Delaware |
001-39220 |
83-4051582 |
||||||||||||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
13995 Pasteur Boulevard | ||||||||
Palm Beach Gardens |
Florida |
33418 |
(561) | 365-2000 |
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
||||
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
||||
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
||||
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock ($0.01 par value) | CARR | New York Stock Exchange | ||||||
4.375% Notes due 2025 | CARR25 | New York Stock Exchange | ||||||
4.125% Notes due 2028 | CARR28 | New York Stock Exchange | ||||||
4.500% Notes due 2032 | CARR32 | New York Stock Exchange |
Exhibit
Number
|
Exhibit Description |
||||
99 | |||||
104 |
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
CARRIER GLOBAL CORPORATION |
||||||||
(Registrant) |
||||||||
Date: April 25, 2024 |
By: |
/S/ PATRICK GORIS |
||||||
Patrick Goris |
||||||||
Senior Vice President and Chief Financial Officer |
Current Guidance | Prior Guidance |
|||||||
Sales |
~$26B
Organic* up MSD
FX 0%
Acquisitions +18%
Divestitures (6%)
|
~$26.5B
Organic* up MSD
FX 0%
Acquisitions +20%
Divestitures (5%)
|
||||||
Adjusted Operating Margin* |
~15.5% |
15.0% - 15.5% |
||||||
Adjusted EPS* |
$2.80 - $2.90 |
$2.80 - $2.90 |
||||||
Free Cash Flow* |
~$0.4B
Includes ~$2B of expected tax payments on the gains from the announced business exits, restructuring, and transaction-related costs
|
~$0.7B
Includes ~$1.7B of expected tax payments on the gains from the announced business exits, restructuring, and transaction-related costs
|
(Unaudited) | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(In millions, except per share amounts) | 2024 | 2023 | ||||||||||||
Net sales | ||||||||||||||
Product sales | $ | 5,542 | $ | 4,686 | ||||||||||
Service sales | 640 | 587 | ||||||||||||
Total Net sales | 6,182 | 5,273 | ||||||||||||
Costs and expenses | ||||||||||||||
Cost of products sold | (3,998) | (3,458) | ||||||||||||
Cost of services sold | (479) | (437) | ||||||||||||
Research and development | (224) | (139) | ||||||||||||
Selling, general and administrative | (985) | (721) | ||||||||||||
Total Costs and expenses | (5,686) | (4,755) | ||||||||||||
Equity method investment net earnings | 31 | 44 | ||||||||||||
Other income (expense), net | (27) | (7) | ||||||||||||
Operating profit | 500 | 555 | ||||||||||||
Interest (expense) income, net | (165) | (46) | ||||||||||||
Income from operations before income taxes | 335 | 509 | ||||||||||||
Income tax (expense) benefit | (46) | (122) | ||||||||||||
Net income from operations | 289 | 387 | ||||||||||||
Less: Non-controlling interest in subsidiaries' earnings from operations | 20 | 14 | ||||||||||||
Net income attributable to common shareowners | $ | 269 | $ | 373 | ||||||||||
Earnings per share | ||||||||||||||
Basic | $ | 0.30 | $ | 0.45 | ||||||||||
Diluted | $ | 0.29 | $ | 0.44 | ||||||||||
Weighted-average number of shares outstanding | ||||||||||||||
Basic | 899.2 | 835.0 | ||||||||||||
Diluted | 913.0 | 852.2 |
(Unaudited) | ||||||||||||||
(In millions) | March 31, 2024 | December 31, 2023 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 1,313 | $ | 10,015 | ||||||||||
Accounts receivable, net | 3,156 | 2,481 | ||||||||||||
Contract assets, current | 320 | 306 | ||||||||||||
Inventories, net | 3,189 | 2,217 | ||||||||||||
Assets held for sale, current | 3,169 | 3,314 | ||||||||||||
Other assets, current | 568 | 447 | ||||||||||||
Total current assets | 11,715 | 18,780 | ||||||||||||
Future income tax benefits | 823 | 739 | ||||||||||||
Fixed assets, net | 3,179 | 2,293 | ||||||||||||
Operating lease right-of-use assets | 633 | 491 | ||||||||||||
Intangible assets, net | 7,351 | 1,028 | ||||||||||||
Goodwill | 15,366 | 7,989 | ||||||||||||
Pension and post-retirement assets | 78 | 32 | ||||||||||||
Equity method investments | 1,155 | 1,140 | ||||||||||||
Other assets | 510 | 330 | ||||||||||||
Total Assets | $ | 40,810 | $ | 32,822 | ||||||||||
Liabilities and Equity | ||||||||||||||
Accounts payable | $ | 3,074 | $ | 2,742 | ||||||||||
Accrued liabilities | 2,994 | 2,811 | ||||||||||||
Contract liabilities, current | 501 | 425 | ||||||||||||
Liabilities held for sale, current | 820 | 862 | ||||||||||||
Current portion of long-term debt | 1,248 | 51 | ||||||||||||
Total current liabilities | 8,637 | 6,891 | ||||||||||||
Long-term debt | 15,647 | 14,242 | ||||||||||||
Future pension and post-retirement obligations | 259 | 155 | ||||||||||||
Future income tax obligations | 2,272 | 535 | ||||||||||||
Operating lease liabilities | 505 | 391 | ||||||||||||
Other long-term liabilities | 1,584 | 1,603 | ||||||||||||
Total Liabilities | 28,904 | 23,817 | ||||||||||||
Equity | ||||||||||||||
Common stock | 9 | 9 | ||||||||||||
Treasury stock | (1,972) | (1,972) | ||||||||||||
Additional paid-in capital | 8,536 | 5,535 | ||||||||||||
Retained earnings | 6,860 | 6,591 | ||||||||||||
Accumulated other comprehensive loss | (1,872) | (1,486) | ||||||||||||
Non-controlling interest | 345 | 328 | ||||||||||||
Total Equity | 11,906 | 9,005 | ||||||||||||
Total Liabilities and Equity | $ | 40,810 | $ | 32,822 | ||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(In millions) | 2024 | 2023 | ||||||||||||
Operating Activities | ||||||||||||||
Net income from operations | $ | 289 | $ | 387 | ||||||||||
Adjustments to reconcile net income to net cash flows from operating activities: | ||||||||||||||
Depreciation and amortization | 314 | 136 | ||||||||||||
Deferred income tax provision | (123) | (24) | ||||||||||||
Stock-based compensation costs | 22 | 22 | ||||||||||||
Equity method investment net earnings | (31) | (44) | ||||||||||||
(Gain) loss on sale of investments / deconsolidation | — | (16) | ||||||||||||
Changes in operating assets and liabilities | ||||||||||||||
Accounts receivable, net | (205) | (157) | ||||||||||||
Contract assets, current | (33) | (28) | ||||||||||||
Inventories, net | (72) | (126) | ||||||||||||
Other assets, current | (52) | (60) | ||||||||||||
Accounts payable and accrued liabilities | (195) | (25) | ||||||||||||
Contract liabilities, current | (18) | 64 | ||||||||||||
Defined benefit plan contributions | (6) | (6) | ||||||||||||
Distributions from equity method investments | 7 | 3 | ||||||||||||
Other operating activities, net | 143 | (6) | ||||||||||||
Net cash flows provided by (used in) operating activities | 40 | 120 | ||||||||||||
Investing Activities | ||||||||||||||
Capital expenditures | (104) | (70) | ||||||||||||
Investments in businesses, net of cash acquired | (10,772) | (52) | ||||||||||||
Disposition of businesses | — | 35 | ||||||||||||
Settlement of derivative contracts, net | (209) | (18) | ||||||||||||
Other investing activities, net | 4 | 5 | ||||||||||||
Net cash flows provided by (used in) investing activities | (11,081) | (100) | ||||||||||||
Financing Activities | ||||||||||||||
Increase (decrease) in short-term borrowings, net | 19 | 10 | ||||||||||||
Issuance of long-term debt | 2,548 | 5 | ||||||||||||
Repayment of long-term debt | (5) | (2) | ||||||||||||
Repurchases of common stock | — | (62) | ||||||||||||
Dividends paid on common stock | (159) | (154) | ||||||||||||
Dividends paid to non-controlling interest | (2) | — | ||||||||||||
Other financing activities, net | (22) | (10) | ||||||||||||
Net cash flows provided by (used in) financing activities | 2,379 | (213) | ||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | (68) | 20 | ||||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash, including cash classified in current assets held for sale | (8,730) | (173) | ||||||||||||
Less: Change in cash balances classified as assets held for sale | (30) | — | ||||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | (8,700) | (173) | ||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 10,017 | 3,527 | ||||||||||||
Cash, cash equivalents and restricted cash, end of period | 1,317 | 3,354 | ||||||||||||
Less: restricted cash | 4 | 7 | ||||||||||||
Cash and cash equivalents, end of period | $ | 1,313 | $ | 3,347 |
(Unaudited) | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
(In millions) | Reported | Adjusted | Reported | Adjusted | |||||||||||||||||||
Net sales | |||||||||||||||||||||||
HVAC | $ | 4,541 | $ | 4,541 | $ | 3,622 | $ | 3,622 | |||||||||||||||
Refrigeration | 884 | 884 | 898 | 898 | |||||||||||||||||||
Fire & Security | 887 | 887 | 869 | 869 | |||||||||||||||||||
Segment sales | 6,312 | 6,312 | 5,389 | 5,389 | |||||||||||||||||||
Eliminations and other | (130) | (130) | (116) | (116) | |||||||||||||||||||
Net sales | $ | 6,182 | $ | 6,182 | $ | 5,273 | $ | 5,273 | |||||||||||||||
Operating profit | |||||||||||||||||||||||
HVAC | $ | 429 | $ | 720 | $ | 435 | $ | 490 | |||||||||||||||
Refrigeration | 97 | 99 | 108 | 111 | |||||||||||||||||||
Fire & Security | 153 | 164 | 93 | 108 | |||||||||||||||||||
Segment operating profit | 679 | 983 | 636 | 709 | |||||||||||||||||||
Eliminations and other | (75) | (34) | (38) | (36) | |||||||||||||||||||
General corporate expenses | (104) | (22) | (43) | (31) | |||||||||||||||||||
Operating profit | $ | 500 | $ | 927 | $ | 555 | $ | 642 | |||||||||||||||
Operating margin | |||||||||||||||||||||||
HVAC | 9.4 | % | 15.9 | % | 12.0 | % | 13.5 | % | |||||||||||||||
Refrigeration | 11.0 | % | 11.2 | % | 12.0 | % | 12.4 | % | |||||||||||||||
Fire & Security | 17.2 | % | 18.5 | % | 10.7 | % | 12.4 | % | |||||||||||||||
Total Carrier | 8.1 | % | 15.0 | % | 10.5 | % | 12.2 | % | |||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||
(In millions) | HVAC | Refrigeration | Fire & Security | Eliminations and Other | General Corporate Expenses | Carrier | |||||||||||||||||||||||||||||
Net sales | $ | 4,541 | $ | 884 | $ | 887 | $ | (130) | $ | — | $ | 6,182 | |||||||||||||||||||||||
Segment operating profit | $ | 429 | $ | 97 | $ | 153 | $ | (75) | $ | (104) | $ | 500 | |||||||||||||||||||||||
Reported operating margin | 9.4 | % | 11.0 | % | 17.2 | % | 8.1 | % | |||||||||||||||||||||||||||
Adjustments to segment operating profit: | |||||||||||||||||||||||||||||||||||
Restructuring costs | $ | 7 | $ | — | $ | 7 | $ | 1 | $ | — | $ | 15 | |||||||||||||||||||||||
Amortization of acquired intangibles | 172 | — | — | — | — | 172 | |||||||||||||||||||||||||||||
Acquisition step-up amortization (1) |
111 | — | — | — | — | 111 | |||||||||||||||||||||||||||||
Acquisition/divestiture-related costs | 1 | 2 | 4 | — | 82 | 89 | |||||||||||||||||||||||||||||
Viessmann-related hedges | — | — | — | 86 | — | 86 | |||||||||||||||||||||||||||||
Gain on liability adjustment (2) |
— | — | — | (46) | — | (46) | |||||||||||||||||||||||||||||
Total adjustments to operating profit | $ | 291 | $ | 2 | $ | 11 | $ | 41 | $ | 82 | $ | 427 | |||||||||||||||||||||||
Adjusted operating profit | $ | 720 | $ | 99 | $ | 164 | $ | (34) | $ | (22) | $ | 927 | |||||||||||||||||||||||
Adjusted operating margin | 15.9 | % | 11.2 | % | 18.5 | % | 15.0 | % |
(Unaudited) | |||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||
(In millions) | HVAC | Refrigeration | Fire & Security | Eliminations and Other | General Corporate Expenses | Carrier | |||||||||||||||||||||||||||||
Net sales | $ | 3,622 | $ | 898 | $ | 869 | $ | (116) | $ | — | $ | 5,273 | |||||||||||||||||||||||
Segment operating profit | $ | 435 | $ | 108 | $ | 93 | $ | (38) | $ | (43) | $ | 555 | |||||||||||||||||||||||
Reported operating margin | 12.0 | % | 12.0 | % | 10.7 | % | 10.5 | % | |||||||||||||||||||||||||||
Adjustments to segment operating profit: | |||||||||||||||||||||||||||||||||||
Restructuring costs | $ | (1) | $ | 3 | $ | 13 | $ | 2 | $ | — | $ | 17 | |||||||||||||||||||||||
Amortization of acquired intangibles | 37 | — | 2 | — | — | 39 | |||||||||||||||||||||||||||||
Acquisition step-up amortization (1) |
11 | — | — | — | — | 11 | |||||||||||||||||||||||||||||
Acquisition/divestiture-related costs | — | — | — | — | 12 | 12 | |||||||||||||||||||||||||||||
TCC acquisition-related gain (3) |
8 | — | — | — | — | 8 | |||||||||||||||||||||||||||||
Total adjustments to operating profit | $ | 55 | $ | 3 | $ | 15 | $ | 2 | $ | 12 | $ | 87 | |||||||||||||||||||||||
Adjusted operating profit | $ | 490 | $ | 111 | $ | 108 | $ | (36) | $ | (31) | $ | 642 | |||||||||||||||||||||||
Adjusted operating margin | 13.5 | % | 12.4 | % | 12.4 | % | 12.2 | % |
(Unaudited) | |||||||||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||
(In millions, except per share amounts) | Reported | Adjustments | Adjusted | ||||||||||||||
Net sales | $ | 6,182 | $ | — | $ | 6,182 | |||||||||||
Operating profit | $ | 500 | 427 | a | $ | 927 | |||||||||||
Operating margin | 8.1 | % | 15.0 | % | |||||||||||||
Income from operations before income taxes | $ | 335 | 427 | a | $ | 762 | |||||||||||
Income tax expense | $ | (46) | (131) | c | $ | (177) | |||||||||||
Effective tax rate | 13.7 | % | 23.2 | % | |||||||||||||
Net income attributable to common shareowners | $ | 269 | $ | 296 | $ | 565 | |||||||||||
Summary of Adjustments: | |||||||||||||||||
Restructuring costs | $ | 15 | a | ||||||||||||||
Amortization of acquired intangibles | 172 | a | |||||||||||||||
Acquisition step-up amortization (1) |
111 | a | |||||||||||||||
Acquisition/divestiture-related costs | 89 | a | |||||||||||||||
Viessmann-related hedges | 86 | a | |||||||||||||||
Gain on liability adjustment (2) |
(46) | a | |||||||||||||||
Total adjustments | $ | 427 | |||||||||||||||
Tax effect on adjustments above | $ | (96) | |||||||||||||||
Tax specific adjustments | (35) | ||||||||||||||||
Total tax adjustments | $ | (131) | c | ||||||||||||||
Shares outstanding - Diluted | 913.0 | 913.0 | |||||||||||||||
Earnings per share - Diluted | $ | 0.29 | $ | 0.62 |
(Unaudited) | |||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
(In millions, except per share amounts) | Reported | Adjustments | Adjusted | ||||||||||||||
Net sales | $ | 5,273 | $ | — | $ | 5,273 | |||||||||||
Operating profit | $ | 555 | 87 | a | $ | 642 | |||||||||||
Operating margin | 10.5 | % | 12.2 | % | |||||||||||||
Income from operations before income taxes | $ | 509 | 87 | a | $ | 596 | |||||||||||
Income tax expense | $ | (122) | (18) | c | $ | (140) | |||||||||||
Effective tax rate | 24.0 | % | 23.5 | % | |||||||||||||
Net income attributable to common shareowners | $ | 373 | $ | 69 | $ | 442 | |||||||||||
Summary of Adjustments: | |||||||||||||||||
Restructuring costs | $ | 17 | a | ||||||||||||||
Amortization of acquired intangibles | 39 | a | |||||||||||||||
Acquisition step-up amortization (1) |
11 | a | |||||||||||||||
Acquisition/divestiture-related costs | 12 | a | |||||||||||||||
TCC acquisition-related gain (2) |
8 | a | |||||||||||||||
Total adjustments | $ | 87 | |||||||||||||||
Tax effect on adjustments above | $ | (18) | |||||||||||||||
Total tax adjustments | $ | (18) | c | ||||||||||||||
Shares outstanding - Diluted | 852.2 | 852.2 | |||||||||||||||
Earnings per share - Diluted | $ | 0.44 | $ | 0.52 |
Three Months Ended March 31, 2024 Compared with Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Factors Contributing to Total % change in Net Sales | |||||||||||||||||||||||||||||
Organic | FX Translation | Acquisitions / Divestitures, net | Other | Total | |||||||||||||||||||||||||
HVAC | 2 | % | (1) | % | 24 | % | — | % | 25 | % | |||||||||||||||||||
Refrigeration | (2) | % | — | % | — | % | — | % | (2) | % | |||||||||||||||||||
Fire & Security | 7 | % | — | % | (5) | % | — | % | 2 | % | |||||||||||||||||||
Consolidated | 2 | % | — | % | 15 | % | — | % | 17 | % | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY | Q1 | |||||||||||||||||||||||||||||||||
(In millions) | 2023 | 2023 | 2023 | 2023 | 2023 | 2024 | ||||||||||||||||||||||||||||||||
HVAC | $ | 37 | $ | 36 | $ | 35 | $ | 35 | $ | 143 | $ | 172 | ||||||||||||||||||||||||||
Fire & Security | 2 | 2 | 2 | — | 6 | — | ||||||||||||||||||||||||||||||||
Total Carrier | 39 | 38 | 37 | 35 | 149 | 172 | ||||||||||||||||||||||||||||||||
Associated tax effect | (12) | (11) | (11) | (11) | (45) | (46) | ||||||||||||||||||||||||||||||||
Net impact to adjusted results | $ | 27 | $ | 27 | $ | 26 | $ | 24 | $ | 104 | $ | 126 |
(Unaudited) | ||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY | Q1 | |||||||||||||||||||||||||||||||||
(In millions) | 2023 | 2023 | 2023 | 2023 | 2023 | 2024 | ||||||||||||||||||||||||||||||||
Net cash flows provided by (used in) operating activities | $ | 120 | $ | 384 | $ | 1,041 | $ | 1,062 | $ | 2,607 | $ | 40 | ||||||||||||||||||||||||||
Less: Capital expenditures | 70 | 74 | 92 | 233 | 469 | 104 | ||||||||||||||||||||||||||||||||
Free cash flow | $ | 50 | $ | 310 | $ | 949 | $ | 829 | $ | 2,138 | $ | (64) |
(Unaudited) | ||||||||||||||
(In millions) | March 31, 2024 | December 31, 2023 | ||||||||||||
Long-term debt | $ | 15,647 | $ | 14,242 | ||||||||||
Current portion of long-term debt | 1,248 | 51 | ||||||||||||
Less: Cash and cash equivalents | 1,313 | 10,015 | ||||||||||||
Net debt | $ | 15,582 | $ | 4,278 |