OTIS WORLDWIDE CORPORATION BUSINESS OVERVIEW
Business Summary
We are the world's leading elevator and escalator manufacturing, installation and service company. Our Company is organized into two segments, New Equipment and Service. Through our 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 buildings and infrastructure projects. Our New Equipment customers include real-estate and building developers and general contractors who develop and/or design buildings for residential, commercial, retail or mixed-use activity. We sell our New Equipment directly to customers, as well as through agents and distributors. Through our Service segment, we perform maintenance and repair services for both our own products and those of other manufacturers and provide modernization services to upgrade elevators and escalators. Maintenance services include inspections to ensure code compliance, preventive maintenance offerings and other customized maintenance offerings tailored to meet customer needs, as well as repair services to address equipment and component wear and tear and breakdowns. Modernization services enhance equipment operation and improve building functionality. Modernization offerings can range from relatively simple upgrades of interior finishes and aesthetics to complex upgrades of larger components and sub-systems. Our typical Service customers include building owners, facility managers, housing associations and government agencies that operate buildings where elevators and escalators are installed. We serve our customers through a global network of employees. These include sales personnel, field technicians with separate skills in performing installation and service, as well as engineers driving our continued product development and innovation. We function under a centralized operating model whereby a global strategy is set around New Equipment and Service because we seek to grow our maintenance portfolio, in part, through the conversion of new elevator and escalator installations into service contracts. Accordingly, we benefit from an integrated global strategy, which sets priorities and establishes accountability across the full product lifecycle. The current status of significant factors affecting our business environment in 2022 is discussed below. For additional discussion, refer to the "Business Overview" section in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K .
Recent Developments
Based on the ongoing crisis inUkraine and the related ongoing supply chain disruptions, we have reassessed our operations inRussia , which represented approximately 2% of our 2021 revenue and profit, comprising mostly of New Equipment. The Company is not taking new elevator or escalator orders inRussia and will make no new investments in the country for the time being. We will continue to fulfill our existing agreements and provide essential equipment and services inRussia , when possible, while remaining in compliance with applicable laws, including applicable sanctions and export controls.
The results of our operations, financial position and overall financial
performance were not materially impacted by the events unfolding in
Zardoya Otis Tender Offer
As previously disclosed, the Company announced the Tender Offer to acquire all of the issued and outstanding shares ofZardoya Otis not owned by Otis, at an offer price of €7.07 per share in cash after adjusting for dividends. The results of the Tender Offer were announced onApril 7, 2022 , with tenders of 45.49% of the shares outstanding accepted. The shares tendered to the Company were settled in cash onApril 12, 2022 for approximately €1.5 billion from the Company's restricted cash held in escrow, resulting in the Company owning 95.51% ofZardoya Otis . The acquisition and settlement of the remaining issued and outstanding shares not owned by the Company for approximately €150 million (based on the adjusted tender price of €7.07 26 -------------------------------------------------------------------------------- Table of Contents per share) and the automatic delisting ofZardoya Otis shares are expected to occur in the second quarter of 2022. See Note 1, "General", Note 7, "Borrowings and Lines of Credit" and Note 19, "Subsequent Events" to the Condensed Consolidated Financial Statements, for further details regarding this transaction and financing arrangements entered into in connection with the Tender Offer.
Impact of COVID-19 on our Company
The results of our operations and overall financial performance were impacted due to the COVID-19 pandemic during the quarters endedMarch 31, 2022 and 2021. COVID-19 has had and could continue to have an impact on our business in the future, including impacts to overall financial performance during the remainder of 2022, as a result of the following, among other things:
•Customer demand impacting our new equipment, maintenance and repair, and modernization businesses
•Cancellations or delays of customer orders
•Customer liquidity constraints and related credit reserves
•Supplier and raw material capacity constraints, delays and related costs
We currently do not expect any significant impact to our capital and financial resources from the COVID-19 pandemic, including to our overall liquidity position based on our available cash and cash equivalents and our access to credit facilities and the capital markets.
See the Liquidity and Financial Condition section in this Form 10-Q for further detail and Item 1A. Risk Factors in our Form 10-K for additional risks related to COVID-19.
CRITICAL ACCOUNTING ESTIMATES
Preparation of our Condensed Consolidated Financial Statements requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses. The accounting policies that involve
the most significant estimates, assumptions and management judgments used in
preparation of the Condensed Consolidated Financial Statements, or are the most
sensitive to change due to outside factors, are discussed in the section
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Critical Accounting Estimates" included in our Form
10-K . Except as disclosed in Note 18 to our Condensed Consolidated Financial
Statements in this Form 10-Q, pertaining to adoption of new accounting
pronouncements, there have been no material changes in these policies.
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RESULTS OF OPERATIONS
Net Sales
Quarter Ended March 31,
(dollars in millions) 2022 2021
Net sales $ 3,414 $ 3,408
Percentage change year-over-year 0.2 %
The factors contributing to the total percentage change year-over-year in total
Net sales for the quarter ended
Quarter Ended March 31, 2022
Organic volume 3.1 %
Foreign currency translation (3.0) %
Acquisitions and divestitures, net 0.1 %
Total % change 0.2 %
The Organic volume increase of 3.1% for the quarter ended March 31, 2022 was
driven by an increase in organic sales of 5.8% in Service, partially offset by a
decrease of (0.5)% in New Equipment organic sales.
See "Segment Review" section for a discussion of Net sales by segment.
Cost of Products and Services Sold
Quarter Ended March 31 ,
(dollars in millions) 2022 2021
Total cost of products and services sold $ 2,408$ 2,389 Percentage change year-over-year 0.8 % The factors contributing to the percentage change year-over-year for the quarter endedMarch 31, 2022 in total cost of products and services sold are as follows: Quarter Ended March 31, 2022 Organic volume 3.8 % Foreign currency translation (3.1) % Other 0.1 % Total % change 0.8 % The organic increase in total cost of products and services sold for the quarter endedMarch 31, 2022 was primarily driven by the organic sales increases noted above and higher input costs including labor inflation and commodity headwinds, partially offset by productivity gains in both segments. 28 --------------------------------------------------------------------------------
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Gross Margin
Quarter Ended March 31,
(dollars in millions) 2022 2021
Gross margin $ 1,006 $ 1,019
Gross margin percentage 29.5 % 29.9 %
Gross margin percentage decreased 40 basis points for the quarter ended
See the "Segment Review" section for discussion of operating results by segment.
Research and Development
Quarter Ended March 31,
(dollars in millions) 2022 2021
Research and development $ 37 $ 35
Percentage of Net sales 1.1 % 1.0 %
Research and development was relatively flat for the quarter ended
Selling, General and Administrative
Quarter Ended March 31 ,
(dollars in millions) 2022 2021
Selling, general and administrative$ 459 $ 482 Percentage of Net sales 13.4 % 14.1 % Selling, general and administrative expenses decreased$23 million for the quarter endedMarch 31, 2022 , when compared to the same period in 2021, as cost containment actions, impact from foreign exchange and lower credit loss reserves were partially offset by labor inflation. Selling, general and administrative expenses as a percentage of Net sales decreased 70 basis points for the quarter endedMarch 31, 2022 , compared to the same period in 2021, as Net sales were relatively flat while expenses decreased. Restructuring Costs Quarter Ended March 31, (dollars in millions) 2022 2021 Restructuring costs $ 14$ 15 We initiate restructuring actions to keep our cost structure competitive. Charges generally arise from severance related to workforce reductions, and to a lesser degree, facility exit and lease termination costs associated with the consolidation of office and manufacturing operations. We continue to closely monitor the economic environment and may undertake further restructuring actions to keep our cost structure aligned with the demands of the prevailing market conditions. Total restructuring costs were$14 million for the quarter endedMarch 31, 2022 and included$13 million of costs related to 2022 actions, and$1 million of costs related to 2021 actions. Most of the expected charges will require cash payments, which we have funded and expect to continue to fund with cash generated from operations. During the quarter endedMarch 31, 2022 , we had cash outflows of approximately$17 million related to the restructuring actions and expect to make cash payments of$71 million to complete the actions announced, which will be comprised of the utilization of existing restructuring accruals and$36 million of additional restructuring expenses to be recognized. 29 -------------------------------------------------------------------------------- Table of Contents We generally expect to achieve annual recurring savings within the two-year period subsequent to initiating the actions, including$30 million for the 2022 actions and$38 million for the 2021 actions, of which approximately$9 million was realized for the 2022 and 2021 actions during the quarter endedMarch 31, 2022 .
For additional discussion of restructuring, see Note 12 to the Condensed Consolidated Financial Statements.
Other Income (Expense), Net
Quarter Ended March 31,
(dollars in millions) 2022 2021
Other income (expense), net $ 16 $ 7
The change in Other income (expense), net of $9 million for the quarter ended
March 31, 2022 , compared to the same period in 2021, was primarily driven by
favorable foreign currency mark-to-market adjustments.
Interest Expense (Income), Net
Quarter Ended March 31 ,
(dollars in millions) 2022 2021
Interest expense (income), net $ 37
The increase in Interest expense (income), net of
The average interest rate on our long-term debt for the quarters ended
For additional discussion of borrowings, see Note 7 to the Condensed Consolidated Financial Statements.
Income Taxes
Quarter Ended March 31,
2022 2021
Effective tax rate 27.8 % 25.9 %
The increase in the effective tax rate for the quarter ended March 31, 2022 is
primarily due to the absence of a reduction in the deferred tax liability
related to repatriation of foreign earnings recorded in the quarter ended March
31, 2021 .
We anticipate some variability in the tax rate quarter to quarter from potential discrete items.
For additional discussion of income taxes and the effective income tax rate, see Note 11 to the Condensed Consolidated Financial Statements.
Noncontrolling Interest in Subsidiaries' Earnings and Net Income Attributable to
Quarter Ended March 31,
(dollars in millions) 2022 2021
Noncontrolling interest in subsidiaries' earnings $ 42 $ 44
Net income attributable to Otis Worldwide Corporation $ 311 $ 308
Noncontrolling interest in subsidiaries' earnings and net income attributable to
Otis Worldwide Corporation were relatively flat for the quarter ended March 31,
2022 , compared to the same period in 2021.
Ownership interest in non-wholly owned subsidiaries has remained generally
consistent year-over-year. For details on the results of the Tender Offer and
purchases of shares of Zardoya Otis not previously owned by the Company made
after March 31, 2022 , see Note 19 to the Condensed Consolidated Financial
Statements.
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Segment Review
Summary performance for our operating segments for the quarters ended
Net Sales Operating Profit Operating Profit Margin
(dollars in millions) 2022 2021 2022 2021 2022 2021
New Equipment $ 1,422 $ 1,458 $ 93 $ 104 6.5 % 7.1 %
Service 1,992 1,950 447 430 22.4 % 22.1 %
Total segment 3,414 3,408 540 534 15.8 % 15.7 %
General corporate expenses and
other - - (14) (25) - -
Total $ 3,414 $ 3,408 $ 526 $ 509 15.4 % 14.9 %
New Equipment
The New Equipment segment designs, manufactures, sells and installs a wide range
of passenger and freight elevators, as well as escalators and moving walkways in
residential and commercial buildings and infrastructure projects. Our New
Equipment customers include real-estate and building developers and general
contractors who develop and/or design buildings for residential, infrastructure,
commercial, retail or mixed-use activity. We sell directly to customers as well
as through agents and distributors. We also sell New Equipment to government
agencies to support infrastructure projects, such as airports, railways or
metros.
Summary performance for New Equipment for the quarters ended March 31, 2022 and
2021 was as follows:
Quarter Ended March 31,
(dollars in millions) 2022 2021 Change Change
Net sales $ 1,422 $ 1,458 $ (36) (2.5) %
Cost of sales 1,190 1,187 3 0.3 %
232 271 (39) (14.4) %
Operating expenses 139 167 (28) (16.8) %
Operating profit $ 93 $ 104 $ (11) (10.6) %
Operating profit margin 6.5 % 7.1 %
Summary analysis of the Net sales change for New Equipment for the quarter ended
Components of Net sales change: Quarter Ended
(0.5) %
Foreign currency translation (1.9) %
Acquisitions/Divestitures, net (0.1) %
Total % change (2.5) %
Quarter Ended
Net sales
The organic sales decrease of (0.5)% was driven by declines in
31
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Operating profit
New Equipment operating profit decreased
Service
The Service segment performs maintenance and repair services for both our products, and those of other manufacturers, and provides modernization services to upgrade elevators and escalators. Maintenance services include inspections to ensure code compliance, preventive maintenance offerings and other customized maintenance offerings tailored to meet customer needs, as well as repair services that address equipment and component wear and tear, and breakdowns. Modernization services enhance equipment operation and improve building functionality. Modernization offerings can range from relatively simple upgrades of interior finishes and aesthetics, to complex upgrades of larger components and sub-systems. Our typical Service customers include building owners, facility managers, housing associations and government agencies that operate buildings where elevators and escalators are installed. Summary performance for Service for the quarters endedMarch 31, 2022 and 2021 was as follows: Quarter Ended March 31, (dollars in millions) 2022 2021 Change Change Net sales $ 1,992$ 1,950 $ 42 2.2 % Cost of sales 1,218 1,202 16 1.3 % 774 748 26 3.5 % Operating expenses 327 318 9 2.8 % Operating profit $ 447$ 430 $ 17 4.0 % Operating profit margin 22.4 % 22.1 %
Summary analysis of Service Net sales change for the quarter ended
Components of Net sales change: Quarter Ended
5.8 %
Foreign currency translation (3.8) %
Acquisitions/Divestitures, net 0.2 %
Total % change 2.2 %
Quarter Ended
Net sales
The organic sales increase of 5.8% is due to organic sales increases in maintenance and repair of 5.6% and modernization of 6.9%.
Components of Net sales change: Maintenance and Repair Modernization
Organic 5.6 % 6.9 %
Foreign currency translation (3.9) % (3.4) %
Acquisitions/Divestitures, net 0.2 % - %
Total % change 1.9 % 3.5 %
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Operating profit
Service operating profit increased
General Corporate Expenses and Other
Quarter Ended March 31,
(dollars in millions) 2022 2021
General corporate expenses and other $
(14)
General corporate expenses and other for the quarter ended
LIQUIDITY AND FINANCIAL CONDITION
(dollars in millions) March 31, 2022 December 31, 2021
Cash and cash equivalents $ 1,235 $ 1,565
Total debt 6,745 7,273
Net debt (total debt less cash and cash equivalents) 5,510 5,708
Total equity 1 (4,922) (3,144)
Total capitalization (total debt plus total equity) 1,823 4,129
Net capitalization (total debt plus total equity less cash and cash equivalents)
588 2,564
Total debt to total capitalization 1 370 % 176 %
Net debt to net capitalization 1 937 % 223 %
1 Our total debt to total capitalization ratio and net debt to net
capitalization ratio increased in the quarter ended March 31, 2022 due to the
$1.5 billion reduction in equity upon the Tender Offer being approved by the
Spanish regulator, and the resulting reclassification of our noncontrolling
interest in Zardoya Otis to redeemable noncontrolling interest based on the
value of the Tender Offer. For more information on the impact of the Zardoya
Otis redeemable noncontrolling interest, see Note 1 to the Condensed
Consolidated Financial Statements.
As of March 31, 2022 , we had cash and cash equivalents of approximately
$1.2 billion , of which approximately 98% was held by the Company's foreign
subsidiaries. We manage our worldwide cash requirements by reviewing available
funds among the many subsidiaries through which we conduct our business and the
cost-effectiveness with which those funds can be accessed. On occasion, we are
required to maintain cash deposits with certain banks with respect to
contractual obligations related to acquisitions and divestitures or other legal
obligations. As of March 31, 2022 and December 31, 2021 , the amount of such
restricted cash was approximately $1.8 billion and $1.9 billion , respectively,
including cash held in escrow to fund the Tender Offer. For information on the
results of the Tender Offer, see Note 19 to the Condensed Consolidated Financial
Statements.
From time-to-time we may need to access the capital markets to obtain financing.
We may incur indebtedness or issue equity as needed. Although we believe that
the arrangements in place as of March 31, 2022 permit us to finance our
operations on acceptable terms and conditions, our access to, and the
availability of, financing on acceptable terms and conditions in the future
could be impacted by many factors, including (1) our credit ratings or absence
of a credit rating, (2) the liquidity of the overall capital markets and (3) the
current state of the economy, including the impact of COVID-19. There can be no
assurance that we will continue to have access to the capital markets on terms
acceptable to us.
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There were no long-term debt issuances for the quarter endedMarch 31, 2022 . The Company redeemed the$500 million floating notes originally due in 2023 during the quarter endedMarch 31, 2022 . For additional discussion of borrowings, see Note 7 to the Condensed Consolidated Financial Statements. The Company does not intend to reinvest certain undistributed earnings of our international subsidiaries that have been previously taxed in theU.S. For the remainder of the Company's undistributed international earnings, unless tax effective to repatriate, we will continue to permanently reinvest these earnings. We expect to fund our ongoing operating, investing and financing requirements mainly through cash flows from operations, available liquidity through cash on hand and available bank lines of credit and access to capital markets. As a result of the increased debt incurred in 2021 to fund the Tender Offer, we temporarily suspended share repurchases as we focused on deleveraging. During the quarter endedMarch 31, 2022 , we repaid certain debt and resumed our share repurchases. OnMarch 9, 2022 , our Board of Directors revoked any remaining share repurchase authority under the prior share repurchase program and approved a new share repurchase program for up to$1 billion of Common Stock, of which none had been utilized as ofMarch 31, 2022 . 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. Cash Flow - Operating Activities Quarter Ended March 31, (dollars in millions) 2022 2021 Net cash flows provided by operating activities $ 504 $ 585 Cash generated from operating activities in the quarter endedMarch 31, 2022 was$81 million lower than the same period in 2021, primarily due to decreased cash inflows related to current assets and current liabilities activity of$150 million , as described below. These were partially offset by$41 million of higher non-cash adjustments from Net income and$26 million of higher Other operating activities, net, primarily due to long-term accruals and other activities in the quarter endedMarch 31, 2022 .
Quarter Ended
Cash inflows related to current assets and current liabilities operating
activity for the quarter ended
•Contract assets, current and Contract liabilities, current, net change of
•Accrued liabilities, which decreased
•Accounts receivable, net, which increased
Quarter Ended
Cash inflows related to current assets and current liabilities operating
activity for the quarter ended
•Contract assets, current and Contract liabilities, current, net change of
•Other current assets, which decreased
•Accounts payable, which increased
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•Accrued liabilities, which decreased$160 million , primarily due to the timing of payments of employee-related benefits, interest and income taxes, including the payment of foreign tax obligations pursuant to the TMA;
•Inventories, net, which increased
•Accounts receivable, net, which increased
Cash Flow - Investing Activities
Cash flows used in investing activities primarily reflect capital expenditures,
investments in businesses and securities, proceeds from the sale of fixed assets
and settlement of derivative contracts.
Quarter Ended
Quarter Ended March 31,
(dollars in millions) 2022 2021 Change
Investing Activities:
Capital expenditures $ (30) $ (44) $ 14Investments in businesses and intangible assets, net of cash acquired
(8) (24) 16
Proceeds from the sale of (investments in) marketable securities
(7) (18) 11
Receipts (payments) on settlements of derivative
contracts 28 8 20
Other investing activities, net - 28 (28)
Net cash flows used in investing activities $ (17) $ (50) $ 33
Cash flows used in investing activities in the quarter ended
•$20 million higher net cash receipts from the settlement of derivative
instruments, with net cash receipts of
•$16 million lower investments in businesses and intangible assets in the
quarter ended
•$14 million lower capital expenditures and
•$28 million lower Other investing activities, net primarily due to property damage insurance proceeds received and proceeds from the sales of fixed assets during the quarter endedMarch 31, 2021 . As discussed in Note 13 to the Condensed Consolidated Financial Statements, we enter into derivative instruments for risk management purposes. We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates and foreign exchange rates. These fluctuations can increase the costs of financing, investing and operating the business. We use derivative instruments, including forward contracts and options to manage certain foreign currency exposures. 35
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Cash Flow - Financing Activities
Financing activities primarily include increases or decreases in short-term
borrowings, issuance or repayment of long-term debt, dividends paid to common
shareholders, repurchases of Common Stock and dividends paid to noncontrolling
interests.
Quarter Ended March 31,
(dollars in millions) 2022 2021 Change
Financing Activities:
Increase (decrease) in short-term borrowings, net $ 26 $ (342) $ 368
Proceeds from issuance of long-term debt - 199 (199)
Payment of debt issuance costs - (2) 2
Repayment of long-term debt (500) - (500)
Dividends paid on Common Stock (102) (87) (15)
Repurchases of Common Stock (200) (300) 100
Dividends paid to noncontrolling interest (33) (32) (1)
Other financing activities, net (14) (10) (4)
Net cash flows provided by (used in) financing
activities $ (823) $ (574) $ (249)
Net cash used in financing activities increased $249 million in the quarter
ended March 31, 2022 compared to the same period in 2021 primarily due to higher
net repayments on borrowings of $474 million during the quarter ended March 31,
2022 compared to $145 million during the same period in 2021, which were made
with cash flow from operations and existing cash balances. Net repayments on
borrowings are comprised of the following activity:
•Repayments of long-term debt of
•Net repayments of short-term borrowings of$342 million , partially offset by net proceeds from the issuance of long-term debt of$197 million , during the quarter endedMarch 31, 2021 .
These higher net repayments on borrowings were partially offset by lower
repurchases of Common Stock in the quarter ended
For additional discussion of borrowings activity, see Note 7 to the Condensed Consolidated Financial Statements.
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Guaranteed Securities : Summarized Financial Information The following information is provided in compliance with Rule 13-01 of Regulation S-X under the Securities Exchange Act of 1934, as amended, with respect to the 2023 Euro Notes, the 2026 Euro Notes and the 2031 Euro Notes (together the "Euro Notes"), in each case issued by Highland Holdings S.à r.l. ("Highland"), a private limited liability company (société à responsabilité limitée) incorporated and existing under the laws of the Grand Duchy of Luxembourg ("Luxembourg"). The Euro Notes are fully and unconditionally guaranteed byOtis Worldwide Corporation ("OWC") on an unsecured, unsubordinated basis. Refer to "Note 10: Borrowings and Lines of Credit" in Item 8 in our 2021
Form 10-K , for additional information.
Highland is a wholly-owned, indirect consolidated subsidiary of OWC. OWC is incorporated under the laws ofDelaware . As a company incorporated and existing under the laws of Luxembourg, and with its registered office in Luxembourg, Highland is subject to Luxembourg insolvency and bankruptcy laws in the event any insolvency proceedings are initiated against it. Luxembourg bankruptcy law is significantly different from, and may be less favorable to creditors than, the bankruptcy law in effect inthe United States and may make it more difficult for creditors to recover the amount they could expect to recover in liquidation underU.S. insolvency and bankruptcy rules.
The Euro Notes are not guaranteed by any of OWC's or Highland's subsidiaries (all OWC subsidiaries other than Highland are referred to herein as "non-guarantor subsidiaries"). Holders of the Euro Notes will have a direct claim only against Highland, as issuer, and OWC, as guarantor.
The following tables set forth the summarized financial information as of and for the quarter endedMarch 31, 2022 and as ofDecember 31, 2021 of each of OWC and Highland on a standalone basis, which does not include the consolidated impact of the assets, liabilities, and financial results of their subsidiaries except as noted on the tables below, nor does it include any impact of intercompany eliminations as there were no intercompany transactions between OWC and Highland. This summarized financial information is not intended to present the financial position or results of operations of OWC or Highland in accordance withU.S. GAAP. Quarter Ended (dollars in millions) March 31, 2022 OWC Statement of Operations - Standalone and Unconsolidated Revenue $ - Cost of revenue - Operating expenses - Income from consolidated subsidiaries 60
Income (loss) from operations excluding income from consolidated subsidiaries
2
Net income (loss) excluding income from consolidated subsidiaries
(27)
(dollars in millions) March 31, 2022 December 31, 2021
OWC Balance Sheet - Standalone and Unconsolidated Current assets (excluding intercompany receivables from non-guarantor subsidiaries)
$ 72 $ 197
Current assets (intercompany receivables from
non-guarantor subsidiaries) - -
Noncurrent assets, investments in consolidated
subsidiaries 1,271 1,271
Noncurrent assets (excluding investments in consolidated subsidiaries)
48 48
Current liabilities (intercompany payables to
non-guarantor subsidiaries) 2,131 1,516
Current liabilities (excluding intercompany payables to non-guarantor subsidiaries)
82 73
Noncurrent liabilities 5,224 5,725
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Quarter Ended
(dollars in millions) March 31, 2022
Highland Statement of Operations - Standalone and Unconsolidated
Revenue $ -
Cost of revenue -
Operating expenses -
Income from consolidated subsidiaries 738
Income (loss) from operations excluding income from consolidated subsidiaries
-
Net income (loss) excluding income from consolidated subsidiaries
(2)
(dollars in millions) March 31, 2022 December 31, 2021
Highland Balance Sheet - Standalone and Unconsolidated Current assets (excluding intercompany receivables from non-guarantor subsidiaries)
$ - $ -
Current assets (intercompany receivables from
non-guarantor subsidiaries) 1 2
Noncurrent assets (investments in consolidated
subsidiaries) 12,524 12,524
Noncurrent assets (intercompany receivables from
non-guarantor subsidiaries) 650 666
Noncurrent assets (excluding investments in consolidated subsidiaries)
- -
Current liabilities (intercompany payables to
non-guarantor subsidiaries) - 171
Current liabilities (excluding intercompany payables to non-guarantor subsidiaries)
4 2
Noncurrent liabilities 1,750 1,795
Off-Balance Sheet Arrangements and Contractual Obligations
Item 5 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2021 Form 10-K , discloses our off-balance sheet arrangements and contractual obligations. As ofMarch 31, 2022 , there have been no material changes to these off-balance sheet arrangements and contractual obligations, outside the ordinary course of business except for those disclosed in the "Note 7, Borrowings and Lines of Credit" within Item 1 of this Form 10-Q.
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