Delivers solid second quarter results with high teens New Equipment order growth, mid-single digit organic Service sales growth and low teens adjusted EPS growth
- 2Q Net sales down 5.8% and organic sales up 0.4%. GAAP EPS ~flat and adjusted EPS up 11.7%
- 2Q New Equipment orders up 16.5%; NE backlog up 6%, adjusted backlog up 10% at constant currency
- 2Q Maintenance portfolio units were up nearly 3.5%
- YTD GAAP cash flow from operations of
$857 million ; free cash flow of$800 million , or 127% of net income - Completed the delisting of
Zardoya Otis and reached an agreement to divest ourRussia business with closing expected imminently - Revised full-year outlook1 with organic sales up 2.5 to 3.5%, adjusted EPS of
$3.17 to$3.21 and free cash flow of~$1.6 billion
"
($ millions, except per |
Quarter Ended |
Six Months Ended |
|||||||||||||
2022 |
2021 |
Y/Y |
Y/Y (CFX) |
2022 |
2021 |
Y/Y |
Y/Y (CFX) |
||||||||
Net sales |
$ 3,488 |
$ 3,701 |
(5.8) % |
(0.5) % |
$ 6,902 |
$ 7,109 |
(2.9) % |
1.2 % |
|||||||
Adjusted net sales |
$ 3,454 |
$ 3,629 |
(4.8) % |
0.5 % |
$ 6,814 |
$ 6,984 |
(2.4) % |
1.7 % |
|||||||
Organic sales growth |
0.4 % |
1.6 % |
|||||||||||||
GAAP |
|||||||||||||||
Operating profit |
$ 487 |
$ 561 |
$ (74) |
$ 1,013 |
$ 1,070 |
$ (57) |
|||||||||
Operating profit margin |
14.0 % |
15.2 % |
(120) bps |
14.7 % |
15.1 % |
(40) bps |
|||||||||
Net income |
$ 321 |
$ 326 |
(1.5) % |
$ 632 |
$ 634 |
(0.3) % |
|||||||||
Earnings per share |
$ 0.76 |
$ 0.76 |
— % |
$ 1.48 |
|
0.7 % |
|||||||||
Adjusted non-GAAP comparison |
|||||||||||||||
Operating profit |
$ 541 |
$ 562 |
$ (21) |
$ 16 |
$ 1,078 |
$ 1,085 |
$ (7) |
$ 50 |
|||||||
Operating profit margin |
15.7 % |
15.5 % |
20 bps |
15.8 % |
15.5 % |
30 bps |
|||||||||
Net income |
$ 365 |
$ 333 |
9.6 % |
$ 689 |
$ 637 |
8.2 % |
|||||||||
Earnings per share |
$ 0.86 |
$ 0.77 |
11.7 % |
$ 1.62 |
|
10.2 % |
Second quarter net sales of
Second quarter GAAP operating profit of
GAAP EPS of
First half net sales decreased 2.9% from a 1.6% increase in organic sales more than offset by a 4.1% headwind from foreign exchange. GAAP and adjusted operating profit decreased
New Equipment
Quarter Ended |
Six Months Ended |
|||||||||||||||
($ millions) |
2022 |
2021 |
Y/Y |
Y/Y (CFX) |
2022 |
2021 |
Y/Y |
Y/Y (CFX) |
||||||||
Net sales |
$ 1,534 |
$ 1,727 |
(11.2) % |
(7.4) % |
$ 2,956 |
$ 3,185 |
(7.2) % |
(4.5) % |
||||||||
Adjusted net sales |
$ 1,509 |
$ 1,663 |
(9.3) % |
(5.5) % |
$ 2,884 |
$ 3,076 |
(6.2) % |
(3.5) % |
||||||||
Organic sales |
(5.0) % |
(3.2) % |
||||||||||||||
GAAP |
||||||||||||||||
Operating profit |
$ 99 |
$ 147 |
$ (48) |
$ 192 |
$ 251 |
$ (59) |
||||||||||
Operating profit margin |
6.5 % |
8.5 % |
(200) bps |
6.5 % |
7.9 % |
(140) bps |
||||||||||
Adjusted non-GAAP comparison |
||||||||||||||||
Operating profit |
$ 113 |
$ 142 |
$ (29) |
$ (28) |
$ 206 |
$ 240 |
$ (34) |
$ (35) |
||||||||
Operating profit margin |
7.5 % |
8.5 % |
(100) bps |
7.1 % |
7.8 % |
(70) bps |
In the second quarter, net sales of
GAAP operating profit of
New Equipment orders were up 16.5%, at constant currency as more than 50% growth in the
First half net sales decreased 7.2% with a 3.2% decrease in organic sales and a 2.7% headwind from foreign exchange. GAAP operating profit decreased
Service
Quarter Ended |
Six Months Ended |
|||||||||||||||
($ millions) |
2022 |
2021 |
Y/Y |
Y/Y (CFX) |
2022 |
2021 |
Y/Y |
Y/Y (CFX) |
||||||||
Net sales |
$ 1,954 |
$ 1,974 |
(1.0) % |
5.5 % |
$ 3,946 |
$ 3,924 |
0.6 % |
5.7 % |
||||||||
Adjusted net sales |
$ 1,945 |
$ 1,966 |
(1.1) % |
5.4 % |
$ 3,930 |
$ 3,908 |
0.6 % |
5.7 % |
||||||||
Organic sales |
5.2 % |
5.5 % |
||||||||||||||
GAAP |
||||||||||||||||
Operating profit |
$ 435 |
$ 441 |
$ (6) |
$ 882 |
$ 871 |
$ 11 |
||||||||||
Operating profit margin |
22.3 % |
22.3 % |
0 bps |
22.4 % |
22.2 % |
20 bps |
||||||||||
Adjusted non-GAAP comparison |
||||||||||||||||
Operating profit |
$ 449 |
$ 445 |
$ 4 |
$ 39 |
$ 908 |
$ 887 |
$ 21 |
$ 79 |
||||||||
Operating profit margin |
23.1 % |
22.6 % |
50 bps |
23.1 % |
22.7 % |
40 bps |
In the second quarter, net sales of
GAAP operating profit of
First half net sales increased 0.6% with a 5.5% increase in organic sales and a 5.1% headwind from foreign exchange. GAAP operating profit increased
Cash flow
Quarter Ended |
Six Months Ended |
|||||||||||
($ millions) |
2022 |
2021 |
Y/Y |
2022 |
2021 |
Y/Y |
||||||
Cash flow from operations |
$ 353 |
$ 533 |
$ (180) |
$ 857 |
$ 1,118 |
$ (261) |
||||||
Free cash flow |
$ 326 |
$ 493 |
$ (167) |
$ 800 |
$ 1,034 |
$ (234) |
||||||
Free cash flow conversion |
102 % |
151 % |
127 % |
163 % |
Second quarter cash from operations of
2022 Outlook1
- Adjusted net sales of
$13.6 to$13.8 billion , down 2 to 3% - Organic sales up 2.5 to 3.5%
- Organic New Equipment sales down 0.5 to 1.0%
- Organic Service sales up 5.5 to 6.5%
- Adjusted operating profit of
$2.1 to$2.2 billion , up$120 to$150 million at constant currency; up$5 million to down$25 million at actual currency - Adjusted EPS of
$3.17 to$3.21 , up 7 to 9%; adjusted effective tax rate of 26.5 to 26.7% - Free cash flow of
~$1.6 billion with conversion of approximately 125% of GAAP net income
1Note: 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
Use and Definitions of Non-GAAP Financial Measures
Adjusted net sales, organic sales, adjusted selling, general and administrative ("SG&A") expense, adjusted operating profit, adjusted net income, adjusted diluted earnings per share ("EPS"), adjusted effective tax rate, adjusted remaining performance obligation ("RPO"), constant currency and free cash flow are non-GAAP financial measures.
Adjusted net sales represents net sales (a GAAP measure), excluding significant items of a non-recurring and/or nonoperational nature ("other significant items").
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. 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 and other significant items.
Adjusted general corporate expenses and other represents general corporate expenses and other (a GAAP measure), excluding restructuring costs and other significant items.
Adjusted operating profit represents income from continuing operations (a GAAP measure), excluding restructuring costs and other significant items.
Adjusted net interest expense represents net interest expense (a GAAP measure), adjusted for the impacts of non-recurring acquisition related financing costs and related net interest expense pending the completion of a transaction.
The adjusted effective tax rate represents the effective tax rate (a GAAP measure) adjusted for other significant items and the tax impact of restructuring costs and other significant items.
Adjusted net income represents net income attributable to
Adjusted RPO represents RPO (a GAAP measure) excluding other significant items.
Management believes that adjusted net sales, organic sales, adjusted SG&A, adjusted general corporate expenses and other, adjusted operating profit, adjusted net income, adjusted EPS, the adjusted effective tax rate and adjusted RPO are useful measures in providing period-to-period comparisons of the results of the Company's ongoing operational performance.
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 adjusted net sales, 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
|
|||||||||
Condensed Consolidated Statements of Operations |
|||||||||
Quarter Ended |
Six Months Ended |
||||||||
(Unaudited) |
(Unaudited) |
||||||||
(amounts in millions, except per share amounts) |
2022 |
2021 |
2022 |
2021 |
|||||
|
$ 3,488 |
$ 3,701 |
$ 6,902 |
$ 7,109 |
|||||
Costs and Expenses: |
|||||||||
Cost of products and services sold |
2,505 |
2,626 |
4,913 |
5,015 |
|||||
Research and development |
38 |
39 |
75 |
74 |
|||||
Selling, general and administrative |
439 |
484 |
898 |
966 |
|||||
Total Costs and Expenses |
2,982 |
3,149 |
5,886 |
6,055 |
|||||
Other income (expense), net |
(19) |
9 |
(3) |
16 |
|||||
Operating profit |
487 |
561 |
1,013 |
1,070 |
|||||
Non-service pension cost (benefit) |
1 |
2 |
1 |
4 |
|||||
Interest expense (income), net |
35 |
27 |
72 |
59 |
|||||
Net income before income taxes |
451 |
532 |
940 |
1,007 |
|||||
Income tax expense |
103 |
153 |
239 |
276 |
|||||
Net income |
348 |
379 |
701 |
731 |
|||||
Less: Noncontrolling interest in subsidiaries' earnings |
27 |
53 |
69 |
97 |
|||||
Net income attributable to |
$ 321 |
$ 326 |
$ 632 |
$ 634 |
|||||
Earnings Per Share of Common Stock: |
|||||||||
Basic |
$ 0.76 |
$ 0.76 |
$ 1.49 |
$ 1.48 |
|||||
Diluted |
$ 0.76 |
$ 0.76 |
$ 1.48 |
$ 1.47 |
|||||
Weighted Average Number of Shares Outstanding: |
|||||||||
Basic shares |
421.4 |
427.9 |
422.8 |
429.8 |
|||||
Diluted Shares |
424.2 |
431.6 |
425.9 |
432.7 |
|
||||||||
Segment |
||||||||
Quarter Ended |
Quarter Ended |
|||||||
(Unaudited) |
(Unaudited) |
|||||||
(dollars in millions) |
2022 |
2021 |
||||||
Reported |
Adjusted |
Reported |
Adjusted * |
|||||
|
||||||||
New Equipment |
$ 1,534 |
$ 1,509 |
$ 1,727 |
$ 1,663 |
||||
Service |
1,954 |
1,945 |
1,974 |
1,966 |
||||
Consolidated |
$ 3,488 |
$ 3,454 |
$ 3,701 |
$ 3,629 |
||||
Operating Profit |
||||||||
New Equipment |
$ 99 |
$ 113 |
$ 147 |
$ 142 |
||||
Service |
435 |
449 |
441 |
445 |
||||
Segment Operating Profit |
534 |
562 |
588 |
587 |
||||
General corporate expenses and other |
(47) |
(21) |
(27) |
(25) |
||||
Consolidated Operating Profit |
$ 487 |
$ 541 |
$ 561 |
$ 562 |
||||
Segment Operating Profit Margin |
||||||||
New Equipment |
6.5 % |
7.5 % |
8.5 % |
8.5 % |
||||
Service |
22.3 % |
23.1 % |
22.3 % |
22.6 % |
||||
Total Operating Profit Margin |
14.0 % |
15.7 % |
15.2 % |
15.5 % |
||||
Six Months Ended |
Six Months Ended |
|||||||
(Unaudited) |
(Unaudited) |
|||||||
(dollars in millions) |
2022 |
2021 |
||||||
Reported |
Adjusted |
Reported |
Adjusted * |
|||||
|
||||||||
New Equipment |
$ 2,956 |
$ 2,884 |
$ 3,185 |
$ 3,076 |
||||
Service |
3,946 |
3,930 |
3,924 |
3,908 |
||||
Consolidated |
$ 6,902 |
$ 6,814 |
$ 7,109 |
$ 6,984 |
||||
Operating Profit |
||||||||
New Equipment |
$ 192 |
$ 206 |
$ 251 |
$ 240 |
||||
Service |
882 |
908 |
871 |
887 |
||||
Segment Operating Profit |
1,074 |
1,114 |
1,122 |
1,127 |
||||
General corporate expenses and other |
(61) |
(36) |
(52) |
(42) |
||||
Consolidated Operating Profit |
$ 1,013 |
$ 1,078 |
$ 1,070 |
$ 1,085 |
||||
Segment Operating Profit Margin |
||||||||
New Equipment |
6.5 % |
7.1 % |
7.9 % |
7.8 % |
||||
Service |
22.4 % |
23.1 % |
22.2 % |
22.7 % |
||||
Total Operating Profit Margin |
14.7 % |
15.8 % |
15.1 % |
15.5 % |
* Adjusted amounts presented for 2021 periods have been adjusted to exclude the impact of our operations in |
|
||||||||
Reconciliation of Reported (GAAP) to Adjusted Operating Profit & Operating Profit Margin |
||||||||
Quarter Ended |
Six Months Ended |
|||||||
(Unaudited) |
(Unaudited) |
|||||||
(dollars in millions) |
2022 |
2021 * |
2022 |
2021 * |
||||
New Equipment |
||||||||
GAAP Net sales |
$ 1,534 |
$ 1,727 |
$ 2,956 |
$ 3,185 |
||||
|
(25) |
(64) |
(72) |
(109) |
||||
Adjusted New Equipment Sales |
$ 1,509 |
$ 1,663 |
$ 2,884 |
$ 3,076 |
||||
GAAP Operating profit |
99 |
147 |
192 |
251 |
||||
Restructuring |
12 |
8 |
16 |
13 |
||||
|
2 |
(13) |
(2) |
(24) |
||||
Adjusted New Equipment Operating Profit |
$ 113 |
$ 142 |
$ 206 |
$ 240 |
||||
Reported New Equipment Operating Profit Margin |
6.5 % |
8.5 % |
6.5 % |
7.9 % |
||||
Adjusted Service Operating Profit Margin |
7.5 % |
8.5 % |
7.1 % |
7.8 % |
||||
Service |
||||||||
GAAP Net sales |
$ 1,954 |
$ 1,974 |
$ 3,946 |
$ 3,924 |
||||
|
(9) |
(8) |
(16) |
(16) |
||||
Adjusted Service Sales |
$ 1,945 |
$ 1,966 |
$ 3,930 |
$ 3,908 |
||||
GAAP Operating profit |
435 |
441 |
882 |
871 |
||||
Restructuring |
13 |
3 |
23 |
13 |
||||
|
1 |
1 |
3 |
3 |
||||
Adjusted Service Operating Profit |
$ 449 |
$ 445 |
$ 908 |
$ 887 |
||||
Reported Service Operating Profit Margin |
22.3 % |
22.3 % |
22.4 % |
22.2 % |
||||
Adjusted Service Operating Profit Margin |
23.1 % |
22.6 % |
23.1 % |
22.7 % |
||||
General corporate expenses and other |
||||||||
GAAP General corporate expenses and other |
$ (47) |
$ (27) |
$ (61) |
$ (52) |
||||
|
8 |
2 |
6 |
1 |
||||
|
18 |
— |
18 |
— |
||||
One-time separation costs, net |
— |
— |
1 |
9 |
||||
Adjusted General corporate expenses and other |
$ (21) |
$ (25) |
$ (36) |
$ (42) |
||||
Total |
||||||||
GAAP Operating profit |
$ 487 |
$ 561 |
$ 1,013 |
$ 1,070 |
||||
Restructuring |
25 |
11 |
39 |
26 |
||||
|
11 |
(10) |
7 |
(20) |
||||
|
18 |
— |
18 |
— |
||||
One-time separation costs, net and other |
— |
— |
1 |
9 |
||||
Adjusted Total Operating Profit |
$ 541 |
$ 562 |
$ 1,078 |
$ 1,085 |
||||
Reported Total Operating Profit Margin |
14.0 % |
15.2 % |
14.7 % |
15.1 % |
||||
Adjusted Total Operating Profit Margin |
15.7 % |
15.5 % |
15.8 % |
15.5 % |
* Adjusted amounts presented for 2021 periods have been adjusted to exclude the impact of our operations in |
|
||||||||
Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Net Income, Earnings Per Share, and Effective Tax Rate |
||||||||
Quarter Ended |
Six Months Ended |
|||||||
(Unaudited) |
(Unaudited) |
|||||||
(dollars in millions, except per share amounts) |
2022 |
2021 * |
2022 |
2021 * |
||||
Adjusted Operating Profit |
$ 541 |
$ 562 |
$ 1,078 |
$ 1,085 |
||||
Non-service pension cost (benefit) |
1 |
2 |
1 |
4 |
||||
Net interest expense 1, 2 |
35 |
28 |
68 |
60 |
||||
Adjusted income from operations before income taxes |
505 |
532 |
1,009 |
1,021 |
||||
Income tax expense |
103 |
153 |
239 |
276 |
||||
Tax impact on restructuring and non-recurring items |
9 |
4 |
11 |
5 |
||||
Non-recurring tax items |
1 |
(11) |
1 |
6 |
||||
Adjusted net income from operations |
392 |
386 |
758 |
734 |
||||
Noncontrolling interest |
27 |
53 |
69 |
97 |
||||
Adjusted net income attributable to |
$ 365 |
$ 333 |
$ 689 |
$ 637 |
||||
GAAP net income attributable to common shareholders |
$ 321 |
$ 326 |
$ 632 |
$ 634 |
||||
Restructuring |
25 |
11 |
39 |
26 |
||||
Zardoya |
— |
— |
5 |
— |
||||
|
11 |
(11) |
6 |
(21) |
||||
|
18 |
— |
18 |
— |
||||
One-time separation costs, net and other |
— |
— |
1 |
9 |
||||
Tax effects of restructuring, non-recurring items and other adjustments |
(9) |
(4) |
(11) |
(5) |
||||
Non-recurring tax items |
(1) |
11 |
(1) |
(6) |
||||
Adjusted net income attributable to common shareholders |
$ 365 |
$ 333 |
$ 689 |
$ 637 |
||||
Diluted Earnings Per Share |
$ 0.76 |
$ 0.76 |
$ 1.48 |
$ 1.47 |
||||
Impact to diluted earnings per share |
0.10 |
0.01 |
0.14 |
— |
||||
Adjusted Diluted Earnings Per Share |
$ 0.86 |
$ 0.77 |
$ 1.62 |
$ 1.47 |
||||
Effective Tax Rate |
22.8 % |
28.8 % |
25.4 % |
27.4 % |
||||
Impact of adjustments on effective tax rate |
(0.4) % |
(1.4) % |
(0.5) % |
0.7 % |
||||
Adjusted Effective Tax Rate |
22.4 % |
27.4 % |
24.9 % |
28.1 % |
* Adjusted amounts presented for 2021 periods have been adjusted to exclude the impact of our operations in |
1 |
2 Net interest expense is reflected as adjusted, without |
|
||||||||||
Components of Changes in |
||||||||||
Quarter Ended |
||||||||||
Factors Contributing to Total % Change in |
||||||||||
Organic |
|
FX Translation |
Acquisitions / Divestitures, |
Total |
||||||
New Equipment |
(5.0) % |
(1.9) % |
(3.8) % |
(0.5) % |
(11.2) % |
|||||
Service |
5.2 % |
0.1 % |
(6.5) % |
0.2 % |
(1.0) % |
|||||
Maintenance and Repair |
4.9 % |
0.1 % |
(6.5) % |
0.2 % |
(1.3) % |
|||||
Modernization |
6.4 % |
— % |
(6.1) % |
— % |
0.3 % |
|||||
Total |
0.4 % |
(1.0) % |
(5.3) % |
0.1 % |
(5.8) % |
|||||
Six Months Ended |
||||||||||
Factors Contributing to Total % Change in |
||||||||||
Organic |
|
FX Translation |
Acquisitions / Divestitures, |
Total |
||||||
New Equipment |
(3.2) % |
(1.0) % |
(2.7) % |
(0.3) % |
(7.2) % |
|||||
Service |
5.5 % |
— % |
(5.1) % |
0.2 % |
0.6 % |
|||||
Maintenance and Repair |
5.2 % |
— % |
(5.1) % |
0.2 % |
0.3 % |
|||||
Modernization |
6.7 % |
— % |
(4.9) % |
— % |
1.8 % |
|||||
Total |
1.6 % |
(0.5) % |
(4.1) % |
0.1 % |
(2.9) % |
Components of New Equipment Backlog |
||
Growth % |
||
Q2 2022 |
||
New Equipment Backlog increase at actual currency |
6 % |
|
|
(2) % |
|
Foreign exchange impact to New Equipment Backlog |
6 % |
|
Adjusted New Equipment Backlog increase at constant currency |
10 % |
|
||||||
Reconciliation of Adjusted Operating Profit at Constant Currency |
||||||
Quarter Ended |
||||||
(dollars in millions) |
2022 |
2021 * |
Y/Y |
|||
New Equipment |
||||||
Adjusted Operating Profit |
$ 113 |
$ 142 |
$ (29) |
|||
Impact of foreign exchange |
1 |
1 |
||||
Adjusted Operating Profit at constant currency |
$ 114 |
$ 142 |
$ (28) |
|||
Service |
||||||
Adjusted Operating Profit |
$ 449 |
$ 445 |
$ 4 |
|||
Impact of foreign exchange |
35 |
35 |
||||
Adjusted Operating Profit at constant currency |
$ 484 |
$ 445 |
$ 39 |
|||
|
||||||
Adjusted Operating Profit |
$ 541 |
$ 562 |
$ (21) |
|||
Impact of foreign exchange |
37 |
37 |
||||
Adjusted Operating Profit at constant currency |
$ 578 |
$ 562 |
$ 16 |
|||
Six Months Ended |
||||||
(dollars in millions) |
2022 |
2021 * |
Y/Y |
|||
New Equipment |
||||||
Adjusted Operating Profit |
$ 206 |
$ 240 |
$ (34) |
|||
Impact of foreign exchange |
(1) |
(1) |
||||
Adjusted Operating Profit at constant currency |
$ 205 |
$ 240 |
$ (35) |
|||
Service |
||||||
Adjusted Operating Profit |
$ 908 |
$ 887 |
$ 21 |
|||
Impact of foreign exchange |
58 |
58 |
||||
Adjusted Operating Profit at constant currency |
$ 966 |
$ 887 |
$ 79 |
|||
|
||||||
Adjusted Operating Profit |
$ 1,078 |
$ 1,085 |
$ (7) |
|||
Impact of foreign exchange |
57 |
57 |
||||
Adjusted Operating Profit at constant currency |
$ 1,135 |
$ 1,085 |
$ 50 |
* Adjusted amounts presented for 2021 periods have been adjusted to exclude the impact of our operations in |
|
||||
Condensed Consolidated Balance Sheet |
||||
|
|
|||
(amounts in millions) |
(Unaudited) |
|||
Assets |
||||
Cash and cash equivalents |
$ 1,218 |
$ 1,565 |
||
Restricted cash |
12 |
1,910 |
||
Accounts receivable, net |
3,189 |
3,232 |
||
Contract assets |
608 |
550 |
||
Inventories |
596 |
622 |
||
Other current assets |
527 |
382 |
||
Total Current Assets |
6,150 |
8,261 |
||
Future income tax benefits |
306 |
335 |
||
Fixed assets, net |
724 |
774 |
||
Operating lease right-of-use assets |
512 |
526 |
||
Intangible assets, net |
385 |
419 |
||
|
1,550 |
1,667 |
||
Other assets |
286 |
297 |
||
Total Assets |
$ 9,913 |
$ 12,279 |
||
Liabilities and Equity (Deficit) |
||||
Short-term borrowings |
$ 81 |
$ 24 |
||
Accounts payable |
1,616 |
1,556 |
||
Accrued liabilities |
1,903 |
1,993 |
||
Contract liabilities |
2,738 |
2,674 |
||
Total Current Liabilities |
6,338 |
6,247 |
||
Long-term debt |
6,602 |
7,249 |
||
Future pension and postretirement benefit obligations |
531 |
558 |
||
Operating lease liabilities |
359 |
336 |
||
Future income tax obligations |
251 |
267 |
||
Other long-term liabilities |
584 |
606 |
||
Total Liabilities |
14,665 |
15,263 |
||
Redeemable noncontrolling interest |
136 |
160 |
||
Shareholders' Equity (Deficit): |
||||
Common Stock and additional paid-in capital |
121 |
119 |
||
Treasury Stock |
(1,125) |
(725) |
||
Accumulated deficit |
(3,245) |
(2,256) |
||
Accumulated other comprehensive income (loss) |
(748) |
(763) |
||
Total Shareholders' Equity (Deficit) |
(4,997) |
(3,625) |
||
Noncontrolling interest |
109 |
481 |
||
Total Equity (Deficit) |
(4,888) |
(3,144) |
||
Total Liabilities and Equity (Deficit) |
$ 9,913 |
$ 12,279 |
|
||||||||
Condensed Consolidated Statement of Cash Flows |
||||||||
Quarter Ended |
Six Months Ended |
|||||||
(Unaudited) |
(Unaudited) |
|||||||
(dollars in millions) |
2022 |
2021 |
2022 |
2021 |
||||
Operating Activities: |
||||||||
Net income from operations |
$ 348 |
$ 379 |
$ 701 |
$ 731 |
||||
Adjustments to reconcile net income to net cash flows provided by operating activities: |
||||||||
Depreciation and amortization |
49 |
51 |
97 |
102 |
||||
Stock compensation cost |
15 |
17 |
28 |
31 |
||||
Change in: |
||||||||
Accounts receivable, net |
(53) |
(40) |
(104) |
(54) |
||||
Contract assets and liabilities, current |
(144) |
(103) |
134 |
225 |
||||
Inventories |
(25) |
22 |
(39) |
(17) |
||||
Accounts payable |
171 |
95 |
135 |
124 |
||||
Pension contributions |
(9) |
(5) |
(21) |
(18) |
||||
Other operating activities, net |
1 |
117 |
(74) |
(6) |
||||
Net cash flows provided by operating activities |
353 |
533 |
857 |
1,118 |
||||
Investing Activities: |
||||||||
Capital expenditures |
(27) |
(40) |
(57) |
(84) |
||||
Investments in businesses and intangible assets, net of cash acquired |
(20) |
(27) |
(28) |
(51) |
||||
Proceeds from sale of (investments in) marketable securities, net |
— |
58 |
(7) |
40 |
||||
Other investing activities, net |
54 |
(8) |
82 |
28 |
||||
Net cash flows used in investing activities |
7 |
(17) |
(10) |
(67) |
||||
Financing Activities: |
||||||||
Increase (decrease) in short-term borrowings, net |
31 |
(3) |
57 |
(345) |
||||
Issuance of long-term debt, net |
— |
— |
— |
199 |
||||
Payment of debt issuance costs |
— |
— |
— |
(2) |
||||
Repayment of long-term debt |
— |
— |
(500) |
— |
||||
Dividends paid on Common Stock |
(122) |
(102) |
(224) |
(189) |
||||
Repurchases of Common Stock |
(200) |
(206) |
(400) |
(506) |
||||
Dividends paid to noncontrolling interest |
(8) |
(23) |
(41) |
(55) |
||||
Acquisition of |
(1,802) |
— |
(1,802) |
— |
||||
Other financing activities, net |
(13) |
(8) |
(27) |
(18) |
||||
Net cash flows provided by (used in) financing activities |
(2,114) |
(342) |
(2,937) |
(916) |
||||
Summary of Activity: |
||||||||
Net cash provided by operating activities |
353 |
533 |
857 |
1,118 |
||||
Net cash used in investing activities |
7 |
(17) |
(10) |
(67) |
||||
Net cash provided by (used in) financing activities |
(2,114) |
(342) |
(2,937) |
(916) |
||||
Effect of foreign exchange rate changes on cash and cash equivalents |
(59) |
25 |
(122) |
8 |
||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(1,813) |
199 |
(2,212) |
143 |
||||
Cash, cash equivalents and restricted cash, beginning of period |
3,078 |
1,745 |
3,477 |
1,801 |
||||
Cash, cash equivalents and restricted cash, end of period |
1,265 |
1,944 |
1,265 |
1,944 |
||||
Less: Restricted cash |
13 |
21 |
13 |
21 |
||||
Less: Cash and cash equivalents in held for sale assets |
34 |
— |