Carrier Global (CARR) 10-K risk factor changes: FY2022 vs FY2021

[removed: -] 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 [removed: global] business performance.

- We may recognize impairment charges for our goodwill and [removed: certain other] intangible assets.

[added: -] In certain circumstances, we could be required to indemnify UTC for material taxes and other related amounts pursuant to indemnification obligations under the TMA.

The global outbreak of COVID-19 [removed: has] [added: in 2020] severely constrained economic activity [removed: and, as a result, has] [added: and] caused a significant contraction in the global economy.

In response to this outbreak, governments [removed: have taken] [added: took] preventive or protective actions, including imposing restrictions on business operations and travel.

Governments [removed: have] also implemented economic stabilization efforts and other measures to mitigate the economic effects of the outbreak; however, the effectiveness and continuation of those measures remains uncertain.

The pandemic [removed: continues to result] [added: resulted] in widespread and extended or partial shutdowns and other restrictions on the operations of non-essential businesses, 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 emergence, severity and spread of COVID-19 [removed: variants, recent and pending approvals of vaccines and boosters, the wide-spread distribution of vaccines and the effectiveness of such vaccines in preventing and decreasing the 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: variants.]

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

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

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

Approximately [removed: 52%] [added: 45%] of our net sales for the year ended December 31, [removed: 2021] [added: 2022] are derived from international operations, including U.S. export sales.

We sell our products and services through certain key distributor, joint venture and similar relationships, including the Carrier Enterprise joint ventures with Watsco, Inc., [removed: the Toshiba Carrier] [added: AHI-Carrier FZC, a United Arab Emirates-based] joint venture [added: and various joint ventures] with [removed: Toshiba][added: members of the Midea Group.]

[removed: The effects of climate] change also may impact our decisions to construct new facilities or maintain existing facilities in the areas most prone to physical risks, which could similarly increase our operating and material costs.

[added: 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.

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 [removed: in] or effective in reducing emissions or energy intensity.

Such attacks could disrupt our systems (or those of third parties) and business operations, impact the ability of our products to work as intended or result in the unauthorized access, use, disclosure, [removed: modification,] [added: modification] or destruction of information in violation of applicable law and/or contractual obligations.

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

In addition, other issues with suppliers (such as capacity constraints, quality issues, consolidations, closings or bankruptcies), price increases, raw material shortages, or the [added: decreased availability of trucks and other delivery services could also have a material adverse effect on our ability to meet our commitments to customers or increase our operating costs.]

Moreover, regulatory changes, inclusive of those aimed at addressing climate change and its impacts, may [removed: render our products and technologies non-compliant and may subject us to operational, compliance and reputational risks.]

Additionally, a shortage in certain work forces, such as technicians, manufacturing workers or truck drivers, [added: due to external forces such as geopolitical strife or pandemics,] may impact our business by affecting the ability to produce, install, sell and deliver our products.

In order to operate more efficiently and cost effectively, we [removed: have] [added: have,] and we may from time to time, adjust employment levels, optimize our footprint and/or implement other restructuring activities.

Product recalls and field corrective actions can be expensive to [removed: implement,] [added: implement] and may damage our reputation, [added: customer relationships and market share.]

If found responsible in connection with such matters, we could be subject to significant fines, penalties, repayments and other damages (in certain cases, treble [removed: damages),] [added: damages)] and experience reputational harm.

In the U.S., these laws include, amongst others, the Export Administration Regulations administered by the U.S. Department of Commerce and embargoes and sanctions [added: regulations administered by the U.S. Department of the Treasury.]

We engage in acquisitions and [removed: divestitures,] [added: divestitures] and may encounter difficulties integrating acquired businesses with, or disposing of businesses from, our current operations; therefore, we may not realize the anticipated benefits of these acquisitions and divestitures.

We may recognize impairment charges for our goodwill and [removed: certain other] intangible assets.

As of December 31, [removed: 2021,] [added: 2022,] the net carrying value of our goodwill and [removed: certain other] intangible assets totaled [removed: $9.3] [added: $10.0] billion and [removed: $509 million,] [added: $1.3 billion,] respectively.

Our [removed: other] intangible assets primarily consist of [added: customer relationships, patents, service portfolios and] trademarks.

We periodically assess these assets to [added: determine if they are impaired.]

Significant negative industry or economic trends, disruptions to our business, planned or unexpected significant changes in the use of the assets, and sustained market capitalization declines may result in the impairment of goodwill or [removed: other] intangible assets.

As of December 31, [removed: 2021,] [added: 2022,] we had approximately [removed: $9.7] [added: $8.8] billion in aggregate principal amount of outstanding indebtedness.

In addition, the Revolving Credit Facility [removed: (defined] [added: and the Japanese Term Loan Facility (both defined] subsequently) [removed: requires] [added: require] that we not exceed a maximum consolidated total leverage ratio*.* If we breach a restrictive covenant under any of our indebtedness, or an event of default occurs in respect of any of our indebtedness, our lenders may be entitled to declare all amounts owing in respect thereof to be immediately due and payable.

Pursuant to the [removed: Separation] [added: separation] and [removed: the Distribution] [added: distribution] agreement and certain other agreements among UTC, Carrier and Otis, each party has agreed to indemnify the other parties for certain liabilities as discussed further in Note 1 – Description of the Business [added: in the accompanying Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K.]

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

Further, under the TMA, we are generally required to indemnify UTC and Otis for a specified portion of any taxes (and any related costs and other damages) (a) arising as a result of the failure of the Distribution and certain related transactions to qualify as a transaction that is generally tax-free (including [removed: as a result] [added: if the transactions were determined not to qualify for non-recognition] of [added: gain or loss under] Section [removed: 355(e)] [added: 355 and related provisions] of the Code) or a failure of any internal separation transaction that is intended to qualify as a transaction that is generally tax-free to so qualify, in each case, to the extent such amounts did not result from a disqualifying action by, or acquisition of equity securities of, Carrier, Otis or UTC or (b) arising from an adjustment, pursuant to an audit or other tax proceeding, with respect to any separation transaction that is not intended to qualify as a transaction that is generally tax-free.

The factors that could affect our common stock price include among others: (1) industry or general market conditions, including inflation and increasing cost of goods; (2) domestic and international economic factors unrelated to our performance; (3) impact of the COVID-19 pandemic; (4) lawsuits, enforcement actions and other claims by third parties or governmental authorities; (5) changes in our customers’ preferences; (6) new regulatory pronouncements and changes in regulatory guidelines; (7) actual or anticipated fluctuations in our quarterly operating results; (8) changes in securities analysts’ estimates of our financial performance or lack of research coverage and reports by industry analysts; (9) action by institutional shareowners or other large shareowners; (10) failure to meet any financial guidance given by us or any change in any financial guidance given by us, or changes by us in our financial guidance practices; (11) announcements by us of significant impairment charges; (12) speculation in the press or investment community; (13) investor perception of us and our industry; (14) changes in market [added: valuations or earnings of similar companies; (15) announcements by us or our competitors of significant contracts, acquisitions,]

[removed: valuations or earnings of similar companies; (15) announcements by us or our competitors of significant contracts, acquisitions,] dispositions or strategic partnerships; (16) war or terrorist acts; (17) any future sales of our common stock or other securities; (18) additions or departures of key [removed: personnel,] [added: personnel] and (19) failure to achieve any of our environmental, social or governance goals.

This exclusive forum provision may limit the ability of our shareowners to bring a claim in a judicial forum that such shareowners find favorable for disputes with Carrier or our directors or officers, which may discourage such lawsuits against [removed: Carrier and our directors and officers.]

Our business, operating results, cash flows and financial condition may be adversely affected by changes in global economic conditions and geopolitical risks and conditions, including credit market conditions, levels of consumer and business confidence, fluctuations in residential, commercial and industrial construction activity, pandemic health issues (including COVID-19 and its effects), natural disasters, commodity prices, energy costs, interest [removed: rates,] [added: rate fluctuations,] inflation, [added: recession,] foreign exchange rates, levels of government spending and deficits, trade policies (including tariffs, boycotts and sanctions), [added: military conflicts, acts of terrorism,] regulatory changes, actual or anticipated defaults on sovereign debt and other challenges that could affect the global economy.

The effects of climate

Additionally, during 2021 and 2022, we have experienced multiple disruptions to our supply chain.

This disruption has resulted, and may continue to result, in sufficient inventory not being available in a timely manner or during the appropriate season as well as higher freight and other logistic costs, including increased carrier rates, which could have a material adverse effect on our business.

render our products and technologies non-compliant and may subject us to operational, compliance and reputational risks.

Emerging global chemical use restrictions related to protection of human health and the environment as well as climate change directives may require additional investments in product designs, resulting in increased manufacturing and production costs as well as updates to product safety assessments.

These restrictions may also increase Carrier’s legal obligations regarding remediation of its current and legacy operational sites.

Carrier and our directors and officers.

In March 2022, we suspended business operations in Russia by ceasing to pursue new business opportunities while continuing to fulfill existing contracts for equipment, service and parts, where possible, in a manner that fully complies with applicable sanctions and trade controls.

Our sales, operations and supply chain in Russia and Ukraine are not material to Carrier.

However, the military conflict between the two countries and attendant geopolitical environment may continue to negatively impact the global economy and major financial markets, and may result in additional increases in commodity prices and supply-chain disruptions, including shortages of materials, higher costs for fuel and freight and increased transportation delays.

In addition, the extent to which COVID-19 will continue to impact the global economy remains uncertain.

We cannot provide assurance that our internal controls over financial reporting will be effective in the future or that a material weakness

- 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.

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

- We have 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.

Additionally, we are a smaller, less diversified company than UTC prior to the Separation and the Distribution.

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

- If the Distribution, together with certain related transactions, were to fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, including as a result of subsequent acquisitions of our stock or the stock of UTC, we, as well as UTC, Otis and UTC’s shareowners, could be subject to significant tax liabilities.

In addition, if certain internal restructuring transactions were to fail to qualify as transactions that are generally tax-free for U.S. federal or non-U.S. income tax purposes, we, as well as UTC and Otis could be subject to significant tax liabilities.

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

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.

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

There is also regulatory

period.

decreased availability of trucks and other delivery services could also have a material adverse effect on our ability to meet our commitments to customers or increase our operating costs.

customer relationships and market share.

Changes in environmental and climate change related-laws could require additional investments in product designs, which may be more expensive or difficult to manufacture, qualify and sell and/or may involve additional product safety risks and could increase environmental compliance expenditures.

regulations administered by the U.S. Department of the Treasury.

determine if they are impaired.

We have 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; additionally, we are a smaller, less diversified company than UTC prior to the Separation and the Distribution.

The historical information about Carrier in this Annual Report on Form 10-K for the periods prior to April 3, 2020 refers to Carrier's businesses as operated by and integrated with UTC.

Our historical financial information included in this Annual Report on Form 10-K is derived from the combined financial statements and accounting records of UTC.

Prior to the Separation

and the Distribution, our business had been operated by UTC as part of its broader corporate organization, rather than as an independent company.

As part of UTC, we were able to enjoy certain benefits from UTC’s operating diversity, purchasing power and opportunities to pursue integrated strategies with UTC’s other businesses.

Accordingly, the financial information included in this Annual Report on Form 10-K for the periods prior to April 3, 2020 does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company or those that we will achieve in the future.

In addition, the diversification of our sales, costs and cash flows are diminished as a stand-alone company, such that our results of operations, cash flows, working capital and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments, pay dividends and service debt may be diminished.

As a stand-alone company, we may also lose capital allocation efficiency and flexibility because we are no longer able to use cash flows from UTC or Otis to fund our investments and operations.

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

Under current U.S. federal income tax law, a spin-off that otherwise qualifies for tax-free treatment can be rendered taxable to the parent corporation and its shareowners as a result of certain post-spin-off transactions, including certain acquisitions of shares or assets of the spun-off corporation.

Carrier Global Corporation is [removed: a] [added: the] leading global provider of healthy, safe, sustainable and intelligent building and cold chain [removed: solutions.][added: solutions with a focus on providing differentiated, digitally-enabled lifecycle solutions to our customers.]

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

In addition, we regularly review our [added: end] markets to proactively identify trends and adapt our strategies accordingly.

[removed: However, we] [added: 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.

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

We expect that these challenges will continue to have an impact on our [removed: business] [added: businesses] for the foreseeable future.

In addition, we continue to invest in our [removed: 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 [removed: moderate] [added: limited] disruption to the availability of our products, though it is possible that more significant disruptions could occur if these supply chain challenges continue.

On January 3, 2022, we completed the [removed: sale of] Chubb [removed: to APi pursuant to a stock purchase agreement] [added: Sale] for [removed: an enterprise value] [added: net proceeds] of [removed: $3.1] [added: $2.9] billion.

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

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

See Note [removed: 2 – Basis] [added: 7 - Borrowings and Lines] of [removed: Presentation] [added: Credit] in the accompanying Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K for additional [removed: information.][added: information regarding the terms of our long-term debt obligations.]

[removed: We continue] [added: As a result, we took several preemptive actions] to [removed: focus our efforts on preserving] [added: manage liquidity, preserve] the health and safety of our employees and customers as well as maintaining the continuity of our operations.

This discussion summarizes the significant factors affecting our consolidated results of operations, financial condition and liquidity for the year ended December 31, [removed: 2021] [added: 2022] compared with December 31, [removed: 2020.][added: 2021.]

A detailed discussion of the year ended December 31, [removed: 2020] [added: 2021] compared with December 31, [removed: 2019] [added: 2020] is not included herein and can be found in the Management's Discussion and Analysis [added: of Financial Condition and Results of Operations] section in the Company's [removed: 2020] [added: 2021] Annual Report on Form 10-K, filed with the SEC on February [removed: 9, 2021,] [added: 8, 2022,] under the heading "Results of Operations," which is incorporated herein by reference.

Year Ended December 31, [removed: 2021] [added: 2022] Compared with Year Ended December 31, [removed: 2020][added: 2021]

| (In millions) | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | Period Change | | | | | | % Change | | | | | | | | |

| Net sales | | | $ | [removed: 20,613] [added: 20,421] | | | | | $ | [removed: 17,456] [added: 20,613] | | | | | [removed: $] | [removed: 3,157] | | | | | [removed: 18] | | [removed: %] | | | | | | |

| Cost of products and services sold | | | [removed: (14,633)] [added: (14,957)] | | | | | | [removed: (12,347)] [added: (14,633)] | | | | | | [removed: (2,286)] | | | | | | [removed: 19] | | [removed: %] | | | | | | |

| [removed: Gross margin] [added: Gross margin] | | | [removed: 5,980] [added: $] | [added: 5,464] | | | | | [removed: 5,109] [added: $] | [added: 5,980] | | | | | [removed: 871] | | | | | | [removed: 17] | | [removed: %] | | | | | | |

| [removed: Operating expenses | | | (3,335) | | | | | | (2,026) | | |] [added: Operating expenses] | | | [removed: (1,309)] [added: $] | [added: (949)] | | | | | [removed: 65] [added: $] | [added: (3,335)] | [removed: %] | | | | | | |

| Operating profit | | | [removed: 2,645] [added: 4,515] | | | | | | [removed: 3,083] [added: 2,645] | | | | | | [removed: (438)] [added: 1,870] | | | | | | [removed: (14)] [added: 71] | | % | | | | | | |

| Non-operating income (expense), net | | | [removed: (245)] [added: (223)] | | | | | | [removed: (228)] [added: (245)] | | | | | | [removed: (17)] [added: 22] | | | | | | [removed: 7] [added: (9)] | | % | | | | | | |

| Income from operations before income taxes | | | [removed: 2,400] [added: 4,292] | | | | | | [removed: 2,855] [added: 2,400] | | | | | | [removed: (455)] [added: 1,892] | | | | | | [removed: (16)] [added: 79] | | % | | | | | | |

| Income tax expense | | | [removed: (699)] [added: (708)] | | | | | | [removed: (849)] [added: (699)] | | | | | | [removed: 150] [added: (9)] | | | | | | [removed: (18)] [added: 1] | | % | | | | | | |

| Net income from operations | | | [removed: 1,701] [added: 3,584] | | | | | | [removed: 2,006] [added: 1,701] | | | | | | [removed: (305)] [added: 1,883] | | | | | | [removed: (15)] [added: 111] | | % | | | | | | |

| Less: Non-controlling interest in subsidiaries' earnings from operations | | | [removed: 37] [added: 50] | | | | | | [removed: 24] [added: 37] | | | | | | 13 | | | | | | [removed: 54] [added: 35] | | % | | | | | | |

| Net income attributable to common shareowners | | | $ | [removed: 1,664] [added: 3,534] | | | | | $ | [removed: 1,982] [added: 1,664] | | | | | $ | [removed: (318)] [added: 1,870] | | | | | [removed: (16)] [added: 112] | | % | | | | | | |

For the year ended December 31, [removed: 2021,] [added: 2022,] *Net sales* [added: in our HVAC segment] was [removed: $20.6] [added: $13.4] billion, an 18% increase compared with [removed: 2020.][added: the same period of 2021.]

| | | | [removed: 2021] | | | [added: 2022] | | | | | | [added: 2021] | | | | | | [added: | | |]

| Organic / Operational | | | [removed: 15] [added: 8] | | % | | | | [removed: | | | | | | | | |]

| Foreign currency translation | | | [removed: 2] [added: (3)] | | % | | | | [removed: | | | | | | | | |]

| Acquisitions and divestitures, net | | | [removed: 1] [added: (6)] | | % | | | | [removed: | | | | | | | | |]

| Total % change | | | [removed: 18] [added: (1)] | | % | | | | [removed: | | | | | | | | |]

[removed: For] [added: Organic sales for] the year ended December 31, [removed: 2021, higher volumes and pricing improvements in each of our segments] [added: 2022] increased [removed: organic sales] by [removed: 15%] [added: 8%] compared with [removed: 2020.][added: the same period of 2021.]

The organic increase was primarily driven by our HVAC segment [removed: with strong demand] [added: due to pricing improvements] in our North America residential and light commercial business and improved global end-markets in our Commercial HVAC business.

Results for 2021 reflected a significant rebound in demand after initial weakness [removed: during the first half of 2020 due to] [added: associated with] the COVID-19 [removed: pandemic and current demand remains strong.][added: pandemic.]

[removed: However,] [added: In addition,] supply chain [removed: and logistic] constraints continue to be challenging, negatively impacting our sales and results of operations.

For the year ended December 31, [removed: 2021,] [added: 2022,] gross margin was [removed: $6.0] [added: $5.5] billion, a [removed: 17% increase] [added: 9% decrease] compared with the same period of [removed: 2020.][added: 2021.]

| (In millions) | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | | | | | | |

Significant Events

Acquisition of Toshiba Carrier Corporation

On February 6, 2022, we entered into a binding agreement to acquire a majority ownership interest in TCC, a VRF and light commercial HVAC joint venture between Carrier and Toshiba Corporation.

TCC designs and manufactures flexible, energy-efficient and high-performance VRF and light commercial HVAC systems as well as commercial products, compressors and heat pumps.

The acquisition included all of TCC's advanced research and development centers and global manufacturing operations, product pipeline and the long-term use of Toshiba's iconic brand.

The acquisition was completed on August 1, 2022.

As a result, the assets, liabilities and results of operations of TCC are consolidated in the accompanying Consolidated Financial Statements as of the date of acquisition and reported within our HVAC segment.

Upon closing, Toshiba Corporation retained a 5% ownership interest in TCC.

impacted our sales and results of operations.

Russia's Invasion of Ukraine

In February 2022, Russian forces initiated a military action against Ukraine.

As a result, the European Union, the United States, the United Kingdom and other countries have imposed sanctions that have increased global economic and political uncertainty.

We operated in Russia through a Russia-based subsidiary and a joint venture which represented less than 1% of our total assets and revenue.

On March 10, 2022, we announced that we were suspending business operations in Russia, honoring existing contractual obligations in a manner that fully complies with all sanctions and trade controls imposed.

As of December 31, 2022, we have ceased all operations in Russia.

While neither Russia nor Ukraine constitute a material portion of our business, the conflict could lead to disruption, instability and volatility in global markets and industries that could negatively impact our results of operations.

We continue to monitor the evolving impacts of this conflict and its effect on the global economy and geopolitical landscape.

On July 26, 2021, we entered into a stock purchase agreement to sell our Chubb business to APi.

On January 3, 2022, we completed the Chubb Sale for net proceeds of $2.9 billion and recognized a gain on the sale of $1.1 billion during the year ended December 31, 2022.

As a result of the Chubb Sale, we do not have any remaining ownership interest in Chubb and no longer consolidate Chubb in our financial statements as of January 3, 2022.

Therefore, this Management’s Discussion and Analysis of Financial Condition and Results of Operations only includes the financial results of Chubb in periods prior to the date of sale.

As a result, prior period results may not be comparable to the current period.

The results of TCC's operations are included in our consolidated results since the acquisition date of August 1, 2022.

Prior to the acquisition, we accounted for our minority ownership in TCC under the equity method of accounting and recognized our portion of earnings within *Equity method investment in net earnings* as part of operating expenses.

As a result, prior period results may not be comparable to the current period.

For the year ended December 31, 2022, *Net sales* was $20.4 billion, a 1% decrease compared with the same period of 2021.

| | | | | | | | | |

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

| | | | | | | | | |

We continue to benefit from the demand for energy-efficient, digital products and healthy building solutions.

In addition, pricing improvements more than offset inflationary impacts in each of our segments.

Refrigeration results were flat as each of the segment's businesses experienced challenges in certain end markets during the second half of the year.

Pricing improvements in our Fire & Security segment were the primary driver of growth compared with the prior year while supply chain and logistics constraints continue to be challenging.

Refer to "Segment Review" below for a discussion of *Net sales* by segment.

Gross margin decreased by $516 million compared with the year ended December 31, 2021.

A main driver of the decrease related to incremental costs of products and services sold associated with TCC since the date of acquisition, which included inventory step-up, backlog amortization and intangible asset amortization resulting from the recognition of acquired assets at fair value.

These costs had a 50 basis point impact on gross margin as a percentage of *Net sales*.

However, these impacts were partially offset by ongoing customer demand, pricing improvements and our continued focus on productivity initiatives.

The decrease is primarily due to the Chubb Sale on January 3, 2022.

In addition, lower restructuring charges and the benefit provided by changes in the fair value of cash-settled equity awards further contributed to the decrease.

Recent Developments

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.

Separation from United Technologies Corporation

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

In connection with the Separation, 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.

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.

On April 1, 2020 and April 2, 2020, we received cash contributions totaling $590 million from UTC related to the Separation.

Our financial statements for periods prior to the Separation and the Distribution are prepared on a "carve-out" basis and include all amounts directly attributable to Carrier.

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*.

In addition, the financial statements include allocations of costs for administrative functions and services performed on our behalf by centralized groups within UTC.

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

Our financial statements for the periods subsequent to April 3, 2020 are consolidated financial statements based on the reported results of Carrier as a stand-alone company.

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.

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.

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Higher sales in our Refrigeration and Fire & Security segments were driven by improved global end-markets.

For additional discussion on the segment results for 2021, see the section entitled "Segment Review."

The increase in gross margin for the year ended December 31, 2021 was primarily driven by continued improvement in the global economic climate during the current period.

Higher volumes and pricing improvements in each of our segments outpaced operational costs as we continued to focus on Carrier 700 cost containment actions.

However, each of our segments was

At the onset of the COVID-19 pandemic, we initiated various cost containment initiatives in order to help mitigate the impacts on our business, which included reducing discretionary spending, employee furloughs and temporarily closing or limiting the presence of our workforce in our facilities.

As a result, the increase in *Selling, general and administrative* expense in the current period reflects the gradual return to our operational spending levels prior to the COVID-19 pandemic.

In addition, higher compensation and restructuring costs as well as transaction costs of $43 million associated with the divestiture of our Chubb business further contributed to the year-over-year increase.

For the year ended December 31, 2021, *Equity method investment net earnings* were $249 million, a 20% increase compared with the same period of 2020.

The increase was primarily related to higher earnings in HVAC joint ventures in Asia, the Middle East and North America as end-markets improved compared with the same period of 2020 and the absence of a 2020 product performance matter at one of our HVAC joint ventures.

These increases were partially offset by the reduction in earnings resulting from the sale of our investment in Beijer REF AB ("Beijer") in 2020.

The gain was partially offset by a $71 million other-than-temporary impairment charge on a minority-owned joint venture, an $11 million charge resulting from a litigation matter and a $12 million unfavorable impact for a change in the estimate of certain long-term liabilities.

In addition, higher gains on hedging activities were partially offset by deferred compensation costs in the current period.

In connection with the Separation and the Distribution, we issued $11.0 billion of long-term debt in February 2020.

As a result, interest expense for the year ended December 31, 2020 only included interest expense incurred on such debt after the issuance date.

In addition, we issued $750 million of 2.70% long-term notes in June 2020.

| | | | | | | 2021 | | | | | | 2020 | | | | | | | | |

[removed: Carrier is] [added: We are] exposed to fluctuations in foreign currency exchange rates, interest rates and commodity [removed: prices.][added: prices which could impact our results of operations and financial condition.]

There has been no significant change in our exposure to market risk for the year ended December 31, [removed: 2021.][added: 2022.]

Commodity Price Exposures. We are exposed to volatility in the prices of [removed: raw materials] [added: commodities] used in some of our products and [removed: fuel costs] [added: when appropriate, we use fixed price contracts] to [removed: ship our products and materials.][added: manage this exposure.]

Interest Rate Exposures. [removed: Our] [added: Substantially all of our] long-term debt [removed: consists mostly of fixed-rate instruments.][added: has fixed interest rates.]

Foreign Currency Exposures. We have operations throughout the world that manufacture and sell products in various international markets.

As a result, we are exposed to exchange rate movements in relation to our reporting currency, the U.S. dollar.

Many of our non-U.S. operations have a functional currency other than the U.S. dollar.

Therefore, our reported results will be higher or lower depending on the weakening or strengthening of the U.S. dollar against the respective foreign currency.

We actively manage material currency exposures that are associated with purchases and sales and other assets and liabilities at the legal entity level; however, we do not hedge currency translation risk.

In connection with the TCC acquisition, we entered into cross currency swaps and the Japanese Term Loan Facility to fund the Yen-denominated purchase price.

We designated the cross currency swaps and the Japanese Term Loan Facility as a hedge of our investment in certain subsidiaries whose functional currency is the Japanese Yen in order to manage foreign currency translation risk.

As a result, changes in the fair value of the cross currency swaps and the carrying value of the Japanese Term Loan Facility associated with foreign exchange rate movements are recorded in *Equity* in the Consolidated Balance Sheet.

To the extent that any hedge is not fully effective at offsetting changes in the underlying hedged item, there could be a net earnings impact.

In addition, we are exposed to fuel costs to ship our products and materials.

We do not have commodity hedge contracts in place at December 31, 2022.

As a result, any fluctuation in market interest rates is not expected to have a material effect on our results of operations.

To manage certain of these exposures, we primarily use foreign currency forward contracts, swaps and options.

Factors that could influence the effectiveness of these hedging programs include currency markets, the availability of hedging instruments and the liquidity of the credit markets.

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

These exposures include the translation of local currency balances of foreign subsidiaries, remeasurement of assets and liabilities denominated in foreign currencies and other transactions involving foreign currencies.

We attempt to manage foreign currency transaction exposures through operational strategies and the use of foreign currency hedging contracts.

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

We do not enter into hedging contracts for speculative purposes.

From time to time, we may use forward contracts in limited circumstances to manage some of those exposures.

When hedges are utilized, gains and losses may affect earnings.

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

We may issue commercial paper, which exposes us to changes in interest rates.

Currently, we do not hold any derivative contracts that hedge our interest rate exposures, but may consider such strategies in the future.

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Carrier Global Corporation is [removed: a] [added: the] leading global provider of healthy, safe, sustainable and intelligent building and cold chain [removed: solutions.][added: solutions with a focus on providing differentiated, digitally-enabled lifecycle solutions to our customers.]

Our portfolio includes industry-leading brands such as Carrier, [removed: Kidde, Edwards, LenelS2,] [added: Toshiba, Automated Logic,] Carrier [removed: Transicold] [added: Transicold, Kidde, Edwards] and [removed: Automated Logic] [added: LenelS2] 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.

In addition, we regularly review our [added: end] markets to proactively identify trends and adapt our strategies accordingly.

For the year ended December 31, [removed: 2021,] [added: 2022,] our net sales were [removed: $20.6] [added: $20.4] billion and our operating profit was [removed: $2.6] [added: $4.5] billion.

Our net sales for [removed: 2021] [added: 2022] were derived from the Americas [removed: (54%),] [added: (60%),] Europe, Middle East and Africa ("EMEA") [removed: (29%)] [added: (23%)] and Asia-Pacific (17%).

Our international operations, including U.S. export sales, represented approximately [removed: 52%] [added: 45%] of our net sales for [removed: 2021.][added: 2022.]

During the same period, new equipment comprised [removed: 73%] [added: 77%] and [removed: aftermarket] [added: parts and service] comprised [removed: 27%] [added: 23%] of our net sales.

[removed: ][added: ]

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

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 [removed: 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.][added: Distribution.]

On [removed: January 3, 2022,] [added: July 26, 2021,] we [removed: completed the sale of] [added: entered into a stock purchase agreement to sell] our Chubb Fire and Security business ("Chubb") to APi Group Corporation [removed: ("APi") pursuant to a stock purchase agreement for an enterprise value of $3.1 billion (the "Chubb Sale Agreement").][added: ("APi").]

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

Our business strategy is to be the world leader in healthy, safe, sustainable and intelligent building and cold chain solutions [removed: which we believe is supported by] [added: with] a [removed: variety of favorable secular trends.][added: focus on providing differentiated, digitally-enabled lifecycle solutions to our customers.]

[removed: We] [added: In order to execute our business strategy, we] are focused on three pillars of [removed: growth to execute our business strategy:][added: growth:]

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 [removed: related to healthy, safe, sustainable and intelligent building and cold chain solutions] with a focus on technologies related to environmentally-friendly refrigerants, energy efficiency, low emissions, air quality, electrification, noise reduction and safety.

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

Our Lynx digital platform, developed in collaboration with [removed: AWS,] [added: Amazon Web Services (“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.

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

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

Products include air conditioners, heating systems, [added: heat pumps,] controls and aftermarket components as well as aftermarket repair and maintenance services and building automation systems.

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

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

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

To maximize our buying effectiveness [removed: in the marketplace,] [added: and leverage our scale,] we have a central strategic sourcing group that consolidates purchases of certain materials and components across our business segments.

From time to time, we take actions to protect our business by asserting our intellectual property rights against third-party [removed: infringers.][added: infringement.]

Our Supplier Excellence program is intended to apply these same operating principles to our supply [removed: base.][added: base and we continue to focus on strategic cost reductions through operational efficiency, digitalization, automation and supply chain productivity.]

[removed: This initiative has] [added: These efforts have] helped reduce the impact of inflationary pressures experienced during [added: 2022 and] 2021.

We hold direct ownership interests in approximately [removed: 34] [added: 47] joint ventures, the financial results of which are accounted for by the equity method of accounting or the cost basis of accounting, of which 99% of such investments are in our HVAC segment.

We operate our [removed: business] [added: businesses] and sell our products all over the world.

As of December 31, [removed: 2021,] [added: 2022,] Carrier had approximately [removed: 58,000] [added: 52,000] employees worldwide, of which [removed: 34%] [added: 39%] are located in the Americas, [removed: 37%] [added: 25%] are located in EMEA and [removed: 29%] [added: 36%] are located in Asia.

As of December 31, [removed: 2021,] [added: 2022,] in the U.S., approximately [removed: 70%] [added: 66%] of Carrier's approximately [removed: 4,700] [added: 5,000] production and maintenance employees were covered under six collective bargaining agreements that have expiration dates ranging from [removed: 2022] [added: 2023] to [removed: 2025.][added: 2026.]

In the European Union, approximately [removed: 19,000] [added: 12,000] employees are represented by two European Works Councils and, at national and local levels, we inform and consult with [removed: 58] [added: 46] local works councils and with unions representing employees at approximately 40 sites.

Health & Safety. Our Environmental, Health and Safety program is focused on eliminating the risk of serious injuries, illness and fatalities to employees, contractors and customers during manufacturing, installation, servicing and other business [removed: activities by applying rigorous standards, controls, inspections and audits to help ensure that our operations and premises comply with national and local regulations and Carrier incident reporting requirements.][added: activities.]

For [removed: 2021,] [added: 2022,] our total recordable incident rate [removed: ("TRIR")] [added: ("TRIR"),] based upon the number of injuries per 200,000 hours worked for our employees [removed: in the U.S.] was [removed: 0.35] [added: 0.31] and our lost time incident rate ("LTIR") was [removed: 0.11.][added: 0.12.]

Inclusion & Diversity. As of December 31, [removed: 2021,] [added: 2022,] approximately [removed: 27%] [added: 29%] of our employees and [removed: 32%] [added: 30%] of our executives globally were women.

As of December 31, [removed: 2021,] [added: 2022,] people of color represented approximately [removed: 27%] [added: 31%] of our U.S. executive and [removed: 24%] [added: 26%] of our professional employees in the U.S.

Our Chairman and Chief Executive Officer ("CEO") has signed the CEO Action for Diversity & Inclusion TM pledge joining more than 2,000 [removed: CEO's] [added: CEOs] to underscore our commitment to ensure inclusion is core to our business culture.

Three-times per year we conduct [removed: an anonymous] [added: a confidential] online survey in local languages to solicit feedback from our employees.

Carrier was incorporated in Delaware in connection with the [removed: Separation.][added: Separation on March 15, 2019.]

Our principal executive offices are located at 13995 Pasteur Boulevard, Palm [added: Beach Gardens, Florida 33418, and our telephone number is (561) 365-2000.]

Acquisition of Toshiba Carrier Corporation

On February 6, 2022, we entered into a binding agreement to acquire a majority ownership interest in Toshiba Carrier Corporation (“TCC”), a variable refrigerant flow ("VRF") and light commercial HVAC joint venture between Carrier and Toshiba Corporation.

TCC designs and manufactures flexible, energy-efficient and high-performance VRF and light commercial HVAC systems as well as commercial products, compressors and heat pumps.

The acquisition included all of TCC's advanced research and development centers and global manufacturing operations, product pipeline and the long-term use of Toshiba's iconic brand.

The acquisition was completed on August 1, 2022 and reported within our HVAC segment.

Upon closing, Toshiba Corporation retained a 5% ownership interest in TCC.

On January 3, 2022, we completed the sale of Chubb (the "Chubb Sale") for net proceeds of $2.9 billion and recognized a gain on the sale of $1.1 billion during the year ended December 31, 2022.

As of December 31, 2022, only the Tax Matters Agreement ("TMA") remains in effect.

We believe our strategy is supported by a variety of favorable secular trends, including health and wellness, sustainability, digitalization and a growing middle class.

In addition, we continue to actively manage and strengthen our business and product portfolio to meet the current and future needs of our customers.

This is driven by sustaining activities with a focus on improving existing products and reducing production costs.

We also pursue potential acquisitions to complement existing products and services to enhance our product portfolio.

These drivers are supported by research and development activities with a focus on new product development and new technology innovation.

We also pursue potential acquisitions to enter new locations and channels as well as expand and enhance our current product portfolio.

In addition, we launched Carrier Ventures, a global venture capital group which focuses on investments to accelerate the development of sustainable innovations and disruptive technologies to transform future building and cold chain management.

The group engages in strategic partnerships with high growth organizations as they invest in the development of technologies to innovate and commercialize the next generation of differentiated net zero solutions.

Grow Aftermarket and Digital. Our strategy is focused on digital capabilities to drive the evolution of our hardware in order to enable cloud connectivity, modernize legacy software and launch new platforms, products and services.

We expect that these solutions will increase our total available market opportunity, enhance our predictive service and maintenance capabilities, strengthen our customer intimacy as well as fuel our aftermarket growth.

Most recently, we signed a multi-year, strategic collaboration

agreement with AWS to offer additional Software-as-a-Service ("SaaS") solutions in the areas of HVAC performance, sustainability and safety and security.

The collaboration is part of our growing investment in digitally-enabled lifecycle solutions designed to inspire confidence in the health and safety of indoor environments.

each of our major product and service offerings.

We apply rigorous standards, controls, inspections and audits to help ensure that our operations and premises comply with national and local regulations and Carrier incident reporting requirements.

Carrier earned the same recognition in 2022.

Carrier also participated for the first time in the Human Rights Campaign Foundation’s 2022 Corporate Equality Index in Mexico and achieved a perfect score being recognized as Best Place to Work for LGBTQ Equality in Mexico.

Our common stock is listed under the symbol "CARR" on the New York Stock Exchange ("NYSE").

Income and expense under these agreements are not material.

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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 also focused on emerging trends in our segments; namely, healthy, safe, sustainable and intelligent buildings and cold chain solutions.

We believe that we are well-positioned to meet the demand expected to result from these trends through products such as our Infinity whole home air purifier and the OptiClean Dual-Mode Air Scrubber & Negative Air Machine for commercial building and home applications, and through products such as Carrier Pods monitored by Sensitech that can help ensure the safe storage and transport of food and medicines.

Grow Aftermarket and Digital. Our strategy is focused on bringing differentiated parts and service solutions to our customers across the entire product lifecycle.

Our BluEdge service platform builds on our history of innovation and our expertise as an original equipment manufacturer.

The platform offers a tiered suite of services across our HVAC, Refrigeration and Fire & Security segments.

Through our understanding of customer needs and investments in connected equipment and digital service solutions, BluEdge helps us achieve enhanced equipment efficiency and performance – key components of our Healthy Buildings, Healthy Homes and Connected Cold Chain Programs.

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.

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

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.

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.

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

Prior to the Distribution, Carrier had no operations other than those incidental to the Separation.

Beach Gardens, Florida 33418, and our telephone number is (561) 365-2000.

As of December 31, [removed: 2021,] [added: 2022,] the Company [removed: has] [added: and certain of its subsidiaries, including Kidde-Fenwal, Inc. ("KFI"), have] been named as [removed: a defendant] [added: defendants] in [removed: over 1,800] [added: more than 3,150] 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 [removed: has] [added: and certain of its subsidiaries including KFI, have] also been named as a defendant in [removed: over 160] [added: more than 300] 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.

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

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

UTC [added: subsidiaries] first entered the AFFF business with [removed: the] [added: their] acquisition of National Foam and Angus Fire in 2005 as part of the acquisition of [removed: Kidde.][added: KFI and Kidde Products Limited ("KPL").]

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

The Company acquired [removed: Kidde] [added: KFI and KPL] as part of its separation from UTC in April 2020.

During the [removed: eight year] [added: eight-year] period of its operation by [removed: Kidde,] [added: KFI,] 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").

Plaintiffs in the MDL Proceedings allege that PFOS and PFOA contamination has resulted from the use of AFFF [removed: containing fluorosurfactants] manufactured using a process known as [removed: ECF.][added: ECF, and that this process was used exclusively by 3M.]

They also allege that PFOA contamination has resulted from the use of AFFF [removed: containing fluorosurfactants] manufactured using a different process, known as [removed: telomerization.][added: telomerization and that this process was used exclusively by the other AFFF manufacturers (including National Foam and Angus Fire).]

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

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 [removed: Company)] [added: Company and KFI)] AFFF manufacturers.

The Company [removed: believes] [added: and its subsidiaries, including KFI, believe] that [removed: it has] [added: they have] meritorious defenses to the claims in the MDL Proceedings and the other AFFF lawsuits.

Based on [removed: the] [added: its] 2013 agreement for the sale of National Foam and Angus Fire, the Company [removed: is] [added: and its subsidiaries, including KFI are] pursuing indemnification against these claims from the purchaser and current owner of National Foam and Angus Fire.

The Company [removed: is] [added: and its subsidiaries, including KFI, are] also 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, the Company is unable to assess the probability of liability or to reasonably estimate the damages, if any, to be allocated to the [removed: Company,] [added: Company and its subsidiaries, including KFI,] if one or more plaintiffs were to prevail in these [removed: cases, and there can be no assurance that any such future exposure will not be material in any period.][added: cases.]

On August 12, 2020, several former employees of UTC or its subsidiaries filed a putative class action complaint (the "Complaint") in the United States District Court for the District of Connecticut against Raytheon Technologies [removed: Corporation ("RTX"),] [added: Corporation,] 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.

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

[removed: 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 [removed: seeks] [added: sought] specific performance.

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

Defendants moved to dismiss the Amended [removed: Complaint on October 13, 2021.][added: Complaint.]

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 recorded insurance recovery receivables for probable asbestos-related recoveries.

The Amended Complaint, with Raytheon, Carrier and Otis as the only defendants, asserted that the defendants are

On September 30, 2022, the court dismissed the case against all defendants, with prejudice.

Plaintiffs appealed the dismissal to the United States Court of Appeals for the Second Circuit.

The briefing process is ongoing.

Neither the Company nor any of its former or current subsidiaries, including National Foam/Angus Fire and KFI/KPL, respecitively, manufactured fluorosurfactants; they instead purchased these substances from unrelated third parties to in turn manufacture AFFF.

The defendants moved for summary judgment on the government contractor defense, which potentially applies to AFFF sold to or used by the U.S. government.

After full briefing and oral argument, on September 16, 2022, the MDL court declined to enter summary judgment for the defendants.

The defense, however, remains available at any trial to which it applies.

On September 23, 2022, after completion of discovery, the MDL court selected one water provider case, the *City of Stuart, FL v.

3M, et al.*, for a bellwether trial.

That trial is tentatively scheduled for June 2023.

The MDL court has ordered that the

bellwether process for personal injury cases will begin in 2023.

The court has not yet outlined details on that process or its timing.

The Company and its subsidiaries, including KFI, and other defendants are also party to one action in Arizona state court brought by a firefighter claiming that occupational exposure to AFFF has caused him certain personal injuries.

There can be no assurance that any such future exposure will not be material in any period.

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.

[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").

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

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.

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.

For the fiscal year ended December 31, [removed: 2021][added: 2022]

Yes [removed: ☐ No] ☒ [added: No ☐]

The aggregate market value of the voting Common Stock held by non-affiliates of the Registrant as of June 30, [removed: 2021,] [added: 2022,] the last business day of the Registrant's most recently completed second fiscal quarter, was approximately [removed: $42.1] [added: $30.0] billion, based on the New York Stock Exchange closing price for such shares on that date.

As of January 31, [removed: 2022,] [added: 2023,] there were [removed: 855,514,035] [added: 834,187,942] shares of Common Stock outstanding.

Part III hereof incorporates by reference portions of the Registrant's definitive proxy statement related to its [removed: 2022] [added: 2023] annual meeting of shareowners.

| [Cautionary Note Concerning Factors That May Affect Future [removed: Results](#i195004a7b4c143739c851a79a147f9cc_25)] [added: Results](#ifccc4432bb8b4626a46cbdb7dff22c4c_10)] | | | [removed: [2](#i195004a7b4c143739c851a79a147f9cc_25)] [added: [2](#ifccc4432bb8b4626a46cbdb7dff22c4c_10)] | | |

| [Item 1. [removed: B](#i195004a7b4c143739c851a79a147f9cc_13)usiness] [added: B](#ifccc4432bb8b4626a46cbdb7dff22c4c_16)usiness] | | | [removed: [4](#i195004a7b4c143739c851a79a147f9cc_13)] [added: [4](#ifccc4432bb8b4626a46cbdb7dff22c4c_16)] | | |

| [Item 1A. Risk [removed: Factors](#i195004a7b4c143739c851a79a147f9cc_28)] [added: Factors](#ifccc4432bb8b4626a46cbdb7dff22c4c_28)] | | | [removed: [10](#i195004a7b4c143739c851a79a147f9cc_28)] [added: [10](#ifccc4432bb8b4626a46cbdb7dff22c4c_28)] | | |

| [Item 1B. Unresolved Staff [removed: Comments](#i195004a7b4c143739c851a79a147f9cc_34)] [added: Comments](#ifccc4432bb8b4626a46cbdb7dff22c4c_34)] | | | [removed: [28](#i195004a7b4c143739c851a79a147f9cc_34)] [added: [26](#ifccc4432bb8b4626a46cbdb7dff22c4c_34)] | | |

| [Item 2. [removed: Properties](#i195004a7b4c143739c851a79a147f9cc_37)] [added: Properties](#ifccc4432bb8b4626a46cbdb7dff22c4c_37)] | | | [removed: [28](#i195004a7b4c143739c851a79a147f9cc_37)] [added: [26](#ifccc4432bb8b4626a46cbdb7dff22c4c_37)] | | |

| [Item 3. Legal [removed: Proceedings](#i195004a7b4c143739c851a79a147f9cc_40)] [added: Proceedings](#ifccc4432bb8b4626a46cbdb7dff22c4c_40)] | | | [removed: [28](#i195004a7b4c143739c851a79a147f9cc_40)] [added: [26](#ifccc4432bb8b4626a46cbdb7dff22c4c_40)] | | |

| [Item 4. Mine Safety [removed: Disclosures](#i195004a7b4c143739c851a79a147f9cc_43)] [added: Disclosures](#ifccc4432bb8b4626a46cbdb7dff22c4c_43)] | | | [removed: [30](#i195004a7b4c143739c851a79a147f9cc_43)] [added: [28](#ifccc4432bb8b4626a46cbdb7dff22c4c_43)] | | |

| [Item 5. Market for Registrant's Common Equity, Related [removed: S](#i195004a7b4c143739c851a79a147f9cc_49)[hare](#i195004a7b4c143739c851a79a147f9cc_49)[own](#i195004a7b4c143739c851a79a147f9cc_49)[er] [added: Shareowner] Matters and Issuer Purchases of Equity [removed: Securities](#i195004a7b4c143739c851a79a147f9cc_49)] [added: Securities](#ifccc4432bb8b4626a46cbdb7dff22c4c_49)] | | | [removed: [30](#i195004a7b4c143739c851a79a147f9cc_49)] [added: [28](#ifccc4432bb8b4626a46cbdb7dff22c4c_49)] | | |

| [removed: [Item](#i195004a7b4c143739c851a79a147f9cc_49)] [added: [Item](#ifccc4432bb8b4626a46cbdb7dff22c4c_49)] 6. \[Reserved\] | | | | | |

| [Item 7. Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i195004a7b4c143739c851a79a147f9cc_58)] [added: Operations](#ifccc4432bb8b4626a46cbdb7dff22c4c_58)] | | | [removed: [32](#i195004a7b4c143739c851a79a147f9cc_58)] [added: [30](#ifccc4432bb8b4626a46cbdb7dff22c4c_58)] | | |

| [Item 7A. Quantitative and Qualitative Disclosures About Market [removed: Risk](#i195004a7b4c143739c851a79a147f9cc_109)] [added: Risk](#ifccc4432bb8b4626a46cbdb7dff22c4c_103)] | | | [removed: [45](#i195004a7b4c143739c851a79a147f9cc_109)] [added: [44](#ifccc4432bb8b4626a46cbdb7dff22c4c_103)] | | |

| [Item 8. Financial Statements and Supplementary [removed: Data](#i195004a7b4c143739c851a79a147f9cc_112)] [added: Data](#ifccc4432bb8b4626a46cbdb7dff22c4c_106)] | | | [removed: [46](#i195004a7b4c143739c851a79a147f9cc_112)] [added: [45](#ifccc4432bb8b4626a46cbdb7dff22c4c_106)] | | |

| [Report of Independent Registered Public Accounting Firm (PCAOB [removed: ID](#i195004a7b4c143739c851a79a147f9cc_118) 238[)](#i195004a7b4c143739c851a79a147f9cc_118)] [added: ID](#ifccc4432bb8b4626a46cbdb7dff22c4c_112) 238[)](#ifccc4432bb8b4626a46cbdb7dff22c4c_112)] | | | [removed: [46](#i195004a7b4c143739c851a79a147f9cc_118)] [added: [45](#ifccc4432bb8b4626a46cbdb7dff22c4c_112)] | | |

| [Consolidated Statement of [removed: Operations](#i195004a7b4c143739c851a79a147f9cc_121)] [added: Operations](#ifccc4432bb8b4626a46cbdb7dff22c4c_115)] | | | [removed: [48](#i195004a7b4c143739c851a79a147f9cc_121)] [added: [48](#ifccc4432bb8b4626a46cbdb7dff22c4c_115)] | | |

| [Consolidated Statement of Comprehensive Income [removed: (Loss)](#i195004a7b4c143739c851a79a147f9cc_124)] [added: (Loss)](#ifccc4432bb8b4626a46cbdb7dff22c4c_118)] | | | [removed: [49](#i195004a7b4c143739c851a79a147f9cc_124)] [added: [49](#ifccc4432bb8b4626a46cbdb7dff22c4c_118)] | | |

| [Consolidated Balance [removed: Sheet](#i195004a7b4c143739c851a79a147f9cc_127)] [added: Sheet](#ifccc4432bb8b4626a46cbdb7dff22c4c_121)] | | | [removed: [50](#i195004a7b4c143739c851a79a147f9cc_127)] [added: [50](#ifccc4432bb8b4626a46cbdb7dff22c4c_121)] | | |

| [Consolidated Statement of Changes in [removed: Equity](#i195004a7b4c143739c851a79a147f9cc_130)] [added: Equity](#ifccc4432bb8b4626a46cbdb7dff22c4c_124)] | | | [removed: [51](#i195004a7b4c143739c851a79a147f9cc_130)] [added: [51](#ifccc4432bb8b4626a46cbdb7dff22c4c_124)] | | |

| [Consolidated Statement of Cash [removed: Flows](#i195004a7b4c143739c851a79a147f9cc_136)] [added: Flows](#ifccc4432bb8b4626a46cbdb7dff22c4c_127)] | | | [removed: [52](#i195004a7b4c143739c851a79a147f9cc_136)] [added: [52](#ifccc4432bb8b4626a46cbdb7dff22c4c_127)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i195004a7b4c143739c851a79a147f9cc_139)] [added: Statements](#ifccc4432bb8b4626a46cbdb7dff22c4c_130)] | | | [removed: [53](#i195004a7b4c143739c851a79a147f9cc_139)] [added: [53](#ifccc4432bb8b4626a46cbdb7dff22c4c_130)] | | |

| [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i195004a7b4c143739c851a79a147f9cc_226)] [added: Disclosure](#ifccc4432bb8b4626a46cbdb7dff22c4c_205)] | | | [removed: [88](#i195004a7b4c143739c851a79a147f9cc_226)] [added: [89](#ifccc4432bb8b4626a46cbdb7dff22c4c_205)] | | |

| [Item 9A. Controls and [removed: Procedures](#i195004a7b4c143739c851a79a147f9cc_229)] [added: Procedures](#ifccc4432bb8b4626a46cbdb7dff22c4c_208)] | | | [removed: [88](#i195004a7b4c143739c851a79a147f9cc_229)] [added: [89](#ifccc4432bb8b4626a46cbdb7dff22c4c_208)] | | |

| [Item 9B. Other [removed: Information](#i195004a7b4c143739c851a79a147f9cc_232)] [added: Information](#ifccc4432bb8b4626a46cbdb7dff22c4c_211)] | | | [removed: [88](#i195004a7b4c143739c851a79a147f9cc_232)] [added: [90](#ifccc4432bb8b4626a46cbdb7dff22c4c_211)] | | |

| [Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent [removed: Inspections](#i195004a7b4c143739c851a79a147f9cc_2237)] [added: Inspections](#ifccc4432bb8b4626a46cbdb7dff22c4c_214)] | | | [removed: [89](#i195004a7b4c143739c851a79a147f9cc_235)] [added: [90](#ifccc4432bb8b4626a46cbdb7dff22c4c_217)] | | |

| [PART [removed: III](#i195004a7b4c143739c851a79a147f9cc_235)] [added: IV](#ifccc4432bb8b4626a46cbdb7dff22c4c_235)] | | | [removed: [89](#i195004a7b4c143739c851a79a147f9cc_235)] [added: [92](#ifccc4432bb8b4626a46cbdb7dff22c4c_235)] | | |

| [Item 10. Directors, Executive Officers and Corporate [removed: Governance](#i195004a7b4c143739c851a79a147f9cc_238)] [added: Governance](#ifccc4432bb8b4626a46cbdb7dff22c4c_220)] | | | [removed: [89](#i195004a7b4c143739c851a79a147f9cc_238)] [added: [90](#ifccc4432bb8b4626a46cbdb7dff22c4c_220)] | | |

| [Item 11. Executive [removed: Compensation](#i195004a7b4c143739c851a79a147f9cc_241)] [added: Compensation](#ifccc4432bb8b4626a46cbdb7dff22c4c_223)] | | | [removed: [90](#i195004a7b4c143739c851a79a147f9cc_241)] [added: [91](#ifccc4432bb8b4626a46cbdb7dff22c4c_223)] | | |

| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related [removed: S](#i195004a7b4c143739c851a79a147f9cc_244)[har](#i195004a7b4c143739c851a79a147f9cc_244)[eowner](#i195004a7b4c143739c851a79a147f9cc_244) [Matters](#i195004a7b4c143739c851a79a147f9cc_244)] [added: Shareowner Matters](#ifccc4432bb8b4626a46cbdb7dff22c4c_226)] | | | [removed: [90](#i195004a7b4c143739c851a79a147f9cc_244)] [added: [91](#ifccc4432bb8b4626a46cbdb7dff22c4c_226)] | | |

| [Item 13. Certain Relationships and Related Transactions, and Director [removed: Independence](#i195004a7b4c143739c851a79a147f9cc_247)] [added: Independence](#ifccc4432bb8b4626a46cbdb7dff22c4c_229)] | | | [removed: [91](#i195004a7b4c143739c851a79a147f9cc_247)] [added: [92](#ifccc4432bb8b4626a46cbdb7dff22c4c_229)] | | |

| [Item 14. Principal Accountant Fees and [removed: Services](#i195004a7b4c143739c851a79a147f9cc_250)] [added: Services](#ifccc4432bb8b4626a46cbdb7dff22c4c_232)] | | | [removed: [91](#i195004a7b4c143739c851a79a147f9cc_250)] [added: [92](#ifccc4432bb8b4626a46cbdb7dff22c4c_232)] | | |

| [Item 15. Exhibits, Financial Statement [removed: Schedules](#i195004a7b4c143739c851a79a147f9cc_256)] [added: Schedules](#ifccc4432bb8b4626a46cbdb7dff22c4c_238)] | | | [removed: [91](#i195004a7b4c143739c851a79a147f9cc_256)] [added: [92](#ifccc4432bb8b4626a46cbdb7dff22c4c_238)] | | |

| [Item 16. Form 10-K [removed: Summary](#i195004a7b4c143739c851a79a147f9cc_259)] [added: Summary](#ifccc4432bb8b4626a46cbdb7dff22c4c_241)] | | | [removed: [94](#i195004a7b4c143739c851a79a147f9cc_259)] [added: [95](#ifccc4432bb8b4626a46cbdb7dff22c4c_241)] | | |

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 [removed: performance or the Separation (as defined in PART I, ITEM I, BUSINESS, Separation from United Technologies Corporation).][added: performance.]

Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash [removed: flows,] [added: flow,] 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, [removed: the estimated costs associated with the Separation,] Carrier's plans with respect to our indebtedness and other statements that are not historical facts.

- 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, [added: inflationary cost pressures,] 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;

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

_________________________________________

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

☐.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

☐.

| [PART I](#ifccc4432bb8b4626a46cbdb7dff22c4c_13) | | | [4](#ifccc4432bb8b4626a46cbdb7dff22c4c_13) | | |

| [PART II](#ifccc4432bb8b4626a46cbdb7dff22c4c_46) | | | [28](#ifccc4432bb8b4626a46cbdb7dff22c4c_46) | | |

| [PART III](#ifccc4432bb8b4626a46cbdb7dff22c4c_217) | | | [90](#ifccc4432bb8b4626a46cbdb7dff22c4c_217) | | |

| [SIGNATURES](#ifccc4432bb8b4626a46cbdb7dff22c4c_244) | | | [96](#ifccc4432bb8b4626a46cbdb7dff22c4c_244) | | |

acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs;

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

________________________________________________

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

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

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

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

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

- the expected benefits of the Separation;

- the risk that dis-synergy costs, costs of restructuring transactions and other costs incurred in connection with the Separation will exceed Carrier’s estimates; and

- the impact of the Separation on Carrier’s business and Carrier’s resources, systems, procedures and controls, diversion of management’s attention and the impact on relationships with customers, suppliers, employees and other business counterparties.

We operate approximately [removed: 1,200] [added: 1,100] sites, which comprise approximately [removed: 37] [added: 41] million square feet of productive space.

Of these, our facilities and key manufacturing sites greater than 100,000 square feet comprise approximately [removed: 27] [added: 32] million square feet of productive space.

Approximately [removed: 60%, 18%] [added: 70%, 14%] and [removed: 18%] [added: 13%] of these significant properties are associated with our HVAC, Refrigeration and Fire & Security segments, respectively, with approximately [removed: 4%] [added: 3%] not associated with a particular segment.

Approximately [removed: 35%] [added: 33%] of these significant properties are leased and the remainder are owned.

Approximately [removed: 32%] [added: 43%] of these significant properties are located in the U.S.

Our fixed assets as of December 31, [removed: 2021] [added: 2022] 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: 2021] [added: 2022] are in good operating condition, are well-maintained and substantially all are in regular use.

The Company's common stock is listed on the NYSE under the ticker symbol "CARR." As of December 31, [removed: 2021,] [added: 2022,] the approximate number of common stock shareowners of record was [removed: 23,865.][added: 22,805.]

[removed: The following graph presents the cumulative total shareowner] return from the Distribution Date through December 31, [removed: 2021] [added: 2022] for our common stock, as compared with the S&P 500 Index and the Dow Jones Industrial [removed: Average.][added: Index.]

[removed: ][added: ]

The cumulative total returns on Carrier common stock and each index as of each April 3, 2020 through December 31, [removed: 2021] [added: 2022] plotted in the above graph are as follows:

| Company / Index | | | April 3, 2020 | | | | | | [removed: June 30, 2020 | | | | | | Sept. 30,] [added: December 31,] 2020 | | | | | | [removed: Dec.] [added: December] 31, [removed: 2020] [added: 2021] | | | | | | [removed: March] [added: December] 31, [removed: 2021 | | |] [added: 2022] | | | [removed: June 30, 2021] | | | | | | [removed: Sept. 30, 2021] | | | | | | [removed: Dec. 31, 2021] | | |

| Carrier Global Corporation | | | $ | 100.00 | | | | | $ | [removed: 167.93 | | | | | $ | 230.82] [added: 286.66] | | | | | $ | [removed: 286.66] [added: 416.55] | | | | | $ | [removed: 320.86 | | |] [added: 316.82] | | [removed: $] | [removed: 371.32] | | | | | [removed: $] | [removed: 395.46] | | | | | [removed: $] | [removed: 416.55] | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | [removed: 123.27 | | | | | $ | 134.28] [added: 150.59] | | | | | $ | [removed: 150.59] [added: 193.82] | | | | | $ | [removed: 159.89 | | |] [added: 154.28] | | [removed: $] | [removed: 173.56] | | | | | [removed: $] | [removed: 174.57] | | | | | [removed: $] | [removed: 193.82] | |

| Dow Jones [removed: Industrials] [added: Industrial] Index | | | $ | 100.00 | | | | | $ | [removed: 121.27 | | | | | $ | 131.23] [added: 145.31] | | | | | $ | [removed: 145.31] [added: 175.75] | | | | | $ | [removed: 157.36 | | |] [added: 157.45] | | [removed: $] | [removed: 165.35] | | | | | [removed: $] | [removed: 162.93] | | | | | [removed: $] | [removed: 175.75] | |

The following table provides information about our purchases during the three months ended December 31, [removed: 2021] [added: 2022] of equity securities that are registered by us pursuant to Section 12 of the Exchange Act.

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

[removed: subject to market conditions and at the Company's discretion] [added: Repurchases occur] in the open market or through one or more other public or private transactions [removed: and subject] [added: pursuant] to [removed: compliance] [added: plans complying] with [removed: the Company's obligations] [added: Rules 10b5-1 and 10b-18] under the [removed: TMA.][added: Exchange Act.]

The following graph presents the cumulative total shareowner

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

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

| 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| October 1 - October 31 | | | | | | 751 | | | | | | $36.34 | | | | | | 751 | | | | | | $ | 2,282 | |

| November 1 - November 30 | | | | | | 642 | | | | | | $42.53 | | | | | | 642 | | | | | | $ | 2,255 | |

| December 1 - December 31 | | | | | | 1,474 | | | | | | $43.46 | | | | | | 1,474 | | | | | | $ | 2,190 | |

| Total | | | | | | 2,867 | | | | | | $41.39 | | | | | | 2,867 | | | | | | | | |

We may purchase our outstanding common stock from time to time subject to market conditions and at our discretion.

billion increase to the Company's existing $350 million share repurchase program authorizing the repurchase of up to $2.1 billion of the Company's outstanding common stock.

In October 2022, our Board of Directors approved a $2 billion increase to the Company's existing $2.1 billion share repurchase program.

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

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

| 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 | | | | | | | | |

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

We have audited the accompanying consolidated balance sheet of Carrier Global Corporation and its subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of operations, of comprehensive income (loss), of changes in equity and of cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

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 [removed: accepted accounting principles.]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that (i) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

As described in Note 13 to the consolidated financial statements, the Company recognized [removed: $20.6 billion] [added: $20,421 million] of consolidated revenue for the year ended December 31, [removed: 2021.][added: 2022.]

Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining [removed: benefit] [added: benefits] from that good or service.

A significant portion of the Company's performance obligations are recognized at a point-in-time when control of the product transfers to the customer, which is generally [removed: at] the time of shipment.

In addition, the Company customarily offers [added: its] customers incentives to purchase products to ensure an adequate supply of its products in [removed: distribution channels.]

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 [added: total] estimated costs at completion used by management by considering factors that can affect the accuracy of those estimates.

[removed: Evaluating the total] [added: estimated] 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.

| (In millions, except per share amounts) | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | |

| Product sales | | | $ | [removed: 17,214] [added: 18,250] | | | | | $ | [removed: 14,347] [added: 17,214] | | | | | $ | [removed: 15,360] [added: 14,347] | | | | |

| Service sales | | | [removed: 3,399] [added: 2,171] | | | | | | [removed: 3,109] [added: 3,399] | | | | | | [removed: 3,248] [added: 3,109] | | | | | |

| | | | [removed: 20,613] [added: 20,421] | | | | | | [removed: 17,456] [added: 20,613] | | | | | | [removed: 18,608] [added: 17,456] | | | | | |

| Cost of products sold | | | [removed: (12,300)] [added: (13,337)] | | | | | | [removed: (10,185)] [added: (12,300)] | | | | | | [removed: (10,890)] [added: (10,185)] | | | | | |

| Cost of services sold | | | [removed: (2,333)] [added: (1,620)] | | | | | | [removed: (2,162)] [added: (2,333)] | | | | | | [removed: (2,299)] [added: (2,162)] | | | | | |

| Research and development | | | [removed: (503)] [added: (539)] | | | | | | [removed: (419)] [added: (503)] | | | | | | [removed: (401)] [added: (419)] | | | | | |

| Selling, general and administrative | | | [removed: (3,120)] [added: (2,512)] | | | | | | [removed: (2,820)] [added: (3,120)] | | | | | | [removed: (2,761)] [added: (2,820)] | | | | | |

| | | | [removed: (18,256)] [added: (18,008)] | | | | | | [removed: (15,586)] [added: (18,256)] | | | | | | [removed: (16,351)] [added: (15,586)] | | | | | |

| Equity method investment net earnings | | | [removed: 249] [added: 262] | | | | | | [removed: 207] [added: 249] | | | | | | [removed: 236] [added: 207] | | | | | |

| Other income (expense), net | | | [removed: 39] [added: 1,840] | | | | | | [removed: 1,006] [added: 39] | | | | | | [removed: (2)] [added: 1,006] | | | | | |

| Operating profit | | | [removed: 2,645] [added: 4,515] | | | | | | [removed: 3,083] [added: 2,645] | | | | | | [removed: 2,491] [added: 3,083] | | | | | |

| Non-service pension benefit [added: (expense)] | | | [removed: 61] [added: (4)] | | | | | | [removed: 60] [added: 61] | | | | | | [removed: 154] [added: 60] | | | | | |

| Interest (expense) income, net | | | [removed: (306)] [added: (219)] | | | | | | [removed: (288)] [added: (306)] | | | | | | [removed: 27] [added: (288)] | | | | | |

| Income from operations before income taxes | | | [removed: 2,400] [added: 4,292] | | | | | | [removed: 2,855] [added: 2,400] | | | | | | [removed: 2,672] [added: 2,855] | | | | | |

| Income tax expense | | | [removed: (699)] [added: (708)] | | | | | | [removed: (849)] [added: (699)] | | | | | | [removed: (517)] [added: (849)] | | | | | |

| Net income from operations | | | [removed: 1,701] [added: 3,584] | | | | | | [removed: 2,006] [added: 1,701] | | | | | | [removed: 2,155] [added: 2,006] | | | | | |

| Less: Non-controlling interest in subsidiaries' earnings from operations | | | [removed: 37] [added: 50] | | | | | | [removed: 24] [added: 37] | | | | | | [removed: 39] [added: 24] | | | | | |

| Net income attributable to common shareowners | | | $ | [removed: 1,664] [added: 3,534] | | | | | $ | [removed: 1,982] [added: 1,664] | | | | | $ | [removed: 2,116] [added: 1,982] | | | | |

| Basic | | | $ | [removed: 1.92] [added: 4.19] | | | | | $ | [removed: 2.29] [added: 1.92] | | | | | $ | [removed: 2.44] [added: 2.29] | | | | |

| Diluted | | | $ | [removed: 1.87] [added: 4.10] | | | | | $ | [removed: 2.25] [added: 1.87] | | | | | $ | [removed: 2.44] [added: 2.25] | | | | |

| Basic | | | [removed: 867.7] [added: 843.4] | | | | | | [removed: 866.5] [added: 867.7] | | | | | | [removed: 866.2] [added: 866.5] | | | | | |

| Diluted | | | [removed: 890.3] [added: 861.2] | | | | | | [removed: 880.2] [added: 890.3] | | | | | | [removed: 866.2] [added: 880.2] | | | | | |

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

| (In millions) | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | [added: | | |]

| Net income from operations | | | $ | [removed: 1,701] [added: 3,584] | | | | | $ | [removed: 2,006] [added: 1,701] | | | | | $ | [removed: 2,155] [added: 2,006] | | [added: | | |]

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

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Toshiba Carrier Corporation (TCC) from its assessment of internal control over financial reporting as of December 31, 2022, because it was acquired by the Company in a purchase business combination during 2022.

We have also excluded TCC from our audit of internal control over financial reporting.

TCC is a majority-owned subsidiary whose total assets and total net sales excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 7% and 4%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2022.

accepted accounting principles.

Evaluating the total

*Acquisition of TCC – Valuation of Technology, Trademark, and Certain Customer Relationships Intangible Assets*

As described in Note 19 to the consolidated financial statements, on August 1, 2022, the Company acquired a majority ownership interest in TCC for $930 million, which resulted in the recognition of intangible assets including $220 million of technology, $180 million of trademark, and $497 million of customer relationships.

Key assumptions used in estimating future cash flows included projected revenue growth rates, earnings before interest and taxes (“EBIT”) margins, discount rates, customer attrition rates, and royalty rates, among others.

The principal considerations for our determination that performing procedures relating to the valuation of technology, trademark, and certain customer relationships intangible assets acquired in the acquisition of TCC is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the technology, trademark, and certain customer relationships intangible assets; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to certain royalty rates used in the valuation of the technology, the discount rate and royalty rate used in the valuation of the trademark, and certain projected revenue growth rates, EBIT margins, discount rates, and customer attrition rates used in the valuation of certain customer relationships; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to business combination accounting, including controls over management’s valuation of the technology, trademark, and certain customer relationships intangible assets and controls over the development of significant assumptions related to projected revenue growth rates, EBIT margins, discount rates, customer attrition rates, and royalty rates, as applicable to the respective intangible assets.

These procedures also included, among others (i) reading the purchase agreement and (ii) testing management’s process for developing the fair value estimate of the technology, trademark, and certain customer relationships intangible assets.

Testing management’s process included evaluating the appropriateness of the valuation methods, testing the completeness and accuracy of the underlying data used by management, and evaluating the reasonableness of the aforementioned significant assumptions.

Evaluating management’s assumptions related to certain projected revenue growth rates and EBIT margins involved considering TCC’s historical performance, consistency with economic and industry data, and 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 the appropriateness of the Company’s valuation methods and the evaluation of the reasonableness of the significant assumptions related to discount rates, customer attrition rates, and certain royalty rates.

| Chubb divestiture | | | (574) | | | | | | — | | | | | | — | | | | | |

| Chubb divestiture | | | 329 | | | | | | — | | | | | | — | | | | | |

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| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,534 | | | | | | 50 | | | | | | 3,584 | | |

| Dividends declared on common stock ($0.64 per share) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (533) | | | | | | — | | | | | | (533) | | |

| Shares issued under incentive plans, net | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (12) | | | | | | — | | | | | | — | | | | | | (12) | | |

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

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| Sale of non-controlling interest | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (5) | | | | | | (5) | | |

| Treasury stock repurchase | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,381) | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,381) | | |

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

February 8, 2022

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

| Balance as of January 1, 2019 | | | | | | $ | 15,132 | | | | | $ | (1,215) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 352 | | | | | $ | 14,269 | |

| Net income | | | | | | 2,116 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 39 | | | | | | 2,155 | | |

| Adoption impact of ASU 2018-02 | | | | | | 9 | | | | | | (9) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

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

The Separation

As a result, the Company 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, the Company took several preemptive actions during 2020 to manage liquidity as demand for its products decreased.

Despite the adverse impacts of the pandemic on the Company’s 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 the Company's strategic priorities.

In addition, the Company continues to actively monitor its liquidity position and working capital needs and believes that its overall capital resources and liquidity position are adequate.

These costs are primarily recorded in *Selling, general and administrative* in the Consolidated Statement of Operations and consist of employee-related costs, costs to establish certain stand-alone functions and information technology systems, professional service fees and other transaction-related costs resulting from Carrier’s transition to becoming an independent, publicly traded company.

On occasion, the Company is

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| Balance as of December 31, 2019 | | | $ | 5,351 | | | | | $ | 1,228 | | | | | $ | 3,305 | | | | | $ | 9,884 | |

| Monitoring lines | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | 71 | | | | | | (59) | | | | | | 12 | | |

| | | | | | | | | | 1,865 | | | | | | (1,420) | | | | | | 445 | | | | | | 2,574 | | | | | | (2,108) | | | | | | 466 | | |

| Future amortization | | | $ | 80 | | | | | $ | 75 | | | | | $ | 69 | | | | | $ | 59 | | | | | $ | 47 | |

Based upon this assessment, the Company determined that it was more likely than not that goodwill and indefinite-lived intangible assets were not impaired.

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| 1.923% Notes due February 15, 2023 | | | | | | | | | | | | $ | — | | (1) | | | | | | $ | 500 | | | | |

(1) In February 2021, the Company prepaid the 1.923% Notes due in February 2023 and incurred a $17 million make-whole premium upon prepayment and wrote-off $2 million of the remaining unamortized deferred financing costs.

On June 2, 2020, the Company entered into an amendment to the Revolving Credit Facility, under which certain terms of the facility were amended for a period beginning on June 2, 2020 and ending on December 30, 2021 (the "Covenant Modification").

The Company terminated the Covenant Modification effective as of August 27, 2021 in accordance with procedures for termination set forth in the revolving credit agreement, which returned the consolidated leverage ratio covenant to the limit in effect prior to the Covenant Modification.

As

| 2022 | | | | | | $ | 183 | | | | |

| 2025 | | | | | | $ | 2,002 | | | | |

| Thereafter | | | | | | $ | 7,504 | | | | |

Interest expense for the year ended December 31, 2021 includes amortization of debt issuance costs of $10 million, a make whole-premium related to the prepayment of the 1.923% Notes of $17 million and a write-off of debt issuance costs of $2 million.

Interest expense for the year ended December 31, 2020 includes amortization of debt issuance costs of $9 million and a write-off of debt issuance costs of $5 million.

| December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | |

For the years ended December 31, 2021 and 2020 there were no transfers in or out of levels 1, 2 or 3.

| 2022 | | | | | | $ | 141 | |

| 2023 | | | | | | 123 | | |

| 2024 | | | | | | 106 | | |

| Thereafter | | | | | | 218 | | |

location and is closed to new entrants.

Evaluation of Disclosure Controls and Procedures — Our management, with the participation of our CEO and Senior Vice President and Chief Financial Officer ("CFO"), has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, [removed: 2021.][added: 2022.]

Based on that evaluation, the Company's CEO and CFO have concluded that, as of December 31, [removed: 2021,] [added: 2022,] 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.

Based on this evaluation, the Company’s management has concluded that, as of December 31, [removed: 2021,] [added: 2022,] the Company’s internal control over financial reporting was effective.

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the [removed: Company’s] effectiveness of [added: the Company's] internal control over financial reporting as of December 31, [removed: 2021] [added: 2022] as stated in their report which appears herein.

Changes in Internal Control Over Financial Reporting — There were no changes in our internal control over financial reporting during the three months ended December 31, [removed: 2021] [added: 2022] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In accordance with guidance issued by the staff of the SEC, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred.

As discussed in Note 19 "Acquisitions" of the Company's Notes to the Consolidated Financial Statements, the Company acquired a majority ownership interest in TCC on August 1, 2022 in a purchase business combination.

TCC has total assets excluding intangible assets and goodwill arising from the acquisition and total net sales, of approximately 7% and 4%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2022.

Management's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022 excluded the TCC acquisition, as the Company is in the process of aligning and integrating various processes, systems and internal controls related to the business and operations of this subsidiary, excluding intangible assets and goodwill, which are included within the scope of management’s assessment.

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: 2022] [added: 2023] Annual Meeting of Shareowners entitled "Proposal 1: Election of Directors" (under the [removed: subheading] [added: subheadings "Criteria for Board Membership",] "Nominees for the [removed: 2022] [added: 2023] Annual [removed: Meeting")] [added: Meeting"] and "Corporate [removed: Governance" (including under the subheading "Committee Meetings and Composition").][added: Governance").]

| Name | | | | | | Position | | | | | | Age as of February [removed: 8, 2022] [added: 7, 2023] | | |

| David Gitlin | | | | | | Chairman and Chief Executive Officer | | | | | | [removed: 52] [added: 53] | | |

| Ajay Agrawal | | | | | | Senior Vice President, Global Services and Healthy Buildings | | | | | | [removed: 58] [added: 59] | | |

| Kyle Crockett | | | | | | Vice President, Controller | | | | | | [removed: 48] [added: 49] | | |

| Patrick Goris | | | | | | Senior Vice President and Chief Financial Officer | | | | | | [removed: 50] [added: 51] | | |

| Christopher Nelson | | | | | | President, HVAC | | | | | | [removed: 51] [added: 52] | | |

| Kevin J. O'Connor | | | | | | Senior Vice President, Chief Legal Officer | | | | | | [removed: 54] [added: 55] | | |

| Jurgen Timperman | | | | | | President, Fire & Security | | | | | | [removed: 49] [added: 50] | | |

| Nadia Villeneuve | | | | | | Senior Vice President, Chief Human Resources Officer | | | | | | [removed: 49] [added: 50] | | |

| Timothy White | | | | | | President, Refrigeration | | | | | | [removed: 48] [added: 49] | | |

He most recently served as President and Chief Operating Officer of Collins Aerospace [added: Systems] from 2018 to 2019 and President of UTC Aerospace Systems from 2015 to 2018.

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

[removed: He most recently] [added: Previously he] served as [removed: Vice] President, Aftermarket Services, and Vice President responsible for Rockwell Collins integration for Collins Aerospace, a UTC company, from August 2015 to September [removed: 2019 and as Vice President, Aftermarket and Programs at the Pratt & Whitney division of UTC from 2009 to July 2015.][added: 2019.]

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

O’Connor. Mr. O’Connor was appointed Senior Vice President, Chief Legal Officer in [removed: March] 2020.

He joined Carrier from Point72 Asset Management where he served as Chief Legal Officer from 2015 through [removed: 2019 and as Vice President, General Counsel & Government Relations of Carrier from January 2020 to March 2020.][added: 2019.]

Prior to [removed: that he] [added: that, she] served as Vice [removed: President, Global Ethics] [added: President] and [removed: Compliance] [added: Chief Human Resources Officer] for [added: the Pratt & Whitney division of] UTC from 2012 to 2015.

Timothy White. Mr. White was appointed President, Refrigeration of Carrier [removed: effective] [added: in] August [removed: 16,] 2021.

He was previously with [removed: UTC] [added: UTC, renamed Raytheon Technologies Corporation,] for 24 years where he held a number of senior leadership roles, including President, Power & Controls and President, Electric Systems, for [removed: UTC's] [added: Raytheon's] Collins Aerospace division.

Information concerning Section 16(a) compliance is incorporated herein by reference to the section of our Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareowners entitled "Other Important Information" under the heading "Delinquent Section 16(a) Reports." We have adopted a code of ethics that applies to all [added: of] our directors, officers, employees and representatives.

He has served as a member of the Board of Directors of The Boeing Company since 2022.

Previously, he served as President, Commercial HVAC from 2018 to March 2020 and President, North American HVAC from 2012 to 2018.

Prior to that, he served as President, Global Fire & Security Products from 2017 to 2019 and President, Global Security Products from 2015 to 2017.

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.

Between 2013 and 2015, Mr. Gitlin was President, Aircraft Systems, UTC Aerospace Systems.

Mr. Gitlin joined UTC in 1997 and held various senior positions, including the following with Hamilton Sundstrand: President of Aerospace Customers & Business Development; Vice President of Auxiliary Power, Engine & Control Systems; Vice President and General Manager Power Systems; Vice President of Pratt & Whitney programs; and General Manager of Rolls-Royce/General Electric programs.

Before joining Hamilton Sundstrand, he served in roles at UTC headquarters and Pratt & Whitney.

Prior to that he served in a variety of leadership roles in UTC from 2005 to 2009, including head of Financial Planning and Analysis for UTC, Vice President of Strategy and Business Development at Hamilton Sundstrand and Senior Director of Strategy and Development at UTC.

Previously, he held many roles at Carrier 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 General Manager, Light Commercial Systems from 2006 to 2008; and Director of Residential Ducted System Platforms from 2004 to 2006.

Prior to that, he held several other roles within UTC’s fire and security business, including President, Global Fire & Security Products from 2017 to 2019, President, Global Security Products from 2015 to 2017, President, Security & Access Solutions from 2012 to 2015, President, Fire & Security Operations from 2011 to 2012 and Regional General Manager, Global Security Products, Middle East and Africa from 2009 to 2011.

Prior to that, she served as Vice President and Chief Human Resources Officer for the Pratt & Whitney division of UTC from 2012 to 2015 and as Vice President, Human Resources, Asia for the UTC Fire & Security division of UTC, located in Shanghai, China, from 2010 to 2012.

The information required by Item 11 is incorporated herein by reference to the sections of our Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareowners entitled [removed: "Compensation Discussion and Analysis," "Compensation of Directors," "Report of the Compensation Committee," "Compensation Tables" and "CEO Pay Ratio."][added: "Proposal 2: Advisory Vote to Approve Named Executive Officer Compensation."]

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: 2022] [added: 2023] Annual Meeting of Shareowners titled "Share Ownership."

The following table provides information as of December 31, [removed: 2021] [added: 2022] concerning Common Stock issuable under Carrier’s equity [added: compensation plans.]

| Equity compensation plans approved by shareowners | | | | | | [removed: 24,063,000] [added: 17,266,000] | | | (1) | | | | | | $ | [removed: 22.03] [added: 24.53] | | | | | [removed: 30,709,000] [added: 26,100,000] | | | (2) | | |

(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: ("SAR");] [added: (SARs);] (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: 1,583,200] [added: 2,235,900] shares of [removed: common stock] [added: Common Stock] could be issued if performance goals are achieved above [removed: target);] [added: 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.

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: 2021] [added: 2022] of [removed: $54.24.][added: $41.25.]

[removed: The] weighted-average exercise price of outstanding options, warrants and rights shown in column (b) takes into account only the shares identified in clauses (i) and (ii).

(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: 2021.][added: 2022.]

The

compensation plans.

The information required by Item 13 is incorporated herein by reference to the sections of our Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareowners entitled "Nominees for the [removed: 2022] [added: 2023] 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: 2022] [added: 2023] Annual Meeting of Shareowners entitled "Proposal 3: Ratify Appointment of Independent Auditor for [removed: 2022,"] [added: 2023,"] including the information provided in that section with regard to "Audit Fees," "Audit-Related Fees," "Tax Fees" and "All Other Fees."

See [removed: [Index](#i195004a7b4c143739c851a79a147f9cc_7)] [added: [Index](#ifccc4432bb8b4626a46cbdb7dff22c4c_7)] appearing on [page [removed: 1](#i195004a7b4c143739c851a79a147f9cc_7).][added: 1](#ifccc4432bb8b4626a46cbdb7dff22c4c_7).]

| 2.2 | | | | | | [Stock Purchase Agreement, dated as of July 26, 2021, among Carrier Global Corporation, Carrier Investments UK Limited, Chubb Limited and APi Group Corporation (incorporated by reference to [removed: Exhibit](https://www.sec.gov/Archives/edgar/data/0001783180/000178318021000053/sharepurchaseagreement.htm) [2](https://www.sec.gov/Archives/edgar/data/0001783180/000178318021000053/sharepurchaseagreement.htm)[.1] [added: Exhibit 2.1] of Carrier Global Corporation's Current Report on Form 8-K filed with the SEC [removed: on](https://www.sec.gov/Archives/edgar/data/0001783180/000178318021000053/sharepurchaseagreement.htm) [July 30](https://www.sec.gov/Archives/edgar/data/0001783180/000178318021000053/sharepurchaseagreement.htm)[,] [added: on July 30,] 2021, File No. 001-39220)](https://www.sec.gov/Archives/edgar/data/0001783180/000178318021000053/sharepurchaseagreement.htm) | | |

| 3.2 | | | | | | [Amended and Restated Bylaws of Carrier [removed: Global](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/carrierglobalcorporation-a.htm) [Corporation*](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/carrierglobalcorporation-a.htm)] [added: Global Corporation (incorporated by reference to Exhibit](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/carrierglobalcorporation-a.htm) [3.2](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/carrierglobalcorporation-a.htm) [of Carrier Global Corporation's Annual Report on Form 10-K filed with the SEC on February 8, 2022, File No. 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/carrierglobalcorporation-a.htm)] | | |

| 10.1 | | | | | | [Amendment [removed: No.](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [2](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[dated] [added: No. 2 dated] as of November 15, 2021 to [removed: the](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[Revolving] [added: the Revolving] Credit Agreement, [removed: dated](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [as of](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [February] [added: dated as of February] 10, 2020, among [removed: Carrier](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [Global] [added: Carrier Global] Corporation, the subsidiary borrowers party thereto, the [removed: lenders](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [party] [added: lenders party] thereto and JPMorgan Chase Bank, [removed: N.A.](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[, as](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [administrative](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [agent](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[*](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)] [added: N.A., as administrative agent](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[(incorporated by reference to Exhibit 10.1 of Carrier Global Corporation's](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [Annual](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [Report on Form](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [10](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[\-K filed with the SEC on](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [February](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm) [8](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[, 202](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[2](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)[, File No. 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000010/a101amendmentno2torevolvin.htm)] | | |

| 10.6 | | | | | | [Carrier Global Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.5 of Carrier Global Corporation's Current Report on Form 8-K filed with the SEC on April 3, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-5.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-5.htm)+] | | |

| [removed: 10.7] [added: 10.8] | | | | | | [Carrier Global Corporation [removed: Change in Control Severance] [added: Executive Annual Bonus] Plan (incorporated by reference to Exhibit [removed: 10.6] [added: 10.7] of Carrier Global Corporation's Current Report on Form 8-K filed with the SEC on April 3, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-6.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-7.htm)+] | | |

| [removed: 10.8] [added: 10.9] | | | | | | [Carrier Global Corporation [removed: Executive Annual Bonus] [added: Deferred Compensation] Plan (incorporated by reference to Exhibit [removed: 10.7] [added: 10.8] of Carrier Global Corporation's Current Report on Form 8-K filed with the SEC on April 3, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-7.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-8.htm)+] | | |

| [removed: 10.9] [added: 10.10] | | | | | | [Carrier Global Corporation [removed: Deferred Compensation] [added: Company Automatic Contribution Excess] Plan (incorporated by reference to Exhibit [removed: 10.8] [added: 10.9] of Carrier Global Corporation's Current Report on Form 8-K filed with the SEC on April 3, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-8.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-9.htm)+] | | |

| [removed: 10.10] [added: 10.12] | | | | | | [Carrier Global Corporation [removed: Company Automatic Contribution Excess] [added: Pension Preservation] Plan (incorporated by reference to Exhibit [removed: 10.9] [added: 10.11] of Carrier Global Corporation's Current Report on Form 8-K filed with the SEC on April 3, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-9.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-11.htm)+] | | |

| [removed: 10.11] [added: 10.14] | | | | | | [Carrier Global Corporation [removed: LTIP Performance Share Unit Deferral] [added: Amended and Restated Savings Restoration] Plan (incorporated by reference to Exhibit [removed: 10.10] [added: 10.14] of Carrier Global Corporation's Current Report on Form 8-K filed with the SEC on April 3, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-10.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nc10009876x4_ex10-14.htm)+] | | |

| [removed: 10.12] [added: 10.13] | | | | | | [removed: [Carrier] [added: [French Sub-Plan for Restricted Stock Granted Under the Carrier] Global Corporation [removed: Pension Preservation] [added: 2020 Long-Term Incentive] Plan (incorporated by reference to Exhibit [removed: 10.11] [added: 10.13] of Carrier Global Corporation's Current Report on Form 8-K filed with the SEC on April 3, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-11.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-13.htm)+] | | |

| [removed: 10.13] [added: 10.22] | | | | | | [removed: [French Sub-Plan] [added: [Schedule of Terms] for [removed: Restricted] [added: Non-Qualified] Stock [removed: Granted Under] [added: Option Awards granted under] the Carrier Global Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.13 [removed: of] [added: to] Carrier Global [removed: Corporation's Current Report] [added: Corporation’s Registration Statement] on Form [removed: 8-K] [added: 10] filed with the SEC on [removed: April 3,] [added: February 7,] 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nt10009876x4_ex10-13.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120002546/nt10003663x10_ex10-13.htm)+] | | |

| [removed: 10.14] [added: 10.7] | | | | | | [Carrier Global Corporation [removed: Amended] [added: Change in Control Severance](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000048/amendedandrestatedcarrierg.htm) [Pl](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000048/amendedandrestatedcarrierg.htm)[an](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000048/amendedandrestatedcarrierg.htm) [(Amended] and Restated [removed: Savings Restoration Plan] [added: effective as of April 13, 2022)] (incorporated by reference to Exhibit [removed: 10.14 of] [added: 10.1 to] Carrier Global [removed: Corporation's Current] [added: Corporation’s Quarterly] Report on Form [removed: 8-K] [added: 10-Q] filed with the SEC on [removed: April 3, 2020,] [added: July 28, 2022,] File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120007888/nc10009876x4_ex10-14.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000178318022000048/amendedandrestatedcarrierg.htm)+] | | |

| 10.15 | | | | | | [Schedule of Terms for Carrier Founders Grant Performance Share Unit Awards granted under the Carrier Global Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.17 of Carrier Global Corporation's Quarterly Report on Form 10-Q filed with the SEC on July 31, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000178318020000052/a2020psuscheduleofterm.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000178318020000052/a2020psuscheduleofterm.htm)+] | | |

| 10.16 | | | | | | [Schedule of Terms for Stock Appreciation Right Awards (Founders Grant) granted under the Carrier Global Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.18 of Carrier Global Corporation's Quarterly Report on Form 10-Q filed with the SEC on July 31, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000178318020000052/a2020sarscheduleofterm.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000178318020000052/a2020sarscheduleofterm.htm)+] | | |

| 10.17 | | | | | | [Schedule of Terms for Restricted Stock Unit Awards granted under the Carrier Global Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.8 to Carrier Global Corporation’s Registration Statement on Form 10 filed with the SEC on February 7, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120002546/nt10003663x10_ex10-8.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120002546/nt10003663x10_ex10-8.htm)+] | | |

| 10.18 | | | | | | [Schedule of Terms for Stock Appreciation Right Awards granted under the Carrier Global Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.10 to Carrier Global Corporation’s Registration Statement on Form 10 filed with the SEC on February 7, 2020, File No. [removed: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120002546/nt10003663x10_ex10-10.htm)] [added: 001-39220)](https://www.sec.gov/Archives/edgar/data/1783180/000114036120002546/nt10003663x10_ex10-10.htm)+] | | |