Strong first half results; Raises full-year
earnings outlook
Toshiba Carrier Corporation acquisition
expected to close in early August
2022
- Net sales down 4% versus 2021 driven by the Chubb divestiture;
organic sales up 7%
- Operating margin up 130 basis points; price/cost positive in
the quarter
- GAAP EPS of $0.67 and adjusted
EPS of $0.69
- Net cash flows from operating activities of $32 million; free cash flow usage of $34 million
- Raising full-year 2022 adjusted EPS* guidance range to
$2.25 to $2.35 from $2.20 to
$2.30
PALM
BEACH GARDENS, Fla., July 28,
2022 /PRNewswire/ -- Carrier Global Corporation
(NYSE:CARR), the leading global provider of healthy, safe,
sustainable and intelligent building and cold chain solutions,
today reported financial results for the second quarter of 2022 and
increased its full-year earnings outlook.
"Our strong results in the second quarter and first half of 2022
underscore the strength of Carrier's balanced business model, and I
want to thank the Carrier team for another solid quarter despite
the challenging supply chain environment," said Carrier Chairman
& CEO David Gitlin. "We continue
to gain traction on digitally-enabled life-cycle solutions as we
delivered double-digit aftermarket growth in the quarter and
further expanded customer adoption of our Abound and Lynx digital
platforms. We now expect to be price/cost positive for the
full year and will continue to invest in differentiated technology
to address key secular trends such as sustainability and healthy
indoor environments. We are also excited for the
opportunities that our combined Carrier and Toshiba Carrier
Corporation portfolio and enhanced market position present in the
fast-growing Variable Refrigerant Flow, international light
commercial and heat pump markets."
Second Quarter 2022 Results
Carrier's second quarter sales of $5.2
billion were down 4% compared to the prior year driven by
the Chubb divestiture, but organic sales grew 7% over the same
period. Sales strength continued in the HVAC segment, with
North America residential and
light commercial up double-digits in the quarter. Commercial
HVAC strength also continued, with orders up double digits for the
sixth consecutive quarter. Refrigeration sales were up 9%
organically, with both transport and commercial refrigeration up
high single-digits. Sales for the Fire & Security segment were
up 3% organically. Excluding Chubb sales from the second quarter of
2021, Fire & Security segment sales were up 4%.
GAAP operating profit in the quarter of $819 million was up 5% from last year and
adjusted operating profit of $857
million was up 4% despite lower reported sales. Strong
price realization helped mitigate continued supply chain
challenges. Price/cost was positive in the second
quarter.
Net income was $573 million and
adjusted net income was $599 million.
GAAP EPS was $0.67 and adjusted EPS
was $0.69. Net cash flows from
operating activities were $32 million
and capital expenditures were $66
million, resulting in a free cash outflow of $34 million. The outflow was the result of tax
payments related to the gain on the Chubb sale, an increase in
receivables driven by strong sales at the end of the quarter, and
supply chain challenges continuing to impact inventory
levels. During the second quarter, Carrier repurchased
$273 million of its common
stock.
Updated Full-Year 2022 Outlook**
Carrier is announcing the following updated outlook for
2022. In addition to improvement in the base business, the
revised 2022 outlook includes approximately $800 million of incremental sales from the
consolidation of Toshiba Carrier Corporation. The Company
anticipates closing the acquisition in early August.
|
Prior 2022
Outlook
|
Updated 2022
Outlook
Excluding Toshiba Carrier
Corporation
|
Updated 2022
Outlook
Including Toshiba Carrier
Corporation
|
Sales
|
~$20B
Organic* up
HSD
FX
~(1%)
Acq / Div, net
~(9%)
|
~$20B
Organic* up
HSD
FX
~(3%)
Acq / Div, net
~(9%)
|
~$20.8B
Organic* up
HSD
FX
~(3%)
Acq / Div, net
~(5%)
|
Adjusted Operating
Margin*
|
Up ~75 bps
Y/Y
|
Up ~75 bps
Y/Y
|
Up ~40 bps
Y/Y
|
Adjusted
EPS*
|
$2.20 -
$2.30
|
$2.25 -
$2.35
|
$2.25 -
$2.35
|
Free Cash
Flow*1
|
~$1.65B
|
~$1.65B
|
~$1.65B
|
|
*Note: When the
company provides expectations for organic sales, adjusted operating
profit, adjusted operating margin, adjusted EPS and free cash flow
on a forward-looking basis, a reconciliation of the differences
between the non-GAAP expectations and the corresponding GAAP
measures generally is not available without unreasonable effort.
See "Use and Definitions of Non-GAAP Financial Measures" below for
additional information.
|
|
**As of July 28,
2022
|
1Includes
~$200M in tax payments on Chubb gain
|
Following the close of the Toshiba Carrier Corporation
acquisition, Carrier intends to exclude the impact of amortization
of acquired intangibles from its non-GAAP financial measures
including adjusted operating profit, adjusted net income and
adjusted EPS. Amortization of acquired intangibles, a non-cash
expense, is unrelated to our core operating performance and amounts
can vary significantly depending on the number, timing and size of
acquisitions, among other factors. We believe this adjustment
provides investors meaningful information to better evaluate our
operating performance between periods.
Conference Call
Carrier will host a webcast of its earnings conference call
today, Thursday, July 28, 2022, at
7:30 a.m. ET. To access the webcast,
visit the Events & Presentations section of the Carrier
Investor Relations site at
ir.carrier.com/news-and-events/events-and-presentations or to
listen to the earnings call by phone, participants must
pre-register at Carrier Earnings Call Registration. All registrants
will receive dial-in information and a PIN allowing access to the
live call.
Cautionary Statement
This communication contains
statements which, to the extent they are not statements of
historical or present fact, constitute "forward-looking statements"
under the securities laws. These forward-looking statements are
intended to provide management's current expectations or plans for
Carrier's future operating and financial performance, based on
assumptions currently believed to be valid. Forward-looking
statements can be identified by the use of words such as "believe,"
"expect," "expectations," "plans," "strategy," "prospects,"
"estimate," "project," "target," "anticipate," "will," "should,"
"see," "guidance," "outlook," "confident," "scenario" and other
words of similar meaning in connection with a discussion of future
operating or financial performance or the separation from United
Technologies Corporation (the "Separation"), since renamed Raytheon
Technologies Corporation. Forward-looking statements may include,
among other things, statements relating to future sales, earnings,
cash 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, the estimated
costs associated with the Separation, Carrier's plans with respect
to its indebtedness and other statements that are not historical
facts. All forward-looking statements involve risks, uncertainties
and other factors that may cause actual results to differ
materially from those expressed or implied in the forward-looking
statements. For additional information on identifying factors that
may cause actual results to vary materially from those stated in
forward-looking statements, see Carrier's reports on Forms 10-K,
10-Q and 8-K filed with or furnished to the U.S. Securities and
Exchange Commission from time to time. Any forward-looking
statement speaks only as of the date on which it is made, and
Carrier assumes no obligation to update or revise such statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law.
CARR-IR
Contact:
|
Media
Inquiries
|
|
Ashley
Barrie
|
|
561-365-1260
|
|
Ashley.Barrie@Carrier.com
|
|
|
|
Investor
Relations
|
|
Sam
Pearlstein
|
|
561-365-2251
|
|
Sam.Pearlstein@Carrier.com
|
SELECTED FINANCIAL DATA, NON-GAAP MEASURES AND
DEFINITIONS
Following are tables that present selected financial data of
Carrier Global Corporation ("Carrier"). Also included are
reconciliations of non-GAAP measures to their most comparable GAAP
measures.
Use and Definitions of Non-GAAP Financial
Measures
Carrier Global Corporation ("Carrier") reports its
financial results in accordance with accounting principles
generally accepted in the United
States ("GAAP"). We supplement the reporting of our
financial information determined under GAAP with certain non-GAAP
financial information. The non-GAAP information presented provides
investors with additional useful information, but should not be
considered in isolation or as substitutes for the related GAAP
measures. Moreover, other companies may define non-GAAP measures
differently, which limits the usefulness of these measures for
comparisons with such other companies. We encourage investors to
review our financial statements and publicly filed reports in their
entirety and not to rely on any single financial measure. A
reconciliation of the non-GAAP measures to the corresponding
amounts prepared in accordance with GAAP appears in the tables in
this Appendix. The tables provide additional information as to the
items and amounts that have been excluded from the adjusted
measures.
Organic sales, adjusted operating profit, adjusted operating
margin, incremental margins / earnings conversion, earnings before
interest, taxes and depreciation and amortization ("EBITDA"),
adjusted EBITDA, adjusted net income, adjusted earnings per share
("EPS"), adjusted interest expense, net, adjusted effective tax
rate and net debt are non-GAAP financial measures.
Organic sales represents consolidated net sales (a GAAP
measure), excluding the impact of foreign currency translation,
acquisitions and divestitures completed in the preceding twelve
months and other significant items of a nonoperational nature
(hereinafter referred to as "other significant items"). Adjusted
operating profit represents operating profit (a GAAP measure),
excluding restructuring costs and other significant items. Adjusted
operating margin represents adjusted operating profit as a
percentage of net sales (a GAAP measure). Incremental margins /
earnings conversion represents the year-over-year change in
adjusted operating profit divided by the year-over-year change in
net sales. EBITDA represents net income attributable to common
shareholders (a GAAP measure), adjusted for interest income and
expense, income tax expense, and depreciation and amortization.
Adjusted EBITDA represents EBITDA, as calculated above, excluding
non-service pension benefit, non-controlling interest in
subsidiaries' earnings from operations, restructuring costs and
other significant items. Adjusted net income represents net income
attributable to common shareowners (a GAAP measure), excluding
restructuring costs and other significant items. Adjusted EPS
represents diluted earnings per share (a GAAP measure), excluding
restructuring costs and other significant items. Adjusted interest
expense, net represents interest expense (a GAAP measure) and
interest income (a GAAP measure), net excluding other significant
items. The adjusted effective tax rate represents the effective tax
rate (a GAAP measure), excluding restructuring costs and other
significant items. Net debt represents long-term debt (a GAAP
measure) less cash and cash equivalents. For the business segments,
when applicable, adjustments of operating profit and operating
margins represent operating profit, excluding restructuring and
other significant items.
Free cash flow is a non-GAAP financial measure that represents
net cash flows provided by operating activities (a GAAP measure)
less capital expenditures. Management believes free cash flow is a
useful measure of liquidity and an additional basis for assessing
Carrier's ability to fund its activities, including the financing
of acquisitions, debt service, repurchases of Carrier's common
stock and distribution of earnings to shareowners.
Orders are contractual commitments with customers to provide
specified goods or services for an agreed upon price and may not be
subject to penalty if cancelled.
When we provide our expectations for organic sales, adjusted
operating profit, adjusted operating margin, adjusted interest
expense, net, adjusted effective tax rate, incremental
margins/earnings conversion, adjusted EPS and free cash flow on a
forward-looking basis, a reconciliation of the differences between
the non-GAAP expectations and the corresponding GAAP measures
(expected net sales, operating profit, operating margin, interest
expense, effective tax rate, incremental operating margin, diluted
EPS and net cash flows provided by operating activities) generally
is not available without unreasonable effort due to potentially
high variability, complexity and low visibility as to the items
that would be excluded from the GAAP measure in the relevant future
period, such as unusual gains and losses, the ultimate outcome of
pending litigation, fluctuations in foreign currency exchange
rates, the impact and timing of potential acquisitions and
divestitures, future restructuring costs, and other structural
changes or their probable significance. The variability of the
excluded items may have a significant, and potentially
unpredictable, impact on our future GAAP results.
Carrier Global
Corporation
|
Condensed
Consolidated Statement of Operations
|
|
|
(Unaudited)
|
|
For the Three Months
Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
(In millions,
except per share amounts)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
sales:
|
|
|
|
|
|
|
|
Product
sales
|
$
4,662
|
|
$
4,584
|
|
$
8,832
|
|
$
8,448
|
Service
sales
|
549
|
|
856
|
|
1,033
|
|
1,691
|
Total Net
sales
|
5,211
|
|
5,440
|
|
9,865
|
|
10,139
|
Costs and
expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
(3,363)
|
|
(3,235)
|
|
(6,361)
|
|
(5,959)
|
Cost of services
sold
|
(401)
|
|
(586)
|
|
(764)
|
|
(1,167)
|
Research and
development
|
(122)
|
|
(125)
|
|
(247)
|
|
(246)
|
Selling, general and
administrative
|
(614)
|
|
(813)
|
|
(1,215)
|
|
(1,556)
|
Total Costs and
expenses
|
(4,500)
|
|
(4,759)
|
|
(8,587)
|
|
(8,928)
|
Equity method
investment net earnings
|
101
|
|
87
|
|
159
|
|
125
|
Other income
(expense), net
|
7
|
|
15
|
|
1,119
|
|
18
|
Operating
profit
|
819
|
|
783
|
|
2,556
|
|
1,354
|
Non-service pension
(expense) benefit
|
(1)
|
|
19
|
|
(2)
|
|
37
|
Interest (expense)
income, net
|
(61)
|
|
(71)
|
|
(109)
|
|
(164)
|
Income from
operations before income taxes
|
757
|
|
731
|
|
2,445
|
|
1,227
|
Income tax (expense)
benefit
|
(170)
|
|
(234)
|
|
(471)
|
|
(338)
|
Net income from
operations
|
587
|
|
497
|
|
1,974
|
|
889
|
Less: Non-controlling
interest in subsidiaries' earnings from operations
|
14
|
|
10
|
|
22
|
|
18
|
Net income
attributable to common shareowners
|
$
573
|
|
$
487
|
|
$
1,952
|
|
$
871
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
$
0.68
|
|
$
0.56
|
|
$
2.30
|
|
$
1.00
|
Diluted
|
$
0.67
|
|
$
0.55
|
|
$
2.25
|
|
$
0.98
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
845.7
|
|
868.7
|
|
849.5
|
|
869.0
|
Diluted
|
862.7
|
|
890.9
|
|
868.4
|
|
890.4
|
Carrier Global
Corporation
|
Condensed
Consolidated Balance Sheet
|
|
|
|
(Unaudited)
|
(In
millions)
|
|
June 30,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
3,017
|
|
$
2,987
|
Accounts receivable,
net
|
|
2,823
|
|
2,403
|
Contract assets,
current
|
|
712
|
|
503
|
Inventories,
net
|
|
2,350
|
|
1,970
|
Assets held for
sale
|
|
—
|
|
3,168
|
Other assets,
current
|
|
374
|
|
376
|
Total current
assets
|
|
9,276
|
|
11,407
|
Future income tax
benefits
|
|
566
|
|
563
|
Fixed assets,
net
|
|
1,805
|
|
1,826
|
Operating lease
right-of-use assets
|
|
595
|
|
640
|
Intangible assets,
net
|
|
458
|
|
509
|
Goodwill
|
|
9,067
|
|
9,349
|
Pension and
post-retirement assets
|
|
31
|
|
43
|
Equity method
investments
|
|
1,671
|
|
1,593
|
Other assets
|
|
193
|
|
242
|
Total
Assets
|
|
$
23,662
|
|
$
26,172
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Accounts
payable
|
|
$
2,403
|
|
$
2,334
|
Accrued
liabilities
|
|
2,430
|
|
2,561
|
Contract liabilities,
current
|
|
444
|
|
415
|
Liabilities held for
sale
|
|
—
|
|
1,134
|
Current portion of
long-term debt
|
|
269
|
|
183
|
Total current
liabilities
|
|
5,546
|
|
6,627
|
Long-term
debt
|
|
8,298
|
|
9,513
|
Future pension and
post-retirement obligations
|
|
366
|
|
380
|
Future income tax
obligations
|
|
335
|
|
354
|
Operating lease
liabilities
|
|
490
|
|
527
|
Other long-term
liabilities
|
|
1,635
|
|
1,677
|
Total
Liabilities
|
|
16,670
|
|
19,078
|
|
|
|
|
|
Equity
|
|
|
|
|
Common
stock
|
|
9
|
|
9
|
Treasury
stock
|
|
(1,543)
|
|
(529)
|
Additional paid-in
capital
|
|
5,441
|
|
5,411
|
Retained
earnings
|
|
4,564
|
|
2,865
|
Accumulated other
comprehensive loss
|
|
(1,775)
|
|
(989)
|
Non-controlling
interest
|
|
296
|
|
327
|
Total
Equity
|
|
6,992
|
|
7,094
|
Total Liabilities
and Equity
|
|
$
23,662
|
|
$
26,172
|
Carrier Global
Corporation
|
Condensed
Consolidated Statement of Cash Flows
|
|
|
(Unaudited)
|
|
|
For the Six Months
Ended
June 30,
|
(In
millions)
|
|
2022
|
|
2021
|
Operating
Activities
|
|
|
|
|
Net income from
operations
|
|
$
1,974
|
|
$
889
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
155
|
|
168
|
Deferred income tax
provision
|
|
(17)
|
|
33
|
Stock-based
compensation costs
|
|
41
|
|
40
|
Equity method
investment net earnings
|
|
(159)
|
|
(125)
|
(Gain) loss on
extinguishment of debt
|
|
(36)
|
|
—
|
(Gain) loss on sale of
investments
|
|
(1,119)
|
|
—
|
Changes in operating
assets and liabilities
|
|
|
|
|
Accounts receivable,
net
|
|
(483)
|
|
(288)
|
Contract assets,
current
|
|
(224)
|
|
(41)
|
Inventories,
net
|
|
(435)
|
|
(210)
|
Other assets,
current
|
|
(37)
|
|
(27)
|
Accounts payable and
accrued liabilities
|
|
79
|
|
368
|
Contract liabilities,
current
|
|
42
|
|
42
|
Defined benefit plan
contributions
|
|
(6)
|
|
(27)
|
Distributions from
equity method investments
|
|
15
|
|
42
|
Other operating
activities, net
|
|
40
|
|
(119)
|
Net cash flows
provided by (used in) operating activities
|
|
(170)
|
|
745
|
Investing
Activities
|
|
|
|
|
Capital
expenditures
|
|
(122)
|
|
(132)
|
Investments in
businesses, net of cash acquired
|
|
(38)
|
|
(167)
|
Disposition of
businesses
|
|
2,944
|
|
1
|
Settlement of
derivative contracts, net
|
|
(123)
|
|
(6)
|
Other investing
activities, net
|
|
(16)
|
|
3
|
Net cash flows
provided by (used in) investing activities
|
|
2,645
|
|
(301)
|
Financing
Activities
|
|
|
|
|
Increase (decrease) in
short-term borrowings, net
|
|
(22)
|
|
(13)
|
Issuance of long-term
debt
|
|
21
|
|
74
|
Repayment of long-term
debt
|
|
(1,127)
|
|
(605)
|
Repurchases of common
stock
|
|
(1,014)
|
|
(130)
|
Dividends paid on
common stock
|
|
(257)
|
|
(209)
|
Dividends paid to
non-controlling interest
|
|
(22)
|
|
(30)
|
Other financing
activities, net
|
|
(13)
|
|
15
|
Net cash flows
provided by (used in) financing activities
|
|
(2,434)
|
|
(898)
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
|
(41)
|
|
(2)
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash
|
|
—
|
|
(456)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
3,025
|
|
3,120
|
Cash, cash equivalents
and restricted cash, end of period
|
|
3,025
|
|
2,664
|
Less: restricted
cash
|
|
8
|
|
34
|
Cash and cash
equivalents, end of period
|
|
$
3,017
|
|
$
2,630
|
Carrier Global
Corporation
|
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP)
|
Operating
Profit
|
|
|
(Unaudited)
|
|
For the Three Months
Ended June 30, 2022
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations and
Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
3,388
|
|
$
1,041
|
|
$
887
|
|
$
(105)
|
|
$
—
|
|
$
5,211
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
585
|
|
$
147
|
|
$
134
|
|
$
(16)
|
|
$
(31)
|
|
$
819
|
Reported operating
margin
|
17.3 %
|
|
14.1 %
|
|
15.1 %
|
|
|
|
|
|
15.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
2
|
|
$
6
|
|
$
3
|
|
$
—
|
|
$
2
|
|
$
13
|
Charge resulting from
legal matter
|
22
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22
|
Acquisition and other
related costs
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
7
|
Russia/Ukraine asset
impairment
|
—
|
|
(1)
|
|
(3)
|
|
—
|
|
—
|
|
(4)
|
Total adjustments to
operating profit
|
$
24
|
|
$
5
|
|
$
—
|
|
$
—
|
|
$
9
|
|
$
38
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
609
|
|
$
152
|
|
$
134
|
|
$
(16)
|
|
$
(22)
|
|
$
857
|
Adjusted operating
margin
|
18.0 %
|
|
14.6 %
|
|
15.1 %
|
|
|
|
|
|
16.4 %
|
|
|
|
(Unaudited)
|
|
For the Three Months
Ended June 30, 2021
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations and
Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
3,120
|
|
$
1,021
|
|
$
1,403
|
|
$
(104)
|
|
$
—
|
|
$
5,440
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
573
|
|
$
123
|
|
$
148
|
|
$
(23)
|
|
$
(38)
|
|
$
783
|
Reported operating
margin
|
18.4 %
|
|
12.0 %
|
|
10.5 %
|
|
|
|
|
|
14.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
7
|
|
$
3
|
|
$
9
|
|
$
—
|
|
$
2
|
|
$
21
|
Acquisition and other
related costs
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
Chubb transaction
costs
|
—
|
|
—
|
|
12
|
|
—
|
|
—
|
|
12
|
Separation
costs
|
—
|
|
—
|
|
—
|
|
2
|
|
1
|
|
3
|
Total adjustments to
operating profit
|
$
9
|
|
$
3
|
|
$
21
|
|
$
2
|
|
$
3
|
|
$
38
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
582
|
|
$
126
|
|
$
169
|
|
$
(21)
|
|
$
(35)
|
|
$
821
|
Adjusted operating
margin
|
18.7 %
|
|
12.3 %
|
|
12.0 %
|
|
|
|
|
|
15.1 %
|
Carrier Global
Corporation
|
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP)
|
Operating
Profit
|
|
|
(Unaudited)
|
|
For the Six Months
Ended June 30, 2022
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations and
Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
6,358
|
|
$
2,017
|
|
$
1,705
|
|
$
(215)
|
|
$
—
|
|
$
9,865
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
1,055
|
|
$
254
|
|
$
1,352
|
|
$
(40)
|
|
$
(65)
|
|
$
2,556
|
Reported operating
margin
|
16.6 %
|
|
12.6 %
|
|
79.3 %
|
|
|
|
|
|
25.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
6
|
|
$
6
|
|
$
9
|
|
$
—
|
|
$
2
|
|
$
23
|
Chubb gain
|
—
|
|
—
|
|
(1,112)
|
|
—
|
|
—
|
|
(1,112)
|
Charge resulting from
legal matter
|
22
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22
|
Acquisition and other
related costs
|
—
|
|
—
|
|
—
|
|
—
|
|
13
|
|
13
|
Russia/Ukraine asset
impairment
|
—
|
|
4
|
|
1
|
|
—
|
|
—
|
|
5
|
Total adjustments to
operating profit
|
$
28
|
|
$
10
|
|
$ (1,102)
|
|
$
—
|
|
$
15
|
|
$ (1,049)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
1,083
|
|
$
264
|
|
$
250
|
|
$
(40)
|
|
$
(50)
|
|
$
1,507
|
Adjusted operating
margin
|
17.0 %
|
|
13.1 %
|
|
14.7 %
|
|
|
|
|
|
15.3 %
|
|
|
|
(Unaudited)
|
|
For the Six Months
Ended June 30, 2021
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations and
Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
5,606
|
|
$
2,026
|
|
$
2,707
|
|
$
(200)
|
|
$
—
|
|
$ 10,139
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
938
|
|
$
250
|
|
$
298
|
|
$
(63)
|
|
$
(69)
|
|
$
1,354
|
Reported operating
margin
|
16.7 %
|
|
12.3 %
|
|
11.0 %
|
|
|
|
|
|
13.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
11
|
|
$
5
|
|
20
|
|
$
—
|
|
$
3
|
|
$
39
|
Acquisition and other
related costs
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
Chubb transaction
costs
|
—
|
|
—
|
|
15
|
|
—
|
|
—
|
|
15
|
Separation
costs
|
—
|
|
—
|
|
—
|
|
17
|
|
2
|
|
19
|
Total adjustments to
operating profit
|
$
13
|
|
$
5
|
|
$
35
|
|
$
17
|
|
$
5
|
|
$
75
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
951
|
|
$
255
|
|
$
333
|
|
$
(46)
|
|
$
(64)
|
|
$
1,429
|
Adjusted operating
margin
|
17.0 %
|
|
12.6 %
|
|
12.3 %
|
|
|
|
|
|
14.1 %
|
Carrier Global
Corporation
|
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
|
Net Income, Earnings
Per Share, and Effective Tax Rate
|
|
|
(Unaudited)
|
|
For the Three Months
Ended June 30, 2022
|
|
For the Six Months
Ended June 30, 2022
|
(In millions,
except per share amounts)
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Net sales
|
$ 5,211
|
|
$
—
|
|
$
5,211
|
|
$
9,865
|
|
$
—
|
|
$ 9,865
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
819
|
|
38
|
a
|
$
857
|
|
$
2,556
|
|
(1,049)
|
a
|
$ 1,507
|
Operating
margin
|
15.7 %
|
|
|
|
16.4 %
|
|
25.9 %
|
|
|
|
15.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
before income taxes
|
$
757
|
|
38
|
a,b
|
$
795
|
|
$
2,445
|
|
(1,077)
|
a,b
|
$ 1,368
|
Income tax
expense
|
$
(170)
|
|
(12)
|
c
|
$
(182)
|
|
$ (471)
|
|
197
|
c
|
$
(274)
|
Income tax
rate
|
22.5 %
|
|
|
|
22.9 %
|
|
19.3 %
|
|
|
|
20.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common shareowners
|
$
573
|
|
$
26
|
|
$
599
|
|
$
1,952
|
|
$
(880)
|
|
$ 1,072
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
|
|
$
13
|
a
|
|
|
|
|
$
23
|
a
|
|
Chubb gain
|
|
|
—
|
a
|
|
|
|
|
(1,112)
|
a
|
|
Charge resulting from
legal matter
|
|
|
22
|
a
|
|
|
|
|
22
|
a
|
|
Acquisition and other
related costs
|
|
|
7
|
a
|
|
|
|
|
13
|
a
|
|
Russia/Ukraine asset
impairment
|
|
|
(4)
|
a
|
|
|
|
|
5
|
a
|
|
Debt extinguishment
(gain), net (1)
|
|
|
—
|
b
|
|
|
|
|
(28)
|
b
|
|
Total
adjustments
|
|
|
$
38
|
|
|
|
|
|
$
(1,077)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect on
adjustments above
|
|
|
$
(7)
|
|
|
|
|
|
$
202
|
|
|
Tax specific
adjustments
|
|
|
(5)
|
|
|
|
|
|
(5)
|
|
|
Total tax
adjustments
|
|
|
$
(12)
|
c
|
|
|
|
|
$
197
|
c
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding -
Diluted
|
862.7
|
|
|
|
862.7
|
|
868.4
|
|
|
|
868.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
$
0.67
|
|
|
|
$
0.69
|
|
$
2.25
|
|
|
|
$
1.23
|
(1)
|
The Company repurchased
approximately $1.15 billion of aggregate principal senior notes on
March 30, 2022 and recognized a net gain of $33 million and
wrote-off $5 million of unamortized deferred financing costs in
Interest (expense) income, net on the accompanying Unaudited
Condensed Consolidated Statement of Operations.
|
Carrier Global
Corporation
|
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
|
Net Income, Earnings
Per Share, and Effective Tax Rate
|
|
|
(Unaudited)
|
|
For the Three Months
Ended June 30, 2021
|
|
For the Six Months
Ended June 30, 2021
|
(In millions,
except per share amounts)
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Net sales
|
$
5,440
|
|
$
—
|
|
$
5,440
|
|
$
10,139
|
|
$
—
|
|
$
10,139
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
783
|
|
38
|
a
|
$
821
|
|
$
1,354
|
|
75
|
a
|
$ 1,429
|
Operating
margin
|
14.4 %
|
|
|
|
15.1 %
|
|
13.4 %
|
|
|
|
14.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
before income taxes
|
$
731
|
|
38
|
a,b
|
$
769
|
|
$
1,227
|
|
94
|
a,b
|
$ 1,321
|
Income tax
expense
|
$
(234)
|
|
42
|
c
|
$
(192)
|
|
$ (338)
|
|
29
|
c
|
$
(309)
|
Income tax
rate
|
32.0 %
|
|
|
|
25.0 %
|
|
27.5 %
|
|
|
|
23.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common shareowners
|
$
487
|
|
$
80
|
|
$
567
|
|
$
871
|
|
$
123
|
|
$
994
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
|
|
$
21
|
a
|
|
|
|
|
$
39
|
a
|
|
Acquisition and other
related costs
|
|
|
14
|
a
|
|
|
|
|
17
|
a
|
|
Separation
costs
|
|
|
3
|
a
|
|
|
|
|
19
|
a
|
|
Debt prepayment
costs
|
|
|
—
|
b
|
|
|
|
|
19
|
b
|
|
Total
adjustments
|
|
|
$
38
|
|
|
|
|
|
$
94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect on
adjustments above
|
|
|
$
(1)
|
|
|
|
|
|
$
(14)
|
|
|
Tax specific
adjustments
|
|
|
43
|
|
|
|
|
|
43
|
|
|
Total tax
adjustments
|
|
|
$
42
|
c
|
|
|
|
|
$
29
|
c
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding -
Diluted
|
890.9
|
|
|
|
890.9
|
|
890.4
|
|
|
|
890.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
$
0.55
|
|
|
|
$
0.64
|
|
$
0.98
|
|
|
|
$
1.12
|
Carrier Global
Corporation
|
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
|
|
Components of
Changes in Net Sales
|
|
Three Months Ended
June 30, 2022 Compared with Three Months Ended June
30, 2021
|
|
(Unaudited)
|
|
Factors Contributing
to Total % change in Net Sales
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
HVAC
|
8 %
|
|
(1) %
|
|
2 %
|
|
— %
|
|
9 %
|
Refrigeration
|
9 %
|
|
(7) %
|
|
— %
|
|
— %
|
|
2 %
|
Fire &
Security
|
3 %
|
|
(2) %
|
|
(38) %
|
|
— %
|
|
(37) %
|
Consolidated
|
7 %
|
|
(3) %
|
|
(8) %
|
|
— %
|
|
(4) %
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2022 Compared with Six Months Ended June 30,
2021
|
|
(Unaudited)
|
|
Factors Contributing
to Total % change in Net Sales
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
HVAC
|
12 %
|
|
(1) %
|
|
3 %
|
|
(1) %
|
|
13 %
|
Refrigeration
|
5 %
|
|
(5) %
|
|
— %
|
|
— %
|
|
— %
|
Fire &
Security
|
4 %
|
|
(2) %
|
|
(39) %
|
|
— %
|
|
(37) %
|
Consolidated
|
9 %
|
|
(3) %
|
|
(9) %
|
|
— %
|
|
(3) %
|
Net Sales Excluding
Impact of Chubb
|
|
(Unaudited)
|
|
For the Three Months
Ended June 30,
2021
|
|
For the Six Months
Ended
June 30, 2021
|
|
Carrier
|
|
Fire and
Security
|
|
Carrier
|
|
Fire and
Security
|
Net Sales:
|
|
|
|
|
|
|
|
Reported
|
$
5,440
|
|
$
1,403
|
|
$
10,139
|
|
$
2,707
|
Chubb
|
(554)
|
|
(554)
|
|
(1,102)
|
|
(1,102)
|
Net sales
excluding impact of Chubb
|
$
4,886
|
|
$
849
|
|
$
9,037
|
|
$
1,605
|
|
|
|
|
|
|
|
|
Percentage increase
in Net sales excluding impact of Chubb
|
7 %
|
|
4 %
|
|
9 %
|
|
6 %
|
Carrier Global
Corporation
|
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
|
|
Free Cash Flow
Reconciliation
|
|
|
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
Q1
|
|
Q2
|
(In
millions)
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
2022
|
|
2022
|
Net cash flows provided
by (used in) operating activities
|
|
$
184
|
|
$
561
|
|
$
579
|
|
$
913
|
|
$ 2,237
|
|
$
(202)
|
|
$
32
|
Less: Capital
expenditures
|
|
53
|
|
79
|
|
74
|
|
138
|
|
344
|
|
56
|
|
66
|
Free cash
flow
|
|
$
131
|
|
$
482
|
|
$
505
|
|
$
775
|
|
$
1,893
|
|
$
(258)
|
|
$
(34)
|
Net Debt
Reconciliation
|
|
|
(Unaudited)
|
(In
millions)
|
|
June 30,
2022
|
|
December 31,
2021
|
Long-term
debt
|
|
$
8,298
|
|
$
9,513
|
Current portion of
long-term debt
|
|
269
|
|
183
|
Less: Cash and cash
equivalents
|
|
3,017
|
|
2,987
|
Net
debt
|
|
$
5,550
|
|
$
6,709
|
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SOURCE Carrier Global Corporation