OTIS REPORTS THIRD QUARTER 2024 RESULTS
- GAAP EPS up 47.3% and adjusted EPS up 1.1%
- Service net sales up 7.2% and Service organic sales up 7.7%
- Maintenance portfolio units increased 4.2%
- Mod orders up 3%, backlog up 14%, up 12% at constant currency
- GAAP cash flow from operations of
$394 million ; adjusted free cash flow of$381 million - Share repurchases of
$200 million - YTD GAAP EPS up 24.2% and YTD adjusted EPS up 8.2%, share repurchases of
$800 million - Updated full-year outlook1: adjusted EPS of
~$3.85 with ~6.5% Service organic sales growth and ~75 basis points of Service margin expansion
"
($ millions, except per share amounts) |
Quarter Ended |
|
Nine Months Ended |
||||||||||||
2024 |
|
2023 |
|
Y/Y |
|
Y/Y |
|
2024 |
|
2023 |
|
Y/Y |
|
Y/Y |
|
Net sales |
$ 3,548 |
|
$ 3,523 |
|
0.7 % |
|
1.5 % |
|
|
|
|
|
— % |
|
1.4 % |
Organic sales growth |
|
|
|
|
|
|
1.2 % |
|
|
|
|
|
|
|
1.2 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|||||||||||||||
Operating profit |
$ 363 |
|
$ 571 |
|
$ (208) |
|
|
|
$ 1,477 |
|
$ 1,664 |
|
$ (187) |
|
|
Operating profit margin |
10.2 % |
|
16.2 % |
|
(600) bps |
|
|
|
14.0 % |
|
15.7 % |
|
(170) bps |
|
|
Net income |
$ 540 |
|
$ 376 |
|
43.6 % |
|
|
|
$ 1,308 |
|
$ 1,083 |
|
20.8 % |
|
|
Earnings per share |
$ 1.34 |
|
$ 0.91 |
|
47.3 % |
|
|
|
$ 3.23 |
|
$ 2.60 |
|
24.2 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP comparison |
|||||||||||||||
Operating profit |
$ 599 |
|
$ 595 |
|
$ 4 |
|
$ 8 |
|
$ 1,773 |
|
$ 1,703 |
|
$ 70 |
|
$ 96 |
Operating profit margin |
16.9 % |
|
16.9 % |
|
0 bps |
|
|
|
16.7 % |
|
16.1 % |
|
60 bps |
|
|
Net income |
$ 385 |
|
$ 395 |
|
(2.5) % |
|
|
|
$ 1,174 |
|
$ 1,113 |
|
5.5 % |
|
|
Earnings per share |
$ 0.96 |
|
$ 0.95 |
|
1.1 % |
|
|
|
$ 2.90 |
|
$ 2.68 |
|
8.2 % |
|
|
Third quarter net sales of
Third quarter GAAP operating profit of
GAAP EPS of
New Equipment
|
|
Quarter Ended |
|
Nine Months Ended |
||||||||||||
($ millions) |
|
2024 |
|
2023 |
|
Y/Y |
|
Y/Y |
|
2024 |
|
2023 |
|
Y/Y |
|
Y/Y |
Net sales |
|
$ 1,309 |
|
$ 1,435 |
|
(8.8) % |
|
(8.1) % |
|
$ 4,010 |
|
$ 4,346 |
|
(7.7) % |
|
(6.2) % |
Organic sales |
|
|
|
|
|
|
|
(8.2) % |
|
|
|
|
|
|
|
(6.3) % |
Segment operating profit |
|
$ 84 |
|
$ 104 |
|
$ (20) |
|
$ (20) |
|
$ 265 |
|
$ 292 |
|
$ (27) |
|
$ (20) |
Segment operating profit margin |
|
6.4 % |
|
7.2 % |
|
(80) bps |
|
|
|
6.6 % |
|
6.7 % |
|
(10) bps |
|
|
In the third quarter, net sales of
Segment operating profit of
New Equipment orders were down 3% at constant currency with greater than 20% growth in the
Service
|
|
Quarter Ended |
|
Nine Months Ended |
||||||||||||
($ millions) |
|
2024 |
|
2023 |
|
Y/Y |
|
Y/Y |
|
2024 |
|
2023 |
|
Y/Y |
|
Y/Y |
Net sales |
|
$ 2,239 |
|
$ 2,088 |
|
7.2 % |
|
8.0 % |
|
$ 6,576 |
|
$ 6,243 |
|
5.3 % |
|
6.6 % |
Organic sales |
|
|
|
|
|
|
|
7.7 % |
|
|
|
|
|
|
|
6.4 % |
Segment operating profit |
|
$ 555 |
|
$ 518 |
|
$ 37 |
|
$ 40 |
|
$ 1,616 |
|
$ 1,496 |
|
$ 120 |
|
$ 138 |
Segment operating profit margin |
|
24.8 % |
|
24.8 % |
|
0 bps |
|
|
|
24.6 % |
|
24.0 % |
|
60 bps |
|
|
In the third quarter, net sales of
Segment operating profit of
Cash flow
|
|
Quarter Ended |
|
Nine Months Ended |
||||||||
($ millions) |
|
2024 |
|
2023 |
|
Y/Y |
|
2024 |
|
2023 |
|
Y/Y |
Cash flow from operations |
|
$ 394 |
|
$ 306 |
|
$ 88 |
|
$ 873 |
|
$ 1,030 |
|
$ (157) |
Free cash flow |
|
$ 362 |
|
$ 272 |
|
$ 90 |
|
$ 786 |
|
$ 934 |
|
$ (148) |
Adjusted free cash flow |
|
$ 381 |
|
$ 274 |
|
$ 107 |
|
$ 889 |
|
$ 961 |
|
$ (72) |
Third quarter cash flow changes were driven by an increase in net income partially offset by changes in working capital.
2024
Outlook1
- Net sales of
~$14.2 billion - Organic sales up ~1.5%
- Organic New Equipment sales down mid to high single digits
- Organic Service sales up ~6.5%
- Adjusted operating profit of
~$2.375 billion , up~$140 million at constant currency; up~$105 million at actual currency - Adjusted EPS of
~$3.85 , up ~9%; adjusted effective tax rate of approximately 25.0% - Adjusted free cash flow of approximately
$1.4 billion to$1.5 billion
1Note: When we provide outlook for organic sales, adjusted operating profit, adjusted effective tax rate and adjusted 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
Non-GAAP measure |
Definition |
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 selling, general and administrative ("SG&A") expense |
Represents SG&A expense (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 and other significant items. |
Adjusted noncontrolling interest in earnings |
Represents noncontrolling interest in earnings (a GAAP measure), excluding restructuring costs and other significant items, including related tax effects. |
Adjusted net income |
Represents net income attributable to |
Adjusted earnings per share ("EPS") |
Represents diluted earnings per share attributable to common shareholders (a GAAP measure), adjusted for the per share impact of restructuring and other significant items, including related tax effects. |
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. |
Constant currency |
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 |
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 |
Adjusted free cash flow |
Represents cash flow from operations (a GAAP measure) less capital expenditures, adjusted to exclude certain items management believes affect the comparability of operating results. Management believes adjusted free cash flow is a useful measure of liquidity that provides investors additional information regarding the Company's ability to fund its activities, including the financing of acquisitions, debt service, repurchases of common stock and distribution of earnings to shareholders. Adjusted free cash flow should not be considered an alternative to, or more meaningful than, net cash flows provided by operating activities, or any other measure of liquidity presented in accordance with GAAP. |
Management believes that organic sales, adjusted SG&A, adjusted operating profit, adjusted net interest expense, adjusted noncontrolling interest in earnings, 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.
When we provide our expectations for adjusted net sales, organic sales, adjusted operating profit, adjusted net interest expense, adjusted noncontrolling interest in earnings, adjusted net income, adjusted effective tax rate, adjusted EPS, free cash flow and adjusted 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 |
|
Nine Months Ended |
||||
|
|
|
(Unaudited) |
|
(Unaudited) |
||||
(amounts in millions, except per share amounts) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
$ 3,548 |
|
$ 3,523 |
|
$ 10,586 |
|
$ 10,589 |
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of products and services sold |
|
2,470 |
|
2,477 |
|
7,401 |
|
7,464 |
|
Research and development |
|
40 |
|
36 |
|
115 |
|
107 |
|
Selling, general and administrative |
|
455 |
|
452 |
|
1,366 |
|
1,386 |
|
Total Costs and Expenses |
|
2,965 |
|
2,965 |
|
8,882 |
|
8,957 |
Other income (expense), net |
|
(220) |
|
13 |
|
(227) |
|
32 |
|
Operating profit |
|
363 |
|
571 |
|
1,477 |
|
1,664 |
|
|
Non-service pension cost (benefit) |
|
1 |
|
— |
|
— |
|
1 |
|
Interest expense (income), net |
|
(150) |
|
39 |
|
(79) |
|
109 |
Net income before income taxes |
|
512 |
|
532 |
|
1,556 |
|
1,554 |
|
|
Income tax expense (benefit) |
|
(45) |
|
137 |
|
175 |
|
400 |
Net income |
|
557 |
|
395 |
|
1,381 |
|
1,154 |
|
|
Less: Noncontrolling interest in subsidiaries' earnings |
|
17 |
|
19 |
|
73 |
|
71 |
Net income attributable to |
|
$ 540 |
|
$ 376 |
|
$ 1,308 |
|
$ 1,083 |
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share of Common Stock: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ 1.35 |
|
$ 0.92 |
|
$ 3.25 |
|
$ 2.62 |
|
Diluted |
|
$ 1.34 |
|
$ 0.91 |
|
$ 3.23 |
|
$ 2.60 |
Weighted Average Number of Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic shares |
|
400.2 |
|
410.8 |
|
402.7 |
|
412.6 |
|
Diluted Shares |
|
402.7 |
|
413.7 |
|
405.4 |
|
415.8 |
Reconciliation of Reported (GAAP) to Adjusted Operating Profit & Operating Profit Margin |
||||||||
|
||||||||
|
|
Quarter Ended |
|
Nine Months Ended |
||||
|
|
(Unaudited) |
|
(Unaudited) |
||||
(dollars in millions) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
New Equipment |
|
$ 1,309 |
|
$ 1,435 |
|
$ 4,010 |
|
$ 4,346 |
Service |
|
2,239 |
|
2,088 |
|
6,576 |
|
6,243 |
Total |
|
$ 3,548 |
|
$ 3,523 |
|
$ 10,586 |
|
$ 10,589 |
|
|
|
|
|
|
|
|
|
Operating Profit |
|
|
|
|
|
|
|
|
New Equipment |
|
$ 84 |
|
$ 104 |
|
$ 265 |
|
$ 292 |
Service |
|
555 |
|
518 |
|
1,616 |
|
1,496 |
Total segment operating profit |
|
639 |
|
622 |
|
1,881 |
|
1,788 |
Corporate and Unallocated |
|
(276) |
|
(51) |
|
(404) |
|
(124) |
Total |
|
363 |
|
571 |
|
1,477 |
|
1,664 |
UpLift restructuring |
|
4 |
|
— |
|
11 |
|
— |
Other restructuring |
|
5 |
|
21 |
|
29 |
|
36 |
UpLift transformation costs |
|
18 |
|
4 |
|
45 |
|
4 |
Separation-related adjustments 1 |
|
193 |
|
— |
|
177 |
|
— |
Litigation and settlement costs 2 |
|
— |
|
— |
|
18 |
|
— |
Held for sale impairment |
|
18 |
|
— |
|
18 |
|
— |
Other, net |
|
(2) |
|
(1) |
|
(2) |
|
(1) |
Total |
|
$ 599 |
|
$ 595 |
|
$ 1,773 |
|
$ 1,703 |
Reported Total Operating Profit Margin |
|
10.2 % |
|
16.2 % |
|
14.0 % |
|
15.7 % |
Adjusted Total Operating Profit Margin |
|
16.9 % |
|
16.9 % |
|
16.7 % |
|
16.1 % |
|
1 Separation-related adjustments in the quarter and nine months ended |
|
2 Litigation-related settlement costs in the nine months ended |
|
|
|
Effective in the first quarter of 2024, the measure of segment performance used by |
|
As a result of the change, restructuring costs and other items not allocated to the operating segments are presented as part of Corporate and Unallocated. The financial information presented herein reflects the impact of the measure of segment performance change for all periods presented. |
Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Net Income, Earnings Per Share, and Effective Tax Rate |
||||||||
|
||||||||
|
|
Quarter Ended |
|
Nine Months Ended |
||||
|
|
(Unaudited) |
|
(Unaudited) |
||||
(dollars in millions, except per share amounts) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Adjusted Operating Profit |
|
$ 599 |
|
$ 595 |
|
$ 1,773 |
|
$ 1,703 |
Non-service pension cost (benefit) |
|
1 |
|
— |
|
— |
|
1 |
Adjusted net interest expense 1, 2 |
|
51 |
|
39 |
|
143 |
|
109 |
Adjusted income from operations before income taxes |
|
547 |
|
556 |
|
1,630 |
|
1,593 |
Income tax expense (benefit) |
|
(45) |
|
137 |
|
175 |
|
400 |
Tax impact on restructuring and non-recurring items |
|
5 |
|
5 |
|
24 |
|
9 |
Non-recurring tax items 1, 2 |
|
185 |
|
— |
|
195 |
|
— |
Adjusted net income from operations |
|
402 |
|
414 |
|
1,236 |
|
1,184 |
Adjusted noncontrolling interest 1 |
|
17 |
|
19 |
|
62 |
|
71 |
Adjusted net income attributable to common shareholders |
|
$ 385 |
|
$ 395 |
|
$ 1,174 |
|
$ 1,113 |
|
|
|
|
|
|
|
|
|
GAAP net income attributable to common shareholders |
|
$ 540 |
|
$ 376 |
|
$ 1,308 |
|
$ 1,083 |
UpLift restructuring |
|
4 |
|
— |
|
11 |
|
— |
Other restructuring |
|
5 |
|
21 |
|
29 |
|
36 |
UpLift transformation costs |
|
18 |
|
4 |
|
45 |
|
4 |
Separation-related adjustments |
|
193 |
|
— |
|
177 |
|
— |
Litigation-related settlement costs |
|
— |
|
— |
|
18 |
|
— |
Held for sale impairment |
|
18 |
|
— |
|
18 |
|
— |
Interest income related to non-recurring tax items 1, 2 |
|
(200) |
|
— |
|
(210) |
|
— |
Tax effects of restructuring, non-recurring items and other adjustments |
|
(5) |
|
(5) |
|
(24) |
|
(9) |
Non-recurring tax items 1, 2 |
|
(185) |
|
— |
|
(195) |
|
— |
Other, net |
|
(3) |
|
(1) |
|
(3) |
|
(1) |
Adjusted net income attributable to common shareholders |
|
$ 385 |
|
$ 395 |
|
$ 1,174 |
|
$ 1,113 |
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
$ 1.34 |
|
$ 0.91 |
|
$ 3.23 |
|
$ 2.60 |
Impact to diluted earnings per share |
|
(0.38) |
|
0.04 |
|
(0.33) |
|
0.08 |
Adjusted Earnings Per Share |
|
$ 0.96 |
|
$ 0.95 |
|
$ 2.90 |
|
$ 2.68 |
|
|
|
|
|
|
|
|
|
Effective Tax Rate |
|
(8.8) % |
|
25.8 % |
|
11.2 % |
|
25.7 % |
Impact of adjustments on effective tax rate |
|
35.5 % |
|
(0.3) % |
|
13.0 % |
|
— % |
Adjusted Effective Tax Rate |
|
26.7 % |
|
25.5 % |
|
24.2 % |
|
25.7 % |
|
1 Certain tax reserves were adjusted in the second quarter of 2024. As a result, Net interest expense and Noncontrolling interest are reflected as adjusted without |
|
2 In |
Components of Changes in |
|
|||||||
|
|
|||||||
Quarter Ended |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Factors Contributing to Total % Change in |
||||||
|
|
Organic |
|
FX Translation |
|
Acquisitions /
Divestitures, |
|
Total |
New Equipment |
|
(8.2) % |
|
(0.7) % |
|
0.1 % |
|
(8.8) % |
Service |
|
7.7 % |
|
(0.8) % |
|
0.3 % |
|
7.2 % |
Maintenance and Repair |
|
6.4 % |
|
(0.7) % |
|
0.4 % |
|
6.1 % |
Modernization |
|
13.7 % |
|
(1.1) % |
|
— % |
|
12.6 % |
Total |
|
1.2 % |
|
(0.8) % |
|
0.3 % |
|
0.7 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|||||||
|
|
|
|
|
||||
|
|
Factors Contributing to Total % Change in |
||||||
|
|
Organic |
|
FX Translation |
|
Acquisitions /
Divestitures, |
|
Total |
New Equipment |
|
(6.3) % |
|
(1.5) % |
|
0.1 % |
|
(7.7) % |
Service |
|
6.4 % |
|
(1.3) % |
|
0.2 % |
|
5.3 % |
Maintenance and Repair |
|
5.7 % |
|
(1.3) % |
|
0.3 % |
|
4.7 % |
Modernization |
|
9.7 % |
|
(1.8) % |
|
0.1 % |
|
8.0 % |
Total |
|
1.2 % |
|
(1.4) % |
|
0.2 % |
|
— % |
Components of Changes in New Equipment Backlog |
||
|
||
|
|
|
|
|
Y/Y Growth % |
New Equipment Backlog increase at actual currency |
|
(1) % |
Foreign exchange impact to New Equipment Backlog |
|
(2) % |
New Equipment Backlog increase at constant currency |
|
(3) % |
|
||
Components of Changes in Modernization Backlog |
||
|
||
|
|
|
|
|
Y/Y Growth % |
Modernization Backlog increase at actual currency |
|
14 % |
Foreign exchange impact to Modernization Backlog |
|
(2) % |
Modernization Backlog increase at constant currency |
|
12 % |
Reconciliation of Segment and Total Adjusted Operating Profit at Constant Currency |
||||||
|
||||||
Quarter Ended |
|
|
||||
|
|
|
|
|
|
|
(dollars in millions) |
|
2024 |
|
2023 |
|
Y/Y |
|
|
|
|
|
|
|
New Equipment |
|
|
|
|
|
|
Segment Operating Profit |
|
$ 84 |
|
$ 104 |
|
$ (20) |
Impact of foreign exchange |
|
— |
|
— |
|
— |
Segment Operating Profit at constant currency |
|
$ 84 |
|
$ 104 |
|
$ (20) |
|
|
|
|
|
|
|
Service |
|
|
|
|
|
|
Segment Operating Profit |
|
$ 555 |
|
$ 518 |
|
$ 37 |
Impact of foreign exchange |
|
3 |
|
— |
|
3 |
Segment Operating Profit at constant currency |
|
$ 558 |
|
$ 518 |
|
$ 40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Profit |
|
$ 599 |
|
$ 595 |
|
$ 4 |
Impact of foreign exchange |
|
4 |
|
— |
|
4 |
Adjusted Operating Profit at constant currency |
|
$ 603 |
|
$ 595 |
|
$ 8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
||||
|
|
|
|
|
|
|
(dollars in millions) |
|
2024 |
|
2023 |
|
Y/Y |
|
|
|
|
|
|
|
New Equipment |
|
|
|
|
|
|
Segment Operating Profit |
|
$ 265 |
|
$ 292 |
|
$ (27) |
Impact of foreign exchange |
|
7 |
|
— |
|
7 |
Segment Operating Profit at constant currency |
|
$ 272 |
|
$ 292 |
|
$ (20) |
|
|
|
|
|
|
|
Service |
|
|
|
|
|
|
Segment Operating Profit |
|
$ 1,616 |
|
$ 1,496 |
|
$ 120 |
Impact of foreign exchange |
|
18 |
|
— |
|
18 |
Segment Operating Profit at constant currency |
|
$ 1,634 |
|
$ 1,496 |
|
$ 138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Profit |
|
$ 1,773 |
|
$ 1,703 |
|
$ 70 |
Impact of foreign exchange |
|
26 |
|
— |
|
26 |
Adjusted Operating Profit at constant currency |
|
$ 1,799 |
|
$ 1,703 |
|
$ 96 |
Condensed Consolidated Balance Sheet |
||||
|
||||
|
|
|
|
|
(amounts in millions) |
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ 827 |
|
$ 1,274 |
Accounts receivable, net |
|
3,604 |
|
3,538 |
Contract assets |
|
776 |
|
717 |
Inventories |
|
625 |
|
612 |
Other current assets |
|
663 |
|
259 |
Total Current Assets |
|
6,495 |
|
6,400 |
Future income tax benefits |
|
315 |
|
323 |
Fixed assets, net |
|
721 |
|
727 |
Operating lease right-of-use assets |
|
409 |
|
416 |
Intangible assets, net |
|
330 |
|
335 |
|
|
1,630 |
|
1,588 |
Other assets |
|
361 |
|
328 |
Total Assets |
|
$ 10,261 |
|
$ 10,117 |
|
|
|
|
|
Liabilities and Equity (Deficit) |
|
|
|
|
Short-term borrowings and current portion of long-term debt |
|
$ 1,667 |
|
$ 32 |
Accounts payable |
|
1,779 |
|
1,878 |
Accrued liabilities |
|
1,864 |
|
1,873 |
Contract liabilities |
|
2,787 |
|
2,696 |
Total Current Liabilities |
|
8,097 |
|
6,479 |
Long-term debt |
|
5,596 |
|
6,866 |
Future pension and postretirement benefit obligations |
|
462 |
|
462 |
Operating lease liabilities |
|
286 |
|
292 |
Future income tax obligations |
|
215 |
|
245 |
Other long-term liabilities |
|
385 |
|
493 |
Total Liabilities |
|
15,041 |
|
14,837 |
|
|
|
|
|
Redeemable noncontrolling interest |
|
55 |
|
135 |
Shareholders' Equity (Deficit): |
|
|
|
|
Common Stock and additional paid-in capital |
|
245 |
|
213 |
Treasury Stock |
|
(3,189) |
|
(2,382) |
Accumulated deficit |
|
(1,153) |
|
(2,005) |
Accumulated other comprehensive income (loss) |
|
(804) |
|
(750) |
Total Shareholders' Equity (Deficit) |
|
(4,901) |
|
(4,924) |
Noncontrolling interest |
|
66 |
|
69 |
Total Equity (Deficit) |
|
(4,835) |
|
(4,855) |
Total Liabilities and Equity (Deficit) |
|
$ 10,261 |
|
$ 10,117 |
Condensed Consolidated Statement of Cash Flows |
||||||||
|
||||||||
|
|
Quarter Ended |
|
Nine Months Ended |
||||
|
|
(Unaudited) |
|
(Unaudited) |
||||
(dollars in millions) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Operating Activities: |
|
|
|
|
|
|
|
|
Net income from operations |
|
$ 557 |
|
$ 395 |
|
$ 1,381 |
|
$ 1,154 |
Adjustments to reconcile net income to net cash flows provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
48 |
|
46 |
|
133 |
|
145 |
Deferred income tax expense (benefit) |
|
(1) |
|
(18) |
|
(26) |
|
(34) |
Stock compensation cost |
|
16 |
|
15 |
|
52 |
|
49 |
Gain from reversal of German Tax Litigation interest accrual |
|
(50) |
|
— |
|
(50) |
|
— |
Change in: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
78 |
|
(10) |
|
(93) |
|
(214) |
Contract assets and liabilities, current |
|
(84) |
|
(86) |
|
23 |
|
68 |
Inventories |
|
(4) |
|
13 |
|
(14) |
|
(8) |
Other current assets |
|
(313) |
|
34 |
|
(373) |
|
(4) |
Accounts payable |
|
14 |
|
(78) |
|
(115) |
|
(35) |
Accrued liabilities |
|
129 |
|
19 |
|
2 |
|
(66) |
Pension contributions |
|
(10) |
|
(8) |
|
(34) |
|
(32) |
Other operating activities, net |
|
14 |
|
(16) |
|
(13) |
|
7 |
Net cash flows provided by (used in) operating activities |
|
394 |
|
306 |
|
873 |
|
1,030 |
Investing Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
(32) |
|
(34) |
|
(87) |
|
(96) |
Acquisitions of businesses and intangible assets, net of cash |
|
(30) |
|
(7) |
|
(70) |
|
(27) |
Proceeds from sale of (investments in) marketable securities, net |
|
(9) |
|
(2) |
|
(9) |
|
(2) |
Other investing activities, net |
|
(42) |
|
2 |
|
(44) |
|
(7) |
Net cash flows provided by (used in) investing activities |
|
(113) |
|
(41) |
|
(210) |
|
(132) |
Financing Activities: |
|
|
|
|
|
|
|
|
Increase (decrease) in short-term borrowings, net |
|
2 |
|
(147) |
|
325 |
|
(90) |
Issuance of long-term debt, net |
|
— |
|
747 |
|
— |
|
747 |
Payment of debt issuance costs |
|
— |
|
(6) |
|
— |
|
(6) |
Dividends paid on Common Stock |
|
(155) |
|
(139) |
|
(450) |
|
(400) |
Repurchases of Common Stock |
|
(200) |
|
(225) |
|
(800) |
|
(575) |
Dividends paid to noncontrolling interest |
|
(70) |
|
(61) |
|
(81) |
|
(76) |
Acquisition of noncontrolling interest shares |
|
— |
|
— |
|
(75) |
|
— |
Other financing activities, net |
|
— |
|
(2) |
|
(21) |
|
(18) |
Net cash flows provided by (used in) financing activities |
|
(423) |
|
167 |
|
(1,102) |
|
(418) |
Summary of Activity: |
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
394 |
|
306 |
|
873 |
|
1,030 |
Net cash provided by (used in) investing activities |
|
(113) |
|
(41) |
|
(210) |
|
(132) |
Net cash provided by (used in) financing activities |
|
(423) |
|
167 |
|
(1,102) |
|
(418) |
Effect of exchange rate changes on cash and cash equivalents |
|
23 |
|
(18) |
|
(9) |
|
(34) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
(119) |
|
414 |
|
(448) |
|
446 |
Cash, cash equivalents and restricted cash, beginning of period |
|
951 |
|
1,227 |
|
1,280 |
|
1,195 |
Cash, cash equivalents and restricted cash, end of period |
|
832 |
|
1,641 |
|
832 |
|
1,641 |
Less: Restricted cash |
|
5 |
|
5 |
|
5 |
|
5 |
Cash and cash equivalents, end of period |
|
$ 827 |
|
$ 1,636 |
|
$ 827 |
|
$ 1,636 |
Adjusted Free Cash Flow Reconciliation |
||||||||
|
||||||||
|
|
Quarter Ended |
|
Nine Months Ended |
||||
|
|
(Unaudited) |
|
(Unaudited) |
||||
(dollars in millions) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net cash flows provided by operating activities (GAAP) |
|
$ 394 |
|
$ 306 |
|
$ 873 |
|
$ 1,030 |
Capital expenditures |
|
(32) |
|
(34) |
|
(87) |
|
(96) |
Free cash flow (Non-GAAP) |
|
362 |
|
272 |
|
786 |
|
934 |
Adjustments for: |
|
|
|
|
|
|
|
|
UpLift restructuring payments |
|
6 |
|
— |
|
20 |
|
— |
UpLift transformation payments |
|
13 |
|
2 |
|
34 |
|
2 |
Separation-related payments 1 |
|
— |
|
— |
|
49 |
|
25 |
Adjusted free cash flow (Non-GAAP) |
|
$ 381 |
|
$ 274 |
|
$ 889 |
|
$ 961 |
|
|
|
|
|
|
|
|
|
1 In April of 2023 and 2024, respectively, we made payments to |
Media Contact:
+1-860-674-3047
Kathleen.Padgett@otis.com
Investor Relations Contact:
+1-860-676-6011
investorrelations@otis.com
View original content:https://www.prnewswire.com/news-releases/otis-reports-third-quarter-2024-results-302291394.html
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