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Reportable Business Segments | 12 Months Ended
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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:
Segment |  | Products or Services |  | Markets Served |  | Geographic Areas
Residential Heating & Cooling |  | Furnaces, 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 & Cooling |  | Unitary 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,
| 2022 |  | 2021 |  | 2020
Net Sales (1) |  |  |  |  |
Residential Heating & Cooling | $ | 3,198.3 |  |  | $ | 2,775.6 |  |  | $ | 2,361.5 |
Commercial Heating & Cooling | 900.7 |  |  | 864.8 |  |  | 800.9 |
Refrigeration | 619.4 |  |  | 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 & Cooling | 80.9 |  |  | 110.9 |  |  | 136.9 |
Refrigeration | 78.8 |  |  | 49.1 |  |  | 32.8 |
Corporate and other | (90.8) |  |  | (96.4) |  |  | (91.5) |
Total segment profit | 665.8 |  |  | 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 charges | 1.5 |  |  | 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,
| 2022 |  | 2021 |  | 2020
Total Assets: |  |  |  |  |
Residential Heating & Cooling | $ | 1,456.4 |  |  | $ | 1,149.7 |  |  | $ | 1,034.6 |
Commercial Heating & Cooling | 456.4 |  |  | 366.2 |  |  | 366.5 |
Refrigeration | 443.6 |  |  | 426.6 |  |  | 387.9 |
Corporate and other | 211.2 |  |  | 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,
| 2022 |  | 2021 |  | 2020
Capital Expenditures: |  |  |  |  |
Residential Heating & Cooling | $ | 42.4 |  |  | $ | 70.0 |  |  | $ | 44.0 |
Commercial Heating & Cooling | 21.5 |  |  | 4.3 |  |  | 5.9 |
Refrigeration | 11.2 |  |  | 11.5 |  |  | 9.2 |
Corporate and other | 26.0 |  |  | 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,
| 2022 |  | 2021 |  | 2020
Depreciation and Amortization: |  |  |  |  |
Residential Heating & Cooling | $ | 31.5 |  |  | $ | 27.6 |  |  | $ | 28.5 |
Commercial Heating & Cooling | 12.9 |  |  | 13.2 |  |  | 13.5 |
Refrigeration | 9.1 |  |  | 7.8 |  |  | 7.8 |
Corporate and other | 24.4 |  |  | 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,
| 2022 |  | 2021 |  | 2020
Income from Equity Method Investments: |  |  |  |  |
Residential Heating & Cooling | $ | 0.9 |  |  | $ | 6.9 |  |  | $ | 11.4 |
Commercial Heating & Cooling | 0.2 |  |  | 1.2 |  |  | 2.3 |
Refrigeration | 4.0 |  |  | 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,
| 2022 |  | 2021 |  | 2020
Property, Plant and Equipment, net: |  |  |  |  |
United States | $ | 408.8 |  |  | $ | 381.0 |  |  | $ | 352.9 |
Mexico | 110.9 |  |  | 102.7 |  |  | 79.2 |
Canada | 2.1 |  |  | 2.1 |  |  | 2.2 |
Other international | 27.1 |  |  | 29.3 |  |  | 30.0 |
Total Property, plant and equipment, net | $ | 548.9 |  |  | $ | 515.1 |  |  | $ | 464.3 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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