Slide 1: Q2 2022 Earnings Conference Call
Q2 2022 EARNINGS CONFERENCE CALL July 28, 2022
Slide 2: Cautionary Statement
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 pla
Slide 3: Q2 2022 Summary
Q2 2022 Summary Highlights Sales $5,211M Organic* +7% Y/Y Increased adjusted operating profit despite lower reported sales Price/cost positive Adjusted Operating $857M Profit* +4% Y/Y Operating margins up 130 bps Y/Y Aftermarket up double-digit Y/Y Free Cash Flow* ($34M) Includes ~$70M in tax paymen
Slide 4: Value Creation Framework
Value Creation Framework FOCUS AREAS DRIVERS Above-market organic growth • Secular trends: Health / wellness, sustainability, digitalization, and growing middle class • Innovation and differentiation • Aftermarket Margin expansion • Price to at least offset inflation • 2-3% gross productivity to fun
Slide 5: Secular Trends Driving Sustained Growth
Secular Trends Driving Sustained Growth Health / Wellness Sustainability / ESG Digitalization Heat pumps Advanced IAQ Sensors Disruptive cooling Abound & Lynx Key Technologies Multi-sensing & Sensor Fusion Grid connectivity & telematics Automation, Controls & Integration Electrification & hydrogen O
Slide 6: Aftermarket and Recurring Revenues
Aftermarket and Recurring Revenues Aftermarket Strategy Q2 Highlights (February 22nd Investor Day) Q2 Aftermarket up double-digits Y/Y Parts ✓ Double-digit growth despite supply chain challenges Capture ✓ New National Accounts added to Breeze Platform ✓ Double-digit sales growth Service ✓ On-track f
Slide 7: Toshiba Carrier: Ready to Execute
Toshiba Carrier: Ready to Execute Proven Integration Playbook Focused Team Poised to Win HVAC ✓ Variable Refrigerant Flow (VRF) Focus ✓ International Light Commercial Areas ✓ Commercial and Residential Heat Pumps North America Global Global Residential / Commercial Comfort ✓ Complementary channel in
Slide 8: Q2 2022 Results
Q2 2022 Results Q2 2022 Q2 2021 Y/Y Sales $5,211M $5,440M (4%) Organic sales* 7% Acquisitions / divestitures, net (8%) FX (3%) Sales excluding Chubb** 7% Adjusted operating profit* $857M $821M 4% Adjusted operating margin* 16.4% 15.1% 130 bps Adjusted effective tax rate* 22.9% 25.0% Adjusted EPS* $0
Slide 9: Q2 2022 HVAC Results
Q2 2022 HVAC Results Q2 2022 Y/Y Highlights Double-digit sales growth in NA residential HVAC Sales $3,388M 9% driven by price realization Organic sales* 8% Acq / div, net 2% Sixth consecutive quarter of double-digit order growth FX (1%) in Commercial HVAC Adjusted operating profit* $609M 5% Aftermar
Slide 10: Q2 2022 Refrigeration Results
Q2 2022 Refrigeration Results Q2 2022 Y/Y Highlights Sales $1,041M 2% Volume leverage and price realization driving margin expansion Organic sales* 9% FX (7%) North America truck/trailer sales up high-teens Y/Y Adjusted operating profit* $152M 21% Sensitech up double digits Adjusted operating margin
Slide 11: Q2 2022 Fire & Security Results
Q2 2022 Fire & Security Results Q2 2022 Y/Y Highlights Sales $887M (37%) Organic sales growth driven by price Organic sales* 3% Acq / div, net (38%) Solid orders growth across the business despite China weakness FX (2%) Sales excluding Chubb** 4% Commercial Fire Americas and Controls up double- digi
Slide 12: Organic Order Trends
Organic Order Trends Orders by Key Business Line Q2 2022 Orders by Geography Q2 2022 (Y/Y) (Y/Y) HVAC* 0% - 5% Americas* Flattish Residential & Light Commercial ~(5%) Commercial HVAC* 10% - 15% EMEA ~(5%) Refrigeration ~(20%) Transport Refrigeration (20%) – (15%) Commercial Refrigeration ~(30%) Chin
Slide 13: Updated 2022 Guidance
Updated 2022 Guidance Prior Guidance Updated Guidance** Updated Guidance** (excluding the Toshiba Carrier (excluding the Toshiba Carrier (including the Toshiba Carrier Corp. acquisition) Corp. acquisition) Corp. acquisition) ~$20B ~$20B ~$20.8B Sales Organic* up HSD Organic* up HSD Organic* up HSD F
Slide 14: Summary
Summary • Strong first-half performance; raising full-year earnings outlook • Continued focus on technology differentiation and aftermarket opportunity • Price / cost now expected to be positive for full-year • Toshiba closing expected early August Leadership in healthy, safe, sustainable and intell
Slide 15: Appendix
APPENDIX
Slide 16: Use and Definitions of Non-GAAP Financial 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 certa
Slide 17: Additional Items
Additional Items Updated guidance Prior guidance Shares outstanding (diluted) ~860M ~865M Corporate expenses / eliminations** $200M - $220M $210M - $230M Adjusted interest expense, net* $245M - $255M $270M - $280M Adjusted effective tax rate* ~22% ~22% Non-service pension income / (expense)** ($10M)
Slide 18: Q2 2022 Adjusted EPS Bridge
Q2 2022 Adjusted EPS* Bridge $0.02 $0.02 $0.08 $0.01 ($0.03) ~($0.05) $0.69 $0.64 ~$0.59 2021 Adjusted EPS Divestitures Operational FX Interest Tax rate Share count 2022 Adjusted EPS 17 *See “Use and Definitions of Non-GAAP Financial Measures” for additional information regarding non-GAAP measures
Slide 19: 2022 Adjusted EPS Guidance Bridge
2022 Adjusted EPS* Guidance Bridge $0.05 $0.01 $0.02 $0.02 ($0.05) $2.25 $2.30 2022 Adjusted EPS Operational FX Interest Share count Amortization on 2022 Adjusted EPS (prior guidance midpoint) intangible assets (updated guidance acquired midpoint) 18 *See “Use and Definitions of Non-GAAP Financial M
Slide 20: Carrier Q2 2022 vs 2021 Sales Reconciliation
Carrier Q2 2022 vs 2021 Sales Reconciliation Y/Y % Three Months Ended June 30, 2022 Compared with Three Months Ended June 30, 2021 (Unaudited) Factors Contributing to Total % change in Net Sales FX Acquisitions / Organic Translation Divestitures, net Other Total HVAC 8 % (1) % 2 % — % 9 % Refrigerat
Slide 21: 2022 Adjusted Operating Profit Reconciliation
2022 Adjusted Operating Profit Reconciliation (Unaudited) For the Three Months Ended June 30, 2022 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 3,388 $ 1,041 $ 887 $ (105) $ — $ 5,211 Segment operating profit $ 585 $ 147 $ 134
Slide 22: 2021 Adjusted Operating Profit Reconciliation
2021 Adjusted Operating Profit Reconciliation (Unaudited) For the Three Months Ended June 30, 2021 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 3,120 $ 1,021 $ 1,403 $ (104) $ — $ 5,440 Segment operating profit $ 573 $ 123 $ 1
Slide 23: 2022 Adjusted Operating Profit Reconciliation
2022 Adjusted Operating Profit Reconciliation (Unaudited) For the Six Months Ended June 30, 2022 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 6,358 $ 2,017 $ 1,705 $ (215) $ — $ 9,865 Segment operating profit $ 1,055 $ 254 $ 1
Slide 24: 2021 Adjusted Operating Profit Reconciliation
2021 Adjusted Operating Profit Reconciliation (Unaudited) For the Six Months Ended June 30, 2021 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 5,606 $ 2,026 $ 2,707 $ (200) $ — $ 10,139 Segment operating profit $ 938 $ 250 $ 29
Slide 25: Q2 2022 EPS Reconciliation
Q2 2022 EPS Reconciliation (Unaudited) For the Three Months Ended June 30, 2022 For the Six Months Ended June 30, 2022 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 5,211 $ — $ 5,211 $ 9,865 $ — $ 9,865 Operating profit $ 819 38 a $ 8
Slide 26: Q2 2021 EPS Reconciliation
Q2 2021 EPS Reconciliation (Unaudited) For the Three Months Ended June 30, 2021 For the Six Months Ended June 30, 2021 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 5,440 $ — $ 5,440 $ 10,139 $ — $ 10,139 Operating profit $ 783 38 a $
Slide 27: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation (Unaudited) Q1 Q2 Q3 Q4 FY Q1 Q2 (In millions) 2021 2021 2021 2021 2021 2022 2022 Net cash flows provided by (used in) operating activities $ 184 $ 561 $ 579 $ 913 $ 2,237 $ (202) $ 32 Less: Capital expenditures 53 79 74 138 344 56 66 Free cash flow $ 131 $ 482 $ 505 $
Slide 28: Net Debt Reconciliation
Net Debt Reconciliation (Unaudited) (In millions) June 30, 2022 December 31, 2021 Long-term debt $ 8,298 $ 9,513 Current portion of long-term debt 269 183 Less: Cash and cash equivalents 3,017 2,987 Net debt $ 5,550 $ 6,709 27 See “Use and Definitions of Non-GAAP Financial Measures” for additional i
Slide 29: Net Sales Excluding Chubb Reconciliation
Net Sales Excluding Chubb Reconciliation Y/Y % (Unaudited) For the Three Months Ended For the Six Months Ended June 30, 2021 June 30, 2021 Fire and Fire and Carrier Security Carrier Security Net Sales: Reported $ 5,440 $ 1,403 $ 10,139 $ 2,707 Chubb (554) (554) (1,102) (1,102) Net sales excluding im