10-Q 1 carr-20220630.htm 10-Q carr-20220630
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Table of Contents             
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
 ____________________________________ 
FORM 10-Q
____________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-39220
____________________________________ 
CARRIER GLOBAL CORPORATION
(Exact name of registrant as specified in its charter)
____________________________________ 
Delaware 83-4051582
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
13995 Pasteur Boulevard, Palm Beach Gardens, Florida 33418
(Address of principal executive offices, including zip code)
(561) 365-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($0.01 par value)CARRNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of July 15, 2022, there were 841,583,456 shares of Common Stock outstanding.
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Table of Contents             
CARRIER GLOBAL CORPORATION
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Three and Six Months Ended June 30, 2022
Page

Carrier Global Corporation and its subsidiaries' names, abbreviations thereof, logos and product and service designators are all either the registered or unregistered trademarks or trade names of Carrier Global Corporation and its subsidiaries. Names, abbreviations of names, logos and products and service designators of other companies are either the registered or unregistered trademarks or trade names of their respective owners. As used herein, the terms "we," "us," "our," "the Company" or "Carrier," unless the context otherwise requires, mean Carrier Global Corporation and its subsidiaries. References to internet websites in this Form 10-Q are provided for convenience only. Information available through these websites is not incorporated by reference into this Form 10-Q.









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Table of Contents             



PART I – FINANCIAL INFORMATION
Item 1.    Financial Statements

CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

For the Three Months Ended June 30,For the Six Months Ended June 30,
(In millions, except per share amounts)2022202120222021
Net sales
Product sales$4,662 $4,584 $8,832 $8,448 
Service sales549 856 1,033 1,691 
Total Net sales5,211 5,440 9,865 10,139 
Costs and expenses
Cost of products sold(3,363)(3,235)(6,361)(5,959)
Cost of services sold(401)(586)(764)(1,167)
Research and development(122)(125)(247)(246)
Selling, general and administrative(614)(813)(1,215)(1,556)
Total Costs and expenses(4,500)(4,759)(8,587)(8,928)
Equity method investment net earnings101 87 159 125 
Other income (expense), net7 15 1,119 18 
Operating profit819 783 2,556 1,354 
Non-service pension (expense) benefit (1)19 (2)37 
Interest (expense) income, net(61)(71)(109)(164)
Income from operations before income taxes757 731 2,445 1,227 
Income tax (expense) benefit(170)(234)(471)(338)
Net income from operations587 497 1,974 889 
Less: Non-controlling interest in subsidiaries' earnings from operations14 10 22 18 
Net income attributable to common shareowners$573 $487 $1,952 $871 
Earnings per share
Basic$0.68 $0.56 $2.30 $1.00 
Diluted $0.67 $0.55 $2.25 $0.98 
Weighted-average number of shares outstanding
Basic845.7 868.7 849.5 869.0 
Diluted862.7 890.9 868.4 890.4 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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

For the Three Months Ended June 30,For the Six Months Ended June 30,
(In millions)2022202120222021
Net income from operations$587 $497 $1,974 $889 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments arising during period(489)59 (550)(62)
Pension and post-retirement benefit plan adjustments2 6  13 
Chubb divestiture  (245) 
Other comprehensive income (loss), net of tax(487)65 (795)(49)
Comprehensive income (loss)100 562 1,179 840 
Less: Comprehensive income (loss) attributable to non-controlling interest5 10 13 18 
Comprehensive income (loss) attributable to common shareowners$95 $552 $1,166 $822 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
As of
(In millions)June 30, 2022December 31, 2021
Assets
Cash and cash equivalents$3,017 $2,987 
Accounts receivable, net2,823 2,403 
Contract assets, current712 503 
Inventories, net2,350 1,970 
Assets held for sale 3,168 
Other assets, current374 376 
Total current assets9,276 11,407 
Future income tax benefits566 563 
Fixed assets, net1,805 1,826 
Operating lease right-of-use assets595 640 
Intangible assets, net458 509 
Goodwill9,067 9,349 
Pension and post-retirement assets31 43 
Equity method investments1,671 1,593 
Other assets193 242 
Total Assets$23,662 $26,172 
Liabilities and Equity
Accounts payable$2,403 $2,334 
Accrued liabilities2,430 2,561 
Contract liabilities, current444 415 
Liabilities held for sale 1,134 
Current portion of long-term debt269 183 
Total current liabilities5,546 6,627 
Long-term debt8,298 9,513 
Future pension and post-retirement obligations366 380 
Future income tax obligations335 354 
Operating lease liabilities490 527 
Other long-term liabilities1,635 1,677 
Total Liabilities16,670 19,078 
Commitments and contingent liabilities (Note 19)
Equity
Common stock 9 9 
Treasury stock(1,543)(529)
Additional paid-in capital5,441 5,411 
Retained earnings4,564 2,865 
Accumulated other comprehensive loss(1,775)(989)
Non-controlling interest296 327 
Total Equity6,992 7,094 
Total Liabilities and Equity$23,662 $26,172 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)

(In millions)Accumulated Other Comprehensive Income (Loss)Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsNon-Controlling InterestTotal Equity
Balance as of December 31, 2021$(989)$9 $(529)$5,411 $2,865 $327 $7,094 
Net income— — — — 1,379 8 1,387 
Other comprehensive income (loss), net of tax(308)— — — — — (308)
Shares issued under incentive plans, net— — — (17)— — (17)
Stock-based compensation— — — 21 — — 21 
Dividends attributable to non-controlling interest— — — — — (1)(1)
Sale of non-controlling interest— — — — — (5)(5)
Treasury stock repurchase— — (741)— — — (741)
Balance as of March 31, 2022$(1,297)$9 $(1,270)$5,415 $4,244 $329 $7,430 
Net income57314587
Other comprehensive income (loss), net of tax(478)(9)(487)
Dividends declared on common stock (1)
(253)(253)
Conversion of cash settled awards66
Stock-based compensation2020
Dividends attributable to non-controlling interest(38)(38)
Treasury stock repurchase(273)(273)
Balance as of June 30, 2022$(1,775)$9 $(1,543)$5,441 $4,564 $296 $6,992 
(In millions)Accumulated Other Comprehensive Income (Loss)Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsNon-Controlling InterestTotal Equity
Balance as of December 31, 2020$(745)$9 $ $5,345 $1,643 $326 $6,578 
Net income— — — — 384 8 392 
Other comprehensive income (loss), net of tax(114)— — — — — (114)
Shares issued under incentive plans, net— — — (14)— — (14)
Stock-based compensation— — — 19 — — 19 
Dividends attributable to non-controlling interest— — — — — (5)(5)
Treasury stock repurchase— — (38)— — — (38)
Balance as of March 31, 2021$(859)$9 $(38)$5,350 $2,027 $329 $6,818 
Net income— — — — 487 10 497 
Other comprehensive income (loss), net of tax65 — — — — — 65 
Dividends declared on common stock (2)
— — — — (209)— (209)
Shares issued under incentive plans, net— — — (4)— — (4)
Stock-based compensation— — — 20 — — 20 
Dividends attributable to non-controlling interest— — — — — (21)(21)
Acquisition of non-controlling interest— — — — — 46 46 
Treasury stock repurchase— — (92)— — — (92)
Balance as of June 30, 2021$(794)$9 $(130)$5,366 $2,305 $364 $7,120 
(1) Cash dividends declared were $0.30 per share for the three months ended June 30, 2022.
(2) Cash dividends declared were $0.24 per share for the three months ended June 30, 2021

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
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CARRIER GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 For the Six Months Ended June 30,
(In millions)20222021
Operating Activities
Net income from operations$1,974 $889 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization155 168 
Deferred income tax provision(17)33 
Stock-based compensation costs41 40 
Equity method investment net earnings(159)(125)
(Gain) loss on extinguishment of debt(36) 
(Gain) loss on sale of investments(1,119) 
Changes in operating assets and liabilities
Accounts receivable, net(483)(288)
Contract assets, current(224)(41)
Inventories, net(435)(210)
Other assets, current(37)(27)
Accounts payable and accrued liabilities79 368 
Contract liabilities, current42 42 
Defined benefit plan contributions(6)(27)
Distributions from equity method investments15 42 
Other operating activities, net40 (119)
Net cash flows provided by (used in) operating activities(170)745 
Investing Activities
Capital expenditures(122)(132)
Investment in businesses, net of cash acquired (38)(167)
Dispositions of businesses 2,944 1 
Settlement of derivative contracts, net(123)(6)
Other investing activities, net(16)3 
Net cash flows provided by (used in) investing activities2,645 (301)
Financing Activities
Increase (decrease) in short-term borrowings, net(22)(13)
Issuance of long-term debt21 74 
Repayment of long-term debt(1,127)(605)
Repurchases of common stock(1,014)(130)
Dividends paid on common stock(257)(209)
Dividends paid to non-controlling interest(22)(30)
Other financing activities, net(13)15 
Net cash flows provided by (used in) financing activities(2,434)(898)
Effect of foreign exchange rate changes on cash and cash equivalents(41)(2)
Net increase (decrease) in cash and cash equivalents and restricted cash (456)
Cash, cash equivalents and restricted cash, beginning of period3,025 3,120 
Cash, cash equivalents and restricted cash, end of period3,025 2,664 
Less: restricted cash8 34 
Cash and cash equivalents, end of period$3,017 $2,630 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.
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CARRIER GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1: DESCRIPTION OF THE BUSINESS
Carrier Global Corporation is the leading global provider of healthy, safe, sustainable and intelligent building and cold chain solutions. The Company's portfolio includes industry-leading brands such as Carrier, Automated Logic, Carrier Transicold, Kidde, Edwards and LenelS2 that offer innovative heating, ventilating, air conditioning ("HVAC"), refrigeration, fire, security and building automation technologies to help make the world safer and more comfortable. The Company also provides a broad array of related building services, including audit, design, installation, system integration, repair, maintenance and monitoring.

In the opinion of management, the accompanying Unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments) necessary to state fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for 2021 filed with the SEC on February 8, 2022 (the "2021 Form 10-K").

Impact of the COVID-19 Pandemic
In early 2020, the World Health Organization declared the outbreak of a respiratory disease known as COVID-19 as a global pandemic. In response, many countries implemented containment and mitigation measures to combat the outbreak, which severely restricted the level of economic activity and caused a significant contraction in the global economy. As a result, the Company took several preemptive actions to manage liquidity, preserve the health and safety of its employees and customers as well as maintain the continuity of its operations. The preparation of financial statements requires management to use judgments in making estimates and assumptions based on the relevant information available at the end of each period, which can have a significant effect on reported amounts. However, due to significant uncertainty surrounding the pandemic, including a resurgence in cases and the spread of COVID-19 variants, management's judgments could change. While the Company's results of operations, cash flows and financial condition could be negatively impacted, the extent of any continuing impact cannot be estimated with certainty at this time.

NOTE 2: BASIS OF PRESENTATION
The Unaudited Condensed Consolidated Financial Statements include all accounts of the Company and its wholly-owned and majority-owned subsidiaries in which it has control. All intra-company accounts and transactions have been eliminated. Related party transactions between the Company and its equity method investees have not been eliminated. Non-controlling interest represents a non-controlling investor's interests in the results of subsidiaries that the Company controls and consolidates.

Sale of Chubb Fire & Security Business
On July 26, 2021, the Company entered into a stock purchase agreement to sell its Chubb Fire and Security business ("Chubb") to APi Group Corporation ("APi"). As a result, the assets and liabilities of Chubb are presented as held for sale on the accompanying Unaudited Condensed Consolidated Balance Sheet as of December 31, 2021 and recorded at the lower of their carrying value or fair value less estimated cost to sell. The sale of Chubb was completed on January 3, 2022 (the "Chubb Sale"). See Note 16 - Divestitures for additional information.

Separation from United Technologies
On April 3, 2020, United Technologies Corporation, since renamed Raytheon Technologies Corporation ("UTC"), completed the spin-off of the Company into an independent, publicly traded company (the "Separation") through a pro-rata distribution (the "Distribution") on a one-for-one basis of all of the outstanding shares of common stock of the Company to UTC shareowners who held shares of UTC common stock as of the close of business on March 19, 2020, the record date of the Distribution. The Company incurred separation-related costs including employee-related costs, costs to establish certain stand-alone functions, information technology systems, professional service fees and other costs associated with becoming an independent, publicly traded company. These costs are primarily recorded in Selling, general and administrative in the Unaudited Condensed Consolidated Statement of Operations and totaled $3 million and $19 million for the three and six months ended June 30, 2021, respectively.

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

NOTE 3: INVENTORIES, NET
Inventories are stated at the lower of cost or estimated net realizable value. Cost is primarily determined based on the first-in, first-out inventory method ("FIFO") or average cost methods, which approximates current replacement cost. However, certain subsidiaries use the last-in, first-out inventory method ("LIFO").

Inventories, net consisted of the following:
(In millions)June 30, 2022December 31, 2021
Raw materials$701 $559 
Work-in-process243 197 
Finished goods1,406 1,214 
Inventories, net$2,350 $1,970 

The Company performs periodic assessments utilizing customer demand, production requirements and historical usage rates to determine the existence of excess and obsolete inventory and records necessary provisions to reduce such inventories to the lower of cost or estimated net realizable value. Raw materials, work-in-process and finished goods are net of valuation reserves of $151 million and $154 million as of June 30, 2022 and December 31, 2021, respectively.

NOTE 4: GOODWILL AND INTANGIBLE ASSETS
The Company records goodwill as the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is tested and reviewed annually for impairment on July 1 or whenever there is a material change in events or circumstances that indicates that the fair value of the reporting unit may be less than its carrying value.

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

(In millions)HVACRefrigerationFire & SecurityTotal
Balance as of December 31, 2021$5,658 $1,228 $2,463 $9,349 
Goodwill resulting from business combinations (1)
15  1 16 
Foreign currency translation(162)(39)(97)(298)
Balance as of June 30, 2022$5,511 $1,189 $2,367 $9,067 
(1) See Note 15 - Acquisitions for additional information.

Indefinite-lived intangible assets are tested and reviewed annually for impairment on July 1 or whenever there is a material change in events or circumstances that indicates that the fair value of the asset may be less than the carrying amount of the asset. All other intangible assets with finite useful lives are amortized over their estimated useful lives.

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Identifiable intangible assets consisted of the following:

June 30, 2022December 31, 2021
(In millions)Gross AmountAccumulated AmortizationNet AmountGross AmountAccumulated AmortizationNet Amount
Amortized:
Customer relationships$919 $(701)$218 $945 $(699)$246 
Patents and trademarks224 (180)44 232 (182)50 
Service portfolios and other672 (540)132 688 (539)149 
1,815 (1,421)394 1,865 (1,420)445 
Unamortized:
Trademarks and other64 — 64 64 — 64 
Intangible assets, net$1,879 $(1,421)$458 $1,929 $(1,420)$509 

Amortization of intangible assets was as follows:

For the Three Months Ended June 30,For the Six Months Ended June 30,
(In millions)2022202120222021
Amortization expense of Intangible assets$20 $25 $41 $49 
NOTE 5: BORROWINGS AND LINES OF CREDIT
Long-term debt consisted of the following:

(In millions)June 30,
2022
December 31,
2021
2.242% Notes due February 15, 2025
$1,200 $2,000 
2.493% Notes due February 15, 2027
900 1,250 
2.722% Notes due February 15, 2030
2,000 2,000 
2.700% Notes due February 15, 2031
750 750 
3.377% Notes due April 5, 2040
1,500 1,500 
3.577% Notes due April 5, 2050
2,000 2,000 
Total long-term Notes8,350 9,500 
Other debt (including project financing obligations and finance leases)279 267 
Discounts and debt issuance costs(62)(71)
Total debt8,567 9,696 
Less: current portion of long-term debt269 183 
Long-term debt, net of current portion$8,298 $9,513 
Revolving Credit Facility
On February 10, 2020, the Company entered into a revolving credit agreement with various banks permitting aggregate borrowings of up to $2.0 billion pursuant to an unsecured, unsubordinated revolving credit facility that matures on April 3, 2025 (the "Revolving Credit Facility"). The Revolving Credit Facility supports the Company's commercial paper program and cash requirements of the Company. A commitment fee of 0.125% is charged on unused commitments. Borrowings under the Revolving Credit Facility are available in U.S. Dollars, Euros and Pounds Sterling and bear interest at a variable interest rate plus a ratings-based margin, which was 125 basis points as of June 30, 2022. As of June 30, 2022, there were no borrowings outstanding under the Revolving Credit Facility.

Commercial Paper Program
The Company has a $2.0 billion unsecured, unsubordinated commercial paper program, which can be used for general
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corporate purposes, including the funding of working capital and potential acquisitions. As of June 30, 2022, there were no borrowings outstanding under the commercial paper program.

Project Financing Arrangements
The Company is involved in several long-term construction contracts in which it arranges project financing with certain customers. As a result, the Company issued $21 million and $71 million of debt during the six months ended June 30, 2022 and 2021, respectively. Long-term debt repayments associated with these financing arrangements during the six months ended June 30, 2022 and 2021 were $12 million and $83 million, respectively.

Debt Covenants
The Revolving Credit Facility and the indenture for the long-term Notes contain affirmative and negative covenants customary for financings of these types, which, among other things, limit the Company's ability to incur additional liens, to make certain fundamental changes and to enter into sale and leaseback transactions. As of June 30, 2022, the Company was in compliance with the covenants under the agreements governing its outstanding indebtedness.

Tender Offers
On March 15, 2022, the Company commenced tender offers to purchase up to $1.15 billion ("Aggregate Tender Cap") aggregate principal of the Company's 2.242% Notes due 2025 and 2.493% Notes due 2027 (together, the "Senior Notes"). The tender offers included payment of applicable accrued and unpaid interest up to the settlement date, along with a fixed spread for early repayment. Based on participation, the Company elected to settle the tender offers on March 30, 2022. The aggregate principal amount of Senior Notes validly tendered and accepted was approximately $1.15 billion, which included $800 million of Notes due 2025 and $350 million of Notes due 2027. As a result, the Company recognized a net gain of $33 million and wrote off $5 million of unamortized deferred financing costs within Interest (expense) income, net on the accompanying Unaudited Condensed Consolidated Statement of Operations during the three months ended March 31, 2022.

NOTE 6: FAIR VALUE MEASUREMENTS
ASC 820, Fair Value Measurement ("ASC 820"), defines fair value as the price that would be received if an asset is sold or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

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

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

In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors, including foreign currency and commodity price risk. These exposures are managed through operational strategies and the use of undesignated hedging contracts. The Company's derivative assets and liabilities are measured at fair value on a recurring basis using internal models based on observable market inputs, such as forward, interest, contract and discount rates with changes in fair value reported directly in earnings.

The following tables provide the valuation hierarchy classification of assets and liabilities that are recorded at fair value and
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measured on a recurring basis in the Company's Unaudited Condensed Consolidated Balance Sheet:

(In millions)TotalLevel 1Level 2Level 3
June 30, 2022
Derivative assets (1)
$3 $ $3 $ 
Derivative liabilities (2)
$(9)$ $(9)$ 
December 31, 2021
Derivative assets (1)
$8 $ $8 $ 
Derivative liabilities (2)
$(35)$ $(35)$ 
(1) Included in Other assets, current on the accompanying Unaudited Condensed Consolidated Balance Sheet.
(2) Included in Accrued liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet.

The following table provides the carrying amounts and fair values of the Company's long-term notes that are not recorded at fair value in the Unaudited Condensed Consolidated Balance Sheet:

June 30, 2022December 31, 2021
(In millions)Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Total long-term Notes (1)
$8,350 $7,040 $9,500 $9,842 
(1) Excludes debt discount and issuance costs.
The fair value of the Company's long-term debt is measured based on observable market inputs which are considered Level 1 within the fair value hierarchy. The carrying value of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings approximate fair value due to the short-term nature of these accounts and would be classified as Level 1 in the fair value hierarchy. The Company's financing leases and project financing obligations, included in Long-term debt and Current portion of long-term debt on the accompanying Unaudited Condensed Consolidated Balance Sheet, approximate fair value and are classified as Level 3 in the fair value hierarchy.

NOTE 7: EMPLOYEE BENEFIT PLANS
The Company sponsors both funded and unfunded domestic and international defined benefit pension and defined contribution plans. In addition, the Company contributes to various domestic and international multi-employer pension plans.

Contributions to the plans were as follows:

For the Three Months Ended June 30,For the Six Months Ended June 30,
(In millions)
2022 (1)
2021
2022 (1)
2021
Defined benefit plans$2 $3 $6 $