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April 26, 2021

Otis Reports First Quarter 2021 Results

Delivers strong first quarter results with sales growth and margin expansion in both segments and double digit New Equipment orders growth; improves 2021 outlook

- Net sales up 14.9%; organic sales up 10.3% - GAAP operating profit up $180 million with 380 basis points of margin expansion

- Adjusted operating profit up $83 million with 40 basis points of margin expansion

- New Equipment orders up 18.4%; backlog up 8%, 2% at constant currency

- GAAP cash flow from operations of $585 million; free cash flow of $541 million

- Completed $300 million in share repurchases

- Improved outlook* for full-year with organic sales up 4 to 6%, adjusted earnings per share of $2.78 to $2.84 and free cash flow of $1.35 to $1.45 billion

FARMINGTON, Conn., April 26, 2021 /PRNewswire/ -- Otis Worldwide Corporation (NYSE:OTIS) reported first quarter 2021 net sales of $3.4 billion with 10.3% organic growth. GAAP diluted earnings per share (EPS) increased 86.8% to $0.71 and adjusted diluted EPS increased 20.0% to $0.72.

"Otis had an excellent start to the year. Our New Equipment orders were up high teens, including growth in every region, and we saw increased organic sales and margin expansion in both segments. Continued robust cash flow generation enabled us to buy back $300 million of shares early in the year," said President and CEO Judy Marks. "This positive momentum combined with continued progress in executing our strategy and recovery in the end markets gives us confidence to improve our 2021 outlook, raise dividends by 20 percent and increase our share repurchase target to half a billion dollars, demonstrating our ongoing commitment to create value for our shareholders."

Key Figures

($ millions, except per share amounts)

Quarter Ended March 31,

2021

 

2020

 

Y/Y

 

Y/Y (CFX)

Net sales

$

3,408

   

$

2,966

   

14.9

%

 

10.5

%

Organic sales

           

10.3

%

               

GAAP

Operating profit

$

509

   

$

329

   

$

180

     

Operating profit margin

14.9

%

 

11.1

%

 

380 bps

   

Net income

$

308

   

$

165

   

86.7

%

   

Earnings per share

$

0.71

   

$

0.38

   

86.8

%

   
               

Adjusted non-GAAP comparison

Operating profit

$

533

   

$

450

   

$

83

   

$

57

 

Operating profit margin

15.6

%

 

15.2

%

 

40 bps

   

Net income

$

312

   

$

262

   

19.1

%

   

Earnings per share

$

0.72

   

$

0.60

   

20.0

%

   

 

First quarter net sales of $3.4 billion increased 14.9% versus the prior year, with a 10.3% increase in organic sales. Organic sales were up in both New Equipment and Service.

First quarter GAAP operating profit of $509 million increased $180 million from the prior year driven by segment operating profit growth of $70 million, the absence of a fixed asset impairment charge taken in the prior year quarter and lower non-recurring separation costs. GAAP operating profit margin expanded 380 basis points to 14.9%.

Adjusted operating profit of $533 million increased $83 million and $57 million at constant currency driven by growth in segment operating profit of $54 million. Adjusted operating profit margin expanded 40 basis points to 15.6%, with margin expansion in both New Equipment and Service.

GAAP EPS of $0.71 increased $0.33 and adjusted EPS of $0.72 increased $0.12, driven by operating profit growth and the benefit from a lower effective tax rate, partially offset by the full quarter impact of interest expense.

New Equipment

 

Quarter Ended March 31,

($ millions)

2021

 

2020

 

Y/Y

 

Y/Y (CFX)

Net sales

$

1,458

   

$

1,123

   

29.8

%

 

25.2

%

Organic sales

           

25.1

%

               

GAAP

Operating profit

$

104

   

$

64

   

$

40

     

Operating profit margin

7.1

%

 

5.7

%

 

140 bps

   
               

Adjusted non-GAAP comparison

Operating profit

$

109

   

$

65

   

$

44

   

$

39

 

Operating profit margin

7.5

%

 

5.8

%

 

170 bps

   
                               

In the first quarter, net sales of $1.5 billion increased 29.8% with a 25.1% increase in organic sales. Organic sales were up double digits in the Americas and Asia and up low single digits in EMEA. China organic sales were up double digits.

GAAP operating profit increased $40 million to $104 million and adjusted operating profit increased $44 million to $109 million as the benefits from higher volume and strong material productivity were partially offset by unfavorable mix and price. GAAP and adjusted operating profit margin expanded 140 and 170 basis points, respectively. 

New Equipment orders were up 18.4% at constant currency with double digit growth in the Americas and Asia and low single digit growth in EMEA. New Equipment orders in China were up double digits. New equipment backlog increased 8% and 2% at constant currency versus prior year.

Service

 

Quarter Ended March 31,

($ millions)

2021

 

2020

 

Y/Y

 

Y/Y (CFX)

Net sales

$

1,950

   

$

1,843

   

5.8

%

 

1.6

%

Organic sales

           

1.3

%

               

GAAP

Operating profit

$

430

   

$

400

   

$

30

     

Operating profit margin

22.1

%

 

21.7

%

 

40 bps

   
               

Adjusted non-GAAP comparison

                             

Operating profit

$

440

   

$

405

   

$

35

   

$

15

 

Operating profit margin

22.6

%

 

22.0

%

 

60 bps

   
                               

In the first quarter, net sales of $2.0 billion increased 5.8%, with a 1.3% increase in organic sales. Organic maintenance and repair sales increased 1.5% and organic modernization sales increased 0.3%.

GAAP operating profit increased $30 million to $430 million and adjusted operating profit increased $35 million to $440 million driven by higher volume, productivity initiatives and favorable pricing, partially offset by higher SG&A expense, including incremental public company standalone costs. GAAP and adjusted operating profit margin expanded 40 and 60 basis points, respectively.

Cash flow

 

Quarter Ended March 31,

($ millions)

2021

 

2020

 

Y/Y

Cash flow from operations

$

585

   

$

159

   

$

426

 

Free cash flow

$

541

   

$

120

   

$

421

 

Free cash flow conversion

176

%

 

73

%

   

First quarter cash from operations of $585 million increased $426 million versus prior year primarily driven by higher GAAP net income and strong working capital performance. First quarter free cash flow of $541 million increased $421 million versus prior year.

2021 Outlook*

Otis is improving its full year outlook:

  • Net sales of $13.6 to $13.9 billion, up 6.7 to 8.7%
  • Organic sales up 4 to 6%
    • Organic New Equipment sales up 7.5 to 8.5%
    • Organic Service sales up 2 to 4%
  • Adjusted operating profit up $175 to $215 million at actual currency; up $120 to $160 million at constant currency
  • Adjusted EPS $2.78 to $2.84, up 10 to 13%; adjusted effective tax rate of approximately 29.5%
  • Free cash flow of $1.35 to $1.45 billion with conversion of approximately 120% of GAAP net income

*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.

Media Contact:

Ray Hernandez 

 

+1-860-674-3029

 

Ray.Hernandez@otis.com  

   

IR Contact:

Stacy Laszewski 

 

+1-860-676-6011

 

investorrelations@otis.com  

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 solely for fiscal years prior to 2020 estimated standalone public company costs, as though Otis' operations had been conducted independently from UTC ("standalone costs"). Standalone costs for fiscal years prior to 2020 are based on quarterly estimates determined during Otis' annual planning process for the 2020 fiscal year. Recurring standalone costs for 2021 and 2020 are not adjusted.

Adjusted operating profit represents income from continuing operations (a GAAP measure), excluding restructuring costs, other non-recurring significant items, UTC allocated costs and including solely for fiscal years prior to 2020 estimated standalone public company costs.

Adjusted net income represents net income from continuing operations (a GAAP measure), excluding restructuring costs and other non-recurring significant items and UTC allocated costs and including solely for fiscal years prior to 2020 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 solely for fiscal years prior to 2020 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, non-recurring significant items and solely for fiscal year prior to 2020 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 solely for fiscal years prior to 2020 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 and to the extent applicable as if it had been a standalone public company for fiscal years prior to 2020.

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 in the U.S. and other countries in which Otis and its businesses operate 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., including the new U.S. Administration, and other countries in which Otis and its businesses operate, including China's response to the new U.S. administration and 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 distribution 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 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.

Otis Worldwide Corporation

Condensed Consolidated Statements of Operations

 
   

Quarter Ended March 31,

   

(Unaudited)

(amounts in millions, except per share amounts)

2021

 

2020

Net Sales

$

3,408

   

$

2,966

 

Costs and Expenses:

     
 

Cost of products and services sold

2,389

   

2,069

 
 

Research and development

35

   

38

 
 

Selling, general and administrative

482

   

465

 
 

Total Costs and Expenses

2,906

   

2,572

 

Other income (expense), net

7

   

(65)

 

Operating profit

509

   

329

 
 

Non-service pension cost (benefit)

2

   

(3)

 
 

Interest expense (income), net

32

   

5

 

Net income before income taxes

475

   

327

 
 

Income tax expense

123

   

125

 

Net income

352

   

202

 
 

Less: Noncontrolling interest in subsidiaries' earnings

44

   

37

 

Net income attributable to common shareholders

$

308

   

$

165

 

Earnings Per Share of Common Stock:

     
 

Basic

$

0.71

   

$

0.38

 
 

Diluted

$

0.71

   

$

0.38

 

Weighted Average Number of Shares Outstanding:

     
 

Basic shares

431.6

   

433.1

 
 

Diluted Shares

433.7

   

433.1

 

 

Otis Worldwide Corporation

Segment Net Sales and Operating Profit

 
 

Quarter Ended March 31,

 

Quarter Ended March 31,

 

(Unaudited)

 

(Unaudited)

(dollars in millions)

2021

 

2020

 

Reported

 

Adjusted

 

Reported

 

Adjusted

Net Sales

             

New Equipment

$

1,458

   

$

1,458

   

$

1,123

   

$

1,123

 

Service

1,950

   

1,950

   

1,843

   

1,843

 

Consolidated Net Sales

$

3,408

   

$

3,408

   

$

2,966

   

$

2,966

 
               

Operating Profit

             

New Equipment

$

104

   

$

109

   

$

64

   

$

65

 

Service

430

   

440

   

400

   

405

 

Segment Operating Profit

534

   

549

   

464

   

470

 

General corporate expenses and other

(25)

   

(16)

   

(135)

   

(20)

 

Consolidated Operating Profit

$

509

   

$

533

   

$

329

   

$

450

 
               

Segment Operating Profit Margin

             

New Equipment

7.1

%

 

7.5

%

 

5.7

%

 

5.8

%

Service

22.1

%

 

22.6

%

 

21.7

%

 

22.0

%

Total Operating Profit Margin

14.9

%

 

15.6

%

 

11.1

%

 

15.2

%

               

 

Otis Worldwide Corporation

Reconciliation of Reported (GAAP) to Adjusted Operating Profit & Operating Profit Margin

 
 

Quarter Ended March 31,

 

(Unaudited)

(dollars in millions)

2021

 

2020

       

New Equipment

     

Net sales

$

1,458

   

$

1,123

 

GAAP Operating profit

104

   

64

 

Restructuring

5

   

1

 

Adjusted New Equipment Operating Profit

$

109

   

$

65

 

Adjusted operating profit margin

7.5

%

 

5.8

%

       

Service

     

Net sales

$

1,950

   

$

1,843

 

GAAP Operating profit

430

   

400

 

Restructuring

10

   

5

 

Adjusted Service Operating Profit

$

440

   

$

405

 

Adjusted Operating Profit Margin

22.6

%

 

22.0

%

       

General corporate expenses and other

     

General corporate expenses and other

$

(16)

   

$

(20)

 
       

Adjusted Total Operating Profit

$

533

   

$

450

 
       

Total Otis

     

GAAP Operating profit

$

509

   

$

329

 

Restructuring

15

   

6

 

   One-time separation costs

9

   

32

 

   Fixed asset impairment  

   

67

 

   UTC allocated corporate expenses

   

16

 

Adjusted Total Operating Profit

$

533

   

$

450

 

Adjusted Operating Profit Margin

15.6

%

 

15.2

%

 

Otis Worldwide Corporation

Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Net Income, Earnings Per Share, and Effective Tax Rate

 
 

Quarter Ended March 31,

 

(Unaudited)

(dollars in millions, except per share amounts)

2021

 

2020

Adjusted Operating Profit

$

533

   

$

450

 

Non-service pension cost (benefit)

2

   

(3)

 

Net interest expense

32

   

5

 

Adjusted income from operations before income taxes

499

   

448

 

Income tax expense

123

   

125

 

Tax impact on restructuring and non-recurring items

3

   

19

 

Non-recurring tax items

17

   

5

 

Adjusted net income from operations

356

   

299

 

Noncontrolling interest

44

   

37

 

Adjusted net income attributable to common shareholders

$

312

   

$

262

 
       

GAAP income attributable to common shareholders

$

308

   

$

165

 

Restructuring

15

   

6

 

One-time separation costs

9

   

32

 

Fixed asset impairment

   

67

 

UTC allocated corporate expenses

   

16

 

Tax effects of restructuring, non-recurring items and other adjustments

(3)

   

(19)

 

Non-recurring tax items

(17)

   

(5)

 

Adjusted net income attributable to common shareholders

$

312

   

$

262

 
       

Diluted Earnings Per Share

$

0.71

   

$

0.38

 

  Impact to diluted earnings per share

0.01

   

0.22

 

Adjusted Diluted Earnings Per Share

$

0.72

   

$

0.60

 
       

Effective Tax Rate

25.9

%

 

38.2

%

  Impact of adjustments on effective tax rate

2.8

%

 

(4.9)

%

Adjusted Effective Tax Rate

28.7

%

 

33.3

%

 

Otis Worldwide Corporation

Components of Changes in Net Sales

 

Quarter Ended March 31, 2021 Compared with Quarter Ended March 31, 2020

   
   

Factors Contributing to Total % Change in Net Sales

   

Organic

 

FX

Translation

 

Acquisitions /

Divestitures,
net

 

Total

New Equipment

 

25.1%

 

4.6%

 

0.1%

 

29.8%

Service

 

1.3%

 

4.2%

 

0.3%

 

5.8%

Maintenance and Repair

 

1.5%

 

4.4%

 

0.3%

 

6.2%

Modernization

 

0.3%

 

3.9%

 

—%

 

4.2%

Total Net Sales

 

10.3%

 

4.4%

 

0.2%

 

14.9%

                 
                 

 

Components of New Equipment Backlog

 
 

Growth %

 

Q1 2021

New Equipment Backlog increase at actual currency

8%

Foreign exchange impact to New Equipment Backlog

(6)%

New Equipment Backlog at constant currency

2%

 

Otis Worldwide Corporation

Reconciliation of Adjusted Operating Profit at Constant Currency

 

Quarter Ended March 31, 2021 Compared with Quarter Ended March 31, 2020

   
             

(dollars in millions)

 

2021

 

2020

 

Y/Y

New Equipment

           

Adjusted Operating Profit

 

$

109

   

$

65

   

$

44

 

Impact of foreign exchange

 

(5)

   

   

(5)

 

Adjusted Operating Profit at constant currency

 

$

104

   

$

65

   

$

39

 
             

Service

           

Adjusted Operating Profit

 

$

440

   

$

405

   

$

35

 

Impact of foreign exchange

 

(20)

   

   

(20)

 

Adjusted Operating Profit at constant currency

 

$

420

   

$

405

   

$

15

 
             

Otis Consolidated

           

Adjusted Operating Profit

 

$

533

   

$

450

   

$

83

 

Impact of foreign exchange

 

(26)

   

   

(26)

 

Adjusted Operating Profit at constant currency

 

$

507

   

$

450

   

$

57

 

 

Otis Worldwide Corporation

Condensed Consolidated Balance Sheet

 
 

March 31, 2021

 

December 31, 2020

(amounts in millions, except per share amounts)

(Unaudited)

 

(Unaudited)

Assets

     

Cash and cash equivalents

$

1,725

   

$

1,782

 

Accounts receivable, net

3,124

   

3,148

 

Contract assets

432

   

458

 

Inventories, net

686

   

659

 

Other current assets

379

   

446

 

Total Current Assets

6,346

   

6,493

 

Future income tax benefits

341

   

334

 

Fixed assets, net

765

   

774

 

Operating lease right-of-use assets

548

   

542

 

Intangible assets, net

448

   

484

 

Goodwill

1,727

   

1,773

 

Other assets

330

   

310

 

Total Assets

$

10,505

   

$

10,710

 
       

Liabilities and (Deficit) Equity

     

Short-term borrowings

$

341

   

$

701

 

Accounts payable

1,459

   

1,453

 

Accrued liabilities

1,769

   

1,977

 

Contract liabilities

2,826

   

2,542

 

Total Current Liabilities

6,395

   

6,673

 

Long-term debt

5,457

   

5,262

 

Future pension and postretirement benefit obligations

637

   

654

 

Operating lease liabilities

364

   

367

 

Future income tax obligations

300

   

321

 

Other long-term liabilities

638

   

634

 

Total Liabilities

13,791

   

13,911

 
       

Redeemable noncontrolling interest

65

   

83

 

Shareholders' (Deficit) Equity:

     

Preferred Stock

   

 

Common Stock and additional paid-in capital

68

   

59

 

Treasury Stock

(300)

   

 

Accumulated deficit

(2,855)

   

(3,076)

 

Accumulated other comprehensive income (loss)

(823)

   

(815)

 

Total Shareholders' (Deficit) Equity

(3,910)

   

(3,832)

 

Noncontrolling interest

559

   

548

 

Total (Deficit) Equity

(3,351)

   

(3,284)

 

Total Liabilities and (Deficit) Equity

$

10,505

   

$

10,710

 
       

 

Otis Worldwide Corporation

Condensed Consolidated Statement of Cash Flows

 
 

Quarter Ended March 31,

 

(Unaudited)

(dollars in millions)

2021

 

2020

Operating Activities:

     

Net income from operations

$

352

   

$

202

 

Adjustments to reconcile net income to net cash flows provided by operating activities:

     

Depreciation and amortization

51

   

43

 

Stock compensation cost

14

   

11

 

Loss on fixed asset impairment

   

55

 

Change in:

     

Accounts receivable, net

(14)

   

(116)

 

Contract assets and liabilities, current

328

   

355

 

Inventories, net

(39)

   

(49)

 

Accounts payable

29

   

(216)

 

Pension contributions

(13)

   

(10)

 

Other operating activities, net

(123)

   

(116)

 

Net cash flows provided by operating activities

585

   

159

 

Investing Activities:

     

Capital expenditures

(44)

   

(39)

 

Investments in businesses, net of cash acquired

(24)

   

(5)

 

Investments in equity securities

(18)

   

(51)

 

Other investing activities, net

36

   

3

 

Net cash flows used in investing activities

(50)

   

(92)

 

Financing Activities:

     

Increase (decrease) in short-term borrowings, net

(342)

   

36

 

Issuance of long-term debt, net

199

   

6,300

 

Payment of long-term debt issuance costs

(2)

   

(43)

 

Net transfers from (to) UTC

   

(6,550)

 

Dividends paid on Common Stock

(87)

   

 

Repurchases of Common Stock

(300)

   

 

Dividends paid to noncontrolling interest

(32)

   

(21)

 

Other financing activities, net

(10)

   

22

 

Net cash flows provided by (used in) financing activities

(574)

   

(256)

 

Summary of Activity:

     

Net cash provided by operating activities

585

   

159

 

Net cash used in investing activities

(50)

   

(92)

 

Net cash provided by (used in) financing activities

(574)

   

(256)

 

Effect of foreign exchange rate changes on cash and cash equivalents

(17)

   

(50)

 

Net increase in cash, cash equivalents and restricted cash

(56)

   

(239)

 

Cash, cash equivalents and restricted cash, beginning of period

1,801

   

1,459

 

Cash, cash equivalents and restricted cash, end of period

1,745

   

1,220

 

Less: Restricted cash

20

   

13

 

Cash and cash equivalents, end of period

$

1,725

   

$

1,207

 

 

Otis Worldwide Corporation

Free Cash Flow Reconciliation

 
 

Quarter Ended March 31,

 

(Unaudited)

(dollars in millions)

2021

 

2020

           

Net income attributable to common shareholders

$

308

     

$

165

   

Net cash flows provided by operating activities

$

585

     

$

159

   

Net cash flows provided by operating activities as a percentage of net income attributable to common shareholders

 

190

%

   

96

%

Capital expenditures

(44)

     

(39)

   

Capital expenditures as a percentage of net income attributable to common shareholders

 

(14)

%

   

(24)

%

Free cash flow

$

541

     

$

120

   

Free cash flow as a percentage of net income attributable to common shareholders

 

176

%

   

73

%

 

Cision View original content:http://www.prnewswire.com/news-releases/otis-reports-first-quarter-2021-results-301276603.html

SOURCE Otis Worldwide Corporation