Analysis of Reportable Segments
Carrier Global Corp. operates in 3 segments: HVAC; Refrigeration; and Fire & Security.
Segment Profit Margin
Carrier Global Corp., profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 19.47% | 15.26% | 25.98% |
| Refrigeration | 12.44% | 11.53% | 10.71% |
| Fire & Security | 45.66% | 12.00% | 11.72% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- HVAC Segment Profit Margin
- The HVAC segment exhibited a notable decline in profit margin from 25.98% in 2020 to 15.26% in 2021, indicating a significant drop in profitability during that period. However, there was a partial recovery in 2022, with the margin rising to 19.47%. Despite this improvement, the margin did not return to the 2020 level, suggesting some ongoing challenges impacting profitability.
- Refrigeration Segment Profit Margin
- The Refrigeration segment showed consistent improvement over the three years. Starting at a profit margin of 10.71% in 2020, the segment's profitability increased modestly to 11.53% in 2021 and further to 12.44% in 2022. This upward trend reflects steady growth in margin performance within this segment.
- Fire & Security Segment Profit Margin
- The Fire & Security segment demonstrated a stable margin between 2020 and 2021, increasing slightly from 11.72% to 12%. In 2022, there was a substantial and unusual surge to 45.66%. This sharp increase is extraordinary compared to previous years and notable relative to other segments, indicating either a significant operational improvement, a one-time gain, or possibly a change in accounting or reporting that merits further investigation.
Segment Profit Margin: HVAC
Carrier Global Corp.; HVAC; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 2,610) | 1,738) | 2,462) |
| Net sales | 13,408) | 11,390) | 9,478) |
| Segment Profitability Ratio | |||
| Segment profit margin1 | 19.47% | 15.26% | 25.98% |
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
Segment profit margin = 100 × Operating profit ÷ Net sales
= 100 × 2,610 ÷ 13,408 = 19.47%
- Operating Profit
- The operating profit exhibited a decline from 2,462 million US dollars in 2020 to 1,738 million US dollars in 2021, indicating a significant reduction in profitability during this period. However, in 2022, the operating profit rebounded strongly to 2,610 million US dollars, surpassing the 2020 figure and suggesting a recovery and improvement in operational performance.
- Net Sales
- Net sales showed a consistent upward trend over the three-year period. Starting at 9,478 million US dollars in 2020, net sales increased to 11,390 million US dollars in 2021 and further to 13,408 million US dollars in 2022. This steady growth reflects expanding revenue generation over the analyzed period.
- Segment Profit Margin
- The segment profit margin demonstrated a downward movement from 25.98% in 2020 to 15.26% in 2021, indicating a reduction in profitability relative to sales during that year. In 2022, the margin improved to 19.47%, reflecting a partial recovery; however, it remained below the margin observed in 2020, suggesting margins are narrower than the earlier period despite higher absolute profits.
Segment Profit Margin: Refrigeration
Carrier Global Corp.; Refrigeration; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 483) | 476) | 357) |
| Net sales | 3,883) | 4,127) | 3,333) |
| Segment Profitability Ratio | |||
| Segment profit margin1 | 12.44% | 11.53% | 10.71% |
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
Segment profit margin = 100 × Operating profit ÷ Net sales
= 100 × 483 ÷ 3,883 = 12.44%
- Net Sales
- Net sales showed an increase from 3333 million US dollars in 2020 to 4127 million US dollars in 2021, representing significant growth. However, there was a decline in 2022 to 3883 million US dollars, indicating a partial reversal of the previous year's growth but still remaining above the 2020 level.
- Operating Profit
- Operating profit rose steadily over the three-year period, from 357 million US dollars in 2020 to 476 million US dollars in 2021 and further to 483 million US dollars in 2022. This demonstrates an upward trend in profitability despite the decline in net sales observed in the last year.
- Segment Profit Margin
- The segment profit margin improved consistently each year, increasing from 10.71% in 2020 to 11.53% in 2021, and reaching 12.44% in 2022. This indicates enhanced efficiency and profitability within the segment, with profit generated per unit of sales growing steadily over the period.
- Overall Analysis
- The segment experienced a strong increase in sales and profitability in 2021, followed by a slight sales contraction in 2022. Despite the sales drop, operating profit continued to rise and profit margins expanded, suggesting effective cost management and pricing strategies. The data reflect a resilient segment with improving profitability metrics even amid fluctuating sales volumes.
Segment Profit Margin: Fire & Security
Carrier Global Corp.; Fire & Security; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 1,630) | 662) | 584) |
| Net sales | 3,570) | 5,515) | 4,985) |
| Segment Profitability Ratio | |||
| Segment profit margin1 | 45.66% | 12.00% | 11.72% |
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
Segment profit margin = 100 × Operating profit ÷ Net sales
= 100 × 1,630 ÷ 3,570 = 45.66%
- Operating Profit
- The operating profit exhibited a fluctuating trend across the three years. It increased moderately from 584 million US dollars in 2020 to 662 million US dollars in 2021. However, there was a substantial surge in 2022, with operating profit reaching 1,630 million US dollars, representing a significant improvement compared to the previous years.
- Net Sales
- Net sales showed an initial growth from 4,985 million US dollars in 2020 to 5,515 million US dollars in 2021. In contrast, there was a noticeable decline in net sales in 2022, dropping sharply to 3,570 million US dollars. This downward movement indicates a contraction in sales volume or pricing despite the increase in operating profit.
- Segment Profit Margin
- The segment profit margin mirrored the changes observed in operating profit and net sales. It remained relatively stable between 2020 (11.72%) and 2021 (12%), followed by a remarkable increase to 45.66% in 2022. This large improvement in margin suggests enhanced profitability and operational efficiency during 2022, despite the lower sales figure.
- Overall Analysis
- The data indicates a significant improvement in profitability in 2022, driven by a sharp increase in operating profit and segment profit margin alongside a decrease in net sales. This pattern may reflect cost control measures, pricing strategies, or changes in product mix leading to higher margins despite reduced sales volume. The contrast between declining sales and rising profitability is a key insight for further investigation into operational factors affecting the segment's performance.
Segment Return on Assets (Segment ROA)
Carrier Global Corp., ROA by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 81.79% | 73.18% | 114.51% |
| Refrigeration | 37.76% | 37.04% | 31.73% |
| Fire & Security | 109.25% | 55.03% | 32.66% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the annual reportable segment Return on Assets (ROA) data reveals distinct trends for each segment across the three-year period from the end of 2020 through 2022.
- HVAC Segment
- The HVAC segment exhibited a significant decline in ROA from 114.51% at the end of 2020 to 73.18% at the end of 2021. Following this drop, there was a moderate recovery to 81.79% by the end of 2022. Despite the rebound, the ROA in 2022 remained substantially lower than the 2020 peak, indicating a contraction in asset efficiency or profitability within this segment over the reviewed period.
- Refrigeration Segment
- The Refrigeration segment showed a steady but modest upward trend. ROA increased from 31.73% in 2020 to 37.04% in 2021 and slightly further to 37.76% in 2022. This gradual improvement suggests incremental gains in asset utilization or profitability, reflecting relatively stable but positive performance dynamics for this segment.
- Fire & Security Segment
- In contrast, the Fire & Security segment experienced a pronounced uptrend in ROA. The segment's ROA rose from a low 32.66% in 2020 to 55.03% in 2021, and then more than doubled to 109.25% in 2022. This substantial increase points to markedly enhanced asset efficiency or profitability, highlighting the segment as a significant growth contributor within the company’s portfolio during the period.
Overall, the data indicates divergent performance trajectories across the segments. HVAC, although still demonstrating the highest absolute ROA values, has faced declining asset returns, whereas Fire & Security has shown remarkable improvement, effectively overtaking Refrigeration and closing the gap with HVAC by 2022. The Refrigeration segment reflects steady but restrained growth. These trends may suggest shifting strategic priorities or evolving market conditions affecting each segment differently.
Segment ROA: HVAC
Carrier Global Corp.; HVAC; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 2,610) | 1,738) | 2,462) |
| Segment assets | 3,191) | 2,375) | 2,150) |
| Segment Profitability Ratio | |||
| Segment ROA1 | 81.79% | 73.18% | 114.51% |
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
Segment ROA = 100 × Operating profit ÷ Segment assets
= 100 × 2,610 ÷ 3,191 = 81.79%
- Operating Profit
- The operating profit exhibited a decline from 2,462 million US dollars at the end of 2020 to 1,738 million US dollars by the end of 2021, indicating a decrease in profitability during this period. However, there was a significant recovery in 2022, with operating profit rising sharply to 2,610 million US dollars, surpassing the 2020 level and suggesting improved operational performance.
- Segment Assets
- Segment assets showed a consistent upward trend over the three years. Beginning at 2,150 million US dollars in 2020, assets increased moderately to 2,375 million US dollars in 2021 and then more markedly to 3,191 million US dollars by the end of 2022. This growth indicates expansion or increased investment in the segment's asset base.
- Segment Return on Assets (ROA)
- The segment ROA declined notably from 114.51% in 2020 to 73.18% in 2021, signaling reduced efficiency in generating operating profit relative to assets during this timeframe. In 2022, ROA improved to 81.79%, reflecting a partial recovery in asset utilization efficiency, although it remained below the 2020 level.
Segment ROA: Refrigeration
Carrier Global Corp.; Refrigeration; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 483) | 476) | 357) |
| Segment assets | 1,279) | 1,285) | 1,125) |
| Segment Profitability Ratio | |||
| Segment ROA1 | 37.76% | 37.04% | 31.73% |
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
Segment ROA = 100 × Operating profit ÷ Segment assets
= 100 × 483 ÷ 1,279 = 37.76%
- Operating Profit
- The operating profit showed a positive trend over the three-year period. It increased significantly from $357 million in 2020 to $476 million in 2021, representing a substantial growth. In 2022, the operating profit continued to increase, though at a much slower pace, reaching $483 million.
- Segment Assets
- Segment assets experienced growth from $1,125 million in 2020 to $1,285 million in 2021. However, in 2022, there was a slight decline to $1,279 million. This suggests a relatively stable asset base with minor fluctuations in the last reported year.
- Segment Return on Assets (ROA)
- The segment’s ROA demonstrated an improving performance, rising from 31.73% in 2020 to 37.04% in 2021 and further increasing marginally to 37.76% in 2022. This indicates enhanced efficiency in generating operating profit relative to the assets employed in this segment.
Segment ROA: Fire & Security
Carrier Global Corp.; Fire & Security; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 1,630) | 662) | 584) |
| Segment assets | 1,492) | 1,203) | 1,788) |
| Segment Profitability Ratio | |||
| Segment ROA1 | 109.25% | 55.03% | 32.66% |
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
Segment ROA = 100 × Operating profit ÷ Segment assets
= 100 × 1,630 ÷ 1,492 = 109.25%
- Operating Profit
- The operating profit demonstrated a consistent and substantial increase over the three-year period. It grew from 584 million US dollars at the end of 2020 to 662 million at the end of 2021, representing a moderate rise. However, by the end of 2022, operating profit surged significantly to 1,630 million US dollars, indicating a remarkable enhancement in profitability.
- Segment Assets
- Segment assets experienced a decline from 1,788 million US dollars at the end of 2020 to 1,203 million in 2021, indicating a reduction in asset base. Nevertheless, assets rebounded to 1,492 million US dollars by the end of 2022, though they remained below the 2020 level. This suggests a partial recovery in the asset base after an initial contraction.
- Segment Return on Assets (ROA)
- The segment return on assets showed a strong upward trend throughout the period. ROA rose from 32.66% in 2020 to 55.03% in 2021, marking an improvement in asset efficiency. This positive trajectory continued sharply into 2022, reaching 109.25%, which reflects a significant increase in profitability relative to segment assets, potentially driven by the notable rise in operating profit combined with the reduced asset base.
Segment Asset Turnover
Carrier Global Corp., asset turnover by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 4.20 | 4.80 | 4.41 |
| Refrigeration | 3.04 | 3.21 | 2.96 |
| Fire & Security | 2.39 | 4.58 | 2.79 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- HVAC Segment Asset Turnover
- The HVAC segment exhibited a slight upward trend from 4.41 in 2020 to 4.8 in 2021, indicating improved efficiency in utilizing assets to generate revenue. However, this was followed by a decline to 4.2 in 2022, suggesting a reduction in asset turnover efficiency during the last reported year.
- Refrigeration Segment Asset Turnover
- The Refrigeration segment showed a moderate increase in asset turnover from 2.96 in 2020 to 3.21 in 2021, signaling enhanced asset utilization. In 2022, there was a minor decrease to 3.04, which may reflect a slight slowdown in asset efficiency, albeit remaining close to the previous peak.
- Fire & Security Segment Asset Turnover
- The Fire & Security segment experienced the most volatile changes among the segments. Starting at 2.79 in 2020, the ratio surged significantly to 4.58 in 2021, indicating a considerable improvement in asset turnover. However, in 2022, there was a sharp decline to 2.39, dropping below the 2020 level, which points to a notable decrease in asset utilization efficiency in the most recent year.
- Overall Observations
- Across the three segments, there is a pattern of asset turnover improvement from 2020 to 2021, followed by a general decline in 2022. The HVAC and Refrigeration segments maintain relatively higher turnover ratios, though both show reduced efficiency in 2022 compared to the previous year. The Fire & Security segment is distinguished by its pronounced fluctuations, peaking in 2021 before falling markedly in 2022. These trends may signal operational or market factors affecting asset utilization differently across segments during the observed period.
Segment Asset Turnover: HVAC
Carrier Global Corp.; HVAC; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Net sales | 13,408) | 11,390) | 9,478) |
| Segment assets | 3,191) | 2,375) | 2,150) |
| Segment Activity Ratio | |||
| Segment asset turnover1 | 4.20 | 4.80 | 4.41 |
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
Segment asset turnover = Net sales ÷ Segment assets
= 13,408 ÷ 3,191 = 4.20
The analysis of the HVAC reportable segment reveals distinct trends in net sales, segment assets, and segment asset turnover over the three-year period ending December 31, 2022.
- Net Sales
- Net sales demonstrated a consistent upward trajectory, increasing from $9,478 million in 2020 to $11,390 million in 2021, and further advancing to $13,408 million in 2022. This represents a cumulative growth of approximately 41.5% over the three years, indicating strong demand or successful expansion within the segment.
- Segment Assets
- Segment assets followed a growing trend as well, rising from $2,150 million in 2020 to $2,375 million in 2021 and reaching $3,191 million by the end of 2022. The growth in assets, which amounts to nearly a 48% increase over the period, suggests ongoing capital investment or acquisition of resources required to support the expansion in operations or sales volume.
- Segment Asset Turnover
- Segment asset turnover, which measures the efficiency of asset utilization to generate sales, exhibited fluctuations across the period. It increased from 4.41 in 2020 to 4.8 in 2021, reflecting improved efficiency, but then decreased to 4.2 in 2022. The decline in the latest year implies that despite rising sales, asset growth outpaced sales growth to some extent, potentially indicating less efficient asset use or a strategic buildup of assets in anticipation of future sales.
Overall, the segment experienced robust sales growth accompanied by significant asset expansion. However, the decline in asset turnover in 2022 highlights a potential area for monitoring asset utilization effectiveness as the company continues to invest in growth initiatives.
Segment Asset Turnover: Refrigeration
Carrier Global Corp.; Refrigeration; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Net sales | 3,883) | 4,127) | 3,333) |
| Segment assets | 1,279) | 1,285) | 1,125) |
| Segment Activity Ratio | |||
| Segment asset turnover1 | 3.04 | 3.21 | 2.96 |
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
Segment asset turnover = Net sales ÷ Segment assets
= 3,883 ÷ 1,279 = 3.04
- Net Sales
- Net sales showed a significant increase from 3,333 million US dollars in 2020 to 4,127 million US dollars in 2021, representing a robust growth year-over-year. However, in 2022, net sales decreased slightly to 3,883 million US dollars, indicating a moderate decline following the previous year's peak.
- Segment Assets
- Segment assets experienced a gradual rise from 1,125 million US dollars in 2020 to 1,285 million US dollars in 2021. This upward trend plateaued in 2022 with a marginal decrease to 1,279 million US dollars, suggesting stability in asset levels after growth.
- Segment Asset Turnover
- The segment asset turnover ratio, which measures the efficiency of using assets to generate sales, improved from 2.96 times in 2020 to 3.21 times in 2021, indicating enhanced operational efficiency. In 2022, the ratio slightly declined to 3.04 times, though it remained above the 2020 level, reflecting sustained but somewhat reduced asset utilization efficiency.
Segment Asset Turnover: Fire & Security
Carrier Global Corp.; Fire & Security; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Net sales | 3,570) | 5,515) | 4,985) |
| Segment assets | 1,492) | 1,203) | 1,788) |
| Segment Activity Ratio | |||
| Segment asset turnover1 | 2.39 | 4.58 | 2.79 |
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
Segment asset turnover = Net sales ÷ Segment assets
= 3,570 ÷ 1,492 = 2.39
- Net Sales
- The net sales exhibited an initial increase from 4,985 million US dollars in 2020 to 5,515 million US dollars in 2021, indicating growth in revenue during this period. However, there was a significant decline in 2022, with net sales dropping to 3,570 million US dollars, representing a notable decrease from the previous year.
- Segment Assets
- Segment assets decreased from 1,788 million US dollars in 2020 to 1,203 million US dollars in 2021, followed by a recovery to 1,492 million US dollars in 2022. Although the assets did not return to the 2020 level, the 2022 increase suggests a partial rebound after the previous decline.
- Segment Asset Turnover
- Segment asset turnover, which measures the efficiency of asset usage to generate sales, improved significantly from 2.79 in 2020 to 4.58 in 2021. This implies more effective utilization of assets during this period. However, a sharp decline to 2.39 in 2022 indicates reduced efficiency and a less effective use of assets compared to both 2020 and 2021 levels.
- Overall Trend and Insights
- The segment experienced growth in net sales and asset utilization efficiency in 2021, despite a reduction in segment assets. Conversely, 2022 saw a marked downturn in net sales and asset turnover, although segment assets partially recovered. The combination of decreased sales and reduced efficiency in 2022 suggests operational challenges or market conditions that adversely affected performance during that year.
Segment Capital Expenditures to Depreciation
Carrier Global Corp., capital expenditures to depreciation by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 0.91 | 1.21 | 1.15 |
| Refrigeration | 1.03 | 1.08 | 0.67 |
| Fire & Security | 0.69 | 0.59 | 0.47 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- HVAC Segment
- The capital expenditures to depreciation ratio for the HVAC segment demonstrated an initial increase from 1.15 in 2020 to 1.21 in 2021, indicating an increment in capital spending relative to depreciation during that period. However, this trend reversed in 2022, with the ratio declining significantly to 0.91, suggesting a reduction in capital expenditures relative to depreciation or possibly an increase in depreciation expenses.
- Refrigeration Segment
- The Refrigeration segment revealed a notable increase in the capital expenditures to depreciation ratio from 0.67 in 2020 to 1.08 in 2021, crossing the threshold of 1, which indicates capital expenditures exceeded the depreciation expense. In 2022, the ratio slightly decreased to 1.03 but remained above 1, implying continued investment surpassing depreciation, albeit at a somewhat reduced pace compared to the prior year.
- Fire & Security Segment
- The Fire & Security segment showed a steady upward trend across the analyzed periods. The ratio increased from 0.47 in 2020 to 0.59 in 2021 and further to 0.69 in 2022. This consistent increase points to progressively higher capital expenditures relative to depreciation, though the ratio remains below 1, indicating that capital expenditures have not yet surpassed depreciation charges.
- Overall Trends and Insights
- Overall, the data reveals variable capital expenditure approaches across segments. The HVAC segment experienced early growth in capital investment intensity relative to asset wear but showed a marked pullback in the latest year. The Refrigeration segment maintained high investment levels above depreciation, suggesting expansion or renewal of assets. Meanwhile, the Fire & Security segment demonstrated continuous growth in investment relative to depreciation, though at a moderate level. These patterns may reflect segment-specific strategies in asset management and future growth expectations.
Segment Capital Expenditures to Depreciation: HVAC
Carrier Global Corp.; HVAC; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Capital expenditures | 232) | 225) | 188) |
| Depreciation & amortization | 256) | 186) | 163) |
| Segment Financial Ratio | |||
| Segment capital expenditures to depreciation1 | 0.91 | 1.21 | 1.15 |
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation & amortization
= 232 ÷ 256 = 0.91
- Capital Expenditures
- The capital expenditures exhibit a consistent upward trend over the three-year period. Starting at $188 million in 2020, they increased to $225 million in 2021, and further to $232 million in 2022. This steady increase indicates a growing investment in the segment's operational assets or expansion activities.
- Depreciation & Amortization
- Depreciation and amortization also show a rising pattern, moving from $163 million in 2020 to $186 million in 2021, with a significant jump to $256 million in 2022. The marked increase in 2022 suggests an acceleration in asset aging, changes in asset base composition, or adjustments in amortization policies.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation begins above one in 2020 and 2021, at 1.15 and 1.21 respectively, indicating that investments in capital assets slightly outpaced asset depreciation during these years. However, in 2022, this ratio declines to 0.91, falling below one. This shift implies that depreciation is now exceeding capital expenditure, which could signal a reduction in asset renewal or expansion relative to the rate at which assets are being expensed.
Segment Capital Expenditures to Depreciation: Refrigeration
Carrier Global Corp.; Refrigeration; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Capital expenditures | 32) | 39) | 26) |
| Depreciation & amortization | 31) | 36) | 39) |
| Segment Financial Ratio | |||
| Segment capital expenditures to depreciation1 | 1.03 | 1.08 | 0.67 |
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation & amortization
= 32 ÷ 31 = 1.03
- Capital Expenditures
- There was an increase in capital expenditures from 26 million US dollars in 2020 to 39 million in 2021, followed by a decline to 32 million in 2022. This indicates an initial rise in investment in physical assets or infrastructure, with a subsequent decrease, though expenditures remained above the 2020 level.
- Depreciation and Amortization
- The depreciation and amortization expense decreased steadily over the three-year period, falling from 39 million US dollars in 2020 to 36 million in 2021 and further down to 31 million in 2022. This suggests a declining amortizable asset base or changes in asset mix or useful lives.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation increased markedly from 0.67 in 2020 to 1.08 in 2021, indicating that investments in capital assets exceeded the depreciation expense for the first time during this period. In 2022, the ratio slightly decreased to 1.03 but remained above one, signifying continued capital spending at a level that supports asset base growth or renewal exceeding the rate of depreciation expense.
Segment Capital Expenditures to Depreciation: Fire & Security
Carrier Global Corp.; Fire & Security; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Capital expenditures | 40) | 49) | 51) |
| Depreciation & amortization | 58) | 83) | 108) |
| Segment Financial Ratio | |||
| Segment capital expenditures to depreciation1 | 0.69 | 0.59 | 0.47 |
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation & amortization
= 40 ÷ 58 = 0.69
The financial data for the "Fire & Security" reportable segment over the three-year period ending December 31, 2022, reveals notable trends in capital expenditures, depreciation and amortization, and their relative ratio.
- Capital Expenditures
- Capital expenditures demonstrated a declining trend, decreasing from 51 million US dollars in 2020 to 49 million US dollars in 2021, and further declining to 40 million US dollars in 2022. This consistent reduction may indicate a strategic scaling back in investment in fixed assets or other capital projects within the segment.
- Depreciation & Amortization
- Depreciation and amortization expenses showed a significant and steady decline over the same period, dropping from 108 million US dollars in 2020 to 83 million US dollars in 2021, and subsequently to 58 million US dollars in 2022. This sharp reduction suggests either accelerated asset write-offs in prior periods or a decrease in the asset base being depreciated, which aligns with the observed decline in capital expenditures.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation and amortization increased progressively from 0.47 in 2020 to 0.59 in 2021, and further to 0.69 in 2022. Despite the absolute decline in capital expenditures, this rising ratio indicates that capital investments are constituting a larger proportion relative to the annual depreciation expense, possibly reflecting a slowdown in asset aging or a strategic shift in asset management.
Overall, the segment displays a contraction in both investment outlays and asset depreciation, coupled with an increasing capital expenditure to depreciation ratio. This pattern may imply a deliberate reduction in asset acquisition or replacement cadence, potentially as part of cost management initiatives or due to changing operational requirements in the segment.
Net sales
Carrier Global Corp., net sales by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 13,408) | 11,390) | 9,478) |
| Refrigeration | 3,883) | 4,127) | 3,333) |
| Fire & Security | 3,570) | 5,515) | 4,985) |
| Total | 20,861) | 21,032) | 17,796) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- HVAC Segment Net Sales
- The net sales for the HVAC segment showed a consistent upward trend across the three years. Starting at $9,478 million in 2020, the value increased to $11,390 million in 2021 and further to $13,408 million in 2022. This represents a strong and sustained growth trajectory over the period analyzed.
- Refrigeration Segment Net Sales
- Net sales in the Refrigeration segment increased from $3,333 million in 2020 to $4,127 million in 2021, indicating significant growth. However, in 2022, there was a decline to $3,883 million. While the segment grew initially, the reduction in the last year suggests potential challenges or market changes impacting this area.
- Fire & Security Segment Net Sales
- This segment exhibited a different pattern. Net sales rose from $4,985 million in 2020 to $5,515 million in 2021, but then experienced a marked drop to $3,570 million in 2022. The decline in 2022 was notable and counter to the upward movement seen in previous years, indicating some setback or restructuring in this segment.
- Total Net Sales
- Total net sales increased from $17,796 million in 2020 to $21,032 million in 2021. Despite the declines in certain segments in 2022, total net sales held relatively steady at $20,861 million, showing only a slight decrease from the previous year. The overall stability in total sales despite mixed segment performances suggests a balancing effect within the portfolio.
- Summary of Trends
- The HVAC segment consistently drove overall growth with steady increases over the three-year period. The Refrigeration segment showed initial growth but faced a downturn in the final year. The Fire & Security segment experienced growth followed by a significant decline, indicating volatility. Despite these variances at the segment level, total net sales remained largely stable from 2021 to 2022, underscoring the importance of the HVAC segment's strong performance in maintaining the company's revenue base.
Operating profit
Carrier Global Corp., operating profit by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 2,610) | 1,738) | 2,462) |
| Refrigeration | 483) | 476) | 357) |
| Fire & Security | 1,630) | 662) | 584) |
| Total | 4,723) | 2,876) | 3,403) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Overall Operating Profit Trend
- The total operating profit exhibited a decline from 2020 to 2021, decreasing from $3,403 million to $2,876 million. Subsequently, a significant recovery and increase occurred in 2022, with the total rising sharply to $4,723 million, surpassing the 2020 level by a substantial margin.
- HVAC Segment
- The HVAC segment showed a notable decline in operating profit in 2021, dropping from $2,462 million in 2020 to $1,738 million in 2021. However, this segment experienced a strong rebound in 2022, increasing to $2,610 million, slightly above the profit level of 2020.
- Refrigeration Segment
- This segment demonstrated a consistent upward trend over the three years. Operating profit increased steadily from $357 million in 2020 to $476 million in 2021, with a further incremental rise to $483 million in 2022. The growth here is gradual but positive, indicating steady improvement.
- Fire & Security Segment
- The Fire & Security segment reported a moderate increase from $584 million in 2020 to $662 million in 2021. The most remarkable change occurred in 2022 when the operating profit more than doubled to $1,630 million, indicating a significant expansion or performance improvement within the segment during that year.
- Segment Contribution to Total
- Even though the HVAC segment represents the largest share of operating profit, the recovery in 2022 was primarily driven by both the strong resurgence in HVAC and the substantial growth in Fire & Security. Refrigeration’s contribution, while increasing, remains modest relative to the other segments. The sharp increase in Fire & Security in 2022 is a key factor behind the total operating profit surpassing previous years.
Segment assets
Carrier Global Corp., segment assets by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 3,191) | 2,375) | 2,150) |
| Refrigeration | 1,279) | 1,285) | 1,125) |
| Fire & Security | 1,492) | 1,203) | 1,788) |
| Total | 5,962) | 4,863) | 5,063) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- HVAC Segment Assets
- The HVAC segment assets demonstrated a consistent upward trend over the observed period. Beginning at 2,150 million US dollars at the end of 2020, the asset base increased to 2,375 million in 2021 and then experienced a substantial rise to 3,191 million by the end of 2022. This reflects strong asset growth, particularly notable between 2021 and 2022.
- Refrigeration Segment Assets
- The Refrigeration segment showed moderate growth initially, with assets increasing from 1,125 million US dollars at the end of 2020 to 1,285 million in 2021. However, this was followed by a slight decline to 1,279 million in 2022. Overall, the Refrigeration segment's assets remained relatively stable with minimal fluctuations across the three years.
- Fire & Security Segment Assets
- Assets within the Fire & Security segment experienced a decline from 1,788 million US dollars in 2020 to 1,203 million in 2021, representing a considerable reduction. However, this segment showed a recovery in 2022, with assets increasing to 1,492 million, though not reaching the level observed in 2020. The pattern suggests some volatility or restructuring within this segment during the period.
- Total Segment Assets
- The total reportable segment assets decreased slightly from 5,063 million US dollars in 2020 to 4,863 million in 2021, signaling an overall contraction. Nevertheless, total assets rebounded significantly to 5,962 million in 2022, surpassing the 2020 level by a substantial margin. This overall growth in 2022 was likely driven by the strong increase in the HVAC segment and partial recovery in Fire & Security assets.
Capital expenditures
Carrier Global Corp., capital expenditures by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 232) | 225) | 188) |
| Refrigeration | 32) | 39) | 26) |
| Fire & Security | 40) | 49) | 51) |
| Total | 304) | 313) | 265) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- HVAC Capital Expenditures
- The capital expenditures for the HVAC segment have shown a consistent upward trend over the three-year period. Starting at $188 million in 2020, investments increased to $225 million in 2021 and further to $232 million in 2022, reflecting ongoing emphasis on this segment.
- Refrigeration Capital Expenditures
- This segment experienced a rise in capital expenditures from $26 million in 2020 to $39 million in 2021, indicating a significant increase in investment. However, in 2022, spending declined to $32 million, suggesting a possible slowdown or reprioritization within this area.
- Fire & Security Capital Expenditures
- Capital expenditures in the Fire & Security segment have decreased steadily, from $51 million in 2020 to $49 million in 2021, and further to $40 million in 2022. This consistent decline may point to reduced focus or maturation of assets in this segment.
- Total Capital Expenditures
- The overall capital expenditures across all segments increased from $265 million in 2020 to $313 million in 2021, demonstrating a marked increase in total investment. However, in 2022, total expenditures slightly decreased to $304 million, primarily influenced by reductions in the Refrigeration and Fire & Security segments despite continued growth in HVAC.
Depreciation & amortization
Carrier Global Corp., depreciation & amortization by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 256) | 186) | 163) |
| Refrigeration | 31) | 36) | 39) |
| Fire & Security | 58) | 83) | 108) |
| Total | 345) | 305) | 310) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Overall Trend in Total Depreciation & Amortization
- The total depreciation and amortization expense demonstrates a fluctuating pattern over the three years. From 2020 to 2021, there is a slight decrease from 310 million US dollars to 305 million US dollars. However, the figure then rises significantly to 345 million US dollars in 2022, indicating a notable increase in amortization and depreciation charges in the most recent year.
- HVAC Segment
- Within the HVAC segment, the data indicates a steady and substantial upward trend. Depreciation and amortization expenses rose from 163 million US dollars in 2020 to 186 million US dollars in 2021, and then more sharply to 256 million US dollars in 2022. This consistent growth suggests increased asset base or capital expenditures being amortized over time in this segment.
- Refrigeration Segment
- The Refrigeration segment shows a gradual declining trend. The expense decreased modestly from 39 million US dollars in 2020 to 36 million US dollars in 2021, followed by a further reduction to 31 million US dollars in 2022. This may reflect disposals of assets, a change in asset mix, or reduced capital investments within this segment.
- Fire & Security Segment
- The Fire & Security segment exhibits a marked downward trajectory over the three-year period. The depreciation and amortization amount dropped from 108 million US dollars in 2020 to 83 million US dollars in 2021, and further declined to 58 million US dollars in 2022. This sustained decrease may indicate asset write-offs, decreased capital expenditures, or a shift in business focus away from this segment.