FARMINGTON, Conn., July 28, 2020 /PRNewswire/ -- Otis Worldwide
Corporation (NYSE: OTIS) reported second quarter 2020 net sales of
$3.0 billion, a decrease of 6.5%
organically versus the prior year. Second quarter GAAP and adjusted
diluted earnings per share (EPS) decreased 26.8% to $0.52 and 5.1% to $0.56, respectively.
"Otis' second quarter results, considering COVID-19 related
challenges, demonstrated the resiliency of our business, the
strength of our strategy, and our ability to contain costs. We
generated robust free cash flow, reinforcing our strong liquidity,
grew global share and partnered with customers to deliver safety,
health, and performance solutions. Our Otis colleagues showed great
dedication and commitment to providing essential services and
continuity to our customers in supporting their efforts to safely
reopen job sites and buildings around the world," said President
and CEO Judy Marks. "Our solid first
half performance and execution on our long-term growth strategies
give us the confidence to improve our 2020 outlook."
Key Figures
($ millions,
except per share amounts)
|
Quarter Ended June
30, 2020
|
|
Six Months Ended
June 30, 2020
|
2020
|
2019
|
Y/Y
|
Y/Y
(CFX)
|
|
2020
|
2019
|
Y/Y
|
Y/Y
(CFX)
|
Net sales
|
$
|
3,029
|
|
$
|
3,351
|
|
(9.6)
|
%
|
(7.0)
|
%
|
|
$
|
5,995
|
|
$
|
6,452
|
|
(7.1)
|
%
|
|
(4.8)
|
%
|
Organic
sales
|
|
|
|
(6.5)
|
%
|
|
|
|
|
|
(4.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
Operating
profit
|
$
|
416
|
|
$
|
481
|
|
$
|
(65)
|
|
|
|
$
|
745
|
|
$
|
896
|
|
$
|
(151)
|
|
|
Operating profit
margin
|
13.7
|
%
|
14.4
|
%
|
(70) bps
|
|
|
12.4
|
%
|
13.9
|
%
|
(150) bps
|
|
Net income
|
$
|
224
|
|
$
|
308
|
|
(27.3)
|
%
|
|
|
$
|
389
|
|
$
|
581
|
|
(33.0)
|
%
|
|
Earnings per
share
|
$
|
0.52
|
|
$
|
0.71
|
|
(26.8)
|
%
|
|
|
$
|
0.90
|
|
$
|
1.34
|
|
(32.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP
comparison
|
Operating
profit
|
$
|
457
|
|
$
|
496
|
|
$
|
(39)
|
|
$
|
(24)
|
|
|
$
|
907
|
|
$
|
929
|
|
$
|
(22)
|
|
$
|
3
|
|
Operating profit
margin
|
15.1
|
%
|
14.8
|
%
|
30 bps
|
30 bps
|
|
15.1
|
%
|
14.4
|
%
|
70 bps
|
80 bps
|
Net income
|
$
|
244
|
|
$
|
258
|
|
(5.4)
|
%
|
|
|
$
|
506
|
|
$
|
525
|
|
(3.6)
|
%
|
|
Earnings per
share
|
$
|
0.56
|
|
$
|
0.59
|
|
(5.1)
|
%
|
|
|
$
|
1.17
|
|
$
|
1.21
|
|
(3.3)
|
%
|
|
Second quarter net sales of $3.0
billion decreased 9.6% versus the prior year, with a 6.5%
decline in organic sales, 2.6% headwind from foreign exchange and
0.5% impact from divestitures. Sales declined in both the New
Equipment and Service segments primarily driven by the impact of
COVID-19.
Second quarter GAAP operating profit of $416 million decreased $65
million from the prior year driven by segment operating
profit decline of $66 million
primarily from lower volume, incremental public company standalone
costs and higher restructuring costs. GAAP operating profit margin
contracted 70 basis points to 13.7%.
Adjusted operating profit of $457
million decreased $39 million
with a $24 million decline at
constant currency. Operating profit decline at constant currency
was driven by a reduction of $46
million in the New Equipment segment, partially offset by
operating profit growth of $14
million in the Service segment, lower corporate costs and
the absence of unfavorable transactional foreign exchange impact
from the prior year. Adjusted operating profit margin expanded 30
basis points to 15.1%, with continued margin expansion in the
Service segment.
GAAP EPS of $0.52 decreased
$0.19, driven by the decline in
operating profit and higher interest expense. Adjusted EPS of
$0.56 decreased $0.03, driven by adjusted operating profit
decline partially offset by lower noncontrolling interest and a
lower adjusted tax rate.
First half net sales declined 7.1% versus the prior year, with a
4.4% decline in organic sales and 2.7% headwind from foreign
exchange and the impact from divestitures. GAAP operating profit
decreased $151 million, with margin
contraction of 150 basis points primarily due to higher separation
costs, incremental public company standalone costs and a one-time
charge taken in the first quarter. Adjusted operating profit
increased $3 million at constant
currency and margin expanded 80 basis points driven by strong
performance in the Service segment.
New Equipment Segment
|
Quarter Ended June
30, 2020
|
|
Six Months Ended
June 30, 2020
|
($
millions)
|
2020
|
2019
|
Y/Y
|
Y/Y
(CFX)
|
|
2020
|
2019
|
Y/Y
|
Y/Y
(CFX)
|
Net sales
|
$
|
1,294
|
|
$
|
1,500
|
|
(13.7)
|
%
|
(10.5)
|
%
|
|
$
|
2,417
|
|
$
|
2,771
|
|
(12.8)
|
%
|
(10.2)
|
%
|
Organic
sales
|
|
|
|
(10.4)
|
%
|
|
|
|
|
(10.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
Operating
profit
|
$
|
79
|
|
$
|
138
|
|
$
|
(59)
|
|
|
|
$
|
143
|
|
$
|
197
|
|
$
|
(54)
|
|
|
Operating profit
margin
|
6.1
|
%
|
9.2
|
%
|
(310) bps
|
|
|
5.9
|
%
|
7.1
|
%
|
(120) bps
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP
comparison
|
Operating
profit
|
$
|
91
|
|
$
|
142
|
|
$
|
(51)
|
|
$
|
(46)
|
|
|
$
|
156
|
|
$
|
206
|
|
$
|
(50)
|
|
$
|
(43)
|
|
Operating profit
margin
|
7.0
|
%
|
9.5
|
%
|
(250) bps
|
(230) bps
|
|
6.5
|
%
|
7.4
|
%
|
(90) bps
|
(80) bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the second quarter, net sales of $1.3
billion decreased 13.7% with a 10.4% decline in organic
sales and a 3.2% impact from foreign exchange. Organic sales
declined double digits in the Americas and EMEA, primarily due to
the impact of COVID-19, offset by low single digit growth in
Asia as China began to recover.
GAAP operating profit decreased $59
million to $79 million.
Adjusted operating profit decreased $51
million to $91 million,
primarily from the impact of lower volume and a $5 million headwind from foreign exchange.
Material productivity and cost containment actions largely offset
the impact of under-absorption, bad debt and unfavorable mix. GAAP
operating profit was also impacted by higher restructuring costs.
GAAP and adjusted operating profit margin contracted 310 and 250
basis points, respectively.
New Equipment orders were down 6.8% at constant currency as 8.3%
growth in China was more than
offset by declines in other regions. On a rolling twelve-month
basis, orders were flat. New equipment backlog at constant currency
increased 2% versus prior year.
First half net sales declined 12.8% with a 10.1% organic
decline. GAAP operating profit declined $54
million and margin contracted 120 basis points. Adjusted
operating profit declined $43 million
and margin contracted 80 basis points at constant currency.
Service Segment
|
Quarter Ended June
30, 2020
|
|
Six Months Ended
June 30, 2020
|
($
millions)
|
2020
|
2019
|
Y/Y
|
Y/Y
(CFX)
|
|
2020
|
2019
|
Y/Y
|
Y/Y
(CFX)
|
Net sales
|
$
|
1,735
|
|
$
|
1,851
|
|
(6.3)
|
%
|
(4.1)
|
%
|
|
$
|
3,578
|
|
$
|
3,681
|
|
(2.8)
|
%
|
(0.8)
|
%
|
Organic
sales
|
|
|
|
(3.3)
|
%
|
|
|
|
|
(0.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
Operating
profit
|
$
|
381
|
|
$
|
388
|
|
$
|
(7)
|
|
|
|
$
|
781
|
|
$
|
774
|
|
$
|
7
|
|
|
Operating profit
margin
|
22.0
|
%
|
21.0
|
%
|
100 bps
|
|
|
21.8
|
%
|
21.0
|
%
|
80 bps
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP
comparison
|
Operating
profit
|
$
|
389
|
|
$
|
384
|
|
$
|
5
|
|
$
|
14
|
|
|
$
|
794
|
|
$
|
783
|
|
$
|
11
|
|
$
|
28
|
|
Operating profit
margin
|
22.4
|
%
|
20.7
|
%
|
170 bps
|
170 bps
|
|
22.2
|
%
|
21.3
|
%
|
90 bps
|
90 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the second quarter, net sales of $1.7
billion decreased 6.3%, with a 3.3% decline in organic sales
and a 3.0% headwind from foreign exchange and the impact of net
acquisitions and divestitures. Organic maintenance and repair sales
declined 3.6% and organic modernization sales declined 1.5%.
GAAP operating profit decreased $7
million to $381 million.
Adjusted operating profit increased $5
million to $389 million as the
benefit from favorable pricing and mix, productivity and cost
containment actions more than offset the impact from lower volume,
price concessions, bad debt and a $9
million headwind from foreign exchange. GAAP operating
profit was also impacted by incremental public company standalone
costs. GAAP and adjusted operating profit margin expanded 100 and
170 basis points, respectively.
First half net sales declined 2.8% from a slight decline in
organic sales and a 2.7% headwind from foreign exchange and the
impact of net acquisitions and divestitures. GAAP operating profit
increased $7 million and margin
expanded 80 basis points. Adjusted operating profit increased
$28 million and margin expanded 90
basis points at constant currency.
Cash flow
|
Quarter Ended June
30, 2020
|
|
Six Months Ended
June 30, 2020
|
($
millions)
|
2020
|
2019
|
Y/Y
|
|
2020
|
2019
|
Y/Y
|
Cash flow from
operations
|
$
|
664
|
|
$
|
354
|
|
$
|
310
|
|
|
$
|
823
|
|
$
|
651
|
|
$
|
172
|
|
Free cash
flow
|
$
|
628
|
|
$
|
319
|
|
$
|
309
|
|
|
$
|
748
|
|
$
|
588
|
|
$
|
160
|
|
Free cash flow
conversion
|
280
|
%
|
104
|
%
|
|
|
192
|
%
|
101
|
%
|
|
Second quarter cash from operations of $664 million increased $310 million versus prior year primarily driven
by favorable working capital performance. Second quarter free cash
flow of $628 million increased
$309 million versus prior year. The
cash balance at the end of the second quarter was $1.9 billion.
First half cash from operations of $823
million increased $172 million
and free cash flow increased $160
million to $748 million.
2020 Outlook*
Otis is improving its full year outlook
to reflect strong first half performance and the anticipated
recovery profile in the second half.
- Net sales down 4.5 to 6.5%
- Organic sales down 2 to 4%
-
- Organic New Equipment sales down mid to high single digits
- Organic Service sales flat to down low single digits
- Adjusted operating profit flat to down $50 million at constant currency and down
$40 to $100
million at actual currency
- Adjusted EPS of $2.20 to
$2.30; adjusted effective tax rate
down 50 basis points to ~31.5%
- Free cash flow of $1.0 to 1.1
billion with conversion of 130 to 140% of GAAP net income
- 2020 debt repayment increased $100
million versus prior outlook to $350
million
*Note: When we provide outlook for organic sales, adjusted
operating profit, 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 maintenance 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 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. and
other countries in which Otis and its businesses operate, including
the effect of changes in U.S. trade policies or the United Kingdom's 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; (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 distribution; (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 and Otis' 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
|
|
+1-860-674-3029
|
|
Ray.Hernandez@otis.com
|
|
|
IR
Contact:
|
Stacy
Laszewski
|
|
+1-860-676-6011
|
|
investorrelations@otis.com
|
Otis Worldwide
Corporation
|
|
Condensed
Consolidated Statements of Operations
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions, except per share amounts)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
Sales
|
$
|
3,029
|
|
|
$
|
3,351
|
|
|
$
|
5,995
|
|
|
$
|
6,452
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of products and
services sold
|
2,138
|
|
|
2,367
|
|
|
4,207
|
|
|
4,567
|
|
|
Research and
development
|
37
|
|
|
40
|
|
|
75
|
|
|
79
|
|
|
Selling, general and
administrative
|
441
|
|
|
444
|
|
|
906
|
|
|
885
|
|
|
Total Costs and
Expenses
|
2,616
|
|
|
2,851
|
|
|
5,188
|
|
|
5,531
|
|
Other income
(expense), net
|
3
|
|
|
(19)
|
|
|
(62)
|
|
|
(25)
|
|
Operating
profit
|
416
|
|
|
481
|
|
|
745
|
|
|
896
|
|
|
Non-service pension
expense (benefit)
|
1
|
|
|
(11)
|
|
|
(2)
|
|
|
(22)
|
|
|
Interest expense
(income), net
|
41
|
|
|
(3)
|
|
|
46
|
|
|
(2)
|
|
Income from
operations before income taxes
|
374
|
|
|
495
|
|
|
701
|
|
|
920
|
|
|
Income tax
expense
|
109
|
|
|
143
|
|
|
234
|
|
|
268
|
|
Net income from
operations
|
265
|
|
|
352
|
|
|
467
|
|
|
652
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
|
41
|
|
|
44
|
|
|
78
|
|
|
71
|
|
Net income
attributable to common shareholders
|
$
|
224
|
|
|
$
|
308
|
|
|
$
|
389
|
|
|
$
|
581
|
|
Earnings Per Share
of Common Stock:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.52
|
|
|
$
|
0.71
|
|
|
$
|
0.90
|
|
|
$
|
1.34
|
|
|
Diluted
|
$
|
0.52
|
|
|
$
|
0.71
|
|
|
$
|
0.90
|
|
|
$
|
1.34
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
shares
|
433.1
|
|
|
433.1
|
|
|
433.1
|
|
|
433.1
|
|
|
Diluted
Shares
|
434.1
|
|
|
433.1
|
|
|
433.6
|
|
|
433.1
|
|
Otis Worldwide
Corporation
|
|
Segment Net Sales
and Operating Profit
|
|
|
Quarter Ended June
30,
|
|
Quarter Ended June
30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
Reported
|
|
Adjusted
|
|
Reported
|
|
Adjusted
|
Net
Sales
|
|
|
|
|
|
|
|
New
Equipment
|
$
|
1,294
|
|
|
$
|
1,294
|
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
Service
|
1,735
|
|
|
1,735
|
|
|
1,851
|
|
|
1,851
|
|
Consolidated Net
Sales
|
$
|
3,029
|
|
|
$
|
3,029
|
|
|
$
|
3,351
|
|
|
$
|
3,351
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
New
Equipment
|
$
|
79
|
|
|
$
|
91
|
|
|
$
|
138
|
|
|
$
|
142
|
|
Service
|
381
|
|
|
389
|
|
|
388
|
|
|
384
|
|
Segment Operating
Profit
|
460
|
|
|
480
|
|
|
526
|
|
|
526
|
|
General corporate
expenses and other
|
(44)
|
|
|
$
|
(23)
|
|
|
(45)
|
|
|
(30)
|
|
Consolidated
Operating Profit
|
$
|
416
|
|
|
$
|
457
|
|
|
$
|
481
|
|
|
$
|
496
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
New
Equipment
|
6.1
|
%
|
|
7.0
|
%
|
|
9.2
|
%
|
|
9.5
|
%
|
Service
|
22.0
|
%
|
|
22.4
|
%
|
|
21.0
|
%
|
|
20.7
|
%
|
Total Operating
Profit Margin
|
13.7
|
%
|
|
15.1
|
%
|
|
14.4
|
%
|
|
14.8
|
%
|
|
|
|
Six Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
Reported
|
|
Adjusted
|
|
Reported
|
|
Adjusted
|
Net
Sales
|
|
|
|
|
|
|
|
New
Equipment
|
$
|
2,417
|
|
|
$
|
2,417
|
|
|
$
|
2,771
|
|
|
$
|
2,771
|
|
Service
|
3,578
|
|
|
3,578
|
|
|
3,681
|
|
|
3,681
|
|
Consolidated Net
Sales
|
$
|
5,995
|
|
|
$
|
5,995
|
|
|
$
|
6,452
|
|
|
$
|
6,452
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
New
Equipment
|
$
|
143
|
|
|
$
|
156
|
|
|
$
|
197
|
|
|
$
|
206
|
|
Service
|
781
|
|
|
794
|
|
|
774
|
|
|
783
|
|
Segment Operating
Profit
|
924
|
|
|
950
|
|
|
971
|
|
|
989
|
|
General corporate
expenses and other
|
(179)
|
|
|
(43)
|
|
|
(75)
|
|
|
$
|
(60)
|
|
Consolidated
Operating Profit
|
$
|
745
|
|
|
$
|
907
|
|
|
$
|
896
|
|
|
$
|
929
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
New
Equipment
|
5.9
|
%
|
|
6.5
|
%
|
|
7.1
|
%
|
|
7.4
|
%
|
Service
|
21.8
|
%
|
|
22.2
|
%
|
|
21.0
|
%
|
|
21.3
|
%
|
Total Operating
Profit Margin
|
12.4
|
%
|
|
15.1
|
%
|
|
13.9
|
%
|
|
14.4
|
%
|
Otis Worldwide
Corporation
|
|
Reconciliation of
Reported (GAAP) to Adjusted Operating Profit & Operating Profit
Margin
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
New
Equipment
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,294
|
|
|
$
|
1,500
|
|
|
$
|
2,417
|
|
|
$
|
2,771
|
|
GAAP Operating
profit
|
79
|
|
|
138
|
|
|
143
|
|
|
197
|
|
Restructuring
|
12
|
|
|
8
|
|
|
13
|
|
|
14
|
|
UTC allocated
corporate expenses
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
Public company
standalone costs1
|
—
|
|
|
(4)
|
|
|
—
|
|
|
(7)
|
|
Other
|
|
|
(2)
|
|
|
|
|
(1)
|
|
Adjusted New
Equipment Operating Profit
|
$
|
91
|
|
|
$
|
142
|
|
|
$
|
156
|
|
|
$
|
206
|
|
Adjusted operating
profit margin
|
7.0
|
%
|
|
9.5
|
%
|
|
6.5
|
%
|
|
7.4
|
%
|
Service
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,735
|
|
|
$
|
1,851
|
|
|
$
|
3,578
|
|
|
$
|
3,681
|
|
GAAP Operating
profit
|
381
|
|
|
388
|
|
|
781
|
|
|
774
|
|
Restructuring
|
8
|
|
|
8
|
|
|
13
|
|
|
27
|
|
UTC allocated
corporate expenses
|
—
|
|
|
4
|
|
|
—
|
|
|
7
|
|
Public company
standalone costs1
|
—
|
|
|
(16)
|
|
|
—
|
|
|
(25)
|
|
Adjusted Service
Operating Profit
|
$
|
389
|
|
|
$
|
384
|
|
|
$
|
794
|
|
|
$
|
783
|
|
Adjusted Operating
Profit Margin
|
22.4
|
%
|
|
20.7
|
%
|
|
22.2
|
%
|
|
21.3
|
%
|
|
|
|
|
|
|
|
|
General corporate
expenses and other
|
|
|
|
|
|
|
|
General corporate
expenses and other
|
$
|
(23)
|
|
|
$
|
(30)
|
|
|
$
|
(43)
|
|
|
$
|
(60)
|
|
Adjusted Total
Operating Profit
|
$
|
457
|
|
|
$
|
496
|
|
|
$
|
907
|
|
|
$
|
929
|
|
|
|
|
|
|
|
|
|
Total
Otis
|
|
|
|
|
|
|
|
GAAP Operating
profit
|
416
|
|
|
481
|
|
|
745
|
|
|
896
|
|
Restructuring
|
20
|
|
|
15
|
|
|
26
|
|
|
40
|
|
Loss on
disposal of business
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
One-time
separation costs
|
21
|
|
|
3
|
|
|
53
|
|
|
3
|
|
Fixed
asset impairment
|
—
|
|
|
—
|
|
|
67
|
|
|
—
|
|
UTC
allocated corporate expenses
|
—
|
|
|
19
|
|
|
16
|
|
|
36
|
|
Public company
standalone costs1
|
—
|
|
|
(42)
|
|
|
—
|
|
|
(64)
|
|
Other
|
—
|
|
|
1
|
|
|
—
|
|
|
(1)
|
|
Adjusted Total
Operating Profit
|
$
|
457
|
|
|
$
|
496
|
|
|
$
|
907
|
|
|
$
|
929
|
|
Adjusted Operating
Profit Margin
|
15.1
|
%
|
|
14.8
|
%
|
|
15.1
|
%
|
|
14.4
|
%
|
|
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
six months ended June 30, 2020 and are not adjusted. For the
quarter ended and six months ended June 30, 2019, these standalone
costs have been included in the adjustments, as though Otis'
operations had been conducted independently from
UTC.
|
Otis Worldwide
Corporation
|
|
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Net Income, Earnings Per
Share, and Effective Tax Rate
|
|
|
Quarter Ended June
30,
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
2020
|
|
2019
|
Adjusted Operating
Profit
|
457
|
|
496
|
907
|
|
929
|
Non-service pension
cost (benefit)3
|
1
|
|
(4)
|
(2)
|
|
(1)
|
Net interest
expense2
|
(41)
|
|
(49)
|
(46)
|
|
(63)
|
Adjusted income
from operations before income taxes
|
415
|
|
443
|
863
|
|
865
|
Income tax
expense
|
109
|
|
143
|
234
|
|
268
|
Tax impact on
restructuring and non-recurring items
|
20
|
|
4
|
39
|
|
10
|
Tax impact on other
adjustments
|
—
|
|
(13)
|
—
|
|
(16)
|
Non-recurring tax
items
|
1
|
|
7
|
6
|
|
7
|
Adjusted net
income from operations
|
285
|
|
302
|
584
|
|
596
|
Noncontrolling
interest
|
41
|
|
44
|
78
|
|
71
|
Adjusted net
income attributable to common shareholders
|
244
|
|
258
|
506
|
|
525
|
|
|
|
|
|
|
|
GAAP income
attributable to common shareholders
|
224
|
|
308
|
389
|
|
581
|
Restructuring
|
20
|
|
15
|
26
|
|
40
|
Loss on disposal of
business
|
—
|
|
19
|
—
|
|
19
|
One-time separation
costs
|
21
|
|
3
|
53
|
|
3
|
Fixed asset
impairment
|
—
|
|
—
|
67
|
|
—
|
UTC allocated
corporate expenses
|
—
|
|
19
|
16
|
|
36
|
Public company
standalone costs1
|
—
|
|
(42)
|
—
|
|
(64)
|
Non-service pension
cost3
|
—
|
|
(15)
|
—
|
|
(23)
|
Net interest
expense2
|
—
|
|
(52)
|
—
|
|
(65)
|
Other
|
—
|
|
1
|
—
|
|
(1)
|
Tax effects of
restructuring, non-recurring items and other adjustments
|
(20)
|
|
9
|
(39)
|
|
6
|
Non-recurring tax
items
|
(1)
|
|
(7)
|
(6)
|
|
(7)
|
Adjusted net
income attributable to common shareholders
|
244
|
|
258
|
506
|
|
525
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share
|
0.52
|
|
0.71
|
0.90
|
|
1.34
|
Impact to
diluted earnings per share
|
0.04
|
|
(0.12)
|
0.27
|
|
(0.13)
|
Adjusted Diluted
Earnings Per Share
|
0.56
|
|
0.59
|
1.17
|
|
1.21
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
29.1
|
%
|
|
28.9
|
%
|
33.4
|
%
|
|
29.1
|
%
|
Impact of
adjustments on effective tax rate
|
2.2
|
%
|
|
2.9
|
%
|
(1.1)
|
%
|
|
2.0
|
%
|
Adjusted Effective
Tax Rate
|
31.3
|
%
|
|
31.8
|
%
|
32.3
|
%
|
|
31.1
|
%
|
|
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 six months ended June 30, 2020 and are not
adjusted. For the quarter ended and six months ended June 30,
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 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 UTC
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
June 30, 2020 Compared with Quarter Ended June 30,
2019
|
|
|
|
Factors
Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX Translation
|
|
Acquisitions
/ Divestitures,
net
|
|
Total
|
New
Equipment
|
|
(10.4)%
|
|
(3.2)%
|
|
(0.1)%
|
|
(13.7)%
|
Service
|
|
(3.3)%
|
|
(2.2)%
|
|
(0.8)%
|
|
(6.3)%
|
Maintenance and
Repair
|
|
(3.6)%
|
|
(2.4)%
|
|
(0.5)%
|
|
(6.5)%
|
Modernization
|
|
(1.5)%
|
|
(1.8)%
|
|
(1.9)%
|
|
(5.2)%
|
Total Net
Sales
|
|
(6.5)%
|
|
(2.6)%
|
|
(0.5)%
|
|
(9.6)%
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 30, 2020 Compared with Six Months Ended June 30,
2019
|
|
|
|
|
|
|
|
|
Factors
Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX Translation
|
|
Acquisitions
/ Divestitures,
net
|
|
Total
|
New
Equipment
|
|
(10.1)%
|
|
(2.6)%
|
|
(0.1)%
|
|
(12.8)%
|
Service
|
|
(0.1)%
|
|
(2.0)%
|
|
(0.7)%
|
|
(2.8)%
|
Maintenance and
Repair
|
|
(0.6)%
|
|
(2.1)%
|
|
(0.5)%
|
|
(3.2)%
|
Modernization
|
|
2.6%
|
|
(1.7)%
|
|
(2.0)%
|
|
(1.1)%
|
Total Net
Sales
|
|
(4.4)%
|
|
(2.3)%
|
|
(0.4)%
|
|
(7.1)%
|
Otis Worldwide
Corporation
|
|
Reconciliation of
Adjusted Operating Profit at Constant Currency
|
|
Quarter Ended
June 30, 2020 Compared with Quarter Ended June 30,
2019
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
2020
|
|
2019
|
|
Y/Y
|
New
Equipment
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
91
|
|
|
$
|
142
|
|
|
(51)
|
|
Impact of foreign
exchange
|
|
5
|
|
|
—
|
|
|
5
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
96
|
|
|
$
|
142
|
|
|
(46)
|
|
|
|
|
|
|
|
|
Service
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
389
|
|
|
$
|
384
|
|
|
5
|
|
Impact of foreign
exchange
|
|
9
|
|
|
—
|
|
|
9
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
398
|
|
|
$
|
384
|
|
|
14
|
|
|
|
|
|
|
|
|
Otis
Consolidated
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
457
|
|
|
$
|
496
|
|
|
(39)
|
|
Impact of foreign
exchange
|
|
15
|
|
|
—
|
|
|
15
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
472
|
|
|
$
|
496
|
|
|
(24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 30, 2020 Compared with Six Months Ended June 30,
2019
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
2020
|
|
2019
|
|
Y/Y
|
New
Equipment
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
156
|
|
|
$
|
206
|
|
|
(50)
|
|
Impact of foreign
exchange
|
|
7
|
|
|
|
|
7
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
163
|
|
|
$
|
206
|
|
|
(43)
|
|
|
|
|
|
|
|
|
Service
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
794
|
|
|
$
|
783
|
|
|
11
|
|
Impact of foreign
exchange
|
|
17
|
|
|
|
|
17
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
811
|
|
|
$
|
783
|
|
|
28
|
|
|
|
|
|
|
|
|
Otis
Consolidated
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
907
|
|
|
$
|
929
|
|
|
(22)
|
|
Impact of foreign
exchange
|
|
25
|
|
|
0
|
|
|
25
|
|
Adjusted Operating
Profit at constant currency
|
|
$
|
932
|
|
|
$
|
929
|
|
|
3
|
|
Otis Worldwide
Corporation
|
|
Condensed
Consolidated Balance Sheet
|
|
|
June 30,
2020
|
|
December 31,
2019
|
(dollars in
millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,912
|
|
|
$
|
1,446
|
|
Accounts receivable,
net
|
2,865
|
|
|
2,861
|
|
Contract assets,
current
|
484
|
|
|
529
|
|
Inventories,
net
|
629
|
|
|
571
|
|
Other assets,
current
|
502
|
|
|
251
|
|
Total Current
Assets
|
6,392
|
|
|
5,658
|
|
Future income tax
benefits
|
427
|
|
|
373
|
|
Fixed
assets
|
1,828
|
|
|
1,803
|
|
Less: Accumulated
depreciation
|
(1,124)
|
|
|
(1,082)
|
|
Fixed assets,
net
|
704
|
|
|
721
|
|
Operating lease
right-of-use assets
|
530
|
|
|
535
|
|
Intangible assets,
net
|
458
|
|
|
490
|
|
Goodwill
|
1,639
|
|
|
1,647
|
|
Other
assets
|
291
|
|
|
263
|
|
Total
Assets
|
$
|
10,441
|
|
|
$
|
9,687
|
|
|
|
|
|
Liabilities and
(Deficit) Equity
|
|
|
|
Short-term
borrowings
|
$
|
33
|
|
|
$
|
34
|
|
Accounts
payable
|
1,349
|
|
|
1,331
|
|
Accrued
liabilities
|
1,917
|
|
|
1,739
|
|
Contract liabilities,
current
|
2,463
|
|
|
2,270
|
|
Total Current
Liabilities
|
5,762
|
|
|
5,374
|
|
Long-term
debt
|
6,260
|
|
|
5
|
|
Future pension and
postretirement benefit obligations
|
589
|
|
|
590
|
|
Operating lease
liabilities
|
377
|
|
|
386
|
|
Future income tax
obligations
|
439
|
|
|
695
|
|
Other long-term
liabilities
|
590
|
|
|
311
|
|
Total
Liabilities
|
14,017
|
|
|
7,361
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
96
|
|
|
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; 433.1 shares issued and
outstanding
|
4
|
|
|
—
|
|
Additional paid-in
capital
|
15
|
|
|
—
|
|
Accumulated
deficit
|
(3,418)
|
|
|
—
|
|
UTC Net
Investment
|
—
|
|
|
2,458
|
|
Accumulated other
comprehensive loss
|
(843)
|
|
|
(758)
|
|
Total Shareholders'
(Deficit) Equity
|
(4,242)
|
|
|
1,700
|
|
Noncontrolling
interest
|
570
|
|
|
531
|
|
Total (Deficit)
Equity
|
(3,672)
|
|
|
2,231
|
|
Total Liabilities and
(Deficit) Equity
|
$
|
10,441
|
|
|
$
|
9,687
|
|
|
|
|
|
|
Debt
Ratios:
|
|
|
|
|
Debt to total
capitalization
|
240%
|
|
|
2%
|
|
Net debt to net
capitalization
|
618%
|
|
|
(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 June
30,
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
2020
|
|
2019
|
Operating
Activities:
|
|
|
|
|
|
|
Net income from
operations
|
$
|
265
|
|
|
$
|
352
|
|
$
|
467
|
|
|
$
|
652
|
|
Adjustments to
reconcile net income to net cash flows provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
49
|
|
|
46
|
|
92
|
|
|
91
|
|
Stock compensation
cost
|
15
|
|
|
9
|
|
27
|
|
|
16
|
|
Loss on disposal of
business
|
—
|
|
|
19
|
|
—
|
|
|
19
|
|
Loss on fixed asset
impairment
|
—
|
|
|
—
|
55
|
|
|
—
|
Change in:
|
|
|
|
|
|
|
Accounts receivable,
net
|
57
|
|
|
(38)
|
|
(59)
|
|
|
(94)
|
|
Contract assets and
liabilities, current
|
(89)
|
|
|
(191)
|
|
266
|
|
|
77
|
|
Inventories,
net
|
(22)
|
|
|
17
|
|
(71)
|
|
|
24
|
|
Other assets,
current
|
18
|
|
|
18
|
|
(67)
|
|
|
25
|
|
Accounts payables and
accrued liabilities
|
368
|
|
|
153
|
|
79
|
|
|
(156)
|
|
Contract liabilities,
current
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
Pension
contributions
|
(10)
|
|
|
(8)
|
|
(20)
|
|
|
(18)
|
|
Other operating
activities, net
|
13
|
|
|
(23)
|
|
54
|
|
|
15
|
|
Net cash flows
provided by operating activities
|
664
|
|
|
354
|
|
823
|
|
|
651
|
|
Investing
Activities:
|
|
|
|
|
|
|
Capital
expenditures
|
(36)
|
|
|
(35)
|
|
(75)
|
|
|
(63)
|
|
Investments in
businesses, net of cash acquired
|
(11)
|
|
|
(13)
|
|
(16)
|
|
|
(32)
|
|
Investments in equity
securities
|
—
|
|
|
—
|
|
(51)
|
|
|
—
|
|
Other investing
activities, net
|
(3)
|
|
|
(26)
|
|
—
|
|
|
3
|
|
Net cash flows used in
investing activities
|
(50)
|
|
|
(74)
|
|
(142)
|
|
|
(92)
|
|
Financing
Activities:
|
|
|
|
|
|
|
Issuance of long-term
debt, net
|
—
|
|
|
—
|
|
6,300
|
|
|
—
|
|
Payment of long-term
debt issuance costs
|
—
|
|
|
—
|
|
(43)
|
|
|
—
|
|
Increase in short-term
borrowings, net
|
(35)
|
|
|
1
|
|
1
|
|
|
16
|
|
Net transfers from
(to) UTC
|
220
|
|
|
(24)
|
|
(6,330)
|
|
|
(330)
|
|
Dividends paid on
common stock
|
(87)
|
|
|
—
|
|
(87)
|
|
|
—
|
|
Dividends paid to
noncontrolling interest
|
(22)
|
|
|
(25)
|
|
(43)
|
|
|
(55)
|
|
Other financing
activities, net
|
—
|
|
|
7
|
|
22
|
|
|
16
|
|
Net cash flows
provided by (used in) financing activities
|
76
|
|
|
(41)
|
|
(180)
|
|
|
(353)
|
|
Summary of
Activity:
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
664
|
|
|
354
|
|
823
|
|
|
651
|
|
Net cash used in
investing activities
|
(50)
|
|
|
(74)
|
|
(142)
|
|
|
(92)
|
|
Net cash provided by
(used in) financing activities
|
76
|
|
|
(41)
|
|
(180)
|
|
|
(353)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
17
|
|
|
(16)
|
|
(33)
|
|
|
4
|
|
Net (increase) in
cash, cash equivalents and restricted cash
|
707
|
|
|
223
|
|
468
|
|
|
210
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
1,220
|
|
|
1,333
|
|
1,459
|
|
|
1,346
|
|
Cash, cash
equivalents and restricted cash, end of period
|
1,927
|
|
|
1,556
|
|
1,927
|
|
|
1,556
|
|
Less: Restricted
cash
|
15
|
|
|
14
|
|
15
|
|
|
14
|
|
Cash and cash
equivalents, end of period
|
$
|
1,912
|
|
|
$
|
1,542
|
|
$
|
1,912
|
|
|
$
|
1,542
|
|
Otis Worldwide
Corporation
|
Free Cash Flow
Reconciliation
|
|
|
Quarter Ended
June 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
$
|
224
|
|
|
|
$
|
308
|
|
|
Net cash flows
provided by operating activities
|
$
|
664
|
|
|
|
$
|
354
|
|
|
Net cash flows
provided by operating activities as a percentage of net income
attributable to common shareholders
|
|
296
|
%
|
|
|
115
|
%
|
Capital
expenditures
|
(36)
|
|
|
|
(35)
|
|
|
Capital expenditures
as a percentage of net income attributable to common
shareholders
|
|
(16)
|
%
|
|
|
(11)
|
%
|
Free cash
flow
|
$
|
628
|
|
|
|
$
|
319
|
|
|
Free cash flow as a
percentage of net income attributable to common
shareholders
|
|
280
|
%
|
|
|
104
|
%
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
$
|
389
|
|
|
|
$
|
581
|
|
|
Net cash flows
provided by operating activities
|
$
|
823
|
|
|
|
$
|
651
|
|
|
Net cash flows
provided by operating activities as a percentage of net income
attributable to common shareholders
|
|
212
|
%
|
|
|
112
|
%
|
Capital
expenditures
|
(75)
|
|
|
|
(63)
|
|
|
Capital expenditures
as a percentage of net income attributable to common
shareholders
|
|
(20)
|
%
|
|
|
(11)
|
%
|
Free cash
flow
|
$
|
748
|
|
|
|
$
|
588
|
|
|
Free cash flow as a
percentage of net income attributable to common
shareholders
|
|
192
|
%
|
|
|
101
|
%
|
View original
content:http://www.prnewswire.com/news-releases/otis-reports-second-quarter-2020-results-301100658.html
SOURCE Otis Worldwide Corporation