CARRIER GLOBAL CorpCARR
CARRIER GLOBAL Corp Revenue Disclosure
REVENUE RECOGNITION
The Company accounts for revenue in accordance with ASC 606: Revenue from Contracts with Customers. Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A significant portion of the Company's performance obligations are recognized at a point-in-time when control of the product transfers to the customer, which is generally the time of shipment. The remaining portion of the Company’s performance obligations are recognized over time as the customer simultaneously obtains control as the Company performs work under a contract, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment.
Performance Obligations
A performance obligation is a distinct good, service or a bundle of goods and services promised in a contract. Some of the Company's contracts with customers contain a single performance obligation, while others contain multiple performance obligations most commonly when a contract spans multiple phases of a product life-cycle such as production, installation, maintenance and support. The Company identifies performance obligations at the inception of a contract and allocates the transaction price to each distinct performance obligation. Revenue is recognized when or as the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on its relative stand-alone selling price.
The Company primarily generates revenue from the sale of products to customers and recognizes revenue at a point in time when control transfers to the customer. Transfer of control is generally based on the shipping terms of the contract. In addition, the Company recognizes revenue on an over-time basis on installation and service contracts. For over-time performance obligations requiring the installation of equipment, revenue is recognized using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which correspond with and best depict transfer of control to the customer. Contract costs include direct costs such as labor, materials and subcontractors’ costs and where applicable, indirect costs.
External segment sales disaggregated by product and service are as follows:
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Sales Type | ||||||||||||||||||||
| Product | $ | 9,327 | $ | 9,428 | $ | 8,538 | ||||||||||||||
| Service | 1,143 | 1,099 | 1,077 | |||||||||||||||||
| Climate Solutions Americas sales | 10,470 | 10,527 | 9,615 | |||||||||||||||||
| Product | 4,572 | 4,652 | 1,722 | |||||||||||||||||
| Service | 472 | 332 | 215 | |||||||||||||||||
| Climate Solutions Europe sales | 5,044 | 4,984 | 1,937 | |||||||||||||||||
| Product | 2,606 | 2,849 | 3,053 | |||||||||||||||||
| Service | 733 | 651 | 528 | |||||||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa sales | 3,339 | 3,500 | 3,581 | |||||||||||||||||
| Product | 2,668 | 3,061 | 3,352 | |||||||||||||||||
| Service | 226 | 414 | 466 | |||||||||||||||||
| Climate Solutions Transportation sales | 2,894 | 3,475 | 3,818 | |||||||||||||||||
| Net sales | $ | 21,747 | $ | 22,486 | $ | 18,951 | ||||||||||||||
The transaction price allocated to performance obligations reflects the Company’s expectations about the consideration it will be entitled to receive from a customer. The Company includes variable consideration in the estimated transaction price when there is a basis to reasonably estimate the amount and when it is probable that a significant reversal of revenue recognized would not occur when the uncertainty associated with variable consideration is subsequently resolved. In addition, the Company customarily offers its customers incentives to purchase products to ensure an adequate supply of its products in distribution channels. The principal incentive programs provide reimbursements to distributors for offering promotional pricing for products. The Company accounts for estimated incentive payments as a reduction in sales at the time a sale is recognized.
Contract Balances
Total contract assets and liabilities consisted of the following:
| (In millions) | 2025 | 2024 | |||||||||
Contract assets, current (included within Other current assets) | $ | 499 | $ | 366 | |||||||
Contract assets, non-current (included within Other assets) | 83 | 65 | |||||||||
| Total contract assets | 582 | 431 | |||||||||
Contract liabilities, current (included within Accrued liabilities) | (691) | (553) | |||||||||
Contract liabilities, non-current (included within Other long-term liabilities) | (203) | (164) | |||||||||
| Total contract liabilities | (894) | (717) | |||||||||
| Net contract assets (liabilities) | $ | (312) | $ | (286) | |||||||
The timing of revenue recognition, billings and cash collections results in contract assets and contract liabilities. Contract assets relate to the conditional right to consideration for any completed performance under a contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Contract liabilities relate to payments received in advance of performance under a contract or when the Company has a right to consideration that is conditioned upon transfer of a good or service to the customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract.
The Company recognized revenue of $506 million for the year ended December 31, 2025, that was related to contract liabilities as of January 1, 2025. The Company expects a majority of its contract liabilities at the end of the period to be recognized as revenue over the next 12 months. There were no individually significant customers with sales exceeding 10% of total sales for the years ended December 31, 2025, 2024 and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 5, 2026 | Showing above |
| 2024 | Feb 11, 2025 | |
| 2023 | Feb 6, 2024 | |
| 2022 | Feb 7, 2023 | |
| 2021 | Feb 8, 2022 | |
| 2020 | Feb 9, 2021 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.