Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 21, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39221 | ||
Entity Registrant Name | OTIS WORLDWIDE CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-3789412 | ||
Entity Address, Address Line One | One Carrier Place | ||
Entity Address, City or Town | Farmington | ||
Entity Address, State or Province | CT | ||
Entity Address, Postal Zip Code | 06032 | ||
City Area Code | 860 | ||
Local Phone Number | 674-3000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 34,888,309,556 | ||
Entity Common Stock, Shares Outstanding | 424,962,356 | ||
Documents Incorporated by Reference | Part III hereof incorporates by reference portions of the Otis Worldwide Corporation Proxy Statement for the 2022 Annual Meeting of Shareholders (the "2022 Proxy Statement"). The 2022 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001781335 | ||
Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock ($0.01 par value) | ||
Trading Symbol | OTIS | ||
Security Exchange Name | NYSE | ||
0.000% Notes due 2023 | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 0.000% Notes due 2023 | ||
Trading Symbol | OTIS/23 | ||
Security Exchange Name | NYSE | ||
0.318% Notes due 2026 | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 0.318% Notes due 2026 | ||
Trading Symbol | OTIS/26 | ||
Security Exchange Name | NYSE | ||
0.934% Notes due 2031 | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 0.934% Notes due 2031 | ||
Trading Symbol | OTIS/31 | ||
Security Exchange Name | NYSE |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 238 |
Auditor Location | Hartford, Connecticut |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net sales: | |||
Revenues | $ 14,298 | $ 12,756 | $ 13,118 |
Costs and expenses: | |||
Research and development | 159 | 152 | 163 |
Selling, general and administrative | 1,948 | 1,924 | 1,810 |
Costs and expenses | 12,212 | 11,053 | 11,265 |
Other income (expense), net | 22 | (64) | (39) |
Operating profit | 2,108 | 1,639 | 1,814 |
Non-service pension cost (benefit) | 11 | 6 | (33) |
Interest expense (income), net | 136 | 122 | (14) |
Net income before income taxes | 1,961 | 1,511 | 1,861 |
Income tax expense | 541 | 455 | 594 |
Net income | 1,420 | 1,056 | 1,267 |
Less: Noncontrolling interest in subsidiaries' earnings | 174 | 150 | 151 |
Net income attributable to Otis Worldwide Corporation | $ 1,246 | $ 906 | $ 1,116 |
Earnings per share (Note 3): | |||
Basic (in usd per share) | $ 2.91 | $ 2.09 | $ 2.55 |
Diluted (in usd per share) | $ 2.89 | $ 2.08 | $ 2.55 |
Weighted average number of shares outstanding | |||
Basic shares (in shares) | 427.7 | 433.2 | 433.1 |
Diluted shares (in shares) | 431.4 | 434.6 | 433.1 |
Product sales | |||
Net sales: | |||
Revenues | $ 6,428 | $ 5,371 | $ 5,648 |
Costs and expenses: | |||
Cost of products and services sold | 5,293 | 4,439 | 4,640 |
Service sales | |||
Net sales: | |||
Revenues | 7,870 | 7,385 | 7,470 |
Costs and expenses: | |||
Cost of products and services sold | $ 4,812 | $ 4,538 | $ 4,652 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,420 | $ 1,056 | $ 1,267 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments, net of tax | (53) | 8 | (26) |
Pension and postretirement benefit plan adjustments: | |||
Net actuarial gain (loss) | 71 | (43) | (28) |
Amortization of actuarial loss and prior service credit | 18 | 15 | 9 |
Other | 13 | (19) | (22) |
Total recognized in other comprehensive loss | 102 | (47) | (41) |
Tax benefit (expense) | (27) | 11 | 9 |
Pension and postretirement benefit plan adjustments, net of tax | 75 | (36) | (32) |
Change in unrealized cash flow hedging: | |||
Unrealized cash flow hedging gain (loss) | (1) | 10 | (3) |
Adjustment for net (gain) loss realized and included in net income | 4 | (3) | 0 |
Change in unrealized cash flow hedging, net of tax | 3 | 7 | (3) |
Other comprehensive income (loss), net of tax | 25 | (21) | (61) |
Comprehensive income | 1,445 | 1,035 | 1,206 |
Less: Comprehensive income attributable to noncontrolling interest | (147) | (186) | (140) |
Comprehensive income attributable to Otis Worldwide Corporation | $ 1,298 | $ 849 | $ 1,066 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 1,565 | $ 1,782 |
Restricted cash | 1,910 | 17 |
Accounts receivable (net of allowance for expected credit losses of $175 and $161) | 3,232 | 3,148 |
Contract assets | 550 | 458 |
Inventories, net | 622 | 659 |
Other current assets | 382 | 429 |
Total Current Assets | 8,261 | 6,493 |
Future income tax benefits | 335 | 334 |
Fixed assets, net | 774 | 774 |
Operating lease right-of-use assets | 526 | 542 |
Intangible assets, net | 419 | 484 |
Goodwill | 1,667 | 1,773 |
Other assets | 297 | 310 |
Total Assets | 12,279 | 10,710 |
Liabilities and (Deficit) Equity | ||
Short-term borrowings | 24 | 701 |
Accounts payable | 1,556 | 1,453 |
Accrued liabilities | 1,993 | 1,977 |
Contract liabilities | 2,674 | 2,542 |
Total Current Liabilities | 6,247 | 6,673 |
Long-term debt | 7,249 | 5,262 |
Future pension and postretirement benefit obligations | 558 | 654 |
Operating lease liabilities | 336 | 367 |
Future income tax obligations | 267 | 321 |
Other long-term liabilities | 606 | 634 |
Total Liabilities | 15,263 | 13,911 |
Commitments and contingent liabilities (Note 22) | ||
Redeemable noncontrolling interest | 160 | 194 |
Shareholders' (Deficit) Equity: | ||
Common Stock and additional paid-in-capital | 119 | 59 |
Treasury Stock | (725) | 0 |
Accumulated deficit | (2,256) | (3,106) |
Accumulated other comprehensive income (loss) | (763) | (815) |
Total Shareholders' (Deficit) Equity | (3,625) | (3,862) |
Noncontrolling interest | 481 | 467 |
Total (Deficit) Equity | (3,144) | (3,395) |
Total Liabilities and (Deficit) Equity | $ 12,279 | $ 10,710 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Accounts receivable, allowance for credit loss | $ 175 | $ 161 | $ 83 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | UTC Net Investment (Deficit) | UTC Net Investment (Deficit)Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' (Deficit) Equity | Total Shareholders' (Deficit) EquityCumulative Effect, Period of Adoption, Adjustment | Noncontrolling Interest |
Beginning balance at Dec. 31, 2018 | $ 2,012 | $ 0 | $ 0 | $ 0 | $ 2,262 | $ (708) | $ 1,554 | $ 458 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net transfers (to) from UTC | (935) | (935) | (935) | ||||||||
Net income | 1,263 | 1,116 | 1,116 | 147 | |||||||
Other comprehensive income (loss), net of tax | (59) | (50) | (50) | (9) | |||||||
Dividends attributable to noncontrolling interest | (146) | (146) | |||||||||
Acquisitions, disposals and other changes | $ (7) | (13) | (13) | 6 | |||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | ||||||||||
Ending balance at Dec. 31, 2019 | $ 2,128 | $ (25) | 0 | 0 | 0 | 2,430 | $ (25) | (758) | 1,672 | $ (25) | 456 |
Beginning balance at Dec. 31, 2018 | 203 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income | 4 | ||||||||||
Other comprehensive income (loss), net of tax | (2) | ||||||||||
Dividends attributable to noncontrolling interest | (17) | ||||||||||
Acquisitions, disposals and other changes | 10 | ||||||||||
Ending balance at Dec. 31, 2019 | 198 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net transfers (to) from UTC | (6,150) | (6,150) | (6,150) | ||||||||
Net income | 1,044 | 741 | 165 | 906 | 138 | ||||||
Other comprehensive income (loss), net of tax | (23) | (57) | (57) | 34 | |||||||
Dividends attributable to noncontrolling interest | (138) | (138) | |||||||||
Acquisitions, disposals and other changes | (26) | (3) | (3) | (23) | |||||||
Issuance of Common Stock and reclassification of deficit | 0 | 4 | (3,584) | 3,580 | |||||||
Stock-based compensation and Common Stock issued under employer plans | 55 | 55 | 55 | ||||||||
Cash dividends declared | (260) | (260) | (260) | ||||||||
Ending balance at Dec. 31, 2020 | (3,395) | 59 | 0 | (3,106) | 0 | (815) | (3,862) | 467 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income | 12 | ||||||||||
Other comprehensive income (loss), net of tax | 2 | ||||||||||
Dividends attributable to noncontrolling interest | (9) | ||||||||||
Acquisitions, disposals and other changes | (9) | ||||||||||
Ending balance at Dec. 31, 2020 | 194 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 1,409 | 1,246 | 1,246 | 163 | |||||||
Other comprehensive income (loss), net of tax | 37 | 52 | 52 | (15) | |||||||
Dividends attributable to noncontrolling interest | (145) | (145) | |||||||||
Acquisitions, disposals and other changes | 8 | (2) | (1) | (3) | 11 | ||||||
Stock-based compensation and Common Stock issued under employer plans | 60 | 62 | (2) | 60 | |||||||
Cash dividends declared | (393) | (393) | (393) | ||||||||
Repurchase of Common Shares | (725) | (725) | (725) | ||||||||
Ending balance at Dec. 31, 2021 | (3,144) | $ 119 | $ (725) | $ (2,256) | $ 0 | $ (763) | $ (3,625) | $ 481 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income | 11 | ||||||||||
Other comprehensive income (loss), net of tax | (12) | ||||||||||
Dividends attributable to noncontrolling interest | (11) | ||||||||||
Acquisitions, disposals and other changes | (22) | ||||||||||
Ending balance at Dec. 31, 2021 | $ 160 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared (in usd per share) | $ 0.92 | $ 0.60 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Activities: | |||
Net income | $ 1,420 | $ 1,056 | $ 1,267 |
Adjustments to reconcile net income to net cash flows provided by operating activities, net of acquisitions: | |||
Depreciation and amortization | 203 | 191 | 180 |
Deferred income tax expense (benefit) | (92) | (51) | (8) |
Stock compensation cost | 65 | 63 | 37 |
Losses on fixed asset impairment or disposal of business | 0 | 71 | 26 |
Change in: | |||
Accounts receivable, net | (152) | (163) | (191) |
Contract assets and liabilities, current | 53 | 282 | 97 |
Inventories, net | 14 | (76) | 60 |
Other current assets | 43 | 28 | 30 |
Accounts payable | 130 | 20 | 6 |
Accrued liabilities | 72 | (14) | (34) |
Pension contributions | (37) | (64) | (32) |
Other operating activities, net | 31 | 137 | 31 |
Net cash flows provided by operating activities | 1,750 | 1,480 | 1,469 |
Investing Activities: | |||
Capital expenditures | (156) | (183) | (145) |
Investments in businesses and intangible assets, net of cash acquired (Note 9) | (80) | (53) | (47) |
Proceeds from sale of (investments in) equity securities | 40 | 0 | |
Proceeds from sale of (investments in) equity securities | (51) | ||
Receipts (payments) on settlements of derivative contracts | 73 | (69) | (5) |
Other investing activities, net | 34 | 3 | (6) |
Net cash flows used in investing activities | (89) | (353) | (203) |
Financing Activities: | |||
Net proceeds from (repayments of) borrowings (maturities of 90 days or less) | (304) | 647 | 6 |
Proceeds from borrowings (maturities longer than 90 days) | 152 | 0 | 0 |
Repayments of borrowings (maturities longer than 90 days) | (503) | 0 | 0 |
Proceeds from issuance of long-term debt | 2,030 | 6,300 | 0 |
Payment of debt issuance costs | (25) | (43) | 0 |
Repayment of long-term debt | 0 | (1,000) | 0 |
Dividends paid on Common Stock | (393) | (260) | 0 |
Repurchases of Common Stock | (725) | 0 | 0 |
Dividends paid to noncontrolling interest | (155) | (149) | (163) |
Net transfers to UTC | 0 | (6,330) | (972) |
Other financing activities, net | (19) | (9) | (4) |
Net cash flows provided by (used in) financing activities | 58 | (844) | (1,133) |
Effect of foreign exchange rate changes on cash and cash equivalents | (43) | 59 | (20) |
Net increase in cash and cash equivalents | 1,676 | 342 | 113 |
Cash, cash equivalents and restricted cash, beginning of year | 1,801 | 1,459 | 1,346 |
Cash, cash equivalents and restricted cash, end of year | 3,477 | 1,801 | 1,459 |
Less: Restricted cash | 1,912 | 19 | 13 |
Cash and cash equivalents, end of period | 1,565 | 1,782 | 1,446 |
Supplemental cash flow information: | |||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 129 | 81 | 18 |
Income Taxes Paid, Net | $ 552 | $ 561 | $ 632 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest paid | $ 129 | $ 81 | $ 18 |
Income taxes paid | 552 | 561 | 632 |
UTC | |||
Interest paid | 0 | 0 | 18 |
Income taxes paid | $ 0 | $ (15) | $ 255 |
Business Overview
Business Overview | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | Business Overview Otis (as defined below) is the world’s largest elevator and escalator manufacturing, installation and service company. Our operations are classified into two segments: New Equipment and Service. Through the New Equipment segment, we design, manufacture, sell and install a wide range of passenger and freight elevators, as well as escalators and moving walkways, for residential and commercial building and infrastructure projects. The Service segment provides maintenance and repair services for both our products and those of other manufacturers, and provides modernization services to upgrade elevators and escalators. On November 26, 2018, United Technologies Corporation, subsequently renamed to Raytheon Technologies Corporation on April 3, 2020 ("UTC" or "RTX", as applicable), announced its intention to spin-off its Otis reportable segment and its Carrier reportable segment into two separate publicly-traded companies (the "Separation"). On April 3, 2020, the Company became an independent publicly-traded company through a pro-rata distribution of 0.5 shares of Common Stock for every share of UTC common stock held at the close of business on the record date of March 19, 2020 ("Distribution"). Otis began to trade as a separate public company (New York Stock Exchange ("NYSE"): OTIS) on April 3, 2 02 0. Unless the context otherwise requires, references to "Otis", "we", "us", "our" and "the Company" refer to (i) Otis Worldwide Corporation's business prior to the Separation and (ii) Otis Worldwide Corporation and its subsidiaries following the Separation, as applicable. References to "UTC" relate to pre-Separation matters, and references to "RTX" relate to post-Separation matters. The Separation was completed pursuant to a Separation and Distribution Agreement ("Separation Agreement") and other agreements with our former parent, UTC, related to the Separation, including but not limited to a transition services agreement (the "Transition Services Agreement" or "TSA"), a tax matters agreement (the "Tax Matters Agreement" or "TMA"), an employee matters agreement (the "Employee Matters Agreement" or "EMA") and an intellectual property agreement (the "Intellectual Property Agreement"). For further discussion on these agreements, see Note 5, "Related Parties" . Zardoya Otis Tender Offer In September 2021, the Company announced a tender offer, subject to the terms and conditions thereof, to acquire all of the issued and outstanding shares of Zardoya Otis, S.A. ("Zardoya Otis") not owned by the Company at a price of €7.00 per share in cash (the "Tender Offer"), subject to adjustment for dividends and other distributions declared and paid by Zardoya Otis after the announcement, and its intention to delist the shares of Zardoya Otis from the Spanish stock exchanges subsequent to the Tender Offer. The price per share of the Tender Offer was first adjusted to €6.93 for the dividend paid on October 11, 2021. On December 21, 2021, the Company announced it reached an agreement for Euro Syns S.A. (a non-controlling equity owner in Zardoya Otis) to irrevocably tender its shares in the Tender Offer at an offer price of €7.14 per share in cash (€7.07 per share after adjusting for dividends paid by Zardoya Otis on January 10, 2022). As a result of this agreement, the Company increased the tender price to all shareholders to €7.07 per share in cash after adjusting for the dividends paid . The Tender Offer is subject to approval by the CNMV, which is still pending as of February 4, 2022. The value of the issued and outstanding shares of Zardoya Otis not owned by the Company is €1.66 billion based on the adjusted tender price of €7.07 . The Company owned a controlling interest and had operational control of Zardoya Otis as of and for the years ended December 31, 2021, 2020 and 2019 , and therefore its financial results are included in our Consolidated Financial Statements. As of December 31, 2021, the Company owned 50.02% of Zardoya Otis. See Note 10, "Borrowings and Lines of Credit" and Note 20, "Guarantees" for additional information regarding financing and guarantee agreements entered into by the Company and its subsidiaries in connection with the Tender Offer. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation. Prior to the Separation on April 3, 2020, our historical financial statements were prepared on a standalone combined basis and were derived from the consolidated financial statements and accounting records of our former parent, UTC. For the period subsequent to April 3, 2020, our financial statements are presented on a consolidated basis as the Company became a standalone public company (collectively, the financial statements for all periods presented, including the historical results of the Company prior to April 3, 2020, are now referred to as "Consolidated Financial Statements" to reflect this change). They have been prepared in accordance with the instructions to Form 10-K. Prior to the Separation on April 3, 2020, the Consolidated Statements of Operations included all revenues and costs directly attributable to Otis, including costs for facilities, functions and services used by Otis. Costs for certain functions and services performed by centralized UTC organizations were directly charged to Otis based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount, usage or other allocation methods. All charges and allocations for facilities, functions and services performed by UTC organizations have been deemed settled in cash by Otis to UTC in the period in which the cost was recorded on the Consolidated Statements of Operations. Current and deferred income taxes were determined based on the standalone results of Otis. However, because the Company was included in our former parent UTC’s tax group in certain jurisdictions, the Company's actual tax balances may differ from those reported. The Company's portion of its domestic income taxes and certain income taxes for jurisdictions outside the U.S. are deemed to have been settled in the period the related tax expense was recorded prior to the Separation. The Consolidated Financial Statements include the accounts of Otis and its controlled subsidiaries, as well as entities where Otis has a variable interest and is the primary beneficiary as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation . The factors we use to determine the primary beneficiary of a variable interest entity ("VIE") may include decision authority, control over management of day-to-day operations and the amount of our equity investment in relation to others' investments. All significant intracompany accounts and transactions within the Company have been eliminated in the preparation of the Consolidated Financial Statements. Certain amounts for prior years have been reclassified to conform to the current year presentation, which are immaterial. Use of Estimates. The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. In addition, estimates and assumptions may impact the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We assessed certain accounting matters that generally require consideration of forecasted financial information in the context of the information reasonably available to us and the unknown future impacts of coronavirus ("COVID-19") as of December 31, 2021 and 2020, and through the date of this report. The accounting matters assessed included, but were not limited to, our allowance for credit losses, the carrying value of our goodwill and other long-lived assets, financial assets and revenue recognition. While there was not a material impact to our Consolidated Financial Statements as of and for the years ended December 31, 2021 and 2020 resulting from our assessments of these matters, future assessment of our current expectations at that time of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to our Consolidated Financial Statements in future reporting periods. Risks and Uncertainties. As the global COVID-19 pandemic continues and the economic recovery is ongoing, the Company continues to closely monitor and manage the impact of the COVID-19 pandemic on its business globally. It is difficult to estimate at this time the duration and extent of the continued impact of the pandemic and ongoing economic recovery on the Company's business, financial position, cash flow and results of operations. The results of our operations and overall financial performance were impacted during the years ended December 31, 2021 and 2020, including impacts to customer demand for our new equipment, maintenance and repair and modernization businesses, cancellations or delays of customer orders, customer liquidity constraints and related credit reserves, and supplier and raw material capacity constraints, delays and related costs. Primarily in 2020, there were also temporary closures and reduced capacity of our operations, limited new equipment job site closures and challenges in accessing units to provide maintenance and repair services that also impacted our results. Due to existing conditions and uncertainty, COVID-19 and ongoing economic recovery could have an impact on our business, cash flow and results of operations into 2022. The extent of the impact will depend largely on future developments, which are highly uncertain, including the severity of the outbreak and variants of COVID-19, efficacy, availability and distribution of vaccines, actions taken by government authorities to further contain the outbreak or address its impact and its longer-term impacts on the global economy, among other factors. Cash and Cash Equivalents. Cash and cash equivalents includes cash on hand, demand deposits and short-term cash investments that are highly liquid in nature and have original maturities of three months or less. Restricted Cash. In certain circumstances we are required to maintain cash deposits with certain banks with respect to contractual or other legal obligations, and therefore the use of these cash deposits for general operational purposes is restricted. Restricted cash as of December 31, 2 021 is primarily cash of $1.9 billion required to be held in escrow to fund the Tender Offer, which is expected to be completed in 2022. The non-current portion of restricted cash is $2 million as of December 31, 2021 and 2020, and is included in Other assets on the Consolidated Balance Sheets. Accounts Receivable. The Company records accounts receivables when the right to consideration becomes unconditional. We regularly evaluate the collectability of our accounts receivable and maintain reserves for expected credit losses. See Note 6, "Accounts Receivable, Net" for additional information on the Company's policy for evaluation of expected credit losses. We do not believe that accounts receivable represent significant concentrations of credit risk because of the diversified portfolio of individual customers and geographic areas. Retainage and Unbilled Receivables. Current an d long-term accounts receivable as of December 31, 2021 and 2020 include retainage of $75 million and $61 million, respectively, and unbilled receiv ables of $109 million and $104 million, respectively. Retainage represents amounts that, pursuant to the applicable contract, are not due until after project completion and acceptance by the customer. Unbilled receivables represent revenues that are earned but may not be currently billable to the customer under the terms of the contract. These items are expected to be billed and collected in the ordinary course of business. Unbilled receivables where we have an unconditional right to payment are included in Accounts receivable, net as of December 31, 2021 and 2020. Customer Financing Notes Receivable. Through financing arrangements with our customers, we extend payment terms, which are generally not more than one year in duration. Factoring. The Company may sell certain trade accounts and notes receivable to lending institutions to manage credit risk. Financial assets sold under these arrangements are excluded from Accounts receivable, net in the Company’s Consolidated Balance Sheets at the time of sale if the Company has surrendered control over the related assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred. Gains and losses stemming from transfers reported as sales are included in Interest expense (income), net in the accompanying Consolidated Statements of Operations. Contract Assets and Liabilities. Contract assets and liabilities represent the difference in the timing of revenue recognition from receipt of cash from our customers and billings. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Performance obligations partially satisfied in advance of customer billings are included in Contract assets, current. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. See Note 4, "Contract Assets and Liabilities" for further discussion of contract assets and liabilities. Inventories. Inventories are stated at the lower of cost or estimated realizable value and are primarily based on a first-in, first-out (“FIFO”) method. Valuation reserves for excess, obsolete and slow-moving inventory are estimated by comparing the inventory levels of individual parts to both future sales forecasts or production requirements and historical usage rates in order to identify inventory where the resale value or replacement value is less than inventoriable cost. See Note 7, "Inventories, Net" for further details of the inventories by classification. Fixed Assets. Fixed assets, including software capitalized for internal-use, are recorded at cost. Depreciation of fixed assets is computed over the fixed assets' useful lives on a straight-line basis, unless another systematic and rational basis is more representative of the fixed asset's pattern of use. See Note 8, "Fixed Assets" for further details of useful lives. Internal-use software. The Company capitalizes direct costs of services used in the development of, and external software acquired for use as, internal-use software. Amounts capitalized are amortized over a period ranging from three Asset Retirement Obligations. The Company records the fair value of legal obligations associated with the retirement of tangible long-lived assets in the period in which the legal obligations are determined to exist. Upon initial recognition of a liability, the Company capitalizes the cost of the asset retirement obligation by increasing the carrying amount of the related long-lived asset. Over time, the liabilit y is adjusted for c hanges in its present value and the capitalized cost is depreciated over the useful life of the related asset. Fair Value of Financial Instruments. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: Level I – Quoted prices for identical instruments in active markets. Level II – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level III – Instruments whose significant value drivers are unobservable. The carrying amount of current trade receivables, accounts payable and accrued expenses approximates fair value due to the short maturity (less than one year) of the instruments. Equity Method Investments. Entities in which we have the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting and are included in Other assets on the Consolidated Balance Sheets. Under this method of accounting, our share of the net earnings or losses of the investee entity is included in Other income (expense), net in the Consolidated Statements of Operations since the activities of the investee entity are closely aligned with the operations of the Company. We evaluate our equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. Business Combinations. We account for transactions that are classified as business combinations in accordance with the FASB ASC Topic 805: Business Combinations . Once a business is acquired, the fair values of the identifiable assets acquired and liabilities assumed are d etermined with the excess cost recorded to goodwill. As required, preliminary fair values are determined once a business is acquired, with the final determination of the fair values being completed within the one-year measurement period from the date of acquisition. Goodwill, Intangible Assets and Long-Lived Assets. Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Intangible assets consist of service portfolios, patents, trademarks/trade names, customer relationships and other intangible assets. Acquired intangible assets are recognized at fair value during acquisition accounting and then amortized to Cost of products and services sold and Selling, general and administrative over the applicable useful lives. Goodwill and Indefinite-Lived Intangible Assets. Goodwill and intangible assets deemed to have indefinite lives are not amortized. Goodwill and indefinite-lived intangible assets are subject to impairment testing annually or when a triggering event occurs using the guidance and criteria described in FASB ASC Topic 350: Intangibles – Goodwill and Other . This testing compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value. We test goodwill for impairment at a level within the Company referred to as the reporting unit, which is one level below the operating segment level. When testing goodwill for impairment, the Company may first assess qualitative factors. If an initial qualitative assessment identified that it is more likely than not that the fair value of a reporting unit is less than its carrying value, additional quantitative testing is performed. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. If the quantitative testing indicates that goodwill is impaired, an impairment charge is recognized based on the difference between the reporting unit's carrying value and its fair value. When it is determined that a quantitative analysis is required, the Company primarily utilizes a discounted cash flow methodology to calculate the fair value of its reporting units. The Company completed its most recent annual impairment testing as of July 1, 2021, and determined in the qualitative assessment that quantitative testing is not necessary. There were no triggering events since the annual impairment test. Finite-Lived Intangible Assets and Long-Lived Assets. Useful lives of finite-lived intangible assets are estimated based upon the nature of the intangible asset. These intangible assets are amortized based on the pattern in which the economic benefits of the intangible assets are consumed or if straight-line amortization approximates the pattern of economic benefit, a straight-line amortization method may be used. The range of estimated useful lives is as follows: Purchased service portfolios 5 to 25 years Patents, trademarks/trade names 4 to 40 years Customer relationships and other 1 to 20 years The Company evaluates the potential impairment of long-lived assets, including finite-lived intangible assets whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. If the carrying value of other long-lived assets h eld and used exceeds the sum of the undiscounted expected future cash flows, the carrying value is written down to fair value. See Note 8, "Fixed Assets" and Note 9, " Business Acquisitions, Goodwill and Intangible Assets " for additional information regarding intangible assets and other long-lived asse ts. Income Taxes. In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest expense has also been recognized. We recognize accrued interest related to unrecognized tax benefits in Interest expense (income), net. Penalties, if incurred, would be recognized as a component of Income tax expense. The U.S. Tax Cuts and Jobs Act ("TCJA") subjects the Company to a tax on Global Intangible Low-Taxed Income (“GILTI”). GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. We account for GILTI as a period cost as incurred. Income taxes as presented in the Consolidated Financial Statements of the Company for periods prior to the Separation attribute current and deferred income taxes of our former parent, UTC, to the Company's stand-alone financial statements in a manner that is systematic, rational and consistent with the asset and liability method prescribed by FASB ASC Topic 740: Income Taxes (“ASC 740”). Accordingly, the Company's income tax provision for periods prior to the Separation was prepared following the separate return method. The separate return method applies ASC 740 to the stand-alone financial statements of each member of the consolidated group as if the group members were a separate taxpayer and a stand-alone enterprise. The calculation of our income taxes on a separate return basis requires a considerable amount of judgment and use of both estimates and allocations. As a result, actual transactions included in the consolidated financial statements of UTC may not be included in the Consolidated Financial Statements of the Company. Similarly, the tax treatment of certain items reflected in the Consolidated Financial Statements of the Company may not be reflected in the consolidated financial statements and tax returns of UTC. Therefore, such items as net operating losses, credit carry-forwards and valuation allowances may exist in the stand-alone financial statements that may or may not exist in UTC’s consolidated financial statements. As such, the income taxes of the Company as presented in the Consolidated Financial Statements prior to the Separation may not be indicative of the income taxes that the Company will report in the future. See Note 5, "Related Parties" and Note 16, "Income Taxes" for additional information. Revenue Recognition. We recognized revenue in accordance with FASB ASC Topic 606: Revenue from Contracts with Customers and its related amendments, (referred to, collectively, as "ASC 606”). The Company's revenue streams include new equipment, maintenance and repair, and modernization. New equipment, modernization and repair services revenue are recognized over time as we are enhancing an asset the customer controls. Maintenance revenue is recognized on a straight-line basis over the life of the maintenance contract. New Equipment, Modernization and Repair services. For new equipment and modernization transactions, equipment and installation are typically procured in a single contract providing the customer with a complete installed elevator or escalator unit. The combination of equipment and installation promises are typically a single performance obligation. For repair services, the customer typically contracts for specific short-term services which form a single performance obligation. For these performance obligations, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which corresponds with and best depicts transfer of control or the enhancement of the customer’s assets. Contract costs included in the calculation are comprised of labor, materials, subcontractors’ costs or other direct costs and indirect costs, which include indirect labor costs. Specific to new equipment and modernization arrangements, the Company, based on project progression, reviews cost estimates on significant contracts on a quarterly basis, and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. These estimates form the basis for the amount of revenue to be recognized and include the latest updated total transaction price, costs and risks for each contract. These estimates for our ongoing contracts may materially change due to the change and completions of the contract scopes, cost estimates and customers' plans, among other factors. For performance obligations recognized under the cost to cost method, we record changes in contract estimates using the cumulative catch-up method. Modifications are recognized as a cumulative catch-up or treated as a separate accounting contract if the modification adds distinct goods or services and the modification is priced at its stand-alone selling price. Maintenance. Our customers purchase maintenance contracts which include services such as required periodic maintenance procedures, preventive services and stand ready obligations to remediate issues with the elevator/escalator when and if they arise. Given the continuous nature of these services throughout the year, we recognize revenue on maintenance contracts on a straight-line basis which aligns with the cost profile of these services. Contractual changes are typically recognized prospectively as most modifications are extensions of the existing arrangement. Transaction Price Considerations. Our contracts typically include fixed payments which are generally received as we progress under our contracts. As a result, we have not identified any significant financing elements in our contract, and our contracts do not have significant estimates related to variable consideration except in the case of a project having an underlying performance issue, which is rare. In situations where multiple performance obligations in a single contract (e.g. , new equipment and maintenance) e xist, the transaction price is allocated to each performance obligation in proportion to their stand-alone selling prices. Estimates are made to account for changes in transaction prices attributable to pricing disputes that occur subsequent to the inception of contracts, based upon historical experience and the status of contracts. Certain costs to obtain or fulfill contracts . Certain costs to obtain or fulfill a contract with a customer must be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer. Sales commissions related to new equipment, modernization and maintenance contracts, excluding renewals, are capitalized as contract fulfillment costs and are amortized consistent with the pattern of transfer of the goods or services. Customer contract costs, which do not qualify for capitalization as contract fulfillment costs, are expensed as incurred. Loss Contracts. Loss provisions on contracts are recognized to the extent that estimated contract costs exceed the estimated consideration from the products contemplated under the contractual arrangement. For new commitments, we generally record loss provisions at contract inception. For existing commitments, anticipated losses on contractual arrangements are recognized in the period in which losses become probable. Remaining Performance Obligations ("RPO"). RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of December 31, 2021, our total RPO was approximately $17.1 billion. Of the total RPO as of December 31, 2021, we expect approximately 89% will be recognized as sales over the following 24 months. Additional disclosure required by ASC 606 is provided in Note 23, "Segment Financial Data", including disaggregation of revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Self-Insurance. The Company is primarily self-insured for a number of risks including, but not limited to, workers’ compensation, general liability, automobile liability and employee-related healthcare benefits. The Company has obtained insurance coverage for amounts exceeding individual and aggregate loss limits. The Company accrues for known future claims and incurred but not reported losses wit hin Accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets, totaling $287 million and $299 million as of December 31, 2021 and 2020, respectively. Derivatives and Hedging Activity. We have used derivative instruments, principally forward contracts, to help manage certain foreign currency and commodity price exposures. Derivative instruments are viewed as risk management tools by us and are not used for trading or speculative purposes. By their nature, all financial instruments involve market and credit risks. We enter into derivative and other financial instruments with major investment grade financial institutions and have policies to monitor the credit risk of those counterparties. We limit counterparty exposure and concentration of risk by diversifying counterparties. While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties. Designated Derivative Instruments. Derivatives used for hedging purposes may be designated and effective as a hedge of the identified risk exposure at the inception of the contract. All derivative instruments are recorded on the Consolidated Balance Sheets at fair value. Derivatives used to hedge foreign currency denominated balance sheet items and commodity prices for materials recognized in cost of sales, and are reported directly in earnings along with offsetting transaction gains and losses on the items being hedged. Derivatives used to hedge forecasted cash flows associated with foreign currency commitmen ts or forecasted commodity purchases m ay be accounted for as cash flow hedges, as deemed appropriate. Gains and losses on derivatives designated as cash flow hedges are recorded in other comprehensive income (loss), net of tax and reclassified to earnings as a component of product sales or expenses, as applicable, when the hedged transaction occurs. Gains and losses on derivatives designated as cash flow hedges are recorded in Other operating activities, net within the Consolidated Statement of Cash Flows. To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hed ging relationship is recorded currently in earnings in the period it occurs. Additional information pertaining to net investment hedging is included in Note 18, "Financial Instruments". Non-designated Derivative Instruments. To the extent the hedge accounting criteria are not applied, the foreign currency forward contracts and commodity price contracts are utilized as economic hedges and changes in the fair value of these contracts are recorded currently in earnings in the period in which they occur. Additional information pertaining to these contracts is included in Note 18, "Financial Instruments". In addition, the Company periodically enters into sales contracts denominated in currencies other than the functional currency of the parties to the transaction. The Company accounts for these transactions separately valuing the embedded derivative component of these contracts. The changes in the fair value of these embedded derivatives are recorded in Other income (expense), net in th e Consolidated Statements of Operations . For the years ended December 31, 2021, 2020 and 2019, we recognized a gain of $1 million, a loss of $3 million and a loss of $27 million, respectively, due to the changes in fair value of embedded derivatives. Environmental. Environmental investigatory, remediation, operating and maintenance costs are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts with respect to each individual site, including current laws, regulations and prior remediation experience. Whe re no amount within a range of estimates is more likely, the minimum is accrued. Liabilities with fixed or reliably determinable future cash payments are discounted. Accrued environmental liabilities are not reduced by potential insurance reimbursements. See Note 22, "Contingent Liabilities" for additional details on the environmental remediation activities. Research and Development. These costs are expensed in the period incurred and are shown on a separate line of the Consolidated Statements of Operations. Research and development expenses, covering research and the advancement of potential new and improved products and their uses, primarily include salaries and other employment costs. Other Income (Expense), Net. Other income (expense), net i ncludes the impact of changes in the fair value and settlement of derivatives, gains or losses on sale of businesses and fixed assets, earnings from equity method investments, fair value changes on equity securities, impairments, non-recurring Separation-related expenses, gains on insurance recoveries and certain other infrequent operating income and expense items. Foreign Exchange. We conduct business in many different currencies and, accordingly, are subject to the inherent risks associated with foreign exchange rate movements. The financial position and results of operations of substantially all of our foreign subsidiaries are measured using the local currency as the functional currency. Foreign currency denominated assets and liabilities are translated into U.S. Dollars at the exchange rates existing at the respective balance sheet dates, and income and expense items are translated at the average exchange rates during the respective periods. The aggregate effects of translating the balance sheets of these subsidiaries are deferred within Accumulated other comprehensive income (loss). Pension and Postretirement Obligations. Guidance under FASB ASC Topic 715: Compensation – Retirement Benefits requires balance sheet recognition of the overfunded or underfunded status of pension and postretirement benefit plans. Under this guidance, actuarial gains and losses, prior service costs or credits and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic benefit cost. Pension and postretirement obligation balances and related costs reflected within the Consolidated Financial Statem ents include both costs directly attributable to plans dedicated to Otis, as well as an alloc |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share On April 3, 2020, the date of consummation of the Separation, 433,079,455 shares of the Common Stock, par value $0.01 per share, were distributed to UTC shareholders of record as of March 19, 2020. This share amount is being utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation as all shares were owned by UTC prior to the Separation. For the 2019 calculations, these shares are treated as issued and outstanding at January 1, 2019 for purposes of calculating historical basic and diluted earnings per share. (dollars in millions, except per share amounts; shares in millions) 2021 2020 2019 Net income attributable to Otis Worldwide Corporation $ 1,246 $ 906 $ 1,116 Impact of redeemable noncontrolling interest — — (13) Net income attributable to common shareholders $ 1,246 $ 906 $ 1,103 Basic weighted average number of shares outstanding 427.7 433.2 433.1 Stock awards and equity units (share equivalent) 3.7 1.4 — Diluted weighted average number of shares outstanding 431.4 434.6 433.1 Earnings Per Share of Common Stock: Basic $ 2.91 $ 2.09 $ 2.55 Diluted $ 2.89 $ 2.08 $ 2.55 The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock appreciation rights and stock options, when the average market price of the Common Stock is lower than the exercise price of the related stock awards during the period because the effect would be anti-dilutive. In addition, the computation of diluted earnings per share excludes the effect of the potential exercise of stock awards when the awards' assumed proceeds exceed the average market price of the common shares during the period. There were 0.1 million and 4.6 million of anti-dilutive stock awards excluded from the computation for 2021 and 2020, respectively. Prior to the Separation, Otis employees participated in UTC's equity incentive plans, pursuant to which they were granted stock options, stock appreciation rights, restricted stock units, and performance-based restricted stock units. All awards granted under these plans were related to UTC common shares. Upon Separation, outstanding awards held by Otis employees under UTC's equity incentive plans were converted in accordance with the EMA using the conversion ratios set forth in the EMA. Depending on whether the awards held on the Separation date were in an unvested or vested status, Otis employees either received converted awards solely in Otis based shares (unvested status) or a combination of Otis, UTC and Carrier share based awards (vested status). Former Otis employees, and current and former legacy UTC and Carrier employees, who on the Separation date were holding outstanding UTC awards in a vested status also received a combination of Otis, UTC and Carrier awards post-spin. The conversion methodology used was calculated in accordance with the EMA and with the purpose of maintaining the aggregate intrinsic value of the award immediately after the Separation when compared to the aggregate intrinsic value immediately prior to the Separation . See Note 13, "Employee Benefit Plans" for further detail. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Contract Assets and Liabilities Contract assets reflect revenue recognized in advance of customer billing. Contract liabilities are recognized when a customer pays consideration, or we have a right to receive an amount of unconditional consideration, in advance of the satisfaction of performance obligations under the contract. We typically receive progress payments from our customers as we perform our work over time. Total Contract assets and Contract liabilities as of December 31, 2021 and 2020 are as follows: (dollars in millions) 2021 2020 Contract assets, current $ 550 $ 458 Total contract assets 550 458 Contract liabilities, current 2,674 2,542 Contract liabilities, noncurrent (included within Other long-term liabilities) 52 44 Total contract liabilities 2,726 2,586 Net contract liabilities $ 2,176 $ 2,128 Contract assets increased by $92 million during the year ended December 31, 2021 as a result of the progression of current contracts and timing of billing on customer contracts . Contract liabilities increased by $140 million during the year ended December 31, 2021 primarily due to contract billings in excess of revenue earned. During the years ended December 31, 2021 and 2020, we recognized revenue of $2.0 billion and $1.6 billion related to the contract liabilities as of January 1, 2021 and as of January 1, 2020, respectively. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties In connection with the Separation as further described in Note 1, "Business Overview", the Company entered into several agreements with our former parent, UTC, and Carrier. These agreements include a separation and distribution agreement that sets forth certain agreements with UTC and Carrier regarding the principal actions to be taken in connection with the Separation, including identifying the assets transferred, the liabilities assumed and the contracts transferred to each of UTC, Carrier and Otis as part of the Separation. Under the TSA, which is substantially completed as of December 31, 2021, RTX provided the Company certain services and we provided certain services to RTX. The EMA allocates among Otis, UTC and Carrier the liabilities and responsibilities relating to employment matters, employee compensation and benefit plans, benefit programs and other related matters. We entered into the TMA with our former parent UTC and Carrier that governs the parties’ respective rights, responsibilities and obligations with respect to tax matters (including responsibility for taxes, entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other tax matters). Subject to certain exceptions set forth in the TMA, Otis generally is responsible for federal, state and foreign taxes imposed on a separate return basis on Otis (or any of its subsidiaries) with respect to taxable periods (or portions thereof) that ended on or prior to the date of the Distribution. The TMA provides special rules that allocate responsibility for tax liabilities arising from a failure of the Separation transactions to qualify for tax-free treatment based on the reasons for such failure. The TMA also imposes restrictions on Otis during the two-year period following the Distribution that are intended to prevent certain transactions from failing to qualify as transactions that are generally tax-free. Net Transfers from (to) UTC and Separation Transactions. In connection with the Separation, certain assets and liabilities were contributed to the Company by our former parent, UTC, leading up to and at the time of the Separation. During 2020 prior to the Separation, net liabilities of $43 million were contributed to the Company by our former parent, UTC, primarily consisting of deferred tax assets and liabilities and fixed assets. Prior to the Separation, these non-cash contributions were recorded as Net transfers (to) from UTC on the Consolidated Statements of Changes in Equity through UTC Net Investment. Upon Separation, the following were recorded as Net transfers (to) from UTC and Separation-related transactions on the Consolidated Statements of Changes in Equity through UTC Net Investment: (dollars in millions) Cash and cash equivalents $ 220 Taxes and other 187 Total $ 407 Prior to the Separation, our former parent, UTC, paid Otis Cash and cash equivalents of $190 million in connection with the Separation Agreement, and $30 million as settlement of related party receivables due from UTC to Otis as a result of a cash overdraft as of March 31, 2020. Additionally, the TCJA imposed a non-recurring toll charge, paid in installments over an 8-year period on deemed repatriated earnings of foreign subsidiaries as of December 31, 2017. Under the terms of the TMA, Otis will indemnify RTX for a percentage of the toll charge installment payments due after April 3, 2020. As a result, a portion of Otis' balance of Future income tax obligations corresponding to the toll charge was reclassified as a contractual indemnity obligation within Other long-term liabilities on the Consolidated Balance Sheets. The TMA also provides for RTX to indemnify Otis for certain foreign tax obligations as a result of Otis' inclusion in certain foreign consolidated tax returns prior to the Separation. As a result, Otis reflected this contractual indemnification asset within Other current assets and the related tax obligations within Accrued liabilities on the Consolidated Balance Sheets. As a result of the Separation and the provisions of the TMA, Otis' total net tax-related liabilities on April 3, 2020 were reduced by $191 million, comprising the following impacts to the Consolidated Balance Sheets: (dollars in millions) Increase (Decrease) Assets Other current assets $ 167 Total Current Assets 167 Future income tax benefits (4) Total Assets $ 163 Liabilities and (Deficit) Equity Accrued liabilities $ 110 Total Current Liabilities 110 Future income tax obligations (377) Other long-term liabilities 239 Total Liabilities (28) Total Shareholders' (Deficit) Equity 191 Total (Deficit) Equity 191 Total Liabilities and (Deficit) Equity $ 163 There were also $4 million of Other long-term liabilities recorded upon Separation on the Consolidated Balance Sheet. In addition to Income taxes paid, net of (refunds) on the Consolidated Statements of Cash Flows, as a result of the TMA, the Company made payments of $56 million and $86 million in 2021 and 2020, respectively, for foreign tax obligations that were reimbursed by RTX. Shared Costs. The Consolidated Financial Statements have been prepared on a standalone basis for the periods prior to the Separation on April 3, 2020, and for those periods are derived from the consolidated financial statements and accounting records of our former parent, UTC. Prior to the Separation, the Company had been managed and operated in the normal course of business with other affiliates of UTC, and UTC incurred corporate costs such as treasury, tax, accounting, human resources, audit, legal, purchasing, information technology and other such services. The costs associated with these services generally included all payroll and benefit costs, as well as overhead costs related to certain functions. All such amounts have been deemed to have been incurred and settled by the Company in the period in which the costs were recorded. Accordingly, prior to the Separation, shared costs of $16 million and $80 million were allocated to the Company for 2020 and 2019, respectively, primarily reflected in Selling, general and administrative expense on the Consolidated Statements of Operations. There were no allocated centralized costs for the periods after the Separation. Separation Costs. We have incurred non-recurring Separation costs as follows: (dollars in millions) 2021 2020 2019 Separation costs $ 27 $ 119 $ 43 Separation-related costs prior to the Separation primarily consisted of employee-related costs, costs to establish certain standalone functions and information technology systems, professional services fees, costs to exit from certain services previously provided under the TSA and other transaction-related costs to transition to being a standalone public company. Costs after the Separation primarily consist of costs to exit from certain services previously provided under the TSA and other transaction-related costs to transition to being a standalone public company. Separation costs of $16 million, $106 million and $43 million, in 2021, 2020 and 2019, respectively, are recorded in Selling, general and administrative expense on the Consolidated Statements of Operations. Additional Separation-related items, which are recorded in Other income (expense), net, include adjustments to indemnification assets due from RTX related to the finalization of tax settlements in accordance with the TMA and other Separation-related costs. Separation costs in 2021, 2020 and 2019 are partially offset by income tax benefits of $15 million, $20 million and $6 million, respectively. Cash Management and Financing. Prior to the Separation, the Company participated in UTC's centralized cash management and financing programs. Disbursements were made through centralized accounts payable systems which were operated by our former parent, UTC. Cash receipts were transferred to centralized accounts, which were also maintained by UTC. As cash was received and disbursed by UTC, it was accounted for by the Company through UTC Net Investment. All short and long-term debt was financed by UTC prior to the issuance of the notes and the term loan in connection with the Separation, and the financing decisions for wholly and majority owned subsidiaries were determined by UTC. The cash reflected on the Consolidated Statements of Cash Flows as of December 31, 2019 represents cash on hand at certain foreign entities that did not participate in the centralized cash management program and were specifically identifiable to the Company. Long-Term Debt, Accounts Receivable and Accounts Payable. Certain related party transactions between the Company and our former parent, UTC, have been included within UTC Net Investment on the Consolidated Balance Sheets in the historical periods presented prior to the Separation. The UTC Net Investment includes related party receivable s due from UTC and its affiliates of $7.7 billion as of December 31, 2019. The UTC Net Investment includes related party payables due to UTC and its affiliates of $750 million as of December 31, 2019 , which primarily related to centralized cash management and financing programs. The UTC Net Investment includes related party debt due to UTC and its affiliates of $100 million as of December 31, 2019. The interest income and interest expense related to the activity with UTC that was included in Otis' results is presented on a net basis in the Consolidated Statements of Operations as this is settled in cash. Interest income and interest expense on the activity with our former parent UTC in 2019 was $23 million and $18 million, respectively. There was no interest income or interest expense activity with our former parent, UTC, in 2021 or 2020. The total effect of the settlement of these related party transactions is reflected as a financing activity on the Consolidated Statements of Cash Flows for the historical periods presented. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net consisted of the following as of December 31: (dollars in millions) 2021 2020 Trade receivables $ 3,117 $ 2,987 Unbilled receivables 109 104 Customer financing notes receivable 93 130 Miscellaneous receivables 88 88 3,407 3,309 Less: allowance for expected credit losses 175 161 Balance $ 3,232 $ 3,148 Credit Losses. We are exposed to credit losses primarily through our net sales of products and services to our customers which are recorded as Accounts Receivable, net on the Consolidated Balance Sheets. We evaluate each customer's ability to pay through assessing customer creditworthiness, historical experience and current economic conditions through a reasonable forecast period. Factors considered in our evaluation of assessing collectability and risk include: underlying value of any collateral or security interests, significant past due balances, historical losses and existing economic conditions including country and political risk. There can be no assurance that actual results will not differ from estimates or that consideration of these factors in the future will not result in an increase or decrease to the allowance for credit losses. We may require collateral or prepayment to mitigate credit risk. We estimate expected credit losses of financial assets with similar risk characteristics. We determine an asset is impaired when our assessment identifies there is a risk that we will be unable to collect amounts due according to the contractual terms of the agreement. We monitor our ongoing credit exposure through reviews of customer balances against contract terms and due dates, current economic conditions and dispute resolution. Estimated credit losses are written off in the period in which the financial asset is no longer collectible. The changes in allowance for credit losses related to Accounts receivable, net for the years ended December 31, 2021 and 2020 are as follows: (dollars in millions) 2021 2020 Balance as of January 1 $ 161 $ 83 Impact of credit standard adoption — 28 Provision for expected credit losses 37 40 Write-offs charged against the allowance for expected credit losses (15) (20) Foreign exchange and other (8) 30 Balance as of December 31 $ 175 $ 161 During 2020, there was approximately $26 million of previously reserved balances reclassified to allowance for credit losses. As a result, there was no impact to the Consolidated Statements of Operations for 2020. |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, Net (dollars in millions) 2021 2020 Raw materials and work-in-process $ 140 $ 113 Finished goods 482 546 Total $ 622 $ 659 Raw materials and work-in-process and Finished goods are net of valuation reserves of $99 million and $112 million as of December 31, 2021 and 2020, respectively. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed Assets (dollars in millions) Estimated Useful Lives 2021 2020 Land $ 43 $ 48 Buildings and improvements 20 - 40 Years 596 616 Machinery and equipment 3 - 12 Years 1,166 1,175 Assets under construction 125 132 1,930 1,971 Less: Accumulated depreciation (1,156) (1,197) $ 774 $ 774 Depreciation expense was $116 million, $100 million and $85 million in 2021, 2020 and 2019, respectively. In 2020, as a result of reviewing our technology strategies following the Separation, the Company recorded a pre-tax loss for the write-off of Assets under construction of approximately $71 million within Other income (expense), net in the Consolidated Statements of Operations. Fixed assets acquired during the year that are accrued within Accounts payable at year end is considered to be a non-cash investing activity and is excluded from cash used for capital expenditures in the Consolidated Statements of Cash Flows. Capital expenditures of $2 million, $15 million and $8 million were accrued within Accounts payable in the Consolidated Balance Sheets as of December 31, 2021, 2020 and 2019, respectively. |
Business Acquisitions, Goodwill
Business Acquisitions, Goodwill, and Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions, Goodwill, and Intangible Assets | Business Acquisitions, Goodwill and Intangible Assets Business Acquisitions. Our investments in businesses and intangible assets, net of cash acquired, totaled $80 million, $55 million (including debt assumed) and $47 million in 2021, 2020 and 2019, respectively. The acquisitions and investments consisted of a number of acquisitions primarily in our Service segment. Transaction costs incurred were not considered significant. In 2019, the Company recorded a pre-tax loss on the sale of a business of $19 million within Other income (expense), net on the Consolidated Statement of Operations. There were no significant disposals of businesses for the years ended December 31, 2021 or 2020. Goodwill. Changes in our Goodwill balances in 2021 were as follows: (dollars in millions) Balance as of January 1, 2021 Goodwill Resulting Foreign Currency Balance as of December 31, 2021 New Equipment $ 357 $ — $ (21) $ 336 Service 1,416 2 (87) 1,331 Total $ 1,773 $ 2 $ (108) $ 1,667 Changes in our Goodwill balances in 2020 were as follows: (dollars in millions) Balance as of January 1, 2020 Goodwill Resulting Foreign Currency Balance as of December 31, 2020 New Equipment $ 337 $ — $ 20 $ 357 Service 1,310 30 76 1,416 Total $ 1,647 $ 30 $ 96 $ 1,773 Intangible Assets. Identifiable intangible assets are comprised of the following: 2021 2020 (dollars in millions) Gross Amount Accumulated Gross Amount Accumulated Amortized: Purchased service portfolios $ 2,025 $ (1,638) $ 2,123 $ (1,661) Patents, trademarks/trade names 21 (17) 22 (16) Customer relationships and other 64 (43) 54 (45) 2,110 (1,698) 2,199 (1,722) Unamortized: Trademarks and other 7 — 7 — Total $ 2,117 $ (1,698) $ 2,206 $ (1,722) Fully amortized service portfolios of $117 million we re written off d uring 2020. Amortization of intangible assets was $87 million, $91 million and $95 million in 2021, 2020 and 2019, respectively. Excluding the impact of currency translation adjustments, there were no other significant changes in our Intangible Assets during 2021, 2020 and 2019. The estimated future amortization of intangible assets is as follows: (dollars in millions) 2022 2023 2024 2025 2026 Future amortization $ 81 $ 69 $ 61 $ 54 $ 40 |
Borrowings and Lines of Credit
Borrowings and Lines of Credit | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings and Lines of Credit | Borrowings and Lines of Credit (dollars in millions) 2021 2020 Commercial paper $ — $ 664 Other borrowings 24 37 Total short-term borrowings $ 24 $ 701 Commercial Paper. As of December 31, 2021, we had an aggregate $1.5 billion unsecured, unsubordinated commercial paper programs in place, and no borrowings outstanding under such programs. We use our commercial paper borrowings for general corporate purposes including to finance acquisitions, pay dividends and for debt refinancing. The need for commercial paper borrowings may arise if the use of domestic cash for general corporate purposes exceeds the sum of domestic cash generation and foreign cash repatriated to the U.S. In September 2020, we issued €420 million of Euro denominated commercial paper. The Euro denominated commercial paper, while outstanding, qualified as a net investment hedge against our investments in European businesses. During 2021, we fully repaid the Euro denominated commercial paper and there is no longer a related net investment hedge as of December 31, 2021. Refer to Note 18, "Financial Instruments" for further details on net investment hedges. We also issued $150 million of U.S. Dollar commercial paper in November 2020, which was fully repaid during 2021. The commercial paper issued in 2020 was used to pay down the term loan described further below under "Long-term debt". Long-term debt. As of December 31, 2021, we have a credit agreement, as amended, with various banks providing for a $1.5 billion unsecured, unsubordinated 5-year revolving credit facility, effective as of April 3, 2020, with an interest rate of LIBOR plus 125 basis points and a commitment fee rate of 12.5 basis points. As of December 31, 2021 , there were no borrowings under the revolving credit facility. The undrawn portion of the revolving credit facility serves as a backstop for the issuance of commercial paper. On February 10, 2020, we entered into a term loan credit agreement, as amended, providing for a $1.0 billion unsecured, unsubordinated 3-year term loan credit facility (the "term loan"). The Company drew on the full amount of the term loan on March 27, 2020 and then prepaid the full amount during 2020, resulting in the termination of the term loan credit agreement. Additionally, on February 27, 2020, we issued $5.3 billion unsecured, unsubordinated notes. The net proceeds of the term loan and the notes of approximately $6.3 billion were distributed to our former parent, UTC, prior to the Separation . On March 11, 2021, we issued ¥21.5 billion Japanese Yen denominated ($199 million), unsecured, unsubordinated 5-year notes due March 2026 (the "Yen Notes"). The net proceeds of the Yen Notes were used to repay a portion of our outstanding Euro denominated commercial paper. The Yen Notes qualify as a net investment hedge against our investments in Japanese businesses. As of December 31, 2021, the net investment hedge is deemed to be effective . Refer to Note 18, "Financial Instruments" for further details on net investment hedges. On September 22, 2021, we entered into a €1.65 billion bridge loan credit agreement (the "Bridge Credit Facility") and related guarantees in connection with the Tender Offer, which was intended to be drawn only to the extent we did not obtain permanent debt financing prior to the settlement date of the Tender Offer. On November 12, 2021, we issued €1.6 billion Euro denominated ($1.8 billion), unsecured, unsubordinated notes (the "Euro Notes"). The net proceeds of the Euro Notes will be used to fund the Tender Offer. Upon issuing the Euro Notes, the Bridge Credit Facility and related guarantees were terminated. The revolving credit agreement and indentures contain affirmative and negative covenants customary for financings of these types that, among other things, limit the Company's and its subsidiaries' ability to incur additional liens, to make certain fundamental changes and to enter into sale and leaseback transactions. In addition, the revolving credit agreement requires that we maintain a maximum consolidated leverage ratio, as defined in the agreement. The revolving credit agreement and indentures also contain events of default customary for financings of these types. The Company is in compliance with all covenants in the revolving credit agreement and the indentures governing all notes as of December 31, 2021. Long-term debt consisted of the following as of December 31: (dollars in millions) 2021 2020 LIBOR plus 45 bps floating rate notes due 2023 1,2 $ 500 $ 500 0.000% notes due 2023 (€500 million principal value) 2 565 — 2.056% notes due 2025 2 1,300 1,300 0.37% notes due 2026 ( ¥21.5 billion principal value) 2 189 — 0.318% notes due 2026 (€600 million principal value) 2 677 — 2.293% notes due 2027 2 500 500 2.565% notes due 2030 2 1,500 1,500 0.934% notes due 2031 (€500 million principal value) 2 565 — 3.112% notes due 2040 2 750 750 3.362% notes due 2050 2 750 750 Other (including finance leases) 4 5 Total principal long-term debt $ 7,300 $ 5,305 Other (premiums, discounts and debt issuance costs) (51) (43) Total long-term debt 7,249 5,262 Less: current portion — — Long-term debt, net of current portion $ 7,249 $ 5,262 1 The three-month LIBOR rate as of December 31, 2021 was approximately 0.21%. 2 We may redeem these notes at our option pursuant to certain terms. Debt issuance costs are presented as a re duction of debt on the Consolidated Balance Sheets and are amortized as a component of interest expense over the term of the related debt using the effective interest method. The Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 reflects the following: (dollars in millions) 2021 2020 2019 Debt issuance costs amortization $ 6 $ 5 $ — Total interest expense on debt (including debt issuance costs amortization) 136 124 — The unamortized debt issuance costs as of December 31, 2021 and 2020 were $51 million and $43 million, respectively. In addition to interest on debt, Interest expense (income), net on the Consolidated Statements of Operations in 2021 includes the write-off of $11 million in financing costs associated with the Bridge Credit Facility and related guarantees that were terminated. The average maturity of our long-term debt as of December 31, 2021 is approximately 8.9 years. The average interest expense rate on our borrowings as of December 31, 2021 and 2020 was as follows: December 31, 2021 2020 Short-term borrowings — % (0.2) % Total long-term debt 1.9 % 2.4 % The average interest expense rate on our borrowings for the years ended December 31, 2021 and 2020 was as follows: 2021 2020 Short-term borrowings (0.3) % (0.2) % Total long-term debt 2.3 % 2.3 % The schedule of principal payments required on long-term debt for the next five years and thereafter is: (dollars in millions) Principal Payments 2022 $ — 2023 1,066 2024 1 2025 1,301 2026 867 Thereafter 4,065 Total $ 7,300 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities (dollars in millions) 2021 2020 Accrued salaries, wages and employee benefits $ 603 $ 556 Accrued interest 221 223 Operating lease liabilities 181 167 Accrued income taxes payable 142 182 VAT and other non-income tax payables 97 102 Other liabilities 749 747 Total $ 1,993 $ 1,977 Accrued interest primarily consists of interest accrued for uncertain tax positions and the German tax litigation as described in Note 22, "Contingent Liabilities", as well as $46 million and $45 million of interest accrued for borrowings as of December 31, 2021 and 2020, respectively, as described in Note 10, "Borrowings and Lines of Credit". |
Other Long-term Liabilities
Other Long-term Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-term Liabilities | Other Long-term Liabilities (dollars in millions) 2021 2020 Contractual indemnity obligation $ 220 $ 239 General, product and auto liability 154 152 Employee benefits 105 113 Other liabilities 127 130 Total $ 606 $ 634 The Contractual indemnity obligation consists of a payable to RTX, resulting from the TMA . See Note 5, "Related Parties " for further details. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company sponsors numerous single-employer domestic and international employee benefit plans and, prior to the Separation, certain of our employees participated in employee benefit plans (“Shared Plans”) sponsored by our former parent, UTC, that included participants of the other UTC businesses. We have accounted for our participation in the Shared Plans prior to the Separation as multiemployer benefit plans, as discussed below. Employee Savings Plans. We sponsor various employee savings plans. Prior to the Separation, our former parent, UTC, also sponsored and contributed to defined contribution employee savings plans in which certain Otis employees participated. Our contributions to employer-sponsored defined contribution plans were $62 million, $54 million and $41 million for 2021, 2020, and 2019, respectively. Pension Plans. We sponsor both funded and unfunded domestic and international defined benefit pension plans that cover a large number of our employees. While we sponsor domestic pension plans that provide retirement benefits to certain employees, they are not a material component of the projected benefit obligation. Our plans use a December 31 measurement date consistent with our fiscal year. (dollars in millions) 2021 2020 Change in benefit obligation: Beginning balance $ 1,225 $ 1,092 Service cost 43 40 Interest cost 13 16 Actuarial (gain) loss (50) 40 Benefits paid (24) (28) Net settlement, curtailment and special termination benefits (31) (26) Other (50) 91 Ending balance $ 1,126 $ 1,225 Change in plan assets: Beginning balance $ 703 $ 622 Actual return on plan assets 43 24 Employer contributions 37 64 Benefits paid (24) (28) Settlements (31) (26) Other (38) 47 Ending balance $ 690 $ 703 Funded status: Fair value of plan assets $ 690 $ 703 Benefit obligations (1,126) (1,225) Funded status of plan $ (436) $ (522) Amounts recognized in the Consolidated Balance Sheets consist of: Noncurrent assets $ 106 $ 87 Current liability (23) (21) Noncurrent liability (519) (588) Net amount recognized $ (436) $ (522) Amounts recognized in Accumulated other comprehensive loss consist of: Net actuarial loss $ 176 $ 280 Prior service credit 2 (1) Net amount recognized $ 178 $ 279 The amounts included in "actuarial (gain) loss" in the above table primarily are due to changes in discount rate assumptions driven by changes in corporate bond yields. The amounts included in “Other” in the above table primarily reflect the impact of foreign exchange translation, primarily for plans in Australia, Canada, Germany, Japan, Spain, South Korea and Switzerland. In 2021, 2020 and 2019 we made cash contributions to our defined benefit pension plans of $37 million, $64 million and $32 million, respectively. Information for pension plans with accumulated benefit obligations in excess of plan assets: (dollars in millions) 2021 2020 Projected benefit obligation $ 567 $ 787 Accumulated benefit obligation 499 685 Fair value of plan assets 49 205 Information for pension plans with projected benefit obligations in excess of plan assets: (dollars in millions) 2021 2020 Projected benefit obligation $ 806 $ 991 Accumulated benefit obligation 694 846 Fair value of plan assets 263 383 The accumulated benefit obligation for all defined benefit pension plans was $1.0 billion and $1.1 billion as of December 31, 2021, and 2020, respectively. The components of the net periodic pension cost are as follows: (dollars in millions) 2021 2020 2019 Service cost $ 43 $ 40 $ 33 Interest cost 13 16 21 Expected return on plan assets (23) (25) (24) Amortization of prior service credit — (1) (1) Recognized actuarial net loss 18 16 10 Net settlement, curtailment and special termination benefits loss (gain) 2 5 2 Net periodic pension cost – employer $ 53 $ 51 $ 41 Other changes in plan assets and benefit obligations recognized in other comprehensive loss are as follows: (dollars in millions) 2021 2020 2019 Current year actuarial (gain) loss $ (70) $ 41 $ 28 Amortization of actuarial loss (18) (16) (10) Amortization of prior service credit — 1 1 Net settlement and curtailment (loss) gain (2) (5) (2) Other (11) 24 27 Total recognized in other comprehensive (income) loss $ (101) $ 45 $ 44 Net recognized in net periodic pension cost and other comprehensive (income) loss $ (48) $ 96 $ 85 The amounts included in “Other” in the above table primarily reflect the impact of foreign exchange translation, primarily for plans in Australia, France, Germany, Canada and Switzerland. Major assumptions used in determining the benefit obligation and net cost for pension plans are presented in the following table as weighted-averages: Benefit Obligation Net Cost 2021 2020 2021 2020 2019 Discount rate: Projected benefit obligation 1.5 % 1.1 % 1.1 % 1.5 % 2.5 % Salary scale 3.0 % 3.0 % 3.0 % 3.1 % 3.3 % Expected return on plan assets — — 3.6 % 4.5 % 5.2 % Interest crediting rate 1.0 % 0.6 % 0.6 % 0.7 % 1.5 % The weighted-average discount rates used to measure pension benefit obligations and net costs are set by reference to specific analyses using each plan’s specific cash flows and are then comparing them to high-quality bond indices for reasonableness. In determining the expected return on plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes, and economic and other indicators of future performance. In addition, we may consult with, and consider the opinions of, financial and other professionals in developing appropriate capital market assumptions. Return projections are also validated using a simulation model that incorporates yield curves, credit spreads and risk premiums to project long-term prospective returns. The plans’ investment management objectives include providing the liquidity and asset levels needed to meet current and future benefit payments, while maintaining a prudent degree of portfolio diversification considering interest rate risk and market volatility. Globally, investment strategies target a mix of approximately 50% of growth-seeking assets and 50% of income-generating and hedging assets using a wide diversification of asset types, fund strategies and investment managers. The growth seeking allocation consists of global public equities in developed and emerging countries, and alternative-asset class strategies. Within the income-generating assets, the fixed income portfolio consists of mainly government and broadly diversified high-quality corporate bonds. The fair values of pension plan assets as of December 31, 2021 and 2020 by asset category are as follows: (dollars in millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Not Subject to Leveling Total Asset category Public equities: Global Equity Commingled Funds (1) $ 70 $ 2 $ — $ — $ 72 Global Equity Funds at net asset value (5) — — — 196 196 Fixed income securities: Governments 19 — — — 19 Corporate Bonds 42 1 — — 43 Fixed income securities at net asset value (5) — — — 117 117 Real estate (2) (5) 11 14 — 11 36 Other (3) (5) 4 126 — 24 154 Cash and cash equivalents (4) (5) 4 1 — 44 49 Total $ 150 $ 144 $ — $ 392 686 Other assets and liabilities (6) 4 Total as of December 31, 2021 $ 690 (dollars in millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Not Subject to Leveling Total Asset category Public equities: Global Equity Commingled Funds (1) $ 52 $ 39 $ — $ — $ 91 Global Equity Funds at net asset value (5) — — — 154 154 Fixed income securities: Governments 20 41 — — 61 Corporate Bonds 49 4 — — 53 Fixed income securities at net asset value (5) — — — 90 90 Real estate (2) (5) 12 6 — 12 30 Other (3) (5) 2 129 — 25 156 Cash and cash equivalents (4) (5) 6 1 — 41 48 Total $ 141 $ 220 $ — $ 322 $ 683 Other assets and liabilities (6) 20 Total as of December 31, 2020 $ 703 (1) Represents investments in mutual funds and investments in commingled funds that invest primarily in common stocks. (2) Represents investments in real estate including commingled funds. (3) Represents insurance contracts and global-balanced-risk commingled funds consisting mainly of equity, bonds and some commodities. (4) Represents short-term commercial paper, bonds and other cash or cash-like instruments. (5) In accordance with FASB ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets. (6) Represents trust receivables and payables that are not leveled. Quoted market prices are used to value investments when available. Investments in securities traded on exchanges, including listed futures and options, are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices. Fixed income securities are primarily measured using a market approach pricing methodology, where observable prices are obtained by market transactions involving identical or comparable securities of issuers with similar credit ratings. Over-the-counter securities and government obligations are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes. Temporary cash investments are stated at cost, which approximates fair value. We expect to make total contributions of ap proximately $34 million to our g lobal defined benefit pension plans in 2022, including benefit payments to be paid directly from corporate assets. Benefit payments, including amounts to be paid from corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $60 million in 2022, $65 million in 2023, $62 million in 2024, $66 million in 2025, $66 million in 2026, and $339 million from 2027 through 2031. Postretirement Benefit Plans. We sponsor postretirement benefit plans that provide health benefits to eligible retirees. The postretirement plans are unfunded. The benefit obligation was $10 million and $11 million as of December 31, 2021, and 2020, respectively. The net periodic cost was $1 million for 2021, 2020 and 2019, respectively. Other comprehensive gain of $1 million was recognized during 2021 and other comprehensive loss of $2 million was recognized during 2020, related to changes in benefit obligations. The projected benefit obligation discount rate was 5.0% and 4.3% as of December 31, 2021 and 2020, respectively. The Net Cost discount rate was 4.3%, 4.7% and 5.3% for 2021, 2020 and 2019, respectively. Benefit payments, including amounts to be paid from corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $1 million each year from 2022 through 2026, and $3 million from 2027 through 2031. Multiemployer Benefit Plans. We contribute to various domestic and international multiemployer defined benefit pension plans. The risks of participating in these multiemployer plans are different from single-employer plans in that assets contributed are pooled and may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. Lastly, if we choose to stop participating in some of our multiemployer plans, we may be required to pay those plans a withdrawal liability based on the underfunded status of the plan. Our participation in these plans for the annual periods ended December 31 is outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act (“PPA”) zone status available in 2021 and 2020 is for the plan’s year-end at June 30, 2020 and June 30, 2019, respectively. The zone status is based on information that we received from the plan and is certified by the plan’s actuary. Our significant plan is in the green zone which represents a plan that is at least 80% funded and does not require a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”). An extended amortization provision of ten years was utilized to recognize investment gains or losses for our significant plan through June 30, 2019. (dollars in millions) PPA Zone Status FIP/RP Status Contributions Surcharge Imposed Expiration Date of Collective-Bargaining Agreement Pension Fund EIN/Pension Plan Number 2021 2020 Pending/Implemented 2021 2020 2019 National Elevator Industry Pension Plan 23-2694291 Green Green No $ 128 $ 131 $ 127 No 7/8/2022 Other funds 8 7 9 $ 136 $ 138 $ 136 For the plan years ended June 30, 2020 and 2019, respectively, we were listed in the National Elevator Industry Pension Plan’s Forms 5500 as providing more than 5% of the total contributions for the plan. At the date these financial statements were issued, the Form 5500 was not available for the plan year ending June 30, 2021. In addition, we participate in multiemployer arrangements that provide postretirement benefits other than pensions, with the National Elevator Industry Health Benefit Plan being the most significant. These arrangements generally provide medical and life benefits for eligible active employees and retirees and their dependents. Contributions to multiemployer plans that provide postretirement benefits other than pensions were $20 million, $20 million and $21 million for 2021, 2020 and 2019, respectively. UTC Sponsored Defined Benefit Plans. Defined benefit pension and postretirement benefit plans were sponsored by our former parent, UTC, and have been accounted for as multi-employer plans in these Consolidated Financial Statements, in accordance with FASB ASC Topic 715-30: Defined Benefit Plans – Pension and FASB ASC Topic 715-60: Defined Benefit Plans – Other Postretirement . The Company's participation in the defined pension and postretirement benefit plans sponsored by our former parent, UTC, concluded upon the completion of the Separation. The amounts for pension and postretirement expenses for Service cost and Non-service pension benefit were $1 million and $5 million, respectively, in 2020, and $15 million and $42 million, respectively, in 2019. Stock-based Compensation. In connection with the Separation, the Company adopted the 2020 Long-Term Incentive Plan (the "Plan"). The Plan became effective on April 3, 2020. A total of 45 million shares of common stock are authorized under the Plan. The Plan provides for the grant of various types of awards including restricted share unit awards, stock appreciation rights, stock options, and performance-based awards. Under the Plan, the exercise price of awards, if any, is set on the grant date and may not be less than the fair market value per share on that date. Generally, stock appreciation rights and stock options have a term of ten years and a three-year vesting period, subject to limited exceptions. In the event of retirement, annual stock appreciation rights, stock options, and restricted share units held for more than one year may become vested and exercisable (if applicable), subject to certain terms and conditions. Awards with performance-based vesting generally have a minimum three-year vesting period and vest based on actual performance against pre-established met rics. In the event of retirement, performance-based awards held for more than one year remain eligible to vest based on actual perfo rmance relative to target metrics. All other restricted awards generally have a three-year vesting period. We currently intend to issue new shares for share option exercises and conversions under our equity compensation arrangements, and will continue to evaluate this policy in connection with our share repurchase program. As of December 31, 2021, approximately 26 million sh ares remain available for awards under the 2020 Plan. In connection with the Separation, and in accordance with the EMA, the Company's employees with outstanding former UTC stock-based awards received replacement stock-based awards under the Plan at Separation. The value of the replaced stock-based awards was designed to preserve the aggregate intrinsic value of the award immediately after the Separation when compared to the aggregate intrinsic value of the award immediately prior to Separation. The incremental expense incurred by the Company was not material. Prior to the Separation, certain of the Company's employees participated in stock-based compensation plans sponsored by our former parent, UTC. The UTC stock-based compensation plans included various types of market and performance-based incentive awards, including stock options, stock appreciation rights, restricted stock units, and performance-based share units. All awards granted under the plans were based on UTC common shares, and only the activity attributable to Otis employees from these awards, as converted at the Separation, is reflected in the accompanying Consolidated Financial Statements for the years ended December 31, 2021 and 2020. Stock-based Compensation Expense We measure the cost of all share-based payments, including stock options, at fair value on the grant date and recognize this cost in the Consolidated Statements of Operations. A forfeiture rate assumption is applied on grant date to adjust the expense recognition for awards that are not expected to vest. Stock-based compensation expense and the resulting tax benefits were as follows: Year Ended (dollars in millions) 2021 2020 2019 Stock-based compensation expense (Share-based) $ 65 $ 63 $ 37 Stock-based compensation expense (Cash-based) 2 (4) 10 Total gross stock-based compensation expense 67 59 47 Less: future tax benefit 8 7 5 Stock-based compensation expense, net of tax $ 59 $ 52 $ 42 For periods prior to the Separation, stock-based compensation expense includes expense attributable to Otis, and the fair value assumptions are based on the awards and terms previously granted under the UTC incentive compensation plan to Otis employees. Accordingly, the amounts presented for the years ended December 31, 2020 and 2019 are not necessarily indicative of future awards and do not necessarily reflect the results that Otis would have experienced as an independent publicly-traded company. For the years ended December 31, 2021, 2020 and 2019, the amount of cash received from the exercise of stock options was $4 million, $3 million and $10 million, respectively, with an associated tax benefit realized of $4 million, $2 million and $6 million, respectively. In addition, for the years ended December 31, 2021, 2020 and 2019, the associated tax benefit realized from the vesting of performance share units and other restricted awards was $4 million, $1 million and $4 million, respectively. The 2021 and 2020 amounts were computed using current U.S. federal and state tax rates. As of December 31, 2021, there was approximately $57 million of total unrecognized compensation cost related to non-vested equity awards granted under the Plan. This cost is expected to be recognized ratably over a weighted-average period of 2.0 years. A summary of the transactions under Otis' plans for the year ended December 31, 2021 follows: Stock Appreciation Rights Restricted Share Units Performance Share Units Stock Options (shares in thousands) Shares Average Price* Shares Average Price** Shares Average Price** Shares Average Price* Outstanding at: December 31, 2020 12,177 $ 60.63 1,710 $ 63.94 — $ — 454 $ 55.31 Granted (1) 1,344 64.81 483 68.67 334 67.58 19 71.93 Exercised / Earned (1) (2,269) 51.67 (458) 68.31 — — (96) 46.41 Cancelled (537) 66.72 (83) 67.60 (4) 67.71 (1) 80.97 December 31, 2021 10,715 $ 62.74 1,652 $ 63.91 330 $ 67.58 376 $ 58.31 * Weighted-average grant price ** Weighted-average grant fair value (1) Includes annual retainer awards issued to the Board of Directors The weighted-average grant date fair value of stock options and stock appreciation rights granted by Otis and our former parent, UTC, during 2021, 2020 and 2019 was $14.83, $10.38 and $20.92, respectively. The weighted-average grant date fair value of performance share units, which vest upon achieving certain performance metrics, and other restricted stock awards granted by Otis and UTC during 2021, 2020 and 2019 was $68.22, $54.29 and $109.17, respectively. The total intrinsic value (which is the amount by which the stock price exceeded the exercise price on the date of exercise) of stock options and stock appreciation rights exercised during 2021, 2020 and 2019 was $74 million, $13 million and $53 million, respectively. The total fair value (which is the stock price at vesting) of performance share units and other restricted awards vested was $32 million, $10 million and $33 million during the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes information about equity awards outstanding that are vested and expected to vest and equity awards outstanding that are exercisable as of December 31, 2021: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable (shares in thousands; aggregate intrinsic value in millions) Awards Average Price* Aggregate Intrinsic Value Remaining Term** Awards Average Price* Aggregate Intrinsic Value Remaining Term** Stock Options/Stock Appreciation Rights 11,027 $ 62.53 $ 271 5.4 years 6,846 $ 57.62 $ 202 3.9 years Performance Share Units/Restricted Stock 1,921 — $ 167 1.4 years * Weighted-average grant price per share ** Weighted-average contractual remaining term in years The fair value of each option award is estimated on the date of grant using a binomial lattice model. The following table indicates the assumptions used in estimating fair value for the years ended December 31, 2021, 2020 and 2019. For periods prior to the Separation, these assumptions represent those utilized by our former parent, UTC, and are not necessarily indicative of assumptions that would be used by Otis as a standalone company. Lattice-based option models incorporate ranges of assumptions for inputs; those ranges are as follows: 2021 2020 2019 Expected volatility 26.9% 25.5% 18.8% - 19.7% Weighted-average volatility 26.9% 25.5% 19.5% Expected term (in years) 6.3 6.8 6.5 - 6.6 Expected dividend yield 1.3% 1.8% 2.4% Risk-free rate 0.7% 0.5% 2.3% - 2.7% Due to the lack of trading history of Otis' stock at the time of valuation efforts, the expected volatility for Otis was calculated based on the average of the volatility of the peer group within the industry. UTC's historical data for Otis employees was used to estimate equity award exercise and employee termination behavior within the valuation model. The expected term represents an estimate of the period of time equity awards are expected to remain outstanding. The risk-free rate is based on the term structure of interest rates at the time of equity award grant. The Company uses a Monte Carlo simulation approach based on a three-year measurement period to determine fair value of performance share units. This approach includes the use of assumptions regarding the future performance of the Company’s stock and those of a peer group. Those assumptions include expected volatility, risk-free interest rates, correlations and dividend yield. |
Stock
Stock | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stock | Stock Preferred Stock. There are 125 million shares of $0.01 par value authorized Preferred Stock, of which none were issued or outstanding as of December 31, 2021 or 2020. Common Stock. There are 2 billion shares of $0.01 par value Common Stock authorized. As of December 31, 2021, 434.7 million shares of Common Stock were issued, which includes 9.7 million shares of treasury stock. As of December 31, 2020, 433.4 million shares of Common Stock were issued and outstanding. Share Repurchase Program. As of December 31, 2021, the Company was authorized by the Board of Directors to purchase up to $1 billion of Common Stock under a share repurchase program, of which $725 million had been utilized. During 2021, the Company repurchased 9.7 million shares of Common Stock for approximately $725 million. The Company's share repurchase program does not obligate it to acquire any specific number of shares. Under this program, shares may be purchased on the open market, in privately negotiated transactions, under accelerated share repurchase programs or under plans complying with rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a result of the increased debt incurred to fund the Tender Offer, we have temporarily suspended our share repurchases as we focus on deleveraging. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) A summary of the changes in each component of Accumulated other comprehensive income (loss), net of tax for the years ended December 31, 2021, 2020 and 2019 is provided below: (dollars in millions) Foreign Defined Benefit Unrealized Accumulated Balance as of December 31, 2018 $ (573) $ (135) $ — $ (708) Other comprehensive income (loss) before (15) (50) (3) (68) Amounts reclassified, pre-tax — 9 — 9 Tax expense (benefit) reclassified — 9 — 9 Balance as of December 31, 2019 $ (588) $ (167) $ (3) $ (758) Other comprehensive income (loss) before (28) (47) 10 (65) Amounts reclassified, pre-tax — 15 (3) 12 Tax expense (benefit) reclassified — (4) — (4) Balance as of December 31, 2020 $ (616) $ (203) $ 4 $ (815) Other comprehensive income (loss) before (26) 62 (1) 35 Amounts reclassified, pre-tax — 18 4 22 Tax expense (benefit) reclassified — (5) — (5) Balance as of December 31, 2021 $ (642) $ (128) $ 7 $ (763) Amounts reclassified that relate to defined benefit pension and postretirement plans include amortization of prior service costs and actuarial net losses recognized during each period presented. These costs are recorded as components of net periodic pension cost for each period presented . See Note 13, "E mployee Benefit Plans" for additional information. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Before Income Taxes. The sources of income from operations before income taxes are: (dollars in millions) 2021 2020 2019 United States $ 420 $ 105 $ 470 Foreign 1,541 1,406 1,391 $ 1,961 $ 1,511 $ 1,861 Following enactment of the TCJA, and as part of the historical UTC assertion, the Company determined that it no longer intends to reinvest certain undistributed earnings of its international subsidiaries that have been previously taxed in the U.S. As such, in 2018 Otis recorded the international taxes associated with the future remittance of these earnings. As part of the Separation process, the Company re-assessed this position as a standalone company. The Company no longer intends to reinvest certain undistributed earnings of its international subsidiaries that have been previously taxed in the U.S. The international taxes recorded relative to this assertion differ from those recorded in 2018. As a result of the change in assertion and changes in planned debt repayments and in estimates related to Otis’ pre-Separation tax attributes, the Company recognized two benefits: one of $10 million during the year ended December 31, 2020, and one of $16 million during the year ended December 31, 2021. For the remainder of the Company's undistributed international earnings, unless tax effective to repatriate, Otis will continue to permanently reinvest these earnings. As of December 31, 2021, such undistributed earnings were approximately $5.1 billion, excluding other comprehensive income amounts. It is not practicable to estimate the amount of tax that might be payable on the remaining amounts. Provision for Income Taxes. The income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 consisted of the following components: (dollars in millions) 2021 2020 2019 Current: United States: Federal $ 77 $ 42 $ 103 State 32 26 38 Foreign 524 438 461 633 506 602 Future: United States: Federal (13) 8 11 State (6) (8) — Foreign (73) (51) (19) (92) (51) (8) Income tax expense $ 541 $ 455 $ 594 Attributable to items (charged) credited to (deficit) equity $ (25) $ (6) $ (14) Reconciliation of Effective Income Tax Rate. Differences between effective income tax rates and the statutory U.S. federal income tax rate are as follows: 2021 2020 2019 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes 0.8 % 0.9 % 1.7 % Tax on international activities 4.7 % 4.4 % 6.5 % U.S. tax effect of foreign earnings 0.5 % 3.4 % 2.9 % Other 0.6 % 0.4 % (0.2) % Effective income tax rate 27.6 % 30.1 % 31.9 % The 2021, 2020, and 2019 effective tax rates are higher than the statutory U.S. rate primarily due to higher international tax rates as co mpared to the lower U.S. federal statutory rate and foreign earnings subject to U.S. tax under the provisions of the TCJA. The 2021 effective tax rate is lower than the 2020 effective tax rate primarily due to a $16 million tax benefit related to the repatriation of foreign earnings as a result of changes to planned debt repayments and in estimates related to Otis’ pre-Separation tax attributes and a decrease of $16 million in U.S. tax related to base erosion and anti-abuse tax in 2021. In addition, the lower effective tax rate is due to the absence of the tax cost resulting from Separation-related expenses and fixed asset impairment in 2020, and the net impact of income tax settlements related to the Separation, as discussed in Note 5, "Related Parties". The 2020 effective tax rate is lower than the 2019 effective tax rate primarily due to a $10 million tax benefit related to our change in assertion of no longer intending to reinvest certain undistributed earnings of our international subsidiaries made during 2020 as compared to the liability previously recorded by UTC, a decrease as a result of tax regulations related to the TCJA that were enacted during 2020, as well as a recognition of a Separation-related foreign tax loss, all partially offset by incremental withholding taxes in 2020. Deferred Tax Assets and Liabilities. Future income taxes represent the tax effects of transactions which are reported in different periods for tax and financial reporting purposes. These amounts consist of the tax effects of temporary differences between the tax and financial reporting balance sheets and tax carryforwards. Future income tax benefits and payables within the same tax paying component of a particular jurisdiction are offset for presentation in the Consolidated Balance Sheets. The tax effects of temporary differences and tax carryforwards which gave rise to future income tax benefits and payables as of December 31, 2021 and 2020 are as follows: (dollars in millions) 2021 2020 Future income tax benefits: Insurance and employee benefits $ 185 $ 201 Other asset basis differences 143 149 Other liability basis differences 320 299 Tax loss carryforwards 200 197 Tax credit carryforwards 46 38 Valuation allowances (247) (242) $ 647 $ 642 Future income taxes payable: Intangible assets $ 168 $ 182 Other assets basis differences 284 335 $ 452 $ 517 Valuation allowances have been established primarily for tax credit carryforwards, tax loss carryforwards, and certain foreign temporary differences to reduce the future income tax benefits to expected realizable amounts. Tax Credit and Loss Carryforwards. As of December 31, 2021, tax credit carryforwards, principally state and foreign, and tax loss carryforwards, principally state and foreign, were as follows: (dollars in millions) Tax Credit Carryforwards Tax Loss Carryforwards Expiration period: 2022-2026 $ 1 $ 53 2027-2031 14 20 2032-2041 1 71 Indefinite 30 668 $ 46 $ 812 Unrecognized Tax Benefits. As of December 31, 2021, the Company had gross tax-effected unrecognized tax benefits of $392 million, all of which, if recognized, would impact the effective tax rate. A reconciliation of the beginning and ending amounts of unrecognized tax benefits and interest expense related to unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019 is as follows: (dollars in millions) 2021 2020 2019 Balance at January 1 $ 397 $ 379 $ 380 Additions for tax positions related to the current year 23 16 18 Additions for tax positions of prior years 1 41 15 Reductions for tax positions of prior years (22) (31) (15) Settlements (7) (8) (19) Balance at December 31 $ 392 $ 397 $ 379 Gross interest expense related to unrecognized tax benefits $ 2 $ 10 $ 8 Total accrued interest balance at December 31 $ 152 $ 153 $ 141 Otis conducts business globally and, as a result, Otis or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the ordinary course of business, Otis could be subject to examination by taxing authorities throughout the world, including such major jurisdictions as Austria, Belgium, Brazil, Canada, China, France, Germany, Hong Kong, India, Italy, Japan, Mexico, Netherlands, Portugal, Russia, South Korea, Spain, Switzerland, the United Kingdom and the U.S. With few exceptions, Otis is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years b efore 2010. A subsidiary of Otis engaged in litigation in Belgium received a favorable appellate court decision in 2018. The Belgian Tax Authorities appealed the decision to the Court of Cassation (the equivalent of Supreme Court in Belgium). On December 4, 2020, the Court of Cassation overturned the decision of the appellate court and remanded the case to the appellate court for reconsideration. It is not known how much time will elapse prior to the issuance of the appellate court’s decision. The associated tax and interest have been fully reserved. In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax be nefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting d ate. It is reasonably possible that a range of a $20 million increase to a $360 million reduction of unrecognized tax benefits and a range of a $5 million increase to a $150 million reduction in associated interest may occur within the next 12 months as a result of additional worldwide uncertain tax positions, the closure of tax statutes, or th e revaluation of current uncertain tax positions arising from the issuance of legislation, regulatory or other guidance or developments in examinations, in appeals or in the courts. See Note 22, "Contingent Liabilities" for discussion regarding uncertain tax positions, included in the above range, related to pending litigation with respect to certain deductions claimed in Germany. |
Restructuring Costs
Restructuring Costs | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Restructuring Costs We initiate restructuring actions to keep our cost structure competitive. Charges generally arise from severance related to workforce reductions, an d to a lesser degree, facility exit and lease termination costs associated with the consolidation of office and manufacturing operations. During the years ended December 31, 2021, 2020 and 2019, we recorded pre-tax restructuring costs totaling $56 million, $77 million and $54 million, respectively, for new and ongoing restructuring actions. We recorded restructuring charges in our operating segments as follows: (dollars in millions) 2021 2020 2019 New Equipment $ 23 $ 30 $ 19 Service 33 47 35 Total $ 56 $ 77 $ 54 Restructuring charges incurred in the years ended December 31, 2021, 2020 and 2019 primarily relate to actions initiated during 2021, 2020 and 2019, and were recorded as follows: (dollars in millions) 2021 2020 2019 Cost of products and services sold $ 22 $ 22 $ 19 Selling, general and administrative 34 55 35 Total $ 56 $ 77 $ 54 Restructuring Actions. During 2021, we recorded restructuring costs of $41 million for restructuring actions initiated in 2021, consisting of $13 million in Cost of products and services sold and $28 million in Selling, general and administrative expenses. During 2021 , we recorded restructuring costs totaling $13 million for restructuring actions initiated in 2020, consisting of $9 million in Cost of products and services sold and $4 million in Selling, general and administrative expenses. During 2021, we also recorded restructuring costs tota ling $2 million for restructuring actions initiated in 2019 and prior. We are targetin g to complete i n 2022 the majority of remaining restructuring actions initiated in 2021 and 2020. The following table summarizes the accrual balance and utilization for the 2021 and 2020 restructuring actions, which are primarily for severance costs: (dollars in millions) 2021 Actions 2020 Actions Restructuring accruals as of December 31, 2020 $ — $ 42 Restructuring costs 41 13 Utilization, foreign exchange and other costs (19) (30) Balance as of December 31, 2021 $ 22 $ 25 The following table summarizes expected, incurred and remaining costs for the 2021 and 2020 restructuring actions by segment: (dollars in millions) Expected Costs Cost Incurred During 2020 Costs Incurred During 2021 Remaining Costs as of December 31, 2021 New Equipment $ 15 $ — $ (14) $ 1 Service 33 — (27) 6 Total 2021 Actions $ 48 $ — $ (41) $ 7 New Equipment $ 36 $ (29) $ (7) $ — Service 48 (42) (6) — Total 2020 Actions $ 84 $ (71) $ (13) $ — |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments We enter into derivative instruments primarily for risk management purposes, including derivatives designated as hedging instruments under ASC 820, Fair Value Measurement . We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, commodity prices and foreign exchange rates. These fluctuations can increase the costs of financing, investing in and operating the business. We may use derivative instruments, including swaps, forward contracts and options, to manage certain foreign currency, commodity price and interest rate exposures. The average of the notional amount of foreign exchange contracts hedging foreign currency transactions was $3.3 billion and $3.0 billion as of December 31, 2021 and 2020, respectively. The average of the notional amount of contracts hedging commodity purchases was $16 million and $0 million as of December 31, 2021 and 2020, respectively The following table summarizes the fair value and presentation on the Consolidated Balance Sheets for derivative instruments as of December 31: (dollars in millions) Balance Sheet Classification 2021 2020 Derivatives designated as Cash flow hedging instruments: Asset Derivatives: Foreign exchange contracts Other current assets $ 7 $ 9 Foreign exchange contracts Other assets 1 4 Total asset derivatives $ 8 $ 13 Liability Derivatives: Foreign exchange contracts Accrued liabilities $ (3) $ (7) Foreign exchange contracts Other long-term liabilities — (4) Total liability derivatives $ (3) $ (11) Derivatives not designated as Cash flow hedging instruments: Asset Derivatives: Foreign exchange contracts Other current assets $ 23 $ 23 Foreign exchange contracts Other assets 5 10 Total asset derivatives $ 28 $ 33 Liability Derivatives: Foreign exchange contracts Accrued liabilities $ (11) $ (24) Foreign exchange contracts Other long-term liabilities (2) (8) Total liability derivatives $ (13) $ (32) Derivatives designated as Cash flow hedging instruments The amount of gain or (loss) attributable to foreign exchange contract activity reclassified from Accumulated other comprehensive income (loss) was immaterial for the years ended December 31, 2021, 2020 and 2019, respectively. The effect of cash flow hedging relationships on Accumulated other comprehensive income (loss) as of December 31, 2021 and 2020 are presented in the table below. December 31, (dollars in millions) 2021 2020 Gain (loss) recorded in Accumulated other comprehensive income (loss) $ 7 $ 4 The Company utilizes the critical terms match method in assessing firm commitment derivatives for hedge effectiveness. Accordingly, the hedged items and derivatives designated as hedging instruments are highly effective. Assuming current market conditions continue, a pre-tax gain of $4 million is expected to be reclassified from Accumulated other comprehensive income (loss) into Cost of product sold to reflect the fixed prices obtained from foreign exchange hedging within the next 12 months. All derivative contracts accounted for as cash flow hedges as of December 31, 2021 will mature by December 2024. Net Investment Hedges We have foreign-denominated long-term debt balances that qualify as net investment hedges. Changes in the value of these net investment hedges due to foreign currency gains or losses are deferred as foreign currency translation adjustments in Other comprehensive income (loss) on the Consolidated Statements of Comprehensive Income, and will remain in Accumulated other comprehensive income (loss) until the hedged investment is sold or substantially liquidated. We evaluate the effectiveness of the net investment hedges each quarter. In September 2020, we issued €420 million of Euro denominated commercial paper. The Euro denominated commercial paper while outstanding qualified as a net investment hedge against our investments in European businesses and was deemed to be effective as of December 31, 2020. During 2021, we fully repaid the Euro denominated commercial paper and there is no longer a net investment hedge as of December 31, 2021. During 2021 and 2020 , we recognized $16 million of gains and $18 million of losses, respectively, associated with this net investment hedge in Other comprehensive income (loss) . We have ¥21.5 billion of Japanese Yen denominated long-term debt, which qualifies as a net investment hedge against our investments in Japanese businesses. As of December 31, 2021, the net investment hedge is deemed to be effective. During 2021, we recognized $10 million of gains associated with this net investment hedge in Other comprehensive income (loss). Derivatives not designated as Cash flow hedging instruments The net effect of derivatives not designated as Cash flow hedging instruments within Other income (expense) net, on the Consolidated Statements of Operations was as follows: Year Ended December 31, (dollars in millions) 2021 2020 2019 Foreign exchange contracts $ 9 $ (4) $ (9) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements In accordance with the provisions of ASC 820: Fair Value Measurements , the following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring and non-recurring basis in our Consolidated Balance Sheets as of December 31, 2021 and 2020: December 31, 2021 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurements: Equity securities $ 25 $ 25 $ — $ — Derivative assets 36 — 36 — Derivative liabilities (16) — (16) — December 31, 2020 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurements: Equity securities $ 59 $ 59 $ — $ — Derivative assets 46 — 46 — Derivative liabilities (43) — (43) — Valuation Techniques . Our equity securities include equity investments that are traded in active markets, either domestically or internationally, and are measured at fair value using closing stock prices from active markets. The fair value gains or losses related to our equity securities are recorded through net income. Our derivative assets and liabilities include foreign exchange and commodity contracts that are measured at fair value using internal models based on observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties' credit risks. As of December 31, 2021, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk. Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties' credit risks. The fair values of the current portion of the Company's financial instruments not carried at fair value approximated their carrying values because of the short-term nature of the current portion. The fair value of receivables, including customer financing notes receivable, net, that were issued long-term are based on the discounted values of their related cash flows at interest rates reflecting the attributes of the counterparties, including geographic location. Customer-specific risk, including credit risk, is already considered in the carrying value of those receivables. Our long-term debt, as described in Note 10, "Borrowings and Lines of Credit", are measured at fair value using closing bond prices from active markets. The following table provides carrying amounts and fair values of financial instruments that are not carried at fair value in our Consolidated Balance Sheets as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 (dollars in millions) Carrying Fair Carrying Fair Long-term receivables, net $ 65 $ 63 $ 65 $ 62 Customer financing notes receivable, net 77 76 128 126 Short-term borrowings (24) (24) (701) (701) Long-term debt (excluding leases and other) (7,296) (7,420) (5,300) (5,717) Long-term liabilities (including current portion) (253) (240) (263) (234) Long-term liabilities (including current portion) as of December 31, 2021 includes $239 million of payables to RTX for reimbursement of tax payments that RTX is responsible to pay after the Separation as a result of the TMA. The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in the Consolidated Balance Sheets as of December 31, 2021 and 2020: December 31, 2021 (dollars in millions) Total Level 1 Level 2 Level 3 Long-term receivables, net $ 63 $ — $ 63 $ — Customer financing notes receivable, net 76 — 76 — Short-term borrowings (24) — (24) — Long-term debt (excluding leases and other) (7,420) — (7,420) — Long-term liabilities (including current portion) (240) — (240) — December 31, 2020 (dollars in millions) Total Level 1 Level 2 Level 3 Long-term receivables, net $ 62 $ — $ 62 $ — Customer financing notes receivable, net 126 — 126 — Short-term borrowings (701) — (701) — Long-term debt (excluding leases and other) $ (5,717) — (5,717) — Long-term liabilities (including current portion) (234) — (234) — |
Guarantees
Guarantees | 12 Months Ended |
Dec. 31, 2021 | |
Guarantees and Product Warranties [Abstract] | |
Guarantees | Guarantees The Company provides service and warranty on its products beyond normal service and warranty policies. The changes in the carrying amount of service and product guarantees for the years ended December 31, 2021 and 2020 are as follows: (dollars in millions) 2021 2020 Balance as of January 1 $ 25 $ 27 Warranties 3 12 Settlements made (9) (14) Other 1 — Balance as of December 31 $ 20 $ 25 The Company provides certain financial guarantees to third parties. As of December 31, 2021, Otis has stand-by letters of credit with maximum potential payment totaling $154 million. We accrue costs associated with guarantees when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts, and where no amount within a range of estimates is more likely, the minimum is accrued. In accordance with the FASB ASC Topic 460: Guarantees , we record these liabilities at fair value. As of December 31, 2021, Otis has determined there are no estimated costs probable under these guarantees. In connection with the Tender Offer, the Company entered into certain arrangements whereby third party banks agreed to provide financial guarantees to the CNMV in an amount equal to the original total price of the Tender Offer of €1.63 billion, as required by the Spanish takeover code. On November 12, 2021, the financial guarantees to the CNMV were terminated upon deposit into escrow of an amount equal to the total price of the Tender Offer. See Note 10, "Borrowings and Lines of Credit" for additional discussion of the Euro Notes issued to fund the Tender Offer. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases ASU 2016-02, Leases (Topic 842) and its related amendments (collectively, "Lease Accounting Standard") establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the Consolidated Balance Sheets for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition on the Consolidated Statements of Operations. We enter into lease agreements for the use of real estate space, vehicles and certain other equipment under operating and finance leases. We determine if an arrangement contains a lease at inception. Operating leases are included in Operating lease ROU assets, Accrued liabilities, and Operating lease liabilities in our Consolidated Balance Sheets. Finance leases are not considered significant to our Consolidated Balance Sheets or Consolidated Statements of Operations. We apply the practical expedient for short-term leases, whereby a lease ROU asset and liability is not recognized and the expense is recognized in a straight-line basis over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments, and use the implicit rate when readily determinable. We determine our incremental borrowing rate through market sources including relevant industry rates. Our lease ROU assets also include any lease pre-payments and exclude lease incentives. Certain of our leases inclu de variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. We exclude variable payments from lease ROU assets and lease liabilities, to the extent not considered fixed, and instead, expense variable payments as incurred. Variable lease expense and lease expense for short duration contracts is not a material component of lease expense. Our leases generally have remaining lease terms of 1 to 20 years, some of which include options to extend leases. The majority of our leases with options to extend are up to five years with the ability to terminate the lease within one year. The exercise of lease renewal options is at our sole discretion and our lease ROU assets and liabilities reflect only the options we are reasonably certain that we will exercise. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense for the years ended December 31, 2021, 2020 and 2019 as $147 million, $148 million and $152 million, respectively . The Company made immaterial adjustments to the prior year footnote disclosure of operating lease expense in 2020 and 2019, which did not impact the amounts recorded in the Consolidated Statements of Operations for the years ended December 31, 2020 and 2019. Supplemental cash flow information related to operating leases for the years ended December 31, 2021, 2020 and 2019 were as follows: (dollars in millions) 2021 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash outflows from operating leases $ (154) $ (162) $ (134) Non-cash operating lease activity: ROU assets obtained in exchange for operating lease liabilities 135 126 157 Operating lease ROU assets and liabilities are reflected on our Consolidated Balance Sheets as follows: December 31, (dollars in millions) 2021 2020 Operating lease ROU assets $ 526 $ 542 Accrued liabilities $ 181 $ 167 Operating lease liabilities 336 367 Total operating lease liabilities $ 517 $ 534 Supplemental information related to operating leases was as follows: December 31, 2021 2020 Weighted Average Remaining Lease Term (in years) 4.4 5.0 Weighted Average Discount Rate 2.6 % 2.9 % Undiscounted maturities of operating lease liabilities, including options to extend lease terms that are reasonably certain of being exercised, as of December 31, 2021 are as follows: (dollars in millions) Total 2022 $ 171 2023 136 2024 102 2025 52 2026 32 Thereafter 52 Total undiscounted lease payments 545 Less: imputed interest (28) Total discounted lease payments $ 517 |
Contingent Liabilities
Contingent Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities Except as otherwise noted, while we are unable to predict the final outcome, based on information currently available, we do not believe that resolution of any of the following matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. In addition to the specific amounts noted below, where we have recorded loss contingency accruals for other matters described below, the amounts in aggregate are not material. Legal costs generally are expensed when incurred. Environmental. As previously disclosed, the Company's operations are subject to environmental regulation by authorities with jurisdiction over its operations. The Company has accrued for the costs of environmental remediation activities, including, but not limited to, investigatory, remediation, operating and maintenance costs and performance guarantees, and periodically reassesses these amounts. Management believes that the likelihood of incurring losses materially in excess of amounts accrued is remote. The outstanding liability for environmental obligations was $12 million as of December 31, 2021 and December 31, 2020, and is principally included in Other long-term liabilities on the Consolidated Balance Sheets. Legal Proceedings. German Tax Litigation As previously disclosed, we have been involved in administrative review proceedings with the German Tax Office, which concern approximately €215 million (approximately $243 million as of December 31, 2021) of tax benefits that we have claimed related to a 1998 reorganization of the corporate structure of our operations in Germany. Upon audit, these tax benefits were disallowed by the German Tax Office. We estimate interest associated with the aforementioned tax benefits is an additional approximately €118 million (approximately $134 million as of December 31, 2021). On August 3, 2012, a suit was filed in the local German Tax Court (Berlin-Brandenburg). In 2015, our former parent UTC made tax and interest payments to German tax authorities of €275 million (approximately $300 million) in order to avoid additional interest accruals pending final resolution of this matter. In March 2016, the local German Tax Court dismissed the suit, and we appealed this decision to the German Federal Tax Court. Following a hearing on July 24, 2018, the German Federal Tax Court remanded the matter to the local German Tax C ourt for further proce edings. On December 7, 2020, the local Tax Court ruled against the Company. We have filed an appeal with the Federal Tax Court and expect a decision on our appeal in the first quarter of 2022. There is no assurance, however, that the German Federal Tax Court will agree to hear the appeal or, if it does, rule in the Company's favor, and the decision of the German Tax Office ultimately could be sustained. Pursuant to the TMA, the Company retains the liability associated with the remaining interest, and has recorded an interest accrual of €45 million (approximately $50 million as of December 31, 2021), net of payments and other deductions, included within Accrued liabilities on the Consolidated Balance Sheets as of December 31, 2021. In the event that RTX and the Company prevail in this matter, any recoveries would be allocated between RTX and the Company pursuant to the terms of the TMA. Asbestos Matters As previously disclosed, we have been named as defendants in lawsuits alleging personal injury as a result of exposure to asbestos. While we have never manufactured any asbestos-containing component parts, and no longer incorporate asbestos in any current products, certain of our historical products have contained components manufactured by third parties incorporating asbestos. A substantial majority of these asbestos-related claims have been dismissed without payment or were covered in full or in part by insurance or other forms of indemnity. Additional cases were litigated and settled without any insurance reimbursement. The amounts involved in asbestos relate d claims were not material individually or in the aggregate as of, and for the years ended, December 31, 2021 and December 31, 2020. The estimated range of total liabilities to resolve all pending and unasserted potential future asbestos claims through 2059 is $22 million to $45 million as of December 31, 2021, and $23 million to $45 million as of December 31, 2020. Because no amount within the range of estimates is more likely to occur than any other, we recorded the minimum amount of $22 million and $23 million as of December 31, 2021 and 2020, respectively, which is principally recorded in Other long-term liabilities on our Consolidated Balance Sheets. Amounts are on a pre-tax basis, not discounted, and excludes the Company's legal fees to defend the asbestos claims (which will continue to be expensed as they are incurred). In addition, the Company has an insurance recovery receivable for probable asbestos related recoveries of approximately $5 million, which is principally recorded in Other assets on our Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020. Putative Class Action Lawsuit On August 12, 2020, a putative class action lawsuit, (Geraud Darnis et al. v. Raytheon Technologies Corporation et al.), was filed in the United States District Court for the District of Connecticut against Otis, Raytheon Technologies Corporation ("RTX"), Carrier, each of their directors, and various incentive and deferred compensation plans. On September 13, 2021, plaintiffs filed an amended complaint against the three company defendants only. The named plaintiffs are former employees of UTC and its current and former subsidiaries, including Otis and Carrier. They seek to recover monetary damages, as well as related declaratory and equitable relief, based on claimed decreases in the value of long-term incentive awards and deferred compensation under nonqualified deferred compensation plans allegedly caused by the formula used to calculate the adjustments to such awards and deferred compensation from RTX, Carrier, and Otis following the spin-offs of Carrier and Otis and the subsequent combination of UTC and Raytheon Company. Otis believes that the claims against the Company are without merit. At this time, Otis is unable to predict the outcome, or reasonably estimate the possible loss or range of loss, if any, which could result from this action. Other. As previously disclosed, we have commitments and contingent liabilities related to legal proceedings, self-insurance programs and matters arising out of the normal course of business. We accrue contingencies based on a range of possible outcomes. If no amount within this range is a better estimate than any other, we accrue the minimum amount. While it is not possible to determine the ultimate disposition of each of these claims and whether they will be resolved consistent with our beliefs, we expect that the outcome of such claims, individually or in the aggregate, will not have a material adverse effect on our business, financial condition, cash flows or results of operations. As previously disclosed, in certain European countries, claims for overcharges on elevators and escalators related to civil cartel cases have been made, which we have accrued for based on our evaluation of the claims. While it is not possible to determine the ultimate disposition of each of these claims and whether they will be resolved consistent with our beliefs, historical settlement experience of these cases have not been material to the business, financial condition, cash flows or results of operations, however the future outcome of these cases cannot be determined. As previously disclosed, in the ordinary course of business, the Company is also routinely a defendant in, party to or otherwise subject to many pending and threatened legal actions, claims, disputes and proceedings. These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax and other laws. In some of these proceedings, claims for substantial monetary damages are asserted against the Company and its subsidiaries and could result in fines, penalties, compensatory or treble damages or non-monetary relief. We do not believe that these matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. |
Segment Financial Data
Segment Financial Data | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Financial Data | Segment Financial DataOur operations are classified into two operating segments: New Equipment and Service. Through the New Equipment segment, we design, manufacture, sell and install a wide range of passenger and freight elevators as well as escalators and moving walkways to customers in the residential and commercial building and infrastructure projects. The Service segment provides maintenance and repair services for both our products and those of other manufacturers, and provides modernization services to upgrade elevators and escalators. The operating segments are generally based on the management structure of the Company, how management allocates resources, assesses performance and makes strategic and operational decisions. Segment Information. Segment information for the years ended December 31 are as follows: Net Sales Operating Profit (dollars in millions) 2021 2020 2019 2021 2020 2019 New Equipment $ 6,428 $ 5,371 $ 5,648 $ 459 $ 318 $ 393 Service 7,870 7,385 7,470 1,762 1,611 1,603 Total segments 14,298 12,756 13,118 2,221 1,929 1,996 General corporate expenses and other (1) — — — (113) (290) (182) Total $ 14,298 $ 12,756 $ 13,118 $ 2,108 $ 1,639 $ 1,814 (1) The decrease in General corporate expenses and other during 2021 compared to 2020 is primarily driven by fixed asset impairment charges of $71 million and associated license costs of $14 million in 2020, as well as lower non-recurring Separation-related and shared costs of $106 million in 2021 compared with 2020. Total assets are not presented for each segment as they are not presented to, or reviewed by, the Chief Operating Decision Maker. Geographic External Sales. Geographic Net sales are attributed to the geographic regions based on their location of origin. With the exception of the U.S. and China, there were no individually significant countries with sales exceeding 10% of Net sales during the years ended December 31, 2021, 2020 and 2019 . External Net Sales Long Lived Assets (dollars in millions) 2021 2020 2019 2021 2020 2019 United States Operations $ 3,700 $ 3,462 $ 3,594 $ 336 $ 309 $ 295 International Operations China 2,877 2,135 2,113 111 113 105 Other 7,721 7,159 7,411 327 352 321 Total $ 14,298 $ 12,756 $ 13,118 $ 774 $ 774 $ 721 Segment Net sales disaggregated by product and service type for the years ended December 31, 2021, 2020 and 2019 are as follows: (dollars in millions) 2021 2020 2019 Disaggregated Net sales by type New Equipment $ 6,428 $ 5,371 $ 5,648 Maintenance and Repair 6,472 6,047 6,120 Modernization 1,398 1,338 1,350 Total Service 7,870 7,385 7,470 Total $ 14,298 $ 12,756 $ 13,118 Major Customers. There were no customers that individually accounted for 10% or more of the Company's consolidated Net sales for the years ended December 31, 2021, 2020 and 2019 . |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 14, 2022, the Company redeemed its $500 million floating rate notes due in 2023, at par, using cash on hand and commercial paper borrowings. See Note 10, "Borrowings and Lines of Credit" for details of the long-term debt. |
SCHEDULE II - Valuation and Qua
SCHEDULE II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - Valuation and Qualifying Accounts | Allowance for Doubtful Accounts and Expected Credit Losses: Balance, December 31, 2018 $ 84 Provision charged to income 26 Doubtful accounts written off (19) Other (8) Balance, December 31, 2019 83 Impact of credit standard adoption 28 Provision for expected credit losses 40 Write-offs charged against the allowance for expected credit losses (20) Other 30 Balance, December 31, 2020 161 Provision for expected credit losses 37 Write-offs charged against the allowance for expected credit losses (15) Other (8) Balance, December 31, 2021 $ 175 Future Income Tax Benefits - Valuation Allowance Balance, December 31, 2018 $ 29 Additions charged to income tax expense 28 Reductions credited to income tax expense — Other adjustments (2) Balance, December 31, 2019 55 Additions charged to income tax expense 63 Reductions credited to income tax expense (13) Other adjustments 137 Balance, December 31, 2020 242 Additions charged to income tax expense 30 Reductions credited to income tax expense (10) Other adjustments (15) Balance, December 31, 2021 $ 247 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation. Prior to the Separation on April 3, 2020, our historical financial statements were prepared on a standalone combined basis and were derived from the consolidated financial statements and accounting records of our former parent, UTC. For the period subsequent to April 3, 2020, our financial statements are presented on a consolidated basis as the Company became a standalone public company (collectively, the financial statements for all periods presented, including the historical results of the Company prior to April 3, 2020, are now referred to as "Consolidated Financial Statements" to reflect this change). They have been prepared in accordance with the instructions to Form 10-K. Prior to the Separation on April 3, 2020, the Consolidated Statements of Operations included all revenues and costs directly attributable to Otis, including costs for facilities, functions and services used by Otis. Costs for certain functions and services performed by centralized UTC organizations were directly charged to Otis based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount, usage or other allocation methods. All charges and allocations for facilities, functions and services performed by UTC organizations have been deemed settled in cash by Otis to UTC in the period in which the cost was recorded on the Consolidated Statements of Operations. Current and deferred income taxes were determined based on the standalone results of Otis. However, because the Company was included in our former parent UTC’s tax group in certain jurisdictions, the Company's actual tax balances may differ from those reported. The Company's portion of its domestic income taxes and certain income taxes for jurisdictions outside the U.S. are deemed to have been settled in the period the related tax expense was recorded prior to the Separation. The Consolidated Financial Statements include the accounts of Otis and its controlled subsidiaries, as well as entities where Otis has a variable interest and is the primary beneficiary as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation . The factors we use to determine the primary beneficiary of a variable interest entity ("VIE") may include decision authority, control over management of day-to-day operations and the amount of our equity investment in relation to others' investments. All significant intracompany accounts and transactions within the Company have been eliminated in the preparation of the Consolidated Financial Statements. Certain amounts for prior years have been reclassified to conform to the current year presentation, which are immaterial. |
Use of Estimates | Use of Estimates. The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. In addition, estimates and assumptions may impact the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We assessed certain accounting matters that generally require consideration of forecasted financial information in the context of the information reasonably available to us and the unknown future impacts of coronavirus ("COVID-19") as of December 31, 2021 and 2020, and through the date of this report. The accounting matters assessed included, but were not limited to, our allowance for credit losses, the carrying value of our goodwill and other long-lived assets, financial assets and revenue recognition. While there was not a material impact to our Consolidated Financial Statements as of and for the years ended December 31, 2021 and 2020 resulting from our assessments of these matters, future assessment of our current expectations at that time of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to our Consolidated Financial Statements in future reporting periods. |
Risks and Uncertainties | Risks and Uncertainties. As the global COVID-19 pandemic continues and the economic recovery is ongoing, the Company continues to closely monitor and manage the impact of the COVID-19 pandemic on its business globally. It is difficult to estimate at this time the duration and extent of the continued impact of the pandemic and ongoing economic recovery on the Company's business, financial position, cash flow and results of operations. The results of our operations and overall financial performance were impacted during the years ended December 31, 2021 and 2020, including impacts to customer demand for our new equipment, maintenance and repair and modernization businesses, cancellations or delays of customer orders, customer liquidity constraints and related credit reserves, and supplier and raw material capacity constraints, delays and related costs. Primarily in 2020, there were also temporary closures and reduced capacity of our operations, limited new equipment job site closures and challenges in accessing units to provide maintenance and repair services that also impacted our results. Due to existing conditions and uncertainty, COVID-19 and ongoing economic recovery could have an impact on our business, cash flow and results of operations into 2022. The extent of the impact will depend largely on future developments, which are highly uncertain, including the severity of the outbreak and variants of COVID-19, efficacy, availability and distribution of vaccines, actions taken by government authorities to further contain the outbreak or address its impact and its longer-term impacts on the global economy, among other factors. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents. Cash and cash equivalents includes cash on hand, demand deposits and short-term cash investments that are highly liquid in nature and have original maturities of three months or less. Restricted Cash. In certain circumstances we are required to maintain cash deposits with certain banks with respect to contractual or other legal obligations, and therefore the use of these cash deposits for general operational purposes is restricted. Restricted cash as of December 31, 2 021 is primarily cash of $1.9 billion required to be held in escrow to fund the Tender |
Accounts Receivable | Accounts Receivable. The Company records accounts receivables when the right to consideration becomes unconditional. We regularly evaluate the collectability of our accounts receivable and maintain reserves for expected credit losses. See Note 6, "Accounts Receivable, Net" for additional information on the Company's policy for evaluation of expected credit losses. We do not believe that accounts receivable represent significant concentrations of credit risk because of the diversified portfolio of individual customers and geographic areas. Retainage and Unbilled Receivables. Current an d long-term accounts receivable as of December 31, 2021 and 2020 include retainage of $75 million and $61 million, respectively, and unbilled receiv ables of $109 million and $104 million, respectively. Retainage represents amounts that, pursuant to the applicable contract, are not due until after project completion and acceptance by the customer. Unbilled receivables represent revenues that are earned but may not be currently billable to the customer under the terms of the contract. These items are expected to be billed and collected in the ordinary course of business. Unbilled receivables where we have an unconditional right to payment are included in Accounts receivable, net as of December 31, 2021 and 2020. Customer Financing Notes Receivable. Through financing arrangements with our customers, we extend payment terms, which are generally not more than one year in duration. Factoring. The Company may sell certain trade accounts and notes receivable to lending institutions to manage credit risk. Financial assets sold under these arrangements are excluded from Accounts receivable, net in the Company’s Consolidated Balance Sheets at the time of sale if the Company has surrendered control over the related assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred. Gains and losses stemming from transfers reported as sales are included in Interest expense (income), net in the accompanying Consolidated Statements of Operations. |
Revenue Recognition, Contract Assets and Liabilities | Contract Assets and Liabilities. Contract assets and liabilities represent the difference in the timing of revenue recognition from receipt of cash from our customers and billings. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Performance obligations partially satisfied in advance of customer billings are included in Contract assets, current. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. See Note 4, "Contract Assets and Liabilities" for further discussion of contract assets and liabilities. Revenue Recognition. We recognized revenue in accordance with FASB ASC Topic 606: Revenue from Contracts with Customers and its related amendments, (referred to, collectively, as "ASC 606”). The Company's revenue streams include new equipment, maintenance and repair, and modernization. New equipment, modernization and repair services revenue are recognized over time as we are enhancing an asset the customer controls. Maintenance revenue is recognized on a straight-line basis over the life of the maintenance contract. New Equipment, Modernization and Repair services. For new equipment and modernization transactions, equipment and installation are typically procured in a single contract providing the customer with a complete installed elevator or escalator unit. The combination of equipment and installation promises are typically a single performance obligation. For repair services, the customer typically contracts for specific short-term services which form a single performance obligation. For these performance obligations, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which corresponds with and best depicts transfer of control or the enhancement of the customer’s assets. Contract costs included in the calculation are comprised of labor, materials, subcontractors’ costs or other direct costs and indirect costs, which include indirect labor costs. Specific to new equipment and modernization arrangements, the Company, based on project progression, reviews cost estimates on significant contracts on a quarterly basis, and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. These estimates form the basis for the amount of revenue to be recognized and include the latest updated total transaction price, costs and risks for each contract. These estimates for our ongoing contracts may materially change due to the change and completions of the contract scopes, cost estimates and customers' plans, among other factors. For performance obligations recognized under the cost to cost method, we record changes in contract estimates using the cumulative catch-up method. Modifications are recognized as a cumulative catch-up or treated as a separate accounting contract if the modification adds distinct goods or services and the modification is priced at its stand-alone selling price. Maintenance. Our customers purchase maintenance contracts which include services such as required periodic maintenance procedures, preventive services and stand ready obligations to remediate issues with the elevator/escalator when and if they arise. Given the continuous nature of these services throughout the year, we recognize revenue on maintenance contracts on a straight-line basis which aligns with the cost profile of these services. Contractual changes are typically recognized prospectively as most modifications are extensions of the existing arrangement. Transaction Price Considerations. Our contracts typically include fixed payments which are generally received as we progress under our contracts. As a result, we have not identified any significant financing elements in our contract, and our contracts do not have significant estimates related to variable consideration except in the case of a project having an underlying performance issue, which is rare. In situations where multiple performance obligations in a single contract (e.g. , new equipment and maintenance) e xist, the transaction price is allocated to each performance obligation in proportion to their stand-alone selling prices. Estimates are made to account for changes in transaction prices attributable to pricing disputes that occur subsequent to the inception of contracts, based upon historical experience and the status of contracts. Certain costs to obtain or fulfill contracts . Certain costs to obtain or fulfill a contract with a customer must be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer. Sales commissions related to new equipment, modernization and maintenance contracts, excluding renewals, are capitalized as contract fulfillment costs and are amortized consistent with the pattern of transfer of the goods or services. Customer contract costs, which do not qualify for capitalization as contract fulfillment costs, are expensed as incurred. Loss Contracts. Loss provisions on contracts are recognized to the extent that estimated contract costs exceed the estimated consideration from the products contemplated under the contractual arrangement. For new commitments, we generally record loss provisions at contract inception. For existing commitments, anticipated losses on contractual arrangements are recognized in the period in which losses become probable. Remaining Performance Obligations ("RPO"). RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of December 31, 2021, our total RPO was approximately $17.1 billion. Of the total RPO as of December 31, 2021, we expect approximately 89% will be recognized as sales over the following 24 months. Additional disclosure required by ASC 606 is provided in Note 23, "Segment Financial Data", including disaggregation of revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. |
Inventories | Inventories. Inventories are stated at the lower of cost or estimated realizable value and are primarily based on a first-in, first-out (“FIFO”) method. Valuation reserves for excess, obsolete and slow-moving inventory are estimated by comparing the inventory levels of individual parts to both future sales forecasts or production requirements and historical usage rates in order to identify inventory where the resale value or replacement value is less than inventoriable cost. See Note 7, "Inventories, Net" for further details of the inventories by classification. |
Fixed Assets | Fixed Assets. Fixed assets, including software capitalized for internal-use, are recorded at cost. Depreciation of fixed assets is computed over the fixed assets' useful lives on a straight-line basis, unless another systematic and rational basis is more representative of the fixed asset's pattern of use. See Note 8, "Fixed Assets" for further details of useful lives. Internal-use software. The Company capitalizes direct costs of services used in the development of, and external software acquired for use as, internal-use software. Amounts capitalized are amortized over a period ranging from three |
Asset Retirement Obligations | Asset Retirement Obligations. The Company records the fair value of legal obligations associated with the retirement of tangible long-lived assets in the period in which the legal obligations are determined to exist. Upon initial recognition of a liability, the Company capitalizes the cost of the asset retirement obligation by increasing the carrying amount of the related long-lived asset. Over time, the liabilit y is adjusted for c hanges in its present value and the capitalized cost is depreciated over the useful life of the related asset. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: Level I – Quoted prices for identical instruments in active markets. Level II – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level III – Instruments whose significant value drivers are unobservable. The carrying amount of current trade receivables, accounts payable and accrued expenses approximates fair value due to the short maturity (less than one year) of the instruments. |
Equity Method Investments | Equity Method Investments. Entities in which we have the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting and are included in Other assets on the Consolidated Balance Sheets. Under this method of accounting, our share of the net earnings or losses of the investee entity is included in Other income (expense), net in the Consolidated Statements of Operations since the activities of the investee entity are closely aligned with the operations of the Company. We evaluate our equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. |
Business Combinations | Business Combinations. We account for transactions that are classified as business combinations in accordance with the FASB ASC Topic 805: Business Combinations . Once a business is acquired, the fair values of the identifiable assets acquired and liabilities assumed are d etermined with the excess cost recorded to goodwill. As required, preliminary fair values are determined once a business is acquired, with the final determination of the fair values being completed within the one-year measurement period from the date of acquisition. |
Goodwill, Intangible Assets and Long-Lived Assets | Goodwill, Intangible Assets and Long-Lived Assets. Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Intangible assets consist of service portfolios, patents, trademarks/trade names, customer relationships and other intangible assets. Acquired intangible assets are recognized at fair value during acquisition accounting and then amortized to Cost of products and services sold and Selling, general and administrative over the applicable useful lives. Goodwill and Indefinite-Lived Intangible Assets. Goodwill and intangible assets deemed to have indefinite lives are not amortized. Goodwill and indefinite-lived intangible assets are subject to impairment testing annually or when a triggering event occurs using the guidance and criteria described in FASB ASC Topic 350: Intangibles – Goodwill and Other . This testing compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value. We test goodwill for impairment at a level within the Company referred to as the reporting unit, which is one level below the operating segment level. When testing goodwill for impairment, the Company may first assess qualitative factors. If an initial qualitative assessment identified that it is more likely than not that the fair value of a reporting unit is less than its carrying value, additional quantitative testing is performed. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. If the quantitative testing indicates that goodwill is impaired, an impairment charge is recognized based on the difference between the reporting unit's carrying value and its fair value. When it is determined that a quantitative analysis is required, the Company primarily utilizes a discounted cash flow methodology to calculate the fair value of its reporting units. The Company completed its most recent annual impairment testing as of July 1, 2021, and determined in the qualitative assessment that quantitative testing is not necessary. There were no triggering events since the annual impairment test. Finite-Lived Intangible Assets and Long-Lived Assets. Useful lives of finite-lived intangible assets are estimated based upon the nature of the intangible asset. These intangible assets are amortized based on the pattern in which the economic benefits of the intangible assets are consumed or if straight-line amortization approximates the pattern of economic benefit, a straight-line amortization method may be used. The range of estimated useful lives is as follows: Purchased service portfolios 5 to 25 years Patents, trademarks/trade names 4 to 40 years Customer relationships and other 1 to 20 years The Company evaluates the potential impairment of long-lived assets, including finite-lived intangible assets whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. If the carrying value of other long-lived assets h eld and used exceeds the sum of the undiscounted expected future cash flows, the carrying value is written down to fair value. See Note 8, "Fixed Assets" and Note 9, " Business Acquisitions, Goodwill and Intangible Assets " for additional information regarding intangible assets and other long-lived asse ts. |
Income Taxes | Income Taxes. In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest expense has also been recognized. We recognize accrued interest related to unrecognized tax benefits in Interest expense (income), net. Penalties, if incurred, would be recognized as a component of Income tax expense. The U.S. Tax Cuts and Jobs Act ("TCJA") subjects the Company to a tax on Global Intangible Low-Taxed Income (“GILTI”). GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. We account for GILTI as a period cost as incurred. Income taxes as presented in the Consolidated Financial Statements of the Company for periods prior to the Separation attribute current and deferred income taxes of our former parent, UTC, to the Company's stand-alone financial statements in a manner that is systematic, rational and consistent with the asset and liability method prescribed by FASB ASC Topic 740: Income Taxes (“ASC 740”). Accordingly, the Company's income tax provision for periods prior to the Separation was prepared following the separate return method. The separate return method applies ASC 740 to the stand-alone financial statements of each member of the consolidated group as if the group members were a separate taxpayer and a stand-alone enterprise. The calculation of our income taxes on a separate return basis requires a considerable amount of judgment and use of both estimates and allocations. As a result, actual transactions included in the consolidated financial statements of UTC may not be included in the Consolidated Financial Statements of the Company. Similarly, the tax treatment of certain items reflected in the Consolidated Financial Statements of the Company may not be reflected in the consolidated financial statements and tax returns of UTC. Therefore, such items as net operating losses, credit carry-forwards and valuation allowances may exist in the stand-alone financial statements that may or may not exist in UTC’s consolidated financial statements. As such, the income taxes of the Company as presented in the Consolidated Financial Statements prior to the Separation may not be indicative of the income taxes that the Company will report in the future. See Note 5, "Related Parties" and Note 16, "Income Taxes" for additional information. |
Self-Insurance | Self-Insurance. The Company is primarily self-insured for a number of risks including, but not limited to, workers’ compensation, general liability, automobile liability and employee-related healthcare benefits. The Company has obtained insurance coverage for amounts exceeding individual and aggregate loss limits. The Company accrues for known future claims and incurred but not reported losses wit hin Accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets, totaling $287 million and $299 million as of December 31, 2021 and 2020, respectively. |
Derivatives and Hedging Activity | Derivatives and Hedging Activity. We have used derivative instruments, principally forward contracts, to help manage certain foreign currency and commodity price exposures. Derivative instruments are viewed as risk management tools by us and are not used for trading or speculative purposes. By their nature, all financial instruments involve market and credit risks. We enter into derivative and other financial instruments with major investment grade financial institutions and have policies to monitor the credit risk of those counterparties. We limit counterparty exposure and concentration of risk by diversifying counterparties. While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties. Designated Derivative Instruments. Derivatives used for hedging purposes may be designated and effective as a hedge of the identified risk exposure at the inception of the contract. All derivative instruments are recorded on the Consolidated Balance Sheets at fair value. Derivatives used to hedge foreign currency denominated balance sheet items and commodity prices for materials recognized in cost of sales, and are reported directly in earnings along with offsetting transaction gains and losses on the items being hedged. Derivatives used to hedge forecasted cash flows associated with foreign currency commitmen ts or forecasted commodity purchases m ay be accounted for as cash flow hedges, as deemed appropriate. Gains and losses on derivatives designated as cash flow hedges are recorded in other comprehensive income (loss), net of tax and reclassified to earnings as a component of product sales or expenses, as applicable, when the hedged transaction occurs. Gains and losses on derivatives designated as cash flow hedges are recorded in Other operating activities, net within the Consolidated Statement of Cash Flows. To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hed ging relationship is recorded currently in earnings in the period it occurs. Additional information pertaining to net investment hedging is included in Note 18, "Financial Instruments". Non-designated Derivative Instruments. To the extent the hedge accounting criteria are not applied, the foreign currency forward contracts and commodity price contracts are utilized as economic hedges and changes in the fair value of these contracts are recorded currently in earnings in the period in which they occur. Additional information pertaining to these contracts is included in Note 18, "Financial Instruments". In addition, the Company periodically enters into sales contracts denominated in currencies other than the functional currency of the parties to the transaction. The Company accounts for these transactions separately valuing the embedded derivative component of these contracts. The changes in the fair value of these embedded derivatives are recorded in Other income (expense), net in th e Consolidated Statements of Operations . For the years ended December 31, 2021, 2020 and 2019, we recognized a gain of $1 million, a loss of $3 million and a loss of $27 million, respectively, due to the changes in fair value of embedded derivatives. |
Environmental | Environmental. Environmental investigatory, remediation, operating and maintenance costs are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts with respect to each individual site, including current laws, regulations and prior remediation experience. Whe re no amount within a range of estimates is more likely, the minimum is accrued. Liabilities with fixed or reliably determinable future cash payments are discounted. Accrued environmental liabilities are not reduced by potential insurance reimbursements. See Note 22, "Contingent Liabilities" for additional details on the environmental remediation activities. |
Research and Development | Research and Development. These costs are expensed in the period incurred and are shown on a separate line of the Consolidated Statements of Operations. Research and development expenses, covering research and the advancement of potential new and improved products and their uses, primarily include salaries and other employment costs. |
Other Income (Expense), Net | Other Income (Expense), Net. Other income (expense), net i ncludes the impact of changes in the fair value and settlement of derivatives, gains or losses on sale of businesses and fixed assets, earnings from equity method investments, fair value changes on equity securities, impairments, non-recurring Separation-related expenses, gains on insurance recoveries and certain other infrequent operating income and expense items. |
Foreign Exchange | Foreign Exchange. We conduct business in many different currencies and, accordingly, are subject to the inherent risks associated with foreign exchange rate movements. The financial position and results of operations of substantially all of our foreign subsidiaries are measured using the local currency as the functional currency. Foreign currency denominated assets and liabilities are translated into U.S. Dollars at the exchange rates existing at the respective balance sheet dates, and income and expense items are translated at the average exchange rates during the respective periods. The aggregate effects of translating the balance sheets of these subsidiaries are deferred within Accumulated other comprehensive income (loss). |
Pension and Postretirement Obligations | Pension and Postretirement Obligations. Guidance under FASB ASC Topic 715: Compensation – Retirement Benefits requires balance sheet recognition of the overfunded or underfunded status of pension and postretirement benefit plans. Under this guidance, actuarial gains and losses, prior service costs or credits and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic benefit cost. Pension and postretirement obligation balances and related costs reflected within the Consolidated Financial Statem ents include both costs directly attributable to plans dedicated to Otis, as well as an allocation of costs for Otis employees’ participation in our former parent, UTC’s plans prior to Separation. See Note 13, "Employee Benefit Plans" for additional information. |
Additional Paid-in Capital and Noncontrolling Interests | Additional Paid-in Capital . Additional paid-in capital includes the value of stock-based award activity, as well as the difference between the cost of acquiring the Noncontrolling interest in consolidated subsidiaries and Otis' carrying value of the Noncontrolling interest associated with those subsidiaries. In 2021, the Company recorded in Additional paid-in capital $2 million for transaction costs associated with the anticipated acquisition of shares of Zardoya Otis not owned by the Company. Refer to Note 1, "Business Overview" for additional information on the Tender Offer. Noncontrolling Interest. Ownership interest in the Company's consolidated subsidiaries held by parties other than the Company are presented separately from Shareholders' (Deficit) Equity as “Noncontrolling interest” within equity on the Consolidated Balance Sheets. The amount of net income attributable to Otis Worldwide Corporation and the noncontrolling interest are both presented on the Consolidated Statements of Operations. All noncontrolling interest with redemption features, such as put options or other contractual obligations to acquire the noncontrolling interest, that are not solely within our control are redeemable noncontrolling interest. Redeemable noncontrolling interest are reported in the mezzanine section of the Consolidated Balance Sheets, between Liabilities and equity (deficit), at the greater of redemption value or initial carrying value. In 2021, the Company identified a misclassification between noncontrolling interest and redeemable noncontrolling interest. The impact of the correction of the misclassification to the Consolidated Balance Sheets as of January 1, 2019 was an increase to redeemable noncontrolling interest of $94 million, a decrease to noncontrolling interest of $79 million and a decrease to UTC Net Investment of $15 million. The impact of the correction of the misclassification to the Consolidated Balance Sheets as of December 31, 2019 was an increase to redeemable noncontrolling interest of $103 million, a decrease to noncontrolling interest of $75 million and a decrease to UTC Net Investment of $28 million. The impact of the correction of the misclassification to the Consolidated Balance Sheets as of December 31, 2020 was an increase to redeemable noncontrolling interest of $111 million, a decrease to noncontrolling interest of $81 million and a decrease to Accumulated Deficit of $30 million. Additionally, the impact of redeemable noncontrolling interest to net income attributable to common shareholders was a reduction of $0.03 to basic and diluted earnings per share of Common Stock in 2019. There was no impact to basic or diluted earnings per share of Common Stock in 2020. The activity attributable to noncontrolling interest and redeemable noncontrolling interest for the years ended December 31, 2021, 2020 and 2019 are presented in the Consolidated Statements of Changes in Equity. |
UTC Net Investment | UTC Net Investment. For periods prior to the Separation, UTC’s Net Investment in the Company was presented as “UTC Net Investment (Deficit)” on the Consolidated Balance Sheets. The Consolidated Statements of Changes in Equity includes activity in UTC Net Investment (Deficit) for corporate allocations, net cash transfers and other property transfers between our former parent, UTC, and the Company, as well as related party receivables, payables and long-term debt between the Company and other UTC affiliates that were settled on a current basis. Prior to the Separation, UTC performed cash management and other treasury-related functions on a centralized basis for nearly all of its legal entities, which inclu ded the Company, and, consequently, the net cash generated by the Company in legal entities that participated in UTC’s centralized cash management and financing programs was transferred to UTC through the related party accounts. See Note 5, "Related Parties" for additional information. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instrument s. This ASU and its related amendments (collectively, the "Credit Loss Standard") modifies the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments including trade receivables, contract assets, long term receivables and off-balance sheet credit exposures. The Credit Loss Standard requires consideration of a broader range of information to estimate expected credit losses, including historical information and current conditions through a reasonable forecast period. The Credit Loss Standard requires that the income statement reflect the measurement of credit losses for newly recognized financial assets as well as the expected increase or decrease of expected credit losses that have taken place during the period, which may result in earlier recognition of certain losses. We adopted this standard effective January 1, 2020 utilizing a modified retrospective approach. A cumulative-eff ect non-cash after-tax adjustment to retained earnings as of January 1, 2020 of $25 million was recorded. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement . The new standard removes the disclosure requirements for the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The provisions of this ASU were effective for years beginning after December 15, 2019, with early adoption permitted. The Company adopted this standard effective January 1, 2020. The adoption of this ASU did not have a material impact on our Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The new standard provides updated guidance surrounding implementation costs associated with cloud computing arrangements that are service contracts. The provisions of this ASU were effective for years beginning after December 15, 2019. The Company adopted this standard prospectively effective January 1, 2020. The adoption of this ASU did not have a material impact on our Consolidated Financial Statements. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220). The new standard allows companies to reclassify to retained earnings the stranded tax effects in Accumulated other comprehensive income from the then-newly-enacted TCJA. The new standard was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company adopted the standard and elected to reclassify the income tax effects of the TCJA from Accumulated other comprehensive (loss) to UTC Net Investment effective January 1, 2019. The adoption of this standard did not have a material impact on our Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans . The new standard includes updates to the disclosure requirements for defined benefit plans including several additions, deletions and modifications to the disclosure requirements. The provisions of this ASU were effective for years ending after December 15, 2020, with early adoption permitted. The Company adopted this standard effective January 1, 2020. The adoption of this ASU did not have a material impact on our Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . The amendments in this update remove certain exceptions of Topic 740 including: exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or gain from other items; exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. There are also additional areas of guidance in regards to: franchise and other taxes partially based on income and the interim recognition of enactment of tax laws and rate changes. The provisions of this ASU were effective for years beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard effective January 1, 2021. The adoption of this ASU did not have a material impact on our Consolidated Financial Statements. Future Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reportin g ("ASU 2020-04") , which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform . ASU 2020-04 may be adopted and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022. We are currently evaluating the impact of adopting this standard but do not expect it to have a material impact on our Consolidated Financial Statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Intangible Assets Disclosure | The range of estimated useful lives is as follows: Purchased service portfolios 5 to 25 years Patents, trademarks/trade names 4 to 40 years Customer relationships and other 1 to 20 years |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | For the 2019 calculations, these shares are treated as issued and outstanding at January 1, 2019 for purposes of calculating historical basic and diluted earnings per share. (dollars in millions, except per share amounts; shares in millions) 2021 2020 2019 Net income attributable to Otis Worldwide Corporation $ 1,246 $ 906 $ 1,116 Impact of redeemable noncontrolling interest — — (13) Net income attributable to common shareholders $ 1,246 $ 906 $ 1,103 Basic weighted average number of shares outstanding 427.7 433.2 433.1 Stock awards and equity units (share equivalent) 3.7 1.4 — Diluted weighted average number of shares outstanding 431.4 434.6 433.1 Earnings Per Share of Common Stock: Basic $ 2.91 $ 2.09 $ 2.55 Diluted $ 2.89 $ 2.08 $ 2.55 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets and Liabilities | Total Contract assets and Contract liabilities as of December 31, 2021 and 2020 are as follows: (dollars in millions) 2021 2020 Contract assets, current $ 550 $ 458 Total contract assets 550 458 Contract liabilities, current 2,674 2,542 Contract liabilities, noncurrent (included within Other long-term liabilities) 52 44 Total contract liabilities 2,726 2,586 Net contract liabilities $ 2,176 $ 2,128 |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Upon Separation, the following were recorded as Net transfers (to) from UTC and Separation-related transactions on the Consolidated Statements of Changes in Equity through UTC Net Investment: (dollars in millions) Cash and cash equivalents $ 220 Taxes and other 187 Total $ 407 (dollars in millions) 2021 2020 2019 Separation costs $ 27 $ 119 $ 43 |
Schedule of Separation and Tax Matters Agreement Impact on Balance Sheet | As a result of the Separation and the provisions of the TMA, Otis' total net tax-related liabilities on April 3, 2020 were reduced by $191 million, comprising the following impacts to the Consolidated Balance Sheets: (dollars in millions) Increase (Decrease) Assets Other current assets $ 167 Total Current Assets 167 Future income tax benefits (4) Total Assets $ 163 Liabilities and (Deficit) Equity Accrued liabilities $ 110 Total Current Liabilities 110 Future income tax obligations (377) Other long-term liabilities 239 Total Liabilities (28) Total Shareholders' (Deficit) Equity 191 Total (Deficit) Equity 191 Total Liabilities and (Deficit) Equity $ 163 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable, net consisted of the following as of December 31: (dollars in millions) 2021 2020 Trade receivables $ 3,117 $ 2,987 Unbilled receivables 109 104 Customer financing notes receivable 93 130 Miscellaneous receivables 88 88 3,407 3,309 Less: allowance for expected credit losses 175 161 Balance $ 3,232 $ 3,148 |
Accounts Receivable, Allowance for Credit Loss | The changes in allowance for credit losses related to Accounts receivable, net for the years ended December 31, 2021 and 2020 are as follows: (dollars in millions) 2021 2020 Balance as of January 1 $ 161 $ 83 Impact of credit standard adoption — 28 Provision for expected credit losses 37 40 Write-offs charged against the allowance for expected credit losses (15) (20) Foreign exchange and other (8) 30 Balance as of December 31 $ 175 $ 161 |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | (dollars in millions) 2021 2020 Raw materials and work-in-process $ 140 $ 113 Finished goods 482 546 Total $ 622 $ 659 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | (dollars in millions) Estimated Useful Lives 2021 2020 Land $ 43 $ 48 Buildings and improvements 20 - 40 Years 596 616 Machinery and equipment 3 - 12 Years 1,166 1,175 Assets under construction 125 132 1,930 1,971 Less: Accumulated depreciation (1,156) (1,197) $ 774 $ 774 |
Business Acquisitions, Goodwi_2
Business Acquisitions, Goodwill, and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Goodwill | Changes in our Goodwill balances in 2021 were as follows: (dollars in millions) Balance as of January 1, 2021 Goodwill Resulting Foreign Currency Balance as of December 31, 2021 New Equipment $ 357 $ — $ (21) $ 336 Service 1,416 2 (87) 1,331 Total $ 1,773 $ 2 $ (108) $ 1,667 Changes in our Goodwill balances in 2020 were as follows: (dollars in millions) Balance as of January 1, 2020 Goodwill Resulting Foreign Currency Balance as of December 31, 2020 New Equipment $ 337 $ — $ 20 $ 357 Service 1,310 30 76 1,416 Total $ 1,647 $ 30 $ 96 $ 1,773 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets | Identifiable intangible assets are comprised of the following: 2021 2020 (dollars in millions) Gross Amount Accumulated Gross Amount Accumulated Amortized: Purchased service portfolios $ 2,025 $ (1,638) $ 2,123 $ (1,661) Patents, trademarks/trade names 21 (17) 22 (16) Customer relationships and other 64 (43) 54 (45) 2,110 (1,698) 2,199 (1,722) Unamortized: Trademarks and other 7 — 7 — Total $ 2,117 $ (1,698) $ 2,206 $ (1,722) |
Schedule of Future Amortization of Intangible Assets | The estimated future amortization of intangible assets is as follows: (dollars in millions) 2022 2023 2024 2025 2026 Future amortization $ 81 $ 69 $ 61 $ 54 $ 40 |
Borrowings and Lines of Credit
Borrowings and Lines of Credit (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term Debt | (dollars in millions) 2021 2020 Commercial paper $ — $ 664 Other borrowings 24 37 Total short-term borrowings $ 24 $ 701 |
Schedule of Long-term Debt | Long-term debt consisted of the following as of December 31: (dollars in millions) 2021 2020 LIBOR plus 45 bps floating rate notes due 2023 1,2 $ 500 $ 500 0.000% notes due 2023 (€500 million principal value) 2 565 — 2.056% notes due 2025 2 1,300 1,300 0.37% notes due 2026 ( ¥21.5 billion principal value) 2 189 — 0.318% notes due 2026 (€600 million principal value) 2 677 — 2.293% notes due 2027 2 500 500 2.565% notes due 2030 2 1,500 1,500 0.934% notes due 2031 (€500 million principal value) 2 565 — 3.112% notes due 2040 2 750 750 3.362% notes due 2050 2 750 750 Other (including finance leases) 4 5 Total principal long-term debt $ 7,300 $ 5,305 Other (premiums, discounts and debt issuance costs) (51) (43) Total long-term debt 7,249 5,262 Less: current portion — — Long-term debt, net of current portion $ 7,249 $ 5,262 1 The three-month LIBOR rate as of December 31, 2021 was approximately 0.21%. 2 We may redeem these notes at our option pursuant to certain terms. |
Schedule of Debt | The Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 reflects the following: (dollars in millions) 2021 2020 2019 Debt issuance costs amortization $ 6 $ 5 $ — Total interest expense on debt (including debt issuance costs amortization) 136 124 — December 31, 2021 2020 Short-term borrowings — % (0.2) % Total long-term debt 1.9 % 2.4 % |
Schedule of Maturities of Long-term Debt | The schedule of principal payments required on long-term debt for the next five years and thereafter is: (dollars in millions) Principal Payments 2022 $ — 2023 1,066 2024 1 2025 1,301 2026 867 Thereafter 4,065 Total $ 7,300 |
Schedule of Average Interest Expense Rate | The average interest expense rate on our borrowings for the years ended December 31, 2021 and 2020 was as follows: 2021 2020 Short-term borrowings (0.3) % (0.2) % Total long-term debt 2.3 % 2.3 % |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | (dollars in millions) 2021 2020 Accrued salaries, wages and employee benefits $ 603 $ 556 Accrued interest 221 223 Operating lease liabilities 181 167 Accrued income taxes payable 142 182 VAT and other non-income tax payables 97 102 Other liabilities 749 747 Total $ 1,993 $ 1,977 |
Other Long-term Liabilities (Ta
Other Long-term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-term Liabilities | (dollars in millions) 2021 2020 Contractual indemnity obligation $ 220 $ 239 General, product and auto liability 154 152 Employee benefits 105 113 Other liabilities 127 130 Total $ 606 $ 634 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | Our plans use a December 31 measurement date consistent with our fiscal year. (dollars in millions) 2021 2020 Change in benefit obligation: Beginning balance $ 1,225 $ 1,092 Service cost 43 40 Interest cost 13 16 Actuarial (gain) loss (50) 40 Benefits paid (24) (28) Net settlement, curtailment and special termination benefits (31) (26) Other (50) 91 Ending balance $ 1,126 $ 1,225 Change in plan assets: Beginning balance $ 703 $ 622 Actual return on plan assets 43 24 Employer contributions 37 64 Benefits paid (24) (28) Settlements (31) (26) Other (38) 47 Ending balance $ 690 $ 703 Funded status: Fair value of plan assets $ 690 $ 703 Benefit obligations (1,126) (1,225) Funded status of plan $ (436) $ (522) Amounts recognized in the Consolidated Balance Sheets consist of: Noncurrent assets $ 106 $ 87 Current liability (23) (21) Noncurrent liability (519) (588) Net amount recognized $ (436) $ (522) Amounts recognized in Accumulated other comprehensive loss consist of: Net actuarial loss $ 176 $ 280 Prior service credit 2 (1) Net amount recognized $ 178 $ 279 The amounts included in "actuarial (gain) loss" in the above table primarily are due to changes in discount rate assumptions driven by changes in corporate bond yields. The amounts included in “Other” in the above table primarily reflect the impact of foreign exchange translation, primarily for plans in Australia, Canada, Germany, Japan, Spain, South Korea and Switzerland. |
Plans with Accumulated Benefit Obligation in Excess of Plan Assets | Information for pension plans with accumulated benefit obligations in excess of plan assets: (dollars in millions) 2021 2020 Projected benefit obligation $ 567 $ 787 Accumulated benefit obligation 499 685 Fair value of plan assets 49 205 |
Plans with Projected Benefit Obligation in Excess of Plan Assets | Information for pension plans with projected benefit obligations in excess of plan assets: (dollars in millions) 2021 2020 Projected benefit obligation $ 806 $ 991 Accumulated benefit obligation 694 846 Fair value of plan assets 263 383 |
Schedule of Net Periodic Pension Costs | The components of the net periodic pension cost are as follows: (dollars in millions) 2021 2020 2019 Service cost $ 43 $ 40 $ 33 Interest cost 13 16 21 Expected return on plan assets (23) (25) (24) Amortization of prior service credit — (1) (1) Recognized actuarial net loss 18 16 10 Net settlement, curtailment and special termination benefits loss (gain) 2 5 2 Net periodic pension cost – employer $ 53 $ 51 $ 41 Other changes in plan assets and benefit obligations recognized in other comprehensive loss are as follows: (dollars in millions) 2021 2020 2019 Current year actuarial (gain) loss $ (70) $ 41 $ 28 Amortization of actuarial loss (18) (16) (10) Amortization of prior service credit — 1 1 Net settlement and curtailment (loss) gain (2) (5) (2) Other (11) 24 27 Total recognized in other comprehensive (income) loss $ (101) $ 45 $ 44 Net recognized in net periodic pension cost and other comprehensive (income) loss $ (48) $ 96 $ 85 |
Defined Benefit Plan, Assumptions | Major assumptions used in determining the benefit obligation and net cost for pension plans are presented in the following table as weighted-averages: Benefit Obligation Net Cost 2021 2020 2021 2020 2019 Discount rate: Projected benefit obligation 1.5 % 1.1 % 1.1 % 1.5 % 2.5 % Salary scale 3.0 % 3.0 % 3.0 % 3.1 % 3.3 % Expected return on plan assets — — 3.6 % 4.5 % 5.2 % Interest crediting rate 1.0 % 0.6 % 0.6 % 0.7 % 1.5 % |
Schedule of Plan Assets | The fair values of pension plan assets as of December 31, 2021 and 2020 by asset category are as follows: (dollars in millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Not Subject to Leveling Total Asset category Public equities: Global Equity Commingled Funds (1) $ 70 $ 2 $ — $ — $ 72 Global Equity Funds at net asset value (5) — — — 196 196 Fixed income securities: Governments 19 — — — 19 Corporate Bonds 42 1 — — 43 Fixed income securities at net asset value (5) — — — 117 117 Real estate (2) (5) 11 14 — 11 36 Other (3) (5) 4 126 — 24 154 Cash and cash equivalents (4) (5) 4 1 — 44 49 Total $ 150 $ 144 $ — $ 392 686 Other assets and liabilities (6) 4 Total as of December 31, 2021 $ 690 (dollars in millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Not Subject to Leveling Total Asset category Public equities: Global Equity Commingled Funds (1) $ 52 $ 39 $ — $ — $ 91 Global Equity Funds at net asset value (5) — — — 154 154 Fixed income securities: Governments 20 41 — — 61 Corporate Bonds 49 4 — — 53 Fixed income securities at net asset value (5) — — — 90 90 Real estate (2) (5) 12 6 — 12 30 Other (3) (5) 2 129 — 25 156 Cash and cash equivalents (4) (5) 6 1 — 41 48 Total $ 141 $ 220 $ — $ 322 $ 683 Other assets and liabilities (6) 20 Total as of December 31, 2020 $ 703 (1) Represents investments in mutual funds and investments in commingled funds that invest primarily in common stocks. (2) Represents investments in real estate including commingled funds. (3) Represents insurance contracts and global-balanced-risk commingled funds consisting mainly of equity, bonds and some commodities. (4) Represents short-term commercial paper, bonds and other cash or cash-like instruments. (5) In accordance with FASB ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets. (6) Represents trust receivables and payables that are not leveled. |
Schedule of Multiemployer Plans | An extended amortization provision of ten years was utilized to recognize investment gains or losses for our significant plan through June 30, 2019. (dollars in millions) PPA Zone Status FIP/RP Status Contributions Surcharge Imposed Expiration Date of Collective-Bargaining Agreement Pension Fund EIN/Pension Plan Number 2021 2020 Pending/Implemented 2021 2020 2019 National Elevator Industry Pension Plan 23-2694291 Green Green No $ 128 $ 131 $ 127 No 7/8/2022 Other funds 8 7 9 $ 136 $ 138 $ 136 |
Stock-based Compensation Expense and Resulting Tax Benefits | Stock-based compensation expense and the resulting tax benefits were as follows: Year Ended (dollars in millions) 2021 2020 2019 Stock-based compensation expense (Share-based) $ 65 $ 63 $ 37 Stock-based compensation expense (Cash-based) 2 (4) 10 Total gross stock-based compensation expense 67 59 47 Less: future tax benefit 8 7 5 Stock-based compensation expense, net of tax $ 59 $ 52 $ 42 |
Share-based Payment Arrangement, Activity | A summary of the transactions under Otis' plans for the year ended December 31, 2021 follows: Stock Appreciation Rights Restricted Share Units Performance Share Units Stock Options (shares in thousands) Shares Average Price* Shares Average Price** Shares Average Price** Shares Average Price* Outstanding at: December 31, 2020 12,177 $ 60.63 1,710 $ 63.94 — $ — 454 $ 55.31 Granted (1) 1,344 64.81 483 68.67 334 67.58 19 71.93 Exercised / Earned (1) (2,269) 51.67 (458) 68.31 — — (96) 46.41 Cancelled (537) 66.72 (83) 67.60 (4) 67.71 (1) 80.97 December 31, 2021 10,715 $ 62.74 1,652 $ 63.91 330 $ 67.58 376 $ 58.31 * Weighted-average grant price ** Weighted-average grant fair value (1) Includes annual retainer awards issued to the Board of Directors |
Performance Share Units Outstanding, Vested and Expected to Vest | The following table summarizes information about equity awards outstanding that are vested and expected to vest and equity awards outstanding that are exercisable as of December 31, 2021: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable (shares in thousands; aggregate intrinsic value in millions) Awards Average Price* Aggregate Intrinsic Value Remaining Term** Awards Average Price* Aggregate Intrinsic Value Remaining Term** Stock Options/Stock Appreciation Rights 11,027 $ 62.53 $ 271 5.4 years 6,846 $ 57.62 $ 202 3.9 years Performance Share Units/Restricted Stock 1,921 — $ 167 1.4 years * Weighted-average grant price per share |
Schedule of Valuation Assumptions | The following table indicates the assumptions used in estimating fair value for the years ended December 31, 2021, 2020 and 2019. For periods prior to the Separation, these assumptions represent those utilized by our former parent, UTC, and are not necessarily indicative of assumptions that would be used by Otis as a standalone company. Lattice-based option models incorporate ranges of assumptions for inputs; those ranges are as follows: 2021 2020 2019 Expected volatility 26.9% 25.5% 18.8% - 19.7% Weighted-average volatility 26.9% 25.5% 19.5% Expected term (in years) 6.3 6.8 6.5 - 6.6 Expected dividend yield 1.3% 1.8% 2.4% Risk-free rate 0.7% 0.5% 2.3% - 2.7% |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | A summary of the changes in each component of Accumulated other comprehensive income (loss), net of tax for the years ended December 31, 2021, 2020 and 2019 is provided below: (dollars in millions) Foreign Defined Benefit Unrealized Accumulated Balance as of December 31, 2018 $ (573) $ (135) $ — $ (708) Other comprehensive income (loss) before (15) (50) (3) (68) Amounts reclassified, pre-tax — 9 — 9 Tax expense (benefit) reclassified — 9 — 9 Balance as of December 31, 2019 $ (588) $ (167) $ (3) $ (758) Other comprehensive income (loss) before (28) (47) 10 (65) Amounts reclassified, pre-tax — 15 (3) 12 Tax expense (benefit) reclassified — (4) — (4) Balance as of December 31, 2020 $ (616) $ (203) $ 4 $ (815) Other comprehensive income (loss) before (26) 62 (1) 35 Amounts reclassified, pre-tax — 18 4 22 Tax expense (benefit) reclassified — (5) — (5) Balance as of December 31, 2021 $ (642) $ (128) $ 7 $ (763) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The sources of income from operations before income taxes are: (dollars in millions) 2021 2020 2019 United States $ 420 $ 105 $ 470 Foreign 1,541 1,406 1,391 $ 1,961 $ 1,511 $ 1,861 |
Schedule of Components of Income Tax Expense (Benefit) | The income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 consisted of the following components: (dollars in millions) 2021 2020 2019 Current: United States: Federal $ 77 $ 42 $ 103 State 32 26 38 Foreign 524 438 461 633 506 602 Future: United States: Federal (13) 8 11 State (6) (8) — Foreign (73) (51) (19) (92) (51) (8) Income tax expense $ 541 $ 455 $ 594 Attributable to items (charged) credited to (deficit) equity $ (25) $ (6) $ (14) |
Schedule of Effective Income Tax Rate Reconciliation | Differences between effective income tax rates and the statutory U.S. federal income tax rate are as follows: 2021 2020 2019 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes 0.8 % 0.9 % 1.7 % Tax on international activities 4.7 % 4.4 % 6.5 % U.S. tax effect of foreign earnings 0.5 % 3.4 % 2.9 % Other 0.6 % 0.4 % (0.2) % Effective income tax rate 27.6 % 30.1 % 31.9 % |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences and tax carryforwards which gave rise to future income tax benefits and payables as of December 31, 2021 and 2020 are as follows: (dollars in millions) 2021 2020 Future income tax benefits: Insurance and employee benefits $ 185 $ 201 Other asset basis differences 143 149 Other liability basis differences 320 299 Tax loss carryforwards 200 197 Tax credit carryforwards 46 38 Valuation allowances (247) (242) $ 647 $ 642 Future income taxes payable: Intangible assets $ 168 $ 182 Other assets basis differences 284 335 $ 452 $ 517 |
Summary of Tax Credit Carryforwards | As of December 31, 2021, tax credit carryforwards, principally state and foreign, and tax loss carryforwards, principally state and foreign, were as follows: (dollars in millions) Tax Credit Carryforwards Tax Loss Carryforwards Expiration period: 2022-2026 $ 1 $ 53 2027-2031 14 20 2032-2041 1 71 Indefinite 30 668 $ 46 $ 812 |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amounts of unrecognized tax benefits and interest expense related to unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019 is as follows: (dollars in millions) 2021 2020 2019 Balance at January 1 $ 397 $ 379 $ 380 Additions for tax positions related to the current year 23 16 18 Additions for tax positions of prior years 1 41 15 Reductions for tax positions of prior years (22) (31) (15) Settlements (7) (8) (19) Balance at December 31 $ 392 $ 397 $ 379 Gross interest expense related to unrecognized tax benefits $ 2 $ 10 $ 8 Total accrued interest balance at December 31 $ 152 $ 153 $ 141 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | We recorded restructuring charges in our operating segments as follows: (dollars in millions) 2021 2020 2019 New Equipment $ 23 $ 30 $ 19 Service 33 47 35 Total $ 56 $ 77 $ 54 Restructuring charges incurred in the years ended December 31, 2021, 2020 and 2019 primarily relate to actions initiated during 2021, 2020 and 2019, and were recorded as follows: (dollars in millions) 2021 2020 2019 Cost of products and services sold $ 22 $ 22 $ 19 Selling, general and administrative 34 55 35 Total $ 56 $ 77 $ 54 |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the accrual balance and utilization for the 2021 and 2020 restructuring actions, which are primarily for severance costs: (dollars in millions) 2021 Actions 2020 Actions Restructuring accruals as of December 31, 2020 $ — $ 42 Restructuring costs 41 13 Utilization, foreign exchange and other costs (19) (30) Balance as of December 31, 2021 $ 22 $ 25 The following table summarizes expected, incurred and remaining costs for the 2021 and 2020 restructuring actions by segment: (dollars in millions) Expected Costs Cost Incurred During 2020 Costs Incurred During 2021 Remaining Costs as of December 31, 2021 New Equipment $ 15 $ — $ (14) $ 1 Service 33 — (27) 6 Total 2021 Actions $ 48 $ — $ (41) $ 7 New Equipment $ 36 $ (29) $ (7) $ — Service 48 (42) (6) — Total 2020 Actions $ 84 $ (71) $ (13) $ — |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table summarizes the fair value and presentation on the Consolidated Balance Sheets for derivative instruments as of December 31: (dollars in millions) Balance Sheet Classification 2021 2020 Derivatives designated as Cash flow hedging instruments: Asset Derivatives: Foreign exchange contracts Other current assets $ 7 $ 9 Foreign exchange contracts Other assets 1 4 Total asset derivatives $ 8 $ 13 Liability Derivatives: Foreign exchange contracts Accrued liabilities $ (3) $ (7) Foreign exchange contracts Other long-term liabilities — (4) Total liability derivatives $ (3) $ (11) Derivatives not designated as Cash flow hedging instruments: Asset Derivatives: Foreign exchange contracts Other current assets $ 23 $ 23 Foreign exchange contracts Other assets 5 10 Total asset derivatives $ 28 $ 33 Liability Derivatives: Foreign exchange contracts Accrued liabilities $ (11) $ (24) Foreign exchange contracts Other long-term liabilities (2) (8) Total liability derivatives $ (13) $ (32) |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The effect of cash flow hedging relationships on Accumulated other comprehensive income (loss) as of December 31, 2021 and 2020 are presented in the table below. December 31, (dollars in millions) 2021 2020 Gain (loss) recorded in Accumulated other comprehensive income (loss) $ 7 $ 4 |
Derivative Instruments, Gain (Loss) | The net effect of derivatives not designated as Cash flow hedging instruments within Other income (expense) net, on the Consolidated Statements of Operations was as follows: Year Ended December 31, (dollars in millions) 2021 2020 2019 Foreign exchange contracts $ 9 $ (4) $ (9) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | In accordance with the provisions of ASC 820: Fair Value Measurements , the following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring and non-recurring basis in our Consolidated Balance Sheets as of December 31, 2021 and 2020: December 31, 2021 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurements: Equity securities $ 25 $ 25 $ — $ — Derivative assets 36 — 36 — Derivative liabilities (16) — (16) — December 31, 2020 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurements: Equity securities $ 59 $ 59 $ — $ — Derivative assets 46 — 46 — Derivative liabilities (43) — (43) — |
Fair Value, by Balance Sheet Grouping | The following table provides carrying amounts and fair values of financial instruments that are not carried at fair value in our Consolidated Balance Sheets as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 (dollars in millions) Carrying Fair Carrying Fair Long-term receivables, net $ 65 $ 63 $ 65 $ 62 Customer financing notes receivable, net 77 76 128 126 Short-term borrowings (24) (24) (701) (701) Long-term debt (excluding leases and other) (7,296) (7,420) (5,300) (5,717) Long-term liabilities (including current portion) (253) (240) (263) (234) The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in the Consolidated Balance Sheets as of December 31, 2021 and 2020: December 31, 2021 (dollars in millions) Total Level 1 Level 2 Level 3 Long-term receivables, net $ 63 $ — $ 63 $ — Customer financing notes receivable, net 76 — 76 — Short-term borrowings (24) — (24) — Long-term debt (excluding leases and other) (7,420) — (7,420) — Long-term liabilities (including current portion) (240) — (240) — December 31, 2020 (dollars in millions) Total Level 1 Level 2 Level 3 Long-term receivables, net $ 62 $ — $ 62 $ — Customer financing notes receivable, net 126 — 126 — Short-term borrowings (701) — (701) — Long-term debt (excluding leases and other) $ (5,717) — (5,717) — Long-term liabilities (including current portion) (234) — (234) — |
Guarantees (Tables)
Guarantees (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Guarantees and Product Warranties [Abstract] | |
Product Warranty Disclosure | The changes in the carrying amount of service and product guarantees for the years ended December 31, 2021 and 2020 are as follows: (dollars in millions) 2021 2020 Balance as of January 1 $ 25 $ 27 Warranties 3 12 Settlements made (9) (14) Other 1 — Balance as of December 31 $ 20 $ 25 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Supplemental Operating Lease Cash Flow Information | Supplemental cash flow information related to operating leases for the years ended December 31, 2021, 2020 and 2019 were as follows: (dollars in millions) 2021 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash outflows from operating leases $ (154) $ (162) $ (134) Non-cash operating lease activity: ROU assets obtained in exchange for operating lease liabilities 135 126 157 |
Operating Lease ROU Assets and Liabilities | Operating lease ROU assets and liabilities are reflected on our Consolidated Balance Sheets as follows: December 31, (dollars in millions) 2021 2020 Operating lease ROU assets $ 526 $ 542 Accrued liabilities $ 181 $ 167 Operating lease liabilities 336 367 Total operating lease liabilities $ 517 $ 534 |
Supplemental Information Related to Operating Leases | Supplemental information related to operating leases was as follows: December 31, 2021 2020 Weighted Average Remaining Lease Term (in years) 4.4 5.0 Weighted Average Discount Rate 2.6 % 2.9 % |
Operating Lease Liabilities | Undiscounted maturities of operating lease liabilities, including options to extend lease terms that are reasonably certain of being exercised, as of December 31, 2021 are as follows: (dollars in millions) Total 2022 $ 171 2023 136 2024 102 2025 52 2026 32 Thereafter 52 Total undiscounted lease payments 545 Less: imputed interest (28) Total discounted lease payments $ 517 |
Segment Financial Data (Tables)
Segment Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment information for the years ended December 31 are as follows: Net Sales Operating Profit (dollars in millions) 2021 2020 2019 2021 2020 2019 New Equipment $ 6,428 $ 5,371 $ 5,648 $ 459 $ 318 $ 393 Service 7,870 7,385 7,470 1,762 1,611 1,603 Total segments 14,298 12,756 13,118 2,221 1,929 1,996 General corporate expenses and other (1) — — — (113) (290) (182) Total $ 14,298 $ 12,756 $ 13,118 $ 2,108 $ 1,639 $ 1,814 (1) The decrease in General corporate expenses and other during 2021 compared to 2020 is primarily driven by fixed asset impairment charges of $71 million and associated license costs of $14 million in 2020, as well as lower non-recurring Separation-related and shared costs of $106 million in 2021 compared with 2020. |
Schedule of Segment Reporting Information, by Geographic Markets | Geographic Net sales are attributed to the geographic regions based on their location of origin. With the exception of the U.S. and China, there were no individually significant countries with sales exceeding 10% of Net sales during the years ended December 31, 2021, 2020 and 2019 . External Net Sales Long Lived Assets (dollars in millions) 2021 2020 2019 2021 2020 2019 United States Operations $ 3,700 $ 3,462 $ 3,594 $ 336 $ 309 $ 295 International Operations China 2,877 2,135 2,113 111 113 105 Other 7,721 7,159 7,411 327 352 321 Total $ 14,298 $ 12,756 $ 13,118 $ 774 $ 774 $ 721 |
Segment Reporting Disclosure, Sales Type | Segment Net sales disaggregated by product and service type for the years ended December 31, 2021, 2020 and 2019 are as follows: (dollars in millions) 2021 2020 2019 Disaggregated Net sales by type New Equipment $ 6,428 $ 5,371 $ 5,648 Maintenance and Repair 6,472 6,047 6,120 Modernization 1,398 1,338 1,350 Total Service 7,870 7,385 7,470 Total $ 14,298 $ 12,756 $ 13,118 |
Business Overview (Details)
Business Overview (Details) € / shares in Units, € in Millions | 12 Months Ended | |||||
Dec. 31, 2021segment | Jan. 10, 2022EUR (€)€ / shares | Dec. 21, 2021€ / shares | Oct. 11, 2021$ / shares | Sep. 30, 2021€ / shares | Apr. 03, 2020shares | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of segments | segment | 2 | |||||
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Otis | UTC | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Shares of separated company given to shareholders (in shares) | shares | 0.5 | |||||
Zardoya Otis, S.A. | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 50.02% | |||||
Zardoya Otis, S.A. | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Tender offer, share price (in euros per share) | € 7.14 | € 7 | ||||
Tender Offer, share price adjusted for dividends (in euros per share) | $ / shares | $ 6.93 | |||||
Subsequent Event | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Tender Offer, consideration | € | € 1,660 | |||||
Subsequent Event | Zardoya Otis, S.A. | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Tender Offer, share price adjusted for dividends (in euros per share) | € 7.07 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | ||||
Restricted cash | $ 1,910 | $ 17 | ||
Restricted cash, noncurrent | 2 | 2 | ||
Accounts Receivable [Abstract] | ||||
Contract receivable retainage | 75 | 61 | ||
Unbilled contracts receivable | 109 | 104 | ||
Revenue Recognition [Abstract] | ||||
Revenue, remaining performance obligation | 17,100 | |||
Self-Insurance [Abstract] | ||||
Accrued liabilities and other liabilities | 287 | 299 | ||
Accounting Changes and Error Corrections [Abstract] | ||||
Increase to redeemable noncontrolling interest | 160 | 194 | $ 198 | $ 203 |
Decrease to noncontrolling interest | (481) | (467) | ||
Decrease to Accumulated Deficit | $ 2,256 | $ 3,106 | ||
Basic (in usd per share) | $ (2.91) | $ (2.09) | $ (2.55) | |
Diluted (in usd per share) | $ (2.89) | $ (2.08) | $ (2.55) | |
Revision of Prior Period, Adjustment | ||||
Accounting Changes and Error Corrections [Abstract] | ||||
Increase to redeemable noncontrolling interest | $ 111 | $ 103 | 94 | |
Decrease to noncontrolling interest | 81 | 75 | 79 | |
Decrease to UTC Net Investment | $ 28 | $ 15 | ||
Decrease to Accumulated Deficit | $ 30 | |||
Basic (in usd per share) | $ 0 | $ 0.03 | ||
Diluted (in usd per share) | $ 0 | $ 0.03 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Accounts Receivable [Abstract] | ||||
Impact of credit standard adoption | $ 25 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||||
Revenue Recognition [Abstract] | ||||
Remaining performance obligation, percentage | 89.00% | |||
Remaining performance obligation, expected timing of satisfaction period | 24 months | |||
Zardoya Otis, S.A. | ||||
Noncontrolling Interest [Abstract] | ||||
Transaction costs | $ 2 | |||
Other Operating Income (Expense) | ||||
Derivatives and Hedging Activities [Abstract] | ||||
Gain (loss) related to changes in fair value of embedded derivatives | $ 1 | $ (3) | $ (27) | |
Internal-use software | Minimum | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Estimated Useful Lives | 3 years | |||
Internal-use software | Maximum | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Estimated Useful Lives | 5 years | |||
Purchased service portfolios | Minimum | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Estimated Useful Lives | 5 years | |||
Purchased service portfolios | Maximum | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Estimated Useful Lives | 25 years | |||
Patents, trademarks/trade names | Minimum | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Estimated Useful Lives | 4 years | |||
Patents, trademarks/trade names | Maximum | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Estimated Useful Lives | 40 years | |||
Customer relationships and other | Minimum | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Estimated Useful Lives | 1 year | |||
Customer relationships and other | Maximum | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Estimated Useful Lives | 20 years |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 03, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Antidilutive securities excluded from computation of EPS (in shares) | 100,000 | 4,600,000 | ||
Net income attributable to common shareowners: | ||||
Net income attributable to Otis Worldwide Corporation | $ 1,246 | $ 906 | $ 1,116 | |
Impact of redeemable noncontrolling interest | 0 | 0 | (13) | |
Net income attributable to common shareholders | $ 1,246 | $ 906 | $ 1,103 | |
Basic weighted average number of shares outstanding (in shares) | 427,700,000 | 433,200,000 | 433,100,000 | |
Stock awards and equity units (share equivalent) | 3,700,000 | 1,400,000 | 0 | |
Diluted weighted average number of shares outstanding (in shares) | 431,400,000 | 434,600,000 | 433,100,000 | |
Earnings Per Share, Basic [Abstract] | ||||
Basic (in usd per share) | $ 2.91 | $ 2.09 | $ 2.55 | |
Diluted (in usd per share) | $ 2.89 | $ 2.08 | $ 2.55 | |
Separation | UTC | Otis | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of shares distributed (in shares) | 433,079,455 | |||
Share price (in dollars per share) | $ 0.01 |
Revenue Recognition - Contract
Revenue Recognition - Contract With Customer, Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets, current | $ 550 | $ 458 |
Total contract assets | 550 | 458 |
Contract liabilities, current | 2,674 | 2,542 |
Contract liabilities, noncurrent (included within Other long-term liabilities) | 52 | 44 |
Total contract liabilities | 2,726 | 2,586 |
Net contract liabilities | $ 2,176 | $ 2,128 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Increase (decrease) in contract assets | $ 92 | |
Increase in contract liabilities | 140 | |
Revenue recognized | $ 2,000 | $ 1,600 |
Related Parties - Narrative (De
Related Parties - Narrative (Details) - USD ($) $ in Millions | Apr. 03, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Net transfers (to) from UTC | $ (6,150) | $ (935) | ||
Other long-term liabilities | $ 606 | 634 | ||
Non-recurring Separation Costs | ||||
Related Party Transaction [Line Items] | ||||
Separation-related costs | 27 | 119 | 43 | |
Tax benefit offsetting separation costs | 15 | 20 | 6 | |
Selling, general and administrative | Non-recurring Separation Costs | ||||
Related Party Transaction [Line Items] | ||||
Separation-related costs | 16 | 106 | ||
Other Nonoperating Income (Expense) | Non-recurring Separation Costs | ||||
Related Party Transaction [Line Items] | ||||
Separation-related costs | 43 | |||
UTC | ||||
Related Party Transaction [Line Items] | ||||
Interest income | 23 | |||
Interest expense | 18 | |||
UTC | Foreign Tax Authority | ||||
Related Party Transaction [Line Items] | ||||
Foreign tax obligation reimbursed | 56 | 86 | ||
UTC | Net transfers from UTC - Net Liabilities | ||||
Related Party Transaction [Line Items] | ||||
Net transfers (to) from UTC | 43 | |||
UTC | Separation Agreement - Cash and Cash Equivalents | ||||
Related Party Transaction [Line Items] | ||||
Net transfers (to) from UTC | $ 190 | |||
UTC | Separation Agreement - Settlement | ||||
Related Party Transaction [Line Items] | ||||
Net transfers (to) from UTC | 30 | |||
UTC | Separation and Tax Matters Agreement, Adjustment | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, offset of net tax related liabilities | 191 | |||
Other long-term liabilities | 239 | |||
UTC | Separation Agreement | ||||
Related Party Transaction [Line Items] | ||||
Net transfers (to) from UTC | 407 | |||
Other long-term liabilities | $ 4 | |||
UTC | Related Party Receivables | ||||
Related Party Transaction [Line Items] | ||||
Due to UTC and it's affiliates | 7,700 | |||
UTC | Related Party Payables | ||||
Related Party Transaction [Line Items] | ||||
Due to UTC and it's affiliates | 750 | |||
UTC | Related Party Debt | ||||
Related Party Transaction [Line Items] | ||||
Due to UTC and it's affiliates | 100 | |||
UTC | Allocated Centralized Costs | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, SG&A expenses | $ 0 | $ 16 | $ 80 |
Related Parties - Schedule of S
Related Parties - Schedule of Separation Related Transactions (Details) - USD ($) $ in Millions | Apr. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |||
Net transfers (to) from UTC | $ (6,150) | $ (935) | |
UTC | Cash and cash equivalents | |||
Related Party Transaction [Line Items] | |||
Net transfers (to) from UTC | $ 220 | ||
UTC | Taxes and other | |||
Related Party Transaction [Line Items] | |||
Net transfers (to) from UTC | 187 | ||
UTC | Separation Agreement | |||
Related Party Transaction [Line Items] | |||
Net transfers (to) from UTC | $ 407 |
Related Parties - Changes in Ba
Related Parties - Changes in Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 03, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | |||||
Other current assets | $ 382 | $ 429 | |||
Total Current Assets | 8,261 | 6,493 | |||
Future income tax benefits | 335 | 334 | |||
Total Assets | 12,279 | 10,710 | |||
Total Current Liabilities | 6,247 | 6,673 | |||
Future income tax obligations | 267 | 321 | |||
Other long-term liabilities | 606 | 634 | |||
Total Liabilities | 15,263 | 13,911 | |||
Total Shareholders' (Deficit) Equity | (3,625) | (3,862) | |||
Total (Deficit) Equity | (3,144) | (3,395) | $ 2,128 | $ 2,012 | |
Total Liabilities and (Deficit) Equity | $ 12,279 | $ 10,710 | |||
Separation and Tax Matters Agreement, Adjustment | UTC | |||||
Related Party Transaction [Line Items] | |||||
Other current assets | $ 167 | ||||
Total Current Assets | 167 | ||||
Future income tax benefits | (4) | ||||
Total Assets | 163 | ||||
Accrued liabilities | 110 | ||||
Total Current Liabilities | 110 | ||||
Future income tax obligations | (377) | ||||
Other long-term liabilities | 239 | ||||
Total Liabilities | (28) | ||||
Total Shareholders' (Deficit) Equity | 191 | ||||
Total (Deficit) Equity | 191 | ||||
Total Liabilities and (Deficit) Equity | $ 163 |
Related Parties - Schedule of_2
Related Parties - Schedule of Separation Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Non-recurring Separation Costs | |||
Related Party Transaction [Line Items] | |||
Separation-related costs | $ 27 | $ 119 | $ 43 |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | |||
Trade receivables | $ 3,117 | $ 2,987 | |
Unbilled receivables | 109 | 104 | |
Customer financing notes receivable | 93 | 130 | |
Miscellaneous receivables | 88 | 88 | |
Total receivables | 3,407 | 3,309 | |
Less: allowance for expected credit losses | (175) | (161) | $ (83) |
Balance | $ 3,232 | $ 3,148 |
Accounts Receivable, Net - Sc_2
Accounts Receivable, Net - Schedule of Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 161 | $ 83 |
Provision for expected credit losses | 37 | 40 |
Write-offs charged against the allowance for expected credit losses | (15) | (20) |
Foreign exchange and other | (8) | 30 |
Ending balance | 175 | 161 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 0 | 28 |
Ending balance | $ 0 |
Accounts Receivable, Net - Narr
Accounts Receivable, Net - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Receivables [Abstract] | |
Allowance for credit loss, recovery | $ 26 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and work-in-process | $ 140 | $ 113 |
Finished goods | 482 | 546 |
Total | 622 | 659 |
Inventory valuation reserves | $ 99 | $ 112 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 1,930 | $ 1,971 | |
Less: Accumulated depreciation | (1,156) | (1,197) | |
Property, Plant and Equipment, Net, Total | 774 | 774 | $ 721 |
Depreciation expense | 116 | 100 | 85 |
Losses on fixed asset impairment or disposal of business | 0 | 71 | 26 |
Capital expenditures accrued | 2 | 15 | $ 8 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 43 | 48 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 596 | 616 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 20 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 40 years | ||
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 1,166 | 1,175 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 3 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 12 years | ||
Assets under construction | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 125 | $ 132 |
Business Acquisitions, Goodwi_3
Business Acquisitions, Goodwill, and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Investments in businesses, net of cash acquired | $ 80 | $ 55 | $ 47 |
Amortization of intangible assets | 87 | 91 | 95 |
Other Operating Income (Expense) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Loss on disposal of business | $ 0 | 0 | $ 19 |
Purchased service portfolios | |||
Finite-Lived Intangible Assets [Line Items] | |||
Service portfolios written off | $ 117 |
Business Acquisitions, Goodwi_4
Business Acquisitions, Goodwill, and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill - Beginning Balance | $ 1,773 | $ 1,647 |
Goodwill Resulting From Business Combinations | 2 | 30 |
Foreign Currency Translation and Other | (108) | 96 |
Goodwill - Ending Balance | 1,667 | 1,773 |
New Equipment | ||
Goodwill [Roll Forward] | ||
Goodwill - Beginning Balance | 357 | 337 |
Goodwill Resulting From Business Combinations | 0 | 0 |
Foreign Currency Translation and Other | (21) | 20 |
Goodwill - Ending Balance | 336 | 357 |
Service | ||
Goodwill [Roll Forward] | ||
Goodwill - Beginning Balance | 1,416 | 1,310 |
Goodwill Resulting From Business Combinations | 2 | 30 |
Foreign Currency Translation and Other | (87) | 76 |
Goodwill - Ending Balance | $ 1,331 | $ 1,416 |
Business Acquisitions, Goodwi_5
Business Acquisitions, Goodwill, and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 2,110 | $ 2,199 |
Accumulated Amortization | (1,698) | (1,722) |
Trademarks and other | 7 | 7 |
Intangible Assets, Gross (Excluding Goodwill), Total | 2,117 | 2,206 |
Purchased service portfolios | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 2,025 | 2,123 |
Accumulated Amortization | (1,638) | (1,661) |
Patents, trademarks/trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 21 | 22 |
Accumulated Amortization | (17) | (16) |
Customer relationships and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 64 | 54 |
Accumulated Amortization | $ (43) | $ (45) |
Business Acquisitions, Goodwi_6
Business Acquisitions, Goodwill, and Intangible Assets - Schedule of Future Intangible Assets (Details) $ in Millions | Dec. 31, 2021USD ($) |
Business Combinations [Abstract] | |
2022 | $ 81 |
2023 | 69 |
2024 | 61 |
2025 | 54 |
2026 | $ 40 |
Borrowings and Lines of Credi_2
Borrowings and Lines of Credit - Short-Term Borrowings (Details) € in Millions, $ in Millions | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020EUR (€) |
Debt Disclosure [Abstract] | |||
Commercial paper | $ 0 | $ 664 | € 420 |
Other borrowings | 24 | 37 | |
Total short-term borrowings | $ 24 | $ 701 |
Borrowings and Lines of Credi_3
Borrowings and Lines of Credit - Narrative (Details) € in Millions, $ in Millions, ¥ in Billions | Mar. 11, 2021USD ($) | Feb. 10, 2020USD ($) | Feb. 27, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 12, 2021USD ($) | Nov. 12, 2021EUR (€) | Sep. 22, 2021EUR (€) | Mar. 11, 2021JPY (¥) | Nov. 30, 2020USD ($) | Sep. 30, 2020EUR (€) |
Line of Credit Facility [Line Items] | ||||||||||||
Commercial paper | $ 0 | $ 664 | € 420 | |||||||||
Debt instrument, carrying amount | 7,300 | 5,305 | ||||||||||
Proceeds from financing arrangements | $ 6,300 | |||||||||||
Debt issuance costs amortization | 6 | 5 | $ 0 | |||||||||
Total interest expense on debt (including debt issuance costs amortization) | 136 | 124 | $ 0 | |||||||||
Unamortized debt issuance cost | $ 51 | $ 43 | ||||||||||
Long term debt, average remaining maturity (in years) | 8 years 10 months 24 days | |||||||||||
Unsubordinated Commercial Paper | Unsecured Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 1,000 | $ 1,500 | ||||||||||
Commercial paper | $ 150 | € 420 | ||||||||||
Debt instrument, term | 5 years | |||||||||||
Unsubordinated Notes | Unsecured Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 5,300 | |||||||||||
Debt instrument, term | 3 years | |||||||||||
Yen Notes | Unsecured Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 199 | ¥ 21.5 | ||||||||||
Debt instrument, term | 5 years | |||||||||||
Bridge Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Write off of financing costs | $ 11 | |||||||||||
Euro Notes | Unsecured Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 1,800 | € 1,600 | ||||||||||
Revolving Credit Facility | Revolving credit agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Commitment fee percentage | 0.125% | |||||||||||
Revolving Credit Facility | Revolving credit agreement | LIBOR | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.25% | |||||||||||
Bridge Loan | Bridge Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | € | € 1,650 |
Borrowings and Lines of Credi_4
Borrowings and Lines of Credit - Long-Term Debt (Details) € in Millions, $ in Millions, ¥ in Billions | 12 Months Ended | |||
Dec. 31, 2021USD ($) | Dec. 31, 2021JPY (¥) | Dec. 31, 2021EUR (€) | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 7,300 | $ 5,305 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (51) | (43) | ||
Long-term Debt, Total | 7,249 | 5,262 | ||
Long-term Debt, Current Maturities | 0 | 0 | ||
Long-term Debt, Excluding Current Maturities | 7,249 | 5,262 | ||
LIBOR plus 45 bps floating rate notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 500 | 500 | ||
Debt instrument, interest rate, effective percentage | 0.21% | 0.21% | 0.21% | |
LIBOR plus 45 bps floating rate notes due 2023 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.45% | |||
0.000% Notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 565 | 0 | ||
Debt instrument, interest rate, stated percentage | 0.00% | 0.00% | 0.00% | |
0.000% Notes due 2023 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | € | € 500 | |||
Notes 2.056% due 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 1,300 | 1,300 | ||
Debt instrument, interest rate, stated percentage | 2.056% | 2.056% | 2.056% | |
Notes 0.37% due 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 189 | 0 | ||
Debt instrument, interest rate, stated percentage | 0.37% | 0.37% | 0.37% | |
Notes 0.37% due 2026 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | ¥ | ¥ 21.5 | |||
0.318% Notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 677 | 0 | ||
Debt instrument, interest rate, stated percentage | 0.318% | 0.318% | 0.318% | |
0.318% Notes due 2026 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | € | € 600 | |||
Notes 2.293% due 2027 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 500 | 500 | ||
Debt instrument, interest rate, stated percentage | 2.293% | 2.293% | 2.293% | |
Notes 2.565% due 2030 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 1,500 | 1,500 | ||
Debt instrument, interest rate, stated percentage | 2.565% | 2.565% | 2.565% | |
0.934% Notes due 2031 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 565 | 0 | ||
Debt instrument, interest rate, stated percentage | 0.934% | 0.934% | 0.934% | |
0.934% Notes due 2031 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | € | € 500 | |||
Notes 3.112% due 2040 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 750 | 750 | ||
Debt instrument, interest rate, stated percentage | 3.112% | 3.112% | 3.112% | |
Notes 3.362% due 2050 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 750 | 750 | ||
Debt instrument, interest rate, stated percentage | 3.362% | 3.362% | 3.362% | |
Other Including Finance Leases | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 4 | $ 5 |
Borrowings and Lines of Credi_5
Borrowings and Lines of Credit - Schedule of Debt Issuance Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Debt issuance costs amortization | $ 6 | $ 5 | $ 0 |
Total interest expense on debt (including debt issuance costs amortization) | $ 136 | $ 124 | $ 0 |
Borrowings and Lines of Credi_6
Borrowings and Lines of Credit - Schedule of Average Interest Expense Rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Short-term borrowings, over time | 0.00% | (0.20%) |
Long-term borrowings, over time | 1.90% | 2.40% |
Short-term borrowings, at point in time | (0.30%) | (0.20%) |
Long-term borrowings, at point in time | 2.30% | 2.30% |
Borrowings and Lines of Credi_7
Borrowings and Lines of Credit - Schedule of Maturities and Repayments of Principal on Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 0 | |
2023 | 1,066 | |
2024 | 1 | |
2025 | 1,301 | |
2026 | 867 | |
Thereafter | 4,065 | |
Total | $ 7,300 | $ 5,305 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued salaries, wages and employee benefits | $ 603 | $ 556 |
Accrued interest | 221 | 223 |
Operating lease liabilities | 181 | 167 |
Accrued income taxes payable | 142 | 182 |
VAT and other non-income tax payables | 97 | 102 |
Other liabilities | 749 | 747 |
Accrued Liabilities, Current, Total | $ 1,993 | $ 1,977 |
Accrued Liabilities - Narrative
Accrued Liabilities - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Line Items] | ||
Accrued interest | $ 221 | $ 223 |
Foreign Tax Authority | German Tax Litigation | ||
Payables and Accruals [Line Items] | ||
Accrued interest | $ 46 | $ 45 |
Other Long-term Liabilities (De
Other Long-term Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Contractual indemnity obligation | $ 220 | $ 239 |
General, product and auto liability | 154 | 152 |
Employee benefits | 105 | 113 |
Other liabilities | 127 | 130 |
Other long-term liabilities | $ 606 | $ 634 |
Employee Benefit Plans - Employ
Employee Benefit Plans - Employee Savings Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, employer contribution amount | $ 62 | $ 54 | $ 41 |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension Plans Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Employer contributions | $ 37 | $ 64 | $ 32 |
Accumulated benefit obligation | 1,000 | 1,100 | |
Expected future employer contributions, next fiscal year | 34 | ||
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |||
Benefit obligations | 1,126 | 1,225 | 1,092 |
Other comprehensive (income) loss recognized related to changes in benefit obligation | $ (75) | $ 36 | $ 32 |
Defined benefit plan, assumption, discount rate | 1.50% | 1.10% | |
Net cost, assumption, discount rate | 1.10% | 1.50% | 2.50% |
Pension Plan | |||
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |||
2022 | $ 60 | ||
2023 | 65 | ||
2024 | 62 | ||
2025 | 66 | ||
2026 | 66 | ||
2027 through 2031 | 339 | ||
Net periodic benefit cost (credit) | 53 | $ 51 | $ 41 |
Postretirement Benefits Plan | |||
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |||
2022 | 1 | ||
2023 | 1 | ||
2024 | 1 | ||
2025 | 1 | ||
2026 | 1 | ||
2027 through 2031 | 3 | ||
Benefit obligations | 10 | 11 | |
Net periodic benefit cost (credit) | 1 | ||
Other comprehensive (income) loss recognized related to changes in benefit obligation | $ (1) | $ 2 | |
Defined benefit plan, assumption, discount rate | 5.00% | 4.30% | |
Net cost, assumption, discount rate | 4.30% | 4.70% | 5.30% |
Employee Benefit Plans - Obliga
Employee Benefit Plans - Obligation and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Change in benefit obligation: | |||
Beginning balance | $ 1,225 | $ 1,092 | |
Service cost | 43 | 40 | |
Interest cost | 13 | 16 | |
Actuarial (gain) loss | (50) | 40 | |
Benefits paid | (24) | (28) | |
Net settlement, curtailment and special termination benefits | (31) | (26) | |
Other | (50) | 91 | |
Ending balance | 1,126 | 1,225 | $ 1,092 |
Change in plan assets: | |||
Beginning balance | 703 | 622 | |
Actual return on plan assets | 43 | 24 | |
Employer contributions | 37 | 64 | 32 |
Benefits paid | (24) | (28) | |
Settlements | (31) | (26) | |
Other | (38) | 47 | |
Ending balance | 690 | 703 | 622 |
Funded status: | |||
Fair value of plan assets | 690 | 703 | 622 |
Benefit obligations | 1,126 | 1,225 | 1,092 |
Funded status of plan | (436) | (522) | |
Amounts recognized in the Consolidated Balance Sheets consist of: | |||
Noncurrent liability | (558) | (654) | |
Net amount recognized | (436) | (522) | |
Amounts recognized in Accumulated other comprehensive loss consist of: | |||
Net actuarial loss | 176 | 280 | |
Prior service credit | 2 | (1) | |
Net amount recognized | 178 | 279 | |
Pension Plan | |||
Change in benefit obligation: | |||
Service cost | 43 | 40 | 33 |
Interest cost | 13 | 16 | $ 21 |
Amounts recognized in the Consolidated Balance Sheets consist of: | |||
Noncurrent assets | 106 | 87 | |
Current liability | (23) | (21) | |
Noncurrent liability | $ (519) | $ (588) |
Employee Benefit Plans - Accumu
Employee Benefit Plans - Accumulated Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 567 | $ 787 |
Accumulated benefit obligation | 499 | 685 |
Fair value of plan assets | $ 49 | $ 205 |
Employee Benefit Plans - Projec
Employee Benefit Plans - Projected Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 806 | $ 991 |
Accumulated benefit obligation | 694 | 846 |
Fair value of plan assets | $ 263 | $ 383 |
Employee Benefit Plans - Net Pe
Employee Benefit Plans - Net Periodic Costs and Other Changes Recognized in OCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Service cost | $ 43 | $ 40 | |
Interest cost | 13 | 16 | |
Expected return on plan assets | 0 | 0 | |
Current year actuarial (gain) loss | (71) | 43 | $ 28 |
Amortization of actuarial loss | (18) | (15) | (9) |
Other | (13) | 19 | 22 |
Total recognized in other comprehensive (income) loss | (102) | 47 | 41 |
Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Service cost | 43 | 40 | 33 |
Interest cost | 13 | 16 | 21 |
Expected return on plan assets | (23) | (25) | (24) |
Amortization of prior service credit | 0 | (1) | (1) |
Recognized actuarial net loss | 18 | 16 | 10 |
Net settlement and curtailment (loss) gain | 2 | 5 | 2 |
Net periodic pension cost – employer | 53 | 51 | 41 |
Current year actuarial (gain) loss | (70) | 41 | 28 |
Amortization of actuarial loss | (18) | (16) | (10) |
Amortization of prior service credit | 0 | 1 | 1 |
Net settlement and curtailment (loss) gain | (2) | (5) | (2) |
Other | (11) | 24 | 27 |
Total recognized in other comprehensive (income) loss | (101) | 45 | 44 |
Net recognized in net periodic pension cost and other comprehensive (income) loss | $ (48) | $ 96 | $ 85 |
Employee Benefit Plans - Assump
Employee Benefit Plans - Assumptions Used in Calculating Defined Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Benefit Obligation | |||
Projected benefit obligation | 1.50% | 1.10% | |
Salary scale | 3.00% | 3.00% | |
Expected return on plan assets | $ 0 | $ 0 | |
Interest crediting rate | 1.00% | 0.60% | |
Net Cost | |||
Discount rate | 1.10% | 1.50% | 2.50% |
Salary scale | 3.00% | 3.10% | 3.30% |
Expected return on plan assets | 3.60% | 4.50% | 5.20% |
Interest crediting rate | 0.60% | 0.70% | 1.50% |
Employee Benefit Plans - Plan A
Employee Benefit Plans - Plan Assets by Category (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | $ 690 | $ 703 | $ 622 |
Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 686 | 683 | |
Trust Receivables And Payables | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 4 | 20 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 150 | 141 | |
Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 144 | 220 | |
Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 392 | 322 | |
Global Equity Commingled Funds | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 72 | 91 | |
Global Equity Commingled Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 70 | 52 | |
Global Equity Commingled Funds | Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 2 | 39 | |
Global Equity Commingled Funds | Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Global Equity Commingled Funds | Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Global Equity Funds | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 196 | 154 | |
Global Equity Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Global Equity Funds | Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Global Equity Funds | Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Global Equity Funds | Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 196 | 154 | |
Governments | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 19 | 61 | |
Governments | Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 19 | 20 | |
Governments | Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 41 | |
Governments | Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Governments | Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate Bonds | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 43 | 53 | |
Corporate Bonds | Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 42 | 49 | |
Corporate Bonds | Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 1 | 4 | |
Corporate Bonds | Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate Bonds | Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Fixed Income Securities | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 117 | 90 | |
Fixed Income Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Fixed Income Securities | Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Fixed Income Securities | Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Fixed Income Securities | Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 117 | 90 | |
Real estate | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 36 | 30 | |
Real estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 11 | 12 | |
Real estate | Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 14 | 6 | |
Real estate | Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Real estate | Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 11 | 12 | |
Other | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 154 | 156 | |
Other | Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 4 | 2 | |
Other | Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 126 | 129 | |
Other | Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Other | Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 24 | 25 | |
Cash and cash equivalents | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 49 | 48 | |
Cash and cash equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 4 | 6 | |
Cash and cash equivalents | Significant Observable Inputs (Level 2) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 1 | 1 | |
Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Cash and cash equivalents | Not Subject to Leveling | Plan Assets At Fair Value | |||
Defined Benefit Plan, Plan Assets, Category [Line Items] | |||
Fair value of plan assets | $ 44 | $ 41 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Multi-employer Contributions (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Other funds | $ 8 | $ 7 | $ 9 |
Contributions | 136 | 138 | 136 |
National Elevator Industry Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
National Elevator Industry Pension Plan | $ 128 | $ 131 | $ 127 |
Employee Benefit Plans - Multie
Employee Benefit Plans - Multiemployer Benefit Plans Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Postretirement Benefits Plan | |||
Multiemployer Plans [Line Items] | |||
Contributions | $ 20 | $ 20 | $ 21 |
Employee Benefit Plans - Share-
Employee Benefit Plans - Share-based Compensation Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 03, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock authorized under share based payment award plans (in shares) | 45 | |||
Vesting period | 3 years | |||
Common stock shares available for awards (in shares) | 26 | |||
Proceeds from stock options exercised | $ 4 | $ 3 | $ 10 | |
Tax benefit associated with share based compensation payments | 8 | $ 7 | $ 5 | |
Unrecognized compensation cost | $ 57 | |||
Unrecognized compensation cost, period for recognition | 2 years | |||
Weighted average grant date fair value of options granted during period (in usd per share) | $ 14.83 | $ 10.38 | $ 20.92 | |
Weighted average grant date fair value of stock appreciation rights granted during period (in usd per share) | $ 68.22 | $ 54.29 | $ 109.17 | |
Aggregate intrinsic value of stock options and stock appreciation rights exercisable | $ 202 | |||
Aggregate intrinsic value of performance shares and restricted stock | $ 167 | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
Tax benefit associated with share based compensation payments | $ 4 | $ 2 | $ 6 | |
Stock Appreciation Rights | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
Weighted average grant date fair value of stock appreciation rights granted during period (in usd per share) | $ 64.81 | |||
Weighted average grant date fair value (in usd per share) | $ 62.74 | $ 60.63 | ||
Aggregate intrinsic value of stock options and stock appreciation rights exercisable | $ 74 | $ 13 | 53 | |
Performance Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Tax benefit realized form vesting of performance shares and other restricted awards | $ 4 | $ 1 | 4 | |
Weighted average grant date fair value of stock appreciation rights granted during period (in usd per share) | $ 67.58 | |||
Weighted average grant date fair value (in usd per share) | $ 67.58 | $ 0 | ||
Aggregate intrinsic value of performance shares and restricted stock | $ 32 | $ 10 | $ 33 | |
Performance Share Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Restricted awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Weighted average grant date fair value of stock appreciation rights granted during period (in usd per share) | $ 68.67 | |||
Weighted average grant date fair value (in usd per share) | $ 63.91 | $ 63.94 |
Employee Benefit Plans - Sche_2
Employee Benefit Plans - Schedule of Amounts for Pension and Retirement Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Other Postretirement Benefits Cost (Reversal of Cost) | $ 1 | $ 15 |
Pension Cost (Reversal of Cost) | $ (5) | $ (42) |
Employee Benefit Plans - Sche_3
Employee Benefit Plans - Schedule of Share-based Compensation and Related Income Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Stock-based compensation expense | $ 67 | $ 59 | $ 47 |
Less: future tax benefit | 8 | 7 | 5 |
Stock-based compensation expense, net of tax | 59 | 52 | 42 |
Share-based Compensation Expense | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Stock-based compensation expense | 65 | 63 | 37 |
Cash-based Compensation Expense | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Stock-based compensation expense | $ 2 | $ (4) | $ 10 |
Employee Benefit Plans - Sche_4
Employee Benefit Plans - Schedule of Share Based Compensation Award Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Non-Option Equity Instruments, Average Price | |||
Granted (in usd per share) | $ 68.22 | $ 54.29 | $ 109.17 |
Stock Options, Shares | |||
Outstanding (in shares) | 454 | ||
Granted (in shares) | 19 | ||
Exercised / Earned (in shares) | (96) | ||
Cancelled (in shares) | (1) | ||
Outstanding (in shares) | 376 | 454 | |
Stock Options, Average Price | |||
Stock options outstanding, average price (in usd per share) | $ 55.31 | ||
Granted (in usd per share) | 71.93 | ||
Exercised / earned (in usd per share) | 46.41 | ||
Cancelled (in usd per share) | 80.97 | ||
Outstanding (in usd per share) | $ 58.31 | $ 55.31 | |
Stock Appreciation Rights | |||
Non-Option Equity Instruments, Shares) | |||
Outstanding (in shares) | 12,177 | ||
Granted (in shares) | 1,344 | ||
Exercised / Earned (in shares) | (2,269) | ||
Cancelled (in shares) | (537) | ||
Outstanding (in shares) | 10,715 | 12,177 | |
Non-Option Equity Instruments, Average Price | |||
Outstanding (in usd per share) | $ 60.63 | ||
Granted (in usd per share) | 64.81 | ||
Exercised / Earned (in usd per share) | 51.67 | ||
Cancelled (in usd per share) | 66.72 | ||
Outstanding (in usd per share) | $ 62.74 | $ 60.63 | |
Restricted Stock Units (RSUs) [Member] | |||
Non-Option Equity Instruments, Shares) | |||
Outstanding (in shares) | 1,710 | ||
Granted (in shares) | 483 | ||
Exercised / Earned (in shares) | (458) | ||
Cancelled (in shares) | (83) | ||
Outstanding (in shares) | 1,652 | 1,710 | |
Non-Option Equity Instruments, Average Price | |||
Outstanding (in usd per share) | $ 63.94 | ||
Granted (in usd per share) | 68.67 | ||
Exercised / Earned (in usd per share) | 68.31 | ||
Cancelled (in usd per share) | 67.60 | ||
Outstanding (in usd per share) | $ 63.91 | $ 63.94 | |
Performance Share Units | |||
Non-Option Equity Instruments, Shares) | |||
Outstanding (in shares) | 0 | ||
Granted (in shares) | 334 | ||
Exercised / Earned (in shares) | 0 | ||
Cancelled (in shares) | (4) | ||
Outstanding (in shares) | 330 | 0 | |
Non-Option Equity Instruments, Average Price | |||
Outstanding (in usd per share) | $ 0 | ||
Granted (in usd per share) | 67.58 | ||
Exercised / Earned (in usd per share) | 0 | ||
Cancelled (in usd per share) | 67.71 | ||
Outstanding (in usd per share) | $ 67.58 | $ 0 |
Employee Benefit Plans - Stock
Employee Benefit Plans - Stock Options, Appreciation Rights, Performance Units, and Restricted Stock Aggregate Intrinsic Values (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |
Awards (in shares) | shares | 11,027 |
Average price (in usd per share) | $ / shares | $ 62.53 |
Aggregate intrinsic value | $ | $ 271 |
Remaining term | 5 years 4 months 24 days |
Awards (in shares) | shares | 6,846 |
Average price (in usd per share) | $ / shares | $ 57.62 |
Aggregate intrinsic value | $ | $ 202 |
Remaining term | 3 years 10 months 24 days |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Awards (in shares) | shares | 1,921 |
Average price (in usd per share) | $ / shares | $ 0 |
Aggregate intrinsic value | $ | $ 167 |
Remaining term | 1 year 4 months 24 days |
Employee Benefit Plans - Stoc_2
Employee Benefit Plans - Stock Option Valuation Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, minimum | 26.90% | 25.50% | 18.80% |
Expected volatility, maximum | 19.70% | ||
Weighted-average volatility | 26.90% | 25.50% | 19.50% |
Expected term (in years) | 6 years 9 months 18 days | ||
Expected dividend yield | 1.30% | 1.80% | 2.40% |
Risk free rate, minimum | 0.70% | 0.50% | 2.30% |
Risk free rate, maximum | 2.70% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 3 months 18 days | 6 years 6 months | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 7 months 6 days |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Preferred stock, shares authorized (in shares) | 125,000,000 | 125,000,000 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 2,000,000,000 | |
Common stock, par value (in usd per share) | $ 0.01 | |
Common stock, shares outstanding (in shares) | 434,700,000 | 433,400,000 |
Common stock, shares issued (in shares) | 434,700,000 | 433,400,000 |
Treasury stock (in shares) | 9,700,000 | |
Stock repurchase program, authorized amount | $ 1,000 | |
Stock repurchase program, amount currently repurchased | $ 725 | |
Stock repurchased during period (in shares) | 9,700,000 | |
Repurchase of Common Shares | $ 725 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ (3,395) | $ 2,128 | $ 2,012 |
Ending balance | (3,144) | (3,395) | 2,128 |
Foreign Currency Translation | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (616) | (588) | (573) |
Other comprehensive income (loss) before reclassifications, net | (26) | (28) | (15) |
Amounts reclassified, pre-tax | 0 | 0 | 0 |
Tax expense (benefit) reclassified | 0 | 0 | 0 |
Ending balance | (642) | (616) | (588) |
Defined Benefit Pension and Postretirement Plans | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (203) | (167) | (135) |
Other comprehensive income (loss) before reclassifications, net | 62 | (47) | (50) |
Amounts reclassified, pre-tax | 18 | 15 | 9 |
Tax expense (benefit) reclassified | (5) | (4) | 9 |
Ending balance | (128) | (203) | (167) |
Unrealized Hedging Gains (Losses) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 4 | (3) | 0 |
Other comprehensive income (loss) before reclassifications, net | (1) | 10 | (3) |
Amounts reclassified, pre-tax | 4 | (3) | 0 |
Tax expense (benefit) reclassified | 0 | 0 | 0 |
Ending balance | 7 | 4 | (3) |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (815) | (758) | (708) |
Other comprehensive income (loss) before reclassifications, net | 35 | (65) | (68) |
Amounts reclassified, pre-tax | 22 | 12 | 9 |
Tax expense (benefit) reclassified | (5) | (4) | 9 |
Ending balance | $ (763) | $ (815) | $ (758) |
Income Taxes - Income Before In
Income Taxes - Income Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 420 | $ 105 | $ 470 |
Foreign | 1,541 | 1,406 | 1,391 |
Net income before income taxes | $ 1,961 | $ 1,511 | $ 1,861 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
One-time tax benefit from overall reduction in liability | $ 16 | $ 10 |
Decrease in U.S. tax related to base erosion and anti-abuse tax | 16 | |
Undistributed earnings of foreign subsidiaries | 5,100 | |
Unrecognized tax benefits that would impact effective tax rate | 392 | |
Increase in unrecognized tax benefits reasonably possible | 20 | |
Decrease in unrecognized tax benefits reasonably possible | 360 | |
Increase in accrued interest reasonably possible | 5 | |
Decrease in accrued interest reasonably possible | $ 150 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
United States: | |||
Federal | $ 77 | $ 42 | $ 103 |
State | 32 | 26 | 38 |
Foreign | 524 | 438 | 461 |
Current Income Tax Expense (Benefit) | 633 | 506 | 602 |
United States: | |||
Federal | (13) | 8 | 11 |
State | (6) | (8) | 0 |
Foreign | (73) | (51) | (19) |
Deferred Income Tax Expense (Benefit), Total | (92) | (51) | (8) |
Income tax expense | 541 | 455 | 594 |
Attributable to items (charged) credited to (deficit) equity | $ (25) | $ (6) | $ (14) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | 21.00% | 21.00% | 21.00% |
State income taxes | 0.80% | 0.90% | 1.70% |
Tax on international activities | 4.70% | 4.40% | 6.50% |
U.S. tax effect of foreign earnings | 0.50% | 3.40% | 2.90% |
Other | 0.60% | 0.40% | (0.20%) |
Effective income tax rate | 27.60% | 30.10% | 31.90% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Insurance and employee benefits | $ 185 | $ 201 |
Other asset basis differences | 143 | 149 |
Other liability basis differences | 320 | 299 |
Tax loss carryforwards | 200 | 197 |
Tax credit carryforwards | 46 | 38 |
Valuation allowances | (247) | (242) |
Deferred tax assets, net of valuation allowance | 647 | 642 |
Intangible assets | 168 | 182 |
Other assets basis differences | 284 | 335 |
Deferred tax liabilities, net | $ 452 | $ 517 |
Income Taxes - Tax Credit and L
Income Taxes - Tax Credit and Loss Carryforwards (Details) $ in Millions | Dec. 31, 2021USD ($) |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforwards | $ 46 |
Tax Loss Carryforwards | 812 |
2022-2026 | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforwards | 1 |
Tax Loss Carryforwards | 53 |
2027-2031 | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforwards | 14 |
Tax Loss Carryforwards | 20 |
2032-2041 | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforwards | 1 |
Tax Loss Carryforwards | 71 |
Indefinite | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforwards | 30 |
Tax Loss Carryforwards | $ 668 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Balance at January 1 | $ 397 | $ 379 | $ 380 |
Additions for tax positions related to the current year | 23 | 16 | 18 |
Additions for tax positions of prior years | 1 | 41 | 15 |
Reductions for tax positions of prior years | (22) | (31) | (15) |
Settlements | (7) | (8) | (19) |
Balance at December 31 | 392 | 397 | 379 |
Gross interest expense related to unrecognized tax benefits | 2 | 10 | 8 |
Total accrued interest balance at December 31 | $ 152 | $ 153 | $ 141 |
Restructuring Costs - Narrative
Restructuring Costs - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 56 | $ 77 | $ 54 |
Cost of products and services sold | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 22 | 22 | 19 |
Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 34 | $ 55 | $ 35 |
Current Year Actions | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 41 | ||
Current Year Actions | Severance costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 41 | ||
Current Year Actions | Cost of products and services sold | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 13 | ||
Current Year Actions | Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 28 | ||
Prior Year Actions | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 13 | ||
Prior Year Actions | Severance costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 13 | ||
Prior Year Actions | Cost of products and services sold | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 9 | ||
Prior Year Actions | Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 4 | ||
Prior to Last Year Actions | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 2 |
Restructuring Costs - Schedule
Restructuring Costs - Schedule of Pretax Restructuring Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 56 | $ 77 | $ 54 |
Cost of products and services sold | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 22 | 22 | 19 |
Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 34 | 55 | 35 |
New Equipment | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 23 | 30 | 19 |
Service | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 33 | $ 47 | $ 35 |
Restructuring Costs - Restructu
Restructuring Costs - Restructuring Roll forward (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | $ 56 | $ 77 | $ 54 |
Current Year Actions | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | 41 | ||
Current Year Actions | Severance costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 0 | ||
Restructuring costs | 41 | ||
Utilization, foreign exchange and other costs | (19) | ||
Restructuring reserve, ending balance | 22 | 0 | |
Prior Year Actions | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | 13 | ||
Prior Year Actions | Severance costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 42 | ||
Restructuring costs | 13 | ||
Utilization, foreign exchange and other costs | (30) | ||
Restructuring reserve, ending balance | $ 25 | $ 42 |
Restructuring Costs - Schedul_2
Restructuring Costs - Schedule of Restructuring Costs Expected, Incurred, and Remaining (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current Year Actions | ||
Restructuring Reserve [Roll Forward] | ||
Expected Costs | $ 48 | |
Cost Incurred | (41) | |
Remaining Costs | 7 | |
Current Year Actions | New Equipment | ||
Restructuring Reserve [Roll Forward] | ||
Expected Costs | 15 | |
Cost Incurred | (14) | |
Remaining Costs | 1 | |
Current Year Actions | Service | ||
Restructuring Reserve [Roll Forward] | ||
Expected Costs | 33 | |
Cost Incurred | (27) | |
Remaining Costs | 6 | |
Prior Year Actions | ||
Restructuring Reserve [Roll Forward] | ||
Expected Costs | 84 | |
Cost Incurred | (13) | $ (71) |
Remaining Costs | 0 | |
Prior Year Actions | New Equipment | ||
Restructuring Reserve [Roll Forward] | ||
Expected Costs | 36 | |
Cost Incurred | (7) | (29) |
Remaining Costs | 0 | |
Prior Year Actions | Service | ||
Restructuring Reserve [Roll Forward] | ||
Expected Costs | 48 | |
Cost Incurred | (6) | $ (42) |
Remaining Costs | $ 0 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) € in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020EUR (€) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Four quarter rolling average of notional amount of foreign exchange contracts hedging foreign currency transactions | $ 3,300 | $ 3,000 | |
Four quarter rolling average of notional amount of contracts hedging commodity purchases | 16 | 0 | |
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months | 4 | ||
Commercial paper | 0 | 664 | € 420 |
Euro Denominated Investment Hedge | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Net investment hedge, effective, recognized gains (loss) in OCI | 16 | $ (18) | |
Yen Denominated Investment Hedge | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Net investment hedge, effective, recognized gains (loss) in OCI | 10 | ||
Net Investment Hedging | Yen Denominated Investment Hedge | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Debt instrument, face amount | $ 21,500 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Fair Value of Derivative Instruments (Details) - Foreign Exchange Contract - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | $ 8 | $ 13 |
Liability derivatives | (3) | (11) |
Designated as Hedging Instrument | Cash Flow Hedging | Other current assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 7 | 9 |
Designated as Hedging Instrument | Cash Flow Hedging | Other assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 1 | 4 |
Designated as Hedging Instrument | Cash Flow Hedging | Accrued liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | (3) | (7) |
Designated as Hedging Instrument | Cash Flow Hedging | Other long-term liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | 0 | (4) |
Not Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 28 | 33 |
Liability derivatives | (13) | (32) |
Not Designated as Hedging Instrument | Other current assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 23 | 23 |
Not Designated as Hedging Instrument | Other assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 5 | 10 |
Not Designated as Hedging Instrument | Accrued liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | (11) | (24) |
Not Designated as Hedging Instrument | Other long-term liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | $ (2) | $ (8) |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Gain (Loss) on Derivative Instruments Reclassified From OCI (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gain (loss) recorded in Accumulated other comprehensive income (loss) | $ 7 | $ 4 |
Financial Instruments - Sched_3
Financial Instruments - Schedule of Gain (Loss) on Derivative Instruments in Other Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Foreign Exchange Contract | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Foreign exchange contracts | $ 9 | $ (4) | $ (9) |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring and Nonrecurring (Details) - Fair Value, Recurring - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | $ 25 | $ 59 |
Derivative assets | 36 | 46 |
Derivative liabilities | (16) | (43) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 25 | 59 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Significant Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Derivative assets | 36 | 46 |
Derivative liabilities | (16) | (43) |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Balan
Fair Value Measurements - Balance Sheet Grouping (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term borrowings | $ (24) | $ (701) |
Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 65 | 65 |
Customer financing notes receivable, net | 77 | 128 |
Short-term borrowings | (24) | (701) |
Long-term debt (excluding leases and other) | (7,296) | (5,300) |
Long-term liabilities (including current portion) | (253) | (263) |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 63 | 62 |
Customer financing notes receivable, net | 76 | 126 |
Short-term borrowings | (24) | (701) |
Long-term debt (excluding leases and other) | (7,420) | (5,717) |
Long-term liabilities (including current portion) | (240) | (234) |
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 0 | 0 |
Customer financing notes receivable, net | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term debt (excluding leases and other) | 0 | 0 |
Long-term liabilities (including current portion) | 0 | 0 |
Estimate of Fair Value Measurement | Significant Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 63 | 62 |
Customer financing notes receivable, net | 76 | 126 |
Short-term borrowings | (24) | (701) |
Long-term debt (excluding leases and other) | (7,420) | (5,717) |
Long-term liabilities (including current portion) | (240) | (234) |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 0 | 0 |
Customer financing notes receivable, net | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term debt (excluding leases and other) | 0 | 0 |
Long-term liabilities (including current portion) | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | Dec. 31, 2021USD ($) |
Reimbursement of tax payments | UTC | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contractual indemnity obligation | $ 239 |
Guarantees - Product Warranty D
Guarantees - Product Warranty Disclosure (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Movement Warranties [Roll Forward] | ||
Balance as of January 1 | $ 25 | $ 27 |
Warranties | 3 | 12 |
Settlements made | (9) | (14) |
Other | 1 | 0 |
Balance as of December 31 | $ 20 | $ 25 |
Guarantees - Narrative (Details
Guarantees - Narrative (Details) - Dec. 31, 2021 € in Thousands, $ in Millions | USD ($) | EUR (€) |
Guarantor Obligations [Line Items] | ||
Financial guarantee | € | € 1,630,000 | |
Standby Letter of Credit | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligation, maximum exposure | $ | $ 154 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets | $ 526 | $ 542 | |
Operating lease liabilities | $ 517 | 534 | |
Extension term | 5 years | ||
Termination term | 1 year | ||
Operating lease expense | $ 147 | $ 148 | $ 152 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Weighted Average Remaining Lease Term (in years) | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Weighted Average Remaining Lease Term (in years) | 20 years |
Leases - Supplemental Operating
Leases - Supplemental Operating Lease Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating cash outflows from operating leases | $ (154) | $ (162) | $ (134) |
ROU assets obtained in exchange for operating lease liabilities | $ 135 | $ 126 | $ 157 |
Leases - Operating Lease ROU As
Leases - Operating Lease ROU Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 526 | $ 542 |
Accrued liabilities | 181 | 167 |
Operating lease liabilities | 336 | 367 |
Operating Lease, Liability, Total | $ 517 | $ 534 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Operating Leases (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Weighted Average Remaining Lease Term (in years) | 4 years 4 months 24 days | 5 years |
Weighted Average Discount Rate | 260.00% | 290.00% |
Leases - Operating Lease Liabil
Leases - Operating Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 171 | |
2023 | 136 | |
2024 | 102 | |
2025 | 52 | |
2026 | 32 | |
Thereafter | 52 | |
Total undiscounted lease payments | 545 | |
Less: imputed interest | (28) | |
Operating Lease, Liability, Total | $ 517 | $ 534 |
Contingent Liabilities (Details
Contingent Liabilities (Details) € in Millions, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2021USD ($) | Dec. 31, 2021EUR (€) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015EUR (€) | Dec. 31, 2021EUR (€) | |
Loss Contingencies [Line Items] | |||||||
Income Tax Expense (Benefit) | $ 541 | $ 455 | $ 594 | ||||
Gross interest expense related to unrecognized tax benefits | 2 | 10 | 8 | ||||
Total accrued interest balance at December 31 | 152 | 153 | $ 141 | ||||
Environmental Regulation | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency Accrual | 12 | 12 | |||||
German Tax Office Against Otis | |||||||
Loss Contingencies [Line Items] | |||||||
Income Tax Expense (Benefit) | 243 | € 215 | |||||
Disallowed tax benefit, estimated interest expense | 134 | € 118 | |||||
Gross interest expense related to unrecognized tax benefits | $ 300 | € 275 | |||||
Total accrued interest balance at December 31 | 50 | € 45 | |||||
Asbestos Matter | |||||||
Loss Contingencies [Line Items] | |||||||
Insurance recovery receivable | 5 | 5 | |||||
Asbestos Matter | Minimum | |||||||
Loss Contingencies [Line Items] | |||||||
Estimate of possible loss | 22 | 23 | |||||
Asbestos Matter | Maximum | |||||||
Loss Contingencies [Line Items] | |||||||
Estimate of possible loss | $ 45 | $ 45 |
Segment Financial Data - Segmen
Segment Financial Data - Segment Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 14,298 | $ 12,756 | $ 13,118 |
Operating profit | $ 2,108 | 1,639 | 1,814 |
Number of operating segments | segment | 2 | ||
Asset impairment charges | $ 0 | 71 | 26 |
Operating segments | |||
Segment Reporting Information [Line Items] | |||
Operating profit | 2,221 | 1,929 | 1,996 |
Operating segments | New Equipment | |||
Segment Reporting Information [Line Items] | |||
Revenues | 6,428 | 5,371 | 5,648 |
Operating profit | 459 | 318 | 393 |
Operating segments | Service | |||
Segment Reporting Information [Line Items] | |||
Revenues | 7,870 | 7,385 | 7,470 |
Operating profit | 1,762 | 1,611 | 1,603 |
General corporate expenses and other | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0 | 0 | 0 |
Operating profit | (113) | (290) | $ (182) |
Asset impairment charges | 71 | ||
Asset impairment related license costs | $ 14 | ||
General corporate expenses and other | Separation related costs | |||
Segment Reporting Information [Line Items] | |||
Restructuring costs | $ 106 |
Segment Financial Data - Geogra
Segment Financial Data - Geographic External Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 14,298 | $ 12,756 | $ 13,118 |
Property, Plant and Equipment, Net | 774 | 774 | 721 |
United States Operations | |||
Segment Reporting Information [Line Items] | |||
Revenues | 3,700 | 3,462 | 3,594 |
Property, Plant and Equipment, Net | 336 | 309 | 295 |
China | |||
Segment Reporting Information [Line Items] | |||
Revenues | 2,877 | 2,135 | 2,113 |
Property, Plant and Equipment, Net | 111 | 113 | 105 |
Other | |||
Segment Reporting Information [Line Items] | |||
Revenues | 7,721 | 7,159 | 7,411 |
Property, Plant and Equipment, Net | $ 327 | $ 352 | $ 321 |
Segment Financial Data - Net Sa
Segment Financial Data - Net Sales by Sales Type (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 14,298 | $ 12,756 | $ 13,118 |
New Equipment | |||
Segment Reporting Information [Line Items] | |||
Revenues | 6,428 | 5,371 | 5,648 |
Total Service | |||
Segment Reporting Information [Line Items] | |||
Revenues | 7,870 | 7,385 | 7,470 |
Maintenance and Repair | |||
Segment Reporting Information [Line Items] | |||
Revenues | 6,472 | 6,047 | 6,120 |
Modernization | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 1,398 | $ 1,338 | $ 1,350 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Jan. 14, 2022USD ($) |
Subsequent Event | LIBOR plus 45 bps floating rate notes due 2023 | |
Subsequent Event [Line Items] | |
Repayments of Debt | $ 500 |
SCHEDULE II - Valuation and Q_2
SCHEDULE II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Impact of credit standard adoption | $ 175 | $ 161 | $ 83 |
Cumulative Effect, Period of Adoption, Adjustment | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Impact of credit standard adoption | 0 | 28 | |
Allowance for Doubtful Accounts and Expected Credit Losses: | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | 161 | 83 | 84 |
Provision for expected credit losses | 37 | 40 | 26 |
Reductions credited to income tax expense | (15) | (20) | (19) |
Other | (8) | 30 | (8) |
Ending balance | 175 | 161 | 83 |
Allowance for Doubtful Accounts and Expected Credit Losses: | Cumulative Effect, Period of Adoption, Adjustment | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Impact of credit standard adoption | 28 | ||
Future Income Tax Benefits - Valuation Allowance | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | 242 | 55 | 29 |
Additions charged to income tax expense | 30 | 63 | 28 |
Reductions credited to income tax expense | (10) | (13) | 0 |
Other adjustments | (15) | 137 | (2) |
Ending balance | $ 247 | $ 242 | $ 55 |