2024 Form 10-K[199](index=199&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased **9.834 million shares** of common stock at an average price of **$64.15** per share, as part of a board-authorized program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased (in 000's) | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 5,438 | $59.18 | | May 2025 | 129 | $70.23 | | June 2025 | 4,267 | $70.30 | | **Total** | **9,834** | **$64.15** | [Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025 - No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[202](index=202&type=chunk) [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The exhibits filed with this report include CEO and CFO certifications as required by the Sarbanes-Oxley Act and interactive data files in XBRL format[203](index=203&type=chunk)

Core Insights - Carrier Global reported $6.11 billion in revenue for the quarter ended June 2025, reflecting a year-over-year decline of 8.6% while EPS increased to $0.92 from $0.87 a year ago, indicating a positive trend in earnings despite revenue decline [1] - The reported revenue exceeded the Zacks Consensus Estimate of $6.06 billion by 0.88%, and the EPS also surpassed the consensus estimate of $0.91 by 1.1% [1] Revenue Performance - Revenue from CSA was $3.25 billion, slightly above the estimated $3.2 billion by analysts [4] - Revenue from CST was $726 million, slightly below the average estimate of $728.85 million [4] - Revenue from CSAME was $882 million, also below the average estimate of $898.31 million [4] - Revenue from CSE was $1.25 billion, exceeding the average estimate of $1.22 billion [4] Stock Performance - Shares of Carrier Global have returned +9.6% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - Carrier's sales increased by 6%, earnings rose by 26%, and aftermarket grew by 13% [1] - Carrier's data center is on track to double to $1 billion this year [1] Market Trends & Observations - The market's response to most earnings has been negative, but the market is still up [4] - Tech sector is performing well [3] - China was really horrible against that [2] Company Specifics - Dave Gitlin at Carrier is recognized for doing a remarkable job [1] - Judy Marks had a very tough quarter [2] - Royal Caribbean is considered safe [5]

Financial Data and Key Metrics Changes - The company reported sales of $6.1 billion with 6% organic sales growth, benefiting from a foreign currency translation tailwind [18][19] - Adjusted operating profit for Q2 was $1.2 billion, a 10% increase year-over-year, with adjusted EPS rising 26% to $0.92 [19][20] - Free cash flow for the quarter was $568 million, stronger than expected, contributing to a total of approximately $1 billion in the first half [20][30] Business Line Data and Key Metrics Changes - The CSA segment achieved organic sales growth of 14%, with commercial sales excluding Nuresco up 45% [21] - The CSE segment saw flat organic sales growth, with residential and light commercial sales remaining about the same [22] - The CS Asia Pacific segment experienced a 4% decline in organic sales, primarily due to weakness in residential China [24] Market Data and Key Metrics Changes - Total company organic orders were down high teens, with North America residential orders down about 60% compared to a year ago [27] - The Americas had strong performance, particularly in commercial HVAC, with significant growth in India, Japan, and the Middle East [5][24] - The European market showed mixed results, with residential sales in Germany down but heat pump unit sales up over 50% [14][15] Company Strategy and Development Direction - The company aims for sustained organic growth of 6% to 8% by exceeding customer expectations through differentiated products and unique system solutions [6] - Focus on expanding the data center business, with expectations to double revenues to $1 billion this year [7] - The integration of RLC and commercial HVAC in Europe is expected to create sales and cost opportunities, leveraging each other's strengths [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving close to 20% adjusted EPS growth this year despite unforeseen headwinds [17] - The company anticipates a strong second half of the year, supported by a robust backlog in commercial orders [27][30] - Management noted that the residential market in North America is expected to face challenges, with volume down more than initially anticipated [42][44] Other Important Information - The company is on track for $3 billion in share buybacks this year [6][30] - Adjusted operating margins expanded by 130 basis points to 19.1%, driven by strong organic growth and productivity [19][12] - The company expects to maintain free cash flow between $2.4 billion and $2.6 billion, reflecting roughly 100% conversion [30] Q&A Session Summary Question: Insights on Europe and margin guidance - Management acknowledged mixed performance in Europe, with stronger results outside Germany and ongoing efforts to capture cost synergies [33][35] Question: Price capture beyond tariffs - The company indicated that total price capture was about two points for both the quarter and the full year, excluding mix benefits [38] Question: U.S. Residential and light commercial market dynamics - Management noted that volume in the second half is expected to decline by 20% to 25%, with a mix in price of 10% to 15% [42][44] Question: Transportation market outlook - Management highlighted a return to growth in North America truck and trailer, with expectations for continued recovery in the second half [128] Question: Update on services and aftermarket performance - Services were up 13% in the quarter, with expectations for continued double-digit growth [120] Question: Canister issue resolution - Management confirmed that the canister issue is no longer a problem, with proactive measures taken to ensure supply [74] Question: Non-data center business performance - Non-data center activity was up 20% in the quarter, with strong growth in applied business and service sectors [77]

Financial Data and Key Metrics Changes - The company reported sales of $6.1 billion with 6% organic sales growth, benefiting from a foreign currency translation tailwind [17] - Adjusted operating profit increased by 10% year-over-year to $1.2 billion, with adjusted operating margin expanding by 130 basis points to 19.1% [18][19] - Adjusted EPS rose by 26% year-over-year to $0.92, driven by organic revenue growth and strong productivity [19][30] Business Line Data and Key Metrics Changes - The CSA segment achieved organic sales growth of 14%, with commercial sales excluding Nuresco up 45% [20] - The CSE segment saw flat organic sales growth, with residential and light commercial sales about flat, while commercial was up low single digits [22] - The CS Asia Pacific segment experienced a 4% decline in organic sales, with strong growth in Japan, India, and the Middle East offset by weakness in residential China [23] Market Data and Key Metrics Changes - Total company organic orders were down high teens, with North America residential orders down about 60% compared to the previous year [25] - The Americas had strong performance, particularly in commercial HVAC, with total global commercial HVAC sales expected to reach approximately $6.5 billion in 2025, up nearly 20% year-over-year [6][17] - The European market showed mixed results, with residential sales down but heat pump unit sales in Germany up over 50% [14] Company Strategy and Development Direction - The company aims for sustained organic growth of 6% to 8% by exceeding customer expectations through differentiated products and double-digit aftermarket growth [5] - The integration of RLC and commercial HVAC in Europe is expected to create sales and cost opportunities, leveraging each other's strengths [15] - The company is focused on building a backlog for data centers and expanding its product offerings, including new technologies and integrated solutions [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving close to 20% adjusted EPS growth this year despite unforeseen headwinds [16] - The company anticipates a strong second half of the year, supported by a robust backlog in commercial and continued growth in aftermarket services [25][30] - Management noted that the residential market in North America is expected to face challenges, with volume estimates adjusted downward for the second half [41][42] Other Important Information - Free cash flow for the first half of the year was approximately $1 billion, with plans for $3 billion in share buybacks [5][28] - The company is maintaining its full-year guidance for adjusted EPS in the range of $3 to $3.1 [29] Q&A Session Summary Question: Insights on Europe and margin guidance - Management discussed synergy capture in Europe and noted that while margins were impacted by mix issues, they remain confident in achieving cost synergies [31][33] Question: Price capture beyond tariffs - The company indicated that total price capture was about two points for the overall company in Q2 and expected to remain similar for the full year [36] Question: U.S. Residential and light commercial market assumptions - Management provided insights on volume expectations, indicating a downward adjustment for the second half due to slower movement and higher inventory levels [41][42] Question: Transportation market outlook - Management noted a return to growth in North America truck and trailer, with expectations for continued recovery in the second half [113][115] Question: Update on Climate Solutions Asia Pacific - Management highlighted strong growth in Japan and India, while acknowledging ongoing challenges in the residential market in China [90][92]

Financial Performance - Q2 2025 sales reached $6,113 million, with organic sales up by 6% year-over-year[4,15] - Adjusted operating profit increased by 10% year-over-year to $1,166 million, resulting in an adjusted operating margin of 19.1%, a 130 bps increase[4,15] - Adjusted EPS grew by 26% year-over-year to $0.92[4,15] - Free cash flow stood at $568 million[4,15] Segment Performance - Climate Solutions Americas (CSA) sales increased by 14% year-over-year to $3,252 million, driven by strong organic growth of 14%[16] Commercial sales within CSA grew by approximately 45%[4,16] - Climate Solutions Europe (CSE) sales increased by 5% year-over-year to $1,253 million[17] Heat pump units in Germany increased by over 50%[4,17] - Climate Solutions Asia Pacific Middle East & Africa (CSAME) sales decreased by 2% year-over-year to $882 million, with sales in China down by 11%[18] - Climate Solutions Transportation (CST) sales decreased by 25% year-over-year to $726 million[19] Strategic Initiatives and Capital Deployment - The company returned $2.3 billion to shareholders year-to-date through dividends and share repurchases[5] $1.9 billion in share repurchases year-to-date, on track to repurchase $3 billion by the end of 2025[4] - The company is on track to return approximately $3.8 billion to shareholders in 2025 through dividends and share repurchases[28] Guidance - The company reaffirmed its full-year 2025 sales guidance of approximately $23 billion with mid-single-digit organic growth[24,26] - The company reaffirmed its full-year 2025 adjusted EPS guidance of $3.00-$3.10, representing a 17-21% increase[24,27] - The company reaffirmed its full-year 2025 free cash flow guidance of $2.4-$2.6 billion[24,27]

Exhibit 99 PALM BEACH GARDENS, Fla., July 29, 2025 – Carrier Global Corporation (NYSE:CARR), global leader in intelligent climate and energy solutions, today reported strong financial results for the second quarter of 2025 and reaffirmed its full year guidance. "We delivered another quarter of strong financial performance," said Carrier Chairman & CEO David Gitlin. "Organic sales growth of 6% was driven by strong results in our Climate Solutions Americas segment, with Commercial sales up 45% and total compa ...