false2023Q112/31000178133500017813352023-01-012023-03-310001781335us-gaap:CommonStockMember2023-01-012023-03-310001781335otis:A0000NotesDue2023Member2023-01-012023-03-310001781335otis:A0318NotesDue2026Member2023-01-012023-03-310001781335otis:A0934NotesDue2031Member2023-01-012023-03-3100017813352023-04-14xbrli:shares0001781335us-gaap:ProductMember2023-01-012023-03-31iso4217:USD0001781335us-gaap:ProductMember2022-01-012022-03-310001781335us-gaap:ServiceMember2023-01-012023-03-310001781335us-gaap:ServiceMember2022-01-012022-03-3100017813352022-01-012022-03-31iso4217:USDxbrli:shares00017813352023-03-3100017813352022-12-310001781335us-gaap:AdditionalPaidInCapitalMember2022-12-310001781335us-gaap:TreasuryStockCommonMember2022-12-310001781335us-gaap:RetainedEarningsMember2022-12-310001781335us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001781335us-gaap:ParentMember2022-12-310001781335us-gaap:NoncontrollingInterestMember2022-12-310001781335us-gaap:RetainedEarningsMember2023-01-012023-03-310001781335us-gaap:ParentMember2023-01-012023-03-310001781335us-gaap:NoncontrollingInterestMember2023-01-012023-03-310001781335us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001781335us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001781335us-gaap:TreasuryStockCommonMember2023-01-012023-03-310001781335us-gaap:AdditionalPaidInCapitalMember2023-03-310001781335us-gaap:TreasuryStockCommonMember2023-03-310001781335us-gaap:RetainedEarningsMember2023-03-310001781335us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001781335us-gaap:ParentMember2023-03-310001781335us-gaap:NoncontrollingInterestMember2023-03-310001781335us-gaap:AdditionalPaidInCapitalMember2021-12-310001781335us-gaap:TreasuryStockCommonMember2021-12-310001781335us-gaap:RetainedEarningsMember2021-12-310001781335us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001781335us-gaap:ParentMember2021-12-310001781335us-gaap:NoncontrollingInterestMember2021-12-3100017813352021-12-310001781335us-gaap:RetainedEarningsMember2022-01-012022-03-310001781335us-gaap:ParentMember2022-01-012022-03-310001781335us-gaap:NoncontrollingInterestMember2022-01-012022-03-310001781335us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001781335us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001781335us-gaap:TreasuryStockCommonMember2022-01-012022-03-310001781335us-gaap:AdditionalPaidInCapitalMember2022-03-310001781335us-gaap:TreasuryStockCommonMember2022-03-310001781335us-gaap:RetainedEarningsMember2022-03-310001781335us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001781335us-gaap:ParentMember2022-03-310001781335us-gaap:NoncontrollingInterestMember2022-03-3100017813352022-03-310001781335srt:MinimumMember2023-03-310001781335srt:MaximumMember2023-03-310001781335srt:ScenarioPreviouslyReportedMember2022-09-300001781335srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2022-09-3000017813352023-04-012023-03-31xbrli:pure0001781335otis:NewEquipmentMember2022-12-310001781335otis:NewEquipmentMember2023-01-012023-03-310001781335otis:NewEquipmentMember2023-03-310001781335otis:ServicesMember2022-12-310001781335otis:ServicesMember2023-01-012023-03-310001781335otis:ServicesMember2023-03-310001781335us-gaap:UnsecuredDebtMemberotis:UnsubordinatedCommercialPaperMember2023-03-31iso4217:EUR0001781335us-gaap:UnsecuredDebtMemberotis:FiveYearRevolvingCreditFacilityAmendedMember2023-03-100001781335us-gaap:UnsecuredDebtMemberotis:FiveYearRevolvingCreditFacilityAmendedMember2023-03-102023-03-100001781335us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:RevolvingCreditFacilityMemberotis:FiveYearRevolvingCreditFacilityAmendedMember2023-03-102023-03-100001781335us-gaap:RevolvingCreditFacilityMemberotis:FiveYearRevolvingCreditFacilityAmendedMemberus-gaap:BaseRateMember2023-03-102023-03-100001781335otis:Notes0000Due2023Member2023-03-310001781335us-gaap:UnsecuredDebtMemberotis:Notes0000Due2023Member2023-03-31iso4217:JPY0001781335otis:Notes0000Due2023Member2022-12-310001781335otis:Notes2056Due2025Member2023-03-310001781335otis:Notes2056Due2025Member2022-12-310001781335otis:Notes037Due2026Member2023-03-310001781335otis:Notes037Due2026Memberus-gaap:UnsecuredDebtMember2023-03-310001781335otis:Notes037Due2026Member2022-12-310001781335otis:Notes0318Due2026Member2023-03-310001781335us-gaap:UnsecuredDebtMemberotis:Notes0318Due2026Member2023-03-310001781335otis:Notes0318Due2026Member2022-12-310001781335otis:Notes2293Due2027Member2023-03-310001781335otis:Notes2293Due2027Member2022-12-310001781335otis:Notes2565Due2030Member2023-03-310001781335otis:Notes2565Due2030Member2022-12-310001781335otis:Notes0934Due2031Member2023-03-310001781335us-gaap:UnsecuredDebtMemberotis:Notes0934Due2031Member2023-03-310001781335otis:Notes0934Due2031Member2022-12-310001781335otis:Notes3112Due2040Member2023-03-310001781335otis:Notes3112Due2040Member2022-12-310001781335otis:Notes3362Due2050Member2023-03-310001781335otis:Notes3362Due2050Member2022-12-310001781335otis:OtherIncludingFinanceLeasesMember2023-03-310001781335otis:OtherIncludingFinanceLeasesMember2022-12-310001781335us-gaap:ShortTermDebtMember2023-03-310001781335us-gaap:ShortTermDebtMember2022-12-310001781335us-gaap:LongTermDebtMember2023-03-310001781335us-gaap:LongTermDebtMember2022-12-310001781335us-gaap:ShortTermDebtMember2023-01-012023-03-310001781335us-gaap:ShortTermDebtMember2022-01-012022-03-310001781335us-gaap:LongTermDebtMember2023-01-012023-03-310001781335us-gaap:LongTermDebtMember2022-01-012022-03-310001781335us-gaap:PensionPlansDefinedBenefitMember2023-01-012023-03-310001781335us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-03-310001781335us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2023-01-012023-03-310001781335us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-01-012022-03-310001781335us-gaap:StockCompensationPlanMember2023-01-012023-03-310001781335us-gaap:StockCompensationPlanMember2022-01-012022-03-310001781335otis:LiabilityAwardsShareBasedCompensationArrangementMember2023-01-012023-03-310001781335otis:LiabilityAwardsShareBasedCompensationArrangementMember2022-01-012022-03-310001781335us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310001781335us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-310001781335us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-310001781335us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-03-310001781335us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-03-310001781335us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-01-012023-03-310001781335us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310001781335us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-03-310001781335us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-03-310001781335us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001781335us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310001781335us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310001781335us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-310001781335us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-03-310001781335us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-03-310001781335us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001781335us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310001781335us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-03-310001781335otis:NewEquipmentMember2022-01-012022-03-310001781335otis:ServicesMember2022-01-012022-03-310001781335us-gaap:CostOfSalesMember2023-01-012023-03-310001781335us-gaap:CostOfSalesMember2022-01-012022-03-310001781335us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-03-310001781335us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-03-310001781335otis:CurrentYearActionsMember2023-03-310001781335otis:CurrentYearActionsMemberotis:NewEquipmentMember2023-03-310001781335otis:CurrentYearActionsMemberotis:ServicesMember2023-03-310001781335otis:CurrentYearActionsMemberus-gaap:EmployeeSeveranceMember2022-12-310001781335otis:CurrentYearActionsMemberus-gaap:EmployeeSeveranceMember2023-01-012023-03-310001781335otis:CurrentYearActionsMemberus-gaap:EmployeeSeveranceMember2023-03-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMember2023-03-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMember2022-12-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherCurrentAssetsMemberus-gaap:CommodityContractMember2023-03-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherCurrentAssetsMemberus-gaap:CommodityContractMember2022-12-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeContractMemberus-gaap:OtherNoncurrentAssetsMember2023-03-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeContractMemberus-gaap:OtherNoncurrentAssetsMember2022-12-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2023-03-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-12-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:AccruedLiabilitiesMemberus-gaap:ForeignExchangeContractMember2023-03-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:AccruedLiabilitiesMemberus-gaap:ForeignExchangeContractMember2022-12-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:AccruedLiabilitiesMemberus-gaap:CommodityContractMember2023-03-310001781335us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:AccruedLiabilitiesMemberus-gaap:CommodityContractMember2022-12-310001781335us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMember2023-03-310001781335us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMember2022-12-310001781335us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:CommodityContractMember2023-03-310001781335us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:CommodityContractMember2022-12-310001781335us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMemberus-gaap:OtherNoncurrentAssetsMember2023-03-310001781335us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMemberus-gaap:OtherNoncurrentAssetsMember2022-12-310001781335us-gaap:NondesignatedMember2023-03-310001781335us-gaap:NondesignatedMember2022-12-310001781335us-gaap:NondesignatedMemberus-gaap:AccruedLiabilitiesMemberus-gaap:ForeignExchangeContractMember2023-03-310001781335us-gaap:NondesignatedMemberus-gaap:AccruedLiabilitiesMemberus-gaap:ForeignExchangeContractMember2022-12-310001781335us-gaap:NondesignatedMemberus-gaap:AccruedLiabilitiesMemberus-gaap:CommodityContractMember2023-03-310001781335us-gaap:NondesignatedMemberus-gaap:AccruedLiabilitiesMemberus-gaap:CommodityContractMember2022-12-310001781335us-gaap:NondesignatedMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:ForeignExchangeContractMember2023-03-310001781335us-gaap:NondesignatedMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:ForeignExchangeContractMember2022-12-310001781335us-gaap:NetInvestmentHedgingMemberotis:YenDenominatedInvestmentHedgeMember2023-03-310001781335otis:YenDenominatedInvestmentHedgeMember2023-01-012023-03-310001781335otis:YenDenominatedInvestmentHedgeMember2022-01-012022-03-310001781335us-gaap:NetInvestmentHedgingMemberus-gaap:ForeignExchangeContractMember2023-03-310001781335us-gaap:NetInvestmentHedgingMemberus-gaap:ForeignExchangeContractMember2023-01-012023-03-310001781335us-gaap:ForeignExchangeContractMember2023-01-012023-03-310001781335us-gaap:ForeignExchangeContractMember2022-01-012022-03-310001781335us-gaap:CostOfSalesMemberotis:ForeignExchangeContractAndCommodityMember2023-01-012023-03-310001781335us-gaap:CostOfSalesMemberotis:ForeignExchangeContractAndCommodityMember2022-01-012022-03-310001781335us-gaap:FairValueMeasurementsRecurringMember2023-03-310001781335us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-03-310001781335us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-03-310001781335us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001781335us-gaap:FairValueMeasurementsRecurringMember2022-12-310001781335us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310001781335us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001781335us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001781335us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-03-310001781335us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001781335us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001781335us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001781335us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Member2023-03-310001781335us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2023-03-310001781335us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Member2023-03-310001781335us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Member2022-12-310001781335us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2022-12-310001781335us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Member2022-12-310001781335us-gaap:FinancialStandbyLetterOfCreditMember2023-03-310001781335otis:EnvironmentalRegulationMember2022-12-310001781335otis:EnvironmentalRegulationMember2023-03-310001781335otis:GermanTaxOfficeAgainstOtiscashpaymentsinprioryearMember2023-01-012023-03-310001781335otis:GermanTaxOfficeAgainstOtiscashpaymentsinprioryearMember2015-01-012015-12-310001781335otis:GermanTaxOfficeAgainstOtiscashpaymentsinprioryearMember2023-03-310001781335srt:MinimumMemberotis:AsbestosMatterMember2023-03-310001781335srt:MinimumMemberotis:AsbestosMatterMember2022-12-310001781335otis:AsbestosMatterMembersrt:MaximumMember2023-03-310001781335otis:AsbestosMatterMembersrt:MaximumMember2022-12-310001781335otis:AsbestosMatterMember2023-03-310001781335otis:AsbestosMatterMember2022-12-3100017813352021-09-132021-09-13otis:defendentotis:segment0001781335otis:NewEquipmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001781335otis:NewEquipmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001781335otis:ServicesMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001781335otis:ServicesMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001781335us-gaap:OperatingSegmentsMember2023-01-012023-03-310001781335us-gaap:OperatingSegmentsMember2022-01-012022-03-310001781335us-gaap:CorporateNonSegmentMember2023-01-012023-03-310001781335us-gaap:CorporateNonSegmentMember2022-01-012022-03-310001781335country:US2023-01-012023-03-310001781335country:US2022-01-012022-03-310001781335country:CN2023-01-012023-03-310001781335country:CN2022-01-012022-03-310001781335otis:OtherMember2023-01-012023-03-310001781335otis:OtherMember2022-01-012022-03-310001781335otis:ServiceMaintenanceAndRepairMember2023-01-012023-03-310001781335otis:ServiceMaintenanceAndRepairMember2022-01-012022-03-310001781335otis:ServiceModernizationMember2023-01-012023-03-310001781335otis:ServiceModernizationMember2022-01-012022-03-31
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 ____________________________________ 
FORM 10-Q
____________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to                 
Commission file number 001-39221
____________________________________ 

logo_otis (2).jpg
OTIS WORLDWIDE CORPORATION
(Exact name of registrant as specified in its charter)
____________________________________ 
Delaware 83-3789412
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)
One Carrier Place, Farmington, Connecticut 06032
(Address of principal executive offices, including zip code)

(860) 674-3000
(Registrant's telephone number, including area code)
____________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange
on which registered
Common Stock ($0.01 par value)OTISNew York Stock Exchange
0.000% Notes due 2023OTIS/23New York Stock Exchange
0.318% Notes due 2026OTIS/26New York Stock Exchange
0.934% Notes due 2031OTIS/31New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý.    No  ¨.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý.    No  ¨.
1

Table of Contents
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerýAccelerated Filer¨
Non-accelerated Filer¨Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  .    No  ý.

As of April 14, 2023 there were 413,291,336 shares of Common Stock outstanding.
2

Table of Contents

OTIS WORLDWIDE CORPORATION
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Quarter Ended March 31, 2023
 
 Page

Otis Worldwide Corporation's and its subsidiaries' names, abbreviations thereof, logos, and product and service designators are all either the registered or unregistered trademarks or tradenames of Otis Worldwide Corporation and its subsidiaries. Names, abbreviations of names, logos, and products and service designators of other companies are either the registered or unregistered trademarks or tradenames of their respective owners. As used herein, the terms "we", "us", "our", "the Company" or "Otis", unless the context otherwise requires, mean Otis Worldwide Corporation and its subsidiaries. References to Internet websites in this Form 10-Q are provided for convenience only. Information available through these websites is not incorporated by reference into this Form 10-Q.
3

Table of Contents
PART I – FINANCIAL INFORMATION

Item 1.    Financial Statements

OTIS WORLDWIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) 

 Quarter Ended March 31,
(dollars in millions, except per share amounts; shares in millions)20232022
Net sales:
Product sales$1,307 $1,422 
Service sales2,039 1,992 
3,346 3,414 
Costs and expenses:
Cost of products sold1,098 1,190 
Cost of services sold1,252 1,218 
Research and development35 37 
Selling, general and administrative455 459 
2,840 2,904 
Other income (expense), net7 16 
Operating profit513 526 
Non-service pension cost (benefit)  
Interest expense (income), net33 37 
Net income before income taxes480 489 
Income tax expense128 136 
Net income352 353 
Less: Noncontrolling interest in subsidiaries' earnings21 42 
Net income attributable to Otis Worldwide Corporation$331 $311 
Earnings per share (Note 2):
Basic$0.80 $0.73 
Diluted$0.79 $0.73 
Weighted average number of shares outstanding:
     Basic shares414.3424.2
     Diluted shares417.8427.7

See accompanying Notes to Condensed Consolidated Financial Statements.
4

Table of Contents
OTIS WORLDWIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Quarter Ended March 31,
(dollars in millions)20232022
Net income$352 $353 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments(34) 
Pension and postretirement benefit plan adjustments 2 
Change in unrealized cash flow hedging3  
Other comprehensive income (loss), net of tax(31)2 
Comprehensive income (loss), net of tax321 355 
Less: Comprehensive (income) loss attributable to noncontrolling interest(24)23 
Comprehensive income attributable to Otis Worldwide Corporation$297 $378 

See accompanying Notes to Condensed Consolidated Financial Statements.
5

Table of Contents
OTIS WORLDWIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(dollars in millions)March 31, 2023December 31, 2022
Assets
Cash and cash equivalents$1,117 $1,189 
Accounts receivable (net of allowance for expected credit losses of $139 and $152)
3,364 3,357 
Contract assets710 664 
Inventories642 617 
Other current assets320 316 
Total Current Assets6,153 6,143 
Future income tax benefits281 285 
Fixed assets (net of accumulated depreciation of $1,183 and $1,151)
719 719 
Operating lease right-of-use assets468 449 
Intangible assets, net360 369 
Goodwill1,570 1,567 
Other assets294 287 
Total Assets$9,845 $9,819 
Liabilities and Equity (Deficit)
Short-term borrowings and current portion of long-term debt$646 $670 
Accounts payable1,515 1,717 
Accrued liabilities1,679 1,794 
Contract liabilities2,983 2,662 
Total Current Liabilities6,823 6,843 
Long-term debt6,116 6,098 
Future pension and postretirement benefit obligations391 392 
Operating lease liabilities329 315 
Future income tax obligations 278 279 
Other long-term liabilities546 556 
Total Liabilities14,483 14,483 
Commitments and contingent liabilities (Note 16)
Redeemable noncontrolling interest129 135 
Shareholders' Equity (Deficit):
Common Stock and additional paid-in capital172 162 
Treasury Stock(1,750)(1,575)
Accumulated deficit(2,653)(2,865)
Accumulated other comprehensive income (loss)(626)(592)
Total Shareholders' Equity (Deficit)(4,857)(4,870)
Noncontrolling interest90 71 
Total Equity (Deficit)(4,767)(4,799)
Total Liabilities and Equity (Deficit)$9,845 $9,819 

See accompanying Notes to Condensed Consolidated Financial Statements.
6

Table of Contents
OTIS WORLDWIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)

Common Stock and Additional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Shareholders'
(Deficit) Equity
Noncontrolling InterestTotal (Deficit) EquityRedeemable Noncontrolling Interest
(dollars in millions, except per share amounts)
Quarter Ended March 31, 2023
Balance as of December 31, 2022$162 $(1,575)$(2,865)$(592)$(4,870)$71 $(4,799)$135 
Net income  331  331 18 349 3 
Other comprehensive income (loss), net of tax   (34)(34)2 (32)1 
Stock-based compensation and Common Stock issued under employee plans10    10  10  
Cash dividends declared ($0.29 per common share)
  (120) (120) (120) 
Repurchase of Common Shares (175)  (175) (175) 
Dividends attributable to noncontrolling interest     (1)(1)(8)
Acquisitions, disposals and other changes   1  1  1 (2)
Balance as of March 31, 2023$172 $(1,750)$(2,653)$(626)$(4,857)$90 $(4,767)$129 
Quarter Ended March 31, 2022
Balance as of December 31, 2021$119 $(725)$(2,256)$(763)$(3,625)$481 $(3,144)$160 
Net income— — 311 — 311 33 344 9 
Other comprehensive income (loss), net of tax— — — 67 67 (1)66 (64)
Stock-based compensation and Common Stock issued under employee plans5 — — — 5 — 5 — 
Cash dividends declared ($0.24 per common share)
— (102)— (102)— (102)— 
Repurchase of Common Shares— (200)— — (200)— (200)— 
Dividends attributable to noncontrolling interest— — — — — (3)(3)(10)
Reclassification of noncontrolling interest to redeemable noncontrolling interest — — (1,482)— (1,482)(403)(1,885)1,476 
Acquisitions, disposals and other changes(3)— — — (3)— (3)1 
Balance as of March 31, 2022$121 $(925)$(3,529)$(696)$(5,029)$107 $(4,922)$1,572 

See accompanying Notes to Condensed Consolidated Financial Statements.
7

Table of Contents
OTIS WORLDWIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Quarter Ended March 31,
(dollars in millions)20232022
Operating Activities:
Net income$352 $353 
Adjustments to reconcile net income to net cash flows provided by operating activities, net of acquisitions and dispositions:
Depreciation and amortization47 48 
Deferred income tax expense (benefit)(2)17 
Stock compensation cost15 13 
Change in operating assets and liabilities:
Accounts receivable, net14 (51)
Contract assets and liabilities, current263 278 
Inventories(20)(14)
Other current assets(12)56 
Accounts payable(218)(36)
Accrued liabilities(155)(178)
Pension contributions(14)(12)
Other operating activities, net8 30 
Net cash flows provided by operating activities278 504 
Investing Activities:
Capital expenditures(25)(30)
Acquisitions of businesses and intangible assets, net of cash (Note 6)(16)(8)
Proceeds from the sale of (investments in) marketable securities (7)
Receipts (payments) on settlements of derivative contracts17 28 
Other investing activities, net3  
Net cash flows provided by (used in) investing activities(21)(17)
Financing Activities:
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)(32)26 
Repayment of long-term debt (500)
Dividends paid on Common Stock(120)(102)
Repurchases of Common Stock(175)(200)
Dividends paid to noncontrolling interest(9)(33)
Other financing activities, net(5)(14)
Net cash flows provided by (used in) financing activities(341)(823)
Effect of foreign exchange rate changes on cash and cash equivalents10 (63)
Net increase (decrease) in cash, cash equivalents and restricted cash(74)(399)
Cash, cash equivalents and restricted cash, beginning of year1,195 3,477 
Cash, cash equivalents and restricted cash, end of period1,121 3,078 
Less: Restricted cash4 1,843 
Cash and cash equivalents, end of period$1,117 $1,235 

See accompanying Notes to Condensed Consolidated Financial Statements.
8

Table of Contents
OTIS WORLDWIDE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1: General

The Condensed Consolidated Financial Statements as of March 31, 2023 and for the quarters ended March 31, 2023 and 2022 are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the interim periods. The Condensed Consolidated Balance Sheet as of December 31, 2022 was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles ("GAAP") in the United States ("U.S."). The results reported in these Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the Company's annual consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for fiscal year 2022 ("2022 Form 10-K" or "Form 10-K").

Unless the context otherwise requires, references to "Otis", "we", "us", "our" and "the Company" refer to Otis Worldwide Corporation and its subsidiaries.

There have been no changes to the Company's significant accounting policies described in the Company's Form 10-K that have a material impact on the Company's Condensed Consolidated Financial Statements and the related notes. Certain amounts presented in the prior period have been reclassified to conform to the current period presentation, which are immaterial.

Use of Estimates. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially 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 macroeconomic developments, including inflationary pressures, higher interest rates and tighter credit conditions, as of March 31, 2023 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 Condensed Consolidated Financial Statements as of March 31, 2023 and for the quarters ended March 31, 2023 and 2022, respectively, resulting from our assessments of these matters, future assessment of our expectations of the magnitude and duration of these macroeconomic developments, as well as other factors, could result in material impacts to our Condensed Consolidated Financial Statements in future reporting periods.

We also assessed certain accounting matters as they relate to the ongoing conflict between Russia and Ukraine, including, but not limited to our allowance for credit losses, the carrying value of long-lived assets, revenue recognition and the classification of assets. There was not a material impact to our Condensed Consolidated Financial Statements as of March 31, 2023 and for the quarter ended March 31, 2023 resulting from our assessment of these matters. We continue to assess the impact on our results of operations, financial position and overall performance as the situation develops and any broader implications it may have on the global economy.

Supplier Finance Programs. On January 1, 2023, we adopted ASU No. 2022-04, Liabilities - Supplier Finance Programs (Topic 450-50): Disclosure of Supplier Finance Program Obligations that requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period.

Certain Otis subsidiaries participate in supplier finance programs, under which we agree to pay third-party financial institutions the stated amounts of confirmed invoices from suppliers on the original maturity dates of the invoices, while the participating suppliers generally have the ability to sell, or otherwise pledge as collateral, their receivables from the Company to the participating financial institutions. Our obligations to suppliers, including the amounts due and scheduled payment dates, are not impacted by the suppliers' decisions to sell their receivables to the financial institutions, or otherwise pledge their receivables as collateral, under these arrangements. The Company is not a party to the arrangements between the suppliers and the financial institutions, and the Company's payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. Based on the applicable supplier agreements, the maturity dates of these supplier invoices can range between 30 and 105 days from the invoice date.
9

Table of Contents

The outstanding obligations confirmed by the Company as valid to the financial institutions under our supplier finance programs were $404 million and $564 million as of March 31, 2023 and December 31, 2022, respectively. These obligations are included in Accounts payable in the Condensed Consolidated Balance Sheets, and all activity related to the obligations is presented within operating activities on the Consolidated Statements of Cash Flows.

The Company or the finance institutions may terminate the agreements with advanced notice. Otis has pledged no assets in connection with its supplier finance programs.

Revision. As previously disclosed in our Form 10-Q for the quarter ended June 30, 2022, following the filing of the Company’s Form 10-Q for the quarterly period ended March 31, 2022, we identified an error in the presentation of the shares of Zardoya Otis, S.A. ("Zardoya Otis", later renamed Otis Mobility S.A.) owned by the third party Euro Syns, S.A ("Euro Syns"). Upon revisiting the accounting as of March 31, 2022, the Company determined that the shares owned by Euro Syns that were recorded in Redeemable non-controlling interest for $409 million should have been classified in Forward purchase agreement (a separate new financial statement line item within current liabilities), resulting in a net decrease in Redeemable noncontrolling interest of $409 million. The effects of these corrections are reflected in these Condensed Consolidated Financial Statements for the quarters ended March 31, 2023 and 2022, including in the Condensed Consolidated Statement of Changes in Equity for the quarter ended March 31, 2022, and will be reflected in future filings, as applicable. There was no impact of this error on the Condensed Consolidated Statement of Operations, Statement of Comprehensive Income or the Statement of Cash Flows for the quarter ended March 31, 2022.

Note 2: Earnings per Share

 Quarter Ended March 31,
(dollars in millions, except per share amounts; shares in millions)20232022
Net income attributable to Otis Worldwide Corporation$331 $311 
Impact of redeemable noncontrolling interest  
Net income attributable to common shareholders$331 $311 
Basic weighted average number of shares outstanding414.3 424.2 
Stock awards and equity units (share equivalent)3.5 3.5 
Diluted weighted average number of shares outstanding417.8 427.7 
Earnings Per Share of Common Stock:
Basic$0.80 $0.73 
Diluted$0.79 $0.73 

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 1.1 million and 2.6 million of anti-dilutive stock awards excluded from the computation for the quarters ended March 31, 2023 and 2022, respectively.

Note 3: Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification ("ASC") Topic 606: Revenue from Contracts with Customers.

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.

10

Table of Contents
Total Contract assets and Contract liabilities as of March 31, 2023 and December 31, 2022 are as follows:

(dollars in millions)March 31, 2023December 31, 2022
Contract assets, current$710 $664 
Total contract assets710 664 
Contract liabilities, current2,983 2,662 
Contract liabilities, non-current (included within Other long-term liabilities)49 52 
Total contract liabilities 3,032 2,714 
Net contract liabilities$2,322 $2,050 

Contract assets increased by $46 million during the quarter ended March 31, 2023 as a result of the progression of current contracts and timing of billing on customer contracts. Contract liabilities increased by $318 million during the quarter ended March 31, 2023 primarily due to contract billings in excess of revenue earned.

In the quarters ended March 31, 2023 and 2022, we recognized revenue of $0.9 billion and $1.0 billion related to contract liabilities as of January 1, 2023 and 2022, respectively.

Remaining Performance Obligations ("RPO"). RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of March 31, 2023, our total RPO was $17.9 billion. Of the total RPO as of March 31, 2023, we expect 90% will be recognized as sales over the following 24 months.

Note 4: Accounts Receivable, Net

Accounts receivable, net consisted of the following as of March 31, 2023 and December 31, 2022:

(dollars in millions)March 31, 2023December 31, 2022
Trade receivables$3,203 $3,231 
Unbilled receivables133 103 
Miscellaneous receivables91 91 
Customer financing notes receivable76 84 
3,503 3,509 
Less: allowance for expected credit losses139 152 
Accounts receivable, net$3,364 $3,357 

The changes in allowance for expected credit losses related to Accounts receivable, net for the quarters ended March 31, 2023 and 2022, respectively, are as follows:
Quarter Ended March 31,
(dollars in millions)20232022
Balance as of January 1$152 $175 
Provision for expected credit losses6 7 
Write-offs charged against the allowance for expected credit losses(20)(2)
Foreign exchange and other1 8 
Balance as of March 31$139 $188 

11

Table of Contents
Note 5: Inventories

(dollars in millions)March 31, 2023December 31, 2022
Raw materials and work-in-process$180 $166 
Finished goods462 451 
Total$642 $617 

Raw materials, work-in-process and finished goods are net of valuation write-downs of $97 million and $96 million as of March 31, 2023 and December 31, 2022, respectively.

Note 6: Business Acquisitions, Goodwill and Intangible Assets

Business Acquisitions. Our acquisitions of businesses and intangible assets, net of cash, totaled $16 million and $8 million in the quarters ended March 31, 2023 and 2022, respectively. The acquisitions consisted of a number of acquisitions primarily in our Service segment. Transaction costs incurred were not considered significant.

Goodwill. Changes in our Goodwill balances during the quarter ended March 31, 2023 were as follows:

(dollars in millions)Balance as of December 31, 2022Goodwill Resulting
from Business Combinations
Foreign Currency
Translation 
and Other
Balance as of
March 31, 2023
New Equipment$292 $ $1 $293 
Service1,275  2 1,277 
Total$1,567 $ $3 $1,570 

Intangible Assets. Intangible assets cost and accumulated amortization were $2,043 million and $1,683 million, respectively, as of March 31, 2023, and $2,026 million and $1,657 million, respectively, as of December 31, 2022.

Amortization of intangible assets for the quarters ended March 31, 2023 and 2022 was $17 million and $19 million, respectively. Excluding the impact of currency translation adjustments, there were no other significant changes in our Intangible assets during the quarters ended March 31, 2023 and 2022.

Note 7: Borrowings and Lines of Credit

(dollars in millions)March 31, 2023December 31, 2022
Commercial paper$75 $94 
Other borrowings32 45 
Total short-term borrowings$107 $139 

Commercial Paper. As of March 31, 2023, there were $75 million in borrowings outstanding under the Company's $1.5 billion commercial paper programs, including €60 million of Euro denominated commercial paper. We use our commercial paper borrowings for general corporate purposes including to finance acquisitions, pay dividends, repurchase shares 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.

For details regarding the Company's short-term borrowings activity in 2022, refer to Note 10 of the Company's audited consolidated financial statements and notes thereto included in our 2022 Form 10-K.

Long-term debt. On March 10, 2023, the Company entered into a new credit agreement ("Credit Agreement") with various banks providing for a $1.5 billion unsecured, unsubordinated 5-year revolving credit facility, with an interest rate on US Dollar denominated borrowings at Otis' option of the Term Secured Overnight Financing Rate ("SOFR") plus 0.10% or a base rate, and an interest rate on Euro denominated borrowings at Otis' option of the EURIBO rate or a daily simple Euro Short Term Rate ("ESTR"), plus, in each case, an applicable margin. The applicable margin initially is 1.25% for Term SOFR rate, EURIBO rate and daily simple ESTR rate borrowings, and 0.25% for base rate borrowings, and can fluctuate determined by
12

Table of Contents
reference to Otis' public debt ratings, as specified in the Credit Agreement. As of March 31, 2023, there were no borrowings under the Credit Agreement. The undrawn portion of the Credit Agreement serves as a backstop for the issuance of commercial paper. On March 10, 2023, we also terminated all commitments outstanding under the previous existing credit agreement, which was scheduled to expire on April 3, 2025.

As of March 31, 2023, the Company is in compliance with all covenants in the revolving credit agreement and the indentures governing all outstanding long-term debt. Long-term debt consisted of the following:

(dollars in millions)March 31, 2023December 31, 2022
0.000% notes due 2023 (€500 million principal value)
$539 $531 
2.056% notes due 2025
1,300 1,300 
0.37% notes due 2026 (¥21.5 billion principal value)
163 163 
0.318% notes due 2026 (€600 million principal value)
646 638 
2.293% notes due 2027
500 500 
2.565% notes due 2030
1,500 1,500 
0.934% notes due 2031 (€500 million principal value)
539 531 
3.112% notes due 2040
750 750 
3.362% notes due 2050
750 750 
Other (including finance leases)8 8 
Total principal long-term debt6,695 6,671 
Other (discounts and debt issuance costs)(40)(42)
Total long-term debt6,655 6,629 
Less: current portion539 531 
Long-term debt, net of current portion$6,116 $6,098 

We may redeem the notes at our option pursuant to certain terms. For additional details regarding the Company's debt activity in 2022, refer to Note 10 of the Company's audited consolidated financial statements and notes thereto included in our 2022 Form 10-K.

Debt discounts and debt issuance costs are presented as a reduction of debt on the Condensed 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 Condensed Consolidated Statements of Operations for the quarters ended March 31, 2023 and 2022 reflects the following:

Quarter Ended March 31,
(dollars in millions)20232022
Debt issuance costs amortization$3 $3 
Total interest expense on external debt33 36 

The unamortized debt issuance costs as of March 31, 2023 and December 31, 2022 were $40 million and $42 million, respectively.

The weighted average maturity of our long-term debt as of March 31, 2023 is approximately 8.3 years. The weighted average interest expense rate on our borrowings outstanding as of March 31, 2023 and December 31, 2022 was as follows:

March 31, 2023December 31, 2022
Short-term borrowings3.4 %4.7 %
Total long-term debt2.0 %2.0 %

13

Table of Contents
The weighted average interest expense rate on our borrowings during the quarters ended March 31, 2023 and 2022 was as follows:

Quarter Ended March 31,
20232022
Short-term borrowings4.8 %0.4 %
Total long-term debt2.0 %2.0 %

Note 8: Employee Benefit Plans

Pension and Postretirement Plans. The Company sponsors both funded and unfunded domestic and foreign defined benefit pension and other postretirement benefit plans, and defined contribution plans. Contributions to our plans were as follows:

 Quarter Ended March 31,
(dollars in millions)20232022
Defined benefit plans$14 $12 
Defined contribution plans19 20 
Multi-employer pension and postretirement plans34 23 

The following table illustrates the components of net periodic benefit cost for the Company's defined benefit pension plans:

 Quarter Ended March 31,
(dollars in millions)20232022
Service cost$7 $10 
Interest cost8 4 
Expected return on plan assets(8)(6)
Recognized actuarial net loss 3 
Total net periodic benefit cost$7 $11 

Postretirement Benefit Plans. The Company sponsors postretirement benefit plans that provide health benefits to eligible retirees. The postretirement plans are unfunded. The net periodic benefit cost was less than $1 million for the quarters ended March 31, 2023 and 2022, respectively.

Stock-based Compensation. The Company adopted the 2020 Long-Term Incentive Plan (the "Plan") effective April 3, 2020. As of March 31, 2023, approximately 23 million shares remain available for awards under the Plan.

Stock-based Compensation Expense

The Company measures the cost of all share-based payments, including stock options, at fair value on the grant date and recognizes this cost in the Condensed Consolidated Statements of Operations over the award's applicable vesting period. 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:
Quarter Ended March 31,
(dollars in millions)
20232022
Stock-based compensation expense (Share Based)$15 $13 
Stock-based compensation expense (income) (Liability Awards) (1)
Total gross stock-based compensation expense15 12 
Less: future tax benefit2 1 
Stock-based compensation expense, net of tax$13 $11 

14

Table of Contents
As of March 31, 2023, following our annual grant issuance on February 7, 2023, there was approximately $101 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 2.1 years.

Note 9: Stock

Preferred Stock. There are 125 million shares of $0.01 par value Preferred Stock authorized, of which none were issued as of March 31, 2023 and December 31, 2022.

Common Stock. There are 2 billion shares of $0.01 par value Common Stock authorized. As of March 31, 2023, 436.1 million shares of Common Stock were issued, which includes 22.9 million shares of treasury stock. As of December 31, 2022, 435.6 million shares of Common Stock were issued, which included 20.8 million shares of treasury stock.

Share Repurchase Program. As of March 31, 2023, the Company was authorized by the Board of Directors to purchase up to $2.0 billion of Common Stock under a share repurchase program, of which $1.8 billion was remaining at such time.

During the quarters ended March 31, 2023 and 2022, the Company repurchased 2.1 mi