Carrier Global (CARR) 10-K risk factor changes: FY2021 vs FY2020

- We are party to joint ventures and other strategic relationships, which may not be successful and may expose us to [removed: special] [added: unique] risks and restrictions.

- Climate [removed: change and] [added: change,] regulations associated with climate change [added: and mitigation efforts] could adversely affect our business.

- We have [removed: only] operated as an independent company since April 3, 2020, the effective date of the Distribution, and our historical financial information is not necessarily indicative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

- After the Separation and the Distribution, certain members of management, directors and shareowners own stock in UTC, Carrier and Otis [removed: Worldwide Corporation ("Otis"),] and as a result may face actual or potential conflicts of interest.

- We may not be able to engage in desirable capital-raising or strategic transactions following the Separation and [removed: the] Distribution.

- In connection with the Separation into three independent public companies, each of UTC, Carrier and Otis [removed: have] [added: has] agreed to indemnify the other parties for certain liabilities.

If we are required to pay UTC and/or Otis under these indemnities, [added: our financial results could be negatively impacted.]

In certain circumstances, we could be required to indemnify UTC for material taxes and other related amounts pursuant to indemnification obligations under the [removed: Tax Matters Agreement ("TMA").][added: TMA.]

- Our amended and restated bylaws designate the [removed: state] courts within the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareowners, which could discourage lawsuits against Carrier and our directors and officers.

- Natural disasters, epidemics or other unexpected events may disrupt our operations, adversely affect our results of [removed: operations and] [added: operations, cash flows or] financial condition, and may not be fully covered by insurance.

The COVID-19 pandemic has [removed: had] [added: had, and could continue to have,] an adverse effect on our business, financial condition and results of operations.

The pandemic continues to result in widespread and extended or partial shutdowns and other restrictions on the operations of non-essential businesses, [added: specifically due to resurgence in cases and the spread of variants,] including construction, hospitality venues, offices and travel.

The nature and extent of the continuing impact of COVID-19 on our business, financial condition and results of operations is uncertain and will depend on future developments, including the [added: emergence, severity and spread of COVID-19 variants,] recent and pending approvals of [removed: vaccines,] [added: vaccines and boosters,] the wide-spread distribution of vaccines and the effectiveness of such vaccines in preventing [removed: COVID-19,] and [added: decreasing] the [added: length and severity of illness from COVID-19 and its variants, and the] time it takes to vaccinate a sufficient percentage of the U.S. and global populations.

[added: Nonetheless, further prolonged closures and restrictions throughout the world or the rollback of] reopening measures due to a resurgence of COVID-19 cases and continued decreases in the general level of economic activity may again disrupt our operations and the operations of our suppliers, distributors and customers.

As a result of the foregoing, the pandemic and its impact have also affected and could continue to affect [added: our ability to obtain necessary raw materials and parts, ship finished products to customers,] the ability of our customers to pay for our products and services and to obtain financing for significant purchases and operations, which [removed: has resulted in, and] could [removed: further] result [removed: in,] [added: in] a decrease and/or cancellation of orders and/or payment delays or defaults.

[removed: Such] [added: Further, such] conditions may also adversely affect our supply base and increase the potential for one or more of our suppliers to experience financial distress or bankruptcy, which could impact our ability to fulfill orders on time or at the anticipated cost.

Approximately [removed: 51%] [added: 52%] of our net sales for the year ended December 31, [removed: 2020 is] [added: 2021 are] derived from international operations, including U.S. export sales.

While we attempt to manage our exchange rate [removed: risk,] [added: risks,] we are not completely insulated from that exposure.

We are party to joint ventures and other strategic relationships, which may not be successful and may expose us to [removed: special] [added: unique] risks and restrictions.

Our business operations, particularly in our HVAC segment, depend on various strategic [removed: relationships:] [added: 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, [removed: Inc.; AHI-Carrier FZC ("AHI-Carrier"), a United Arab Emirates-based joint venture with Airconditioning & Heating International FZC, a subsidiary of United Motors & Heavy Equipment Co. LLC; various joint ventures with members of] [added: Inc.,] the [removed: Midea Group; and] Toshiba [removed: Carrier, a] [added: Carrier] joint venture with Toshiba [removed: with which we have several other joint ventures.]

[added: Loss of a key channel partner, or a significant downturn or deterioration in the business or financial condition of a key channel partner, joint venture or similar] relationship, whether related to, among other things, a labor strike, diminished liquidity or credit unavailability, weak demand for products or delays in the launch of new products, could adversely affect our results of operations in a particular period or the value of our equity investment.

In addition, our ability to apply our internal controls and compliance policies to our [added: minority-held] joint ventures is limited and can expose us to additional financial and reputational risks.

For example, some of our joint [removed: venture] [added: ventures] or other strategic agreements prohibit us from competing in certain geographic markets or product and services channels, and these restrictions may apply to other products and services we develop or businesses we acquire in the future.

Climate [removed: change and] [added: change,] regulations associated with climate change [added: and mitigation efforts] could adversely affect our business.

The effects of climate change, including [removed: extreme] [added: increased frequency and intensity of] weather [removed: conditions,] [added: conditions and water scarcity,] create financial risks to our business.

[removed: As a result, increased] [added: Increased] public awareness and concern about climate change will likely continue [removed: to] [added: to:] (1) generate more international, regional and/or national requirements to curtail the use of high global warming potential refrigerants [removed: (which] [added: (e.g. the Kigali Amendment to the Montreal Protocol and the American Innovation and Manufacturing ("AIM") Act of 2020, which] are essential to many of our products); (2) increase building energy [added: and cold chain] efficiency; and (3) cause a shift away from the use of fossil fuels as an energy [removed: source.][added: source, including natural gas prohibitions.]

In some instances, these requirements may render our existing technology, particularly some of our HVAC and refrigeration products, non-compliant or [removed: obsolete.][added: obsolete and we may be required to make increased capital expenditures to meet new regulations and standards, changing interpretations and stricter enforcement of current laws and regulations.]

[removed: The introduction of new products and technologies involves risks, and] [added: While] we [removed: may not realize the degree or timing of benefits initially anticipated.*),] [added: are committed to pursuing sustainable solutions for our products, there can be no assurance] that our [added: development efforts will be successful, that our] products will be accepted by the market, that proposed regulations or deregulation will not have an adverse effect on our competitive position, or that economic returns will [removed: reflect] [added: justify] our investments in new product development.

The inconsistent international, regional and/or national requirements associated with climate change [removed: regulations] [added: regulations, such as the U.S. re-entrance into the Paris Climate Agreement,] also create economic and regulatory uncertainty.

[removed: There is also regulatory] and budgetary uncertainty associated with government incentives, which, if discontinued, could adversely impact the demand for energy-efficient buildings and could increase costs of compliance.

Cooler than normal summers depress sales of our replacement air conditioning products and services and warmer than [added: normal winters have the same effect on our heating products.]

The failure to design, [removed: develop] [added: develop, maintain] and implement [removed: new] IT technology infrastructure systems in an effective and timely manner or to maintain these systems could divert management’s attention and resources.

[removed: In addition, our] [added: Our] business [added: has been and] may [added: again in the future] be impacted by disruptions to our or third-party IT infrastructure, which [added: have resulted and] could [added: in the future] result from (among other causes) cyber-attacks, infrastructure failures or compromises to our physical security.

However, depending on the nature, sophistication and scope of cyber-attacks, it is possible that potential vulnerabilities could go undetected for an extended [removed: period.]

As a result, we could potentially experience: (i) production downtimes; (ii) operational delays or other detrimental impacts on our operations; (iii) destruction or corruption of [removed: data;] [added: data (our or third party);] (iv) security breaches; (v) manipulation or improper use of our or third-party systems, networks or products; and (vi) financial losses from remedial actions, loss of business, liability, penalties, fines and/or damage to our reputation—any of which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

Any disruption to our business arising from such issues, or an increase in our costs to cover these issues that is greater than what we have anticipated, could have an adverse effect on our [added: reputation,] competitive position, [removed: reputation,] results of operations, cash flows or financial condition.

We nonetheless rely on a combination of patents, trademarks, copyrights, trade secrets, nondisclosure agreements, customer and supplier agreements, license agreements, [removed: information technology] [added: IT] security systems, internal controls and compliance systems and other measures to protect our intellectual property.

We also rely on nondisclosure agreements, [removed: information technology] [added: IT] security systems and other measures to protect certain customer and supplier information and intellectual property that we have in our possession or to which we have access.

We cannot be sure that our pending patent applications will result in the issuance of patents, that patents issued to or licensed by us in the past or in the future will not be challenged or circumvented by competitors, or that these patents will be [added: found to be valid or sufficiently broad to preclude our competitors from introducing technologies similar to those covered by our patents and patent applications.]

- Mandatory COVID-19 vaccination of employees could impact our workforce and suppliers and have a material adverse effect on our business and results of operations.

- Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations.

- The ability of suppliers to deliver parts, components and manufacturing equipment to our manufacturing facilities, and our ability to manufacture without disruption, could affect our global business performance.

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The COVID-19 pandemic has impacted our supply chain as we experienced disruptions or delays in shipments of certain materials or components of our products.

Facility closures or other restrictions, including employee vaccine mandates, could materially adversely affect our ability to adequately staff, supply or otherwise maintain our operations.

In addition, labor shortages due to prolonged illness or quarantine or an increase in the cost of labor could adversely affect our profit margins and results of operations.

Any recovery from the COVID-19 pandemic and related economic impact may be slowed or reversed by a variety of factors, such as, in the United States, the current widespread increase in COVID-19 infections.

In addition, even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of its global economic impact.

Further, many of the factors discussed under Risk Factors in this Form 10-K are, and we anticipate will continue to be further, heightened or exacerbated by the impact of the COVID-19 pandemic.

Mandatory COVID-19 vaccination of employees could impact our workforce and suppliers and have a material adverse effect on our business and results of operations.

On September 9, 2021, President Biden announced a proposed new rule requiring all employers with at least 100 employees to require that their employees be fully vaccinated or tested weekly.

On November 4, 2021, the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) released its COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) to carry out this mandate.

However, on January 13, 2022, the U.S. Supreme Court issued a stay

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on implementation of the ETS pending the conclusion of litigation at the Sixth Circuit Court of Appeals and in subsequent appeals, if applicable.

On January 25, 2022, OSHA withdrew the ETS and asked the Sixth Circuit to dismiss the case against the ETS as moot.

If OSHA seeks to implement similar, industry-specific rules that apply to Carrier businesses, the vaccination or weekly testing mandate might present logistical and cost challenges for a large portion of our U.S. operations.

In addition, on September 9, 2021, President Biden issued an executive order (“Executive Order”) requiring all employers with U.S. Government contracts to ensure that their U.S.-based employees, contractors, and subcontractors, that work on or in support of U.S. Government contracts, are fully vaccinated, with no testing alternative.

On December 17, 2021, a federal appeals court confirmed a nationwide injunction against the Executive Order pending a full case review.

If the Executive Order survives judicial review, its vaccination mandate may pose staffing issues for our businesses performing work in connection with federal contracts.

Our suppliers may also be subject to the Executive Order or possible new OSHA rules on vaccinations and testing.

At this time, it is not possible to predict with certainty the nature and extent to which the company or our suppliers will be impacted.

Also, additional vaccine mandates may be announced in other jurisdictions in which our businesses or our suppliers operate.

Implementation of these requirements by the company and our suppliers may result in employee attrition, including attrition of critically skilled labor, and difficulty in fulfilling future labor requirements or obtaining parts, components and manufacturing equipment, which could have a material adverse effect on our business, financial condition and results of operations.

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Corporation, AHI-Carrier FZC, a United Arab Emirates-based joint venture and various joint ventures with members of the Midea Group.

The potential impacts of climate change on our operations are highly uncertain and depend upon the unique geographic and environmental factors present; for example rising sea levels at certain of our facilities, changing storm patterns and intensities and changing temperature levels.

Potential adverse impacts from climate change may create health and safety issues for employees operating at our facilities and may lead to an inability to maintain standard operating hours.

Furthermore, our customers and the markets we serve may impose emissions or other environmental standards through regulation, market-based emissions policies or consumer preferences that we may not be able to timely meet due to our required level of capital investment and technology advancement.

There is also regulatory

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We have set environmental, social and governance goals to be achieved by 2030, which include investing over $2 billion to develop healthy, safe, sustainable and intelligent buildings and cold chain solutions that incorporate sustainable design principles and reduce lifecycle impacts, reducing our customers' carbon footprint by more than 1 gigaton, achieving carbon neutral operations and reducing energy intensity by 10% across our operations.

Although we intend to meet these goals, we may be required to expend significant resources to do so, which could increase our operational costs.

Further, there can be no assurance of the extent to which any of our goals will be achieved, or that any future expenditures or investments we make in furtherance of achieving such goals will be available, effective, meet investor expectations or any binding or non-binding legal standards regarding sustainability performance.

For example, to make substantial progress toward or to meet some of these goals, we may need to purchase or deploy a combination of renewable energy utility contracts, carbon credits or offsets, energy-efficient or low-emission products or operations, or carbon sequestration technologies, and there can be no assurance of the extent to which such contracts, credits, offsets, products, operations or technologies will be available in or effective in reducing emissions or energy intensity.

Moreover, we may determine that it is in the best interest of our company and our shareowners to prioritize other business, social, governance or sustainability investments over the achievement of our current goals based on economic, regulatory and social factors, business strategy or pressure from investors, activist groups or other stakeholders.

If we are unable to make substantial progress toward or meet these goals, then we could incur adverse publicity and reaction from investors, activist groups or other stakeholders, which could adversely impact the perception of us and our products and services by current and potential customers, as well as investors, which could in turn adversely impact our results of operations.

Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations.

- We could experience temporary interruptions in business operations and incur additional costs as we further develop information technology infrastructure and transition our data to our stand-alone systems.

our financial results could be negatively impacted.

Nonetheless, further prolonged closures and restrictions throughout the world or the rollback of

We have a global business.

Loss of a key channel partner, or a significant downturn or deterioration in the business or financial condition of a key channel partner, joint venture or similar

During one such recent audit, for example, Carrier identified certain payments made to AHI-Carrier over a ten-year period for products sold in the ordinary course by that minority-owned joint venture from entities of undetermined affiliation with AHI-Carrier’s distributors and customers, predominantly based in countries in the Commonwealth of Independent States.

Carrier does not manage the joint venture and does not direct its treasury or related functions; however, Carrier exercised our audit rights under the joint venture agreement and investigated these third-party payments.

As previously disclosed, the Company reported the preliminary findings of our investigation to the SEC and the U.S. Department of Justice in February 2020.

In December 2020, the SEC informed the Company that it had concluded its investigation of the matter and did not intend to recommend an enforcement action.

While we are committed to pursuing sustainable solutions for our products, there can be no assurance that our development efforts will be successful, as noted below (see *We design, manufacture and service products that incorporate advanced technologies.

normal winters have the same effect on our heating products.

found to be valid or sufficiently broad to preclude our competitors from introducing technologies similar to those covered by our patents and patent applications.

That potential volatility is particularly acute in certain instances where we depend upon a single source.

Tariffs can also increase our costs, the impact of which is difficult to predict.

litigation as well as government enforcement actions, which has also occurred in certain instances.

We are subject to a variety of litigation, legal and compliance risks.

These risks relate to, among other things, personal injuries, intellectual property rights, contract-related claims, taxes, environmental matters, employee health and safety, competition laws and laws governing improper business practices.

We may recognize impairment charges for our goodwill and certain other intangible assets.

In accordance with generally accepted accounting principles in the U.S. ("GAAP"), we periodically assess these assets to determine if they are impaired.

Additionally, UTC or one of its affiliates performed or helped perform various corporate functions for us, such as accounting, auditing, tax, legal, human resources, investor relations, risk management, treasury and other general and administrative functions.

We could experience temporary interruptions in business operations and incur additional costs as we further develop information technology infrastructure and transition our data to our stand-alone systems.

We are in the process of finalizing development of an IT infrastructure and systems to support our critical business functions, including accounting and reporting, in order to replace many of the systems and functions UTC provided prior to the Separation and the Distribution.

We may experience temporary disruption in our business operations as we continue to develop this IT infrastructure, which could have a material adverse effect on our profitability.

In addition, our costs for the operation of these systems may be higher than the amounts reflected in the Consolidated Financial Statements for the periods prior to April 3, 2020.

shares of Carrier common stock would be acquired, whether by merger or otherwise; (2) issuing equity securities beyond certain thresholds; (3) repurchasing shares of Carrier common stock other than in certain open-market transactions; and (4) ceasing to actively conduct certain of our businesses.

shortly after the Effective Time) or that a court would not sustain such a challenge.

of creditors.

to examinations by various tax authorities.

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal controls over financial reporting until we file our first Annual Report on Form 10-K with the SEC, at which time we will be an accelerated filer or a large accelerated filer; accordingly, we expect this attestation at the time we file our Annual Report on Form 10-K for fiscal year 2021.

In connection with the Separation, [removed: Carrier] [added: we] issued an aggregate principal balance of $11.0 billion of debt and transferred approximately $10.9 billion of cash to UTC on February 27, 2020 and March 27, 2020.

On April 1, 2020 and April 2, 2020, [removed: Carrier] [added: we] received cash contributions totaling $590 million from UTC related to the Separation.

See Note [removed: 12 – *Borrowings] [added: 7 - Borrowings] and Lines of [removed: Credit* and Note 4 – *Earnings Per Share*] [added: Credit] in the accompanying Notes to the Consolidated Financial Statements [added: in this Annual Report on Form 10-K] for additional information.

[removed: For the] [added: Our financial statements for] periods prior to the Separation and the [removed: Distribution, the Consolidated Financial Statements were derived from the consolidated financial statements and accounting records of UTC and thus were] [added: Distribution are] prepared on a "carve-out" [removed: basis, as described subsequently.][added: basis and include all amounts directly attributable to Carrier.]

[removed: The Company's] [added: Our] financial statements for the [removed: period from] [added: periods subsequent to] April 3, 2020 [removed: through December 31, 2020] are consolidated financial statements based on the reported results of Carrier as a stand-alone company.

[removed: The results of operations] [added: In addition, the financial statements] include allocations of costs for administrative functions and services performed on [added: our] behalf [removed: of Carrier] by centralized groups within UTC.

See Note [removed: 1 – *Description of the Business*] [added: 19 - Acquisitions] in the accompanying Notes to the Consolidated Financial Statements [added: in this Annual Report on Form 10-K] for additional information.

Carrier Global Corporation is a leading global provider of healthy, [removed: safe and] [added: safe,] sustainable [added: and intelligent] building and cold chain solutions.

[removed: Today, our] [added: Our] portfolio includes industry-leading brands such as Carrier, Kidde, Edwards, LenelS2, Carrier Transicold and Automated Logic that offer innovative HVAC, refrigeration, fire, security and building automation technologies to help make the world safer and more comfortable.

These [removed: factors and trends] include the mega-trends of urbanization, climate change and increasing requirements for food safety driven by the food needs of our growing global population and the rising standards of living in emerging markets.

We believe that [removed: the Company's HVAC, Refrigeration and Fire & Security] [added: our] business segments are well positioned to benefit from favorable secular trends, including these mega-trends and from the strength of our industry-leading brands and track record of innovation.

Our business is also affected by changes in the general level of economic activity, such as changes in business and consumer spending, construction [removed: activity] and shipping [removed: activity.][added: activity as well as short-term economic factors such as currency fluctuations, commodity price volatility and supply disruptions.]

Our operations are [removed: organized] [added: classified] into three segments: HVAC, Refrigeration and Fire & Security.

[removed: Our] [added: - The] HVAC segment provides products, controls, services and solutions to meet the [removed: heating and] [added: heating,] cooling and ventilation needs of residential and commercial [removed: customers.][added: customers while enhancing building performance, health, energy efficiency and sustainability.]

[removed: Our] [added: - The] Refrigeration segment [removed: provides] [added: includes transport] refrigeration and monitoring [removed: systems] [added: products, services and digital solutions] for trucks, trailers, shipping containers, intermodal [added: applications, food retail] and [removed: rail,] [added: warehouse cooling,] as well as commercial refrigeration products.

[removed: Our] [added: - The] Fire & Security segment provides a wide range of [removed: residential and] [added: residential,] commercial [removed: building systems] and [removed: security] [added: industrial technologies designed to help protect people] and [removed: service solutions.][added: property.]

See Note [removed: 1 *– Description of the Business* and Note 26 *–* *Segment Financial Data*] [added: 19 - Acquisitions] in the accompanying Notes to the Consolidated Financial Statements [added: in this Annual Report on Form 10-K] for [removed: further] [added: additional] information.

[removed: *Impact] [added: Impact] of the COVID-19 [removed: pandemic*][added: Pandemic]

[added: See] Note 3 – [removed: *Summary] [added: Summary] of Significant Accounting [removed: Policies*] [added: Policies] in the accompanying Notes to the Consolidated Financial Statements [removed: describes the significant accounting policies used] in [removed: preparation] [added: this Annual Report on Form 10-K for a discussion] of [removed: the consolidated] [added: recent accounting pronouncements and their effect on our] financial statements.

Goodwill and [added: Indefinite-Lived] Intangible Assets

We test our reporting units and [removed: trademarks] [added: indefinite-lived intangible assets] for impairment annually as of the first day of our third quarter, or more frequently if events or circumstances [removed: indicate it is more likely than not that the fair value of a reporting unit or trademark is less than its carrying amount.][added: occur.]

See Note [removed: 10] [added: 2] – [removed: *Business Acquisitions, Dispositions, Goodwill and Intangible Assets*] [added: Basis of Presentation] in the accompanying Notes to the Consolidated Financial Statements [added: in this Annual Report on Form 10-K] for [removed: further] [added: additional] information.

[removed: We] [added: In addition, we] recognize revenue on an over-time basis on installation and service [removed: contracts related to our HVAC, Refrigeration and Fire & Security service businesses.][added: contracts.]

For [removed: contracts recorded on an] over-time [removed: basis, we measure progress toward completion] [added: performance obligations requiring the installation of equipment, revenue is recognized] using costs incurred to date relative to total estimated costs at [removed: completion.][added: completion to measure progress.]

In the ordinary course of [removed: business] [added: business,] there is inherent uncertainty in quantifying our income tax positions.

See Note [removed: 3 – *Summary of Significant Accounting Policies*] [added: 10 - Employee Benefit Plans, Note 17 - Income Taxes,] and Note [removed: 19 – *Income Taxes*] [added: 23 - Commitments and Contingent Liabilities] in the accompanying Notes to the Consolidated Financial Statements [added: in this Annual Report on Form 10-K] for [removed: further discussion.][added: additional information.]

The following table summarizes the sensitivity of our pension plan liabilities and net periodic cost to a 25 basis point change in the discount rates for benefit obligations, interest cost and service cost as of December 31, [removed: 2020:][added: 2021:]

| [removed: (dollars in] [added: (In] millions) | | | | | | Increase in Discount Rate of 25 bps | | | | | | Decrease in Discount Rate of 25 bps | | |

| Projected benefit obligation | | | | | | $ | [removed: (112)] [added: (32)] | | | | | $ | [removed: 119] [added: 35] | |

[removed: Pension expense] [added: Net periodic pension (benefit) cost] is also sensitive to changes in the expected return on plan assets.

An increase or decrease of 25 basis points in the expected return on plan assets would have decreased or increased [removed: 2020] [added: 2021] pension expense by approximately [removed: $7] [added: $1] million.

See Note [removed: 13] [added: 10] – [removed: *Employee] [added: Employee] Benefit [removed: Plans*] [added: Plans] in the accompanying Notes to the Consolidated Financial Statements [added: in this Annual Report on Form 10-K] for [removed: further discussion.][added: additional information.]

As described in Note [removed: 25] [added: 23] – [removed: *Commitments] [added: Commitments] and Contingent [removed: Liabilities*] [added: Liabilities] in the accompanying Notes to the Consolidated Financial [removed: Statements,] [added: Statements in this Annual Report on Form 10-K,] contractual, regulatory and other matters, including asbestos claims, may arise in the ordinary course of business that subject us to claims or litigation.

We have recorded reserves in the consolidated financial statements related to these matters, which are developed using input derived from actuarial estimates and historical and anticipated experience depending on the nature of the reserve, and in certain instances in consultation with legal counsel, internal and external [added: consultants and engineers.]

[removed: We] [added: However, we do not] believe that [removed: expenditures necessary to comply with] the [removed: current regulations governing environmental protection] [added: resolution of any of these matters] will [removed: not] have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition.

The following represents our consolidated net sales and operating [removed: results (dollars in millions):][added: results:]

| [removed: Segment net sales:] | | | [removed: | | | | | | | | | | | |] [added: Net sales] | | |

| Cost of products and services sold | | | [removed: 12,347] [added: (14,633)] | | | | | | [removed: 13,189] [added: (12,347)] | | | | | | [removed: 13,345] | | | [added: | | | | | | | | | | | |]

| Gross margin | | | [added: $ | 5,980 | | | | | $ |] 5,109 | | | | | | [removed: 5,419] | | | | | | [removed: 5,569] | | | [added: | | | | |]

| Research and development | | | [removed: 419] [added: (503)] | | | | | | [removed: 401] [added: (419)] | | | | | | [removed: 400] | | |

We also provide a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring.

In addition, we regularly review our markets to proactively identify trends and adapt our strategies accordingly.

However, we continue to invest in our business, take pricing actions to mitigate supply chain and inflationary pressures, develop new products and services in order to remain competitive in our markets and use risk management strategies to mitigate various exposures.

We believe that we have industry-leading global brands, which form the foundation of our business strategy.

Coupled with our focus on growth, innovation and operational efficiency, we expect to drive long-term future growth and increased value for our shareowners.

Recent Developments

Supply Chain Challenges

The ongoing global economic recovery from the COVID-19 pandemic has caused significant challenges for global supply chains resulting in inflationary cost pressures, component shortages and transportation delays.

As a result, we have incurred incremental costs for commodities and components used in our products as well as component shortages and higher freight costs that have negatively impacted our sales and results of operations.

We expect that these challenges will continue to have an impact on our business for the foreseeable future.

We continue to take proactive steps to limit the impact of these challenges and are working closely with our suppliers to ensure availability of products and implement other cost savings initiatives.

In addition, we continue to invest in our operations and supply chain to improve its resilience with a focus on automation, dual sourcing of critical components and localized manufacturing when feasible.

To date, there has been moderate disruption to the availability of our products, though it is possible that more significant disruptions could occur if these supply chain challenges continue.

Sale of Chubb Fire & Security Business

On January 3, 2022, we completed the sale of Chubb to APi pursuant to a stock purchase agreement for an enterprise value of $3.1 billion.

Chubb, reported within our Fire & Security segment, delivers essential fire safety and security solutions from design and installation to monitoring, service and maintenance across more than 17 countries around the globe.

As a result, the

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operations of Chubb are included in our 2021 consolidated results of operations.

However, the assets and liabilities of Chubb are presented as held for sale in the accompanying Consolidated Balance Sheet as of December 31, 2021.

The purchase price is subject to working capital and other adjustments as provided in the Chubb Sale Agreement.

Consistent with our capital allocation strategy, the net proceeds of approximately $2.6 billion will be used to fund investments in organic and inorganic growth initiatives and capital returns to our shareowners as well as for general corporate purposes.

On April 3, 2020, UTC completed the Separation of Carrier into an independent publicly traded company.

In addition, we entered into several agreements with UTC and Otis that govern various aspects of the relationship among us, UTC and Otis following the Separation and the Distribution including the TSA (which expired on March 31, 2021), the TMA, an employee matters agreement and an intellectual property agreement.

Income and expense under these agreements are not material.

Net cash transfers and other property transferred between UTC and us, including related party receivables and payables between us and other UTC affiliates, are presented as *Net transfers to UTC*.

All allocations and estimates in the Consolidated Financial Statements are based on assumptions that management believes are reasonable.

In early 2020, the World Health Organization declared the outbreak of a respiratory disease known as COVID-19 as a global pandemic.

In response, many countries implemented containment and mitigation measures to combat the outbreak, which severely restricted the level of economic activity and caused a significant contraction in the global economy.

As a result, we temporarily closed or reduced production at manufacturing facilities across the globe to ensure employee safety and instructed non-essential employees to work from home.

In addition, we took several preemptive actions during 2020 to manage liquidity as demand for our products decreased.

Despite the adverse impacts of the pandemic on our results beginning in the first quarter of 2020, manufacturing operations resumed and several restorative actions were completed during 2020 including the reinstatement of annual merit-based salary increases and continued investment to support our strategic priorities.

We continue to focus our efforts on preserving the health and safety of our employees and customers as well as maintaining the continuity of our operations.

In addition, we continue to actively monitor our liquidity position and working capital needs and believe that our overall capital resources and liquidity position are adequate.

The preparation of financial statements requires management to use judgments in making estimates and assumptions based on the relevant information available at the end of each period, which can have a significant effect on reported amounts.

However, due to significant uncertainty surrounding the pandemic, including a resurgence in cases and the spread of COVID-19 variants, management's judgments could change.

While our results of operations, cash flows and financial condition could be negatively impacted, the extent of any continuing impact cannot be estimated with certainty at this time.

This discussion summarizes the significant factors affecting our consolidated results of operations, financial condition and liquidity for the year ended December 31, 2021 compared with December 31, 2020.

This discussion should be read in conjunction with Item 8, the Consolidated Financial Statements and the accompanying Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K.

A detailed discussion of the year ended December 31, 2020 compared with December 31, 2019 is not included herein and can be found in the Management's Discussion and Analysis section in the Company's 2020 Annual Report on Form 10-K, filed with the SEC on February 9, 2021, under the heading "Results of Operations," which is incorporated herein by reference.

On April 3, 2020, UTC completed the Separation through the Distribution of all of the outstanding common stock of the Company to UTC shareowners who held shares of UTC common stock as of the close of business on March 19, 2020, the record date for the Distribution.

UTC distributed 866,158,910 shares of Carrier common stock in the Distribution at the Effective Time.

As a result of the Distribution, UTC shareowners of record received one share of the Company's common stock for every one share of UTC common stock and Carrier became an independent public company.

Our common stock is listed under the symbol "CARR" on the NYSE.

Prior to the Separation and the Distribution, the Consolidated Financial Statements reflect the financial position, results of operations and cash flows of the Company for the periods presented as historically managed within UTC.

The Consolidated Financial Statements include all revenues and costs directly attributable to Carrier, including costs for facilities, functions and services used by Carrier.

Prior to the Separation and the Distribution, costs for certain functions and services performed by UTC were directly charged to Carrier based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount, proportionate usage or other allocation methods.

We entered into the TSA with UTC and Otis in connection with the Separation pursuant to which UTC provides us with certain services and we provide certain services to UTC for a limited time to help ensure an orderly transition following the Separation and the Distribution.

The services we receive include, but are not limited to, information technology services, technical and engineering support, application support for operations, legal, payroll, finance, tax and accounting, general administrative services and other support services.

The costs for these services historically were included in our operating results based on allocations from UTC and have not been materially different under the TSA, nor do we expect such costs to be materially different when these services are transitioned from UTC to Carrier.

Subsequent to the Separation and the Distribution, we have incurred and will continue to incur expenditures consisting primarily of employee-related costs, costs to establish certain stand-alone functions and information technology systems and other transaction-related costs.

Additionally, we will have incurred and will continue to incur increased costs as a result of becoming an independent, publicly traded company, primarily from establishing or expanding corporate support for our businesses, including information technology, human resources, treasury, tax, internal audit, risk management, accounting and financial reporting, investor relations, governance, legal, procurement and other services.

Our estimates of these additional recurring costs expected to be incurred annually are approximately $75 million in the aggregate greater than the expenses historically allocated to us from UTC, and primarily relate to Selling, general and administrative expenses.

We believe our cash flows from operations will be sufficient to fund these additional corporate expenses.

In connection with the Separation, we entered into the TMA with UTC and Otis that governs the parties’ respective rights, responsibilities and obligations with respect to tax matters (including responsibility for taxes, entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other tax matters).

Subject to certain exceptions set forth in the TMA, Carrier generally is responsible for federal, state and foreign taxes imposed on a separate return basis upon Carrier (or any of our subsidiaries) with respect to taxable periods (or portions thereof) that ended on or prior to the date of the Distribution.

The TMA provides special rules that allocate responsibility for tax liabilities arising from a failure of the

Separation transactions to qualify for tax-free treatment based on the reasons for such failure.

The TMA also imposes restrictions on each of Carrier and Otis during the two-year period following the Distribution that are intended to prevent certain transactions from failing to qualify as transactions that are generally tax-free.

In connection with the Separation, we also entered into an employee matters agreement and intellectual property agreement with UTC and Otis.

These agreements are not expected to have a material impact on the financial results of Carrier.

The effects of climate change, such as extreme weather conditions, create financial risks to our business.

For example, the demand for our products and services, such as residential air conditioning equipment, may be affected by unseasonable weather conditions.

Demand for our HVAC products and services, representing our largest segment by sales, is seasonal and affected by the weather.

Cooler than normal summers depress our sales of replacement air conditioning products and services.

Similarly, warmer than normal winters have the same effect on our heating products.

A change in building and remodeling activity also can affect our financial performance.

In addition, our financial performance may be influenced by the production and utilization of transport equipment, including truck production cycles in North America and Europe.

*Business Segments*

Our customers are in both the public and private sectors, and our businesses reflect extensive geographic diversification.

As part of our growth strategy, we invest in businesses in certain countries that carry higher levels of currency, political and/or economic risk, such as Mexico, China, Brazil, India and countries in the Middle East.

As of December 31, 2020, our net assets in any one of these countries did not exceed 11% of our consolidated equity.

See Note 26 *–* *Segment Financial Data* in the accompanying Notes to the Consolidated Financial Statements for further discussion of sales attributed to geographic regions.

Our earnings growth strategy contemplates earnings from organic sales growth, including growth from new product development and product improvements, structural cost reductions, operational improvements and incremental earnings from acquisitions.

Acquisition and restructuring costs associated with business combinations are expensed as incurred.

Depending on the nature and level of acquisition activity, our earnings could be adversely impacted due to acquisition and restructuring actions initiated in connection with the integration of businesses acquired.

For further discussion of acquisitions and restructuring, see Note 6 – Equity Method Investments and Related Parties, Note 10 – *Business Acquisitions, Dispositions, Goodwill and Intangible Assets* and Note 17 – *Restructuring Costs* in the accompanying Notes to the Consolidated Financial Statements.

COVID-19 surfaced in late 2019 and has spread throughout the world.

In March 2020, COVID-19 was declared a pandemic by the World Health Organization and a national emergency by the U.S. government.

The pandemic has negatively affected the U.S. and global economies, disrupted global supply chains and financial markets, resulted in significant travel restrictions, mandated facility closures, and resulted in shelter-in-place orders.

To manage certain of [removed: those] [added: these] exposures, we primarily use foreign currency forward contracts, swaps and options.

There has been no significant change in our exposure to market risk for the year ended December 31, [removed: 2020.][added: 2021.]

[added: Foreign Currency Exposures.] We transact business in various foreign currencies, which exposes our cash flows and earnings to changes in foreign currency exchange rates.

While the objective of our hedging program is to minimize the foreign currency exchange [added: rate] impact on operating results, there may be variances between the gains and losses resulting from the hedging contracts and the underlying [removed: exposure] [added: exposures] because of the [removed: length] [added: duration] of certain hedging contracts.

[removed: Carrier does] [added: We do] not enter into hedging contracts for speculative purposes.

[removed: We are exposed to volatility in the prices of raw materials used in some of our products, and from] [added: From] time to [removed: time] [added: time,] we may use forward contracts in limited circumstances to manage some of those exposures.

[removed: In the future, if] [added: When] hedges are utilized, gains and losses may affect earnings.

[added: Interest Rate Exposures.] Our long-term debt consists mostly of fixed-rate instruments.

Commodity Price Exposures. We are exposed to volatility in the prices of raw materials used in some of our products and fuel costs to ship our products and materials.

We do not enter into hedging contracts for speculative purposes.

Derivative activity as of December 31, 2021 was not material to our financial statements.

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These hedging activities provide limited protection against currency exchange and credit risks.

Foreign Currency Exposures

Commodity Price Exposures

There were no outstanding hedge derivatives as of December 31, 2020.

Interest Rate Exposures

Carrier Global Corporation is a leading global provider of healthy, [removed: safe and] [added: safe,] sustainable [added: and intelligent] building and cold chain solutions.

Our portfolio includes industry-leading brands such as Carrier, Kidde, Edwards, [removed: LenelS2] [added: LenelS2, Carrier Transicold] and Automated Logic that offer innovative heating, ventilating and air conditioning ("HVAC"), refrigeration, fire, security and building automation technologies to help make the world safer and more comfortable.

These [removed: factors and trends] include the mega-trends of urbanization, climate change and increasing requirements for food safety driven by the food needs of a growing global population and the rising standards of living in emerging markets.

We believe that [removed: the Company's HVAC, Refrigeration and Fire & Security] [added: our] business segments are [added: well] positioned to benefit from favorable secular trends, including these [removed: mega-trends,] [added: mega-trends] and from the strength of our industry-leading brands and track record of innovation.

On [removed: November 26, 2018,] [added: April 3, 2020 (the "Distribution Date"),] United Technologies Corporation, since renamed Raytheon Technologies Corporation [removed: ("UTC"), announced its intention to] [added: ("UTC") completed the] spin-off [added: of] Carrier into [removed: a separate,] [added: an independent] publicly traded company (the [removed: "Separation").][added: "Separation") through a pro rata distribution (the "Distribution") of all of the outstanding shares of common stock of the Company to UTC shareowners.]

In connection with the Separation, [removed: Carrier] [added: we] issued an aggregate principal balance of $11.0 billion of debt and transferred [removed: an aggregate of] approximately $10.9 billion of cash to UTC on February 27, 2020 and March 27, 2020.

On April 1, 2020 and April 2, 2020, [removed: Carrier] [added: we] received cash contributions totaling $590 million from UTC related to the Separation.

Our operations [removed: for the periods presented herein] are classified into three segments: HVAC, Refrigeration and Fire & [removed: Security, with each segment comprised of groups of similar operating companies.][added: Security.]

For the year ended December 31, [removed: 2020,] [added: 2021,] our net sales were [removed: $17.5 billion,] [added: $20.6 billion] and our operating profit was [removed: $3.1] [added: $2.6] billion.

Our net sales for [removed: 2020] [added: 2021] were derived from the Americas [removed: (55%),] [added: (54%),] Europe, Middle East and Africa ("EMEA") [removed: (30%)] [added: (29%)] and Asia-Pacific [removed: (15%).][added: (17%).]

Our international operations, including U.S. export sales, represented approximately [removed: 51%] [added: 52%] of our net sales for [removed: 2020.][added: 2021.]

During the same period, new equipment comprised [removed: 72% and service] [added: 73%] and aftermarket comprised [removed: 28%] [added: 27%] of our net [removed: sales excluding inter-segment eliminations.][added: sales.]

[removed: Carrier’s] [added: Our] business strategy is to be the world leader in healthy, [removed: safe and] [added: safe,] sustainable [added: and intelligent] building and cold chain [removed: solutions.][added: solutions which we believe is supported by a variety of favorable secular trends.]

[added: Strengthen and Grow our Core.] Our strategy involves driving [removed: our] organic growth in part by maintaining our proven track record of innovation, which is focused on designing smarter, more connected and more sustainable systems and [removed: solutions across our business.][added: solutions.]

Our strategy also relies on our iconic, industry-leading brands and on strengthening our long-term relationships with channel partners and customers by offering solutions that anticipate customer needs related to healthy, [removed: safe and] [added: safe,] sustainable [added: and intelligent] building and cold chain [removed: solutions,] [added: solutions] with a focus on technologies related to [added: environmentally-friendly] refrigerants, [added: energy] efficiency, [added: low] emissions, air quality, electrification, noise [removed: levels] [added: reduction] and safety.

Increase [removed: product extensions] [added: Product Extensions] and [removed: geographic coverage.] [added: Geographic Coverage.] Our strategy involves [removed: employing] [added: leveraging] our global operations, the strength of our iconic, industry-leading brands and our success in creating valuable partnerships to focus on targeted expansion into new locations and channels where we believe that we can drive profitable growth.

We are also focused on emerging trends in our segments; namely, [removed: health and safety in homes] [added: healthy, safe, sustainable] and [removed: commercial buildings,] [added: intelligent buildings] and cold chain solutions.

Grow [removed: services] [added: Aftermarket] and [removed: digital.] [added: Digital.] Our strategy is [removed: also] focused on bringing differentiated parts and service solutions to our customers across the entire product lifecycle.

Our [removed: new] BluEdge [added: service] platform builds on our history of innovation and our expertise as an original equipment manufacturer.

Through our understanding of customer needs and investments in connected equipment and digital service solutions, BluEdge [removed: will help] [added: helps] us achieve enhanced equipment efficiency and performance – key components of our [removed: healthy, safe and sustainable buildings] [added: Healthy Buildings, Healthy Homes] and [removed: cold chain programs.][added: Connected Cold Chain Programs.]

[removed: Our] [added: In addition, our] product teams are deriving insights from data by employing [removed: AWS’s services] [added: Amazon Web Services (“AWS”)] for connectivity, artificial intelligence and machine learning.

[removed: Our] [added: HVAC. The] HVAC segment provides products, controls, services and solutions to meet the [removed: heating and] [added: heating,] cooling and ventilation needs of residential and commercial [removed: customers,] [added: customers] while enhancing building performance, health, energy efficiency and sustainability.

Our established brands include Automated Logic, Bryant, [removed: Payne, Carlyle,] Carrier, CIAT, Day & Night, Heil, [removed: NORESCO,] [added: NORESCO and] Riello [added: which offer an innovative] and [removed: Tempstar.][added: complete portfolio of products that provide numerous solutions for our customers.]

Products include [removed: heating and cooling systems for both residential and commercial applications,] air [removed: handling systems, controls, building automation] [added: conditioners, heating] systems, [removed: aftermarket services] [added: controls] and [added: aftermarket components as well as aftermarket] repair and [removed: energy solutions.][added: maintenance services and building automation systems.]

Some of these products are part of Carrier’s Healthy Buildings Program, which offers a suite of targeted solutions that are focused on improving [added: and optimizing] indoor air quality in buildings and [removed: homes.][added: homes to enhance human health, safety and productivity.]

[removed: HVAC products] [added: Products] and solutions are sold [removed: directly, including] [added: directly] to [removed: key accounts,] building contractors and [removed: owners,] [added: owners] and indirectly through joint ventures, independent sales representatives, distributors, wholesalers, dealers and retail [removed: outlets, as well as through direct sales offices which sell, in part, to mechanical contractors.][added: outlets.]

[removed: Our commercial] [added: Commercial] refrigeration [removed: equipment] solutions [added: include refrigerated cabinets, freezers, systems and controls which] incorporate next-generation technologies to preserve freshness, ensure safety and enhance the appearance of food and beverages sold by retailers.

[removed: Our Refrigeration products] [added: Products] and services are sold under established brand names, including Carrier Commercial Refrigeration, Carrier Transicold and Sensitech.

[removed: Refrigeration products] [added: Products] and services are sold [removed: directly, including] [added: directly] to transportation companies and retail [removed: stores,] [added: stores] and indirectly through joint ventures, independent sales representatives, distributors, wholesalers and dealers.

[removed: Our Fire & Security segment provides a wide range of residential, commercial and industrial technologies and systems, and service solutions to protect people and property, including] [added: Products include] fire, flame, gas, smoke and carbon monoxide [removed: detection;] [added: detection,] portable fire [removed: extinguishers;] [added: extinguishers,] fire suppression [removed: systems;] [added: systems,] intruder [removed: alarms;] [added: alarms,] access control systems and video management [removed: systems;] [added: systems] and electronic controls.

Other fire and security service offerings include audit, design, installation and system [removed: integration,] [added: integration] as well as aftermarket maintenance and repair and monitoring services.

Our [removed: Fire & Security] [added: fire and security] products and solutions, also part of Carrier's Healthy Homes and Healthy Buildings Program, are sold directly to end customers as well as through manufacturers’ representatives, distributors, dealers, value-added resellers and retail distribution.

[removed: In addition, certain of our products] [added: Our established brands include Kidde, Edwards, GST, LenelS2, Marioff, Autronica, Aritech, Det-Tronics, Onity, Supra and Fireye which provide product and technology innovations that] are supported by installation, maintenance and monitoring through a network of channel partners and our own field service business, along with web-based and mobile [removed: applications,] [added: applications] and cloud-based services.

As a result, [added: rapid] changes in legislation, regulations and government policies, including with respect to regulations intended to combat climate change, affect our operations and business in the countries, regions and localities in which we operate and sell our products.

Such changes, which can [removed: also] render our products and technologies non-compliant, involve refrigerants, noise levels, product and fire safety, [removed: hydro fluorocarbon] [added: hydrofluorocarbon] emissions, fluorinated gases, hazardous [removed: substances,] [added: substances] and electric and electronic equipment waste.

[removed: Additionally, the increased] [added: Increased] fragmentation of regulatory requirements [removed: at various levels of government] [added: changes the manner in which we conduct our business and] increases our costs because it necessitates the development of country or regional specific variants, monitoring of and compliance with those [removed: regulations,] [added: regulations] and additional testing and certifications.

[removed: Our] [added: In addition, our] operations are [removed: also] subject to and affected by environmental regulations promulgated by federal, state and local authorities in the U.S. and by authorities with jurisdiction over our foreign operations.

We hold approximately [removed: 8,000] [added: 9,000] active patents and pending patent applications worldwide.

With roots in our legacy manufacturing and business processes, the Carrier operating system — Carrier Excellence — is our continuous improvement framework that is expected to drive operational excellence across [removed: the company.][added: our businesses.]

We also implemented a strategic cost reduction initiative in 2020 that [removed: initially] targeted eliminating [removed: $600] [added: $700] million in costs over three years through operational efficiency, digitalization, automation and supply chain [removed: productivity.][added: productivity ("Carrier 700").]

We also provide a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring.

In addition, we regularly review our markets to proactively identify trends and adapt our strategies accordingly.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Sales by Segment * | | | | | | Net Sales by Region | | | | | | Sales by Type | | |


* Segment sales include inter-company sales.

Separation from United Technologies Corporation

In addition, we entered into several agreements with UTC and Otis Worldwide Corporation ("Otis") that govern various aspects of the relationship among us, UTC and Otis following the Separation and the Distribution including the Transition Services Agreement ("TSA"), which expired on March 31, 2021, the Tax Matters Agreement ("TMA"), an employee matters agreement and an intellectual property agreement.

Income and expense under these agreements are not material.

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Sale of Chubb Fire and Security Business

On January 3, 2022, we completed the sale of our Chubb Fire and Security business ("Chubb") to APi Group Corporation ("APi") pursuant to a stock purchase agreement for an enterprise value of $3.1 billion (the "Chubb Sale Agreement").

Chubb, reported within our Fire & Security segment, delivers essential fire safety and security solutions from design and installation to monitoring, service and maintenance across more than 17 countries around the globe.

The purchase price is subject to working capital and other adjustments as provided in the Chubb Sale Agreement.

Consistent with our capital allocation strategy, the net proceeds of approximately $2.6 billion will be used to fund investments in organic and inorganic growth initiatives and capital returns to our shareowners as well as for general corporate purposes.

We are focused on three pillars of growth to execute our business strategy:

In order to differentiate our products and services, drive productivity and support operating efficiency for our customers and our channels, we leverage innovative digital capabilities across our business segments.

Abound is a cloud-based building platform that unlocks and unites building data to create more healthy, safe, sustainable and intelligent solutions for indoor spaces.

It gathers data from disparate systems, sensors and sources; identifies opportunities to optimize performance; and works with healthy building solutions to improve occupant experiences.

Carrier's Lynx digital platform was recognized among Fast Company’s 2021 World Changing Ideas.

Our Lynx digital platform, developed in collaboration with AWS, allows customers to leverage data to enhance visibility, resiliency, agility and efficiency in the cold chain to reduce loss and support real-time decisions.

Our industry-leading global brands and track record of innovation form the foundation of our business strategy.

This strategy is fueled by our position at the epicenter of important secular trends—including an emphasis on health and wellness, a growing focus on sustainability and increasing digitalization.

Coupled with our focus on growth, innovation and operational efficiency, we expect to drive long-term growth and increased value for our shareowners.

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Business Segments

We globally manage our business operations through three segments: HVAC, Refrigeration and Fire & Security.

Financial information related to our segments is included in Note 21 – Segment Financial Data in the accompanying Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K.

Each respective segment's major products, services and distribution methods are as follows:

Refrigeration. The Refrigeration segment provides a healthier, safer, more sustainable and more intelligent cold chain through the reliable transport and preservation of food, medicine and other perishable cargo.

Our refrigeration and monitoring products, services and digital solutions, which form Carrier's Healthy, Safe, Sustainable and Intelligent Cold Chain offering, strengthen the connected cold chain and are designed for trucks, trailers, shipping containers, intermodal applications, food retail and warehouse cooling.

Fire & Security. The Fire & Security segment provides a wide range of residential, commercial and industrial technologies designed to help protect people and property.

Competitive Conditions

Each of our businesses is subject to significant competition from a number of companies throughout the world.

Due to the nature of our products and services and the markets we serve, our competition can vary from regional or specialized companies to larger public or private companies.

Some of our key competitors include Daikin Industries, Trane Technologies, Johnson Controls, Lennox International, Honeywell, Siemens, Bosch, Assa Abloy, MSA Safety, Stanley Black & Decker, Newell Brands, Midea Group, Mitsubishi Electric and China International Marine Containers.

The most significant competitive factors we face are technology differentiation, product performance, service, delivery schedule and price.

Brand reputation, service to customers and quality are also important competitive factors for our products and services.

While our competitive position varies among our products and services, we are a significant competitor with respect to each of our major product and service offerings.

Carrier was incorporated in Delaware on March 1, 2019, as a wholly owned subsidiary of UTC.

On April 3, 2020 (the "Distribution Date"), UTC completed the Separation through a pro rata distribution (the "Distribution") on a one-for-one basis of all of the outstanding common stock of the Company to UTC shareowners who held shares of UTC common stock as of the close of business on March 19, 2020, the record date for the Distribution.

UTC distributed 866,158,910 shares of Carrier common stock in the Distribution, which was effective at 12:01 a.m., Eastern Time, on April 3, 2020 (the "Effective Time").

As a result of the Distribution, UTC shareowners of record received one share of the Company’s common stock for every one share of UTC common stock, and Carrier became an independent public company.

See Note 12 – *Borrowings and Lines of Credit* and Note 4 – *Earnings Per Share* in the accompanying Notes to the Consolidated Financial Statements for further information.

References to each segment include the various operating companies established worldwide through which the operations for each segment are conducted.

This Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available free of charge through the Investors section of our Internet website (http://www.corporate.carrier.com) under the heading "SEC Filings" as soon as reasonably practicable after these reports are electronically filed with, or furnished to, the United States Securities and Exchange Commission ("SEC").

In addition, the SEC maintains an Internet website (http://www.sec.gov) containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

We are focused on three pillars of growth: strengthen and grow our core, increase product extensions and geographic coverage, and grow services and digital to create recurring sales opportunities.

The elements of our Company’s strategy encompass the following elements:

Strengthen and grow our core. We are a leader in our three segments.

And we are investing in our sales force and research and development to grow that presence.

Digital is also central to our growth strategy.

We are implementing innovative digital capabilities across our business segments to help differentiate our products and services.

Amazon Web Services (“AWS”) is our new preferred cloud provider.

Carrier and AWS are developing new offerings like Lynx, our proprietary intelligent ecosystem that will help optimize the safe and sustainable transport of perishable goods and medicine across the cold chain.

Carrier IO, another new proprietary platform, will provide turnkey services to connect equipment and help accelerate product development across our portfolio.

In 2020, we implemented new and enhanced e-commerce capabilities and online shop-and-buy offerings to help drive online sales and create an easier, more convenient and engaging customer experience.

Description of Business by Segment

Each segment’s business, including its principal products and services and other material developments and information, is described subsequently.

Segment financial data for the years 2018 through 2020, including financial information about U.S. and international sales and operating profits, is included in Note 26 – *Segment Financial Data* in the accompanying Notes to the Consolidated Financial Statements.

Segment sales discussed below include inter-company sales, which are ultimately eliminated within the "Eliminations and other" category and that are reflected in the segment financial data in Note 26 – *Segment Financial Data* in the accompanying Notes to the Consolidated Financial Statements.

HVAC

Our HVAC segment had net sales of $9.5 billion for the year ended December 31, 2020, and, as of December 31, 2020, remaining performance obligations ("RPO") of approximately $3.0 billion.

Refrigeration

Our Refrigeration segment includes transport refrigeration and monitoring products, services and digital solutions for trucks, trailers, shipping containers, intermodal and rail, as well as commercial refrigeration products.

Transport refrigeration products and cold chain monitoring solutions, which form Carrier's Healthy, Safe, Sustainable Cold Chain Program offering, are used to enable the safe, reliable transport of food and beverages, medical supplies, including vaccines, and other perishable cargo.

Commercial refrigeration solutions include refrigerated cabinets, freezers, systems and controls.

Our Refrigeration segment had net sales of $3.3 billion for the year ended December 31, 2020 and, as of December 31, 2020, RPO of approximately $1.1 billion.

Fire & Security

Our established brands include Kidde, Edwards, GST, LenelS2, Marioff, Autronica, Aritech, Chubb, Det-Tronics, Onity, Supra and Fireye.

Our Fire & Security segment had net sales of approximately $5.0 billion for the year ended December 31, 2020 and, as of December 31, 2020, RPO of approximately $1.3 billion.

Competition and Other Factors Affecting the Carrier Business

As a global business, our operations can be affected by a variety of economic, industry and other factors, including those described in this section and in the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Cautionary Note Concerning Factors That May Affect Future Results" and "Risk Factors" in this Annual Report on Form 10-K.

Each business unit is subject to significant competition from a number of companies in the U.S. and other countries, and each competes on the basis of technology differentiation, product performance, service, delivery schedule, and price.

The geographies in which we sell our products, solutions and services in the HVAC, Refrigeration and Fire & Security segments also have a number of local competitors.

Competition in HVAC includes several multinational, regional and local companies, the largest of which include Daikin Industries, Gree Electric, Trane Technologies, Johnson Controls, Lennox International, Midea Group and Mitsubishi Electric.

Sales depend on price, product availability, delivery schedule, product performance, product line breadth, brand reputation, design, technical expertise and service.

Competition in Refrigeration includes multinational companies, including Trane Technologies, Daikin Industries and Panasonic, as well as regional and local companies.

Sales depend on product performance, efficiency, reliability, price, service and support.

The Company [removed: and our consolidated subsidiaries have] [added: has] been named as [removed: defendants] [added: a defendant] in lawsuits alleging personal injury as a result of exposure to asbestos allegedly integrated into certain Carrier products or business premises.

While the Company has never manufactured asbestos and no longer incorporates it into any currently-manufactured products, certain products that [removed: Carrier] [added: the Company] no longer manufactures contained components incorporating asbestos.

A substantial majority of these asbestos-related claims have been dismissed without payment or [removed: were] [added: have been] covered in full or in part by insurance or other forms of indemnity.

The amounts recorded for asbestos-related liabilities are based on currently available information and assumptions that [removed: we believe] [added: the Company believes] are reasonable and are made with input from outside actuarial experts.

[removed: Aqueous Film Forming Foam ("AFFF")] [added: AFFF] is a firefighting [removed: foam] [added: foam,] developed [added: beginning] in the [removed: 1970s] [added: late 1960s] pursuant to U.S. military [removed: specification and] [added: specification,] used to extinguish certain types of [added: hydrocarbon-fueled] fires primarily at [removed: airports and] military [removed: bases.][added: bases and airports.]

UTC [removed: acquired] [added: first entered] the [added: AFFF business with the acquisition of] National Foam and Angus Fire [removed: businesses] in 2005 as part of the acquisition of [removed: Kidde, which has been operated by Carrier.][added: Kidde.]

In 2013, [removed: UTC] [added: Kidde] divested the National Foam and Angus Fire businesses to a third party.

In December 2018, the U.S. Judicial Panel on Multidistrict Litigation [removed: ("MDL")] transferred and consolidated all [removed: of the] AFFF cases pending in the [added: U.S.] federal courts [removed: to] [added: against] the [removed: U.S. District Court for] [added: Company and others to] the [removed: District of South Carolina for pre-trial proceedings.]

Plaintiffs [removed: in the MDL] [added: further] allege [removed: that a chemical ingredient in AFFF contains, or breaks down into, compounds known] [added: that,] as [removed: perflourooctane sulfonate ("PFOS")] [added: a result of the use of AFFF, PFOS] and [removed: perflourooctane acid ("PFOA") that] [added: PFOA] were released into the environment and, in some instances, ultimately [removed: leached into] [added: reached] drinking water supplies.

[removed: Chemicals] [added: Compounds] containing PFOS and PFOA [removed: (or their precursors)] [added: (as well as many other per- and polyfluoroalkyl substances known collectively as "PFAS")] have also been used for decades by many third parties [added: in a number of different industries] to manufacture carpets, clothing, fabrics, [removed: cookware] [added: cookware, food packaging, personal care products, cleaning products, paints, varnishes] and other consumer [added: and industrial] products.

The individual plaintiffs in the MDL [added: Proceedings] generally seek [removed: compensatory] damages for alleged personal injuries, medical [removed: monitoring,] [added: monitoring] and diminution in property value and injunctive relief to remediate alleged contamination of water supplies.

The [removed: U.S.,] [added: U.S.] state, municipal and water utility plaintiffs in the MDL [added: Proceedings] generally seek damages and costs related to the remediation of public property and water supplies.

[removed: Carrier] [added: Outside of the MDL Proceedings, the Company] and other defendants are also party to [removed: fewer than 10 cases] [added: six lawsuits] in [added: U.S.] state [removed: court] [added: courts] brought by oil refining companies [removed: in the U.S.] alleging product liability claims related to legacy sales of AFFF and seeking damages for the costs to replace the product and for property damage.

[removed: Carrier] [added: In addition, the Company] and other defendants are [removed: also] party to [removed: an action] [added: two actions] related to the [removed: AFFF manufacturing facility that was operated by National Foam and Angus Fire] [added: Pennsylvania Site] in which the [added: plaintiff] water utility [removed: plaintiffs] [added: company] seeks remediation costs related to the alleged contamination of the local water supply.

[removed: We are] [added: The Company is] also [removed: seeking] [added: pursuing] insurance coverage for these claims.

At this time, however, given the numerous factual, scientific and legal issues to be resolved relating to these claims, [removed: Carrier] [added: the Company] is unable to assess the probability of liability or [added: to] reasonably estimate the damages, if any, to be allocated to [removed: Carrier,] [added: the Company,] if one or more plaintiffs were to prevail in these [removed: cases] [added: cases,] and there can be no assurance that any such future exposure will not be material in any period.

On August 12, 2020, several former employees of UTC [removed: and] [added: or] its subsidiaries filed a putative class action complaint [added: (the "Complaint")] in the [removed: U.S.] [added: United States] District Court for the District of Connecticut against Raytheon Technologies [removed: Corporation,] [added: Corporation ("RTX"),] Carrier, Otis, the former members of the UTC Board of Directors and the members of the Carrier and Otis Boards of Directors (*Geraud Darnis, et al.

Raytheon Technologies Corporation, et [removed: al.*).][added: al*.).]

The [removed: complaint] [added: Complaint] challenges the method by which UTC equity awards were converted to [removed: UTC,] [added: RTX,] Carrier and Otis equity awards following the Separation and the Distribution.

[removed: Carrier believes] [added: We believe] that the claims against [removed: the Company] [added: us] are without merit.

[removed: In the ordinary course of business, Carrier is also] [added: Additionally, we are] routinely a defendant in, party to or otherwise subject to many pending and threatened legal actions, claims, disputes and proceedings.

In some of these proceedings, claims for substantial monetary damages are asserted against [removed: Carrier] [added: us] and could result in fines, penalties, compensatory or treble damages or non-monetary relief.

See Item 7.

Critical Accounting Estimates and Note 23 - Commitments and Contingent Liabilities in the accompanying Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K for additional information.

As of December 31, 2021, the Company has been named as a defendant in over 1,800 lawsuits filed by individuals in or removed to the federal courts of the United States alleging that the historic use of Aqueous Film Forming Foam ("AFFF") caused personal injuries and/or property damage.

The Company has also been named as a defendant in over 160 lawsuits filed by several U.S. states, municipalities and water utilities in or removed to U.S. federal courts alleging that the historic use of AFFF caused contamination of property and water supplies.

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

U.S. District Court for the District of South Carolina ("MDL Court") for pre-trial proceedings ("MDL Proceedings").

The Company acquired Kidde as part of its separation from UTC in April 2020.

During the eight year period of its operation by Kidde, National Foam manufactured AFFF for sale to government (including the U.S. federal government) and non-government customers in the U.S. at a single facility located in West Chester, Pennsylvania ("Pennsylvania Site").

During the same period, Angus Fire manufactured AFFF for sale outside the United States at a single facility located in Bentham, England.

The key components of AFFF that contribute to its fire-extinguishing capabilities are known as fluorosurfactants.

National Foam and Angus Fire did not manufacture fluorosurfactants but instead purchased these substances from unrelated third parties.

Plaintiffs in the MDL Proceedings allege that the fluorosurfactants used by various manufacturers in producing AFFF contained, or over time degraded into, compounds known as perflourooctane sulfonate ("PFOS") and/or perflourooctane acid ("PFOA").

Plaintiffs in the MDL Proceedings allege that PFOS and PFOA contamination has resulted from the use of AFFF containing fluorosurfactants manufactured using a process known as ECF.

They also allege that PFOA contamination has resulted from the use of AFFF containing fluorosurfactants manufactured using a different process, known as telomerization.

Plaintiffs further allege that 3M was the only AFFF manufacturer that used fluorosurfactants relying on the ECF process and that all other foam manufacturers (including National Foam and Angus Fire) relied solely on fluorosurfactants produced via telomerization.

Plaintiffs in the MDL Proceedings have named multiple defendants, including four suppliers of chemicals and raw materials used to manufacture fluorosurfactants, four fluorosurfactant manufacturers, two toll manufacturers of fluorosurfactants and seven current (including National Foam and Angus Fire) and former (including the Company) AFFF manufacturers.

General liability discovery in the MDL Proceedings continues.

Preliminary stage discovery in ten "bellwether" water provider cases was concluded and three of these cases were selected for tier two site- specific discovery.

That discovery is ongoing.

The MDL Court has established a briefing schedule with respect to certain aspects of the government contractor defense, potentially applicable to AFFF sold to or used by the U.S. government or other customers requiring product manufactured to meet military specification, such that all briefs were filed at the end of January 2022 with a hearing to follow.

The Company believes that it has meritorious defenses to the claims in the MDL Proceedings and the other AFFF lawsuits.

Based on the 2013 agreement for the sale of National Foam and Angus Fire, the Company is pursuing indemnification against these claims from the purchaser and current owner of National Foam and Angus Fire.

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

Defendants moved to dismiss the Complaint.

Plaintiffs amended their Complaint on September 13, 2021 (the "Amended Complaint").

The Amended Complaint, now with RTX, Carrier and Otis as the only defendants, asserts that the defendants are liable for breach of certain equity compensation plans and for breach of the implied covenant of good faith and fair dealing.

The Amended Complaint also seeks specific performance.

Defendants moved to dismiss the Amended Complaint on October 13, 2021.

As of December 31, 2020, the estimated range of liability to resolve all pending and unasserted potential future asbestos claims through 2059 is approximately $245 million to $276 million.

Where no amount within a range of estimates is more likely, the minimum is accrued.

We have recorded the minimum amount of $245 million and $255 million, which is principally recorded in Other long-term liabilities on the Consolidated Balance Sheet as of December 31, 2020 and 2019, respectively.

These amounts are undiscounted and exclude the Company’s legal fees to defend the asbestos claims, which are expensed as incurred.

In addition, the Company has an insurance recovery receivable for probable asbestos-related recoveries of approximately $103 million and $104 million, which is included primarily in Other assets on the Consolidated Balance Sheet as of December 31, 2020 and 2019, respectively.

Carrier and many other parties, including the third-party buyer of the National Foam and Angus Fire businesses, have been named as defendants in over 700 cases, including putative class actions and other lawsuits, alleging that the historic use of AFFF caused personal injuries and property damage.

Additionally, several state and municipal plaintiffs have commenced litigation against the same defendants to recover remediation costs related to historic use of AFFF.

National Foam and Angus Fire purchased these perflourinated

chemical ingredients from third-party chemical manufacturers to manufacture AFFF.

We believe that we have meritorious defenses to these claims.

The complaint asserts that the defendants are liable for breach of certain equity compensation plans and for breach of fiduciary duty and also asserts claims under certain provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").

We accrue contingencies based on a range of possible outcomes.

If no amount within this range is a better estimate than any other, we accrue the minimum amount.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

| [removed: (State] [added: (State] or Other Jurisdiction of Incorporation or [removed: Organization)] [added: Organization)] | | | | | | [removed: (I.R.S.] [added: (I.R.S.] Employer Identification [removed: No.)] [added: No.)] | | |

[removed: (Address] [added: (Address] of principal executive offices, including zip [removed: code)][added: code)]

[removed: (Registrant's] [added: (Registrant's] telephone number, including area [removed: code)][added: code)]

| Large accelerated filer | | | [removed: ☐] [added: ☒] | | | Accelerated filer | | | ☐ | | | Emerging growth company | | | ☐ | | |

| Non-accelerated filer | | | [removed: ☒] [added: ☐] | | | Smaller reporting company | | | ☐ | | | | | | | | |

The aggregate market value of the voting Common Stock held by non-affiliates of the Registrant as of June 30, [removed: 2020,] [added: 2021,] the last business day of the Registrant's most recently completed second fiscal quarter, was approximately [removed: $19.2] [added: $42.1] billion, based on the New York Stock Exchange closing price for such shares on that date.

As of January 31, [removed: 2021,] [added: 2022,] there were [removed: 869,213,146] [added: 855,514,035] shares of Common Stock outstanding.

Part III hereof incorporates by reference portions of the Registrant's definitive proxy statement related to its [removed: 2021] [added: 2022] annual meeting of shareowners.

| [Item [removed: 1.](#iacc4eb25cfe149f5ab4182376c23c54d_1781) [B](#iacc4eb25cfe149f5ab4182376c23c54d_1781)usiness] [added: 1. B](#i195004a7b4c143739c851a79a147f9cc_13)usiness] | | | [removed: [2](#iacc4eb25cfe149f5ab4182376c23c54d_1781)] [added: [4](#i195004a7b4c143739c851a79a147f9cc_13)] | | |

[removed: | [Cautionary Note Concerning Factors That May Affect Future Results](#iacc4eb25cfe149f5ab4182376c23c54d_2089) | | | [8](#iacc4eb25cfe149f5ab4182376c23c54d_2089) | | |][added: CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS]

| [Item 1A. Risk [removed: Factors](#iacc4eb25cfe149f5ab4182376c23c54d_1756)] [added: Factors](#i195004a7b4c143739c851a79a147f9cc_28)] | | | [removed: [10](#iacc4eb25cfe149f5ab4182376c23c54d_1756)] [added: [10](#i195004a7b4c143739c851a79a147f9cc_28)] | | |

| [Item 1B. Unresolved Staff [removed: Comments](#iacc4eb25cfe149f5ab4182376c23c54d_1775)] [added: Comments](#i195004a7b4c143739c851a79a147f9cc_34)] | | | [removed: [26](#iacc4eb25cfe149f5ab4182376c23c54d_1775)] [added: [28](#i195004a7b4c143739c851a79a147f9cc_34)] | | |

| [Item 2. [removed: Properties](#iacc4eb25cfe149f5ab4182376c23c54d_1816)] [added: Properties](#i195004a7b4c143739c851a79a147f9cc_37)] | | | [removed: [27](#iacc4eb25cfe149f5ab4182376c23c54d_1816)] [added: [28](#i195004a7b4c143739c851a79a147f9cc_37)] | | |

| [Item 3. Legal [removed: Proceedings](#iacc4eb25cfe149f5ab4182376c23c54d_175)] [added: Proceedings](#i195004a7b4c143739c851a79a147f9cc_40)] | | | [removed: [27](#iacc4eb25cfe149f5ab4182376c23c54d_175)] [added: [28](#i195004a7b4c143739c851a79a147f9cc_40)] | | |

| [Item 4. Mine Safety [removed: Disclosures](#iacc4eb25cfe149f5ab4182376c23c54d_1828)] [added: Disclosures](#i195004a7b4c143739c851a79a147f9cc_43)] | | | [removed: [28](#iacc4eb25cfe149f5ab4182376c23c54d_1828)] [added: [30](#i195004a7b4c143739c851a79a147f9cc_43)] | | |

| [Item 5. Market for Registrant's Common Equity, Related [removed: Stockholder] [added: S](#i195004a7b4c143739c851a79a147f9cc_49)[hare](#i195004a7b4c143739c851a79a147f9cc_49)[own](#i195004a7b4c143739c851a79a147f9cc_49)[er] Matters and Issuer Purchases of Equity [removed: Securities](#iacc4eb25cfe149f5ab4182376c23c54d_13)] [added: Securities](#i195004a7b4c143739c851a79a147f9cc_49)] | | | [removed: [29](#iacc4eb25cfe149f5ab4182376c23c54d_13)] [added: [30](#i195004a7b4c143739c851a79a147f9cc_49)] | | |

| [Item 7. Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#iacc4eb25cfe149f5ab4182376c23c54d_112)] [added: Operations](#i195004a7b4c143739c851a79a147f9cc_58)] | | | [removed: [31](#iacc4eb25cfe149f5ab4182376c23c54d_112)] [added: [32](#i195004a7b4c143739c851a79a147f9cc_58)] | | |

| [Item 7A. Quantitative and Qualitative Disclosures About Market [removed: Risk](#iacc4eb25cfe149f5ab4182376c23c54d_1908)] [added: Risk](#i195004a7b4c143739c851a79a147f9cc_109)] | | | [removed: [51](#iacc4eb25cfe149f5ab4182376c23c54d_1908)] [added: [45](#i195004a7b4c143739c851a79a147f9cc_109)] | | |

| [Item 8. Financial Statements and Supplementary [removed: Data](#iacc4eb25cfe149f5ab4182376c23c54d_40)] [added: Data](#i195004a7b4c143739c851a79a147f9cc_112)] | | | [removed: [52](#iacc4eb25cfe149f5ab4182376c23c54d_40)] [added: [46](#i195004a7b4c143739c851a79a147f9cc_112)] | | |

| [Consolidated Statement of [removed: Operations](#iacc4eb25cfe149f5ab4182376c23c54d_16)] [added: Operations](#i195004a7b4c143739c851a79a147f9cc_121)] | | | [removed: [54](#iacc4eb25cfe149f5ab4182376c23c54d_16)] [added: [48](#i195004a7b4c143739c851a79a147f9cc_121)] | | |

| [Consolidated Statement of Comprehensive [removed: Income](#iacc4eb25cfe149f5ab4182376c23c54d_19)] [added: Income (Loss)](#i195004a7b4c143739c851a79a147f9cc_124)] | | | [removed: [55](#iacc4eb25cfe149f5ab4182376c23c54d_19)] [added: [49](#i195004a7b4c143739c851a79a147f9cc_124)] | | |

| [Consolidated Balance [removed: Sheet](#iacc4eb25cfe149f5ab4182376c23c54d_22)] [added: Sheet](#i195004a7b4c143739c851a79a147f9cc_127)] | | | [removed: [56](#iacc4eb25cfe149f5ab4182376c23c54d_22)] [added: [50](#i195004a7b4c143739c851a79a147f9cc_127)] | | |

| [Consolidated Statement of Changes in [removed: Equity](#iacc4eb25cfe149f5ab4182376c23c54d_34)] [added: Equity](#i195004a7b4c143739c851a79a147f9cc_130)] | | | [removed: [57](#iacc4eb25cfe149f5ab4182376c23c54d_34)] [added: [51](#i195004a7b4c143739c851a79a147f9cc_130)] | | |

| [Consolidated Statement of Cash [removed: Flows](#iacc4eb25cfe149f5ab4182376c23c54d_37)] [added: Flows](#i195004a7b4c143739c851a79a147f9cc_136)] | | | [removed: [58](#iacc4eb25cfe149f5ab4182376c23c54d_37)] [added: [52](#i195004a7b4c143739c851a79a147f9cc_136)] | | |

| [Notes [removed: to](#iacc4eb25cfe149f5ab4182376c23c54d_43) [Consolidated] [added: to Consolidated] Financial [removed: Statements](#iacc4eb25cfe149f5ab4182376c23c54d_43)] [added: Statements](#i195004a7b4c143739c851a79a147f9cc_139)] | | | [removed: [59](#iacc4eb25cfe149f5ab4182376c23c54d_43)] [added: [53](#i195004a7b4c143739c851a79a147f9cc_139)] | | |

| [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#iacc4eb25cfe149f5ab4182376c23c54d_1928)] [added: Disclosure](#i195004a7b4c143739c851a79a147f9cc_226)] | | | [removed: [99](#iacc4eb25cfe149f5ab4182376c23c54d_1928)] [added: [88](#i195004a7b4c143739c851a79a147f9cc_226)] | | |

| [Item 9A. Controls and [removed: Procedures](#iacc4eb25cfe149f5ab4182376c23c54d_166)] [added: Procedures](#i195004a7b4c143739c851a79a147f9cc_229)] | | | [removed: [99](#iacc4eb25cfe149f5ab4182376c23c54d_166)] [added: [88](#i195004a7b4c143739c851a79a147f9cc_229)] | | |

| [Item 9B. Other [removed: Information](#iacc4eb25cfe149f5ab4182376c23c54d_184)] [added: Information](#i195004a7b4c143739c851a79a147f9cc_232)] | | | [removed: [99](#iacc4eb25cfe149f5ab4182376c23c54d_184)] [added: [88](#i195004a7b4c143739c851a79a147f9cc_232)] | | |

| [Item 10. Directors, Executive Officers and Corporate [removed: Governance](#iacc4eb25cfe149f5ab4182376c23c54d_1945)] [added: Governance](#i195004a7b4c143739c851a79a147f9cc_238)] | | | [removed: [99](#iacc4eb25cfe149f5ab4182376c23c54d_1945)] [added: [89](#i195004a7b4c143739c851a79a147f9cc_238)] | | |

| [Item 11. Executive [removed: Compensation](#iacc4eb25cfe149f5ab4182376c23c54d_1954)] [added: Compensation](#i195004a7b4c143739c851a79a147f9cc_241)] | | | [removed: [101](#iacc4eb25cfe149f5ab4182376c23c54d_1954)] [added: [90](#i195004a7b4c143739c851a79a147f9cc_241)] | | |

| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related [removed: Stockholder Matters](#iacc4eb25cfe149f5ab4182376c23c54d_1975)] [added: S](#i195004a7b4c143739c851a79a147f9cc_244)[har](#i195004a7b4c143739c851a79a147f9cc_244)[eowner](#i195004a7b4c143739c851a79a147f9cc_244) [Matters](#i195004a7b4c143739c851a79a147f9cc_244)] | | | [removed: [101](#iacc4eb25cfe149f5ab4182376c23c54d_1975)] [added: [90](#i195004a7b4c143739c851a79a147f9cc_244)] | | |

| [Item 13. Certain Relationships and Related Transactions, and Director [removed: Independence](#iacc4eb25cfe149f5ab4182376c23c54d_1961)] [added: Independence](#i195004a7b4c143739c851a79a147f9cc_247)] | | | [removed: [102](#iacc4eb25cfe149f5ab4182376c23c54d_1961)] [added: [91](#i195004a7b4c143739c851a79a147f9cc_247)] | | |

| [Item 14. Principal Accountant Fees and [removed: Services](#iacc4eb25cfe149f5ab4182376c23c54d_1966)] [added: Services](#i195004a7b4c143739c851a79a147f9cc_250)] | | | [removed: [102](#iacc4eb25cfe149f5ab4182376c23c54d_1966)] [added: [91](#i195004a7b4c143739c851a79a147f9cc_250)] | | |

| [Item 15. Exhibits, Financial Statement [removed: Schedules](#iacc4eb25cfe149f5ab4182376c23c54d_187)] [added: Schedules](#i195004a7b4c143739c851a79a147f9cc_256)] | | | [removed: [102](#iacc4eb25cfe149f5ab4182376c23c54d_187)] [added: [91](#i195004a7b4c143739c851a79a147f9cc_256)] | | |

| [Item 16. Form 10-K [removed: Summary](#iacc4eb25cfe149f5ab4182376c23c54d_181)] [added: Summary](#i195004a7b4c143739c851a79a147f9cc_259)] | | | [removed: [105](#iacc4eb25cfe149f5ab4182376c23c54d_181)] [added: [94](#i195004a7b4c143739c851a79a147f9cc_259)] | | |

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

| [Cautionary Note Concerning Factors That May Affect Future Results](#i195004a7b4c143739c851a79a147f9cc_25) | | | [2](#i195004a7b4c143739c851a79a147f9cc_25) | | |

| [PART I](#i195004a7b4c143739c851a79a147f9cc_10) | | | [4](#i195004a7b4c143739c851a79a147f9cc_10) | | |

| [PART II](#i195004a7b4c143739c851a79a147f9cc_46) | | | [30](#i195004a7b4c143739c851a79a147f9cc_46) | | |

| [Item](#i195004a7b4c143739c851a79a147f9cc_49) 6. \[Reserved\] | | | | | |

| [Report of Independent Registered Public Accounting Firm (PCAOB ID](#i195004a7b4c143739c851a79a147f9cc_118) 238[)](#i195004a7b4c143739c851a79a147f9cc_118) | | | [46](#i195004a7b4c143739c851a79a147f9cc_118) | | |

| [Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](#i195004a7b4c143739c851a79a147f9cc_2237) | | | [89](#i195004a7b4c143739c851a79a147f9cc_235) | | |

| [PART III](#i195004a7b4c143739c851a79a147f9cc_235) | | | [89](#i195004a7b4c143739c851a79a147f9cc_235) | | |

| [PART IV](#i195004a7b4c143739c851a79a147f9cc_253) | | | [91](#i195004a7b4c143739c851a79a147f9cc_253) | | |

| | | | | | |

| [SIGNATURES](#i195004a7b4c143739c851a79a147f9cc_262) | | | [95](#i195004a7b4c143739c851a79a147f9cc_262) | | |

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

This Annual Report on Form 10-K contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws.

From time to time, oral or written forward-looking statements may also be included in other information released to the public.

These forward-looking statements are intended to provide management’s current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid.

Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "confident," "scenario" and other words of similar meaning in connection with a discussion of future operating or financial performance or the Separation (as defined in PART I, ITEM I, BUSINESS, Separation from United Technologies Corporation).

Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flows, results of operations, uses of cash, share repurchases, tax rates and other measures of financial performance or potential future plans, strategies or transactions of Carrier, the estimated costs associated with the Separation, Carrier's plans with respect to our indebtedness and other statements that are not historical facts.

All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements.

For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995.

Such risks, uncertainties and other factors include, without limitation:

- the effect of economic conditions in the industries and markets in which Carrier and our businesses operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction, the impact of weather conditions, pandemic health issues (including COVID-19, any variants and their effects, among other things, on production and on global supply, demand, and distribution as the outbreak continues and results in a prolonged period of travel, commercial and other restrictions and limitations), natural disasters and the financial condition of our customers and suppliers;

- challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services;

- future levels of indebtedness, capital spending and research and development spending;

- future availability of credit and factors that may affect such availability, including credit market conditions and Carrier's capital structure and credit ratings;

- the timing and scope of future repurchases of Carrier's common stock, including market conditions and the level of other investing activities and uses of cash;

- delays and disruption in the delivery of materials and services from suppliers;

- cost reduction efforts and restructuring costs and savings and other consequences thereof;

- new business and investment opportunities;

- risks resulting from being a smaller less diversified company than prior to the Separation;

- the outcome of legal proceedings, investigations and other contingencies;

- the impact of pension plan assumptions on future cash contributions and earnings;

- the impact of the negotiation of collective bargaining agreements and labor disputes;

- the effect of changes in political conditions in the U.S. and other countries in which Carrier and our businesses operate, including the effect of changes in U.S. trade policies, on general market conditions, global trade policies and currency exchange rates in the near term and beyond;

- the effect of changes in tax, environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which we and our businesses operate;

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- the ability of Carrier to retain and hire key personnel;

- the scope, nature, impact or timing of acquisition and divestiture activity, including among other things integration of acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs;

- the expected benefits of the Separation;

- a determination by the U.S. Internal Revenue Service ("IRS") and other tax authorities that the Distribution or certain related transactions should be treated as taxable transactions;

| [PART I](#iacc4eb25cfe149f5ab4182376c23c54d_1864) | | | [2](#iacc4eb25cfe149f5ab4182376c23c54d_1864) | | |

| [PART II](#iacc4eb25cfe149f5ab4182376c23c54d_10) | | | [29](#iacc4eb25cfe149f5ab4182376c23c54d_10) | | |

| [Item 6. Selected Financial Data](#iacc4eb25cfe149f5ab4182376c23c54d_1922) | | | [30](#iacc4eb25cfe149f5ab4182376c23c54d_1922) | | |

| [Report of Indepe](#iacc4eb25cfe149f5ab4182376c23c54d_109)[ndent R](#iacc4eb25cfe149f5ab4182376c23c54d_109)[egistered Public Accounting Firm](#iacc4eb25cfe149f5ab4182376c23c54d_109) | | | [52](#iacc4eb25cfe149f5ab4182376c23c54d_109) | | |

| [PART III](#iacc4eb25cfe149f5ab4182376c23c54d_163) | | | [99](#iacc4eb25cfe149f5ab4182376c23c54d_163) | | |

| [PART IV](#iacc4eb25cfe149f5ab4182376c23c54d_172) | | | [102](#iacc4eb25cfe149f5ab4182376c23c54d_172) | | |

| [SIGNATURES](#iacc4eb25cfe149f5ab4182376c23c54d_190) | | | [106](#iacc4eb25cfe149f5ab4182376c23c54d_190) | | |

We operate approximately 1,200 sites, which comprise approximately [removed: 35] [added: 37] million square feet of productive space.

Of these, our facilities and key manufacturing sites greater than 100,000 square feet comprise approximately [removed: 24] [added: 27] million square feet of productive space.

Approximately 60%, [removed: 15%] [added: 18%] and [removed: 21%] [added: 18%] of these significant properties are associated with our HVAC, Refrigeration and Fire & Security segments, respectively, with approximately 4% not associated with a particular segment.

Approximately [removed: 32%] [added: 35%] of these significant properties are leased and the remainder are owned.

Approximately [removed: 30%] [added: 32%] of these significant properties are located in the U.S.

Our fixed assets as of December 31, [removed: 2020] [added: 2021] include manufacturing facilities and non-manufacturing facilities, such as warehouses and machinery and equipment, most of which is general purpose machinery and equipment that use special jigs, tools and fixtures and that, in many instances, have automatic control features and special adaptations.

The facilities, warehouses, machinery and equipment in use as of December 31, [removed: 2020] [added: 2021] are in good operating condition, are well-maintained and substantially all are [removed: generally] in regular use.

The Company's common stock is listed on the NYSE under the ticker symbol "CARR." As of December 31, [removed: 2020,] [added: 2021,] the approximate number of common stock shareowners of record was [removed: 25,967.][added: 23,865.]

The following information is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act [removed: of 1933, as amended,] or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing.

[removed: As a result of the Separation and the Distribution, Carrier became an independent public company and our common stock commenced trading under the symbol "CARR."] The following graph presents the cumulative total shareowner return from the Distribution Date through [removed: the year ended] December 31, [removed: 2020] [added: 2021] for our common stock, as compared with the S&P 500 Index and the Dow Jones Industrial Average.

Our common stock [removed: price] is a component of the S&P 500 Index.

These figures assume that all dividends paid over the period were reinvested and that the starting value of each index and the investment in [added: Carrier] common stock was $100 on April 3, 2020.

[removed: ][added: ]

The cumulative total returns on Carrier common stock and each index as of each April 3, 2020 through December 31, [removed: 2020] [added: 2021] plotted in the above graph are as follows:

| Company / Index | | | [removed: | | |] April 3, 2020 | | | | | | June 30, 2020 | | | | | | [removed: September] [added: Sept.] 30, 2020 | | | | | | [removed: December] [added: Dec.] 31, 2020 | | | [added: | | | March 31, 2021 | | | | | | June 30, 2021 | | | | | | Sept. 30, 2021 | | | | | | Dec. 31, 2021 | | |]

| Carrier Global Corporation | | | [removed: | | |] $ | 100.00 | | | | | $ | 167.93 | | | | | $ | 230.82 | | | | | $ | 286.66 | | [added: | | | $ | 320.86 | | | | | $ | 371.32 | | | | | $ | 395.46 | | | | | $ | 416.55 | |]

| S&P 500 Index | | | [removed: | | |] $ | 100.00 | | | | | $ | 123.27 | | | | | $ | 134.28 | | | | | $ | 150.59 | | [added: | | | $ | 159.89 | | | | | $ | 173.56 | | | | | $ | 174.57 | | | | | $ | 193.82 | |]

| Dow Jones Industrials Index | | | [removed: | | |] $ | 100.00 | | | | | $ | 121.27 | | | | | $ | 131.23 | | | | | $ | 145.31 | | [added: | | | $ | 157.36 | | | | | $ | 165.35 | | | | | $ | 162.93 | | | | | $ | 175.75 | |]

The declaration and payment of dividends is at the discretion of our Board of Directors, and will depend upon our financial results, cash requirements and other factors deemed relevant by our Board of Directors.

As a result of the Separation and the Distribution, Carrier became an independent public company.

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Issuer Purchases of Equity Securities

The following table provides information about our purchases during the three months ended December 31, 2021 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act.

| | | | | | | Total Number of Shares Purchased (in 000's) | | | | | | Average Price Paid per Share (1) | | | | | | Total Number of Shares Purchased as Part of a Publicly Announced Program (in 000's) | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions) | | |

| 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| October 1 - October 31 | | | | | | 430 | | | | | | $53.00 | | | | | | 430 | | | | | | $ | 1,801 | |

| November 1 - November 30 | | | | | | 2,547 | | | | | | $53.98 | | | | | | 2,547 | | | | | | $ | 1,664 | |

| December 1 - December 31 | | | | | | 1,693 | | | | | | $54.75 | | | | | | 1,693 | | | | | | $ | 1,571 | |

| Total | | | | | | 4,670 | | | | | | $54.17 | | | | | | 4,670 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

(1) Excludes broker commissions.

In July 2021, the Company's Board of Directors authorized a $1.75 billion increase to the Company's existing $350 million stock repurchase program.

The program allows the Company to repurchase its outstanding common stock from time to time

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

subject to market conditions and at the Company's discretion in the open market or through one or more other public or private transactions and subject to compliance with the Company's obligations under the TMA.

Equity Compensation Plan Information

See Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Shareowner Matters, of this Annual Report on Form 10-K.

We have audited the accompanying consolidated balance sheet of Carrier Global Corporation and its subsidiaries (the “Company”) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the related consolidated statements of operations, of comprehensive [removed: income,] [added: income (loss),] of changes in equity and of cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] including the related notes [removed: and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2020 appearing after Item 16 and signatures page] (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements [added: referred to above] present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020] [added: 2021] in conformity with accounting principles generally accepted in the United States of America.

Basis for [removed: Opinion][added: Opinions]

Our responsibility is to express [removed: an opinion] [added: opinions] on the Company’s consolidated financial statements [added: and on the Company's internal control over financial reporting] based on our audits.

We conducted our audits [removed: of these consolidated financial statements] in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the [removed: audit] [added: audits] to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or [removed: fraud.][added: fraud, and whether effective internal control over financial reporting was maintained in all material respects.]

Our audits [added: of the consolidated financial statements] included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We believe that our audits provide a reasonable basis for our [removed: opinion.][added: opinions.]

Goodwill is tested [added: and reviewed] annually for impairment [removed: as of] [added: on] July [removed: 1,] [added: 1] or [removed: when] [added: whenever there is] a [removed: triggering event occurs] [added: material change in events or circumstances] that indicates [added: that] the fair value of the reporting unit may [removed: have decreased below the][added: be less than its carrying amount.]

If the [removed: carrying] [added: estimated fair] value of [removed: the] [added: a] reporting unit exceeds its [removed: estimated fair value, management records an impairment based on the difference between fair value and] carrying [removed: value, not to exceed the total amount of] [added: amount,] goodwill [removed: allocated to] [added: of] the reporting [removed: unit.][added: unit is not impaired.]

| [removed: (dollars in] [added: (In] millions, except per share [removed: amounts; shares in millions)] [added: amounts)] | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | |

| Product sales [removed: (Note 6)] | | | $ | [removed: 14,347] [added: 17,214] | | | | | $ | [removed: 15,360] [added: 14,347] | | | | | $ | [removed: 15,674] [added: 15,360] | | | | |

| Service sales | | | [removed: 3,109] [added: 3,399] | | | | | | [removed: 3,248] [added: 3,109] | | | | | | [removed: 3,240] [added: 3,248] | | | | | |

| | | | [removed: 17,456] [added: 20,613] | | | | | | [removed: 18,608] [added: 17,456] | | | | | | [removed: 18,914] [added: 18,608] | | | | | |

| Cost of products sold [removed: (Note 6)] | | | [removed: 10,185] [added: (12,300)] | | | | | | [removed: 10,890] [added: (10,185)] | | | | | | [removed: 11,063] [added: (10,890)] | | | | | |

| Cost of services sold | | | [removed: 2,162] [added: (2,333)] | | | | | | [removed: 2,299] [added: (2,162)] | | | | | | [removed: 2,282] [added: (2,299)] | | | | | |

| Research and development | | | [removed: 419] [added: (503)] | | | | | | [removed: 401] [added: (419)] | | | | | | [removed: 400] [added: (401)] | | | | | |

| Selling, general and administrative | | | [removed: 2,820] [added: (3,120)] | | | | | | [removed: 2,761] [added: (2,820)] | | | | | | [removed: 2,689] [added: (2,761)] | | | | | |

| | | | [removed: 15,586] [added: (18,256)] | | | | | | [removed: 16,351] [added: (15,586)] | | | | | | [removed: 16,434] [added: (16,351)] | | | | | |

| Equity method investment net earnings | | | [removed: 207] [added: 249] | | | | | | [removed: 236] [added: 207] | | | | | | [removed: 220] [added: 236] | | | | | |

| Other income (expense), net | | | [removed: 1,006] [added: 39] | | | | | | [removed: (2)] [added: 1,006] | | | | | | [removed: 937] [added: (2)] | | | | | |

| Operating profit | | | [removed: 3,083] [added: 2,645] | | | | | | [removed: 2,491] [added: 3,083] | | | | | | [removed: 3,637] [added: 2,491] | | | | | |

| Non-service pension benefit | | | [removed: 60] [added: 61] | | | | | | [removed: 154] [added: 60] | | | | | | [removed: 168] [added: 154] | | | | | |

| Interest (expense) income, net | | | [removed: (288)] [added: (306)] | | | | | | [removed: 27] [added: (288)] | | | | | | [removed: 37] [added: 27] | | | | | |

| Income from operations before income taxes | | | [removed: 2,855] [added: 2,400] | | | | | | [removed: 2,672] [added: 2,855] | | | | | | [removed: 3,842] [added: 2,672] | | | | | |

| Income tax expense | | | [removed: 849] [added: (699)] | | | | | | [removed: 517] [added: (849)] | | | | | | [removed: 1,073] [added: (517)] | | | | | |

| Net income from operations | | | [removed: 2,006] [added: 1,701] | | | | | | [removed: 2,155] [added: 2,006] | | | | | | [removed: 2,769] [added: 2,155] | | | | | |

| Less: Non-controlling interest in subsidiaries' earnings from operations | | | [removed: 24] [added: 37] | | | | | | [removed: 39] [added: 24] | | | | | | [removed: 35] [added: 39] | | | | | |

| Net income attributable to common shareowners | | | $ | [removed: 1,982] [added: 1,664] | | | | | $ | [removed: 2,116] [added: 1,982] | | | | | $ | [removed: 2,734] [added: 2,116] | | | | |

[removed: | Earnings per share (Note 4) | | | | | | | | | | | | | | | | | | | | |][added: NOTE 18: EARNINGS PER SHARE]

| Basic | | | $ | [removed: 2.29] [added: 1.92] | | | | | $ | [removed: 2.44] [added: 2.29] | | | | | $ | [removed: 3.16] [added: 2.44] | | | | |

| Diluted | | | $ | [removed: 2.25] [added: 1.87] | | | | | $ | [removed: 2.44] [added: 2.25] | | | | | $ | [removed: 3.16] [added: 2.44] | | | | |

| Weighted-average number of shares [removed: outstanding (Note 4)] [added: outstanding] | | | | | | | | | | | | | | | | | | | | |

| Basic | | | [removed: 866.5] [added: 867.7] | | | | | | [removed: 866.2] [added: 866.5] | | | | | | 866.2 | | | | | |

| Diluted | | | [removed: 880.2] [added: 890.3] | | | | | | [removed: 866.2] [added: 880.2] | | | | | | 866.2 | | | | | |

CONSOLIDATED STATEMENT OF COMPREHENSIVE [removed: INCOME][added: INCOME (LOSS)]

| | | | [removed: | | |] For the Year Ended December 31, | | | | | | | | | | | | | | |

| [removed: (dollars in] [added: (In] millions) | | | [removed: | | | 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Net income from operations | | | [removed: | | |] $ | [removed: 2,006] [added: 1,701] | | | | | $ | [removed: 2,155] [added: 2,006] | | | | | $ | [removed: 2,769] [added: 2,155] | |

| Other comprehensive income (loss), net of tax: | | | | | | | | | | | | | | | | | | [removed: | | |]

Opinions on the Financial Statements and Internal Control over Financial Reporting

We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

*Revenue Recognition from Contracts with Customers*

As described in Note 13 to the consolidated financial statements, the Company recognized $20.6 billion of consolidated revenue for the year ended December 31, 2021.

The Company recognizes revenue 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 benefit from that good or service.

The principal considerations for our determination that performing procedures relating to revenue recognition from contracts with customers is a critical audit matter are the high degree of audit effort in performing procedures related to revenue recognized on the Company’s point-in-time and over-time contracts with customers and in evaluating evidence related to management’s determination of total estimated costs at completion for revenue recognized on an over-time basis.

These procedures included testing the effectiveness of controls relating to the revenue recognition process on the Company’s point-in-time and over-time contracts with customers, including controls over the determination of total estimated costs at completion for revenue recognized on an over-time basis.

These procedures also included, among others (i) evaluating management’s significant accounting policies related to revenue recognition; (ii) testing the appropriateness of the timing and amount of revenue recognized for a sample of point-in-time revenue transactions by obtaining and inspecting source documents, such as contracts with customers, purchase order information, shipping documents, cash receipts, and other documentation; and (iii) evaluating and testing management’s process for determining the total estimated costs at completion for a sample of over-time revenue contracts, which included evaluating the estimated costs at completion used by management by considering factors that can affect the accuracy of those estimates.

Evaluating the total costs at completion for revenue recognized on an over-time basis involved comparing the originally estimated costs and actual costs incurred, including identifying circumstances that may warrant a modification to the total estimated costs to complete.

February 8, 2022

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

| Foreign currency translation adjustments arising during period | | | (314) | | | | | | 604 | | | | | | 50 | | |

| Pension and post-retirement benefit plans adjustments arising during the period | | | 70 | | | | | | (83) | | | | | | (83) | | |

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

| (In millions, except share amounts) | | | 2021 | | | | | | 2020 | | |

| Assets held for sale | | | 3,168 | | | | | | — | | |

| Liabilities held for sale | | | 1,134 | | | | | | — | | |

| Treasury stock - 10,375,654 common shares | | | (529) | | | | | | — | | |

[T](#i195004a7b4c143739c851a79a147f9cc_7)[able of](#i195004a7b4c143739c851a79a147f9cc_7) [](#i195004a7b4c143739c851a79a147f9cc_7)[Contents](#i195004a7b4c143739c851a79a147f9cc_7)

| Shares issued under incentive plans, net | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (15) | | | | | | — | | | | | | — | | | | | | (15) | | |

| Stock-based compensation | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 77 | | | | | | — | | | | | | — | | | | | | 77 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,664 | | | | | | 37 | | | | | | 1,701 | | |

| Dividends declared on common stock ($0.51 per share) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (442) | | | | | | — | | | | | | (442) | | |

| Shares issued under incentive plans, net | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (24) | | | | | | — | | | | | | — | | | | | | (24) | | |

| Stock-based compensation | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 92 | | | | | | — | | | | | | — | | | | | | 92 | | |

| Acquisition (sale) of non-controlling interest, net | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2) | | | | | | — | | | | | | 2 | | | | | | — | | |

Opinion on the Financial Statements

*Change in Accounting Principle*

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

These consolidated financial statements are the responsibility of the Company’s management.

*Goodwill Impairment Assessment – One Reporting Unit where the Excess of Fair Value over Carrying Value Was Approximately 13% at the Assessment Date*

As described in Notes 3 and 10 to the consolidated financial statements, the Company’s total goodwill balance was $10.1 billion as of December 31, 2020 and the goodwill associated with one reporting unit where the excess of fair value over carrying value was approximately 13% at the assessment date was $917 million.

carrying value.

Management utilizes the discounted cash flow method under the income approach to estimate the fair value of the reporting units.

The significant assumptions related to projected net sales, projected operating margins, working capital, capital expenditures, income tax rate, long-term growth rate and the discount rate.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the one reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value measurement of the reporting unit, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projected net sales, projected operating margins, long-term growth rate and the discount rate, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included, among others (i) testing management’s process for developing the fair value measurement of the reporting unit; (ii) evaluating the appropriateness of the discounted cash flow method, (iii) testing the completeness and accuracy of underlying data used in the method, and (iv) evaluating the reasonableness of the significant assumptions used by management related to projected net sales, projected operating margins, long-term growth rate and the discount rate.

Evaluating management’s assumptions related to projected net sales and projected operating margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of management’s discounted cash flow method and management’s significant assumptions related to the long-term growth rate and the discount rate.

February 9, 2021

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | 604 | | | | | | 50 | | | | | | (449) | | |

| | | | | | | (83) | | | | | | (83) | | | | | | (159) | | |

| Change in unrealized cash flow hedging: | | | | | | | | | | | | | | | | | | | | |

| Loss reclassified into Product sales | | | | | | — | | | | | | — | | | | | | 2 | | |

| | | | | | | — | | | | | | — | | | | | | 2 | | |

| UTC Net investment | | | — | | | | | | 15,355 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at January 1, 2018 | | | | | | $ | 15,030 | | | | | $ | (617) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 371 | | | | | $ | 14,784 | |

| Net income | | | | | | 2,734 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 35 | | | | | | 2,769 | | |

| Common stock issued under employee plans | | | | | | — | | | | | | — | | | | | | — | | | | | | 62 | | | | | | — | | | | | | — | | | | | | 62 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net transfers to UTC | | | (10,359) | | | | | | (1,954) | | | | | | (2,685) | | |

Carrier Global Corporation is a leading global provider of HVAC, refrigeration, and fire and security solutions.

These products and services are sold under the Carrier name and other brand names including Automated Logic, BluEdge, Bryant, CIAT, Day & Night, Heil, NORESCO, Riello, Carrier Commercial Refrigeration, Carrier Transicold, Sensitech and others.

Fire & Security’s products and services are used by governments, financial institutions, architects, building owners and developers, security and fire consultants, homeowners and other end-users requiring a high level of security and fire protection for their businesses and residences.

These products and services are sold under brand names including Autronica, Chubb, Det-Tronics, Edwards, Fireye, GST, Kidde, LenelS2, Marioff, Onity, Supra and others.

On November 26, 2018, UTC announced its intention to spin off Carrier, into a separate, publicly traded company.

Carrier was incorporated in Delaware on March 19, 2019, as a wholly-owned subsidiary of UTC.

UTC distributed 866,158,910 shares of Carrier common stock in the Distribution, which was effective at 12:01 a.m., Eastern Time, on April 3, 2020.

As a result of the Distribution, Carrier became an independent public company and our common stock is listed under the symbol "CARR" on the NYSE.

In connection with the Separation and the Distribution, Carrier entered into several agreements with UTC and Otis, including a separation and distribution agreement that sets forth certain agreements with UTC and Otis regarding the principal actions to be taken in connection with the Separation and the Distribution, including identifying the assets transferred, the liabilities assumed and the contracts transferred to each of UTC, Otis and Carrier as part of the Separation and the Distribution, and when and how these transfers and assumptions occurred.

Other agreements we entered into that govern aspects of our relationship with UTC and Otis following the Separation and the Distribution include:

Transition Services Agreement.

We entered into the TSA with UTC and Otis in connection with the Separation pursuant to which UTC provides us with certain services and we provide certain services to UTC for a limited time to help ensure an orderly transition following the Separation and the Distribution.

[removed: In accordance with Rule 13a-15(b)] [added: Evaluation] of [removed: the Exchange Act, management has conducted an evaluation, under the supervision] [added: Disclosure Controls] and [added: Procedures — Our management,] with the participation of [removed: the Chief Executive Officer ("CEO")] [added: our CEO] and [added: Senior Vice President and] Chief Financial Officer ("CFO"), [removed: of] [added: has evaluated] the effectiveness of the [removed: design and operation of our] [added: Company's] disclosure controls and procedures [added: (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)] as of December 31, [removed: 2020.][added: 2021.]

Changes in Internal Control Over Financial Reporting — There were no changes in our internal control over financial reporting [removed: for] [added: during] the three months ended December 31, [removed: 2020] [added: 2021] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Based on that evaluation, the Company's CEO and CFO have concluded that, as of December 31, 2021, the Company's disclosure controls and procedures were effective in recording, processing, summarizing and reporting, within the time periods specified in the SEC's rules and forms, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Company's management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control Over Financial Reporting — The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

The Company’s management, with the participation of the Company’s CEO and CFO, has evaluated the effectiveness of the Company’s internal control over financial reporting based on the criteria described in *Internal Control-Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, the Company’s management has concluded that, as of December 31, 2021, the Company’s internal control over financial reporting was effective.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the Company’s effectiveness of internal control over financial reporting as of December 31, 2021 as stated in their report which appears herein.

Evaluation of Disclosure Controls and Procedures — We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

These controls and procedures also give reasonable assurance that information required to be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding required disclosures.

Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2020.

Management’s Report on Internal Control Over Financial Reporting — This Annual Report on Form 10-K does not include a report of management's assessment regarding internal control over financial reporting or an attestation of the Company's independent registered public accounting firm due to the transition period established by the rules of the SEC for newly created public companies.

PART III.

Not applicable.

PART III.

The information required by Item 10 with respect to directors, the Audit Committee of the Board of Directors and audit committee financial experts is incorporated herein by reference to the sections of our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareowners entitled [removed: "Election] [added: "Proposal 1: Election] of Directors" (under the subheading [removed: "Nominees")] [added: "Nominees for the 2022 Annual Meeting")] and "Corporate Governance" (including under the subheading [removed: "Board Committees").][added: "Committee Meetings and Composition").]

| Name | | | | | | Position | | | | | | Age as of February [removed: 9, 2021] [added: 8, 2022] | | |

| David Gitlin | | | | | | [removed: President] [added: Chairman] and Chief Executive Officer | | | | | | [removed: 51] [added: 52] | | |

| Ajay Agrawal | | | | | | Senior Vice President, [removed: Strategy &] [added: Global] Services [added: and Healthy Buildings] | | | | | | [removed: 57] [added: 58] | | |

| Kyle Crockett | | | | | | Vice President, Controller | | | | | | [removed: 47] [added: 48] | | |

| Patrick Goris | | | | | | Senior Vice President and Chief Financial Officer | | | | | | [removed: 49] [added: 50] | | |

| Christopher Nelson | | | | | | President, HVAC | | | | | | [removed: 50] [added: 51] | | |

| Kevin J. O'Connor | | | | | | Senior Vice President, Chief Legal Officer | | | | | | [removed: 53] [added: 54] | | |

| Jurgen Timperman | | | | | | President, Fire & Security | | | | | | [removed: 48] [added: 49] | | |

| Nadia Villeneuve | | | | | | Senior Vice President, Chief Human Resources Officer | | | | | | [removed: 48] [added: 49] | | |

[removed: David Gitlin.] Mr. Gitlin [removed: was appointed President and Chief Executive Officer of Carrier in June 2019 and] [added: also] held the position of President, HVAC from December 2019 to March 2020.

Ajay Agrawal. Mr. Agrawal was appointed Senior Vice President, [added: Global Services & Healthy Buildings in March 2021 and served as Senior Vice President,] Strategy & Services of Carrier [removed: in] [added: from] October [removed: 2019.][added: 2019 to March 2021.]

Patrick Goris. Mr. Goris was appointed Senior Vice President and Chief Financial Officer of [removed: Carrier,] [added: Carrier] effective November [removed: 16,] 2020.

[removed: Since 2017,] [added: Prior to joining Carrier,] Mr. Goris [removed: has] served as [removed: the] Senior Vice President and Chief Financial Officer of Rockwell Automation, Inc., [removed: a publicly traded provider of industrial automation and digital transformation solutions.][added: from 2017 to 2020.]

Previously, he held many roles at Carrier [removed: including,] [added: including] President, HVAC − Commercial from 2018 to March 2020; President, North American HVAC from 2012 to 2018; Vice President, Sales & Marketing for Residential & Commercial Systems from 2008 to 2012; Vice President and [added: General Manager, Light Commercial Systems from 2006 to 2008; and Director of Residential Ducted System Platforms from 2004 to 2006.]

Information concerning Section 16(a) compliance is incorporated herein by reference to the section of our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareowners entitled "Other Important Information" under the heading [removed: "Section] [added: "Delinquent Section] 16(a) [removed: Beneficial Ownership Reporting Compliance."] [added: Reports."] We have adopted a code of ethics that applies to all our directors, officers, employees and representatives.

This code is publicly available on our website at [removed: https://www.corporate.carrier.com/corporate-responsibility/governance/.][added: https://www.corporate.carrier.com/corporate-responsibility/governance.]

On December 16, 2021, Patrick Goris, Senior Vice President and Chief Financial Officer, terminated the Rule 10b5-1 stock trading plan (the "Plan") adopted in accordance with Rule 10b5-1 under the Exchange Act and the guidelines specified by the Company’s insider trading policy during 2021.

| | | | | | | | | | | | | | | |

| Timothy White | | | | | | President, Refrigeration | | | | | | 48 | | |

David Gitlin. Mr. Gitlin was elected Chairman of the Board in April 2021 and was appointed President and Chief Executive Officer of Carrier in June 2019.

Timothy White. Mr. White was appointed President, Refrigeration of Carrier effective August 16, 2021.

Prior to joining Carrier, Mr. White served as CEO, Onshore Wind Americas for General Electric from 2020 to 2021.

He was previously with UTC for 24 years where he held a number of senior leadership roles, including President, Power & Controls and President, Electric Systems, for UTC's Collins Aerospace division.

| John V. Faraci | | | | | | Executive Chairman | | | | | | 70 | | |

| David Appel | | | | | | President, Refrigeration | | | | | | 65 | | |

John V.

Faraci. Mr. Faraci was elected Executive Chairman of Carrier upon the completion of the Distribution.

Mr. Faraci previously served as Chairman and Chief Executive Officer of International Paper (paper, packaging and distribution) from 2003 to 2014.

Earlier in 2003, he served as President and director of that company, and served as its Executive Vice President and Chief Financial Officer from 2000 to 2003.

Mr. Faraci is a director of ConocoPhillips Company, PPG Industries, Inc. and United States Steel Corporation, and was a director of UTC before the Separation.

David Appel. Mr. Appel was appointed President, Refrigeration of Carrier in 2010.

Prior to that, he held several roles within Carrier’s business, including President, HVAC for Europe, the Middle East and Africa (EMEA) from 2009 to 2010; President, Building Systems & Service EMEA from 2006 to 2009; Vice President, European HVAC Distribution from 2003 to 2006; and Managing Director for Toshiba Carrier UK from 2002 to 2003.

General Manager, Light Commercial Systems from 2006 to 2008; and Director of Residential Ducted System Platforms from 2004 to 2006.

The information required by Item 11 is incorporated herein by reference to the sections of our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareowners entitled [removed: "Executive Compensation,"] "Compensation [removed: of Directors"] [added: Discussion] and [added: Analysis," "Compensation of Directors,"] "Report of the Compensation [removed: Committee."][added: Committee," "Compensation Tables" and "CEO Pay Ratio."]

The information relating to security ownership of certain beneficial owners and management is incorporated herein by reference to the section of our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareowners titled "Share Ownership."

The following table provides information as of December 31, [removed: 2020] [added: 2021] concerning Common Stock issuable under Carrier’s equity [removed: compensation plans.]

| Equity compensation plans approved by shareowners | | | | | | [removed: 23,618,000] [added: 24,063,000] | | | (1) | | | | | | $ | [removed: 19.90] [added: 22.03] | | | | | [removed: 39,611,000] [added: 30,709,000] | | | (2) | | |

[removed: '(1)] [added: (1)] Consists of the following issuable shares of [removed: Common Stock] [added: common stock] awarded under the Carrier Global Corporation 2020 Long-Term Incentive Plan (the “2020 LTIP”): (i) shares of [removed: Common Stock] [added: common stock] issuable upon the exercise of outstanding non-qualified stock options; (ii) shares of [removed: Common Stock] [added: common stock] issuable upon the exercise of outstanding Stock Appreciation Rights [removed: (SARs);] [added: ("SAR");] (iii) shares of [removed: Common Stock] [added: common stock] issuable pursuant to outstanding restricted stock unit and performance share unit awards, assuming performance at the target level (up to an additional [removed: 742,985] [added: 1,583,200] shares of [removed: Common Stock] [added: common stock] could be issued if performance goals are achieved above target); and (iv) shares of [removed: Common Stock] [added: common stock] issuable upon the settlement of outstanding deferred stock units awarded under the 2020 LTIP.

Under the 2020 LTIP, each SAR referred to in clause (ii) is exercisable for a number of shares of [removed: Common Stock] [added: common stock] having a value equal [added: to the increase in the market price of a share of such stock from the date the SAR was granted.]

For purposes of determining the total number of shares to be issued in respect of outstanding SARs as reflected in column (a) above, we have used the NYSE closing price for a share of [removed: Common Stock] [added: common stock] on December 31, [removed: 2020] [added: 2021] of [removed: $37.72.][added: $54.24.]

(2) Represents the maximum number of shares of [removed: Common Stock] [added: common stock] available to be awarded under the 2020 LTIP as of December 31, [removed: 2020.][added: 2021.]

Stock options and [removed: SARs] [added: stock appreciation rights] do not constitute Full Share Awards and will result in a reduction in the number of shares of [removed: Common Stock] [added: common stock] available for delivery under the [removed: 2018] [added: 2020] LTIP on a one-for-one basis.

compensation plans.

___________________

to the increase in the market price of a share of such stock from the date the SAR was granted.

The information required by Item 13 is incorporated herein by reference to the sections of our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareowners entitled [removed: "Corporate Governance"] [added: "Nominees for the 2022 Annual Meeting"] (under the subheading "Director Independence") and "Other Important Information" (under the subheading "Transactions with Related Persons").

The information required by Item 14 is incorporated by reference to the sections of our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareowners entitled [removed: "Appoint an] [added: "Proposal 3: Ratify Appointment of] Independent Auditor for [removed: 2021,"] [added: 2022,"] including the information provided in that section with regard to "Audit Fees," "Audit-Related Fees," "Tax Fees" and "All Other Fees."

See [removed: [Index](#iacc4eb25cfe149f5ab4182376c23c54d_7)] [added: [Index](#i195004a7b4c143739c851a79a147f9cc_7)] appearing on [page [removed: 1](#iacc4eb25cfe149f5ab4182376c23c54d_7).][added: 1](#i195004a7b4c143739c851a79a147f9cc_7).]

| [removed: 3.2] [added: 10.25] | | | | | | [removed: [Amended and Restated Bylaws of Carrier] [added: [Carrier] Global Corporation [added: Board of Directors Deferred Stock Unit Plan (amended and restated effective October 15,](https://www.sec.gov/Archives/edgar/data/0001783180/000178318021000011/carrierboardofdirectorsdsu.htm) [2020)] (incorporated by reference to Exhibit [removed: 3.2] [added: 10.28] of Carrier Global Corporation's [removed: Current] [added: Annual] Report on Form [removed: 8-K] [added: 10-K] filed with the SEC [removed: on](https://www.sec.gov/Archives/edgar/data/1783180/000114036120028246/brhc10017930_ex3-2.htm) [Decem](https://www.sec.gov/Archives/edgar/data/1783180/000114036120028246/brhc10017930_ex3-2.htm)[ber 14](https://www.sec.gov/Archives/edgar/data/1783180/000114036120028246/brhc10017930_ex3-2.htm)[, 2020,] [added: on February 9, 2021,] File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120028246/brhc10017930_ex3-2.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/0001783180/000178318021000011/carrierboardofdirectorsdsu.htm)] | | |