Carrier Global Corp. (NYSE:CARR)

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Area Asset Turnover: United States Operations

Carrier Global Corp.; United States Operations; area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
External sales	11,797)	10,492)	9,105)
Long-lived assets	803)	772)	782)
Area Activity Ratio
Area asset turnover¹	14.69	13.59	11.64

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

¹ 2022 Calculation
Area asset turnover = External sales ÷ Long-lived assets
= 11,797 ÷ 803 = 14.69

The United States operations demonstrate a significant improvement in asset productivity over the three-year period ending December 31, 2022. This trend is characterized by robust revenue growth paired with a stable long-term asset base, resulting in a substantial increase in the area asset turnover ratio.

External Sales Trends: External sales exhibited consistent and significant growth, rising from 9,105 million US dollars in 2020 to 10,492 million US dollars in 2021, and further increasing to 11,797 million US dollars by 2022. This trajectory indicates a steady expansion of revenue generation within the domestic market.
Long-lived Asset Stability: Long-lived assets remained relatively stable throughout the observed period. A marginal decrease occurred between 2020 and 2021, moving from 782 million US dollars to 772 million US dollars, followed by a slight increase to 803 million US dollars in 2022. The lack of significant fluctuation suggests that the growth in sales was achieved without requiring proportional increases in capital investment in fixed assets.
Area Asset Turnover Performance: The area asset turnover ratio showed a strong upward trend, increasing from 11.64 in 2020 to 13.59 in 2021, and reaching 14.69 by 2022. This progression reflects an increase in operational efficiency, as the company generated progressively more revenue per dollar of long-lived assets invested in the region.

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Area Asset Turnover: Europe

Carrier Global Corp.; Europe; area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
External sales	4,359)	5,776)	4,935)
Long-lived assets	453)	476)	490)
Area Activity Ratio
Area asset turnover¹	9.62	12.13	10.07

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

¹ 2022 Calculation
Area asset turnover = External sales ÷ Long-lived assets
= 4,359 ÷ 453 = 9.62

The financial performance in the European region exhibits significant volatility in revenue generation and asset utilization efficiency over the three-year period ending December 31, 2022. While the asset base remained relatively stable with a slight downward trajectory, the fluctuations in external sales directly dictated the variance in the area asset turnover ratio.

External Sales Trends: Revenue experienced a notable peak in 2021, rising to 5,776 million USD from 4,935 million USD in 2020. However, this growth was not sustained, as sales declined sharply in 2022 to 4,359 million USD, representing a decrease that brought revenue levels below those recorded at the start of the period.
Long-lived Assets Management: A consistent reduction in long-lived assets is observed, moving from 490 million USD in 2020 to 453 million USD by 2022. This steady contraction suggests a strategy of asset divestment or depreciation that outpaced new capital expenditures in the region.
Area Asset Turnover Analysis: The asset turnover ratio reflects the volatility of sales. The ratio peaked at 12.13 in 2021, driven by the simultaneous increase in revenue and decrease in the asset base, indicating a period of high operational efficiency. In 2022, the ratio fell to 9.62, the lowest in the period, as the substantial decline in sales outweighed the marginal reduction in long-lived assets.

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Area Asset Turnover: Asia Pacific

Carrier Global Corp.; Asia Pacific; area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
External sales	3,489)	3,464)	2,655)
Long-lived assets	573)	279)	249)
Area Activity Ratio
Area asset turnover¹	6.09	12.42	10.66

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

¹ 2022 Calculation
Area asset turnover = External sales ÷ Long-lived assets
= 3,489 ÷ 573 = 6.09

An examination of the financial performance in the Asia Pacific region reveals a significant divergence between revenue growth and asset accumulation over the three-year period ending December 31, 2022.

External Sales Trends: Revenue demonstrated strong growth between 2020 and 2021, increasing from US$ 2,655 million to US$ 3,464 million. This growth trajectory flattened in 2022, with sales reaching US$ 3,489 million, representing a marginal year-over-year increase of approximately 0.7%.
Long-lived Asset Expansion: Long-lived assets remained relatively stable between 2020 and 2021, moving from US$ 249 million to US$ 279 million. However, a substantial increase occurred in 2022, with assets rising to US$ 573 million, more than doubling the previous year's balance.
Area Asset Turnover Analysis: The asset turnover ratio peaked in 2021 at 12.42, indicating high operational efficiency in generating sales relative to the asset base. By December 31, 2022, the ratio declined sharply to 6.09. This contraction is directly attributable to the disproportionate increase in long-lived assets relative to the stagnation in external sales during the final year of the period, suggesting a significant capital investment that has not yet yielded a proportional increase in revenue.

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Area Asset Turnover: Other

Carrier Global Corp.; Other; area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
External sales	776)	881)	761)
Long-lived assets	412)	299)	289)
Area Activity Ratio
Area asset turnover¹	1.88	2.95	2.63

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

¹ 2022 Calculation
Area asset turnover = External sales ÷ Long-lived assets
= 776 ÷ 412 = 1.88

The financial performance of the "Other" geographic area between 2020 and 2022 is characterized by an initial increase in operational efficiency followed by a significant decline in asset utilization.

External Sales Trends: External sales experienced volatility over the three-year period. Revenue grew from 761 million US dollars in 2020 to a peak of 881 million US dollars in 2021, representing a growth phase. However, this trend reversed in 2022, with sales declining to 776 million US dollars, returning to levels near those recorded in 2020.
Long-lived Asset Accumulation: There was a consistent upward trajectory in long-lived assets. After a marginal increase from 289 million US dollars in 2020 to 299 million US dollars in 2021, assets grew substantially in 2022 to 412 million US dollars. This indicates a significant expansion of the capital base in this region during the final year of the period.
Area Asset Turnover Analysis: The area asset turnover ratio reflects a deterioration in efficiency by 2022. The ratio improved from 2.63 in 2020 to 2.95 in 2021, driven by sales growth that outpaced asset expansion. Conversely, a sharp decline to 1.88 was observed in 2022. This downturn resulted from the simultaneous occurrence of decreasing external sales and a marked increase in long-lived assets, suggesting that the additional capital investments have not yet translated into proportional revenue generation.

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Carrier Global Corp., external sales by geographic area

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
United States Operations	11,797)	10,492)	9,105)
Europe	4,359)	5,776)	4,935)
Asia Pacific	3,489)	3,464)	2,655)
International Operations	7,848)	9,240)	7,590)
Other	776)	881)	761)
Consolidated	20,421)	20,613)	17,456)

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

Consolidated external sales experienced an initial growth phase, increasing from US$ 17,456 million in 2020 to US$ 20,613 million in 2021, before undergoing a slight contraction to US$ 20,421 million in 2022. This trajectory indicates a period of rapid expansion followed by a stabilization of total revenue.

United States Operations: A consistent and steady upward trend is observed in the domestic market. Sales grew from US$ 9,105 million in 2020 to US$ 10,492 million in 2021, reaching US$ 11,797 million by the end of 2022. The United States operations have served as the primary driver of growth and the most stable revenue component throughout the period.
International Operations: Revenue from international operations exhibited higher volatility compared to domestic sales. An increase from US$ 7,590 million in 2020 to US$ 9,240 million in 2021 was followed by a decline to US$ 7,848 million in 2022, reflecting a sensitivity to regional economic fluctuations.
Regional Performance: Europe and Asia Pacific: The European market showed significant fluctuation, peaking at US$ 5,776 million in 2021 before declining sharply to US$ 4,359 million in 2022. In contrast, the Asia Pacific region demonstrated strong expansion between 2020 and 2021, moving from US$ 2,655 million to US$ 3,464 million, and maintained this level with a slight increase to US$ 3,489 million in 2022.
Other Revenue Categories: Sales categorized as "Other" remained relatively marginal and stable, shifting from US$ 761 million in 2020 to US$ 881 million in 2021, and settling at US$ 776 million in 2022.

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Carrier Global Corp., long-lived assets by geographic area

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
United States Operations	803)	772)	782)
Europe	453)	476)	490)
Asia Pacific	573)	279)	249)
International Operations	1,026)	755)	739)
Other	412)	299)	289)
Consolidated	2,241)	1,826)	1,810)

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

Consolidated long-lived assets experienced a total increase of approximately 23.8% between December 31, 2020, and December 31, 2022. While growth remained marginal between 2020 and 2021, a significant expansion occurred during the 2022 fiscal year, elevating the total valuation to 2,241 million US dollars.

United States Operations: Domestic long-lived assets remained relatively stable over the three-year period. After a slight decrease from 782 million US dollars in 2020 to 772 million US dollars in 2021, assets rose to 803 million US dollars by the end of 2022, indicating a strategy of maintenance rather than aggressive domestic expansion.
Asia Pacific Expansion: The most pronounced growth occurred in the Asia Pacific region, where assets rose from 249 million US dollars in 2020 to 573 million US dollars in 2022. This increase of approximately 130% identifies this region as the primary driver of the company's long-term asset growth.
European Contraction: A consistent downward trend is observed in Europe, with asset values declining annually from 490 million US dollars in 2020 to 453 million US dollars in 2022. This suggests a reduction in capital allocation or an increase in asset depreciation relative to new investments in the European market.
International Operations Total: Total international assets grew from 739 million US dollars in 2020 to 1,026 million US dollars in 2022. The substantial growth in Asia Pacific effectively offset the decline in Europe, shifting the weight of international long-lived assets toward the Asia Pacific region.
Other Assets: Assets classified as other exhibited an upward trajectory, increasing from 289 million US dollars in 2020 to 412 million US dollars in 2022, further contributing to the overall expansion of the consolidated asset base.

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