Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Cover page. | |
Entity Registrant Name | CARRIER GLOBAL CORPORATION |
Entity Central Index Key | 0001783180 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Document Type | S-4 |
Amendment Flag | false |
Combined Statements of Operatio
Combined Statements of Operations (FY) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales: | |||||||||||
Net Sales | $ 5,002 | $ 4,822 | $ 12,862 | $ 14,107 | $ 18,608 | $ 18,914 | $ 17,814 | ||||
Costs and expenses: | |||||||||||
Research and development | 100 | 102 | 292 | 302 | 401 | 400 | 364 | ||||
Selling, general and administrative | 681 | 702 | 2,010 | 2,066 | 2,761 | 2,689 | 2,584 | ||||
Total costs and expenses | 4,222 | 4,180 | 11,340 | 12,329 | 16,351 | 16,434 | 15,577 | ||||
Equity method investment net earnings | 62 | 78 | 148 | 198 | 236 | 220 | 218 | ||||
Other income (expense), net | 239 | (91) | 168 | (42) | (2) | 937 | 575 | ||||
Operating profit | 1,081 | 629 | 1,838 | 1,934 | 2,491 | 3,637 | 3,030 | ||||
Non-service pension benefit | 16 | 47 | 47 | 124 | (154) | (168) | (139) | ||||
Interest (income) expense, net | (88) | 3 | (206) | 23 | (27) | (37) | 115 | ||||
Income from operations before income taxes | 1,009 | 679 | 1,679 | 2,081 | 2,672 | 3,842 | 3,054 | ||||
Income tax expense | 261 | 175 | 560 | 380 | 517 | 1,073 | 1,787 | ||||
Net income from operations | 748 | $ 269 | $ 102 | 504 | $ 794 | $ 403 | 1,119 | 1,701 | 2,155 | 2,769 | 1,267 |
Less: Noncontrolling interest in subsidiaries' earnings | 7 | 12 | 21 | 25 | 39 | 35 | 40 | ||||
Net income attributable to Carrier Global Corporation | 741 | 492 | 1,098 | 1,676 | 2,116 | 2,734 | 1,227 | ||||
Product [Member] | |||||||||||
Net sales: | |||||||||||
Net Sales | 4,193 | 3,998 | 10,615 | 11,703 | 15,360 | 15,674 | 14,775 | ||||
Costs and expenses: | |||||||||||
Cost of products and services sold | 2,884 | 2,784 | 7,464 | 8,255 | 10,890 | 11,063 | 10,474 | ||||
Service [Member] | |||||||||||
Net sales: | |||||||||||
Net Sales | 809 | 824 | 2,247 | 2,404 | 3,248 | 3,240 | 3,039 | ||||
Costs and expenses: | |||||||||||
Cost of products and services sold | $ 557 | $ 592 | $ 1,574 | $ 1,706 | $ 2,299 | $ 2,282 | $ 2,155 |
Combined Statements of Comprehe
Combined Statements of Comprehensive Income (FY) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Combined Statements of Comprehensive Income [Abstract] | |||
Net income | $ 2,155 | $ 2,769 | $ 1,267 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments arising during period | 48 | (449) | 771 |
Less: reclassification adjustments for gain on sale of an investment in a foreign entity recognized in Other income (expense), net | 2 | 0 | 0 |
Foreign currency translation adjustments arising during period, after reclassification adjustments | 50 | (449) | 771 |
Pension and postretirement benefit plans: | |||
Net actuarial loss arising during period | (112) | (221) | (13) |
Prior service (cost) credit arising during period | 0 | (9) | 14 |
Amortization of actuarial loss and prior service cost | 11 | 17 | 16 |
Other | 3 | 21 | (33) |
Pension and postretirement benefit plans, before tax | (98) | (192) | (16) |
Tax benefit | 15 | 33 | 5 |
Pension and postretirement benefit plans, after tax | (83) | (159) | (11) |
Unrealized loss on available-for-sale securities: | |||
Unrealized holding loss arising during period | 0 | 0 | (31) |
Reclassification adjustments for gain on sale of investment included in Other income (expense), net | 0 | 0 | (394) |
Unrealized loss on available-for-sale securities, after reclassification adjustments, before tax | 0 | 0 | (425) |
Tax benefit | 0 | 0 | 163 |
Unrealized loss on available-for-sale securities, after adjustment, tax | 0 | 0 | (262) |
Change in unrealized cash flow hedging: | |||
Unrealized cash flow hedging gain arising during period | 0 | 0 | 2 |
Loss reclassified into Product sales | 0 | 2 | 1 |
Unrealized cash flow hedge gain arising during period, after reclassification | 0 | 2 | 3 |
Other comprehensive (loss) income, net of tax | (33) | (606) | 501 |
Comprehensive income | 2,122 | 2,163 | 1,768 |
Less: Comprehensive income attributable to noncontrolling interest | (35) | (27) | (74) |
Comprehensive income attributable to Carrier Global Corporation | $ 2,087 | $ 2,136 | $ 1,694 |
Combined Balance Sheets (FY)
Combined Balance Sheets (FY) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 952 | $ 1,129 |
Accounts receivable (net of allowance for doubtful accounts of $45 and $141) (Notes 5 and 16) | 2,726 | 2,673 |
Contract assets, current | 622 | 566 |
Inventories, net | 1,332 | 1,363 |
Other assets, current | 327 | 378 |
Total Current Assets | 5,959 | 6,109 |
Future income tax benefits | 500 | 398 |
Operating lease right-of-use assets | 832 | 0 |
Fixed assets, net | 1,663 | 1,653 |
Intangible assets, net | 1,083 | 1,214 |
Goodwill | 9,884 | 9,849 |
Pension and postretirement assets | 490 | 441 |
Equity method investments | 1,739 | 1,770 |
Other assets | 256 | 303 |
Total Assets | 22,406 | 21,737 |
Liabilities and Equity | ||
Accounts payable (Notes 5 and 16) | 1,701 | 1,944 |
Accrued liabilities | 2,325 | 2,074 |
Accrued liabilities | 2,088 | |
Contract liabilities, current | 443 | 448 |
Current portion of long-term debt | 237 | |
Total Current Liabilities | 4,469 | 4,466 |
Long-term debt | 82 | |
Operating lease liabilities | 682 | 0 |
Future pension and postretirement benefit obligations | 456 | 419 |
Future income tax obligations | 1,099 | 1,280 |
Other long-term liabilities | 1,265 | 1,303 |
Other long-term liabilities | 1,183 | |
Total Liabilities | 7,971 | 7,468 |
Commitments and contingent liabilities (Note 20) | ||
UTC Net Investment: | ||
UTC Net investment | 15,355 | 15,132 |
Accumulated other comprehensive loss | (1,253) | (1,215) |
Total UTC Net Investment | 14,102 | 13,917 |
Common stock, par value $0.01; 4,000,000,000 shares authorized; 866,687,269 shares issued and outstanding as of September 30, 2020 | 0 | |
Additional paid-in capital | 0 | |
Retained earnings | 0 | |
Accumulated other comprehensive loss | (1,253) | (1,215) |
Noncontrolling interest | 333 | 352 |
Total Equity | 14,435 | 14,269 |
Total Liabilities and Equity | $ 22,406 | $ 21,737 |
Combined Balance Sheets (Parent
Combined Balance Sheets (Parenthetical) (FY) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Accounts receivable, allowance for doubtful accounts | $ 45 | $ 141 |
Combined Statements of Changes
Combined Statements of Changes in Equity (FY) - USD ($) $ in Millions | UTC Net Investment [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total UTC Net Investment [Member] | Noncontrolling Interest [Member] | Total | Cumulative Effect, Period of Adoption, Adjustment [Member]UTC Net Investment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Accumulated Other Comprehensive Income (Loss) [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Total UTC Net Investment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Noncontrolling Interest [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] |
Balance at Dec. 31, 2016 | $ 15,696 | $ (1,084) | $ 14,612 | $ 348 | $ 14,960 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 1,227 | 0 | 1,227 | 40 | 1,267 | |||||
Redeemable noncontrolling interest in subsidiaries' earnings | 0 | 0 | 0 | (9) | (9) | |||||
Other comprehensive (loss) income, net of tax | 0 | 467 | 467 | 11 | 478 | |||||
Other comprehensive (loss) income, net of tax | 501 | |||||||||
Sale of subsidiary shares from noncontrolling interest | 4 | 0 | 4 | 0 | 4 | |||||
Dividends attributable to noncontrolling interest | 0 | 0 | 0 | (31) | (31) | |||||
Acquisition of noncontrolling interest | 0 | 0 | 0 | 12 | 12 | |||||
Redeemable noncontrolling interest fair value adjustment | (81) | 0 | (81) | 0 | (81) | |||||
Net transfers to UTC | (1,816) | 0 | (1,816) | 0 | (1,816) | |||||
Balance at Dec. 31, 2017 | 15,030 | (617) | 14,413 | 371 | 14,784 | |||||
Balance (Adoption of ASU 2016-16 [Member]) at Dec. 31, 2017 | $ 9 | $ 0 | $ 9 | $ 0 | $ 9 | |||||
Balance at Dec. 31, 2016 | 177 | |||||||||
Increase (Decrease) in Redeemable Noncontrolling Interest [Roll Forward] | ||||||||||
Redeemable noncontrolling interest in subsidiaries' earnings | 9 | |||||||||
Other comprehensive income, net of tax | 23 | |||||||||
Purchase of subsidiary shares from noncontrolling interest | (286) | |||||||||
Dividends attributable to noncontrolling interest | (4) | |||||||||
Redeemable noncontrolling interest fair value adjustment | 81 | |||||||||
Balance at Dec. 31, 2017 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 2,734 | 0 | 2,734 | 35 | 2,769 | |||||
Other comprehensive (loss) income, net of tax | 0 | (598) | (598) | (8) | (606) | |||||
Dividends attributable to noncontrolling interest | 0 | 0 | 0 | (46) | (46) | |||||
Net transfers to UTC | (2,641) | 0 | (2,641) | 0 | (2,641) | |||||
Balance at Dec. 31, 2018 | 15,132 | (1,215) | 13,917 | 352 | 14,269 | 9 | (9) | 0 | ||
Balance (Adoption of ASU 2018-02 [Member]) at Dec. 31, 2018 | 9 | (9) | 0 | 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 400 | 3 | 403 | |||||||
Other comprehensive (loss) income, net of tax | 96 | 5 | 101 | |||||||
Dividends attributable to noncontrolling interest | (2) | (2) | ||||||||
Net transfers to UTC | 81 | 81 | ||||||||
Balance at Mar. 31, 2019 | 15,460 | (1,128) | 358 | 14,690 | ||||||
Balance at Dec. 31, 2018 | 15,132 | (1,215) | 13,917 | 352 | 14,269 | 9 | (9) | 0 | ||
Balance (Adoption of ASU 2018-02 [Member]) at Dec. 31, 2018 | 9 | (9) | 0 | 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 1,701 | |||||||||
Other comprehensive (loss) income, net of tax | (252) | |||||||||
Balance at Sep. 30, 2019 | 15,747 | (1,474) | 371 | 14,644 | (9) | |||||
Balance at Dec. 31, 2018 | 15,132 | (1,215) | 13,917 | 352 | 14,269 | 9 | (9) | 0 | ||
Balance (Adoption of ASU 2018-02 [Member]) at Dec. 31, 2018 | 9 | (9) | $ 0 | $ 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 2,116 | 0 | 2,116 | 39 | 2,155 | |||||
Other comprehensive (loss) income, net of tax | 0 | (29) | (29) | (4) | (33) | |||||
Dividends attributable to noncontrolling interest | 0 | 0 | 0 | (28) | (28) | |||||
Disposition of noncontrolling interest | 0 | 0 | 0 | (26) | (26) | |||||
Net transfers to UTC | (1,902) | 0 | (1,902) | 0 | (1,902) | |||||
Balance at Dec. 31, 2019 | 15,355 | (1,253) | 14,102 | 333 | 14,435 | (4) | (4) | |||
Balance at Mar. 31, 2019 | 15,460 | (1,128) | 358 | 14,690 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 784 | 10 | 794 | |||||||
Other comprehensive (loss) income, net of tax | (74) | (3) | (77) | |||||||
Dividends attributable to noncontrolling interest | (2) | (2) | ||||||||
Net transfers to UTC | 445 | 445 | ||||||||
Balance at Jun. 30, 2019 | 15,799 | (1,202) | 363 | 14,960 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 492 | 12 | 504 | |||||||
Other comprehensive (loss) income, net of tax | (272) | (4) | (276) | |||||||
Net transfers to UTC | 544 | 544 | ||||||||
Balance at Sep. 30, 2019 | 15,747 | (1,474) | 371 | 14,644 | $ (9) | |||||
Balance at Dec. 31, 2019 | 15,355 | (1,253) | 14,102 | 333 | 14,435 | (4) | (4) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 96 | 6 | 102 | |||||||
Other comprehensive (loss) income, net of tax | (483) | (2) | (485) | |||||||
Dividends attributable to noncontrolling interest | (8) | (8) | ||||||||
Net transfers to UTC | 11,014 | 11,014 | ||||||||
Balance at Mar. 31, 2020 | 4,433 | (1,736) | 329 | 3,026 | ||||||
Balance at Dec. 31, 2019 | 15,355 | (1,253) | $ 14,102 | 333 | 14,435 | $ (4) | $ (4) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 1,119 | |||||||||
Other comprehensive (loss) income, net of tax | 86 | |||||||||
Net transfers to UTC | (780) | |||||||||
Balance at Sep. 30, 2020 | 0 | (1,172) | 341 | 5,437 | ||||||
Balance at Mar. 31, 2020 | 4,433 | (1,736) | 329 | 3,026 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 8 | 269 | ||||||||
Other comprehensive (loss) income, net of tax | 257 | 1 | 258 | |||||||
Net transfers to UTC | (859) | (859) | ||||||||
Balance at Jun. 30, 2020 | 0 | (1,479) | 338 | 4,366 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 7 | 748 | ||||||||
Other comprehensive (loss) income, net of tax | 307 | 5 | 312 | |||||||
Dividends attributable to noncontrolling interest | (9) | (9) | ||||||||
Balance at Sep. 30, 2020 | $ 0 | $ (1,172) | $ 341 | $ 5,437 |
Combined Statements of Cash Flo
Combined Statements of Cash Flows (FY) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Operating Activities: | |||
Net income | $ 2,155 | $ 2,769 | $ 1,267 |
Adjustments to reconcile net income to net cash flows provided by operating activities, net of acquisitions and dispositions: | |||
Depreciation and amortization | 335 | 357 | 372 |
Deferred income tax (benefit) provision | (122) | 133 | 73 |
Impact from U.S. tax reform | 0 | 0 | 799 |
Gain on sale of Taylor | 0 | (799) | 0 |
Gain on sale of available-for-sale securities | 0 | 0 | (418) |
Stock compensation cost | 52 | 44 | 34 |
Equity method investment net earnings | (236) | (220) | (218) |
Distributions from equity method investments | 158 | 143 | 142 |
Impairment of equity method investment | 108 | 0 | 0 |
Change in: | |||
Accounts receivable, net | (129) | (211) | 159 |
Contract assets, current | 23 | (67) | 0 |
Inventories, net | (2) | (151) | (102) |
Other assets, current | 17 | (7) | (21) |
Accounts payable and accrued liabilities | (311) | 88 | 192 |
Contract liabilities, current | (18) | 24 | 0 |
Pension contributions | (36) | (45) | (44) |
Other operating activities, net | 8 | (3) | (137) |
Net cash flows provided by operating activities | 2,002 | 2,055 | 2,098 |
Investing Activities: | |||
Capital expenditures | (243) | (263) | (326) |
Investments in businesses, net of cash acquired (Note 9) | 0 | (310) | (176) |
Dispositions of businesses (Note 9) | 6 | 1,032 | 52 |
Proceeds from sale of investments in Watsco, Inc. | 0 | 0 | 596 |
Other investing activities, net | 24 | (44) | 125 |
Net cash flows provided by (used in) investing activities | (213) | 415 | 271 |
Financing Activities: | |||
Increase (decrease) in short-term borrowings, net | 25 | 3 | (8) |
Issuance of project financing obligations | 107 | 117 | 99 |
Repayment of project financing obligations | (138) | 0 | (103) |
Purchase of shares from redeemable noncontrolling interest | 0 | 0 | (286) |
Dividends paid to non-controlling interest | (28) | (46) | (31) |
Net transfers to UTC | (1,954) | (2,685) | (1,850) |
Other financing activities, net | 21 | (16) | (14) |
Net cash flows provided by (used in) financing activities | (1,967) | (2,627) | (2,193) |
Effect of foreign exchange rates on cash and cash equivalents | 1 | (39) | 64 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (177) | (196) | 240 |
Cash, cash equivalents and restricted cash, beginning of year | 1,134 | 1,330 | 1,090 |
Cash, cash equivalents and restricted cash, end of year | 957 | 1,134 | 1,330 |
Less: restricted cash | 5 | 5 | 6 |
Cash and cash equivalents, end of year | 952 | 1,129 | 1,324 |
Supplemental Cash Flow Information: | |||
Interest paid, net of amounts capitalized | 28 | 16 | 14 |
Interest paid - related party | 55 | 59 | 202 |
Income taxes paid - related party | 475 | 649 | 608 |
Income taxes paid, net of refunds | $ 284 | $ 276 | $ 309 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Q3) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales | |||||||||||
Net Sales | $ 5,002 | $ 4,822 | $ 12,862 | $ 14,107 | $ 18,608 | $ 18,914 | $ 17,814 | ||||
Costs and expenses | |||||||||||
Research and development | 100 | 102 | 292 | 302 | 401 | 400 | 364 | ||||
Selling, general and administrative | 681 | 702 | 2,010 | 2,066 | 2,761 | 2,689 | 2,584 | ||||
Total costs and expenses | 4,222 | 4,180 | 11,340 | 12,329 | 16,351 | 16,434 | 15,577 | ||||
Equity method investment net earnings | 62 | 78 | 148 | 198 | 236 | 220 | 218 | ||||
Other income (expense), net | 239 | (91) | 168 | (42) | (2) | 937 | 575 | ||||
Operating profit | 1,081 | 629 | 1,838 | 1,934 | 2,491 | 3,637 | 3,030 | ||||
Non-service pension benefit | 16 | 47 | 47 | 124 | (154) | (168) | (139) | ||||
Interest (expense) income, net | (88) | 3 | (206) | 23 | (27) | (37) | 115 | ||||
Income from operations before income taxes | 1,009 | 679 | 1,679 | 2,081 | 2,672 | 3,842 | 3,054 | ||||
Income tax expense | 261 | 175 | 560 | 380 | 517 | 1,073 | 1,787 | ||||
Net income from operations | 748 | $ 269 | $ 102 | 504 | $ 794 | $ 403 | 1,119 | 1,701 | 2,155 | 2,769 | 1,267 |
Less: Non-controlling interest subsidiaries' earnings | 7 | 12 | 21 | 25 | 39 | 35 | 40 | ||||
Net income attributable to Carrier Global Corporation | $ 741 | $ 492 | $ 1,098 | $ 1,676 | 2,116 | 2,734 | 1,227 | ||||
Earnings per share (Note 3) | |||||||||||
Basic (in dollars per share) | $ 0.86 | $ 0.57 | $ 1.27 | $ 1.94 | |||||||
Diluted (in dollars per share) | $ 0.84 | $ 0.57 | $ 1.25 | $ 1.94 | |||||||
Weighted-average number of shares outstanding (Note 3) | |||||||||||
Basic (in shares) | 866.4 | 866.2 | 866.3 | 866.2 | |||||||
Diluted (in shares) | 881.5 | 866.2 | 876.2 | 866.2 | |||||||
Product | |||||||||||
Net sales | |||||||||||
Net Sales | $ 4,193 | $ 3,998 | $ 10,615 | $ 11,703 | 15,360 | 15,674 | 14,775 | ||||
Costs and expenses | |||||||||||
Cost of products and services sold | 2,884 | 2,784 | 7,464 | 8,255 | 10,890 | 11,063 | 10,474 | ||||
Service | |||||||||||
Net sales | |||||||||||
Net Sales | 809 | 824 | 2,247 | 2,404 | 3,248 | 3,240 | 3,039 | ||||
Costs and expenses | |||||||||||
Cost of products and services sold | $ 557 | $ 592 | $ 1,574 | $ 1,706 | $ 2,299 | $ 2,282 | $ 2,155 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Q3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Combined Statements of Comprehensive Income [Abstract] | ||||
Net income | $ 748 | $ 504 | $ 1,119 | $ 1,701 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments arising during period | 307 | (278) | 68 | (263) |
Pension and post-retirement benefit plan adjustments | 5 | 2 | 18 | 11 |
Other comprehensive (loss) income, net of tax | 312 | (276) | 86 | (252) |
Comprehensive income | 1,060 | 228 | 1,205 | 1,449 |
Less: Comprehensive income attributable to non-controlling interest | (12) | (8) | (25) | (23) |
Comprehensive income attributable to Carrier Global Corporation | $ 1,048 | $ 220 | $ 1,180 | $ 1,426 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Q3) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||||||||||
Cash and cash equivalents | $ 3,848 | $ 952 | $ 862 | $ 1,129 | $ 1,324 | |||||
Accounts receivable, net (Note 5 and Note 6) | 2,872 | 2,726 | 2,673 | |||||||
Contract assets, current | 753 | 622 | 566 | |||||||
Inventories, net | 1,581 | 1,332 | 1,363 | |||||||
Other assets, current | 280 | 327 | 378 | 341 | ||||||
Total Current Assets | 9,334 | 5,959 | 6,109 | 6,000 | ||||||
Future income tax benefits | 439 | 500 | 398 | |||||||
Fixed assets, net | 1,676 | 1,663 | 1,653 | 1,684 | ||||||
Operating lease right-of-use assets | 823 | 832 | 0 | |||||||
Intangible assets, net | 1,024 | 1,083 | 1,214 | |||||||
Goodwill | 9,906 | 9,884 | 9,849 | 10,065 | ||||||
Pension and post-retirement assets | 574 | 490 | 441 | |||||||
Equity method investments | 1,696 | 1,739 | 1,770 | |||||||
Other assets | 256 | 256 | 303 | |||||||
Total Assets | 25,728 | 22,406 | 21,737 | |||||||
Current liabilities: | ||||||||||
Accounts payable (Note 5) | 2,019 | 1,701 | 1,944 | |||||||
AccruedLiabilitiesCurrent | 2,445 | 2,088 | ||||||||
Contract liabilities, current | 495 | 443 | 448 | |||||||
Current portion of long-term debt | 223 | 237 | ||||||||
Total Current Liabilities | 5,182 | 4,469 | 4,466 | |||||||
Long-term debt | 11,751 | 82 | ||||||||
Future pension and post-retirement obligations | 473 | 456 | 419 | |||||||
Future income tax obligations (Note 5 and Note 14) | 471 | 1,099 | 1,280 | |||||||
Operating lease liabilities | 676 | 682 | 0 | |||||||
Other long-term liabilities (Note 5) | 1,738 | 1,183 | ||||||||
Total Liabilities | 20,291 | 7,971 | 7,468 | |||||||
Commitments and contingent liabilities (Note 18) | ||||||||||
Equity | ||||||||||
UTC Net investment | 0 | 15,355 | 15,132 | |||||||
Common stock, par value $0.01; 4,000,000,000 shares authorized; 866,687,269 shares issued and outstanding as of September 30, 2020 | 9 | 0 | ||||||||
Additional paid-in capital | 5,327 | 0 | ||||||||
Retained earnings | 932 | 0 | ||||||||
Accumulated other comprehensive loss | (1,172) | (1,253) | (1,215) | |||||||
Non-controlling interest | 341 | 333 | 352 | |||||||
Total Equity | 5,437 | $ 4,366 | $ 3,026 | 14,435 | $ 14,644 | $ 14,960 | $ 14,690 | 14,269 | $ 14,784 | $ 14,960 |
Total Liabilities and Equity | $ 25,728 | $ 22,406 | $ 21,737 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) (Q3) | Sep. 30, 2020$ / sharesshares |
Equity | |
Common stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.01 |
Common stock, shares authorized (in shares) | 4,000,000,000 |
Common stock, shares, issued (in shares) | 866,687,269 |
Common stock, shares, outstanding (in shares) | 866,687,269 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Q3) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities | |||||
Net income | $ 1,119 | $ 1,701 | $ 2,155 | $ 2,769 | $ 1,267 |
Adjustments to reconcile net income from operations to net cash flows provided by operating activities, net of acquisitions and dispositions | |||||
Depreciation and amortization | 241 | 251 | 335 | 357 | 372 |
Deferred income tax provision | 121 | (109) | (122) | 133 | 73 |
Stock compensation costs | 56 | 40 | 52 | 44 | 34 |
Equity method investment net earnings | (148) | (198) | (236) | (220) | (218) |
Distributions from equity method investments | 88 | 80 | 158 | 143 | 142 |
Impairment charge on minority-owned joint venture investments | 72 | 108 | 108 | 0 | 0 |
Gain on sale of investment | (252) | 0 | |||
Changes in operating assets and liabilities | |||||
Accounts receivable, net | (117) | (205) | (129) | (211) | 159 |
Contract assets, current | (120) | (50) | 23 | (67) | 0 |
Inventories, net | (237) | (269) | (2) | (151) | (102) |
Other assets, current | 52 | 50 | 17 | (7) | (21) |
Accounts payable and accrued liabilities | 529 | (198) | (311) | 88 | 192 |
Contract liabilities, current | 44 | (10) | (18) | 24 | 0 |
Defined benefit plan contributions | (29) | (29) | (36) | (45) | (44) |
Other operating activities, net | 74 | (173) | 8 | (3) | (137) |
Net cash flows provided by operating activities | 1,493 | 989 | 2,002 | 2,055 | 2,098 |
Investing Activities | |||||
Capital expenditures | (151) | (139) | (243) | (263) | (326) |
Proceeds on sale of investment | 300 | 0 | 0 | 0 | 596 |
Receipt from settlement of derivative contracts | 67 | 0 | |||
Other investing activities, net | 14 | (11) | 24 | (44) | 125 |
Net cash flows provided by (used in) investing activities | 230 | (150) | (213) | 415 | 271 |
Financing Activities | |||||
(Decrease) increase in short-term borrowings, net | (22) | 43 | 25 | 3 | (8) |
Issuance of long-term debt | 11,762 | 106 | 107 | 117 | 99 |
Repayment of long-term debt | (124) | (98) | (138) | 0 | (103) |
Dividends paid on common stock | (70) | 0 | |||
Dividends paid to non-controlling interest | (17) | (4) | (28) | (46) | (31) |
Net transfers to UTC | (10,359) | (1,111) | (1,954) | (2,685) | (1,850) |
Other financing activities, net | 3 | (31) | 21 | (16) | (14) |
Net cash flows provided by (used in) financing activities | 1,173 | (1,095) | (1,967) | (2,627) | (2,193) |
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract] | |||||
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | (12) | 1 | (39) | 64 |
Net (decrease) increase in cash, cash equivalents and restricted cash | 2,896 | (268) | (177) | (196) | 240 |
Cash, cash equivalents and restricted cash, beginning of year | 957 | 1,134 | 1,134 | 1,330 | 1,090 |
Cash, cash equivalents and restricted cash, end of year | 3,853 | 866 | 957 | 1,134 | 1,330 |
Less: restricted cash | 5 | 4 | 5 | 5 | 6 |
Cash and cash equivalents, end of period | $ 3,848 | $ 862 | $ 952 | $ 1,129 | $ 1,324 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Q3) - USD ($) $ in Millions | Total | Cumulative Effect, Period Of Adoption, Adjustment | UTC Net Investment | UTC Net InvestmentCumulative Effect, Period Of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive LossCumulative Effect, Period Of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Retained Earnings | Non-Controlling Interest |
Balance at Dec. 31, 2016 | $ 14,960 | $ 15,696 | $ (1,084) | $ 348 | ||||||
Net income | 1,267 | 1,227 | 0 | 40 | ||||||
Other comprehensive (loss) income, net of tax | 501 | |||||||||
Dividends attributable to noncontrolling interest | (31) | 0 | 0 | (31) | ||||||
Net transfers (to) from UTC | 1,816 | 1,816 | 0 | 0 | ||||||
Balance at Dec. 31, 2017 | 14,784 | 15,030 | (617) | 371 | ||||||
Net income | 2,769 | 2,734 | 0 | 35 | ||||||
Other comprehensive (loss) income, net of tax | (606) | 0 | (598) | (8) | ||||||
Dividends attributable to noncontrolling interest | (46) | 0 | 0 | (46) | ||||||
Net transfers (to) from UTC | 2,641 | 2,641 | 0 | 0 | ||||||
Balance at Dec. 31, 2018 | 14,269 | $ 0 | 15,132 | $ 9 | (1,215) | $ (9) | $ 0 | $ 0 | $ 0 | 352 |
Net income | 403 | 400 | 3 | |||||||
Other comprehensive (loss) income, net of tax | 101 | 96 | 5 | |||||||
Dividends attributable to noncontrolling interest | (2) | (2) | ||||||||
Net transfers (to) from UTC | (81) | (81) | ||||||||
Balance at Mar. 31, 2019 | 14,690 | 15,460 | (1,128) | 0 | 0 | 0 | 358 | |||
Balance at Dec. 31, 2018 | 14,269 | 0 | 15,132 | 9 | (1,215) | (9) | 0 | 0 | 0 | 352 |
Net income | 1,701 | |||||||||
Other comprehensive (loss) income, net of tax | (252) | |||||||||
Balance at Sep. 30, 2019 | 14,644 | 15,747 | (1,474) | (9) | 0 | 0 | 0 | 371 | ||
Balance at Dec. 31, 2018 | 14,269 | 0 | 15,132 | 9 | (1,215) | (9) | 0 | 0 | 0 | 352 |
Net income | 2,155 | 2,116 | 0 | 39 | ||||||
Other comprehensive (loss) income, net of tax | (33) | 0 | (29) | (4) | ||||||
Dividends attributable to noncontrolling interest | (28) | 0 | 0 | (28) | ||||||
Net transfers (to) from UTC | 1,902 | 1,902 | 0 | 0 | ||||||
Balance at Dec. 31, 2019 | 14,435 | (4) | 15,355 | (4) | (1,253) | 0 | 0 | 0 | 333 | |
Balance at Mar. 31, 2019 | 14,690 | 15,460 | (1,128) | 0 | 0 | 0 | 358 | |||
Net income | 794 | 784 | 10 | |||||||
Other comprehensive (loss) income, net of tax | (77) | (74) | (3) | |||||||
Dividends attributable to noncontrolling interest | (2) | (2) | ||||||||
Net transfers (to) from UTC | (445) | (445) | ||||||||
Balance at Jun. 30, 2019 | 14,960 | 15,799 | (1,202) | 0 | 0 | 0 | 363 | |||
Net income | 504 | 492 | 12 | |||||||
Other comprehensive (loss) income, net of tax | (276) | (272) | (4) | |||||||
Net transfers (to) from UTC | (544) | (544) | ||||||||
Balance at Sep. 30, 2019 | 14,644 | 15,747 | (1,474) | $ (9) | 0 | 0 | 0 | 371 | ||
Balance at Dec. 31, 2019 | 14,435 | (4) | 15,355 | (4) | (1,253) | 0 | 0 | 0 | 333 | |
Net income | 102 | 96 | 6 | |||||||
Other comprehensive (loss) income, net of tax | (485) | (483) | (2) | |||||||
Dividends attributable to noncontrolling interest | (8) | (8) | ||||||||
Net transfers (to) from UTC | (11,014) | (11,014) | ||||||||
Balance at Mar. 31, 2020 | 3,026 | 4,433 | (1,736) | 0 | 0 | 0 | 329 | |||
Balance at Dec. 31, 2019 | 14,435 | $ (4) | 15,355 | $ (4) | (1,253) | 0 | 0 | 0 | 333 | |
Net income | 1,119 | |||||||||
Other comprehensive (loss) income, net of tax | 86 | |||||||||
Net transfers (to) from UTC | 780 | |||||||||
Balance at Sep. 30, 2020 | 5,437 | 0 | (1,172) | 9 | 5,327 | 932 | 341 | |||
Balance at Mar. 31, 2020 | 3,026 | 4,433 | (1,736) | 0 | 0 | 0 | 329 | |||
Net income | 269 | 261 | 8 | |||||||
Other comprehensive (loss) income, net of tax | 258 | 257 | 1 | |||||||
Dividends declared on Common Stock | (70) | (70) | ||||||||
Common stock issued under employee plans | 24 | 24 | ||||||||
Net transfers (to) from UTC | 859 | 859 | ||||||||
Reclassification of UTC Net investment in connection with Separation | 0 | (5,292) | 9 | 5,283 | ||||||
Balance at Jun. 30, 2020 | 4,366 | 0 | (1,479) | 9 | 5,307 | 191 | 338 | |||
Net income | 748 | 741 | 7 | |||||||
Other comprehensive (loss) income, net of tax | 312 | 307 | 5 | |||||||
Common stock issued under employee plans | 20 | 20 | ||||||||
Dividends attributable to noncontrolling interest | (9) | (9) | ||||||||
Balance at Sep. 30, 2020 | $ 5,437 | $ 0 | $ (1,172) | $ 9 | $ 5,327 | $ 932 | $ 341 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES EQUITY (Parenthetical) (Q3) | 3 Months Ended |
Jun. 30, 2020$ / shares | |
Combined Statements of Changes in Equity [Abstract] | |
Common stock dividends, declared (in dollars per share) | $ 0.08 |
DESCRIPTION OF THE BUSINESS (FY
DESCRIPTION OF THE BUSINESS (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
DESCRIPTION OF THE BUSINESS [Abstract] | ||
DESCRIPTION OF THE BUSINESS | The Condensed Consolidated Financial Statements as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 are unaudited, and include all adjustments, consisting only of normal recurring adjustments considered necessary by management to fairly state our results of operations, financial position and cash flows for the interim periods. The results reported in the Unaudited Condensed Consolidated Financial Statements are not necessarily indicative of results that may be expected for any other interim period or the entire year. The financial information included herein should be read in conjunction with the financial statements and notes in the Company's information statement, dated March 16, 2020, which was included as Exhibit 99.1 in our Current Report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on March 16, 2020 (the "Information Statement"). Impact of the COVID-19 pandemic A novel strain of coronavirus ("COVID-19") surfaced in Wuhan, China in late 2019 and has since spread throughout the rest of the world. In March 2020, COVID-19 was declared a pandemic by the World Health Organization and a national emergency by the U.S. Government. The pandemic has negatively affected the U.S. and global economies, disrupted global supply chains and financial markets, resulted in significant travel restrictions, mandated facility closures and shelter-in-place orders. Carrier is taking all prudent measures to protect the health and safety of our employees. In particular, we have implemented work from home requirements (where possible), social distancing and deep cleaning protocols at all of our facilities as well as travel restrictions, among other measures. We have also taken appropriate measures to work with our customers to minimize potential disruptions and to support the communities that we serve to address the challenges posed by the pandemic. The full extent of the impact of COVID-19 on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic as well as any worsening or additional outbreaks of the pandemic, and related containment and mitigation actions taken by the U.S., state and local and international governments to prevent disease spread. The extent of the pandemic's impact on Carrier will also depend upon our employees' ability to work safely in our facilities, our customers’ ability to continue to operate or to receive our products, and the level of activity and demand for the ultimate products and services of our customers or their customers. During the three months ended March 31, 2020, we temporarily closed or reduced production at manufacturing facilities in North America, Asia and Europe for safety reasons and in response to lower demand for our products. Subsequently, our manufacturing operations have resumed, measures have been enacted to scale capacity to demand, and we continue to actively take steps to mitigate supply chain risk. We continue to apply appropriate safety measures and have not experienced any significant disruptions to our manufacturing operations. We also initiated return-to-work protocols at our non-manufacturing facilities where employees were previously working remotely. We continue to focus on navigating the challenges COVID-19 presents by preserving our liquidity and managing our cash flows through preemptive actions to enhance our ability to meet our liquidity needs over the next twelve months. Such actions during the nine months ended September 30, 2020 include, but are not limited to, modifying the financial covenants in our revolving and term loan credit facilities and issuing $750 million Borrowings and Lines of Credit 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. Carrier also provides a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. Carrier’s operations are classified into three segments: HVAC, Refrigeration and Fire & Security. The HVAC and Refrigeration segments sell their products and solutions directly, including to building contractors and owners, transportation companies and retail stores, or indirectly through joint venture and other minority-owned investments, independent sales representatives, distributors, wholesalers, dealers and retail outlets. These products and services are sold under the Carrier name and other brand names including Automated Logic, Bryant, CIAT, Day & Night, Heil, NORESCO, Riello, Carrier Commercial Refrigeration, Carrier Transicold, Sensitech and others. The Fire & Security segment sells its products directly to customers, or indirectly through manufacturers’ representatives, distributors, dealers, value-added resellers and retailers. Fire & Security’s products and services are used by governments, financial institutions, architects, building owners and developers, security and fire consultants, homeowners and other end-users requiring a high level of security and fire protection for their businesses and residences. These products and services are sold under brand names including Autronica, Chubb, Det-Tronics, Edwards, Fireye, GST, Kidde, LenelS2, Marioff, Onity, Supra and others. On November 26, 2018, United Technologies Corporation, since renamed Raytheon Technologies Corporation ("UTC"), announced its intention to spin off Carrier, one of UTC's reportable segments, into a separate publicly traded company (the "Separation"). On April 3, 2020 (the "Distribution Date"), UTC completed the Separation through a pro-rata distribution (the "Distribution") of all of the outstanding 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 for the Distribution. UTC distributed 866,158,910 shares of Carrier common stock in the Distribution, which was effective at 12:01 a.m., Eastern Time, on April 3, 2020 (the "Effective Time"). As a result of the Distribution, UTC shareowners of record received one share of the Company's common stock for every one share of UTC common stock and Carrier became an independent public company and our common stock is listed under the symbol "CARR" on the New York Stock Exchange. In connection with the Separation, Carrier 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, Carrier received cash contributions totaling $590 million from UTC related to the Separation. See Note 10 – Borrowings and Lines of Credit Earnings Per Share In connection with the Separation, Carrier entered into several agreements with UTC and Otis Worldwide Corporation ("Otis"), including a separation and distribution agreement that sets forth certain agreements with UTC and Otis regarding the principal actions to be taken in connection with the Separation, including identifying the assets transferred, the liabilities assumed and the contracts transferred to each of UTC, Otis and Carrier as part of the Separation, and when and how these transfers and assumptions occurred. Other agreements we entered into that govern aspects of our relationship with UTC and Otis following the Separation include: Transition Services Agreement Tax Matters Agreement. Employee Matters Agreement and Intellectual Property Agreement. | NOTE 1: DESCRIPTION OF THE BUSINESS Carrier Global Corporation (“Carrier”, “the Business,” “we,” “us” or “our”) is a global provider of heating, ventilating, air conditioning (“HVAC”), refrigeration, fire and security solutions. Carrier also provides a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. Carrier’s operations are classified into three segments: HVAC, Refrigeration, and Fire & Security. The HVAC and Refrigeration segments sell their products and solutions directly, including to building contractors and owners, transportation companies and retail stores, or indirectly through equity method investments, independent sales representatives, distributors, wholesalers, dealers and retail outlets. These products and services are sold under the Carrier name and other brand names including Automated Logic, Bryant, CIAT, Day & Night, Heil, NORESCO, Riello, Carrier Commercial Refrigeration, Carrier Transicold, Sensitech and others. For the Fire & Security segment, products and services are used by governments, financial institutions, architects, building owners and developers, security and fire consultants, homeowners and other end-users requiring a high level of security and fire protection for their businesses and residences. Carrier provides its fire and security products and services under Autronica, Chubb, Det-Tronics, Edwards, Fireye, GST, Interlogix, Kidde, LenelS2, Marioff, Onity, Supra and other brand names, and sells directly to customers as well as through manufacturers’ representatives, distributors, dealers, value-added resellers and retailers. On November 26, 2018, United Technologies Corporation (“UTC”) announced its plan to separate Carrier into an independent publicly traded company (the “Separation”). The Separation will be effectuated through a spin-off, pursuant to which UTC will distribute to UTC shareowners all of the outstanding common shares of common stock of Carrier. |
BASIS OF PRESENTATION (FY)
BASIS OF PRESENTATION (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
BASIS OF PRESENTATION [Abstract] | ||
BASIS OF PRESENTATION | NOTE 2: BASIS OF PRESENTATION The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. All significant intra-company accounts and transactions have been eliminated in the preparation of the Unaudited Condensed Consolidated Financial Statements. 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 we control and consolidate. Certain immaterial amounts presented in the Information Statement have been reclassified to conform to the current period presentation, including the reclassification of the Current portion of long-term debt from Accrued liabilities for 2019 on the accompanying Unaudited Condensed Consolidated Balance Sheet. The Company's financial statements for periods prior to the Separation and the Distribution are prepared on a "carve-out" basis, as described below. The Company's financial statements for the period from April 3, 2020 through September 30, 2020 are consolidated financial statements based on the reported results of Carrier as a stand-alone company. Basis of Presentation Prior to the Separation and the Distribution For the period prior to the Separation and the Distribution, the Unaudited Condensed Consolidated Financial Statements reflect the Company's financial position, results of operations and cash flows for the periods presented, which were historically managed by UTC. For the periods presented prior to the Separation and the Distribution, the Unaudited Condensed Consolidated Financial Statements are derived from UTC's consolidated financial statements and accounting records. The Unaudited Condensed Consolidated Statement of Operations includes all revenues and costs directly attributable to Carrier, including costs for facilities, functions and services used by Carrier. Prior to the Separation, costs for certain functions and services performed by UTC were directly charged to Carrier based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount, proportionate usage or other allocation methods. The results of operations include allocations of costs for administrative functions and services performed on behalf of Carrier by centralized groups within UTC and of certain pension and other post-retirement benefit costs (see Note 5 – Related Parties Prior to the Separation, UTC used a centralized approach to cash management and the financing of its operations. Accordingly, none of UTC's cash, third party debt or related interest expense has been allocated to Carrier in the Unaudited Condensed Consolidated Financial Statements for the period prior to the Separation. However, cash balances primarily associated with certain foreign entities that did not participate in UTC’s cash management program have been included in the Unaudited Condensed Consolidated Financial Statements for periods prior to the Separation. Transactions between UTC and Carrier are deemed settled immediately through UTC’s Net investment, other than those transactions which have been historically cash-settled and which are reflected in the Unaudited Condensed Consolidated Balance Sheet within Accounts receivable, net and Accounts payable. The net effect of the deemed settled transactions is reflected in the Unaudited Condensed Consolidated Statement of Cash Flows as Net transfers to UTC within financing activities and in the Unaudited Condensed Consolidated Balance Sheet as UTC’s Net investment (see Note 5 – Related Parties All of the allocations and estimates in the Unaudited Condensed Consolidated Financial Statements are based on assumptions that management believes are reasonable. However, for the periods prior to the Separation, the Unaudited Condensed Consolidated Financial Statements may not be indicative of the Company's future financial position, results of operations and cash flows or if the Company had been a separate, stand-alone entity during the periods presented. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU 2017-04, Intangibles – Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued SEC Rules In May 2020, the SEC issued Final Rule Release No. 33-10786, which amends the financial statement requirements for acquisitions and dispositions of businesses and related pro forma financial information required under SEC Regulation S-X, Rule 3-05. The final rule modifies the significance test required in SEC Regulation S-X, Rule 1-02(w) by raising the significance threshold for reporting dispositions of a business from 10% to 20% and by modifying the calculation of the investment and income tests. In accordance with Rules 3-09 or 4-08(g), the revised income test will apply to the evaluation of equity method investments for significance. The Company is currently evaluating the impact of these modifications, which are effective for fiscal years beginning after December 31, 2020. In August 2020, the SEC issued Final Rule Release No. 33-10825, which amends certain disclosure requirements required by Regulation S-K relating to the description of business (Item 101), legal proceedings (Item 103) and risk factors (Item 105). The amendments to Item 101 will, among other things, allow the Company to provide updates to the general development of the business based on materiality, if it incorporates by reference a full discussion from a previously filed registration statement or report. The amendment also requires disclosure of the registrant’s human capital resources to the extent such disclosures would be material to an understanding of the registrant’s business. The amendments to Item 103 will, among other things, increase the quantitative threshold for disclosing certain governmental environmental proceedings and the amendments to Item 105 will, among other things, require a risk factor summary where the risk factor section itself is longer than 15 pages. The Company is currently evaluating the impact of these modifications, which are effective for fiscal years beginning December 31, 2020. | NOTE 2: BASIS OF PRESENTATION The Business has historically operated as a part of UTC; consequently, stand-alone financial statements have not historically been prepared for the Business. The accompanying Combined Financial Statements have been prepared from UTC’s historical accounting records and are presented on a stand-alone basis as if the Business’ operations had been conducted independently from UTC. These Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Combined Statements of Operations include all revenues and costs directly attributable to Carrier, including costs for facilities, functions and services used by Carrier. Costs for certain functions and services performed by centralized UTC are directly charged to Carrier based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount, usage or other allocation methods. The results of operations include allocations of costs for administrative functions and services performed on behalf of Carrier by centralized groups within UTC and certain pension and other post-retirement benefit costs (see Note 5 – Related Parties UTC uses a centralized approach to cash management and financing its operations. Accordingly, none of the cash, third party debt or related interest expense of UTC has been allocated to Carrier in the Combined Financial Statements. However, cash balances primarily associated with certain foreign entities that do not participate in UTC’s cash management program have been included in the Combined Financial Statements. Transactions between UTC and Carrier are deemed to have been settled immediately through UTC’s Net Investment, other than those transactions which have historically been cash-settled and which are reflected in the Combined Balance Sheets within Accounts receivable (see Note 6 – Accounts Receivable, Net Related Parties Related Parties All intracompany accounts and transactions within the Business have been eliminated in the preparation of the Combined Financial Statements. The Combined Financial Statements of the Business include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to the Business. All of the allocations and estimates in the Combined Financial Statements are based on assumptions that management believes are reasonable. However, the Combined Financial Statements included herein may not be indicative of the financial position, results of operations and cash flows of the Business in the future, or if the Business had been a separate, stand-alone entity during the years presented. The noncontrolling interest represents the noncontrolling investors’ interests in the results of subsidiaries that we control and combine. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (FY) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Combination. Use of Estimates. Cash and Cash Equivalents. Related Parties On occasion, the Business is required to maintain cash deposits with certain banks with respect to contractual or other legal obligations. As of December 31, 2019 and 2018, restricted cash of approximately $5 million and $5 million, respectively, is included in Other assets, current on the Combined Balance Sheets. Accounts Receivable. Revenue from Contracts with Customers Contract Assets and Liabilities. Contract liabilities relate to payments received in advance of the satisfaction of performance obligations under the contract. The Business receives payments from customers based on the terms established in the contracts. See Note 4 – Revenue Recognition Inventories. Valuation reserves for excess, obsolete and slow-moving inventory are estimated by comparing the inventory levels of individual parts and products to both future sales forecasts or production requirements and historical usage rates in order to identify inventory where the resale value or replacement value is less than the cost of the inventory. Other factors that management considers in determining the adequacy of these reserves include whether the part meets current specifications and whether it can be substituted for a part currently being sold or used as a service part, and overall market conditions and other inventory management initiatives. Fair Value of Financial Instruments. • Level I – Quoted prices for identical instruments in active markets. • Level II – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level III – Instruments whose significant value drivers are unobservable. The carrying amount of trade receivables, accounts payable and accrued expenses approximates fair value due to the short maturity (less than one year) of the instruments. Business Combinations. Business Combinations Equity Method Investments. Goodwill and Intangible Assets. Intangibles – Goodwill and Other Intangible assets consist of trademarks, patents, service contracts, monitoring lines and customer relationships and are recognized at fair value in acquisition accounting and then amortized to cost of sales and selling, general and administrative expenses. Useful lives of finite-lived intangible assets are estimated based upon the nature of the intangible asset. These intangible assets are amortized based on the pattern in which the economic benefits of the intangible assets are consumed. If a pattern of economic benefit cannot be reliably determined or if straight-line amortization approximates the pattern of economic benefit, a straight-line amortization method may be used. The range of estimated useful lives is as follows: Customer relationships 1-30 years Trademarks and trade names 5-30 years Service contracts 1-23 years Monitoring lines 7-10 years Patents 7-8 years Other Long-Lived Assets. Income Taxes. Income Taxes Certain operations of the Business have historically been included in a consolidated return with other UTC entities. Current obligations for taxes in certain jurisdictions, where the Business files a consolidated tax return with UTC, are deemed settled with UTC for purposes of the Combined Financial Statements. Current obligations for tax in jurisdictions where the Business does not file a consolidated return with UTC, including certain foreign jurisdictions and certain U.S. states, are recorded as accrued liabilities. On December 22, 2017, the TCJA was enacted (see Note 14 – Income Taxes In the ordinary course of business, there is inherent uncertainty in quantifying income tax positions. The Business 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. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Business has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest expense has also been recognized. The Business recognizes accrued interest related to unrecognized tax benefits in interest expense. Penalties, if incurred, would be recognized as a component of income tax expense. The TCJA contains a new law that subjects the Business to a tax on Global Intangible Low-Taxed Income (“GILTI”), beginning in 2018. GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The FASB has provided that companies subject to GILTI have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for temporary differences, including outside basis differences, expected to reverse as GILTI. The Business has elected to account for GILTI as a period cost, if incurred. Revenue Recognition. Revenue Recognition The Business accounts for revenue in accordance with FASB ASC Topic 606: Revenue from Contracts with Customers Carrier considers the contractual consideration payable by the customer and assesses variable consideration that may affect the total transaction price, including contractual discounts, price concessions, contract incentive payments, estimates of award fees and other sources of variable consideration, when determining the transaction price of each contract. The Business includes variable consideration in the estimated transaction price when there is a basis to reasonably estimate the amount. These estimates are based on historical experience, anticipated performance and best judgment at the time. The Business also considers whether the contracts provide customers with significant financing. Generally, contracts do not contain significant financing. Point in time revenue recognition Over-time revenue recognition. Contract modifications that are for goods or services that are not distinct are accounted for as part of the existing contract. If the goods or services are considered distinct, then the contract modification would be accounted for prospectively or as part of a new contract. The Business reviews cost estimates on significant contracts on at least a quarterly basis, and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. The Business records changes in contract estimates using the cumulative catch-up method. There were no material changes in contract estimates during the periods presented. For 2017, prior to the adoption of the New Revenue Standard, the Business recognized sales for products and services in accordance with the provisions of Staff Accounting Bulletin (“SAB”) Topic 13, Revenue Recognition Contract Accounting and Separately Priced Maintenance: Loss provisions on contracts were recognized to the extent that estimated contract costs exceed the estimated consideration contemplated under the contractual arrangement. For new commitments, the Business generally recorded loss provisions at the earlier of contract announcement or contract signing except for certain requirements contracts under which losses are recorded upon receipt of the purchase order which obligates us to perform. For existing commitments, anticipated losses on contracts were recognized in the period in which losses become evident. Products contemplated under contractual arrangements included firm quantities of products sold under contract. The Business reviewed its cost estimates on significant contracts on a quarterly basis, and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. The Business recorded changes in contract estimates using the cumulative catch-up method in accordance with the FASB ASC Topic 605: Revenue Recognition Cash Payments to Customers. Self-Insurance. Environmental. Contingent Liabilities Asbestos Related Liabilities and Insurance Recoveries, and Indemnification Receivables. Contingent Liabilities Asset Retirement Obligations. Other Income (Expense), Net. Foreign Exchange. Pension and Postretirement Obligations. Compensation – Retirement Benefits Employee Benefit Plans Product Performance Obligations. Guarantees UTC Net Investment. Recent Accounting Pronouncements. Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
REVENUE RECOGNITION (FY)
REVENUE RECOGNITION (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
REVENUE RECOGNITION [Abstract] | ||
REVENUE RECOGNITION | NOTE 4: REVENUE RECOGNITION Contract Assets and Liabilities. (dollars in millions) September 30, 2020 December 31, 2019 Contract assets, current $ 753 $ 622 Contract assets, non-current (included within Other assets) 75 57 Total contract assets 828 679 Contract liabilities, current (495 ) (443 ) Contract liabilities, non-current (included within Other long-term liabilities) (166 ) (168 ) Total contract liabilities (661 ) (611 ) Net contract assets $ 167 $ 68 Contract assets increased $149 million for the nine months ended September 30, 2020, primarily due to the timing of billings on customer contracts and contract completions. Contract liabilities increased $50 million for the nine months ended September 30, 2020, primarily due to customer billings in excess of revenue earned. For the three months ended September 30, 2020 and 2019, we recognized revenue of $55 million and $53 million, respectively, and for the nine months ended September 30, 2020 and 2019, we recognized revenue of $288 million and $301 million, respectively, that was related to contract liabilities as of January 1, 2020 and 2019, respectively. Remaining Performance Obligations ("RPO"). See Note 19 – Segment Financial Data Revenue from Contracts with Customers. | NOTE 4: REVENUE RECOGNITION Under the New Revenue Standard effective for the period ending December 31, 2018, revenue is recognized using an over-time revenue recognition model when contracts meet one or more of the mandatory criteria established in the New Revenue Standard. If none of the criteria are met, revenue is recognized at a point in time. Performance obligations are satisfied at a point in time for HVAC, certain refrigeration systems and certain alarm and fire detection and suppression systems and products. Revenue is recognized at the point when control of the product transfers to the customer, generally upon product shipment. Under the New Revenue Standard, revenue is recognized on an over-time basis using an input method for installation, service and other repair contracts within the Business. For separately priced product maintenance, sales are primarily recognized on a straight-line basis over the contract period. The Business measures progress toward completion for these contracts using costs incurred to date relative to total estimated costs at completion. Incurred costs represent work performed, which corresponds with and best depicts the transfer of control to the customer. The ongoing effect of recognizing revenue on an over-time basis is not expected to be materially different than the previous revenue recognition method. The New Revenue Standard had an immaterial impact on the 2018 Combined Statement of Operations. The New Revenue Standard also resulted in the establishment of Contract asset and Contract liability balance sheet accounts, and in the reclassification of balances to these new accounts from Accounts receivable, Inventories and contracts in progress, net, and Accrued liabilities. Contract Assets and Liabilities. (dollars in millions) 2019 2018 Contract assets, current $ 622 $ 566 Contract assets, noncurrent (included within Other assets) 57 100 Total contract assets 679 666 Contract liabilities, current (443 ) (448 ) Contract liabilities, noncurrent (included within Other long-term liabilities) (168 ) (164 ) Total contract liabilities (611 ) (612 ) Net contract assets $ 68 $ 54 The Business reclassified $666 million to contract assets in connection with the adoption of the New Revenue Standard on January 1, 2018. Contract assets increased by $13 million from January 1, 2019 to December 31, 2019 due primarily to revenue recognition in excess of customer billings. Contract assets increased by $143 million from January 1, 2018 to December 31, 2018 due primarily to revenue recognition in excess of customer billings. The Business reclassified $612 million to contract liabilities in connection with the adoption of the New Revenue Standard. In 2019, we recognized net sales of $362 million related to contract liabilities as of January 1, 2019. Contract liabilities decreased by $1 million from January 1, 2019 to December 31, 2019 and increased by $4 million from January 1, 2018 through December 31, 2018. Remaining performance obligations (“RPO”). |
RELATED PARTIES (FY)
RELATED PARTIES (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
RELATED PARTIES [Abstract] | ||
RELATED PARTIES | NOTE 5: RELATED PARTIES Equity Method Investments Carrier sells products to and purchases products from unconsolidated entities accounted for under the equity method and, therefore, these entities are considered related parties. During the three months ended September 30, 2020 and 2019, Product sales in the Unaudited Condensed Consolidated Statement of Operations included sales to equity method investees of $576 million and $498 million, respectively. During the three months ended September 30, 2020 and 2019, Cost of products sold in the Unaudited Condensed Consolidated Statement of Operations included purchases from equity method investees of $70 million and $96 million, respectively. During the nine months ended September 30, 2020 and 2019, Product sales in the Unaudited Condensed Consolidated Statement of Operations included sales to equity method investees of $1.4 billion and $1.4 billion, respectively. During the nine months ended September 30, 2020 and 2019, Cost of products sold in the Unaudited Condensed Consolidated Statement of Operations included purchases from equity method investees of $213 million and $274 million, respectively. Carrier had receivables from equity method investees of $213 million and $137 million at September 30, 2020 and December 31, 2019, respectively. Carrier also had payables to equity method investees of $40 million and $55 million at September 30, 2020 and December 31, 2019, respectively. The receivables and payables are included in Accounts receivable, net and Accounts payable on the Unaudited Condensed Consolidated Balance Sheet. The Company periodically reviews the carrying value of its equity method investments to determine if there has been an other-than-temporary decline in fair value. A variety of factors are considered when determining if a decline in carrying value is other-than-temporary, including, among other factors, the financial condition and business prospects of the investee, as well as the Company's intent with regard to the investment. During the three months ended March 31, 2020, we determined that indicators of impairment existed for a minority owned joint venture investment in the portfolio. We performed a valuation of this investment, which was based on the income approach using the discounted cash flow method. We determined that the loss in value was other-than-temporary due to a reduction in sales and earnings that were driven by a deterioration in the oil and gas industry (the joint venture's primary market) and by the impact of the COVID-19 pandemic, among other factors. As a result, we recorded a non-cash, other-than-temporary impairment charge of $71 million on this investment during the three months ended March 31, 2020 which is included in Other income (expense), net on the accompanying Unaudited Condensed Consolidated Statement of Operations. In September 2020, the Company sold 9.25 million B shares of Beijer Ref AB ("Beijer") for SEK290 ($32.38) per share equal to approximately 7.9% of the outstanding B shares in Beijer, through an accelerated equity offering. We received proceeds of approximately $300 million and recognized a pre-tax gain on the sale of $252 million included in Other income (expense), net on the accompanying Unaudited Condensed Consolidated Statement of Operations. Following the sale, Beijer, which is listed on the Nasdaq Stockholm, continues to be reported as an equity method investment with Carrier continuing to hold approximately 30% of Beijer's B shares, approximately 22% of Beijer's A shares and approximately 26% of the Beijer total votes. Related Party with UTC Prior to the Separation, Carrier had been managed and operated in the normal course of business with other affiliates of UTC. Accordingly, certain shared costs were allocated to the Company and are reflected as expenses in the Unaudited Condensed Consolidated Financial Statements. Related Party Sales. Allocated Centralized Costs. The allocated centralized costs for the three months ended September 30, 2020 and 2019 were $0 million and $62 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $43 million and $178 million, The expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided to or for the benefit of the Company prior to the Separation. The amounts that would have been, or will be incurred on a stand-alone basis could differ from the amounts allocated due to economies of scale, differences in management approach, a need for more or fewer employees, or other factors. In addition, the Company's future results of operations, financial position and cash flows could differ materially from the historical results presented herein. Separation Costs. Cash Management and Financing. Description of the Business During the nine months ended September 30, 2020, net assets of $780 million were contributed to the Company by UTC which primarily consisted of cash of $590 million, deferred tax assets and liabilities and fixed assets. These contributions of net assets are recorded as Net transfers from UTC on the Unaudited Condensed Consolidated Statement of Changes in Equity through UTC Net investment. Accounts Receivable and Payable. Prior to the Separation, interest income and expense related to activity with UTC that was historically included in Carrier’s results is presented on a net basis in the Unaudited Condensed Consolidated Statement of Operations. For the three and nine months ended September 30, 2019, there was $21 million and $70 million, respectively, of interest income from activity with UTC. For the three and nine months ended September 30, 2019, there was $12 million and $44 million, respectively, of interest expense from activity with UTC. The effect of the settlement of these related party transactions is included in financing activity in the Unaudited Condensed Consolidated Statement of Cash Flows. There was no interest income or expense from activity with UTC for the three and nine months ended September 30, 2020. Additionally, certain transactions between Carrier and its subsidiaries, and UTC and its affiliates, were cash-settled prior to the Separation and are reflected in Accounts receivable, net and Accounts payable in the Unaudited Condensed Consolidated Balance Sheet as of December 31, 2019 in the amounts of $6 million and $4 million, respectively. As of September 30, 2020, there were no outstanding Accounts receivable, net or Accounts payable with UTC. | NOTE 5: RELATED PARTIES Historically, Carrier has been managed and operated in the ordinary course of business with other affiliates of UTC. Accordingly, certain shared costs have been allocated to the Business and reflected as expenses in the Combined Financial Statements. Related Party Sales. Allocated Centralized Costs. UTC incurs significant corporate costs for services provided to the Business as well as to other UTC businesses. These services include treasury, tax, accounting, human resources, audit, legal, purchasing, information technology and other such services. The costs associated with these services generally include all payroll and benefit costs, as well as overhead costs related to the support functions. UTC also allocates costs associated with corporate insurance coverage and medical, pension, postretirement and other health plan costs for employees participating in UTC sponsored plans. UTC corporate costs were either specifically attributable to Carrier, when possible, or allocated to the Business. Allocations are based on direct usage where identifiable as well a number of other utilization measures including headcount, proportionate usage and relative revenues. All such amounts have been deemed to have been incurred and settled by the Business in the period in which the costs were recorded and are included in the UTC Net Investment. The allocated functional service expenses and general corporate expenses for the years ended December 31, 2019, 2018 and 2017 were $245 million, $277 million and $240 million, respectively, and are primarily included in Selling, general and administrative in the Combined Statements of Operations. In the opinion of management of UTC and the Business, the expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Business during 2019, 2018 and 2017. The amounts that would have been, or will be incurred, on a stand-alone basis could differ from the amounts allocated due to economies of scale, difference in management judgment, a requirement for more or fewer employees or other factors. Management does not believe, however, that it is practicable to estimate what these expenses would have been had the Business operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities. In addition, the future results of operations, financial position and cash flows could differ materially from the historical results presented herein. Cash Management and Financing. Basis of Presentation Accounts Receivable and Payable. Additionally, certain transactions between Carrier and UTC and affiliate businesses are cash-settled on a current basis and, therefore, are reflected in the Combined Balance Sheets. Accounts receivable includes $6 million and $12 million at December 31, 2019 and 2018, respectively, and Accounts payable includes $4 million and $8 million at December 31, 2019 and 2018, respectively, related to such transactions. Guarantees. UTC has also obtained guarantees from banks on behalf of Carrier to guarantee ordinary course of business performance obligations as required by certain Carrier customers or other third parties. Typically, such guarantees are in amounts equal to a portion or the entire value of the awarded contract and remain in place through the completion of a contract or warranty period. As of December 31, 2019 and 2018, total outstanding UTC guarantees were approximately $1.4 billion and $0.9 billion, respectively. The Business does not believe that the performance of the underlying obligations secured by such guarantees will have a material adverse effect on Carrier’s financial position, results of operations or cash flows. Third-party costs relating to bank guarantees are reflected in the results of operations. Equity Method Investments. Equity Method Investments Separation Costs. |
ACCOUNTS RECEIVABLE, NET (FY)
ACCOUNTS RECEIVABLE, NET (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCOUNTS RECEIVABLE, NET [Abstract] | ||
ACCOUNTS RECEIVABLE, NET | NOTE 6: ACCOUNTS RECEIVABLE, NET The Company is exposed to credit losses primarily through the sale of products and services to commercial customers, which are recorded as Trade receivables. We evaluate a customer’s ability to pay by assessing creditworthiness, historical experience and current business and economic conditions. We determine credit ratings for each customer in our portfolio based upon public information and information obtained directly from our customers. We evaluate the reasonableness of the allowance for credit losses on a quarterly basis or when events and circumstances warrant. In addition to credit quality indicators, the other factors we consider in our evaluation of collectability include the underlying value of any collateral or security interests, past due balances, historical losses, existing economic conditions, and country and political risk. In certain circumstances, we may require collateral or prepayment to mitigate credit risk. We determine receivables are impaired when, based on historical experience, current information and events and a reasonable forecast period, we may be unable to collect amounts due according to the contractual terms of an agreement. Estimated credit losses are written off in the period in which it is determined that an account receivable is no longer collectible. Accounts receivable, net consisted of the following: (dollars in millions) September 30, 2020 December 31, 2019 Trade receivables $ 2,578 $ 2,444 Receivables from affiliates 213 143 Other receivables 169 184 Accounts receivable 2,960 2,771 Less: Allowance for expected credit losses (88 ) (45 ) Accounts receivable, net $ 2,872 $ 2,726 The changes in the allowance for expected credit losses related to Accounts receivable, net are as follows: (dollars in millions) Balance as of January 1, 2020 $ 45 Provision for expected credit losses 38 Write-offs charged against the allowance for expected credit losses (2 ) Other (including impact of adoption of ASU 2016-13) 7 Balance as of September 30, 2020 $ 88 | NOTE 6: ACCOUNTS RECEIVABLE, NET (dollars in millions) 2019 2018 Trade receivables $ 2,444 $ 2,549 Receivables from affiliates 143 113 Miscellaneous receivables 184 152 $ 2,771 $ 2,814 Less: Allowance for doubtful accounts (45 ) (141 ) 2,726 2,673 Accounts receivable are carried at amounts that approximate fair value. Bad debt expense was $18 million, $20 million and $12 million for the years ended December 31, 2019, 2018 and 2017, respectively. In 2019, $61 million of the prior year allowance for doubtful accounts has been reflected as a direct reduction in Trade receivables. |
INVENTORIES, NET (FY)
INVENTORIES, NET (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
INVENTORIES, NET [Abstract] | ||
INVENTORIES, NET | NOTE 7: INVENTORIES, NET (dollars in millions) September 30, 2020 December 31, 2019 Raw materials $ 248 $ 290 Work-in-process 148 120 Finished goods 1,185 922 Inventories, net $ 1,581 $ 1,332 Raw materials, work-in-process and finished goods are net of valuation reserves of $180 million and $152 million as of September 30, 2020 and December 31, 2019, respectively. | NOTE 7: INVENTORIES, NET (dollars in millions) 2019 2018 Raw materials $ 290 $ 336 Work-in-process 120 102 Finished goods 922 925 $ 1,332 1,363 Raw materials, work-in-process and finished goods are net of valuation reserves of $152 million and $142 million as of December 31, 2019 and 2018, respectively. |
FIXED ASSETS, NET (FY)
FIXED ASSETS, NET (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
FIXED ASSETS, NET [Abstract] | ||
FIXED ASSETS, NET | NOTE 8: FIXED ASSETS, NET Fixed assets are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives. (dollars in millions) Estimated Useful Lives (Years) September 30, 2020 December 31, 2019 Land $ 112 $ 113 Buildings and improvements 40 1,129 1,138 Machinery, tools and equipment 3 to 25 2,047 1,924 Rental assets 3 to 12 404 395 Other, including assets under construction 187 188 Fixed assets, gross 3,879 3,758 Accumulated depreciation (2,203 ) (2,095 ) Fixed assets, net $ 1,676 $ 1,663 Depreciation expense was $56 million and $54 million for the three months ended September 30, 2020 and 2019, respectively, and $165 million and $163 million for the nine months ended September 30, 2020 and 2019, respectively. | NOTE 8: FIXED ASSETS, NET Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of individual assets. (dollars in millions) Estimated Useful Lives (Years) 2019 2018 Land $ 113 $ 114 Buildings and improvements 40 1,138 1,142 Machinery, tools and equipment 3 to 25 1,924 1,815 Rental assets 3 to 12 395 293 Other, including assets under construction 188 180 3,758 3,544 Accumulated depreciation (2,095 ) (1,891 ) $ 1,663 $ 1,653 Depreciation expense was $219 million, $221 million and $226 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
BUSINESS ACQUISITIONS, DISPOSIT
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS [Abstract] | ||
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS | NOTE 9: BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS Business Acquisitions and Dispositions. Goodwill. (dollars in millions) HVAC Refrigeration Fire & Security Total Balance as of January 1, 2020 $ 5,351 $ 1,228 $ 3,305 $ 9,884 Foreign currency translation 2 5 15 22 Balance as of September 30, 2020 $ 5,353 $ 1,233 $ 3,320 $ 9,906 Intangible Assets, net. September 30, 2020 December 31, 2019 (dollars in millions) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized: Customer relationships $ 1,506 $ (1,223 ) $ 1,479 $ (1,154 ) Patents and trademarks 293 (213 ) 287 (201 ) Monitoring lines 67 (55 ) 67 (52 ) Service portfolios and other 636 (528 ) 629 (506 ) 2,502 (2,019 ) 2,462 (1,913 ) Unamortized: Trademarks and other 541 — 534 — Intangible assets, net $ 3,043 $ (2,019 ) $ 2,996 $ (1,913 ) Amortization of Intangible assets was $26 million and $30 million for the three months ended September 30, 2020 and 2019, respectively, and $76 million and $88 million for the nine months ended September 30, 2020 and 2019, respectively. Annual Impairment Assessment. Goodwill and indefinite-lived intangible assets are tested annually for impairment, or when a triggering event occurs that indicates the fair value of the reporting unit or asset may have decreased below the carrying value. The impairment assessment compares the estimated fair value of each reporting unit or indefinite-lived trademark to its associated carrying value. If the carrying value of the reporting unit or trademark exceeds its estimated fair value, then we record an impairment based on the difference between fair value and carrying value. In the case of a reporting unit, an impairment would not exceed the associated carrying value of goodwill. We performed our annual impairment assessment test of goodwill and indefinite-lived trademarks as of July 1, 2020. As part of our annual impairment testing we considered the impact of the adverse effects of the COVID-19 pandemic on the global economy and our business. To this end, we performed a quantitative impairment assessment that measured the fair value of each reporting unit to its associated carrying value to determine whether it was necessary to recognize a goodwill impairment. Estimating the fair value of individual reporting units and trademarks requires us to make assumptions and estimates regarding our future plans, as well as industry, economic and regulatory conditions, which were updated in performing the impairment assessment. For all reporting units, the fair value of goodwill exceeded the carrying value, resulting in no goodwill impairment. However, for one reporting unit, with goodwill of $917 million, the excess of fair value over the carrying value was approximately 13%. For this reporting unit, a 100 basis point increase in the discount rate used in the financial forecast would result in an impairment of approximately $84 million. The estimated fair value of the reporting unit would be negatively impacted if future economic conditions are worse than our financial forecast and assumptions or there are substantial reductions in our end markets and volume assumptions relative to our financial forecast. Based upon the quantitative assessment performed, the fair value of indefinite lived trademarks was determined to exceed the carrying value, resulting in no impairment. | NOTE 9: BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS Business Acquisitions and Dispositions. Business Combinations The Business completed the sale of businesses in 2019 and 2018 for $6 million and $1,032 million in cash, respectively. In 2018, the Business recorded a pre-tax gain of $799 million on the sale of the Taylor business. Goodwill. (dollars in millions) HVAC Refrigeration Fire & Security Total Balance as of January 1, 2018 $ 5,472 $ 1,417 $ 3,176 $ 10,065 Goodwill resulting from business combinations — 1 194 195 Foreign currency translation and other (142 ) (187 ) (82 ) (411 ) Balance as of December 31, 2018 5,330 1,231 3,288 9,849 Foreign currency translation and other 21 (3 ) 17 35 Balance as of December 31, 2019 $ 5,351 $ 1,228 $ 3,305 $ 9,884 The $411 million net reduction in goodwill within foreign currency translations and other in 2018 includes a $151 million reduction of goodwill attributable to the sale of Taylor within the Refrigeration segment. We completed our annual impairment testing as of July 1, 2019 and determined that no adjustments to the carrying value of goodwill were necessary. Intangible Assets. 2019 2018 (dollars in millions) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized: Customer relationships $ 1,479 $ (1,154 ) $ 1,511 $ (1,098 ) Patents and trademarks 287 (201 ) 292 (189 ) Monitoring lines 67 (52 ) 64 (46 ) Service portfolios and other 629 (506 ) 631 (490 ) 2,462 (1,913 ) 2,498 (1,823 ) Unamortized: Trademarks and other 534 — 539 — Total $ 2,996 $ (1,913 ) $ 3,037 $ (1,823 ) Amortization of intangible assets was $116 million, $136 million and $146 million for the years ended December 31, 2019, 2018 and 2017, respectively. The estimated future amortization of intangible assets is as follows: (dollars in millions) 2020 2021 2022 2023 2024 Future amortization $ 101 $ 91 $ 72 $ 63 $ 55 |
ACCRUED LIABILITIES (FY)
ACCRUED LIABILITIES (FY) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | NOTE 10: ACCRUED LIABILITIES (dollars in millions) 2019 2018 Accrued salaries, wages and employee benefits $ 516 $ 519 Accrued taxes 318 325 Warranty related 200 190 Project financing obligations 234 150 Accrued restructuring 66 56 Accrued legal and environmental reserves 24 26 Customer advances and deferred revenue 26 24 Other 941 784 $ 2,325 $ 2,074 Customer advances and deferred revenue is primarily comprised of advanced billings on service contracts that are typically billed annually or quarterly and amortized ratably over the contract period. The project financing obligations included in the table above are associated with the sale of rights to unbilled revenues related to the ongoing activity of an entity included within our HVAC segment. |
OTHER LONG-TERM LIABILITIES (FY
OTHER LONG-TERM LIABILITIES (FY) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER LONG-TERM LIABILITIES [Abstract] | |
OTHER LONG-TERM LIABILITIES | NOTE 11: OTHER LONG-TERM LIABILITIES Other long-term liabilities as of December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Warranty related $ 288 $ 283 Environmental reserves 203 200 Project financing obligations 75 137 Asset retirement obligations 74 73 Other 625 610 $ 1,265 $ 1,303 The project financing obligations included in the table above are associated with the sale of rights to unbilled revenues related to the ongoing activity of an entity included within our HVAC segment. |
EMPLOYEE BENEFIT PLANS (FY)
EMPLOYEE BENEFIT PLANS (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS [Abstract] | ||
EMPLOYEE BENEFIT PLANS | NOTE 11: EMPLOYEE BENEFIT PLANS Pension Plans. Contributions to the plans were as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Defined benefit plans $ 1 $ 2 $ 29 $ 29 Defined contribution plans $ 23 $ 22 $ 78 $ 71 Multi-employer pension plans $ 5 $ 5 $ 15 $ 15 The following table illustrates the components of net periodic pension benefits for our defined benefit pension and post-retirement benefit plans: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Service cost $ 7 $ 7 $ 22 $ 23 Interest cost 13 17 39 50 Expected return on plan assets (35 ) (37 ) (104 ) (115 ) Amortization of prior service credit 1 — 2 1 Recognized actuarial net loss 5 2 15 7 Net settlement, curtailment and special termination benefit loss — — 1 1 Net periodic pension benefit $ (9 ) $ (11 ) $ (25 ) $ (33 ) UTC Sponsored Defined Benefit Plans. Defined Benefit Plans – Pension Defined Benefit Plans – Other Post-retirement Compensation-Retirement Benefits, The expenses associated with these UTC plans were allocated to the Company and reported in Cost of products sold, Cost of services sold, Selling, general and administrative and Non-service pension benefit on the accompanying Unaudited Condensed Consolidated Statement of Operations. The Company's participation in these defined benefit pension and post-retirement benefits plans sponsored by UTC has concluded in conjunction with the Separation. The pension and post-retirement expense and benefits were as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Service cost $ — $ 4 $ — $ 13 Non-service pension benefit — (20 ) (2 ) (59 ) Total net periodic benefit $ — $ (16 ) $ (2 ) $ (46 ) | NOTE 12: EMPLOYEE BENEFIT PLANS The Business sponsors numerous single-employer domestic and international employee benefit plans and certain of our employees participate in employee benefit plans (the “Shared Plans”) sponsored by UTC which include participants of other UTC businesses. We account for our participation in the Shared Plans as multiemployer benefit plans, as discussed below. In March 2017, the FASB issued ASU 2017-07, Compensation Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Employee Savings Plans. Pension Plans. (dollars in millions) 2019 2018 Change in Benefit Obligation Beginning balance $ 2,581 $ 2,822 Service cost 31 33 Interest cost 67 64 Actuarial (gain) loss 351 (110 ) Benefits paid (132 ) (114 ) Net settlement, curtailment and special termination benefits (38 ) (8 ) Other 25 (106 ) Ending balance $ 2,885 $ 2,581 Change in Plan Assets Beginning balance $ 2,635 $ 3,000 Actual return on plan assets 381 (162 ) Employer contributions 36 45 Benefits paid (132 ) (114 ) Settlements (14 ) (7 ) Other 47 (127 ) Ending balance $ 2,953 $ 2,635 Funded Status Fair value of plan assets $ 2,953 $ 2,635 Benefit obligations (2,885 ) (2,581 ) Funded status of plan $ 68 $ 54 (dollars in millions) 2019 2018 Amounts Recognized in the Combined Balance Sheets Consist of Noncurrent assets $ 488 $ 442 Current liability (9 ) (16 ) Noncurrent liability (411 ) (372 ) Net amount recognized $ 68 $ 54 Amounts Recognized in Accumulated Other Comprehensive Loss Consist of Net actuarial loss $ 577 $ 482 Prior service cost 15 11 Net amount recognized $ 592 $ 493 The amounts included in “Other” in the above table primarily reflect the impact of foreign exchange translation, primarily for plans in the U.K., Canada and Germany. Qualified domestic pension plan benefits covering certain union-represented employees comprise approximately 9% of the projected benefit obligation. Benefits for union employees are generally based on a stated amount for each year of service; these plans are closed to new entrants. Foreign plans comprise approximately 91% of the projected benefit obligation; certain of these plans provide participants with one-time payments upon separation of employment rather than a retirement annuity, but are considered defined benefit plans for accounting purposes. Nonqualified domestic pension plans provide supplementary retirement benefits to certain employees and are not a material component of the projected benefit obligation. In 2019, 2018 and 2017, we made $36 million, $45 million and $44 million, respectively, of cash contributions to our foreign defined benefit pension plans. Information for pension plans with accumulated benefit obligations in excess of plan assets: (dollars in millions) 2019 2018 Projected benefit obligation $ 549 $ 501 Accumulated benefit obligation 506 463 Fair value of plan assets 137 125 Information for pension plans with projected benefit obligations in excess of plan assets: (dollars in millions) 2019 2018 Projected benefit obligation $ 690 $ 616 Accumulated benefit obligation 630 564 Fair value of plan assets 270 228 The accumulated benefit obligation for all defined benefit pension plans was $2.8 billion and $2.5 billion at December 31, 2019 and 2018, respectively. The components of the net periodic pension benefit are as follows: (dollars in millions) 2019 2018 2017 Pension Benefits: Service cost $ 31 $ 33 $ 34 Interest cost 67 64 65 Expected return on plan assets (154 ) (170 ) (160 ) Amortization of prior service cost 2 1 2 Recognized actuarial net loss 9 16 14 Net settlement, curtailment and special termination benefits loss (gain) 4 1 (3 ) Net periodic pension benefit – employer $ (41 ) $ (55 ) $ (48 ) Other changes in plan assets and benefit obligations recognized in other comprehensive loss in 2019 are as follows: (dollars in millions) 2019 Current year actuarial loss $ 112 Amortization of actuarial loss (9 ) Amortization of prior service cost (2 ) Net settlement and curtailment gain (4 ) Other 2 Total recognized in other comprehensive loss $ 99 Net recognized in net periodic pension benefit and other comprehensive loss $ 58 The amount included in “Other” in the above table primarily reflects the impact of foreign exchange translation, primarily for plans in the U.K., Canada and Germany. The estimated amount that will be amortized from accumulated other comprehensive loss into net periodic pension benefit in 2020 is as follows: (dollars in millions) Net actuarial loss $ 18 Prior service cost 1 $ 19 Major assumptions used in determining the benefit obligation and net cost for pension plans are presented in the following table as weighted-averages: Benefit Obligation Net Cost (dollars in millions) 2019 2018 2019 2018 2017 Discount rate Projected benefit obligation 2.0 % 2.8 % 2.8 % 2.5 % 2.7 % Interest cost (1) — — 2.7 % 2.4 % 2.5 % Service cost (1) — — 3.2 % 2.8 % 3.1 % Salary scale 3.4 % 3.0 % 3.0 % 3.0 % 2.6 % Expected return on plan assets — — 5.6 % 6.0 % 6.2 % Note (1) The 2019 and 2018 discount rates used to measure the service cost and interest cost applies to our significant plans. The projected benefit obligation discount rate is used for the service cost and interest cost measurements for non-significant plans. The weighted-average discount rates used to measure pension benefit obligations and net costs are set by reference to specific analyses using each plan’s specific cash flows and are then comparing them to high-quality bond indices for reasonableness. For those significant plans, the Business utilizes a full yield curve approach in the estimation of the service cost and interest cost components by applying the specific spot rates along the yield curve used in determination of the benefit obligation to the relevant projected cash flows. In determining the expected return on plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes, and economic and other indicators of future performance. In addition, we may consult with and consider the opinions of financial and other professionals in developing appropriate capital market assumptions. Return projections are also validated using a simulation model that incorporates yield curves, credit spreads and risk premiums to project long-term prospective returns. The plans’ investment management objectives include providing the liquidity and asset levels needed to meet current and future benefit payments, while maintaining a prudent degree of portfolio diversification considering interest rate risk and market volatility. Globally, investment strategies target a mix of approximately 40% of growth seeking assets and 60% of income generating and hedging assets using a wide diversification of asset types, fund strategies and investment managers. The growth seeking allocation consists of global public equities in developed and emerging countries, and alternative-asset class strategies. Within the income generating assets, the fixed income portfolio consists of mainly government and broadly diversified high quality corporate bonds. The plans have continued their pension risk management techniques designed to reduce the plans’ interest rate risk. More specifically, the plans have incorporated liability hedging programs that include the adoption of a risk reduction objective as part of the long-term investment strategy. Under this objective the income generating and hedging assets typically increased as funded status improves. The hedging programs incorporate a range of assets and investment tools, each with ranging interest rate sensitivity. As a result of the improved funded status of the plans due to favorable asset returns and funding of the plans, the income generating and hedging assets increased significantly in recent years. The fair values of pension plan assets at December 31, 2019 and 2018 by asset category are as follows: (dollars in millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Not Subject to Leveling Total Asset Category Public Equities: Global Equities $ 29 $ — $ — $ — $ 29 Global Equity Commingled Funds (1) — 141 — — 141 Enhanced Global Equities (2) 3 3 — — 6 Global Equity Funds at net asset value (8) — — — 927 927 Private Equities (3),(8) — — 2 10 12 Fixed income securities: Governments 8 35 — — 43 Corporate Bonds — 169 — — 169 Fixed income securities (8) — — — 1,449 1,449 Real Estate (4),(8) — 3 12 6 21 Other (5),(8) — 68 — 23 91 Cash & cash equivalents (6),(8) — 3 — 44 47 Subtotal $ 40 $ 422 $ 14 $ 2,459 $ 2,935 Other Assets & Liability (7) 18 Total at December 31, 2019 $ 2,953 Public Equities: Global Equities $ 22 $ — $ — $ — $ 22 Global Equity Commingled Funds (1) 1 115 — — 116 Enhanced Global Equities (2) 1 4 — — 5 Global Equity Funds at net asset value (8) — — — 815 815 Private Equities (3),(8) — — 1 9 10 Fixed income securities: Governments 13 28 — — 41 Corporate Bonds — 136 — — 136 Fixed income securities (8) — — — 1,323 1,323 Real Estate (4),(8) — 3 10 13 26 Other (5),(8) — 63 — 18 81 Cash & cash equivalents (6),(8) — 7 — 37 44 Subtotal $ 37 $ 356 $ 11 $ 2,215 $ 2,619 Other Assets & Liability (7) 16 Total at December 31, 2018 $ 2,635 Note (1) Represents commingled funds that invest primarily in common stocks. Note 2 Represents enhanced equity separate account and commingled fund portfolios. A portion of the portfolio may include long-short market neutral and relative value strategies that invest in publicly traded, equity and fixed income securities, as well as derivatives of equity and fixed income securities and foreign currency. Note 3 Represents limited partner investments with general partners that primarily invest in debt and equity. Note 4 Represents investments in real estate including commingled funds and directly held properties. Note 5 Represents insurance contracts and global balanced risk commingled funds consisting mainly of equity, bonds and some commodities. Note 6 Represents short-term commercial paper, bonds and other cash or cash-like instruments. Note 7 Represents trust receivables and payables that are not leveled. Note 8 In accordance with ASU 2015-07, Fair Value Measurement (Topic 820) Derivatives in the plan are primarily used to manage risk and gain asset class exposure while still maintaining liquidity. Derivative instruments mainly consist of equity futures, interest rate futures, interest rate swaps and currency forward contracts. The fair value measurement of plan assets using significant unobservable inputs (Level 3) did not have significant activity in 2019 or 2018 related to unrealized losses (gains), purchases, sales, or settlements. Quoted market prices are used to value investments when available. Investments in securities traded on exchanges, including listed futures and options, are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices. Fixed income securities are primarily measured using a market approach pricing methodology, where observable prices are obtained by market transactions involving identical or comparable securities of issuers with similar credit ratings. Over-the-counter securities and government obligations are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes. Temporary cash investments are stated at cost, which approximates fair value. We expect to make total contributions of approximately $29 million to our global defined benefit pension plans in 2020. Contributions do not reflect benefits to be paid directly from corporate assets. Benefit payments, including amounts to be paid from corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $127 million in 2020, $120 million in 2021, $123 million in 2022, $125 million in 2023, $126 million in 2024 and $665 million from 2025 through 2029. Postretirement Benefit Plans. The projected benefit obligation discount rate was 3.0% and 3.6% at December 31, 2019 and 2018, respectively. The Net Cost discount rate was 3.6%, 3.4% and 3.7% for 2019, 2018 and 2017, respectively. Benefit payments, including amounts to be paid from corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $0.3 million in 2020, $0.3 million in 2021, $0.2 million in 2022, $0.2 million in 2023, $0.2 million in 2024 and $1.1 million from 2025 through 2029. Multiemployer Benefit Plans. Our participation in these plans for the annual periods ended December 31 is outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act (“PPA”) zone status available in 2019 and 2018 is for the plan’s year-end at December 31, 2018, and December 31, 2017, respectively. The zone status is based on information that we received from the plan and is certified by the plan’s actuary. Our significant plan is in the green zone which represents a plan that is at least 80% funded and does not require a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”). (dollars in millions) EIN/ Pension Plan Number Zone Status FIP/ RP Status Pending/ Implemented Contributions Surcharge Imposed Expiration Date of Collective- Bargaining Agreement Pension Fund 2019 2018 2019 2018 Metal and technology industry pension plan N/A Green Green No $ 6 $ 6 No September 30, 2021 Other funds 14 15 $ 20 $ 21 UTC’s defined benefit pension and postretirement benefit plans have been accounted for as multi-employer plans in these Combined Financial Statements, in accordance with FASB ASC No. 715-30, “Defined Benefit Plans-Pension” and FASB ASC No. 715-60, “Defined Benefit Plans-Other Postretirement”. FASB ASC No. 715, “Compensation-Retirement Benefits” provides that an employer that participates in a multi-employer defined benefit plan is not required to report a liability beyond the contributions currently due and unpaid to the plan. Therefore, no assets or liabilities related to these plans have been included in the Combined Balance Sheets. These pension and post retirement expenses were allocated to the Business and reported in cost of goods sold, selling, general and administrative expenses and non-service pension costs. The amounts for pension and retirement expenses for the year ended December 31, 2019, 2018 and 2017 were as follows: (dollars in millions) 2019 2018 2017 Service cost $ 18 $ 22 $ 23 Non-service pension cost (81 ) (80 ) (57 ) $ (63 ) $ (58 ) $ (34 ) |
EMPLOYEE BENEFIT PLANS | NOTE 12: STOCK-BASED COMPENSATION Stock-Based Compensation. As a result of the Separation and Distribution, outstanding and vested awards granted to employees under UTC's LTIP were generally converted into Carrier, Otis and UTC stock-based awards. Unvested awards held by Carrier employees and former employees were converted to Carrier stock-based awards. The ratio used to convert the UTC LTIP awards was intended to preserve the aggregate intrinsic value of each award immediately after the Separation and the Distribution when compared to the aggregate intrinsic value immediately prior to the Separation and the Distribution. All performance share units outstanding on the Distribution Date were converted to restricted stock units using payout metrics based on a combination of actual performance through the Distribution Date and the target for the remainder of the performance period. Subsequent to and due to the conversion, we expect to incur $14 million of incremental stock-based compensation expense to be recognized over the awards' remaining 1.5 year vesting period. Under Carrier's LTIP, the exercise price of awards, if any, is set on the grant date and, on a per share basis, may not be less than the fair market value of Carrier's common stock on that date on a per share basis. Stock appreciation rights and stock options have a term of ten years and a three-year vesting period, subject to limited exceptions. In the event of retirement, stock appreciation rights, stock options and restricted stock units held for more than one year may vest and become exercisable (if applicable), subject to certain terms and conditions. Performance share units vest based on performance relative to pre-established metrics and generally have a minimum three-year vesting period. In the event of retirement, performance share units held for more than one year remain eligible to vest based on actual performance relative to pre-established metrics. We measure the cost of stock-based compensation, including stock options, at fair value on the grant date net of expected forfeitures and amortize the cost over the awards vesting period. We recognized $21 million and $18 million of stock-based compensation expense for the three months ended September 30, 2020 and 2019 and $56 million and $40 million for the nine months ended September 30, 2020 and 2019, respectively. In addition, we recognized $5 million and $2 million of stock-based compensation expense for cash settled awards for the three months ended September 30, 2020 and 2019, respectively, and $2 million for each of the nine months ended September 30, 2020 and 2019. The stock-based compensation expense for periods prior to March 31, 2020 represent amounts allocated to us from UTC for our direct employees. At September 30, 2020, there was $107 million of unrecognized stock-based compensation costs related to non-vested awards granted under the Carrier LTIP, which will be recognized ratably over a weighted-average period of 2.2 years. Carrier LTIP activity for the nine months ended September 30, 2020 was as follows: Stock Options and Stock Appreciation Rights Performance Share Units Restricted Share Units (shares and units in thousands) Shares Average Price 1 Units Average Price 2 Units Average Price 2 Outstanding as of April 3, 2020 3 36,015 $ 19.90 68 $ 21.23 5,622 $ 21.37 Granted 3,753 $ 16.62 728 $ 18.23 443 $ 18.98 Exercised (984 ) $ 15.52 — $ — (116 ) $ 20.42 Forfeited/Cancelled (509 ) $ 22.73 (22 ) $ 19.25 (108 ) $ 22.25 Outstanding as of September 30, 2020 38,275 $ 19.66 774 $ 18.48 5,841 $ 21.27 1 2 3 The weighted-average fair value of stock appreciation rights granted during the nine months ended September 30, 2020 was $4.36. The following table summarizes outstanding Carrier LTIP awards that are vested and expected to vest (adjusted for expected forfeitures) and that are exercisable at September 30, 2020: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable ( shares and units in thousands; aggregate intrinsic value in dollars in thousands) Awards Average Price 1 Aggregate Intrinsic Value Remaining Life 2 Awards Average Price 1 Aggregate Intrinsic Value Remaining Life 2 Stock Options/ Stock Appreciation Rights 36,868 $ 19.61 $ 403,105 6.7 16,173 $ 16.97 $ 219,447 4.2 Performance Share Units/ Restricted Stock Units 6,291 $ 20.96 $ 192,116 1.8 1 2 The fair value of stock appreciation rights is estimated on the date of grant using a binomial model. The following assumptions were used in the binomial model for the nine months ended September 30, 2020: For the Nine Months Ended September 30, 2020 Volatility 35.6 % Expected life (in years) 7.0 Expected dividend yield 2.0 % Range of risk-free rate 0.1% - 1.0 % Carrier has limited historical trading data and used peer group data to estimate expected volatility. Carrier used historical Carrier employee data, including data prior to the Separation, to estimate expected life. The expected dividend yield is consistent with Carrier's dividend policy on an annualized basis. The risk-free rate is based on the term structure of interest rates at the time of award grant. | Stock-Based Compensation. Under the UTC LTIP Plans, the exercise price of awards is set on the grant date and may not be less than the fair market value per share on that date. Generally, stock appreciation rights and stock options have a term of ten years and a three-year vesting period, subject to limited exceptions. In the event of retirement, annual stock appreciation rights, stock options and restricted stock units held for more than one year may become vested and exercisable, subject to certain terms and conditions. LTIP awards with performance-based vesting generally have a minimum three-year vesting period and vest based on actual performance against pre-established metrics. In the event of retirement, performance-based awards held for more than one year, remain eligible to vest based on actual performance relative to target metrics. The Business measures the cost of all share-based payments, including stock options, at fair value on the grant date and recognizes this cost in the Combined Statements of Operations net of expected forfeitures. For the years ended December 31, 2019, 2018 and 2017, $52 million, $44 million and $34 million respectively, of compensation cost directly attributable to Carrier employees was recognized in operating results. The associated future income tax benefit recognized was $11 million, $10 million and $8 million for the years ended December 31, 2019, 2018 and 2017, respectively. The amounts have been adjusted for the impact of the TCJA. Please see Note 14 — Income Taxes For the years ended December 31, 2019, 2018 and 2017, the amount of cash received from the exercise of stock options was $3 million, $4 million and $7 million, respectively, with an associated tax benefit realized of $16 million, $7 million and $19 million, respectively. In addition, for the years ended December 31, 2019, 2018 and 2017, the associated tax benefit realized from the vesting of performance share units and other restricted awards was $9 million, $2 million and $4 million, respectively. The 2019 amount was computed using current U.S. federal and state tax rates. At December 31, 2019, there was $62 million of total unrecognized compensation costs related to non-vested equity awards granted under long-term incentive plans. This cost is expected to be recognized ratably over a weighted-average period of 2.5 years. A summary of the transactions under all long-term incentive plans that UTC granted to Carrier employees for the year ended December 31, 2019 follows: Stock Options Stock Appreciation Rights Performance Share Units Other Incentive (shares and units in thousands) Shares Average Price* Shares Average Price* Units Average Price* Shares/ Units Outstanding at December 31, 2018 71 $ 85.86 5,635 $ 100.16 289 $ 110.59 499 Granted 2 133.19 1,673 124.37 142 121.79 219 Ancillary** — — — — 18 95.53 — Exercised/earned (35 ) 87.18 (1,658 ) 89.30 (155 ) 95.54 (211 ) Cancelled (1 ) 110.83 (157 ) 120.41 (25 ) 112.39 (35 ) Net Transfers (1) (1 ) 95.23 665 105.29 93 108.91 121 December 31, 2019 36 $ 91.06 6,158 $ 109.71 362 $ 120.16 593 * Weighted-average grant/exercise price ** Ancillary shares granted based on actual performance achieved on the 2016 award Note (1) Represents net activity related to employee movement between UTC business units and other miscellaneous adjustments. The weighted-average grant date fair value of stock options and stock appreciation rights granted by UTC during 2019, 2018 and 2017 was $21.02, $20.25 and $17.55, respectively. The weighted-average grant date fair value of performance share units, which vest upon achieving certain performance metrics, granted by UTC during 2019, 2018 and 2017 was $112.76, $131.42 and $111.00 respectively. The total fair value of awards vested during the years ended December 31, 2019, 2018 and 2017 was $48 million, $27 million and $35 million, respectively. The total intrinsic value (which is the amount by which the stock price exceeded the exercise price on the date of exercise) of stock options and stock appreciation rights exercised during the years ended December 31, 2019, 2018, and 2017 was $80 million, $43 million and $63 million, respectively. The total intrinsic value (which is the stock price at vesting) of performance share units and other restricted awards vested was $45 million, $14 million and $18 million during the years ended December 31, 2019, 2018 and 2017, respectively. The following table summarizes information about equity awards outstanding for Carrier employees that are vested and expected to vest and equity awards outstanding that are exercisable at December 31, 2019: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable (shares in thousands; aggregate intrinsic value in millions) Awards Average * Aggregate Remaining ** Awards Average * Aggregate Remaining ** Stock Options/Stock Appreciation rights 6,083 $ 109.31 $ 246 6.1 years 3,333 $ 98.4 $ 171 4.3 years Performance Share Units/ Restricted Stock 1,006 $ — $ 151 1.7 years * Weighted-average exercise price per share ** Weighted-average contractual remaining term in years The fair value of each option award is estimated on the date of grant using a binomial lattice model. The following table indicates the assumptions used in estimating fair value for the years ended December 31, 2019 and 2018. These assumptions represent those utilized by UTC and are not necessarily indicative of assumptions that would be used by Carrier as a stand-alone company. Lattice-based option models incorporate ranges of assumptions for inputs; those ranges are as follows: 2019 2018 2017 Expected volatility 18.8% - 19.7 % 17.5% - 21.1 % 19 % Weighted-average volatility 20 % 18 % 19 % Expected term (in years) 6.5 - 6.6 6.5-6.6 6.5 Expected dividend yield 2.4 % 2.2 % 2.4 % Risk-free rate 2.3% - 2.7 % 1.3% - 2.7 % 0.5% - 2.5 % Expected volatilities are based on the returns of UTC stock, including implied volatilities from traded options on UTC’s stock for the binomial lattice model. UTC uses historical data to estimate equity award exercise and employee termination behavior within the valuation model. The expected term represents an estimate of the period of time equity awards are expected to remain outstanding. The risk-free rate is based on the term structure of interest rates at the time of equity award grant. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | ||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 13: ACCUMULATED OTHER COMPREHENSIVE LOSS A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the three and nine months ended September 30, 2020 and 2019 is as follows: (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Post- retirement Plans Accumulated Other Comprehensive Loss Three Months Ended September 30, 2020 Balance as of June 30, 2020 $ (1,018 ) $ (461 ) $ (1,479 ) Other comprehensive income before reclassifications, net 302 — 302 Amounts reclassified, pre-tax — 6 6 Tax expense reclassified — (1 ) (1 ) Balance as of September 30, 2020 $ (716 ) $ (456 ) $ (1,172 ) Nine Months Ended September 30, 2020 Balance as of January 1, 2020 $ (780 ) $ (473 ) $ (1,253 ) Other comprehensive income before reclassifications, net 64 2 66 Amounts reclassified, pre-tax — 18 18 Tax benefit reclassified — (3 ) (3 ) Balance as of September 30, 2020 $ (716 ) $ (456 ) $ (1,172 ) (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Post- retirement Plans Accumulated Other Comprehensive Loss Three Months Ended September 30, 2019 Balance as of June 30, 2019 $ (821 ) $ (381 ) $ (1,202 ) Other comprehensive loss before reclassifications, net (274 ) — (274 ) Amounts reclassified, pre-tax — 2 2 Balance as of September 30, 2019 $ (1,095 ) $ (379 ) $ (1,474 ) Nine Months Ended September 30, 2019 Balance as of January 1, 2019 $ (834 ) $ (381 ) $ (1,215 ) Other comprehensive (loss) income before reclassifications, net (261 ) 2 (259 ) Amounts reclassified, pre-tax — 9 9 ASU 2018-02 adoption impact — (9 ) (9 ) Balance as of September 30, 2019 $ (1,095 ) $ (379 ) $ (1,474 ) Amounts reclassified related to defined benefit pension and post-retirement plans include amortization of prior service costs and recognized actuarial net losses. These costs are recorded as components of net periodic pension cost for each period presented (see Note 11 – Employee Benefit Plans | NOTE 13: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) A summary of the changes in each component of accumulated other comprehensive (loss) income, net of tax for the years ended December 31, 2019, 2018 and 2017 is provided below: (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Postretirement Plans Unrealized Gains (Losses) on Available- for-Sale Securities Unrealized Hedging Gains (Losses) Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2017 $ (1,130 ) $ (211 ) $ 262 $ (5 ) $ (1,084 ) Other comprehensive income (loss) before reclassifications, net 747 (32 ) (31 ) 2 686 Amounts reclassified, pre-tax (10 ) 16 (394 ) 1 (387 ) Tax expense reclassified — 5 163 — 168 Balance at December 31, 2017 $ (393 ) $ (222 ) $ — $ (2 ) $ (617 ) Other comprehensive loss before reclassifications, net (441 ) (209 ) — — (650 ) Amounts reclassified, pre-tax — 17 — 2 19 Tax expense reclassified — 33 — — 33 Balance at December 31, 2018 $ (834 ) $ (381 ) $ — $ — $ (1,215 ) Other comprehensive loss before reclassifications, net 52 (109 ) — — (57 ) Amounts reclassified, pre-tax 2 11 — — 13 Tax expense reclassified — 15 — — 15 ASU 2018-02 adoption impact — (9 ) — — (9 ) Balance at December 31, 2019 $ (780 ) $ (473 ) $ — $ — $ (1,253 ) Amounts reclassified related to defined benefit pension and postretirement plans include amortization of prior service costs and actuarial net losses recognized during each period presented. These costs are recorded as components of net periodic pension cost for each period presented (see Note 12 — Employee Benefit Plans Amounts reclassified in 2017 that relate to unrealized gains (losses) on available-for-sale securities, pre-tax includes approximately $394 million of previously unrealized gains reclassified to Other income (expense), net as a result of sales of significant investments in available-for-sale securities in 2017, including Carrier’s sale of investments in Watsco, Inc. All noncontrolling interests with redemption features, such as put options, that are not solely within the Business’ control (redeemable noncontrolling interests) were reported in the mezzanine section of the Combined Balance Sheets, between liabilities and equity, at the greater of redemption value or initial carrying value through December 31, 2017. The decrease in the value of redeemable noncontrolling interest in the Combined Statements of Changes in Equity for the year ended December 31, 2017 is primarily attributable to our acquisition of the remaining interest in an Italian heating products and services company, initially acquired in 2016. |
INCOME TAXES (FY)
INCOME TAXES (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
INCOME TAXES [Abstract] | ||
INCOME TAXES | NOTE 14: INCOME TAXES The effective tax rate for the three and nine months ended September 30, 2020 was 25.9% and 33.4%, respectively, compared with 25.8% and 18.3%, respectively, for the three and nine months ended September 30, 2019. The increase in the effective tax rate for the three months ended September 30, 2020 is primarily due to the absence of a net tax reduction resulting from separation-related activities impacting non-U.S. deferred taxes, partially offset by a tax reduction for the 2020 tax year from the finalization of the U.S. Treasury Global Intangible Low-Taxed Income ("GILTI") High Tax Exclusion ("HTE") regulations. The increase in the effective tax rate for the nine months ended September 30, 2020 is primarily due to the absence of a prior year combined tax benefit of $149 million resulting from the filing by a Carrier subsidiary to participate in an amnesty program offered by the Italian Tax Authority and the conclusion of an audit by the Internal Revenue Service (the "IRS") for UTC's 2014, 2015 and 2016 tax years. In addition, during the current year the Company recognized a $51 million charge related to a valuation allowance recorded against a United Kingdom tax loss and a credit carry forward as a result of activities related to the Separation, and a charge of $46 million resulting from Carrier's decision to no longer permanently reinvest certain pre-2018 unremitted non-U.S. earnings. 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 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 if valuation allowances against deferred tax assets are required. The Company maintains valuation allowances against certain non-U.S. deferred tax assets. We will continue to evaluate the impact that the COVID-19 pandemic and other economic impacts may have on the future realizability of a portion of the remaining deferred tax assets. Carrier conducts business globally and, as a result, files income tax returns in U.S. federal and various state and foreign jurisdictions. In certain jurisdictions, Carrier's operations were included in UTC's combined tax returns for the periods through the Separation. The 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, Netherlands, Singapore, the United Kingdom and the United States. Carrier 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 and local and foreign income tax examinations for tax years before 2010. Income taxes through March 31, 2020 were recorded based on a "carve-out" and separate company basis. Prior to the Separation, 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, the Company’s income taxes are prepared on a stand-alone basis. The Company reduced its forecasted annualized effective tax rate in the three months ended September 30, 2020 partially due to the impact of applying the election of the HTE regulations to the 2020 tax year results. The HTE regulation also permitted a company to elect to apply the regulations retroactively to the years 2018 and 2019. In accordance with the TMA, if the HTE election were made by an amended return by the Company for 2018 and 2019, UTC would be entitled to any federal tax benefit. The Company on a stand-alone basis did not record a benefit from the HTE regulation associated with the years 2018 and 2019 and the amount would not have been material to the Condensed Consolidated Statement of Operations. Pursuant to the TMA, Carrier is required to make payments to UTC representing Carrier's portion of UTC's remaining net tax liability attributable to U.S. income tax on previously undistributed earnings of Carrier's international subsidiaries resulting from the passage of the Tax Cuts and Jobs Act of 2017 (the "TCJA"). The balances computed on a separate company basis of approximately $68 million recorded within Accrued liabilities and $701 million recorded within Future income tax obligations were adjusted through UTC Net investment upon the Separation, resulting in a future stand-alone obligation of $453 million recorded within Other long-term liabilities and $6 million within Accrued liabilities. This obligation is expected to be settled in six annual installments, beginning April 15, 2021. After the Separation, Carrier is entitled to unrecognized tax benefits to the extent the item relates exclusively to Carrier in accordance with the TMA. The change from a separate company to stand-alone basis resulted in a decrease of $37 million to Future income tax obligations and $27 million to Future income tax benefits, both of which were recorded through UTC Net investment subsequent to the Separation. In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record 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 up to $15 million may occur within 12 months as a result of additional worldwide uncertain tax positions, the revaluation of uncertain tax positions arising from examinations, appeals, court decisions or the closure of tax statutes and the Separation. | NOTE 14: INCOME TAXES Income Before Income Taxes: The sources of income from operations before income taxes are: (dollars in millions) 2019 2018 2017 United States $ 1,460 $ 2,360 $ 1,620 Foreign $ 1,212 $ 1,482 $ 1,434 Total $ 2,672 $ 3,842 $ 3,054 On December 22, 2017 Public Law 115-97 “An Act to Provide for Reconciliation to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” was enacted. This law is commonly referred to as the Tax Cuts and Jobs Act of 2017 (“TCJA”). Following enactment of the TCJA, Carrier no longer intends to reinvest certain undistributed earnings of its international subsidiaries that have been previously taxed in the U.S. As such, in 2018 it recorded the international taxes associated with the future remittance of these earnings. For the remainder of Carrier’s undistributed international earnings, unless tax effective to repatriate, Carrier intends to continue to permanently reinvest these earnings. As of December 31, 2019, such undistributed earnings were approximately $6 billion, excluding other comprehensive income amounts. It is not practicable to estimate the amount of tax that might be payable on the remaining amounts. Provision for Income Taxes The income tax expense (benefit) for the years ended December 31, 2019, 2018 and 2017 consisted of the following components: (dollars in millions) 2019 2018 2017 Current: United States: Federal $ 262 $ 479 1,318 State 72 119 99 Foreign 305 342 342 639 940 1,759 Future: United States: Federal (14 ) (37 ) 22 State (2 ) 24 2 Foreign (106 ) 146 4 (122 ) 133 28 Income tax expense 517 1,073 1,787 Attributable to items credited to UTC Net Investment $ (36 ) $ (68 ) $ (168 ) Reconciliation of Effective Income Tax Rate. (dollars in millions) 2019 2018 2017 Statutory U.S. federal income tax rate 21.0 % 21.0 % 35.0 % State income taxes 2.5 % 2.6 % 1.8 % Tax on international activities 2.5 % 4.4 % (3.4 )% Tax audit settlements (5.6 )% — % (0.4 )% U.S. tax reform adoption — % — % 26.1 % Other (1.0 )% (0.1 )% (0.6 )% Effective income tax rate 19.4 % 27.9 % 58.5 % The 2019 effective tax rate reflects a net tax benefit of $149 million as a result of the filing by a subsidiary of Carrier to participate in an amnesty program offered by the Italian Tax Authority and conclusion of the audit by the Examination Division of the Internal Revenue Service for the UTC 2014, 2015 and 2016 tax years. The 2018 effective tax rate reflects a net tax charge of $102 million as a result of UTC’s change of assertion of no longer intending to reinvest certain undistributed earnings of its international subsidiaries. The 2017 effective tax rate reflects a net tax charge of $799 million attributable to the passage of the TCJA. These amounts primarily relate to U.S. income tax attributable to certain previously undistributed earnings of the Business’ international subsidiaries and equity investments and the revaluation of U.S. deferred income taxes. Deferred Tax Assets and Liabilities. The tax effects of temporary differences and tax carryforwards which gave rise to future income tax benefits and payables at December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Future income tax benefits: Insurance and employee benefits $ 76 $ 76 Other asset basis differences 128 126 Other liability basis differences 556 331 Tax loss carryforward 236 159 Tax credit carryforwards 55 60 Valuation allowances (128 ) (107 ) $ 923 $ 645 Future income taxes payable: Intangible assets $ 392 $ 403 Other asset basis differences 297 165 $ 689 $ 568 Valuation allowances have been established primarily for tax credit carryforwards, tax loss carryforwards and certain foreign temporary differences to reduce the future income tax benefits to expected realizable amounts. Tax Credit and Loss Carryforwards. (dollars in millions) Tax Loss Carryforwards Tax Credit Carryforwards Expiration period: 2020-2024 $ 52 $ 8 2025-2029 105 3 2030-2039 41 1 Indefinite 882 43 Total $ 1,080 $ 55 Unrecognized Tax Benefits. (dollars in millions) 2019 2018 2017 Balance at January 1 $ 316 $ 290 $ 243 Additions for tax positions related to the current year 30 27 54 Additions for tax positions of prior years 14 3 17 Reductions for tax positions of prior years (19 ) (4 ) (20 ) Settlements (175 ) — (4 ) Balance at December 31 $ 166 $ 316 $ 290 Gross interest expense related to unrecognized tax benefits $ 8 $ 8 $ 4 Total accrued interest balance at December 31 $ 25 $ 33 $ 24 Carrier conducts business globally and, as a result, Carrier or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As noted previously, in certain jurisdictions, Carrier’s operations are included in combined tax returns with UTC. In the ordinary course of business, the Business is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Belgium, Canada, China, Czech Republic, France, Germany, Hong Kong, India, Italy, Mexico, Netherlands, Singapore, the United Kingdom and the United States. With few exceptions, Carrier is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2010. During the second quarter of 2019, a subsidiary of Carrier that was engaged in litigation before the Italian Supreme Court filed for participation in the Italian amnesty program. In addition, during the second quarter of 2019, the Examination Division of the IRS completed its review of UTC’s tax years of 2014, 2015 and 2016 and certain state income tax exams concluded. As a result of the amnesty filing in Italy and the conclusion of the IRS and state audits, Carrier recognized a non-cash gain of approximately $166 million, including pre-tax interest of approximately $16 million. During 2017, Carrier recognized a noncash gain of approximately $20 million, including a pre-tax interest adjustment of $2 million, as a result of federal, state and non-U.S. tax year primarily related to the expiration of applicable statutes of limitation, including expiration of the U.S. federal income tax statute of limitations for UTC’s 2013 tax year. It is reasonably possible that a net increase within the range of $14 million to $18 million of unrecognized tax benefits may occur over the next 12 months as a result of additional worldwide uncertain tax positions, the revaluation of current uncertain tax positions arising from developments in examinations, in appeals, or in the courts, or the closure of tax statutes. |
RESTRUCTURING COSTS (FY)
RESTRUCTURING COSTS (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
RESTRUCTURING COSTS [Abstract] | ||
RESTRUCTURING COSTS | NOTE 15: RESTRUCTURING COSTS During the three and nine months ended September 30, 2020 and 2019, we recorded net pre-tax restructuring costs for new and ongoing restructuring actions as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ — $ 12 $ 3 $ 47 Refrigeration (1 ) 7 2 14 Fire & Security 4 14 13 35 Eliminations and other — 1 1 1 Total restructuring costs $ 3 $ 34 $ 19 $ 97 Restructuring charges incurred during the nine months ended September 30, 2020 and 2019 primarily relate to actions initiated during 2020 and 2019, and were recorded as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Cost of sales $ (1 ) $ 14 $ 5 $ 27 Selling, general and administrative 4 20 14 70 Total restructuring costs $ 3 $ 34 $ 19 $ 97 2020 Actions. The following table summarizes the accrual balance and utilization for the 2020 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total For the Three Months Ended September 30, 2020 Restructuring accrual as of June 30, 2020 $ 8 $ 1 $ 9 Net pre-tax restructuring costs 5 — 5 Utilization, foreign exchange and other costs (4 ) — (4 ) Balance as of September 30, 2020 $ 9 $ 1 $ 10 For the Nine Months Ended September 30, 2020 Restructuring accrual as of January 1, 2020 $ — $ — $ — Net pre-tax restructuring costs 17 1 18 Utilization, foreign exchange and other costs (8 ) — (8 ) Balance as of September 30, 2020 $ 9 $ 1 $ 10 The following table summarizes expected, incurred and remaining costs for the 2020 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred - Three Months Ended March 31, 2020 Costs Incurred - Three Months Ended June 30, 2020 Costs Incurred - Three Months Ended September 30, 2020 Remaining Costs at September 30, 2020 HVAC $ 5 $ (1 ) $ (2 ) $ (1 ) $ 1 Refrigeration 3 — (3 ) — — Fire & Security 13 (1 ) (5 ) (4 ) 3 Eliminations and other 1 — (1 ) — — Total $ 22 $ (2 ) $ (11 ) $ (5 ) $ 4 2019 Actions. (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total For the Three Months Ended September 30, 2020 Restructuring accrual as of June 30, 2020 $ 27 $ — $ 27 Net pre-tax restructuring costs — — — Utilization, foreign exchange and other costs (5 ) — (5 ) Balance as of September 30, 2020 $ 22 $ — $ 22 For the Nine Months Ended September 30, 2020 Restructuring accrual as of January 1, 2020 $ 43 $ 1 $ 44 Net pre-tax restructuring costs 3 — 3 Utilization, foreign exchange and other costs (24 ) (1 ) (25 ) Balance as of September 30, 2020 $ 22 $ — $ 22 The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred in 2019 Costs Incurred - Three Months Ended March 31, 2020 Costs Incurred - Three Months Ended June 30, 2020 Costs Incurred - Three Months Ended September 30, 2020 Remaining Costs at September 30, 2020 HVAC $ 53 $ (51 ) $ (1 ) $ 2 $ (1 ) $ 2 Refrigeration 16 (14 ) — (1 ) 1 2 Fire & Security 49 (43 ) (2 ) (1 ) — 3 Eliminations and other 2 (2 ) — — — — Total $ 120 $ (110 ) $ (3 ) $ — $ — $ 7 2018 and Prior Actions. | NOTE 15: RESTRUCTURING COSTS During the years ended December 31, 2019, 2018 and 2017, the Business recorded net pre-tax restructuring costs totaling $126 million, $80 million and $111 million, respectively, for new and ongoing restructuring actions. The Business recorded charges in the segments as follows: (dollars in millions) 2019 2018 2017 HVAC $ 56 $ 20 $ 36 Refrigeration 14 23 13 Fire & Security 53 34 57 Eliminations and other 3 3 5 Total $ 126 $ 80 $ 111 Restructuring charges incurred in the years ended December 31, 2019, 2018 and 2017 primarily relate to actions initiated during 2019, 2018 and 2017, and were recorded as follows: (dollars in millions) 2019 2018 2017 Cost of sales $ 36 $ 36 $ 48 Selling, general, & administrative 90 44 63 Total $ 126 $ 80 $ 111 2019 Actions. The following table summarizes the accrual balances and utilization by cost type for the 2019 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2019 $ — $ — $ — Net pre-tax restructuring costs 102 8 110 Utilization, foreign exchange and other costs (60 ) (7 ) (67 ) Balance at December 31, 2019 $ 42 $ 1 $ 43 The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred During 2019 Remaining Costs at December 31, 2019 HVAC $ 53 $ (51 ) $ 2 Refrigeration 16 (14 ) 2 Fire & Security 49 (43 ) 6 Eliminations and other 2 (2 ) — Total $ 120 $ (110 ) $ 10 2018 Actions. The following table summarizes the accrual balances and utilization by cost type for the 2018 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2018 $ — $ — $ — Net pre-tax restructuring costs 57 6 63 Utilization, foreign exchange and other costs (26 ) (4 ) (30 ) Balance at December 31, 2018 $ 31 $ 2 $ 33 Net pre-tax restructuring costs 8 8 16 Utilization, foreign exchange and other costs (30 ) (9 ) (39 ) Balance at December 31, 2019 $ 9 $ 1 $ 10 The following table summarizes expected, incurred and remaining costs for the 2018 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred During 2018 Costs Incurred During 2019 Remaining Costs at December 31, 2019 HVAC $ 24 $ (17 ) $ (7 ) $ — Refrigeration 26 (21 ) — 5 Fire & Security 34 (22 ) (9 ) 3 Eliminations and other 3 (3 ) — — Total $ 87 $ (63 ) $ (16 ) $ 8 2017 Actions The following table summarizes the accrual balances and utilization by cost type for the 2017 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2017 $ — $ — $ — Net pre-tax restructuring costs 74 2 76 Utilization, foreign exchange and other costs (33 ) (1 ) (34 ) Balance at December 31, 2017 41 1 42 Net pre-tax restructuring costs (4 ) 5 1 Utilization, foreign exchange and other costs (26 ) (1 ) (27 ) Balance at December 31, 2018 11 5 16 Net pre-tax restructuring costs (1 ) 1 — Utilization, foreign exchange and other costs (7 ) (1 ) (8 ) Balance at December 31, 2019 $ 3 $ 5 $ 8 As of December 31, 2019, remaining expected costs related to 2017 restructuring programs are not significant. 2016 Actions |
EQUITY METHOD INVESTMENTS (FY)
EQUITY METHOD INVESTMENTS (FY) | 12 Months Ended |
Dec. 31, 2019 | |
EQUITY METHOD INVESTMENTS [Abstract] | |
EQUITY METHOD INVESTMENTS | NOTE 16: EQUITY METHOD INVESTMENTS Carrier had 30 and 31 uncombined domestic and foreign affiliates as of December 31, 2019 and 2018, respectively. The Business has reflected the results of its historical equity earnings from its equity investments in its Combined Statements of Operations. While the Business retains an ongoing interest in and has significant influence with its equity method investments, the Business does not control these operations directly. Carrier’s ownership interests in equity method investments vary among individual investments but range between 20% and 50%. Summarized financial information for equity method investments is reflected below. (dollars in millions) 2019 2018 Current assets $ 4,324 $ 4,123 Noncurrent assets 2,058 1,703 Total assets 6,382 5,826 Current liabilities 2,310 2,204 Noncurrent liabilities 592 445 Total liabilities 2,902 2,649 Total net equity of investees 3,480 3,177 (dollars in millions) 2019 2018 2017 Net sales $ 9,622 $ 9,142 $ 8,697 Gross profit 1,741 1,673 1,606 Income from continuing operations 578 645 561 Net income 578 645 561 Carrier periodically reviews the carrying value of its investments to determine if there has been an other-than-temporary decline in carrying value. A variety of factors are considered when determining if a decline in carrying value is other than temporary, including, among other factors, the financial condition and business prospects of the investee, as well as Carrier’s intent with regard to the investment. During the Business’ assessment of potential impairment indicators related to its equity method investments during 2019, the Business determined that indicators of impairment existed for a specific investment in its portfolio. The Business performed a valuation of this investment and determined that the fair value was less than its carrying value. As a result, the Business recorded a non-cash pre-tax charge of $108 million in the third quarter of 2019. There were no other material impairments of Carrier’s investments during the historical periods presented. Carrier sells products to and purchases products from uncombined entities accounted for under the equity method, which are considered to be related parties. During each of the years ended December 31, 2019, 2018 and 2017, Product sales in the Combined Statements of Operations included sales to equity method investees of $1.8 billion, $1.9 billion and $1.9 billion, respectively. During the years ended December 31, 2019, 2018 and 2017, respectively, Cost of products sold in the Combined Statements of Operations included purchases from equity method investees of $368 million, $355 million and $378 million (as corrected from approximately $600 million in both 2018 and 2017). Carrier had receivables from equity method investees of $137 million and $101 million at December 31, 2019 and 2018, respectively. Carrier also had payables to equity method investees of $55 million and $74 million at December 31, 2019 and 2018, respectively. The receivables and payables were included in Account receivable, net and Accounts payable, respectively, on the Combined Balance Sheets. |
OTHER INCOME (EXPENSE), NET (FY
OTHER INCOME (EXPENSE), NET (FY) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER INCOME (EXPENSE), NET [Abstract] | |
OTHER INCOME (EXPENSE), NET | NOTE 17: OTHER INCOME (EXPENSE), NET (dollars in millions) 2019 2018 2017 Transaction gains $ — $ 799 $ 379 Impairment of equity method investment (Note 16) (108 ) — — Other 106 138 196 Total $ (2 ) $ 937 $ 575 The transaction gain recorded in 2018 relates to our sale of Taylor. The transaction gain recorded in 2017 relates to the sale of our investment in Watsco, Inc. |
GUARANTEES (FY)
GUARANTEES (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
GUARANTEES [Abstract] | ||
GUARANTEES | NOTE 16: 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 some of its 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 largely 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, for the nine months ended September 30, 2020 and 2019 are as follows: For the Nine Months Ended September 30, (dollars in millions) 2020 2019 Balance as of January 1 $ 488 $ 473 Warranties, performance guarantees issued and changes in estimated liability 131 133 Settlements made (111 ) (126 ) Other 1 (2 ) Balance as of September 30 $ 509 $ 478 | NOTE 18: GUARANTEES The Business has commitments and performance guarantees, including energy savings guarantees, under long-term service and maintenance contracts related to its air conditioning equipment and system controls. Liabilities recorded on the Combined Balance Sheets related to these guarantees were not significant during the historical periods presented. The Business also has obligations arising from sales of certain businesses and assets, including those from representations and warranties and related indemnities for environmental, health and safety (including asbestos-related), tax and employment matters. The maximum potential payment related to these obligations is not a specified amount as a number of the obligations do not contain financial caps. The carrying amount of liabilities related to these obligations was $10 million at both December 31, 2019 and December 31, 2018 recorded within Accrued liabilities. For additional information regarding the environmental indemnifications, see Note 20 — Contingent Liabilities Carrier accrues for costs associated with guarantees when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts, and where no amount within a range of estimates is more likely, the minimum is accrued. In accordance with FASB ASC Topic 460-10: Guarantees The Business provides service and warranty policies on its products and extends performance and operating cost guarantees beyond normal service and warranty policies on some of its products. In addition, the Business 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 largely estimated based upon historical experience. Adjustments are recorded to accruals as claim data and historical experience warrant. The changes in the carrying amount of service and product warranties and product performance guarantees for the years ended December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Balance as of January 1 $ 473 $ 500 Warranties and performance guarantees issued 182 171 Settlement made (164 ) (191 ) Other (3 ) (7 ) Balance as of December 31 $ 488 $ 473 |
LEASES (FY)
LEASES (FY) | 12 Months Ended |
Dec. 31, 2019 | |
LEASES [Abstract] | |
LEASES | NOTE 19: LEASES We adopted ASU 2016-02, Leases (Topic 842) The New Lease Accounting Standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the Combined Balance Sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Combined Statement of Operations. In addition, this standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as financing. If the lessor doesn’t convey risks and rewards or control, the lease is treated as operating. We have elected certain of the practical expedients available under the New Lease Accounting Standard. We have applied the practical expedient which allows prospective transition to the New Lease Accounting Standard on January 1, 2019. Under the transition practical expedient, we did not reassess lease classification, embedded leases or initial direct costs. We have applied the practical expedient for short-term leases, whereby a lease ROU asset and liability is not recognized and the expense is recognized in a straight-line basis over the lease term. In addition, we have lease agreements with lease and non-lease components, for which we have elected the practical expedients to combine these components for certain equipment leases. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities. The adoption of the New Lease Accounting Standard did not have a material effect on our Combined Statement of Operations or Combined Statement of Cash Flows. Upon adoption, we recorded an $894 million right-of-use asset and a $901 million lease liability. The adoption of the New Lease Accounting Standard had an immaterial impact on UTC Net Investment. We enter into lease agreements for the use of real estate space, vehicles, information technology equipment and certain other equipment under operating and finance leases. We determine if an arrangement contains a lease at inception. Operating leases are included in Operating lease right-of-use assets, Accrued liabilities and Operating lease liabilities in our Combined Balance Sheet. Finance leases are not considered significant to our Combined Balance Sheet or Combined Statement of Operations. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use an incremental borrowing rate, consistent with that of UTC, based on the information available at commencement date in determining the present value of lease payments, and use the implicit rate when readily determinable. We determine our incremental borrowing rate through market sources including relevant industry rates. Our lease right-of-use assets also include any lease pre-payments and exclude lease incentives. Certain of our leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. We exclude variable payments from lease right-of-use assets and lease liabilities, to the extent not considered fixed, and instead, expense variable payments as incurred. Variable lease expense and lease expense for short duration contracts is not a material component of lease expense. Our leases generally have remaining lease terms of 1 to 25 years, some of which include options to extend leases. The majority of our leases with options to extend are up to 3 years with the ability to terminate the lease within 1 year. The exercise of lease renewal options is at our sole discretion and our lease right-of-use assets and liabilities reflect only the options we are reasonably certain that we will exercise. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense for the year ended December 31, 2019, was $206 million. Supplemental cash flow information related to operating leases was as follows: (dollars in millions) Year Ended December 31, 2019 Operating cash flows used for the measurement of operating lease liabilities $ (201 ) Operating lease right-of-use assets obtained in exchange for operating lease obligations $ 136 Operating lease right-of-use assets and liabilities are reflected on our Combined Balance Sheet as follows: (dollars in millions, except lease term and discount rate) December 31, 2019 Operating lease right-of-use assets $ 832 Accrued liabilities (163 ) Operating lease liabilities (682 ) Total operating lease liabilities $ (845 ) Supplemental information related to operating leases was as follows: December 31, 2019 Weighted-Average Remaining Lease Term (in years) 8.0 Weighted-Average Discount Rate 3.6 % Carrier has historically operated as a part of UTC and currently uses UTC’s weighted-average discount rate. This rate may differ when Carrier operates on a stand-alone basis. Undiscounted maturities of operating lease liabilities, including options to extend lease terms that are reasonably certain of being exercised, as of December 31, 2019 are as follows: (dollars in millions, except lease term and discount rate) Operating 2020 $ 182 2021 151 2022 121 2023 97 2024 73 Thereafter 315 Total undiscounted lease payments 939 Less imputed interest (94 ) Total discounted lease payments $ 845 Prior to the adoption of the New Lease Accounting Standard, rental commitments on an undiscounted basis were approximately $685 million at December 31, 2018, under long-term non-cancelable operating leases and were payable as follows: $189 million in 2019, $146 million in 2020, $110 million in 2021, $77 million in 2022, $52 million in 2023 and $111 million thereafter. Rent expense was $167 million and $164 million in 2018 and 2017, respectively. |
CONTINGENT LIABILITIES (FY)
CONTINGENT LIABILITIES (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | ||
CONTINGENT LIABILITIES | NOTE 18: COMMITMENTS AND CONTINGENT LIABILITIES The Company is unable to predict the final outcome of the following matters based on the information currently available except as otherwise noted. However, the Company does not believe that the resolution of any of these matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. Environmental. Legal Proceedings. Asbestos Matters The amounts recorded for asbestos-related liabilities are based on currently available information and assumptions that we believe are reasonable and are made with input from outside actuarial experts. UTC Equity Awards Conversion Litigation Geraud Darnis, et al. v. Raytheon Technologies Corporation, et al. Income Taxes. Description of the Business, Other. Guarantees The Company has other commitments and contingent liabilities related to legal proceedings, self-insurance programs and matters arising in the ordinary course of business. The Company accrues for contingencies generally based upon a range of possible outcomes. If no amount within the range is a better estimate than any other, the Company accrues the minimum amount. In the ordinary course of business, Carrier is routinely a defendant in, party to or otherwise subject to pending and threatened legal actions, claims, disputes and proceedings. These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax and other laws. In some of these proceedings or instances, claims for substantial monetary damages are asserted against the Company and its subsidiaries and could result in fines, penalties, compensatory or treble damages or non-monetary relief. We do not believe that these matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. | NOTE 20: CONTINGENT LIABILITIES Except as otherwise noted, while the Business is unable to predict the final outcome, based on information currently available, the Business does not believe that resolution of any of the following matters will have a material adverse effect upon the Business’ competitive position, results of operations, cash flows or financial condition. Environmental. Legal Proceedings. Asbestos Matters The amounts recorded for asbestos-related liabilities are based on currently available information and assumptions that we believe are reasonable and are made with input from outside actuarial experts. The estimated range of total liabilities to resolve all pending and unasserted potential future asbestos claims through 2059 is approximately $255 million to $290 million. Where no amount within a range of estimates is more likely, the minimum is accrued. We have recorded the minimum amount of $255 million, which is principally recorded in Other long-term liabilities on the Combined Balance Sheet as of December 31, 2019. This amount is on a pre-tax basis, not discounted, and excludes the Business’ legal fees to defend the asbestos claims, which will continue to be expensed by the Business as they are incurred. In addition, the Business has an insurance recovery receivable for probable asbestos related recoveries of approximately $104 million, which is included primarily in Other assets on the Combined Balance Sheet as of December 31, 2019. Other. Guarantees The Business also has other commitments and contingent liabilities related to legal proceedings and matters arising out of the ordinary course of business. The Business accrues contingencies based upon a range of possible outcomes. If no amount within this range is a better estimate than any other, then the Business accrues the minimum amount. In the ordinary course of business, Carrier is also routinely a defendant in, party to or otherwise subject to many pending and threatened legal actions, claims, disputes and proceedings. These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax and other laws. In some of these proceedings, claims for substantial monetary damages are asserted against the Business and its subsidiaries and could result in fines, penalties, compensatory or treble damages or non-monetary relief. The Business does not believe that these matters will have a material adverse effect upon its competitive position, results of operations, cash flows or financial condition. |
SEGMENT FINANCIAL DATA (FY)
SEGMENT FINANCIAL DATA (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SEGMENT FINANCIAL DATA [Abstract] | ||
SEGMENT FINANCIAL DATA | NOTE 19: SEGMENT FINANCIAL DATA Carrier’s operations are classified into three segments: HVAC, Refrigeration and Fire & Security. HVAC provides products, controls, services and solutions to meet the heating and cooling needs of residential and commercial customers, while enhancing building performance, energy efficiency and sustainability. Refrigeration is comprised of transport refrigeration and commercial refrigeration products and solutions. Transport refrigeration products and services include refrigeration and monitoring systems for trucks, trailers, shipping containers, intermodal and rail. Fire & Security includes a wide range of residential and building systems products and solutions, including fire, flame, gas, smoke and carbon monoxide detection; portable fire extinguishers; fire suppression systems; intruder alarms; access control systems and video management systems. Other fire and security service offerings include audit, design, installation and system integration, as well as aftermarket maintenance and repair and monitoring services. Segment Information. Net Sales Operating Profit For the Three Months Ended September 30, For the Three Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ 2,892 $ 2,602 $ 839 $ 404 Refrigeration 876 922 103 125 Fire & Security 1,324 1,402 200 205 Total segment 5,092 4,926 1,142 734 Eliminations and other (90 ) (104 ) (31 ) (63 ) General corporate expenses — — (30 ) (42 ) Consolidated $ 5,002 $ 4,822 $ 1,081 $ 629 Net Sales Operating Profit For the Nine Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ 7,142 $ 7,505 $ 1,364 $ 1,242 Refrigeration 2,384 2,839 263 373 Fire & Security 3,587 4,078 426 521 Total segment 13,113 14,422 2,053 2,136 Eliminations and other (251 ) (315 ) (122 ) (95 ) General corporate expenses — — (93 ) (107 ) Consolidated $ 12,862 $ 14,107 $ 1,838 $ 1,934 Geographic External Sales. For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 United States Operations $ 2,780 $ 2,541 $ 6,983 $ 7,473 International Operations Europe 1,307 1,313 3,455 3,906 Asia Pacific 715 729 1,879 2,079 Other 200 239 545 649 Consolidated $ 5,002 $ 4,822 $ 12,862 $ 14,107 Products sales and Service sales. For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Sales Type Product $ 2,547 $ 2,224 $ 6,180 $ 6,455 Service 345 378 962 1,050 HVAC sales 2,892 2,602 7,142 7,505 Product 771 823 2,093 2,551 Service 105 99 291 288 Refrigeration sales 876 922 2,384 2,839 Product 965 1,055 2,587 3,011 Service 359 347 1,000 1,067 Fire & Security sales 1,324 1,402 3,587 4,078 Total segment sales 5,092 4,926 13,113 14,422 Eliminations and other (90 ) (104 ) (251 ) (315 ) Consolidated $ 5,002 $ 4,822 $ 12,862 $ 14,107 | NOTE 21: SEGMENT FINANCIAL DATA Carrier has historically operated as an operating segment within UTC. As it is transitioning into an independent, publicly traded company, the Business’ Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), evaluated how to view and measure the Business’ performance. Based upon such evaluation, and effective during the second quarter of 2019, Carrier determined it is organized into three operating segments, which are also its reportable segments, based on how the CODM allocates resources, assesses performance and makes strategic and operational decisions. The CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on net sales and operating profit. For the years ended December 31, 2019, 2018 and 2017, segment results are presented in accordance with this new structure. The Carrier operating segments determined in accordance with FASB ASC Topic 280 — Segment Reporting HVAC Refrigeration Fire & Security Established brands include Autronica, Chubb, Det-Tronics, Edwards, Fireye, GST, Interlogix, Kidde, LenelS2, Marioff, Onity and Supra. Fire & Security products and solutions are sold directly to end customers, as well as through manufacturers’ representatives, distributors, dealers, value-added resellers and retailers. Segment Information. Net sales Operating profit (dollars in millions) 2019 2018 2017 2019 2018 2017 HVAC $ 9,712 $ 9,713 $ 9,045 $ 1,563 $ 1,720 $ 2,001 Refrigeration 3,792 4,095 3,823 532 1,353 562 Fire & Security 5,500 5,531 5,324 708 726 639 Total Segment 19,004 19,339 18,192 2,803 3,799 3,202 Eliminations and other (396 ) (425 ) (378 ) (156 ) (24 ) (32 ) General corporate expenses — — — (156 ) (138 ) (140 ) Combined $ 18,608 $ 18,914 $ 17,814 $ 2,491 $ 3,637 $ 3,030 Total assets are not presented for each segment as they are not presented to or reviewed by the CODM. Segment Assets Capital Expenditures Depreciation & Amortization (dollars in millions) 2019 2018 2017 2019 2018 2017 2019 2018 2017 HVAC $ 1,953 $ 1,844 $ 1,630 $ 150 $ 149 $ 148 $ 160 $ 164 $ 173 Refrigeration 989 998 1,017 30 40 36 34 36 33 Fire & Security 1,728 1,764 1,698 50 45 50 123 141 152 Total Segment 4,670 4,606 4,345 230 234 234 317 341 358 Eliminations and other 10 (4 ) (10 ) 13 29 92 18 16 14 Combined $ 4,680 $ 4,602 $ 4,335 $ 243 $ 263 $ 326 $ 335 $ 357 $ 372 Cash and cash equivalents 952 1,129 1,324 Other assets, current 327 378 341 Total Current Assets $ 5,959 $ 6,109 $ 6,000 Segment assets in the table above represents accounts receivable, contract assets, current, and inventories, net. Such accounts are regularly reviewed by management and are therefore reported above as segment assets. All other remaining assets and liabilities for all periods presented are managed on a company-wide basis. Geographic External Sales and Long-Lived Assets. External Net sales Long-Lived Assets (dollars in millions) 2019 2018 2017 2019 2018 2017 United States Operations $ 9,594 $ 9,415 $ 8,686 $ 701 $ 700 $ 727 International Operations: Europe 5,327 5,711 5,323 439 451 480 Asia Pacific 2,813 2,853 2,782 241 244 222 Other 874 935 1,023 282 258 255 $ 18,608 $ 18,914 $ 17,814 $ 1,663 $ 1,653 $ 1,684 Segment sales disaggregated by product versus service for the year ended December 31, 2019, 2018 and 2017 are as follows: (dollars in millions) 2019 2018 2017 Sales Type Product $ 8,279 $ 8,395 $ 7,902 Service 1,433 1,318 1,143 Total HVAC sales 9,712 9,713 9,045 Product 3,405 3,665 3,427 Service 387 430 396 Total Refrigeration sales 3,792 4,095 3,823 Product 4,072 4,039 3,824 Service 1,428 1,492 1,500 Total Fire & Security sales 5,500 5,531 5,324 Total segment sales 19,004 19,339 18,192 Eliminations and other (396 ) (425 ) (378 ) Combined $ 18,608 $ 18,914 $ 17,814 Major Customers. |
SUBSEQUENT EVENTS (FY)
SUBSEQUENT EVENTS (FY) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUBSEQUENT EVENTS [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 20 SUBSEQUENT EVENTS On October 15, 2020, the Board of Directors declared a dividend of $0.08 per share of common stock payable November 23, 2020 to shareowners of record at the close of business on October 30, 2020. | NOTE 22: SUBSEQUENT EVENTS The Business evaluated events and transactions occurring subsequent to December 31, 2019 through February 7, 2020, the date the Combined Financial Statements were issued and concluded that there were no subsequent events that required recognition or disclosure. Events Subsequent to Original Issuance of Combined Financial Statements (Unaudited) In connection with the reissuance of the Combined Financial Statements, the Business has evaluated subsequent events through March 11, 2020, the date the Combined Financial Statements were available to be reissued. On February 10, 2020, Carrier entered into a revolving credit agreement providing for a $2.0 billion unsecured, unsubordinated 5-year revolving credit facility and a term loan credit Agreement providing for a $1.75 billion unsecured, unsubordinated 3-year term loan credit facility. Carrier expects to draw upon the term loan credit agreement in full and use the proceeds to make a cash distribution to UTC prior to the separation of Carrier from UTC. The term loan credit agreement will initially be guaranteed by UTC and the UTC guarantee will terminate upon the distribution of shares of Carrier common stock to UTC shareholders in connection with the separation of Carrier from UTC. On February 27, 2020, Carrier issued $9.25 billion of unsecured, unsubordinated notes consisting of the following: $500 million of 1.923% notes due 2023, $2.0 billion of 2.242% notes due 2025, $1.25 billion of 2.493% notes due 2027, $2.0 billion of 2.722% notes due 2030, $1.5 billion of 3.377% notes due 2040 and $2.0 billion of 3.577% notes due 2050 (together, the “Notes”). Carrier used the net proceeds from the sale of the Notes to make a cash distribution to UTC. Each series of Notes initially will be guaranteed on an unsecured, unsubordinated basis by UTC. Each of the UTC guarantees will terminate upon the distribution of shares of Carrier common stock to UTC shareowners in connection with the separation of Carrier from UTC. |
DESCRIPTION OF THE BUSINESS (Q3
DESCRIPTION OF THE BUSINESS (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
DESCRIPTION OF THE BUSINESS [Abstract] | ||
DESCRIPTION OF THE BUSINESS | The Condensed Consolidated Financial Statements as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 are unaudited, and include all adjustments, consisting only of normal recurring adjustments considered necessary by management to fairly state our results of operations, financial position and cash flows for the interim periods. The results reported in the Unaudited Condensed Consolidated Financial Statements are not necessarily indicative of results that may be expected for any other interim period or the entire year. The financial information included herein should be read in conjunction with the financial statements and notes in the Company's information statement, dated March 16, 2020, which was included as Exhibit 99.1 in our Current Report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on March 16, 2020 (the "Information Statement"). Impact of the COVID-19 pandemic A novel strain of coronavirus ("COVID-19") surfaced in Wuhan, China in late 2019 and has since spread throughout the rest of the world. In March 2020, COVID-19 was declared a pandemic by the World Health Organization and a national emergency by the U.S. Government. The pandemic has negatively affected the U.S. and global economies, disrupted global supply chains and financial markets, resulted in significant travel restrictions, mandated facility closures and shelter-in-place orders. Carrier is taking all prudent measures to protect the health and safety of our employees. In particular, we have implemented work from home requirements (where possible), social distancing and deep cleaning protocols at all of our facilities as well as travel restrictions, among other measures. We have also taken appropriate measures to work with our customers to minimize potential disruptions and to support the communities that we serve to address the challenges posed by the pandemic. The full extent of the impact of COVID-19 on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic as well as any worsening or additional outbreaks of the pandemic, and related containment and mitigation actions taken by the U.S., state and local and international governments to prevent disease spread. The extent of the pandemic's impact on Carrier will also depend upon our employees' ability to work safely in our facilities, our customers’ ability to continue to operate or to receive our products, and the level of activity and demand for the ultimate products and services of our customers or their customers. During the three months ended March 31, 2020, we temporarily closed or reduced production at manufacturing facilities in North America, Asia and Europe for safety reasons and in response to lower demand for our products. Subsequently, our manufacturing operations have resumed, measures have been enacted to scale capacity to demand, and we continue to actively take steps to mitigate supply chain risk. We continue to apply appropriate safety measures and have not experienced any significant disruptions to our manufacturing operations. We also initiated return-to-work protocols at our non-manufacturing facilities where employees were previously working remotely. We continue to focus on navigating the challenges COVID-19 presents by preserving our liquidity and managing our cash flows through preemptive actions to enhance our ability to meet our liquidity needs over the next twelve months. Such actions during the nine months ended September 30, 2020 include, but are not limited to, modifying the financial covenants in our revolving and term loan credit facilities and issuing $750 million Borrowings and Lines of Credit 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. Carrier also provides a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. Carrier’s operations are classified into three segments: HVAC, Refrigeration and Fire & Security. The HVAC and Refrigeration segments sell their products and solutions directly, including to building contractors and owners, transportation companies and retail stores, or indirectly through joint venture and other minority-owned investments, independent sales representatives, distributors, wholesalers, dealers and retail outlets. These products and services are sold under the Carrier name and other brand names including Automated Logic, Bryant, CIAT, Day & Night, Heil, NORESCO, Riello, Carrier Commercial Refrigeration, Carrier Transicold, Sensitech and others. The Fire & Security segment sells its products directly to customers, or indirectly through manufacturers’ representatives, distributors, dealers, value-added resellers and retailers. Fire & Security’s products and services are used by governments, financial institutions, architects, building owners and developers, security and fire consultants, homeowners and other end-users requiring a high level of security and fire protection for their businesses and residences. These products and services are sold under brand names including Autronica, Chubb, Det-Tronics, Edwards, Fireye, GST, Kidde, LenelS2, Marioff, Onity, Supra and others. On November 26, 2018, United Technologies Corporation, since renamed Raytheon Technologies Corporation ("UTC"), announced its intention to spin off Carrier, one of UTC's reportable segments, into a separate publicly traded company (the "Separation"). On April 3, 2020 (the "Distribution Date"), UTC completed the Separation through a pro-rata distribution (the "Distribution") of all of the outstanding 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 for the Distribution. UTC distributed 866,158,910 shares of Carrier common stock in the Distribution, which was effective at 12:01 a.m., Eastern Time, on April 3, 2020 (the "Effective Time"). As a result of the Distribution, UTC shareowners of record received one share of the Company's common stock for every one share of UTC common stock and Carrier became an independent public company and our common stock is listed under the symbol "CARR" on the New York Stock Exchange. In connection with the Separation, Carrier 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, Carrier received cash contributions totaling $590 million from UTC related to the Separation. See Note 10 – Borrowings and Lines of Credit Earnings Per Share In connection with the Separation, Carrier entered into several agreements with UTC and Otis Worldwide Corporation ("Otis"), including a separation and distribution agreement that sets forth certain agreements with UTC and Otis regarding the principal actions to be taken in connection with the Separation, including identifying the assets transferred, the liabilities assumed and the contracts transferred to each of UTC, Otis and Carrier as part of the Separation, and when and how these transfers and assumptions occurred. Other agreements we entered into that govern aspects of our relationship with UTC and Otis following the Separation include: Transition Services Agreement Tax Matters Agreement. Employee Matters Agreement and Intellectual Property Agreement. | NOTE 1: DESCRIPTION OF THE BUSINESS Carrier Global Corporation (“Carrier”, “the Business,” “we,” “us” or “our”) is a global provider of heating, ventilating, air conditioning (“HVAC”), refrigeration, fire and security solutions. Carrier also provides a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. Carrier’s operations are classified into three segments: HVAC, Refrigeration, and Fire & Security. The HVAC and Refrigeration segments sell their products and solutions directly, including to building contractors and owners, transportation companies and retail stores, or indirectly through equity method investments, independent sales representatives, distributors, wholesalers, dealers and retail outlets. These products and services are sold under the Carrier name and other brand names including Automated Logic, Bryant, CIAT, Day & Night, Heil, NORESCO, Riello, Carrier Commercial Refrigeration, Carrier Transicold, Sensitech and others. For the Fire & Security segment, products and services are used by governments, financial institutions, architects, building owners and developers, security and fire consultants, homeowners and other end-users requiring a high level of security and fire protection for their businesses and residences. Carrier provides its fire and security products and services under Autronica, Chubb, Det-Tronics, Edwards, Fireye, GST, Interlogix, Kidde, LenelS2, Marioff, Onity, Supra and other brand names, and sells directly to customers as well as through manufacturers’ representatives, distributors, dealers, value-added resellers and retailers. On November 26, 2018, United Technologies Corporation (“UTC”) announced its plan to separate Carrier into an independent publicly traded company (the “Separation”). The Separation will be effectuated through a spin-off, pursuant to which UTC will distribute to UTC shareowners all of the outstanding common shares of common stock of Carrier. |
BASIS OF PRESENTATION (Q3)
BASIS OF PRESENTATION (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
BASIS OF PRESENTATION [Abstract] | ||
BASIS OF PRESENTATION | NOTE 2: BASIS OF PRESENTATION The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. All significant intra-company accounts and transactions have been eliminated in the preparation of the Unaudited Condensed Consolidated Financial Statements. 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 we control and consolidate. Certain immaterial amounts presented in the Information Statement have been reclassified to conform to the current period presentation, including the reclassification of the Current portion of long-term debt from Accrued liabilities for 2019 on the accompanying Unaudited Condensed Consolidated Balance Sheet. The Company's financial statements for periods prior to the Separation and the Distribution are prepared on a "carve-out" basis, as described below. The Company's financial statements for the period from April 3, 2020 through September 30, 2020 are consolidated financial statements based on the reported results of Carrier as a stand-alone company. Basis of Presentation Prior to the Separation and the Distribution For the period prior to the Separation and the Distribution, the Unaudited Condensed Consolidated Financial Statements reflect the Company's financial position, results of operations and cash flows for the periods presented, which were historically managed by UTC. For the periods presented prior to the Separation and the Distribution, the Unaudited Condensed Consolidated Financial Statements are derived from UTC's consolidated financial statements and accounting records. The Unaudited Condensed Consolidated Statement of Operations includes all revenues and costs directly attributable to Carrier, including costs for facilities, functions and services used by Carrier. Prior to the Separation, costs for certain functions and services performed by UTC were directly charged to Carrier based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount, proportionate usage or other allocation methods. The results of operations include allocations of costs for administrative functions and services performed on behalf of Carrier by centralized groups within UTC and of certain pension and other post-retirement benefit costs (see Note 5 – Related Parties Prior to the Separation, UTC used a centralized approach to cash management and the financing of its operations. Accordingly, none of UTC's cash, third party debt or related interest expense has been allocated to Carrier in the Unaudited Condensed Consolidated Financial Statements for the period prior to the Separation. However, cash balances primarily associated with certain foreign entities that did not participate in UTC’s cash management program have been included in the Unaudited Condensed Consolidated Financial Statements for periods prior to the Separation. Transactions between UTC and Carrier are deemed settled immediately through UTC’s Net investment, other than those transactions which have been historically cash-settled and which are reflected in the Unaudited Condensed Consolidated Balance Sheet within Accounts receivable, net and Accounts payable. The net effect of the deemed settled transactions is reflected in the Unaudited Condensed Consolidated Statement of Cash Flows as Net transfers to UTC within financing activities and in the Unaudited Condensed Consolidated Balance Sheet as UTC’s Net investment (see Note 5 – Related Parties All of the allocations and estimates in the Unaudited Condensed Consolidated Financial Statements are based on assumptions that management believes are reasonable. However, for the periods prior to the Separation, the Unaudited Condensed Consolidated Financial Statements may not be indicative of the Company's future financial position, results of operations and cash flows or if the Company had been a separate, stand-alone entity during the periods presented. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU 2017-04, Intangibles – Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued SEC Rules In May 2020, the SEC issued Final Rule Release No. 33-10786, which amends the financial statement requirements for acquisitions and dispositions of businesses and related pro forma financial information required under SEC Regulation S-X, Rule 3-05. The final rule modifies the significance test required in SEC Regulation S-X, Rule 1-02(w) by raising the significance threshold for reporting dispositions of a business from 10% to 20% and by modifying the calculation of the investment and income tests. In accordance with Rules 3-09 or 4-08(g), the revised income test will apply to the evaluation of equity method investments for significance. The Company is currently evaluating the impact of these modifications, which are effective for fiscal years beginning after December 31, 2020. In August 2020, the SEC issued Final Rule Release No. 33-10825, which amends certain disclosure requirements required by Regulation S-K relating to the description of business (Item 101), legal proceedings (Item 103) and risk factors (Item 105). The amendments to Item 101 will, among other things, allow the Company to provide updates to the general development of the business based on materiality, if it incorporates by reference a full discussion from a previously filed registration statement or report. The amendment also requires disclosure of the registrant’s human capital resources to the extent such disclosures would be material to an understanding of the registrant’s business. The amendments to Item 103 will, among other things, increase the quantitative threshold for disclosing certain governmental environmental proceedings and the amendments to Item 105 will, among other things, require a risk factor summary where the risk factor section itself is longer than 15 pages. The Company is currently evaluating the impact of these modifications, which are effective for fiscal years beginning December 31, 2020. | NOTE 2: BASIS OF PRESENTATION The Business has historically operated as a part of UTC; consequently, stand-alone financial statements have not historically been prepared for the Business. The accompanying Combined Financial Statements have been prepared from UTC’s historical accounting records and are presented on a stand-alone basis as if the Business’ operations had been conducted independently from UTC. These Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Combined Statements of Operations include all revenues and costs directly attributable to Carrier, including costs for facilities, functions and services used by Carrier. Costs for certain functions and services performed by centralized UTC are directly charged to Carrier based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount, usage or other allocation methods. The results of operations include allocations of costs for administrative functions and services performed on behalf of Carrier by centralized groups within UTC and certain pension and other post-retirement benefit costs (see Note 5 – Related Parties UTC uses a centralized approach to cash management and financing its operations. Accordingly, none of the cash, third party debt or related interest expense of UTC has been allocated to Carrier in the Combined Financial Statements. However, cash balances primarily associated with certain foreign entities that do not participate in UTC’s cash management program have been included in the Combined Financial Statements. Transactions between UTC and Carrier are deemed to have been settled immediately through UTC’s Net Investment, other than those transactions which have historically been cash-settled and which are reflected in the Combined Balance Sheets within Accounts receivable (see Note 6 – Accounts Receivable, Net Related Parties Related Parties All intracompany accounts and transactions within the Business have been eliminated in the preparation of the Combined Financial Statements. The Combined Financial Statements of the Business include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to the Business. All of the allocations and estimates in the Combined Financial Statements are based on assumptions that management believes are reasonable. However, the Combined Financial Statements included herein may not be indicative of the financial position, results of operations and cash flows of the Business in the future, or if the Business had been a separate, stand-alone entity during the years presented. The noncontrolling interest represents the noncontrolling investors’ interests in the results of subsidiaries that we control and combine. |
EARNINGS PER SHARE (Q3)
EARNINGS PER SHARE (Q3) | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 3: EARNINGS PER SHARE On the Distribution Date, 866,158,910 shares of the Company’s common stock, par value $0.01 per share, were distributed to 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 such shares are treated as issued and outstanding for purposes of calculating historical earnings per share. For periods prior to the Separation, it is assumed that there are no dilutive equity instruments as there were no Carrier stock-based awards outstanding prior to the Separation. Diluted earnings per share is computed by giving effect to all potentially dilutive stock awards that are outstanding. For periods subsequent to the Separation, 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. The weighted-average number of common shares outstanding for basic and diluted earnings per share for the three and nine months ended September 30, 2020 was based on the weighted-average number of common shares outstanding for the period beginning after the Distribution Date. For the three months ended September 30, 2020 and the period April 3, 2020 through September 30, 2020, the number of stock awards excluded from the computation of diluted earnings per share due to their anti-dilutive effect was approximately 3.2 million. Three Months Ended September 30, Nine Months Ended September 30, (dollars in millions, except per share amounts; shares in millions) 2020 2019 2020 2019 Net income attributable to common shareowners $ 741 $ 492 $ 1,098 $ 1,676 Basic weighted-average number of shares outstanding 866.4 866.2 866.3 866.2 Stock awards and equity units (share equivalent) 15.1 — 9.9 — Diluted weighted-average number of shares outstanding 881.5 866.2 876.2 866.2 Earnings Per Share Basic $ 0.86 $ 0.57 $ 1.27 $ 1.94 Diluted $ 0.84 $ 0.57 $ 1.25 $ 1.94 |
REVENUE RECOGNITION (Q3)
REVENUE RECOGNITION (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
REVENUE RECOGNITION [Abstract] | ||
REVENUE RECOGNITION | NOTE 4: REVENUE RECOGNITION Contract Assets and Liabilities. (dollars in millions) September 30, 2020 December 31, 2019 Contract assets, current $ 753 $ 622 Contract assets, non-current (included within Other assets) 75 57 Total contract assets 828 679 Contract liabilities, current (495 ) (443 ) Contract liabilities, non-current (included within Other long-term liabilities) (166 ) (168 ) Total contract liabilities (661 ) (611 ) Net contract assets $ 167 $ 68 Contract assets increased $149 million for the nine months ended September 30, 2020, primarily due to the timing of billings on customer contracts and contract completions. Contract liabilities increased $50 million for the nine months ended September 30, 2020, primarily due to customer billings in excess of revenue earned. For the three months ended September 30, 2020 and 2019, we recognized revenue of $55 million and $53 million, respectively, and for the nine months ended September 30, 2020 and 2019, we recognized revenue of $288 million and $301 million, respectively, that was related to contract liabilities as of January 1, 2020 and 2019, respectively. Remaining Performance Obligations ("RPO"). See Note 19 – Segment Financial Data Revenue from Contracts with Customers. | NOTE 4: REVENUE RECOGNITION Under the New Revenue Standard effective for the period ending December 31, 2018, revenue is recognized using an over-time revenue recognition model when contracts meet one or more of the mandatory criteria established in the New Revenue Standard. If none of the criteria are met, revenue is recognized at a point in time. Performance obligations are satisfied at a point in time for HVAC, certain refrigeration systems and certain alarm and fire detection and suppression systems and products. Revenue is recognized at the point when control of the product transfers to the customer, generally upon product shipment. Under the New Revenue Standard, revenue is recognized on an over-time basis using an input method for installation, service and other repair contracts within the Business. For separately priced product maintenance, sales are primarily recognized on a straight-line basis over the contract period. The Business measures progress toward completion for these contracts using costs incurred to date relative to total estimated costs at completion. Incurred costs represent work performed, which corresponds with and best depicts the transfer of control to the customer. The ongoing effect of recognizing revenue on an over-time basis is not expected to be materially different than the previous revenue recognition method. The New Revenue Standard had an immaterial impact on the 2018 Combined Statement of Operations. The New Revenue Standard also resulted in the establishment of Contract asset and Contract liability balance sheet accounts, and in the reclassification of balances to these new accounts from Accounts receivable, Inventories and contracts in progress, net, and Accrued liabilities. Contract Assets and Liabilities. (dollars in millions) 2019 2018 Contract assets, current $ 622 $ 566 Contract assets, noncurrent (included within Other assets) 57 100 Total contract assets 679 666 Contract liabilities, current (443 ) (448 ) Contract liabilities, noncurrent (included within Other long-term liabilities) (168 ) (164 ) Total contract liabilities (611 ) (612 ) Net contract assets $ 68 $ 54 The Business reclassified $666 million to contract assets in connection with the adoption of the New Revenue Standard on January 1, 2018. Contract assets increased by $13 million from January 1, 2019 to December 31, 2019 due primarily to revenue recognition in excess of customer billings. Contract assets increased by $143 million from January 1, 2018 to December 31, 2018 due primarily to revenue recognition in excess of customer billings. The Business reclassified $612 million to contract liabilities in connection with the adoption of the New Revenue Standard. In 2019, we recognized net sales of $362 million related to contract liabilities as of January 1, 2019. Contract liabilities decreased by $1 million from January 1, 2019 to December 31, 2019 and increased by $4 million from January 1, 2018 through December 31, 2018. Remaining performance obligations (“RPO”). |
RELATED PARTIES (Q3)
RELATED PARTIES (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
RELATED PARTIES [Abstract] | ||
RELATED PARTIES | NOTE 5: RELATED PARTIES Equity Method Investments Carrier sells products to and purchases products from unconsolidated entities accounted for under the equity method and, therefore, these entities are considered related parties. During the three months ended September 30, 2020 and 2019, Product sales in the Unaudited Condensed Consolidated Statement of Operations included sales to equity method investees of $576 million and $498 million, respectively. During the three months ended September 30, 2020 and 2019, Cost of products sold in the Unaudited Condensed Consolidated Statement of Operations included purchases from equity method investees of $70 million and $96 million, respectively. During the nine months ended September 30, 2020 and 2019, Product sales in the Unaudited Condensed Consolidated Statement of Operations included sales to equity method investees of $1.4 billion and $1.4 billion, respectively. During the nine months ended September 30, 2020 and 2019, Cost of products sold in the Unaudited Condensed Consolidated Statement of Operations included purchases from equity method investees of $213 million and $274 million, respectively. Carrier had receivables from equity method investees of $213 million and $137 million at September 30, 2020 and December 31, 2019, respectively. Carrier also had payables to equity method investees of $40 million and $55 million at September 30, 2020 and December 31, 2019, respectively. The receivables and payables are included in Accounts receivable, net and Accounts payable on the Unaudited Condensed Consolidated Balance Sheet. The Company periodically reviews the carrying value of its equity method investments to determine if there has been an other-than-temporary decline in fair value. A variety of factors are considered when determining if a decline in carrying value is other-than-temporary, including, among other factors, the financial condition and business prospects of the investee, as well as the Company's intent with regard to the investment. During the three months ended March 31, 2020, we determined that indicators of impairment existed for a minority owned joint venture investment in the portfolio. We performed a valuation of this investment, which was based on the income approach using the discounted cash flow method. We determined that the loss in value was other-than-temporary due to a reduction in sales and earnings that were driven by a deterioration in the oil and gas industry (the joint venture's primary market) and by the impact of the COVID-19 pandemic, among other factors. As a result, we recorded a non-cash, other-than-temporary impairment charge of $71 million on this investment during the three months ended March 31, 2020 which is included in Other income (expense), net on the accompanying Unaudited Condensed Consolidated Statement of Operations. In September 2020, the Company sold 9.25 million B shares of Beijer Ref AB ("Beijer") for SEK290 ($32.38) per share equal to approximately 7.9% of the outstanding B shares in Beijer, through an accelerated equity offering. We received proceeds of approximately $300 million and recognized a pre-tax gain on the sale of $252 million included in Other income (expense), net on the accompanying Unaudited Condensed Consolidated Statement of Operations. Following the sale, Beijer, which is listed on the Nasdaq Stockholm, continues to be reported as an equity method investment with Carrier continuing to hold approximately 30% of Beijer's B shares, approximately 22% of Beijer's A shares and approximately 26% of the Beijer total votes. Related Party with UTC Prior to the Separation, Carrier had been managed and operated in the normal course of business with other affiliates of UTC. Accordingly, certain shared costs were allocated to the Company and are reflected as expenses in the Unaudited Condensed Consolidated Financial Statements. Related Party Sales. Allocated Centralized Costs. The allocated centralized costs for the three months ended September 30, 2020 and 2019 were $0 million and $62 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $43 million and $178 million, The expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided to or for the benefit of the Company prior to the Separation. The amounts that would have been, or will be incurred on a stand-alone basis could differ from the amounts allocated due to economies of scale, differences in management approach, a need for more or fewer employees, or other factors. In addition, the Company's future results of operations, financial position and cash flows could differ materially from the historical results presented herein. Separation Costs. Cash Management and Financing. Description of the Business During the nine months ended September 30, 2020, net assets of $780 million were contributed to the Company by UTC which primarily consisted of cash of $590 million, deferred tax assets and liabilities and fixed assets. These contributions of net assets are recorded as Net transfers from UTC on the Unaudited Condensed Consolidated Statement of Changes in Equity through UTC Net investment. Accounts Receivable and Payable. Prior to the Separation, interest income and expense related to activity with UTC that was historically included in Carrier’s results is presented on a net basis in the Unaudited Condensed Consolidated Statement of Operations. For the three and nine months ended September 30, 2019, there was $21 million and $70 million, respectively, of interest income from activity with UTC. For the three and nine months ended September 30, 2019, there was $12 million and $44 million, respectively, of interest expense from activity with UTC. The effect of the settlement of these related party transactions is included in financing activity in the Unaudited Condensed Consolidated Statement of Cash Flows. There was no interest income or expense from activity with UTC for the three and nine months ended September 30, 2020. Additionally, certain transactions between Carrier and its subsidiaries, and UTC and its affiliates, were cash-settled prior to the Separation and are reflected in Accounts receivable, net and Accounts payable in the Unaudited Condensed Consolidated Balance Sheet as of December 31, 2019 in the amounts of $6 million and $4 million, respectively. As of September 30, 2020, there were no outstanding Accounts receivable, net or Accounts payable with UTC. | NOTE 5: RELATED PARTIES Historically, Carrier has been managed and operated in the ordinary course of business with other affiliates of UTC. Accordingly, certain shared costs have been allocated to the Business and reflected as expenses in the Combined Financial Statements. Related Party Sales. Allocated Centralized Costs. UTC incurs significant corporate costs for services provided to the Business as well as to other UTC businesses. These services include treasury, tax, accounting, human resources, audit, legal, purchasing, information technology and other such services. The costs associated with these services generally include all payroll and benefit costs, as well as overhead costs related to the support functions. UTC also allocates costs associated with corporate insurance coverage and medical, pension, postretirement and other health plan costs for employees participating in UTC sponsored plans. UTC corporate costs were either specifically attributable to Carrier, when possible, or allocated to the Business. Allocations are based on direct usage where identifiable as well a number of other utilization measures including headcount, proportionate usage and relative revenues. All such amounts have been deemed to have been incurred and settled by the Business in the period in which the costs were recorded and are included in the UTC Net Investment. The allocated functional service expenses and general corporate expenses for the years ended December 31, 2019, 2018 and 2017 were $245 million, $277 million and $240 million, respectively, and are primarily included in Selling, general and administrative in the Combined Statements of Operations. In the opinion of management of UTC and the Business, the expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Business during 2019, 2018 and 2017. The amounts that would have been, or will be incurred, on a stand-alone basis could differ from the amounts allocated due to economies of scale, difference in management judgment, a requirement for more or fewer employees or other factors. Management does not believe, however, that it is practicable to estimate what these expenses would have been had the Business operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities. In addition, the future results of operations, financial position and cash flows could differ materially from the historical results presented herein. Cash Management and Financing. Basis of Presentation Accounts Receivable and Payable. Additionally, certain transactions between Carrier and UTC and affiliate businesses are cash-settled on a current basis and, therefore, are reflected in the Combined Balance Sheets. Accounts receivable includes $6 million and $12 million at December 31, 2019 and 2018, respectively, and Accounts payable includes $4 million and $8 million at December 31, 2019 and 2018, respectively, related to such transactions. Guarantees. UTC has also obtained guarantees from banks on behalf of Carrier to guarantee ordinary course of business performance obligations as required by certain Carrier customers or other third parties. Typically, such guarantees are in amounts equal to a portion or the entire value of the awarded contract and remain in place through the completion of a contract or warranty period. As of December 31, 2019 and 2018, total outstanding UTC guarantees were approximately $1.4 billion and $0.9 billion, respectively. The Business does not believe that the performance of the underlying obligations secured by such guarantees will have a material adverse effect on Carrier’s financial position, results of operations or cash flows. Third-party costs relating to bank guarantees are reflected in the results of operations. Equity Method Investments. Equity Method Investments Separation Costs. |
ACCOUNTS RECEIVABLE, NET (Q3)
ACCOUNTS RECEIVABLE, NET (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCOUNTS RECEIVABLE, NET [Abstract] | ||
ACCOUNTS RECEIVABLE, NET | NOTE 6: ACCOUNTS RECEIVABLE, NET The Company is exposed to credit losses primarily through the sale of products and services to commercial customers, which are recorded as Trade receivables. We evaluate a customer’s ability to pay by assessing creditworthiness, historical experience and current business and economic conditions. We determine credit ratings for each customer in our portfolio based upon public information and information obtained directly from our customers. We evaluate the reasonableness of the allowance for credit losses on a quarterly basis or when events and circumstances warrant. In addition to credit quality indicators, the other factors we consider in our evaluation of collectability include the underlying value of any collateral or security interests, past due balances, historical losses, existing economic conditions, and country and political risk. In certain circumstances, we may require collateral or prepayment to mitigate credit risk. We determine receivables are impaired when, based on historical experience, current information and events and a reasonable forecast period, we may be unable to collect amounts due according to the contractual terms of an agreement. Estimated credit losses are written off in the period in which it is determined that an account receivable is no longer collectible. Accounts receivable, net consisted of the following: (dollars in millions) September 30, 2020 December 31, 2019 Trade receivables $ 2,578 $ 2,444 Receivables from affiliates 213 143 Other receivables 169 184 Accounts receivable 2,960 2,771 Less: Allowance for expected credit losses (88 ) (45 ) Accounts receivable, net $ 2,872 $ 2,726 The changes in the allowance for expected credit losses related to Accounts receivable, net are as follows: (dollars in millions) Balance as of January 1, 2020 $ 45 Provision for expected credit losses 38 Write-offs charged against the allowance for expected credit losses (2 ) Other (including impact of adoption of ASU 2016-13) 7 Balance as of September 30, 2020 $ 88 | NOTE 6: ACCOUNTS RECEIVABLE, NET (dollars in millions) 2019 2018 Trade receivables $ 2,444 $ 2,549 Receivables from affiliates 143 113 Miscellaneous receivables 184 152 $ 2,771 $ 2,814 Less: Allowance for doubtful accounts (45 ) (141 ) 2,726 2,673 Accounts receivable are carried at amounts that approximate fair value. Bad debt expense was $18 million, $20 million and $12 million for the years ended December 31, 2019, 2018 and 2017, respectively. In 2019, $61 million of the prior year allowance for doubtful accounts has been reflected as a direct reduction in Trade receivables. |
INVENTORIES, NET (Q3)
INVENTORIES, NET (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
INVENTORIES, NET [Abstract] | ||
INVENTORIES, NET | NOTE 7: INVENTORIES, NET (dollars in millions) September 30, 2020 December 31, 2019 Raw materials $ 248 $ 290 Work-in-process 148 120 Finished goods 1,185 922 Inventories, net $ 1,581 $ 1,332 Raw materials, work-in-process and finished goods are net of valuation reserves of $180 million and $152 million as of September 30, 2020 and December 31, 2019, respectively. | NOTE 7: INVENTORIES, NET (dollars in millions) 2019 2018 Raw materials $ 290 $ 336 Work-in-process 120 102 Finished goods 922 925 $ 1,332 1,363 Raw materials, work-in-process and finished goods are net of valuation reserves of $152 million and $142 million as of December 31, 2019 and 2018, respectively. |
FIXED ASSETS, NET (Q3)
FIXED ASSETS, NET (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
FIXED ASSETS, NET [Abstract] | ||
FIXED ASSETS, NET | NOTE 8: FIXED ASSETS, NET Fixed assets are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives. (dollars in millions) Estimated Useful Lives (Years) September 30, 2020 December 31, 2019 Land $ 112 $ 113 Buildings and improvements 40 1,129 1,138 Machinery, tools and equipment 3 to 25 2,047 1,924 Rental assets 3 to 12 404 395 Other, including assets under construction 187 188 Fixed assets, gross 3,879 3,758 Accumulated depreciation (2,203 ) (2,095 ) Fixed assets, net $ 1,676 $ 1,663 Depreciation expense was $56 million and $54 million for the three months ended September 30, 2020 and 2019, respectively, and $165 million and $163 million for the nine months ended September 30, 2020 and 2019, respectively. | NOTE 8: FIXED ASSETS, NET Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of individual assets. (dollars in millions) Estimated Useful Lives (Years) 2019 2018 Land $ 113 $ 114 Buildings and improvements 40 1,138 1,142 Machinery, tools and equipment 3 to 25 1,924 1,815 Rental assets 3 to 12 395 293 Other, including assets under construction 188 180 3,758 3,544 Accumulated depreciation (2,095 ) (1,891 ) $ 1,663 $ 1,653 Depreciation expense was $219 million, $221 million and $226 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
BUSINESS ACQUISITIONS, DISPOS_2
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS [Abstract] | ||
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS | NOTE 9: BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS Business Acquisitions and Dispositions. Goodwill. (dollars in millions) HVAC Refrigeration Fire & Security Total Balance as of January 1, 2020 $ 5,351 $ 1,228 $ 3,305 $ 9,884 Foreign currency translation 2 5 15 22 Balance as of September 30, 2020 $ 5,353 $ 1,233 $ 3,320 $ 9,906 Intangible Assets, net. September 30, 2020 December 31, 2019 (dollars in millions) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized: Customer relationships $ 1,506 $ (1,223 ) $ 1,479 $ (1,154 ) Patents and trademarks 293 (213 ) 287 (201 ) Monitoring lines 67 (55 ) 67 (52 ) Service portfolios and other 636 (528 ) 629 (506 ) 2,502 (2,019 ) 2,462 (1,913 ) Unamortized: Trademarks and other 541 — 534 — Intangible assets, net $ 3,043 $ (2,019 ) $ 2,996 $ (1,913 ) Amortization of Intangible assets was $26 million and $30 million for the three months ended September 30, 2020 and 2019, respectively, and $76 million and $88 million for the nine months ended September 30, 2020 and 2019, respectively. Annual Impairment Assessment. Goodwill and indefinite-lived intangible assets are tested annually for impairment, or when a triggering event occurs that indicates the fair value of the reporting unit or asset may have decreased below the carrying value. The impairment assessment compares the estimated fair value of each reporting unit or indefinite-lived trademark to its associated carrying value. If the carrying value of the reporting unit or trademark exceeds its estimated fair value, then we record an impairment based on the difference between fair value and carrying value. In the case of a reporting unit, an impairment would not exceed the associated carrying value of goodwill. We performed our annual impairment assessment test of goodwill and indefinite-lived trademarks as of July 1, 2020. As part of our annual impairment testing we considered the impact of the adverse effects of the COVID-19 pandemic on the global economy and our business. To this end, we performed a quantitative impairment assessment that measured the fair value of each reporting unit to its associated carrying value to determine whether it was necessary to recognize a goodwill impairment. Estimating the fair value of individual reporting units and trademarks requires us to make assumptions and estimates regarding our future plans, as well as industry, economic and regulatory conditions, which were updated in performing the impairment assessment. For all reporting units, the fair value of goodwill exceeded the carrying value, resulting in no goodwill impairment. However, for one reporting unit, with goodwill of $917 million, the excess of fair value over the carrying value was approximately 13%. For this reporting unit, a 100 basis point increase in the discount rate used in the financial forecast would result in an impairment of approximately $84 million. The estimated fair value of the reporting unit would be negatively impacted if future economic conditions are worse than our financial forecast and assumptions or there are substantial reductions in our end markets and volume assumptions relative to our financial forecast. Based upon the quantitative assessment performed, the fair value of indefinite lived trademarks was determined to exceed the carrying value, resulting in no impairment. | NOTE 9: BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS Business Acquisitions and Dispositions. Business Combinations The Business completed the sale of businesses in 2019 and 2018 for $6 million and $1,032 million in cash, respectively. In 2018, the Business recorded a pre-tax gain of $799 million on the sale of the Taylor business. Goodwill. (dollars in millions) HVAC Refrigeration Fire & Security Total Balance as of January 1, 2018 $ 5,472 $ 1,417 $ 3,176 $ 10,065 Goodwill resulting from business combinations — 1 194 195 Foreign currency translation and other (142 ) (187 ) (82 ) (411 ) Balance as of December 31, 2018 5,330 1,231 3,288 9,849 Foreign currency translation and other 21 (3 ) 17 35 Balance as of December 31, 2019 $ 5,351 $ 1,228 $ 3,305 $ 9,884 The $411 million net reduction in goodwill within foreign currency translations and other in 2018 includes a $151 million reduction of goodwill attributable to the sale of Taylor within the Refrigeration segment. We completed our annual impairment testing as of July 1, 2019 and determined that no adjustments to the carrying value of goodwill were necessary. Intangible Assets. 2019 2018 (dollars in millions) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized: Customer relationships $ 1,479 $ (1,154 ) $ 1,511 $ (1,098 ) Patents and trademarks 287 (201 ) 292 (189 ) Monitoring lines 67 (52 ) 64 (46 ) Service portfolios and other 629 (506 ) 631 (490 ) 2,462 (1,913 ) 2,498 (1,823 ) Unamortized: Trademarks and other 534 — 539 — Total $ 2,996 $ (1,913 ) $ 3,037 $ (1,823 ) Amortization of intangible assets was $116 million, $136 million and $146 million for the years ended December 31, 2019, 2018 and 2017, respectively. The estimated future amortization of intangible assets is as follows: (dollars in millions) 2020 2021 2022 2023 2024 Future amortization $ 101 $ 91 $ 72 $ 63 $ 55 |
BORROWINGS AND LINES OF CREDIT
BORROWINGS AND LINES OF CREDIT (Q3) | 9 Months Ended |
Sep. 30, 2020 | |
BORROWINGS AND LINES OF CREDIT [Abstract] | |
BORROWINGS AND LINES OF CREDIT | NOTE 10: BORROWINGS AND LINES OF CREDIT On February 10, 2020, we entered into a revolving credit agreement with various banks permitting aggregate borrowings of up to he 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 . As of On February 10, 2020, we entered into a $1.75 billion term loan credit agreement that provides an unsecured, unsubordinated term loan credit facility which matures on February 10, 2023 (the "term loan credit facility ”, and together with the revolving credit facility, the “credit facilities On February 27, 2020, Carrier issued $9.25 billion of unsecured, unsubordinated long-term notes in six series with maturity dates ranging from 2023 through 2050. On March 27, 2020, Carrier drew $1.75 billion on the term loan credit facility. The proceeds from the notes and the term loan credit facility were used to distribute to UTC in connection with the Separation. The revolving credit facility, term loan credit facility and indenture contain affirmative and negative covenants customary for financings of this type, that among other things, limit Carrier and its subsidiaries' 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 amendments to both the revolving credit facility and the term loan credit facility. Pursuant to the amendments, certain terms of the revolving credit facility and the term loan credit facility were amended for a period beginning on June 2, 2020 and ending on December 30, 2021 (the "Covenant Modification Period"). The Company may terminate the amendment prior to December 30, 2021, subject to the satisfaction of certain conditions. The amendments defer testing of our consolidated total net leverage ratio financial covenant until June 30, 2021 and increase the consolidated total net leverage ratio limit until December 31, 2021. The amendments also require us to maintain liquidity at a certain level until the earlier of (1) June 29, 2021 and (2) the last day of the Covenant Modification Period. Additionally, during the Covenant Modification Period, the Company is subject to (a) limitations on the incurrence of subsidiary indebtedness, (b) limitations on the making of restricted payments, including purchases by the Company of its ordinary shares and the amount of dividends the Company may pay, and (c) a "most favored nations" provision related to certain terms of any committed credit facility in an amount greater than $100 million. As of September 30, 2020, we were compliant with our covenants under the agreements governing our outstanding indebtedness. On June 19, 2020, we issued $750 million of unsecured, unsubordinated 2.700% Notes due 2031. These notes rank equally with our existing unsecured, unsubordinated obligations. The net proceeds from the sale of the notes, which further enhance our liquidity and financial flexibility during the ongoing COVID-19 pandemic, are being used for general corporate purposes. As of September 30, 2020, we have a $2.0 billion unsecured, unsubordinated commercial paper program which we plan to use for general corporate purposes, including the funding of working capital and potential acquisitions. As of September 30, 2020, there were no borrowings outstanding under the commercial paper program. Long-term debt, all of which was issued during the nine months ended September 30, 2020 except for Other long-term debt, consisted of the following: (dollars in millions) Debt Description Interest Rate September 30, 2020 December 31, 2019 3-Year Term Loan Credit Facility due February 10, 2023 1.275 % 1 $ 1,750 2 $ — 1.923% Notes due February 15, 2023 1.923 % 500 2 — 2.242% Notes due February 15, 2025 2.242 % 2,000 2 — 2.493% Notes due February 15, 2027 2.493 % 1,250 2 — 2.722% Notes due February 15, 2030 2.722 % 2,000 2 — 2.700% Notes due February 15, 2031 2.700 % 750 — 3.377% Notes due April 5, 2040 3.377 % 1,500 2 — 3.577% Notes due April 5, 2050 3.577 % 2,000 2 — Other (including project financing obligations and finance leases) 309 319 Total principal long-term debt 12,059 319 Other (discounts and debt issuance costs) (85 ) — Total debt 11,974 319 Less: current portion of long-term debt 223 237 Long-term debt, net of current portion $ 11,751 $ 82 1 2 We issued $102 million and $106 million of debt during the nine months ended September 30, 2020 and 2019, respectively, relating to project financing arrangements. Long-term debt repayments during the nine months ended September 30, 2020 and 2019 were $124 million and $98 million, respectively, relating to project financing arrangements. Scheduled maturities of long-term debt, excluding amortization of discount, are as follows: (dollars in millions) 2020 $ 223 2021 $ 45 2022 $ 40 2023 $ 2,251 2024 $ — Thereafter $ 9,500 The average maturity of our long-term debt as of September 30, 2020 is approximately 12 years and the weighted-average interest rate on our total borrowings for |
EMPLOYEE BENEFIT PLANS (Q3)
EMPLOYEE BENEFIT PLANS (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS [Abstract] | ||
EMPLOYEE BENEFIT PLANS | NOTE 11: EMPLOYEE BENEFIT PLANS Pension Plans. Contributions to the plans were as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Defined benefit plans $ 1 $ 2 $ 29 $ 29 Defined contribution plans $ 23 $ 22 $ 78 $ 71 Multi-employer pension plans $ 5 $ 5 $ 15 $ 15 The following table illustrates the components of net periodic pension benefits for our defined benefit pension and post-retirement benefit plans: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Service cost $ 7 $ 7 $ 22 $ 23 Interest cost 13 17 39 50 Expected return on plan assets (35 ) (37 ) (104 ) (115 ) Amortization of prior service credit 1 — 2 1 Recognized actuarial net loss 5 2 15 7 Net settlement, curtailment and special termination benefit loss — — 1 1 Net periodic pension benefit $ (9 ) $ (11 ) $ (25 ) $ (33 ) UTC Sponsored Defined Benefit Plans. Defined Benefit Plans – Pension Defined Benefit Plans – Other Post-retirement Compensation-Retirement Benefits, The expenses associated with these UTC plans were allocated to the Company and reported in Cost of products sold, Cost of services sold, Selling, general and administrative and Non-service pension benefit on the accompanying Unaudited Condensed Consolidated Statement of Operations. The Company's participation in these defined benefit pension and post-retirement benefits plans sponsored by UTC has concluded in conjunction with the Separation. The pension and post-retirement expense and benefits were as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Service cost $ — $ 4 $ — $ 13 Non-service pension benefit — (20 ) (2 ) (59 ) Total net periodic benefit $ — $ (16 ) $ (2 ) $ (46 ) | NOTE 12: EMPLOYEE BENEFIT PLANS The Business sponsors numerous single-employer domestic and international employee benefit plans and certain of our employees participate in employee benefit plans (the “Shared Plans”) sponsored by UTC which include participants of other UTC businesses. We account for our participation in the Shared Plans as multiemployer benefit plans, as discussed below. In March 2017, the FASB issued ASU 2017-07, Compensation Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Employee Savings Plans. Pension Plans. (dollars in millions) 2019 2018 Change in Benefit Obligation Beginning balance $ 2,581 $ 2,822 Service cost 31 33 Interest cost 67 64 Actuarial (gain) loss 351 (110 ) Benefits paid (132 ) (114 ) Net settlement, curtailment and special termination benefits (38 ) (8 ) Other 25 (106 ) Ending balance $ 2,885 $ 2,581 Change in Plan Assets Beginning balance $ 2,635 $ 3,000 Actual return on plan assets 381 (162 ) Employer contributions 36 45 Benefits paid (132 ) (114 ) Settlements (14 ) (7 ) Other 47 (127 ) Ending balance $ 2,953 $ 2,635 Funded Status Fair value of plan assets $ 2,953 $ 2,635 Benefit obligations (2,885 ) (2,581 ) Funded status of plan $ 68 $ 54 (dollars in millions) 2019 2018 Amounts Recognized in the Combined Balance Sheets Consist of Noncurrent assets $ 488 $ 442 Current liability (9 ) (16 ) Noncurrent liability (411 ) (372 ) Net amount recognized $ 68 $ 54 Amounts Recognized in Accumulated Other Comprehensive Loss Consist of Net actuarial loss $ 577 $ 482 Prior service cost 15 11 Net amount recognized $ 592 $ 493 The amounts included in “Other” in the above table primarily reflect the impact of foreign exchange translation, primarily for plans in the U.K., Canada and Germany. Qualified domestic pension plan benefits covering certain union-represented employees comprise approximately 9% of the projected benefit obligation. Benefits for union employees are generally based on a stated amount for each year of service; these plans are closed to new entrants. Foreign plans comprise approximately 91% of the projected benefit obligation; certain of these plans provide participants with one-time payments upon separation of employment rather than a retirement annuity, but are considered defined benefit plans for accounting purposes. Nonqualified domestic pension plans provide supplementary retirement benefits to certain employees and are not a material component of the projected benefit obligation. In 2019, 2018 and 2017, we made $36 million, $45 million and $44 million, respectively, of cash contributions to our foreign defined benefit pension plans. Information for pension plans with accumulated benefit obligations in excess of plan assets: (dollars in millions) 2019 2018 Projected benefit obligation $ 549 $ 501 Accumulated benefit obligation 506 463 Fair value of plan assets 137 125 Information for pension plans with projected benefit obligations in excess of plan assets: (dollars in millions) 2019 2018 Projected benefit obligation $ 690 $ 616 Accumulated benefit obligation 630 564 Fair value of plan assets 270 228 The accumulated benefit obligation for all defined benefit pension plans was $2.8 billion and $2.5 billion at December 31, 2019 and 2018, respectively. The components of the net periodic pension benefit are as follows: (dollars in millions) 2019 2018 2017 Pension Benefits: Service cost $ 31 $ 33 $ 34 Interest cost 67 64 65 Expected return on plan assets (154 ) (170 ) (160 ) Amortization of prior service cost 2 1 2 Recognized actuarial net loss 9 16 14 Net settlement, curtailment and special termination benefits loss (gain) 4 1 (3 ) Net periodic pension benefit – employer $ (41 ) $ (55 ) $ (48 ) Other changes in plan assets and benefit obligations recognized in other comprehensive loss in 2019 are as follows: (dollars in millions) 2019 Current year actuarial loss $ 112 Amortization of actuarial loss (9 ) Amortization of prior service cost (2 ) Net settlement and curtailment gain (4 ) Other 2 Total recognized in other comprehensive loss $ 99 Net recognized in net periodic pension benefit and other comprehensive loss $ 58 The amount included in “Other” in the above table primarily reflects the impact of foreign exchange translation, primarily for plans in the U.K., Canada and Germany. The estimated amount that will be amortized from accumulated other comprehensive loss into net periodic pension benefit in 2020 is as follows: (dollars in millions) Net actuarial loss $ 18 Prior service cost 1 $ 19 Major assumptions used in determining the benefit obligation and net cost for pension plans are presented in the following table as weighted-averages: Benefit Obligation Net Cost (dollars in millions) 2019 2018 2019 2018 2017 Discount rate Projected benefit obligation 2.0 % 2.8 % 2.8 % 2.5 % 2.7 % Interest cost (1) — — 2.7 % 2.4 % 2.5 % Service cost (1) — — 3.2 % 2.8 % 3.1 % Salary scale 3.4 % 3.0 % 3.0 % 3.0 % 2.6 % Expected return on plan assets — — 5.6 % 6.0 % 6.2 % Note (1) The 2019 and 2018 discount rates used to measure the service cost and interest cost applies to our significant plans. The projected benefit obligation discount rate is used for the service cost and interest cost measurements for non-significant plans. The weighted-average discount rates used to measure pension benefit obligations and net costs are set by reference to specific analyses using each plan’s specific cash flows and are then comparing them to high-quality bond indices for reasonableness. For those significant plans, the Business utilizes a full yield curve approach in the estimation of the service cost and interest cost components by applying the specific spot rates along the yield curve used in determination of the benefit obligation to the relevant projected cash flows. In determining the expected return on plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes, and economic and other indicators of future performance. In addition, we may consult with and consider the opinions of financial and other professionals in developing appropriate capital market assumptions. Return projections are also validated using a simulation model that incorporates yield curves, credit spreads and risk premiums to project long-term prospective returns. The plans’ investment management objectives include providing the liquidity and asset levels needed to meet current and future benefit payments, while maintaining a prudent degree of portfolio diversification considering interest rate risk and market volatility. Globally, investment strategies target a mix of approximately 40% of growth seeking assets and 60% of income generating and hedging assets using a wide diversification of asset types, fund strategies and investment managers. The growth seeking allocation consists of global public equities in developed and emerging countries, and alternative-asset class strategies. Within the income generating assets, the fixed income portfolio consists of mainly government and broadly diversified high quality corporate bonds. The plans have continued their pension risk management techniques designed to reduce the plans’ interest rate risk. More specifically, the plans have incorporated liability hedging programs that include the adoption of a risk reduction objective as part of the long-term investment strategy. Under this objective the income generating and hedging assets typically increased as funded status improves. The hedging programs incorporate a range of assets and investment tools, each with ranging interest rate sensitivity. As a result of the improved funded status of the plans due to favorable asset returns and funding of the plans, the income generating and hedging assets increased significantly in recent years. The fair values of pension plan assets at December 31, 2019 and 2018 by asset category are as follows: (dollars in millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Not Subject to Leveling Total Asset Category Public Equities: Global Equities $ 29 $ — $ — $ — $ 29 Global Equity Commingled Funds (1) — 141 — — 141 Enhanced Global Equities (2) 3 3 — — 6 Global Equity Funds at net asset value (8) — — — 927 927 Private Equities (3),(8) — — 2 10 12 Fixed income securities: Governments 8 35 — — 43 Corporate Bonds — 169 — — 169 Fixed income securities (8) — — — 1,449 1,449 Real Estate (4),(8) — 3 12 6 21 Other (5),(8) — 68 — 23 91 Cash & cash equivalents (6),(8) — 3 — 44 47 Subtotal $ 40 $ 422 $ 14 $ 2,459 $ 2,935 Other Assets & Liability (7) 18 Total at December 31, 2019 $ 2,953 Public Equities: Global Equities $ 22 $ — $ — $ — $ 22 Global Equity Commingled Funds (1) 1 115 — — 116 Enhanced Global Equities (2) 1 4 — — 5 Global Equity Funds at net asset value (8) — — — 815 815 Private Equities (3),(8) — — 1 9 10 Fixed income securities: Governments 13 28 — — 41 Corporate Bonds — 136 — — 136 Fixed income securities (8) — — — 1,323 1,323 Real Estate (4),(8) — 3 10 13 26 Other (5),(8) — 63 — 18 81 Cash & cash equivalents (6),(8) — 7 — 37 44 Subtotal $ 37 $ 356 $ 11 $ 2,215 $ 2,619 Other Assets & Liability (7) 16 Total at December 31, 2018 $ 2,635 Note (1) Represents commingled funds that invest primarily in common stocks. Note 2 Represents enhanced equity separate account and commingled fund portfolios. A portion of the portfolio may include long-short market neutral and relative value strategies that invest in publicly traded, equity and fixed income securities, as well as derivatives of equity and fixed income securities and foreign currency. Note 3 Represents limited partner investments with general partners that primarily invest in debt and equity. Note 4 Represents investments in real estate including commingled funds and directly held properties. Note 5 Represents insurance contracts and global balanced risk commingled funds consisting mainly of equity, bonds and some commodities. Note 6 Represents short-term commercial paper, bonds and other cash or cash-like instruments. Note 7 Represents trust receivables and payables that are not leveled. Note 8 In accordance with ASU 2015-07, Fair Value Measurement (Topic 820) Derivatives in the plan are primarily used to manage risk and gain asset class exposure while still maintaining liquidity. Derivative instruments mainly consist of equity futures, interest rate futures, interest rate swaps and currency forward contracts. The fair value measurement of plan assets using significant unobservable inputs (Level 3) did not have significant activity in 2019 or 2018 related to unrealized losses (gains), purchases, sales, or settlements. Quoted market prices are used to value investments when available. Investments in securities traded on exchanges, including listed futures and options, are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices. Fixed income securities are primarily measured using a market approach pricing methodology, where observable prices are obtained by market transactions involving identical or comparable securities of issuers with similar credit ratings. Over-the-counter securities and government obligations are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes. Temporary cash investments are stated at cost, which approximates fair value. We expect to make total contributions of approximately $29 million to our global defined benefit pension plans in 2020. Contributions do not reflect benefits to be paid directly from corporate assets. Benefit payments, including amounts to be paid from corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $127 million in 2020, $120 million in 2021, $123 million in 2022, $125 million in 2023, $126 million in 2024 and $665 million from 2025 through 2029. Postretirement Benefit Plans. The projected benefit obligation discount rate was 3.0% and 3.6% at December 31, 2019 and 2018, respectively. The Net Cost discount rate was 3.6%, 3.4% and 3.7% for 2019, 2018 and 2017, respectively. Benefit payments, including amounts to be paid from corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $0.3 million in 2020, $0.3 million in 2021, $0.2 million in 2022, $0.2 million in 2023, $0.2 million in 2024 and $1.1 million from 2025 through 2029. Multiemployer Benefit Plans. Our participation in these plans for the annual periods ended December 31 is outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act (“PPA”) zone status available in 2019 and 2018 is for the plan’s year-end at December 31, 2018, and December 31, 2017, respectively. The zone status is based on information that we received from the plan and is certified by the plan’s actuary. Our significant plan is in the green zone which represents a plan that is at least 80% funded and does not require a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”). (dollars in millions) EIN/ Pension Plan Number Zone Status FIP/ RP Status Pending/ Implemented Contributions Surcharge Imposed Expiration Date of Collective- Bargaining Agreement Pension Fund 2019 2018 2019 2018 Metal and technology industry pension plan N/A Green Green No $ 6 $ 6 No September 30, 2021 Other funds 14 15 $ 20 $ 21 UTC’s defined benefit pension and postretirement benefit plans have been accounted for as multi-employer plans in these Combined Financial Statements, in accordance with FASB ASC No. 715-30, “Defined Benefit Plans-Pension” and FASB ASC No. 715-60, “Defined Benefit Plans-Other Postretirement”. FASB ASC No. 715, “Compensation-Retirement Benefits” provides that an employer that participates in a multi-employer defined benefit plan is not required to report a liability beyond the contributions currently due and unpaid to the plan. Therefore, no assets or liabilities related to these plans have been included in the Combined Balance Sheets. These pension and post retirement expenses were allocated to the Business and reported in cost of goods sold, selling, general and administrative expenses and non-service pension costs. The amounts for pension and retirement expenses for the year ended December 31, 2019, 2018 and 2017 were as follows: (dollars in millions) 2019 2018 2017 Service cost $ 18 $ 22 $ 23 Non-service pension cost (81 ) (80 ) (57 ) $ (63 ) $ (58 ) $ (34 ) |
STOCK-BASED COMPENSATION (Q3)
STOCK-BASED COMPENSATION (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
STOCK-BASED COMPENSATION [Abstract] | ||
STOCK-BASED COMPENSATION | NOTE 12: STOCK-BASED COMPENSATION Stock-Based Compensation. As a result of the Separation and Distribution, outstanding and vested awards granted to employees under UTC's LTIP were generally converted into Carrier, Otis and UTC stock-based awards. Unvested awards held by Carrier employees and former employees were converted to Carrier stock-based awards. The ratio used to convert the UTC LTIP awards was intended to preserve the aggregate intrinsic value of each award immediately after the Separation and the Distribution when compared to the aggregate intrinsic value immediately prior to the Separation and the Distribution. All performance share units outstanding on the Distribution Date were converted to restricted stock units using payout metrics based on a combination of actual performance through the Distribution Date and the target for the remainder of the performance period. Subsequent to and due to the conversion, we expect to incur $14 million of incremental stock-based compensation expense to be recognized over the awards' remaining 1.5 year vesting period. Under Carrier's LTIP, the exercise price of awards, if any, is set on the grant date and, on a per share basis, may not be less than the fair market value of Carrier's common stock on that date on a per share basis. Stock appreciation rights and stock options have a term of ten years and a three-year vesting period, subject to limited exceptions. In the event of retirement, stock appreciation rights, stock options and restricted stock units held for more than one year may vest and become exercisable (if applicable), subject to certain terms and conditions. Performance share units vest based on performance relative to pre-established metrics and generally have a minimum three-year vesting period. In the event of retirement, performance share units held for more than one year remain eligible to vest based on actual performance relative to pre-established metrics. We measure the cost of stock-based compensation, including stock options, at fair value on the grant date net of expected forfeitures and amortize the cost over the awards vesting period. We recognized $21 million and $18 million of stock-based compensation expense for the three months ended September 30, 2020 and 2019 and $56 million and $40 million for the nine months ended September 30, 2020 and 2019, respectively. In addition, we recognized $5 million and $2 million of stock-based compensation expense for cash settled awards for the three months ended September 30, 2020 and 2019, respectively, and $2 million for each of the nine months ended September 30, 2020 and 2019. The stock-based compensation expense for periods prior to March 31, 2020 represent amounts allocated to us from UTC for our direct employees. At September 30, 2020, there was $107 million of unrecognized stock-based compensation costs related to non-vested awards granted under the Carrier LTIP, which will be recognized ratably over a weighted-average period of 2.2 years. Carrier LTIP activity for the nine months ended September 30, 2020 was as follows: Stock Options and Stock Appreciation Rights Performance Share Units Restricted Share Units (shares and units in thousands) Shares Average Price 1 Units Average Price 2 Units Average Price 2 Outstanding as of April 3, 2020 3 36,015 $ 19.90 68 $ 21.23 5,622 $ 21.37 Granted 3,753 $ 16.62 728 $ 18.23 443 $ 18.98 Exercised (984 ) $ 15.52 — $ — (116 ) $ 20.42 Forfeited/Cancelled (509 ) $ 22.73 (22 ) $ 19.25 (108 ) $ 22.25 Outstanding as of September 30, 2020 38,275 $ 19.66 774 $ 18.48 5,841 $ 21.27 1 2 3 The weighted-average fair value of stock appreciation rights granted during the nine months ended September 30, 2020 was $4.36. The following table summarizes outstanding Carrier LTIP awards that are vested and expected to vest (adjusted for expected forfeitures) and that are exercisable at September 30, 2020: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable ( shares and units in thousands; aggregate intrinsic value in dollars in thousands) Awards Average Price 1 Aggregate Intrinsic Value Remaining Life 2 Awards Average Price 1 Aggregate Intrinsic Value Remaining Life 2 Stock Options/ Stock Appreciation Rights 36,868 $ 19.61 $ 403,105 6.7 16,173 $ 16.97 $ 219,447 4.2 Performance Share Units/ Restricted Stock Units 6,291 $ 20.96 $ 192,116 1.8 1 2 The fair value of stock appreciation rights is estimated on the date of grant using a binomial model. The following assumptions were used in the binomial model for the nine months ended September 30, 2020: For the Nine Months Ended September 30, 2020 Volatility 35.6 % Expected life (in years) 7.0 Expected dividend yield 2.0 % Range of risk-free rate 0.1% - 1.0 % Carrier has limited historical trading data and used peer group data to estimate expected volatility. Carrier used historical Carrier employee data, including data prior to the Separation, to estimate expected life. The expected dividend yield is consistent with Carrier's dividend policy on an annualized basis. The risk-free rate is based on the term structure of interest rates at the time of award grant. | Stock-Based Compensation. Under the UTC LTIP Plans, the exercise price of awards is set on the grant date and may not be less than the fair market value per share on that date. Generally, stock appreciation rights and stock options have a term of ten years and a three-year vesting period, subject to limited exceptions. In the event of retirement, annual stock appreciation rights, stock options and restricted stock units held for more than one year may become vested and exercisable, subject to certain terms and conditions. LTIP awards with performance-based vesting generally have a minimum three-year vesting period and vest based on actual performance against pre-established metrics. In the event of retirement, performance-based awards held for more than one year, remain eligible to vest based on actual performance relative to target metrics. The Business measures the cost of all share-based payments, including stock options, at fair value on the grant date and recognizes this cost in the Combined Statements of Operations net of expected forfeitures. For the years ended December 31, 2019, 2018 and 2017, $52 million, $44 million and $34 million respectively, of compensation cost directly attributable to Carrier employees was recognized in operating results. The associated future income tax benefit recognized was $11 million, $10 million and $8 million for the years ended December 31, 2019, 2018 and 2017, respectively. The amounts have been adjusted for the impact of the TCJA. Please see Note 14 — Income Taxes For the years ended December 31, 2019, 2018 and 2017, the amount of cash received from the exercise of stock options was $3 million, $4 million and $7 million, respectively, with an associated tax benefit realized of $16 million, $7 million and $19 million, respectively. In addition, for the years ended December 31, 2019, 2018 and 2017, the associated tax benefit realized from the vesting of performance share units and other restricted awards was $9 million, $2 million and $4 million, respectively. The 2019 amount was computed using current U.S. federal and state tax rates. At December 31, 2019, there was $62 million of total unrecognized compensation costs related to non-vested equity awards granted under long-term incentive plans. This cost is expected to be recognized ratably over a weighted-average period of 2.5 years. A summary of the transactions under all long-term incentive plans that UTC granted to Carrier employees for the year ended December 31, 2019 follows: Stock Options Stock Appreciation Rights Performance Share Units Other Incentive (shares and units in thousands) Shares Average Price* Shares Average Price* Units Average Price* Shares/ Units Outstanding at December 31, 2018 71 $ 85.86 5,635 $ 100.16 289 $ 110.59 499 Granted 2 133.19 1,673 124.37 142 121.79 219 Ancillary** — — — — 18 95.53 — Exercised/earned (35 ) 87.18 (1,658 ) 89.30 (155 ) 95.54 (211 ) Cancelled (1 ) 110.83 (157 ) 120.41 (25 ) 112.39 (35 ) Net Transfers (1) (1 ) 95.23 665 105.29 93 108.91 121 December 31, 2019 36 $ 91.06 6,158 $ 109.71 362 $ 120.16 593 * Weighted-average grant/exercise price ** Ancillary shares granted based on actual performance achieved on the 2016 award Note (1) Represents net activity related to employee movement between UTC business units and other miscellaneous adjustments. The weighted-average grant date fair value of stock options and stock appreciation rights granted by UTC during 2019, 2018 and 2017 was $21.02, $20.25 and $17.55, respectively. The weighted-average grant date fair value of performance share units, which vest upon achieving certain performance metrics, granted by UTC during 2019, 2018 and 2017 was $112.76, $131.42 and $111.00 respectively. The total fair value of awards vested during the years ended December 31, 2019, 2018 and 2017 was $48 million, $27 million and $35 million, respectively. The total intrinsic value (which is the amount by which the stock price exceeded the exercise price on the date of exercise) of stock options and stock appreciation rights exercised during the years ended December 31, 2019, 2018, and 2017 was $80 million, $43 million and $63 million, respectively. The total intrinsic value (which is the stock price at vesting) of performance share units and other restricted awards vested was $45 million, $14 million and $18 million during the years ended December 31, 2019, 2018 and 2017, respectively. The following table summarizes information about equity awards outstanding for Carrier employees that are vested and expected to vest and equity awards outstanding that are exercisable at December 31, 2019: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable (shares in thousands; aggregate intrinsic value in millions) Awards Average * Aggregate Remaining ** Awards Average * Aggregate Remaining ** Stock Options/Stock Appreciation rights 6,083 $ 109.31 $ 246 6.1 years 3,333 $ 98.4 $ 171 4.3 years Performance Share Units/ Restricted Stock 1,006 $ — $ 151 1.7 years * Weighted-average exercise price per share ** Weighted-average contractual remaining term in years The fair value of each option award is estimated on the date of grant using a binomial lattice model. The following table indicates the assumptions used in estimating fair value for the years ended December 31, 2019 and 2018. These assumptions represent those utilized by UTC and are not necessarily indicative of assumptions that would be used by Carrier as a stand-alone company. Lattice-based option models incorporate ranges of assumptions for inputs; those ranges are as follows: 2019 2018 2017 Expected volatility 18.8% - 19.7 % 17.5% - 21.1 % 19 % Weighted-average volatility 20 % 18 % 19 % Expected term (in years) 6.5 - 6.6 6.5-6.6 6.5 Expected dividend yield 2.4 % 2.2 % 2.4 % Risk-free rate 2.3% - 2.7 % 1.3% - 2.7 % 0.5% - 2.5 % Expected volatilities are based on the returns of UTC stock, including implied volatilities from traded options on UTC’s stock for the binomial lattice model. UTC uses historical data to estimate equity award exercise and employee termination behavior within the valuation model. The expected term represents an estimate of the period of time equity awards are expected to remain outstanding. The risk-free rate is based on the term structure of interest rates at the time of equity award grant. |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | ||
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 13: ACCUMULATED OTHER COMPREHENSIVE LOSS A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the three and nine months ended September 30, 2020 and 2019 is as follows: (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Post- retirement Plans Accumulated Other Comprehensive Loss Three Months Ended September 30, 2020 Balance as of June 30, 2020 $ (1,018 ) $ (461 ) $ (1,479 ) Other comprehensive income before reclassifications, net 302 — 302 Amounts reclassified, pre-tax — 6 6 Tax expense reclassified — (1 ) (1 ) Balance as of September 30, 2020 $ (716 ) $ (456 ) $ (1,172 ) Nine Months Ended September 30, 2020 Balance as of January 1, 2020 $ (780 ) $ (473 ) $ (1,253 ) Other comprehensive income before reclassifications, net 64 2 66 Amounts reclassified, pre-tax — 18 18 Tax benefit reclassified — (3 ) (3 ) Balance as of September 30, 2020 $ (716 ) $ (456 ) $ (1,172 ) (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Post- retirement Plans Accumulated Other Comprehensive Loss Three Months Ended September 30, 2019 Balance as of June 30, 2019 $ (821 ) $ (381 ) $ (1,202 ) Other comprehensive loss before reclassifications, net (274 ) — (274 ) Amounts reclassified, pre-tax — 2 2 Balance as of September 30, 2019 $ (1,095 ) $ (379 ) $ (1,474 ) Nine Months Ended September 30, 2019 Balance as of January 1, 2019 $ (834 ) $ (381 ) $ (1,215 ) Other comprehensive (loss) income before reclassifications, net (261 ) 2 (259 ) Amounts reclassified, pre-tax — 9 9 ASU 2018-02 adoption impact — (9 ) (9 ) Balance as of September 30, 2019 $ (1,095 ) $ (379 ) $ (1,474 ) Amounts reclassified related to defined benefit pension and post-retirement plans include amortization of prior service costs and recognized actuarial net losses. These costs are recorded as components of net periodic pension cost for each period presented (see Note 11 – Employee Benefit Plans | NOTE 13: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) A summary of the changes in each component of accumulated other comprehensive (loss) income, net of tax for the years ended December 31, 2019, 2018 and 2017 is provided below: (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Postretirement Plans Unrealized Gains (Losses) on Available- for-Sale Securities Unrealized Hedging Gains (Losses) Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2017 $ (1,130 ) $ (211 ) $ 262 $ (5 ) $ (1,084 ) Other comprehensive income (loss) before reclassifications, net 747 (32 ) (31 ) 2 686 Amounts reclassified, pre-tax (10 ) 16 (394 ) 1 (387 ) Tax expense reclassified — 5 163 — 168 Balance at December 31, 2017 $ (393 ) $ (222 ) $ — $ (2 ) $ (617 ) Other comprehensive loss before reclassifications, net (441 ) (209 ) — — (650 ) Amounts reclassified, pre-tax — 17 — 2 19 Tax expense reclassified — 33 — — 33 Balance at December 31, 2018 $ (834 ) $ (381 ) $ — $ — $ (1,215 ) Other comprehensive loss before reclassifications, net 52 (109 ) — — (57 ) Amounts reclassified, pre-tax 2 11 — — 13 Tax expense reclassified — 15 — — 15 ASU 2018-02 adoption impact — (9 ) — — (9 ) Balance at December 31, 2019 $ (780 ) $ (473 ) $ — $ — $ (1,253 ) Amounts reclassified related to defined benefit pension and postretirement plans include amortization of prior service costs and actuarial net losses recognized during each period presented. These costs are recorded as components of net periodic pension cost for each period presented (see Note 12 — Employee Benefit Plans Amounts reclassified in 2017 that relate to unrealized gains (losses) on available-for-sale securities, pre-tax includes approximately $394 million of previously unrealized gains reclassified to Other income (expense), net as a result of sales of significant investments in available-for-sale securities in 2017, including Carrier’s sale of investments in Watsco, Inc. All noncontrolling interests with redemption features, such as put options, that are not solely within the Business’ control (redeemable noncontrolling interests) were reported in the mezzanine section of the Combined Balance Sheets, between liabilities and equity, at the greater of redemption value or initial carrying value through December 31, 2017. The decrease in the value of redeemable noncontrolling interest in the Combined Statements of Changes in Equity for the year ended December 31, 2017 is primarily attributable to our acquisition of the remaining interest in an Italian heating products and services company, initially acquired in 2016. |
INCOME TAXES (Q3)
INCOME TAXES (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
INCOME TAXES [Abstract] | ||
INCOME TAXES | NOTE 14: INCOME TAXES The effective tax rate for the three and nine months ended September 30, 2020 was 25.9% and 33.4%, respectively, compared with 25.8% and 18.3%, respectively, for the three and nine months ended September 30, 2019. The increase in the effective tax rate for the three months ended September 30, 2020 is primarily due to the absence of a net tax reduction resulting from separation-related activities impacting non-U.S. deferred taxes, partially offset by a tax reduction for the 2020 tax year from the finalization of the U.S. Treasury Global Intangible Low-Taxed Income ("GILTI") High Tax Exclusion ("HTE") regulations. The increase in the effective tax rate for the nine months ended September 30, 2020 is primarily due to the absence of a prior year combined tax benefit of $149 million resulting from the filing by a Carrier subsidiary to participate in an amnesty program offered by the Italian Tax Authority and the conclusion of an audit by the Internal Revenue Service (the "IRS") for UTC's 2014, 2015 and 2016 tax years. In addition, during the current year the Company recognized a $51 million charge related to a valuation allowance recorded against a United Kingdom tax loss and a credit carry forward as a result of activities related to the Separation, and a charge of $46 million resulting from Carrier's decision to no longer permanently reinvest certain pre-2018 unremitted non-U.S. earnings. 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 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 if valuation allowances against deferred tax assets are required. The Company maintains valuation allowances against certain non-U.S. deferred tax assets. We will continue to evaluate the impact that the COVID-19 pandemic and other economic impacts may have on the future realizability of a portion of the remaining deferred tax assets. Carrier conducts business globally and, as a result, files income tax returns in U.S. federal and various state and foreign jurisdictions. In certain jurisdictions, Carrier's operations were included in UTC's combined tax returns for the periods through the Separation. The 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, Netherlands, Singapore, the United Kingdom and the United States. Carrier 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 and local and foreign income tax examinations for tax years before 2010. Income taxes through March 31, 2020 were recorded based on a "carve-out" and separate company basis. Prior to the Separation, 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, the Company’s income taxes are prepared on a stand-alone basis. The Company reduced its forecasted annualized effective tax rate in the three months ended September 30, 2020 partially due to the impact of applying the election of the HTE regulations to the 2020 tax year results. The HTE regulation also permitted a company to elect to apply the regulations retroactively to the years 2018 and 2019. In accordance with the TMA, if the HTE election were made by an amended return by the Company for 2018 and 2019, UTC would be entitled to any federal tax benefit. The Company on a stand-alone basis did not record a benefit from the HTE regulation associated with the years 2018 and 2019 and the amount would not have been material to the Condensed Consolidated Statement of Operations. Pursuant to the TMA, Carrier is required to make payments to UTC representing Carrier's portion of UTC's remaining net tax liability attributable to U.S. income tax on previously undistributed earnings of Carrier's international subsidiaries resulting from the passage of the Tax Cuts and Jobs Act of 2017 (the "TCJA"). The balances computed on a separate company basis of approximately $68 million recorded within Accrued liabilities and $701 million recorded within Future income tax obligations were adjusted through UTC Net investment upon the Separation, resulting in a future stand-alone obligation of $453 million recorded within Other long-term liabilities and $6 million within Accrued liabilities. This obligation is expected to be settled in six annual installments, beginning April 15, 2021. After the Separation, Carrier is entitled to unrecognized tax benefits to the extent the item relates exclusively to Carrier in accordance with the TMA. The change from a separate company to stand-alone basis resulted in a decrease of $37 million to Future income tax obligations and $27 million to Future income tax benefits, both of which were recorded through UTC Net investment subsequent to the Separation. In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record 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 up to $15 million may occur within 12 months as a result of additional worldwide uncertain tax positions, the revaluation of uncertain tax positions arising from examinations, appeals, court decisions or the closure of tax statutes and the Separation. | NOTE 14: INCOME TAXES Income Before Income Taxes: The sources of income from operations before income taxes are: (dollars in millions) 2019 2018 2017 United States $ 1,460 $ 2,360 $ 1,620 Foreign $ 1,212 $ 1,482 $ 1,434 Total $ 2,672 $ 3,842 $ 3,054 On December 22, 2017 Public Law 115-97 “An Act to Provide for Reconciliation to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” was enacted. This law is commonly referred to as the Tax Cuts and Jobs Act of 2017 (“TCJA”). Following enactment of the TCJA, Carrier no longer intends to reinvest certain undistributed earnings of its international subsidiaries that have been previously taxed in the U.S. As such, in 2018 it recorded the international taxes associated with the future remittance of these earnings. For the remainder of Carrier’s undistributed international earnings, unless tax effective to repatriate, Carrier intends to continue to permanently reinvest these earnings. As of December 31, 2019, such undistributed earnings were approximately $6 billion, excluding other comprehensive income amounts. It is not practicable to estimate the amount of tax that might be payable on the remaining amounts. Provision for Income Taxes The income tax expense (benefit) for the years ended December 31, 2019, 2018 and 2017 consisted of the following components: (dollars in millions) 2019 2018 2017 Current: United States: Federal $ 262 $ 479 1,318 State 72 119 99 Foreign 305 342 342 639 940 1,759 Future: United States: Federal (14 ) (37 ) 22 State (2 ) 24 2 Foreign (106 ) 146 4 (122 ) 133 28 Income tax expense 517 1,073 1,787 Attributable to items credited to UTC Net Investment $ (36 ) $ (68 ) $ (168 ) Reconciliation of Effective Income Tax Rate. (dollars in millions) 2019 2018 2017 Statutory U.S. federal income tax rate 21.0 % 21.0 % 35.0 % State income taxes 2.5 % 2.6 % 1.8 % Tax on international activities 2.5 % 4.4 % (3.4 )% Tax audit settlements (5.6 )% — % (0.4 )% U.S. tax reform adoption — % — % 26.1 % Other (1.0 )% (0.1 )% (0.6 )% Effective income tax rate 19.4 % 27.9 % 58.5 % The 2019 effective tax rate reflects a net tax benefit of $149 million as a result of the filing by a subsidiary of Carrier to participate in an amnesty program offered by the Italian Tax Authority and conclusion of the audit by the Examination Division of the Internal Revenue Service for the UTC 2014, 2015 and 2016 tax years. The 2018 effective tax rate reflects a net tax charge of $102 million as a result of UTC’s change of assertion of no longer intending to reinvest certain undistributed earnings of its international subsidiaries. The 2017 effective tax rate reflects a net tax charge of $799 million attributable to the passage of the TCJA. These amounts primarily relate to U.S. income tax attributable to certain previously undistributed earnings of the Business’ international subsidiaries and equity investments and the revaluation of U.S. deferred income taxes. Deferred Tax Assets and Liabilities. The tax effects of temporary differences and tax carryforwards which gave rise to future income tax benefits and payables at December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Future income tax benefits: Insurance and employee benefits $ 76 $ 76 Other asset basis differences 128 126 Other liability basis differences 556 331 Tax loss carryforward 236 159 Tax credit carryforwards 55 60 Valuation allowances (128 ) (107 ) $ 923 $ 645 Future income taxes payable: Intangible assets $ 392 $ 403 Other asset basis differences 297 165 $ 689 $ 568 Valuation allowances have been established primarily for tax credit carryforwards, tax loss carryforwards and certain foreign temporary differences to reduce the future income tax benefits to expected realizable amounts. Tax Credit and Loss Carryforwards. (dollars in millions) Tax Loss Carryforwards Tax Credit Carryforwards Expiration period: 2020-2024 $ 52 $ 8 2025-2029 105 3 2030-2039 41 1 Indefinite 882 43 Total $ 1,080 $ 55 Unrecognized Tax Benefits. (dollars in millions) 2019 2018 2017 Balance at January 1 $ 316 $ 290 $ 243 Additions for tax positions related to the current year 30 27 54 Additions for tax positions of prior years 14 3 17 Reductions for tax positions of prior years (19 ) (4 ) (20 ) Settlements (175 ) — (4 ) Balance at December 31 $ 166 $ 316 $ 290 Gross interest expense related to unrecognized tax benefits $ 8 $ 8 $ 4 Total accrued interest balance at December 31 $ 25 $ 33 $ 24 Carrier conducts business globally and, as a result, Carrier or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As noted previously, in certain jurisdictions, Carrier’s operations are included in combined tax returns with UTC. In the ordinary course of business, the Business is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Belgium, Canada, China, Czech Republic, France, Germany, Hong Kong, India, Italy, Mexico, Netherlands, Singapore, the United Kingdom and the United States. With few exceptions, Carrier is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2010. During the second quarter of 2019, a subsidiary of Carrier that was engaged in litigation before the Italian Supreme Court filed for participation in the Italian amnesty program. In addition, during the second quarter of 2019, the Examination Division of the IRS completed its review of UTC’s tax years of 2014, 2015 and 2016 and certain state income tax exams concluded. As a result of the amnesty filing in Italy and the conclusion of the IRS and state audits, Carrier recognized a non-cash gain of approximately $166 million, including pre-tax interest of approximately $16 million. During 2017, Carrier recognized a noncash gain of approximately $20 million, including a pre-tax interest adjustment of $2 million, as a result of federal, state and non-U.S. tax year primarily related to the expiration of applicable statutes of limitation, including expiration of the U.S. federal income tax statute of limitations for UTC’s 2013 tax year. It is reasonably possible that a net increase within the range of $14 million to $18 million of unrecognized tax benefits may occur over the next 12 months as a result of additional worldwide uncertain tax positions, the revaluation of current uncertain tax positions arising from developments in examinations, in appeals, or in the courts, or the closure of tax statutes. |
RESTRUCTURING COSTS (Q3)
RESTRUCTURING COSTS (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
RESTRUCTURING COSTS [Abstract] | ||
RESTRUCTURING COSTS | NOTE 15: RESTRUCTURING COSTS During the three and nine months ended September 30, 2020 and 2019, we recorded net pre-tax restructuring costs for new and ongoing restructuring actions as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ — $ 12 $ 3 $ 47 Refrigeration (1 ) 7 2 14 Fire & Security 4 14 13 35 Eliminations and other — 1 1 1 Total restructuring costs $ 3 $ 34 $ 19 $ 97 Restructuring charges incurred during the nine months ended September 30, 2020 and 2019 primarily relate to actions initiated during 2020 and 2019, and were recorded as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Cost of sales $ (1 ) $ 14 $ 5 $ 27 Selling, general and administrative 4 20 14 70 Total restructuring costs $ 3 $ 34 $ 19 $ 97 2020 Actions. The following table summarizes the accrual balance and utilization for the 2020 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total For the Three Months Ended September 30, 2020 Restructuring accrual as of June 30, 2020 $ 8 $ 1 $ 9 Net pre-tax restructuring costs 5 — 5 Utilization, foreign exchange and other costs (4 ) — (4 ) Balance as of September 30, 2020 $ 9 $ 1 $ 10 For the Nine Months Ended September 30, 2020 Restructuring accrual as of January 1, 2020 $ — $ — $ — Net pre-tax restructuring costs 17 1 18 Utilization, foreign exchange and other costs (8 ) — (8 ) Balance as of September 30, 2020 $ 9 $ 1 $ 10 The following table summarizes expected, incurred and remaining costs for the 2020 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred - Three Months Ended March 31, 2020 Costs Incurred - Three Months Ended June 30, 2020 Costs Incurred - Three Months Ended September 30, 2020 Remaining Costs at September 30, 2020 HVAC $ 5 $ (1 ) $ (2 ) $ (1 ) $ 1 Refrigeration 3 — (3 ) — — Fire & Security 13 (1 ) (5 ) (4 ) 3 Eliminations and other 1 — (1 ) — — Total $ 22 $ (2 ) $ (11 ) $ (5 ) $ 4 2019 Actions. (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total For the Three Months Ended September 30, 2020 Restructuring accrual as of June 30, 2020 $ 27 $ — $ 27 Net pre-tax restructuring costs — — — Utilization, foreign exchange and other costs (5 ) — (5 ) Balance as of September 30, 2020 $ 22 $ — $ 22 For the Nine Months Ended September 30, 2020 Restructuring accrual as of January 1, 2020 $ 43 $ 1 $ 44 Net pre-tax restructuring costs 3 — 3 Utilization, foreign exchange and other costs (24 ) (1 ) (25 ) Balance as of September 30, 2020 $ 22 $ — $ 22 The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred in 2019 Costs Incurred - Three Months Ended March 31, 2020 Costs Incurred - Three Months Ended June 30, 2020 Costs Incurred - Three Months Ended September 30, 2020 Remaining Costs at September 30, 2020 HVAC $ 53 $ (51 ) $ (1 ) $ 2 $ (1 ) $ 2 Refrigeration 16 (14 ) — (1 ) 1 2 Fire & Security 49 (43 ) (2 ) (1 ) — 3 Eliminations and other 2 (2 ) — — — — Total $ 120 $ (110 ) $ (3 ) $ — $ — $ 7 2018 and Prior Actions. | NOTE 15: RESTRUCTURING COSTS During the years ended December 31, 2019, 2018 and 2017, the Business recorded net pre-tax restructuring costs totaling $126 million, $80 million and $111 million, respectively, for new and ongoing restructuring actions. The Business recorded charges in the segments as follows: (dollars in millions) 2019 2018 2017 HVAC $ 56 $ 20 $ 36 Refrigeration 14 23 13 Fire & Security 53 34 57 Eliminations and other 3 3 5 Total $ 126 $ 80 $ 111 Restructuring charges incurred in the years ended December 31, 2019, 2018 and 2017 primarily relate to actions initiated during 2019, 2018 and 2017, and were recorded as follows: (dollars in millions) 2019 2018 2017 Cost of sales $ 36 $ 36 $ 48 Selling, general, & administrative 90 44 63 Total $ 126 $ 80 $ 111 2019 Actions. The following table summarizes the accrual balances and utilization by cost type for the 2019 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2019 $ — $ — $ — Net pre-tax restructuring costs 102 8 110 Utilization, foreign exchange and other costs (60 ) (7 ) (67 ) Balance at December 31, 2019 $ 42 $ 1 $ 43 The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred During 2019 Remaining Costs at December 31, 2019 HVAC $ 53 $ (51 ) $ 2 Refrigeration 16 (14 ) 2 Fire & Security 49 (43 ) 6 Eliminations and other 2 (2 ) — Total $ 120 $ (110 ) $ 10 2018 Actions. The following table summarizes the accrual balances and utilization by cost type for the 2018 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2018 $ — $ — $ — Net pre-tax restructuring costs 57 6 63 Utilization, foreign exchange and other costs (26 ) (4 ) (30 ) Balance at December 31, 2018 $ 31 $ 2 $ 33 Net pre-tax restructuring costs 8 8 16 Utilization, foreign exchange and other costs (30 ) (9 ) (39 ) Balance at December 31, 2019 $ 9 $ 1 $ 10 The following table summarizes expected, incurred and remaining costs for the 2018 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred During 2018 Costs Incurred During 2019 Remaining Costs at December 31, 2019 HVAC $ 24 $ (17 ) $ (7 ) $ — Refrigeration 26 (21 ) — 5 Fire & Security 34 (22 ) (9 ) 3 Eliminations and other 3 (3 ) — — Total $ 87 $ (63 ) $ (16 ) $ 8 2017 Actions The following table summarizes the accrual balances and utilization by cost type for the 2017 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2017 $ — $ — $ — Net pre-tax restructuring costs 74 2 76 Utilization, foreign exchange and other costs (33 ) (1 ) (34 ) Balance at December 31, 2017 41 1 42 Net pre-tax restructuring costs (4 ) 5 1 Utilization, foreign exchange and other costs (26 ) (1 ) (27 ) Balance at December 31, 2018 11 5 16 Net pre-tax restructuring costs (1 ) 1 — Utilization, foreign exchange and other costs (7 ) (1 ) (8 ) Balance at December 31, 2019 $ 3 $ 5 $ 8 As of December 31, 2019, remaining expected costs related to 2017 restructuring programs are not significant. 2016 Actions |
GUARANTEES (Q3)
GUARANTEES (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
GUARANTEES [Abstract] | ||
GUARANTEES | NOTE 16: 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 some of its 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 largely 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, for the nine months ended September 30, 2020 and 2019 are as follows: For the Nine Months Ended September 30, (dollars in millions) 2020 2019 Balance as of January 1 $ 488 $ 473 Warranties, performance guarantees issued and changes in estimated liability 131 133 Settlements made (111 ) (126 ) Other 1 (2 ) Balance as of September 30 $ 509 $ 478 | NOTE 18: GUARANTEES The Business has commitments and performance guarantees, including energy savings guarantees, under long-term service and maintenance contracts related to its air conditioning equipment and system controls. Liabilities recorded on the Combined Balance Sheets related to these guarantees were not significant during the historical periods presented. The Business also has obligations arising from sales of certain businesses and assets, including those from representations and warranties and related indemnities for environmental, health and safety (including asbestos-related), tax and employment matters. The maximum potential payment related to these obligations is not a specified amount as a number of the obligations do not contain financial caps. The carrying amount of liabilities related to these obligations was $10 million at both December 31, 2019 and December 31, 2018 recorded within Accrued liabilities. For additional information regarding the environmental indemnifications, see Note 20 — Contingent Liabilities Carrier accrues for costs associated with guarantees when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts, and where no amount within a range of estimates is more likely, the minimum is accrued. In accordance with FASB ASC Topic 460-10: Guarantees The Business provides service and warranty policies on its products and extends performance and operating cost guarantees beyond normal service and warranty policies on some of its products. In addition, the Business 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 largely estimated based upon historical experience. Adjustments are recorded to accruals as claim data and historical experience warrant. The changes in the carrying amount of service and product warranties and product performance guarantees for the years ended December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Balance as of January 1 $ 473 $ 500 Warranties and performance guarantees issued 182 171 Settlement made (164 ) (191 ) Other (3 ) (7 ) Balance as of December 31 $ 488 $ 473 |
FAIR VALUE MEASUREMENTS (Q3)
FAIR VALUE MEASUREMENTS (Q3) | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 17 FAIR VALUE MEASUREMENTS We invest a portion of our Cash and cash equivalents in money market mutual funds with original maturities of less than three months. We manage foreign currency transaction exposures through operational strategies and the use of foreign currency hedging contracts. In accordance with the provisions of ASC Topic 820 – Fair Value Measurement, September 30, 2020 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurement: Money market mutual funds $ 38 1 $ — $ 38 $ — Derivative assets $ 15 2 $ — $ 15 $ — Derivative liabilities $ (33 ) 3 $ — $ (33 ) $ — 1 2 3 Valuation Techniques. Our derivative assets and liabilities are measured at fair value using internal models based on observable market inputs, such as forward rate, interest rate, contract rate and discount rate. The following table provides the carrying amounts and fair values of financial instruments that are not recorded at fair value in our Unaudited Condensed Consolidated Balance Sheet: September 30, 2020 December 31, 2019 (dollars in millions) Carrying Amount Fair Value Carrying Amount Fair Value Current and long-term debt (excluding finance leases) $ 11,969 $ 12,531 $ 313 $ 313 The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in our Unaudited Condensed Consolidated Balance Sheet: September 30, 2020 (dollars in millions) Total Level 1 Level 2 Level 3 Current and long-term debt (excluding finance leases) $ 12,531 $ 10,478 $ — $ 2,053 December 31, 2019 (dollars in millions) Total Level 1 Level 2 Level 3 Current and long-term debt (excluding finance leases) $ 313 $ — $ — $ 313 Valuation Techniques. Based on the information available as of September 30, 2020, the fair value of the term loan credit facility was estimated on the basis of the present value of the expected future cash flows contractually due in accordance with the terms of the term loan credit agreement, a Level 3 measurement. The cash flows were discounted using the LIBOR rate at the valuation date based on the terms of the term loan credit agreement and adjusted for any change in credit risk premium. At September 30, 2020, the project financing obligations included in Long-term debt approximate fair value. Du ring the three months ended September 30, 2020 and 2019, there were no transfers in or out of Levels 1, 2 or 3. The following table presents changes during the nine months ended September 30, 2020 and 2019 in Level 3 liabilities not measured at fair value on a recurring basis: For the Nine Months Ended September 30, (dollars in millions) 2020 2019 Fair value as of January 1 $ 313 $ 291 Issuances, including interest on project financing obligations 1,865 118 Settlements (125 ) (98 ) Fair value as of September 30 $ 2,053 $ 311 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | ||
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 18: COMMITMENTS AND CONTINGENT LIABILITIES The Company is unable to predict the final outcome of the following matters based on the information currently available except as otherwise noted. However, the Company does not believe that the resolution of any of these matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. Environmental. Legal Proceedings. Asbestos Matters The amounts recorded for asbestos-related liabilities are based on currently available information and assumptions that we believe are reasonable and are made with input from outside actuarial experts. UTC Equity Awards Conversion Litigation Geraud Darnis, et al. v. Raytheon Technologies Corporation, et al. Income Taxes. Description of the Business, Other. Guarantees The Company has other commitments and contingent liabilities related to legal proceedings, self-insurance programs and matters arising in the ordinary course of business. The Company accrues for contingencies generally based upon a range of possible outcomes. If no amount within the range is a better estimate than any other, the Company accrues the minimum amount. In the ordinary course of business, Carrier is routinely a defendant in, party to or otherwise subject to pending and threatened legal actions, claims, disputes and proceedings. These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax and other laws. In some of these proceedings or instances, claims for substantial monetary damages are asserted against the Company and its subsidiaries and could result in fines, penalties, compensatory or treble damages or non-monetary relief. We do not believe that these matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. | NOTE 20: CONTINGENT LIABILITIES Except as otherwise noted, while the Business is unable to predict the final outcome, based on information currently available, the Business does not believe that resolution of any of the following matters will have a material adverse effect upon the Business’ competitive position, results of operations, cash flows or financial condition. Environmental. Legal Proceedings. Asbestos Matters The amounts recorded for asbestos-related liabilities are based on currently available information and assumptions that we believe are reasonable and are made with input from outside actuarial experts. The estimated range of total liabilities to resolve all pending and unasserted potential future asbestos claims through 2059 is approximately $255 million to $290 million. Where no amount within a range of estimates is more likely, the minimum is accrued. We have recorded the minimum amount of $255 million, which is principally recorded in Other long-term liabilities on the Combined Balance Sheet as of December 31, 2019. This amount is on a pre-tax basis, not discounted, and excludes the Business’ legal fees to defend the asbestos claims, which will continue to be expensed by the Business as they are incurred. In addition, the Business has an insurance recovery receivable for probable asbestos related recoveries of approximately $104 million, which is included primarily in Other assets on the Combined Balance Sheet as of December 31, 2019. Other. Guarantees The Business also has other commitments and contingent liabilities related to legal proceedings and matters arising out of the ordinary course of business. The Business accrues contingencies based upon a range of possible outcomes. If no amount within this range is a better estimate than any other, then the Business accrues the minimum amount. In the ordinary course of business, Carrier is also routinely a defendant in, party to or otherwise subject to many pending and threatened legal actions, claims, disputes and proceedings. These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax and other laws. In some of these proceedings, claims for substantial monetary damages are asserted against the Business and its subsidiaries and could result in fines, penalties, compensatory or treble damages or non-monetary relief. The Business does not believe that these matters will have a material adverse effect upon its competitive position, results of operations, cash flows or financial condition. |
SEGMENT FINANCIAL DATA (Q3)
SEGMENT FINANCIAL DATA (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SEGMENT FINANCIAL DATA [Abstract] | ||
SEGMENT FINANCIAL DATA | NOTE 19: SEGMENT FINANCIAL DATA Carrier’s operations are classified into three segments: HVAC, Refrigeration and Fire & Security. HVAC provides products, controls, services and solutions to meet the heating and cooling needs of residential and commercial customers, while enhancing building performance, energy efficiency and sustainability. Refrigeration is comprised of transport refrigeration and commercial refrigeration products and solutions. Transport refrigeration products and services include refrigeration and monitoring systems for trucks, trailers, shipping containers, intermodal and rail. Fire & Security includes a wide range of residential and building systems products and solutions, including fire, flame, gas, smoke and carbon monoxide detection; portable fire extinguishers; fire suppression systems; intruder alarms; access control systems and video management systems. Other fire and security service offerings include audit, design, installation and system integration, as well as aftermarket maintenance and repair and monitoring services. Segment Information. Net Sales Operating Profit For the Three Months Ended September 30, For the Three Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ 2,892 $ 2,602 $ 839 $ 404 Refrigeration 876 922 103 125 Fire & Security 1,324 1,402 200 205 Total segment 5,092 4,926 1,142 734 Eliminations and other (90 ) (104 ) (31 ) (63 ) General corporate expenses — — (30 ) (42 ) Consolidated $ 5,002 $ 4,822 $ 1,081 $ 629 Net Sales Operating Profit For the Nine Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ 7,142 $ 7,505 $ 1,364 $ 1,242 Refrigeration 2,384 2,839 263 373 Fire & Security 3,587 4,078 426 521 Total segment 13,113 14,422 2,053 2,136 Eliminations and other (251 ) (315 ) (122 ) (95 ) General corporate expenses — — (93 ) (107 ) Consolidated $ 12,862 $ 14,107 $ 1,838 $ 1,934 Geographic External Sales. For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 United States Operations $ 2,780 $ 2,541 $ 6,983 $ 7,473 International Operations Europe 1,307 1,313 3,455 3,906 Asia Pacific 715 729 1,879 2,079 Other 200 239 545 649 Consolidated $ 5,002 $ 4,822 $ 12,862 $ 14,107 Products sales and Service sales. For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Sales Type Product $ 2,547 $ 2,224 $ 6,180 $ 6,455 Service 345 378 962 1,050 HVAC sales 2,892 2,602 7,142 7,505 Product 771 823 2,093 2,551 Service 105 99 291 288 Refrigeration sales 876 922 2,384 2,839 Product 965 1,055 2,587 3,011 Service 359 347 1,000 1,067 Fire & Security sales 1,324 1,402 3,587 4,078 Total segment sales 5,092 4,926 13,113 14,422 Eliminations and other (90 ) (104 ) (251 ) (315 ) Consolidated $ 5,002 $ 4,822 $ 12,862 $ 14,107 | NOTE 21: SEGMENT FINANCIAL DATA Carrier has historically operated as an operating segment within UTC. As it is transitioning into an independent, publicly traded company, the Business’ Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), evaluated how to view and measure the Business’ performance. Based upon such evaluation, and effective during the second quarter of 2019, Carrier determined it is organized into three operating segments, which are also its reportable segments, based on how the CODM allocates resources, assesses performance and makes strategic and operational decisions. The CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on net sales and operating profit. For the years ended December 31, 2019, 2018 and 2017, segment results are presented in accordance with this new structure. The Carrier operating segments determined in accordance with FASB ASC Topic 280 — Segment Reporting HVAC Refrigeration Fire & Security Established brands include Autronica, Chubb, Det-Tronics, Edwards, Fireye, GST, Interlogix, Kidde, LenelS2, Marioff, Onity and Supra. Fire & Security products and solutions are sold directly to end customers, as well as through manufacturers’ representatives, distributors, dealers, value-added resellers and retailers. Segment Information. Net sales Operating profit (dollars in millions) 2019 2018 2017 2019 2018 2017 HVAC $ 9,712 $ 9,713 $ 9,045 $ 1,563 $ 1,720 $ 2,001 Refrigeration 3,792 4,095 3,823 532 1,353 562 Fire & Security 5,500 5,531 5,324 708 726 639 Total Segment 19,004 19,339 18,192 2,803 3,799 3,202 Eliminations and other (396 ) (425 ) (378 ) (156 ) (24 ) (32 ) General corporate expenses — — — (156 ) (138 ) (140 ) Combined $ 18,608 $ 18,914 $ 17,814 $ 2,491 $ 3,637 $ 3,030 Total assets are not presented for each segment as they are not presented to or reviewed by the CODM. Segment Assets Capital Expenditures Depreciation & Amortization (dollars in millions) 2019 2018 2017 2019 2018 2017 2019 2018 2017 HVAC $ 1,953 $ 1,844 $ 1,630 $ 150 $ 149 $ 148 $ 160 $ 164 $ 173 Refrigeration 989 998 1,017 30 40 36 34 36 33 Fire & Security 1,728 1,764 1,698 50 45 50 123 141 152 Total Segment 4,670 4,606 4,345 230 234 234 317 341 358 Eliminations and other 10 (4 ) (10 ) 13 29 92 18 16 14 Combined $ 4,680 $ 4,602 $ 4,335 $ 243 $ 263 $ 326 $ 335 $ 357 $ 372 Cash and cash equivalents 952 1,129 1,324 Other assets, current 327 378 341 Total Current Assets $ 5,959 $ 6,109 $ 6,000 Segment assets in the table above represents accounts receivable, contract assets, current, and inventories, net. Such accounts are regularly reviewed by management and are therefore reported above as segment assets. All other remaining assets and liabilities for all periods presented are managed on a company-wide basis. Geographic External Sales and Long-Lived Assets. External Net sales Long-Lived Assets (dollars in millions) 2019 2018 2017 2019 2018 2017 United States Operations $ 9,594 $ 9,415 $ 8,686 $ 701 $ 700 $ 727 International Operations: Europe 5,327 5,711 5,323 439 451 480 Asia Pacific 2,813 2,853 2,782 241 244 222 Other 874 935 1,023 282 258 255 $ 18,608 $ 18,914 $ 17,814 $ 1,663 $ 1,653 $ 1,684 Segment sales disaggregated by product versus service for the year ended December 31, 2019, 2018 and 2017 are as follows: (dollars in millions) 2019 2018 2017 Sales Type Product $ 8,279 $ 8,395 $ 7,902 Service 1,433 1,318 1,143 Total HVAC sales 9,712 9,713 9,045 Product 3,405 3,665 3,427 Service 387 430 396 Total Refrigeration sales 3,792 4,095 3,823 Product 4,072 4,039 3,824 Service 1,428 1,492 1,500 Total Fire & Security sales 5,500 5,531 5,324 Total segment sales 19,004 19,339 18,192 Eliminations and other (396 ) (425 ) (378 ) Combined $ 18,608 $ 18,914 $ 17,814 Major Customers. |
SUBSEQUENT EVENTS (Q3)
SUBSEQUENT EVENTS (Q3) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUBSEQUENT EVENTS [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 20 SUBSEQUENT EVENTS On October 15, 2020, the Board of Directors declared a dividend of $0.08 per share of common stock payable November 23, 2020 to shareowners of record at the close of business on October 30, 2020. | NOTE 22: SUBSEQUENT EVENTS The Business evaluated events and transactions occurring subsequent to December 31, 2019 through February 7, 2020, the date the Combined Financial Statements were issued and concluded that there were no subsequent events that required recognition or disclosure. Events Subsequent to Original Issuance of Combined Financial Statements (Unaudited) In connection with the reissuance of the Combined Financial Statements, the Business has evaluated subsequent events through March 11, 2020, the date the Combined Financial Statements were available to be reissued. On February 10, 2020, Carrier entered into a revolving credit agreement providing for a $2.0 billion unsecured, unsubordinated 5-year revolving credit facility and a term loan credit Agreement providing for a $1.75 billion unsecured, unsubordinated 3-year term loan credit facility. Carrier expects to draw upon the term loan credit agreement in full and use the proceeds to make a cash distribution to UTC prior to the separation of Carrier from UTC. The term loan credit agreement will initially be guaranteed by UTC and the UTC guarantee will terminate upon the distribution of shares of Carrier common stock to UTC shareholders in connection with the separation of Carrier from UTC. On February 27, 2020, Carrier issued $9.25 billion of unsecured, unsubordinated notes consisting of the following: $500 million of 1.923% notes due 2023, $2.0 billion of 2.242% notes due 2025, $1.25 billion of 2.493% notes due 2027, $2.0 billion of 2.722% notes due 2030, $1.5 billion of 3.377% notes due 2040 and $2.0 billion of 3.577% notes due 2050 (together, the “Notes”). Carrier used the net proceeds from the sale of the Notes to make a cash distribution to UTC. Each series of Notes initially will be guaranteed on an unsecured, unsubordinated basis by UTC. Each of the UTC guarantees will terminate upon the distribution of shares of Carrier common stock to UTC shareowners in connection with the separation of Carrier from UTC. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (FY) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule II - Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II Carrier Global Corporation (A Business of United Technologies Corporation) Valuation and Qualifying Accounts As of and for the Years Ended December 31, 2019, 2018 and 2017 (Dollars in millions) Allowances for Doubtful Accounts Balance, January 1, 2017 $ 157 Provision charged to income 12 Doubtful accounts written off (net) (23 ) Other adjustments 6 Balance, December 31, 2017 152 Provision charged to income 20 Doubtful accounts written off (net) (22 ) Other adjustments (9 ) Balance, December 31, 2018 141 Provision charged to income 18 Doubtful accounts written off (net) (45 ) Other adjustments (1) (69 ) Balance, December 31, 2019 $ 45 (Dollars in millions) Future Income Tax Benefits — Valuation allowance Balance, January 1, 2017 $ 104 Additions charged to income tax expense 17 Reductions credited to income tax expense (11 ) Other adjustments 3 Balance, December 31, 2017 113 Additions charged to income tax expense 15 Reductions credited to income tax expense (14 ) Other adjustments (7 ) Balance, December 31, 2018 107 Additions charged to income tax expense 41 Reductions credited to income tax expense (16 ) Other adjustments (4 ) Balance, December 31, 2019 $ 128 (1) Includes $61 million of the prior year allowance for doubtful accounts which has been reflected as a direct reduction in Trade receivables. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (FY) (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Principles of Combination | Principles of Combination. | |
Use of Estimates | Use of Estimates. | |
Cash and Cash Equivalents | Cash and Cash Equivalents. Related Parties On occasion, the Business is required to maintain cash deposits with certain banks with respect to contractual or other legal obligations. As of December 31, 2019 and 2018, restricted cash of approximately $5 million and $5 million, respectively, is included in Other assets, current on the Combined Balance Sheets. | |
Accounts Receivable | Accounts Receivable. Revenue from Contracts with Customers | |
Contract Assets and Liabilities | Contract Assets and Liabilities. Contract liabilities relate to payments received in advance of the satisfaction of performance obligations under the contract. The Business receives payments from customers based on the terms established in the contracts. See Note 4 – Revenue Recognition | |
Inventories | Inventories. Valuation reserves for excess, obsolete and slow-moving inventory are estimated by comparing the inventory levels of individual parts and products to both future sales forecasts or production requirements and historical usage rates in order to identify inventory where the resale value or replacement value is less than the cost of the inventory. Other factors that management considers in determining the adequacy of these reserves include whether the part meets current specifications and whether it can be substituted for a part currently being sold or used as a service part, and overall market conditions and other inventory management initiatives. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. • Level I – Quoted prices for identical instruments in active markets. • Level II – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level III – Instruments whose significant value drivers are unobservable. The carrying amount of trade receivables, accounts payable and accrued expenses approximates fair value due to the short maturity (less than one year) of the instruments. | |
Business Combinations | Business Combinations. Business Combinations | |
Equity Method Investments | Equity Method Investments. | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. Intangibles – Goodwill and Other Intangible assets consist of trademarks, patents, service contracts, monitoring lines and customer relationships and are recognized at fair value in acquisition accounting and then amortized to cost of sales and selling, general and administrative expenses. Useful lives of finite-lived intangible assets are estimated based upon the nature of the intangible asset. These intangible assets are amortized based on the pattern in which the economic benefits of the intangible assets are consumed. If a pattern of economic benefit cannot be reliably determined or if straight-line amortization approximates the pattern of economic benefit, a straight-line amortization method may be used. The range of estimated useful lives is as follows: Customer relationships 1-30 years Trademarks and trade names 5-30 years Service contracts 1-23 years Monitoring lines 7-10 years Patents 7-8 years | |
Other Long-Lived Assets | Other Long-Lived Assets. | |
Income Taxes | Income Taxes. Income Taxes Certain operations of the Business have historically been included in a consolidated return with other UTC entities. Current obligations for taxes in certain jurisdictions, where the Business files a consolidated tax return with UTC, are deemed settled with UTC for purposes of the Combined Financial Statements. Current obligations for tax in jurisdictions where the Business does not file a consolidated return with UTC, including certain foreign jurisdictions and certain U.S. states, are recorded as accrued liabilities. On December 22, 2017, the TCJA was enacted (see Note 14 – Income Taxes In the ordinary course of business, there is inherent uncertainty in quantifying income tax positions. The Business 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. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Business has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest expense has also been recognized. The Business recognizes accrued interest related to unrecognized tax benefits in interest expense. Penalties, if incurred, would be recognized as a component of income tax expense. The TCJA contains a new law that subjects the Business to a tax on Global Intangible Low-Taxed Income (“GILTI”), beginning in 2018. GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The FASB has provided that companies subject to GILTI have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for temporary differences, including outside basis differences, expected to reverse as GILTI. The Business has elected to account for GILTI as a period cost, if incurred. | |
Revenue Recognition | Revenue Recognition. Revenue Recognition The Business accounts for revenue in accordance with FASB ASC Topic 606: Revenue from Contracts with Customers Carrier considers the contractual consideration payable by the customer and assesses variable consideration that may affect the total transaction price, including contractual discounts, price concessions, contract incentive payments, estimates of award fees and other sources of variable consideration, when determining the transaction price of each contract. The Business includes variable consideration in the estimated transaction price when there is a basis to reasonably estimate the amount. These estimates are based on historical experience, anticipated performance and best judgment at the time. The Business also considers whether the contracts provide customers with significant financing. Generally, contracts do not contain significant financing. Point in time revenue recognition Over-time revenue recognition. Contract modifications that are for goods or services that are not distinct are accounted for as part of the existing contract. If the goods or services are considered distinct, then the contract modification would be accounted for prospectively or as part of a new contract. The Business reviews cost estimates on significant contracts on at least a quarterly basis, and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. The Business records changes in contract estimates using the cumulative catch-up method. There were no material changes in contract estimates during the periods presented. For 2017, prior to the adoption of the New Revenue Standard, the Business recognized sales for products and services in accordance with the provisions of Staff Accounting Bulletin (“SAB”) Topic 13, Revenue Recognition Contract Accounting and Separately Priced Maintenance: Loss provisions on contracts were recognized to the extent that estimated contract costs exceed the estimated consideration contemplated under the contractual arrangement. For new commitments, the Business generally recorded loss provisions at the earlier of contract announcement or contract signing except for certain requirements contracts under which losses are recorded upon receipt of the purchase order which obligates us to perform. For existing commitments, anticipated losses on contracts were recognized in the period in which losses become evident. Products contemplated under contractual arrangements included firm quantities of products sold under contract. The Business reviewed its cost estimates on significant contracts on a quarterly basis, and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. The Business recorded changes in contract estimates using the cumulative catch-up method in accordance with the FASB ASC Topic 605: Revenue Recognition Cash Payments to Customers. | |
Self-Insurance | Self-Insurance. | |
Environmental | Environmental. Contingent Liabilities | |
Asbestos Related Liabilities and Insurance Recoveries, and Indemnification Receivables | Asbestos Related Liabilities and Insurance Recoveries, and Indemnification Receivables. Contingent Liabilities | |
Asset Retirement Obligations | Asset Retirement Obligations. | |
Other Income (Expense), Net | Other Income (Expense), Net. | |
Foreign Exchange | Foreign Exchange. | |
Pension and Postretirement Obligations | Pension and Postretirement Obligations. Compensation – Retirement Benefits Employee Benefit Plans | |
Product Performance Obligations | Product Performance Obligations. Guarantees | |
UTC Net Investment | UTC Net Investment. | |
Recent Accounting Pronouncements. | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU 2017-04, Intangibles – Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued SEC Rules In May 2020, the SEC issued Final Rule Release No. 33-10786, which amends the financial statement requirements for acquisitions and dispositions of businesses and related pro forma financial information required under SEC Regulation S-X, Rule 3-05. The final rule modifies the significance test required in SEC Regulation S-X, Rule 1-02(w) by raising the significance threshold for reporting dispositions of a business from 10% to 20% and by modifying the calculation of the investment and income tests. In accordance with Rules 3-09 or 4-08(g), the revised income test will apply to the evaluation of equity method investments for significance. The Company is currently evaluating the impact of these modifications, which are effective for fiscal years beginning after December 31, 2020. In August 2020, the SEC issued Final Rule Release No. 33-10825, which amends certain disclosure requirements required by Regulation S-K relating to the description of business (Item 101), legal proceedings (Item 103) and risk factors (Item 105). The amendments to Item 101 will, among other things, allow the Company to provide updates to the general development of the business based on materiality, if it incorporates by reference a full discussion from a previously filed registration statement or report. The amendment also requires disclosure of the registrant’s human capital resources to the extent such disclosures would be material to an understanding of the registrant’s business. The amendments to Item 103 will, among other things, increase the quantitative threshold for disclosing certain governmental environmental proceedings and the amendments to Item 105 will, among other things, require a risk factor summary where the risk factor section itself is longer than 15 pages. The Company is currently evaluating the impact of these modifications, which are effective for fiscal years beginning December 31, 2020. | Recent Accounting Pronouncements. Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
BASIS OF PRESENTATION (Q3) (Pol
BASIS OF PRESENTATION (Q3) (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
BASIS OF PRESENTATION [Abstract] | ||
Basis of Accounting | The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. All significant intra-company accounts and transactions have been eliminated in the preparation of the Unaudited Condensed Consolidated Financial Statements. Related party transactions between the Company and its equity method investees have not been eliminated. | |
New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU 2017-04, Intangibles – Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued SEC Rules In May 2020, the SEC issued Final Rule Release No. 33-10786, which amends the financial statement requirements for acquisitions and dispositions of businesses and related pro forma financial information required under SEC Regulation S-X, Rule 3-05. The final rule modifies the significance test required in SEC Regulation S-X, Rule 1-02(w) by raising the significance threshold for reporting dispositions of a business from 10% to 20% and by modifying the calculation of the investment and income tests. In accordance with Rules 3-09 or 4-08(g), the revised income test will apply to the evaluation of equity method investments for significance. The Company is currently evaluating the impact of these modifications, which are effective for fiscal years beginning after December 31, 2020. In August 2020, the SEC issued Final Rule Release No. 33-10825, which amends certain disclosure requirements required by Regulation S-K relating to the description of business (Item 101), legal proceedings (Item 103) and risk factors (Item 105). The amendments to Item 101 will, among other things, allow the Company to provide updates to the general development of the business based on materiality, if it incorporates by reference a full discussion from a previously filed registration statement or report. The amendment also requires disclosure of the registrant’s human capital resources to the extent such disclosures would be material to an understanding of the registrant’s business. The amendments to Item 103 will, among other things, increase the quantitative threshold for disclosing certain governmental environmental proceedings and the amendments to Item 105 will, among other things, require a risk factor summary where the risk factor section itself is longer than 15 pages. The Company is currently evaluating the impact of these modifications, which are effective for fiscal years beginning December 31, 2020. | Recent Accounting Pronouncements. Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (FY) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Estimated Useful Lives of Intangible Assets | Customer relationships 1-30 years Trademarks and trade names 5-30 years Service contracts 1-23 years Monitoring lines 7-10 years Patents 7-8 years |
REVENUE RECOGNITION (FY) (Table
REVENUE RECOGNITION (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
REVENUE RECOGNITION [Abstract] | ||
Contract Assets and Contract Liabilities | Total contract assets and liabilities are as follows: (dollars in millions) September 30, 2020 December 31, 2019 Contract assets, current $ 753 $ 622 Contract assets, non-current (included within Other assets) 75 57 Total contract assets 828 679 Contract liabilities, current (495 ) (443 ) Contract liabilities, non-current (included within Other long-term liabilities) (166 ) (168 ) Total contract liabilities (661 ) (611 ) Net contract assets $ 167 $ 68 | Total contract assets and contract liabilities as of December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Contract assets, current $ 622 $ 566 Contract assets, noncurrent (included within Other assets) 57 100 Total contract assets 679 666 Contract liabilities, current (443 ) (448 ) Contract liabilities, noncurrent (included within Other long-term liabilities) (168 ) (164 ) Total contract liabilities (611 ) (612 ) Net contract assets $ 68 $ 54 |
ACCOUNTS RECEIVABLE, NET (FY) (
ACCOUNTS RECEIVABLE, NET (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCOUNTS RECEIVABLE, NET [Abstract] | ||
Accounts Receivable, Net | Accounts receivable, net consisted of the following: (dollars in millions) September 30, 2020 December 31, 2019 Trade receivables $ 2,578 $ 2,444 Receivables from affiliates 213 143 Other receivables 169 184 Accounts receivable 2,960 2,771 Less: Allowance for expected credit losses (88 ) (45 ) Accounts receivable, net $ 2,872 $ 2,726 | (dollars in millions) 2019 2018 Trade receivables $ 2,444 $ 2,549 Receivables from affiliates 143 113 Miscellaneous receivables 184 152 $ 2,771 $ 2,814 Less: Allowance for doubtful accounts (45 ) (141 ) 2,726 2,673 |
INVENTORIES, NET (FY) (Tables)
INVENTORIES, NET (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
INVENTORIES, NET [Abstract] | ||
Inventories, Net | (dollars in millions) September 30, 2020 December 31, 2019 Raw materials $ 248 $ 290 Work-in-process 148 120 Finished goods 1,185 922 Inventories, net $ 1,581 $ 1,332 | (dollars in millions) 2019 2018 Raw materials $ 290 $ 336 Work-in-process 120 102 Finished goods 922 925 $ 1,332 1,363 |
FIXED ASSETS, NET (FY) (Tables)
FIXED ASSETS, NET (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
FIXED ASSETS, NET [Abstract] | ||
Property, Plant and Equipment | Fixed assets are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives. (dollars in millions) Estimated Useful Lives (Years) September 30, 2020 December 31, 2019 Land $ 112 $ 113 Buildings and improvements 40 1,129 1,138 Machinery, tools and equipment 3 to 25 2,047 1,924 Rental assets 3 to 12 404 395 Other, including assets under construction 187 188 Fixed assets, gross 3,879 3,758 Accumulated depreciation (2,203 ) (2,095 ) Fixed assets, net $ 1,676 $ 1,663 | Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of individual assets. (dollars in millions) Estimated Useful Lives (Years) 2019 2018 Land $ 113 $ 114 Buildings and improvements 40 1,138 1,142 Machinery, tools and equipment 3 to 25 1,924 1,815 Rental assets 3 to 12 395 293 Other, including assets under construction 188 180 3,758 3,544 Accumulated depreciation (2,095 ) (1,891 ) $ 1,663 $ 1,653 |
BUSINESS ACQUISITIONS, DISPOS_3
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS [Abstract] | ||
Goodwill | The changes in the carrying amount of goodwill are as follows: (dollars in millions) HVAC Refrigeration Fire & Security Total Balance as of January 1, 2020 $ 5,351 $ 1,228 $ 3,305 $ 9,884 Foreign currency translation 2 5 15 22 Balance as of September 30, 2020 $ 5,353 $ 1,233 $ 3,320 $ 9,906 | The changes in the carrying amount of goodwill are as follows: (dollars in millions) HVAC Refrigeration Fire & Security Total Balance as of January 1, 2018 $ 5,472 $ 1,417 $ 3,176 $ 10,065 Goodwill resulting from business combinations — 1 194 195 Foreign currency translation and other (142 ) (187 ) (82 ) (411 ) Balance as of December 31, 2018 5,330 1,231 3,288 9,849 Foreign currency translation and other 21 (3 ) 17 35 Balance as of December 31, 2019 $ 5,351 $ 1,228 $ 3,305 $ 9,884 |
Intangible Assets | Identifiable intangible assets are comprised of the following: 2019 2018 (dollars in millions) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized: Customer relationships $ 1,479 $ (1,154 ) $ 1,511 $ (1,098 ) Patents and trademarks 287 (201 ) 292 (189 ) Monitoring lines 67 (52 ) 64 (46 ) Service portfolios and other 629 (506 ) 631 (490 ) 2,462 (1,913 ) 2,498 (1,823 ) Unamortized: Trademarks and other 534 — 539 — Total $ 2,996 $ (1,913 ) $ 3,037 $ (1,823 ) | |
Estimated Future Amortization of Intangible Assets | The estimated future amortization of intangible assets is as follows: (dollars in millions) 2020 2021 2022 2023 2024 Future amortization $ 101 $ 91 $ 72 $ 63 $ 55 |
ACCRUED LIABILITIES (FY) (Table
ACCRUED LIABILITIES (FY) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED LIABILITIES [Abstract] | |
Accrued Liabilities | (dollars in millions) 2019 2018 Accrued salaries, wages and employee benefits $ 516 $ 519 Accrued taxes 318 325 Warranty related 200 190 Project financing obligations 234 150 Accrued restructuring 66 56 Accrued legal and environmental reserves 24 26 Customer advances and deferred revenue 26 24 Other 941 784 $ 2,325 $ 2,074 |
OTHER LONG-TERM LIABILITIES (_2
OTHER LONG-TERM LIABILITIES (FY) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER LONG-TERM LIABILITIES [Abstract] | |
Other Long-term Liabilities | Other long-term liabilities as of December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Warranty related $ 288 $ 283 Environmental reserves 203 200 Project financing obligations 75 137 Asset retirement obligations 74 73 Other 625 610 $ 1,265 $ 1,303 |
EMPLOYEE BENEFIT PLANS (FY) (Ta
EMPLOYEE BENEFIT PLANS (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS [Abstract] | ||
Change in Benefit Obligation | (dollars in millions) 2019 2018 Change in Benefit Obligation Beginning balance $ 2,581 $ 2,822 Service cost 31 33 Interest cost 67 64 Actuarial (gain) loss 351 (110 ) Benefits paid (132 ) (114 ) Net settlement, curtailment and special termination benefits (38 ) (8 ) Other 25 (106 ) Ending balance $ 2,885 $ 2,581 | |
Change in Plan Assets | Change in Plan Assets Beginning balance $ 2,635 $ 3,000 Actual return on plan assets 381 (162 ) Employer contributions 36 45 Benefits paid (132 ) (114 ) Settlements (14 ) (7 ) Other 47 (127 ) Ending balance $ 2,953 $ 2,635 | |
Funded Status | Funded Status Fair value of plan assets $ 2,953 $ 2,635 Benefit obligations (2,885 ) (2,581 ) Funded status of plan $ 68 $ 54 | |
Amounts Recognized in Balance Sheet | (dollars in millions) 2019 2018 Amounts Recognized in the Combined Balance Sheets Consist of Noncurrent assets $ 488 $ 442 Current liability (9 ) (16 ) Noncurrent liability (411 ) (372 ) Net amount recognized $ 68 $ 54 | |
Amounts Recognized in Accumulated Other Comprehensive Loss | Amounts Recognized in Accumulated Other Comprehensive Loss Consist of Net actuarial loss $ 577 $ 482 Prior service cost 15 11 Net amount recognized $ 592 $ 493 | |
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | Information for pension plans with accumulated benefit obligations in excess of plan assets: (dollars in millions) 2019 2018 Projected benefit obligation $ 549 $ 501 Accumulated benefit obligation 506 463 Fair value of plan assets 137 125 | |
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets | Information for pension plans with projected benefit obligations in excess of plan assets: (dollars in millions) 2019 2018 Projected benefit obligation $ 690 $ 616 Accumulated benefit obligation 630 564 Fair value of plan assets 270 228 | |
Net Periodic Pension Benefit | The components of the net periodic pension benefit are as follows: (dollars in millions) 2019 2018 2017 Pension Benefits: Service cost $ 31 $ 33 $ 34 Interest cost 67 64 65 Expected return on plan assets (154 ) (170 ) (160 ) Amortization of prior service cost 2 1 2 Recognized actuarial net loss 9 16 14 Net settlement, curtailment and special termination benefits loss (gain) 4 1 (3 ) Net periodic pension benefit – employer $ (41 ) $ (55 ) $ (48 ) | |
Changes in Plan Assets and Benefit Obligations Recognized Other Comprehensive Loss | Other changes in plan assets and benefit obligations recognized in other comprehensive loss in 2019 are as follows: (dollars in millions) 2019 Current year actuarial loss $ 112 Amortization of actuarial loss (9 ) Amortization of prior service cost (2 ) Net settlement and curtailment gain (4 ) Other 2 Total recognized in other comprehensive loss $ 99 Net recognized in net periodic pension benefit and other comprehensive loss $ 58 | |
Accumulated Other Comprehensive Loss Net Periodic Pension Benefit | The estimated amount that will be amortized from accumulated other comprehensive loss into net periodic pension benefit in 2020 is as follows: (dollars in millions) Net actuarial loss $ 18 Prior service cost 1 $ 19 | |
Assumptions in Benefit Obligation and Net Cost Pension Plans | Major assumptions used in determining the benefit obligation and net cost for pension plans are presented in the following table as weighted-averages: Benefit Obligation Net Cost (dollars in millions) 2019 2018 2019 2018 2017 Discount rate Projected benefit obligation 2.0 % 2.8 % 2.8 % 2.5 % 2.7 % Interest cost (1) — — 2.7 % 2.4 % 2.5 % Service cost (1) — — 3.2 % 2.8 % 3.1 % Salary scale 3.4 % 3.0 % 3.0 % 3.0 % 2.6 % Expected return on plan assets — — 5.6 % 6.0 % 6.2 % Note (1) The 2019 and 2018 discount rates used to measure the service cost and interest cost applies to our significant plans. The projected benefit obligation discount rate is used for the service cost and interest cost measurements for non-significant plans. | |
Fair Values of Pension Plan Assets by Asset Category | The fair values of pension plan assets at December 31, 2019 and 2018 by asset category are as follows: (dollars in millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Not Subject to Leveling Total Asset Category Public Equities: Global Equities $ 29 $ — $ — $ — $ 29 Global Equity Commingled Funds (1) — 141 — — 141 Enhanced Global Equities (2) 3 3 — — 6 Global Equity Funds at net asset value (8) — — — 927 927 Private Equities (3),(8) — — 2 10 12 Fixed income securities: Governments 8 35 — — 43 Corporate Bonds — 169 — — 169 Fixed income securities (8) — — — 1,449 1,449 Real Estate (4),(8) — 3 12 6 21 Other (5),(8) — 68 — 23 91 Cash & cash equivalents (6),(8) — 3 — 44 47 Subtotal $ 40 $ 422 $ 14 $ 2,459 $ 2,935 Other Assets & Liability (7) 18 Total at December 31, 2019 $ 2,953 Public Equities: Global Equities $ 22 $ — $ — $ — $ 22 Global Equity Commingled Funds (1) 1 115 — — 116 Enhanced Global Equities (2) 1 4 — — 5 Global Equity Funds at net asset value (8) — — — 815 815 Private Equities (3),(8) — — 1 9 10 Fixed income securities: Governments 13 28 — — 41 Corporate Bonds — 136 — — 136 Fixed income securities (8) — — — 1,323 1,323 Real Estate (4),(8) — 3 10 13 26 Other (5),(8) — 63 — 18 81 Cash & cash equivalents (6),(8) — 7 — 37 44 Subtotal $ 37 $ 356 $ 11 $ 2,215 $ 2,619 Other Assets & Liability (7) 16 Total at December 31, 2018 $ 2,635 Note (1) Represents commingled funds that invest primarily in common stocks. Note 2 Represents enhanced equity separate account and commingled fund portfolios. A portion of the portfolio may include long-short market neutral and relative value strategies that invest in publicly traded, equity and fixed income securities, as well as derivatives of equity and fixed income securities and foreign currency. Note 3 Represents limited partner investments with general partners that primarily invest in debt and equity. Note 4 Represents investments in real estate including commingled funds and directly held properties. Note 5 Represents insurance contracts and global balanced risk commingled funds consisting mainly of equity, bonds and some commodities. Note 6 Represents short-term commercial paper, bonds and other cash or cash-like instruments. Note 7 Represents trust receivables and payables that are not leveled. Note 8 In accordance with ASU 2015-07, Fair Value Measurement (Topic 820) | |
Multiemployer Plans | The pension and post-retirement expense and benefits were as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Service cost $ — $ 4 $ — $ 13 Non-service pension benefit — (20 ) (2 ) (59 ) Total net periodic benefit $ — $ (16 ) $ (2 ) $ (46 ) | Our participation in these plans for the annual periods ended December 31 is outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act (“PPA”) zone status available in 2019 and 2018 is for the plan’s year-end at December 31, 2018, and December 31, 2017, respectively. The zone status is based on information that we received from the plan and is certified by the plan’s actuary. Our significant plan is in the green zone which represents a plan that is at least 80% funded and does not require a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”). (dollars in millions) EIN/ Pension Plan Number Zone Status FIP/ RP Status Pending/ Implemented Contributions Surcharge Imposed Expiration Date of Collective- Bargaining Agreement Pension Fund 2019 2018 2019 2018 Metal and technology industry pension plan N/A Green Green No $ 6 $ 6 No September 30, 2021 Other funds 14 15 $ 20 $ 21 The amounts for pension and retirement expenses for the year ended December 31, 2019, 2018 and 2017 were as follows: (dollars in millions) 2019 2018 2017 Service cost $ 18 $ 22 $ 23 Non-service pension cost (81 ) (80 ) (57 ) $ (63 ) $ (58 ) $ (34 ) |
Transactions Under all Long-Term Incentive Plans | Carrier LTIP activity for the nine months ended September 30, 2020 was as follows: Stock Options and Stock Appreciation Rights Performance Share Units Restricted Share Units (shares and units in thousands) Shares Average Price 1 Units Average Price 2 Units Average Price 2 Outstanding as of April 3, 2020 3 36,015 $ 19.90 68 $ 21.23 5,622 $ 21.37 Granted 3,753 $ 16.62 728 $ 18.23 443 $ 18.98 Exercised (984 ) $ 15.52 — $ — (116 ) $ 20.42 Forfeited/Cancelled (509 ) $ 22.73 (22 ) $ 19.25 (108 ) $ 22.25 Outstanding as of September 30, 2020 38,275 $ 19.66 774 $ 18.48 5,841 $ 21.27 1 2 3 The following table summarizes outstanding Carrier LTIP awards that are vested and expected to vest (adjusted for expected forfeitures) and that are exercisable at September 30, 2020: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable ( shares and units in thousands; aggregate intrinsic value in dollars in thousands) Awards Average Price 1 Aggregate Intrinsic Value Remaining Life 2 Awards Average Price 1 Aggregate Intrinsic Value Remaining Life 2 Stock Options/ Stock Appreciation Rights 36,868 $ 19.61 $ 403,105 6.7 16,173 $ 16.97 $ 219,447 4.2 Performance Share Units/ Restricted Stock Units 6,291 $ 20.96 $ 192,116 1.8 1 2 | A summary of the transactions under all long-term incentive plans that UTC granted to Carrier employees for the year ended December 31, 2019 follows: Stock Options Stock Appreciation Rights Performance Share Units Other Incentive (shares and units in thousands) Shares Average Price* Shares Average Price* Units Average Price* Shares/ Units Outstanding at December 31, 2018 71 $ 85.86 5,635 $ 100.16 289 $ 110.59 499 Granted 2 133.19 1,673 124.37 142 121.79 219 Ancillary** — — — — 18 95.53 — Exercised/earned (35 ) 87.18 (1,658 ) 89.30 (155 ) 95.54 (211 ) Cancelled (1 ) 110.83 (157 ) 120.41 (25 ) 112.39 (35 ) Net Transfers (1) (1 ) 95.23 665 105.29 93 108.91 121 December 31, 2019 36 $ 91.06 6,158 $ 109.71 362 $ 120.16 593 * Weighted-average grant/exercise price ** Ancillary shares granted based on actual performance achieved on the 2016 award Note (1) Represents net activity related to employee movement between UTC business units and other miscellaneous adjustments. The following table summarizes information about equity awards outstanding for Carrier employees that are vested and expected to vest and equity awards outstanding that are exercisable at December 31, 2019: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable (shares in thousands; aggregate intrinsic value in millions) Awards Average * Aggregate Remaining ** Awards Average * Aggregate Remaining ** Stock Options/Stock Appreciation rights 6,083 $ 109.31 $ 246 6.1 years 3,333 $ 98.4 $ 171 4.3 years Performance Share Units/ Restricted Stock 1,006 $ — $ 151 1.7 years * Weighted-average exercise price per share ** Weighted-average contractual remaining term in years |
Valuation Assumptions | The fair value of stock appreciation rights is estimated on the date of grant using a binomial model. The following assumptions were used in the binomial model for the nine months ended September 30, 2020: For the Nine Months Ended September 30, 2020 Volatility 35.6 % Expected life (in years) 7.0 Expected dividend yield 2.0 % Range of risk-free rate 0.1% - 1.0 % | The fair value of each option award is estimated on the date of grant using a binomial lattice model. The following table indicates the assumptions used in estimating fair value for the years ended December 31, 2019 and 2018. These assumptions represent those utilized by UTC and are not necessarily indicative of assumptions that would be used by Carrier as a stand-alone company. Lattice-based option models incorporate ranges of assumptions for inputs; those ranges are as follows: 2019 2018 2017 Expected volatility 18.8% - 19.7 % 17.5% - 21.1 % 19 % Weighted-average volatility 20 % 18 % 19 % Expected term (in years) 6.5 - 6.6 6.5-6.6 6.5 Expected dividend yield 2.4 % 2.2 % 2.4 % Risk-free rate 2.3% - 2.7 % 1.3% - 2.7 % 0.5% - 2.5 % |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the three and nine months ended September 30, 2020 and 2019 is as follows: (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Post- retirement Plans Accumulated Other Comprehensive Loss Three Months Ended September 30, 2020 Balance as of June 30, 2020 $ (1,018 ) $ (461 ) $ (1,479 ) Other comprehensive income before reclassifications, net 302 — 302 Amounts reclassified, pre-tax — 6 6 Tax expense reclassified — (1 ) (1 ) Balance as of September 30, 2020 $ (716 ) $ (456 ) $ (1,172 ) Nine Months Ended September 30, 2020 Balance as of January 1, 2020 $ (780 ) $ (473 ) $ (1,253 ) Other comprehensive income before reclassifications, net 64 2 66 Amounts reclassified, pre-tax — 18 18 Tax benefit reclassified — (3 ) (3 ) Balance as of September 30, 2020 $ (716 ) $ (456 ) $ (1,172 ) (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Post- retirement Plans Accumulated Other Comprehensive Loss Three Months Ended September 30, 2019 Balance as of June 30, 2019 $ (821 ) $ (381 ) $ (1,202 ) Other comprehensive loss before reclassifications, net (274 ) — (274 ) Amounts reclassified, pre-tax — 2 2 Balance as of September 30, 2019 $ (1,095 ) $ (379 ) $ (1,474 ) Nine Months Ended September 30, 2019 Balance as of January 1, 2019 $ (834 ) $ (381 ) $ (1,215 ) Other comprehensive (loss) income before reclassifications, net (261 ) 2 (259 ) Amounts reclassified, pre-tax — 9 9 ASU 2018-02 adoption impact — (9 ) (9 ) Balance as of September 30, 2019 $ (1,095 ) $ (379 ) $ (1,474 ) | A summary of the changes in each component of accumulated other comprehensive (loss) income, net of tax for the years ended December 31, 2019, 2018 and 2017 is provided below: (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Postretirement Plans Unrealized Gains (Losses) on Available- for-Sale Securities Unrealized Hedging Gains (Losses) Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2017 $ (1,130 ) $ (211 ) $ 262 $ (5 ) $ (1,084 ) Other comprehensive income (loss) before reclassifications, net 747 (32 ) (31 ) 2 686 Amounts reclassified, pre-tax (10 ) 16 (394 ) 1 (387 ) Tax expense reclassified — 5 163 — 168 Balance at December 31, 2017 $ (393 ) $ (222 ) $ — $ (2 ) $ (617 ) Other comprehensive loss before reclassifications, net (441 ) (209 ) — — (650 ) Amounts reclassified, pre-tax — 17 — 2 19 Tax expense reclassified — 33 — — 33 Balance at December 31, 2018 $ (834 ) $ (381 ) $ — $ — $ (1,215 ) Other comprehensive loss before reclassifications, net 52 (109 ) — — (57 ) Amounts reclassified, pre-tax 2 11 — — 13 Tax expense reclassified — 15 — — 15 ASU 2018-02 adoption impact — (9 ) — — (9 ) Balance at December 31, 2019 $ (780 ) $ (473 ) $ — $ — $ (1,253 ) |
INCOME TAXES (FY) (Tables)
INCOME TAXES (FY) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES [Abstract] | |
Income Before Income Taxes | The sources of income from operations before income taxes are: (dollars in millions) 2019 2018 2017 United States $ 1,460 $ 2,360 $ 1,620 Foreign $ 1,212 $ 1,482 $ 1,434 Total $ 2,672 $ 3,842 $ 3,054 |
Provision for Income Taxes | The income tax expense (benefit) for the years ended December 31, 2019, 2018 and 2017 consisted of the following components: (dollars in millions) 2019 2018 2017 Current: United States: Federal $ 262 $ 479 1,318 State 72 119 99 Foreign 305 342 342 639 940 1,759 Future: United States: Federal (14 ) (37 ) 22 State (2 ) 24 2 Foreign (106 ) 146 4 (122 ) 133 28 Income tax expense 517 1,073 1,787 Attributable to items credited to UTC Net Investment $ (36 ) $ (68 ) $ (168 ) |
Reconciliation of Effective Income Tax Rate | Differences between the effective income tax rates and the statutory U.S. federal income tax rate are as follows: (dollars in millions) 2019 2018 2017 Statutory U.S. federal income tax rate 21.0 % 21.0 % 35.0 % State income taxes 2.5 % 2.6 % 1.8 % Tax on international activities 2.5 % 4.4 % (3.4 )% Tax audit settlements (5.6 )% — % (0.4 )% U.S. tax reform adoption — % — % 26.1 % Other (1.0 )% (0.1 )% (0.6 )% Effective income tax rate 19.4 % 27.9 % 58.5 % |
Deferred Tax Assets and Liabilities | The tax effects of temporary differences and tax carryforwards which gave rise to future income tax benefits and payables at December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Future income tax benefits: Insurance and employee benefits $ 76 $ 76 Other asset basis differences 128 126 Other liability basis differences 556 331 Tax loss carryforward 236 159 Tax credit carryforwards 55 60 Valuation allowances (128 ) (107 ) $ 923 $ 645 Future income taxes payable: Intangible assets $ 392 $ 403 Other asset basis differences 297 165 $ 689 $ 568 |
Tax Credit and Loss Carryforwards | At December 31, 2019, tax credit carryforwards, principally state and foreign, and tax loss carryforwards, principally state and foreign, were as follows: (dollars in millions) Tax Loss Carryforwards Tax Credit Carryforwards Expiration period: 2020-2024 $ 52 $ 8 2025-2029 105 3 2030-2039 41 1 Indefinite 882 43 Total $ 1,080 $ 55 |
Unrecognized Tax Benefits | At December 31, 2019, Carrier had gross tax-effected unrecognized tax benefits of $166 million, all of which, if recognized, would impact the effective tax rate. A reconciliation of the beginning and ending amounts of unrecognized tax benefits and interest expense related to unrecognized tax benefits for the years ended December 31, 2019, 2018 and 2017 is as follows: (dollars in millions) 2019 2018 2017 Balance at January 1 $ 316 $ 290 $ 243 Additions for tax positions related to the current year 30 27 54 Additions for tax positions of prior years 14 3 17 Reductions for tax positions of prior years (19 ) (4 ) (20 ) Settlements (175 ) — (4 ) Balance at December 31 $ 166 $ 316 $ 290 Gross interest expense related to unrecognized tax benefits $ 8 $ 8 $ 4 Total accrued interest balance at December 31 $ 25 $ 33 $ 24 |
RESTRUCTURING COSTS (FY) (Table
RESTRUCTURING COSTS (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
RESTRUCTURING COSTS [Abstract] | ||
Restructuring Reserve by Type of Cost | During the three and nine months ended September 30, 2020 and 2019, we recorded net pre-tax restructuring costs for new and ongoing restructuring actions as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ — $ 12 $ 3 $ 47 Refrigeration (1 ) 7 2 14 Fire & Security 4 14 13 35 Eliminations and other — 1 1 1 Total restructuring costs $ 3 $ 34 $ 19 $ 97 Restructuring charges incurred during the nine months ended September 30, 2020 and 2019 primarily relate to actions initiated during 2020 and 2019, and were recorded as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Cost of sales $ (1 ) $ 14 $ 5 $ 27 Selling, general and administrative 4 20 14 70 Total restructuring costs $ 3 $ 34 $ 19 $ 97 The following table summarizes the accrual balance and utilization for the 2020 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total For the Three Months Ended September 30, 2020 Restructuring accrual as of June 30, 2020 $ 8 $ 1 $ 9 Net pre-tax restructuring costs 5 — 5 Utilization, foreign exchange and other costs (4 ) — (4 ) Balance as of September 30, 2020 $ 9 $ 1 $ 10 For the Nine Months Ended September 30, 2020 Restructuring accrual as of January 1, 2020 $ — $ — $ — Net pre-tax restructuring costs 17 1 18 Utilization, foreign exchange and other costs (8 ) — (8 ) Balance as of September 30, 2020 $ 9 $ 1 $ 10 The following table summarizes expected, incurred and remaining costs for the 2020 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred - Three Months Ended March 31, 2020 Costs Incurred - Three Months Ended June 30, 2020 Costs Incurred - Three Months Ended September 30, 2020 Remaining Costs at September 30, 2020 HVAC $ 5 $ (1 ) $ (2 ) $ (1 ) $ 1 Refrigeration 3 — (3 ) — — Fire & Security 13 (1 ) (5 ) (4 ) 3 Eliminations and other 1 — (1 ) — — Total $ 22 $ (2 ) $ (11 ) $ (5 ) $ 4 The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred in 2019 Costs Incurred - Three Months Ended March 31, 2020 Costs Incurred - Three Months Ended June 30, 2020 Costs Incurred - Three Months Ended September 30, 2020 Remaining Costs at September 30, 2020 HVAC $ 53 $ (51 ) $ (1 ) $ 2 $ (1 ) $ 2 Refrigeration 16 (14 ) — (1 ) 1 2 Fire & Security 49 (43 ) (2 ) (1 ) — 3 Eliminations and other 2 (2 ) — — — — Total $ 120 $ (110 ) $ (3 ) $ — $ — $ 7 | During the years ended December 31, 2019, 2018 and 2017, the Business recorded net pre-tax restructuring costs totaling $126 million, $80 million and $111 million, respectively, for new and ongoing restructuring actions. The Business recorded charges in the segments as follows: (dollars in millions) 2019 2018 2017 HVAC $ 56 $ 20 $ 36 Refrigeration 14 23 13 Fire & Security 53 34 57 Eliminations and other 3 3 5 Total $ 126 $ 80 $ 111 Restructuring charges incurred in the years ended December 31, 2019, 2018 and 2017 primarily relate to actions initiated during 2019, 2018 and 2017, and were recorded as follows: (dollars in millions) 2019 2018 2017 Cost of sales $ 36 $ 36 $ 48 Selling, general, & administrative 90 44 63 Total $ 126 $ 80 $ 111 The following table summarizes the accrual balances and utilization by cost type for the 2019 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2019 $ — $ — $ — Net pre-tax restructuring costs 102 8 110 Utilization, foreign exchange and other costs (60 ) (7 ) (67 ) Balance at December 31, 2019 $ 42 $ 1 $ 43 The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred During 2019 Remaining Costs at December 31, 2019 HVAC $ 53 $ (51 ) $ 2 Refrigeration 16 (14 ) 2 Fire & Security 49 (43 ) 6 Eliminations and other 2 (2 ) — Total $ 120 $ (110 ) $ 10 The following table summarizes expected, incurred and remaining costs for the 2018 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred During 2018 Costs Incurred During 2019 Remaining Costs at December 31, 2019 HVAC $ 24 $ (17 ) $ (7 ) $ — Refrigeration 26 (21 ) — 5 Fire & Security 34 (22 ) (9 ) 3 Eliminations and other 3 (3 ) — — Total $ 87 $ (63 ) $ (16 ) $ 8 |
Restructuring and Related Costs | The following table summarizes the accrual balances and utilization for the 2019 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total For the Three Months Ended September 30, 2020 Restructuring accrual as of June 30, 2020 $ 27 $ — $ 27 Net pre-tax restructuring costs — — — Utilization, foreign exchange and other costs (5 ) — (5 ) Balance as of September 30, 2020 $ 22 $ — $ 22 For the Nine Months Ended September 30, 2020 Restructuring accrual as of January 1, 2020 $ 43 $ 1 $ 44 Net pre-tax restructuring costs 3 — 3 Utilization, foreign exchange and other costs (24 ) (1 ) (25 ) Balance as of September 30, 2020 $ 22 $ — $ 22 | The following table summarizes the accrual balances and utilization by cost type for the 2018 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2018 $ — $ — $ — Net pre-tax restructuring costs 57 6 63 Utilization, foreign exchange and other costs (26 ) (4 ) (30 ) Balance at December 31, 2018 $ 31 $ 2 $ 33 Net pre-tax restructuring costs 8 8 16 Utilization, foreign exchange and other costs (30 ) (9 ) (39 ) Balance at December 31, 2019 $ 9 $ 1 $ 10 The following table summarizes the accrual balances and utilization by cost type for the 2017 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2017 $ — $ — $ — Net pre-tax restructuring costs 74 2 76 Utilization, foreign exchange and other costs (33 ) (1 ) (34 ) Balance at December 31, 2017 41 1 42 Net pre-tax restructuring costs (4 ) 5 1 Utilization, foreign exchange and other costs (26 ) (1 ) (27 ) Balance at December 31, 2018 11 5 16 Net pre-tax restructuring costs (1 ) 1 — Utilization, foreign exchange and other costs (7 ) (1 ) (8 ) Balance at December 31, 2019 $ 3 $ 5 $ 8 |
EQUITY METHOD INVESTMENTS (FY)
EQUITY METHOD INVESTMENTS (FY) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EQUITY METHOD INVESTMENTS [Abstract] | |
Financial Information for Equity Method Investments | Summarized financial information for equity method investments is reflected below. (dollars in millions) 2019 2018 Current assets $ 4,324 $ 4,123 Noncurrent assets 2,058 1,703 Total assets 6,382 5,826 Current liabilities 2,310 2,204 Noncurrent liabilities 592 445 Total liabilities 2,902 2,649 Total net equity of investees 3,480 3,177 (dollars in millions) 2019 2018 2017 Net sales $ 9,622 $ 9,142 $ 8,697 Gross profit 1,741 1,673 1,606 Income from continuing operations 578 645 561 Net income 578 645 561 |
OTHER INCOME (EXPENSE), NET (_2
OTHER INCOME (EXPENSE), NET (FY) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER INCOME (EXPENSE), NET [Abstract] | |
Other Income (Expense) | (dollars in millions) 2019 2018 2017 Transaction gains $ — $ 799 $ 379 Impairment of equity method investment (Note 16) (108 ) — — Other 106 138 196 Total $ (2 ) $ 937 $ 575 |
GUARANTEES (FY) (Tables)
GUARANTEES (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
GUARANTEES [Abstract] | ||
Changes in Carrying Amount of Service and Product Warranties and Product Performance Guarantees | 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, for the nine months ended September 30, 2020 and 2019 are as follows: For the Nine Months Ended September 30, (dollars in millions) 2020 2019 Balance as of January 1 $ 488 $ 473 Warranties, performance guarantees issued and changes in estimated liability 131 133 Settlements made (111 ) (126 ) Other 1 (2 ) Balance as of September 30 $ 509 $ 478 | The changes in the carrying amount of service and product warranties and product performance guarantees for the years ended December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Balance as of January 1 $ 473 $ 500 Warranties and performance guarantees issued 182 171 Settlement made (164 ) (191 ) Other (3 ) (7 ) Balance as of December 31 $ 488 $ 473 |
LEASES (FY) (Tables)
LEASES (FY) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LEASES [Abstract] | |
Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases was as follows: (dollars in millions) Year Ended December 31, 2019 Operating cash flows used for the measurement of operating lease liabilities $ (201 ) Operating lease right-of-use assets obtained in exchange for operating lease obligations $ 136 |
Operating Lease Right-of-Use Assets and Liabilities | Operating lease right-of-use assets and liabilities are reflected on our Combined Balance Sheet as follows: (dollars in millions, except lease term and discount rate) December 31, 2019 Operating lease right-of-use assets $ 832 Accrued liabilities (163 ) Operating lease liabilities (682 ) Total operating lease liabilities $ (845 ) |
Supplemental Information Related to Operating Leases | Supplemental information related to operating leases was as follows: December 31, 2019 Weighted-Average Remaining Lease Term (in years) 8.0 Weighted-Average Discount Rate 3.6 % |
Undiscounted Maturities of Operating Lease Liabilities | Undiscounted maturities of operating lease liabilities, including options to extend lease terms that are reasonably certain of being exercised, as of December 31, 2019 are as follows: (dollars in millions, except lease term and discount rate) Operating 2020 $ 182 2021 151 2022 121 2023 97 2024 73 Thereafter 315 Total undiscounted lease payments 939 Less imputed interest (94 ) Total discounted lease payments $ 845 |
SEGMENT FINANCIAL DATA (FY) (Ta
SEGMENT FINANCIAL DATA (FY) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SEGMENT FINANCIAL DATA [Abstract] | ||
Segment Information | Segment information for the periods presented are as follows: Net Sales Operating Profit For the Three Months Ended September 30, For the Three Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ 2,892 $ 2,602 $ 839 $ 404 Refrigeration 876 922 103 125 Fire & Security 1,324 1,402 200 205 Total segment 5,092 4,926 1,142 734 Eliminations and other (90 ) (104 ) (31 ) (63 ) General corporate expenses — — (30 ) (42 ) Consolidated $ 5,002 $ 4,822 $ 1,081 $ 629 Net Sales Operating Profit For the Nine Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ 7,142 $ 7,505 $ 1,364 $ 1,242 Refrigeration 2,384 2,839 263 373 Fire & Security 3,587 4,078 426 521 Total segment 13,113 14,422 2,053 2,136 Eliminations and other (251 ) (315 ) (122 ) (95 ) General corporate expenses — — (93 ) (107 ) Consolidated $ 12,862 $ 14,107 $ 1,838 $ 1,934 | Segment information for the years ended December 31 is as follows: Net sales Operating profit (dollars in millions) 2019 2018 2017 2019 2018 2017 HVAC $ 9,712 $ 9,713 $ 9,045 $ 1,563 $ 1,720 $ 2,001 Refrigeration 3,792 4,095 3,823 532 1,353 562 Fire & Security 5,500 5,531 5,324 708 726 639 Total Segment 19,004 19,339 18,192 2,803 3,799 3,202 Eliminations and other (396 ) (425 ) (378 ) (156 ) (24 ) (32 ) General corporate expenses — — — (156 ) (138 ) (140 ) Combined $ 18,608 $ 18,914 $ 17,814 $ 2,491 $ 3,637 $ 3,030 Total assets are not presented for each segment as they are not presented to or reviewed by the CODM. Segment Assets Capital Expenditures Depreciation & Amortization (dollars in millions) 2019 2018 2017 2019 2018 2017 2019 2018 2017 HVAC $ 1,953 $ 1,844 $ 1,630 $ 150 $ 149 $ 148 $ 160 $ 164 $ 173 Refrigeration 989 998 1,017 30 40 36 34 36 33 Fire & Security 1,728 1,764 1,698 50 45 50 123 141 152 Total Segment 4,670 4,606 4,345 230 234 234 317 341 358 Eliminations and other 10 (4 ) (10 ) 13 29 92 18 16 14 Combined $ 4,680 $ 4,602 $ 4,335 $ 243 $ 263 $ 326 $ 335 $ 357 $ 372 Cash and cash equivalents 952 1,129 1,324 Other assets, current 327 378 341 Total Current Assets $ 5,959 $ 6,109 $ 6,000 |
Geographic External Sales and Long-Lived Assets | For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 United States Operations $ 2,780 $ 2,541 $ 6,983 $ 7,473 International Operations Europe 1,307 1,313 3,455 3,906 Asia Pacific 715 729 1,879 2,079 Other 200 239 545 649 Consolidated $ 5,002 $ 4,822 $ 12,862 $ 14,107 | Long-lived assets are net fixed assets attributed to the specific geographic regions: External Net sales Long-Lived Assets (dollars in millions) 2019 2018 2017 2019 2018 2017 United States Operations $ 9,594 $ 9,415 $ 8,686 $ 701 $ 700 $ 727 International Operations: Europe 5,327 5,711 5,323 439 451 480 Asia Pacific 2,813 2,853 2,782 241 244 222 Other 874 935 1,023 282 258 255 $ 18,608 $ 18,914 $ 17,814 $ 1,663 $ 1,653 $ 1,684 |
Segment Sales Disaggregated by Product versus Service | Segment sales disaggregated by product and service are as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Sales Type Product $ 2,547 $ 2,224 $ 6,180 $ 6,455 Service 345 378 962 1,050 HVAC sales 2,892 2,602 7,142 7,505 Product 771 823 2,093 2,551 Service 105 99 291 288 Refrigeration sales 876 922 2,384 2,839 Product 965 1,055 2,587 3,011 Service 359 347 1,000 1,067 Fire & Security sales 1,324 1,402 3,587 4,078 Total segment sales 5,092 4,926 13,113 14,422 Eliminations and other (90 ) (104 ) (251 ) (315 ) Consolidated $ 5,002 $ 4,822 $ 12,862 $ 14,107 | Segment sales disaggregated by product versus service for the year ended December 31, 2019, 2018 and 2017 are as follows: (dollars in millions) 2019 2018 2017 Sales Type Product $ 8,279 $ 8,395 $ 7,902 Service 1,433 1,318 1,143 Total HVAC sales 9,712 9,713 9,045 Product 3,405 3,665 3,427 Service 387 430 396 Total Refrigeration sales 3,792 4,095 3,823 Product 4,072 4,039 3,824 Service 1,428 1,492 1,500 Total Fire & Security sales 5,500 5,531 5,324 Total segment sales 19,004 19,339 18,192 Eliminations and other (396 ) (425 ) (378 ) Combined $ 18,608 $ 18,914 $ 17,814 |
EARNINGS PER SHARE (Q3) (Tables
EARNINGS PER SHARE (Q3) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended September 30, Nine Months Ended September 30, (dollars in millions, except per share amounts; shares in millions) 2020 2019 2020 2019 Net income attributable to common shareowners $ 741 $ 492 $ 1,098 $ 1,676 Basic weighted-average number of shares outstanding 866.4 866.2 866.3 866.2 Stock awards and equity units (share equivalent) 15.1 — 9.9 — Diluted weighted-average number of shares outstanding 881.5 866.2 876.2 866.2 Earnings Per Share Basic $ 0.86 $ 0.57 $ 1.27 $ 1.94 Diluted $ 0.84 $ 0.57 $ 1.25 $ 1.94 |
REVENUE RECOGNITION (Q3) (Table
REVENUE RECOGNITION (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
REVENUE RECOGNITION [Abstract] | ||
Contract with Customer, Asset and Liability | Total contract assets and liabilities are as follows: (dollars in millions) September 30, 2020 December 31, 2019 Contract assets, current $ 753 $ 622 Contract assets, non-current (included within Other assets) 75 57 Total contract assets 828 679 Contract liabilities, current (495 ) (443 ) Contract liabilities, non-current (included within Other long-term liabilities) (166 ) (168 ) Total contract liabilities (661 ) (611 ) Net contract assets $ 167 $ 68 | Total contract assets and contract liabilities as of December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Contract assets, current $ 622 $ 566 Contract assets, noncurrent (included within Other assets) 57 100 Total contract assets 679 666 Contract liabilities, current (443 ) (448 ) Contract liabilities, noncurrent (included within Other long-term liabilities) (168 ) (164 ) Total contract liabilities (611 ) (612 ) Net contract assets $ 68 $ 54 |
ACCOUNTS RECEIVABLE, NET (Q3) (
ACCOUNTS RECEIVABLE, NET (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCOUNTS RECEIVABLE, NET [Abstract] | ||
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable, net consisted of the following: (dollars in millions) September 30, 2020 December 31, 2019 Trade receivables $ 2,578 $ 2,444 Receivables from affiliates 213 143 Other receivables 169 184 Accounts receivable 2,960 2,771 Less: Allowance for expected credit losses (88 ) (45 ) Accounts receivable, net $ 2,872 $ 2,726 | (dollars in millions) 2019 2018 Trade receivables $ 2,444 $ 2,549 Receivables from affiliates 143 113 Miscellaneous receivables 184 152 $ 2,771 $ 2,814 Less: Allowance for doubtful accounts (45 ) (141 ) 2,726 2,673 |
Accounts Receivable, Allowance for Credit Loss | The changes in the allowance for expected credit losses related to Accounts receivable, net are as follows: (dollars in millions) Balance as of January 1, 2020 $ 45 Provision for expected credit losses 38 Write-offs charged against the allowance for expected credit losses (2 ) Other (including impact of adoption of ASU 2016-13) 7 Balance as of September 30, 2020 $ 88 |
INVENTORIES, NET (Q3) (Tables)
INVENTORIES, NET (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
INVENTORIES, NET [Abstract] | ||
Schedule of Inventory, Current | (dollars in millions) September 30, 2020 December 31, 2019 Raw materials $ 248 $ 290 Work-in-process 148 120 Finished goods 1,185 922 Inventories, net $ 1,581 $ 1,332 | (dollars in millions) 2019 2018 Raw materials $ 290 $ 336 Work-in-process 120 102 Finished goods 922 925 $ 1,332 1,363 |
FIXED ASSETS, NET (Q3) (Tables)
FIXED ASSETS, NET (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
FIXED ASSETS, NET [Abstract] | ||
Property, Plant and Equipment | Fixed assets are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives. (dollars in millions) Estimated Useful Lives (Years) September 30, 2020 December 31, 2019 Land $ 112 $ 113 Buildings and improvements 40 1,129 1,138 Machinery, tools and equipment 3 to 25 2,047 1,924 Rental assets 3 to 12 404 395 Other, including assets under construction 187 188 Fixed assets, gross 3,879 3,758 Accumulated depreciation (2,203 ) (2,095 ) Fixed assets, net $ 1,676 $ 1,663 | Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of individual assets. (dollars in millions) Estimated Useful Lives (Years) 2019 2018 Land $ 113 $ 114 Buildings and improvements 40 1,138 1,142 Machinery, tools and equipment 3 to 25 1,924 1,815 Rental assets 3 to 12 395 293 Other, including assets under construction 188 180 3,758 3,544 Accumulated depreciation (2,095 ) (1,891 ) $ 1,663 $ 1,653 |
BUSINESS ACQUISITIONS, DISPOS_4
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS [Abstract] | ||
Schedule of Goodwill | The changes in the carrying amount of goodwill are as follows: (dollars in millions) HVAC Refrigeration Fire & Security Total Balance as of January 1, 2020 $ 5,351 $ 1,228 $ 3,305 $ 9,884 Foreign currency translation 2 5 15 22 Balance as of September 30, 2020 $ 5,353 $ 1,233 $ 3,320 $ 9,906 | The changes in the carrying amount of goodwill are as follows: (dollars in millions) HVAC Refrigeration Fire & Security Total Balance as of January 1, 2018 $ 5,472 $ 1,417 $ 3,176 $ 10,065 Goodwill resulting from business combinations — 1 194 195 Foreign currency translation and other (142 ) (187 ) (82 ) (411 ) Balance as of December 31, 2018 5,330 1,231 3,288 9,849 Foreign currency translation and other 21 (3 ) 17 35 Balance as of December 31, 2019 $ 5,351 $ 1,228 $ 3,305 $ 9,884 |
Intangible Assets Disclosure | Identifiable intangible assets are comprised of the following: September 30, 2020 December 31, 2019 (dollars in millions) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized: Customer relationships $ 1,506 $ (1,223 ) $ 1,479 $ (1,154 ) Patents and trademarks 293 (213 ) 287 (201 ) Monitoring lines 67 (55 ) 67 (52 ) Service portfolios and other 636 (528 ) 629 (506 ) 2,502 (2,019 ) 2,462 (1,913 ) Unamortized: Trademarks and other 541 — 534 — Intangible assets, net $ 3,043 $ (2,019 ) $ 2,996 $ (1,913 ) | |
Schedule of Indefinite-Lived Intangible Assets | Identifiable intangible assets are comprised of the following: September 30, 2020 December 31, 2019 (dollars in millions) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized: Customer relationships $ 1,506 $ (1,223 ) $ 1,479 $ (1,154 ) Patents and trademarks 293 (213 ) 287 (201 ) Monitoring lines 67 (55 ) 67 (52 ) Service portfolios and other 636 (528 ) 629 (506 ) 2,502 (2,019 ) 2,462 (1,913 ) Unamortized: Trademarks and other 541 — 534 — Intangible assets, net $ 3,043 $ (2,019 ) $ 2,996 $ (1,913 ) |
BORROWINGS AND LINES OF CREDI_2
BORROWINGS AND LINES OF CREDIT (Q3) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
BORROWINGS AND LINES OF CREDIT [Abstract] | |
Schedule of Long-term Debt | Long-term debt, all of which was issued during the nine months ended September 30, 2020 except for Other long-term debt, consisted of the following: (dollars in millions) Debt Description Interest Rate September 30, 2020 December 31, 2019 3-Year Term Loan Credit Facility due February 10, 2023 1.275 % 1 $ 1,750 2 $ — 1.923% Notes due February 15, 2023 1.923 % 500 2 — 2.242% Notes due February 15, 2025 2.242 % 2,000 2 — 2.493% Notes due February 15, 2027 2.493 % 1,250 2 — 2.722% Notes due February 15, 2030 2.722 % 2,000 2 — 2.700% Notes due February 15, 2031 2.700 % 750 — 3.377% Notes due April 5, 2040 3.377 % 1,500 2 — 3.577% Notes due April 5, 2050 3.577 % 2,000 2 — Other (including project financing obligations and finance leases) 309 319 Total principal long-term debt 12,059 319 Other (discounts and debt issuance costs) (85 ) — Total debt 11,974 319 Less: current portion of long-term debt 223 237 Long-term debt, net of current portion $ 11,751 $ 82 1 2 |
Schedule of Maturities of Long-term Debt | Scheduled maturities of long-term debt, excluding amortization of discount, are as follows: (dollars in millions) 2020 $ 223 2021 $ 45 2022 $ 40 2023 $ 2,251 2024 $ — Thereafter $ 9,500 |
EMPLOYEE BENEFIT PLANS (Q3) (Ta
EMPLOYEE BENEFIT PLANS (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS [Abstract] | ||
Schedule of Employer Contributions to Plans | Contributions to the plans were as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Defined benefit plans $ 1 $ 2 $ 29 $ 29 Defined contribution plans $ 23 $ 22 $ 78 $ 71 Multi-employer pension plans $ 5 $ 5 $ 15 $ 15 | |
Schedule of Defined Benefit Plans Disclosures | The following table illustrates the components of net periodic pension benefits for our defined benefit pension and post-retirement benefit plans: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Service cost $ 7 $ 7 $ 22 $ 23 Interest cost 13 17 39 50 Expected return on plan assets (35 ) (37 ) (104 ) (115 ) Amortization of prior service credit 1 — 2 1 Recognized actuarial net loss 5 2 15 7 Net settlement, curtailment and special termination benefit loss — — 1 1 Net periodic pension benefit $ (9 ) $ (11 ) $ (25 ) $ (33 ) | |
Schedule of Multiemployer Plans | The pension and post-retirement expense and benefits were as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Service cost $ — $ 4 $ — $ 13 Non-service pension benefit — (20 ) (2 ) (59 ) Total net periodic benefit $ — $ (16 ) $ (2 ) $ (46 ) | Our participation in these plans for the annual periods ended December 31 is outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act (“PPA”) zone status available in 2019 and 2018 is for the plan’s year-end at December 31, 2018, and December 31, 2017, respectively. The zone status is based on information that we received from the plan and is certified by the plan’s actuary. Our significant plan is in the green zone which represents a plan that is at least 80% funded and does not require a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”). (dollars in millions) EIN/ Pension Plan Number Zone Status FIP/ RP Status Pending/ Implemented Contributions Surcharge Imposed Expiration Date of Collective- Bargaining Agreement Pension Fund 2019 2018 2019 2018 Metal and technology industry pension plan N/A Green Green No $ 6 $ 6 No September 30, 2021 Other funds 14 15 $ 20 $ 21 The amounts for pension and retirement expenses for the year ended December 31, 2019, 2018 and 2017 were as follows: (dollars in millions) 2019 2018 2017 Service cost $ 18 $ 22 $ 23 Non-service pension cost (81 ) (80 ) (57 ) $ (63 ) $ (58 ) $ (34 ) |
STOCK-BASED COMPENSATION (Q3) (
STOCK-BASED COMPENSATION (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
STOCK-BASED COMPENSATION [Abstract] | ||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Carrier LTIP activity for the nine months ended September 30, 2020 was as follows: Stock Options and Stock Appreciation Rights Performance Share Units Restricted Share Units (shares and units in thousands) Shares Average Price 1 Units Average Price 2 Units Average Price 2 Outstanding as of April 3, 2020 3 36,015 $ 19.90 68 $ 21.23 5,622 $ 21.37 Granted 3,753 $ 16.62 728 $ 18.23 443 $ 18.98 Exercised (984 ) $ 15.52 — $ — (116 ) $ 20.42 Forfeited/Cancelled (509 ) $ 22.73 (22 ) $ 19.25 (108 ) $ 22.25 Outstanding as of September 30, 2020 38,275 $ 19.66 774 $ 18.48 5,841 $ 21.27 1 2 3 The following table summarizes outstanding Carrier LTIP awards that are vested and expected to vest (adjusted for expected forfeitures) and that are exercisable at September 30, 2020: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable ( shares and units in thousands; aggregate intrinsic value in dollars in thousands) Awards Average Price 1 Aggregate Intrinsic Value Remaining Life 2 Awards Average Price 1 Aggregate Intrinsic Value Remaining Life 2 Stock Options/ Stock Appreciation Rights 36,868 $ 19.61 $ 403,105 6.7 16,173 $ 16.97 $ 219,447 4.2 Performance Share Units/ Restricted Stock Units 6,291 $ 20.96 $ 192,116 1.8 1 2 | A summary of the transactions under all long-term incentive plans that UTC granted to Carrier employees for the year ended December 31, 2019 follows: Stock Options Stock Appreciation Rights Performance Share Units Other Incentive (shares and units in thousands) Shares Average Price* Shares Average Price* Units Average Price* Shares/ Units Outstanding at December 31, 2018 71 $ 85.86 5,635 $ 100.16 289 $ 110.59 499 Granted 2 133.19 1,673 124.37 142 121.79 219 Ancillary** — — — — 18 95.53 — Exercised/earned (35 ) 87.18 (1,658 ) 89.30 (155 ) 95.54 (211 ) Cancelled (1 ) 110.83 (157 ) 120.41 (25 ) 112.39 (35 ) Net Transfers (1) (1 ) 95.23 665 105.29 93 108.91 121 December 31, 2019 36 $ 91.06 6,158 $ 109.71 362 $ 120.16 593 * Weighted-average grant/exercise price ** Ancillary shares granted based on actual performance achieved on the 2016 award Note (1) Represents net activity related to employee movement between UTC business units and other miscellaneous adjustments. The following table summarizes information about equity awards outstanding for Carrier employees that are vested and expected to vest and equity awards outstanding that are exercisable at December 31, 2019: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable (shares in thousands; aggregate intrinsic value in millions) Awards Average * Aggregate Remaining ** Awards Average * Aggregate Remaining ** Stock Options/Stock Appreciation rights 6,083 $ 109.31 $ 246 6.1 years 3,333 $ 98.4 $ 171 4.3 years Performance Share Units/ Restricted Stock 1,006 $ — $ 151 1.7 years * Weighted-average exercise price per share ** Weighted-average contractual remaining term in years |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of stock appreciation rights is estimated on the date of grant using a binomial model. The following assumptions were used in the binomial model for the nine months ended September 30, 2020: For the Nine Months Ended September 30, 2020 Volatility 35.6 % Expected life (in years) 7.0 Expected dividend yield 2.0 % Range of risk-free rate 0.1% - 1.0 % | The fair value of each option award is estimated on the date of grant using a binomial lattice model. The following table indicates the assumptions used in estimating fair value for the years ended December 31, 2019 and 2018. These assumptions represent those utilized by UTC and are not necessarily indicative of assumptions that would be used by Carrier as a stand-alone company. Lattice-based option models incorporate ranges of assumptions for inputs; those ranges are as follows: 2019 2018 2017 Expected volatility 18.8% - 19.7 % 17.5% - 21.1 % 19 % Weighted-average volatility 20 % 18 % 19 % Expected term (in years) 6.5 - 6.6 6.5-6.6 6.5 Expected dividend yield 2.4 % 2.2 % 2.4 % Risk-free rate 2.3% - 2.7 % 1.3% - 2.7 % 0.5% - 2.5 % |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | ||
Schedule of Accumulated Other Comprehensive Income (Loss) | A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the three and nine months ended September 30, 2020 and 2019 is as follows: (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Post- retirement Plans Accumulated Other Comprehensive Loss Three Months Ended September 30, 2020 Balance as of June 30, 2020 $ (1,018 ) $ (461 ) $ (1,479 ) Other comprehensive income before reclassifications, net 302 — 302 Amounts reclassified, pre-tax — 6 6 Tax expense reclassified — (1 ) (1 ) Balance as of September 30, 2020 $ (716 ) $ (456 ) $ (1,172 ) Nine Months Ended September 30, 2020 Balance as of January 1, 2020 $ (780 ) $ (473 ) $ (1,253 ) Other comprehensive income before reclassifications, net 64 2 66 Amounts reclassified, pre-tax — 18 18 Tax benefit reclassified — (3 ) (3 ) Balance as of September 30, 2020 $ (716 ) $ (456 ) $ (1,172 ) (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Post- retirement Plans Accumulated Other Comprehensive Loss Three Months Ended September 30, 2019 Balance as of June 30, 2019 $ (821 ) $ (381 ) $ (1,202 ) Other comprehensive loss before reclassifications, net (274 ) — (274 ) Amounts reclassified, pre-tax — 2 2 Balance as of September 30, 2019 $ (1,095 ) $ (379 ) $ (1,474 ) Nine Months Ended September 30, 2019 Balance as of January 1, 2019 $ (834 ) $ (381 ) $ (1,215 ) Other comprehensive (loss) income before reclassifications, net (261 ) 2 (259 ) Amounts reclassified, pre-tax — 9 9 ASU 2018-02 adoption impact — (9 ) (9 ) Balance as of September 30, 2019 $ (1,095 ) $ (379 ) $ (1,474 ) | A summary of the changes in each component of accumulated other comprehensive (loss) income, net of tax for the years ended December 31, 2019, 2018 and 2017 is provided below: (dollars in millions) Foreign Currency Translation Defined Benefit Pension and Postretirement Plans Unrealized Gains (Losses) on Available- for-Sale Securities Unrealized Hedging Gains (Losses) Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2017 $ (1,130 ) $ (211 ) $ 262 $ (5 ) $ (1,084 ) Other comprehensive income (loss) before reclassifications, net 747 (32 ) (31 ) 2 686 Amounts reclassified, pre-tax (10 ) 16 (394 ) 1 (387 ) Tax expense reclassified — 5 163 — 168 Balance at December 31, 2017 $ (393 ) $ (222 ) $ — $ (2 ) $ (617 ) Other comprehensive loss before reclassifications, net (441 ) (209 ) — — (650 ) Amounts reclassified, pre-tax — 17 — 2 19 Tax expense reclassified — 33 — — 33 Balance at December 31, 2018 $ (834 ) $ (381 ) $ — $ — $ (1,215 ) Other comprehensive loss before reclassifications, net 52 (109 ) — — (57 ) Amounts reclassified, pre-tax 2 11 — — 13 Tax expense reclassified — 15 — — 15 ASU 2018-02 adoption impact — (9 ) — — (9 ) Balance at December 31, 2019 $ (780 ) $ (473 ) $ — $ — $ (1,253 ) |
RESTRUCTURING COSTS (Q3) (Table
RESTRUCTURING COSTS (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
RESTRUCTURING COSTS [Abstract] | ||
Schedule of Restructuring Reserve by Type of Cost | During the three and nine months ended September 30, 2020 and 2019, we recorded net pre-tax restructuring costs for new and ongoing restructuring actions as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ — $ 12 $ 3 $ 47 Refrigeration (1 ) 7 2 14 Fire & Security 4 14 13 35 Eliminations and other — 1 1 1 Total restructuring costs $ 3 $ 34 $ 19 $ 97 Restructuring charges incurred during the nine months ended September 30, 2020 and 2019 primarily relate to actions initiated during 2020 and 2019, and were recorded as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Cost of sales $ (1 ) $ 14 $ 5 $ 27 Selling, general and administrative 4 20 14 70 Total restructuring costs $ 3 $ 34 $ 19 $ 97 The following table summarizes the accrual balance and utilization for the 2020 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total For the Three Months Ended September 30, 2020 Restructuring accrual as of June 30, 2020 $ 8 $ 1 $ 9 Net pre-tax restructuring costs 5 — 5 Utilization, foreign exchange and other costs (4 ) — (4 ) Balance as of September 30, 2020 $ 9 $ 1 $ 10 For the Nine Months Ended September 30, 2020 Restructuring accrual as of January 1, 2020 $ — $ — $ — Net pre-tax restructuring costs 17 1 18 Utilization, foreign exchange and other costs (8 ) — (8 ) Balance as of September 30, 2020 $ 9 $ 1 $ 10 The following table summarizes expected, incurred and remaining costs for the 2020 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred - Three Months Ended March 31, 2020 Costs Incurred - Three Months Ended June 30, 2020 Costs Incurred - Three Months Ended September 30, 2020 Remaining Costs at September 30, 2020 HVAC $ 5 $ (1 ) $ (2 ) $ (1 ) $ 1 Refrigeration 3 — (3 ) — — Fire & Security 13 (1 ) (5 ) (4 ) 3 Eliminations and other 1 — (1 ) — — Total $ 22 $ (2 ) $ (11 ) $ (5 ) $ 4 The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred in 2019 Costs Incurred - Three Months Ended March 31, 2020 Costs Incurred - Three Months Ended June 30, 2020 Costs Incurred - Three Months Ended September 30, 2020 Remaining Costs at September 30, 2020 HVAC $ 53 $ (51 ) $ (1 ) $ 2 $ (1 ) $ 2 Refrigeration 16 (14 ) — (1 ) 1 2 Fire & Security 49 (43 ) (2 ) (1 ) — 3 Eliminations and other 2 (2 ) — — — — Total $ 120 $ (110 ) $ (3 ) $ — $ — $ 7 | During the years ended December 31, 2019, 2018 and 2017, the Business recorded net pre-tax restructuring costs totaling $126 million, $80 million and $111 million, respectively, for new and ongoing restructuring actions. The Business recorded charges in the segments as follows: (dollars in millions) 2019 2018 2017 HVAC $ 56 $ 20 $ 36 Refrigeration 14 23 13 Fire & Security 53 34 57 Eliminations and other 3 3 5 Total $ 126 $ 80 $ 111 Restructuring charges incurred in the years ended December 31, 2019, 2018 and 2017 primarily relate to actions initiated during 2019, 2018 and 2017, and were recorded as follows: (dollars in millions) 2019 2018 2017 Cost of sales $ 36 $ 36 $ 48 Selling, general, & administrative 90 44 63 Total $ 126 $ 80 $ 111 The following table summarizes the accrual balances and utilization by cost type for the 2019 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2019 $ — $ — $ — Net pre-tax restructuring costs 102 8 110 Utilization, foreign exchange and other costs (60 ) (7 ) (67 ) Balance at December 31, 2019 $ 42 $ 1 $ 43 The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred During 2019 Remaining Costs at December 31, 2019 HVAC $ 53 $ (51 ) $ 2 Refrigeration 16 (14 ) 2 Fire & Security 49 (43 ) 6 Eliminations and other 2 (2 ) — Total $ 120 $ (110 ) $ 10 The following table summarizes expected, incurred and remaining costs for the 2018 restructuring actions by segment: (dollars in millions) Expected Costs Costs Incurred During 2018 Costs Incurred During 2019 Remaining Costs at December 31, 2019 HVAC $ 24 $ (17 ) $ (7 ) $ — Refrigeration 26 (21 ) — 5 Fire & Security 34 (22 ) (9 ) 3 Eliminations and other 3 (3 ) — — Total $ 87 $ (63 ) $ (16 ) $ 8 |
Schedule of Restructuring and Related Costs | The following table summarizes the accrual balances and utilization for the 2019 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total For the Three Months Ended September 30, 2020 Restructuring accrual as of June 30, 2020 $ 27 $ — $ 27 Net pre-tax restructuring costs — — — Utilization, foreign exchange and other costs (5 ) — (5 ) Balance as of September 30, 2020 $ 22 $ — $ 22 For the Nine Months Ended September 30, 2020 Restructuring accrual as of January 1, 2020 $ 43 $ 1 $ 44 Net pre-tax restructuring costs 3 — 3 Utilization, foreign exchange and other costs (24 ) (1 ) (25 ) Balance as of September 30, 2020 $ 22 $ — $ 22 | The following table summarizes the accrual balances and utilization by cost type for the 2018 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2018 $ — $ — $ — Net pre-tax restructuring costs 57 6 63 Utilization, foreign exchange and other costs (26 ) (4 ) (30 ) Balance at December 31, 2018 $ 31 $ 2 $ 33 Net pre-tax restructuring costs 8 8 16 Utilization, foreign exchange and other costs (30 ) (9 ) (39 ) Balance at December 31, 2019 $ 9 $ 1 $ 10 The following table summarizes the accrual balances and utilization by cost type for the 2017 restructuring actions: (dollars in millions) Severance Facility Exit, Lease Termination and Other Costs Total Balance at January 1, 2017 $ — $ — $ — Net pre-tax restructuring costs 74 2 76 Utilization, foreign exchange and other costs (33 ) (1 ) (34 ) Balance at December 31, 2017 41 1 42 Net pre-tax restructuring costs (4 ) 5 1 Utilization, foreign exchange and other costs (26 ) (1 ) (27 ) Balance at December 31, 2018 11 5 16 Net pre-tax restructuring costs (1 ) 1 — Utilization, foreign exchange and other costs (7 ) (1 ) (8 ) Balance at December 31, 2019 $ 3 $ 5 $ 8 |
GUARANTEES (Q3) (Tables)
GUARANTEES (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
GUARANTEES [Abstract] | ||
Schedule of Product Warranty Liability | 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, for the nine months ended September 30, 2020 and 2019 are as follows: For the Nine Months Ended September 30, (dollars in millions) 2020 2019 Balance as of January 1 $ 488 $ 473 Warranties, performance guarantees issued and changes in estimated liability 131 133 Settlements made (111 ) (126 ) Other 1 (2 ) Balance as of September 30 $ 509 $ 478 | The changes in the carrying amount of service and product warranties and product performance guarantees for the years ended December 31, 2019 and 2018 are as follows: (dollars in millions) 2019 2018 Balance as of January 1 $ 473 $ 500 Warranties and performance guarantees issued 182 171 Settlement made (164 ) (191 ) Other (3 ) (7 ) Balance as of December 31 $ 488 $ 473 |
FAIR VALUE MEASUREMENTS (Q3) (T
FAIR VALUE MEASUREMENTS (Q3) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | In accordance with the provisions of ASC Topic 820 – September 30, 2020 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurement: Money market mutual funds $ 38 1 $ — $ 38 $ — Derivative assets $ 15 2 $ — $ 15 $ — Derivative liabilities $ (33 ) 3 $ — $ (33 ) $ — 1 2 3 The following table provides the carrying amounts and fair values of financial instruments that are not recorded at fair value in our Unaudited Condensed Consolidated Balance Sheet: September 30, 2020 December 31, 2019 (dollars in millions) Carrying Amount Fair Value Carrying Amount Fair Value Current and long-term debt (excluding finance leases) $ 11,969 $ 12,531 $ 313 $ 313 The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in our Unaudited Condensed Consolidated Balance Sheet: September 30, 2020 (dollars in millions) Total Level 1 Level 2 Level 3 Current and long-term debt (excluding finance leases) $ 12,531 $ 10,478 $ — $ 2,053 December 31, 2019 (dollars in millions) Total Level 1 Level 2 Level 3 Current and long-term debt (excluding finance leases) $ 313 $ — $ — $ 313 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents changes during the nine months ended September 30, 2020 and 2019 in Level 3 liabilities not measured at fair value on a recurring basis: For the Nine Months Ended September 30, (dollars in millions) 2020 2019 Fair value as of January 1 $ 313 $ 291 Issuances, including interest on project financing obligations 1,865 118 Settlements (125 ) (98 ) Fair value as of September 30 $ 2,053 $ 311 |
SEGMENT FINANCIAL DATA (Q3) (Ta
SEGMENT FINANCIAL DATA (Q3) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SEGMENT FINANCIAL DATA [Abstract] | ||
Schedule of Segment Reporting Information, by Segment | Segment information for the periods presented are as follows: Net Sales Operating Profit For the Three Months Ended September 30, For the Three Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ 2,892 $ 2,602 $ 839 $ 404 Refrigeration 876 922 103 125 Fire & Security 1,324 1,402 200 205 Total segment 5,092 4,926 1,142 734 Eliminations and other (90 ) (104 ) (31 ) (63 ) General corporate expenses — — (30 ) (42 ) Consolidated $ 5,002 $ 4,822 $ 1,081 $ 629 Net Sales Operating Profit For the Nine Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 HVAC $ 7,142 $ 7,505 $ 1,364 $ 1,242 Refrigeration 2,384 2,839 263 373 Fire & Security 3,587 4,078 426 521 Total segment 13,113 14,422 2,053 2,136 Eliminations and other (251 ) (315 ) (122 ) (95 ) General corporate expenses — — (93 ) (107 ) Consolidated $ 12,862 $ 14,107 $ 1,838 $ 1,934 | Segment information for the years ended December 31 is as follows: Net sales Operating profit (dollars in millions) 2019 2018 2017 2019 2018 2017 HVAC $ 9,712 $ 9,713 $ 9,045 $ 1,563 $ 1,720 $ 2,001 Refrigeration 3,792 4,095 3,823 532 1,353 562 Fire & Security 5,500 5,531 5,324 708 726 639 Total Segment 19,004 19,339 18,192 2,803 3,799 3,202 Eliminations and other (396 ) (425 ) (378 ) (156 ) (24 ) (32 ) General corporate expenses — — — (156 ) (138 ) (140 ) Combined $ 18,608 $ 18,914 $ 17,814 $ 2,491 $ 3,637 $ 3,030 Total assets are not presented for each segment as they are not presented to or reviewed by the CODM. Segment Assets Capital Expenditures Depreciation & Amortization (dollars in millions) 2019 2018 2017 2019 2018 2017 2019 2018 2017 HVAC $ 1,953 $ 1,844 $ 1,630 $ 150 $ 149 $ 148 $ 160 $ 164 $ 173 Refrigeration 989 998 1,017 30 40 36 34 36 33 Fire & Security 1,728 1,764 1,698 50 45 50 123 141 152 Total Segment 4,670 4,606 4,345 230 234 234 317 341 358 Eliminations and other 10 (4 ) (10 ) 13 29 92 18 16 14 Combined $ 4,680 $ 4,602 $ 4,335 $ 243 $ 263 $ 326 $ 335 $ 357 $ 372 Cash and cash equivalents 952 1,129 1,324 Other assets, current 327 378 341 Total Current Assets $ 5,959 $ 6,109 $ 6,000 |
Revenue from External Customers by Geographic Areas | For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 United States Operations $ 2,780 $ 2,541 $ 6,983 $ 7,473 International Operations Europe 1,307 1,313 3,455 3,906 Asia Pacific 715 729 1,879 2,079 Other 200 239 545 649 Consolidated $ 5,002 $ 4,822 $ 12,862 $ 14,107 | Long-lived assets are net fixed assets attributed to the specific geographic regions: External Net sales Long-Lived Assets (dollars in millions) 2019 2018 2017 2019 2018 2017 United States Operations $ 9,594 $ 9,415 $ 8,686 $ 701 $ 700 $ 727 International Operations: Europe 5,327 5,711 5,323 439 451 480 Asia Pacific 2,813 2,853 2,782 241 244 222 Other 874 935 1,023 282 258 255 $ 18,608 $ 18,914 $ 17,814 $ 1,663 $ 1,653 $ 1,684 |
Revenue from External Customers by Products and Services | Segment sales disaggregated by product and service are as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (dollars in millions) 2020 2019 2020 2019 Sales Type Product $ 2,547 $ 2,224 $ 6,180 $ 6,455 Service 345 378 962 1,050 HVAC sales 2,892 2,602 7,142 7,505 Product 771 823 2,093 2,551 Service 105 99 291 288 Refrigeration sales 876 922 2,384 2,839 Product 965 1,055 2,587 3,011 Service 359 347 1,000 1,067 Fire & Security sales 1,324 1,402 3,587 4,078 Total segment sales 5,092 4,926 13,113 14,422 Eliminations and other (90 ) (104 ) (251 ) (315 ) Consolidated $ 5,002 $ 4,822 $ 12,862 $ 14,107 | Segment sales disaggregated by product versus service for the year ended December 31, 2019, 2018 and 2017 are as follows: (dollars in millions) 2019 2018 2017 Sales Type Product $ 8,279 $ 8,395 $ 7,902 Service 1,433 1,318 1,143 Total HVAC sales 9,712 9,713 9,045 Product 3,405 3,665 3,427 Service 387 430 396 Total Refrigeration sales 3,792 4,095 3,823 Product 4,072 4,039 3,824 Service 1,428 1,492 1,500 Total Fire & Security sales 5,500 5,531 5,324 Total segment sales 19,004 19,339 18,192 Eliminations and other (396 ) (425 ) (378 ) Combined $ 18,608 $ 18,914 $ 17,814 |
DESCRIPTION OF THE BUSINESS (_2
DESCRIPTION OF THE BUSINESS (FY) (Details) - Segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
DESCRIPTION OF THE BUSINESS [Abstract] | ||
Number of reportable segments | 3 | 3 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (FY) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |||||
Restricted cash | $ 5 | $ 5 | $ 6 | $ 5 | $ 4 |
Inventories [Abstract] | |||||
Inventory higher value if valued under FIFO method | $ 120 | $ 113 | |||
Percentage of inventory utilized the LIFO method | 32.00% | 31.00% | |||
Other Long-Lived Assets [Abstract] | |||||
Impairments of long-lived assets | $ 0 | $ 0 | 0 | ||
Self-Insurance [Abstract] | |||||
Liabilities related to self-insured risks | 239 | 224 | |||
Liabilities related to self-insured risks, long-term | 66 | 64 | |||
Expense related to self-insurance | 177 | 170 | $ 158 | ||
Asset Retirement Obligations [Abstract] | |||||
Amount of outstanding liability for asset retirement obligations | $ 74 | $ 73 | |||
Customer Relationships [Member] | Minimum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 1 year | ||||
Customer Relationships [Member] | Maximum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 30 years | ||||
Trademarks and Trade Names [Member] | Minimum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 5 years | ||||
Trademarks and Trade Names [Member] | Maximum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 30 years | ||||
Service Contracts [Member] | Minimum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 1 year | ||||
Service Contracts [Member] | Maximum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 23 years | ||||
Monitoring Lines [Member] | Minimum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 7 years | ||||
Monitoring Lines [Member] | Maximum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 10 years | ||||
Patents [Member] | Minimum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 7 years | ||||
Patents [Member] | Maximum [Member] | |||||
Finite-lived intangible assets [Abstract] | |||||
Useful lives of finite-lived intangible assets | 8 years |
REVENUE RECOGNITION, Contract A
REVENUE RECOGNITION, Contract Assets and Liabilities (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue Recognition [Abstract] | ||||||
Contract assets, current | $ 753 | $ 753 | $ 622 | $ 566 | ||
Contract assets, non-current (included within Other assets) | 75 | 75 | 57 | 100 | ||
Total contract assets | 828 | 828 | 679 | 666 | ||
Contract liabilities, current | (495) | (495) | (443) | (448) | ||
Contract liabilities, non-current (included within Other long-term liabilities) | (166) | (166) | (168) | (164) | ||
Total contract liabilities | (661) | (661) | (611) | (612) | ||
Net contract assets | 167 | 167 | 68 | 54 | ||
Contract with customer, asset, change | 149 | 13 | 143 | |||
Contract with customer, liability, change | 50 | (1) | 4 | |||
Contract with customer, liability, revenue recognized | $ 55 | $ 53 | $ 288 | $ 301 | $ 362 | |
New Revenue Standard [Member] | ||||||
Revenue Recognition [Abstract] | ||||||
Total contract assets | 666 | |||||
Total contract liabilities | $ (612) |
REVENUE RECOGNITION, Remaining
REVENUE RECOGNITION, Remaining Performance Obligations (FY) (Details) - USD ($) $ in Billions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue, Performance Obligation Satisfied over Time [Abstract] | |||
Revenue, remaining performance obligation, amount | $ 5.6 | $ 4.7 | $ 5.3 |
Revenue, remaining performance obligation, percentage | 64.00% | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |||
Revenue, Performance Obligation Satisfied over Time [Abstract] | |||
Revenue, remaining performance obligation, period | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |||
Revenue, Performance Obligation Satisfied over Time [Abstract] | |||
Revenue, remaining performance obligation, percentage | 73.00% | ||
Revenue, remaining performance obligation, period | 12 months |
RELATED PARTIES (FY), (Details)
RELATED PARTIES (FY), (Details) - UTC [Member] - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party [Abstract] | |||||||
Revenue from related parties | $ 0 | $ 6,000,000 | $ 3,000,000 | $ 18,000,000 | $ 23,000,000 | $ 25,000,000 | $ 29,000,000 |
Related party transaction, selling, general and administrative expenses from transactions with related party | 0 | 62,000,000 | 43,000,000 | 178,000,000 | 245,000,000 | 277,000,000 | 240,000,000 |
Accounts receivable, related parties | 16,000,000,000 | 15,100,000,000 | |||||
Accounts payable, related parties | 3,300,000,000 | 2,600,000,000 | 146,000,000 | ||||
Interest income, related party | 0 | 21,000,000 | 0 | 70,000,000 | 91,000,000 | 110,000,000 | 85,000,000 |
Interest expense, related party | 0 | $ 12,000,000 | 0 | $ 44,000,000 | 55,000,000 | 59,000,000 | 202,000,000 |
Accounts receivable, related parties, current | 0 | 0 | 6,000,000 | 12,000,000 | |||
Accounts payable, related parties, current | $ 0 | $ 0 | 4,000,000 | 8,000,000 | |||
Outstanding guarantees | 1,400,000,000 | 900,000,000 | |||||
Pre-separation costs | $ 58,000,000 | $ 0 | $ 0 |
ACCOUNTS RECEIVABLE, NET (FY)_2
ACCOUNTS RECEIVABLE, NET (FY) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts receivable net [Abstract] | ||||
Accounts receivable | $ 2,960 | $ 2,771 | $ 2,814 | |
Less: Allowance for expected credit losses | (88) | (45) | (141) | |
Accounts receivable, net | 2,872 | 2,726 | 2,673 | |
Bad debt expense | 38 | 18 | 20 | $ 12 |
Trade Receivables [Member] | ||||
Accounts receivable net [Abstract] | ||||
Accounts receivable | 2,578 | 2,444 | 2,549 | |
Less: Allowance for expected credit losses | (61) | |||
Receivables From Affiliates [Member] | ||||
Accounts receivable net [Abstract] | ||||
Accounts receivable | 213 | 143 | 113 | |
Miscellaneous Receivables [Member] | ||||
Accounts receivable net [Abstract] | ||||
Accounts receivable | $ 169 | $ 184 | $ 152 |
INVENTORIES, NET (FY) (Details)
INVENTORIES, NET (FY) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
INVENTORIES, NET [Abstract] | |||
Raw materials | $ 248 | $ 290 | $ 336 |
Work-in-process | 148 | 120 | 102 |
Finished goods | 1,185 | 922 | 925 |
Inventories, net | 1,332 | 1,363 | |
Inventory valuation reserves | $ 180 | $ 152 | $ 142 |
FIXED ASSETS, NET (FY) (Details
FIXED ASSETS, NET (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fixed assets, net [Abstract] | |||||||
Fixed assets, gross | $ 3,879 | $ 3,879 | $ 3,758 | $ 3,544 | |||
Accumulated depreciation | (2,203) | (2,203) | (2,095) | (1,891) | |||
Fixed assets, net | 1,676 | 1,676 | 1,663 | 1,653 | $ 1,684 | ||
Depreciation | 56 | $ 54 | 165 | $ 163 | 219 | 221 | $ 226 |
Land [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Fixed assets, gross | 112 | $ 112 | $ 113 | 114 | |||
Buildings and Improvements [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Property, plant and equipment, estimated useful life | 40 years | 40 years | |||||
Fixed assets, gross | 1,129 | $ 1,129 | $ 1,138 | 1,142 | |||
Machinery, Tools and Equipment [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Fixed assets, gross | 2,047 | 2,047 | 1,924 | 1,815 | |||
Rental Assets [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Fixed assets, gross | 404 | 404 | 395 | 293 | |||
Other, Including Assets Under Construction [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Fixed assets, gross | $ 187 | $ 187 | $ 188 | $ 180 | |||
Minimum [Member] | Machinery, Tools and Equipment [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Property, plant and equipment, estimated useful life | 3 years | 3 years | |||||
Minimum [Member] | Rental Assets [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Property, plant and equipment, estimated useful life | 3 years | 3 years | |||||
Maximum [Member] | Machinery, Tools and Equipment [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Property, plant and equipment, estimated useful life | 25 years | 25 years | |||||
Maximum [Member] | Rental Assets [Member] | |||||||
Fixed assets, net [Abstract] | |||||||
Property, plant and equipment, estimated useful life | 12 years | 12 years |
BUSINESS ACQUISITIONS, DISPOS_5
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS, Business Acquisitions and Dispositions (FY) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisitions and Dispositions [Abstract] | |||
Investments in business, net of cash acquired | $ 0 | $ 310 | $ 176 |
Proceeds from sale of business in cash | 6 | 1,032 | 52 |
Pre-tax gain on sale of Taylor | $ 0 | $ 799 | $ 0 |
BUSINESS ACQUISITIONS, DISPOS_6
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS, Goodwill (FY) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | |||
Goodwill - Beginning Balance | $ 9,884 | $ 9,849 | $ 10,065 |
Goodwill resulting from business combinations | 195 | ||
Foreign currency translation and other | 22 | 35 | (411) |
Goodwill - Ending Balance | 9,906 | 9,884 | 9,849 |
HVAC [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill - Beginning Balance | 5,351 | 5,330 | 5,472 |
Goodwill resulting from business combinations | 0 | ||
Foreign currency translation and other | 2 | 21 | (142) |
Goodwill - Ending Balance | 5,353 | 5,351 | 5,330 |
Refrigeration [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill - Beginning Balance | 1,228 | 1,231 | 1,417 |
Goodwill resulting from business combinations | 1 | ||
Foreign currency translation and other | 5 | (3) | (187) |
Goodwill - Ending Balance | 1,233 | 1,228 | 1,231 |
Reduction of goodwill attributable to sale | (151) | ||
Fire & Security [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill - Beginning Balance | 3,305 | 3,288 | 3,176 |
Goodwill resulting from business combinations | 194 | ||
Foreign currency translation and other | 15 | 17 | (82) |
Goodwill - Ending Balance | $ 3,320 | $ 3,305 | $ 3,288 |
BUSINESS ACQUISITIONS, DISPOS_7
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS, Finite and Indefinite-lived Intangible Assets (FY) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-lived Intangible Assets, Net [Abstract] | |||
Gross Amount | $ 2,502 | $ 2,462 | $ 2,498 |
Accumulated Amortization | (2,019) | (1,913) | (1,823) |
Indefinite-lived Intangible Assets, Net [Abstract] | |||
Total assets | 3,043 | 2,996 | 3,037 |
Trademarks And Other [Member] | |||
Indefinite-lived Intangible Assets, Net [Abstract] | |||
Gross Amount | 541 | 534 | 539 |
Customer Relationships [Member] | |||
Finite-lived Intangible Assets, Net [Abstract] | |||
Gross Amount | 1,506 | 1,479 | 1,511 |
Accumulated Amortization | (1,223) | (1,154) | (1,098) |
Patents and Trademarks [Member] | |||
Finite-lived Intangible Assets, Net [Abstract] | |||
Gross Amount | 293 | 287 | 292 |
Accumulated Amortization | (213) | (201) | (189) |
Monitoring Lines [Member] | |||
Finite-lived Intangible Assets, Net [Abstract] | |||
Gross Amount | 67 | 67 | 64 |
Accumulated Amortization | (55) | (52) | (46) |
Service Portfolios And Other [Member] | |||
Finite-lived Intangible Assets, Net [Abstract] | |||
Gross Amount | 636 | 629 | 631 |
Accumulated Amortization | $ (528) | $ (506) | $ (490) |
BUSINESS ACQUISITIONS, DISPOS_8
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS, Future Amortization of Intangible Assets (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS [Abstract] | |||||||
Amortization of intangible assets | $ 26 | $ 30 | $ 76 | $ 88 | $ 116 | $ 136 | $ 146 |
Future Amortization [Abstract] | |||||||
2020 | 101 | ||||||
2021 | 91 | ||||||
2022 | 72 | ||||||
2023 | 63 | ||||||
2024 | $ 55 |
ACCRUED LIABILITIES (FY) (Detai
ACCRUED LIABILITIES (FY) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
ACCRUED LIABILITIES [Abstract] | ||
Accrued salaries, wages and employee benefits | $ 516 | $ 519 |
Accrued taxes | 318 | 325 |
Warranty related | 200 | 190 |
Project financing obligations | 234 | 150 |
Accrued restructuring | 66 | 56 |
Accrued legal and environmental reserves | 24 | 26 |
Customer advances and deferred revenue | 26 | 24 |
Other | 941 | 784 |
Accrued Liabilities | $ 2,325 | $ 2,074 |
OTHER LONG-TERM LIABILITIES (_3
OTHER LONG-TERM LIABILITIES (FY) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
OTHER LONG-TERM LIABILITIES [Abstract] | |||
Warranty related | $ 288 | $ 283 | |
Environmental reserves | $ 220 | 203 | 200 |
Project financing obligations | 75 | 137 | |
Asset retirement obligations | 74 | 73 | |
Other | 625 | 610 | |
Other long-term liabilities | $ 1,265 | $ 1,303 |
EMPLOYEE BENEFIT PLANS (FY) (De
EMPLOYEE BENEFIT PLANS (FY) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
EMPLOYEE BENEFIT PLANS [Abstract] | ||||||||||
Defined contribution plans, employer contribution | $ 23 | $ 22 | $ 78 | $ 71 | $ 88 | $ 94 | $ 86 | |||
Change in Benefit Obligation [Roll Forward] | ||||||||||
Service cost | 7 | 7 | 22 | 23 | ||||||
Interest cost | 13 | 17 | 39 | 50 | ||||||
Change in Plan Assets [Roll Forward] | ||||||||||
Employer contributions | 1 | 2 | 29 | 29 | ||||||
Amounts Recognized in the Combined Balance Sheets [Abstract] | ||||||||||
Noncurrent assets | 574 | $ 574 | 574 | $ 490 | $ 441 | |||||
Noncurrent liability | (473) | (473) | (473) | (456) | (419) | |||||
Postretirement Benefit Plan [Abstract] | ||||||||||
Net periodic benefit cost | (9) | (11) | $ (25) | (33) | ||||||
Stock Based Compensation [Abstract] | ||||||||||
Expiration period | 10 years | 10 years | ||||||||
Award vesting period | 3 years | 3 years | ||||||||
Share-based payment arrangement, expense | 21 | $ 18 | $ 56 | 40 | $ 52 | 44 | 34 | |||
Share-based payment arrangement, future income tax benefit recognized | 11 | 10 | 8 | |||||||
Cash received from the exercise of stock options | 3 | 4 | 7 | |||||||
Stock option tax benefit realized | 16 | 7 | 19 | |||||||
Stock option tax benefit realized vesting performance and other restricted awards | $ 9 | $ 2 | $ 4 | |||||||
Unrecognized compensation costs | $ 107 | $ 107 | $ 107 | 62 | ||||||
Stock Option [Member] | ||||||||||
Stock Based Compensation [Abstract] | ||||||||||
Cost not yet recognized, period for recognition | 2 years 2 months 12 days | 2 years 6 months | ||||||||
Granted (in dollars per shares) | $ 21.02 | $ 20.25 | $ 17.55 | |||||||
Fair value award vested | $ 80 | $ 43 | $ 63 | |||||||
Stock Appreciation Rights (SARs) [Member] | ||||||||||
Stock Based Compensation [Abstract] | ||||||||||
Granted (in dollars per shares) | $ 21.02 | $ 20.25 | $ 17.55 | |||||||
Fair value award vested | $ 80 | $ 43 | $ 63 | |||||||
Performance Shares [Member] | ||||||||||
Stock Based Compensation [Abstract] | ||||||||||
Granted (in dollars per share) | $ 18.23 | $ 112.76 | $ 131.42 | $ 111 | ||||||
Fair value of restricted awards vested | $ 45 | $ 14 | $ 18 | |||||||
Restricted Stock Units [Member] | ||||||||||
Stock Based Compensation [Abstract] | ||||||||||
Granted (in dollars per share) | $ 18.98 | |||||||||
Fair value of restricted awards vested | $ 45 | 14 | 18 | |||||||
Minimum [Member] | ||||||||||
Stock Based Compensation [Abstract] | ||||||||||
Award requisite service period | 3 years | 3 years | ||||||||
Pension Plan [Member] | ||||||||||
Change in Benefit Obligation [Roll Forward] | ||||||||||
Beginning balance | $ 2,885 | 2,581 | $ 2,581 | 2,822 | ||||||
Service cost | 31 | 33 | 34 | |||||||
Interest cost | 67 | 64 | 65 | |||||||
Actuarial (gain) loss | 351 | (110) | ||||||||
Benefits paid | (132) | (114) | ||||||||
Net settlement, curtailment and special termination benefits | (38) | (8) | ||||||||
Other | 25 | (106) | ||||||||
Ending balance | 2,885 | 2,581 | 2,822 | |||||||
Change in Plan Assets [Roll Forward] | ||||||||||
Beginning balance | 2,953 | 2,635 | 2,635 | 3,000 | ||||||
Actual return on plan assets | 381 | (162) | ||||||||
Employer contributions | 36 | 45 | ||||||||
Benefits paid | (132) | (114) | ||||||||
Settlements | (14) | (7) | ||||||||
Other | 47 | (127) | ||||||||
Ending balance | 2,953 | 2,635 | 3,000 | |||||||
Funded Status [Abstract] | ||||||||||
Fair value of plan assets | 2,953 | 2,635 | 2,953 | 2,635 | 3,000 | 2,953 | 2,635 | |||
Benefit obligations | (2,885) | (2,581) | (2,885) | (2,581) | (2,822) | (2,885) | (2,581) | |||
Funded status of plan | 68 | 54 | ||||||||
Amounts Recognized in the Combined Balance Sheets [Abstract] | ||||||||||
Noncurrent assets | 488 | 442 | ||||||||
Current liability | (9) | (16) | ||||||||
Noncurrent liability | (411) | (372) | ||||||||
Net amount recognized | 68 | 54 | ||||||||
Amounts Recognized in Accumulated Other Comprehensive Loss [Abstract] | ||||||||||
Net actuarial loss | 577 | 482 | ||||||||
Prior service cost | 15 | 11 | ||||||||
Net amount recognized | 592 | $ 493 | ||||||||
Expected Future Benefit Payments [Abstract] | ||||||||||
2020 | 127 | |||||||||
2021 | 120 | |||||||||
2022 | 123 | |||||||||
2023 | 125 | |||||||||
2024 | 126 | |||||||||
2025 through 2029 | $ 665 | |||||||||
Postretirement Benefit Plan [Abstract] | ||||||||||
Net periodic benefit cost | $ (41) | $ (55) | $ (48) | |||||||
Projected benefit obligation discount rate | 2.00% | 2.80% | ||||||||
Net cost discount rate | 2.80% | 2.50% | 2.70% | |||||||
Global Defined Benefit Pension Plans [Member] | ||||||||||
Expected Future Benefit Payments [Abstract] | ||||||||||
Expected contributions in 2020 | $ 29 | |||||||||
Postretirement Benefits Plan [Member] | ||||||||||
Change in Benefit Obligation [Roll Forward] | ||||||||||
Beginning balance | 6 | 6 | $ 6 | |||||||
Ending balance | 6 | $ 6 | ||||||||
Funded Status [Abstract] | ||||||||||
Benefit obligations | $ (6) | $ (6) | (6) | (6) | (6) | $ (6) | ||||
Expected Future Benefit Payments [Abstract] | ||||||||||
2020 | 0.3 | |||||||||
2021 | 0.3 | |||||||||
2022 | 0.2 | |||||||||
2023 | 0.2 | |||||||||
2024 | 0.2 | |||||||||
2025 through 2029 | $ 1.1 | |||||||||
Postretirement Benefit Plan [Abstract] | ||||||||||
Net periodic benefit cost | 0.2 | $ 0.2 | $ 0.3 | |||||||
Changes in benefit obligations recognized in other comprehensive income | $ 1 | |||||||||
Projected benefit obligation discount rate | 3.00% | 3.60% | ||||||||
Net cost discount rate | 3.60% | 3.40% | 3.70% |
EMPLOYEE BENEFIT PLANS, Pension
EMPLOYEE BENEFIT PLANS, Pension Plans with Accumulated Benefit Obligations and Projected Benefit Obligations in Excess of Plan Assets (FY) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Benefit Obligation in Excess of Plan Assets [Abstract] | |||
Projected benefit obligation | $ 549 | $ 501 | |
Accumulated benefit obligation | 506 | 463 | |
Fair value of plan assets | 137 | 125 | |
Benefit Obligation in Excess of Plan Assets [Abstract] | |||
Projected benefit obligation | 690 | 616 | |
Accumulated benefit obligation | 630 | 564 | |
Fair value of plan assets | 270 | 228 | |
Pension Plan [Member] | |||
Employee Benefit Plans [Abstract] | |||
Cash contributions to defined benefit pension plans | $ 36 | $ 45 | $ 44 |
United States [Member] | Pension Plan [Member] | |||
Employee Benefit Plans [Abstract] | |||
Percentage of projected benefit obligation | 9.00% | ||
Foreign Plan [Member] | Pension Plan [Member] | |||
Employee Benefit Plans [Abstract] | |||
Percentage of projected benefit obligation | 91.00% |
EMPLOYEE BENEFIT PLANS, Pensi_2
EMPLOYEE BENEFIT PLANS, Pension Plan (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Benefits [Abstract] | |||||||
Service cost | $ 7 | $ 7 | $ 22 | $ 23 | |||
Interest cost | 13 | 17 | 39 | 50 | |||
Expected return on plan assets | (35) | (37) | (104) | (115) | |||
Recognized actuarial net loss | 5 | 2 | 15 | 7 | |||
Amortization of prior service credit | 1 | 0 | 2 | 1 | |||
Net settlement, curtailment and special termination benefit loss | 0 | 0 | 1 | 1 | |||
Net periodic pension benefit - employer | $ (9) | $ (11) | $ (25) | $ (33) | |||
Pension Plan [Member] | |||||||
Pension Benefits [Abstract] | |||||||
Accumulated benefit obligation for defined benefit pension plans | $ 2,885 | $ 2,581 | $ 2,822 | ||||
Service cost | 31 | 33 | 34 | ||||
Interest cost | 67 | 64 | 65 | ||||
Expected return on plan assets | (154) | (170) | (160) | ||||
Recognized actuarial net loss | 9 | 16 | 14 | ||||
Amortization of prior service credit | 2 | 1 | 2 | ||||
Net settlement, curtailment and special termination benefit loss | 4 | 1 | (3) | ||||
Net periodic pension benefit - employer | $ (41) | $ (55) | $ (48) |
EMPLOYEE BENEFIT PLANS, Changes
EMPLOYEE BENEFIT PLANS, Changes in Plan Assets and Benefit Obligations Recognized Other Comprehensive Loss (FY) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss [Abstract] | |||
Current year actuarial loss | $ 112 | $ 221 | $ 13 |
Total recognized in other comprehensive loss | 98 | $ 192 | $ 16 |
Pension Plan [Member] | |||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss [Abstract] | |||
Current year actuarial loss | 112 | ||
Amortization of actuarial loss | (9) | ||
Amortization of prior service cost | (2) | ||
Net settlement and curtailment gain | (4) | ||
Other | 2 | ||
Total recognized in other comprehensive loss | 99 | ||
Net recognized in net periodic pension benefit and other comprehensive loss | $ 58 |
EMPLOYEE BENEFIT PLANS, Accumul
EMPLOYEE BENEFIT PLANS, Accumulated Other Comprehensive Loss Net Periodic Pension Benefit (FY) (Details) - Pension Plan [Member] $ in Millions | Dec. 31, 2019USD ($) |
Amortization from Accumulated Other Comprehensive Loss into Net Periodic Pension Benefit in 2020 [Abstract] | |
Net actuarial loss | $ 18 |
Prior service cost | 1 |
Total accumulated other comprehensive loss | $ 19 |
EMPLOYEE BENEFIT PLANS, Assumpt
EMPLOYEE BENEFIT PLANS, Assumptions in Benefit Obligation and Net Cost Pension Plans (FY) (Details) - Pension Plan [Member] | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ||||
Discount rate | 2.00% | 2.80% | ||
Salary scale | 3.40% | 3.00% | ||
Weighted Average Assumptions Used in Calculating Net Cost [Abstract] | ||||
Net cost discount rate | 2.80% | 2.50% | 2.70% | |
Interest cost | [1] | 0.027 | 0.024 | 0.025 |
Service cost | [1] | 0.032 | 0.028 | 0.031 |
Salary scale | 3.00% | 3.00% | 2.60% | |
Expected return on plan assets | 5.60% | 6.00% | 6.20% | |
Growth Seeking Assets [Member] | ||||
Weighted Average Assumptions Used in Calculating Net Cost [Abstract] | ||||
Investment percentage within plan asset category | 40.00% | |||
Income Generating and Hedging Assets [Member] | ||||
Weighted Average Assumptions Used in Calculating Net Cost [Abstract] | ||||
Investment percentage within plan asset category | 60.00% | |||
[1] | Obligation discount rate is used for the service cost and interest cost measurements for non-significant plans. |
EMPLOYEE BENEFIT PLANS, Fair Va
EMPLOYEE BENEFIT PLANS, Fair Values of Pension Plan Assets by Asset Category (FY) (Details) - Pension Plan [Member] - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Total Pension Plan Assets [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[2],[3],[4],[5],[6],[7] | $ 2,953 | $ 2,635 |
Subtotal [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 2,935 | 2,619 | |
Subtotal [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[2],[3],[4],[5],[6],[7] | 40 | 37 |
Subtotal [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[2],[3],[4],[5],[6],[7] | 422 | 356 |
Subtotal [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[2],[3],[4],[5],[6],[7] | 14 | 11 |
Subtotal [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 2,459 | 2,215 | |
Global Equities [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 29 | 22 | |
Global Equities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 29 | 22 | |
Global Equities [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Global Equities [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Global Equities [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Global Equity Commingled Funds [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [2] | 141 | 116 |
Global Equity Commingled Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [2] | 0 | 1 |
Global Equity Commingled Funds [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [2] | 141 | 115 |
Global Equity Commingled Funds [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [2] | 0 | 0 |
Global Equity Commingled Funds [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [2] | 0 | 0 |
Enhanced Global Equities [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [3] | 6 | 5 |
Enhanced Global Equities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [3] | 3 | 1 |
Enhanced Global Equities [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [3] | 3 | 4 |
Enhanced Global Equities [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [3] | 0 | 0 |
Enhanced Global Equities [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [3] | 0 | 0 |
Global Equity Funds [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1] | 927 | 815 |
Global Equity Funds [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1] | 927 | 815 |
Private Equities [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[6] | 12 | 10 |
Private Equities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[6] | 0 | 0 |
Private Equities [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[6] | 0 | 0 |
Private Equities [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[6] | 2 | 1 |
Private Equities [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[6] | 10 | 9 |
Governments [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 43 | 41 | |
Governments [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 8 | 13 | |
Governments [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 35 | 28 | |
Governments [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Governments [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Corporate Bonds [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 169 | 136 | |
Corporate Bonds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Corporate Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 169 | 136 | |
Corporate Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Corporate Bonds [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Fixed Income Securities [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1] | 1,449 | 1,323 |
Fixed Income Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1] | 0 | 0 |
Fixed Income Securities [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1] | 0 | 0 |
Fixed Income Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1] | 0 | 0 |
Fixed Income Securities [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1] | 1,449 | 1,323 |
Real Estate [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[5] | 21 | 26 |
Real Estate [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[5] | 0 | 0 |
Real Estate [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[5] | 3 | 3 |
Real Estate [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[5] | 12 | 10 |
Real Estate [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[5] | 6 | 13 |
Other [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[4] | 91 | 81 |
Other [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[4] | 0 | 0 |
Other [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[4] | 68 | 63 |
Other [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[4] | 0 | 0 |
Other [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[4] | 23 | 18 |
Cash & cash equivalents [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[7] | 47 | 44 |
Cash & cash equivalents [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[7] | 0 | 0 |
Cash & cash equivalents [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[7] | 3 | 7 |
Cash & cash equivalents [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[7] | 0 | 0 |
Cash & cash equivalents [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[7] | 44 | 37 |
Other Assets & Liability [Member] | Not Subject to Leveling [Member] | |||
Fair Value of Plan Assets [Abstract] | |||
Fair value of plan assets | [1],[2],[3],[4],[5],[6],[7],[8] | $ 18 | $ 16 |
[1] | In accordance with ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets. | ||
[2] | Represents commingled funds that invest primarily in common stocks. | ||
[3] | Represents enhanced equity separate account and commingled fund portfolios. A portion of the portfolio may include long-short market neutral and relative value strategies that invest in publicly traded, equity and fixed income securities, as well as derivatives of equity and fixed income securities and foreign currency. | ||
[4] | Represents insurance contracts and global balanced risk commingled funds consisting mainly of equity, bonds and some commodities. | ||
[5] | Represents investments in real estate including commingled funds and directly held properties. | ||
[6] | Represents limited partner investments with general partners that primarily invest in debt and equity. | ||
[7] | Represents short-term commercial paper, bonds and other cash or cash-like instruments. | ||
[8] | Represents trust receivables and payables that are not leveled. |
EMPLOYEE BENEFIT PLANS, Multiem
EMPLOYEE BENEFIT PLANS, Multiemployer Benefit Plans (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension and Retirement Expenses [Abstract] | |||||||
Service cost | $ 7 | $ 7 | $ 22 | $ 23 | |||
Non-service pension benefit | (16) | (47) | (47) | (124) | $ 154 | $ 168 | $ 139 |
Net periodic pension benefit - employer | (9) | (11) | (25) | (33) | |||
UTC Sponsored Defined Benefit Plans [Member] | |||||||
Pension and Retirement Expenses [Abstract] | |||||||
Service cost | 0 | 4 | 0 | 13 | 18 | 22 | 23 |
Non-service pension benefit | 0 | (20) | (2) | (59) | (81) | (80) | (57) |
Net periodic pension benefit - employer | $ 0 | $ (16) | $ (2) | $ (46) | $ (63) | (58) | (34) |
Pension Plan [Member] | |||||||
Multiemployer Plan, Pension, Significant [Abstract] | |||||||
Minimum funding percentage, individually significant | At least 80 percent | ||||||
Pension and Retirement Expenses [Abstract] | |||||||
Service cost | $ 31 | 33 | 34 | ||||
Net periodic pension benefit - employer | (41) | (55) | $ (48) | ||||
Pension Plan [Member] | Pension Fund [Member] | |||||||
Multiemployer Plan, Pension, Significant [Abstract] | |||||||
Contributions | $ 20 | $ 21 | |||||
Pension Plan [Member] | Metal and Technology Industry Pension Plan [Member] | |||||||
Multiemployer Plan, Pension, Significant [Abstract] | |||||||
Zone Status | Green | Green | |||||
FIP/RP Status Pending/Implemented | No | ||||||
Contributions | $ 6 | $ 6 | |||||
Surcharge imposed | No | ||||||
Expiration date of Collective-Bargaining Agreement | Sep. 30, 2021 | ||||||
Pension Plan [Member] | Other Funds [Member] | |||||||
Multiemployer Plan, Pension, Significant [Abstract] | |||||||
Contributions | $ 14 | $ 15 |
EMPLOYEE BENEFIT PLANS, LTIP Ac
EMPLOYEE BENEFIT PLANS, LTIP Activity (FY) (Details) - $ / shares shares in Thousands | 6 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | ||
Shares Outstanding [Roll Forward] | |||
Exercised/earned (in shares) | (984) | ||
Average Price [Abstract] | |||
Exercised/earned (in dollars per share) | $ 15.52 | ||
Stock Option [Member] | |||
Shares Outstanding [Roll Forward] | |||
Beginning balance (in shares) | 71 | ||
Granted (in shares) | 2 | ||
Ancillary (in shares) | 0 | ||
Exercised/earned (in shares) | (35) | ||
Cancelled (in shares) | (1) | ||
Net Transfers (in shares) | [1] | (1) | |
Ending balance (in shares) | 36 | ||
Average Price [Abstract] | |||
Beginning balance (in dollars per share) | [2] | $ 85.86 | |
Granted (in dollars per share) | [2] | 133.19 | |
Ancillary (in dollars per share) | [2] | 0 | |
Exercised/earned (in dollars per share) | [2] | 87.18 | |
Cancelled (in dollars per share) | [2] | 110.83 | |
Net Transfers (in dollars per share) | [1],[2] | 95.23 | |
Ending balance (in dollars per share) | [2] | $ 91.06 | |
Stock Appreciation Rights (SARs) [Member] | |||
Shares Outstanding [Roll Forward] | |||
Beginning balance (in shares) | 5,635 | ||
Granted (in shares) | 1,673 | ||
Ancillary (in shares) | 0 | ||
Exercised/earned (in shares) | (1,658) | ||
Cancelled (in shares) | (157) | ||
Net Transfers (in shares) | [1] | 665 | |
Ending balance (in shares) | 6,158 | ||
Average Price [Abstract] | |||
Beginning balance (in dollars per share) | [2] | $ 100.16 | |
Granted (in dollars per share) | [2] | 124.37 | |
Ancillary (in dollars per share) | [2] | 0 | |
Exercised/earned (in dollars per share) | [2] | 89.30 | |
Cancelled (in dollars per share) | [2] | 120.41 | |
Net Transfers (in dollars per share) | [1],[2] | 105.29 | |
Ending balance (in dollars per share) | [2] | 109.71 | |
Performance Share Units [Member] | |||
Average Price [Abstract] | |||
Beginning balance (in dollars per share) | [2] | 110.59 | |
Granted (in dollars per share) | [2] | 121.79 | |
Ancillary (in dollars per share) | [2],[3] | 95.53 | |
Exercised/earned (in dollars per share) | [2] | 95.54 | |
Cancelled (in dollars per share) | [2] | 112.39 | |
Net Transfers (in dollars per share) | [1],[2] | 108.91 | |
Ending balance (in dollars per share) | [2] | $ 120.16 | |
Units Outstanding [Roll Forward] | |||
Beginning balance (in shares) | 68 | 289 | |
Granted (in shares) | 728 | 142 | |
Ancillary (in shares) | [3] | 18 | |
Exercised/earned (in shares) | (155) | ||
Cancelled (in shares) | (22) | (25) | |
Net Transfers (in shares) | [1] | 93 | |
Ending balance (in shares) | 774 | 362 | |
Other Incentive Shares [Member] | |||
Units Outstanding [Roll Forward] | |||
Beginning balance (in shares) | 499 | ||
Granted (in shares) | 219 | ||
Ancillary (in shares) | 0 | ||
Exercised/earned (in shares) | (211) | ||
Cancelled (in shares) | (35) | ||
Net Transfers (in shares) | [1] | 121 | |
Ending balance (in shares) | 593 | ||
[1] | Represents net activity related to employee movement between UTC business units and other miscellaneous adjustments. | ||
[2] | Weighted-average grant/exercise price | ||
[3] | Ancillary shares granted based on actual performance achieved on the 2016 award |
EMPLOYEE BENEFIT PLANS, LTIP Aw
EMPLOYEE BENEFIT PLANS, LTIP Awards Vested and Expected to Vest and Exercisable (FY) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | ||
Stock Options and Stock Appreciation Rights [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options vest and expected to vest (in shares) | 36,868 | 6,083 | |
Options vested and expected to vest (in dollars per share) | $ 19.61 | $ 109.31 | [1] |
Options vested and expected to vest, aggregate intrinsic value | $ 403,105 | $ 246,000 | |
Options vested and expected to vest, weighted average remaining contractual term | 6 years 8 months 12 days | 6 years 1 month 6 days | [2] |
Options exercisable (in shares) | 16,173 | 3,333 | |
Options exercisable (in dollars per share) | $ 16.97 | $ 98.4 | [1] |
Options exercisable, aggregate intrinsic value | $ 219,447 | $ 171,000 | |
Options exercisable, weighted average remaining contractual term | 4 years 2 months 12 days | 4 years 3 months 18 days | [2] |
Performance Share Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance shares vested and expected to vest (in shares) | 6,291 | 1,006 | |
Performance shares vested and expected to vest (in dollars per share) | $ 20.96 | $ 0 | [1] |
Performance shares vested and expected to vest, aggregate intrinsic value | $ 192,116 | $ 151,000 | |
Performance shares vested and expected to vest, weighted average remaining contractual term | 1 year 9 months 18 days | 1 year 8 months 12 days | [2] |
[1] | Weighted-average exercise price per share | ||
[2] | Weighted-average contractual remaining term in years |
EMPLOYEE BENEFIT PLANS, Fair _2
EMPLOYEE BENEFIT PLANS, Fair Value Assumptions (FY) (Details) - Stock Option [Member] | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 19.00% | ||
Weighted-average volatility | 20.00% | 18.00% | 19.00% |
Expected term (in years) | 6 years 6 months | ||
Expected dividend yield | 2.40% | 2.20% | 2.40% |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 18.80% | 17.50% | |
Expected term (in years) | 6 years 6 months | 6 years 6 months | |
Range of risk-free rate | 2.30% | 1.30% | 0.50% |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 19.70% | 21.10% | |
Expected term (in years) | 6 years 7 months 6 days | 6 years 7 months 6 days | |
Range of risk-free rate | 2.70% | 2.70% | 2.50% |
ACCUMULATED OTHER COMPREHENSI_5
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | $ 4,366 | $ 14,960 | $ 14,435 | $ 14,269 | $ 14,269 | $ 14,784 | $ 14,960 |
Other comprehensive income (loss) before reclassifications, net | (57) | (650) | 686 | ||||
Amounts reclassified, pre-tax | 13 | 19 | (387) | ||||
Tax expense reclassified | 15 | 33 | 168 | ||||
Balance | 5,437 | 14,644 | 5,437 | 14,644 | 14,435 | 14,269 | 14,784 |
Foreign Currency Translation [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | (1,018) | (821) | (780) | (834) | (834) | (393) | (1,130) |
Other comprehensive income (loss) before reclassifications, net | 302 | (274) | 64 | (261) | 52 | (441) | 747 |
Amounts reclassified, pre-tax | 0 | 0 | 0 | 0 | 2 | 0 | (10) |
Tax expense reclassified | 0 | 0 | 0 | 0 | 0 | ||
Balance | (716) | (1,095) | (716) | (1,095) | (780) | (834) | (393) |
Defined Benefit Pension and Postretirement Plans [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | (461) | (381) | (473) | (381) | (381) | (222) | (211) |
Other comprehensive income (loss) before reclassifications, net | 0 | 0 | 2 | 2 | (109) | (209) | (32) |
Amounts reclassified, pre-tax | 6 | 2 | 18 | 9 | 11 | 17 | 16 |
Tax expense reclassified | (1) | (3) | 15 | 33 | 5 | ||
Balance | (456) | (379) | (456) | (379) | (473) | (381) | (222) |
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | 0 | 0 | 0 | 0 | 262 | ||
Other comprehensive income (loss) before reclassifications, net | 0 | 0 | (31) | ||||
Amounts reclassified, pre-tax | 0 | 0 | (394) | ||||
Tax expense reclassified | 0 | 0 | 163 | ||||
Balance | 0 | 0 | 0 | ||||
Unrealized Hedging Gains (Losses) [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | 0 | 0 | 0 | (2) | (5) | ||
Other comprehensive income (loss) before reclassifications, net | 0 | 0 | 2 | ||||
Amounts reclassified, pre-tax | 0 | 2 | 1 | ||||
Tax expense reclassified | 0 | 0 | 0 | ||||
Balance | 0 | 0 | (2) | ||||
Accumulated Other Comprehensive Income (Loss) [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | (1,479) | (1,202) | (1,253) | (1,215) | (1,215) | (617) | (1,084) |
Other comprehensive income (loss) before reclassifications, net | 302 | (274) | 66 | (259) | |||
Amounts reclassified, pre-tax | 6 | 2 | 18 | 9 | |||
Tax expense reclassified | (1) | (3) | |||||
Balance | $ (1,172) | (1,474) | (1,172) | (1,474) | (1,253) | (1,215) | $ (617) |
Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | $ (4) | 0 | 0 | ||||
Balance | (4) | 0 | |||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Foreign Currency Translation [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | 0 | 0 | |||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Defined Benefit Pension and Postretirement Plans [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | (9) | (9) | |||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | (9) | (9) | |||||
Balance | $ (9) | (9) | (9) | ||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2018-02 [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | 0 | 0 | |||||
Balance | 0 | ||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2018-02 [Member] | Foreign Currency Translation [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | 0 | 0 | |||||
Balance | 0 | ||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2018-02 [Member] | Defined Benefit Pension and Postretirement Plans [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | (9) | (9) | |||||
Balance | (9) | ||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2018-02 [Member] | Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | 0 | 0 | |||||
Balance | 0 | ||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2018-02 [Member] | Unrealized Hedging Gains (Losses) [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | 0 | 0 | |||||
Balance | 0 | ||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2018-02 [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance | $ (9) | $ (9) | |||||
Balance | $ (9) |
INCOME TAXES (FY) (Details)
INCOME TAXES (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Before Income Taxes [Abstract] | |||||||
United States | $ 1,460 | $ 2,360 | $ 1,620 | ||||
Foreign | 1,212 | 1,482 | 1,434 | ||||
Income from operations before income taxes | $ 1,009 | $ 679 | $ 1,679 | $ 2,081 | 2,672 | 3,842 | 3,054 |
Undistributed earnings | 6,000 | ||||||
Current [Abstract] | |||||||
United States, Federal | 262 | 479 | 1,318 | ||||
United States, State | 72 | 119 | 99 | ||||
Foreign | 305 | 342 | 342 | ||||
Current income tax expense (benefit) | 639 | 940 | 1,759 | ||||
Future [Abstract] | |||||||
United States, Federal | (14) | (37) | 22 | ||||
United States, State | (2) | 24 | 2 | ||||
Foreign | (106) | 146 | 4 | ||||
Deferred income tax expense (benefit) | (122) | 133 | 28 | ||||
Income tax expense | $ 261 | $ 175 | $ 560 | $ 380 | 517 | 1,073 | 1,787 |
Attributable to items credited to UTC Net Investment | $ (36) | $ (68) | $ (168) |
INCOME TAXES, Reconciliation of
INCOME TAXES, Reconciliation of Effective Income Tax Rate (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAXES [Abstract] | |||||||
Statutory U.S. federal income tax rate | 21.00% | 21.00% | 35.00% | ||||
State income taxes | 2.50% | 2.60% | 1.80% | ||||
Tax on international activities | 2.50% | 4.40% | (3.40%) | ||||
Tax audit settlements | (5.60%) | 0.00% | (0.40%) | ||||
U.S. tax reform adoption | 0.00% | 0.00% | 26.10% | ||||
Other | (1.00%) | (0.10%) | (0.60%) | ||||
Effective income tax rate | 25.90% | 25.80% | 33.40% | 18.30% | 19.40% | 27.90% | 58.50% |
Net tax benefit from participation in amnesty program | $ 149 | $ (149) | |||||
Net tax charge from reinvestment of certain undistributed earnings of international subsidiaries | $ 46 | $ 102 | |||||
Net tax charge attributable to passage of TCJA | $ 799 |
INCOME TAXES, Deferred Tax Asse
INCOME TAXES, Deferred Tax Assets and Liabilities (FY) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Future income tax benefits [Abstract] | ||
Insurance and employee benefits | $ 76 | $ 76 |
Other asset basis differences | 128 | 126 |
Other liability basis differences | 556 | 331 |
Tax loss carryforward | 236 | 159 |
Tax credit carryforwards | 55 | 60 |
Valuation allowances | (128) | (107) |
Deferred tax assets | 923 | 645 |
Future income taxes payable [Abstract] | ||
Intangible assets | 392 | 403 |
Other asset basis differences | 297 | 165 |
Deferred tax liabilities | $ 689 | $ 568 |
INCOME TAXES, Tax Credit and Lo
INCOME TAXES, Tax Credit and Loss Carryforwards (FY) (Details) $ in Millions | Dec. 31, 2019USD ($) |
Tax Credit and Loss Carryforwards [Abstract] | |
Tax loss carryforwards | $ 1,080 |
Tax credit carryforwards | 55 |
2020-2024 [Member] | |
Tax Credit and Loss Carryforwards [Abstract] | |
Tax loss carryforwards | 52 |
Tax credit carryforwards | 8 |
2025-2029 [Member] | |
Tax Credit and Loss Carryforwards [Abstract] | |
Tax loss carryforwards | 105 |
Tax credit carryforwards | 3 |
2030-2039 [Member] | |
Tax Credit and Loss Carryforwards [Abstract] | |
Tax loss carryforwards | 41 |
Tax credit carryforwards | 1 |
Indefinite [Member] | |
Tax Credit and Loss Carryforwards [Abstract] | |
Tax loss carryforwards | 882 |
Tax credit carryforwards | $ 43 |
INCOME TAXES, Unrecognized Tax
INCOME TAXES, Unrecognized Tax Benefits (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAXES [Abstract] | ||||
Balance at January 1 | $ 316 | $ 290 | $ 243 | |
Additions for tax positions related to the current year | 30 | 27 | 54 | |
Additions for tax positions of prior years | 14 | 3 | 17 | |
Reductions for tax positions of prior years | (19) | (4) | (20) | |
Settlements | (175) | 0 | (4) | |
Balance at December 31 | 166 | 316 | 290 | |
Gross interest expense related to unrecognized tax benefits | 8 | 8 | 4 | |
Total accrued interest balance at December 31 | 25 | $ 33 | 24 | |
Unrecognized Tax Benefits [Abstract] | ||||
Non-cash gain recognized | $ (166) | (20) | ||
Pre-tax interest adjustment | $ (16) | $ (2) | ||
Minimum [Member] | ||||
Unrecognized Tax Benefits [Abstract] | ||||
Increase in unrecognized tax benefits over next 12 months | 14 | |||
Maximum [Member] | ||||
Unrecognized Tax Benefits [Abstract] | ||||
Increase in unrecognized tax benefits over next 12 months | $ 18 |
RESTRUCTURING COSTS (FY), Restr
RESTRUCTURING COSTS (FY), Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | $ 3 | $ 34 | $ 19 | $ 97 | $ 126 | $ 80 | $ 111 |
Cost of Sales [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | (1) | 14 | 5 | 27 | 36 | 36 | 48 |
Selling, General and Administrative [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | 4 | 20 | 14 | 70 | 90 | 44 | 63 |
2019 Actions [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 43 | 0 | 0 | ||||
Net pre-tax restructuring costs | 110 | ||||||
Utilization, foreign exchange and other costs | (67) | ||||||
Ending balance | 43 | 0 | |||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 120 | ||||||
Costs incurred | (110) | ||||||
Remaining costs | 10 | ||||||
2019 Actions [Member] | Severance [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 42 | 0 | 0 | ||||
Net pre-tax restructuring costs | 102 | ||||||
Utilization, foreign exchange and other costs | (60) | ||||||
Ending balance | 42 | 0 | |||||
2019 Actions [Member] | Facility Exit, Lease Termination and Other Costs [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 1 | 0 | 0 | ||||
Net pre-tax restructuring costs | 8 | ||||||
Utilization, foreign exchange and other costs | (7) | ||||||
Ending balance | 1 | 0 | |||||
2019 Actions [Member] | Cost of Sales [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | 29 | ||||||
2019 Actions [Member] | Selling, General and Administrative [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | 81 | ||||||
2018 Actions [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 10 | 33 | 33 | 0 | |||
Net pre-tax restructuring costs | 16 | 63 | |||||
Utilization, foreign exchange and other costs | (39) | (30) | |||||
Ending balance | 10 | 33 | 0 | ||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 87 | ||||||
Costs incurred | (16) | (63) | |||||
Remaining costs | 8 | ||||||
2018 Actions [Member] | Severance [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 9 | 31 | 31 | 0 | |||
Net pre-tax restructuring costs | 8 | 57 | |||||
Utilization, foreign exchange and other costs | (30) | (26) | |||||
Ending balance | 9 | 31 | 0 | ||||
2018 Actions [Member] | Facility Exit, Lease Termination and Other Costs [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 1 | 2 | 2 | 0 | |||
Net pre-tax restructuring costs | 8 | 6 | |||||
Utilization, foreign exchange and other costs | (9) | (4) | |||||
Ending balance | 1 | 2 | 0 | ||||
2018 Actions [Member] | Cost of Sales [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | 7 | ||||||
2018 Actions [Member] | Selling, General and Administrative [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | 9 | ||||||
2017 Actions [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 8 | 16 | 16 | 42 | 0 | ||
Net pre-tax restructuring costs | 0 | 1 | 76 | ||||
Utilization, foreign exchange and other costs | (8) | (27) | (34) | ||||
Ending balance | 8 | 16 | 42 | ||||
2017 Actions [Member] | Severance [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 3 | 11 | 11 | 41 | 0 | ||
Net pre-tax restructuring costs | (1) | (4) | 74 | ||||
Utilization, foreign exchange and other costs | (7) | (26) | (33) | ||||
Ending balance | 3 | 11 | 41 | ||||
2017 Actions [Member] | Facility Exit, Lease Termination and Other Costs [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 5 | 5 | 5 | 1 | 0 | ||
Net pre-tax restructuring costs | 1 | 5 | 2 | ||||
Utilization, foreign exchange and other costs | (1) | (1) | (1) | ||||
Ending balance | 5 | 5 | 1 | ||||
2016 Actions [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Beginning balance | 5 | ||||||
Net pre-tax restructuring costs | 0 | ||||||
Ending balance | 5 | ||||||
Operating Segments [Member] | HVAC [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | 0 | 12 | 3 | 47 | 56 | 20 | 36 |
Operating Segments [Member] | Refrigeration [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | (1) | 7 | 2 | 14 | 14 | 23 | 13 |
Operating Segments [Member] | Fire & Security [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | 4 | 14 | 13 | 35 | 53 | 34 | 57 |
Operating Segments [Member] | 2019 Actions [Member] | HVAC [Member] | |||||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 53 | ||||||
Costs incurred | (51) | ||||||
Remaining costs | 2 | ||||||
Operating Segments [Member] | 2019 Actions [Member] | Refrigeration [Member] | |||||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 16 | ||||||
Costs incurred | (14) | ||||||
Remaining costs | 2 | ||||||
Operating Segments [Member] | 2019 Actions [Member] | Fire & Security [Member] | |||||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 49 | ||||||
Costs incurred | (43) | ||||||
Remaining costs | 6 | ||||||
Operating Segments [Member] | 2018 Actions [Member] | HVAC [Member] | |||||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 24 | ||||||
Costs incurred | (7) | (17) | |||||
Remaining costs | 0 | ||||||
Operating Segments [Member] | 2018 Actions [Member] | Refrigeration [Member] | |||||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 26 | ||||||
Costs incurred | 0 | (21) | |||||
Remaining costs | 5 | ||||||
Operating Segments [Member] | 2018 Actions [Member] | Fire & Security [Member] | |||||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 34 | ||||||
Costs incurred | (9) | (22) | |||||
Remaining costs | 3 | ||||||
Eliminations and Other [Member] | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Net pre-tax restructuring costs | $ 0 | $ 1 | $ 1 | $ 1 | 3 | 3 | $ 5 |
Eliminations and Other [Member] | 2019 Actions [Member] | |||||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 2 | ||||||
Costs incurred | (2) | ||||||
Remaining costs | 0 | ||||||
Eliminations and Other [Member] | 2018 Actions [Member] | |||||||
Expected. Incurred and Remaining Costs [Abstract] | |||||||
Expected costs | 3 | ||||||
Costs incurred | 0 | $ (3) | |||||
Remaining costs | $ 0 |
EQUITY METHOD INVESTMENTS (FY_2
EQUITY METHOD INVESTMENTS (FY) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)Affiliate | Dec. 31, 2018USD ($)Affiliate | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Equity Method Investments [Abstract] | ||||||||||||
Number of uncombined domestic and foreign affiliates | Affiliate | 30 | 31 | ||||||||||
Summarized Financial Information [Abstract] | ||||||||||||
Current assets | $ 9,334,000,000 | $ 9,334,000,000 | $ 5,959,000,000 | $ 6,109,000,000 | $ 6,000,000,000 | |||||||
Total Assets | 25,728,000,000 | 25,728,000,000 | 22,406,000,000 | 21,737,000,000 | ||||||||
Current liabilities | 5,182,000,000 | 5,182,000,000 | 4,469,000,000 | 4,466,000,000 | ||||||||
Total Liabilities | 20,291,000,000 | 20,291,000,000 | 7,971,000,000 | 7,468,000,000 | ||||||||
Total net equity of investees | 5,437,000,000 | $ 4,366,000,000 | $ 3,026,000,000 | $ 14,644,000,000 | $ 14,960,000,000 | $ 14,690,000,000 | 5,437,000,000 | $ 14,644,000,000 | 14,435,000,000 | 14,269,000,000 | 14,784,000,000 | $ 14,960,000,000 |
Net sales | 5,002,000,000 | 4,822,000,000 | 12,862,000,000 | 14,107,000,000 | 18,608,000,000 | 18,914,000,000 | 17,814,000,000 | |||||
Net income | 748,000,000 | $ 269,000,000 | 102,000,000 | 504,000,000 | $ 794,000,000 | $ 403,000,000 | 1,119,000,000 | 1,701,000,000 | 2,155,000,000 | 2,769,000,000 | 1,267,000,000 | |
Non-cash pre-tax charge | 108,000,000 | 72,000,000 | 108,000,000 | 108,000,000 | 0 | 0 | ||||||
Equity Method Investee [Member] | ||||||||||||
Summarized Financial Information [Abstract] | ||||||||||||
Non-cash pre-tax charge | $ 71,000,000 | |||||||||||
Revenue from related parties | 576,000,000 | 498,000,000 | 1,400,000,000 | 1,400,000,000 | 1,800,000,000 | 1,900,000,000 | 1,900,000,000 | |||||
Related parties amount in cost of sales | 70,000,000 | $ 96,000,000 | 213,000,000 | $ 274,000,000 | 368,000,000 | 355,000,000 | 378,000,000 | |||||
Accounts receivable, related parties | 213,000,000 | 213,000,000 | 137,000,000 | 101,000,000 | ||||||||
Accounts payable, related parties | $ 40,000,000 | $ 40,000,000 | 55,000,000 | 74,000,000 | ||||||||
Equity Method Investee [Member] | Previously Reported [Member] | ||||||||||||
Summarized Financial Information [Abstract] | ||||||||||||
Related parties amount in cost of sales | 600,000,000 | 600,000,000 | ||||||||||
Equity Method Investments [Member] | ||||||||||||
Summarized Financial Information [Abstract] | ||||||||||||
Current assets | 4,324,000,000 | 4,123,000,000 | ||||||||||
Noncurrent assets | 2,058,000,000 | 1,703,000,000 | ||||||||||
Total Assets | 6,382,000,000 | 5,826,000,000 | ||||||||||
Current liabilities | 2,310,000,000 | 2,204,000,000 | ||||||||||
Noncurrent liabilities | 592,000,000 | 445,000,000 | ||||||||||
Total Liabilities | 2,902,000,000 | 2,649,000,000 | ||||||||||
Total net equity of investees | 3,480,000,000 | 3,177,000,000 | ||||||||||
Net sales | 9,622,000,000 | 9,142,000,000 | 8,697,000,000 | |||||||||
Gross Profit | 1,741,000,000 | 1,673,000,000 | 1,606,000,000 | |||||||||
Income from continuing operations | 578,000,000 | 645,000,000 | 561,000,000 | |||||||||
Net income | $ 578,000,000 | $ 645,000,000 | $ 561,000,000 | |||||||||
Minimum [Member] | ||||||||||||
Equity Method Investments [Abstract] | ||||||||||||
Ownership interest in equity method investments | 20.00% | |||||||||||
Maximum [Member] | ||||||||||||
Equity Method Investments [Abstract] | ||||||||||||
Ownership interest in equity method investments | 50.00% |
OTHER INCOME (EXPENSE), NET (_3
OTHER INCOME (EXPENSE), NET (FY) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OTHER INCOME (EXPENSE), NET [Abstract] | |||||||
Transaction gains | $ 0 | $ 799 | $ 379 | ||||
Impairment of equity method investment | $ (108) | $ (72) | $ (108) | (108) | 0 | 0 | |
Other | 106 | 138 | 196 | ||||
Total | $ 239 | $ (91) | $ 168 | $ (42) | $ (2) | $ 937 | $ 575 |
GUARANTEES (FY) (Details)
GUARANTEES (FY) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Product Warranty Accrual [Roll Forward] | ||||
Beginning balance | $ 488 | $ 473 | $ 473 | $ 500 |
Warranties and performance guarantees issued | 131 | 133 | 182 | 171 |
Settlement made | (111) | (126) | (164) | (191) |
Other | 1 | (2) | (3) | (7) |
Ending balance | $ 509 | $ 478 | 488 | 473 |
Indemnification Agreement for Divested Business [Member] | ||||
Guarantees [Abstract] | ||||
Carrying amount of liabilities related to obligations | $ 10 | $ 10 |
LEASES (FY) (Details)
LEASES (FY) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease expense | $ 206 | |||
Supplemental Cash Flow Information Related Operating Lease [Abstract] | ||||
Operating cash flows used for the measurement of operating lease liabilities | (201) | |||
Operating lease right-of-use assets obtained in exchange for operating lease obligations | 136 | |||
Operating Lease Right-of-Use Assets and Liabilities [Abstract] | ||||
Operating lease right-of-use assets | 832 | $ 0 | $ 823 | |
Accrued liabilities | $ (163) | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | |||
Operating lease liabilities | $ (682) | 0 | $ (676) | |
Total operating lease liabilities | $ (845) | |||
Supplemental Information Related to Operating Leases [Abstract] | ||||
Weighted-Average Remaining Lease Term (in years) | 8 years | |||
Weighted-Average Discount Rate | 3.60% | |||
Undiscounted Maturities of Operating Lease Liabilities [Abstract] | ||||
2020 | $ 182 | |||
2021 | 151 | |||
2022 | 121 | |||
2023 | 97 | |||
2024 | 73 | |||
Thereafter | 315 | |||
Total undiscounted lease payments | 939 | |||
Less imputed interest | (94) | |||
Total discounted lease payments | $ 845 | |||
Maturities of Operating Lease Liabilities Prior to Adoption of New Lease Accounting Standards [Abstract] | ||||
2019 | 189 | |||
2020 | 146 | |||
2021 | 110 | |||
2022 | 77 | |||
2023 | 52 | |||
Thereafter | 111 | |||
Total long-term non-cancelable operating leases | 685 | |||
Operating lease rent expense | 167 | $ 164 | ||
ASU 2016-02 [Member] | ||||
Operating Lease Right-of-Use Assets and Liabilities [Abstract] | ||||
Operating lease right-of-use assets | 894 | |||
Total operating lease liabilities | (901) | |||
Undiscounted Maturities of Operating Lease Liabilities [Abstract] | ||||
Total discounted lease payments | $ 901 | |||
Minimum [Member] | ||||
Leases [Abstract] | ||||
Remaining lease term | 1 year | |||
Maximum [Member] | ||||
Leases [Abstract] | ||||
Remaining lease term | 25 years | |||
Term of extension | 3 years | |||
Termination period | 1 year |
CONTINGENT LIABILITIES (FY) (De
CONTINGENT LIABILITIES (FY) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Other Commitments [Abstract] | |||
Accrual for environmental loss contingencies | $ 233 | $ 217 | $ 215 |
Accrued environmental loss contingencies, current | 13 | 14 | 15 |
Accrued environmental loss contingencies, noncurrent | 220 | 203 | $ 200 |
Loss contingency, receivable | 104 | 104 | |
Minimum [Member] | Asbestos Matters | |||
Other Commitments [Abstract] | |||
Loss contingency accrual | 250 | 255 | |
Maximum [Member] | Asbestos Matters | |||
Other Commitments [Abstract] | |||
Loss contingency accrual | $ 290 | $ 290 |
SEGMENT FINANCIAL DATA (FY) (De
SEGMENT FINANCIAL DATA (FY) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Information [Abstract] | |||||||
Number of operating segments | Segment | 3 | ||||||
Net sales | $ 5,002 | $ 4,822 | $ 12,862 | $ 14,107 | $ 18,608 | $ 18,914 | $ 17,814 |
Operating profit | 1,081 | 629 | 1,838 | 1,934 | 2,491 | 3,637 | 3,030 |
Segment assets | 4,680 | 4,602 | 4,335 | ||||
Cash and cash equivalents | 3,848 | 862 | 3,848 | 862 | 952 | 1,129 | 1,324 |
Other assets, current | 280 | 280 | 327 | 378 | 341 | ||
Total Current Assets | 9,334 | 9,334 | 5,959 | 6,109 | 6,000 | ||
Capital expenditures | 151 | 139 | 243 | 263 | 326 | ||
Depreciation and amortization | 241 | 251 | 335 | 357 | 372 | ||
Long-lived assets | 1,676 | 1,676 | 1,663 | 1,653 | 1,684 | ||
Product [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 4,193 | 3,998 | 10,615 | 11,703 | 15,360 | 15,674 | 14,775 |
Service [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 809 | 824 | 2,247 | 2,404 | 3,248 | 3,240 | 3,039 |
United States Operations [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 2,780 | 2,541 | 6,983 | 7,473 | 9,594 | 9,415 | 8,686 |
Long-lived assets | 701 | 700 | 727 | ||||
Europe [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 1,307 | 1,313 | 3,455 | 3,906 | 5,327 | 5,711 | 5,323 |
Long-lived assets | 439 | 451 | 480 | ||||
Asia Pacific [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 715 | 729 | 1,879 | 2,079 | 2,813 | 2,853 | 2,782 |
Long-lived assets | 241 | 244 | 222 | ||||
Other [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 200 | 239 | 545 | 649 | 874 | 935 | 1,023 |
Long-lived assets | 282 | 258 | 255 | ||||
Operating Segments [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 5,092 | 4,926 | 13,113 | 14,422 | 19,004 | 19,339 | 18,192 |
Operating profit | 1,142 | 734 | 2,053 | 2,136 | 2,803 | 3,799 | 3,202 |
Segment assets | 4,670 | 4,606 | 4,345 | ||||
Capital expenditures | 230 | 234 | 234 | ||||
Depreciation and amortization | 317 | 341 | 358 | ||||
Operating Segments [Member] | HVAC [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 2,892 | 2,602 | 7,142 | 7,505 | 9,712 | 9,713 | 9,045 |
Operating profit | 839 | 404 | 1,364 | 1,242 | 1,563 | 1,720 | 2,001 |
Segment assets | 1,953 | 1,844 | 1,630 | ||||
Capital expenditures | 150 | 149 | 148 | ||||
Depreciation and amortization | 160 | 164 | 173 | ||||
Operating Segments [Member] | HVAC [Member] | Product [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 2,547 | 2,224 | 6,180 | 6,455 | 8,279 | 8,395 | 7,902 |
Operating Segments [Member] | HVAC [Member] | Service [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 345 | 378 | 962 | 1,050 | 1,433 | 1,318 | 1,143 |
Operating Segments [Member] | Refrigeration [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 876 | 922 | 2,384 | 2,839 | 3,792 | 4,095 | 3,823 |
Operating profit | 103 | 125 | 263 | 373 | 532 | 1,353 | 562 |
Segment assets | 989 | 998 | 1,017 | ||||
Capital expenditures | 30 | 40 | 36 | ||||
Depreciation and amortization | 34 | 36 | 33 | ||||
Operating Segments [Member] | Refrigeration [Member] | Product [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 771 | 823 | 2,093 | 2,551 | 3,405 | 3,665 | 3,427 |
Operating Segments [Member] | Refrigeration [Member] | Service [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 105 | 99 | 291 | 288 | 387 | 430 | 396 |
Operating Segments [Member] | Fire & Security [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 1,324 | 1,402 | 3,587 | 4,078 | 5,500 | 5,531 | 5,324 |
Operating profit | 200 | 205 | 426 | 521 | 708 | 726 | 639 |
Segment assets | 1,728 | 1,764 | 1,698 | ||||
Capital expenditures | 50 | 45 | 50 | ||||
Depreciation and amortization | 123 | 141 | 152 | ||||
Operating Segments [Member] | Fire & Security [Member] | Product [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 965 | 1,055 | 2,587 | 3,011 | 4,072 | 4,039 | 3,824 |
Operating Segments [Member] | Fire & Security [Member] | Service [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 359 | 347 | 1,000 | 1,067 | 1,428 | 1,492 | 1,500 |
Eliminations and Other [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | (90) | (104) | (251) | (315) | (396) | (425) | (378) |
Operating profit | (31) | (63) | (122) | (95) | (156) | (24) | (32) |
Segment assets | 10 | (4) | (10) | ||||
Capital expenditures | 13 | 29 | 92 | ||||
Depreciation and amortization | 18 | 16 | 14 | ||||
General Corporate Expenses [Member] | |||||||
Segment Information [Abstract] | |||||||
Net sales | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Operating profit | $ (30) | $ (42) | $ (93) | $ (107) | $ (156) | $ (138) | $ (140) |
SUBSEQUENT EVENTS (FY) (Details
SUBSEQUENT EVENTS (FY) (Details) - USD ($) | Feb. 27, 2020 | Feb. 10, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 12,059,000,000 | $ 319,000,000 | ||
Term Loan [Member] | ||||
Debt Instruments [Abstract] | ||||
Revolving credit facility, maximum borrowing capacity | $ 1,750,000,000 | |||
Long-term debt, gross | $ 1,750,000,000 | 0 | ||
Interest rate | 1.275% | |||
Unsecured Debt [Member] | 1.923% Notes due February 15, 2023 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 500,000,000 | 0 | ||
Interest rate | 1.923% | |||
Unsecured Debt [Member] | 2.242% Notes due February 15, 2025 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 2,000,000,000 | 0 | ||
Interest rate | 2.242% | |||
Unsecured Debt [Member] | 2.493% Notes due February 15, 2027 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 1,250,000,000 | 0 | ||
Interest rate | 2.493% | |||
Unsecured Debt [Member] | 2.722% Notes due February 15, 2030 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 2,000,000,000 | 0 | ||
Interest rate | 2.722% | |||
Unsecured Debt [Member] | 3.377% Notes due April 05, 2040 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 1,500,000,000 | 0 | ||
Interest rate | 3.377% | |||
Unsecured Debt [Member] | 3.577% Notes due April 05, 2050 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 2,000,000,000 | $ 0 | ||
Interest rate | 3.577% | |||
Revolving Credit Facility [Member] | Line of Credit [Member] | ||||
Debt Instruments [Abstract] | ||||
Revolving credit facility, maximum borrowing capacity | 2,000,000,000 | $ 0 | ||
Subsequent Event [Member] | Term Loan [Member] | ||||
Debt Instruments [Abstract] | ||||
Revolving credit facility, maximum borrowing capacity | $ 1,750,000,000 | |||
Debt instrument, credit facility term | 3 years | |||
Subsequent Event [Member] | Unsecured Debt [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 9,250,000,000 | |||
Subsequent Event [Member] | Unsecured Debt [Member] | 1.923% Notes due February 15, 2023 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 500,000,000 | |||
Interest rate | 1.923% | |||
Maturity date | Feb. 15, 2023 | |||
Subsequent Event [Member] | Unsecured Debt [Member] | 2.242% Notes due February 15, 2025 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 2,000,000,000 | |||
Interest rate | 2.242% | |||
Maturity date | Feb. 15, 2025 | |||
Subsequent Event [Member] | Unsecured Debt [Member] | 2.493% Notes due February 15, 2027 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 1,250,000,000 | |||
Interest rate | 2.493% | |||
Maturity date | Feb. 15, 2027 | |||
Subsequent Event [Member] | Unsecured Debt [Member] | 2.722% Notes due February 15, 2030 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 2,000,000,000 | |||
Interest rate | 2.722% | |||
Maturity date | Feb. 15, 2030 | |||
Subsequent Event [Member] | Unsecured Debt [Member] | 3.377% Notes due April 05, 2040 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 1,500,000,000 | |||
Interest rate | 3.377% | |||
Maturity date | Apr. 5, 2040 | |||
Subsequent Event [Member] | Unsecured Debt [Member] | 3.577% Notes due April 05, 2050 [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, gross | $ 2,000,000,000 | |||
Interest rate | 3.577% | |||
Maturity date | Apr. 5, 2050 | |||
Subsequent Event [Member] | Revolving Credit Facility [Member] | Line of Credit [Member] | ||||
Debt Instruments [Abstract] | ||||
Revolving credit facility, maximum borrowing capacity | $ 2,000,000,000 | |||
Debt instrument, credit facility term | 5 years |
DESCRIPTION OF BUSINESS (Q3) (D
DESCRIPTION OF BUSINESS (Q3) (Details) $ in Millions | Apr. 02, 2020USD ($) | Mar. 27, 2020USD ($) | Sep. 30, 2020USD ($)Segmentshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 03, 2020shares | Feb. 27, 2020USD ($) |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Number of reportable segments | Segment | 3 | 3 | |||||||
Common stock, shares, issued (in shares) | shares | 866,687,269 | 866,158,910 | |||||||
Aggregate principal balance | $ 11,000 | ||||||||
Net transfers to parent | $ 10,900 | $ 10,359 | $ 1,111 | $ 1,954 | $ 2,685 | $ 1,850 | |||
UTC Net Investment | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Net cash contribution from parent | $ 590 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Q3) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Apr. 03, 2020 | |
EARNINGS PER SHARE [Abstract] | |||
Common stock, shares, issued (in shares) | 866,687,269 | 866,687,269 | 866,158,910 |
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 3,200,000 | 3,200,000 |
EARNINGS PER SHARE (Q3) (Detail
EARNINGS PER SHARE (Q3) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EARNINGS PER SHARE [Abstract] | |||||||
Net income attributable to common shareowners | $ 741 | $ 492 | $ 1,098 | $ 1,676 | $ 2,116 | $ 2,734 | $ 1,227 |
Basic weighted-average number of shares outstanding | 866.4 | 866.2 | 866.3 | 866.2 | |||
Stock awards and equity units (share equivalent) | 15.1 | 0 | 9.9 | 0 | |||
Diluted weighted-average number of shares outstanding | 881.5 | 866.2 | 876.2 | 866.2 | |||
Earnings Per Share | |||||||
Basic (in dollars per share) | $ 0.86 | $ 0.57 | $ 1.27 | $ 1.94 | |||
Diluted (in dollars per share) | $ 0.84 | $ 0.57 | $ 1.25 | $ 1.94 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Assets and Liabilities (Q3) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
REVENUE RECOGNITION [Abstract] | |||
Contract assets, current | $ 753 | $ 622 | $ 566 |
Contract assets, non-current (included within Other assets) | 75 | 57 | 100 |
Total contract assets | 828 | 679 | 666 |
Contract liabilities, current | (495) | (443) | (448) |
Contract liabilities, non-current (included within Other long-term liabilities) | (166) | (168) | (164) |
Total contract liabilities | (661) | (611) | (612) |
Net contract assets | $ 167 | $ 68 | $ 54 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Q3) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUE RECOGNITION [Abstract] | ||||||
Contract with customer, asset, change | $ 149 | $ 13 | $ 143 | |||
Contract with customer, liability, change | (50) | 1 | $ (4) | |||
Contract with customer, liability, revenue recognized | $ 55 | $ 53 | $ 288 | $ 301 | $ 362 |
REVENUE RECOGNITION - Remaining
REVENUE RECOGNITION - Remaining Performance Obligations (Q3) (Details) - USD ($) $ in Billions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 5.6 | $ 4.7 | $ 5.3 |
Revenue, remaining performance obligation, percentage | 64.00% | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, period | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, percentage | 73.00% | ||
Revenue, remaining performance obligation, period | 12 months |
RELATED PARTIES - Narrative (Q3
RELATED PARTIES - Narrative (Q3) (Details) $ / shares in Units, shares in Thousands | Apr. 02, 2020USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / shares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2020kr / shares |
Related Party Transaction [Line Items] | ||||||||||||||
Impairment charge on minority-owned joint venture investments | $ 108,000,000 | $ 72,000,000 | $ 108,000,000 | $ 108,000,000 | $ 0 | $ 0 | ||||||||
Separation costs | $ 13,000,000 | 13,000,000 | ||||||||||||
Net transfers (to) from UTC | $ 859,000,000 | $ (11,014,000,000) | (544,000,000) | $ (445,000,000) | $ (81,000,000) | 1,902,000,000 | 2,641,000,000 | 1,816,000,000 | ||||||
UTC Net Investment | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Net transfers (to) from UTC | $ 859,000,000 | (11,014,000,000) | (544,000,000) | $ (445,000,000) | $ (81,000,000) | 780,000,000 | 1,902,000,000 | 2,641,000,000 | 1,816,000,000 | |||||
Net cash contribution from parent | $ 590,000,000 | |||||||||||||
Spinoff | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Separation costs | 24,000,000 | 92,000,000 | ||||||||||||
Equity Method Investee | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Revenue from related parties | 576,000,000 | 498,000,000 | 1,400,000,000 | 1,400,000,000 | 1,800,000,000 | 1,900,000,000 | 1,900,000,000 | |||||||
Related parties amount in cost of sales | 70,000,000 | 96,000,000 | 213,000,000 | 274,000,000 | 368,000,000 | 355,000,000 | 378,000,000 | |||||||
Accounts receivable, related parties | $ 213,000,000 | 213,000,000 | 213,000,000 | 137,000,000 | 101,000,000 | |||||||||
Accounts payable, related parties | 40,000,000 | $ 40,000,000 | $ 40,000,000 | 55,000,000 | 74,000,000 | |||||||||
Impairment charge on minority-owned joint venture investments | $ 71,000,000 | |||||||||||||
Equity Method Investee | Beijer Ref | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Sale of stock, consideration received on transaction | $ 300,000,000 | |||||||||||||
Subsidiary or equity method investee, cumulative percentage ownership after all transactions | 26.00% | |||||||||||||
Gain (Loss) on Sale of Investments | $ 252,000,000 | |||||||||||||
Equity Method Investee | B Shares | Beijer Ref | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 9,250 | |||||||||||||
Sale of stock, price per share (in kronor per share) | (per share) | $ 32.38 | $ 32.38 | $ 32.38 | kr 290 | ||||||||||
Subsidiary or equity method investee, percentage of outstanding stock | 7.90% | |||||||||||||
Subsidiary or equity method investee, cumulative percentage ownership after all transactions | 30.00% | |||||||||||||
Equity Method Investee | A Shares | Beijer Ref | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Subsidiary or equity method investee, cumulative percentage ownership after all transactions | 22.00% | |||||||||||||
UTC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Revenue from related parties | $ 0 | 6,000,000 | $ 3,000,000 | 18,000,000 | 23,000,000 | 25,000,000 | 29,000,000 | |||||||
Accounts receivable, related parties | 16,000,000,000 | 15,100,000,000 | ||||||||||||
Accounts payable, related parties | 3,300,000,000 | 2,600,000,000 | 146,000,000 | |||||||||||
Related party transaction, selling, general and administrative expenses from transactions with related party | 0 | 62,000,000 | 43,000,000 | 178,000,000 | 245,000,000 | 277,000,000 | 240,000,000 | |||||||
Interest income, related party | 0 | 21,000,000 | 0 | 70,000,000 | 91,000,000 | 110,000,000 | 85,000,000 | |||||||
Interest expense, related party | 0 | $ 12,000,000 | 0 | $ 44,000,000 | 55,000,000 | 59,000,000 | $ 202,000,000 | |||||||
Accounts receivable, related parties, current | $ 0 | 0 | 0 | 6,000,000 | 12,000,000 | |||||||||
Accounts payable, related parties, current | $ 0 | $ 0 | $ 0 | $ 4,000,000 | $ 8,000,000 |
ACCOUNTS RECEIVABLE, NET (Q3)_2
ACCOUNTS RECEIVABLE, NET (Q3) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | $ 2,960 | $ 2,771 | $ 2,814 |
Less: Allowance for expected credit losses | (88) | (45) | (141) |
Accounts receivable, net | 2,872 | 2,726 | 2,673 |
Trade receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | 2,578 | 2,444 | 2,549 |
Less: Allowance for expected credit losses | (61) | ||
Receivables from affiliates | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | 213 | 143 | 113 |
Other receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | $ 169 | $ 184 | $ 152 |
ACCOUNTS RECEIVABLE, NET - Acco
ACCOUNTS RECEIVABLE, NET - Accounts Receivable Rollforward (Q3) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ 45 | $ 141 | ||
Provision for expected credit losses | 38 | 18 | $ 20 | $ 12 |
Write-offs charged against the allowance for expected credit losses | (2) | |||
Accounts Receivable, Allowance For Credit Loss, Other | 7 | |||
Ending balance | $ 88 | $ 45 | $ 141 |
INVENTORIES, NET (Q3) (Details)
INVENTORIES, NET (Q3) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
INVENTORIES, NET [Abstract] | |||
Raw materials | $ 248 | $ 290 | $ 336 |
Work-in-process | 148 | 120 | 102 |
Finished goods | 1,185 | 922 | 925 |
Inventories, net | 1,581 | 1,332 | 1,363 |
Inventory valuation reserves | $ 180 | $ 152 | $ 142 |
FIXED ASSETS, NET (Q3) (Details
FIXED ASSETS, NET (Q3) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||||||
Fixed assets, gross | $ 3,879 | $ 3,879 | $ 3,758 | $ 3,544 | |||
Accumulated depreciation | (2,203) | (2,203) | (2,095) | (1,891) | |||
Fixed assets, net | 1,676 | 1,676 | 1,663 | 1,653 | $ 1,684 | ||
Depreciation | 56 | $ 54 | 165 | $ 163 | 219 | 221 | $ 226 |
Land | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Fixed assets, gross | 112 | $ 112 | $ 113 | 114 | |||
Buildings and improvements | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property, plant and equipment, estimated useful life | 40 years | 40 years | |||||
Fixed assets, gross | 1,129 | $ 1,129 | $ 1,138 | 1,142 | |||
Machinery, tools and equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Fixed assets, gross | 2,047 | 2,047 | 1,924 | 1,815 | |||
Rental assets | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Fixed assets, gross | 404 | 404 | 395 | 293 | |||
Other, including assets under construction | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Fixed assets, gross | $ 187 | $ 187 | $ 188 | $ 180 | |||
Minimum | Machinery, tools and equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property, plant and equipment, estimated useful life | 3 years | 3 years | |||||
Minimum | Rental assets | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property, plant and equipment, estimated useful life | 3 years | 3 years | |||||
Maximum | Machinery, tools and equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property, plant and equipment, estimated useful life | 25 years | 25 years | |||||
Maximum | Rental assets | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property, plant and equipment, estimated useful life | 12 years | 12 years |
BUSINESS ACQUISITIONS, DISPOS_9
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS - Goodwill (Q3) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | |||
Goodwill - Beginning Balance | $ 9,884 | $ 9,849 | $ 10,065 |
Foreign currency translation | 22 | 35 | (411) |
Goodwill - Ending Balance | 9,906 | 9,884 | 9,849 |
HVAC | |||
Goodwill [Roll Forward] | |||
Goodwill - Beginning Balance | 5,351 | 5,330 | 5,472 |
Foreign currency translation | 2 | 21 | (142) |
Goodwill - Ending Balance | 5,353 | 5,351 | 5,330 |
Refrigeration | |||
Goodwill [Roll Forward] | |||
Goodwill - Beginning Balance | 1,228 | 1,231 | 1,417 |
Foreign currency translation | 5 | (3) | (187) |
Goodwill - Ending Balance | 1,233 | 1,228 | 1,231 |
Fire & Security | |||
Goodwill [Roll Forward] | |||
Goodwill - Beginning Balance | 3,305 | 3,288 | 3,176 |
Foreign currency translation | 15 | 17 | (82) |
Goodwill - Ending Balance | $ 3,320 | $ 3,305 | $ 3,288 |
BUSINESS ACQUISITIONS, DISPO_10
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS - Finite and Indefinite-lived Intangible Assets (Q3) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 2,502 | $ 2,462 | $ 2,498 |
Accumulated Amortization | (2,019) | (1,913) | (1,823) |
Indefinite-lived Intangible Assets [Line Items] | |||
Total intangible assets, gross (excluding goodwill) | 3,043 | 2,996 | 3,037 |
Trademarks and other | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets (excluding goodwill) | 541 | 534 | 539 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 1,506 | 1,479 | 1,511 |
Accumulated Amortization | (1,223) | (1,154) | (1,098) |
Patents and trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 293 | 287 | 292 |
Accumulated Amortization | (213) | (201) | (189) |
Monitoring lines | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 67 | 67 | 64 |
Accumulated Amortization | (55) | (52) | (46) |
Service portfolios and other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 636 | 629 | 631 |
Accumulated Amortization | $ (528) | $ (506) | $ (490) |
BUSINESS ACQUISITIONS, DISPO_11
BUSINESS ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLE ASSETS - Future Amortization of Intangible Assets (Q3) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Goodwill [Line Items] | |||||||
Amortization of intangible assets | $ 26 | $ 30 | $ 76 | $ 88 | $ 116 | $ 136 | $ 146 |
Goodwill | 9,906 | $ 9,906 | $ 9,884 | $ 9,849 | $ 10,065 | ||
Reporting Unit with Carrying Value within 20% of Fair Value | |||||||
Goodwill [Line Items] | |||||||
Number of reporting units | Segment | 1 | ||||||
Goodwill | $ 917 | $ 917 | |||||
Reporting unit, percentage of fair value in excess of carrying amount | 13.00% | 13.00% | |||||
Sensitivity analysis of fair value, reporting unit, impact of 100 basis point change in discount rate | $ 84 | $ 84 |
BORROWINGS AND LINES OF CREDI_3
BORROWINGS AND LINES OF CREDIT - Narrative (Q3) (Details) | Mar. 27, 2020USD ($) | Feb. 10, 2020USD ($) | Mar. 27, 2020USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 19, 2020USD ($) | Jun. 02, 2020USD ($) | Feb. 27, 2020USD ($)debtseries |
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal balance | $ 11,000,000,000 | ||||||||||||
Issuance of long-term debt | $ 11,762,000,000 | $ 106,000,000 | $ 107,000,000 | $ 117,000,000 | $ 99,000,000 | ||||||||
Net transfers to parent | $ 10,900,000,000 | 10,359,000,000 | 1,111,000,000 | 1,954,000,000 | 2,685,000,000 | 1,850,000,000 | |||||||
Debt instrument, covenant, modification period threshold for provision of terms | $ 100,000,000 | ||||||||||||
Repayment of long-term debt | $ 124,000,000 | 98,000,000 | $ 138,000,000 | $ 0 | $ 103,000,000 | ||||||||
Weighted average interest rate | 2.70% | 2.70% | |||||||||||
Interest expense, debt | $ 90,000,000 | $ 213,000,000 | |||||||||||
Amortization of debt issuance costs | $ 2,000,000 | 5,000,000 | |||||||||||
Interest expense, debt, financing fees expensed | $ 5,000,000 | ||||||||||||
Interest expense, debt, excluding amortization | $ 127,000,000 | ||||||||||||
Weighted Average | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Average maturity of long-term debt | 12 years | 12 years | |||||||||||
Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Revolving credit facility, maximum borrowing capacity | $ 1,750,000,000 | ||||||||||||
Issuance of long-term debt | $ 1,750,000,000 | ||||||||||||
Interest rate, stated percentage | 1.275% | 1.275% | |||||||||||
Unsecured Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal balance | $ 9,250,000,000 | ||||||||||||
Series of notes issuance | debtseries | 6 | ||||||||||||
Unsecured Debt | 2.700% Notes due February 15, 2031 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal balance | $ 750,000,000 | ||||||||||||
Interest rate, stated percentage | 2.70% | 2.70% | |||||||||||
Other Debt | Project Financing Arrangements | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal balance | $ 102,000,000 | $ 102,000,000 | $ 106,000,000 | ||||||||||
Commercial Paper | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal balance | 2,000,000,000 | 2,000,000,000 | |||||||||||
Short-term debt | 0 | $ 0 | |||||||||||
London Interbank Offered Rate (LIBOR) | Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on variable rate | 1.125% | ||||||||||||
Revolving Credit Facility | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Revolving credit facility, maximum borrowing capacity | $ 2,000,000,000 | $ 0 | $ 0 | ||||||||||
Commitment fee percentage | 0.125% | ||||||||||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on variable rate | 1.25% |
BORROWINGS AND LINES OF CREDI_4
BORROWINGS AND LINES OF CREDIT - Long-term Debt (Q3) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 12,059 | $ 319 |
Other (discounts and debt issuance costs) | (85) | 0 |
Total debt | 11,974 | 319 |
Current portion of long-term debt | 223 | 237 |
Long-term debt | $ 11,751 | 82 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.275% | |
Long-term debt, gross | $ 1,750 | 0 |
Other Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 309 | 319 |
London Interbank Offered Rate (LIBOR) | Term Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.125% | |
1.923% Notes due February 15, 2023 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.923% | |
Long-term debt, gross | $ 500 | 0 |
2.242% Notes due February 15, 2025 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.242% | |
Long-term debt, gross | $ 2,000 | 0 |
2.493% Notes due February 15, 2027 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.493% | |
Long-term debt, gross | $ 1,250 | 0 |
2.722% Notes due February 15, 2030 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.722% | |
Long-term debt, gross | $ 2,000 | 0 |
2.700% Notes due February 15, 2031 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.70% | |
Long-term debt, gross | $ 750 | 0 |
3.377% Notes due April 5, 2040 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.377% | |
Long-term debt, gross | $ 1,500 | 0 |
3.577% Notes due April 5, 2050 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.577% | |
Long-term debt, gross | $ 2,000 | $ 0 |
BORROWINGS AND LINES OF CREDI_5
BORROWINGS AND LINES OF CREDIT - Long-term Debt Maturity (Q3) (Details) $ in Millions | Sep. 30, 2020USD ($) |
BORROWINGS AND LINES OF CREDIT [Abstract] | |
2020 | $ 223 |
2021 | 45 |
2022 | 40 |
2023 | 2,251 |
2024 | 0 |
Thereafter | $ 9,500 |
EMPLOYEE BENEFIT PLANS (Q3) (De
EMPLOYEE BENEFIT PLANS (Q3) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |||||||
Defined benefit plans | $ 1 | $ 2 | $ 29 | $ 29 | |||
Defined contribution plans | 23 | 22 | 78 | 71 | $ 88 | $ 94 | $ 86 |
Multi-employer pension plans | $ 5 | $ 5 | $ 15 | $ 15 |
EMPLOYEE BENEFIT PLANS - Pensio
EMPLOYEE BENEFIT PLANS - Pension Plan (Q3) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
EMPLOYEE BENEFIT PLANS [Abstract] | ||||
Service cost | $ 7 | $ 7 | $ 22 | $ 23 |
Interest cost | 13 | 17 | 39 | 50 |
Expected return on plan assets | (35) | (37) | (104) | (115) |
Amortization of prior service credit | 1 | 0 | 2 | 1 |
Recognized actuarial net loss | 5 | 2 | 15 | 7 |
Net settlement, curtailment and special termination benefit loss | 0 | 0 | 1 | 1 |
Net periodic pension benefit - employer | $ (9) | $ (11) | $ (25) | $ (33) |
EMPLOYEE BENEFIT PLANS - Pens_2
EMPLOYEE BENEFIT PLANS - Pension and Retirements Expenses (Q3) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Multiemployer Plans [Line Items] | |||||||
Service cost | $ 7 | $ 7 | $ 22 | $ 23 | |||
Non-service pension benefit | (16) | (47) | (47) | (124) | $ 154 | $ 168 | $ 139 |
Net periodic pension benefit - employer | (9) | (11) | (25) | (33) | |||
UTC Sponsored Defined Benefit Plans | |||||||
Multiemployer Plans [Line Items] | |||||||
Service cost | 0 | 4 | 0 | 13 | 18 | 22 | 23 |
Non-service pension benefit | 0 | (20) | (2) | (59) | (81) | (80) | (57) |
Net periodic pension benefit - employer | $ 0 | $ (16) | $ (2) | $ (46) | $ (63) | $ (58) | $ (34) |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Q3) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration period (in years) | 10 years | 10 years | |||||
Award vesting period (in years) | 3 years | 3 years | |||||
Share-based payment arrangement, expense | $ 21 | $ 18 | $ 56 | $ 40 | $ 52 | $ 44 | $ 34 |
Share-based payment arrangement, cash used to settle award | 5 | $ 2 | 2 | $ 2 | |||
Unrecognized compensation costs | $ 107 | 107 | $ 62 | ||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Deferred share-based compensation expense | $ 14 | ||||||
Cost not yet recognized, period for recognition | 1 year 6 months | ||||||
Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Cost not yet recognized, period for recognition | 2 years 2 months 12 days | 2 years 6 months | |||||
Stock Appreciation Rights (SARs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based awards granted (in dollars per shares) | $ 4.36 | ||||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award requisite service period (in years) | 3 years | 3 years |
STOCK-BASED COMPENSATION - LTIP
STOCK-BASED COMPENSATION - LTIP Activity (Q3) (Details) - $ / shares shares in Thousands | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Shares | |||||
Exercised (in shares) | (984) | ||||
Weighted Average Exercise Price | |||||
Exercised (in dollars per share) | $ 15.52 | ||||
Stock Options and Stock Appreciation Rights | |||||
Shares | |||||
Beginning balance (in shares) | 36,015 | ||||
Granted (in shares) | 3,753 | ||||
Forfeitures/Cancelled (in shares) | (509) | ||||
Ending balance (in shares) | 38,275 | ||||
Weighted Average Exercise Price | |||||
Beginning balance (in dollars per share) | $ 19.90 | ||||
Granted (in dollars per share) | 16.62 | ||||
Forfeited/Cancelled (in dollars per share) | 22.73 | ||||
Ending balance (in dollars per share) | $ 19.66 | ||||
Performance Share Units | |||||
Weighted Average Exercise Price | |||||
Beginning balance (in dollars per share) | [1] | $ 110.59 | |||
Granted (in dollars per share) | [1] | 121.79 | |||
Exercised (in dollars per share) | [1] | 95.54 | |||
Forfeited/Cancelled (in dollars per share) | [1] | 112.39 | |||
Ending balance (in dollars per share) | [1] | $ 120.16 | $ 110.59 | ||
Units | |||||
Beginning balance (in shares) | 68 | 289 | |||
Granted (in shares) | 728 | 142 | |||
Exercised (in shares) | 0 | ||||
Forfeited (in shares) | (22) | (25) | |||
Ending balance (in shares) | 774 | 362 | 289 | ||
Weighted Average Grant Date Fair Value | |||||
Beginning balance (in dollars per share) | $ 21.23 | ||||
Granted (in dollars per share) | 18.23 | $ 112.76 | $ 131.42 | $ 111 | |
Exercised (in dollars per share) | 0 | ||||
Forfeited (in dollars per share) | 19.25 | ||||
Ending balance (in dollars per share) | $ 18.48 | ||||
Restricted Share Units | |||||
Units | |||||
Beginning balance (in shares) | 5,622 | ||||
Granted (in shares) | 443 | ||||
Exercised (in shares) | (116) | ||||
Forfeited (in shares) | (108) | ||||
Ending balance (in shares) | 5,841 | ||||
Weighted Average Grant Date Fair Value | |||||
Beginning balance (in dollars per share) | $ 21.37 | ||||
Granted (in dollars per share) | 18.98 | ||||
Exercised (in dollars per share) | 20.42 | ||||
Forfeited (in dollars per share) | 22.25 | ||||
Ending balance (in dollars per share) | $ 21.27 | ||||
[1] | Weighted-average grant/exercise price |
STOCK-BASED COMPENSATION - LT_2
STOCK-BASED COMPENSATION - LTIP Awards Vested and Expected to Vest and Exercisable (Q3) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | ||
Stock Options and Stock Appreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options vest and expected to vest (in shares) | 36,868 | 6,083 | |
Options vested and expected to vest (in dollars per share) | $ 19.61 | $ 109.31 | [1] |
Options vested and expected to vest, aggregate intrinsic value | $ 403,105 | $ 246,000 | |
Options vested and expected to vest, weighted average remaining contractual term | 6 years 8 months 12 days | 6 years 1 month 6 days | [2] |
Options exercisable (in shares) | 16,173 | 3,333 | |
Options exercisable (in dollars per share) | $ 16.97 | $ 98.4 | [1] |
Options exercisable, aggregate intrinsic value | $ 219,447 | $ 171,000 | |
Options exercisable, weighted average remaining contractual term | 4 years 2 months 12 days | 4 years 3 months 18 days | [2] |
Performance Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance shares vested and expected to vest (in shares) | 6,291 | 1,006 | |
Performance shares vested and expected to vest (in dollars per share) | $ 20.96 | $ 0 | [1] |
Performance shares vested and expected to vest, aggregate intrinsic value | $ 192,116 | $ 151,000 | |
Performance shares vested and expected to vest, weighted average remaining contractual term | 1 year 9 months 18 days | 1 year 8 months 12 days | [2] |
[1] | Weighted-average exercise price per share | ||
[2] | Weighted-average contractual remaining term in years |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value Assumptions (Q3) (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 19.00% | |||
Expected life (in years) | 20.00% | 18.00% | 19.00% | |
Expected dividend yield | 2.40% | 2.20% | 2.40% | |
Stock Option | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 18.80% | 17.50% | ||
Range of risk-free rate | 2.30% | 1.30% | 0.50% | |
Stock Option | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 19.70% | 21.10% | ||
Range of risk-free rate | 2.70% | 2.70% | 2.50% | |
Stock Appreciation Rights (SARs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 35.60% | |||
Expected life (in years) | 700.00% | |||
Expected dividend yield | 2.00% | |||
Stock Appreciation Rights (SARs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Range of risk-free rate | 0.10% | |||
Stock Appreciation Rights (SARs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Range of risk-free rate | 1.00% |
ACCUMULATED OTHER COMPREHENSI_6
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Changes in AOCI (Q3) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Balance | $ 4,366 | $ 14,960 | $ 14,435 | $ 14,269 | $ 14,269 | $ 14,784 | $ 14,960 |
Other comprehensive income (loss) before reclassifications, net | (57) | (650) | 686 | ||||
Amounts reclassified, pre-tax | 13 | 19 | (387) | ||||
Tax expense (benefit) reclassified | 15 | 33 | 168 | ||||
Balance | 5,437 | 14,644 | 5,437 | 14,644 | 14,435 | 14,269 | 14,784 |
Cumulative Effect, Period Of Adoption, Adjustment | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Balance | (4) | 0 | 0 | ||||
Balance | (4) | 0 | |||||
Foreign Currency Translation | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Balance | (1,018) | (821) | (780) | (834) | (834) | (393) | (1,130) |
Other comprehensive income (loss) before reclassifications, net | 302 | (274) | 64 | (261) | 52 | (441) | 747 |
Amounts reclassified, pre-tax | 0 | 0 | 0 | 0 | 2 | 0 | (10) |
Tax expense (benefit) reclassified | 0 | 0 | 0 | 0 | 0 | ||
Balance | (716) | (1,095) | (716) | (1,095) | (780) | (834) | (393) |
Foreign Currency Translation | Cumulative Effect, Period Of Adoption, Adjustment | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Balance | 0 | 0 | |||||
Defined Benefit Pension and Post-retirement Plans | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Balance | (461) | (381) | (473) | (381) | (381) | (222) | (211) |
Other comprehensive income (loss) before reclassifications, net | 0 | 0 | 2 | 2 | (109) | (209) | (32) |
Amounts reclassified, pre-tax | 6 | 2 | 18 | 9 | 11 | 17 | 16 |
Tax expense (benefit) reclassified | (1) | (3) | 15 | 33 | 5 | ||
Balance | (456) | (379) | (456) | (379) | (473) | (381) | (222) |
Defined Benefit Pension and Post-retirement Plans | Cumulative Effect, Period Of Adoption, Adjustment | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Balance | (9) | (9) | |||||
Accumulated Other Comprehensive Loss | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Balance | (1,479) | (1,202) | (1,253) | (1,215) | (1,215) | (617) | (1,084) |
Other comprehensive income (loss) before reclassifications, net | 302 | (274) | 66 | (259) | |||
Amounts reclassified, pre-tax | 6 | 2 | 18 | 9 | |||
Tax expense (benefit) reclassified | (1) | (3) | |||||
Balance | $ (1,172) | (1,474) | $ (1,172) | (1,474) | (1,253) | (1,215) | $ (617) |
Accumulated Other Comprehensive Loss | Cumulative Effect, Period Of Adoption, Adjustment | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Balance | (9) | $ (9) | |||||
Balance | $ (9) | $ (9) | $ (9) |
INCOME TAXES - Narrative (Q3) (
INCOME TAXES - Narrative (Q3) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020USD ($) | Sep. 30, 2019 | Sep. 30, 2020USD ($) | Sep. 30, 2019 | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017 | Apr. 03, 2020USD ($)Installment | |
Significant Change In Unrecognized Tax Benefits Is Reasonably Possible [Line Items] | ||||||||
Effective income tax rate reconciliation, percent | 25.90% | 25.80% | 33.40% | 18.30% | 19.40% | 27.90% | 58.50% | |
Effective income tax rate reconciliation, tax settlement, amount | $ 149 | $ (149) | ||||||
Effective income tax rate reconciliation, change in deferred tax assets valuation allowance | $ 51 | |||||||
Effective income tax rate reconciliation, repatriation of foreign earnings, amount | 46 | $ 102 | ||||||
Accrued income taxes, current | $ 318 | $ 325 | ||||||
Increase (decrease) in unrecognized tax benefits | (37) | |||||||
Deferred tax assets, unrealized currency losses | 27 | 27 | ||||||
United Technologies Corp | ||||||||
Significant Change In Unrecognized Tax Benefits Is Reasonably Possible [Line Items] | ||||||||
Tax cuts and jobs act, transition tax for accumulated foreign earnings, liability, noncurrent | $ 701 | |||||||
Unrecognized tax benefits, number of annual installments | Installment | 6 | |||||||
Accrued Liabilities | United Technologies Corp | ||||||||
Significant Change In Unrecognized Tax Benefits Is Reasonably Possible [Line Items] | ||||||||
Tax cuts and jobs act, transition tax for accumulated foreign earnings, liability, current | $ 68 | |||||||
Accrued income taxes, current | 6 | |||||||
Other Noncurrent Liabilities | United Technologies Corp | ||||||||
Significant Change In Unrecognized Tax Benefits Is Reasonably Possible [Line Items] | ||||||||
Accrued income taxes, noncurrent | $ 453 | |||||||
Maximum | ||||||||
Significant Change In Unrecognized Tax Benefits Is Reasonably Possible [Line Items] | ||||||||
Decrease in unrecognized tax benefits is reasonably possible | $ 15 | $ 15 |
RESTRUCTURING COSTS - Schedules
RESTRUCTURING COSTS - Schedules (Q3) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | $ 3 | $ 34 | $ 19 | $ 97 | $ 126 | $ 80 | $ 111 | ||
Cost of sales | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | (1) | 14 | 5 | 27 | 36 | 36 | 48 | ||
Selling, general and administrative | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | 4 | 20 | 14 | 70 | 90 | 44 | 63 | ||
2020 Actions | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Beginning balance | 9 | $ 0 | 0 | ||||||
Net pre-tax restructuring costs | 5 | 18 | |||||||
Utilization, foreign exchange and other costs | (4) | (8) | |||||||
Ending balance | 10 | $ 9 | 10 | 0 | |||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 22 | 22 | |||||||
Costs Incurred | (5) | (11) | (2) | ||||||
Remaining Costs | 4 | 4 | |||||||
2020 Actions | Severance | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Beginning balance | 8 | 0 | 0 | ||||||
Net pre-tax restructuring costs | 5 | 17 | |||||||
Utilization, foreign exchange and other costs | (4) | (8) | |||||||
Ending balance | 9 | 8 | 9 | 0 | |||||
2020 Actions | Facility Exit, Lease Termination and Other Costs | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Beginning balance | 1 | 0 | 0 | ||||||
Net pre-tax restructuring costs | 0 | 1 | |||||||
Utilization, foreign exchange and other costs | 0 | 0 | |||||||
Ending balance | 1 | 1 | 1 | 0 | |||||
2020 Actions | Cost of sales | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | 7 | ||||||||
2020 Actions | Selling, general and administrative | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | 11 | ||||||||
2019 Actions | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Beginning balance | 27 | 44 | 44 | ||||||
Net pre-tax restructuring costs | 0 | 3 | 82 | ||||||
Utilization, foreign exchange and other costs | (5) | (25) | |||||||
Ending balance | 22 | 27 | 22 | 44 | |||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 120 | 120 | |||||||
Costs Incurred | 0 | 0 | (3) | (110) | |||||
Remaining Costs | 7 | 7 | |||||||
2019 Actions | Severance | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Beginning balance | 27 | 43 | 43 | ||||||
Net pre-tax restructuring costs | 0 | 3 | |||||||
Utilization, foreign exchange and other costs | (5) | (24) | |||||||
Ending balance | 22 | 27 | 22 | 43 | |||||
2019 Actions | Facility Exit, Lease Termination and Other Costs | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Beginning balance | 0 | 1 | 1 | ||||||
Net pre-tax restructuring costs | 0 | 0 | |||||||
Utilization, foreign exchange and other costs | 0 | (1) | |||||||
Ending balance | 0 | 0 | 0 | 1 | |||||
2019 Actions | Cost of sales | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | 0 | 20 | |||||||
2019 Actions | Selling, general and administrative | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | 3 | 62 | |||||||
Operating Segments | HVAC | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | 0 | 12 | 3 | 47 | 56 | 20 | 36 | ||
Operating Segments | Refrigeration | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | (1) | 7 | 2 | 14 | 14 | 23 | 13 | ||
Operating Segments | Fire & Security | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | 4 | 14 | 13 | 35 | 53 | 34 | 57 | ||
Operating Segments | 2020 Actions | HVAC | |||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 5 | 5 | |||||||
Costs Incurred | (1) | (2) | (1) | ||||||
Remaining Costs | 1 | 1 | |||||||
Operating Segments | 2020 Actions | Refrigeration | |||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 3 | 3 | |||||||
Costs Incurred | 0 | (3) | 0 | ||||||
Remaining Costs | 0 | 0 | |||||||
Operating Segments | 2020 Actions | Fire & Security | |||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 13 | 13 | |||||||
Costs Incurred | (4) | (5) | (1) | ||||||
Remaining Costs | 3 | 3 | |||||||
Operating Segments | 2019 Actions | HVAC | |||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 53 | 53 | |||||||
Costs Incurred | (1) | 2 | (1) | (51) | |||||
Remaining Costs | 2 | 2 | |||||||
Operating Segments | 2019 Actions | Refrigeration | |||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 16 | 16 | |||||||
Costs Incurred | 1 | (1) | 0 | (14) | |||||
Remaining Costs | 2 | 2 | |||||||
Operating Segments | 2019 Actions | Fire & Security | |||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 49 | 49 | |||||||
Costs Incurred | 0 | (1) | (2) | (43) | |||||
Remaining Costs | 3 | 3 | |||||||
Eliminations and other | |||||||||
Restructuring Reserve [Roll Forward] | |||||||||
Net pre-tax restructuring costs | 0 | 1 | 1 | 1 | 3 | $ 3 | $ 5 | ||
Eliminations and other | 2020 Actions | |||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | 1 | 1 | |||||||
Costs Incurred | 0 | (1) | 0 | ||||||
Remaining Costs | 0 | 0 | |||||||
Eliminations and other | 2019 Actions | |||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||
Expected Costs | $ 2 | $ 2 | |||||||
Costs Incurred | 0 | $ 0 | $ 0 | $ (2) | |||||
Remaining Costs | $ 0 | $ 0 |
RESTRUCTURING COSTS - Narrative
RESTRUCTURING COSTS - Narrative (Q3) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | $ 3 | $ 34 | $ 19 | $ 97 | $ 126 | $ 80 | $ 111 | |
2020 Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | 5 | 18 | ||||||
Restructuring reserve | 10 | 10 | 0 | $ 9 | ||||
2019 Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | 0 | 3 | 82 | |||||
Restructuring reserve | 22 | 22 | 44 | $ 27 | ||||
2018 and Prior Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | (2) | 16 | ||||||
Restructuring reserve | 7 | 28 | 7 | 28 | ||||
Cost of sales | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | (1) | 14 | 5 | 27 | 36 | 36 | 48 | |
Cost of sales | 2020 Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | 7 | |||||||
Cost of sales | 2019 Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | 0 | 20 | ||||||
Cost of sales | 2018 and Prior Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | (1) | 7 | ||||||
Selling, general and administrative | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | $ 4 | $ 20 | 14 | 70 | $ 90 | $ 44 | $ 63 | |
Selling, general and administrative | 2020 Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | 11 | |||||||
Selling, general and administrative | 2019 Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | 3 | 62 | ||||||
Selling, general and administrative | 2018 and Prior Actions | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Net pre-tax restructuring costs | $ (1) | $ 9 |
GUARANTEES (Q3) (Details)
GUARANTEES (Q3) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||||
Beginning balance | $ 488 | $ 473 | $ 473 | $ 500 |
Warranties, performance guarantees issued and changes in estimated liability | 131 | 133 | 182 | 171 |
Settlements made | (111) | (126) | (164) | (191) |
Other | 1 | (2) | (3) | (7) |
Ending balance | $ 509 | $ 478 | $ 488 | $ 473 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value and Carrying Amounts Measured on a Recurring Basis (Q3) (Details) - Fair Value, Recurring $ in Millions | Sep. 30, 2020USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Derivative assets | $ 15 |
Derivative liabilities | (33) |
Money market mutual funds | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Money market mutual funds | 38 |
Level 1 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Derivative assets | 0 |
Derivative liabilities | 0 |
Level 1 | Money market mutual funds | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Money market mutual funds | 0 |
Level 2 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Derivative assets | 15 |
Derivative liabilities | (33) |
Level 2 | Money market mutual funds | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Money market mutual funds | 38 |
Level 3 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Derivative assets | 0 |
Derivative liabilities | 0 |
Level 3 | Money market mutual funds | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Money market mutual funds | $ 0 |
FAIR VALUES MEASUREMENTS - Carr
FAIR VALUES MEASUREMENTS - Carrying Amounts and Fair Values of Financial Instruments (Q3) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Current and long-term debt (excluding finance leases), carrying amount | $ 11,969 | $ 313 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Current and long-term debt (excluding finance leases), fair value | 12,531 | 313 |
Fair Value | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Current and long-term debt (excluding finance leases), fair value | 10,478 | 0 |
Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Current and long-term debt (excluding finance leases), fair value | 0 | 0 |
Fair Value | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Current and long-term debt (excluding finance leases), fair value | $ 2,053 | $ 313 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Level 3 Liabilities (Q3) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value as of January 1 | $ 313 | $ 291 |
Issuances, including interest on project financing obligations | 1,865 | 118 |
Settlements | (125) | (98) |
Fair value as of September 30 | $ 2,053 | $ 311 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Q3) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Other Commitments [Line Items] | |||
Accrual for environmental loss contingencies | $ 233 | $ 217 | $ 215 |
Accrued environmental loss contingencies, current | 13 | 14 | 15 |
Accrued environmental loss contingencies, noncurrent | 220 | 203 | $ 200 |
Loss contingency, receivable | 104 | 104 | |
Other Noncurrent Liabilities | |||
Other Commitments [Line Items] | |||
Tax cuts and jobs act, transition tax for accumulated foreign earnings, liability | 72 | ||
Minimum | Asbestos Matters | |||
Other Commitments [Line Items] | |||
Loss contingency accrual | 250 | 255 | |
Maximum | Asbestos Matters | |||
Other Commitments [Line Items] | |||
Loss contingency accrual | $ 290 | $ 290 |
SEGMENT FINANCIAL DATA (Q3) (De
SEGMENT FINANCIAL DATA (Q3) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||||
Number of reportable segments | Segment | 3 | 3 | |||||
Net Sales | $ 5,002 | $ 4,822 | $ 12,862 | $ 14,107 | $ 18,608 | $ 18,914 | $ 17,814 |
Operating profit | 1,081 | 629 | 1,838 | 1,934 | 2,491 | 3,637 | 3,030 |
Product | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 4,193 | 3,998 | 10,615 | 11,703 | 15,360 | 15,674 | 14,775 |
Service | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 809 | 824 | 2,247 | 2,404 | 3,248 | 3,240 | 3,039 |
United States Operations | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 2,780 | 2,541 | 6,983 | 7,473 | 9,594 | 9,415 | 8,686 |
Europe | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 1,307 | 1,313 | 3,455 | 3,906 | 5,327 | 5,711 | 5,323 |
Asia Pacific | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 715 | 729 | 1,879 | 2,079 | 2,813 | 2,853 | 2,782 |
Other | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 200 | 239 | 545 | 649 | 874 | 935 | 1,023 |
Operating Segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 5,092 | 4,926 | 13,113 | 14,422 | 19,004 | 19,339 | 18,192 |
Operating profit | 1,142 | 734 | 2,053 | 2,136 | 2,803 | 3,799 | 3,202 |
Operating Segments | HVAC | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 2,892 | 2,602 | 7,142 | 7,505 | 9,712 | 9,713 | 9,045 |
Operating profit | 839 | 404 | 1,364 | 1,242 | 1,563 | 1,720 | 2,001 |
Operating Segments | HVAC | Product | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 2,547 | 2,224 | 6,180 | 6,455 | 8,279 | 8,395 | 7,902 |
Operating Segments | HVAC | Service | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 345 | 378 | 962 | 1,050 | 1,433 | 1,318 | 1,143 |
Operating Segments | Refrigeration | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 876 | 922 | 2,384 | 2,839 | 3,792 | 4,095 | 3,823 |
Operating profit | 103 | 125 | 263 | 373 | 532 | 1,353 | 562 |
Operating Segments | Refrigeration | Product | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 771 | 823 | 2,093 | 2,551 | 3,405 | 3,665 | 3,427 |
Operating Segments | Refrigeration | Service | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 105 | 99 | 291 | 288 | 387 | 430 | 396 |
Operating Segments | Fire & Security | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 1,324 | 1,402 | 3,587 | 4,078 | 5,500 | 5,531 | 5,324 |
Operating profit | 200 | 205 | 426 | 521 | 708 | 726 | 639 |
Operating Segments | Fire & Security | Product | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 965 | 1,055 | 2,587 | 3,011 | 4,072 | 4,039 | 3,824 |
Operating Segments | Fire & Security | Service | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 359 | 347 | 1,000 | 1,067 | 1,428 | 1,492 | 1,500 |
Eliminations and other | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | (90) | (104) | (251) | (315) | (396) | (425) | (378) |
Operating profit | (31) | (63) | (122) | (95) | (156) | (24) | (32) |
General corporate expenses | |||||||
Segment Reporting Information [Line Items] | |||||||
Net Sales | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Operating profit | $ (30) | $ (42) | $ (93) | $ (107) | $ (156) | $ (138) | $ (140) |
SUBSEQUENT EVENT (Q3) (Details)
SUBSEQUENT EVENT (Q3) (Details) | Oct. 15, 2020$ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividends payable, amount per common share (in dollars per share) | $ 0.08 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (FY) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Allowances for Doubtful Accounts [Member] | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Beginning balance | $ 141 | $ 152 | $ 157 | |
Provision/additions charged to income | 18 | 20 | 12 | |
Doubtful accounts written off (net) | (45) | (22) | (23) | |
Other adjustments | (69) | [1] | (9) | 6 |
Ending balance | 45 | 141 | 152 | |
Allowances for Doubtful Accounts [Member] | Trade Receivables [Member] | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Other adjustments | (61) | |||
Future Income Tax Benefits - Valuation Allowance [Member] | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Beginning balance | 107 | 113 | 104 | |
Provision/additions charged to income | 41 | 15 | 17 | |
Reductions credited to income tax expense | (16) | (14) | (11) | |
Other adjustments | (4) | (7) | 3 | |
Ending balance | $ 128 | $ 107 | $ 113 | |
[1] | Includes $61 million of the prior year allowance for doubtful accounts which has been reflected as a direct reduction in Trade receivables. |