RELATED PARTIES

12 Months Ended

Dec. 31, 2021

Equity Method Investments

The Company sells products to and purchases products from unconsolidated entities accounted for under the equity method, and therefore, these entities are considered to be related parties. The Company has 30 directly owned unconsolidated domestic and foreign affiliates as of December 31, 2021 and 2020, respectively, of which 99% of such investments are in its HVAC segment. Amounts attributable to equity method investees are as follows:


(In millions)	2021		2020		2019
Sales to equity method investees included in Product sales	$	2,258	$	1,758	$	1,807
Purchases from equity method investees included in Cost of products sold	$	357	$	292	$	368

The Company had receivables from and payables to equity method investees as follows:


(In millions)	2021		2020
Receivables from equity method investees included in Accounts receivable, net	$	150	$	161
Payables to equity method investees included in Accounts payable	$	51	$	38

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. In 2020, the Company determined that indicators of impairment existed for a minority owned joint venture investment and performed a valuation of this investment using a discounted cash flow method. The Company determined that the loss in value was other-than-temporary due to a reduction in sales and earnings that were primarily 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. As a result, the Company recorded a non-cash, other-than-temporary impairment charge of $71 million on this investment in 2020, which is included in Other income (expense), net on the accompanying Consolidated Statement of Operations. In 2019, the Company determined that indicators of impairment existed for a minority owned joint venture investment and performed a valuation of this investment using a discounted cash flow method. The Company determined that the loss in value was other-than-temporary. As a result, the Company recorded a non-cash, other-than-temporary impairment charge of $108 million on this investment in 2019, which is included in Other income (expense), net on the accompanying Consolidated Statement of Operations.

In September 2020, the Company sold 9.25 million B shares of Beijer for SEK290 ($32.38) per share equal to approximately 7.9% of the outstanding B shares in Beijer, through an accelerated equity offering. The Company received proceeds of approximately $300 million and recognized a pre-tax gain on the sale of $252 million, which is included in Other income (expense), net on the Consolidated Statement of Operations. Subsequently, in December 2020, the Company sold all of its remaining A and B shares of Beijer for SEK245 ($29.03) per share. The Company received proceeds of approximately $1.1 billion and recognized a pre-tax gain on the sale of $871 million, which is included in Other income (expense), net on the Consolidated Statement of Operations. Prior to the sale of the Company's remaining shares, Beijer was reported as an equity method investment.

Summarized Financial Information. Pursuant to Rule 3-10 and Rule 4-08(g) of Regulation S-X under the Securities Act, the Company is required to present summarized financial information of the combined accounts of its non-consolidated joint

ventures accounted for by the equity method. Summarized unaudited financial information for equity method investments is as follows:



(In millions)	2021		2020
Current assets	$	4,275	$	3,671
Non-current assets	2,140		2,035
Total assets	6,415		5,706

Current liabilities	(2,596)		(2,223)
Non-current liabilities	(329)		(298)
Total liabilities	(2,925)		(2,521)
Total net equity of investees	$	3,490	$	3,185



(In millions)	2021		2020		2019
Net sales	$	9,471	$	9,299	$	9,622
Gross profit	$	1,907	$	1,722	$	1,741
Income from continuing operations	$	650	$	544	$	578
Net income	$	650	$	544	$	578