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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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($0.01 par value)CARRNew 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 filerSmaller reporting companyEmerging 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
Page

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)2021202020212020
Net sales
Product sales$4,510 $4,193 $12,958 $10,615 
Service sales831 809 2,522 2,247 
Total Net sales5,341 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 earnings76 62 201 148 
Other income (expense), net22 239 40 168 
Operating profit828 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 taxes768 1,009 1,995 1,679 
Income tax (expense) benefit(288)(261)(626)(560)
Net income from operations480 748 1,369 1,119 
Less: Non-controlling interest in subsidiaries' earnings from operations11 7 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
Basic867.6 866.4 868.6 866.3 
Diluted892.0 881.5 890.9 876.2 
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)2021202020212020
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 adjustments6 5 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 interest11 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, 2021December 31, 2020
Assets
Cash and cash equivalents$2,671 $3,115 
Accounts receivable, net2,669 2,781 
Contract assets, current502 656 
Inventories, net1,926 1,629 
Assets held for sale3,148  
Other assets, current384 343 
Total current assets11,300 8,524 
Future income tax benefits456 449 
Fixed assets, net1,764 1,810 
Operating lease right-of-use assets626 788 
Intangible assets, net481 1,037 
Goodwill9,237 10,139 
Pension and post-retirement assets25 554 
Equity method investments1,619 1,513 
Other assets280 279 
Total Assets$25,788 $25,093 
Liabilities and Equity
Accounts payable$2,158 $1,936 
Accrued liabilities2,260 2,471 
Contract liabilities, current418 512 
Liabilities held for sale1,102  
Current portion of long-term debt130 191 
Total current liabilities6,068 5,110 
Long-term debt9,558 10,036 
Future pension and post-retirement obligations416 524 
Future income tax obligations331 479 
Operating lease liabilities515 642 
Other long-term liabilities1,678 1,724 
Total Liabilities18,566 18,515 
Commitments and contingent liabilities (Note 19)
Equity
Common stock 9 9 
Treasury stock(276) 
Additional paid-in capital5,384 5,345 
Retained earnings2,774 1,643 
Accumulated other comprehensive loss(991)(745)
Non-controlling interest322 326 
Total Equity7,222 6,578 
Total Liabilities and Equity$25,788 $25,093 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
(In millions)UTC Net InvestmentAccumulated Other Comprehensive Income (Loss)Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsNon-Controlling InterestTotal Equity
Balance as of December 31, 2020$ $(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 $6,818 
Net income48710497
Other comprehensive income (loss), net of tax6565
Dividends declared on common stock (1)
(209)(209)
Shares issued under incentive plans, net(4)(4)
Stock-based compensation2020
Dividends attributable to non-controlling interest(21)(21)
Acquisition of non-controlling interest4646
Treasury stock repurchase(92)(92)
Balance as of June 30, 2021$ $(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 InvestmentAccumulated Other Comprehensive Income (Loss)Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsNon-Controlling InterestTotal Equity
Balance as of December 31, 2019$15,355 $(1,253)$ $ $ $ $333 $14,435 
Net income96 — — — — — 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 $3,026 
Net income— — — — — 261 8 269 
Other comprehensive income (loss), net of tax— 257 — — — — 1 258 
Dividends declared on common stock (2)
— — — — — (70)— (70)
Shares issued under incentive plans, net— — — — 24 — — 24 
Net transfers from UTC859 — — — — — — 859 
Reclassification of UTC Net investment to Common stock and Additional paid-in capital(5,292)— 9 — 5,283 — —  
Balance as of June 30, 2020$ $(1,479)$9 $ $5,307 $191 $338 $4,366 
Net income — — — — 741 7 748 
Other comprehensive income (loss), net of tax— 307 — — — — 5 312 
Shares issued under incentive plans, net— — — — 20 — — 20 
Dividends attributable to non-controlling interest— — — — — — (9)(9)
Balance as of September 30, 2020$ $(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)20212020
Operating Activities
Net income from operations$1,369 $1,119 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization251 241 
Deferred income tax provision69 121 
Stock-based compensation costs60 56 
Equity method investment net earnings(201)(148)
Distributions from equity method investments65 88 
Impairment charge on minority-owned joint venture investments2 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 liabilities496 529 
Contract liabilities, current43 44 
Defined benefit plan contributions(29)(29)
Other operating activities, net(77)74 
Net cash flows provided by (used in) operating activities1,324 1,493 
Investing Activities
Capital expenditures(206)(151)
Investment in businesses, net of cash acquired (214) 
Dispositions of businesses 3  
Proceeds on sale of investments 300 
Settlement of derivative contracts, net(18)67 
Other investing activities, net9 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 debt122 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)3 
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 sale74  
Cash, cash equivalents and restricted cash, beginning of period3,120 957 
Cash, cash equivalents and restricted cash, end of period2,704 3,853 
Less: restricted cash33 5 
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-process203 143 
Finished goods1,202 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)HVACRefrigerationFire & SecurityTotal
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, 2021December 31, 2020
(In millions)Gross AmountAccumulated Amortization
Net Amount (1)
Gross AmountAccumulated AmortizationNet Amount
Amortized:
Customer relationships$924 $(684)$240 $1,558 $(1,285)$273 
Patents and trademarks230 (179)51 301 (222)79 
Monitoring lines   71 (59)12 
Service portfolios and other662 (536)126 644 (542)102 
1,816 (1,399)417 2,574 (2,108)466 
Unamortized:
Trademarks and other64  64 571 — 571 
Intangible assets, net$1,880 $(1,399)$481 $3,145 $(2,108)$