FARMINGTON, Conn., Feb. 1, 2021 /PRNewswire/ -- Otis Worldwide
Corporation (NYSE:OTIS) reported fourth quarter 2020 net sales of
$3.5 billion with 1.3% organic
growth. GAAP diluted earnings per share (EPS) increased 16.0% to
$0.58 and adjusted diluted EPS
increased 40.4% to $0.66. Full year
net sales of $12.8 billion decreased
2.1% organically with GAAP diluted EPS decreasing 19.4% to
$2.08 and adjusted diluted EPS
increasing 12.5% to $2.52.
"Otis delivered a strong fourth quarter, ending a solid first
year as an independent company. We returned to growth in the
quarter while continuing to grow share, expand adjusted margin and
generate robust cash flow demonstrating the dedication of our
colleagues around the world to meet our commitments, even in trying
economic times," said President and CEO Judy Marks. "By combining this positive momentum
with improvements in our end markets, we expect to deliver 2% to 4%
organic sales growth with high single-digit adjusted EPS growth and
free cash flow conversion of about 120% in 2021*. This outlook
reflects the resiliency of the business model, strength of our
long-term strategy and a commitment to create value for our
customers and shareholders."
Key
Figures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
($ millions,
except per
share amounts)
|
2020
|
|
2019
|
|
Y/Y
|
|
Y/Y
(CFX)
|
|
2020
|
|
2019
|
|
Y/Y
|
|
Y/Y
(CFX)
|
Net sales
|
$
|
3,493
|
|
|
$
|
3,353
|
|
|
4.2
|
%
|
|
1.6
|
%
|
|
$
|
12,756
|
|
|
$
|
13,118
|
|
|
(2.8)
|
%
|
|
(2.4)
|
%
|
Organic
sales
|
|
|
|
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
(2.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
Operating
profit
|
$
|
440
|
|
|
$
|
436
|
|
|
$
|
4
|
|
|
|
|
$
|
1,639
|
|
|
$
|
1,814
|
|
|
$
|
(175)
|
|
|
|
Operating profit
margin
|
12.6
|
%
|
|
13.0
|
%
|
|
(40) bps
|
|
|
|
12.8
|
%
|
|
13.8
|
%
|
|
(100) bps
|
|
|
Net income
|
$
|
251
|
|
|
$
|
218
|
|
|
15.1
|
%
|
|
|
|
$
|
906
|
|
|
$
|
1,116
|
|
|
(18.8)
|
%
|
|
|
Earnings per
share
|
$
|
0.58
|
|
|
$
|
0.50
|
|
|
16.0
|
%
|
|
|
|
$
|
2.08
|
|
|
$
|
2.58
|
|
|
(19.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP
comparison
|
Operating
profit
|
$
|
509
|
|
|
$
|
473
|
|
|
$
|
36
|
|
|
$
|
19
|
|
|
$
|
1,919
|
|
|
$
|
1,872
|
|
|
$
|
47
|
|
|
$
|
52
|
|
Operating profit
margin
|
14.6
|
%
|
|
14.1
|
%
|
|
50 bps
|
|
30 bps
|
|
15.0
|
%
|
|
14.3
|
%
|
|
70 bps
|
|
70 bps
|
Net income
|
$
|
288
|
|
|
$
|
205
|
|
|
40.5
|
%
|
|
|
|
$
|
1,096
|
|
|
$
|
971
|
|
|
12.9
|
%
|
|
|
Earnings per
share
|
$
|
0.66
|
|
|
$
|
0.47
|
|
|
40.4
|
%
|
|
|
|
$
|
2.52
|
|
|
$
|
2.24
|
|
|
12.5
|
%
|
|
|
Fourth quarter net sales of $3.5
billion increased 4.2% with a 1.3% increase in organic
sales. Organic sales increased 4.8% in the New Equipment segment
and decreased 1.4% in the Service segment.
Fourth quarter GAAP operating profit of $440 million increased $4
million from the prior year. Adjusted operating profit of
$509 million increased $36 million and $19
million at constant currency. Adjusted operating profit
growth at constant currency was primarily driven by segment profit
growth of $15 million. In addition,
GAAP operating profit growth was impacted by higher restructuring
and incremental public company standalone costs, partially offset
by net non-recurring items. GAAP operating profit margin contracted
40 basis points to 12.6% and adjusted operating profit margin
expanded 50 basis points to 14.6%, with margin expansion in both
segments.
GAAP EPS of $0.58 increased
$0.08 and adjusted EPS of
$0.66 increased $0.19, driven by operating profit growth and
a lower effective tax rate. In addition, GAAP EPS growth was
partially offset by higher interest expense.
Full year net sales declined 2.8% versus the prior year, with a
2.1% decline in organic sales. GAAP operating profit decreased
$175 million while adjusted operating
profit increased $47 million and
$52 million at constant currency.
Adjusted operating profit growth at constant currency was driven by
strong performance in the Service segment, lower corporate costs
and favorable transactional foreign exchange, partially offset by
decline in the New Equipment segment. GAAP operating profit was
also impacted by higher non-recurring separation costs, incremental
public company standalone costs and non-recurring asset charges.
GAAP operating profit margin contracted 100 basis points to 12.8%
and adjusted operating profit margin expanded 70 basis points to
15.0%.
New Equipment
Segment
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
($
millions)
|
2020
|
|
2019
|
|
Y/Y
|
|
Y/Y
(CFX)
|
|
2020
|
|
2019
|
|
Y/Y
|
|
Y/Y
(CFX)
|
Net sales
|
$
|
1,531
|
|
|
$
|
1,427
|
|
|
7.3
|
%
|
|
5.0
|
%
|
|
$
|
5,371
|
|
|
$
|
5,648
|
|
|
(4.9)
|
%
|
|
(4.1)
|
%
|
Organic
sales
|
|
|
|
|
|
|
4.8
|
%
|
|
|
|
|
|
|
|
(4.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
Operating
profit
|
$
|
80
|
|
|
$
|
81
|
|
|
$
|
(1)
|
|
|
|
|
$
|
318
|
|
|
$
|
393
|
|
|
$
|
(75)
|
|
|
|
Operating profit
margin
|
5.2
|
%
|
|
5.7
|
%
|
|
(50) bps
|
|
|
|
5.9
|
%
|
|
7.0
|
%
|
|
(110) bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP
comparison
|
Operating
profit
|
$
|
90
|
|
|
$
|
82
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
348
|
|
|
$
|
402
|
|
|
$
|
(54)
|
|
|
$
|
(45)
|
|
Operating profit
margin
|
5.9
|
%
|
|
5.7
|
%
|
|
20 bps
|
|
20 bps
|
|
6.5
|
%
|
|
7.1
|
%
|
|
(60) bps
|
|
(50) bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the fourth quarter, net sales of $1.5
billion increased 7.3% with a 4.8% increase in organic
sales. Organic sales were up 17.7% and 5.4% in the Americas and
EMEA, respectively, partially offset by a 3.8% decline in
Asia.
GAAP operating profit decreased $1
million to $80 million.
Adjusted operating profit increased $8
million to $90 million as
higher volume and material productivity were partially offset by
unfavorable rate driven by incremental channel investments in
China, field inefficiencies,
price/mix and higher bad debt expense. GAAP operating profit was
also impacted by incremental public company standalone costs and
higher restructuring costs. GAAP operating profit margin contracted
50 basis points and adjusted operating profit margin expanded 20
basis points.
New Equipment orders were down 3.5% at constant currency as
decline in the Americas was partially offset by growth in EMEA and
Asia. Orders in China were strong, up approximately 10%. New
equipment backlog at constant currency increased 2% versus prior
year.
Full year net sales declined 4.9% with a 4.0% organic decline.
GAAP operating profit declined $75
million and adjusted operating profit declined $54 million as strong material productivity and
cost containment actions were more than offset by the impact of
lower volume and unfavorable rate from under-absorption, field
inefficiencies, price/mix and higher bad debt expense. GAAP
operating profit was also impacted by incremental public company
standalone costs and higher restructuring costs. GAAP and adjusted
operating profit margin contracted 110 basis points and 60 basis
points, respectively.
Service
Segment
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
($
millions)
|
2020
|
|
2019
|
|
Y/Y
|
|
Y/Y
(CFX)
|
|
2020
|
|
2019
|
|
Y/Y
|
|
Y/Y
(CFX)
|
Net sales
|
$
|
1,962
|
|
|
$
|
1,926
|
|
|
1.9
|
%
|
|
(1.0)
|
%
|
|
$
|
7,385
|
|
|
$
|
7,470
|
|
|
(1.1)
|
%
|
|
(1.0)
|
%
|
Organic
sales
|
|
|
|
|
|
|
(1.4)
|
%
|
|
|
|
|
|
|
|
(0.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
Operating
profit
|
$
|
421
|
|
|
$
|
422
|
|
|
$
|
(1)
|
|
|
|
|
$
|
1,611
|
|
|
$
|
1,603
|
|
|
$
|
8
|
|
|
|
Operating profit
margin
|
21.5
|
%
|
|
21.9
|
%
|
|
(40) bps
|
|
|
|
21.8
|
%
|
|
21.5
|
%
|
|
30 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP
comparison
|
Operating
profit
|
$
|
442
|
|
|
$
|
419
|
|
|
$
|
23
|
|
|
$
|
8
|
|
|
$
|
1,658
|
|
|
$
|
1,599
|
|
|
$
|
59
|
|
|
$
|
55
|
|
Operating profit
margin
|
22.5
|
%
|
|
21.8
|
%
|
|
70 bps
|
|
60 bps
|
|
22.5
|
%
|
|
21.4
|
%
|
|
110 bps
|
|
100 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the fourth quarter, net sales of $2.0
billion increased 1.9%, with a 1.4% decline in organic
sales. Organic maintenance and repair sales declined 1.1% and
organic modernization sales declined 2.5%.
GAAP operating profit decreased $1
million to $421 million.
Adjusted operating profit of $442
million increased $23 million
and $8 million at constant currency
as the benefit from productivity was partially offset by the impact
from lower volume. GAAP operating profit was also impacted by
incremental public company standalone costs and higher
restructuring costs. GAAP operating profit margin contracted 40
basis points and adjusted operating profit margin expanded 70 basis
points.
Full year net sales declined 1.1% with a 0.7% organic decline.
GAAP operating profit increased $8
million and adjusted operating profit increased $59 million as the benefit from productivity and
cost containment actions more than offset the impact from lower
volume and higher bad debt expense. GAAP and adjusted operating
profit margin expanded 30 basis points and 110 basis points,
respectively.
Cash
flow
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
($
millions)
|
2020
|
|
2019
|
|
Y/Y
|
|
2020
|
|
2019
|
|
Y/Y
|
Cash flow from
operations
|
$
|
309
|
|
|
$
|
454
|
|
|
$
|
(145)
|
|
|
$
|
1,480
|
|
|
$
|
1,469
|
|
|
$
|
11
|
|
Free cash
flow
|
$
|
238
|
|
|
$
|
407
|
|
|
$
|
(169)
|
|
|
$
|
1,297
|
|
|
$
|
1,324
|
|
|
$
|
(27)
|
|
Free cash flow
conversion
|
95
|
%
|
|
187
|
%
|
|
|
|
143
|
%
|
|
119
|
%
|
|
|
Fourth quarter cash from operations of $309 million decreased $145 million. Fourth quarter free cash flow
decreased $169 million to
$238 million as working capital
headwinds, timing of pension contributions and tax payments and a
$26 million increase in capital
expenditures was partially offset by higher GAAP net income.
Full year cash from operations of $1.5
billion increased $11 million.
Full year free cash flow decreased $27
million to $1.3 billion as
lower GAAP net income, including higher separation costs and
interest expense, and a $38 million
increase in capital expenditures was partially offset by favorable
working capital performance and other operating activities.
2021 Outlook*
Otis is announcing its full year outlook:
- Net sales of $13.3 to
$13.6 billion, up 4.5 to 6.5%
- Organic sales up 2 to 4%
-
- Organic New Equipment sales up 2 to 5%
- Organic Service sales up 2 to 4%
- Adjusted operating profit of $2.05 to $2.1
billion, up $125 to
$175 million at actual currency; up
$75 to $125
million at constant currency
- Adjusted EPS $2.67 to
$2.77, up 6 to 10%; adjusted
effective tax rate of approximately 29.5%
- Free cash flow of $1.3 to
$1.4 billion with conversion of
approximately 120% of GAAP net income
*Note: When we provide outlook for organic sales, adjusted
operating profit, adjusted EPS, adjusted effective tax rate and
free cash flow on a forward-looking basis, a reconciliation of the
differences between the non-GAAP expectations and the corresponding
GAAP measures generally is not available without unreasonable
effort. See "Use and Definitions of Non-GAAP Financial Measures"
below for additional information.
About Otis
Otis is the world's leading elevator and escalator
manufacturing, installation and service company. We move 2 billion
people a day and maintain more than 2 million customer units
worldwide, the industry's largest Service portfolio. Headquartered
in Connecticut, USA, Otis is
69,000 people strong, including 40,000 field professionals, all
committed to meeting the diverse needs of our customers and
passengers in more than 200 countries and territories worldwide.
For more information, visit www.otis.com and follow us on LinkedIn,
Instagram, Facebook and Twitter @OtisElevatorCo.
Use and Definitions of Non-GAAP Financial Measures
Otis Worldwide Corporation ("Otis") reports its financial
results in accordance with accounting principles generally accepted
in the United States ("GAAP"). We
supplement the reporting of our financial information determined
under GAAP with certain non-GAAP financial information. The
non-GAAP information presented provides investors with additional
useful information, but should not be considered in isolation or as
substitutes for the related GAAP measures. Moreover, other
companies may define non-GAAP measures differently, which limits
the usefulness of these measures for comparisons with such other
companies. We encourage investors to review our financial
statements and publicly filed reports in their entirety and not to
rely on any single financial measure. A reconciliation of the
non-GAAP measures (referenced in this press release) to the
corresponding amounts prepared in accordance with GAAP appears in
the attached tables. These tables provide additional information as
to the items and amounts that have been excluded from the adjusted
measures.
Organic sales, adjusted selling, general and administrative
("SG&A") expense, earnings before interest taxes and
depreciation ("EBITDA"), adjusted EBITDA, adjusted operating
profit, adjusted net income, adjusted diluted earnings per share
("EPS"), adjusted effective tax rate and free cash flow are
non-GAAP financial measures.
Organic sales represents consolidated net sales (a GAAP
measure), excluding the impact of foreign currency translation,
acquisitions and divestitures completed in the preceding twelve
months and other significant items of a non-recurring and/or
nonoperational nature ("other significant items"). Management
believes organic sales is a useful measure in providing
period-to-period comparisons of the results of the Company's
ongoing operational performance.
Adjusted SG&A expense represents SG&A expense (a GAAP
measure), excluding restructuring costs, other significant items
and allocated costs for certain functions and services previously
performed by United Technologies Corporation ("UTC") prior to our
separation ("UTC allocated costs") and including estimated
standalone public company costs, as though Otis' operations had
been conducted independently from UTC ("standalone costs").
Standalone costs for the 2019 fiscal year are based on quarterly
estimates determined during Otis' annual planning process for the
2020 fiscal year.
Adjusted operating profit represents income from continuing
operations (a GAAP measure), excluding restructuring costs, other
significant items and allocated costs for certain functions and UTC
allocated costs and including estimated standalone public company
costs.
Adjusted net income represents net income from continuing
operations (a GAAP measure), excluding restructuring costs and
other significant items and UTC allocated costs and including
estimated standalone public company costs, estimated adjustments to
non-service pension expense, net interest expense and income tax
expense as if Otis was a standalone public company ("standalone
operating income adjustments"). Adjusted EPS represents diluted
earnings per share from continuing operations (a GAAP measure),
adjusted for the per share impact of restructuring, other
significant items and standalone operating income adjustments.
The adjusted effective tax rate represents the effective tax
rate (a GAAP measure) adjusted for the tax impact of restructuring
costs, significant items and the tax impact of the additional
adjustments (estimated standalone public company costs, interest
expense and non-service pension expense).
EBITDA represents net income from operations (a GAAP measure),
adjusted for noncontrolling interests, income tax expense, net
interest expense, non-service pension expense and depreciation and
amortization. Adjusted EBITDA represents EBITDA, as calculated
above, adjusted for the impact of restructuring, other significant
items and UTC allocated costs, including estimated standalone
public company costs. Management believes that adjusted SG&A,
EBITDA, adjusted EBITDA, adjusted operating profit, adjusted net
income, adjusted EPS and the adjusted effective tax rate are useful
measures in providing period-to-period comparisons of the results
of the Company's ongoing operational performance as if it had been
a standalone public company.
Additionally, GAAP financial results include the impact of
changes in foreign currency exchange rates ("AFX"). We use the
non-GAAP measure "at constant currency" or "CFX" to show changes in
our financial results without giving effect to period-to-period
currency fluctuations. Under U.S. GAAP, income statement results
are translated in U.S. dollars at the average exchange rate for the
period presented. Management believes that this non-GAAP measure is
useful in providing period-to-period comparisons of the results of
the Company's ongoing operational performance.
Free cash flow is a non-GAAP financial measure that represents
cash flow from operations (a GAAP measure) less capital
expenditures. Management believes free cash flow is a useful
measure of liquidity and an additional basis for assessing Otis'
ability to fund its activities, including the financing of
acquisitions, debt service, repurchases of common stock and
distribution of earnings to shareholders.
When we provide our expectations for organic sales, adjusted
operating profit, adjusted net income, adjusted effective tax rate,
adjusted EPS and free cash flow on a forward-looking basis, a
reconciliation of the differences between the non-GAAP expectations
and the corresponding GAAP measures (expected diluted EPS from
continuing operations, operating profit, the effective tax rate,
net sales and expected cash flow from operations) generally is not
available without unreasonable effort due to potentially high
variability, complexity and low visibility as to the items that
would be excluded from the GAAP measure in the relevant future
period, such as unusual gains and losses, the ultimate outcome of
pending litigation, fluctuations in foreign currency exchange
rates, the impact and timing of potential acquisitions and
divestitures, and other structural changes or their probable
significance. The variability of the excluded items may have a
significant, and potentially unpredictable, impact on our future
GAAP results.
Cautionary Statement
This communication contains statements which, to the extent they
are not statements of historical or present fact, constitute
"forward-looking statements" under the securities laws. From time
to time, oral or written forward-looking statements may also be
included in other information released to the public. These
forward-looking statements are intended to provide management's
current expectations or plans for Otis' future operating and
financial performance, based on assumptions currently believed to
be valid. Forward-looking statements can be identified by the use
of words such as "believe," "expect," "expectations," "plans,"
"strategy," "prospects," "estimate," "project," "target,"
"anticipate," "will," "should," "see," "guidance," "outlook,"
"confident" and other words of similar meaning in connection with a
discussion of future operating or financial performance or the
separation and distribution. Forward-looking statements may
include, among other things, statements relating to future sales,
earnings, cash flow, results of operations, uses of cash,
dividends, share repurchases, tax rates and other measures of
financial performance or potential future plans, strategies or
transactions of Otis following its separation from United
Technologies Corporation, including the estimated costs associated
with the separation and distribution and other statements that are
not historical facts. All forward-looking statements involve risks,
uncertainties and other factors that may cause actual results to
differ materially from those expressed or implied in the
forward-looking statements. For those statements, Otis claims the
protection of the safe harbor for forward-looking statements
contained in the U.S. Private Securities Litigation Reform Act of
1995. Such risks, uncertainties and other factors include, without
limitation: (1) the effect of economic conditions in the industries
and markets in which Otis and its businesses operate in the U.S.
and globally and any changes therein, including financial market
conditions, fluctuations in commodity prices, interest rates and
foreign currency exchange rates, levels of end market demand in
construction, the impact of weather conditions, pandemic health
issues (including COVID-19 and its effects, among other things, on
global supply, demand, and distribution disruptions as the outbreak
continues and results in an increasingly prolonged period of
travel, commercial and/or other similar restrictions and
limitations), natural disasters and the financial condition of
Otis' customers and suppliers; (2) challenges in the development,
production, delivery, support, performance and realization of the
anticipated benefits of advanced technologies and new products and
services; (3) future levels of indebtedness and capital spending
and research and development spending; (4) future availability of
credit and factors that may affect such availability, including
credit market conditions and Otis' capital structure; (5) the
timing and scope of future repurchases of Otis' common stock,
which, if commenced, may be suspended at any time due to various
factors, including market conditions and the level of other
investing activities and uses of cash; (6) delays and disruption in
delivery of materials and services from suppliers; (7) cost
reduction efforts and restructuring costs and savings and other
consequences thereof; (8) new business and investment
opportunities; (9) the anticipated benefits of moving away from
diversification and balance of operations across product lines,
regions and industries; (10) the outcome of legal proceedings,
investigations and other contingencies; (11) pension plan
assumptions and future contributions; (12) the impact of the
negotiation of collective bargaining agreements and labor disputes;
(13) the effect of changes in political conditions in the U.S.,
including the new U.S. Administration, and other countries in which
Otis and its businesses operate, including the United Kingdom's recent withdrawal from the
European Union, on general market conditions, global trade policies
and currency exchange rates in the near term and beyond; (14) the
effect of changes in tax, environmental, regulatory (including
among other things import/export) and other laws and regulations in
the U.S. and other countries in which Otis and its businesses
operate, including changes as a result of the new U.S.
Administration; (15) the ability of Otis to retain and hire key
personnel; (16) the scope, nature, impact or timing of acquisition
and divestiture activity, including among other things integration
of acquired businesses into existing businesses and realization of
synergies and opportunities for growth and innovation and
incurrence of related costs; (17) the expected benefits of the
separation and the timing thereof; (18) the determination by the
Internal Revenue Service and other tax authorities that the
distribution or certain related transactions should be treated as
taxable transactions; (19) risks associated with indebtedness
incurred as a result of financing transactions undertaken in
connection with the separation; (20) the risk that dis-synergy
costs, costs of restructuring transactions and other costs incurred
in connection with the separation will exceed Otis' estimates; and
(21) the impact of the separation on Otis' businesses, resources,
systems, procedures and controls, diversion of management's
attention and the impact on relationships with customers,
suppliers, employees and other business counterparties. The above
list of factors is not exhaustive or necessarily in order of
importance. For additional information on identifying factors that
may cause actual results to vary from those stated in
forward-looking statements, see Otis' registration statements on
Form 10 and Form S-3 and the reports of Otis on Forms 10-K, 10-Q
and 8-K filed with or furnished to the SEC from time to time. Any
forward-looking statement speaks only as of the date on which it is
made, and Otis assumes no obligation to update or revise such
statement, whether as a result of new information, future events or
otherwise, except as required by applicable law.
Media
Contact:
|
Ray
Hernandez
|
|
860-674-3029
|
|
Ray.Hernandez@otis.com
|
|
|
IR
Contact:
|
Stacy
Laszewski
|
|
860-676-6011
|
|
investorrelations@otis.com
|
Otis Worldwide
Corporation
Consolidated
Statements of Operations
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(amounts in
millions, except per share amounts)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
Sales
|
$
|
3,493
|
|
|
$
|
3,353
|
|
|
$
|
12,756
|
|
|
$
|
13,118
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of products and
services sold
|
2,481
|
|
|
2,387
|
|
|
8,977
|
|
|
9,292
|
|
|
Research and
development
|
40
|
|
|
45
|
|
|
152
|
|
|
163
|
|
|
Selling, general and
administrative
|
537
|
|
|
481
|
|
|
1,924
|
|
|
1,810
|
|
|
Total Costs and
Expenses
|
3,058
|
|
|
2,913
|
|
|
11,053
|
|
|
11,265
|
|
Other income
(expense), net
|
5
|
|
|
(4)
|
|
|
(64)
|
|
|
(39)
|
|
Operating
profit
|
440
|
|
|
436
|
|
|
1,639
|
|
|
1,814
|
|
|
Non-service pension
expense (benefit)
|
6
|
|
|
5
|
|
|
6
|
|
|
(33)
|
|
|
Interest expense
(income), net
|
37
|
|
|
(6)
|
|
|
122
|
|
|
(14)
|
|
Net income before
income taxes
|
397
|
|
|
437
|
|
|
1,511
|
|
|
1,861
|
|
|
Income tax
expense
|
118
|
|
|
183
|
|
|
455
|
|
|
594
|
|
Net income
|
279
|
|
|
254
|
|
|
1,056
|
|
|
1,267
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
|
28
|
|
|
36
|
|
|
150
|
|
|
151
|
|
Net income
attributable to common shareholders
|
$
|
251
|
|
|
$
|
218
|
|
|
$
|
906
|
|
|
$
|
1,116
|
|
Earnings Per Share
of Common Stock:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.58
|
|
|
$
|
0.50
|
|
|
$
|
2.09
|
|
|
$
|
2.58
|
|
|
Diluted
|
$
|
0.58
|
|
|
$
|
0.50
|
|
|
$
|
2.08
|
|
|
$
|
2.58
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
shares
|
433.4
|
|
|
433.1
|
|
|
433.2
|
|
|
433.1
|
|
|
Diluted
Shares
|
435.8
|
|
|
433.1
|
|
|
434.6
|
|
|
433.1
|
|
Otis Worldwide
Corporation
Segment Net Sales
and Operating Profit
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Quarter Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
Reported
|
|
Adjusted
|
|
Reported
|
|
Adjusted
|
Net
Sales
|
|
|
|
|
|
|
|
New
Equipment
|
$
|
1,531
|
|
|
$
|
1,531
|
|
|
$
|
1,427
|
|
|
$
|
1,427
|
|
Service
|
1,962
|
|
|
1,962
|
|
|
1,926
|
|
|
1,926
|
|
Consolidated Net
Sales
|
$
|
3,493
|
|
|
$
|
3,493
|
|
|
$
|
3,353
|
|
|
$
|
3,353
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
New
Equipment
|
$
|
80
|
|
|
$
|
90
|
|
|
$
|
81
|
|
|
$
|
82
|
|
Service
|
421
|
|
|
442
|
|
|
422
|
|
|
419
|
|
Segment Operating
Profit
|
501
|
|
|
532
|
|
|
503
|
|
|
501
|
|
General corporate
expenses and other
|
(61)
|
|
|
(23)
|
|
|
(67)
|
|
|
(28)
|
|
Consolidated
Operating Profit
|
$
|
440
|
|
|
$
|
509
|
|
|
$
|
436
|
|
|
$
|
473
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
New
Equipment
|
5.2
|
%
|
|
5.9
|
%
|
|
5.7
|
%
|
|
5.7
|
%
|
Service
|
21.5
|
%
|
|
22.5
|
%
|
|
21.9
|
%
|
|
21.8
|
%
|
Total Operating
Profit Margin
|
12.6
|
%
|
|
14.6
|
%
|
|
13.0
|
%
|
|
14.1
|
%
|
|
Year Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
Reported
|
|
Adjusted
|
|
Reported
|
|
Adjusted
|
Net
Sales
|
|
|
|
|
|
|
|
New
Equipment
|
$
|
5,371
|
|
|
$
|
5,371
|
|
|
$
|
5,648
|
|
|
$
|
5,648
|
|
Service
|
7,385
|
|
|
7,385
|
|
|
7,470
|
|
|
7,470
|
|
Consolidated Net
Sales
|
$
|
12,756
|
|
|
$
|
12,756
|
|
|
$
|
13,118
|
|
|
$
|
13,118
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
New
Equipment
|
$
|
318
|
|
|
$
|
348
|
|
|
$
|
393
|
|
|
$
|
402
|
|
Service
|
1,611
|
|
|
1,658
|
|
|
1,603
|
|
|
1,599
|
|
Segment Operating
Profit
|
1,929
|
|
|
2,006
|
|
|
1,996
|
|
|
2,001
|
|
General corporate
expenses and other
|
(290)
|
|
|
(87)
|
|
|
(182)
|
|
|
(129)
|
|
Consolidated
Operating Profit
|
$
|
1,639
|
|
|
$
|
1,919
|
|
|
$
|
1,814
|
|
|
$
|
1,872
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
New
Equipment
|
5.9
|
%
|
|
6.5
|
%
|
|
7.0
|
%
|
|
7.1
|
%
|
Service
|
21.8
|
%
|
|
22.5
|
%
|
|
21.5
|
%
|
|
21.4
|
%
|
Total Operating
Profit Margin
|
12.8
|
%
|
|
15.0
|
%
|
|
13.8
|
%
|
|
14.3
|
%
|
Otis Worldwide
Corporation
Reconciliation of
Reported (GAAP) to Adjusted Operating Profit & Operating Profit
Margin
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
New
Equipment
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,531
|
|
|
$
|
1,427
|
|
|
$
|
5,371
|
|
|
$
|
5,648
|
|
GAAP Operating
profit
|
80
|
|
|
81
|
|
|
318
|
|
|
393
|
|
Restructuring
|
10
|
|
|
3
|
|
|
30
|
|
|
19
|
|
UTC allocated
corporate expenses
|
—
|
|
|
2
|
|
|
—
|
|
|
6
|
|
Public company
standalone costs1
|
—
|
|
|
(4)
|
|
|
—
|
|
|
(16)
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted New
Equipment Operating Profit
|
$
|
90
|
|
|
$
|
82
|
|
|
$
|
348
|
|
|
$
|
402
|
|
Adjusted operating
profit margin
|
5.9
|
%
|
|
5.7
|
%
|
|
6.5
|
%
|
|
7.1
|
%
|
Service
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,962
|
|
|
$
|
1,926
|
|
|
$
|
7,385
|
|
|
$
|
7,470
|
|
GAAP Operating
profit
|
421
|
|
|
422
|
|
|
1,611
|
|
|
1,603
|
|
Restructuring
|
21
|
|
|
7
|
|
|
47
|
|
|
35
|
|
UTC allocated
corporate expenses
|
—
|
|
|
4
|
|
|
—
|
|
|
14
|
|
Public company
standalone costs1
|
—
|
|
|
(16)
|
|
|
—
|
|
|
(56)
|
|
Other
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
Adjusted Service
Operating Profit
|
$
|
442
|
|
|
$
|
419
|
|
|
$
|
1,658
|
|
|
$
|
1,599
|
|
Adjusted Operating
Profit Margin
|
22.5
|
%
|
|
21.8
|
%
|
|
22.5
|
%
|
|
21.4
|
%
|
|
|
|
|
|
|
|
|
General corporate
expenses and other
|
|
|
|
|
|
|
|
General corporate
expenses and other
|
$
|
(23)
|
|
|
$
|
(28)
|
|
|
$
|
(87)
|
|
|
$
|
(129)
|
|
Adjusted Total
Operating Profit
|
$
|
509
|
|
|
$
|
473
|
|
|
$
|
1,919
|
|
|
$
|
1,872
|
|
|
|
|
|
|
|
|
|
Total
Otis
|
|
|
|
|
|
|
|
GAAP Operating
profit
|
$
|
440
|
|
|
$
|
436
|
|
|
$
|
1,639
|
|
|
$
|
1,814
|
|
Restructuring
|
31
|
|
|
10
|
|
|
77
|
|
|
54
|
|
Loss on
disposal of business
|
—
|
|
|
8
|
|
|
—
|
|
|
26
|
|
One-time
separation costs
|
37
|
|
|
33
|
|
|
119
|
|
|
43
|
|
Expected
insurance recovery
|
(17)
|
|
|
—
|
|
|
(17)
|
|
|
—
|
|
Fixed
asset impairment
|
18
|
|
|
—
|
|
|
85
|
|
|
—
|
|
UTC
allocated corporate expenses
|
—
|
|
|
24
|
|
|
16
|
|
|
80
|
|
Public company
standalone costs1
|
—
|
|
|
(42)
|
|
|
—
|
|
|
(147)
|
|
Other
|
—
|
|
|
4
|
|
|
—
|
|
|
2
|
|
Adjusted Total
Operating Profit
|
$
|
509
|
|
|
$
|
473
|
|
|
$
|
1,919
|
|
|
$
|
1,872
|
|
Adjusted Operating
Profit Margin
|
14.6
|
%
|
|
14.1
|
%
|
|
15.0
|
%
|
|
14.3
|
%
|
1
|
- Public company
standalone costs represent estimated costs such as personnel costs,
risk management and incentive compensation that have been incurred
and are reflected in results for the quarter and year ended
December 31, 2020 and are not adjusted. For the quarter ended and
year ended December 31, 2019, these standalone costs have been
included in the adjustments, as though Otis' operations had been
conducted independently from our former parent
UTC.
|
Otis Worldwide
Corporation
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Net Income, Earnings Per
Share, and Effective Tax Rate
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions, except per share amounts)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Operating
Profit
|
$
|
509
|
|
|
$
|
473
|
|
|
$
|
1,919
|
|
|
$
|
1,872
|
|
Non-service pension
cost3
|
(5)
|
|
|
(4)
|
|
|
(5)
|
|
|
(9)
|
|
Net interest
expense2
|
(38)
|
|
|
(49)
|
|
|
(123)
|
|
|
(160)
|
|
Adjusted income
from operations before income taxes
|
466
|
|
|
420
|
|
|
1,791
|
|
|
1,703
|
|
Income tax
expense
|
118
|
|
|
183
|
|
|
455
|
|
|
594
|
|
Tax impact on
restructuring and non-recurring items
|
11
|
|
|
7
|
|
|
58
|
|
|
18
|
|
Tax impact on other
adjustments
|
—
|
|
|
(12)
|
|
|
—
|
|
|
(41)
|
|
Non-recurring tax
items
|
21
|
|
|
1
|
|
|
32
|
|
|
10
|
|
Adjusted net
income from operations
|
316
|
|
|
241
|
|
|
1,246
|
|
|
1,122
|
|
Noncontrolling
interest
|
28
|
|
|
36
|
|
|
150
|
|
|
151
|
|
Adjusted net
income attributable to common shareholders
|
$
|
288
|
|
|
$
|
205
|
|
|
$
|
1,096
|
|
|
$
|
971
|
|
|
|
|
|
|
|
|
|
GAAP income
attributable to common shareholders
|
$
|
251
|
|
|
$
|
218
|
|
|
$
|
906
|
|
|
$
|
1,116
|
|
Restructuring
|
31
|
|
|
10
|
|
|
77
|
|
|
54
|
|
Loss on disposal of
business
|
—
|
|
|
8
|
|
|
—
|
|
|
26
|
|
One-time separation
costs
|
37
|
|
|
33
|
|
|
119
|
|
|
43
|
|
Expected insurance
recovery
|
(17)
|
|
|
—
|
|
|
(17)
|
|
|
—
|
|
Fixed asset
impairment
|
18
|
|
|
—
|
|
|
85
|
|
|
—
|
|
UTC allocated
corporate expenses
|
—
|
|
|
24
|
|
|
16
|
|
|
80
|
|
Public company
standalone costs1
|
—
|
|
|
(42)
|
|
|
—
|
|
|
(147)
|
|
Non-service pension
cost3
|
—
|
|
|
1
|
|
|
—
|
|
|
(42)
|
|
Net interest
expense2
|
—
|
|
|
(55)
|
|
|
—
|
|
|
(174)
|
|
Other
|
—
|
|
|
4
|
|
|
—
|
|
|
2
|
|
Tax effects of
restructuring, non-recurring items and other adjustments
|
(11)
|
|
|
5
|
|
|
(58)
|
|
|
23
|
|
Non-recurring tax
items
|
(21)
|
|
|
(1)
|
|
|
(32)
|
|
|
(10)
|
|
Adjusted net
income attributable to common shareholders
|
$
|
288
|
|
|
$
|
205
|
|
|
$
|
1,096
|
|
|
$
|
971
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share
|
$
|
0.58
|
|
|
$
|
0.50
|
|
|
$
|
2.08
|
|
|
$
|
2.58
|
|
Impact to
diluted earnings per share
|
0.08
|
|
|
(0.03)
|
|
|
0.44
|
|
|
(0.34)
|
|
Adjusted Diluted
Earnings Per Share
|
$
|
0.66
|
|
|
$
|
0.47
|
|
|
$
|
2.52
|
|
|
$
|
2.24
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
29.8
|
%
|
|
41.9
|
%
|
|
30.1
|
%
|
|
31.9
|
%
|
Impact of
adjustments on effective tax rate
|
2.3
|
%
|
|
0.7
|
%
|
|
0.3
|
%
|
|
2.2
|
%
|
Adjusted Effective
Tax Rate
|
32.1
|
%
|
|
42.6
|
%
|
|
30.4
|
%
|
|
34.1
|
%
|
1
|
- Public company
standalone costs represent estimated costs such as personnel costs,
risk management and incentive compensation that have been incurred
and are reflected in results for the quarter ended and year ended
December 31, 2020 and are not adjusted. For the quarter ended
and year ended December 31, 2019, these standalone costs have been
included in the adjustments, as though Otis' operations had been
conducted independently from UTC.
|
2
|
- Otis issued
debt and began to incur interest expenses in February 2020
associated with the debt issuance. The current quarter and
year-to-date actual interest expense incurred has been reflected in
the comparative period in 2019 as though Otis incurred those
expenses in the prior year.
|
3
|
- Non-service pension
included in GAAP net income attributable to Otis includes amounts
associated with Otis' participation in our former parent' UTC's
retained pension plans. The amounts related to these plans are
removed from Otis' results in 2019, as though Otis' operations had
been conducted independently from UTC.
|
Otis Worldwide
Corporation
Components of
Changes in Net Sales
|
|
|
|
|
|
Quarter Ended
December 31, 2020 Compared with Quarter Ended December 31,
2019
|
|
|
|
|
Factors
Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions
/
Divestitures,
net
|
|
Other
|
|
Total
|
New
Equipment
|
|
4.8%
|
|
2.3%
|
|
0.2%
|
|
—%
|
|
7.3%
|
Service
|
|
(1.4)%
|
|
2.9%
|
|
0.4%
|
|
—%
|
|
1.9%
|
Maintenance and
Repair
|
|
(1.1)%
|
|
2.8%
|
|
0.4%
|
|
—%
|
|
2.1%
|
Modernization
|
|
(2.5)%
|
|
3.0%
|
|
0.3%
|
|
—%
|
|
0.8%
|
Total Net
Sales
|
|
1.3%
|
|
2.6%
|
|
0.3%
|
|
—%
|
|
4.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2020 Compared with Year Ended December 31,
2019
|
|
|
|
|
|
|
|
|
|
|
|
Factors
Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions
/
Divestitures,
net
|
|
Other
|
|
Total
|
New
Equipment
|
|
(4.0)%
|
|
(0.8)%
|
|
—%
|
|
(0.1)%
|
|
(4.9)%
|
Service
|
|
(0.7)%
|
|
(0.1)%
|
|
(0.3)%
|
|
—%
|
|
(1.1)%
|
Maintenance and
Repair
|
|
(0.9)%
|
|
(0.1)%
|
|
(0.2)%
|
|
—%
|
|
(1.2)%
|
Modernization
|
|
0.1%
|
|
0.1%
|
|
(1.1)%
|
|
—%
|
|
(0.9)%
|
Total Net
Sales
|
|
(2.1)%
|
|
(0.4)%
|
|
(0.2)%
|
|
(0.1)%
|
|
(2.8)%
|
|
|
|
|
|
|
|
|
|
|
|
Components of New
Equipment Backlog
|
|
|
|
|
Growth
%
|
|
Q4
2020
|
New Equipment Backlog
increase at actual currency
|
6%
|
Foreign exchange
impact to New Equipment Backlog
|
(4)%
|
New Equipment Backlog
at constant currency
|
2%
|
|
|
|
|
|
|
Otis Worldwide
Corporation
Reconciliation of
Adjusted Operating Profit at Constant Currency
|
|
|
|
|
|
Quarter Ended
December 31, 2020 Compared with Quarter Ended December 31,
2019
|
|
|
|
|
|
|
|
|
|
(dollars in
millions)
|
|
2020
|
|
2019
|
|
Y/Y
|
New
Equipment
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
90
|
|
|
$
|
82
|
|
|
$
|
8
|
|
Impact of foreign
exchange
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
89
|
|
|
$
|
82
|
|
|
$
|
7
|
|
|
|
|
|
|
|
|
Service
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
442
|
|
|
$
|
419
|
|
|
$
|
23
|
|
Impact of foreign
exchange
|
|
(15)
|
|
|
—
|
|
|
(15)
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
427
|
|
|
$
|
419
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
Otis
Consolidated
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
509
|
|
|
$
|
473
|
|
|
$
|
36
|
|
Impact of foreign
exchange
|
|
(17)
|
|
|
—
|
|
|
(17)
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
492
|
|
|
$
|
473
|
|
|
$
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2020 Compared with Year Ended December 31,
2019
|
|
|
|
|
|
|
|
|
|
(dollars in
millions)
|
|
2020
|
|
2019
|
|
Y/Y
|
New
Equipment
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
348
|
|
|
$
|
402
|
|
|
$
|
(54)
|
|
Impact of foreign
exchange
|
|
9
|
|
|
—
|
|
|
9
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
357
|
|
|
$
|
402
|
|
|
$
|
(45)
|
|
|
|
|
|
|
|
|
Service
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
1,658
|
|
|
$
|
1,599
|
|
|
$
|
59
|
|
Impact of foreign
exchange
|
|
(4)
|
|
|
—
|
|
|
(4)
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
1,654
|
|
|
$
|
1,599
|
|
|
$
|
55
|
|
|
|
|
|
|
|
|
Otis
Consolidated
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
1,919
|
|
|
$
|
1,872
|
|
|
$
|
47
|
|
Impact of foreign
exchange
|
|
5
|
|
|
—
|
|
|
5
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
1,924
|
|
|
$
|
1,872
|
|
|
$
|
52
|
|
Otis Worldwide
Corporation
Consolidated
Balance Sheet
|
|
|
|
|
|
|
December 31,
2020
|
|
December 31,
2019
|
(amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,782
|
|
|
$
|
1,446
|
|
Accounts receivable,
net
|
3,148
|
|
|
2,861
|
|
Contract
assets
|
458
|
|
|
529
|
|
Inventories,
net
|
659
|
|
|
571
|
|
Other current
assets
|
446
|
|
|
251
|
|
Total Current
Assets
|
6,493
|
|
|
5,658
|
|
Future income tax
benefits
|
334
|
|
|
373
|
|
Fixed assets,
net
|
774
|
|
|
721
|
|
Operating lease
right-of-use assets
|
542
|
|
|
535
|
|
Intangible assets,
net
|
484
|
|
|
490
|
|
Goodwill
|
1,773
|
|
|
1,647
|
|
Other
assets
|
310
|
|
|
263
|
|
Total
Assets
|
$
|
10,710
|
|
|
$
|
9,687
|
|
|
|
|
|
Liabilities and
(Deficit) Equity
|
|
|
|
Short-term
borrowings
|
$
|
701
|
|
|
$
|
34
|
|
Accounts
payable
|
1,453
|
|
|
1,331
|
|
Accrued
liabilities
|
1,977
|
|
|
1,739
|
|
Contract
liabilities
|
2,542
|
|
|
2,270
|
|
Total Current
Liabilities
|
6,673
|
|
|
5,374
|
|
Long-term
debt
|
5,262
|
|
|
5
|
|
Future pension and
postretirement benefit obligations
|
654
|
|
|
590
|
|
Operating lease
liabilities
|
367
|
|
|
386
|
|
Future income tax
obligations
|
321
|
|
|
695
|
|
Other long-term
liabilities
|
634
|
|
|
311
|
|
Total
Liabilities
|
13,911
|
|
|
7,361
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
83
|
|
|
95
|
|
Shareholders'
(Deficit) Equity:
|
|
|
|
Preferred Stock, $0.01
par value, 125 share authorized; None issued or
outstanding
|
—
|
|
|
—
|
|
Common Stock, $0.01
par value, 2,000 shares authorized; 433.4 shares issued and
outstanding
|
59
|
|
|
—
|
|
Additional paid-in
capital
|
—
|
|
|
—
|
|
Accumulated
deficit
|
(3,076)
|
|
|
—
|
|
UTC Net
Investment
|
—
|
|
|
2,458
|
|
Accumulated other
comprehensive income (loss)
|
(815)
|
|
|
(758)
|
|
Total Shareholders'
(Deficit) Equity
|
(3,832)
|
|
|
1,700
|
|
Noncontrolling
interest
|
548
|
|
|
531
|
|
Total (Deficit)
Equity
|
(3,284)
|
|
|
2,231
|
|
Total Liabilities and
(Deficit) Equity
|
$
|
10,710
|
|
|
$
|
9,687
|
|
Debt
Ratios:
|
|
|
|
Debt to total
capitalization
|
223
|
%
|
|
2
|
%
|
Net debt to net
capitalization
|
466
|
%
|
|
(171)
|
%
|
Debt to total capitalization equals total debt divided by total
debt plus equity. Net debt to net capitalization equals total debt
less cash and cash equivalents divided by total debt plus equity
less cash and cash equivalents.
Otis Worldwide
Corporation
Condensed
Consolidated Statement of Cash Flows
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net income from
operations
|
$
|
279
|
|
|
$
|
254
|
|
|
$
|
1,056
|
|
|
$
|
1,267
|
|
Adjustments to
reconcile net income to net cash flows provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
51
|
|
|
45
|
|
|
191
|
|
|
180
|
|
Stock compensation
cost
|
19
|
|
|
8
|
|
|
63
|
|
|
37
|
|
Loss on fixed asset
impairment
|
16
|
|
|
—
|
|
|
71
|
|
|
—
|
|
Loss on disposal of
business
|
—
|
|
|
7
|
|
|
—
|
|
|
26
|
|
Change in:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
(84)
|
|
|
(38)
|
|
|
(163)
|
|
|
(191)
|
|
Contract assets and
liabilities, current
|
5
|
|
|
(11)
|
|
|
282
|
|
|
97
|
|
Inventories,
net
|
25
|
|
|
29
|
|
|
(76)
|
|
|
60
|
|
Accounts
payable
|
1
|
|
|
48
|
|
|
20
|
|
|
6
|
|
Pension
contributions
|
(36)
|
|
|
(7)
|
|
|
(64)
|
|
|
(32)
|
|
Other operating
activities, net
|
33
|
|
|
119
|
|
|
100
|
|
|
19
|
|
Net cash flows
provided by operating activities
|
309
|
|
|
454
|
|
|
1,480
|
|
|
1,469
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(71)
|
|
|
(47)
|
|
|
(183)
|
|
|
(145)
|
|
Investments in
businesses, net of cash acquired
|
(3)
|
|
|
(8)
|
|
|
(53)
|
|
|
(47)
|
|
Investments in equity
securities
|
—
|
|
|
—
|
|
|
(51)
|
|
|
—
|
|
Other investing
activities, net
|
10
|
|
|
2
|
|
|
(66)
|
|
|
(11)
|
|
Net cash flows used in
investing activities
|
(64)
|
|
|
(53)
|
|
|
(353)
|
|
|
(203)
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
Issuance of long-term
debt, net
|
—
|
|
|
—
|
|
|
6,300
|
|
|
—
|
|
Payment of long-term
debt issuance costs
|
—
|
|
|
—
|
|
|
(43)
|
|
|
—
|
|
Repayment of long-term
debt
|
(250)
|
|
|
—
|
|
|
(1,000)
|
|
|
—
|
|
Increase (decrease) in
short-term borrowings, net
|
137
|
|
|
(12)
|
|
|
647
|
|
|
6
|
|
Net transfers from
(to) UTC
|
—
|
|
|
(374)
|
|
|
(6,330)
|
|
|
(972)
|
|
Dividends paid on
common stock
|
(87)
|
|
|
—
|
|
|
(260)
|
|
|
—
|
|
Dividends paid to
noncontrolling interest
|
(24)
|
|
|
(31)
|
|
|
(149)
|
|
|
(163)
|
|
Other financing
activities, net
|
(31)
|
|
|
(22)
|
|
|
(9)
|
|
|
(4)
|
|
Net cash flows
provided by (used in) financing activities
|
(255)
|
|
|
(439)
|
|
|
(844)
|
|
|
(1,133)
|
|
Summary of
Activity:
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
309
|
|
|
454
|
|
|
1,480
|
|
|
1,469
|
|
Net cash used in
investing activities
|
(64)
|
|
|
(53)
|
|
|
(353)
|
|
|
(203)
|
|
Net cash provided by
(used in) financing activities
|
(255)
|
|
|
(439)
|
|
|
(844)
|
|
|
(1,133)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
59
|
|
|
21
|
|
|
59
|
|
|
(20)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
49
|
|
|
(17)
|
|
|
342
|
|
|
113
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
1,752
|
|
|
1,476
|
|
|
1,459
|
|
|
1,346
|
|
Cash, cash
equivalents and restricted cash, end of period
|
1,801
|
|
|
1,459
|
|
|
1,801
|
|
|
1,459
|
|
Less: Restricted
cash
|
19
|
|
|
13
|
|
|
19
|
|
|
13
|
|
Cash and cash
equivalents, end of period
|
$
|
1,782
|
|
|
$
|
1,446
|
|
|
$
|
1,782
|
|
|
$
|
1,446
|
|
Otis Worldwide
Corporation
Free Cash Flow
Reconciliation
|
|
|
|
Quarter Ended
December 31,
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
$
|
251
|
|
|
|
$
|
218
|
|
|
Net cash flows
provided by operating activities
|
$
|
309
|
|
|
|
$
|
454
|
|
|
Net cash flows
provided by operating activities as a percentage of net
income attributable to common shareholders
|
|
123
|
%
|
|
|
208
|
%
|
Capital
expenditures
|
(71)
|
|
|
|
(47)
|
|
|
Capital expenditures
as a percentage of net income attributable
to common shareholders
|
|
(28)
|
%
|
|
|
(22)
|
%
|
Free cash
flow
|
$
|
238
|
|
|
|
$
|
407
|
|
|
Free cash flow as a
percentage of net income attributable to common
shareholders
|
|
95
|
%
|
|
|
187
|
%
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
$
|
906
|
|
|
|
$
|
1,116
|
|
|
Net cash flows
provided by operating activities
|
$
|
1,480
|
|
|
|
$
|
1,469
|
|
|
Net cash flows
provided by operating activities as a percentage of net
income attributable to common shareholders
|
|
163
|
%
|
|
|
132
|
%
|
Capital
expenditures
|
(183)
|
|
|
|
(145)
|
|
|
Capital expenditures
as a percentage of net income attributable to
common shareholders
|
|
(21)
|
%
|
|
|
(13)
|
%
|
Free cash
flow
|
$
|
1,297
|
|
|
|
$
|
1,324
|
|
|
Free cash flow as a
percentage of net income attributable to common
shareholders
|
|
143
|
%
|
|
|
119
|
%
|
View original
content:http://www.prnewswire.com/news-releases/otis-reports-fourth-quarter-and-full-year-2020-results-301218839.html
SOURCE Otis Worldwide Corporation