CARRIER GLOBAL Corp 10-Q for FY2021 Q2

CARRIER GLOBAL Corp (CARR)

10-Q 2021-07-29 For: 2021-06-30

Added on April 11, 2026

About this 10-Q

CARRIER GLOBAL Corp filed this 10-Q on July 29, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $5.44B; up 37.0% from $3.97B a year earlier
Net income: $497M; up 84.8% from net income of $269M a year earlier
Diluted EPS: $0.55; up 83.3% from $0.30 a year earlier

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Delaware						83-4051582
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)


			Page

PART I – FINANCIAL INFORMATION			3

Item 1. Financial Statements:			3

Condensed Consolidated Statement of Operations (Unaudited)			3



Condensed Consolidated Statement of Comprehensive Income (Loss) (Unaudited)			4

Condensed Consolidated Balance Sheet (Unaudited)			5

Condensed Consolidated Statement of Changes in Equity (Unaudited)			6

Condensed Consolidated Statement of Cash Flows (Unaudited)			7

Notes to Condensed Consolidated Financial Statements (Unaudited)			8

Report of Independent Registered Public Accounting Firm			25

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			26

Item 3. Quantitative and Qualitative Disclosures About Market Risk			40

Item 4. Controls and Procedures			40

PART II – OTHER INFORMATION			42

Item 1. Legal Proceedings			42

Item 1A. Risk Factors			42

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			43



Item 6. Exhibits			44

SIGNATURES			45


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In millions, except per share amounts)	2021		2020		2021		2020
Net sales
Product sales	$	4,584	$	3,275	$	8,448	$	6,422
Service sales	856		697		1,691		1,438
Total Net sales	5,440		3,972		10,139		7,860
Costs and expenses
Cost of products sold	(3,235)		(2,343)		(5,959)		(4,580)
Cost of services sold	(586)		(488)		(1,167)		(1,017)
Research and development	(125)		(94)		(246)		(192)
Selling, general and administrative	(813)		(637)		(1,556)		(1,329)
Total Costs and expenses	(4,759)		(3,562)		(8,928)		(7,118)
Equity method investment net earnings	87		57		125		86
Other income (expense), net	15		(25)		18		(71)
Operating profit	783		442		1,354		757
Non-service pension (expense) benefit	19		14		37		31
Interest (expense) income, net	(71)		(81)		(164)		(118)
Income from operations before income taxes	731		375		1,227		670
Income tax (expense) benefit	(234)		(106)		(338)		(299)
Net income from operations	497		269		889		371
Less: Non-controlling interest in subsidiaries' earnings from operations	10		8		18		14









Net income attributable to common shareowners	$	487	$	261	$	871	$	357

Earnings per share
Basic	$	0.56	$	0.30	$	1.00	$	0.41
Diluted	$	0.55	$	0.30	$	0.98	$	0.41

Weighted-average number of shares outstanding
Basic	868.7		866.2		869.0		866.2
Diluted	890.9		870.9		890.4		870.9


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Net income from operations	$	497	$	269	$	889	$	371


Other comprehensive income (loss), net of tax




Foreign currency translation adjustments arising during period	59		251		(62)		(239)








Pension and post-retirement benefit plan adjustments	6		7		13		12












Other comprehensive income (loss), net of tax	65		258		(49)		(227)
Comprehensive income (loss)	562		527		840		144
Less: Comprehensive income (loss) attributable to non-controlling interest	10		9		18		13
Comprehensive income (loss) attributable to common shareowners	$	552	$	518	$	822	$	131


	As of
(In millions)	June 30, 2021		December 31, 2020
Assets
Cash and cash equivalents	$	2,630	$	3,115
Accounts receivable, net	3,128		2,781
Contract assets, current	695		656
Inventories, net	1,885		1,629
Other assets, current	416		343
Total current assets	8,754		8,524
Future income tax benefits	461		449
Fixed assets, net	1,837		1,810
Operating lease right-of-use assets	786		788
Intangible assets, net	1,071		1,037
Goodwill	10,279		10,139
Pension and post-retirement assets	635		554
Equity method investments	1,572		1,513
Other assets	343		279
Total Assets	$	25,738	$	25,093

Liabilities and Equity
Accounts payable	$	2,362	$	1,936
Accrued liabilities	2,541		2,471
Contract liabilities, current	576		512
Current portion of long-term debt	125		191
Total current liabilities	5,604		5,110
Long-term debt	9,600		10,036
Future pension and post-retirement obligations	511		524
Future income tax obligations	556		479
Operating lease liabilities	635		642
Other long-term liabilities	1,712		1,724
Total Liabilities	18,618		18,515
Commitments and contingent liabilities (Note 18)
Equity
Common stock	9		9
Treasury stock	(130)		—
Additional paid-in capital	5,366		5,345
Retained earnings	2,305		1,643
Accumulated other comprehensive loss	(794)		(745)
Non-controlling interest	364		326
Total Equity	7,120		6,578
Total Liabilities and Equity	$	25,738	$	25,093


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(In millions)	UTC Net Investment		Accumulated Other Comprehensive Income (Loss)		Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Non-Controlling Interest		Total Equity
Balance as of December 31, 2019	$	15,355	$	(1,253)	$	—	$	—	$	—	$	—	$	333	$	14,435
Net income	96		—		—		—		—		—		6		102
Other comprehensive income (loss), net of tax	—		(483)		—		—		—		—		(2)		(485)


Dividends attributable to non-controlling interest	—		—		—		—		—		—		(8)		(8)

Net transfers to UTC	(11,014)		—		—		—		—		—		—		(11,014)

Adoption impact of ASU 2016-13	(4)		—		—		—		—		—		—		(4)

Balance as of March 31, 2020	$	4,433	$	(1,736)	$	—	$	—	$	—	$	—	$	329	$	3,026

Net income	—		—		—		—		—		261		8		269
Other comprehensive income (loss), net of tax	—		257		—		—		—		—		1		258
Dividends declared on common stock (1)	—		—		—		—		—		(70)		—		(70)
Shares issued under incentive plans, net	—		—		—		—		24		—		—		24




Net transfers from UTC	859		—		—		—		—		—		—		859
Reclassification of UTC Net investment to Common stock and Additional paid-in capital	(5,292)		—		9		—		5,283		—		—		—

Balance as of June 30, 2020	$	—	$	(1,479)	$	9	$	—	$	5,307	$	191	$	338	$	4,366














(In millions)	UTC Net Investment		Accumulated Other Comprehensive Income (Loss)		Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Non-Controlling Interest		Total Equity
Balance as of December 31, 2020	$	—	$	(745)	$	9	$	—	$	5,345	$	1,643	$	326	$	6,578
Net income	—		—		—		—		—		384		8		392
Other comprehensive income (loss), net of tax	—		(114)		—		—		—		—		—		(114)

Shares issued under incentive plans, net	—		—		—		—		(14)		—		—		(14)
Stock-based compensation	—		—		—		—		19		—		—		19
Dividends attributable to non-controlling interest	—		—		—		—		—		—		(5)		(5)


Treasury stock repurchase	—		—		—		(38)		—		—		—		(38)



Balance as of March 31, 2021	$	—	$	(859)	$	9	$	(38)	$	5,350	$	2,027	$	329	$	6,818

Net income	—		—		—		—		—		487		10		497
Other comprehensive income (loss), net of tax	—		65		—		—		—		—		—		65
Dividends declared on common stock (2)	—		—		—		—		—		(209)		—		(209)
Shares issued under incentive plans, net	—		—		—		—		(4)		—		—		(4)
Stock-based compensation	—		—		—		—		20		—		—		20

Dividends attributable to non-controlling interest	—		—		—		—		—		—		(21)		(21)

Acquisition of non-controlling interest	—		—		—		—		—		—		46		46
Treasury stock repurchase	—		—		—		(92)		—		—		—		(92)

Balance as of June 30, 2021	$	—	$	(794)	$	9	$	(130)	$	5,366	$	2,305	$	364	$	7,120













(1) Cash dividends declared were $0.08 per share for the three months ended June 30, 2020.
(2) Cash dividends declared were $0.24 per share for the three months ended June 30, 2021.


(In millions)		HVAC		Refrigeration		Fire & Security		Total
Balance as of December 31, 2020		$	5,489	$	1,251	$	3,399	$	10,139
Goodwill resulting from business combinations	(1)	175		—		—		175
Foreign currency translation		(19)		(4)		(12)		(35)
Balance as of June 30, 2021		$	5,645	$	1,247	$	3,387	$	10,279


	June 30, 2021						December 31, 2020
(In millions)	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
Amortized:
Customer relationships	$	1,593	$	(1,302)	$	291	$	1,558	$	(1,285)	$	273
Patents and trademarks	300		(227)		73		301		(222)		79
Monitoring lines	72		(61)		11		71		(59)		12
Service portfolios and other	683		(550)		133		644		(542)		102
	2,648		(2,140)		508		2,574		(2,108)		466
Unamortized:
Trademarks and other	563		—		563		571		—		571
Intangible assets, net	$	3,211	$	(2,140)	$	1,071	$	3,145	$	(2,108)	$	1,037


(In millions, except percentages)	June 30, 2021			December 31, 2020

1.923% Notes due February 15, 2023	$	—	(1)	$	500
2.242% Notes due February 15, 2025	2,000			2,000
2.493% Notes due February 15, 2027	1,250			1,250
2.722% Notes due February 15, 2030	2,000			2,000
2.700% Notes due February 15, 2031	750			750
3.377% Notes due April 5, 2040	1,500			1,500
3.577% Notes due April 5, 2050	2,000			2,000


Total long-term Notes	9,500			10,000
Other debt (including project financing obligations and finance leases)	300			308
Discounts and debt issuance costs	(75)			(81)
Total debt	9,725			10,227
Less: current portion of long-term debt	125			191
Long-term debt, net of current portion	$	9,600		$	10,036


(In millions)	Total			Level 1		Level 2		Level 3
June 30, 2021


Derivative assets	$	3	(1)	$	—	$	3	$	—
Derivative liabilities	$	(3)	(2)	$	—	$	(3)	$	—

December 31, 2020


Derivative assets	$	17	(1)	$	—	$	17	$	—
Derivative liabilities	$	(5)	(2)	$	—	$	(5)	$	—


(In millions)	Foreign Currency Translation		Defined Benefit Pension and Post-retirement Plans		Accumulated Other Comprehensive Income (Loss)





Balance as of March 31, 2021	$	(312)	$	(547)	$	(859)
Other comprehensive income (loss) before reclassifications, net	59		—		59
Amounts reclassified, pre-tax	—		8		8
Tax expense (benefit) reclassified	—		(2)		(2)

Balance as of June 30, 2021	$	(253)	$	(541)	$	(794)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share amounts)	2021		2020		2021		2020
Net income attributable to common shareowners	$	487	$	261	$	871	$	357

Basic weighted-average number of shares outstanding	868.7		866.2		869.0		866.2
Stock awards and equity units (share equivalent)	22.2		4.7		21.4		4.7
Diluted weighted-average number of shares outstanding	890.9		870.9		890.4		870.9

Antidilutive shares excluded from computation of diluted earnings per share	3.1		30.9		3.1		30.9

Earnings Per Share
Basic	$	0.56	$	0.30	$	1.00	$	0.41
Diluted	$	0.55	$	0.30	$	0.98	$	0.41


(in millions)	Estimated Useful Life (in years)	Intangible Assets Acquired
Customer relationships	14	$	52
Technology	10	34
Non-compete agreement	5	8
Total intangible assets acquired		$	94



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Sales Type
Product	$	2,757	$	1,976	$	4,904	$	3,633
Service	363		315		702		617
HVAC sales	3,120		2,291		5,606		4,250

Product	915		609		1,807		1,322
Service	106		91		219		186
Refrigeration sales	1,021		700		2,026		1,508

Product	1,012		762		1,931		1,622
Service	391		295		776		641
Fire & Security sales	1,403		1,057		2,707		2,263

Total segment sales	5,544		4,048		10,339		8,021
Eliminations and other	(104)		(76)		(200)		(161)
Net sales	$	5,440	$	3,972	$	10,139	$	7,860


	For the Three Months Ended June 30, 2021
Organic	31	%
Foreign currency translation	5	%
Acquisitions and divestitures, net	1	%

Total % change	37	%


	For the Six Months Ended June 30, 2021
Organic	24	%
Foreign currency translation	5	%


Total % change	29	%


	Net Sales				Operating Profit				Operating Profit Margin
	For the Three Months Ended June 30,				For the Three Months Ended June 30,				For the Three Months Ended June 30,
(In millions)	2021		2020		2021		2020		2021		2020
HVAC	$	3,120	$	2,291	$	573	$	358	18.4	%	15.6	%
Refrigeration	1,021		700		123		61		12.0	%	8.7	%
Fire & Security	1,403		1,057		148		106		10.5	%	10.0	%
Total segment	$	5,544	$	4,048	$	844	$	525	15.2	%	13.0	%


	Operating Profit
Operational	61	%
Foreign currency translation	2	%
Acquisitions and divestitures, net	(1)	%
Restructuring	(2)	%

Total % change in Operating profit	60	%



Summary performance for each of our segments for the six months ended June 30, 2021 and 2020 is as follows:
	Net Sales				Operating Profit				Operating Profit Margin
(dollars in millions)	2021		2020		2021		2020		2021		2020
HVAC	$	5,606	$	4,250	$	938	$	525	16.7	%	12.4	%
Refrigeration	2,026		1,508		250		160		12.3	%	10.6	%
Fire & Security	2,707		2,263		298		226		11.0	%	10.0	%
Total segment	$	10,339	$	8,021	$	1,486	$	911	14.4	%	11.4	%


	Total Number of Shares Purchased (in 000's)	Average Price Paid per Share (1)	Total Number of Shares Purchased as Part of a Publicly Announced Program (in 000's)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions)
2021




April 1 - April 30	131	$43.07	131	$306.8
May 1 - May 31	1,506	$43.88	1,506	$240.7
June 1 - June 30	441	$46.14	441	$220.4
Total	2,078	$44.33	2,078


Exhibit Number						Exhibit Description
15						Letter Re: Unaudited Interim Financial Information*
31.1						Rule 13a-14(a)/15d-14(a) Certification*
31.2						Rule 13a-14(a)/15d-14(a) Certification*
31.3						Rule 13a-14(a)/15d-14(a) Certification*
32						Section 1350 Certifications*
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.* (File name: carr-20210331.xml)
101.SCH						XBRL Taxonomy Extension Schema Document.* (File name: carr-20210331.xsd)
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document.* (File name: carr-20210331_cal.xml)
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document.* (File name: carr-20210331_def.xml)
101.LAB						XBRL Taxonomy Extension Label Linkbase Document.* (File name: carr-20210331_lab.xml)
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document.* (File name: carr-20210331_pre.xml)


		CARRIER GLOBAL CORPORATION (Registrant)

Dated:	July 29, 2021	by:	/s/PATRICK GORIS
			Patrick Goris
			Senior Vice President and Chief Financial Officer

			(on behalf of the Registrant and as the Registrant's Principal Financial Officer)

Dated:	July 29, 2021	by:	/s/KYLE CROCKETT
			Kyle Crockett
			Vice President, Controller

			(on behalf of the Registrant and as the Registrant's Principal Accounting Officer)