- Net sales up 17% versus first quarter 2023; organic sales up
2%
- GAAP EPS of $0.29 and adjusted
EPS of $0.62
- GAAP operating margin down 240 bps year over year; adjusted
operating margin expanded 280 bps
- Maintaining full year 2024 adjusted EPS guidance range despite
additional $0.05 headwind from the
earlier timing of business exits
- Increasing full year 2024 adjusted operating margin guidance to
~15.5%
- Expect to resume share repurchases in 2024
PALM
BEACH GARDENS, Fla., April 25,
2024 /PRNewswire/ -- Carrier Global Corporation
(NYSE:CARR), global leader in intelligent climate and energy
solutions, today reported strong financial results for the first
quarter of 2024 and reaffirmed its full year earnings guidance
despite the expected earlier timing of business exits compared to
guidance provided in February.
"We continue to perform while transforming. We expanded adjusted
operating margins by 280 basis points driven by very strong
productivity while continuing to invest in our future," said
Carrier Chairman & CEO David
Gitlin. "We closed on Viessmann Climate Solutions at
the beginning of the year, which will be transformational for
Carrier and the industry. We are focused on capitalizing on the
long-term secular sustainability trends, outperforming the market,
and achieving and accelerating revenue and cost synergies. The
business exits are also on track as we are within months of closing
on three of our four transactions and are making significant
progress on completing the fourth. We now expect to resume share
repurchases in 2024 as the net proceeds from the announced
transactions help us return to ~2x net leverage this year."
First Quarter 2024 Results
Carrier's first quarter sales of $6.2
billion were up 17% compared to the prior year including 2%
organic growth and approximately 16% contribution from the
acquisition of Viessmann Climate Solutions offset by about 1% from
divestitures. Organic sales in the HVAC segment were up 2%. HVAC
sales in the Americas were up mid-single-digits driven by continued
strength in commercial and light commercial HVAC both of which were
up approximately 20%, partially offset by residential HVAC which
was down low-single-digits. HVAC organic sales in EMEA were down
10% with commercial HVAC up around 10% which was more than offset
by a significant decline in EMEA residential and light commercial.
These organic figures exclude the contribution of Viessmann Climate
Solutions which was down 12% year-over-year in the quarter, more
than half of which was driven by lower solar PV sales. HVAC sales
in Asia Pacific were flat with
strong growth in China offset by
lower sales in Japan as we
continue to improve our mix in that country. Refrigeration
sales were down 2% organically driven by North America truck and trailer and commercial
refrigeration, mostly offset by over 50% growth in container. Fire
and Security showed broad-based growth and sales were up 7%
organically in the quarter with commercial and residential fire up
mid-single digits.
GAAP operating profit in the quarter of $500 million was down 10% from last year
primarily due to acquisition costs and the amortization expense of
acquired intangible assets, which more than offset the addition of
Viessmann Climate Solutions. Adjusted operating profit of
$927 million was up 44%, mostly
driven by strong productivity and the contribution from Viessmann
Climate Solutions.
Net income was $269 million and
adjusted net income was $565 million.
GAAP EPS was $0.29 and adjusted EPS
was $0.62. Net cash flows generated
in operating activities were $40
million and capital expenditures were $104 million, resulting in a free cash outflow of
$64 million. The outflow was
consistent with Carrier's seasonal working capital pattern.
Full-Year 2024 Guidance**
Carrier updated the following guidance for 2024, which includes
Access Solutions, Commercial Refrigeration, and Industrial Fire for
half a year:
|
Current
Guidance
|
Prior
Guidance
|
Sales
|
~$26B
Organic* up
MSD
FX 0%
Acquisitions
+18%
Divestitures
(6%)
|
~$26.5B
Organic* up
MSD
FX 0%
Acquisitions
+20%
Divestitures
(5%)
|
|
|
|
Adjusted Operating
Margin*
|
~15.5%
|
15.0% -
15.5%
|
|
|
|
Adjusted
EPS*
|
$2.80 -
$2.90
|
$2.80 -
$2.90
|
|
|
|
Free Cash
Flow*
|
~$0.4B
Includes ~$2B of
expected tax payments
on the gains from the announced
business exits, restructuring, and
transaction-related costs
|
~$0.7B
Includes ~$1.7B of
expected tax
payments on the gains from the
announced business exits, restructuring,
and transaction-related costs
|
|
*Note: When the
company provides expectations for organic sales, adjusted operating
profit, adjusted operating margin, adjusted EPS and free cash flow
on a forward-looking basis, a reconciliation of the differences
between the non-GAAP expectations and the corresponding GAAP
measures generally is not available without unreasonable effort.
See "Use and Definitions of Non-GAAP Financial Measures" below for
additional information.
|
**As of April 25,
2024
|
Conference Call
Carrier will host a webcast of its earnings conference call
today, Thursday, April 25, 2024, at
7:30 a.m. ET. To access the webcast,
visit the Events & Presentations section of the Carrier
Investor Relations site at
ir.carrier.com/news-and-events/events-and-presentations or to
listen to the earnings call by phone, participants must
pre-register at Carrier Earnings Call Registration. All
registrants will receive dial-in information and a PIN allowing
access to the live call.
Cautionary Statement
This communication contains statements which, to the extent they
are not statements of historical or present fact, constitute
"forward-looking statements" under the securities laws. These
forward-looking statements are intended to provide management's
current expectations or plans for Carrier's future operating and
financial performance, based on assumptions currently believed to
be valid. Forward-looking statements can be identified by the use
of words such as "believe," "expect," "expectations," "plans,"
"strategy," "prospects," "estimate," "project," "target,"
"anticipate," "will," "should," "see," "guidance," "outlook,"
"confident," "scenario" and other words of similar meaning in
connection with a discussion of future operating or financial
performance. Forward-looking statements may include, among other
things, statements relating to future sales, earnings, cash flow,
results of operations, uses of cash, share repurchases, tax rates
and other measures of financial performance or potential future
plans, strategies or transactions of Carrier, our portfolio
transformation and the use of the anticipated proceeds thereof,
potential future investments, Carrier's plans with respect to its
indebtedness and other statements that are not historical facts.
All forward-looking statements involve risks, uncertainties and
other factors that may cause actual results to differ materially
from those expressed or implied in the forward-looking statements.
For additional information on identifying factors that may cause
actual results to vary materially from those stated in
forward-looking statements, see Carrier's reports on Forms 10-K,
10-Q and 8-K filed with or furnished to the U.S. Securities and
Exchange Commission from time to time. Any forward-looking
statement speaks only as of the date on which it is made, and
Carrier assumes no obligation to update or revise such statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law.
About Carrier
Carrier Global Corporation, global leader in intelligent climate
and energy solutions, is committed to creating solutions that
matter for people and our planet for generations to come. From the
beginning, we've led in inventing new technologies and entirely new
industries. Today, we continue to lead because we have a
world-class, diverse workforce that puts the customer at the center
of everything we do. For more information, visit
corporate.carrier.com or follow Carrier on social media at
@Carrier.
CARR-IR
Contact:
|
Investor
Relations
|
|
Sam Pearlstein
|
|
561-365-2251
|
|
Sam.Pearlstein@Carrier.com
|
|
|
|
Media
Inquiries
|
|
Ashley
Barrie
|
|
561-365-1260
|
|
Ashley.Barrie@Carrier.com
|
SELECTED FINANCIAL DATA, NON-GAAP MEASURES AND
DEFINITIONS
Following are tables that present selected financial data of
Carrier Global Corporation ("Carrier"). Also included are
reconciliations of non-GAAP measures to their most comparable GAAP
measures.
Use and Definitions of Non-GAAP Financial Measures
Carrier Global Corporation ("Carrier") reports its financial
results in accordance with accounting principles generally accepted
in the United States ("GAAP"). We
supplement the reporting of our financial information determined
under GAAP with certain non-GAAP financial information. The
non-GAAP information presented provides investors with additional
useful information, but should not be considered in isolation or as
substitutes for the related GAAP measures. Moreover, other
companies may define non-GAAP measures differently, which limits
the usefulness of these measures for comparisons with such other
companies. We encourage investors to review our financial
statements and publicly filed reports in their entirety and not to
rely on any single financial measure. A reconciliation of the
non-GAAP measures to the corresponding amounts prepared in
accordance with GAAP appears in the tables in this Appendix. The
tables provide additional information as to the items and amounts
that have been excluded from the adjusted measures.
Organic sales, adjusted operating profit, adjusted operating
margin, incremental margins / earnings conversion, earnings before
interest, taxes and depreciation and amortization ("EBITDA"),
adjusted EBITDA, adjusted net income, adjusted earnings per share
("EPS"), adjusted interest expense, net, adjusted effective tax
rate and net debt are non-GAAP financial measures.
Organic sales represents consolidated net sales (a GAAP
measure), excluding the impact of foreign currency translation,
acquisitions and divestitures completed in the preceding twelve
months and other significant items of a nonoperational nature
(hereinafter referred to as "other significant items"). Adjusted
operating profit represents operating profit (a GAAP measure),
excluding restructuring costs, amortization of acquired intangibles
and other significant items. Adjusted operating margin represents
adjusted operating profit as a percentage of net sales (a GAAP
measure). Incremental margins / earnings conversion represents the
year-over-year change in adjusted operating profit divided by the
year-over-year change in net sales. EBITDA represents net income
attributable to common shareholders (a GAAP measure), adjusted for
interest income and expense, income tax expense, and depreciation
and amortization. Adjusted EBITDA represents EBITDA, as calculated
above, excluding non-service pension benefit, non-controlling
interest in subsidiaries' earnings from operations, restructuring
costs and other significant items. Adjusted net income represents
net income attributable to common shareowners (a GAAP measure),
excluding restructuring costs, amortization of acquired intangibles
and other significant items. Adjusted EPS represents diluted
earnings per share (a GAAP measure), excluding restructuring costs,
amortization of acquired intangibles and other significant items.
Adjusted interest expense, net represents interest expense (a GAAP
measure) and interest income (a GAAP measure), net excluding other
significant items. The adjusted effective tax rate represents the
effective tax rate (a GAAP measure), excluding restructuring costs,
amortization of acquired intangibles and other significant items.
Net debt represents long-term debt (a GAAP measure) less cash and
cash equivalents (a GAAP measure). For the business segments, when
applicable, adjustments of operating profit and operating margins
represent operating profit, excluding restructuring, amortization
of acquired intangibles and other significant items.
Free cash flow is a non-GAAP financial measure that represents
net cash flows provided by operating activities (a GAAP measure)
less capital expenditures. Management believes free cash flow is a
useful measure of liquidity and an additional basis for assessing
Carrier's ability to fund its activities, including the financing
of acquisitions, debt service, repurchases of Carrier's common
stock and distribution of earnings to shareowners.
Orders are contractual commitments with customers to provide
specified goods or services for an agreed upon price and may not be
subject to penalty if cancelled.
When we provide our expectations for organic sales, adjusted
operating profit, adjusted operating margin, adjusted interest
expense, net, adjusted effective tax rate, incremental
margins/earnings conversion, EBITDA, adjusted EBITDA, adjusted EPS
and free cash flow on a forward-looking basis, a reconciliation of
the differences between the non-GAAP expectations and the
corresponding GAAP measures (expected net sales, operating profit,
operating margin, interest expense, effective tax rate, incremental
operating margin, net income attributable to common shareowners,
diluted EPS and net cash flows provided by operating activities)
generally is not available without unreasonable effort due to
potentially high variability, complexity and low visibility as to
the items that would be excluded from the GAAP measure in the
relevant future period, such as unusual gains and losses, the
ultimate outcome of pending litigation, fluctuations in foreign
currency exchange rates, the impact and timing of potential
acquisitions and divestitures, future restructuring costs, and
other structural changes or their probable significance. The
variability of the excluded items may have a significant, and
potentially unpredictable, impact on our future GAAP results.
Carrier Global
Corporation
Condensed
Consolidated Statement of Operations
|
|
|
|
(Unaudited)
|
|
|
Three Months
Ended
March 31,
|
(In millions,
except per share amounts)
|
|
2024
|
|
2023
|
Net
sales
|
|
|
|
|
Product
sales
|
|
$
5,542
|
|
$
4,686
|
Service
sales
|
|
640
|
|
587
|
Total Net
sales
|
|
6,182
|
|
5,273
|
Costs and
expenses
|
|
|
|
|
Cost of products
sold
|
|
(3,998)
|
|
(3,458)
|
Cost of services
sold
|
|
(479)
|
|
(437)
|
Research and
development
|
|
(224)
|
|
(139)
|
Selling, general and
administrative
|
|
(985)
|
|
(721)
|
Total Costs and
expenses
|
|
(5,686)
|
|
(4,755)
|
Equity method
investment net earnings
|
|
31
|
|
44
|
Other income
(expense), net
|
|
(27)
|
|
(7)
|
Operating
profit
|
|
500
|
|
555
|
Interest (expense)
income, net
|
|
(165)
|
|
(46)
|
Income from
operations before income taxes
|
|
335
|
|
509
|
Income tax (expense)
benefit
|
|
(46)
|
|
(122)
|
Net income from
operations
|
|
289
|
|
387
|
Less: Non-controlling
interest in subsidiaries' earnings from operations
|
|
20
|
|
14
|
Net income
attributable to common shareowners
|
|
$
269
|
|
$
373
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
Basic
|
|
$
0.30
|
|
$
0.45
|
Diluted
|
|
$
0.29
|
|
$
0.44
|
Weighted-average
number of shares outstanding
|
|
|
|
|
Basic
|
|
899.2
|
|
835.0
|
Diluted
|
|
913.0
|
|
852.2
|
Carrier Global
Corporation
Condensed
Consolidated Balance Sheet
|
|
|
|
(Unaudited)
|
(In
millions)
|
|
March 31,
2024
|
|
December 31,
2023
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,313
|
|
$
10,015
|
Accounts receivable,
net
|
|
3,156
|
|
2,481
|
Contract assets,
current
|
|
320
|
|
306
|
Inventories,
net
|
|
3,189
|
|
2,217
|
Assets held for sale,
current
|
|
3,169
|
|
3,314
|
Other assets,
current
|
|
568
|
|
447
|
Total current
assets
|
|
11,715
|
|
18,780
|
Future income tax
benefits
|
|
823
|
|
739
|
Fixed assets,
net
|
|
3,179
|
|
2,293
|
Operating lease
right-of-use assets
|
|
633
|
|
491
|
Intangible assets,
net
|
|
7,351
|
|
1,028
|
Goodwill
|
|
15,366
|
|
7,989
|
Pension and
post-retirement assets
|
|
78
|
|
32
|
Equity method
investments
|
|
1,155
|
|
1,140
|
Other assets
|
|
510
|
|
330
|
Total
Assets
|
|
$
40,810
|
|
$
32,822
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Accounts
payable
|
|
$
3,074
|
|
$
2,742
|
Accrued
liabilities
|
|
2,994
|
|
2,811
|
Contract liabilities,
current
|
|
501
|
|
425
|
Liabilities held for
sale, current
|
|
820
|
|
862
|
Current portion of
long-term debt
|
|
1,248
|
|
51
|
Total current
liabilities
|
|
8,637
|
|
6,891
|
Long-term
debt
|
|
15,647
|
|
14,242
|
Future pension and
post-retirement obligations
|
|
259
|
|
155
|
Future income tax
obligations
|
|
2,272
|
|
535
|
Operating lease
liabilities
|
|
505
|
|
391
|
Other long-term
liabilities
|
|
1,584
|
|
1,603
|
Total
Liabilities
|
|
28,904
|
|
23,817
|
|
|
|
|
|
Equity
|
|
|
|
|
Common
stock
|
|
9
|
|
9
|
Treasury
stock
|
|
(1,972)
|
|
(1,972)
|
Additional paid-in
capital
|
|
8,536
|
|
5,535
|
Retained
earnings
|
|
6,860
|
|
6,591
|
Accumulated other
comprehensive loss
|
|
(1,872)
|
|
(1,486)
|
Non-controlling
interest
|
|
345
|
|
328
|
Total
Equity
|
|
11,906
|
|
9,005
|
Total Liabilities
and Equity
|
|
$
40,810
|
|
$
32,822
|
Carrier Global
Corporation
Condensed
Consolidated Statement of Cash Flows
|
|
|
(Unaudited)
|
|
|
Three Months
Ended
March 31,
|
(In
millions)
|
|
2024
|
|
2023
|
Operating
Activities
|
|
|
|
|
Net income from
operations
|
|
$
289
|
|
$
387
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
314
|
|
136
|
Deferred income tax
provision
|
|
(123)
|
|
(24)
|
Stock-based
compensation costs
|
|
22
|
|
22
|
Equity method
investment net earnings
|
|
(31)
|
|
(44)
|
(Gain) loss on sale of
investments / deconsolidation
|
|
—
|
|
(16)
|
Changes in operating
assets and liabilities
|
|
|
|
|
Accounts receivable,
net
|
|
(205)
|
|
(157)
|
Contract assets,
current
|
|
(33)
|
|
(28)
|
Inventories,
net
|
|
(72)
|
|
(126)
|
Other assets,
current
|
|
(52)
|
|
(60)
|
Accounts payable and
accrued liabilities
|
|
(195)
|
|
(25)
|
Contract liabilities,
current
|
|
(18)
|
|
64
|
Defined benefit plan
contributions
|
|
(6)
|
|
(6)
|
Distributions from
equity method investments
|
|
7
|
|
3
|
Other operating
activities, net
|
|
143
|
|
(6)
|
Net cash flows
provided by (used in) operating activities
|
|
40
|
|
120
|
Investing
Activities
|
|
|
|
|
Capital
expenditures
|
|
(104)
|
|
(70)
|
Investments in
businesses, net of cash acquired
|
|
(10,772)
|
|
(52)
|
Disposition of
businesses
|
|
—
|
|
35
|
Settlement of
derivative contracts, net
|
|
(209)
|
|
(18)
|
Other investing
activities, net
|
|
4
|
|
5
|
Net cash flows
provided by (used in) investing activities
|
|
(11,081)
|
|
(100)
|
Financing
Activities
|
|
|
|
|
Increase (decrease) in
short-term borrowings, net
|
|
19
|
|
10
|
Issuance of long-term
debt
|
|
2,548
|
|
5
|
Repayment of long-term
debt
|
|
(5)
|
|
(2)
|
Repurchases of common
stock
|
|
—
|
|
(62)
|
Dividends paid on
common stock
|
|
(159)
|
|
(154)
|
Dividends paid to
non-controlling interest
|
|
(2)
|
|
—
|
Other financing
activities, net
|
|
(22)
|
|
(10)
|
Net cash flows
provided by (used in) financing activities
|
|
2,379
|
|
(213)
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
|
(68)
|
|
20
|
Net increase
(decrease) in cash and cash equivalents and restricted cash,
including cash classified
in current assets held for sale
|
|
(8,730)
|
|
(173)
|
Less: Change in cash
balances classified as assets held for sale
|
|
(30)
|
|
—
|
Net increase (decrease)
in cash and cash equivalents and restricted cash
|
|
(8,700)
|
|
(173)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
10,017
|
|
3,527
|
Cash, cash equivalents
and restricted cash, end of period
|
|
1,317
|
|
3,354
|
Less: restricted
cash
|
|
4
|
|
7
|
Cash and cash
equivalents, end of period
|
|
$
1,313
|
|
$
3,347
|
Carrier Global
Corporation
Segment Net Sales
and Operating Profit
|
|
|
(Unaudited)
|
|
Three Months
Ended March 31,
|
|
2024
|
|
2023
|
(In
millions)
|
Reported
|
|
Adjusted
|
|
Reported
|
|
Adjusted
|
Net
sales
|
|
|
|
|
|
|
|
HVAC
|
$
4,541
|
|
$
4,541
|
|
$
3,622
|
|
$
3,622
|
Refrigeration
|
884
|
|
884
|
|
898
|
|
898
|
Fire &
Security
|
887
|
|
887
|
|
869
|
|
869
|
Segment
sales
|
6,312
|
|
6,312
|
|
5,389
|
|
5,389
|
Eliminations and
other
|
(130)
|
|
(130)
|
|
(116)
|
|
(116)
|
Net
sales
|
$
6,182
|
|
$
6,182
|
|
$
5,273
|
|
$
5,273
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
HVAC
|
$ 429
|
|
$
720
|
|
$ 435
|
|
$ 490
|
Refrigeration
|
97
|
|
99
|
|
108
|
|
111
|
Fire &
Security
|
153
|
|
164
|
|
93
|
|
108
|
Segment operating
profit
|
679
|
|
983
|
|
636
|
|
709
|
Eliminations and
other
|
(75)
|
|
(34)
|
|
(38)
|
|
(36)
|
General corporate
expenses
|
(104)
|
|
(22)
|
|
(43)
|
|
(31)
|
Operating
profit
|
$
500
|
|
$
927
|
|
$
555
|
|
$
642
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
HVAC
|
9.4 %
|
|
15.9 %
|
|
12.0 %
|
|
13.5 %
|
Refrigeration
|
11.0 %
|
|
11.2 %
|
|
12.0 %
|
|
12.4 %
|
Fire &
Security
|
17.2 %
|
|
18.5 %
|
|
10.7 %
|
|
12.4 %
|
Total
Carrier
|
8.1 %
|
|
15.0 %
|
|
10.5 %
|
|
12.2 %
|
Carrier Global
Corporation
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP)
Operating
Profit
|
|
|
(Unaudited)
|
|
Three Months Ended
March 31, 2024
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations
and Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
4,541
|
|
$
884
|
|
$
887
|
|
$
(130)
|
|
$
—
|
|
$
6,182
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
429
|
|
$
97
|
|
$
153
|
|
$
(75)
|
|
$
(104)
|
|
$
500
|
Reported operating
margin
|
9.4 %
|
|
11.0 %
|
|
17.2 %
|
|
|
|
|
|
8.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
7
|
|
$
—
|
|
$
7
|
|
$
1
|
|
$
—
|
|
$
15
|
Amortization of
acquired intangibles
|
172
|
|
—
|
|
—
|
|
—
|
|
—
|
|
172
|
Acquisition step-up
amortization (1)
|
111
|
|
—
|
|
—
|
|
—
|
|
—
|
|
111
|
Acquisition/divestiture-related costs
|
1
|
|
2
|
|
4
|
|
—
|
|
82
|
|
89
|
Viessmann-related
hedges
|
—
|
|
—
|
|
—
|
|
86
|
|
—
|
|
86
|
Gain on liability
adjustment (2)
|
—
|
|
—
|
|
—
|
|
(46)
|
|
—
|
|
(46)
|
Total adjustments to
operating profit
|
$
291
|
|
$
2
|
|
$
11
|
|
$
41
|
|
$
82
|
|
$
427
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
720
|
|
$
99
|
|
$
164
|
|
$
(34)
|
|
$
(22)
|
|
$
927
|
Adjusted operating
margin
|
15.9 %
|
|
11.2 %
|
|
18.5 %
|
|
|
|
|
|
15.0 %
|
|
|
|
(Unaudited)
|
|
Three Months Ended
March 31, 2023
|
(In
millions)
|
HVAC
|
|
Refrigeration
|
|
Fire &
Security
|
|
Eliminations
and Other
|
|
General
Corporate
Expenses
|
|
Carrier
|
Net
sales
|
$
3,622
|
|
$
898
|
|
$
869
|
|
$
(116)
|
|
$
—
|
|
$
5,273
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
profit
|
$
435
|
|
$
108
|
|
$
93
|
|
$
(38)
|
|
$
(43)
|
|
$
555
|
Reported operating
margin
|
12.0 %
|
|
12.0 %
|
|
10.7 %
|
|
|
|
|
|
10.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to segment
operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
$
(1)
|
|
$
3
|
|
$
13
|
|
$
2
|
|
$
—
|
|
$
17
|
Amortization of
acquired intangibles
|
37
|
|
—
|
|
2
|
|
—
|
|
—
|
|
39
|
Acquisition step-up
amortization (1)
|
11
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11
|
Acquisition/divestiture-related costs
|
—
|
|
—
|
|
—
|
|
—
|
|
12
|
|
12
|
TCC
acquisition-related gain (3)
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8
|
Total adjustments to
operating profit
|
$
55
|
|
$
3
|
|
$
15
|
|
$
2
|
|
$
12
|
|
$
87
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
$
490
|
|
$
111
|
|
$
108
|
|
$
(36)
|
|
$
(31)
|
|
$
642
|
Adjusted operating
margin
|
13.5 %
|
|
12.4 %
|
|
12.4 %
|
|
|
|
|
|
12.2 %
|
|
(1) Amortization of the
step-up to fair value of acquired inventory and backlog.
|
(2) Gain associated with an
adjustment to our tax-related liability owed to UTC.
|
(3) The carrying value of our
previously held TCC equity investments were recognized at fair
value at the TCC acquisition date.
|
Carrier Global
Corporation
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
Net Income, Earnings
Per Share and Effective Tax Rate
|
|
|
(Unaudited)
|
|
Three Months Ended
March 31, 2024
|
(In millions,
except per share amounts)
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Net sales
|
$
6,182
|
|
$
—
|
|
$
6,182
|
|
|
|
|
|
|
Operating
profit
|
$
500
|
|
427
|
a
|
$
927
|
Operating
margin
|
8.1 %
|
|
|
|
15.0 %
|
|
|
|
|
|
|
Income from operations
before income taxes
|
$
335
|
|
427
|
a
|
$
762
|
Income tax
expense
|
$
(46)
|
|
(131)
|
c
|
$
(177)
|
Effective tax
rate
|
13.7 %
|
|
|
|
23.2 %
|
|
|
|
|
|
|
Net income
attributable to common shareowners
|
$
269
|
|
$
296
|
|
$
565
|
|
|
|
|
|
|
Summary of
Adjustments:
|
|
|
|
|
|
Restructuring
costs
|
|
|
$
15
|
a
|
|
Amortization of
acquired intangibles
|
|
|
172
|
a
|
|
Acquisition step-up
amortization (1)
|
|
|
111
|
a
|
|
Acquisition/divestiture-related costs
|
|
|
89
|
a
|
|
Viessmann-related
hedges
|
|
|
86
|
a
|
|
Gain on liability
adjustment (2)
|
|
|
(46)
|
a
|
|
Total
adjustments
|
|
|
$
427
|
|
|
|
|
|
|
|
|
Tax effect on
adjustments above
|
|
|
$
(96)
|
|
|
Tax specific
adjustments
|
|
|
(35)
|
|
|
Total tax
adjustments
|
|
|
$
(131)
|
c
|
|
|
|
|
|
|
|
Shares outstanding -
Diluted
|
913.0
|
|
|
|
913.0
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
$
0.29
|
|
|
|
$
0.62
|
|
(1) Amortization of the
step-up to fair value of acquired inventory and backlog.
|
(2) Gain associated with an
adjustment to our tax-related liability owed to UTC.
|
Carrier Global
Corporation
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
Net Income, Earnings
Per Share and Effective Tax Rate
|
|
|
(Unaudited)
|
|
Three Months Ended
March 31, 2023
|
(In millions,
except per share amounts)
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Net sales
|
$
5,273
|
|
$
—
|
|
$
5,273
|
|
|
|
|
|
|
Operating
profit
|
$ 555
|
|
87
|
a
|
$
642
|
Operating
margin
|
10.5 %
|
|
|
|
12.2 %
|
|
|
|
|
|
|
Income from operations
before income taxes
|
$ 509
|
|
87
|
a
|
$
596
|
Income tax
expense
|
$
(122)
|
|
(18)
|
c
|
$
(140)
|
Effective tax
rate
|
24.0 %
|
|
|
|
23.5 %
|
|
|
|
|
|
|
Net income
attributable to common shareowners
|
$
373
|
|
$
69
|
|
$
442
|
|
|
|
|
|
|
Summary of
Adjustments:
|
|
|
|
|
|
Restructuring
costs
|
|
|
$
17
|
a
|
|
Amortization of
acquired intangibles
|
|
|
39
|
a
|
|
Acquisition step-up
amortization (1)
|
|
|
11
|
a
|
|
Acquisition/divestiture-related costs
|
|
|
12
|
a
|
|
TCC acquisition-related
gain (2)
|
|
|
8
|
a
|
|
Total
adjustments
|
|
|
$
87
|
|
|
|
|
|
|
|
|
Tax effect on
adjustments above
|
|
|
$
(18)
|
|
|
Total tax
adjustments
|
|
|
$
(18)
|
c
|
|
|
|
|
|
|
|
Shares outstanding -
Diluted
|
852.2
|
|
|
|
852.2
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
$
0.44
|
|
|
|
$
0.52
|
|
(1) Amortization of the
step-up to fair value of acquired inventory and backlog.
|
(2) The carrying value of our
previously held TCC equity investments were recognized at fair
value at the TCC acquisition date.
|
Carrier Global
Corporation
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
|
|
Components of
Changes in Net Sales
|
|
Three Months Ended
March 31, 2024 Compared with Three Months
Ended March 31, 2023
|
|
(Unaudited)
|
|
Factors Contributing
to Total % change in Net Sales
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
HVAC
|
2 %
|
|
(1) %
|
|
24 %
|
|
— %
|
|
25 %
|
Refrigeration
|
(2) %
|
|
— %
|
|
— %
|
|
— %
|
|
(2) %
|
Fire &
Security
|
7 %
|
|
— %
|
|
(5) %
|
|
— %
|
|
2 %
|
Consolidated
|
2 %
|
|
— %
|
|
15 %
|
|
— %
|
|
17 %
|
Historical Amounts
of Amortization of Acquired Intangibles
|
|
|
|
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
Q1
|
(In
millions)
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2024
|
HVAC
|
|
$
37
|
|
$
36
|
|
$
35
|
|
$
35
|
|
$
143
|
|
$
172
|
Fire &
Security
|
|
2
|
|
2
|
|
2
|
|
—
|
|
6
|
|
—
|
Total
Carrier
|
|
39
|
|
38
|
|
37
|
|
35
|
|
149
|
|
172
|
Associated tax
effect
|
|
(12)
|
|
(11)
|
|
(11)
|
|
(11)
|
|
(45)
|
|
(46)
|
Net impact to
adjusted results
|
|
$
27
|
|
$
27
|
|
$
26
|
|
$
24
|
|
$
104
|
|
$
126
|
Free Cash Flow
Reconciliation
|
|
|
|
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
Q1
|
(In
millions)
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2024
|
Net cash flows provided
by (used in) operating activities
|
|
$
120
|
|
$
384
|
|
$ 1,041
|
|
$ 1,062
|
|
$ 2,607
|
|
$
40
|
Less: Capital
expenditures
|
|
70
|
|
74
|
|
92
|
|
233
|
|
469
|
|
104
|
Free cash
flow
|
|
$
50
|
|
$
310
|
|
$
949
|
|
$
829
|
|
$
2,138
|
|
$
(64)
|
Net Debt
Reconciliation
|
|
|
|
(Unaudited)
|
(In
millions)
|
|
March 31,
2024
|
|
December 31,
2023
|
Long-term
debt
|
|
$
15,647
|
|
$
14,242
|
Current portion of
long-term debt
|
|
1,248
|
|
51
|
Less: Cash and cash
equivalents
|
|
1,313
|
|
10,015
|
Net
debt
|
|
$
15,582
|
|
$
4,278
|
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SOURCE Carrier Global Corporation