Carrier Global Corporation

Supply chain and procurement · Supplier operation and dependance

We use a variety of raw materials, supplier-provided parts, finished goods, and third-party service providers in our business. The ability of suppliers to deliver materials, parts, components, finished goods, and manufacturing equipment to our manufacturing facilities, and our ability to manufacture and distribute without disruption, could affect our business performance. Significant shortages, supplier capacity constraints, supplier disputes, supplier quality issues, or production disruptions, price increases, duties, tariffs or other government actions could increase our operating costs, disrupt our operations and adversely impact the competitive positions of our products.

Human capital and workforce · Labor relations and union negotiations

Labor matters may impact our business. A significant portion of our employees are represented by labor unions or works councils in a number of countries under various collective bargaining agreements with varying durations and expiration dates. We may not be able to successfully renegotiate each of these agreements before they expire. In addition, existing agreements may not prevent a strike or work stoppage, union and works council campaigns and other labor disputes.

Supply chain and procurement · Raw material availability and cost volatility

Our reliance on suppliers and commodity markets to secure components (such as motors and valves), finished goods (including products purchased directly from suppliers for resale), and raw materials (such as copper, aluminum and steel), as well as on service providers to deliver our products, exposes us to volatility in the prices and availability of these materials, products, and services.

Core operations · Quality control and product defects

Failure to achieve and maintain a high level of product and service quality could damage our reputation with customers and negatively impact our results. Product and service quality issues could harm customer confidence in our company and our brands. If certain of our product and service offerings do not meet applicable safety standards, as has previously occurred, or our customers' expectations regarding safety or quality, we can experience, and have experienced previously, lost sales and increased costs.

Economic and market conditions · Market volatility and financial crises

Furthermore, the tightening of credit in the capital markets could adversely affect the ability of our customers, including individual end-customers and businesses, to obtain financing for significant purchases and operations, which could result in a decrease in or cancellation of orders for our products and services.

Economic and market conditions · Economic recession and downturns

We may be affected by global economic, capital market and political conditions, and conditions in the energy, construction, transportation and infrastructure industries in particular. Our business, operating results, cash flows and financial condition have in the past been and in the future may be adversely affected by changes in global economic conditions and geopolitical risks and conditions, including climate and energy policies, regulatory changes, credit market conditions, levels of consumer and business confidence, fluctuations in residential, commercial and industrial construction activity.

Natural and catastrophic events · Natural disasters and extreme weather

Natural disasters, epidemics or other unexpected events may disrupt our operations, adversely affect our results of operations, cash flows or financial condition, and may not be fully covered by insurance. The occurrence of one or more natural disasters, power outages or other unexpected events, including hurricanes, fires, earthquakes, volcanic eruptions, tsunamis, floods and other forms of severe weather, health epidemics, pandemics or other contagious outbreaks, conflicts, wars or terrorist acts, in the U.S. or in other countries in which we or our suppliers or customers operate have in the past and could in the future adversely affect our operations and financial performance.

Strategic execution · Strategic transformation and turnaround risks

We may not realize expected benefits from our cost reduction and restructuring efforts, and our profitability or our business otherwise might be adversely affected. In order to operate more efficiently and cost effectively, we have, and we may from time to time, adjust employment levels, optimize our footprint and/or implement other restructuring activities.

Innovation and product development · Product development and randd investment risks

We design, manufacture and service products that incorporate advanced technologies. The introduction of new products and technologies involves risks, and we may not realize the degree or timing of benefits initially anticipated. Our future success depends on designing, developing, producing, selling and supporting innovative products that incorporate advanced technologies.

Market position and competition · Competitive pressure and market share loss

We operate in a competitive environment and our profitability and competitive position depend on our ability to accurately estimate the costs and timing of providing our products and services. In certain of our businesses, our contracts are typically awarded on a competitive basis. Our bids are based upon, among other factors, the cost to timely provide the products and services.

Strategic execution · Joint venture and partnership risks

Our business operations, particularly in our Climate Solutions Americas and Climate Solutions Asia Pacific, Middle East & Africa segments, depend on various strategic relationships, namely, joint ventures and non-wholly owned subsidiaries. We sell our products and services through certain key distributor, joint venture and similar relationships, including the Carrier Enterprise joint ventures with Watsco, Inc., AHI-Carrier FZC, a United Arab Emirates-based joint venture and various joint ventures with members of the Midea Group.

Digital transformation and innovation · Technology implementation and upgrades

Our business and financial performance depend on continued and substantial investments in our information and operational technology infrastructure, which may not yield anticipated benefits and which may be vulnerable to cyber-attacks. The efficient operation of our business requires continued and substantial investments in information technology ('IT') and operational technology ('OT', together, 'Technology') infrastructure systems.

Market and investment · Investment portfolio performance

Our defined benefit pension plans are subject to financial market risks that could adversely affect our results. The performance of the financial markets and interest rates can impact our defined benefit pension plan expenses and funding obligations. Significant decreases in the discount rate or investment losses on plan assets may increase our funding obligations and adversely impact our financial results.

International and currency · International operations and emerging markets

Approximately 52% of our net sales for the year ended December 31, 2025, are derived from international operations, including U.S. export sales. As a result, changes in local and regional economic conditions, including fluctuating exchange rates, may adversely affect demand for our products and the profits generated by our non-U.S. operations because a significant portion of our sales and expenses are denominated in currencies other than U.S. dollars.

Capital structure and performance · Financial performance volatility

The market price and trading volume of our common stock may fluctuate significantly. The trading price of our common stock has been and may continue to be volatile and the trading volume in our common stock may fluctuate.

Credit and liquidity · Debt service and covenant compliance

The agreements governing our indebtedness contain covenants restricting our financial flexibility in a number of ways, including, among other things, restrictions on our ability and the ability of certain of our subsidiaries to incur liens, to make certain fundamental changes and to enter into sale and leaseback transactions. In addition, some of the agreements governing our indebtedness require that we not exceed a maximum consolidated total leverage ratio and contain certain customary events of default.

Capital structure and performance · Debt management and refinancing

We incurred debt obligations, and we may incur additional debt in the future, which could adversely affect our business and profitability and our ability to meet other obligations. As of December 31, 2025, we had approximately $11.5 billion in aggregate principal amount of outstanding indebtedness.

Legal and litigation · Product liability and warranty claims

When our products fail to perform as expected, we have been, and may in the future be, exposed to warranty, product liability, personal injury and other claims. Product recalls and field corrective actions can be expensive to implement and may damage our reputation, customer relationships and market share.

Tax and financial reporting · Transfer pricing and international tax

In certain circumstances, we could be required to indemnify UTC for material taxes and other related amounts pursuant to indemnification obligations under the TMA. Under the TMA, we are generally required to indemnify UTC and Otis for any taxes resulting from the Separation (and any related costs and other damages) to the extent such amounts resulted from: (1) an acquisition of all or a portion of the equity securities or assets of Carrier.

Corporate governance · Shareholder rights and activism

After the Separation and the Distribution, certain members of management, directors and shareowners own stock in UTC, Carrier and Otis and as a result may face actual or potential conflicts of interest. Following the Separation and the Distribution, certain members of management and the Board of Directors of each of UTC, Carrier and Otis own common stock in all three companies.