Board approves $2
billion share repurchase authorization
- Net sales up 2% versus 2021; organic sales up 8%
- GAAP EPS of $1.53 and adjusted
EPS of $0.70
- Net cash flows from operating activities of $790 million; free cash flow of $699 million
- Updating 2022 adjusted EPS* guidance range to $2.30 to $2.35 from
$2.25 to $2.35
- Updating 2022 free cash flow* guidance to ~$1.4 billion from ~$1.65
billion
- Carrier's Board authorizes $2
billion share repurchase program
PALM
BEACH GARDENS, Fla., Oct. 27,
2022 /PRNewswire/ -- Carrier Global Corporation
(NYSE: CARR), the leading global provider of healthy, safe,
sustainable and intelligent building and cold chain solutions,
reported another quarter of strong financial results and updated
its full-year adjusted EPS outlook to the high-end of its prior
guidance.
"Carrier delivered another strong quarter," said Carrier
Chairman & CEO David Gitlin.
"Our continued focus on innovation and digitally enabled lifecycle
solutions provides differentiated outcomes to customers and
positions us to benefit from compelling secular trends. Our
strong aftermarket growth through the first nine months of the year
further strengthens the resiliency of our business model. Our new
share repurchase authorization demonstrates our confidence in
Carrier's long-term strategy and commitment to delivering
shareholder value through disciplined capital allocation."
Third Quarter 2022 Results
Carrier's third quarter sales of $5.5 billion were up 2% compared to the
prior year, despite the impact from the Chubb divestiture and
foreign exchange. Organic sales grew 8% while the Chubb divestiture
reduced sales by about 10%, acquisitions contributed 8% and
currency translation reduced sales by 4%. The Toshiba Carrier
Corporation acquisition closed Aug. 1
and represented substantially all the sales growth from
acquisitions in the quarter.
HVAC had another strong organic growth quarter with residential
and light commercial sales up 12% and commercial HVAC growing 15%.
Commercial HVAC continued to see strong order trends, up double
digits for the seventh consecutive quarter. Refrigeration sales
were down 1% organically due to supply shortages and a decline in
Container sales. Organic sales for the Fire & Security segment
were up 5%.
GAAP operating profit in the quarter of $1.5 billion was up substantially due to a
$732 million gain related to the
acquisition of Toshiba Carrier Corporation. Adjusted operating
profit of $861 million was flat
compared to last year. Strong price realization helped mitigate
continued supply chain challenges. Price/cost remained positive in
the third quarter across all three segments.
Net income was $1.3 billion and
adjusted net income was $600 million. GAAP EPS was
$1.53 and adjusted EPS was
$0.70. Net cash flows from operating
activities were $790 million and capital expenditures
were $91 million, resulting in free cash flow of $699 million. Despite an improved free cash flow
quarter, Carrier reduced full-year guidance from $1.65 billion to $1.4
billion as supply chain improvements are taking place later
in the year than previously anticipated. During the third quarter,
Carrier repurchased $247 million of its common stock.
On Oct. 25, 2022, Carrier Global
Corporation's Board of Directors approved a $2 billion share repurchase authorization. Share
repurchases will take place at the company's discretion in the open
market or through one or more other public or private transactions,
subject to, among other things, market conditions, share price,
compliance with securities laws and regulatory requirements and
other factors. The stock repurchase authorization has no time limit
and may be modified, suspended or discontinued at any time. With
the remaining portion of the prior authorization, Carrier currently
has about $2.3 billion of repurchase
authorization. This authorization is a key component of the
company's capital allocation plans, which also includes
acquisitions and dividends to help position the company for
strategic growth and to generate attractive shareowner
returns.
Updated Full-Year 2022 Outlook**
Carrier is announcing the following updated outlook for
2022.
|
Prior 2022
Outlook
|
Updated 2022
Outlook
|
Sales
|
~$20.8B Organic*
up HSD FX
~(3%) Acq / Div, net
~(5%)
|
~$20.4B Organic*
up HSD FX
~(4%) Acq / Div, net
~(5%)
|
Adjusted Operating
Margin*
|
Up ~40 bps
Y/Y
|
Up ~60 bps
Y/Y
|
Adjusted
EPS*
|
$2.25 -
$2.35
|
$2.30 -
$2.35
|
Free Cash
Flow*1
|
~$1.65B
|
~$1.4B
|
|
*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 Oct. 27,
2022
|
1Includes
~$200M in tax payments on Chubb gain
|
Carrier excludes 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, Oct. 27, 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, amortization of acquired intangibles
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, amortization of acquired intangibles
and other significant items. Adjusted EPS represents diluted
earnings per share (a GAAP measure), excluding restructuring costs,
amortization of acquired intangibles 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,
amortization of acquired intangibles and other significant items.
Net debt represents long-term debt (a GAAP measure) less cash and
cash equivalents (a GAAP measure). For the business segments, when
applicable, adjustments of operating profit and operating margins
represent operating profit, excluding restructuring, amortization
of acquired intangibles 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)
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(In millions,
except per share amounts)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
sales
|
|
|
|
|
|
|
|
Product
sales
|
$
4,891
|
|
$
4,510
|
|
$
13,723
|
|
$
12,958
|
Service
sales
|
560
|
|
831
|
|
1,593
|
|
2,522
|
Total Net
sales
|
5,451
|
|
5,341
|
|
15,316
|
|
15,480
|
Costs and
expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
(3,569)
|
|
(3,172)
|
|
(9,930)
|
|
(9,131)
|
Cost of services
sold
|
(405)
|
|
(568)
|
|
(1,169)
|
|
(1,735)
|
Research and
development
|
(143)
|
|
(123)
|
|
(390)
|
|
(369)
|
Selling, general and
administrative
|
(624)
|
|
(748)
|
|
(1,839)
|
|
(2,304)
|
Total Costs and
expenses
|
(4,741)
|
|
(4,611)
|
|
(13,328)
|
|
(13,539)
|
Equity method
investment net earnings
|
63
|
|
76
|
|
222
|
|
201
|
Other income
(expense), net
|
753
|
|
22
|
|
1,872
|
|
40
|
Operating
profit
|
1,526
|
|
828
|
|
4,082
|
|
2,182
|
Non-service pension
(expense) benefit
|
—
|
|
14
|
|
(2)
|
|
51
|
Interest (expense)
income, net
|
(56)
|
|
(74)
|
|
(165)
|
|
(238)
|
Income from
operations before income taxes
|
1,470
|
|
768
|
|
3,915
|
|
1,995
|
Income tax (expense)
benefit
|
(138)
|
|
(288)
|
|
(609)
|
|
(626)
|
Net income from
operations
|
1,332
|
|
480
|
|
3,306
|
|
1,369
|
Less: Non-controlling
interest in subsidiaries' earnings from
operations
|
20
|
|
11
|
|
42
|
|
29
|
Net income
attributable to common shareowners
|
$
1,312
|
|
$
469
|
|
$
3,264
|
|
$
1,340
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
$
1.56
|
|
$
0.54
|
|
$
3.86
|
|
$
1.54
|
Diluted
|
$
1.53
|
|
$
0.53
|
|
$
3.78
|
|
$
1.50
|
Weighted-average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
839.6
|
|
867.6
|
|
846.1
|
|
868.6
|
Diluted
|
856.5
|
|
892.0
|
|
864.3
|
|
890.9
|
Carrier Global
Corporation Condensed Consolidated Balance
Sheet
|
|
|
|
(Unaudited)
|
(In
millions)
|
|
September 30,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,985
|
|
$
2,987
|
Accounts receivable,
net
|
|
3,003
|
|
2,403
|
Contract assets,
current
|
|
666
|
|
503
|
Inventories,
net
|
|
2,664
|
|
1,970
|
Assets held for
sale
|
|
—
|
|
3,168
|
Other assets,
current
|
|
422
|
|
376
|
Total current
assets
|
|
9,740
|
|
11,407
|
Future income tax
benefits
|
|
619
|
|
563
|
Fixed assets,
net
|
|
2,055
|
|
1,826
|
Operating lease
right-of-use assets
|
|
625
|
|
640
|
Intangible assets,
net
|
|
1,309
|
|
509
|
Goodwill
|
|
9,621
|
|
9,349
|
Pension and
post-retirement assets
|
|
23
|
|
43
|
Equity method
investments
|
|
1,151
|
|
1,593
|
Other assets
|
|
207
|
|
242
|
Total
Assets
|
|
$
25,350
|
|
$
26,172
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Accounts
payable
|
|
$
2,817
|
|
$
2,334
|
Accrued
liabilities
|
|
2,537
|
|
2,561
|
Contract liabilities,
current
|
|
440
|
|
415
|
Liabilities held for
sale
|
|
—
|
|
1,134
|
Current portion of
long-term debt
|
|
219
|
|
183
|
Total current
liabilities
|
|
6,013
|
|
6,627
|
Long-term
debt
|
|
8,670
|
|
9,513
|
Future pension and
post-retirement obligations
|
|
431
|
|
380
|
Future income tax
obligations
|
|
522
|
|
354
|
Operating lease
liabilities
|
|
514
|
|
527
|
Other long-term
liabilities
|
|
1,737
|
|
1,677
|
Total
Liabilities
|
|
17,887
|
|
19,078
|
|
|
|
|
|
Equity
|
|
|
|
|
Common
stock
|
|
9
|
|
9
|
Treasury
stock
|
|
(1,791)
|
|
(529)
|
Additional paid-in
capital
|
|
5,463
|
|
5,411
|
Retained
earnings
|
|
5,876
|
|
2,865
|
Accumulated other
comprehensive loss
|
|
(2,405)
|
|
(989)
|
Non-controlling
interest
|
|
311
|
|
327
|
Total
Equity
|
|
7,463
|
|
7,094
|
Total Liabilities
and Equity
|
|
$
25,350
|
|
$
26,172
|
Carrier Global
Corporation Condensed Consolidated Statement of Cash
Flows
|
|
|
(Unaudited)
|
|
|
Nine Months
Ended
September 30,
|
(In
millions)
|
|
2022
|
|
2021
|
Operating
Activities
|
|
|
|
|
Net income from
operations
|
|
$
3,306
|
|
$
1,369
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
257
|
|
251
|
Deferred income tax
provision
|
|
(107)
|
|
69
|
Stock-based
compensation costs
|
|
58
|
|
60
|
Equity method
investment net earnings
|
|
(222)
|
|
(201)
|
Impairment charge on
minority-owned joint venture investments
|
|
—
|
|
2
|
(Gain) loss on
extinguishment of debt
|
|
(36)
|
|
—
|
(Gain) loss on sale of
investments
|
|
(1,844)
|
|
(4)
|
Changes in operating
assets and liabilities
|
|
|
|
|
Accounts receivable,
net
|
|
(433)
|
|
(290)
|
Contract assets,
current
|
|
(201)
|
|
(66)
|
Inventories,
net
|
|
(492)
|
|
(344)
|
Other assets,
current
|
|
(3)
|
|
(20)
|
Accounts payable and
accrued liabilities
|
|
180
|
|
496
|
Contract liabilities,
current
|
|
34
|
|
43
|
Defined benefit plan
contributions
|
|
(10)
|
|
(29)
|
Distributions from
equity method investments
|
|
55
|
|
65
|
Other operating
activities, net
|
|
78
|
|
(77)
|
Net cash flows
provided by (used in) operating activities
|
|
620
|
|
1,324
|
Investing
Activities
|
|
|
|
|
Capital
expenditures
|
|
(213)
|
|
(206)
|
Investments in
businesses, net of cash acquired
|
|
(472)
|
|
(214)
|
Disposition of
businesses
|
|
2,944
|
|
3
|
Settlement of
derivative contracts, net
|
|
(202)
|
|
(18)
|
Other investing
activities, net
|
|
(12)
|
|
9
|
Net cash flows
provided by (used in) investing activities
|
|
2,045
|
|
(426)
|
Financing
Activities
|
|
|
|
|
Increase (decrease) in
short-term borrowings, net
|
|
(125)
|
|
(17)
|
Issuance of long-term
debt
|
|
421
|
|
122
|
Repayment of long-term
debt
|
|
(1,185)
|
|
(692)
|
Repurchases of common
stock
|
|
(1,261)
|
|
(275)
|
Dividends paid on
common stock
|
|
(384)
|
|
(313)
|
Dividends paid to
non-controlling interest
|
|
(22)
|
|
(32)
|
Other financing
activities, net
|
|
(28)
|
|
(18)
|
Net cash flows
provided by (used in) financing activities
|
|
(2,584)
|
|
(1,225)
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
|
(115)
|
|
(15)
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash
|
|
(34)
|
|
(342)
|
Less: Change in cash
balances classified as assets held for sale
|
|
—
|
|
74
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
3,025
|
|
3,120
|
Cash, cash equivalents
and restricted cash, end of period
|
|
2,991
|
|
2,704
|
Less: restricted
cash
|
|
6
|
|
33
|
Cash and cash
equivalents, end of period
|
|
$
2,985
|
|
$
2,671
|
Carrier Global
Corporation Reconciliation of Reported (GAAP) to Adjusted
(Non-GAAP) Operating Profit
|
|
|
(Unaudited)
|
|
Three Months Ended
September 30, 2022
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations
and Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
3,734
|
|
$
923
|
|
$
905
|
|
$
(111)
|
|
$
—
|
|
$
5,451
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
1,314
|
|
$
116
|
|
$
142
|
|
$
(10)
|
|
$
(36)
|
|
$
1,526
|
Reported operating
margin
|
35.2 %
|
|
12.6 %
|
|
15.7 %
|
|
|
|
|
|
28.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
2
|
|
$
3
|
|
$
1
|
|
$
—
|
|
$
—
|
|
$
6
|
Amortization of
acquired intangibles (1)
|
16
|
|
—
|
|
1
|
|
—
|
|
—
|
|
17
|
Acquisition step-up
amortization (2)
|
24
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24
|
Acquisition-related
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
15
|
|
15
|
Chubb gain
|
—
|
|
—
|
|
7
|
|
—
|
|
—
|
|
7
|
TCC
acquisition-related gain (3)
|
(732)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(732)
|
Russia/Ukraine asset
impairment
|
—
|
|
(1)
|
|
(1)
|
|
—
|
|
—
|
|
(2)
|
Total adjustments to
operating profit
|
$
(690)
|
|
$
2
|
|
$
8
|
|
$
—
|
|
$
15
|
|
$
(665)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
624
|
|
$
118
|
|
$
150
|
|
$
(10)
|
|
$
(21)
|
|
$
861
|
Adjusted operating
margin
|
16.7 %
|
|
12.8 %
|
|
16.6 %
|
|
|
|
|
|
15.8 %
|
|
(Unaudited)
|
|
Three Months Ended
September 30, 2021
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations
and Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
3,054
|
|
$
1,011
|
|
$
1,377
|
|
$
(101)
|
|
$
—
|
|
$
5,341
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
573
|
|
$
119
|
|
$
182
|
|
$
(10)
|
|
$
(36)
|
|
$
828
|
Reported operating
margin
|
18.8 %
|
|
11.8 %
|
|
13.2 %
|
|
|
|
|
|
15.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
7
|
|
$
2
|
|
$
3
|
|
$
—
|
|
$
1
|
|
$
13
|
Amortization of
acquired intangibles (1)
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
Acquisition step-up
amortization (2)
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
Chubb transaction
costs
|
—
|
|
—
|
|
13
|
|
—
|
|
1
|
|
14
|
Total adjustments to
operating profit
|
$
17
|
|
$
2
|
|
$
16
|
|
$
—
|
|
$
2
|
|
$
37
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
590
|
|
$
121
|
|
$
198
|
|
$
(10)
|
|
$
(34)
|
|
$
865
|
Adjusted operating
margin
|
19.3 %
|
|
12.0 %
|
|
14.4 %
|
|
|
|
|
|
16.2 %
|
(1) Beginning in Q3 2022, we exclude
the impact of amortization of acquired intangibles from our
non-GAAP financial measures including adjusted operating
profit. 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. Historical periods have
been updated to conform with the current period
presentation.
|
(2) Amortization of the step-up to
fair value of acquired inventory and backlog.
|
(3) The
carrying value of our previously held TCC equity investments were
recognized at fair value at the TCC acquisition date.
|
Carrier Global
Corporation Reconciliation of Reported (GAAP) to Adjusted
(Non-GAAP) Operating Profit
|
|
|
(Unaudited)
|
|
Nine Months Ended
September 30, 2022
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations
and Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
10,092
|
|
$
2,940
|
|
$
2,610
|
|
$
(326)
|
|
$
—
|
|
$
15,316
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
2,369
|
|
$
370
|
|
$
1,494
|
|
$
(50)
|
|
$
(101)
|
|
$
4,082
|
Reported operating
margin
|
23.5 %
|
|
12.6 %
|
|
57.2 %
|
|
|
|
|
|
26.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
8
|
|
$
9
|
|
$
10
|
|
$
—
|
|
$
2
|
|
$
29
|
Amortization of
acquired intangibles (1)
|
24
|
|
—
|
|
3
|
|
—
|
|
—
|
|
27
|
Acquisition step-up
amortization (2)
|
24
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24
|
Acquisition-related
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
28
|
|
28
|
Chubb gain
|
—
|
|
—
|
|
(1,105)
|
|
—
|
|
—
|
|
(1,105)
|
TCC
acquisition-related gain (3)
|
(732)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(732)
|
Russia/Ukraine asset
impairment
|
—
|
|
3
|
|
—
|
|
—
|
|
—
|
|
3
|
Charge resulting from
legal matter
|
22
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22
|
Total adjustments to
operating profit
|
$
(654)
|
|
$
12
|
|
$
(1,092)
|
|
$
—
|
|
$
30
|
|
$
(1,704)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
1,715
|
|
$
382
|
|
$
402
|
|
$
(50)
|
|
$
(71)
|
|
$
2,378
|
Adjusted operating
margin
|
17.0 %
|
|
13.0 %
|
|
15.4 %
|
|
|
|
|
|
15.5 %
|
|
(Unaudited)
|
|
Nine Months Ended
September 30, 2021
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations
and Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
8,660
|
|
$
3,037
|
|
$
4,084
|
|
$
(301)
|
|
$
—
|
|
$ 15,480
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
1,511
|
|
$
369
|
|
$
480
|
|
$
(73)
|
|
$
(105)
|
|
$
2,182
|
Reported operating
margin
|
17.4 %
|
|
12.2 %
|
|
11.8 %
|
|
|
|
|
|
14.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
18
|
|
$
7
|
|
$
23
|
|
$
—
|
|
$
4
|
|
$
52
|
Amortization of
acquired intangibles (1)
|
11
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11
|
Acquisition step-up
amortization (2)
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
Chubb transaction
costs
|
—
|
|
—
|
|
28
|
|
—
|
|
1
|
|
29
|
Separation
costs
|
—
|
|
—
|
|
—
|
|
19
|
|
—
|
|
19
|
Total adjustments to
operating profit
|
$
34
|
|
$
7
|
|
$
51
|
|
$
19
|
|
$
5
|
|
$
116
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
1,545
|
|
$
376
|
|
$
531
|
|
$
(54)
|
|
$
(100)
|
|
$
2,298
|
Adjusted operating
margin
|
17.8 %
|
|
12.4 %
|
|
13.0 %
|
|
|
|
|
|
14.8 %
|
(1) Beginning in Q3 2022, we exclude
the impact of amortization of acquired intangibles from our
non-GAAP financial measures including adjusted operating
profit. 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. Historical periods have
been updated to conform with the current period
presentation.
|
(2) Amortization of the step-up to
fair value of acquired inventory and backlog.
|
(3) The
carrying value of our previously held TCC equity investments were
recognized at fair value at the TCC acquisition date.
|
Carrier Global
Corporation
Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP)
Results
Net Income, Earnings Per Share, and Effective Tax
Rate
|
|
|
(Unaudited)
|
|
Three Months Ended September 30,
2022
|
|
Nine Months Ended September 30,
2022
|
(In millions, except per share
amounts)
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Net sales
|
$
5,451
|
|
$
—
|
|
$
5,451
|
|
$
15,316
|
|
$
—
|
|
$
15,316
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
1,526
|
|
(665)
|
a
|
$ 861
|
|
$
4,082
|
|
(1,704)
|
a
|
$
2,378
|
Operating margin
|
28.0 %
|
|
|
|
15.8 %
|
|
26.7 %
|
|
|
|
15.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
before income taxes
|
$
1,470
|
|
(665)
|
a
|
$ 805
|
|
$
3,915
|
|
(1,732)
|
a,b
|
$
2,183
|
Income tax
expense
|
$ (138)
|
|
(47)
|
c
|
$
(185)
|
|
$ (609)
|
|
148
|
c
|
$
(461)
|
Income tax rate
|
9.4 %
|
|
|
|
23.0 %
|
|
15.6 %
|
|
|
|
21.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common
shareowners
|
$
1,312
|
|
$
(712)
|
|
$ 600
|
|
$
3,264
|
|
$
(1,584)
|
|
$
1,680
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
|
|
$
6
|
a
|
|
|
|
|
$
29
|
a
|
|
Amortization of
acquired intangibles (1)
|
|
|
17
|
a
|
|
|
|
|
27
|
a
|
|
Acquisition step-up
amortization (2)
|
|
|
24
|
a
|
|
|
|
|
24
|
a
|
|
Acquisition-related
costs
|
|
|
15
|
a
|
|
|
|
|
28
|
a
|
|
Chubb gain
|
|
|
7
|
a
|
|
|
|
|
(1,105)
|
a
|
|
TCC acquisition-related
gain (3)
|
|
|
(732)
|
a
|
|
|
|
|
(732)
|
a
|
|
Russia/Ukraine asset
impairment
|
|
|
(2)
|
a
|
|
|
|
|
3
|
a
|
|
Charge resulting from
legal matter
|
|
|
—
|
|
|
|
|
|
22
|
a
|
|
Debt extinguishment
(gain), net (4)
|
|
|
—
|
|
|
|
|
|
(28)
|
b
|
|
Total adjustments
|
|
|
$
(665)
|
|
|
|
|
|
$
(1,732)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect on
adjustments above
|
|
|
$
(15)
|
|
|
|
|
|
$
185
|
|
|
Tax specific
adjustments
|
|
|
(32)
|
|
|
|
|
|
(37)
|
|
|
Total tax adjustments
|
|
|
$
(47)
|
c
|
|
|
|
|
$
148
|
c
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding -
Diluted
|
856.5
|
|
|
|
856.5
|
|
864.3
|
|
|
|
864.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Diluted
|
$
1.53
|
|
|
|
$
0.70
|
|
$
3.78
|
|
|
|
$
1.94
|
(1) Beginning in Q3 2022, we exclude
the impact of amortization of acquired intangibles from our
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. Historical periods have been updated to conform
with the current period
presentation.
|
(2) Amortization of the step-up to
fair value of acquired inventory and backlog.
|
(3) The
carrying value of our previously held TCC equity investments were
recognized at fair value at the TCC acquisition date.
|
(4) 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.
|
Carrier Global
Corporation Reconciliation of Reported (GAAP) to Adjusted
(Non-GAAP) Results Net Income, Earnings Per Share, and
Effective Tax Rate
|
|
|
(Unaudited)
|
|
Three Months Ended
September 30, 2021
|
|
Nine Months Ended
September 30, 2021
|
(In millions,
except per share amounts)
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Net sales
|
$
5,341
|
|
$
—
|
|
$
5,341
|
|
$
15,480
|
|
$
—
|
|
$
15,480
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
828
|
|
37
|
a
|
$
865
|
|
$
2,182
|
|
116
|
a
|
$ 2,298
|
Operating
margin
|
15.5 %
|
|
|
|
16.2 %
|
|
14.1 %
|
|
|
|
14.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
before income
taxes
|
$
768
|
|
37
|
a,b
|
$
805
|
|
$
1,995
|
|
135
|
a,b
|
$ 2,130
|
Income tax
expense
|
$
(288)
|
|
129
|
c
|
$
(159)
|
|
$ (626)
|
|
157
|
c
|
$ (469)
|
Income tax
rate
|
37.5 %
|
|
|
|
19.8 %
|
|
31.4 %
|
|
|
|
22.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common
shareowners
|
$
469
|
|
$
166
|
|
$
635
|
|
$
1,340
|
|
$
292
|
|
$ 1,632
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
|
|
$
13
|
a
|
|
|
|
|
$
52
|
a
|
|
Amortization of
acquired intangibles (1)
|
|
|
7
|
a
|
|
|
|
|
11
|
a
|
|
Acquisition step-up
amortization (2)
|
|
|
3
|
a
|
|
|
|
|
5
|
a
|
|
Chubb transaction
costs
|
|
|
14
|
a
|
|
|
|
|
29
|
a
|
|
Separation
costs
|
|
|
—
|
|
|
|
|
|
19
|
a
|
|
Debt prepayment
costs
|
|
|
—
|
|
|
|
|
|
19
|
b
|
|
Total
adjustments
|
|
|
$
37
|
|
|
|
|
|
$
135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect on
adjustments above
|
|
|
$
(7)
|
|
|
|
|
|
$
(22)
|
|
|
Tax specific
adjustments
|
|
|
136
|
|
|
|
|
|
179
|
|
|
Total tax
adjustments
|
|
|
$
129
|
c
|
|
|
|
|
$
157
|
c
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding -
Diluted
|
892.0
|
|
|
|
892.0
|
|
890.9
|
|
|
|
890.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
$
0.53
|
|
|
|
$
0.71
|
|
$
1.50
|
|
|
|
$
1.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Beginning in Q3 2022, we exclude
the impact of amortization of acquired intangibles from our
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. Historical periods have been updated to conform
with the current period
presentation.
|
(2) Amortization of the step-up to
fair value of acquired inventory and backlog.
|
Carrier Global
Corporation
Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP)
Results
|
|
Components of
Changes in Net Sales
|
|
Three Months Ended
September 30, 2022 Compared with Three
Months Ended September 30, 2021
|
|
(Unaudited)
|
|
Factors Contributing
to Total % change in Net Sales
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
HVAC
|
13 %
|
|
(3) %
|
|
12 %
|
|
— %
|
|
22 %
|
Refrigeration
|
(1) %
|
|
(8) %
|
|
— %
|
|
— %
|
|
(9) %
|
Fire &
Security
|
5 %
|
|
(3) %
|
|
(36) %
|
|
— %
|
|
(34) %
|
Consolidated
|
8 %
|
|
(4) %
|
|
(2) %
|
|
— %
|
|
2 %
|
Nine Months Ended
September 30, 2022 Compared with Nine Months Ended
September 30, 2021
|
|
(Unaudited)
|
|
Factors Contributing
to Total % change in Net Sales
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
HVAC
|
13 %
|
|
— %
|
|
6 %
|
|
(2) %
|
|
17 %
|
Refrigeration
|
3 %
|
|
(6) %
|
|
— %
|
|
— %
|
|
(3) %
|
Fire &
Security
|
4 %
|
|
(2) %
|
|
(38) %
|
|
— %
|
|
(36) %
|
Consolidated
|
9 %
|
|
(3) %
|
|
(7) %
|
|
— %
|
|
(1) %
|
Net Sales Excluding
Impact of Chubb
|
|
(Unaudited)
|
|
Three Months
Ended
September 30, 2021
|
|
Nine Months
Ended
September 30, 2021
|
|
Carrier
|
|
Fire and
Security
|
|
Carrier
|
|
Fire and
Security
|
Net Sales:
|
|
|
|
|
|
|
|
Reported
|
$
5,341
|
|
$
1,377
|
|
$
15,480
|
|
$
4,084
|
Chubb
|
(520)
|
|
(520)
|
|
(1,622)
|
|
(1,622)
|
Net sales
excluding impact of Chubb
|
$
4,821
|
|
$
857
|
|
$ 13,858
|
|
$
2,462
|
|
|
|
|
|
|
|
|
Percentage increase
in Net sales excluding impact of Chubb
|
13 %
|
|
6 %
|
|
11 %
|
|
6 %
|
Carrier Global
Corporation Reconciliation of Reported (GAAP) to Adjusted
(Non-GAAP) Results
|
|
Historical Amounts
of Amortization of Acquired Intangibles
|
|
|
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
Q1
|
|
Q2
|
|
Q3
|
(In
millions)
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
HVAC
|
|
$
—
|
|
$
4
|
|
$
7
|
|
$
4
|
|
$
15
|
|
$
4
|
|
$
4
|
|
$
16
|
Fire &
Security
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
1
|
Total
Carrier
|
|
—
|
|
4
|
|
7
|
|
4
|
|
15
|
|
5
|
|
5
|
|
17
|
Associated tax
effect
|
|
—
|
|
(1)
|
|
(2)
|
|
(1)
|
|
(4)
|
|
(1)
|
|
(1)
|
|
(7)
|
Net impact to
adjusted
results
|
|
$
—
|
|
$
3
|
|
$
5
|
|
$
3
|
|
$
11
|
|
$
4
|
|
$
4
|
|
$
10
|
Free Cash Flow
Reconciliation
|
|
|
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
Q1
|
|
Q2
|
|
Q3
|
(In
millions)
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
Net cash flows provided
by
(used in) operating activities
|
|
$
184
|
|
$
561
|
|
$
579
|
|
$
913
|
|
$ 2,237
|
|
$
(202)
|
|
$
32
|
|
$
790
|
Less: Capital
expenditures
|
|
53
|
|
79
|
|
74
|
|
138
|
|
344
|
|
56
|
|
66
|
|
91
|
Free cash
flow
|
|
$
131
|
|
$
482
|
|
$
505
|
|
$
775
|
|
$
1,893
|
|
$
(258)
|
|
$
(34)
|
|
$
699
|
Net Debt
Reconciliation
|
|
|
(Unaudited)
|
(In
millions)
|
|
September 30,
2022
|
|
December 31,
2021
|
Long-term
debt
|
|
$
8,670
|
|
$
9,513
|
Current portion of
long-term debt
|
|
219
|
|
183
|
Less: Cash and cash
equivalents
|
|
2,985
|
|
2,987
|
Net
debt
|
|
$
5,904
|
|
$
6,709
|
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SOURCE Carrier Global Corporation