XML 30 R13.htm IDEA: XBRL DOCUMENT v3.22.4
Reportable Business Segments
 12 Months Ended
Dec. 31, 2022
Segment Reporting, Measurement Disclosures [Abstract]  
Reportable Business Segments scription of Segments
We operate in three reportable business segments of the HVACR industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:
SegmentProducts or ServicesMarkets ServedGeographic Areas
Residential Heating & CoolingFurnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and supplies
Residential Replacement;
Residential New Construction
United States
Canada
Commercial Heating & CoolingUnitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial products
Light Commercial
United States
Canada
Refrigeration(1)
Condensing units, unit coolers, fluid coolers, air- cooled condensers, air handlers, process chillers, controls, and compressorized racks
Light Commercial;
Food Preservation;
Non-Food/Industrial
United States
Canada
Europe

(1) In November 2022, we announced the decision to explore strategic alternatives for our European commercial HVAC and refrigeration businesses. We will continue to invest in our Heatcraft Worldwide Refrigeration business which will become part of the Commercial Heating & Cooling segment beginning in 2023 and the European portfolio will be presented with Corporate and Other beginning in 2023 until disposition. As we will manage the businesses in this manner beginning in 2023, we will present the financial results of the revised segments beginning in 2023.

Segment Data

We use segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. We define segment profit or loss as a segment’s income or loss from continuing operations before income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation below details the items excluded.

Our corporate costs include those costs related to corporate functions such as legal, internal audit, treasury, human resources, tax compliance and senior executive staff. Corporate costs also include the long-term, share-based incentive awards provided to employees throughout our business. We recorded these share-based awards as Corporate costs because they are determined at the discretion of the Board of Directors and based on the historical practice of doing so for internal reporting purposes.

Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations included in the results presented in the table below.
Net sales and segment profit (loss) by segment, along with a reconciliation of segment profit (loss) to Operating income, are shown below (in millions):
 For the Years Ended December 31,
 202220212020
Net Sales (1)
Residential Heating & Cooling$3,198.3 $2,775.6 $2,361.5 
Commercial Heating & Cooling900.7 864.8 800.9 
Refrigeration619.4 553.7 471.7 
$4,718.4 $4,194.1 $3,634.1 
Segment profit (loss) (2)
Residential Heating & Cooling$596.9 $540.3 $428.5 
Commercial Heating & Cooling80.9 110.9 136.9 
Refrigeration78.8 49.1 32.8 
Corporate and other(90.8)(96.4)(91.5)
Total segment profit665.8 603.9 506.7 
Reconciliation to Operating income:
Special product quality adjustments— (2.5)1.0 
Loss from natural disasters, net of insurance recoveries— — 3.1 
Items in Losses (gains) and other expenses, net that are excluded from segment profit (loss) (2)
8.1 14.3 13.3 
Restructuring charges1.5 1.8 10.8 
Operating income$656.2 $590.3 $478.5 
 
(1) On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

(2) We define segment profit (loss) as a segment’s operating income included in the accompanying Consolidated Statements of Operations, excluding:
•The following items in (Gains) losses and other expenses, net:
◦Net change in unrealized (gains) losses on unsettled futures contracts,
◦Environmental liabilities and special litigation charges,
◦Charges incurred related to COVID-19 pandemic, and
◦Other items, net,
•Special product quality adjustments
•Loss from natural disasters, net of insurance recoveries
•Restructuring charges, and


Total assets by segment are shown below (in millions):
As of December 31,
202220212020
Total Assets:
Residential Heating & Cooling$1,456.4 $1,149.7 $1,034.6 
Commercial Heating & Cooling456.4 366.2 366.5 
Refrigeration443.6 426.6 387.9 
Corporate and other211.2 229.4 243.5 
Total assets$2,567.6 $2,171.9 $2,032.5 

The assets in the Corporate and other segment primarily consist of cash, short-term investments and deferred tax assets. Assets recorded in the operating segments represent those assets directly associated with those segments.

Total capital expenditures by segment are shown below (in millions):
For the Years Ended December 31,
202220212020
Capital Expenditures:
Residential Heating & Cooling$42.4 $70.0 $44.0 
Commercial Heating & Cooling21.5 4.3 5.9 
Refrigeration11.2 11.5 9.2 
Corporate and other26.0 21.0 19.4 
Total capital expenditures $101.1 $106.8 $78.5 

Depreciation and amortization expenses by segment are shown below (in millions):
For the Years Ended December 31,
202220212020
Depreciation and Amortization:
Residential Heating & Cooling$31.5 $27.6 $28.5 
Commercial Heating & Cooling12.9 13.2 13.5 
Refrigeration9.1 7.8 7.8 
Corporate and other24.4 23.8 22.8 
Total depreciation and amortization$77.9 $72.4 $72.6 

The equity method investments are shown below (in millions):
For the Years Ended December 31,
202220212020
Income from Equity Method Investments:
Residential Heating & Cooling$0.9 $6.9 $11.4 
Commercial Heating & Cooling0.2 1.2 2.3 
Refrigeration4.0 3.7 1.9 
Total income from equity method investments$5.1 $11.8 $15.6 


Geographic Information

Property, plant and equipment, net for each major geographic area in which we operate, based on the domicile of our operations, are shown below (in millions):
As of December 31,
202220212020
Property, Plant and Equipment, net:
United States$408.8 $381.0 $352.9 
Mexico110.9 102.7 79.2 
Canada2.1 2.1 2.2 
Other international27.1 29.3 30.0 
Total Property, plant and equipment, net$548.9 $515.1 $464.3