01—Abstract
Summary
Summary of the 10-K filed February 8, 2022. Cited figures are marked; the original filing is the authoritative source.
Carrier Global Corporation's 2021 10-K filing highlights a year of significant growth and strategic adjustments.
The company achieved a substantial 18% increase in net sales, reaching $20.6 billiona, driven by broad-based organic growth across its HVAC, Refrigeration, and Fire & Security segments. This performance was bolstered by a rebound in global end-markets and strategic pricing actions, although it was partially tempered by ongoing supply chain challenges, component shortages, and inflationary cost pressures. Carrier also made a significant strategic move by completing the sale of its Chubb Fire and Security business in early 2022 for $3.1 billion, with net proceeds intended for growth initiatives and capital returns.
The company continues to focus on its core strategy of strengthening and growing its businesses through innovation, expanding product offerings and geographic coverage, and growing its aftermarket and digital services. Despite macroeconomic headwinds and supply chain disruptions, Carrier is well-positioned to benefit from secular trends such as urbanization, climate change, and increasing demand for sustainable and intelligent solutions, demonstrating resilience and a forward-looking approach.
02—Key points
Key Highlights
- Net sales increased by 18% year-over-year to $20.6 billion, driven by strong demand and pricing improvements across all segments.
- The company is strategically divesting non-core assets, exemplified by the sale of its Chubb Fire and Security business for $3.1 billion.
- Carrier is investing in growth initiatives, focusing on innovation in healthy, safe, sustainable, and intelligent building and cold chain solutions.
- Supply chain disruptions, component shortages, and inflationary cost pressures presented challenges, impacting sales and operations, but the company is implementing mitigation strategies.
- The company's three segments – HVAC, Refrigeration, and Fire & Security – all experienced sales growth, with HVAC showing particular strength.
- Carrier continues to strengthen its balance sheet and manages its liquidity effectively, with $3.0 billion in cash and cash equivalents at year-end.
- The company is committed to ESG goals, with plans to invest over $2 billion by 2030 in sustainable solutions and achieve carbon-neutral operations.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 8, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $20.61B$17.46B | +18.1% |
| R&D Expenses | $503.00M$419.00M | +20.0% |
| SG&A Expenses | $3.12B$2.82B | +10.6% |
| Operating Expenses | $18.26B$15.59B | +17.1% |
| Operating Income | $2.65B$3.08B | −14.2% |
| Interest Expense | $319.00M$298.00M | +7.0% |
| Net Income | $1.66B$2.01B | −17.0% |
| EPS (Basic) | $1.92$2.29 | −16.2% |
| EPS (Diluted) | $1.87$2.25 | −16.9% |
| Shares Outstanding (Basic) | 867.70M866.50M | +0.1% |
| Shares Outstanding (Diluted) | 890.30M880.20M | +1.1% |
05—Questions
Frequently Asked Questions
What were the main drivers of Carrier's revenue growth in 2021?
Carrier Global Corporation's revenue growth in 2021 was primarily driven by an 18% increase in net sales to $20.6 billion. This growth was fueled by a 15% increase in organic sales across its segments, a 2% positive impact from foreign currency translation, and a 1% contribution from acquisitions and divestitures. The HVAC segment saw particular strength from new construction, demand related to the work-from-home trend, and improved global end-markets. The Refrigeration segment benefited from the recovery in global transportation and demand for cargo monitoring, while the Fire & Security segment experienced growth from improved end-markets, especially in Europe and Asia.
What significant strategic actions did Carrier take in 2021 or early 2022?
In early 2022, Carrier completed the sale of its Chubb Fire and Security business for an enterprise value of $3.1 billion, which is expected to provide approximately $2.6 billion in net proceeds. These proceeds are earmarked for investments in organic and inorganic growth, as well as capital returns to shareholders. Strategically, the company is also focused on strengthening its core businesses, expanding its product and geographic reach, and growing its aftermarket and digital services, aligning with global mega-trends like sustainability and digitalization.
What challenges did Carrier face in 2021, and how did it address them?
Carrier faced significant challenges in 2021 due to ongoing global economic recovery from the COVID-19 pandemic, which led to widespread supply chain disruptions, component shortages, and transportation delays. These issues resulted in inflationary cost pressures, impacting raw material and component costs, as well as higher freight expenses. To mitigate these effects, Carrier is working closely with its suppliers to ensure product availability, implementing cost-saving initiatives, and investing in supply chain resilience through automation, dual sourcing, and localized manufacturing where feasible. The company also employed pricing actions to offset some of these rising costs.
How did the divestiture of the Chubb business impact the company's financial reporting for 2021?
The Chubb business was classified as held for sale on the Consolidated Balance Sheet as of December 31, 2021. While its operations were included in the 2021 consolidated results of operations, its assets and liabilities were presented separately as 'assets held for sale' and 'liabilities held for sale'. Depreciation and amortization for Chubb's assets ceased upon their reclassification as held for sale. The sale was completed in January 2022.
06—Continue