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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Measurements, Recurring and Nonrecurring

In accordance with the provisions of ASC 820: Fair Value Measurements, the following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring and non-recurring basis in our Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019:


	September 30, 2020
(dollars in millions)	Total		Level 1		Level 2		Level 3
Recurring fair value measurements:
Equity securities	$	51	$	51	$	—	$	—
Derivative assets	51		—		51		—
Derivative liabilities	(33)		—		(33)		—


	December 31, 2019
(dollars in millions)	Total		Level 1		Level 2		Level 3
Recurring fair value measurements:
Equity securities	$	3	$	3	$	—	$	—
Derivative assets	9		—		9		—
Derivative liabilities	(5)		—		(5)		—

Fair Value, by Balance Sheet Grouping

The following table provides carrying amounts and fair values of financial instruments that are not carried at fair value in our Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019:


	September 30, 2020				December 31, 2019
(dollars in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term receivables, net	$	61	$	62	$	62	$	62
Customer financing notes receivable, net	99		99		62		62
Short-term borrowings	(538)		(538)		(34)		(34)
Long-term debt (excluding leases and other)	(5,550)		(5,760)		—		—
Long-term liabilities	(275)		(263)		(4)		(4)

Long-term liabilities as of September 30, 2020 includes $239 million of payables to UTC for reimbursement of tax payments UTC is responsible to pay after the Separation as a result of the TMA.

The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in the Condensed Consolidated Balance Sheet at September 30, 2020 and December 31, 2019:


	September 30, 2020
(dollars in millions)	Total		Level 1		Level 2		Level 3
Long-term receivables, net	$	62	$	—	$	62	$	—
Customer financing notes receivable, net	99		—		99		—
Short-term borrowings	(538)		—		(538)		—
Long-term debt (excluding leases and other)	(5,760)		—		(5,760)
Long-term liabilities	(263)		—		(263)		—


	December 31, 2019
(dollars in millions)	Total		Level 1		Level 2		Level 3
Long-term receivables	$	62	$	—	$	62	$	—
Customer financing notes receivable, net	62		—		62		—
Short-term borrowings	(34)		—		(34)		—

Long-term liabilities	(4)		—		(4)		—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details