Summary of Otis Worldwide Corporation Conference Call Company Overview - **Company**: Otis Worldwide Corporation (NYSE:OTIS) - **Event**: Morgan Stanley Virtual Conference - **Date**: September 14, 2021 - **Participants**: Judy Marks (President and CEO), Josh Pokrzywinski (Morgan Stanley Analyst) Key Points Discussed Financial Performance - The company will discuss results from continuing operations, excluding restructuring and significant non-recurring items [3] - Adjusted results will be presented as if Otis was a stand-alone company for the current period and prior year [3] - Reconciliation of these measures is available in the appendix of the earnings presentations [3] Forward-Looking Statements - The discussion includes forward-looking statements that are subject to risks and uncertainties [3] - Important factors that could cause actual results to differ materially are detailed in Otis' SEC filings, including Form 10-K and quarterly reports on Form 10-Q [3] Industry Context - The conference is part of a broader discussion on the electrical equipment and multi-industry sectors, indicating the relevance of Otis within these industries [1][2] Company Strategy - The company has had a busy year and a half, suggesting ongoing developments and strategic initiatives [3] Additional Important Information - The call emphasizes the importance of understanding the context of financial results and the potential impact of external factors on future performance [3] - The presence of a dedicated analyst from Morgan Stanley indicates a focus on investor relations and market perception [1]

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 June 30, 2021 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 ____________________________________ | | | ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|------------------------------------|------------------------|---------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Q2 2021 July 26, 2021 | Earnings Call | | | | | | | | | © 2021 OTIS WORLDWIDE CORPORATION. | | | | | Forward-Looking Statements Note: All results and expectations in this presentation reflect continuing operations unless otherwise not ...

Otis Worldwide Corporation (NYSE:OTIS) Q2 2021 Earnings Conference Call July 26, 2021 8:30 AM ET Company Participants Judith Marks – President & Chief Executive Officer Michael Rednor – Senior Director of Investor Relations Rahul Ghai – Vice President & Chief Financial Officer Conference Call Participants Jeff Sprague – Vertical Research Nick Housden – RBC Capital Markets John Walsh – Credit Suisse Steve Tusa – JPMorgan Cai von Rumohr – Cowen Julian Mitchell – Barclays Nigel Coe – Wolfe Research Operator Go ...

Otis Worldwide Corporation (NYSE:OTIS) Annual Bernstein Strategic Decisions Conference June 3, 2021 10:00 AM ET Company Participants Judy Marks - President and CEO Conference Call Participants Brendan Luecke - Bernstein Brendan Luecke Good morning. My name is Brendan Luecke and I will be covering multi-industry sector at Bernstein. I would like to welcome all of you to today’s fireside chat with Otis Elevator. Thank you very much for joining us. Before we dive in I do want to touch base on a few housekeepi ...

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, 2021 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 ____________________________________ OTIS ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|-------|------------------------------------|-------------------------|---------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Q1 2021 April 26, 2021 | Earnings Call | | | | | | | | | | © 2021 OTIS WORLDWIDE CORPORATION. | | | | | Forward-Looking Statements Note: All results and expectations in this presentation reflect continuing opera ...

Otis Worldwide Corporation (NYSE:OTIS) Q1 2021 Earnings Conference Call April 26, 2021 8:30 AM ET Company Participants Stacy Laszewski - Vice President, FP&A and Investor Relations Judy Marks - President and Chief Executive Officer Rahul Ghai - Executive Vice President and Chief Financial Officer Conference Call Participants Nigel Coe - Wolfe Research Steve Tusa - JPMorgan Jeff Sprague - Vertical Research John Walsh - Credit Suisse Joel Spungin - Berenberg Julian Mitchell - Barclays Cai von Rumohr - Cowen C ...

OTIS ESG program March 30, 2021 © 2021 O TIS WO RLDWIDE CORPORATION. Forward-Looking Statements Note: All results and expectations in this presentation reflect continuing operations unless otherwise noted. This communication contains statements w hich, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or w ritten forward-looking statements may also be included in other information released to the pu ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) Otis is the world's leading elevator and escalator company, operating globally with New Equipment and Service segments, becoming independent in April 2020 - Otis is the world's leading elevator and escalator company, serving customers in **over 200 countries** with a direct presence in approximately **80 countries**[19](index=19&type=chunk) - The company became an independent, publicly-traded company on **April 3, 2020**, following its separation from United Technologies Corporation (UTC)[19](index=19&type=chunk) 2020 Financial and Operational Highlights | Metric | Value | | :--- | :--- | | **Net Sales** | $12.8 billion | | **Operating Profit** | $1.6 billion | | **International Sales % of Net Sales** | 73% | | **New Equipment Segment % of Net Sales** | 42% | | **Service Segment % of Net Sales** | 58% | | **New Equipment Segment % of Operating Profit** | 16% | | **Service Segment % of Operating Profit** | 84% | - The company employs approximately **69,000 employees** globally, with **41% in Asia**, **37% in EMEA**, and **22% in the Americas**[59](index=59&type=chunk)[60](index=60&type=chunk) [New Equipment Segment](index=5&type=section&id=Item%201.%20Business%23New%20Equipment) This segment designs, manufactures, and installs elevators and escalators, generating **$5.4 billion** in sales in 2020, with China as a critical market New Equipment Segment Performance (2020) | Metric | Value | | :--- | :--- | | **Sales** | $5.4 billion | | **Operating Profit** | $318 million | - In 2020, New Equipment unit sales in China accounted for **over half** of the company's global unit sales[25](index=25&type=chunk) - Key product offerings include the digitally native Gen360 elevator and the Gen2 system, which has sold **over one million units** since 2000[27](index=27&type=chunk)[28](index=28&type=chunk) [Service Segment](index=6&type=section&id=Item%201.%20Business%23Service) This segment provides maintenance and modernization services for **over 2 million units** globally, generating **$7.4 billion** in sales in 2020, with a focus on IoT solutions Service Segment Performance (2020) | Metric | Value | | :--- | :--- | | **Net Sales** | $7.4 billion | | **Operating Profit** | $1.6 billion | - The company maintains a service portfolio of **over 2 million units** globally, including Otis and third-party equipment[34](index=34&type=chunk) - By the end of 2020, approximately **540,000 units** were connected globally, including nearly **100,000 Otis ONE units**[41](index=41&type=chunk) [Research and Development & Intellectual Property](index=7&type=section&id=Item%201.%20Business%23Research%20and%20Development%20%26%20Intellectual%20Property) In 2020, the company invested **$199 million** in R&D and digital initiatives, holding approximately **3,000 issued patents** globally 2020 Innovation Investment | Category | Amount (USD) | % of Net Sales | | :--- | :--- | :--- | | R&D Expense | $152 million | 1.2% | | Digital & Strategic Initiatives | $47 million | N/A | | **Total** | **$199 million** | **1.6%** | - The company holds approximately **3,000 globally issued patents** and has about **3,100 patent applications** pending worldwide[44](index=44&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including global economic conditions, COVID-19 impacts, international operations, supply chain, debt, litigation, and post-separation challenges - **Business Risks:** Global economic conditions, the COVID-19 pandemic, and construction industry challenges affect the company, with international operations (73% of 2020 sales) facing currency and geopolitical risks, especially in China[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) - **Financial & Operational Risks:** The company's **$6.0 billion debt** (as of Dec 31, 2020) may reduce flexibility, alongside risks from supply chain, competition, and litigation including FCPA and antitrust claims[82](index=82&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk)[98](index=98&type=chunk) - **Separation-Related Risks:** Historical financial data may not be indicative of future performance, IT system transitions pose risks, and the Tax Matters Agreement (TMA) restricts certain strategic transactions and includes indemnification obligations[127](index=127&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[132](index=132&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company maintains a global real estate portfolio of approximately **16 million square feet** across **2,300 facilities** in about **80 countries** - The company has a physical presence in approximately **80 countries** with a property portfolio of about **16 million square feet**[140](index=140&type=chunk) - The portfolio includes **over 1,400 branches**, **11 R&D centers**, and **18 manufacturing facilities** globally, with **10 owned**[140](index=140&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, including German tax litigation and asbestos-related lawsuits, with no material adverse effect expected - For a discussion regarding material legal proceedings, refer to **Note 21, Contingent Liabilities** in the 2020 Annual Report[142](index=142&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer of Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20of%20Purchases%20of%20Equity%20Securities) Otis common stock trades on the NYSE under 'OTIS'; a **$1 billion** share repurchase program was authorized in April 2020, but no shares were repurchased in 2020 - The company's common stock is listed on the NYSE under the symbol **"OTIS"**[145](index=145&type=chunk) - On April 27, 2020, the Board authorized a share repurchase program for up to **$1 billion** of Common Stock, with no repurchases made in 2020[147](index=147&type=chunk) [Selected Financial Data](index=28&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents a five-year financial summary, highlighting stable net sales, a decrease in 2020 net income, and a significant increase in total debt due to separation financing Five-Year Financial Summary (in millions, except per share data) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Net sales** | $12,756 | $13,118 | $12,915 | | **Net income attributable to common shareholders** | $906 | $1,116 | $1,049 | | **Diluted earnings per share** | $2.08 | $2.58 | $2.42 | | **Cash dividends per common share** | $0.60 | — | — | | **Total assets** | $10,710 | $9,687 | $9,135 | | **Total debt** | $5,963 | $39 | $28 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2020, Otis's net sales decreased **2.8%** to **$12.8 billion**, impacted by the COVID-19 pandemic and separation costs, while operating profit was **$1.6 billion** and cash flow from operations remained strong at **$1.5 billion** [Results of Operations](index=45&type=section&id=Item%207.%20MD%26A%23Results%20of%20Operations) In 2020, net sales decreased **2.8%** to **$12.8 billion**, gross margin improved to **29.6%**, while SG&A expenses increased **6.3%** due to separation costs, leading to a decrease in operating profit to **$1.6 billion** Year-Over-Year Net Sales Change (2020 vs. 2019) | Driver | % Change | | :--- | :--- | | Organic volume | (2.1)% | | Foreign currency translation | (0.4)% | | Acquisitions and divestitures, net | (0.2)% | | Other | (0.1)% | | **Total % change** | **(2.8)%** | - SG&A expenses increased by **$114 million (6.3%)** in 2020, primarily due to non-recurring separation-related and incremental public company costs[218](index=218&type=chunk) - Restructuring costs for 2020 were **$77 million**, expected to generate recurring pre-tax savings of approximately **$57 million annually** once fully implemented[221](index=221&type=chunk)[222](index=222&type=chunk) [Segment Review](index=50&type=section&id=Item%207.%20MD%26A%23Segment%20Review) In 2020, New Equipment net sales fell **4.9%** to **$5.4 billion** with operating profit down **19.1%**, while Service net sales decreased **1.1%** to **$7.4 billion** but operating profit grew **0.5%** due to productivity and pricing Segment Performance (2020 vs. 2019) | Segment | 2020 Net Sales (in millions) | YoY % Change | 2020 Operating Profit (in millions) | YoY % Change | | :--- | :--- | :--- | :--- | :--- | | New Equipment | $5,371 | (4.9)% | $318 | (19.1)% | | Service | $7,385 | (1.1)% | $1,611 | 0.5% | - New Equipment operating profit decreased primarily due to lower volume and unfavorable rate drivers, including under-absorption, field inefficiencies, and higher bad debt expense[247](index=247&type=chunk) - Service operating profit increased due to favorable productivity, pricing, and mix, offsetting price concessions, lower volume, and higher bad debt expense[254](index=254&type=chunk) [Liquidity and Financial Condition](index=52&type=section&id=Item%207.%20MD%26A%23Liquidity%20and%20Financial%20Condition) As of December 31, 2020, Otis had **$1.8 billion** in cash and **$6.0 billion** in total debt, resulting in **$4.2 billion** net debt, with strong operating cash flow of **$1.5 billion** Financial Position (as of Dec 31, 2020) | Metric | Value (in millions) | | :--- | :--- | | Cash and cash equivalents | $1,782 | | Total debt | $5,963 | | **Net debt** | **$4,181** | | Total equity | $(3,284) | - In 2020, the company issued **$6.3 billion** in debt, with net proceeds used for cash distribution to UTC as part of the separation[262](index=262&type=chunk)[263](index=263&type=chunk) - Net cash provided by operating activities was **$1.48 billion** in 2020, slightly higher than **$1.47 billion** in 2019, demonstrating resilient cash generation[268](index=268&type=chunk)[269](index=269&type=chunk) [Critical Accounting Estimates](index=56&type=section&id=Item%207.%20MD%26A%23Critical%20Accounting%20Estimates) Management identifies critical accounting estimates including revenue recognition for long-term contracts, income taxes, goodwill impairment, contingent liabilities, and employee benefit plans, all requiring significant judgment - **Revenue Recognition:** For new equipment and modernization contracts, revenue is recognized over time using a cost-to-cost method, requiring significant judgment in estimating total costs to completion[286](index=286&type=chunk)[330](index=330&type=chunk) - **Goodwill:** Annual impairment testing in 2020 determined no adjustment was necessary as the fair value of each reporting unit significantly exceeded its carrying value[296](index=296&type=chunk) - **Employee Benefit Plans:** Pension accounting is sensitive to assumptions like the discount rate and expected return on assets; a **25 basis point** change in discount rate would alter the projected benefit obligation by approximately **$33-34 million**[298](index=298&type=chunk)[299](index=299&type=chunk) [Financial Statements and Supplementary Data](index=28&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates the company's audited consolidated financial statements for 2018-2020, reflecting its transition to a standalone public entity, with 2020 net sales of **$12.8 billion** and a total equity deficit of **$3.3 billion** Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2020) | Metric | Value (in millions) | | :--- | :--- | | Net sales | $12,756 | | Operating profit | $1,639 | | Net income | $1,056 | | Net income attributable to common shareholders | $906 | Consolidated Balance Sheet Highlights (As of Dec 31, 2020) | Metric | Value (in millions) | | :--- | :--- | | Total Current Assets | $6,493 | | Total Assets | $10,710 | | Total Current Liabilities | $6,673 | | Long-term debt | $5,262 | | Total Liabilities | $13,911 | | Total (Deficit) Equity | $(3,284) | Consolidated Statement of Cash Flows Highlights (Year Ended Dec 31, 2020) | Metric | Value (in millions) | | :--- | :--- | | Net cash provided by operating activities | $1,480 | | Net cash used in investing activities | $(353) | | Net cash used in financing activities | $(844) | [Controls and Procedures](index=29&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2020 - Management concluded that as of **December 31, 2020**, the company's disclosure controls and procedures were effective[153](index=153&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of **December 31, 2020**, based on the COSO framework[154](index=154&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=29&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on executive officers, including Judith F. Marks as CEO and Rahul Ghai as CFO, and references corporate governance details from the 2021 Proxy Statement - Judith F. Marks serves as President and Chief Executive Officer, and Rahul Ghai serves as Executive Vice President and Chief Financial Officer[158](index=158&type=chunk) - The company has adopted a code of ethics, **"The Otis Absolutes,"** applicable to all directors, officers, employees, and representatives[160](index=160&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=31&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details equity compensation plans as of December 31, 2020, showing approximately **3.8 million** securities to be issued and **27.9 million** available for future issuance Equity Compensation Plan Information (as of Dec 31, 2020) | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price of Outstanding Options (b) | Securities Remaining for Future Issuance (c) | | :--- | :--- | :--- | :--- | | **Approved by Shareholders** | 3,825,504 | $60.41 | 27,938,146 | | **Not Approved by Shareholders** | - | - | - | PART IV [Exhibits and Financial Statement Schedule](index=33&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedule) This section lists all exhibits filed with the 10-K, including key separation agreements from UTC and the financial statement schedule for Valuation and Qualifying Accounts - Key agreements filed as exhibits include the Separation and Distribution Agreement, Transition Services Agreement (TSA), Tax Matters Agreement (TMA), and Employee Matters Agreement (EMA), all dated **April 2, 2020**[169](index=169&type=chunk)[170](index=170&type=chunk) Schedule II - Valuation and Qualifying Accounts (in millions) | Account | Balance at Dec 31, 2019 | Balance at Dec 31, 2020 | Key 2020 Changes | | :--- | :--- | :--- | :--- | | **Allowance for Doubtful Accounts** | $83 | $161 | +$28 (credit standard adoption), +$40 (provision) | | **Future Income Tax Benefits - Valuation Allowance** | $55 | $242 | +$63 (charged to expense), +$137 (Separation activity) |