CARRIER GLOBAL CORPORATION OnApril 3, 2020, UTC completed the Separation through the Distribution of all of the outstanding common stock of the Company to UTC shareownerswho held shares of UTC common stock as of the close of business onMarch 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 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 theNew 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 onFebruary 27, 2020 andMarch 27, 2020 . OnApril 1, 2020 andApril 2, 2020 , Carrier received cash contributions totaling$590 million from UTC related to the Separation. See Note 10 - Borrowings and Lines of Credit and Note 3 - Earnings Per Share to the Unaudited Condensed Consolidated Financial Statements for additional information. These Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by GAAP for complete financial statements. Prior to the Separation, the Unaudited Condensed Consolidated Financial Statements reflect the financial position, results of operations and cash flows of the Company for the periods presented as historically managed within UTC. For the periods prior to the Separation, the Unaudited Condensed Consolidated Financial Statements are derived from the consolidated financial statements and accounting records of UTC and thus are prepared on a "carve-out" basis, as described below. The Company's financial statements for the period fromApril 3, 2020 throughSeptember 30, 2020 are consolidated financial statements based on the reported results of Carrier as a stand-alone company. The Unaudited Condensed Consolidated Statement of Operations include 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. We entered into theTSA with UTC andOtis in connection with the Separation pursuant to which UTC provides us with certain services and we provide certain services to UTC for a limited time to help ensure an orderly transition following the Separation. The services we receive include, but are not limited to, information technology services, technical and engineering support, application support for operations, legal, payroll, finance, tax and accounting, general administrative services and other support services. The costs for these services historically were included in our operating results based on allocations from UTC, and in the nine months endedSeptember 30, 2020 , were not materially different under theTSA nor do we expect such costs to be materially different when these services are transitioned from UTC to Carrier. Subsequent to the Separation, we have and will continue to incur expense consisting primarily of employee-related costs, costs to establish certain stand-alone functions and information technology systems and other transaction-related costs. Additionally, we have incurred and will continue to incur increased costs as a result of becoming an independent, publicly traded company, primarily from establishing or expanding corporate support for our businesses, including information technology, human resources, treasury, tax, internal audit, risk management, accounting and financial reporting, investor relations, governance, legal, procurement and other services. Our preliminary estimates of these additional recurring costs expected to be incurred annually are approximately$75 million to$95 million greater than the expenses historically allocated to us from UTC, and primarily relate to Selling, general and administrative expenses. We believe our cash flow from operations will be sufficient to fund these additional corporate expenses. In connection with the Separation, we entered into the TMA with UTC andOtis that governs the parties' respective rights, responsibilities and obligations with respect to tax matters (including responsibility for taxes, entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other tax matters). Subject to certain exceptions set forth in the TMA, Carrier generally is responsible for federal, state and foreign taxes imposed on a separate return basis upon Carrier (or any of its subsidiaries) with respect to taxable periods (or portions thereof) that ended on or prior to the date of the Distribution. The TMA provides special rules that allocate responsibility for tax liabilities arising from a failure of the Separation transactions to qualify for tax-free treatment based on the reasons for such failure. The TMA also imposes 32 -------------------------------------------------------------------------------- Table of Contents restrictions on each of Carrier andOtis during the two-year period following the Distribution that are intended to prevent certain transactions from failing to qualify as transactions that are generally tax-free. For additional discussion, see "Certain Relationships and Related Party Transactions" in the Information Statement. In connection with the Separation, we also entered into an employee matters agreement and intellectual property agreement with UTC andOtis . These agreements are not expected to have a material impact on the financial results of Carrier. For additional discussion, see "Certain Relationships and Related Party Transactions" in the Information Statement. Business Summary Carrier is a leading global provider of HVAC, refrigeration, fire and security solutions. We also provide a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring. Our innovative solutions promote smarter, safer and more sustainable buildings and infrastructure, and help to effectively preserve the freshness, quality and safety of perishables across a wide variety of industries. Our comprehensive range of products and services, reputation for quality and innovation and our industry-leading brands make us a trusted provider for our customers' critical applications in the construction, transportation, security, food, retail, pharmaceutical and other industries. Our worldwide operations are affected by industrial, economic and political factors on both a regional and global level. This includes the mega-trends of urbanization, climate change, the increasing requirements for food safety driven by the food needs of our growing global population, rising standards of living and increasing energy and environmental regulation. We believe that growth in our businesses is supported by favorable secular trends, including these mega-trends, which underpin growth across our HVAC, Refrigeration and Fire & Security businesses. We also believe that we are well positioned to benefit from these long-term trends as a result of the strength of our industry-leading brands and track record of innovation. The effects of climate change, such as extreme weather conditions, create financial risks to our business. For example, the demand for our products and services, such as residential air conditioning equipment, may be affected by unseasonable weather conditions. Demand for our HVAC products and services, representing our largest segment by sales, is seasonal and affected by the weather. Cooler than normal summers depress our sales of replacement air conditioning products and services. Similarly, warmer than normal winters have the same effect on our heating products. Our business is also affected by changes in the general level of economic activity, such as changes in business and consumer spending, construction (including remodeling) and shipping activity. In addition, our financial performance may be influenced by the production and utilization of transport equipment, including truck production cycles inNorth America andEurope . Impact of the COVID-19 pandemic COVID-19 surfaced inWuhan, China in late 2019 and has since spread throughout the rest of the world. InMarch 2020 , COVID-19 was declared a pandemic by theWorld Health Organization and a national emergency by theU.S. Government . The pandemic has negatively affected theU.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 theU.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 endedMarch 31, 2020 , we temporarily closed or reduced production at manufacturing facilities inNorth America ,Asia andEurope 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 33
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Table of Contents 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 endedSeptember 30, 2020 include, but are not limited to, modifying the financial covenants in our revolving and term loan credit facilities and issuing$750 million of unsecured, unsubordinated long-term debt (see Note 10 - Borrowings and Lines of Credit for additional information), reducing our discretionary spending, capital investments and general and administrative costs by implementing pay freezes and cuts, employee furloughs and suspending non-critical hiring, and participating in global COVID-19 relief measures, including the CARES Act. Business Segments Our operations are organized into three segments: HVAC, Refrigeration and Fire & Security. Our HVAC segment provides products, controls, services and solutions to meet the heating and cooling needs of residential and commercial customers. Our Refrigeration segment provides refrigeration and monitoring systems for trucks, trailers, shipping containers, intermodal and rail, as well as commercial refrigeration products. Our Fire & Security products encompass a wide range of residential and commercial building systems and security and service solutions. Our customers are in both the public and private sectors, and our businesses reflect extensive geographic diversification. See Note 19 - Segment Financial Data to the Unaudited Condensed Consolidated Financial Statements for additional discussion of sales attributed to geographic regions. Our earnings growth strategy contemplates earnings from organic sales growth, including growth from new product development and product improvements, structural cost reductions, operational improvements and incremental earnings from acquisitions. Both acquisition and restructuring costs associated with business combinations are expensed as incurred. Depending on the nature and level of acquisition activity, our earnings could be adversely impacted due to acquisition and restructuring actions initiated in connection with the integration of businesses acquired. For additional discussion of acquisitions and restructuring, see "Liquidity and Financial Condition," "Restructuring Costs," Note 10 - Borrowings and Lines of Credit and Note 15 - Restructuring Costs to the Unaudited Condensed Consolidated Financial Statements. CRITICAL ACCOUNTING ESTIMATES Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses. We believe that the most complex and sensitive judgments, because of their potential significance to the Unaudited Condensed Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. In "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Information Statement, we describe the significant accounting estimates and policies used in the preparation of the Unaudited Condensed Consolidated Financial Statements. There have been no significant changes in our critical accounting estimates. However, in the three months endedSeptember 30, 2020 , we completed our annual goodwill impairment testing.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 ofJuly 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. 34 -------------------------------------------------------------------------------- Table of Contents For all reporting units, the fair value of goodwill was determined to exceed the carrying values, 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$84 million . The estimated fair value of the reporting unit would be negatively impacted if future economic conditions are worse than our financial forecast and assumptions or there are substantial reductions in our end markets and volume assumptions relative to our financial forecast. Based upon the quantitative assessment performed, the fair value of indefinite lived trademarks was determined to exceed the carrying value, resulting in no impairment. RESULTS OF OPERATIONSNet Sales For the Three Months Ended For the Nine Months EndedSeptember 30 ,September 30 ,
(dollars in millions) 2020 2019 2020 2019 Net sales$ 5,002 $ 4,822 $ 12,862 $ 14,107 Percentage change 4 % (9) %
The factors contributing to the total percentage change year-over-year in total net sales are as follows:
For the Three Months Ended For the Nine Months Ended
September 30, 2020 September 30, 2020
Organic / Operational 3 % (8) %
Foreign currency translation 1 % (1) %
Total % change 4 % (9) %
Organic sales increased 3% for the three months ended September 30, 2020
compared with the same period of the prior year, reflecting organic sales growth
of 11% in HVAC, partially offset by lower organic sales of 6% in Refrigeration
and 7% in Fire & Security. The growth in HVAC was driven by strong sales for
North America residential, which were driven by new housing starts and higher
demand for replacement units due to increased usage attributed to a warmer than
normal summer and remote work and school activities associated with COVID-19.
Refrigeration sales declined organically driven by declines in transport
refrigeration due to economic slowdowns related to the COVID-19 pandemic and the
cyclical peak experienced in 2019. The organic sales decline in Fire & Security
reflects lower product and field service sales. Lower product sales were
primarily driven by the impact of the COVID-19 pandemic on the hospitality and
industrial businesses in North America and in Europe , the Middle East and Africa
("EMEA"), partially offset by strength in commercial fire products, particularly
in North America and China . The decline in field service sales was primarily
driven by continued partial shutdowns related to the COVID-19 pandemic across a
number of regions and a slowdown in economic activity across several regions.
Organic sales for the nine months ended September 30, 2020 reflects lower sales
volumes across all of the segments driven by the economic slowdowns attributed
to the COVID-19 pandemic in the first half of the year. The organic sales
decrease in HVAC reflects declines in commercial HVAC and light commercial HVAC
that were largely driven by the economic slowdowns related to the COVID-19
pandemic, partially offset by increases in North America residential HVAC. The
increase in residential sales was driven by new housing starts in addition to
higher demand for replacement units due to increased usage attributed to a
warmer than normal summer and remote work and school activities associated with
COVID-19. This increase more than offset the year-over-year impact of increased
demand for furnaces for the three months ended March 31, 2019 that was
associated with a change in furnace fan efficiency ratings that went into effect
in 2019. The decrease in Refrigeration was driven by declines in commercial
refrigeration that were primarily due to lower demand and the closure of new
equipment installation sites because of the COVID-19 pandemic, in transport
refrigeration in Europe and North America due to economic slowdowns related to
the COVID-19 pandemic and lower truck trailer sales volume in North America when
compared against the cyclical peak experienced in 2019. Fire & Security sales
decreased organically reflecting lower product and field service sales. The
decline in product sales was primarily driven by lower volume in North America
and EMEA due to the COVID-19 pandemic. Field service sales were down primarily
in Europe and Asia reflecting the impact of business shutdowns and project
delays as a result of the COVID-19 pandemic. See "Segment Review."
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Cost of Products and Services Sold
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
(dollars in millions) 2020 2019 2020 2019
Total cost of products and services sold $ 3,441 $ 3,376 $ 9,038 $ 9,961
Percentage change year-over-year 2 % (9) %
The factors contributing to the percentage change year-over-year in total cost of products and services sold are as follows:
For the Three Months Ended For the Nine Months Ended
September 30, 2020 September 30, 2020
Organic / Operational 1 % (8) %
Foreign currency translation 1 % (1) %
Total % change 2 % (9) %
The 1% increase in organic Cost of products and services sold for the three
months ended September 30, 2020 compared with the organic sales increase of 3%
reflects the benefits from improved logistics and material productivity. The 8%
decrease in organic Cost of products and services sold for the nine months ended
September 30, 2020 is attributable to the sales volume declines driven by the
economic slowdowns related to the COVID-19 pandemic.
Gross Margin
For the Three Months Ended For the Nine Months Ended
September 30, September 30,(dollars in millions) 2020 2019 2020 2019 Gross margin$ 1,561 $ 1,446 $ 3,824 $ 4,146 Percentage of net sales 31.2 % 30.0 % 29.7 % 29.4 % The 120 basis point increase in gross margin as a percentage of sales for the three months endedSeptember 30, 2020 reflects the effects of higher sales volumes in HVAC and the benefits from improved logistics and material productivity. The 30 basis point increase in gross margin as a percentage of sales for the nine months endedSeptember 30, 2020 reflects the benefit from favorable material productivity, partially offset by the effects of lower sales volume largely as a result of the COVID-19 pandemic. Research and Development For the Three Months Ended For the Nine Months Ended September 30, September 30, (dollars in millions) 2020 2019 2020 2019 Research and development$ 100 $ 102 $ 292 $ 302 Percentage of net sales 2.0 % 2.1 % 2.3 % 2.1 % Research and development spending is subject to the variable nature of program development schedules and, therefore, year-over-year fluctuations in spending levels are expected. Research and development costs for both the three and nine months endedSeptember 30, 2020 reflect the absence of costs as a result of the wind-down of a residential intrusion business. Selling, General and Administrative For the Three Months Ended For the Nine Months Ended September 30, September 30, (dollars in millions) 2020 2019 2020 2019 Selling, general and administrative expenses$ 681 $ 702 $ 2,010 $ 2,066 Percentage of net sales 13.6 % 14.6 % 15.6 % 14.6 %
The decrease in Selling, general and administrative expenses for the three
months ended
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independent, publicly traded company of $20 million and one-time separation
costs of $11 million . As a percentage of sales, the 100 basis point decrease was
primarily driven by the absence of the prior year consultant contract
termination charge.
The decrease in Selling, general and administrative expenses in the nine months
ended September 30, 2020 was primarily driven by cost containment initiatives
implemented to mitigate the impact of COVID-19 on our businesses. Such cost
containment actions included furloughs, temporary pay freezes and pay cuts and
reductions in discretionary spending across the business. Higher year-over-year
one-time separation-related costs of $79 million and higher costs associated
with Carrier's transition to an independent, publicly traded company of $53
million were partially offset by lower restructuring costs of $56 million and
lower costs associated with the wind-down of a residential intrusion business of
$18 million . As a percentage of sales, the 100 basis point increase was
primarily driven by lower sales volumes experienced as a result of the COVID-19
pandemic.
We are continuously evaluating our cost structure and have implemented
restructuring actions to keep our cost structure competitive. The amounts
reflected previously include the impact of restructuring actions on Selling,
general and administrative expenses. For additional discussion, see
"Restructuring Costs" and Note 15 - Restructuring Costs to the Unaudited
Condensed Consolidated Financial Statements.
Restructuring Costs
For the Nine Months Ended September 30,
(dollars in millions) 2020 2019
Cost of sales $ 5 $ 27
Selling, general and administrative 14 70
Total restructuring costs $ 19 $ 97
Restructuring actions are a component of our operating margin improvement
efforts and relate to existing and recently acquired operations. Charges
generally arise from severance related to workforce reductions, facility exit
and lease termination costs associated with the consolidation of field and
manufacturing operations and costs to exit legacy programs. We continue to
closely monitor the economic environment and may undertake further restructuring
actions to keep our cost structure aligned with the demand for our products and
services and prevailing market conditions.
2020 Actions. During the nine months ended September 30, 2020 , we recorded net
pre-tax restructuring charges of $18 million relating to ongoing cost reduction
actions initiated in 2020. For actions initiated in 2020, we are targeting to
complete the majority of the remaining workforce and facility-related cost
reductions in 2021. During the nine months ended September 30, 2020 , we had $8
million of cash outflows related to the 2020 actions. As of September 30, 2020 ,
we expect to incur additional restructuring and other charges of $4 million to
complete these actions.
2019 Actions. During the nine months ended September 30, 2020 and 2019, we
recorded net pre-tax restructuring charges of $3 million and $82 million ,
respectively, for actions initiated in 2019. For actions initiated in 2019, we
are targeting to complete the majority of the remaining workforce and
facility-related cost reductions in 2020. During the nine months ended
September 30, 2020 , we had cash outflows of approximately $25 million related to
the 2019 actions.
In addition, during the nine months ended September 30, 2020 and 2019, we
recorded net pre-tax restructuring costs totaling $(2) million and $16 million ,
respectively, for restructuring actions initiated in 2018 and prior.
Equity Method Investment Net Earnings
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
(dollars in millions) 2020 2019 2020 2019
Equity method investment net earnings $ 62 Investments over which we do not exercise control, but have significant influence, are accounted for using the equity method of accounting. Equity method investment net earnings decreased$16 million for the three months endedSeptember 30, 2020 primarily driven by the adverse impact of a product performance matter at one of our HVAC joint ventures. For the nine months endedSeptember 30, 2020 , equity method investment net earnings decreased$50 million driven 37
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Table of Contents by the impact of the COVID-19 pandemic and the adverse impact of a product performance matter at one of our HVAC joint ventures.
InSeptember 2020 , the Company sold 9.25 million B shares of Beijer forSEK290 ($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$252 million . Following the sale, Beijer, which is listed on the Nasdaq Stockholm, continues to be reported as an equity method investment with Carrier continuing to hold approximately 30% of Beijer's B shares, approximately 22% of Beijer's A shares. Other Income (Expense), Net For the Three Months Ended For the Nine Months Ended September 30, September 30, (dollars in millions) 2020 2019 2020 2019 Other income (expense), net$ 239 $ (91) $ 168 $ (42) Other income (expense), net primarily includes the impact of gains and losses related to the sale of interests in our equity method investments or infrequently occurring items. The year-over-year change of$330 million for the three months endedSeptember 30, 2020 , is primarily driven by a$252 million gain on the sale of 9.25 million Beijer shares and the absence of a$108 million other-than-temporary impairment charge on a minority-owned joint venture investment in 2019, partially offset by a$11 million charge resulting from a litigation matter. The year-over-year change of$210 million for the nine months endedSeptember 30, 2020 , is primarily driven by a$252 million gain on the sale of 9.25 million Beijer shares and the$37 million year-over-year impact from other-than-temporary impairment charges on minority-owned joint venture investments. We recorded a$71 million and$108 million other-than-temporary impairment charge on minority-owned joint venture investments in 2020 and 2019, respectively. These impacts were partially offset by the unfavorable impact of a change in the estimate of certain long-term liabilities of$12 million , an$11 million charge resulting from a litigation matter and the absence of gains on the sale of investments of$34 million in the nine months endedSeptember 30, 2019 . Interest (Expense) Income, Net For the Three Months Ended For the Nine Months Ended September 30, September 30, (dollars in millions) 2020 2019 2020 2019 Interest expense$ (90) $ (20) $ (213) $ (55) Interest income 2 23 7 78 Interest (expense) income, net$ (88) $
3
Prior to the Separation, interest income and expense related primarily to interest on related party activity between Carrier and UTC. See "Liquidity and Financial Condition" in this Item 2 and Note 5 - Related Parties and Note 10 - Borrowings and Lines of Credit to the Unaudited Condensed Consolidated Financial Statements. Interest (expense) income, net reflects higher year-over-year interest expense for the three and nine months endedSeptember 30, 2020 due to the issuance of$9.25 billion of fixed rate notes inFebruary 2020 , a$1.75 billion draw on our term loan credit facility inMarch 2020 and the issuance of$750 million of fixed rate notes inJune 2020 , partially offset by a decrease in interest income earned on related party receivables due from UTC. Income Taxes For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Effective tax rate 25.9 % 25.8 % 33.4 % 18.3 % 38
-------------------------------------------------------------------------------- Table of Contents The increase in the effective tax rate for the three months endedSeptember 30, 2020 compared with the prior year 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 theU.S. Treasury GILTI HTE regulations. The increase in the effective tax rate for the nine months endedSeptember 30, 2020 compared with the prior year 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 theItalian Tax Authority and conclusion of an audit by theIRS for UTC tax years 2014, 2015 and 2016. In addition, during the current year the Company recognized a$51 million charge related to a valuation allowance recorded against aUnited Kingdom tax loss and credit carry forward as a result of separation-related activities and a charge of$46 million resulting from Carrier's decision to no longer permanently reinvest certain pre-2018 unremitted non-U.S. earnings. We continue to monitor potential tax impacts from final regulations issued under the TCJA, as well as the economic impacts from COVID-19 and related legislative actions.
For additional discussion of income taxes and the effective income tax rate, see Note 14 - Income Taxes to the Unaudited Condensed Consolidated Financial Statements.
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