Name: Carrier Global Corp. (NYSE:CARR) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Carrier Global Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income from operations	3,584)	1,701)	2,006)
Depreciation and amortization	380)	338)	336)
Deferred income tax provision	(124)	(74)	97)
Stock-based compensation cost	77)	92)	77)
Equity method investment net earnings	(262)	(249)	(207)
Impairment charge on minority-owned joint venture investments	—)	2)	72)
Gain on extinguishment of debt	(36)	—)	—)
(Gain) loss on sale of investments	(1,815)	2)	(1,123)
Accounts receivable, net	(145)	(97)	49)
Contract assets, current	(51)	(47)	(9)
Inventories, net	(334)	(408)	(240)
Other assets, current	104)	(11)	3)
Accounts payable and accrued liabilities	61)	829)	237)
Contract liabilities, current	29)	51)	46)
Changes in operating assets and liabilities	(336)	317)	86)
Defined benefit plan contributions	(16)	(47)	(41)
Distributions from equity method investments	148)	159)	169)
Other operating activities, net	143)	(4)	220)
Adjustments to reconcile net income from operations to net cash flows from operating activities	(1,841)	536)	(314)
Net cash flows provided by operating activities	1,743)	2,237)	1,692)
Capital expenditures	(353)	(344)	(312)
Proceeds on sale of investments	—)	7)	1,377)
Investment in businesses, net of cash acquired	(506)	(366)	—)
Dispositions of businesses	2,902)	—)	—)
Settlement of derivative contracts, net	(194)	4)	40)
Payment to former shareholders of TCC	(104)	—)	—)
Other investing activities, net	—)	7)	1)
Net cash flows (used in) provided by investing activities	1,745)	(692)	1,106)
Increase (decrease) in short-term borrowings, net	(140)	13)	(23)
Issuance of long-term debt	432)	140)	11,784)
Repayment of long-term debt	(1,275)	(704)	(1,911)
Repurchases of common stock	(1,380)	(527)	—)
Dividends paid on common stock	(509)	(417)	(138)
Dividends paid to non-controlling interest	(46)	(42)	(48)
Net transfers to UTC	—)	—)	(10,359)
Other financing activities, net	(13)	(25)	14)
Net cash flows used in financing activities	(2,931)	(1,562)	(681)
Effect of foreign exchange rate changes on cash and cash equivalents	(56)	(16)	45)
Net increase (decrease) in cash and cash equivalents and restricted cash, including cash classified in current assets held for sale	501)	(33)	2,162)
Change in cash balances classified as assets held for sale	—)	(60)	—)
Net increase (decrease) in cash and cash equivalents and restricted cash	501)	(93)	2,162)
Cash, cash equivalents and restricted cash, beginning of period	3,026)	3,119)	957)
Cash, cash equivalents and restricted cash, end of period	3,527)	3,026)	3,119)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

The financial profile over the 2020-2022 period is characterized by significant volatility in net income and strategic shifts in capital allocation. While operational cash generation remained relatively stable, the company transitioned from a period of massive debt issuance and corporate restructuring toward an aggressive strategy of shareholder returns and business portfolio optimization.

Operating Cash Flow Trends: Net income from operations exhibited a sharp increase in 2022, reaching 3,584 million compared to 1,701 million in 2021. However, net cash flows provided by operating activities did not follow this linear trajectory, peaking in 2021 at 2,237 million before declining to 1,743 million in 2022. This divergence is largely attributed to significant non-cash adjustments, specifically the 1,815 million gain on the sale of investments in 2022, which reduced the operating cash flow relative to net income.; Working capital management showed consistent pressure from inventory accumulation, with cash outflows for inventories persisting across all three years, peaking at 408 million in 2021. A notable volatility is observed in accounts payable and accrued liabilities, which surged to 829 million in 2021 but contracted to 61 million in 2022.
Investing Activities and Asset Management: Investing cash flows were highly erratic, moving from a net inflow of 1,106 million in 2020 to a net outflow of 692 million in 2021, and returning to a substantial inflow of 1,745 million in 2022. This 2022 surge was driven primarily by the disposition of businesses, which generated 2,902 million.; Capital expenditures remained stable and showed a slight upward trend, increasing from 312 million in 2020 to 353 million in 2022. This indicates a consistent commitment to maintaining or expanding the asset base despite broader portfolio restructuring.
Financing and Capital Structure: A dramatic shift in financing activity is evident. The year 2020 was marked by a massive issuance of long-term debt totaling 11,784 million, partially offset by a 10,359 million transfer to UTC. By 2022, financing activities shifted toward returning capital to shareholders, with net cash flows used in financing increasing to 2,931 million.; Shareholder distributions grew aggressively. Repurchases of common stock rose from zero in 2020 to 1,380 million in 2022. Similarly, dividends paid on common stock increased from 138 million in 2020 to 509 million in 2022, signaling a transition toward a more mature capital return policy.
Liquidity Position: The company maintained a strong and stable liquidity position. Cash, cash equivalents, and restricted cash ended the 2022 period at 3,527 million, an increase from 3,119 million at the end of 2020. The ability to fund increased dividends and stock buybacks while maintaining cash reserves suggests that the company effectively leveraged its business dispositions and debt management to sustain liquidity.

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