Analysis of Debt
Total Debt (Carrying Amount)
Carrier Global Corp., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
A consistent downward trend in the total carrying amount of long-term debt is observed between December 31, 2020, and December 31, 2022. The total long-term debt, including the current portion, decreased from 10,227 million USD to 8,842 million USD over the three-year period, representing an overall reduction of approximately 1,385 million USD.
- Total Debt Reduction Velocity
- The reduction in total long-term debt accelerated over the analyzed period. Between 2020 and 2021, the total debt decreased by 531 million USD. This pace increased significantly between 2021 and 2022, with a reduction of 854 million USD, indicating a more aggressive deleveraging effort in the most recent fiscal year.
- Analysis of Debt Composition
- The debt structure is heavily weighted toward long-term obligations. The long-term debt, net of the current portion, declined from 10,036 million USD in 2020 to 8,702 million USD in 2022. Concurrently, the current portion of long-term debt decreased from 191 million USD to 140 million USD. The current portion consistently represents a very small fraction of the total debt, suggesting that the company's immediate debt maturity requirements are low relative to its total leverage.
- Financial Leverage Implications
- The steady decline in both the short-term and long-term components of debt suggests a systematic effort to reduce the total carrying amount of liabilities. This trend typically points toward improved solvency and a reduction in the financial risk associated with interest payments and principal repayments.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Total Debt (Fair Value)
| Dec 31, 2022 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Long-term notes | 6,832) |
| Japanese Term Loan Facility | 404) |
| Other debt, including project financing obligations and finance leases | 149) |
| Total long-term debt, including current portion (fair value) | 7,385) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.84 |
Based on: 10-K (reporting date: 2022-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on borrowings: 2.90%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 2.90% | 8,842) | 256) | |
| Total | 8,842) | 256) | |
| 2.90% | |||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 256 ÷ 8,842 = 2.90%