"
|
|||||||||||||||||||||||||||||||
Quarter Ended |
Year Ended |
||||||||||||||||||||||||||||||
($ millions, except per |
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
Fourth quarter GAAP operating profit of
GAAP EPS of
Full year net sales declined 2.8% versus the prior year, with a 2.1% decline in organic sales. GAAP operating profit decreased
New Equipment Segment |
|||||||||||||||||||||||||||||||
Quarter Ended |
Year Ended |
||||||||||||||||||||||||||||||
($ 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
GAAP operating profit decreased
New Equipment orders were down 3.5% at constant currency as decline in the
Full year net sales declined 4.9% with a 4.0% organic decline. GAAP operating profit declined
Service Segment |
|||||||||||||||||||||||||||||||
Quarter Ended |
Year Ended |
||||||||||||||||||||||||||||||
($ 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
GAAP operating profit decreased
Full year net sales declined 1.1% with a 0.7% organic decline. GAAP operating profit increased
Cash flow |
|||||||||||||||||||||||
Quarter Ended |
Year Ended |
||||||||||||||||||||||
($ 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
Full year cash from operations of
2021 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
Use and Definitions of Non-GAAP Financial 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
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
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
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
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
Media Contact: |
|
860-674-3029 |
|
IR Contact: |
|
860-676-6011 |
|
Consolidated Statements of Operations
|
||||||||||||||||
Quarter Ended |
Year Ended |
|||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||
(amounts in millions, except per share amounts) |
2020 |
2019 |
2020 |
2019 |
||||||||||||
|
$ |
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 |
Segment
|
|||||||||||||||
Quarter Ended |
Quarter Ended |
||||||||||||||
(Unaudited) |
(Unaudited) |
||||||||||||||
(dollars in millions) |
2020 |
2019 |
|||||||||||||
Reported |
Adjusted |
Reported |
Adjusted |
||||||||||||
|
|||||||||||||||
New Equipment |
$ |
1,531 |
$ |
1,531 |
$ |
1,427 |
$ |
1,427 |
|||||||
Service |
1,962 |
1,962 |
1,926 |
1,926 |
|||||||||||
Consolidated |
$ |
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 |
Year Ended |
||||||||||||||
(Unaudited) |
(Unaudited) |
||||||||||||||
(dollars in millions) |
2020 |
2019 |
|||||||||||||
Reported |
Adjusted |
Reported |
Adjusted |
||||||||||||
|
|||||||||||||||
New Equipment |
$ |
5,371 |
$ |
5,371 |
$ |
5,648 |
$ |
5,648 |
|||||||
Service |
7,385 |
7,385 |
7,470 |
7,470 |
|||||||||||
Consolidated |
$ |
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 |
% |
Reconciliation of Reported (GAAP) to Adjusted Operating Profit & Operating Profit Margin
|
|||||||||||||||
Quarter Ended |
Year Ended |
||||||||||||||
(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 |
|||||||||||||||
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 |
Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Net Income, Earnings Per Share, and Effective Tax Rate
|
|||||||||||||||
Quarter Ended |
Year Ended |
||||||||||||||
(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 |
2 |
- Otis issued debt and began to incur interest expenses in |
3 |
- Non-service pension included in GAAP net income attributable to |
Components of Changes in
|
||||||||||
Quarter Ended |
||||||||||
Factors Contributing to Total % Change in |
||||||||||
Organic |
FX |
Acquisitions / |
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 |
1.3% |
2.6% |
0.3% |
—% |
4.2% |
|||||
Year Ended |
||||||||||
Factors Contributing to Total % Change in |
||||||||||
Organic |
FX |
Acquisitions / |
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 |
(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% |
Reconciliation of Adjusted Operating Profit at Constant Currency
|
||||||||||||
Quarter Ended |
||||||||||||
(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 |
||||||
|
||||||||||||
Adjusted Operating Profit |
$ |
509 |
$ |
473 |
$ |
36 |
||||||
Impact of foreign exchange |
(17) |
— |
(17) |
|||||||||
Adjusted Operating Profit at constant currency |
$ |
492 |
$ |
473 |
$ |
19 |
||||||
Year Ended |
||||||||||||
(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 |
||||||
|
||||||||||||
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 |
Consolidated Balance Sheet
|
|||||||
|
|
||||||
(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 |
|||||
|
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, |
— |
— |
|||||
Common Stock, |
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.
Condensed Consolidated Statement of Cash Flows
|
|||||||||||||||
Quarter Ended |
Year Ended |
||||||||||||||
(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 |
|||||||||||||||
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) |
|