v3.26.1
REVENUE RECOGNITION
 6 Months Ended
Jun. 30, 2026
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION 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 at 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.
External segment sales disaggregated by product and service are as follows:

Three Months Ended
 June 30,		Six Months Ended
June 30,
(In millions)2026202520262025
Sales Type
Product$3,055 $2,970 $5,269 $5,289 
Service317 282 604 535 
Climate Solutions Americas sales3,372 3,252 5,873 5,824 
Product1,187 1,137 2,341 2,208 
Service137 116 276 214 
Climate Solutions Europe sales1,324 1,253 2,617 2,422 
Product712 697 1,354 1,357 
Service205 185 397 351 
Climate Solutions Asia Pacific, Middle East & Africa sales917 882 1,751 1,708 
Product680 673 1,337 1,275 
Service58 53 114 102 
Climate Solutions Transportation sales738 726 1,451 1,377 
Net sales$6,351 $6,113 $11,692 $11,331 

Contract Balances

Total contract assets and contract liabilities consisted of the following:

(In millions)June 30,
2026		December 31,
2025
Contract assets (included within Other current assets)
$450 $499 
Contract assets, non-current (included within Other assets)
14 83 
Total contract assets464 582 
Contract liabilities (included within Accrued liabilities)
(816)(691)
Contract liabilities, non-current (included within Other long-term liabilities)
(217)(203)
Total contract liabilities (1,033)(894)
Net contract assets (liabilities)$(569)$(312)

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 a customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract.
The Company recognized revenue of $407 million during the six months ended June 30, 2026, that related to contract liabilities as of January 1, 2026. The Company expects a majority of its current contract liabilities at the end of the period to be recognized as revenue in the next 12 months.