Reportable Business Segments

6 Months Ended

Jun. 30, 2026

Segment Reporting, Measurement Disclosures [Abstract]

Reportable Business Segments

2. Reportable Business Segments:

We operate in two reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:

 

Segment	Product or Services	Markets Served	Geographic Areas
Home Comfort Solutions	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and supplies, water heaters	Residential Replacement; Residential Parts and Supplies; Residential New Construction	United States Canada
Building Climate Solutions	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial products, curb, curb adapters, drop box diffusers, HVAC recycling and salvage service, condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, replacement parts and supplies	Light Commercial; Commercial Parts and Supplies; Food Preservation; Non-Food Industry; Cold Storage and Light Industrial	United States Canada

We use segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. We define segment profit or loss as a segment’s income or loss from continuing operations before interest and income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation in the table below details the items excluded.

Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations for the periods presented.

The chief operating decision maker uses segment profit or loss from operations, excluding certain items, to allocate resources (including employees, financial, or capital resources) for each segment predominantly in the annual budget and forecasting process. The chief operating decision maker considers budget-to-actual variances in segment profit or loss on a monthly basis when evaluating segment performance and making decisions about allocating resources to the segments.

Our chief operating decision maker is Alok Maskara, Chief Executive Officer.

Key financial information for each segment is shown below (in millions):

	Home Comfort Solutions		Building Climate Solutions		Total
Three months ended June 30, 2026
Net sales(1)	$	935.6	$	609.7	$	1,545.3
Cost of goods sold	626.0		378.7		1,004.7
Selling, general and administrative	88.0		75.5		163.5
Other (income) expense(2)	(0.2)		0.2		—
Segment profit(3)	$	221.8	$	155.3	$	377.1
Three months ended June 30, 2025
Net sales(1)	$	1,009.3	$	491.6	$	1,500.9
Cost of goods sold	671.5		310.8		982.3
Selling, general and administrative	91.4		61.1		152.5
Other income(2)	(5.6)		(0.9)		(6.5)
Segment profit(3)	$	252.0	$	120.6	$	372.6

	Home Comfort Solutions		Building Climate Solutions		Total
Six months ended June 30, 2026
Net sales(1)	$	1,585.6	$	1,094.8	$	2,680.4
Cost of goods sold	1,093.8		694.9		1,788.7
Selling, general and administrative	185.2		149.5		334.7
Other income(2)	(1.7)		(0.5)		(2.2)
Segment profit(3)	$	308.3	$	250.9	$	559.2
Six months ended June 30, 2025
Net sales(1)	$	1,730.7	$	842.8	$	2,573.5
Cost of goods sold	1,171.6		542.6		1,714.2
Selling, general and administrative	189.8		121.5		311.3
Other income(2)	(6.6)		(0.7)		(7.3)
Segment profit(3)	$	375.9	$	179.4	$	555.3

(1) On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

(2) Other (income) expense is primarily comprised of income from equity method investments and (gains) losses and other expenses, net.

(3) We define segment profit as a segment's operating income included in the accompanying Consolidated Statements of Operations, excluding:

•Restructuring charges, and

•Loss (gain) on sale from previous dispositions.

The reconciliations of segment profit to Operating income and Net income before income taxes are presented below (in millions):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
Total segment profit(1)	$	377.1	$	372.6	$	559.2	$	555.3
Reconciliation to Operating income:
Restructuring charges	—		—		—		—
Gain on sale from previous dispositions	—		—		—		—
Corporate and other expenses(2)	(22.1)		(23.6)		(40.7)		(38.3)
Operating income	355.0		349.0		518.5		517.0
Reconciliation to net income before income taxes:
Pension settlements	0.1		0.1		0.6		0.2
Interest expense, net	14.7		8.3		29.9		14.5
Other expense, net	0.6		0.6		1.5		1.5
Net income before income taxes	$	339.6	$	340.0	$	486.5	$	500.8

(1) We define segment profit as a segment's operating income (loss) included in the accompanying Consolidated Statements of Operations, excluding:

•Restructuring charges, and

•Loss (gain) on sale from previous dispositions.

(2) Corporate and other expenses include unallocated corporate costs related to corporate administrative functions such as tax, treasury, accounting, internal audit, legal and human resources.

Total assets by segment are shown below (in millions) as of:

	June 30, 2026		December 31, 2025
Total Assets:
Home Comfort Solutions	$	2,230.0	$	1,971.0
Building Climate Solutions	1,902.8		1,746.4
Total assets from reportable segments	$	4,132.8	$	3,717.4
Corporate and Other	412.2		364.4
Total assets	$	4,545.0	$	4,081.8

The assets in the Corporate and Other primarily consist of cash, property, plant and equipment, short-term investments, and deferred tax assets. Assets recorded in the operating segments represent those assets directly associated with those segments.

Total capital expenditures by segment are shown below (in millions):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
Capital Expenditures:
Home Comfort Solutions	$	10.1	$	11.8	$	25.2	$	23.2
Building Climate Solutions	16.4		6.2		23.9		12.5
Total capital expenditures from reportable segments	$	26.5	$	18.0	$	49.1	$	35.7
Corporate and Other	9.2		10.5		42.1		18.3
Total capital expenditures	$	35.7	$	28.5	$	91.2	$	54.0

Depreciation and amortization expenses by segment are shown below (in millions):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
Depreciation and Amortization:
Home Comfort Solutions	$	13.0	$	11.5	$	23.7	$	21.9
Building Climate Solutions	12.3		8.0		24.0		15.9
Total depreciation and amortization from reportable segments	$	25.3	$	19.5	$	47.7	$	37.8
Corporate and Other	7.3		7.3		14.1		14.6
Total depreciation and amortization	$	32.6	$	26.8	$	61.8	$	52.4

The income from equity method investments is shown below (in millions):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
(Loss) Income from Equity Method Investments:
Home Comfort Solutions	$	(0.4)	$	1.7	$	0.8	$	2.4
Building Climate Solutions	(0.2)		0.4		(0.2)		0.8
Total (loss) income from equity method investments from reportable segments	$	(0.6)	$	2.1	$	0.6	$	3.2
Corporate and Other	1.6		—		—		0.1
Total income from equity method investments	$	1.0	$	2.1	$	0.6	$	3.3

Geographic Information

Property, plant and equipment, net for each major geographic area in which we operate, based on the domicile of our operations, are shown below (in millions) as of:

	June 30, 2026		December 31, 2025
Property, Plant and Equipment, net:
United States	$	655.7	$	607.4
Mexico	269.1		269.2
Canada	3.9		4.2
Other international	5.5		6.4
Total Property, plant and equipment, net	$	934.2	$	887.2