Discontinued Operations and Disposal Groups

3 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

Discontinued Operations

As discussed above, on April 2, 2020, Carrier and Otis entered into a Separation and Distribution Agreement with UTC (since renamed Raytheon Technologies Corporation), pursuant to which, among other things, UTC agreed to separate into three independent, publicly traded companies – UTC, Carrier and Otis and distribute all of the outstanding common stock of Carrier and Otis to UTC shareowners who held shares of UTC common stock as of the close of business on March 19, 2020. The Separation Transactions and Distributions were completed on April 3, 2020.

Carrier and Otis are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Loss from discontinued operations attributable to common shareowners is as follows:


	Quarter Ended March 31,
(dollars in millions)	2021		2020
Otis	$	—	$	187
Carrier	—		196
Separation related transactions (1)	(19)		(904)
Loss from discontinued operations attributable to common shareowners	$	(19)	$	(521)

(1) Reflects debt extinguishment costs in the quarter ended March 31, 2020 related to the Company’s paydown of debt to not exceed the maximum applicable net indebtedness under the Raytheon Merger Agreement, and unallocable transaction costs incurred by the Company primarily related to professional services costs pertaining to the Separation Transactions and the establishment of Carrier and Otis as stand-alone public companies, facility relocation costs, costs to separate information systems, costs of retention bonuses and tax charges and benefits related to separation activities.

The following summarized financial information related to discontinued operations has been reclassified from Income from continuing operations attributable to common shareowners and included in Loss from discontinued operations attributable to common shareowners:


	Quarter Ended March 31,
(dollars in millions)	2021		2020
Otis
Product sales	$	—	$	1,123
Service sales	—		1,843
Cost of products sold	—		913
Cost of services sold	—		1,157
Research and development	—		38
Selling, general and administrative expense	—		450
Other income (expense), net	—		(65)
Non-operating (income) expense, net	—		3
Income from discontinued operations, before tax	—		340
Income tax expense from discontinued operations	—		116
Net income from discontinued operations	—		224
Less: Noncontrolling interest in subsidiaries earnings from discontinued operations	—		37
Income from discontinued operations attributable to common shareowners	$	—	$	187
Carrier
Product sales	$	—	$	3,143
Service sales	—		741
Cost of products sold	—		2,239
Cost of services sold	—		527
Research and development	—		98
Selling, general and administrative expense	—		669
Other income (expense), net	—		(30)
Non-operating (income) expense, net	—		17
Income from discontinued operations, before tax	—		304
Income tax expense from discontinued operations	—		102
Net income from discontinued operations	—		202
Less: Noncontrolling interest in subsidiaries earnings from discontinued operations	—		6
Income from discontinued operations attributable to common shareowners	$	—	$	196
Separation related transactions (1)
Selling, general and administrative expense	$	20	$	154

Non-operating expense, net	—		666
Loss from discontinued operations, before tax	(20)		(820)
Income tax (benefit) expense from discontinued operations	(1)		84
Net loss from discontinued operations	(19)		(904)
Total loss from discontinued operations attributable to common shareowners	$	(19)	$	(521)

Selected financial information related to cash flows from discontinued operations is as follows:


	Quarter Ended March 31,
(dollars in millions)	2021		2020











Net cash used in operating activities	$	(5)	$	(472)
Net cash used in investing activities	—		(241)
Net cash provided by financing activities	5		322

Net cash used in operating activities for the three months ended March 31, 2020 includes the net operating cash flows of Carrier and Otis prior to the Separation Transactions, as well as costs incurred by the Company primarily related to professional services costs pertaining to the Separation Transactions and the establishment of Carrier and Otis as stand-alone public companies, facility relocation costs, costs to separate information systems, costs of retention bonuses and tax charges related to separation activities. Net cash provided by financing activities for the three months ended March 31, 2020 primarily consists of net transfer activity, partially offset by debt extinguishment costs related to the early repayment of debt.