Carrier Global Corp. (NYSE:CARR)

The analysis of the data over the three-year period reveals several trends in intangible assets and related categories.

Goodwill

Goodwill decreased from 10,139 million USD in 2020 to 9,349 million USD in 2021, then increased to 9,977 million USD in 2022. This indicates a decline followed by partial recovery, suggesting adjustments or impairments in 2021 with some reinstatement or acquisitions in 2022.

Customer relationships

Customer relationships showed a significant decline from 1,558 million USD in 2020 to 945 million USD in 2021, followed by a notable increase to 1,431 million USD in 2022. This suggests variable valuation or amortization activity, with a strong rebound in the latest period.

Patents and trademarks

This asset category decreased from 301 million USD in 2020 to 232 million USD in 2021, then surged to 401 million USD in 2022. The rise in 2022 may indicate new acquisitions or revaluations.

Monitoring lines

Monitoring lines were recorded only in 2020 with 71 million USD, with no reported values in subsequent years, suggesting disposal, impairment, or reclassification.

Service portfolios and other

Service portfolios and other intangible assets increased steadily from 644 million USD in 2020 to 688 million USD in 2021, and further to 953 million USD in 2022, indicating continuous growth in this asset category.

Amortized, gross amount

The gross amortized amount declined from 2,574 million USD in 2020 to 1,865 million USD in 2021 but then rose sharply to 2,785 million USD in 2022. This fluctuation aligns with changes in underlying amortizable assets.

Accumulated amortization

Accumulated amortization decreased in absolute value from -2,108 million USD in 2020 to -1,420 million USD in 2021 and slightly increased to -1,506 million USD in 2022. The reduction in amortization in 2021 followed by a slight rise in 2022 points to varying amortization charges or asset disposals.

Amortized, net amount

The net amortized amount decreased modestly from 466 million USD in 2020 to 445 million USD in 2021, then surged significantly to 1,279 million USD in 2022, reflecting either new amortizable assets or adjustments in amortization methods.

Trademarks and other (Unamortized)

Unamortized trademarks and other intangible assets dropped sharply from 571 million USD in 2020 to 64 million USD in 2021 and stabilized at 63 million USD in 2022, indicating significant amortization or derecognition during 2021.

Intangible assets, net

Net intangible assets declined from 1,037 million USD in 2020 to 509 million USD in 2021, then rebounded strongly to 1,342 million USD in 2022. This pattern reflects the combined effects of amortization, disposals, acquisitions, and revaluations.

Goodwill and intangible assets

Overall, goodwill and intangible assets decreased from 11,176 million USD in 2020 to 9,858 million USD in 2021, before increasing again to 11,319 million USD in 2022, showing a similar trend of contraction followed by recovery across this period.

In summary, the data shows a general pattern of reduced intangible asset values in 2021, possibly due to amortization, impairments, or disposals, followed by significant asset additions or revaluations in 2022. Service portfolios and patents and trademarks exhibit the most consistent growth in the latter period, while goodwill and customer relationships rebound strongly after initial declines. Accumulated amortization trends suggest varying amortization schedules or asset retirements during the period analyzed.

The data reveals notable trends in the financial position over the three-year period ending December 31, 2022. Both reported and adjusted figures present distinct perspectives on the company's asset base and equity.

Total Assets

Reported total assets increased slightly in 2021 compared to 2020, from approximately $25.1 billion to $26.2 billion, then marginally declined to about $26.1 billion in 2022. This indicates relative stability in the overall asset base with minor fluctuations.

In contrast, adjusted total assets, which likely exclude goodwill or other intangible assets, show a different trend. These assets rose more significantly from roughly $14.9 billion in 2020 to $16.8 billion in 2021, before decreasing to around $16.1 billion in 2022. Although adjusted assets are substantially lower than reported assets, the rise and subsequent fall suggest changes in the asset composition or impairment events.

Equity Attributable to Common Shareowners

Reported equity increased consistently over the period, from about $6.3 billion in 2020 to $6.8 billion in 2021, and further to $7.8 billion in 2022. This steady growth implies strengthening shareholder value under reported measures.

The adjusted equity figures paint a more negative scenario, with equity values remaining below zero throughout the period but improving from approximately -$3.9 billion in 2020 to -$2.6 billion in 2021, and further to -$2.2 billion in 2022. This persistent negative adjusted equity indicates that after certain adjustments are applied—possibly accounting for goodwill impairments or other reclassifications—the net book value attributable to shareholders remains deficient yet improving year over year.

Overall, the divergence between reported and adjusted figures highlights the impact of intangible asset valuations, particularly goodwill, on the company's financial metrics. While reported data suggests stable to improving asset and equity values, the adjusted data reveals underlying challenges with asset quality and shareholder equity when those intangibles are excluded or adjusted. The improving trend in adjusted equity suggests some recovery or positive adjustments, but the continued negative values warrant attention from management and stakeholders regarding asset composition and balance sheet strength.

Total Asset Turnover

The reported total asset turnover ratio increased from 0.7 in 2020 to 0.79 in 2021, before slightly decreasing to 0.78 in 2022, indicating a modest overall enhancement in the efficiency of asset utilization over the period. In contrast, the adjusted total asset turnover shows a consistent upward trend, rising from 1.17 in 2020 to 1.23 in 2021 and further to 1.27 in 2022, suggesting improved operational efficiency when goodwill adjustments are considered.

Financial Leverage

The reported financial leverage ratio decreased steadily from 4.01 in 2020 to 3.87 in 2021 and further to 3.36 in 2022. This decline points to a reduction in the extent to which the company is using debt relative to equity, indicating a potential shift towards a more conservative capital structure or deleveraging over the period. No adjusted financial leverage data are available for analysis.

Return on Equity (ROE)

The reported ROE decreased significantly from 31.7% in 2020 to 24.59% in 2021, followed by a sharp increase to 45.55% in 2022. This volatility suggests fluctuations in profitability or changes in equity levels impacting shareholder returns. No adjusted ROE figures are provided.

Return on Assets (ROA)

Reported ROA experienced a decline from 7.9% in 2020 to 6.36% in 2021, then increased markedly to 13.55% in 2022, indicating improvement in asset profitability after a temporary setback. The adjusted ROA reflects a similar pattern, starting higher at 13.25% in 2020, decreasing to 9.89% in 2021, and rebounding strongly to 21.94% in 2022, which underscores enhanced asset performance when goodwill is excluded.

The financial data displays trends in both reported and goodwill adjusted metrics over a three-year period.

Total Assets

The reported total assets increased from $25,093 million in 2020 to $26,172 million in 2021, showing a moderate growth of approximately 4.3%, then slightly decreased to $26,086 million in 2022. This indicates relative stability in asset size with minimal fluctuation in the latter year. In contrast, the adjusted total assets, which exclude goodwill, showed an increase from $14,954 million in 2020 to $16,823 million in 2021, representing a significant rise of about 12.5%, followed by a decrease to $16,109 million in 2022, a decline of roughly 4.3%. Despite the reduction in 2022, the adjusted asset base remains notably higher than in 2020, suggesting underlying asset growth excluding goodwill.

Total Asset Turnover

The reported total asset turnover ratio improved from 0.7 in 2020 to 0.79 in 2021, indicating enhanced efficiency in generating sales relative to reported assets, but marginally declined to 0.78 in 2022. Meanwhile, the adjusted total asset turnover ratio exhibited a continuous upward trend across all three years, increasing from 1.17 in 2020 to 1.23 in 2021 and further to 1.27 in 2022. This steady improvement suggests increasing efficiency in asset utilization when excluding goodwill, indicating that the company's core assets were more effectively leveraged to generate revenue over the period.

Overall, the data suggests that while the total asset base has remained relatively stable on a reported basis, with a slight dip in 2022, the underlying adjusted assets experienced more significant growth and subsequent mild contraction. Importantly, asset turnover measures consistently improved when adjusted for goodwill, indicating strengthening operational efficiency and better asset management in generating sales relative to the adjusted asset base. The divergence between reported and adjusted asset turnover trends highlights the impact of goodwill on asset utilization metrics and supports a positive outlook on the company's tangible asset performance.

The analysis of the annual financial data reveals several key trends and insights regarding the company's asset base, equity position, and financial leverage over the three-year period ending December 31, 2022.

Total Assets

Reported total assets increased marginally from $25,093 million in 2020 to $26,172 million in 2021, before slightly decreasing to $26,086 million in 2022. This suggests a period of relative stability in asset size with minor fluctuations. Adjusted total assets, which factor out goodwill, followed a different pattern. They rose from $14,954 million in 2020 to $16,823 million in 2021, an increase of approximately 12.5%, then declined to $16,109 million in 2022, a decrease of about 4.3%. This indicates that the underlying asset base, excluding intangible goodwill, experienced growth followed by a moderate contraction.

Equity Attributable to Common Shareowners

Reported equity showed a consistent upward trend, increasing from $6,252 million in 2020 to $6,767 million in 2021, and further to $7,758 million in 2022. This steady growth, totaling roughly 24.1% over the three years, reflects an improving capital base from the perspective of common shareholders. Conversely, adjusted equity, which accounts for goodwill adjustments, remains negative but demonstrates an improving trajectory. The negative adjusted equity narrowed from -$3,887 million in 2020 to -$2,582 million in 2021, and further to -$2,219 million in 2022. While still indicating a deficit when goodwill is excluded, the consistent reduction suggests progress in mitigating the imbalance between liabilities and tangible equity.

Financial Leverage

Reported financial leverage ratios decreased progressively over the period, from 4.01 in 2020 to 3.87 in 2021, and further to 3.36 in 2022. This decline implies a reduction in the proportion of debt relative to equity, signifying an improving capital structure with potentially lower financial risk. Adjusted financial leverage data are not available, limiting the ability to assess leverage based on tangible equity exclusively.

Overall, the reported figures suggest steady growth and strengthening of the company's financial position, as evidenced by increasing total assets and equity along with declining leverage. Adjusted figures, which exclude goodwill, reveal more nuanced conditions, highlighting challenges related to negative tangible equity but also indicating improvement. The disparity between reported and adjusted equity underscores the significance of goodwill in the company's balance sheet composition. The absence of adjusted leverage ratios restricts a comprehensive risk assessment from a tangible equity standpoint.

The analysis of the reported and goodwill adjusted financial data reveals several notable trends regarding equity and return on equity (ROE) for the periods ending December 31, 2020, 2021, and 2022.

Reported Equity Attributable to Common Shareowners

Reported equity steadily increased over the three-year period. It rose from $6,252 million in 2020 to $6,767 million in 2021, and further to $7,758 million in 2022. This represents a consistent upward trend, with a total increase of approximately 24.1% over the period, indicating sustained growth in equity as recognized in the reported figures.

Adjusted Equity Attributable to Common Shareowners

The adjusted equity attributable to common shareowners, which takes into account goodwill adjustments, shows negative values over all three years. However, these negative adjusted equity figures improved consistently, moving from -$3,887 million in 2020 to -$2,582 million in 2021, and further to -$2,219 million in 2022. This trend suggests a reduction in negative goodwill or other adjustments affecting equity, although adjusted equity remains substantially below zero.

Reported Return on Equity (ROE)

The reported ROE exhibited fluctuations during the period. In 2020, the ROE was high at 31.7%, followed by a decline to 24.59% in 2021, before sharply increasing to a peak of 45.55% in 2022. The dip in 2021 could reflect operational or profit challenges during that year, whereas the significant rebound in 2022 indicates a marked enhancement in profitability relative to reported equity.

Adjusted Return on Equity (Adjusted ROE)

No values were reported for adjusted ROE across the three years, preventing analysis of profitability relative to adjusted equity. This absence of adjusted ROE data limits insights into returns after goodwill adjustments.

Overall, the company demonstrates growth in reported equity and a strong rebound in reported ROE by 2022. The negative adjusted equity figures show consistent improvement but remain substantially negative, implying that goodwill or other adjustments materially impact the equity base. The lack of adjusted ROE data restricts a comprehensive view of profitability considering these adjustments.

Total Assets

The reported total assets exhibited a slight increase from 25,093 million US dollars in 2020 to 26,172 million in 2021, followed by a marginal decline to 26,086 million in 2022. Adjusted total assets, which presumably exclude goodwill, showed a rise from 14,954 million US dollars in 2020 to 16,823 million in 2021, then decreased to 16,109 million in 2022. The adjusted assets remain significantly lower than the reported values, indicating a substantial goodwill component.

Return on Assets (ROA)

The reported ROA declined from 7.9% in 2020 to 6.36% in 2021, before rebounding sharply to 13.55% in 2022. The adjusted ROA displayed a similar trend, falling from 13.25% in 2020 to 9.89% in 2021, then increasing markedly to 21.94% in 2022. The adjusted ROA is consistently higher than the reported ROA across all periods, reflecting the impact of excluding goodwill on profitability metrics.

Insights

There is evidence of a moderate expansion in asset base from 2020 through 2021, followed by stabilization or slight contraction in 2022. The divergence between reported and adjusted assets suggests the presence of a considerable amount of goodwill, which affects asset size and return calculations. The improvement in ROA metrics in 2022 indicates enhanced operational efficiency or profitability, with adjusted ROA showing a substantially higher return relative to reported figures, highlighting the dilutive effect of goodwill on reported returns.