10-KPeriod: FY2020

CARRIER GLOBAL Corp Annual Report, Year Ended Dec 31, 2020

Filed February 9, 2021For Securities:CARR

Summary

Carrier Global Corporation's 2020 10-K report details its performance as an independent company following its spin-off from United Technologies Corporation (now Raytheon Technologies Corporation) on April 3, 2020. The company generated $17.5 billion in net sales for the year ended December 31, 2020, operating across three segments: HVAC, Refrigeration, and Fire & Security. The COVID-19 pandemic had a significant impact, leading to lower sales volumes across all segments due to economic slowdowns and operational disruptions. Despite these challenges, Carrier demonstrated resilience, with its stock performing positively against major indices from its spin-off date through year-end. The company is focused on strengthening its core businesses, expanding product and geographic reach, and growing its services and digital offerings, positioning itself for future growth by addressing global trends like urbanization, climate change, and increasing demands for healthy and sustainable building solutions.

Financial Highlights

54 data points
Beta

Revenue

$17.46B

Net Income

$2.01B

11.5% Net Margin

EPS (Diluted)

$2.25

Total Assets

$25.09B

Cash & Equivalents

$3.12B

Free Cash Flow

$1.69B

Financial Statements
Beta
Revenue$17.46B
R&D Expenses$419.00M
SG&A Expenses$2.82B
Operating Expenses$15.59B
Operating Income$3.08B
Interest Expense$298.00M
Net Income$2.01B
EPS (Basic)$2.29
EPS (Diluted)$2.25
Shares Outstanding (Basic)866.50M
Shares Outstanding (Diluted)880.20M

Key Highlights

  • 1Carrier Global Corporation officially became an independent public company on April 3, 2020, after being spun off from United Technologies Corporation.
  • 2The company reported net sales of $17.5 billion for the year ended December 31, 2020, with its business divided into three segments: HVAC ($9.5 billion), Refrigeration ($3.3 billion), and Fire & Security ($5.0 billion).
  • 3The COVID-19 pandemic negatively impacted sales, leading to a 6% decline in net sales year-over-year, primarily due to lower volumes across all segments, particularly in commercial HVAC, refrigeration equipment, and security products.
  • 4Despite the pandemic's impact, Carrier's stock delivered a total shareholder return of 186.66% from its spin-off date (April 3, 2020) to December 31, 2020, outperforming the S&P 500 and Dow Jones Industrial Average.
  • 5The company is strategically focused on three growth pillars: strengthening its core business, expanding product extensions and geographic coverage, and growing services and digital offerings.
  • 6Carrier incurred significant debt related to the separation, issuing $11.0 billion in debt, and ended the year with total debt of $10.2 billion.
  • 7The company is actively managing its cost structure, including a strategic cost reduction initiative targeting $700 million in cost savings over three years through operational efficiency, digitalization, and supply chain productivity.

Frequently Asked Questions

Carrier's business is organized into three segments: HVAC, Refrigeration, and Fire & Security. For the year ended December 31, 2020, the company reported net sales of $17.5 billion. The HVAC segment was the largest, with $9.5 billion in net sales, followed by Fire & Security with $5.0 billion, and Refrigeration with $3.3 billion. The company's operating profit was $3.1 billion. It is important to note that 2020 was Carrier's first year as an independent public company following its spin-off from UTC.

The COVID-19 pandemic had a significant negative impact on Carrier's operations and financial results in 2020. The company experienced lower sales volumes across all segments due to economic slowdowns, government-imposed restrictions, and reduced demand, particularly in commercial sectors. This resulted in a 6% organic sales decrease for the year. Carrier took preemptive actions to preserve liquidity and manage cash flow, including reducing discretionary spending and capital investments.

Carrier's overarching strategy is to be a global leader in healthy, safe, and sustainable building and cold chain solutions. The company is focused on three key growth pillars: strengthening and growing its core businesses, increasing product extensions and geographic coverage, and growing services and digital offerings to create recurring sales opportunities. Key areas of focus include innovation in areas like air quality, energy efficiency, refrigerants, and digital service solutions.

The separation from UTC on April 3, 2020, resulted in Carrier issuing $11.0 billion in debt and transferring approximately $10.9 billion in cash to UTC. As a result, Carrier's financial structure changed significantly, with long-term debt increasing to $10.2 billion by the end of 2020. The company also incurred separation-related costs and costs associated with becoming an independent public company.