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Table of Contents             
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
 ____________________________________ 
FORM 10-Q
____________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-39220
____________________________________ 
CARRIER GLOBAL CORPORATION
(Exact name of registrant as specified in its charter)
____________________________________ 
Delaware   83-4051582
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
13995 Pasteur Boulevard, Palm Beach Gardens, Florida 33418
(Address of principal executive offices, including zip code)
(561) 365-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock ($0.01 par value) CARR New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of October 15, 2021, there were 866,584,932 shares of Common Stock outstanding.
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CARRIER GLOBAL CORPORATION
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Three and Nine Months Ended September 30, 2021
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Carrier Global Corporation and its subsidiaries' names, abbreviations thereof, logos and product and service designators are all either the registered or unregistered trademarks or trade names of Carrier Global Corporation and its subsidiaries. Names, abbreviations of names, logos and products and service designators of other companies are either the registered or unregistered trademarks or trade names of their respective owners. As used herein, the terms "we," "us," "our," "the Company" or "Carrier," unless the context otherwise requires, mean Carrier Global Corporation and its subsidiaries. References to internet websites in this Form 10-Q are provided for convenience only. Information available through these websites is not incorporated by reference into this Form 10-Q.









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PART I – FINANCIAL INFORMATION
Item 1.    Financial Statements

CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(In millions, except per share amounts) 2021 2020 2021 2020
Net sales
Product sales $ 4,510  $ 4,193  $ 12,958  $ 10,615 
Service sales 831  809  2,522  2,247 
Total Net sales 5,341  5,002  15,480  12,862 
Costs and expenses
Cost of products sold (3,172) (2,884) (9,131) (7,464)
Cost of services sold (568) (557) (1,735) (1,574)
Research and development (123) (100) (369) (292)
Selling, general and administrative (748) (681) (2,304) (2,010)
Total Costs and expenses (4,611) (4,222) (13,539) (11,340)
Equity method investment net earnings 76  62  201  148 
Other income (expense), net 22  239  40  168 
Operating profit 828  1,081  2,182  1,838 
Non-service pension (expense) benefit 14  16  51  47 
Interest (expense) income, net (74) (88) (238) (206)
Income from operations before income taxes 768  1,009  1,995  1,679 
Income tax (expense) benefit (288) (261) (626) (560)
Net income from operations 480  748  1,369  1,119 
Less: Non-controlling interest in subsidiaries' earnings from operations 11  29  21 
Net income attributable to common shareowners $ 469  $ 741  $ 1,340  $ 1,098 
Earnings per share
Basic $ 0.54  $ 0.86  $ 1.54  $ 1.27 
Diluted $ 0.53  $ 0.84  $ 1.50  $ 1.25 
Weighted-average number of shares outstanding
Basic 867.6  866.4  868.6  866.3 
Diluted 892.0  881.5  890.9  876.2 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
Net income from operations $ 480  $ 748  $ 1,369  $ 1,119 
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments arising during period (203) 307  (265) 68 
Pension and post-retirement benefit plan adjustments 19  18 
Other comprehensive income (loss), net of tax (197) 312  (246) 86 
Comprehensive income (loss) 283  1,060  1,123  1,205 
Less: Comprehensive income (loss) attributable to non-controlling interest 11  12  29  25 
Comprehensive income (loss) attributable to common shareowners $ 272  $ 1,048  $ 1,094  $ 1,180 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In millions) September 30, 2021 December 31, 2020
Assets
Cash and cash equivalents $ 2,671  $ 3,115 
Accounts receivable, net 2,669  2,781 
Contract assets, current 502  656 
Inventories, net 1,926  1,629 
Assets held for sale 3,148  — 
Other assets, current 384  343 
Total current assets 11,300  8,524 
Future income tax benefits 456  449 
Fixed assets, net 1,764  1,810 
Operating lease right-of-use assets 626  788 
Intangible assets, net 481  1,037 
Goodwill 9,237  10,139 
Pension and post-retirement assets 25  554 
Equity method investments 1,619  1,513 
Other assets 280  279 
Total Assets $ 25,788  $ 25,093 
Liabilities and Equity
Accounts payable $ 2,158  $ 1,936 
Accrued liabilities 2,260  2,471 
Contract liabilities, current 418  512 
Liabilities held for sale 1,102  — 
Current portion of long-term debt 130  191 
Total current liabilities 6,068  5,110 
Long-term debt 9,558  10,036 
Future pension and post-retirement obligations 416  524 
Future income tax obligations 331  479 
Operating lease liabilities 515  642 
Other long-term liabilities 1,678  1,724 
Total Liabilities 18,566  18,515 
Commitments and contingent liabilities (Note 19)
Equity
Common stock
Treasury stock (276) — 
Additional paid-in capital 5,384  5,345 
Retained earnings 2,774  1,643 
Accumulated other comprehensive loss (991) (745)
Non-controlling interest 322  326 
Total Equity 7,222  6,578 
Total Liabilities and Equity $ 25,788  $ 25,093 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
(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  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 (1)
(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 
Net income —  —  —  —  —  469  11  480 
Other comprehensive income (loss), net of tax —  (197) —  —  —  —  —  (197)
Shares issued under incentive plans, net —  —  —  —  (1) —  —  (1)
Stock-based compensation —  —  —  —  21  —  —  21 
Dividends attributable to non-controlling interest —  —  —  —  —  —  (6) (6)
Acquisition of non-controlling interest —  —  —  —  (2) —  (47) (49)
Treasury stock repurchase —  —  —  (146) —  —  —  (146)
Balance as of September 30, 2021 $   $ (991) $ 9  $ (276) $ 5,384  $ 2,774  $ 322  $ 7,222 
(1) Cash dividends declared were $0.24 per share for the three months ended June 30, 2021
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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
(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  —  —  —  —  —  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  269 
Other comprehensive income (loss), net of tax —  257  —  —  —  —  258 
Dividends declared on common stock (2)
—  —  —  —  —  (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) —  —  5,283  —  —  — 
Balance as of June 30, 2020 $   $ (1,479) $ 9  $   $ 5,307  $ 191  $ 338  $ 4,366 
Net income —  —  —  —  —  741  748 
Other comprehensive income (loss), net of tax —  307  —  —  —  —  312 
Shares issued under incentive plans, net —  —  —  —  20  —  —  20 
Dividends attributable to non-controlling interest —  —  —  —  —  —  (9) (9)
Balance as of September 30, 2020 $   $ (1,172) $ 9  $   $ 5,327  $ 932  $ 341  $ 5,437 
(2) Cash dividends declared were $0.08 per share for the three months ended June 30, 2020


The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
  For the Nine Months Ended September 30,
(In millions) 2021 2020
Operating Activities
Net income from operations $ 1,369  $ 1,119 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization 251  241 
Deferred income tax provision 69  121 
Stock-based compensation costs 60  56 
Equity method investment net earnings (201) (148)
Distributions from equity method investments 65  88 
Impairment charge on minority-owned joint venture investments 72 
(Gain) loss on sale of investments (4) (252)
Changes in operating assets and liabilities
Accounts receivable, net (290) (117)
Contract assets, current (66) (120)
Inventories, net (344) (237)
Other assets, current (20) 52 
Accounts payable and accrued liabilities 496  529 
Contract liabilities, current 43  44 
Defined benefit plan contributions (29) (29)
Other operating activities, net (77) 74 
Net cash flows provided by (used in) operating activities 1,324  1,493 
Investing Activities
Capital expenditures (206) (151)
Investment in businesses, net of cash acquired (214) — 
Dispositions of businesses — 
Proceeds on sale of investments —  300 
Settlement of derivative contracts, net (18) 67 
Other investing activities, net 14 
Net cash flows provided by (used in) investing activities (426) 230 
Financing Activities
Increase (decrease) in short-term borrowings, net (17) (22)
Issuance of long-term debt 122  11,762 
Repayment of long-term debt (692) (124)
Repurchases of common stock (275) — 
Dividends paid on common stock (313) (70)
Dividends paid to non-controlling interest (32) (17)
Net transfers to UTC —  (10,359)
Other financing activities, net (18)
Net cash flows provided by (used in) financing activities (1,225) 1,173 
Effect of foreign exchange rate changes on cash and cash equivalents (15) — 
Net increase (decrease) in cash and cash equivalents and restricted cash (342) 2,896 
Less: Change in cash balances classified as assets held for sale 74  — 
Cash, cash equivalents and restricted cash, beginning of period 3,120  957 
Cash, cash equivalents and restricted cash, end of period 2,704  3,853 
Less: restricted cash 33 
Cash and cash equivalents, end of period $ 2,671  $ 3,848 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
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CARRIER GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1: DESCRIPTION OF THE BUSINESS

Carrier Global Corporation is a leading global provider of heating, ventilating, air conditioning ("HVAC"), refrigeration and fire and security solutions. The Company also provides a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. In the opinion of management, the accompanying Unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments) necessary to state fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for 2020 filed with the SEC on February 9, 2021 (the "2020 Form 10-K").

On April 3, 2020 (the "Distribution Date"), United Technologies Corporation, since renamed Raytheon Technologies Corporation ("UTC"), completed the spin-off of the Company into an independent, publicly traded company (the "Separation") through a pro-rata distribution (the "Distribution") on a one-for-one basis of all of the outstanding shares of common stock of the Company to UTC shareowners who held shares of UTC common stock as of the close of business on March 19, 2020, the record date of the Distribution. In connection with the Separation, the Company issued an aggregate principal balance of $11.0 billion of debt and transferred approximately $10.9 billion of cash to UTC on February 27, 2020 and March 27, 2020. On April 1, 2020 and April 2, 2020, the Company received cash contributions totaling $590 million from UTC related to the Separation.

In connection with the Separation, the Company entered into several agreements with UTC and Otis Worldwide Corporation ("Otis") that govern various aspects of the relationship among the Company, UTC and Otis following the Separation and the Distribution, including a transition services agreement ("TSA"), a tax matters agreement ("TMA"), an employee matters agreement and an intellectual property agreement that cover services such as information technology, tax, finance and human resources. In addition, the Company incurred separation-related costs including employee-related costs, costs to establish certain stand-alone functions, information technology systems, professional service fees and other costs associated with becoming an independent, publicly traded company. These costs are primarily recorded in Selling, general and administrative in the Unaudited Condensed Consolidated Statement of Operations and totaled $24 million for the three months ended September 30, 2020. Costs for the nine months ended September 30, 2021 and 2020 were $19 million and $92 million, respectively. The TSA expired on March 31, 2021.

Impact of the COVID-19 Pandemic

In early 2020, the World Health Organization declared the outbreak of a respiratory disease known as COVID-19 as a global pandemic. In response, many countries implemented containment and mitigation measures to combat the outbreak, which severely restricted the level of economic activity and caused a significant contraction in the global economy. As a result, the Company temporarily closed or reduced production at manufacturing facilities across the globe to ensure employee safety and instructed non-essential employees to work from home. In addition, the Company took several preemptive actions during 2020 to manage liquidity as demand for its products decreased. Despite the adverse impacts of the pandemic on the Company’s results beginning in the first quarter of 2020, manufacturing operations resumed and several restorative actions were completed during 2020, including the reinstatement of annual merit-based salary increases and continued investment to support the Company's strategic priorities.

The Company continues to focus its efforts on preserving the health and safety of its employees and customers as well as maintaining the continuity of its operations. In addition, the Company continues to actively monitor its liquidity position and working capital needs and believes that its overall capital resources and liquidity position are adequate. The preparation of financial statements requires management to use judgments in making estimates and assumptions based on the relevant information available at the end of each period, which can have a significant effect on reported amounts. However, due to significant uncertainty surrounding the pandemic, including a resurgence in cases and the spread of COVID-19 variants, management's judgments could change. While the Company's results of operations, cash flows and financial condition could be negatively impacted, the extent of any continuing impact cannot be estimated with certainty at this time.

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NOTE 2: BASIS OF PRESENTATION

The Unaudited Condensed Consolidated Financial Statements include all accounts of the Company and its wholly-owned and majority-owned subsidiaries in which it has control. All intra-company accounts and transactions have been eliminated. Related party transactions between the Company and its equity method investees have not been eliminated. Non-controlling interest represents a non-controlling investor's interests in the results of subsidiaries that the Company controls and consolidates.

The Company's financial statements for the periods prior to the Separation and the Distribution are prepared on a "carve-out" basis and include all amounts directly attributable to the Company. Net cash transfers and other property transferred between UTC and the Company, including related party receivables and payables between the Company and other UTC affiliates, are presented as Net transfers to UTC. In addition, the financial statements include allocations of costs for administrative functions and services performed on behalf of the Company by centralized groups within UTC. All allocations and estimates in the Unaudited Condensed Consolidated Financial Statements are based on assumptions that management believes are reasonable. The Company's financial statements for the periods subsequent to April 3, 2020 are consolidated financial statements based on the reported results of Carrier as a stand-alone company.

Held for Sale

On July 26, 2021, the Company entered into a stock purchase agreement to sell its Chubb Fire and Security business ("Chubb") to APi Group Corporation ("APi"). The transaction is expected to close late in the fourth quarter of 2021 or early in the first quarter of 2022, subject to regulatory approvals, required works council approval in France and customary closing conditions. In accordance with U.S. GAAP, the assets and liabilities of Chubb have been classified as held for sale on the accompanying Unaudited Condensed Consolidated Balance Sheet as of September 30, 2021 and recorded at the lower of their carrying value or fair value less estimated cost to sell. See Note 16 - Divestitures for additional information.

Recently Adopted Accounting Pronouncements

The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the sole source of authoritative U.S. GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues Accounting Standards Updates ("ASU") to communicate changes to the codification. The Company considers the applicability and impact of all ASUs. ASUs not referenced below were assessed and determined to be either not applicable or are not expected to have a material impact on the Unaudited Condensed Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which simplifies certain aspects of income tax accounting guidance in ASC 740, Income Taxes ("ASC 740") reducing the complexity of its application while maintaining or improving the usefulness of the information required to be reported. The ASU eliminates certain exceptions from ASC 740 including: intra-period tax allocation, deferred tax liabilities related to outside basis differences and year-to-date loss in interim periods, among others. ASU 2019-12 was effective for periods beginning after December 15, 2020, including interim periods therein with early adoption permitted. The Company adopted this ASU on January 1, 2021 with no material impact on the Unaudited Condensed Consolidated Financial Statements.

NOTE 3: INVENTORIES, NET

Inventories are stated at the lower of cost or estimated realizable value. Cost is primarily determined based on the first-in, first-out inventory method ("FIFO") or average cost methods, which approximates current replacement cost. However, certain subsidiaries use the last-in, first-out inventory method ("LIFO").

The major classes of inventory are as follows:

(In millions) September 30,
2021
December 31,
2020
Raw materials $ 521  $ 363 
Work-in-process 203  143 
Finished goods 1,202  1,123 
Inventories, net $ 1,926  $ 1,629 

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The Company performs periodic assessments to determine the existence of excess and obsolete inventory and records necessary provisions to reduce such inventories to estimated realizable value. Raw materials, work-in-process and finished goods are net of valuation reserves of $165 million and $183 million as of September 30, 2021 and December 31, 2020, respectively.

NOTE 4: GOODWILL AND INTANGIBLE ASSETS

The Company records goodwill as the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is tested and reviewed annually for impairment on July 1 or whenever there is a material change in events or circumstances that indicates that the fair value of the reporting unit may be less than its carrying value.

The changes in the carrying amount of goodwill are as follows:

(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)
180  (1) —  179 
Reclassified as Assets held for sale (2)
—  —  (936) (936)
Foreign currency translation (78) (19) (48) (145)
Balance as of September 30, 2021 $ 5,591  $ 1,231  $ 2,415  $ 9,237 
(1) See Note 15 - Acquisitions for additional information
(2) See Note 16 - Divestitures for additional information

Indefinite-lived intangible assets are tested and reviewed annually for impairment during the third quarter or whenever there is a material change in events or circumstances that indicates that the fair value of the asset may be less than the carrying amount of the asset. All other intangible assets with finite useful lives are amortized over their estimated useful lives.

Identifiable intangible assets are comprised of the following:

September 30, 2021 December 31, 2020
(In millions) Gross Amount Accumulated Amortization
Net Amount (1)
Gross Amount Accumulated Amortization Net Amount
Amortized:
Customer relationships $ 924  $ (684) $ 240  $ 1,558  $ (1,285) $ 273 
Patents and trademarks 230  (179) 51  301  (222) 79 
Monitoring lines —  —  —  71  (59) 12 
Service portfolios and other 662  (536) 126  644  (542) 102 
1,816  (1,399) 417  2,574  (2,108) 466 
Unamortized:
Trademarks and other 64    64  571  —  571 
Intangible assets, net $ 1,880  $ (1,399) $ 481  $ 3,145  $ (2,108) $ 1,037 
(1) See Note 16 - Divestitures for additional information

Amortization of intangible assets was $25 million and $26 million for the three months ended September 30, 2021 and 2020, respectively, and $74 million and $76 million for the nine months ended September 30, 2021 and 2020, respectively.

Annual Impairment Assessment

The Company tested its goodwill and indefinite-lived intangible assets for impairment as part of its annual assessment. For each test, the Company qualitatively assessed all relevant events or circumstances that could impact the estimate of fair value and determined that it was more likely than not that the fair value of any asset exceeded its carrying amount.
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NOTE 5: BORROWINGS AND LINES OF CREDIT

Long-term debt consisted of the following:

(In millions) September 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) 261  308 
Discounts and debt issuance costs (73) (81)
Total debt 9,688  10,227 
Less: current portion of long-term debt 130  191 
Long-term debt, net of current portion $ 9,558  $ 10,036 
(1) In February 2021, the Company prepaid the 1.923% Notes due in February 2023 and incurred a $17 million make-whole premium upon prepayment and wrote-off $2 million of the remaining unamortized deferred financing costs
Revolving Credit Facility

On February 10, 2020, the Company entered into a revolving credit agreement with various banks permitting aggregate borrowings of up to $2.0 billion pursuant to an unsecured, unsubordinated revolving credit facility that matures on April 3, 2025 (the "Revolving Credit Facility"). The Revolving Credit Facility supports the Company's commercial paper program and cash requirements of the Company. A commitment fee of 0.125% is charged on unused commitments. Borrowings under the Revolving Credit Facility are available in U.S. Dollars, Euros and Pounds Sterling and bear interest at a variable interest rate based on LIBOR plus a ratings-based margin, which was 125 basis points as of September 30, 2021. As of September 30, 2021, there were no borrowings outstanding under the Revolving Credit Facility.

Commercial Paper Program

As of September 30, 2021, the Company had a $2.0 billion unsecured, unsubordinated commercial paper program, which can be used for general corporate purposes, including the funding of working capital and potential acquisitions. As of September 30, 2021, there were no borrowings outstanding under the commercial paper program.

Project Financing Arrangements

The Company is involved in several long-term construction contracts in which it arranges project financing with certain customers. As a result, the Company issued $108 million and $102 million of debt during the nine months ended September 30, 2021 and 2020, respectively. Long-term debt repayments associated with these financing arrangements during the nine months ended September 30, 2021 and 2020 were $170 million and $124 million, respectively.

Debt Covenants

The Revolving Credit Facility and the indenture for the long-term notes contain affirmative and negative covenants customary for financings of these types which, among other things, limit the Company's ability to incur additional liens, to make certain fundamental changes and to enter into sale and leaseback transactions. On June 2, 2020, the Company entered into an amendment of the Revolving Credit Facility, under which certain terms of the facility were amended for a period beginning on June 2, 2020 and ending on December 30, 2021 (the "Covenant Modification"). The Company terminated the Covenant Modification effective as of August 27, 2021 in accordance with the procedure for termination set forth in the revolving credit agreement, which returned the consolidated leverage ratio covenant to the limit in effect prior to the Covenant Modification. As
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of September 30, 2021, the Company was in compliance with the covenants under the agreements governing its outstanding indebtedness.

NOTE 6: FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement ("ASC 820"), defines fair value as the price that would be received if an asset is sold or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors, including foreign currency and commodity price risk. These exposures are managed through operational strategies and the use of undesignated hedging contracts. The Company's derivative assets and liabilities are measured at fair value on a recurring basis using internal models based on observable market inputs, such as forward, interest, contract and discount rates. The following tables provide the valuation hierarchy classification of assets and liabilities that are recorded at fair value and measured on a recurring basis in the Company's Unaudited Condensed Consolidated Balance Sheet:

(In millions) Total Level 1 Level 2 Level 3
September 30, 2021
Derivative assets $ 10  (1) $ —  $ 10  $ — 
Derivative liabilities $ (4) (2) $ —  $ (4) $ — 
December 31, 2020
Derivative assets $ 17  (1) $ —  $ 17  $ — 
Derivative liabilities $ (5) (2) $ —  $ (5) $ — 
(1) Included in Other assets, current on the accompanying Unaudited Condensed Consolidated Balance Sheet
(2) Included in Accrued liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet

The Company's long-term debt is measured at fair value based on observable market inputs which are considered Level 1 within the fair value hierarchy. The following table provides the carrying amounts and fair values of financial instruments that are not recorded at fair value in the Company's Unaudited Condensed Consolidated Balance Sheet:

September 30, 2021 December 31, 2020
(In millions) Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Total Long-term Notes (1)
$ 9,500  $ 9,960  $ 10,000  $ 10,811 
(1) Excludes debt discount and issuance costs
The carrying value of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings approximate fair value due to the short-term nature of these accounts and would be classified as Level 1 in the fair value hierarchy. The Company's financing leases and project financing obligations, included in Long-term debt, approximate fair value and are classified as Level 3 in the fair value hierarchy.

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NOTE 7: EMPLOYEE BENEFIT PLANS

The Company sponsors both funded and unfunded domestic and international defined benefit and defined contribution plans as well as other post-retirement benefit plans. In addition, the Company contributes to various domestic and international multi-employer defined benefit pension and other post-retirement benefit plans.

Contributions to the plans were as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
Defined benefit plans $ $ $ 29  $ 29 
Defined contribution plans $ 30  $ 23  $ 97  $ 78 
Multi-employer pension plans $ $ $ 17  $ 15 

The following table illustrates the components of net periodic pension benefits for the defined benefit pension and post-retirement benefit plans:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
Service cost $ $ $ 21  $ 22 
Interest cost 13  28  39 
Expected return on plan assets (36) (35) (109) (104)
Amortization of prior service credit — 
Recognized actuarial net (gain) loss 24  15 
Net settlement, curtailment and special termination benefit (gain) loss — 
Net periodic pension expense (benefit) $ (8) $ (9) $ (31) $ (25)

NOTE 8: STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation plans in accordance with ASC 718, Compensation - Stock Compensation, which requires a fair-value based method for measuring the value of stock-based compensation. Fair value is measured at the date of grant and is generally not adjusted for subsequent changes. The Company's stock-based compensation plans include programs for stock appreciation rights, restricted stock units and performance share units.

Stock-based compensation expense is included in Cost of products sold, Selling, general and administrative and Research and development in the accompanying Unaudited Condensed Consolidated Statements of Operations. The expense recognized was as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Equity settled $ 21  $ 21  $ 60  $ 56 
Cash settled 15 
Total stock-based compensation expense $ 26  $ 26  $ 75  $ 58 

Prior to the Separation and the Distribution, the Company participated in UTC's long-term incentive plans, which authorized various types of market and performance-based incentive awards. For these periods, stock-based compensation expense was allocated to the Company from UTC based upon direct employee headcount. In connection with the Separation and the Distribution, all awards were converted into Carrier stock-based awards with unvested awards converted to preserve their intrinsic value immediately before and after the Separation.

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NOTE 9: GUARANTEES

The Company provides service and warranty coverage on its products and extends performance and operating cost guarantees beyond normal service and warranty coverage on certain products. In addition, the Company incurs discretionary costs to service its products in connection with specific product performance issues. Liabilities for performance and operating cost guarantees are based upon future product performance and durability and are estimated based upon historical experience. Adjustments are recorded to accruals based on claims data and historical experience. The changes in the carrying amount of service and product warranties and product performance guarantees, included in Accrued liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet, are as follows:

For the Nine Months Ended September 30,
(In millions) 2021 2020
Balance as of January 1, $ 514  $ 488 
Warranties, performance guarantees issued and changes in estimated liability 136  131 
Settlements made (127) (111)
Other
Balance as of September 30, $ 524  $ 509 

NOTE 10: EQUITY

The authorized number of shares of common stock of Carrier is 4,000,000,000 shares of $0.01 par value. As of September 30, 2021, 872,324,594 shares of common stock were issued, which includes 5,705,590 shares of treasury stock.

Share Repurchase Program

In July 2021, the Company's Board of Directors authorized a $1.75 billion increase to the Company's existing $350 million stock repurchase program. This program allows the Company to repurchase its outstanding common stock from time to time subject to market conditions and at the Company's discretion in the open market or through one or more other public or private transactions and subject to compliance with the Company's obligations under the TMA. The Company records repurchases under the cost method whereby the entire cost of the acquired stock is recorded as Treasury stock as a reduction to equity. The reissuance of treasury stock uses the first-in, first-out method of accounting.

The Company repurchased 2.7 million shares and 5.7 million shares of common stock for an aggregate purchase price of $146 million and $276 million for the three and nine months ended September 30, 2021, respectively, which are held in Treasury stock as of September 30, 2021 as reflected on its Unaudited Condensed Consolidated Balance Sheet.

Accumulated Other Comprehensive Income (Loss)

A summary of changes in the components of Accumulated other comprehensive income (loss) for the three months ended September 30, 2021 and 2020 is as follows:

(In millions) Foreign Currency Translation Defined Benefit Pension and Post-retirement Plans Accumulated Other Comprehensive Income (Loss)
Balance as of June 30, 2021 $ (253) $ (541) $ (794)
Other comprehensive income (loss) before reclassifications, net (203) —  (203)
Amounts reclassified, pre-tax — 
Tax expense (benefit) reclassified —  (2) (2)
Balance as of September 30, 2021 $ (456) $ (535) $ (991)

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(In millions) Foreign Currency Translation Defined Benefit Pension and Post-retirement Plans Accumulated Other Comprehensive Income (Loss)
Balance as of June 30, 2020 $ (1,018) $ (461) $ (1,479)
Other comprehensive income (loss) before reclassifications, net 302  —  302 
Amounts reclassified, pre-tax — 
Tax expense (benefit) reclassified —  (1) (1)
Balance as of September 30, 2020 $ (716) $ (456) $ (1,172)

A summary of changes in the components of Accumulated other comprehensive income (loss) for the nine months ended September 30, 2021 and 2020 is as follows:

(In millions) Foreign Currency Translation Defined Benefit Pension and Post-retirement Plans Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2020 $ (191) $ (554) $ (745)
Other comprehensive income (loss) before reclassifications, net (265) —  (265)
Amounts reclassified, pre-tax —  25  25 
Tax expense reclassified —  (6) (6)
Balance as of September 30, 2021 $ (456) $ (535) $ (991)

(In millions) Foreign Currency Translation Defined Benefit Pension and Post-retirement Plans Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2019 $ (780) $ (473) $ (1,253)
Other comprehensive income (loss) before reclassifications, net 64  66 
Amounts reclassified, pre-tax —  18  18 
Tax expense reclassified —  (3) (3)
Balance as of September 30, 2020 $ (716) $ (456) $ (1,172)

NOTE 11: REVENUE RECOGNITION

The Company recognizes revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefit from that good or service. A significant portion of the Company's performance obligations are recognized at a point-in-time when control of the product transfers to the customer, which is generally at the time of shipment. The remaining portion of the Company's performance obligations are recognized over time as the customer simultaneously obtains control as the Company performs work under a contract, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment.
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Sales disaggregated by product and service are as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
Sales Type
Product $ 2,702  $ 2,547  $ 7,606  $ 6,180 
Service 352  345  1,054  962 
HVAC sales 3,054  2,892  8,660  7,142 
Product 894  771  2,701  2,093 
Service 117  105  336  291 
Refrigeration sales 1,011  876  3,037  2,384 
Product 1,012  965  2,943  2,587 
Service 365  359  1,141  1,000 
Fire & Security sales 1,377  1,324  4,084  3,587 
Total segment sales 5,442  5,092  15,781  13,113 
Eliminations and other (101) (90) (301) (251)
Net sales $ 5,341  $ 5,002  $ 15,480  $ 12,862 

Contract Balances

Total contract assets and liabilities arising from contracts with customers are as follows:

(In millions) September 30,
2021
December 31,
2020
Contract assets, current $ 502  $ 656 
Contract assets, non-current (included within Other assets) 119  98 
Total contract assets 621  754 
Contract liabilities, current 418  512 
Contract liabilities, non-current (included within Other long-term liabilities) 169  165 
Total contract liabilities 587  677 
Net contract assets $ 34  $ 77 

The timing of revenue recognition, billings and cash collections results in contract assets and contract liabilities. Contract assets relate to the conditional right to consideration for any completed performance under a contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Contract liabilities relate to payments received in advance of performance under the contract or when the Company has a right to consideration that is conditioned upon transfer of a good or service to the customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. The Company recognized revenue of $337 million during the nine months ended September 30, 2021 that related to contract liabilities as of January 1, 2021. The Company expects a majority of its contract liabilities at the end of the period to be recognized as revenue in the next 12 months.

NOTE 12: RESTRUCTURING COSTS

The Company incurs costs associated with restructuring initiatives intended to improve operating performance, profitability and working capital levels. Actions associated with these initiatives may include improving productivity, workforce reductions and the consolidation of facilities.
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The Company recorded net pre-tax restructuring costs for new and ongoing restructuring initiatives as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
HVAC $ $ —  $ 18  $
Refrigeration (1)
Fire & Security 23  13 
Total Segment 12  48  18 
General corporate expenses — 
Total restructuring costs $ 13  $ 3  $ 52  $ 19 
Cost of sales $ $ (1) $ 18  $
Selling, general and administrative 34  14 
Total restructuring costs $ 13  $ 3  $ 52  $ 19 

The changes in the restructuring accrual, included in Accrued liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet, are as follows:

For the Nine Months Ended September 30,
(In millions) 2021 2020
Balance as of January 1, $ 49  $ 66 
Net pre-tax restructuring costs 52  19 
Utilization, foreign exchange and other (54) (46)
Reclassified as Liabilities held for sale (1)
(14) — 
Balance as of September 30, $ 33  $ 39 
(1) See Note 16 - Divestitures for additional information

During the nine months ended September 30, 2021, charges associated with restructuring initiatives related to cost reduction efforts. Amounts recognized primarily related to severance due to workforce reductions and exit costs due to the consolidation of field operations. As of September 30, 2021, the Company had $33 million accrued for costs associated with its announced restructuring initiatives, all of which is expected to be paid within one year.

NOTE 13: INCOME TAXES

The Company accounts for income tax expense in accordance with ASC 740, which requires an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The effective tax rate for the three months ended September 30, 2021 was 37.5% compared with 25.9% for the three months ended September 30, 2020. The period-over-period increase was driven by a net tax charge of $136 million primarily relating to the re-organizations and disentanglements of certain Chubb subsidiaries executed in advance of the planned divestiture of the Company's Chubb business. This increase was partially offset by a favorable tax adjustment of $23 million due to foreign tax credits generated and expected to be utilized in the current year.

The effective tax rate for the nine months ended September 30, 2021 was 31.4% compared with 33.4% for the nine months ended September 30, 2020. The year-over-year decrease is primarily due to the significant items recognized during the period as a percentage of Income from operations before income taxes. The nine months ended September 30, 2021 include a net tax charge of $136 million primarily relating to the re-organizations and disentanglements of certain Chubb subsidiaries executed in advance of the planned divestiture of the Company's Chubb business, a $43 million deferred tax charge as a result of the tax rate increase from 19% to 25% in the United Kingdom, partially offset by a favorable tax adjustment of $23 million due to
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foreign tax credits generated and expected to be utilized in the current year and $21 million resulting from re-organization of a German subsidiary. The nine months ended September 30, 2020 include a tax charge of $51 million related to a valuation allowance recorded against a United Kingdom tax loss and credit carryforward and a $46 million charge resulting from the Company's decision to no longer permanently reinvest certain pre-2018 unremitted non-U.S. earnings.

Income taxes through March 31, 2020 were recorded based on a "carve-out" and separate company basis. Prior to the Separation and the Distribution, the Company’s portion of income taxes for domestic and certain foreign jurisdictions were deemed settled in the period the related tax expense was recorded. After the Separation and the Distribution, the Company’s income taxes are prepared on a stand-alone basis.

The Company assesses the realizability of its deferred tax assets on a quarterly basis through an analysis of potential sources of future taxable income, including prior year taxable income that may be available to absorb a carryback of tax losses, reversals of existing taxable temporary differences, tax planning strategies and forecasts of taxable income. The Company considers all negative and positive evidence, including the weight of the evidence, to determine whether valuation allowances against deferred tax assets are required. The Company maintains valuation allowances against certain deferred tax assets.

The Company conducts business globally and files income tax returns in U.S. federal, state and foreign jurisdictions. In certain jurisdictions, the Company's operations were included in UTC's combined tax returns for the periods through the Distribution. The U.S. Internal Revenue Service ("IRS") commenced an audit of UTC's tax years 2017 and 2018 in the second quarter of 2020. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including Australia, Belgium, Canada, China, Czech Republic, France, Germany, Hong Kong, India, Italy, Mexico, the Netherlands, Singapore, the United Kingdom and the United States. The Company is no longer subject to U.S. federal income tax examination for years prior to 2017 and, with few exceptions, is no longer subject to state, local and foreign income tax examinations for tax years prior to 2013.

In the ordinary course of business, there is inherent uncertainty in quantifying the Company's income tax positions. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. The Company believes that it is reasonably possible that a net decrease in unrecognized tax benefits of between $25 million and $75 million may occur within 12 months as a result of additional uncertain tax positions, the Separation, the revaluation of uncertain tax positions arising from examinations, appeals, court decisions and/or the expiration of tax statutes.

NOTE 14: EARNINGS PER SHARE

Earnings per share is computed by dividing Net income attributable to common shareowners by the weighted-average number of shares of common stock outstanding during the period (excluding treasury stock). Diluted earnings per share is computed by giving effect to all potentially dilutive stock awards that are outstanding. The computation of diluted earnings per share excludes the effect of the potential exercise of stock-based awards, including stock appreciation rights and stock options, when the effect of the potential exercise would be anti-dilutive.
Three Months Ended September 30, Nine Months Ended September 30,
(In millions, except per share amounts) 2021 2020 2021 2020
Net income attributable to common shareowners $ 469  $ 741  $ 1,340  $ 1,098 
Basic weighted-average number of shares outstanding 867.6  866.4  868.6  866.3 
Stock awards and equity units (share equivalent) 24.4  15.1  22.3  9.9 
Diluted weighted-average number of shares outstanding 892.0  881.5  890.9  876.2 
Antidilutive shares excluded from computation of diluted earnings per share 0.2  3.2  0.2  3.2 
Earnings Per Share
Basic $ 0.54  $ 0.86  $ 1.54  $ 1.27 
Diluted $ 0.53  $ 0.84  $ 1.50  $ 1.25 

On the Distribution Date, 866,158,910 shares of the Company’s common stock, par value $0.01 per share, were distributed to
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UTC shareowners of record as of March 19, 2020. This share amount is utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation and the Distribution and such shares are treated as issued and outstanding for purposes of calculating historical earnings per share. It is assumed that there are no dilutive equity instruments for the periods prior to the Separation and Distribution because there were no Carrier stock-based awards outstanding prior to the Separation and the Distribution.

NOTE 15: ACQUISITIONS

During the nine months ended September 30, 2021, the Company acquired consolidated businesses and a minority-owned business. The aggregate cash paid, net of cash acquired, totaled $214 million and was funded through cash on hand. Acquisitions are recorded using the acquisition method of accounting in accordance with ASC 805, Business Combinations ("ASC 805"). As a result, the aggregate purchase price has been allocated to assets acquired and liabilities assumed based on the estimate of fair market value of such assets and liabilities at the date of acquisition. Intangible assets associated with these transactions totaled $94 million and primarily related to customer relationships, technology assets and a non-compete agreement. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $180 million.

Acquisition of Giwee Group Co.

On June 1, 2021, the Company acquired a 70% controlling stake in Guangdong Giwee Group and its subsidiaries ("Giwee") and acquired the remaining 30% ownership interest on September 7, 2021. Giwee is a China-based manufacturer of HVAC products, offering a portfolio of products including variable refrigerant flow, modular chillers and light commercial air conditioners. The results of Giwee are reported within the HVAC segment as of the date of acquisition. The Company has not included pro forma financial information required under ASC 805 as the pro forma impact was not deemed significant.

The excess of the purchase price over the estimated fair value of the net assets acquired was recognized as goodwill and totaled $174 million, which is not deductible for tax purposes. Accounts receivable and current liabilities were stated at their historical carrying value, which approximates fair value given the short-term nature of these assets and liabilities. The estimate of fair value for inventory and property, plant and equipment was based on an assessment of the acquired assets' condition as well as an evaluation of the current market value of such assets.

The Company recorded intangible assets based on its preliminary estimate of fair value, which consisted of the following:

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

The valuation of intangible assets was determined using an income approach methodology including the multi-period excess earnings method and the relief from royalty method. Key assumptions used in estimating future cash flows included projected revenue growth rates, customer attrition rates and royalty rates. The projected future cash flows are discounted to present value using an appropriate discount rate. As of September 30, 2021, the Company has not finalized the process of allocating the purchase price and valuing the acquired assets and liabilities for the Giwee acquisition.

NOTE 16: DIVESTITURES

Sale of Chubb Fire & Security Business

On July 26, 2021, the Company entered into a stock purchase agreement to sell its Chubb business to APi for an enterprise value of $3.1 billion (the "Chubb Sale Agreement"). Chubb, reported within the Company’s Fire & Security segment, delivers essential fire safety and security solutions from design and installation to monitoring, service and maintenance across more than 17 countries around the globe. The transaction is expected to close late in the fourth quarter of 2021 or early in the first quarter of 2022, subject to regulatory approvals, required works council approval in France and customary closing conditions. The
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purchase price is subject to working capital and other adjustments as provided in the Chubb Sale Agreement. In accordance with U.S. GAAP, the assets and liabilities of Chubb have been reclassified as held for sale in the accompanying Unaudited Condensed Consolidated Balance Sheet as of September 30, 2021 and recorded at the lower of their carrying value or fair value less estimated cost to sell, and are no longer depreciated or amortized. Based on the carrying amount of Chubb’s net assets, foreign currency translation rates and other assumptions at September 30, 2021, the Company expects to recover the carrying value of the disposal group upon completion of the transaction.

The components of Chubb's assets and liabilities recorded as held for sale on the Unaudited Condensed Consolidated Balance Sheet at September 30, 2021 were as follows:

(in millions) September 30,
2021
Cash and cash equivalents $ 74 
Accounts receivable, net 414 
Inventories, net 70 
Contract assets, current 210 
Other assets, current 28 
Fixed assets, net 66 
Intangible assets, net 551 
Goodwill 936 
Operating lease right-of-use assets 173 
Pension and post-retirement assets 600 
Other assets 26 
Total assets held for sale $ 3,148 
Accounts payable $ 178 
Accrued liabilities 288 
Contract liabilities, current 154 
Future pension and post-retirement obligations 85 
Future income tax obligations 255 
Operating lease liabilities 122 
Other long-term liabilities 20 
Total liabilities held for sale $ 1,102 

NOTE 17: SEGMENT FINANCIAL DATA

The Company has three operating segments:

The HVAC segment provides products, controls, services and solutions to meet the heating, cooling and ventilation needs of residential and commercial customers while enhancing building performance, health, energy efficiency and sustainability.

The Refrigeration segment includes transport refrigeration and monitoring products, services and digital solutions for trucks, trailers, shipping containers, intermodal and rail, as well as commercial refrigeration products.

The Fire & Security segment provides a wide range of residential, commercial and industrial technologies and systems, and service solutions to protect people and property.

Our customers are in both the public and private sectors and our businesses reflect extensive geographic diversification. Inter-company sales between segments are immaterial.

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