# EDGAR Filing Document

**Accession Number:** 0001781335
**File Stem:** 0001781335-26-000011
**Filing Date:** 2026-2
**Character Count:** 620395
**Document Hash:** 26e27e71ceec7a7b60f8c684da07c509
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001781335-26-000011.hdr.sgml**: 20260205

**ACCESSION NUMBER**: 0001781335-26-000011

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 148

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260205

**DATE AS OF CHANGE**: 20260205

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Otis Worldwide Corp
- **CENTRAL INDEX KEY:** 0001781335
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 833789412
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39221
- **FILM NUMBER:** 26603041

**BUSINESS ADDRESS:**
- **STREET 1:** ONE CARRIER PLACE
- **CITY:** FARMINGTON
- **STATE:** CT
- **ZIP:** 06032
- **BUSINESS PHONE:** 8606743000

**MAIL ADDRESS:**
- **STREET 1:** ONE CARRIER PLACE
- **CITY:** FARMINGTON
- **STATE:** CT
- **ZIP:** 06032

?xml version='1.0' encoding='ASCII'? otis-20251231

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON D.C. 20549**

____________________________________

**FORM 10-K** 

____________________________________

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2025**

or

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| | |
|:---|:---|
| ◻ | **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-20251231_g1.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:**

---

| | | |
|:---|:---|:---|
| **<u>Title of each class</u>** | **<u>Trading Symbol(s)</u>** | **<u>Name of each exchange <br>on which registered</u>** |
| **Common Stock ($0.01 par value)** | **OTIS** | **New York Stock Exchange** |
| **0.318% Notes due 2026** | **OTIS/26** | **New York Stock Exchange** |
| **2.875% Notes due 2027** | **OTIS/27** | **New York Stock Exchange** |
| **0.934% Notes due 2031** | **OTIS/31** | **New York Stock Exchange** |

---

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes 🗷.&nbsp;&nbsp;&nbsp;&nbsp;No ◻.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes ☐.&nbsp;&nbsp;&nbsp;&nbsp;No 🗷.

------

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.&nbsp;&nbsp;&nbsp;&nbsp;Yes 🗷.&nbsp;&nbsp;&nbsp;&nbsp;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).&nbsp;&nbsp;&nbsp;&nbsp;Yes 🗷.&nbsp;&nbsp;&nbsp;&nbsp;No ◻.

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 Filer | 🗷 | Accelerated 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. § 7262(b)) by the registered public accounting firm that prepared or issued its audit report. 🗷.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ◻.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ◻.

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

The aggregate market value of the voting Common Stock held by non-affiliates as of June 30, 2025 was $38,824,474,742 based on the New York Stock Exchange closing price for such shares on that date. For purposes of this calculation, the Registrant has assumed that its directors and executive officers are affiliates.

As of January 22, 2026, there were 388,720,773 shares of Common Stock outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**

Part III hereof incorporates by reference portions of the Otis Worldwide Corporation Proxy Statement for the 2026 Annual Meeting of Shareholders (the "2026 Proxy Statement"). The 2026 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

------

**OTIS WORLDWIDE CORPORATION**

**Form 10-K**

**For the Year Ended December 31, 2025**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| PART I |  |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1. Business](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_13)</u> | <u>[1](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_13)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Cautionary Note Concerning Factors That May Affect Future Results](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_46)</u> | <u>[9](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_46)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1A. Risk Factors](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_49)</u> | <u>[10](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_49)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1B. Unresolved Staff Comments](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_52)</u> | <u>[22](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_52)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1C. Cybersecurity](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_55)</u> | <u>[22](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_55)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 2. Properties](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_58)</u> | <u>[24](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_58)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 3. Legal Proceedings](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_61)</u> | <u>[24](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_61)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 4. Mine Safety Disclosures](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_64)</u> | <u>[24](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_64)</u> |
| PART II |  |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer of Purchases of Equity Securities](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_70)</u> | <u>[25](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_70)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 6. \[Reserved\]](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_82)</u> | <u>[26](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_82)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_85)</u> | <u>[27](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_85)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 7A. Quantitative and Qualitative Disclosures About Market Risk](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_127)</u> | <u>[48](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_127)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 8. Financial Statements and Supplementary Data](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_130)</u> | <u>[50](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_130)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_265)</u> | <u>[100](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_265)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 9A. Controls and Procedures](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_268)</u> | <u>[100](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_268)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 9B. Other Information](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_271)</u> | <u>[100](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_271)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_274)</u> | <u>[100](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_274)</u> |
| PART III |  |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 10. Directors, Executive Officers and Corporate Governance](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_280)</u> | <u>[101](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_280)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 11. Executive Compensation](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_283)</u> | <u>[103](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_283)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_286)</u> | <u>[104](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_286)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 13. Certain Relationships and Related Transactions, and Director Independence](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_289)</u> | <u>[105](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_289)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 14. Principal Accounting Fees and Services](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_292)</u> | <u>[105](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_292)</u> |
| PART IV |  |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 15. Exhibits and Financial Statement Schedule](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_298)</u> | <u>[106](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_298)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 16. Form 10-K Summary](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_301)</u> | <u>[112](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_301)</u> |
| <u>[SIGNATURES](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_304)</u> | <u>[113](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_304)</u> |

---

------

<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

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 product 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-K are provided for convenience only. Information available through these websites is not incorporated by reference into this Form 10-K.

**PART I**

**Item 1. Business**

**Our Company**

Otis is the world's leading elevator and escalator manufacturing, installation, service and modernization company. We serve customers in over 200 countries and territories around the world. Otis has global scale and local focus, with more than 1,400 branches and offices, and a direct physical presence in more than 70 countries.

The following description of our business should be read in conjunction with Item 7 in this Form 10-K, including the information contained therein under the heading "Business Overview."

**Description of Business by Segment**

Our Company is organized into two segments, New Equipment and Service, which, for 2025, contributed 35% and 65% of our net sales, and 9% and 91% of our segment operating profit, respectively. Our international operations represented approximately 71% of our net sales for 2025.

***New Equipment***

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, commercial 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 also sell New Equipment to government agencies, particularly, to support infrastructure projects, such as airports, railways or metros. We generally sell directly to our customers through our New Equipment sales personnel. Due to the nature of the customer base in China and certain other geographies, our direct sales force is augmented by agents and distributors. Given the breadth of our customer base and the large number of customers to whom we deliver new equipment on an annual basis, we are not dependent on any single customer and do not have any contracts material to Otis as a whole with any single customer. The same is true for our broad and geographically dispersed network of agents and distributors.

New Equipment customers typically engage with us at an early stage during the construction cycle. The timing of order placement depends on factors including project complexity and customer requirements. Elevator installation usually occurs midway through building construction.

New Equipment orders are generally delivered within 12 months of booking, although larger projects can take longer to deliver based on customer construction schedules, and in some regions, mostly in China, the order to delivery window is shorter. When placing New Equipment orders, customers typically make an advance payment to cover costs including design and contract engineering. These advance payments are typically followed by periodic progress payments at specified milestones, such as delivery of materials at the job site and completion of installation and equipment commissioning. Installation is carried out by our installation technicians or through subcontractors, in which case we typically complete the final inspection and commissioning to ensure that our quality standards are met. Revenues are recognized based on percentage of completion. Once commissioned, New Equipment units are typically supported by a warranty for a limited period of time.

We have developed a range of elevator and escalator solutions to meet the varying needs and objectives of our diverse customers, primarily centered around the following elevator platforms: *Gen2*, *Gen3*, *Gen360* and *SkyRise*. Our primary elevator and escalator solutions are described below.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

*Gen2*

Gen2 has been our principal low-and mid-rise elevator solution. Since its launch in 2000, we have sold over one million units, making it our best-selling elevator platform.

*Gen3*

The successor to the Gen2 family of elevators, the Gen3 platform enhances the space-saving, energy-efficient design of the Gen2 elevator with the connectivity of the Otis ONE IoT (Internet of Things) digital service platform, while offering additional safety features for passengers and our colleagues who maintain the elevator.

*Gen360*

The Gen360 elevator frees hoistway space to accommodate larger cabins and features a new electronic architecture, with many mechanical components replaced by electronic components that, when combined with our service, increase reliability and reduce the potential for entrapments. A foldable, in-ceiling platform allows maintenance operations to be performed safely from within the car rather than on top of it and, depending on local regulations, eliminates the need for a refuge space above the car and the protrusion on the roof allowing for a flat roof design. With optional 360-degree cameras in the hoistway, Otis service teams can visually confirm, fine-tune, diagnose and solve many issues remotely without stopping the elevator. Otis ONE is our IoT solution that connects elevators to the cloud for real-time monitoring, predictive maintenance, and enhanced, transparent communication.

*SkyRise* 

For taller, high-rise buildings, the SkyRise advanced elevator platform combines cutting-edge technologies and precision engineering to deliver solutions for residential, commercial and mixed-use skyscrapers.

*Escalators and Moving Walkways*

In addition to elevator solutions, we also offer escalators and moving walkways. With a range of finishes and aesthetics, Otis escalators integrate easily with any building design. Our smart design and features enhance sustainability and passenger safety, such as sensor-equipped escalators and moving walkways that efficiently run only when passengers approach, or operate at reduced speeds to conserve energy when there are no riders.

***Service***

Through our Service segment, we perform maintenance and repair services, as well as modernization services to upgrade elevators and escalators. We have a maintenance portfolio of approximately 2.5 million units globally, which includes Otis equipment manufactured and sold by us, as well as equipment from other original equipment manufacturers. Through our network of service sales personnel, we sell our services directly to customers in all significant elevator and escalator verticals around the world.

Service customers typically comprise building owners, facility managers, housing associations and government agencies that operate buildings where elevators and escalators are installed. Customers securing services for elevators are frequently different from those who initially make purchasing decisions with respect to New Equipment solutions. As the largest service provider in the industry worldwide, we have a wide range of customers in our Service segment and do not have any single service contract that is material to Otis as a whole. Contract duration depends on several factors, including customer needs, regulatory requirements and industry/geography dynamics. We work closely with our customers to renew these contracts as appropriate. Certain types of customers, such as those owning or operating large properties or portfolios of properties, tend to execute long-term maintenance agreements.

We provide our Service offerings to our customers through a global network of 37,000 Service mechanics operating out of more than 1,400 branches and offices typically located in close proximity to concentrations of customers. Our mechanics are critical to our ability to deliver a high level of service to our customers. Our OTISLINE operations provide personalized customer support 24/7. They receive customer service requests and assign and dispatch field technicians, as necessary, to respond to service requests. We support our customers with our network of service parts centers and repair centers.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

Our services include inspections, preventive maintenance offerings and other customized maintenance offerings tailored to meet customer needs. A basic maintenance contract provides for inspection consistent with local regulatory needs. We offer incremental, tiered maintenance and service offerings, with varying levels of coverage up to and including comprehensive component replacement coverage. We also provide customers with repair services to address equipment and component wear and tear, as well as breakdowns.

We seek to grow our maintenance portfolio through conversion of newly installed units into maintenance contracts, through prospecting and winning units already in service from customers using another service provider and through acquisitions. Our Service sales personnel seek to win service contracts upon the expiration or termination of existing service contracts from customers by offering a superior value proposition through service excellence, an engaged and technically sophisticated group of field service technicians, a streamlined customer experience and reliable elevator and escalator operating performance.

Similar to most other electro-mechanical equipment, elevators and escalators are subject to wear and tear over time, which can erode equipment functionality. As equipment ages, we work with customers to help renew and refresh their elevators and escalators through modernization solutions that enhance operational performance, improve overall building functionality, and support more sustainable building systems. Modernization offerings range from relatively simple upgrades of interior finishes and aesthetics to complex upgrades of larger components and sub-systems, including the machine, ropes or belts, safety systems and the entire car or escalator.

*Digital Technology initiatives*

Otis offers a range of technologies for improving the passenger experience and we have been using technology to monitor elevator performance remotely for decades. As of December 31, 2025, approximately 1.1 million units of our global portfolio, including units under the warranty period, are connected. In 2026, we expect to continue to innovate and expand our digital ecosystem and suite of digital solutions for both our existing service portfolio customers and for new equipment shipments from our factories.

Otis ONE is our latest cloud-based IoT technology, designed to continuously monitor equipment health and performance in real time to provide proactive, predictive and transparent information to our technicians and customers. The technology expands predictive and remote maintenance capabilities to support improved elevator up-time and service productivity.

We offer additional technology and multimedia options to customers with voice, data and video digital services, leveraging our IoT technologies, as described below. These are often incorporated as an optional upgrade on maintenance contracts.

 *eView In-Car Display*

Our in-car display streams live, customizable infotainment to passengers and can connect them to OTISLINE, Otis' 24-hour service call center, during an emergency.

*Compass 360 Destination Management System*

Our proprietary destination management system groups passengers by their desired destination and directs them to an assigned car that minimizes waiting and ride time. The system's algorithms anticipate traffic demand within a building and improve traffic flow.

*eCall Plus Smartphone App*

Otis' smartphone app enables passengers to summon their elevator remotely for a touchless experience.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**Research and Development & Intellectual Property**

Innovation is a fundamental characteristic of our history and is central to our strategy. For 2025, research and development ("R&D") expense was $152 million and 1.1% as a percentage of net sales. In addition to R&D expense, we made investments in digital and strategic initiatives of $45 million, which in combination with R&D expense was 1.4% as a percentage of net sales. We coordinate our R&D efforts globally through an operating model that sets global and local priorities based on customer and segment needs. We have 11 R&D centers and 16 factories around the world, including major locations in China, India, Japan, France, Germany, Spain and the United States. The R&D centers are strategically located close to concentrations of customers and factories to enable efficient development of engineering solutions that can serve as global model products and adapt quickly and efficiently to local customer needs and local demographic and construction trends. We have 1,300 engineers globally, with increasing focus on digital initiatives, software, design of the user interface and the user experience.

We maintain a portfolio of patents, trademarks, copyrights, trade secrets, licenses and franchises related to the Otis business to protect our R&D investments in products and services. We currently own approximately 4,600 patents issued in various jurisdictions, and we have approximately 1,300 patent applications pending globally. We filed approximately 900 patent applications in the last three years. Our patents are primarily filed in Europe, the United States and Asia. We believe that our patents and trade secrets create a competitive advantage and that we have taken reasonable measures to build a portfolio of valid and enforceable intellectual property rights. However, these intellectual property rights might be challenged and could be found invalid or unenforceable. Loss of strategic patents and trade secrets could significantly affect our competitiveness. See Item 1A in this Form 10-K for further discussion of intellectual property matters.

**Joint Ventures and Non-Wholly Owned Subsidiaries**

Our international strategic relationships, joint ventures and non-wholly owned subsidiaries are an important part of our business as they support our access to international markets and customers. Results of these entities are consolidated with our financial and operational results. Our largest joint venture is located in China with the remainder of our joint ventures and non-wholly owned subsidiaries located in various other countries.

Prior to October 2025, we operated in China through two principal joint ventures: Otis Elevator (China) Investment Company Limited ("Otis China") and Otis Electric Elevator Company Limited ("Otis Electric"). Otis China is a joint venture established in 1998 for the purpose of manufacturing, installing and servicing elevators, escalators and related equipment. We are the majority owner of Otis China, and Tianjin Tai Kang Investment Co. Ltd. is our joint venture partner. Otis Electric, a subsidiary of Otis China, is a joint venture established in 1997 for the purpose of manufacturing, installing and servicing elevators, escalators and related equipment. Otis China owns a controlling equity stake in Otis Electric. Otis China's partner in Otis Electric was Xizi Elevator Group Co.

In October 2025, we purchased all of the outstanding shares of the noncontrolling shareholder of Otis Electric. Otis Electric is now 100% owned by Otis China and one of its subsidiaries. See "Note 1: Business Overview" in Item 8 in this Form 10-K for further details regarding this transaction.

**Competition** 

We operate in a highly competitive industry. Due to the global and localized nature of the industry, there are numerous participants of varying size that operate in our industry. According to industry estimates, there are hundreds of participants that offer New Equipment solutions and several thousand participants that offer maintenance and service solutions. In both the New Equipment and Service segments, major competitors globally include KONE Oyj, Schindler Group and TK Elevator, while there are a number of additional competitors in the Asia Pacific region. Competitive dynamics vary significantly by segment and geography. In the Service segment, independent service providers and other small operators are significant competitors in most of our local geographies. These independent service providers have an aggregate portfolio of about 50% of service units, but account for a smaller percentage of the service business when measured by value because of the types of units and level of maintenance covered by these providers.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

There are several factors that determine competitiveness in the industry, including local codes and compliance requirements, customer preferences, price, reputation, delivery and execution, product quality, equipment performance, reliability and long-term service and product support. Our success in both our New Equipment and Service segments depends upon our ability to develop and market our products, services and solutions, as well as our ability to provide the people, technologies, facilities, equipment and financial capacity needed to deliver those products and services with maximum efficiency and at quality levels expected by our customers. We believe our global presence, local relationships and proven track record in executing complex elevator and escalator solutions contribute to our iconic brand, reputation and competitive position in the industry.

We believe our business strategies allow us to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Sustain New Equipment growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Accelerate Service portfolio growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Deliver modernization value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Advance the digitalization of Otis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Focus and empower the organization.

We believe these results of our business strategies support our ability to successfully compete across the New Equipment and Service segments, and help deliver sustainable earnings growth.

The Company may not be able to compete effectively on all of these fronts and with all of its competitors, and the failure to do so could have a material adverse effect on our sales and profit margins and reputation. For further discussion of risks related to the competitive environment of our business, see Item 1A in this Form 10-K.

**Compliance with Government Regulations** 

We conduct our business through subsidiaries and affiliates worldwide. Any changes in legislation or government policies impacting our industry, including with respect to employee safety, labor-related regulations, industrial equipment, licensing requirements, foreign ownership limitations and building and elevator safety codes, can affect our operations. We closely monitor local legislation and government policies in the locations in which we operate.

United States (the "U.S.") laws, regulations, orders, and other measures concerning the export or re-export of products, software, services and technology to, and other trade-related activities involving, non-U.S. countries and parties affect the operations of Otis and its affiliates, as do those of other countries pertaining to similar matters.

In addition, our operations are subject to and affected by environmental regulations promulgated by federal, state and local authorities in the United States and regulatory authorities with jurisdiction over our foreign operations. We have incurred and will likely continue to incur liabilities under various government statutes and regulations for the cleanup of pollutants previously released into the environment. We do not anticipate that compliance with current provisions relating to the protection of the environment or that any payments we may be required to make for cleanup liabilities will have a material adverse effect upon our competitive position, cash flows, results of operations or financial condition.

For further discussion of risks related to international trade compliance, environmental matters and other government regulations, see in this Form 10-K Item 1A, Item 7 and "Note 2: Summary of Significant Accounting Policies" and "Note 20: Contingent Liabilities" in Item 8 in this Form 10-K.

**Seasonality**

Our business and operating results are generally not subject to significant fluctuations as a result of seasonality, although we have experienced lower New Equipment net sales in Asia in the first calendar quarter, coinciding with Lunar New Year celebrations. In addition, we have also experienced lower New Equipment net sales in the fourth quarter in China, due to a national holiday that occurs during the first week of October which may impact the relative mix of net sales within the quarter.

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**Raw Materials and Supplies**

Due to the global and distributed nature of our operations, we partner with a diverse network of several thousand suppliers globally. These include product and non-product suppliers, as well as subcontractors. We rely on approximately 400 key suppliers for our manufacturing supply chain.

Components and systems necessary to effectively complete our New Equipment projects, as well as to satisfy our maintenance and repair obligations, are often available from two or more sources within the industry. While we believe no single supplier is material to our business, some components or applications require particular specifications or qualifications. In those cases, there may be a single supplier or a limited number of suppliers that can readily provide such components, which have in the past, and could in the future, result in supply constraints or cost pressures due to an issue with such a supplier, including financial or operational difficulties or a contract dispute. We implement mitigation actions to address potential disruption in and other risks relating to our supply chain, including the use of safety stock and alternative materials, as well as risk assessments, qualification of multiple supply sources and use of long-term supplier agreements.

Although at times high prices for some important raw materials have caused margin and cost pressures for our business, we do not expect near-term unavailability or pricing of materials, components or supplies that would have a material adverse effect on our business. We seek to manage commodity price risk through locking and hedging strategies, as well as passing the increases onto our customers through pricing. See Item 1A in this Form 10-K for risks associated with raw material and supply chain.

**Sustainability and Responsibility**

At Otis, sustainability and responsibility are strategically woven into each of our core business functions in support of our vision and our commitment to living our Otis mission as a world-class, customer-centric, service-oriented company. Together with our Otis Absolutes of Safety, Ethics and Quality and our Leading at Otis Behaviors, our projects and programs under our four pillars of Health & Safety, Governance & Accountability, Environment & Impact and People & Communities advance our five strategic objectives – of sustaining New Equipment growth, accelerating our Service portfolio growth, delivering modernization value, and focusing and empowering our organization while advancing digitalization – to create value for our stakeholders and the broader communities where we live and work. We are committed to the health and safety of our colleagues and the riding public. We are committed to environmental sustainability as a business strategy, advancing digitalization and leveraging smart technology to create products and services that meet customer expectations. We proactively engage in the communities where we live and work. We position ourselves to attract, develop and retain the best talent in the market. See "Human Capital" below for additional information regarding certain initiatives related to our Otis colleagues.

In April 2024, the Science Based Target Initiative ("SBTi") validated our near-term science-based greenhouse gas emissions reduction targets (SBTs). Our SBTs are: (i) reduce absolute scope 1 and 2 greenhouse gas emissions 55% by 2033 from 2021 base year (the target boundary includes biogenic land-related emissions and removals from bioenergy feedstocks) and (ii) reduce absolute scope 3 greenhouse gas emissions from purchased goods and services, business travel, and use of sold products 33% by 2033 from 2021 base year. Our climate strategy is designed to build resiliency and strengthen the operational efficiency of our business and supply chain. It is based on our climate scenario analysis under the Task Force on Climate-related Financial Disclosures (TCFD), near-term SBTs and the implementation of major initiatives in the near-term, medium-term and long-term focused on energy management and operational efficiency across our factories, real estate portfolio and fleet, real estate portfolio climate resilience, product sustainability through the advancement of digitalization and innovation and responsible climate resilient sourcing.

In June 2025, we published our fourth annual voluntary report describing our sustainability-related strategies, programs, and actions in alignment with our business strategies, and providing performance data and metrics under our four pillars. It was drafted in accordance with the Global Reporting Initiative Standards, the Sustainability Accounting Standards Board guidelines for the Resource Transformation sector (with Electrical and Electronic Equipment and Industrial Machinery and Goods as subsectors, when applicable), and the TCFD recommendations. We also engaged third parties for limited or reasonable assurance assessment of certain of our health and safety and environmental metrics under our voluntary reporting. This annual report – now called "Connect & Thrive" can be found on our company website (http://www.otis.com) under the heading "Sustainability & Responsibility", which we update from time to time. Neither our Connect & Thrive report nor our company website are incorporated by reference into this Form 10-K.

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Underscoring the integration of sustainability and responsibility into our core business operations Otis has enhanced its sustainability-related governance model by further rooting sustainability within each business function. Functional leads are responsible for sustainability-related topics within their respective functions, with direct oversight by the CEO and, ultimately, the Board of Directors (including the Nominations and Governance Committee). These functional leaders are supported by functional committees and workstreams that oversee sustainability-related strategies at the functional level. These groups collaborate with subject matter experts across their functions to develop and implement sustainable-related strategies that align with our vision.

There have been no, and we do not expect there to be in the near term, material impacts on our business, financial condition or results of operations as a result of compliance with legislation or regulatory rules regarding climate change, from the known physical effects of climate change, as a result of implementing our sustainability-related initiatives or from transitional risks such as increased regulations or customer shifting preferences toward low carbon products, as determined under our climate scenarios analysis. For a discussion of risks associated with sustainability-related matters, see Item 1A in this Form 10-K.

**Human Capital**

As of December 31, 2025, our global workforce consists of approximately 72,000 colleagues (including approximately 45,000 field professionals), with 45% in Asia, 34% in Europe, the Middle East and Africa ("EMEA") and 21% in the Americas.

Approximately 64% of our U.S. workforce is covered by a collective bargaining agreement. Outside of the U.S., our colleagues are represented by workers' councils or statutory labor unions as may be customary or required in those jurisdictions. While we strive to maintain good relationships with our employee representative bodies, our business may be adversely affected by work stoppages, union negotiations, labor disputes and other matters associated with our labor force. The collective bargaining agreement for most of our bargaining unit colleagues in the U.S. was renewed without disruption in July 2022 and is set to expire in July 2027. For a discussion of risks associated with employment-related matters, see Item 1A in this Form 10-K.

***Compensation and Benefits***

Our colleagues are vital to our success, and we offer pay and benefits designed to attract, retain and motivate our colleagues and align their compensation with both individual and our overall performance. We offer fair employment conditions and follow local labor laws that address minimum wages, insurance coverage of work-related accidents, severance pay and other employment provisions, including overtime and sick pay. While our programs vary by location and eligibility, they generally include base and overtime pay, short-term incentive bonuses, long-term incentive pay in the form of stock awards, retirement plan benefits, health care and insurance benefits, tuition assistance through our Employee Scholar program, paid sick, bereavement, vacation, parental and family leaves, and wellness and employee assistance programs.

***Health and Safety***

Safety is one of the Otis Absolutes. For that reason, safety measures and indicators are regularly monitored by management and reported to our Board of Directors. To promote safety, we have a health and safety management system and regularly measure the effectiveness of our health and safety programs. We also provide regular health and safety training to our field professionals and we regularly enhance our learning tools to support the success of our health and safety programs. We follow local labor laws that address maximum working hours. We empower all of our colleagues and subcontractors with stop work authority if they perceive an unsafe condition or behavior that may cause injury. We also seek to promote a culture where stop work authority can be freely exercised without the fear of retribution or retaliation, and a learning culture to enhance the quality and delivery of safety and technical training. Health and Safety is one of the four focus areas of our sustainability and responsibility projects and programs. See the "Sustainability and Responsibility" section of this Form 10-K above for more information regarding our sustainability-related strategies and actions.

We are focused on our colleagues' mental and physical well-being. We provide employee assistance plan benefits to all of our colleagues worldwide. We also offer flexible work arrangements to many salaried colleagues.

***Hiring, Training, Development and Retention***

We position ourselves to attract and retain the best talent in the market and interact meaningfully in the global communities where we live and work. We perform strategic talent outreach to expand our applicant pool and ensure access to top-qualified candidates. When seeking candidates or promoting Otis colleagues, we focus on matching the best talent to open roles in support of our organizational model and business needs, thereby driving value for our company and its stakeholders.

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We seek others' ideas, encourage innovation and empower our colleagues through various learning and development programs that are aligned with our business strategy and are designed to contribute to our broader success such as our "Employee Scholar Program", a company-sponsored education program that allows colleagues to expand their skills through degree or certification programs. Our mechanics receive extensive training to service and install equipment safely. This training consists of live, virtual, and on-the-job modules with experienced mechanics. We also offer various programs to build leadership and functional capabilities and provide development initiatives through our colleague-led Business Resource Groups (BRGs). Our BRGs have evolved to ensure global alignment and greater accountability for business goals while offering programming for our Otis colleagues relevant to our "4C pillars" of Career, Culture, Customer, and Community.

We track our colleagues' voluntary attrition rate to help us assess our workplace initiatives. We also track our colleagues' satisfaction through colleague engagement surveys to anticipate attrition, as discussed further below. Our commitment to building and fostering a sense of belonging and an inclusive workplace strengthens employee engagement and supports the retention of top talent.

***Colleague Engagement***

We believe that engaged colleagues deliver better service to our customers. We measure engagement by conducting annual colleague engagement surveys. The results, which are reported to our Board of Directors and management, help us assess how our colleagues feel about working for us. We use the survey results to develop action plans to address areas of concern. The engagement survey, which anonymizes the data, covers topics such as safety, ethics, belonging, quality, company prospects, inclusion, success, growth and managerial effectiveness.

**Corporate Information**

Otis is a Delaware corporation and was incorporated on March 1, 2019 in connection with the separation and distribution ("Separation") of each of Otis and Carrier Global Corporation ("Carrier") from United Technologies Corporation, subsequently renamed RTX Corporation ("UTC" or "RTX", as applicable) into separate independent publicly traded companies. The Separation occurred on April 3, 2020. References to "UTC" relate to pre-Separation matters, and references to "RTX" relate to post-Separation matters.

The Separation was completed pursuant to a Separation and Distribution Agreement ("Separation Agreement") and other agreements with UTC and Carrier related to the Separation, including but not limited to a tax matters agreement ("TMA"), an employee matter agreement ("EMA") and an intellectual property agreement (the "Intellectual Property Agreement"). For further discussion of these agreements, see Item 1A, "Note 1: Business Overview" in Item 8 and Item 15 in this Form 10-K.

**Available Information**

This Form 10-K and our quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports are available free of charge through the Investors section of our Internet website (http://www.otis.com) under the heading "Financial Information" as soon as reasonably practicable after these reports are electronically filed with, or furnished to, the SEC. In addition, the SEC maintains a website (http://www.sec.gov) containing reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

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**Cautionary Note Concerning Factors That May Affect Future Results**

This Form 10-K contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide management's current expectations or plans for Otis' future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "medium-term," "near-term," "confident," "goals" and other words of similar meaning in connection with a discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, dividends, share repurchases, tax rates, R&D spend, restructuring or transformation actions (including UpLift and related reorganization and outsourcing activities and such actions with respect to our business in China), credit ratings, net indebtedness and other measures of financial performance or potential future plans, strategies or transactions, or statements that relate to climate change and our intent to achieve certain sustainability targets or other corporate responsibility initiatives, including operational impacts and costs associated therewith, and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For those statements, Otis claims the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effect of economic conditions in the industries and markets in which Otis and its businesses operate and any changes therein, including financial market conditions, fluctuations in commodity prices, and other inflationary pressures, interest rates and foreign currency exchange rates, levels of end market demand in construction, pandemic health issues, natural disasters, whether as a result of climate change or otherwise, and the financial condition of Otis' customers and suppliers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effect of changes in political conditions in the U.S. and in other countries in which Otis and its businesses operate, including tensions between the U.S. and China and geopolitical conflicts, including the ongoing conflict between Russia and Ukraine and instability in the Middle East, on general market conditions, commodity costs, global trade policies and related sanctions, export controls and tariffs, and currency exchange rates in the near term and beyond;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• challenges in the development, production, delivery, support, employee adoption, performance and realization of the anticipated benefits of advanced technologies and new products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future levels of indebtedness, capital spending and research and development spending;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future availability of credit and factors that may affect such availability or costs thereof, including credit market conditions and Otis' capital structure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing and scope of future repurchases of Common Stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in prices and delays and disruptions in delivery of materials and services from suppliers, whether as a result of changes in general economic conditions, geopolitical conflicts or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cost reduction or containment actions, restructuring or transformation costs and related savings and other consequences thereof, including with respect to UpLift and our China business and related impacts of reorganization, change management and outsourcing activities, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• new business and investment opportunities and the realization of anticipated benefits, including meeting customer expectations and maintaining our competitiveness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the outcome of legal proceedings, investigations and other contingencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pension plan assumptions and future contributions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of the negotiation of collective bargaining agreements and labor disputes, labor actions, including strikes or work stoppages, and labor inflation in the markets in which Otis and its businesses operate globally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effect of changes in laws, regulations and enforcement priorities in the U.S. and other countries in which Otis and its businesses operate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of Otis to retain and hire key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the scope, nature, impact or timing of acquisition and divestiture activity, the integration of acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the determination by the Internal Revenue Service (the "IRS") and other tax authorities that the distribution or certain related transactions in connection with the Separation should be treated as taxable transactions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our obligations and disputes that have or may hereafter arise under the agreements we entered into with RTX and Carrier in connection with the Separation.

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These and other factors are more fully discussed in the "Business", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections and elsewhere in this Form 10-K and may cause actual results to differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements speak only as of the date of this report, or in the case of any document incorporated by reference, the date of that document. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings with the SEC.

**Item 1A. Risk Factors**

**Risks Related to Our Business**

***We may be affected by global economic conditions in general and conditions in the construction and infrastructure industries in particular.***

Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions, including levels of consumer and business confidence, commodity prices, raw material and energy costs, supply chain issues, trade policies (including tariffs and trade barriers), foreign currency exchange rates, interest rates, labor costs, levels of government spending and deficits, actual or anticipated default on sovereign debt, political conditions in the U.S. or otherwise, regulatory changes and other challenges that could affect the global economy. In addition, the current global economic environment has resulted, and may continue to result, in increased levels of commodity, materials and wage inflation. These various global economic conditions have affected and may continue to affect our business in a number of ways as discussed in more detail in this Item 1A and elsewhere in this Form 10-K. More particularly, a slowdown in building and remodeling activity, whether due to remote work or otherwise, or decreased public spending on infrastructure projects could adversely affect our financial performance.

***Our operations are subject to natural and man-made unexpected events that may increase our costs, limit access to building sites, interrupt production or our supply chain or otherwise adversely affect our business, results of operations or financial condition.***

The occurrence of one or more unexpected events, including war (see discussion below regarding ongoing conflicts), acts of terrorism or violence, civil unrest, pandemics, fires, tornadoes, hurricanes, earthquakes, floods and other forms of natural disasters or severe weather, whether as a result of climate change or otherwise, in the United States or in other countries in which we operate or in which our suppliers are located could result in physical damage to and complete or partial closure of one or more of our manufacturing facilities or temporary or long-term disruption in the supply of component products from some of our suppliers, disruption and delay in the transport of our products to customers or limit our access to building sites to install our products or perform our services. Existing insurance coverage may not provide protection for all of the costs that may arise from such events. The impacts of these unexpected events are difficult to predict, but could result in higher costs or delays in our operations and/or adversely affect economic conditions in the regions where we operate and our financial performance.

***Our international operations subject us to risk as our results of operations may be adversely affected by changes in local and regional economic conditions, such as fluctuations in exchange rates and changes in credit conditions.***

We conduct our business on a global basis, with approximately 71% of our 2025 net sales derived from international operations. Changes in local and regional economic conditions, including credit conditions and fluctuations in exchange rates, may affect product demand and reported profits in our non-U.S. operations, where transactions are generally denominated in local currencies. In addition, currency fluctuations may affect the prices we pay for the materials used in our products. Though we engage in hedging strategies to manage foreign currency exposures in connection with certain cross-border transactions, our operating margins may be negatively impacted by currency fluctuations that result in higher costs or lower revenues for certain cross-border transactions. Our financial statements are denominated in U.S. dollars. Accordingly, fluctuations in exchange rates have given and may continue to give rise to gains or losses when financial statements of non-U.S. operating units are translated into U.S. dollars. Given that the majority of our net sales are non-U.S. based, a strengthening of the U.S. dollar against other major foreign currencies has adversely affected and could in the future adversely affect our results of operations. Additionally, limitations on the ability of our customers and suppliers to access credit at interest rates and on terms that are acceptable to them could lead to customer and supplier defaults and cancellations of existing orders, limit or prevent customers from being able to finance purchases of our products and services in the future, and cause delays in the delivery of key products from suppliers.

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***Our international operations subject us to risks associated with government policies on international trade and investments and risks in general and particularly in China.***

Our international sales and operations are subject to risks associated with changes in local government laws, regulations and policies, including those related to investments and limitations on foreign ownership of businesses, taxation, foreign exchange controls, capital controls, local manufacturing, product content or supplier requirements, employment regulations and the repatriation of earnings. Government policies on international trade and investments such as import quotas, capital controls, punitive taxes or tariffs or similar trade barriers, whether imposed by individual governments or regional trade blocs, can affect demand for our products and services, impact the competitive position of our products or services, or encumber our ability to manufacture or sell products in certain countries. International transactions also involve increased financial and legal risks due to differing legal systems and customs in foreign countries, which could result in increased costs, risk of fines or penalties as well as reputational harm. Our international sales and operations are also sensitive to changes in foreign nations' priorities, including government budgets, as well as to political and economic instability.

The implementation of more restrictive trade policies, including tariffs and retaliatory actions in response thereto, or the renegotiation of existing trade agreements with the U.S. or countries where we sell large quantities of products and services, procure materials incorporated into our products, manufacture products or recruit and employ employees (see discussion on China below), could have a material adverse effect on our business, results of operations and financial condition. These impacts may include hindering our ability to recruit and retain employees or deploy certain employees to the geographies where their skills are best utilized, increased costs for our customers, declining consumer confidence, significant inflation and diminished economic expectations, which could ultimately reduce demand for our products. While we take steps to mitigate or avoid these increased costs, disruptions and legal risks due to changes in trade policies, our ability to do so may be limited by operational and supply chain constraints, especially in the short term. In addition, our ability to recover cost increases and maintain profitability levels through price adjustments may be limited by competitive pressures, customer acceptance, and contractual limitations. Tariff actions by the U.S. and retaliatory actions by other countries have caused, and may in the future cause, significant disruption and volatility in the financial markets, which could adversely affect the availability, terms and cost of capital, including with respect to refinancing our existing debt, and which in turn could reduce our cash flows and harm our business.

China is currently the largest end market for sales of new equipment in our industry, with our New Equipment net sales in China representing approximately one fifth of our global New Equipment net sales and over half of our global New Equipment unit volume and a growing part of our Service segment. Changes to market and economic conditions in China, including credit conditions for our customers, have recently impacted and may continue to impact our ability to maintain New Equipment net sales in China at rates consistent with prior years as well as future growth of our Service segment. Additionally, the escalation of trade conflicts between the U.S. and China could further impact economic conditions in the U.S. and China. Furthermore, as is the case in many countries where we operate, China could impose additional regulatory and legal requirements, including requirements that could increase costs in China and/or restrict access to Chinese markets, which could negatively impact our overall financial performance.

***Our international operations subject us to risks associated with emerging markets.***

We expect that net sales to emerging markets will continue to account for a significant portion of our net sales as those and other developing nations and regions around the world increase their demand for our products and services. A slowdown in urbanization in emerging countries, such as China or India, have and could continue to adversely affect our financial performance. In addition, as part of our global business model, we operate in certain countries, including Argentina, Brazil, China, India, Indonesia, Malaysia, Mexico, Poland, South Africa, Ukraine, Turkey and certain countries in the Middle East, that carry high levels of currency, political, compliance and economic risk. Our emerging market operations can present many risks, including differences in culturally accepted practices (such as employment and business practices), compliance risks, economic and government instability, currency fluctuations, and the imposition of foreign exchange and capital controls. While these factors and their impact are difficult to predict, any one or more of them could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

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***Our international operations subject us to risks associated with geopolitical conflicts.***

Our international sales and operations are subject to risks associated with geopolitical conflicts, including the ongoing conflicts between Russia and Ukraine and instability in the Middle East. Geopolitical conflicts, including threats related thereto, have resulted in worldwide geopolitical and macroeconomic uncertainty, and we cannot predict how conflicts will evolve or the timing thereof. If current geopolitical conflicts expand to other countries and depending on the ultimate outcomes of these conflicts, which remain uncertain, they or new geopolitical conflicts could have additional adverse effects on macroeconomic conditions, including but not limited to, increased costs, constraints on the availability of commodities, supply chain disruptions and decreased business spending. Furthermore, continuation of the conflicts could give rise to disruptions to our or our business partners' global technology infrastructure, including through cyberattack or cyber-intrusion; adverse changes in international trade policies and relations; regulatory enforcement; our ability to implement and execute our business strategy; terrorist activities; our exposure to foreign currency fluctuations; and constraints, volatility, or disruption in the capital markets, any of which could have a material adverse effect on our business, results of operations, cash flows and financial condition.

***We use a variety of raw materials, supplier-provided parts, components, sub-systems and third-party manufacturing services in our business, and significant shortages, supplier capacity constraints, supplier production disruptions or price increases could increase our operating costs and adversely impact the competitive positions of our products.*** 

Our reliance on suppliers (including third-party manufacturers) and commodity markets to secure the raw materials and components used in our products exposes us to volatility in the prices and availability of these materials. Issues with suppliers, (such as a disruption in deliveries, capacity and credit constraints, production disruptions, quality issues and supplier closings or bankruptcies), price increases or decreased availability of raw materials or commodities (particularly steel) have in the past had and could in the future have a material adverse effect on our ability to meet our commitments to customers or could increase our operating costs, either of which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

***Adverse changes in our relationships with, or the financial condition, performance or purchasing patterns, or compliance practices of, key distributors and agents could adversely affect us.***

Certain of our businesses sell a significant amount of their products to distributors and agents, particularly in China, that have valuable relationships with customers. Some of these distributors and agents also sell our competitors' products, and if they favor competing products for any reason they may fail to market our products effectively. Adverse changes in our relationships with these distributors and other partners, or adverse developments in their financial condition, performance or purchasing patterns, or compliance practices, could adversely affect our reputation, competitive position, results of operations, cash flows or financial condition.

***We design, manufacture, install and service products that incorporate advanced technologies; the introduction of new products and technologies, including artificial intelligence, involves risks, and we may not realize the degree or timing of benefits initially anticipated.***

We seek to grow our business through the design, development, production, sale and support of innovative products that incorporate advanced technologies. The product and service needs of our customers change and evolve regularly, and we invest substantial amounts in research and development efforts to pursue advancements in technologies, products and services. Our ability to realize the anticipated benefits of our technological advancements, such as the development and execution of advanced technologies, including artificial intelligence ("AI"), for the benefit of our New Equipment or Service segment or the development of new products depends on a variety of factors, including meeting development, production, certification and regulatory approval schedules; execution of internal and external performance plans; availability of supplier and internally produced parts and materials; performance of suppliers and subcontractors; hiring and training of qualified personnel; employee adoption of new technologies; achieving cost and production efficiencies; validation of innovative technologies; our ability to maintain new products at the Service levels and costs anticipated; and customer interest in new technologies and products and acceptance of products we manufacture or that incorporate technologies we develop.

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Our research and development efforts may not result in innovative products or services that incorporate new technologies for our New Equipment and Service segments, or products or services being developed on a timely basis or that meet the needs of our customers as effectively as competitive offerings. In addition, the markets for our products or services, or products that incorporate our technologies, may not develop or grow as we anticipate. We or our suppliers or subcontractors may encounter difficulties in developing and producing new products and services, and may not realize the degree or timing of benefits initially anticipated or may otherwise suffer significant adverse financial consequences. Due to the design complexity of our products, we may experience delays in completing the development and introduction of new products. Any delays could result in increased development costs or divert resources from other projects. If we are unable to successfully develop and timely introduce new products, services and technologies, our competitors may develop competing technologies that gain market acceptance in advance of or instead of our products or services that might cause our existing technology and offerings to become obsolete, which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

Further, as we integrate emerging and rapidly evolving technologies, including AI, into our products and services, we face evolving risks related to safety, data governance, regulatory compliance and intellectual property and may not be able to anticipate or identify vulnerabilities, design flaws or security threats resulting from the use of such technology and develop adequate protection measures, which could lead to unintended consequences and significantly impact our business, reputation, and financial results.

***We operate in a competitive environment and our profitability depends on our ability to accurately estimate the costs and timing of providing our products and services.***

Our contracts are typically awarded on a competitive basis. Our quotations and bids are based upon, among other items, the cost to provide the products and services. To generate an acceptable return on our investment on these contracts, we must be able to accurately estimate our costs to provide the services and deliver the products required by the contract and to be able to complete the contracts in a timely manner. If we fail to accurately estimate our costs or the time required to complete a new equipment order, or the extent of required maintenance pursuant to a service contract, or execute on our productivity initiatives, the profitability of our contracts may be materially and adversely affected. Some of our contracts provide for liquidated damages if we do not perform in accordance with the contract. As a result of these and other factors, we may not be able to provide products and services at competitive prices while maintaining anticipated levels of profitability, which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

***We may not realize expected benefits from our cost reduction, restructuring and transformation efforts, including UpLift, and our profitability may be negatively impacted or our business otherwise might be adversely affected.***

In order to operate more efficiently and cost effectively, we have and may continue to adjust employment, optimize our footprint or undertake other restructuring or transformation activities, including in connection with UpLift and our China business, and related reorganization, transformation and outsourcing activities, as applicable. These activities are complex and may involve or require significant changes to our operations. If we do not successfully manage restructuring and other transformation activities, expected efficiencies and benefits might be delayed or not realized, and our operations and business could be disrupted. Risks associated with these actions and other workforce management issues include unfavorable political responses, unforeseen delays in the implementation of anticipated workforce reductions, additional unexpected costs, challenges in change management, adverse effects on employee morale and capacity, and the failure to meet operational targets due to the loss of employees or work stoppages or transitioning work to third parties, any of which may impair our ability to achieve anticipated cost reductions, otherwise harm our business or have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

***We operate in challenging markets for talent and may fail to attract, develop and retain key personnel.***

We depend on the skills, institutional knowledge, working relationships, and continued services and contributions of key personnel, including our leadership team, engineers, field professionals, and others at all levels of the company. In addition, our ability to achieve our operating and strategic goals depends on our ability to identify, hire, train and retain qualified individuals. We compete with other companies both within and outside of our industry for talented personnel in a highly competitive labor market, and we may lose key personnel or fail to attract sufficient skilled personnel and incur additional labor costs. Any such losses, failures or increased costs could have material adverse effects on our results of operations, financial condition and cash flows.

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***Our debt levels and related debt service obligations could have negative consequences; we may need additional debt or equity financing in the future to meet our capital needs, and such financing may not be available on favorable terms, if at all, due to changes in global capital markets, our financial performance or outlook or our credit ratings and may be dilutive to existing shareholders.***

As of December 31, 2025, we had $7.7 billion outstanding long-term debt. Our debt level and related debt service obligations could have negative consequences, including, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring us to dedicate significant cash flow from operations to the payment of principal and interest on our debt, which would reduce funds we have available for other purposes, such as acquisitions and reinvestment in our businesses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reducing our flexibility in planning for or reacting to changes in our business and market conditions.

We may need additional financing for general corporate purposes. For example, we may need funds to increase our investment in research and development activities, to refinance or repay existing debt, or to make a strategic acquisition. We may be unable to obtain additional financing on terms favorable to us, if at all. Volatility in the world financial markets could further increase borrowing costs or affect our ability to access the capital markets. Our ability to issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our products or services, or in the solvency of our customers, suppliers or distributors or other significantly unfavorable changes in economic conditions.

We have an investment-grade credit rating from each of Moody's Investors Service, Inc. and Standard & Poor's. There can be no assurance that we will be able to maintain our credit ratings, and any actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade or similar announcement, could increase the cost of borrowing under any indebtedness we may incur, reduce market capacity for our commercial paper, require the posting of additional collateral under our derivative contracts, or otherwise have a negative impact on our liquidity, capital position and access to the capital markets.

If we raise additional funds through the issuance of equity securities, our shareholders will experience dilution of their ownership interest. If we raise additional funds by issuing debt, we may be subject to limitations on our operations due to restrictive covenants or rating agencies may downgrade our credit rating.

***Quarterly cash dividends and share repurchases may be discontinued, accelerated or modified, are subject to a number of uncertainties and may affect the price of Common Stock.***

Quarterly cash dividends and share repurchases are a component of our capital allocation strategy, which we fund with operating free cash flow, borrowings and divestitures. In general, dividends and share repurchases may be discontinued, accelerated, suspended or delayed at any time without prior notice. Furthermore, the amount of such dividends and repurchases may be changed, and the amount, timing and frequency of such dividends and repurchases may vary from historical practice or from the Company's stated expectations. Decisions with respect to dividends and share repurchases are subject to the discretion of our Board of Directors and are based on a variety of factors. Important factors that could cause us to discontinue, limit, suspend, increase or delay our quarterly cash dividends or share repurchases include market conditions, the market price of our Common Stock, the nature and timing of other investment and acquisition opportunities, changes in our business strategy, the terms of our financing arrangements, our outlook as to the ability to obtain financing at attractive rates, the impact on our credit ratings and the availability of domestic cash. The reduction or elimination of our cash dividend or share repurchase program could adversely affect the market price of Common Stock. Although our share repurchase program is intended to enhance long-term shareholder value, changes in laws or regulations related thereto or short-term stock price fluctuations could reduce the program's effectiveness.

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***We engage in acquisitions and divestitures, and may encounter difficulties integrating acquired businesses with, or disposing of businesses from, our current operations; therefore, we may not realize the anticipated benefits of these acquisitions and divestitures.***

We seek to grow through strategic acquisitions, including of the interests in certain ventures and entities which we do not already wholly own, in addition to internal growth. Our due diligence reviews in connection with our acquisitions may not identify all of the material issues necessary to accurately estimate the cost and potential loss contingencies of a particular transaction, including potential exposure to regulatory sanctions resulting from an acquisition target's previous activities. For example, we may incur unanticipated costs, expenses or other liabilities as a result of an acquisition target's violation of applicable laws, such as anti-corruption, antitrust, anti-collusion, environmental or income tax laws. We also may incur unanticipated costs or expenses, including post-closing asset impairment charges, as well as expenses associated with eliminating duplicate facilities, litigation and other liabilities. We may incur unexpected costs associated with labor law, tax or pension matters or to bring acquired assets up to our operating standards. We may encounter difficulties in integrating acquired businesses with our operations, applying our internal controls to these acquired businesses or in managing strategic investments. In addition, accounting requirements relating to business combinations, including the requirement to expense certain acquisition costs as incurred, may cause us to incur greater earnings volatility and generally lower earnings during periods in which we acquire new businesses.

We also make strategic divestitures from time to time. Our divestitures may result in continued financial exposure to the divested businesses, such as through guarantees, other financial arrangements, continued supply and services arrangements, and environmental and product liability claims, following the transaction. Under these arrangements, nonperformance by those divested businesses could result in obligations being imposed on us that could have a material adverse effect on our competitive position, cash flows, results of operations or financial condition.

Additionally, we may not realize the degree or timing of benefits we anticipate when we first enter into a transaction, including as a result of current and proposed changes to U.S. and foreign regulatory approval processes and requirements in connection with an acquisition or divestiture. Any of the foregoing could adversely affect our business and results of operations.

***We are party to joint ventures which may not be successful and may expose us to special risks and restrictions.***

In certain regions, we operate our business through joint venture relationships or non-wholly owned subsidiaries, including Otis Elevator (China) Investment Limited in China. A significant downturn or deterioration in the business or financial condition of a joint venture partner could affect our results of operations in a particular period. Our joint ventures may experience labor strikes, diminished liquidity or credit unavailability, weak demand for products, delays in the launch of new products or other difficulties in their businesses. Changes in local government laws, regulations and policies, including those related to investments and limitations on foreign ownership of businesses, could adversely impact our ability to participate in and operate our joint ventures, or could result in changes to the ownership structure or allocation of rights in our joint ventures. If we are not successful in maintaining our joint ventures and other strategic partnerships, our financial condition, results of operations and cash flows may be adversely affected.

Joint ventures and non-wholly owned subsidiaries inherently involve special risks. Whether or not we hold a majority interest or maintain operational control in such arrangements, our partners or other shareholders may (1) have economic or business interests or goals that are inconsistent with or contrary to ours, (2) exercise veto or other rights, to the extent available, to block actions that we believe to be in our or the joint venture's or non-wholly owned subsidiary's best interests, (3) take action contrary to our policies or objectives with respect to our investments, business or compliance practices or (4) be unable or unwilling (including as a result of financial or other difficulties) to fulfill their obligations, such as contributing capital to expansion or maintenance projects, under the joint venture or other agreement. There can be no assurance that any particular joint venture or non-wholly owned subsidiary will be beneficial to us.

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***Additional tax expense or additional tax exposures could affect our future profitability.***

We are subject to income taxes in the United States and various international jurisdictions. Changes to tax laws and regulations, as well as changes and conflicts in related interpretations or other tax guidance could materially impact our tax receivables and liabilities and our deferred tax assets and deferred tax liabilities. Additionally, in the ordinary course of business, we are subject to examinations by various tax authorities. In addition, governmental authorities in various jurisdictions could launch new examinations and expand existing examinations. The global and diverse nature of our operations means that these risks will continue and additional examinations, proceedings and contingencies will arise from time to time. Our competitive position, cash flows, results of operation or financial condition may be affected by the outcome of examinations, proceedings and contingencies that cannot be predicted with certainty.

See "Business Overview" and "Results of Operations – Income Taxes" in Item 7 and "Note 2: Summary of Significant Accounting Policies" and "Note 14: Income Taxes" in Item 8 in this Form 10-K, for further discussion on income taxes and related contingencies.

***Our defined benefit pension plans are subject to financial market risk that could adversely affect our results.***

The performance of the financial markets and interest rates, as well statutory and/or regulatory changes, can impact our defined benefit pension plan expenses and funding obligations. Significant decreases in the discount rate or investment losses on plan assets may increase our funding obligations and adversely impact our financial results. See "Note 11: Employee Benefit Plans" in Item 8 of this Form 10-K for further discussion on pension plans and related obligations and contingencies.

***We are subject to litigation, product safety and other legal and compliance risks.***

We are subject to a variety of litigation, legal and compliance risks. These risks relate to, among other things, product safety, personal injuries, intellectual property rights, contract-related claims, taxes, environmental matters, competition laws and laws governing improper business practices. We could be charged with wrongdoing in connection with such matters. If convicted or found liable, we could be subject to significant fines, penalties, repayments and other damages (in certain cases, treble damages).

As a global business, we are subject to complex laws and regulations in the U.S. and other countries in which we operate. Those laws and regulations may be interpreted in different ways. They may also change from time to time, as may related interpretations and other guidance. Changes in laws or regulations could result in higher expenses or changes to business operations that could impact our ability to sell our products and services or sell them at expected profit levels. Uncertainty relating to those laws or regulations may also affect how we operate, structure our investments, structure our contracts and comply with the terms of these contracts and/or enforce our rights thereunder.

Product and general liability claims (including claims related to the safety, reliability or maintenance of our products) and accident risks during the production, installation, maintenance and use of our products can result in significant costs, including settlements, punitive damages and other risks such as damage to our reputation, negative publicity and management distraction, which could reduce demand for our products and services.

In addition, we are subject to the U.S. Foreign Corrupt Practices Act (the "FCPA") and other anti-corruption laws that generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. The FCPA applies to companies, individual directors, officers, employees and agents. Under certain anti-corruption laws, companies also may be held liable for the actions of partners or representatives. Certain of our customer relationships are with governmental entities and are, therefore, subject to the FCPA and other anti-corruption laws. Despite meaningful measures that we undertake to seek to ensure lawful conduct, which include training and internal controls, we may not always be able to prevent our employees, partners, joint ventures, agents or distributors from violating the FCPA or other anti-corruption laws. Changes in these laws or their interpretation, administration and/or enforcement may also occur over time. As a result, we could be subject to criminal and civil penalties, disgorgement, changes or enhancements to our compliance measures that could increase our costs, decrease our access to certain sales channels, personnel changes or other remedial actions.

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Moreover, we are subject to antitrust and anti-collusion laws, including mandatory supply laws and bidding regulations, in various jurisdictions throughout the world. Changes in these laws or their interpretation, administration and/or enforcement may occur over time, and any such changes may limit our future acquisitions or operations, or result in changes to our strategies, sales and distribution structures or other business practices. We are subject to ongoing claims related to alleged violations of anti-collusion laws in certain European countries, where we are subject to claims for overcharges on elevators and escalators related to civil cartel cases. Though we have implemented policies, controls and other measures to prevent collusion or anti-competitive behavior, our controls may not always be effective in preventing our employees, partners, joint ventures, agents or distributors from violating antitrust or anti-collusion laws.

Additionally, we provide products and services to government entities. Government contract laws and regulations impose certain risks. If violations of law are found, they could result in civil and criminal penalties and administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business. Each of these factors could negatively impact our business, results of operations, financial condition, and reputation.

Violations of the FCPA, antitrust or other anti-corruption or anti-collusion laws, government contract laws, or allegations of such violations, could disrupt our operations, cause reputational harm, involve significant management distraction and result in a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

We also must comply with various laws and regulations relating to the export of products, services and technology from the U.S. and other countries having jurisdiction over our operations. In the U.S., these laws include, among others, the Export Administration Regulations administered by the Department of Commerce and embargoes and sanctions regulations administered by the Department of the Treasury. In addition, U.S. foreign policy may restrict or prohibit business dealings with certain individuals, entities or countries; changes in these prohibitions can happen suddenly and could result in a material adverse effect on our operations. See discussion of other risks associated with our international business, including changes in trade policies, discussed above and elsewhere in this Form 10-K.

For a description of current material legal proceedings, see "Note 20: Contingent Liabilities" in Item 8 of this Form 10-K.

***We are impacted by evolving stakeholder interest in sustainability and responsibility matters.***

We report on our sustainability and responsibility projects and programs, as required by applicable law and voluntarily. Our strategies reflect our focus on projects and programs that tie to business performance allowing us to adapt to evolving market needs and pursue new opportunities in alignment with our business strategies. Nonetheless, there is no certainty that these projects and programs will deliver the desired outcomes. Our ability to deliver on our sustainability and responsibility initiatives is subject to numerous risks, many of which are outside of our control. Examples of such risks include: (1) the availability and cost of low- or non-carbon-based energy sources and technologies, (2) third-party coordination and alignment over which we do not have control and which may be unpredictable, (3) evolving regulatory requirements affecting sustainability or responsibility related standards or disclosures, (4) the availability of suppliers that can meet our sustainability-related standards, and (5) our ability to recruit, develop, and retain talent in our labor markets. In addition, standards for tracking and reporting on sustainability-related matters have not been harmonized and continue to evolve. Our processes and controls for reporting of sustainability and responsibility matters have been enhanced but may not always comply with evolving and disparate standards for identifying, measuring, and reporting metrics globally, our interpretation of reporting standards may differ from those of others, and such standards may change over time, any of which could result in significant revisions to our performance metrics, climate-related targets or reported progress in achieving such targets and increased compliance costs and risks.

If our sustainability and responsibility practices do not meet evolving regulations, investor or other stakeholder expectations and standards, then our reputation, our ability to attract or retain employees, and our attractiveness as an investment, supplier, or business partner could be negatively impacted, or could result in litigation. We may also be subject to penalties for non-compliance under applicable laws. In addition, our failure or perceived failure to pursue or fulfill our climate-related targets within the timelines we announce, or at all, could have similar negative impacts.

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***Information security, data privacy and identity protection may require significant resources and present certain risks to our business, reputation and financial condition.***

We collect, store, have access to and otherwise process certain company and third-party confidential or sensitive data that may be subject to data privacy and cybersecurity laws, regulations or customer-imposed controls, including proprietary business information, personal data and other information. We also develop products that may in certain cases collect, store, have access to, and otherwise process certain personally identifiable or confidential data of our customers who purchase and use such products either separately or as a part of another product or system or by way of access to our websites or social media accounts. Although we seek to protect such data and design our products to enable our customers to use them while complying with applicable data privacy and cybersecurity laws and/or customer-imposed controls, we have experienced cyberattacks. While these attacks have not to our knowledge had a material adverse impact on the Company to date, our internal systems and products may be vulnerable to further cyberattacks, security breaches, theft, programming errors or employee errors, which could lead to the compromise of confidential and sensitive data, unauthorized access, use, disclosure, modification or destruction of information, improper use of our systems, software solutions or networks, defective products, production downtimes and/or operational disruptions in violation of applicable law and/or contractual obligations. A significant actual or perceived risk of theft, loss, fraudulent use or misuse of customer, employee or other data, whether by us, our suppliers, distributors, customers or other third parties, as a result of employee error or malfeasance, or as a result of the compromise of software, security and other products we incorporate into our products, as well as non-compliance with applicable industry standards or our contractual or other legal obligations or privacy and information security policies regarding such data, could result in costs, fines, litigation or regulatory actions, or could lead customers to select products and services of our competitors. In addition, any such event could harm our reputation, cause unfavorable publicity or otherwise adversely affect certain potential customers' perceptions of the security and reliability of our services as well as our credibility and reputation, which could result in lost sales. Because of the global nature of our business, both our internal systems and products must comply with the applicable laws, regulations and standards in a number of jurisdictions, which continue to evolve and in certain cases, include provisions that are unclear. Government enforcement actions, including due to geopolitical concerns, and violations of data privacy and cybersecurity laws could be costly or interrupt our business operations. Any of the foregoing factors could result in reputational damage or civil or governmental proceedings and/or substantial monetary damages or fines, which could result in a material adverse effect on our competitive position, results of operations, cash flows or financial condition. As global standards and regulations relating to AI increase and change, they could result in additional costs, regulatory scrutiny, legal liability and reputational harm, including if we fail to comply with such standards and regulations. Additionally, misuse of sensitive data used in AI models may lead to privacy violations or non-compliance with data protection laws.

***Our business and financial performance depend on continued substantial investment in information technology infrastructure, which may not yield anticipated benefits, and may be adversely affected by cyberattacks on information technology infrastructure and products and other business disruptions.***

The efficient operation of our business requires continued substantial investment in technology infrastructure systems, including partial shifting from virtual private networks to cloud-based networks, and we must attract and retain qualified people to operate these systems, expand and improve them, integrate new systems effectively and efficiently convert to new systems when required. An inability to fund, acquire and implement these systems might impact our ability to respond effectively to changing customer expectations, manage our business, scale our solutions effectively or impact our customer service levels, which could put us at a competitive disadvantage and negatively impact our financial results. Repeated or prolonged interruptions of service due to problems with our systems or third-party technologies, whether or not in our control, could have a significant negative impact on our reputation and our ability to sell products and services. Furthermore, we are highly dependent upon a variety of internal computer and telecommunication systems to operate our business. Failure to design, develop and implement new technology infrastructure systems in an effective and timely manner, or to adequately invest in and maintain these systems, could result in the diversion of management's attention and resources and could materially adversely affect our operating results, competitive position and ability to efficiently manage our business. Our existing information systems may become obsolete, requiring us to transition our systems to a new platform. Such a transition would be time-consuming, costly and damaging to our competitive position, and could require additional management resources. Failure to implement and deploy new systems or replacement systems on the schedules anticipated, could materially adversely affect our operating results.

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In addition, our business may be impacted by disruptions to our own or third-party information technology ("IT") infrastructure, which could result from (among other causes) cyberattacks on or failures of such infrastructure or compromises to its physical security, as well as from damaging weather or other acts of nature. Cyber-based risks, in particular, are evolving and include attacks on our IT infrastructure, as well as attacks targeting the security, integrity and/or availability of the hardware, software and information installed, stored or transmitted in our products, including after the purchase of those products and when they are installed into third-party products, facilities or infrastructure. Such attacks could disrupt our business operations, our systems or those of third parties, and could impact the ability of our products to work as intended. We and some of our third-party suppliers have experienced cyber-based attacks, and, due to the evolving threat landscape, may continue to experience them going forward, potentially with more frequency. We continue to make investments and adopt measures designed to enhance our protection, detection, response, and recovery capabilities, and to mitigate potential risks to our technology, products, services and operations from potential cyberattacks. However, given the unpredictability, nature and scope of cyberattacks, it is possible that potential vulnerabilities could go undetected for an extended period. As a result of a cyberattack, we could potentially be subject to production downtimes, operational delays or other detrimental impacts on our operations or ability to provide products and services to our customers; destruction or corruption of data; security breaches; manipulation or improper use of our or third-party systems, networks or products; financial losses from remedial actions, loss of business, potential liability, penalties, fines and/or damage to our reputation, any of which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

***We depend on our intellectual property, and have access to certain intellectual property and information of our customers, suppliers and distributors; infringement or failure to protect our intellectual property could adversely affect our future growth and success.***

We rely on a combination of patents, trademarks, copyrights, trade secrets, nondisclosure agreements, customer and supplier agreements, license agreements, restrictive covenants, information technology security systems, internal controls and compliance systems and other measures to protect our intellectual property. We also rely on nondisclosure agreements, information technology security systems and other measures to protect certain customer and supplier information and intellectual property that we have in our possession or to which we have access. Our efforts to protect such intellectual property and proprietary rights may not be sufficient. We cannot be sure that our pending patent applications will result in the issuance of patents to us, that patents issued to or licensed by us in the past or in the future will not be challenged or circumvented by competitors or that these patents will be found to be valid or sufficiently broad to preclude our competitors from introducing technologies similar to those covered by our patents and patent applications. Our ability to protect and enforce our intellectual property rights also may be limited. In addition, we may be the target of competitor or other third-party patent enforcement actions seeking substantial monetary damages or seeking to prevent the sale and marketing of certain of our products or services. Our competitive position also may be adversely impacted by limitations on our ability to obtain possession of, and ownership or necessary licenses concerning, data important to the development or provision of our products or service offerings, or by limitations on our ability to restrict the use by others of data related to our products or services. Any of these events or factors could subject us to judgments, penalties and significant litigation costs or temporarily or permanently disrupt our sales and marketing of the affected products or services and could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

Operating outside the United States also exposes us to additional intellectual property risk. The laws and enforcement practices of certain jurisdictions in which we operate may not protect our intellectual property rights to the same extent as in the United States and may impose joint venture, technology transfer, local service or other foreign investment requirements, and restrictions that potentially compromise control over our technology and proprietary information. Failure of foreign jurisdictions to protect our intellectual property rights, an inability to effectively enforce such rights in foreign jurisdictions, or the imposition of foreign jurisdiction investment or sourcing restrictions or requirements could result in loss of valuable proprietary information and could impact our competitive position and financial results.

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**Risks Related to Our Common Stock**

***Anti-takeover provisions could enable our Board of Directors to resist a takeover attempt by a third party and limit the power of our shareholders.***

Otis' amended and restated certificate of incorporation and amended and restated bylaws contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with Otis' Board of Directors rather than to attempt a hostile takeover. These provisions include, among others, (1) the ability of our remaining directors to fill vacancies on Otis' Board of Directors (except in an instance where a director is removed by shareholders and the resulting vacancy is filled by shareholders); (2) limitations on shareholders' ability to call a special shareholder meeting; (3) rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings; and (4) the right of Otis' Board of Directors to issue preferred stock without shareholder approval.

In addition, we are subject to Section 203 of the Delaware General Corporation Law (the "DGCL"), which could have the effect of delaying or preventing a change of control that you may favor. Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with persons that acquire, more than 15% of the outstanding voting stock of a Delaware corporation may not engage in a business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or any of its affiliates becomes the holder of more than 15% of the corporation's outstanding voting stock.

We believe these provisions protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with Otis' Board of Directors and by providing Otis' Board of Directors with more time to assess any acquisition proposal. These provisions are not intended to make Otis immune from takeovers; however, these provisions apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that Otis' Board of Directors determines is not in the best interests of Otis and our shareholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

***Our amended and restated bylaws designate the state courts within the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could discourage lawsuits against Otis and our directors and officers.***

Otis' amended and restated bylaws provide that, unless Otis' Board of Directors otherwise determines, the state courts within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of Otis, any action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former director or officer or other employee of Otis to Otis or its shareholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty, any action asserting a claim against Otis or any current or former director or officer or other employee of Otis arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or amended and restated bylaws, any action asserting a claim relating to or involving Otis governed by the internal affairs doctrine, or any action asserting an "internal corporate claim" as that term is defined in Section 115 of the DGCL.

To the fullest extent permitted by law, this exclusive forum provision applies to state and federal law claims, including claims under the federal securities laws, including the Securities Exchange Act of 1934, as amended (the "Exchange Act"), although Otis shareholders will not be deemed to have waived Otis' compliance with the federal securities laws and the rules and regulations thereunder. The enforceability of similar exclusive forum provisions in other companies' organizational documents has been challenged in legal proceedings, and it is possible that, in connection with claims subject to exclusive federal jurisdiction, a court could find the exclusive forum provision contained in the amended and restated bylaws to be inapplicable or unenforceable.

This exclusive forum provision may limit the ability of our shareholders to bring a claim in a judicial forum that such shareholders find favorable for disputes with Otis or our directors or officers, which may discourage such lawsuits against Otis and our directors and officers. Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions, which could negatively affect our business, results of operations and financial condition.

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**Risks Related to the Separation**

***In connection with the Separation, each of RTX, Otis and Carrier agreed to indemnify the other parties for certain liabilities. If we are required to pay under these indemnities to RTX and/or Carrier, our financial results could be negatively impacted. Also, the RTX or Carrier indemnities may not be sufficient to hold us harmless from the full amount of liabilities for which RTX and Carrier are allocated responsibility, and RTX and/or Carrier may not be able to satisfy their respective indemnification obligations in the future.***

Pursuant to the Separation Agreement, the TMA and the EMA, each party agreed to indemnify the other parties for certain liabilities. Indemnities that we may be required to provide RTX and/or Carrier are not subject to any cap, may be significant and could negatively impact our business. Third parties could also seek to hold us responsible for any of the liabilities that RTX and/or Carrier has agreed to retain. The indemnities from RTX and Carrier for our benefit may not be sufficient to protect us against the full amount of such liabilities, and RTX and/or Carrier may not be able to fully satisfy their respective indemnification obligations. Any amounts we are required to pay pursuant to such indemnification obligations and other liabilities could require us to divert cash that would otherwise have been used in furtherance of our operating business. Moreover, even if we ultimately succeed in recovering from RTX or Carrier, as applicable, we may be temporarily required to bear these losses ourselves. Each of these risks could negatively affect our business, results of operations and financial condition.

***If the Separation, together with certain related transactions, were to fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, including as a result of subsequent acquisitions of our stock or the stock of RTX, we, as well as RTX, Carrier, and RTX's shareholders, could be subject to significant tax liabilities. In addition, if certain internal restructuring transactions were to fail to qualify as transactions that are generally tax-free for U.S. federal or non-U.S. income tax purposes, we, as well as RTX and Carrier could be subject to significant tax liabilities. In certain circumstances, we could be required to indemnify RTX for material taxes and other related amounts pursuant to indemnification obligations under the TMA.***

In connection with the Separation, our former parent UTC received a ruling from the IRS regarding certain U.S. federal income tax matters relating to the Separation and an opinion of outside counsel regarding the qualification of certain elements of the Separation under Section 355 of the Code. The IRS ruling and the opinion of counsel were based upon and rely on, among other things, various facts and assumptions, as well as certain representations, statements and undertakings of UTC (and RTX), Otis and Carrier, including those relating to the past and future conduct of UTC (and RTX), Otis and Carrier. Notwithstanding receipt of the IRS ruling and the opinion of counsel, the IRS could determine that the Separation and/or certain related transactions should be treated as taxable transactions for U.S. federal income tax purposes if it determines that any of the representations, assumptions or undertakings upon which the IRS ruling or the opinion of counsel was based were inaccurate or have not been complied with. In addition, the IRS ruling does not address all of the issues that are relevant to determining whether the Separation, together with certain related transactions, qualifies as a transaction that is generally tax-free for U.S. federal income tax purposes. The opinion of counsel represents the judgment of such counsel and is not binding on the IRS or any court, and the IRS or a court may disagree with the conclusions in the opinion of counsel. Accordingly, notwithstanding receipt by UTC of the IRS ruling and the opinion of counsel, there can be no assurance that the IRS will not assert that the Separation and/or certain related transactions did not qualify for tax-free treatment for U.S. federal income tax purposes or that a court would not sustain such a challenge.

If the distribution of Common Stock pursuant to the Separation were to fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code, in general, for U.S. federal income tax purposes, RTX would recognize a taxable gain as if it had sold the Common Stock in a taxable sale for its fair market value, and RTX shareholders who received Common Stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares. Even if the distribution of Common Stock pursuant to the Separation were to otherwise qualify as a tax-free transaction under Sections 355 and 368(a)(1)(D) of the Code, it may result in a taxable gain to RTX (but not its shareholders) under Section 355(e) of the Code if the Separation were deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50% or greater interest (by vote or value) in RTX or Otis. For this purpose, any acquisitions of RTX or Otis shares within the period beginning two years before the distribution of Common Stock pursuant to the Separation and ending two years after such distribution are presumed to be part of such a plan, although RTX or Otis may be able to rebut that presumption (including by qualifying for one or more safe harbors under applicable Treasury Regulations).

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In addition, in connection with and prior to the Separation, UTC and its subsidiaries completed various internal reorganization transactions. With respect to certain transactions undertaken as part of the internal reorganization, UTC obtained tax rulings in certain non-U.S. jurisdictions and/or opinions of external tax advisors, in each case, regarding the tax treatment of such transactions. Such tax rulings and opinions were based upon and relied on, among other things, various facts and assumptions, as well as certain representations (including with respect to certain valuation matters relating to the internal reorganization), statements and undertakings of UTC (and RTX), Otis, Carrier or their respective subsidiaries. If any of these representations or statements were, or become, inaccurate or incomplete, or if RTX, Otis, Carrier or any of their respective subsidiaries do not fulfill or otherwise comply with any such undertakings or covenants, such tax rulings and/or opinions may be invalid or the conclusions reached therein could be jeopardized. Further, notwithstanding receipt of any such tax rulings and/or opinions, there can be no assurance that the relevant taxing authorities will not assert that the tax treatment of the relevant transactions differs from the conclusions reached in the relevant tax rulings and/or opinions. In the event the relevant taxing authorities prevail with any challenge in respect of any relevant transaction, we, as well as RTX and Carrier, could be subject to significant tax liabilities.

Under the TMA, Otis generally is required to indemnify RTX and Carrier for any taxes resulting from the Separation and certain related transactions (and any related costs and other damages) to the extent such amounts resulted from (1) an acquisition of all or a portion of the equity securities or assets of Otis, whether by merger or otherwise (and regardless of whether we participated in or otherwise facilitated the acquisition), (2) other actions or failures to act by Otis or (3) certain of Otis' representations, covenants or undertakings contained in any of the Separation-related agreements and documents or in any documents relating to the IRS ruling and/or the opinion of counsel being incorrect or violated. Further, under the TMA, we generally are required to indemnify RTX and Carrier for a specified portion of any taxes (and any related costs and other damages) (a) arising as a result of the failure of the Separation and certain related transactions to qualify as a transaction that is generally tax-free (including as a result of Section 355(e) of the Code) or a failure of any internal separation transaction that is intended to qualify as a transaction that is generally tax-free to so qualify, in each case, to the extent such amounts do not result from a disqualifying action by, or acquisition of equity securities of, Otis, Carrier or RTX or (b) arising from an adjustment, pursuant to an audit or other tax proceeding, with respect to any transaction undertaken in connection with the Separation that is not intended to qualify as a transaction that is generally tax-free. Any such indemnity obligations could be material.

**Item 1B. Unresolved Staff Comments**

None.

**Item 1C. Cybersecurity**

***Cybersecurity Risk Management and Strategy***

The security of our products, services and corporate network is a key priority for our business. We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats (as defined in Item 106(a) of Regulation S-K). These risks include, among other things, operational risks, intellectual property theft, fraud, extortion, harm to employees, customers, business partners or the riding public, violation of privacy or security laws and other litigation and legal risk, and reputational risks.

Otis has taken a risk-based approach to cybersecurity, which considers the sensitivity and volume of the relevant data, the potential effects on third parties and individuals, the needs of our business, and the costs and/or practicality of remediation. Based on this qualitative and quantitative assessment, we determine if identified cybersecurity risks are at an acceptable level, or should be mitigated or transferred.

We have implemented cybersecurity policies throughout our operations, including designing and incorporating cybersecurity, as appropriate, into our products and services while they are being developed. Our enterprise risk management ("ERM") process considers cybersecurity threat risks alongside other company risks as part of our overall risk assessment process. Additionally, cybersecurity functional groups incorporate external research and intelligence gathering to keep the organization informed of new and evolving cyber risks.

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We have implemented several cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage material risks from cybersecurity threats, and to protect against, detect and respond to cybersecurity incidents (as defined in Item 106(a) of Regulation S-K), including, among others, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• established a global Security Operations Center to support visibility to cybersecurity incidents in real time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• require all salaried Otis colleagues to complete an annual cybersecurity training program where specific threats and scenarios are highlighted based on our analysis of current risks to the organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• conduct regular phishing email simulations for employees and contractors with access to corporate email systems to enhance awareness and responsiveness to such possible threats;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain a robust Cybersecurity Incident Response Plan, which provides a framework for handling cybersecurity incidents based on, among other factors, the potential severity of the incident and facilitates cross-functional coordination across Otis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• periodically run tabletop exercises to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain cybersecurity insurance and regularly review our policy and levels of coverage based on current risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• monitor emerging data protection and cybersecurity laws, and implement changes to our processes, systems and offerings designed to comply, and through policy, practice and contract (as applicable) require employees, as well as third parties who provide services on our behalf, to treat customer information and data with care;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• conduct several cyber-specific internal audits per year; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• engage consultants and other third parties in connection with our cybersecurity practices.

As part of the above processes, we conduct monthly third-party scanning of our network.

Otis also applies a risk-based approach to mitigate cybersecurity risks associated with our use of third-party service providers, including those in our supply chain that have access to our customer and employee data or our systems. Third-party risks are included within our ERM process. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers. We perform due diligence on third parties that have access to our most critical systems, data or facilities that house such systems or data, and based on our risk assessment put in place contractual undertakings and oversight, to manage and reduce the risks associated with such third-party vendors. Such contractual undertakings include requirements to comply with administrative, technical and physical safeguards to satisfy the requirements for certification under ISO 27001, to provide notification of cyber incidents involving our systems or data and an agreement to be subject to cybersecurity audits, which we conduct as appropriate.

While Otis has not experienced a material cybersecurity incident to date, see Item 1A in this Form 10-K for more information regarding cybersecurity-related risks that could materially affect our business strategy, results of operations, or financial condition, under the headings "Information security, data privacy and identity protection may require significant resources and present certain risks to our business, reputation and financial condition", "Our business and financial performance depend on continued substantial investment in information technology infrastructure, which may not yield anticipated benefits, and may be adversely affected by cyberattacks on information technology infrastructure and products and other business disruptions" and "We depend on our intellectual property, and have access to certain intellectual property and information of our customers, suppliers and distributors; infringement or failure to protect our intellectual property could adversely affect our future growth and success".

***Cybersecurity Governance***

Otis has established a three-level governance model for managing cybersecurity risks. Cybersecurity risks are overseen by the Audit Committee of our Board of Directors (the "Board"). Our Chief Digital Officer ("CDO") and Chief Information Security Officer ("CISO") briefed the Audit Committee and other members of the Board on the Otis Cybersecurity Program, the cyber-threat landscape and cyber-resiliency two times in 2025. Our Cybersecurity Program is directed by both our CDO and CISO and we have established a Cyber Governance Council and Steering Committee made up of senior management (including our CEO). These committees are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan.

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Members of our Board also received briefings on risks associated with AI, data protection (including data privacy laws), our incident response plan and our IT infrastructure in 2025. In addition, the Audit Committee participated in a simulated cybersecurity incident tabletop exercise in 2025. Several members of our Board hold a CERT Certificate in Cybersecurity Oversight issued by the CERT Division of the Software Engineering Institute at Carnegie Mellon University, and two members of our Audit Committee attended a continuing education class related to AI governance and strategy through the National Association of Corporate Directors ("NACD") in 2025.

Our CDO and CISO collectively have over 25 years of prior work experience in various roles involving managing information security, developing cybersecurity strategy and implementing effective information and cybersecurity programs, as well as relevant degrees and certifications, including Certified Information Security Manager certification and NACD Cyber training. All Otis colleagues engaged in cybersecurity are required to have a baseline certification (such as Security+, CISSP or CISM), as well as an operational cyber certification (for example, incident response or forensics analysis).

**Item 2. Properties**

We have a direct physical presence in more than 70 countries with an overall property portfolio comprising approximately 13 million square feet of space. We have approximately 2,300 facilities, of which approximately 47%, 40% and 13% are located in EMEA, Asia and the Americas, respectively. We operate more than 1,400 branches and offices, 11 R&D centers and 16 manufacturing facilities globally. Our principal manufacturing facilities are located across Brazil, China, Japan, France, India, Korea, Spain, and the United States, of which 13 are owned. Our principal R&D centers are located in China, France, Germany, India, Japan, Spain and the United States. Our branches and R&D centers typically support both our New Equipment and Service segments.

Our fixed assets as of December 31, 2025 include manufacturing facilities and non-manufacturing facilities, such as warehouses, and a substantial quantity of machinery and equipment, most of which are general purpose machinery and equipment using special jigs, tools and fixtures and in many instances having automatic control features and special adaptations. The facilities, warehouses, machinery and equipment in use as of December 31, 2025 are substantially in good operating condition.

**Item 3. Legal Proceedings**

For a discussion regarding material legal proceedings, see "Note 20: Contingent Liabilities" to the Consolidated Financial Statements within Item 8 of this Form 10-K.

**Item 4. Mine Safety Disclosures**

Not applicable.

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**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

Our Common Stock is listed on the New York Stock Exchange under the symbol "OTIS". There were approximately 16,800 registered shareholders as of January 22, 2026. The information required by Item 5 with respect to securities authorized for issuance under equity compensation plans is incorporated by reference to Part III, Item 12 in this Form 10-K.

**Stock Performance Graph**

The following table and graph illustrate the total return from December 31, 2020 through December 31, 2025, for (1) our Common Stock, (2) the Standard and Poor's (the "S&P") 500 Index, and (3) the S&P 500 Industrials Sector Index. The graph and table assume that $100.00 was invested on December 31, 2020 in each of our Common Stock, the S&P 500 Index and the S&P 500 Industrials Sector Index, and that any dividends were reinvested. The comparison reflected in the graph and the table are not intended to forecast the future performance of our Common Stock and may not be indicative of our future performance.

**Comparison of Cumulative Total Return — Table**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2020** | **December 31, 2021** | **December 31, 2022** | **December 31, 2023** | **December 31, 2024** | **December 31, 2025** |
| **Otis** | $100 | $130 | $119 | $138 | $145 | $139 |
| **S&P 500 Index** | 100 | 129 | 105 | 133 | 166 | 196 |
| **S&P 500 Industrials Sector Index** | 100 | 121 | 114 | 135 | 159 | 190 |

---

**Comparison of Cumulative Total Return — Graph**

![Stock Performance Graph 2025 JPEG v2.jpg](otis-20251231_g2.jpg)

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**Issuer Purchases of Equity Securities**

The following table provides information about our purchases during the quarter ended December 31, 2025 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act.

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| | | | | |
|:---|:---|:---|:---|:---|
| **2025** | **Total Number of Shares Purchased<br>(thousands)** | **Average Price Paid per Share** <sup>(1)</sup> | **Total Number of Shares Purchased as<br>Part of a Publicly Announced Program<br>(thousands)** | **Approximate Dollar Value of Shares that<br>May Yet Be Purchased Under the Program<br>(dollars in millions)** |
| October 1 — October 31 |  | $— |  | $1300 |
| November 1 — November 30 |  |  |  | $1300 |
| December 1 — December 31 |  |  |  | $1300 |
| Total |  | $— |  |  |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Average price paid per share includes any broker commissions associated with the repurchases.

On January 16, 2025, 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 $2.0 billion of Common Stock. As of December 31, 2025, the maximum dollar value of shares that may yet be purchased under this current program was approximately $1.3 billion.

Under these programs, 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 Exchange Act.

**Item 6. [Reserved]**

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**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

**BUSINESS OVERVIEW**

We are the world's leading elevator and escalator manufacturing, installation, service and modernization 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 range from relatively simple upgrades of interior finishes and aesthetics to complex upgrades of larger components and sub-systems, including the machine, ropes or belts, safety systems and the entire car or escalator. 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 colleagues. 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 we pursue a global strategy 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.

For additional discussion of our business, refer to Item 1 in this Form 10-K.

***<u>UpLift</u>***

Announced in July 2023, UpLift is a program with the goal of transforming our operating model. UpLift includes the standardization of our processes and improvement of our supply chain procurement, among other aspects of the program, as well as organizational changes which result in restructuring actions. The annual run-rate savings generated by UpLift are approximately $200 million. As of 2025, total restructuring and other incremental costs to complete the transformation ("UpLift transformation costs") are approximately $300 million, including trailing restructuring costs expected in 2026 of $18 million.

The Company generated approximately $70 million of pre-tax savings in each of 2025 and 2024, including run-rate savings of approximately $200 million and $120 million, respectively, driven by our simplified operating structure, optimized organizational spans and layers, and reduced digital technology costs. These savings are primarily reflected in Selling, general and administrative expenses.

UpLift costs incurred are as follows:

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| UpLift restructuring costs | $**76** | $31 | $25 |
| UpLift transformation costs | **69** | 65 | 16 |
| Total UpLift costs | $**145** | $96 | $41 |

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Total UpLift costs incurred to date are $282 million, including $132 million of restructuring costs and $150 million of transformation costs.

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UpLift restructuring costs are primarily severance costs and are recorded primarily in Selling, general and administrative in the Consolidated Statements of Operations. UpLift transformation costs are primarily for consultants, third-party service providers and personnel focused on designing and implementing a centralized service delivery model that supports our new organizational structure, including the standardization of our supply chain and digital technology procurement. These costs are recorded in Other income (expense), net in the Consolidated Statements of Operations.

For further details, refer to the discussion on restructuring costs in the "Results of Operations," as well as "Note 15: Restructuring and Transformation Costs" to the Consolidated Financial Statements in Item 8 in this Form 10-K.

***<u>German Tax Litigation</u>***

In August 2024, we received a favorable ruling regarding a German tax litigation. As a result, we recorded income tax benefits of approximately $185 million and related interest income of approximately $200 million, which are included in Income tax expense (benefit), net and Interest expense (income), net, respectively, in the Consolidated Statements of Operations for 2024. Additionally, pursuant to the Tax Matters Agreement ("TMA") with RTX Corporation ("RTX", our former parent), the Company recorded indemnification expense of $194 million for amounts due to RTX resulting from the outcome of the German tax litigation. This expense is included in Other income (expense), net in the Consolidated Statements of Operations for 2024.

Based on additional information received from RTX during the year, which resulted in additional indemnification expense of $67 million, offset by indemnity payments made to RTX of $205 million, the Company now estimates the amount payable to RTX to be $56 million. The indemnification expense is included in Other income (expense), net in the Consolidated Statements of Operations in 2025. This estimate could further change due to the parties' continuing dispute concerning the scope of the final indemnity amount, which will be resolved pursuant to the procedures set forth in the TMA.

For further details, refer to "Note 14: Income Taxes" and "Note 20: Contingent Liabilities" to the Consolidated Financial Statements in Item 8 in this Form 10-K.

***<u>Impact of Global Macroeconomic Conditions on Our Company</u>***

Global macroeconomic conditions have impacted, and continue to impact, aspects of the Company's operations and overall financial performance. These macroeconomic conditions include, among others, inflationary pressures, high interest rates, tighter credit conditions and changes in global trade policies including higher tariffs in the U.S. and other countries. These macroeconomic trends could continue to impact our business, including impacts to overall financial performance in 2026, as a result of the following, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Higher costs of products and services due to tariffs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Customer demand impacting our new equipment, maintenance and repair, and modernization businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Customer liquidity constraints and related credit reserve;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cancellations or delays of customer orders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supplier liquidity, as well as supplier and raw material capacity constraints, delays and related costs.

Other than the impact from new tariffs currently in effect of approximately $20 million during 2025 and a similar impact anticipated in 2026, we currently do not expect any significant impact to our capital and financial resources from these macroeconomic conditions, 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 of this item of this Form 10-K for further detail and Item 1A in this Form 10-K for macroeconomic risks related to our business.

***<u>Risks Associated with Ongoing Conflicts</u>***

The ongoing conflict between Russia and Ukraine has resulted in worldwide geopolitical and macroeconomic uncertainty, including volatile commodity markets, foreign exchange fluctuations, supply chain disruptions, increased risk of cybersecurity incidents, reputational risk, increased operating costs (including fuel and other input costs), environmental, health and safety risks related to securing and maintaining facilities, additional sanctions and other regulations (including restrictions on the transfer of funds to and from Russia). We do not have operations in Russia.

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To the extent possible, we continue to operate our business in Ukraine, which represented less than 1% of our 2025, 2024 and 2023 net sales and operating profit.

Additionally, we do not have operations or material net sales in Israel or Gaza. Although we have operations in the Middle East and transport products through the Red Sea, we currently do not expect the recent conflicts in that region to have a material impact on our business.

We cannot predict how the events described above will evolve. Depending on the ultimate outcomes of these conflicts, which remain uncertain, they could heighten certain risks disclosed in Item 1A in this Form 10-K, including but not limited to, adverse effects on macroeconomic conditions, including increased inflation, constraints on the availability of commodities, supply chain disruption and decreased business spending; cyber-incidents; disruptions to our or our business partners' global technology infrastructure, including through cyberattack or cyber-intrusion; adverse changes in international trade policies and relations; claims, litigation and regulatory enforcement; our ability to implement and execute our business strategy; terrorist activities; our exposure to foreign currency fluctuations; reputational risk; and constraints, volatility, or disruption in the capital markets, any of which could have a material adverse effect on our business, results of operations, cash flows and financial condition.

***<u>Sustainability-related matters</u>***

There have been no, and we do not expect there to be in the near term, material impacts on our business, financial condition or results of operations as a result of compliance with legislation or regulatory rules regarding climate change, from the known physical effects of climate change or as a result of implementing our sustainability-related initiatives or from transitional risks such as increased regulations or customer shifting preference toward low carbon products, as determined under our climate scenarios. Other climate change concerns, however, could subject us to additional costs and restrictions, and we are not able to predict how such regulations or concerns would affect our business, operations or financial results. For a discussion of risks associated with sustainability-related matters, see Item 1A in this Form 10-K.

For a discussion of Otis' climate near-term science-based targets, see the discussion under "Sustainability and Responsibility" in Item 1 in this Form 10-K.

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**RESULTS OF OPERATIONS**

**Net Sales**

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Net sales | $**14431** | $14261 | $14209 |
| Percentage change year-over-year | **1%** | —% | 4% |

---

The factors contributing to the total percentage change year-over-year in total Net sales are as follows:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Organic volume | **— %** | 1% |
| Foreign currency translation | **1%** | (1)% |
| Acquisitions and divestitures, net and Other | **— %** | —% |
| Total % change | **1%** | —% |

---

The Organic volume was flat for 2025 driven by an increase in organic sales of 5% in Service, offset by a decrease of (7)% in New Equipment.

The Organic volume increase of 1% for 2024 was driven by an increase in organic sales of 7% in Service, offset by a decrease of (6)% in New Equipment.

See "Segment Review" below for a discussion of Net sales by segment.

**Cost of Products and Services Sold**

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Cost of products and services sold | $**10061** | $10004 | $10016 |
| Percentage change year-over-year | **1%** | —% | 3% |

---

The factors contributing to the percentage change year-over-year in total cost of products and services sold are as follows:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Organic volume | **(1)%** | 1% |
| Foreign currency translation | **1%** | (1)% |
| Acquisitions and divestitures, net and Other | **1%** | —% |
| Total % change | **1%** | —% |

---

The Organic volume decrease of (1)% in total cost of products and services sold in 2025 was primarily driven by the organic sales changes noted above. Productivity was partially offset by the impact of tariffs and inflationary pressures, including higher labor costs.

The Organic volume increase of 1% in total cost of products and services sold in 2024 was primarily driven by the organic sales increases noted above and inflationary pressures, including annual wage increases and higher Service-related material costs, partially offset by productivity and lower commodity prices, primarily steel.

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**Gross Margin**

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Gross margin | $**4370** | $4257 | $4193 |
| Gross margin percentage | **30.3%** | 29.9% | 29.5% |

---

Gross margin percentage increased 40 basis points in 2025 compared to 2024, primarily due to the increase in Service sales and decrease in New Equipment sales and the benefits from productivity, partially offset by the inflationary pressures described above.

Gross margin percentage increased 40 basis points in 2024 compared to 2023, due to Service sales growing faster than New Equipment sales, the benefits from productivity and lower commodity prices, partially offset by the inflationary pressures described above.

**Research and Development**

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Research and development | $**152** | $152 | $144 |
| Percentage of Net sales | **1.1%** | 1.1% | 1.0% |

---

Research and development was relatively flat in 2025 compared to 2024 and 2023. Research and development includes product development and innovation, including digital features, enhancements to current elevator and escalator systems, and the development of the next-generation products.

**Selling, General and Administrative**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Selling, general and administrative | $**1979** | $1861 | $1884 |
| Percentage of Net sales | **13.7%** | 13.0% | 13.3% |

---

Selling, general and administrative expenses increased $118 million in 2025 compared to 2024, driven by higher restructuring costs, annual wage increases, other employment-related costs and the impact from foreign exchange, partially offset by savings resulting from UpLift.

Selling, general and administrative expenses decreased $23 million in 2024 compared to 2023, driven by savings resulting from UpLift, lower restructuring costs and favorable foreign exchange impacts, partially offset by annual wage increases and higher other employment-related costs.

Selling, general and administrative expenses as a percentage of Net sales increased 70 basis points in 2025 compared to 2024, and decreased 30 basis points in 2024 compared to 2023.

**Restructuring Costs**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| UpLift restructuring costs | $**76** | $31 | $25 |
| Other restructuring costs | **54** | 40 | 42 |
| Total restructuring costs | $**130** | $71 | $67 |

---

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.

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UpLift restructuring costs were $76 million and $31 million in 2025 and 2024, respectively. We also incurred $69 million and $65 million of UpLift transformation costs in 2025 and 2024, respectively, which are primarily for consultants, third-party service providers and personnel focused on designing and implementing a centralized service delivery model that supports our new organizational structure, including the standardization of our supply chain and digital technology procurement. These costs are recorded in Other income (expense), net in the Consolidated Statements of Operations.

Other restructuring action costs were $54 million in 2025 and included $36 million of costs related to 2025 actions and $18 million of costs related to 2024 actions.

Most of the expected restructuring charges will require cash payments, which we have funded and expect to continue to fund with cash generated from operations. The table below presents approximate cash outflows related to the restructuring actions during 2025, and the expected cash payments to complete the actions announced:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **UpLift Actions** | **Other Actions** | **Total Restructuring** |
| Cash outflows during the year ended December 31, 2025 | $39 | $49 | $88 |
| Expected cash payments remaining to complete actions announced | 68 | 40 | 108 |

---

The approved UpLift restructuring actions are expected to generate approximately $103 million in annual recurring savings by the end of 2025, primarily in Selling, general and administrative expenses, of which approximately $84 million and $39 million were realized during 2025 and 2024, respectively, including $50 million of incremental savings compared to 2024.

For other restructuring actions, we generally expect to achieve annual recurring savings within the two-year period subsequent to initiating the actions, including $33 million for the 2025 actions and $27 million for the 2024 actions, split evenly in Cost of Products and Services Sold and in Selling, general and administrative expenses. Approximately $43 million of savings was realized for the 2025 and 2024 actions during 2025.

For additional discussion of restructuring and transformation costs, see "Note 15: Restructuring and Transformation Costs" to the Consolidated Financial Statements in Item 8 in this Form 10-K.

**Other Income (Expense), Net**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Other income (expense), net | $**(106)** | $(236) | $21 |

---

Other income (expense), net primarily includes the impact of changes in the fair value and settlement of derivatives, gains or losses on sale of businesses and fixed assets, earnings from equity method investments, fair value changes on equity securities, impairments, UpLift transformation costs, non-recurring Separation-related adjustments and certain other operating items.

The change in Other income (expense), net of $130 million in 2025 compared to 2024, was primarily driven by lower Separation-related adjustments of $107 million, gains on sales of assets of $29 million, lower impairment loss related to net assets held for sale of $8 million and favorable foreign currency mark-to-market adjustments, partially offset by higher UpLift transformation costs of $4 million.

The change in Other income (expense), net of $(257) million in 2024 compared to 2023, was primarily driven by Separation-related adjustments of $177 million, UpLift transformation costs of $65 million, $18 million of impairment loss related to net assets held for sale, foreign currency mark-to-market adjustments, and non-recurring litigation-related settlement costs, including $18 million in the second quarter of 2024, partially offset by other reserve adjustments.

For additional discussion of the Separation-related adjustments, Litigation-related settlement costs and Held for sale impairment, see "Note 21: Segment Financial Data" to the Consolidated Financial Statements in Item 8 in this Form 10-K. For additional discussion of UpLift transformation costs, see "Note 15: Restructuring and Transformation Costs" to the Consolidated Financial Statements in Item 8 in this Form 10-K.

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**Interest Expense (Income), Net**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Interest expense (income), net | $**196** | $(31) | $150 |

---

Interest expense (income), net primarily relates to interest expense on our external debt, offset by interest income earned on cash balances and short-term investments, and also includes interest related to tax matters.

The change in Interest expense (income), net of $227 million in 2025 compared to 2024, was primarily driven by the absence of $200 million of interest income related to the favorable ruling received in August 2024 regarding a tax litigation in Germany, higher interest related to the $600 million and €850 million unsecured, unsubordinated debt issued in November 2024, as well as the $500 million unsecured, unsubordinated debt issued in September 2025, partially offset by lower interest expense related to the repayment of the $1.3 billion unsecured, unsubordinated debt in April 2025. Interest expense (income), net in 2025 was also impacted by interest reserve adjustments related to non-recurring tax items.

The change in Interest expense (income), net of $(181) million in 2024 compared to 2023, was primarily driven by approximately $200 million related to the German tax litigation, interest reserve adjustments and higher interest income, partially offset by higher interest expense related to the $600 million and €850 million unsecured, unsubordinated debt issued in November 2024 and $750 million unsecured, unsubordinated debt issued in August 2023.

The average interest rate on our external debt for 2025, 2024 and 2023 was 2.8%, 2.5% and 2.1%, respectively.

For additional discussion of borrowings, see "Note 8: Borrowings and Lines of Credit" to the Consolidated Financial Statements in Item 8 in this Form 10-K. For additional discussion of German tax litigation, see "Note 20: Contingent Liabilities" and "Note 21: Segment Financial Data" to the Consolidated Financial Statements in Item 8 in this Form 10-K.

**Income Taxes**

---

| | | | |
|:---|:---|:---|:---|
| | **2025** | **2024** | **2023** |
| Effective tax rate | **24.8%** | 15.0% | 26.2% |

---

The 2025 effective tax rate is higher than the statutory U.S. rate primarily due to higher international tax rates as compared to the lower U.S. federal statutory rate. The 2025 effective tax rate is higher than the 2024 effective tax rate primarily due to the absence of estimated tax benefits arising from the resolution of the German tax litigation and the absence of the reduction in a deferred tax liability related to the mitigation of future repatriation costs, both recorded in 2024, and the tax effect of the increase in our estimated nondeductible TMA indemnity obligation payable to RTX recorded in 2025. These impacts were partially offset by an incremental benefit related to foreign-derived intangible income and foreign valuation allowance releases recorded in 2025.

The 2024 effective tax rate is lower than the 2023 effective tax rate and the statutory U.S. rate primarily due to recognition of estimated tax benefits arising from the resolution of the German tax litigation and the reduction of a deferred tax liability related to the mitigation of future repatriation costs.

The 2023 effective tax rate is higher than the statutory U.S. rate primarily due to higher international tax rates as compared to the lower U.S. federal statutory rate.

For additional discussion of income taxes and the effective income tax rate, see "Note 14: Income Taxes" to the Consolidated Financial Statements in Item 8 in this Form 10-K.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**Noncontrolling Interest in Subsidiaries' Earnings and Net Income Attributable to Otis Worldwide Corporation**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Noncontrolling interest in subsidiaries' earnings | $**71** | $89 | $92 |
| Net income attributable to Otis Worldwide Corporation | $**1384** | $1645 | $1406 |

---

Noncontrolling interest in subsidiaries' earnings decreased in 2025 in comparison to 2024, primarily driven by lower net income from non-wholly owned subsidiaries. Other than our acquisition of the noncontrolling shares of Otis Electric during the fourth quarter of 2025, ownership interest in the underlying non-wholly owned subsidiaries has remained generally consistent year-over-year. See "Note 1: Business Overview" to the Consolidated Financial Statements in Item 8 in this Form 10-K for further discussion of the noncontrolling interest acquisition.

Noncontrolling interest in subsidiaries' earnings were relatively flat in 2024 in comparison to 2023. Other than our acquisition of the noncontrolling shares of our subsidiary in Japan during the second quarter of 2024, ownership interest in the underlying non-wholly owned subsidiaries has remained generally consistent year-over-year. See "Note 1: Business Overview" to the Consolidated Financial Statements in Item 8 in this Form 10-K for further discussion of the noncontrolling interest acquisition.

Net income attributable to Otis Worldwide Corporation decreased in 2025 compared to 2024, due to a higher effective tax rate and higher interest expense, partially offset by higher operating profit (including the impact of foreign exchange rates) and lower noncontrolling interest in subsidiaries' earnings.

Net income attributable to Otis Worldwide Corporation increased in 2024 compared to 2023, due to a lower effective tax rate and lower interest expense, partially offset by lower operating profit (including the unfavorable impact of foreign exchange rates).

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**Segment Review**

Summary performance for our operating segments for 2025, 2024 and 2023 was as follows:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Net Sales** | **Net Sales** | **Net Sales** | **Operating Profit** | **Operating Profit** | **Operating Profit** | **Operating Profit Margin** | **Operating Profit Margin** | **Operating Profit Margin** |
|<br>***(dollars in millions)*** | **2025** | **2024** | **2023** | **2025** | **2024** | **2023** | **2025** | **2024** | **2023** |
| New Equipment | $**4989** | $5367 | $5812 | $**240** | $329 | $381 | **4.8%** | 6.1% | 6.6% |
| Service | **9442** | 8894 | 8397 | **2374** | 2185 | 2014 | **25.1%** | 24.6% | 24.0% |
| &nbsp;&nbsp;&nbsp;Total segment | **14431** | 14261 | 14209 | **2614** | 2514 | 2395 | **18.1%** | 17.6% | 16.9% |
| Corporate and Unallocated |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General corporate expenses and other | **—** | **—** | **—** | **180** | 158 | 126 |  |  |  |
| &nbsp;&nbsp;&nbsp;UpLift restructuring | **—** | **—** | **—** | **76** | 31 | 25 |  |  |  |
| &nbsp;&nbsp;&nbsp;Other restructuring | **—** | **—** | **—** | **54** | 40 | 42 |  |  |  |
| &nbsp;&nbsp;&nbsp;UpLift transformation costs | **—** | **—** | **—** | **69** | 65 | 16 |  |  |  |
| &nbsp;&nbsp;&nbsp;Separation-related reserve adjustment | **—** | **—** | **—** | **70** | 177 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Litigation-related settlement costs | **—** | **—** | **—** | **21** | 18 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Held for sale impairment | **—** | **—** | **—** | **10** | 18 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other, net | **—** | **—** | **—** | **1** | (1) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total | $**14431** | $14261 | $14209 | $**2133** | $2008 | $2186 | **14.8%** | 14.1% | 15.4% |

---

**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 2025, 2024 and 2023 was as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | **Total Increase (Decrease)<br>Year-Over-Year for:** | **Total Increase (Decrease)<br>Year-Over-Year for:** | **Total Increase (Decrease)<br>Year-Over-Year for:** | **Total Increase (Decrease)<br>Year-Over-Year for:** |
|<br>***(dollars in millions)*** | **2025** | **2024** | **2023** | **2025 compared with 2024** | **2025 compared with 2024** | **2024 compared with 2023** | **2024 compared with 2023** |
| Net sales | $**4989** | $5367 | $5812 | $**(378)** | **(7)%** | $(445) | (8)% |
| Cost of sales | **4157** | 4443 | 4837 | **(286)** | **(6)%** | (394) | (8)% |
|  | **832** | 924 | 975 | **(92)** | **(10)%** | (51) | (5)% |
| Operating expenses | **592** | 595 | 594 | **(3)** | **(1)%** | 1 | —% |
| Operating profit | $**240** | $329 | $381 | $**(89)** | **(27)%** | $(52) | (14)% |
| Operating profit margin | **4.8%** | 6.1% | 6.6% |  |  |  |  |

---

Summary analysis of the Net sales change for New Equipment for 2025 and 2024 compared with the prior years was as follows:

---

| | | |
|:---|:---|:---|
| **Components of Net sales change:** | **2025** | **2024** |
| Organic volume | **(7)%** | (6)% |
| Foreign currency translation | **— %** | (1)% |
| Acquisitions/Divestitures, net and Other | **— %** | (1)% |
| Total % change | **(7)%** | (8)% |

---

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

***2025 Compared with 2024***

The organic sales decrease of (7)% was driven by a greater than (20)% decline in China and high single-digit decline in Americas, partially offset by mid single-digit growth in EMEA and Asia Pacific.

New Equipment operating profit decreased $(89) million. The impacts of lower volume, unfavorable price and tariff headwinds, and regional and product mix were partially offset by productivity, including the benefits of restructuring actions. Operating margin decreased 130 basis points.

***2024 Compared with 2023***

The organic sales decrease of (6)% was driven by a greater than 20% decline in China, partially offset by mid single-digit growth in Americas and Asia Pacific and low single-digit growth in EMEA.

New Equipment operating profit decreased $(52) million including foreign exchange headwinds of $(8) million. The impacts of lower volume and unfavorable regional and product mix were partially offset by favorable price, productivity including the benefits from UpLift, and commodity tailwinds. Operating margin decreased 50 basis points.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**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 range from relatively simple upgrades of interior finishes and aesthetics, to complex upgrades of larger components and sub-systems, including the machine, ropes or belts, safety systems and the entire car or escalator. 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 2025, 2024 and 2023 was as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | **Total Increase (Decrease)<br>Year-Over-Year for:** | **Total Increase (Decrease)<br>Year-Over-Year for:** | **Total Increase (Decrease)<br>Year-Over-Year for:** | **Total Increase (Decrease)<br>Year-Over-Year for:** |
|<br>***(dollars in millions)*** | **2025** | **2024** | **2023** | **2025 compared with 2024** | **2025 compared with 2024** | **2024 compared with 2023** | **2024 compared with 2023** |
| Net sales | $**9442** | $8894 | $8397 | $**548** | **6%** | $497 | 6% |
| Cost of sales | **5860** | 5533 | 5173 | **327** | **6%** | 360 | 7% |
|  | **3582** | 3361 | 3224 | **221** | **7%** | 137 | 4% |
| Operating expenses | **1208** | 1176 | 1210 | **32** | **3%** | (34) | (3)% |
| Operating profit | $**2374** | $2185 | $2014 | $**189** | **9%** | $171 | 8% |
| Operating profit margin | **25.1%** | 24.6% | 24.0% |  |  |  |  |

---

Summary analysis of the Net sales change for Service for 2025 and 2024 compared with the prior years was as follows:

---

| | | |
|:---|:---|:---|
| **Components of Net sales change:** | **2025** | **2024** |
| Organic volume | **5%** | 7% |
| Foreign currency translation | **1%** | (1)% |
| Acquisitions/Divestitures, net and Other | **— %** | —% |
| Total % change | **6%** | 6% |

---

***2025 Compared with 2024***

*Net Sales*

The organic sales increase of 5% is due to increases in maintenance and repair of 4% and modernization of 9%.

---

| | | |
|:---|:---|:---|
| **Components of Net sales change:** | **Maintenance and Repair** | **Modernization** |
| Organic volume | **4%** | **9%** |
| Foreign currency translation | **1%** | **— %** |
| Acquisitions/Divestitures, net and Other | **— %** | **1%** |
| Total % change | **5%** | **10%** |

---

*Operating profit*

Service operating profit increased $189 million including foreign exchange tailwinds of $36 million. Higher volume, improved pricing, productivity and gains on sales of assets of $19 million, were partially offset by inflationary pressures including higher labor costs, and mix. Operating margin increased 50 basis points.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

***2024 Compared with 2023***

*Net Sales*

The organic sales increase of 7% is due to increases in maintenance and repair of 6%, and modernization of 12%.

---

| | | |
|:---|:---|:---|
| **Components of Net sales change:** | **Maintenance and Repair** | **Modernization** |
| Organic volume | 6% | 12% |
| Foreign currency translation | (1)% | (2)% |
| Acquisitions/Divestitures, net and Other | —% | —% |
| Total % change | 5% | 10% |

---

*Operating Profit*

Service operating profit increased $171 million including foreign exchange headwinds of $(21) million. Higher volume, improved pricing on maintenance contracts, and productivity including the benefits from UpLift were partially offset by inflationary pressures, including annual wage increases and higher material costs. Operating margin increased 60 basis points.

**Corporate and Unallocated**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| General corporate expenses and other | $**180** | $158 | $126 |
| UpLift restructuring | **76** | 31 | 25 |
| Other restructuring | **54** | 40 | 42 |
| UpLift transformation costs | **69** | 65 | 16 |
| Separation-related adjustments | **70** | 177 |  |
| Litigation-related settlement costs | **21** | 18 |  |
| Held for sale impairment | **10** | 18 |  |
| Other, net | **1** | (1) |  |
| Total Corporate and Unallocated | $**481** | $506 | $209 |

---

General corporate expenses and other increased $22 million and $32 million in 2025 compared to 2024 and 2024 compared to 2023, respectively, primarily due to higher corporate costs including annual wage increases and other employment-related costs, partially offset by foreign currency mark-to-market adjustments and gains on sales of assets of $7 million in 2025.

For additional discussion of the Separation-related adjustments, Litigation-related settlement costs, and Held for sale impairment, see "Note 21: Segment Financial Data" to the Consolidated Financial Statements in Item 8 in this Form 10-K. For additional discussion of the restructuring and UpLift transformation costs, see "Note 15: Restructuring and Transformation Costs" to the Consolidated Financial Statements in Item 8 in this Form 10-K.

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**LIQUIDITY AND FINANCIAL CONDITION**

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 the capital markets.

As of December 31, 2025, we had cash and cash equivalents of approximately $1.1 billion, of which approximately 86% was held by the Company's foreign subsidiaries. Domestic cash and cash equivalents as of December 31, 2025 includes amounts that will be used to fund the repayment at maturity of the Japanese Yen denominated 0.370% notes due March 18, 2026. 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. The amount of such restricted cash was $9 million and $21 million as of December 31, 2025 and 2024, respectively.

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 December 31, 2025 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 tighter credit conditions. There can be no assurance that we will continue to have access to the capital markets on terms acceptable to us.

The following table contains several key measures of our financial condition and liquidity:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **December 31, 2025** | **December 31, 2024** |
| Cash and cash equivalents | $**1096** | $2300 |
| Total debt | **7956** | 8324 |
| Net debt (total debt less cash and cash equivalents) | **6860** | 6024 |
| Total equity | **(5346)** | (4785) |
| Total capitalization (total debt plus total equity) | **2610** | 3539 |
| Net capitalization (total debt plus total equity less cash and cash equivalents) | **1514** | 1239 |
| Total debt to total capitalization | **305%** | 235% |
| Net debt to net capitalization | **453%** | 486% |

---

The Company does not intend to reinvest certain undistributed earnings of our international subsidiaries that have been previously taxed in the U.S. For the remainder of the Company's undistributed international earnings, unless tax effective to repatriate, we will continue to permanently reinvest these earnings.

**Borrowings and Lines of Credit**

The following is a summary of the long-term debt issuances and repayments in 2025, 2024 and 2023:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | ***(dollars in millions)*** | |
| **Issuance Date** | **Description of Debt** |<br>**Aggregate Principal Balance** |
| September 4, 2025 | 5.131% notes due 2035 | $500 |
| November 19, 2024 | 2.875% notes due 2027 (€850 million principal value) | 899 |
| November 19, 2024 | 5.125% notes due 2031 | 600 |
| August 16, 2023 | 5.25% notes due 2028 | 750 |
| **Repayment Date** | **Description of Debt** | **Aggregate Principal Paid** |
| April 7, 2025 | 2.056% notes due 2025 | $1300 |
| November 13, 2023 | 0.000% notes due 2023 (€500 million principal value) | 534 |

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A portion of the proceeds from the September 2025 issuance of $500 million notes listed above will be used to fund the repayment at maturity of the Company's currently outstanding ¥21.5 billion Japanese Yen denominated 0.370% notes due March 18, 2026. The remainder of the proceeds were used to fund the repayment of certain of our commercial paper borrowings.

A portion of the proceeds from the November 2024 issuance of the Euro and USD notes listed above were used to fund the repayment at maturity of the Company's $1.3 billion 2.056% notes that were due April 5, 2025. The remainder of the proceeds were used to fund the repayment of the Company's commercial paper and for other general corporate purposes.

The proceeds from the August 2023 issuance of $750 million notes listed above were used to fund the repayments of Otis' commercial paper and €500 million 0.000% notes that were due in November 2023, with the remainder used for other general corporate purposes.

As of December 31, 2025, there were no borrowings outstanding under the Company's $1.5 billion commercial paper program. For additional discussion of borrowings, see "Note 8: Borrowings and Lines of Credit" to the Consolidated Financial Statements in Item 8 of this Form 10-K.

**Share Repurchase Program**

On January 16, 2025, our Board of Directors revoked any remaining share repurchase authority under the prior share repurchase program and approved a share repurchase program for up to $2.0 billion of Common Stock, of which approximately $1.3 billion was remaining as of December 31, 2025.

Under these programs, 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.

**Discussion of Cash Flows**

The following table reflects the major categories of cash flows. For additional details, see the Consolidated Statements of Cash Flows.

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| **Net cash flows provided by (used in):** |  |  |  |
| &nbsp;&nbsp;Operating activities | $**1596** | $1563 | $1627 |
| &nbsp;&nbsp;Investing activities | **(406)** | (164) | (183) |
| &nbsp;&nbsp;Financing activities | **(2421)** | (309) | (1350) |
| &nbsp;&nbsp;Effect of exchange rate changes on cash and cash equivalents | **15** | (49) | (9) |
| Net increase (decrease) in cash and cash equivalents and restricted cash | $**(1216)** | $1041 | $85 |

---

*Operating activities*

Cash flows from operating activities primarily represent inflows and outflows associated with our operations. Primary activities include net income from operations adjusted for non-cash transactions, working capital changes and changes in other assets and liabilities.

The increase in net cash provided by operating activities in 2025 compared to 2024 was primarily driven by working capital balances during the periods, including a decrease in Other current assets in 2025 compared to an increase in 2024, due to the refunds received in 2025 from the German tax litigation, a larger increase in Accounts payable in 2025 compared to 2024, due to the timing of payments to suppliers, partially offset by a larger increase in Accounts receivable, net, in 2025 compared to 2024, due to the timing of billings and collections. Additionally, Separation-related and UpLift-related net payments were approximately $258 million and $97 million, respectively, in 2025, compared to net payments of approximately $49 million and $86 million, respectively, in 2024.

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The decrease in net cash provided by operating activities in 2024 compared to 2023 was primarily driven by Separation-related and UpLift-related net payments, approximately $49 million and $86 million, respectively, in 2024, compared to net payments of approximately $25 million and $20 million, respectively, in 2023. Working capital activity includes a smaller decrease in Accounts receivable, net in 2024 compared to 2023 due to the timing of billings and collections, mostly offset by a smaller increase in Accounts payable in 2024 compared to 2023 due to the timing of payments to suppliers and other activity.

During 2025, net cash provided by operating activities was $1.6 billion. The primary driver of the inflow related to $1.5 billion of net income. The decrease in Other current assets due to refunds received in 2025 from the German tax litigation and the increase in Accounts payable due to timing of payments to suppliers were partially offset by an increase in Accounts receivable, net, due to timing of billings and collections and a decrease in Accrued Liabilities due to Separation-related and UpLift-related payments. For additional discussion of the German tax litigation, see "Note 1: Business Overview" and "Note 20: Contingent Liabilities" to the Consolidated Financial Statements in Item 8 of this Form 10-K.

During 2024, net cash provided by operating activities was $1.6 billion. Net income of $1.7 billion includes approximately $185 million of income tax benefits and approximately $200 million of interest income, partially offset by $194 million of indemnification expense resulting from the outcome of the German tax litigation during the third quarter of 2024, none of which resulted in cash flow activity during 2024. A decrease in Accounts receivable, net, due to the timing of billings and collections is mostly offset by an increase in Accounts payable due to the timing of payments to suppliers. For additional discussion of the German tax litigation, see "Note 1: Business Overview" and "Note 20: Contingent Liabilities" to the Consolidated Financial Statements in Item 8 of this Form 10-K.

*Investing activities*

Cash flows from investing activities primarily represent inflows and outflows associated with long-term assets, including capital expenditures, investments in businesses and securities, proceeds from the sale of fixed assets and the settlement of derivative contracts.

The increase in net cash used in investing activities in 2025 compared to 2024 was primarily driven by the net cash payments from the settlement of derivative instruments in 2025 compared to net cash receipts in 2024, partially offset by higher net proceeds from sale of fixed assets in 2025 compared to 2024. The decrease in net cash used in investing activities in 2024 compared to 2023 was primarily driven by the net cash receipts from the settlement of derivative instruments in 2024 compared to net cash payments in 2023, partially offset by acquisition of businesses and intangible assets.

During 2025, net cash used in investing activities was $406 million. The primary drivers of the outflow related to $204 million of net cash payments from the settlement of derivative instruments, $152 million of capital expenditures and $109 million of acquisitions of businesses and intangible assets, partially offset by $60 million of net proceeds from the sale of fixed assets.

During 2024, net cash used in investing activities was $164 million. The primary drivers of the outflow related to $126 million of capital expenditures and $87 million of acquisitions of businesses and intangible assets, partially offset by $49 million of net cash receipts from the settlement of derivative instruments.

As discussed in "Note 16: Financial Instruments" to the Consolidated Financial Statements in Item 8 in this Form 10-K, 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, foreign exchange rates and commodity prices. 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 and commodity price exposures.

*Financing activities*

Cash flows from financing activities primarily represent inflows and outflows associated with equity and borrowings. Primary activities include short-term and long-term borrowing activity, paying dividends to shareholders, the repurchase of our Common Stock and dividends or other payments to noncontrolling interests.

The increase in net cash used in financing activities in 2025 compared to 2024 was primarily due to the repayment of long-term debt in 2025 and lower net proceeds from the long-term debt issuance in 2025 compared to 2024. The decrease in net cash used in financing activities in 2024 compared to 2023 was primarily due to the higher net proceeds from the long-term debt issued in 2024 compared to 2023.

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During 2025, net cash used in financing activities was $2.4 billion. The primary drivers of the outflow were repayments of long-term debt of $1.3 billion, repurchases of our Common Stock of $809 million, dividends paid on our Common Stock and to noncontrolling shareholders of $647 million and $69 million, respectively, and acquisitions of noncontrolling interest shares of $217 million, including approximately $215 million for our purchase of all outstanding shares from the noncontrolling shareholder of Otis Electric. These were partially offset by the net proceeds from the long-term debt issuance of $495 million and net proceeds from short-term borrowings of $142 million.

During 2024, net cash used in financing activities was $309 million. The primary drivers of the outflow were the repurchases of our Common Stock of $1.0 billion, dividends paid on our Common Stock and to noncontrolling shareholders of $606 million and $94 million, respectively, and acquisition of noncontrolling interest shares of $75 million, including approximately $70 million for our subsidiary in Japan. These were partially offset by the net proceeds from the long-term debt issuance of $1.5 billion.

For additional discussion of acquisition of noncontrolling interest, borrowing and share repurchase activity, see "Note 1: Business Overview", "Note 8: Borrowings and Lines of Credit", and "Note 12: Stock", respectively, to the Consolidated Financial Statements in Item 8 in this Form 10-K.

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***<u>Guaranteed Securities: Summarized Financial Information</u>***

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 2026 Euro Notes, the 2027 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 by Otis Worldwide Corporation ("OWC") on an unsecured, unsubordinated basis. Refer to "Note 8: Borrowings and Lines of Credit" to the Consolidated Financial Statements in Item 8 in this Form 10-K for additional information.

Highland is a wholly-owned, indirect consolidated subsidiary of OWC. OWC is incorporated under the laws of Delaware. 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 in the United States and may make it more difficult for creditors to recover the amount they could expect to recover in liquidation under U.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 years ended December 31, 2025 and 2024 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 with U.S. GAAP.

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| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
|<br>***(dollars in millions)*** | **2025** | **2024** |
| ***OWC Statement of Operations - Standalone and Unconsolidated*** |  |  |
| Revenue | $**—** | $— |
| Cost of revenue | **—** |  |
| Operating expenses | **11** | 10 |
| Income from consolidated subsidiaries | **—** | 1 |
| Income (loss) from operations excluding income from consolidated subsidiaries | **(85)** | (191) |
| Net income (loss) excluding income from consolidated subsidiaries | **(280)** | (364) |

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| | | |
|:---|:---|:---|
| | **As of December 31,** | **As of December 31,** |
|<br>***(dollars in millions)*** | **2025** | **2024** |
| ***OWC Balance Sheet - Standalone and Unconsolidated*** |  |  |
| Current assets (intercompany receivables from non-guarantor subsidiaries) | $**—** | $— |
| Current assets (excluding intercompany receivables from non-guarantor subsidiaries) | **188** | 1490 |
| Noncurrent assets (investments in consolidated subsidiaries) | **1031** | 1151 |
| Noncurrent assets (excluding investments in consolidated subsidiaries) | **39** | 37 |
| Current liabilities (intercompany payables to non-guarantor subsidiaries) | **7508** | 6277 |
| Current liabilities (excluding intercompany payables to non-guarantor subsidiaries) | **333** | 1625 |
| Noncurrent liabilities (intercompany payables to non-guarantor subsidiaries) | **—** |  |
| Noncurrent liabilities (excluding intercompany payables to non-guarantor subsidiaries) | **5412** | 5100 |

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| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
|<br>***(dollars in millions)*** | **2025** | **2024** |
| ***Highland Statement of Operations - Standalone and Unconsolidated*** |  |  |
| Revenue | $**—** | $— |
| Cost of revenue | **—** |  |
| Operating expenses | **—** | 1 |
| Income from consolidated subsidiaries | **499** | 420 |
| Income (loss) from operations excluding income from consolidated subsidiaries | **—** | (1) |
| Net income (loss) excluding income from consolidated subsidiaries | **(243)** | (248) |

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| | | |
|:---|:---|:---|
| | **As of December 31,** | **As of December 31,** |
|<br>***(dollars in millions)*** | **2025** | **2024** |
| ***Highland Balance Sheet - Standalone and Unconsolidated*** |  |  |
| Current assets (intercompany receivables from non-guarantor subsidiaries) | $**—** | $— |
| Current assets (excluding intercompany receivables from non-guarantor subsidiaries) | **—** |  |
| Noncurrent assets (investments in consolidated subsidiaries) | **15711** | 15711 |
| Noncurrent assets (intercompany receivables from non-guarantor subsidiaries) | **470** | 460 |
| Noncurrent assets (excluding investments in consolidated subsidiaries) | **—** |  |
| Current liabilities (intercompany payables to non-guarantor subsidiaries) | **—** |  |
| Current liabilities (excluding intercompany payables to non-guarantor subsidiaries) | **708** | 4 |
| Current liabilities (intercompany payables from non-guarantor subsidiaries) | **20** | 9 |
| Noncurrent liabilities (intercompany payables to non-guarantor subsidiaries) | **4174** | 3513 |
| Noncurrent liabilities (excluding intercompany payables to non-guarantor subsidiaries) | **1577** | 2017 |

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**CRITICAL ACCOUNTING ESTIMATES**

Preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. "Note 2: Summary of Significant Accounting Policies" to the Consolidated Financial Statements in Item 8 in this Form 10-K describes the significant accounting policies used in preparation of the Consolidated Financial Statements. Management believes the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. The most significant areas involving management judgments and estimates are described below. Actual results in these areas could differ from management's estimates.

**Revenue Recognition from Contracts with Customers** 

We recognize revenue in accordance with FASB ASC Topic 606: *Revenue from Contracts with Customers* and its related amendments, (referred to, collectively, as "ASC 606"). For new equipment and modernization contracts, equipment and installation are typically procured in a single contract providing the customer with a complete installed elevator or escalator unit. The combination of equipment and installation promises are typically a single performance obligation. For these performance obligations, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress. Contract costs are usually incurred over a period of time, which can be several years, and the estimation of these costs requires management's judgment. Contract costs included in the calculation are comprised of labor, materials, subcontractors' costs or other direct costs and indirect costs, which include indirect labor costs.

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The long-term nature of the contracts, the complexity of the products and the scale of the projects can affect our ability to estimate costs precisely. In developing our cost estimates, we utilize a combination of our historical costs experience and expected costs considering current circumstances. We review cost estimates for modification on significant new equipment and modernization contracts on a quarterly basis and when circumstances change, and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. We record changes in contract estimates using the cumulative catch-up method and we review changes in contract estimates for their impact on net sales or operating profit in the Consolidated Financial Statements. Modifications are recognized as a cumulative catch-up or treated as a separate accounting contract if the modification adds distinct goods or services and the modification is priced at its stand-alone selling price.

See "Note 2: Summary of Significant Accounting Policies" to the Consolidated Financial Statements in Item 8 in this Form 10-K.

**Income Taxes**

The future tax benefit arising from deductible temporary differences and tax carryforwards was $687 million and $576 million as of December 31, 2025 and 2024, respectively. Management estimates that our earnings during the periods when the temporary differences become deductible will be generally sufficient to realize the related future income tax benefits, which may be realized over an extended period of time. For those jurisdictions where the expiration date of tax carryforwards or the projected operating results indicate that realization is not likely, a valuation allowance is provided.

In assessing the need for a valuation allowance, we estimate future taxable income, considering the feasibility of ongoing tax planning strategies and the realizability of tax loss carryforwards. Valuation allowances related to deferred tax assets can be affected by changes to tax laws, changes to statutory tax rates and future taxable income levels. In the event we were to determine that we would not be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through an increase to tax expense in the period in which that determination is made or when tax law changes are enacted. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carrying amounts, we would decrease the recorded valuation allowance through a decrease to tax expense in the period in which that determination is made.

In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the Consolidated Financial Statements.

**Goodwill** 

We have generated goodwill as a result of our acquisitions. At the time of acquisition, we account for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed.

We review our goodwill for impairment on an annual basis at July 1 or more frequently if events or a change in circumstances indicate that the carrying amount may not be recoverable. We test goodwill for impairment at a level within the Company referred to as the reporting unit, which is one level below the operating segment level. We have determined there are three reporting units within each business segment.

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In accordance with Accounting Standards Codification ("ASC") 350, *Intangibles – Goodwill and Other*, we initially perform a qualitative assessment (commonly known as "step zero") to determine whether further impairment testing is necessary before performing the two-step test. The qualitative assessment requires judgments by management about economic conditions including the entity's operating environment, its industry and other market considerations, entity-specific events related to financial performance or loss of key personnel and other events that could impact the reporting unit. If management concludes, based on assessment of relevant events, facts and circumstances, that it is more likely than not that a reporting unit's fair value is greater than its carrying value, no further impairment testing is required. If we determine, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, we perform a quantitative goodwill impairment test by comparing the reporting unit's fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting unit's carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. No impairment loss is recognized if the fair value of the reporting unit exceeds its carrying value.

We completed the annual goodwill impairment test for all of our reporting units as of July 1, 2025 and determined that no adjustment to goodwill was necessary as the fair value of each reporting unit was in excess of the carrying value of each reporting unit.

**Contingent Liabilities**

Otis is party to litigation related to a number of matters as described in "Note 20: Contingent Liabilities" to the Consolidated Financial Statements in Item 8 in this Form 10-K. In particular, they may include risks associated with contractual, regulatory and other matters, which may arise in the ordinary course of business. The outcome of these matters may have a material effect on the financial position, results of operations or cash flows. Management regularly analyzes current information about these matters and accrues for contingent losses that are probable and reasonably estimable. To assess the exposure to potential liability, we consult with relevant internal and external counsel. In making the decision regarding the need for loss accruals, management considers the degree of probability of an unfavorable outcome and the ability to make a sufficiently reliable estimate of the amount of loss. See Part I, Item 1A in this Form 10-K for further discussion.

**Employee Benefit Plans**

We sponsor domestic and international defined benefit pension and other postretirement plans. Major assumptions used in the accounting for these employee benefit plans include the discount rate, expected return on plan assets, rate of increase in employee compensation levels and mortality rates. Assumptions are determined based on company data and appropriate market indicators, and are evaluated each year as of December 31. A change in any of these assumptions would have an effect on net periodic pension and postretirement benefit costs reported in the Consolidated Financial Statements.

In the following table, we show the sensitivity of our pension plan liabilities to a 25 basis point change in the discount rates for benefit obligations, as of December 31, 2025:

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| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **Increase in Discount Rate of 25 bps** | **Decrease in Discount Rate of 25 bps** |
| Projected benefit obligation | $(22) | $24 |

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The impact on the net periodic pension (benefit) cost, the accumulated postretirement benefit obligation and the net periodic postretirement (benefit) cost is each $1 million or less.

Pension expense is also sensitive to changes in the expected long-term rate of asset return. An increase or decrease of 25 basis points in the expected long-term rate of asset return would have decreased or increased 2025 pension expense by approximately $2 million.

The weighted-average discount rates used to measure pension liabilities and costs are generally based on yield curves developed utilizing high quality corporate bonds, as well as each plan's specific cash flows, and are compared to high-quality bond indices for reasonableness. The weighted-average discount rate used to measure pension liabilities was 3.6% in 2025 and 3.3% in 2024, reflecting changes in market interest rates.

See "Note 11: Employee Benefit Plans" to the Consolidated Financial Statements in Item 8 in this Form 10-K for further discussion.

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 **Off-Balance Sheet Arrangements and Contractual Obligations**

We extend a variety of financial guarantees to third parties in support of our business. We also have obligations arising from environmental, health and safety, tax and employment matters. Circumstances that could cause the contingent obligations and liabilities arising from these arrangements to come to fruition include changes in the underlying transaction, non-performance under a contract or deterioration in the financial condition of the guaranteed party.

Otis' contractual obligations and commitments as of December 31, 2025 are discussed below. See also "Note 11: Employee Benefit Plans" to the Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion of our expected pension and postretirement contributions.

***Long-term Debt***

See "Note 8: Borrowings and Lines of Credit" to the Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion of our long-term debt principal payments as of December 31, 2025. In the following table, we show the timing of payments of interest on long-term debt as of December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|<br>***(dollars in millions)*** |<br>**Total** | **2026** | **2027-2028** | **2029-2030** | **Thereafter** |
| Long-term debt - future interest | $**1799** | $231 | $411 | $279 | $878 |

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For long-term debt denominated in foreign currencies, the interest payments above reflect U.S. dollar amounts using foreign currency exchange rates as of December 31, 2025.

***Purchase Obligations***

Purchase obligations include amounts committed for the purchase of goods and services under legally enforceable contracts or purchase orders. Where it is not practically feasible to determine the legally enforceable portion of our obligation under certain of our long-term purchase agreements, we include additional expected purchase obligations beyond what may be legally enforceable. We enter into contractual purchase commitments with suppliers and service vendors to support our information technology that are either necessary to operate our business or result from implementing strategic initiatives. In the following table, we show the timing of payments of total purchase obligations as of December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|<br>***(dollars in millions)*** |<br>**Total** | **2026** | **2027-2028** | **2029-2030** | **Thereafter** |
| Purchase obligations | $**1427** | $645 | $706 | $76 | $— |

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***Other Long-term Liabilities***

Other long-term liabilities in the table below includes obligations related to product, service and warranty policies, estimated remediation costs and contractual indemnities, and are included in Other long-term liabilities on the "Consolidated Balance Sheets" to the Consolidated Financial Statements in Item 8 of this Form 10-K. The timing of expected cash flows associated with these obligations is based upon management's estimates over the terms of these agreements and is largely based upon historical experience. In the following table, we show the timing of these payments as of December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|<br>***(dollars in millions)*** |<br>**Total** | **2026** | **2027-2028** | **2029-2030** | **Thereafter** |
| Other long-term liabilities | $**140** | $41 | $33 | $9 | $57 |

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The amounts above include $23 million of non-current contractual payables due to RTX for reimbursement of tax payments that RTX is responsible to pay after the Separation pursuant to the TMA.

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***Unrecognized Tax Benefits***

Otis has unrecognized tax benefits of $152 million as of December 31, 2025. The timing of when such unrecognized tax benefits will become realizable is uncertain. See "Note 14: Income Taxes" to the Consolidated Financial Statements in Item 8 in this Form 10-K for additional discussion on unrecognized tax benefits.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk**

Our primary market exposures are to fluctuations in foreign currency exchange rates, commodity prices and interest rates. To manage certain of those exposures, we use derivative instruments, including forward contracts. Derivative instruments utilized in our hedging activities are viewed as risk management tools, involve relatively little complexity and are not used for trading or speculative purposes. We diversify the counterparties used and monitor the concentration of risk to limit our counterparty exposure.

To quantify our market risk exposure, we perform a sensitivity analysis based on hypothetical changes in foreign currency exchange rates and interest rates.

Refer to "Note 2: Summary of Significant Accounting Policies", "Note 8: Borrowings and Lines of Credit" and "Note 16: Financial Instruments" in Item 8 in this Form 10-K for additional discussion of foreign currency exchange, interest rates and financial instruments, including the average aggregate notional amount of our outstanding foreign currency and commodity price hedges during 2025 and 2024.

*Foreign Currency Risk*

For our non-U.S. based entities, a substantial portion of revenues are generated, and costs are incurred, in local currencies. We transact business in various foreign currencies, which exposes our cash flows and earnings to changes in foreign currency exchange rates. We periodically enter into sales contracts denominated in currencies other than the functional currency of the parties to the transaction, which can create foreign exchange exposure.

The value of certain foreign currencies as compared to the U.S. dollar may impact Otis' financial results. We have a high volume of foreign currency exposures that result from our international net sales, purchases, investments and other international transactions. International net sales were approximately $10.2 billion, $10.0 billion and $10.2 billion in 2025, 2024 and 2023, respectively.

We manage foreign currency exposures associated with committed foreign currency purchases and sales, as well as foreign currency denominated assets and liabilities that are created in the ordinary course of business. Foreign exchange exposures arising from intercompany loan and deposit transactions are also hedged regularly. More than insignificant exposures that cannot be naturally offset are generally hedged with foreign currency derivatives. The aggregate notional amount of our outstanding foreign currency hedges was approximately $5.4 billion and $5.1 billion as of December 31, 2025 and 2024, respectively. Foreign currency forward contracts are sensitive to changes in foreign currency exchange rates. An unfavorable exchange rate movement of 10% to our portfolio of foreign currency contracts would have resulted in an increase in unrealized losses of $163 million and $124 million as of December 31, 2025 and 2024, respectively. Such losses or gains would be offset by corresponding gains or losses in the remeasurement of the underlying transactions or investments being hedged. We believe these foreign currency forward exchange contracts and the offsetting underlying commitments or investments, when taken together, do not create material market risk.

While the objective of the hedging program is to minimize the foreign currency exchange impact on operating results, there are typically variances between the hedging gains or losses and the translational impact due to the length of hedging contracts, changes in the sales profile, volatility in the exchange rates and other such operational considerations. Otis does not enter into hedging contracts for speculative purposes.

As discussed in "Note 16: Financial Instruments" in Item 8 in this Form 10-K, as of December 31, 2025 we have ¥21.5 billion ($137 million) of Japanese Yen denominated long-term debt that qualifies as a net investment hedge against our investments in Japanese businesses, as well as derivative instruments that qualify as net investment hedges against our investments in certain European businesses with notional amounts of €169 million ($199 million) and Asian businesses with notional amounts of HK$2.2 billion ($283 million). As of December 31, 2025, these net investment hedges are deemed to be effective.

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As of December 31, 2025 we have approximately €2.0 billion ($2.3 billion) of Euro denominated long-term debt. This debt was issued by a subsidiary with Euro functional currency. The currency effects of this debt are reflected in the Accumulated other comprehensive income (loss) within Shareholder's (Deficit) Equity in the Balance Sheet in Item 8 in this Form 10-K. Refer to "Note 8: Borrowings and Lines of Credit" in Item 8 in this Form 10-K for additional discussion of our borrowings.

*Commodity Price Risk*

The fluctuation in prices of certain raw materials may impact Otis' financial results. We are exposed to volatility in the prices of commodities used in some of our products and component parts, such as steel, aluminum and copper, among others. When possible and appropriate, we maintain fixed price contracts on raw materials and component parts. However, we are prone to exposure as these contracts expire. When possible and appropriate, we also include price escalation linked to commodity prices in contracts with our customers and take pricing actions for future contracts. However, products and services delivered to our customers can be provided a year or more after being agreed to, and not all raw material price increases can be passed along to customers with existing contracts. Therefore, when commodity price risk is not mitigated by other methods, we may enter into hedging contracts. Otis does not enter into hedging contracts for speculative purposes.

Commodity hedging contracts are sensitive to changes in commodity prices, but any losses or gains would be offset by corresponding gains or losses in the underlying commodity purchases being hedged. Therefore, we believe these commodity hedging contracts and the offsetting underlying purchases, when taken together, do not create material market risk.

*Interest Rate Risk*

A 100 basis points increase in interest rates would have had an approximate $400 million reduction on the fair value of our fixed-rate debt as of December 31, 2025 and 2024. Our long-term debt portfolio consists of fixed-rate instruments, and, therefore, any fluctuation in market interest rates is not expected to have a material effect on the Company's results of operations. Additionally, the investors in our fixed-rate debt obligations generally do not have the right to demand we pay off these obligations prior to maturity. Therefore, we believe our exposure to interest rate risk on our fixed-rate debt is not material.

From time to time, we may hedge floating rates using interest rate swaps. The hedges would be designated as fair value hedges and the gains and losses on the swaps would be reported in interest expense, reflecting that portion of interest expense at a variable rate.

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**Item 8. Financial Statements and Supplementary Data**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND**

**FINANCIAL STATEMENT SCHEDULE**

---

| | |
|:---|:---|
| | **Page** |
| <u>[Management's Report on Internal Control Over Financial Reporting](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_142)</u> | <u>[51](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_142)</u> |
| <u>[Report of Independent Registered Public Accounting Firm](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_145)</u> (PCAOB ID 238) | <u>[52](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_145)</u> |
| <u>[Consolidated Statements of Operations for the years ended December 31, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_148)[5](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_148)[, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_148)[4](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_148)[and 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_148)[3](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_148)</u> | <u>[54](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_148)</u> |
| <u>[Consolidated Statements of Comprehensive Income for the years ended December 31, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_151)[5](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_151)[, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_151)[4](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_151)[and 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_151)[3](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_151)</u> | <u>[55](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_151)</u> |
| <u>[Consolidated Balance Sheets as of December 31, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_154)[5](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_154)[and 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_154)[4](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_154)</u> | <u>[56](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_154)</u> |
| <u>[Consolidated Statements of Changes in Equity for the years ended December 31, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_157)[5](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_157)[, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_157)[4](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_157)[and 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_157)[3](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_157)</u> | <u>[57](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_157)</u> |
| <u>[Consolidated Statements of Cash Flows for the years ended December 31, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_160)[5](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_160)[, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_160)[4](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_160)[and 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_160)[3](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_160)</u> | <u>[58](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_160)</u> |
| <u>[Notes to Consolidated Financial Statements](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_163)</u> | <u>[59](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_163)</u> |
| <u>[Financial Statement Schedule - Schedule II — Valuation and Qualifying Accounts for the years ended December 31, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_262)[5](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_262)[, 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_262)[4](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_262)[and 202](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_262)[3](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_262)</u> | <u>[99](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_262)</u> |

---

**(All other schedules are not required and have been omitted)**

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**Management's Report on Internal Control over Financial Reporting**

The management of Otis is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Management has assessed the effectiveness of Otis' internal control over financial reporting as of December 31, 2025. In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in *Internal Control - Integrated Framework* (2013). Management concluded that based on its assessment, Otis' internal control over financial reporting was effective as of December 31, 2025. The effectiveness of Otis' internal control over financial reporting, as of December 31, 2025, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

---

| | |
|:---|:---|
| **OTIS WORLDWIDE CORPORATION<br>(Registrant)** | **OTIS WORLDWIDE CORPORATION<br>(Registrant)** |
| by: | /s/ Judith F. Marks |
| | **Judith F. Marks** |
| | **Chair, President and Chief Executive Officer** |
| by: | /s/ Cristina Méndez |
| | **Cristina Méndez** |
| | **Executive Vice President and Chief Financial Officer** |
| by: | /s/ Michael P. Ryan |
| | **Michael P. Ryan** |
| | **Senior Vice President and Chief Accounting Officer** |

---

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**Report of Independent Registered Public Accounting Firm** 

To the Board of Directors and Shareholders of Otis Worldwide Corporation

***Opinions on the Financial Statements and Internal Control over Financial Reporting***

We have audited the accompanying consolidated balance sheets of Otis Worldwide Corporation and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

***Basis for Opinions***

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

***Definition and Limitations of Internal Control over Financial Reporting***

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

***Critical Audit Matters***

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

*Revenue Recognition - Estimated Costs at Completion for New Equipment and Modernization Contracts*

As described in Notes 2 and 21 to the consolidated financial statements, the Company recognized $5.0 billion and $1.9 billion of revenue from new equipment and modernization contracts, respectively, for the year ended December 31, 2025. For new equipment and modernization contracts, equipment and installation are typically procured in a single contract providing the customer with a complete installed elevator or escalator unit. The combination of equipment and installation promises are typically a single performance obligation. For these performance obligations, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress. As disclosed by management, contract costs are usually incurred over a period of time, which can be several years, and the estimation of these costs requires management's judgment. The long-term nature of the contracts, the complexity of the products and the scale of the projects can affect management's ability to estimate costs precisely. In developing the cost estimates, management utilizes a combination of the historical costs and expected costs considering current circumstances. Management reviews cost estimates for modification on significant new equipment and modernization contracts on a quarterly basis and when circumstances change and, for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. Management records changes in contract estimates using the cumulative catch-up method and reviews changes in contract estimates for their impact on net sales or operating profit in the consolidated financial statements. Contract costs included in the calculation are comprised of labor, materials, subcontractors' costs or other direct costs and indirect costs, which include indirect labor costs.

The principal considerations for our determination that performing procedures relating to revenue recognition - estimated costs at completion for new equipment and modernization contracts is a critical audit matter are the significant judgment by management to determine the estimated costs at contract completion, which in turn led to significant auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to the estimated expected labor and indirect labor costs used in the development of estimated costs at contract completion.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the determination of the estimated costs at contract completion and development of the significant assumptions related to the estimated expected labor and indirect labor costs. These procedures also included, among others, evaluating and testing management's process for developing and modifying estimated costs at contract completion for a sample of contracts, which included evaluating the reasonableness of significant assumptions related to the estimated expected labor and indirect labor costs considered by management specific to each contract. Evaluating the reasonableness of the estimated expected labor and indirect labor costs involved assessing management's ability to reasonably estimate costs at completion by (i) testing costs incurred to date and obtaining a sample of executed contracts and related change orders, (ii) performing a comparison of the margin, driven by the estimated and actual costs incurred, to that of similar completed equipment contracts, and (iii) evaluating the timely identification of circumstances that may warrant a modification to estimated total cost to complete.

/s/ PricewaterhouseCoopers LLP

Hartford, Connecticut

February 5, 2026

We have served as the Company's auditor since 2019.

------

<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**OTIS WORLDWIDE CORPORATION**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions, except per share amounts; shares in millions)*** | **2025** | **2024** | **2023** |
| Net sales: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product sales | $**4989** | $5367 | $5812 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service sales | **9442** | 8894 | 8397 |
|  | **14431** | 14261 | 14209 |
| Costs and expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of products sold | **4182** | 4459 | 4843 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of services sold | **5879** | 5545 | 5173 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development | **152** | 152 | 144 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | **1979** | 1861 | 1884 |
|  | **12192** | 12017 | 12044 |
| Other income (expense), net | **(106)** | (236) | 21 |
| Operating profit | **2133** | 2008 | 2186 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-service pension cost (benefit) | **3** |  | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense (income), net | **196** | (31) | 150 |
| Net income before income taxes | **1934** | 2039 | 2031 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | **479** | 305 | 533 |
| Net income | **1455** | 1734 | 1498 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: Noncontrolling interest in subsidiaries' earnings | **71** | 89 | 92 |
| Net income attributable to Otis Worldwide Corporation | $**1384** | $1645 | $1406 |
| Earnings per share (Note 3): |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | $**3.52** | $4.10 | $3.42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | $**3.50** | $4.07 | $3.39 |
| Weighted average number of shares outstanding |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic shares | **392.8** | 401.7 | 411.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted shares | **394.9** | 404.4 | 414.6 |

---

See accompanying Notes to Consolidated Financial Statements.

------

<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**OTIS WORLDWIDE CORPORATION**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Net income | $**1455** | $1734 | $1498 |
| Other comprehensive income (loss): |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments, net of tax | **(366)** | (13) | (93) |
| &nbsp;&nbsp;&nbsp;&nbsp;Pension and postretirement benefit plan adjustments: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net actuarial gain (loss) | **63** | (2) | (90) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior service credit | **(5)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of actuarial (gain) loss and prior service credit | **3** |  | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **(5)** | 6 | (1) |
|  | **56** | 4 | (92) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax benefit (expense) | **(15)** | (2) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;Pension and postretirement benefit plan adjustments, net of tax | **41** | 2 | (70) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized cash flow hedging: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized cash flow hedging gain (loss) | **(3)** | 2 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustment for net (gain) loss realized and included in net income | **2** |  | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized cash flow hedging, net of tax | **(1)** | 2 | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax benefit (expense) | **(1)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized cash flow hedging, net of tax | **(2)** | 2 | (2) |
| Other comprehensive income (loss), net of tax | **(327)** | (9) | (165) |
| Comprehensive income (loss), net of tax | **1128** | 1725 | 1333 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Comprehensive (income) loss attributable to noncontrolling interest | **(86)** | (75) | (85) |
| Comprehensive income attributable to Otis Worldwide Corporation | $**1042** | $1650 | $1248 |

---

See accompanying Notes to Consolidated Financial Statements.

------

<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**OTIS WORLDWIDE CORPORATION**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| **<u>Assets</u>** |  |  |
| Cash and cash equivalents | $**1096** | $2300 |
| Accounts receivable (net of allowance for expected credit losses of $125 and $125) | **3688** | 3428 |
| Contract assets | **699** | 706 |
| Inventories | **613** | 557 |
| Other current assets | **405** | 679 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Assets | **6501** | 7670 |
| Future income tax benefits | **407** | 302 |
| Fixed assets, net | **743** | 701 |
| Operating lease right-of-use assets | **554** | 422 |
| Intangible assets, net | **343** | 311 |
| Goodwill | **1695** | 1548 |
| Other assets | **410** | 362 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets | $**10653** | $11316 |
| **<u>Liabilities and Equity (Deficit)</u>** |  |  |
| Short-term borrowings and current portion of long-term debt | $**1056** | $1351 |
| Accounts payable | **2142** | 1879 |
| Accrued liabilities | **1847** | 1921 |
| Contract liabilities | **2611** | 2598 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | **7656** | 7749 |
| Long-term debt | **6900** | 6973 |
| Future pension and postretirement benefit obligations | **419** | 434 |
| Operating lease liabilities | **397** | 298 |
| Future income tax obligations | **223** | 207 |
| Other long-term liabilities | **329** | 383 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities | **15924** | 16044 |
| Commitments and contingent liabilities (Note 20) |  |  |
| Redeemable noncontrolling interest | **75** | 57 |
| Shareholders' Equity (Deficit): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock and additional paid-in-capital | **333** | 265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury Stock | **(4198)** | (3390) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | **(440)** | (978) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | **(1087)** | (745) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Shareholders' Equity (Deficit) | **(5392)** | (4848) |
| Noncontrolling interest | **46** | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Equity (Deficit) | **(5346)** | (4785) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities and Equity (Deficit) | $**10653** | $11316 |

---

See accompanying Notes to Consolidated Financial Statements.

------

<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**OTIS WORLDWIDE CORPORATION** 

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| ***(dollars in millions, except per share amounts)*** | **Common Stock and Additional Paid-In Capital** | **Treasury Stock** | **Accumulated Deficit** | **Accumulated Other Comprehensive Income (Loss)** | **Total Shareholders' <br>(Deficit) Equity** | **Noncontrolling Interest** | **Total (Deficit) Equity** | **Redeemable Noncontrolling Interest** |
| Balance as of December 31, 2022 | $162 | $(1575) | $(2865) | $(592) | $(4870) | $71 | $(4799) | $135 |
| &nbsp;&nbsp;Net income |  |  | 1406 |  | 1406 | 83 | 1489 | 9 |
| &nbsp;&nbsp;Other comprehensive income (loss), net of tax |  |  |  | (158) | (158) | (3) | (161) | (4) |
| &nbsp;&nbsp;Stock-based compensation and Common Stock issued under employer plans | 51 |  | (2) |  | 49 |  | 49 |  |
| &nbsp;&nbsp;Cash dividends declared ($1.31 per Common Share) |  |  | (539) |  | (539) |  | (539) |  |
| &nbsp;&nbsp;Repurchase of Common Shares |  | (807) |  |  | (807) |  | (807) |  |
| &nbsp;&nbsp;Dividends attributable to noncontrolling interest |  |  |  |  |  | (79) | (79) | (9) |
| &nbsp;&nbsp;Acquisitions, disposals and other changes |  |  | (5) |  | (5) | (3) | (8) | 4 |
| Balance as of December 31, 2023 | 213 | (2382) | (2005) | (750) | (4924) | 69 | (4855) | 135 |
| &nbsp;&nbsp;Net income |  |  | 1645 |  | 1645 | 80 | 1725 | 9 |
| &nbsp;&nbsp;Other comprehensive income (loss), net of tax |  |  |  | 5 | 5 | (5) |  | (9) |
| &nbsp;&nbsp;Stock-based compensation and Common Stock issued under employer plans | 53 |  | (3) |  | 50 |  | 50 |  |
| &nbsp;&nbsp;Cash dividends declared ($1.51 per Common Share) |  |  | (606) |  | (606) |  | (606) |  |
| &nbsp;&nbsp;Repurchase of Common Shares |  | (1008) |  |  | (1008) |  | (1008) |  |
| &nbsp;&nbsp;Dividends attributable to noncontrolling interest |  |  |  |  |  | (81) | (81) | (12) |
| &nbsp;&nbsp;Acquisitions, disposals and other changes | (1) |  | (9) |  | (10) |  | (10) | (66) |
| Balance as of December 31, 2024 | 265 | (3390) | (978) | (745) | (4848) | 63 | (4785) | 57 |
| &nbsp;&nbsp;Net income | **—** | **—** | **1384** | **—** | **1384** | **65** | **1449** | **6** |
| &nbsp;&nbsp;Other comprehensive income (loss), net of tax | **—** | **—** | **—** | **(342)** | **(342)** | **8** | **(334)** | **7** |
| &nbsp;&nbsp;Stock-based compensation and Common Stock issued under employer plans | **71** | **—** | **(3)** | **—** | **68** | **—** | **68** | **—** |
| &nbsp;&nbsp;Cash dividends declared ($1.65 per Common Share) | **—** | **—** | **(647)** | **—** | **(647)** | **—** | **(647)** | **—** |
| &nbsp;&nbsp;Repurchase of Common Shares | **—** | **(808)** | **—** | **—** | **(808)** | **—** | **(808)** | **—** |
| &nbsp;&nbsp;Dividends attributable to noncontrolling interest | **—** | **—** | **—** | **—** | **—** | **(63)** | **(63)** | **(5)** |
| &nbsp;&nbsp;Acquisitions, disposals and other changes | **(3)** | **—** | **(196)** | **—** | **(199)** | **(27)** | **(226)** | **10** |
| Balance as of December 31, 2025 | $**333** | $**(4198)** | $**(440)** | $**(1087)** | $**(5392)** | $**46** | $**(5346)** | $**75** |

---

See accompanying Notes to Consolidated Financial Statements.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**OTIS WORLDWIDE CORPORATION**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Operating Activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $**1455** | $1734 | $1498 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash flows provided by operating activities, net of acquisitions and dispositions: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **175** | 181 | 193 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax expense (benefit) | **(104)** | (31) | (61) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock compensation cost | **80** | 73 | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain from reversal of German Tax Litigation interest accrual (Note 1) | **—** | (50) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | **(111)** | (68) | (239) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets and liabilities, current | **(71)** | (40) | (30) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | **(25)** | 26 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | **225** | (354) | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | **181** | 57 | 152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | **(140)** | 85 | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension and postretirement contributions | **(43)** | (51) | (48) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other operating activities, net | **(26)** | 1 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows provided by operating activities | **1596** | 1563 | 1627 |
| Investing Activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | **(152)** | (126) | (138) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions of businesses and intangible assets, net of cash (Note 7) | **(109)** | (87) | (36) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from the sale of fixed assets | **60** | 6 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of (investments in) marketable securities, net | **—** | (9) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receipts (payments) on settlements of derivative contracts, net | **(204)** | 49 | (28) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other investing activities, net | **(1)** | 3 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows provided by (used in) investing activities | **(406)** | (164) | (183) |
| Financing Activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from (repayments of) borrowings (maturities of 90 days or less) | **(25)** | 11 | (113) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from borrowings (maturities longer than 90 days) | **167** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of long-term debt | **500** | 1497 | 747 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of debt issuance costs | **(5)** | (11) | (6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of long-term debt | **(1300)** |  | (534) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid on Common Stock | **(647)** | (606) | (539) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchases of Common Stock | **(809)** | (1007) | (800) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition of noncontrolling interest shares (Note 1) | **(217)** | (75) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to noncontrolling interest | **(69)** | (94) | (85) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other financing activities, net | **(16)** | (24) | (20) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows provided by (used in) financing activities | **(2421)** | (309) | (1350) |
| Effect of foreign exchange rate changes on cash and cash equivalents | **15** | (49) | (9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in cash and cash equivalents | **(1216)** | 1041 | 85 |
| Cash, cash equivalents and restricted cash, beginning of year | **2321** | 1280 | 1195 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash, cash equivalents and restricted cash, end of year | **1105** | 2321 | 1280 |
| Less: Restricted cash | **9** | 21 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents, end of period | $**1096** | $2300 | $1274 |
| *Supplemental cash flow information:* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid | $**230** | $172 | $132 |

---

See accompanying Notes to Consolidated Financial Statements.

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**Note 1: Business Overview** 

Otis (as defined below) is the world's largest elevator and escalator manufacturing, installation and service company. Our operations are classified into two segments: New Equipment and Service. Through the New Equipment segment, we design, manufacture, sell and install a wide range of passenger and freight elevators, as well as escalators and moving walkways, for residential, commercial and infrastructure projects. The Service segment provides maintenance and repair services for both our products and those of other manufacturers, and provides modernization services to upgrade elevators and escalators.

***UpLift***

During 2023, the Company announced UpLift to transform the Company's operating model. UpLift includes, among other aspects, the standardization of processes and improvement of supply chain procurement, as well as organizational changes which result in restructuring actions. See Note 15, "Restructuring and Transformation Costs" for information regarding UpLift restructuring actions and related costs incurred.

***German Tax Litigation***

In August 2024, we received a favorable ruling regarding a tax litigation in Germany. As a result, income tax benefits of approximately $185 million and related interest income of approximately $200 million are included in Income tax expense (benefit) and Interest expense (income), net, respectively, in the Consolidated Statements of Operations for 2024. The income tax benefits are recorded as an income tax receivable in Other current assets in the Consolidated Balance Sheets as of December 31, 2024. The interest income includes the reversal of an interest accrual of $50 million and recognition of an interest receivable of approximately $140 million reflected in Accrued liabilities and Other current assets, respectively, in the Consolidated Balance Sheets as of December 31, 2024.

The Company has started to receive refunds and anticipates the refund process to continue into 2026. As a result, Other current assets in the Consolidated Balance Sheets as of December 31, 2025 and 2024 include an income tax receivable of approximately $75 million and $175 million, respectively, and an interest receivable of approximately $65 million and $140 million, respectively.

Pursuant to the Tax Matters Agreement ("TMA") with RTX Corporation ("RTX", our former parent), and based on the facts and contractual provisions at the time, the Company recorded indemnification expense of $194 million for amounts due to RTX resulting from the outcome of this tax litigation in Germany in 2024. Based on additional information received from RTX during the year, which resulted in additional indemnification expense of $67 million, offset by indemnity payments made to RTX of $205 million, the Company now estimates the amount payable to RTX to be $56 million. The indemnification expense is included in Other income (expense), net in the Consolidated Statements of Operations in 2025 and 2024, and the amounts payable to RTX are included in Accrued liabilities in the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively.

See Note 14, "Income Taxes" and Note 20, "Contingent Liabilities" for additional information.

***Acquisitions of Noncontrolling Interests***

In October 2025, we purchased all of the outstanding shares of Otis Electric Elevator Company Limited ("Otis Electric") from the noncontrolling shareholder for approximately $215 million ($80 million from Cash and $135 million from borrowings). As a result, $188 million was recorded to Accumulated deficit for the difference between the purchase price and the historical noncontrolling interest carrying value and $27 million was recorded to Noncontrolling interest. Otis Electric is now 100% owned by our joint venture Otis Elevator (China) Investment Company Limited ("Otis China") and one of its subsidiaries. The impact to Accumulated other comprehensive income (loss) was not significant.

The Company owned a controlling interest and had operational control of Otis Electric as of and for the years ended December 31, 2025, 2024 and 2023, and all other periods during 2025, 2024 and 2023, and therefore its financial results are included in our Consolidated Financial Statements.

In 2024, we purchased all of the outstanding shares of our consolidated subsidiary in Japan from the noncontrolling shareholders for approximately $70 million.

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***Separation from United Technologies Corporation***

On April 3, 2020, United Technologies Corporation, subsequently renamed to RTX Corporation ("UTC" or "RTX", as applicable), completed the spin-off of the Company into an independent publicly-traded company (the "Separation") through a pro-rata distribution of 0.5 shares of Common Stock for every share of UTC common stock held at the close of business on the record date of March 19, 2020 ("Distribution"). Otis began to trade as a separate public company (New York Stock Exchange ("NYSE"): OTIS) on April 3, 2020. See Note 2, "Summary of Significant Accounting Policies" for additional information regarding the Separation and related costs.

Unless the context otherwise requires, references to "Otis", "we", "us", "our" and "the Company" refer to (i) Otis Worldwide Corporation's business prior to the Separation and (ii) Otis Worldwide Corporation and its subsidiaries following the Separation, as applicable. References to "UTC" relate to pre-Separation matters, and references to "RTX" relate to post-Separation matters.

**Note 2: Summary of Significant Accounting Policies**

**Principles of Consolidation and Basis of Presentation.** The accompanying Consolidated Financial Statements include the accounts of Otis and its controlled subsidiaries, as well as entities where Otis has a variable interest and is the primary beneficiary as defined by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 810, *Consolidation*. The factors we use to determine the primary beneficiary of a variable interest entity ("VIE") may include decision authority, control over management of day-to-day operations and the amount of our equity investment in relation to others' investments.

All significant intercompany accounts and transactions within the Company have been eliminated in the preparation of the Consolidated Financial Statements.

Certain amounts for prior years have been reclassified to conform to the current year presentation, which are immaterial.

**Use of Estimates.** The preparation of the Consolidated Financial Statements and accompanying notes in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. In addition, estimates and assumptions may impact the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ 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 conditions, including inflationary pressures, higher interest rates and tighter credit conditions as of December 31, 2025 and through the date of this report. The accounting matters assessed included, but were not limited to, our allowance for credit losses, the carrying value of our goodwill and other long-lived assets, financial assets and revenue recognition. While there was not a material impact to our Consolidated Financial Statements resulting from our assessments of these matters, future assessment of our current expectations at that time of the magnitude and duration of these macroeconomic conditions, as well as other factors, could result in material impacts to our Consolidated Financial Statements in future reporting periods.

New import tariffs implemented by the U.S. and other countries, as currently in effect, could have a material impact on our results in 2026 and future years. The impact of tariffs is dependent upon negotiations with customers and suppliers and other mitigation efforts and potential further changes in global trade policies, including higher tariffs in the U.S. or other countries.

We also assessed certain accounting matters as they relate to the ongoing conflict between Russia and Ukraine and the conflicts in the Middle East, 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 Consolidated Financial Statements 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 situations develop and any broader implications they may have on the global economy.

**Cash and Cash Equivalents.** Cash and cash equivalents includes cash on hand, demand deposits and short-term cash investments that are highly liquid in nature and have original maturities of three months or less.

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*Restricted Cash.* In certain circumstances we are required to maintain cash deposits with certain banks with respect to contractual or other legal obligations, and therefore the use of these cash deposits for general operational purposes is restricted. Our restricted cash balances are $9 million and $21 million as of December 31, 2025 and 2024, respectively, which are primarily included in Other current assets in the Consolidated Balance Sheets.

**Accounts Receivable.** The Company records accounts receivable when the right to consideration becomes unconditional. We regularly evaluate the collectability of our accounts receivable and maintain reserves for expected credit losses. We do not believe that accounts receivable represent significant concentrations of credit risk because of the diversified portfolio of individual customers and geographic areas.

*Trade receivables.* Trade receivables as of December 31, 2025 and 2024 are $3.7 billion and $3.4 billion, respectively. Trade receivables include billed receivables which are currently due from customers and unbilled receivables where we have satisfied our performance obligations but the amounts due may not be currently billable to the customer under the terms of the contract. Amounts are billed as work progresses in accordance with agreed-upon contract terms, either at periodic intervals or upon achievement of contractual milestones.

*Retainage.* Current and long-term accounts receivable as of December 31, 2025 and 2024 include retainage of $58 million and $57 million, respectively. Retainage represents amounts that, pursuant to the applicable contract, are not due until after project completion and acceptance by the customer.

*Customer Financing Notes Receivable.* Through financing arrangements with our customers, we extend payment terms, which are generally not more than one year in duration. Customer financing notes receivable as of December 31, 2025 and 2024 are $47 million and $55 million, respectively, and are included in Accounts receivable, net as of December 31, 2025 and 2024.

*Credit Losses.* We are exposed to credit losses primarily through our net sales of products and services to our customers which are recorded as Accounts Receivable, net in the Consolidated Balance Sheets. We evaluate each customer's ability to pay through assessing customer creditworthiness, historical experience and current economic conditions through a reasonable forecast period. Factors considered in our evaluation of assessing collectability and risk include: underlying value of any collateral or security interests, significant past due balances, historical losses and existing economic conditions including country and political risk. There can be no assurance that actual results will not differ from estimates or that consideration of these factors in the future will not result in an increase or decrease to the allowance for credit losses. We may require collateral or prepayment to mitigate credit risk.

We estimate expected credit losses of financial assets with similar risk characteristics. We determine an asset is impaired when our assessment identifies there is a risk that we will be unable to collect amounts due according to the contractual terms of the agreement. We monitor our ongoing credit exposure through reviews of customer balances against contract terms and due dates, current economic conditions and dispute resolution. Estimated credit losses are written off in the period in which the financial asset is no longer collectible.

The changes in allowance for credit losses related to Accounts receivable, net for 2025, 2024, and 2023 are as follows:

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Balance as of January 1 | $**125** | $130 | $152 |
| Provision for expected credit losses | **33** | 34 | 29 |
| Write-offs charged against the allowance for expected credit losses | **(39)** | (32) | (48) |
| Foreign exchange and other | **6** | (7) | (3) |
| Balance as of December 31 | $**125** | $125 | $130 |

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*Factoring.* The Company may sell certain trade accounts and notes receivable to lending institutions primarily to manage credit risk. Financial assets sold under these arrangements are excluded from Accounts receivable, net in the Company's Consolidated Balance Sheets at the time of sale if the Company has surrendered control over the related assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company's continuing involvement with the assets transferred. Gains and losses stemming from transfers reported as sales are included in Interest expense (income), net in the accompanying Consolidated Statements of Operations.

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**Contract Assets and Liabilities.** Contract assets and liabilities represent the difference in the timing of revenue recognition from receipt of cash from our customers and billings.

Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billings. Performance obligations partially satisfied in advance of customer billings are included in Contract assets, current. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. See Note 4, "Contract Assets and Liabilities" for further discussion of contract assets and liabilities.

**Inventories.** Inventories are stated at the lower of cost or estimated realizable value and are primarily based on a first-in, first-out method. Valuation write-downs for excess, obsolete and slow-moving inventory are estimated by comparing the inventory levels of individual parts to both future sales forecasts or production requirements and historical usage rates in order to identify inventory where the resale value or replacement value is less than inventoriable cost. See Note 5, "Inventories" for further details of the inventories by classification.

**Fixed Assets.** Fixed assets, including software capitalized for internal-use, are recorded at cost. Depreciation of fixed assets is computed over the fixed assets' useful lives on a straight-line basis, unless another systematic and rational basis is more representative of the fixed asset's pattern of use. See Note 6, "Fixed Assets" for further details of useful lives.

*Internal Use Software.* The Company capitalizes direct costs of services used in the development of, and external software acquired for use as, internal-use software. Amounts capitalized are amortized over a period ranging from three to five years, on a straight-line basis, unless another systematic and rational basis is more representative of the software's use. Amounts are reported as a component of Machinery and equipment.

*Asset Retirement Obligations.* The Company records the fair value of legal obligations associated with the retirement of tangible long-lived assets in the period in which the legal obligations are determined to exist. Upon initial recognition of a liability, the Company capitalizes the cost of the asset retirement obligation by increasing the carrying amount of the related long-lived asset. Over time, the liability is adjusted for changes in its present value and the capitalized cost is depreciated over the useful life of the related asset.

**Fair Value of Financial Instruments.** The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:

Level I – Quoted prices for identical instruments in active markets.

Level II – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level III – Instruments whose significant value drivers are unobservable.

The carrying amount of current trade receivables, accounts payable and accrued expenses approximates fair value due to the short maturity (less than one year) of the instruments.

**Equity Method Investments.** Entities in which we have the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting and are included in Other assets in the Consolidated Balance Sheets. Under this method of accounting, our share of the net earnings or losses of the investee entity is included in Other income (expense), net in the Consolidated Statements of Operations since the activities of the investee entity are closely aligned with the operations of the Company. We evaluate our equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

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**Business Combinations.** We account for transactions that are classified as business combinations in accordance with the FASB ASC Topic 805: *Business Combinations*. Once a business is acquired, the fair values of the identifiable assets acquired and liabilities assumed are determined with the excess cost recorded to goodwill. As required, preliminary fair values are determined once a business is acquired, with the final determination of the fair values being completed within the one-year measurement period from the date of acquisition.

**Goodwill, Intangible Assets and Long-Lived Assets.** Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Intangible assets consist of service portfolios, patents, trademarks/trade names, customer relationships and other intangible assets. Acquired intangible assets are recognized at fair value during acquisition accounting and then amortized to Cost of products and services sold and Selling, general and administrative over the applicable useful lives.

*Goodwill and Indefinite-Lived Intangible Assets.* Goodwill and intangible assets deemed to have indefinite lives are not amortized. Goodwill and indefinite-lived intangible assets are subject to impairment testing annually or when a triggering event occurs using the guidance and criteria described in FASB ASC Topic 350: *Intangibles – Goodwill and Other*. This testing compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value.

We test goodwill for impairment at a level within the Company referred to as the reporting unit, which is one level below the operating segment level. When testing goodwill for impairment, the Company may first assess qualitative factors. If an initial qualitative assessment identified that it is more likely than not that the fair value of a reporting unit is less than its carrying value, additional quantitative testing is performed. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. If the quantitative testing indicates that goodwill is impaired, an impairment charge is recognized based on the difference between the reporting unit's carrying value and its fair value. When it is determined that a quantitative analysis is required, the Company primarily utilizes a discounted cash flow methodology to calculate the fair value of its reporting units. The Company completed its most recent annual impairment testing as of July 1, 2025, and determined in the qualitative assessment that quantitative testing is not necessary. There were no triggering events since the annual impairment test.

*Finite-Lived Intangible Assets and Long-Lived Assets.* Useful lives of finite-lived intangible assets are estimated based upon the nature of the intangible asset. These intangible assets are amortized based on the pattern in which the economic benefits of the intangible assets are consumed or if straight-line amortization approximates the pattern of economic benefit, a straight-line amortization method may be used. The range of estimated useful lives is as follows:

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| | |
|:---|:---|
| Purchased service portfolios | 5 to 25 years |
| Patents, trademarks/trade names | 4 to 40 years |
| Customer relationships and other | 1 to 20 years |

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The Company evaluates the potential impairment of long-lived assets, including finite-lived intangible assets, whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. If the carrying value of other long-lived assets held and used exceeds the sum of the undiscounted expected future cash flows, the carrying value is written down to fair value. See Note 6, "Fixed Assets" and Note 7, "Business Acquisitions, Dispositions, Goodwill and Intangible Assets" for additional information regarding intangible assets and other long-lived assets.

**Income Taxes.** In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest expense has also been recognized. We recognize accrued interest related to unrecognized tax benefits in Interest expense (income), net. Penalties, if incurred, would be recognized as a component of Income tax expense.

The U.S. Tax Cuts and Jobs Act ("TCJA") subjects the Company to a tax on Global Intangible Low-Taxed Income ("GILTI"). GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. We account for GILTI as a period cost as incurred.

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See Note 14, "Income Taxes" for additional information.

**Revenue Recognition.** We recognize revenue in accordance with FASB ASC Topic 606: *Revenue from Contracts with Customers* and its related amendments, (referred to, collectively, as "ASC 606"). The Company's revenue streams include new equipment, maintenance and repair, and modernization. New equipment, modernization and repair services revenue are recognized over time as we are enhancing an asset the customer controls. Maintenance revenue is recognized on a straight-line basis over the life of the maintenance contract.

*New Equipment, Modernization and Repair Services.* For new equipment and modernization transactions, equipment and installation are typically procured in a single contract providing the customer with a complete installed elevator or escalator unit. The combination of equipment and installation promises are typically a single performance obligation. For repair services, the customer typically contracts for specific short-term services which form a single performance obligation.

For these performance obligations, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which corresponds with and best depicts transfer of control or the enhancement of the customer's assets. Contract costs included in the calculation are comprised of labor, materials, subcontractors' costs or other direct costs and indirect costs, which include indirect labor costs. In developing our cost estimates, we utilize a combination of our historical cost experience and expected costs considering current circumstances. Specific to new equipment and modernization arrangements, the Company, based on project progression, reviews cost estimates for modification on significant contracts on a quarterly basis and when circumstances change, and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. These estimates form the basis for the amount of revenue to be recognized and include the latest updated total transaction price, costs and risks for each contract. These estimates for our ongoing contracts may materially change due to the change and completions of the contract scopes, cost estimates and customers' plans, among other factors.

For performance obligations recognized under the cost to cost method, we record changes in contract estimates using the cumulative catch-up method. Modifications are recognized as a cumulative catch-up or treated as a separate accounting contract if the modification adds distinct goods or services and the modification is priced at its stand-alone selling price.

*Maintenance.* Our customers purchase maintenance contracts which include services such as required periodic maintenance procedures, preventive services and stand ready obligations to remediate issues with the elevator/escalator when and if they arise. Given the continuous nature of these services throughout the year, we recognize revenue on maintenance contracts on a straight-line basis which aligns with the cost profile of these services. Contractual changes are typically recognized prospectively as most modifications are extensions of the existing arrangement.

*Transaction Price Considerations.* Our contracts with customers typically include fixed payments to Otis. These fixed payments are generally received as we progress the performance obligations to the customers. As a result, we have not identified any significant financing elements in our contracts, and our contracts do not have significant estimates related to variable consideration except in the case of a project having an underlying performance issue, which is rare. In situations where multiple performance obligations in a single contract exist (e.g.*,* both new equipment and maintenance), the transaction price is allocated to each performance obligation in proportion to its stand-alone selling price. Estimates are made to account for changes in transaction prices attributable to pricing disputes that occur subsequent to the inception of contracts, based upon historical experience and the status of contracts.

*Certain Costs to Obtain or Fulfill Contracts*. Certain costs to obtain or fulfill a contract with a customer must be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer. Sales commissions related to new equipment, modernization and maintenance contracts, excluding renewals, are capitalized as contract fulfillment costs and are amortized consistent with the pattern of transfer of the goods or services. Customer contract costs, which do not qualify for capitalization as contract fulfillment costs, are expensed as incurred.

*Loss Contracts.* Loss provisions on contracts are recognized to the extent that estimated contract costs exceed the estimated consideration from the products or services contemplated under the contractual arrangement. For new commitments, we generally record loss provisions at contract inception. For existing commitments, anticipated losses on contractual arrangements are recognized in the period in which losses become probable.

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*Remaining Performance Obligations ("RPO").* RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of December 31, 2025, our total RPO was approximately $19.1 billion. Of the total RPO as of December 31, 2025, we expect approximately 75% will be recognized as sales over the following 24 months.

Additional disclosure required by ASC 606 is provided in Note 21, "Segment Financial Data", including disaggregation of revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

**Supplier Finance Programs**. 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 due date 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 payment terms of these supplier invoices typically range between 30 and 240 days from the invoice date.

The outstanding obligations confirmed by the Company as valid to the financial institutions under our supplier finance programs were $831 million and $714 million as of December 31, 2025 and 2024, respectively, including $80 million and $67 million as of December 31, 2025 and 2024, respectively, related to programs with payment terms of 240 days from the invoice date. These obligations are included in Accounts payable in the Consolidated Balance Sheets, and all activity related to the obligations is presented within operating activities in the Consolidated Statements of Cash Flows.

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

The changes in outstanding obligations confirmed as valid by the Company under its supplier finance programs for 2025 and 2024 are as follows:

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| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Confirmed obligations outstanding as of January 1 | $**714** | $627 |
| Invoices confirmed during the year | **2064** | 2118 |
| Confirmed invoices paid during the year | **(1970)** | (2013) |
| Foreign currency exchange impact | **23** | (18) |
| Confirmed obligations outstanding as of December 31 | $**831** | $714 |

---

**Self-Insurance.** The Company is primarily self-insured for a number of risks including, but not limited to, workers' compensation, general liability, automobile liability and employee-related healthcare benefits. The Company has obtained insurance coverage for amounts exceeding individual and aggregate loss limits. The Company accrues for known future claims and incurred but not reported losses within Accrued liabilities and Other long-term liabilities in the Consolidated Balance Sheets, totaling $240 million and $238 million as of December 31, 2025 and 2024, respectively.

**Derivatives and Hedging Activity.** We have used derivative instruments, principally forward contracts, to help manage certain foreign currency and commodity price exposures. Derivative instruments are viewed as risk management tools by us and are not used for trading or speculative purposes. By their nature, all financial instruments involve market and credit risks. We enter into derivative and other financial instruments with major investment-grade financial institutions and have policies to monitor the credit risk of those counterparties. We limit counterparty exposure and concentration of risk by diversifying counterparties. While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties.

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*Designated Derivative Instruments.* Derivatives used for hedging purposes may be designated and effective as a hedge of the identified risk exposure at the inception of the contract. All derivative instruments are recorded in the Consolidated Balance Sheets at fair value. Derivatives are used to hedge foreign currency denominated balance sheet items and commodity prices for materials recognized in cost of sales, and are reported directly in earnings along with offsetting transaction gains and losses on the items being hedged. Derivatives used to hedge forecasted cash flows associated with foreign currency commitments or forecasted commodity purchases may be accounted for as cash flow hedges, as deemed appropriate. Gains and losses on derivatives designated as cash flow hedges are recorded in Other comprehensive income (loss), net of tax and reclassified to earnings as a component of product sales or expenses, as applicable, when the hedged transaction occurs. Gains and losses on derivatives designated as cash flow hedges are recorded in Other operating activities, net within the Consolidated Statement of Cash Flows until reclassification to earnings. To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period it occurs.

Additional information pertaining to net investment hedging is included in Note 16, "Financial Instruments".

*Non-Designated Derivative Instruments.* To the extent the hedge accounting criteria are not applied, the foreign currency forward contracts and commodity price contracts are utilized as economic hedges and changes in the fair value of these contracts are recorded in earnings in the period in which they occur. Additional information pertaining to these contracts is included in Note 16, "Financial Instruments".

In addition, the Company periodically enters into sales contracts denominated in currencies other than the functional currency of the parties to the transaction. The Company accounts for these transactions separately valuing the embedded derivative component of these contracts. The changes in the fair value of these embedded derivatives are immaterial in 2025, 2024 and 2023.

**Environmental.** Environmental investigatory, remediation, operating and maintenance costs are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts with respect to each individual site, including current laws, regulations and prior remediation experience. Where no amount within a range of estimates is more likely, the minimum is accrued. Liabilities with fixed or reliably determinable future cash payments are discounted. Accrued environmental liabilities are not reduced by potential insurance reimbursements. See Note 20, "Contingent Liabilities" for additional details on the environmental remediation activities.

**Research and Development.** These costs are expensed in the period incurred and are shown on a separate line of the Consolidated Statements of Operations. Research and development expenses, covering research and the advancement of potential new and improved products and their uses, primarily include salaries and other employment costs.

**Other Income (Expense), Net.** Other income (expense), net includes the impact of changes in the fair value and settlement of certain derivatives, gains or losses on sale of businesses and fixed assets, earnings from equity method investments, fair value changes on marketable securities, impairments, UpLift transformation costs, Separation-related adjustments, gains on insurance recoveries and certain other infrequent operating income and expense items. See Note 15, "Restructuring and Transformation Costs" for additional details on UpLift transformation costs.

**Foreign Exchange.** We conduct business in many different currencies and, accordingly, are subject to the inherent risks associated with foreign exchange rate movements. The financial position and results of operations of substantially all of our foreign subsidiaries are measured using the local currency as the functional currency. Foreign currency denominated assets and liabilities are translated into U.S. dollars at the exchange rates existing at the respective balance sheet dates, and income and expense items are translated at the average exchange rates during the respective periods. The aggregate effects of translating the balance sheets of these subsidiaries are deferred within Accumulated other comprehensive income (loss).

**Pension and Postretirement Obligations.** Guidance under FASB ASC Topic 715: *Compensation – Retirement Benefits* requires balance sheet recognition of the overfunded or underfunded status of pension and postretirement benefit plans. Under this guidance, actuarial gains and losses, prior service costs or credits and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in Other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic benefit cost. See Note 11, "Employee Benefit Plans" for additional information.

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**Additional Paid-in Capital.** Additional paid-in capital includes the value of stock-based award activity, as well as the difference between the cost of acquiring the Noncontrolling interest in consolidated subsidiaries and Otis' carrying value of the Noncontrolling interest associated with those subsidiaries.

**Noncontrolling Interest.** Ownership interest in the Company's consolidated subsidiaries held by parties other than the Company are presented separately from Shareholders' Equity (Deficit) as "Noncontrolling interest" within equity in the Consolidated Balance Sheets. The amount of net income attributable to Otis Worldwide Corporation and the noncontrolling interest are both presented in the Consolidated Statements of Operations.

All noncontrolling interest with redemption features, such as put options or other contractual obligations to acquire the noncontrolling interest, that are not solely within our control are redeemable noncontrolling interest. Redeemable noncontrolling interest are reported in the mezzanine section of the Consolidated Balance Sheets, between Liabilities and Shareholders' Equity (Deficit), at the greater of redemption value or initial carrying value.

The activity attributable to noncontrolling interest and redeemable noncontrolling interest for 2025, 2024 and 2023 is presented in the Consolidated Statements of Changes in Equity.

**Separation from UTC and Related Costs.** The Separation, as further described in Note 1, "Business Overview", was completed pursuant to a Separation and Distribution Agreement ("Separation Agreement") and other agreements with our former parent, UTC, and Carrier Global Corporation ("Carrier"), related to the Separation, including but not limited to a tax matters agreement (the "Tax Matters Agreement" or "TMA").

We entered into the TMA with our former parent UTC and Carrier that governs the parties' respective rights, responsibilities and obligations with respect to tax matters (including responsibility for taxes, entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other tax matters). Subject to certain exceptions set forth in the TMA, Otis generally is responsible for federal, state and foreign taxes imposed on a separate return basis on Otis (or any of its subsidiaries) with respect to taxable periods (or portions thereof) that ended on or prior to the date of the Distribution. The TMA provides special rules that allocate responsibility for tax liabilities arising from a failure of the Separation transactions to qualify for tax-free treatment based on the reasons for such failure.

**Accounting Pronouncements.**

In March 2020, the FASB issued ASU 2020-04*,* Reference Rate Reform (Topic 848): *Facilitation of the Effects of Reference Rate Reform on Financial Reportin*g ("ASU 2020-04")*,* which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Additionally, in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): *Deferral of the Sunset Date of Topic 848* ("ASU 2022-06"), which allows ASU 2020-04 to be adopted and applied prospectively to contract modifications made on or before December 31, 2024. The adoption of this ASU did not have a material impact on our Consolidated Financial Statements.

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Topic 450-50): *Disclosure of Supplier Finance Program Obligations*, which 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, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. The adoption of this ASU did not have a material impact on our Consolidated Financial Statements, as disclosed in Note 2, "Summary of Significant Accounting Policies" under the heading "Supplier Finance Programs".

In August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Ventures Formations (Subtopic 805-60): *Recognition and Initial Measurement* ("ASU 2023-05"), which requires that joint ventures, upon formation, apply a new basis of accounting by initially measuring assets and liabilities at fair value. The amendments in ASU 2023-05 are effective for joint ventures that are formed on or after January 1, 2025. The adoption of this ASU did not have a material impact on our Consolidated Financial Statements.

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In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): *Improvements to Reportable Segment Disclosures*. The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. We adopted this standard effective for the reporting period December 31, 2024. The adoption of this standard resulted in additional disclosure. See Note 21, "Segment Financial Data" for further details.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): *Improvements to Income Tax Disclosures*. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The adoption of this ASU resulted in additional annual disclosure, but did not impact our consolidated financial position, results of operations, or cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): *Disaggregation of Income Statement Expenses*. The amendments in this update require disclosure, in the notes to financial statements, on disaggregated information about specific categories underlying certain income statement expense line items that are considered relevant, including the purchase of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted. Adoption of this ASU will result in additional disclosure, but will not impact our consolidated financial position, results of operations, or cash flows.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): *Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity*. The amendments in this update require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in the ASU to determine which entity is the accounting acquirer. The amendments in ASU 2025-03 are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted. We are currently evaluating the impact of this standard, however; we do not expect it to have a material impact on our Consolidated Financial Statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): *Measurement of Credit Losses for Accounts Receivable and Contract Assets.* The amendments in this Update provide a practical expedient when developing reasonable and supportable forecasts as part of estimating expected credit losses, allowing entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in ASU 2025-05 are effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact of this standard, however; we do not expect it to have a material impact on our Consolidated Financial Statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): *Targeted Improvements to the Accounting for Internal-Use Software*. The amendments in this update remove all references to prescriptive and sequential software development stages (referred to as "project stages") throughout Subtopic 350-40. The amendments in this update specify that the disclosures in Subtopic 360-10, Property, Plant, and Equipment—Overall, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. Additionally, the amendments clarify that the intangibles disclosures in paragraphs 350-30-50-1 through 50-3 are not required for capitalized internal-use software costs. The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact of this standard.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): *Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract*. The amendments in this update exclude from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. The amendments in ASU 2025-07 are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact of this standard.

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In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): *Hedge Accounting Improvements*. Consistent with the original objective of Update 2017-12, the objective of this Update is to more closely align hedge accounting with the economics of an entity's risk management activities. The amendments in this Update are intended to better reflect those strategies in financial reporting by enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted transactions. The amendments in ASU 2025-09 apply to any entity that elects to apply hedge accounting in accordance with Topic 815 and are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact of this standard.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): *Narrow-Scope Improvements*. The amendments in this Update result in a comprehensive list of interim disclosures that are required by GAAP. In developing the list of disclosures required by other Topics, the Board focused on identifying the interim disclosures that are currently required under GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact of this standard.

Other new accounting pronouncements issued but not effective until after December 31, 2025 did not and are not expected to have a material impact on our financial position, results of operations or cash flows.

**Note 3: Earnings per Share**

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions, except per share amounts; shares in millions)*** | **2025** | **2024** | **2023**  |
| Net income attributable to common shareholders | $**1384** | $1645 | $1406 |
| Basic weighted average number of shares outstanding | **392.8** | 401.7 | 411.4 |
| Stock awards and equity units (share equivalent) | **2.1** | 2.7 | 3.2 |
| Diluted weighted average number of shares outstanding | **394.9** | 404.4 | 414.6 |
| Earnings Per Share of Common Stock: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $**3.52** | $4.10 | $3.42 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $**3.50** | $4.07 | $3.39 |

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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. Lastly, the computations of diluted earnings per share include outstanding awards granted prior to the Separation from UTC and converted upon the Separation, in accordance with the Employee Matters Agreement. There were 0.4 million, 0.7 million and 1.0 million of anti-dilutive stock awards excluded from the computation for 2025, 2024 and 2023 respectively.

The impact of redeemable noncontrolling interest to Net income attributable to common shareholders was immaterial for 2025, 2024, and 2023.

**Note 4: Contract Assets and Liabilities**

Contract assets reflect revenue recognized in advance of customer billings. Contract liabilities are recognized when a customer pays consideration, or we have an unconditional right to receive consideration, in advance of the satisfaction of performance obligations under the contract. We receive payments from customers based on the terms established in our contracts, which are payments in advance of performing work, progress payments as we perform contract work over time, or in some cases, payments upon completion of work.

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Total Contract assets and Contract liabilities as of December 31, 2025 and 2024 are as follows:

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| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Contract assets, current | $**699** | $706 |
| &nbsp;&nbsp;Total contract assets | **699** | 706 |
| Contract liabilities, current | **(2611)** | (2598) |
| Contract liabilities, noncurrent (included within Other long-term liabilities) | **(29)** | (38) |
| &nbsp;&nbsp;Total contract liabilities | **(2640)** | (2636) |
| Net contract liabilities | $**(1941)** | $(1930) |

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Contract assets decreased by $7 million and Contract liabilities increased by $4 million during 2025 due to the progression of current contracts and timing of billing on customer contracts, net of the foreign exchange increases of $33 million and $120 million, respectively.

During 2025, 2024 and 2023, we recognized revenue of approximately $2.0 billion each year related to the contract liabilities as of January 1, 2025, 2024, and 2023.

**Note 5: Inventories**

Inventories consisted of the following as of December 31:

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| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Raw materials and work-in-process | $**139** | $134 |
| Finished goods | **474** | 423 |
| Total | $**613** | $557 |

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Raw materials and work-in-process and finished goods are net of valuation write-downs of $84 million and $82 million as of December 31, 2025 and 2024, respectively.

**Note 6: Fixed Assets**

Fixed assets consisted of the following as of December 31:

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **Estimated Useful Lives** | **2025** | **2024** |
| Land |  | $**39** | $38 |
| Buildings and improvements | 20 - 40 Years | **498** | 516 |
| Machinery and equipment | 3 - 12 Years | **1311** | 1234 |
| Assets under construction |  | **156** | 105 |
|  |  | **2004** | 1893 |
| Less: Accumulated depreciation |  | **(1261)** | (1192) |
| Total |  | $**743** | $701 |

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Depreciation expense was $113 million, $120 million and $126 million in 2025, 2024 and 2023, respectively.

**Note 7: Business Acquisitions, Dispositions, Goodwill and Intangible Assets**

**Business Acquisitions.** Our acquisitions of businesses and intangible assets, net of cash, totaled $109 million, $87 million and $36 million (including debt assumed) in 2025, 2024 and 2023, respectively, and were primarily in our Service segment. Transaction costs incurred were not considered significant.

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**Goodwill.** Changes in our Goodwill balances in 2025 were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| ***(dollars in millions)*** | **Balance as of**<br>**December 31, 2024** | **Goodwill Resulting<br>From Business Combinations** | **Foreign Currency<br>Translation <br>and Other** | **Balance as of**<br>**December 31, 2025** |
| New Equipment | $**277** | $**—** | $**17** | $**294** |
| Service | **1271** | **65** | **65** | **1401** |
| Total | $**1548** | $**65** | $**82** | $**1695** |

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Changes in our Goodwill balances in 2024 were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| ***(dollars in millions)*** | **Balance as of**<br>**December 31, 2023** | **Goodwill Resulting<br>From Business Combinations** | **Foreign Currency<br>Translation <br>and Other** | **Balance as of <br>December 31, 2024** |
| New Equipment | $295 | $— | $(18) | $277 |
| Service | 1293 | 46 | (68) | 1271 |
| Total | $1588 | $46 | $(86) | $1548 |

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**Intangible Assets.** Identifiable intangible assets are comprised of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
|<br>***(dollars in millions)*** | **Gross Amount** | **Accumulated<br>Amortization** | **Gross Amount** | **Accumulated<br>Amortization** |
| Amortized: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchased service portfolios | $**2133** | $**(1818)** | $1930 | $(1640) |
| &nbsp;&nbsp;&nbsp;&nbsp;Patents, trademarks/trade names | **19** | **(16)** | 18 | (16) |
| &nbsp;&nbsp;&nbsp;&nbsp;Customer relationships and other | **61** | **(43)** | 52 | (39) |
|  | **2213** | **(1877)** | 2000 | (1695) |
| Unamortized: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Trademarks and other | **7** | **—** | 6 |  |
| Total | $**2220** | $**(1877)** | $2006 | $(1695) |

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Amortization of intangible assets was $62 million in 2025 and 2024, and $67 million in 2023. Excluding the impact of acquisitions, currency translation adjustments and the reclassification of $16 million of intangible assets, net to assets held for sale in 2024, there were no other significant changes in our Intangible Assets during 2025, 2024 and 2023.

The estimated future amortization of intangible assets over the next five years is as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2026** | **2027** | **2028** | **2029** | **2030** |
| Future amortization | $46 | $40 | $35 | $32 | $29 |

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**Disposals and Held for Sale Assets and Liabilities.** Assets held for sale were $5 million and $38 million as of December 31, 2025 and 2024, respectively. Liabilities held for sale were $9 million as of December 31, 2024. There were no liabilities held for sale as of December 31, 2025. These balances are included in Other current assets and Accrued liabilities in the Consolidated Balance Sheets, respectively.

During 2025, we sold one of our non-U.S. subsidiaries, primarily related to the Service segment. The Company recorded a total pre-tax loss on sale of $28 million, of which $10 million was recorded in 2025, and $18 million was recorded in 2024, in Other income (expenses), net in the Consolidated Statements of Operations.

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**Note 8: Borrowings and Lines of Credit**

Short-term borrowings consisted of the following as of December 31:

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| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Commercial paper | $**—** | $— |
| Other borrowings | **215** | 51 |
| Total short-term borrowings | $**215** | $51 |

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**Commercial Paper and Other Borrowings.** As of December 31, 2025, there were no borrowings outstanding under the Company's $1.5 billion commercial paper programs. 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. The main increase in Other borrowings was due to borrowings for the purchase of the outstanding shares of Otis Electric from the non-controlling shareholder. See Note 1 "Business Overview" for additional information on the acquisition of the non-controlling interest.

**Long-Term Debt.** As of December 31, 2025, we have a credit agreement ("Credit Agreement") with various banks providing for a $1.5 billion unsecured, unsubordinated five-year revolving credit facility, effective August 8, 2025, with an interest rate on US dollar denominated borrowings at Otis' option of the Term Secured Overnight Financing Rate ("SOFR") 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 1.000% for Term SOFR rate, EURIBO rate and daily simple ESTR rate borrowings, and 0.000% for base rate borrowings, and can fluctuate based on reference to Otis' public debt ratings, as specified in the Credit Agreement. As of December 31, 2025, there were no borrowings under the revolving credit facility. The undrawn portion of the revolving credit facility serves as a backstop for the issuance of commercial paper. On August 8, 2025, we terminated all commitments outstanding under the previous credit agreement, which was scheduled to expire on March 10, 2028.

On August 16, 2023, we issued $750 million unsecured, unsubordinated five-year notes due August 16, 2028 (the "Notes") with an interest rate of 5.25%. The net proceeds of the Notes were used to fund the repayment of our outstanding commercial paper borrowings and to fund the repayment at maturity of the €500 million 0.000% Euro Notes due November 12, 2023, with the remainder used for other general corporate purposes.

On November 19, 2024, we issued $600 million unsecured, unsubordinated seven-year notes due November 19, 2031 with an interest rate of 5.125% and €850 million Euro denominated ($899 million), unsecured, unsubordinated three-year notes due November 19, 2027 with an interest rate of 2.875%. A portion of the net proceeds of the notes were used to fund the repayment at maturity of the $1.3 billion 2.056% Notes that were due on April 5, 2025. The remainder of the proceeds were used to fund the repayment of the Company's commercial paper borrowings and for other general corporate purposes.

On September 4, 2025, we issued $500 million unsecured, unsubordinated ten-year notes due September 4, 2035 with an interest rate of 5.131%. A portion of the proceeds will be used to fund the repayment at maturity of the Japanese Yen denominated 0.370% Notes due March 18, 2026. The remainder of the proceeds were used to fund the repayment of certain of our commercial paper borrowings.

Our revolving credit agreement and indentures contain affirmative and negative covenants customary for financings of these types that, among other things, limit the Company's and its subsidiaries' ability to incur additional liens, to make certain fundamental changes and to enter into sale and leaseback transactions. In addition, the revolving credit agreement requires that we maintain a maximum consolidated leverage ratio, as defined in the agreement. The revolving credit agreement and indentures also contain events of default customary for financings of these types. The Company is in compliance with all covenants in the revolving credit agreement and the indentures governing all notes as of December 31, 2025.

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Long-term debt, including current portion, consisted of the following as of December 31:

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| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| 2.056% notes due 2025  | $**—** | $1300 |
| 0.370% notes due 2026 (¥21.5 billion principal value)  | **137** | 137 |
| 0.318% notes due 2026 (€600 million principal value)  | **705** | 624 |
| 2.293% notes due 2027  | **500** | 500 |
| 2.875% notes due 2027 (€850 million principal value) | **999** | 885 |
| 5.250% notes due 2028  | **750** | 750 |
| 2.565% notes due 2030  | **1500** | 1500 |
| 5.125% notes due 2031 | **600** | 600 |
| 0.934% notes due 2031 (€500 million principal value)  | **588** | 520 |
| 5.131% notes due 2035 | **500** |  |
| 3.112% notes due 2040  | **750** | 750 |
| 3.362% notes due 2050  | **750** | 750 |
| Other (including finance leases) | **6** | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total principal long-term debt | **7785** | 8322 |
| Other (discounts and debt issuance costs) | **(44)** | (49) |
| Total long-term debt | **7741** | 8273 |
| Less: current portion | **841** | 1300 |
| Long-term debt, net of current portion | $**6900** | $6973 |

---

We may redeem any series of notes at our option pursuant to certain terms.

Debt discounts and debt issuance costs are presented as a reduction of debt in the Consolidated Balance Sheets and are amortized as a component of interest expense over the term of the related debt using the effective interest method. The Consolidated Statements of Operations for 2025, 2024 and 2023 reflects the following:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Debt issuance costs amortization | $**10** | $8 | $7 |
| Total interest expense on debt | **217** | 183 | 155 |

---

The unamortized debt issuance costs as of December 31, 2025 and 2024 were $41 million and $45 million, respectively.

The average maturity of our long-term debt as of December 31, 2025 is approximately 6.7 years. The average interest expense rate on our borrowings as of December 31, 2025 and 2024 was as follows:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Short-term commercial paper | **— %** | —% |
| Total long-term debt | **3.0%** | 2.7% |

---

The average interest expense rate on our borrowings for 2025, 2024 and 2023 was as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **2025** | **2024** | **2023** |
| Short-term commercial paper | **3.8%** | 5.4% | 5.1% |
| Total long-term debt | **2.8%** | 2.5% | 2.1% |

---

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The schedule of principal payments required on long-term debt, excluding finance leases, for the next five years and thereafter is:

---

| | |
|:---|:---|
| ***(dollars in millions)*** | **Principal Payments** |
| 2026 | $842 |
| 2027 | 1499 |
| 2028 | 750 |
| 2029 |  |
| 2030 | 1500 |
| Thereafter | 3188 |
| Total | $7779 |

---

**Note 9: Accrued Liabilities**

Accrued liabilities consisted of the following as of December 31:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Accrued salaries, wages and employee benefits | $**605** | $579 |
| Operating lease liabilities | **158** | 120 |
| Accrued interest | **129** | 147 |
| Contractual indemnity obligations | **113** | 244 |
| VAT and other non-income tax payables | **109** | 123 |
| Accrued income taxes payable | **75** | 75 |
| Other liabilities | **658** | 633 |
| Total | $**1847** | $1921 |

---

Accrued interest primarily consists of interest accrued for uncertain tax positions, as well as $67 million and $64 million of interest accrued for borrowings as of December 31, 2025 and 2024, respectively, as described in Note 8, "Borrowings and Lines of Credit".

As of December 31, 2025 and 2024, Contractual indemnity obligations includes a $56 million and $194 million indemnity payable to RTX, respectively, resulting from the outcome of the German tax litigation as described in Note 20, "Contingent Liabilities".

**Note 10: Other Long-Term Liabilities**

Other long-term liabilities consisted of the following as of December 31:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| General, product and auto liability | $**136** | $137 |
| Employee benefits | **98** | 92 |
| Contractual indemnity obligations | **23** | 80 |
| Other liabilities | **72** | 74 |
| Total | $**329** | $383 |

---

The Contractual indemnity obligations consist of payables to RTX, resulting from the TMA. See Note 2, "Summary of Significant Accounting Policies" for further details.

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**Note 11: Employee Benefit Plans**

The Company sponsors numerous single-employer domestic and foreign employee benefit plans.

**Employee Savings Plans.** We sponsor various employee savings plans. Our contributions to employer-sponsored defined contribution plans were $74 million, $71 million and $65 million for 2025, 2024, and 2023, respectively.

**Pension Plans.** We sponsor both funded and unfunded domestic and foreign defined benefit pension plans that cover a large number of our employees. While we sponsor domestic pension plans that provide retirement benefits to certain employees, they are not a material component of the projected benefit obligation. Our plans use a December 31 measurement date consistent with our fiscal year.

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| **Change in benefit obligation:** |  |  |
| Beginning balance | $**949** | $957 |
| &nbsp;&nbsp;&nbsp;&nbsp;Service cost | **34** | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest cost | **32** | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;Actuarial (gain) loss | **(47)** | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;Benefits paid | **(33)** | (46) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net settlement, curtailment and special termination benefits | **(32)** | (9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | **94** | (42) |
| Ending balance | $**997** | $949 |
| **Change in plan assets:** |  |  |
| Beginning balance | $**637** | $609 |
| &nbsp;&nbsp;&nbsp;&nbsp;Actual return on plan assets | **48** | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;Employer contributions | **42** | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;Benefits paid | **(33)** | (46) |
| &nbsp;&nbsp;&nbsp;&nbsp;Settlements | **(32)** | (9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | **51** | (25) |
| Ending balance | $**713** | $637 |
| **Funded status:** |  |  |
| Fair value of plan assets | $**713** | $637 |
| Benefit obligations | **(997)** | (949) |
| Funded status of plan | $**(284)** | $(312) |
| **Amounts recognized in the Consolidated Balance Sheets consist of:** |  |  |
| Noncurrent assets | $**130** | $115 |
| Current liability | **(30)** | (28) |
| Noncurrent liability | **(384)** | (399) |
| Net amount recognized | $**(284)** | $(312) |
| **Amounts recognized in Accumulated other comprehensive loss consist of:** |  |  |
| Net actuarial loss | $**38** | $98 |
| Prior service cost | **5** | 1 |
| Net amount recognized | $**43** | $99 |

---

The amounts included in "actuarial (gain) loss" in the above table are primarily due to changes in discount rate assumptions driven by changes in corporate bond yields. The amounts included in "Other" in the above table primarily reflect the impact of foreign exchange translation, primarily for plans in Australia, Germany, Japan, South Korea and Switzerland.

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In 2025, 2024 and 2023 we made cash contributions to our defined benefit pension plans of $42 million, $51 million and $48 million, respectively.

Information for pension plans with accumulated benefit obligations or projected benefit obligations in excess of plan assets as of December 31 are as follows:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| **Pension plans with accumulated benefit obligations in excess of plan assets:** |  |  |
| Projected benefit obligation | $**411** | $397 |
| Accumulated benefit obligation | **367** | 353 |
| Fair value of plan assets | **3** | 3 |
| **Pension plans with projected benefit obligations in excess of plan assets:** |  |  |
| Projected benefit obligation | $**533** | $707 |
| Accumulated benefit obligation | **455** | 609 |
| Fair value of plan assets | **119** | 280 |

---

The accumulated benefit obligation for all defined benefit pension plans was approximately $0.9 billion and $0.8 billion as of December 31, 2025 and 2024, respectively.

The components of the net periodic pension cost are as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Service cost | $**34** | $32 | $29 |
| Interest cost | **32** | 32 | 33 |
| Expected return on plan assets | **(35)** | (34) | (31) |
| Recognized actuarial net loss | **3** | 1 | (1) |
| Net settlement, curtailment and special termination benefits loss (gain) | **2** | 1 | 4 |
| Net periodic pension cost – employer | $**36** | $32 | $34 |

---

Other changes in plan assets and benefit obligations recognized in other comprehensive loss are as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Current year actuarial (gain) loss | $**(60)** | $2 | $93 |
| Prior service cost arising during period | **5** |  |  |
| Amortization of actuarial gain (loss) | **(3)** |  | 1 |
| Net settlement and curtailment (loss) gain | **(3)** | (1) | (4) |
| Other | **5** | (6) | 1 |
| Total recognized in other comprehensive (income) loss | $**(56)** | $(5) | $91 |
| Net recognized in net periodic pension cost and other comprehensive (income) loss | $**(20)** | $27 | $125 |

---

The amounts included in "Other" in the above table primarily reflect the impact of foreign exchange translation, primarily for plans in Canada, Germany, Spain, and Switzerland.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

Major assumptions used in determining the benefit obligation and net cost for pension plans are presented in the following table as weighted-averages:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Benefit Obligation** | **Benefit Obligation** | **Net Cost** | **Net Cost** | **Net Cost** |
| | **2025** | **2024** | **2025** | **2024** | **2023** |
| Discount rate | **3.6%** | 3.3% | **3.3%** | 3.4% | 3.8% |
| Salary scale | **3.0%** | 3.1% | **3.1%** | 3.2% | 3.1% |
| Expected return on plan assets | **—** |  | **5.3%** | 5.3% | 5.1% |
| Interest crediting rate | **2.0%** | 1.8% | **1.8%** | 1.7% | 2.1% |

---

The weighted-average discount rates used to measure pension benefit obligations and net costs are set by reference to specific analyses using each plan's specific cash flows and then compared to high-quality bond indices for reasonableness.

In determining the expected return on plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes, and economic and other indicators of future performance. In addition, we may consult with, and consider the opinions of, financial and other professionals in developing appropriate capital market assumptions. Return projections are also validated using a simulation model that incorporates yield curves, credit spreads and risk premiums to project long-term prospective returns.

The plans' investment management objectives include providing the liquidity and asset levels needed to meet current and future benefit payments, while maintaining a prudent degree of portfolio diversification considering interest rate risk and market volatility. Globally, investment strategies target a mix of approximately 50% of growth-seeking assets and 50% of income-generating and hedging assets using a wide diversification of asset types, fund strategies and investment managers. The growth seeking allocation consists of global public equities in developed and emerging countries, and alternative-asset class strategies. Within the income-generating assets, the fixed income portfolio consists of mainly government and broadly diversified high-quality corporate bonds.

The fair values of pension plan assets as of December 31, 2025 by asset category are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***(dollars in millions)*** | **Quoted Prices in Active Markets for Identical Assets<br>(Level 1)** | **Significant Observable Inputs<br>(Level 2)** | **Significant Unobservable Inputs<br>(Level 3)** | **Not Subject to Leveling** | **Total** |
| Asset category |  |  |  |  |  |
| <u>Public equities:</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Global Equity Commingled Funds <sup>(1)</sup> | $**86** | $**3** | $**—** | $**—** | $**89** |
| &nbsp;&nbsp;&nbsp;&nbsp;Global Equity Funds at net asset value <sup>(5)</sup> | **—** | **—** | **—** | **154** | **154** |
| <u>Fixed income securities:</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Governments | **22** | **41** | **—** | **—** | **63** |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate Bonds | **50** | **45** | **—** | **—** | **95** |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed income securities at net asset value <sup>(5)</sup> | **—** | **—** | **—** | **60** | **60** |
| Real estate <sup>(2) (5)</sup> | **14** | **20** | **—** | **7** | **41** |
| Other <sup>(3) (5)</sup> | **7** | **140** | **—** | **26** | **173** |
| Cash and cash equivalents <sup>(4) (5)</sup> | **31** | **2** | **—** | **7** | **40** |
| Total | $**210** | $**251** | $**—** | $**254** | **715** |
| Other assets and liabilities <sup>(6)</sup> |  |  |  |  | **(2)** |
| Total as of December 31, 2025 |  |  |  |  | $**713** |

---

<sup>(1)</sup> Represents investments in mutual funds and investments in commingled funds that invest primarily in common stocks.

<sup>(2)</sup> Represents investments in real estate including commingled funds.

<sup>(3)</sup> Represents insurance contracts and global-balanced-risk commingled funds consisting mainly of equity, bonds and some commodities.

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<sup>(4)</sup> Represents short-term commercial paper, bonds and other cash or cash-like instruments.

<sup>(5)</sup> In accordance with FASB ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets.

<sup>(6)</sup> Represents trust receivables and payables that are not leveled.

The fair values of pension plan assets as of December 31, 2024 by asset category are as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***(dollars in millions)*** | **Quoted Prices in Active Markets for Identical Assets<br>(Level 1)** | **Significant Observable Inputs<br>(Level 2)** | **Significant Unobservable Inputs<br>(Level 3)** | **Not Subject to Leveling** | **Total** |
| Asset category |  |  |  |  |  |
| <u>Public equities:</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Global Equity Commingled Funds <sup>(1)</sup> | $72 | $3 | $— | $— | $75 |
| &nbsp;&nbsp;&nbsp;&nbsp;Global Equity Funds at net asset value <sup>(5)</sup> |  |  |  | 143 | 143 |
| <u>Fixed income securities:</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Governments | 14 | 2 |  |  | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate Bonds | 44 |  |  |  | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed income securities at net asset value <sup>(5)</sup> |  |  |  | 140 | 140 |
| Real estate <sup>(2) (5)</sup> | 12 | 17 |  | 9 | 38 |
| Other <sup>(3) (5)</sup> | 5 | 122 |  | 23 | 150 |
| Cash and cash equivalents <sup>(4) (5)</sup> | 27 |  |  | 3 | 30 |
| Total | $174 | $144 | $— | $318 | $636 |
| Other assets and liabilities <sup>(6)</sup> |  |  |  |  | 1 |
| Total as of December 31, 2024 |  |  |  |  | $637 |

---

<sup>(1)</sup> Represents investments in mutual funds and investments in commingled funds that invest primarily in common stocks.

<sup>(2)</sup> Represents investments in real estate including commingled funds.

<sup>(3)</sup> Represents insurance contracts and global-balanced-risk commingled funds consisting mainly of equity, bonds and some commodities.

<sup>(4)</sup> Represents short-term commercial paper, bonds and other cash or cash-like instruments.

<sup>(5)</sup> In accordance with FASB ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets.

<sup>(6)</sup> Represents trust receivables and payables that are not leveled.

Quoted market prices are used to value investments when available. Investments in securities traded on exchanges, including listed futures and options, are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices. Fixed income securities are primarily measured using a market approach pricing methodology, where observable prices are obtained by market transactions involving identical or comparable securities of issuers with similar credit ratings. Over-the-counter securities and government obligations are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes. Temporary cash investments are stated at cost, which approximates fair value.

We expect to make total contributions of approximately $45 million to our global defined benefit pension plans in 2026, including benefit payments to be paid directly from corporate assets.

Benefit payments, including amounts to be paid from corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $79 million in 2026, $74 million in 2027, $75 million in 2028, $76 million in 2029, $80 million in 2030, and $391 million from 2031 through 2035.

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**Postretirement Benefit Plans.** We sponsor postretirement benefit plans that provide health benefits to eligible retirees. The postretirement plans are unfunded. The benefit obligation was $7 million and $6 million as of December 31, 2025, and 2024, respectively. The net periodic cost was less than $1 million for 2025, 2024 and 2023. Other comprehensive losses recognized related to changes in benefit obligations were less than $1 million in 2025 and $1 million in 2024.

The projected benefit obligation discount rate was 6.8% as of December 31, 2025 and 2024. The Net Cost discount rate was 6.8%, 7.2% and 7.0% for 2025, 2024 and 2023, respectively.

Benefit payments, including amounts to be paid from corporate assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: $1 million each year from 2026 through 2030, and $3 million from 2031 through 2035.

**Multiemployer Benefit Plans.** We contribute to various domestic and international multiemployer defined benefit pension plans. The risks of participating in these multiemployer plans are different from single-employer plans in that assets contributed are pooled and may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. Lastly, if we choose to stop participating in some of our multiemployer plans, we may be required to pay those plans a withdrawal liability based on the underfunded status of the plan.

Our participation in these plans for the annual periods ended December 31 is outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act ("PPA") zone status available in 2025 and 2024 is for the plan's year-end at June 30, 2024 and June 30, 2023, respectively. The zone status is based on information that we received from the plan and is certified by the plan's actuary. Our significant plan is in the green zone which represents a plan that is at least 80% funded and does not require a financial improvement plan ("FIP") or a rehabilitation plan ("RP").

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| ***(dollars in millions)*** | | **PPA Zone Status** | **PPA Zone Status** | **FIP/RP Status** | **Contributions** | **Contributions** | **Contributions** | **Surcharge Imposed** | **Expiration Date of Collective-Bargaining Agreement** |
| **Pension Fund** | **EIN/Pension Plan Number** | **2025** | **2024** | **Pending/Implemented** | **2025** | **2024** | **2023** | **Surcharge Imposed** | **Expiration Date of Collective-Bargaining Agreement** |
| National Elevator Industry Pension Plan | 23-2694291 | **Green** | Green | No | $**133** | $134 | $128 | No | 7/8/2027 |
| Other funds |  |  |  |  | **9** | 9 | 9 |  |  |
| Total |  |  |  |  | $**142** | $143 | $137 |  |  |

---

For the plan years ended June 30, 2024 and 2023, respectively, we were listed in the National Elevator Industry Pension Plan's Forms 5500 as providing more than 5% of the total contributions for the plan. At the date these financial statements were issued, the Form 5500 was not available for the plan year ending June 30, 2025.

In addition, we participate in multiemployer arrangements that provide postretirement benefits other than pensions, with the National Elevator Industry Health Benefit Plan being the most significant. These arrangements generally provide medical and life benefits for eligible active employees and retirees and their dependents. Contributions to multiemployer plans that provide postretirement benefits other than pensions were $20 million for 2025, 2024 and 2023.

**Stock-Based Compensation.** The Company adopted the 2020 Long-Term Incentive Plan (the "Plan") effective on April 3, 2020. A total of 45 million shares of common stock are authorized under the Plan. The Plan provides for the grant of various types of awards including restricted share unit awards, stock appreciation rights, stock options, and performance-based awards. Under the Plan, the exercise price of awards, if any, is set on the grant date and may not be less than the fair market value per share on that date. Generally, stock appreciation rights and stock options have a term of ten years and a three-year vesting period, subject to limited exceptions. In the event of retirement, annual stock appreciation rights, stock options, and restricted share units held for more than one year may become vested and exercisable (if applicable), subject to certain terms and conditions. Awards with performance-based vesting generally have a minimum three-year vesting period and vest based on actual performance against pre-established metrics. In the event of retirement, performance-based awards held for more than one year generally remain eligible to vest based on actual performance relative to target metrics. All other restricted awards generally have a three-year vesting period. We currently intend to issue new shares for share option exercises and conversions under our equity compensation arrangements, and will continue to evaluate this policy in connection with our share repurchase program. As of December 31, 2025, approximately 18 million shares remain available for awards under the 2020 Plan.

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*Stock-based Compensation Expense*

We measure the cost of all share-based payments, including stock options, at fair value on the grant date and recognize this cost in the Consolidated Statements of Operations. A forfeiture rate assumption is applied on grant date to adjust the expense recognition for awards that are not expected to vest.

Stock-based compensation expense, net of estimated forfeitures, is primarily reflected in Selling, general and administrative expenses in the Consolidated Statements of Operations, in addition to Cost of products sold, Cost of services sold and Research and development.

Stock-based compensation expense and the resulting tax benefits in 2025, 2024 and 2023 were as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Stock-based compensation expense (Share Based) | $**80** | $73 | $64 |
| Stock-based compensation expense (income) (Liability Awards) | **—** |  |  |
| Total gross stock-based compensation expense | **80** | 73 | 64 |
| Less: future tax benefit | **(7)** | (7) | (7) |
| Stock-based compensation expense, net of tax | $**73** | $66 | $57 |

---

For 2025, 2024 and 2023, the amount of cash received from the exercise of stock options was $3 million, $4 million and $6 million, respectively, with an associated tax benefit realized of $7 million, $11 million and $6 million, respectively. In addition, for 2025, 2024 and 2023, the associated tax benefit realized from the vesting of performance share units and other restricted awards was $5 million, $10 million and $9 million, respectively. The tax benefit was computed using current U.S. federal and state tax rates applicable in 2025, 2024 and 2023.

As of December 31, 2025, there was approximately $83 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 1.7 years.

A summary of the activity under Otis' plans for 2025 follows:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Stock Appreciation Rights** | **Stock Appreciation Rights** | **Restricted Share Units** | **Restricted Share Units** | **Performance Share Units** | **Performance Share Units** | **Stock Options** | **Stock Options** |
|<br>***(shares in thousands)*** | **Shares** | **Average Price\*** | **Shares** | **Average Price\*\*** | **Shares** | **Average Price \*\*** | **Shares** | **Average Price \*** |
| Outstanding at: |  |  |  |  |  |  |  |  |
| December 31, 2024 | 5946 | $71.58 | 943 | $88.01 | 953 | $92.08 | 124 | $68.21 |
| &nbsp;&nbsp;Granted <sup>(1)</sup> |  |  | 503 | 94.07 | 411 | 98.33 |  |  |
| &nbsp;&nbsp;Exercised / Earned <sup>(1)</sup> | (1189) | 60.91 | (412) | 85.09 | (179) | 86.71 | (54) | 61.41 |
| &nbsp;&nbsp;Cancelled | (75) | 86.10 | (97) | 90.41 | (129) | 92.82 |  |  |
| December 31, 2025 | 4682 | $74.06 | 937 | $92.16 | 1056 | $95.34 | 70 | $73.38 |

---

<sup>\*</sup> Weighted-average grant price

<sup>\*\*</sup> Weighted-average grant fair value

<sup>(1)</sup> Includes annual retainer awards issued to the Board of Directors

No stock options and stock appreciation rights were granted by Otis during 2025. The weighted-average grant date fair value of stock options and stock appreciation rights granted by Otis, during 2024 and 2023 was $24.34 and $24.67, respectively. The weighted-average grant date fair value of performance share units, which vest upon achieving certain performance metrics, and other restricted stock awards granted by Otis during 2025, 2024 and 2023 was $96.07, $89.54 and $84.88, respectively. The total intrinsic value (which is the amount by which the stock price exceeded the exercise price on the date of exercise) of stock options and stock appreciation rights exercised during 2025, 2024 and 2023 was $44 million, $78 million and $65 million, respectively. The total fair value (which is the stock price at vesting) of performance share units and other restricted awards vested was $56 million, $95 million and $75 million during 2025, 2024 and 2023, respectively.

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The following table summarizes information about equity awards outstanding that are vested and expected to vest and equity awards outstanding that are exercisable as of December 31, 2025:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Equity Awards Vested and Expected to Vest** | **Equity Awards Vested and Expected to Vest** | **Equity Awards Vested and Expected to Vest** | **Equity Awards Vested and Expected to Vest** | **Equity Awards That Are Exercisable** | **Equity Awards That Are Exercisable** | **Equity Awards That Are Exercisable** | **Equity Awards That Are Exercisable** |
|<br>***(shares in thousands; aggregate intrinsic value in millions)*** | **Awards** | **Average Price \*** | **Aggregate Intrinsic Value** | **Remaining Term \*\*** | **Awards** | **Average Price \*** | **Aggregate Intrinsic Value** | **Remaining Term \*\*** |
| Stock Options/Stock Appreciation Rights | **4746** | $**74.03** | $**66** | **4.5 years** | **4249** | $**72.22** | $**65** | **4.1 years** |
| Performance Share Units/Restricted Share Units | **1929** | **—** | $**169** | **1.1 years** | **—** | **—** | **—** | **—** |

---

<sup>\*</sup> Weighted-average grant price per share

<sup>\*\*</sup> Weighted-average contractual remaining term in years

In 2025, the Company made a change to the equity awards mix granted annually to the executive population as part of their overall compensation program. Specifically, the Company eliminated annual grants of stock appreciation rights and stock option awards and replaced them with additional mix of restricted stock units and performance share units. As a result of this change, the Company was no longer required to perform valuation modeling using the Binomial Lattice model in 2025. For prior years, the fair value of each option award was estimated on the date of grant using the Binomial Lattice model. The following table indicates the assumptions used in estimating fair values for stock appreciated rights and stock options granted in 2024 and 2023. Lattice-based option models incorporate ranges of assumptions for inputs; those ranges are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **2025** | **2024** | **2023** |
| Expected volatility | **N/A** | 26.1% - 26.8% | 27.8% - 28.1% |
| Weighted-average volatility | **N/A** | 26.8% | 27.9% |
| Expected term (in years) | **N/A** | 5.3 | 6.2 |
| Expected dividend yield | **N/A** | 1.6% | 1.5% |
| Risk-free rate | **N/A** | 3.6% - 3.7% | 3.4% - 4.7% |

---

For 2024 and 2023, the expected volatility for Otis was calculated using a blend of Otis and peer-group stock volatility. The estimate for equity award exercise and employee termination behavior within the valuation model incorporates Otis employee data from prior to the Separation. The expected term represents an estimate of the period of time equity awards are expected to remain outstanding. The risk-free rate is based on the term structure of interest rates at the time of equity award grant.

The Company uses a Monte Carlo simulation approach based on a three-year measurement period to determine fair value of the performance share units that are subject to market conditions. This approach includes the use of assumptions regarding the future performance of the Company's stock and those of a peer group. Those assumptions include expected volatility, risk-free interest rates, correlations and dividend yield.

**Note 12: Stock**

**Preferred Stock.** There are 125 million shares of $0.01 par value authorized Preferred Stock, of which none were issued or outstanding as of December 31, 2025 or 2024.

**Common Stock.** There are 2.0 billion shares of $0.01 par value Common Stock authorized. As of December 31, 2025 and 2024, 439.4 million and 438.6 million shares of Common Stock were issued, respectively, which includes 49.6 million and 41.0 million shares of treasury stock, respectively.

**Treasury Stock.** As of December 31, 2025, 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 approximately $1.3 billion was remaining at such time.

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During 2025, 2024 and 2023, the Company repurchased 8.6 million, 10.6 million and 9.6 million shares of Common Stock, respectively, for approximately $800 million, $1.0 billion and $800 million, respectively. Share repurchases in excess of issuances are subject to a 1% excise tax, which is included as part of the cost basis of the shares acquired in Treasury Stock in the Consolidated Balance Sheets as of December 31, 2025 and 2024, as well as within financing activities in the Consolidated Statements of Cash Flows when paid.

The Company's share repurchase program does not obligate it to acquire any specific number of shares. Under this program, shares may be purchased on the open market, in privately negotiated transactions, under accelerated share repurchase programs or under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended.

**Note 13: Accumulated Other Comprehensive Income (Loss)**

A summary of the changes in each component of Accumulated other comprehensive income (loss), net of tax, for 2025, 2024 and 2023 is provided below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| ***(dollars in millions)*** | **Foreign<br>Currency<br>Translation** | **Defined Benefit<br>Pension and<br>Postretirement<br>Plans** | **Unrealized<br>Hedging<br>Gains (Losses)** | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** |
| Balance as of December 31, 2022 | $(587) | $(8) | $3 | $(592) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications, net | (87) | (69) | 6 | (150) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts reclassified, pre-tax | 1 | (1) | (8) | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax expense (benefit) reclassified |  |  |  |  |
| Balance as of December 31, 2023 | (673) | (78) | 1 | (750) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications, net | 1 | 2 | 2 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts reclassified, pre-tax |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax expense (benefit) reclassified |  |  |  |  |
| Balance as of December 31, 2024 | (672) | (76) | 3 | (745) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications, net | **(381)** | **39** | **(4)** | **(346)** |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts reclassified, pre-tax | **—** | **3** | **2** | **5** |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax expense (benefit) reclassified | **—** | **(1)** | **—** | **(1)** |
| Balance as of December 31, 2025 | $**(1053)** | $**(35)** | $**1** | $**(1087)** |

---

Amounts reclassified that relate to defined benefit pension and postretirement plans include amortization of prior service costs and actuarial net losses recognized during each period presented. These costs are recorded as components of net periodic pension cost for each period presented. See Note 11, "Employee Benefit Plans" for additional information.

**Note 14: Income Taxes**

**Income Before Income Taxes.** The sources of income from operations before income taxes are:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| United States | $**631** | $505 | $565 |
| Foreign | **1303** | 1534 | 1466 |
| Net income before income taxes | $**1934** | $2039 | $2031 |

---

As a result of the TCJA the Company determined it no longer intends to reinvest certain undistributed earnings of its international subsidiaries that have been previously taxed in the U.S. As such, Otis recorded the international taxes associated with the future remittance of these earnings as part of the Separation from UTC. For the remainder of the Company's undistributed international earnings, unless tax effective to repatriate, Otis will continue to permanently reinvest these earnings. It is not practicable to estimate the amount of tax that might be payable on the remaining amounts.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

On July 4, 2025, the One Big Beautiful Bill Act was enacted, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international). The tax impacts of this legislation do not have a material impact on our Consolidated Financial Statements.

**Provision for Income Taxes.** The income tax expense (benefit) for 2025, 2024 and 2023 consisted of the following components:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| <u>Current:</u> |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;United States: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal | $**128** | $74 | $82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State | **56** | 45 | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign | **399** | 217 | 462 |
|  | **583** | 336 | 594 |
| <u>Future:</u> |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;United States: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal | **(59)** | (11) | (24) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State | **(16)** | (1) | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign | **(29)** | (19) | (32) |
|  | **(104)** | (31) | (61) |
| Income tax expense | $**479** | $305 | $533 |
| Attributable to items (charged) credited to (deficit) equity | $**(15)** | $(6) | $16 |

---

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

**Reconciliation of Effective Income Tax Rate.** Differences between effective income tax rates and the statutory U.S. federal income tax rate are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** | **2023** | **2023** |
|<br>***(dollars in millions)*** | **Amount** | **Percent** | **Amount** | **Percent** | **Amount** | **Percent** |
| U.S. Federal Statutory Tax Rate | $**406** | **21.0%** | $428 | 21.0% | $427 | 21.0% |
| State and Local Income Taxes, Net of Federal Income Tax Effect <sup>(1)</sup> | **31** | **1.6%** | 35 | 1.7% | 36 | 1.8% |
| Foreign Tax Effects: |  |  |  |  |  |  |
| France: |  |  |  |  |  |  |
| Distributable reserve deferred adjustment | **—** | **— %** | (37) | (1.8)% |  | —% |
| Other | **13** | **0.7%** | 14 | 0.7% | 10 | 0.5% |
| Germany: |  |  |  |  |  |  |
| Statutory tax rate difference between Germany and United States | **8** | **0.4%** | 25 | 1.2% | 7 | 0.4% |
| Tax litigation settlement | **1** | **0.1%** | (247) | (12.1)% |  | —% |
| Other | **(1)** | **— %** |  | —% | 2 | 0.1% |
| Ireland: |  |  |  |  |  |  |
| Nontaxable interest income | **(25)** | **(1.3)%** | (29) | (1.4)% | (23) | (1.1)% |
| Other | **—** | **— %** | 3 | 0.2% | 8 | 0.4% |
| Luxembourg: |  |  |  |  |  |  |
| Nondeductible interest expense | **49** | **2.4%** | 53 | 2.6% | 47 | 2.3% |
| Other | **—** | **— %** | (4) | (0.2)% | (5) | (0.2)% |
| Other foreign jurisdictions | **53** | **2.6%** | 94 | 4.6% | 73 | 3.4% |
| Effect of Changes in Tax Laws or Rates Enacted in the Current Period | **—** | **— %** |  | —% |  | —% |
| Effect of Cross-Border Tax Laws: |  |  |  |  |  |  |
| Foreign-derived intangible income | **(49)** | **(2.5)%** | (35) | (1.7)% | (23) | (1.1)% |
| Foreign withholding tax reclassification | **(49)** | **(2.5)%** | (43) | (2.1)% | (31) | (1.5)% |
| Other | **13** | **0.7%** | 8 | 0.4% | 10 | 0.5% |
| Tax Credits: |  |  |  |  |  |  |
| Other | **(2)** | **(0.1)%** | (1) | (0.1)% | (2) | (0.1)% |
| Changes in Valuation Allowance | **1** | **0.1%** | 1 | 0.1% | (3) | (0.2)% |
| Nontaxable or Nondeductible Items: |  |  |  |  |  |  |
| Net Indemnity Payable/(Receivable) to/(from) former parent | **15** | **0.8%** | 37 | 1.8% |  | —% |
| Other | **11** | **0.6%** | 6 | 0.3% | 7 | 0.3% |
| Changes in Unrecognized Tax Benefits | **2** | **0.1%** |  | —% | (4) | (0.2)% |
| Other Adjustments | **2** | **0.1%** | (3) | (0.2)% | (3) | (0.1)% |
| Effective income tax rate | $**479** | **24.8%** | $305 | 15.0% | $533 | 26.2% |

---

<sup>(1)</sup> State taxes in California and New York contributed to the majority of the tax effect in this category.

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

The 2025 effective tax rate is higher than the statutory U.S. rate primarily due to higher international tax rates as compared to the lower U.S. federal statutory rate. The 2025 effective tax rate is higher than the 2024 effective tax rate primarily due to the absence of estimated tax benefits arising from the resolution of the German tax litigation and the absence of the reduction in a deferred tax liability related to the mitigation of future repatriation costs, both recorded in 2024, and the tax effect of the increase in our estimated nondeductible TMA indemnity obligation payable to RTX recorded in 2025. These impacts were partially offset by an incremental benefit related to foreign-derived intangible income and foreign valuation allowance releases recorded in 2025.

The 2024 effective tax rate is lower than the 2023 effective tax rate and the statutory U.S. rate primarily due to recognition of estimated tax benefits arising from the resolution of the German tax litigation and the reduction of a deferred tax liability related to the mitigation of future repatriation costs.

The 2023 effective tax rate is higher than the statutory U.S. rate primarily due to higher international tax rates as compared to the lower U.S. federal statutory rate.

**Deferred Tax Assets and Liabilities.** Future income taxes represent the tax effects of transactions which are reported in different periods for tax and financial reporting purposes. These amounts consist of the tax effects of temporary differences between the tax and financial reporting balance sheets and tax carryforwards. Future income tax benefits and obligations within the same tax paying component of a particular jurisdiction are offset for presentation in the Consolidated Balance Sheets.

The tax effects of temporary differences and tax carryforwards which gave rise to future income tax benefits and obligations as of December 31, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Future income tax benefits: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance and employee benefits | $**90** | $109 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other asset basis differences | **119** | 113 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liability basis differences | **453** | 349 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax loss carryforwards | **226** | 201 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax credit carryforwards | **55** | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;Valuation allowances | **(256)** | (250) |
| Total future income tax benefits | $**687** | $576 |
| Future income tax obligations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets | $**148** | $143 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets basis differences | **221** | 203 |
| Total future income tax obligations | $**369** | $346 |

---

Valuation allowances have been established primarily for tax credit carryforwards, tax loss carryforwards, and certain foreign temporary differences to reduce the future income tax benefits to expected realizable amounts.

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**Tax Credit and Loss Carryforwards.** As of December 31, 2025, tax credit carryforwards, principally federal and state, and tax loss carryforwards, principally foreign, were as follows:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **Tax Credit Carryforwards** | **Tax Loss Carryforwards** |
| Expiration period: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;2026-2030 | $**11** | $**52** |
| &nbsp;&nbsp;&nbsp;&nbsp;2031-2035 | **12** | **22** |
| &nbsp;&nbsp;&nbsp;&nbsp;2036-2045 | **2** | **111** |
| &nbsp;&nbsp;&nbsp;&nbsp;Indefinite | **30** | **789** |
| Total | $**55** | $**974** |

---

**Unrecognized Tax Benefits.** As of December 31, 2025, the Company had gross tax-effected unrecognized tax benefits of $152 million, all of which, if recognized, would impact the effective tax rate. A reconciliation of the beginning and ending amounts of unrecognized tax benefits and interest expense related to unrecognized tax benefits for 2025, 2024 and 2023 is as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Balance at January 1 | $**149** | $394 | $386 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions for tax positions related to the current year | **11** | 12 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions for tax positions of prior years | **10** |  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reductions for tax positions of prior years | **(18)** | (12) | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Settlements | **—** | (245) | (1) |
| Balance at December 31 | $**152** | $149 | $394 |
| Gross interest expense (income) related to unrecognized tax benefits | $**(22)** | $(146) | $6 |
| Total accrued interest balance at December 31 | $**64** | $84 | $148 |

---

The decrease in unrecognized tax benefits and associated interest in 2024 is primarily due to the resolution of the German tax litigation. See Note 20, "Contingent Liabilities" for discussion regarding the German tax litigation.

Otis conducts business globally and, as a result, Otis or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions.

In the ordinary course of business, Otis could be subject to examination by taxing authorities throughout the world, including such major jurisdictions as Austria, Belgium, Brazil, Canada, China, France, Germany, Hong Kong, India, Italy, Japan, Mexico, Netherlands, Portugal, South Korea, Spain, Switzerland, the United Kingdom and the U.S. With a few exceptions, Otis is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2016.

A subsidiary of Otis lost a tax litigation case in Belgium in 2023 and decided not to appeal. Otis may receive the assessment for tax and interest within the next 12 months. The associated tax and interest have been fully reserved.

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**Income Taxes Paid.** The income taxes paid, net of refunds, for 2025, 2024 and 2023 are as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Income taxes paid, net of refunds |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal | $**116** | $55 | $85 |
| &nbsp;&nbsp;&nbsp;&nbsp;State | **62** | 52 | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China | **72** | 91 | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;France | **43** | 52 | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Germany | **(102)** | 33 | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japan | **39** | 41 | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Spain | **47** | 41 | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign Other | **194** | 221 | 189 |
| Total income taxes paid, net of refunds | $**471** | $586 | $546 |

---

**Note 15: Restructuring and Transformation Costs**

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. Due to the size, nature and frequency of these discrete actions, they are fundamentally different from the Company's ongoing productivity initiatives.

During 2025, 2024 and 2023, we recorded restructuring costs for new and ongoing restructuring actions, including UpLift actions beginning in 2023, as follows:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2023** | **2023** | **2023** |
|  | **UpLift** | **Other** | **Total** | **UpLift** | **Other** | **Total** | **UpLift** | **Other** | **Total** |
| Cost of products and services sold | $**13** | $**31** | $**44** | $8 | $20 | $28 | $— | $6 | $6 |
| Selling, general and administrative | **63** | **23** | **86** | 23 | 20 | 43 | 25 | 36 | 61 |
| Total | $**76** | $**54** | $**130** | $31 | $40 | $71 | $25 | $42 | $67 |

---

Restructuring costs incurred and expected, unless otherwise indicated, are approximately 30% New Equipment and 70% Service. Although this reflects the segments to which the restructuring costs relate, refer to Note 21, "Segment Financial Data" for more information about our measure of segment performance (segment operating profit), which no longer includes restructuring costs, among other items, beginning in 2024.

**UpLift Restructuring Actions and Transformation Costs.** In 2023, we announced UpLift to transform our operating model. UpLift includes, among other aspects, the standardization of our processes and improvement of our supply chain procurement, as well as organizational changes which result in restructuring actions.

UpLift restructuring actions were approved in 2023, 2024 and 2025. These costs are primarily severance related costs. These actions initiated during 2025, 2024 and 2023 are substantially completed as of December 31, 2025. Expected total costs and remaining costs to incur for the actions initiated are approximately $150 million and $18 million, respectively. Following completion of the program, the Company does not expect to incur restructuring or transformation costs of a similar nature. Ongoing costs related to continuous improvement initiatives are expected to be consistent with historical operating expenses.

In 2025, 2024, and 2023, we incurred $69 million, $65 million and $16 million, respectively, of incremental, non-restructuring costs associated with transforming our operating model as a part of UpLift ("UpLift transformation costs"), which are recorded in Other income (expense), net in the Consolidated Statements of Operations. The UpLift transformation costs are primarily for consultants, third-party service providers and personnel focused on designing and implementing a centralized service delivery model that supports our new organizational structure, including the standardization of our supply chain and digital technology procurement.

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**Other Restructuring Actions.** The other restructuring expenses incurred during 2025, 2024 and 2023 were primarily the result of restructuring programs initiated related to severance and facility exit costs. We are targeting to complete in 2026 the majority of the remaining restructuring actions initiated in 2025 and 2024, with certain utilization beyond 2026 due to contractual obligations or legal requirements in the applicable jurisdictions. Expected total costs and remaining costs to incur for the other restructuring actions initiated are $94 million and $16 million, respectively. Remaining costs are expected to be approximately 50% New Equipment and 50% Service.

*Reorganization of Operations in China*

In January 2025, we announced the reorganization of our operations in China. Among other aspects, this reorganization will result in restructuring actions of approximately $30 million. These actions include severance related costs, and these actions are substantially completed as of December 31, 2025. Amounts related to the reorganization of operations in China are included within Other restructuring actions.

**Restructuring Accruals.** The following table summarizes the accrual balance and utilization for the restructuring actions, which are primarily for severance costs:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **UpLift Actions** | **Other Actions** | **Total Restructuring Actions** |
| Restructuring accruals as of December 31, 2023 | $13 | $35 | $48 |
| Net restructuring costs | 31 | 40 | 71 |
| Utilization, foreign exchange and other | (31) | (51) | (82) |
| Restructuring accruals as of December 31, 2024 | 13 | 24 | 37 |
| Net restructuring costs | **76** | **54** | **130** |
| Utilization, foreign exchange and other | **(39)** | **(54)** | **(93)** |
| Restructuring accrual as of December 31, 2025 | $**50** | $**24** | $**74** |

---

**Note 16: Financial Instruments**

We enter into derivative instruments primarily for risk management purposes, including derivatives designated as hedging instruments under ASC 815, *Derivatives and Hedging*. We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, commodity prices and foreign exchange rates. These fluctuations can increase the costs of financing, investing in and operating the business. We may use derivative instruments, including swaps, forward contracts and options, to manage certain foreign currency, commodity price and interest rate exposures.

The four-quarter average of the notional amount of foreign exchange contracts hedging foreign currency transactions was approximately $5.6 billion and $5.3 billion as of December 31, 2025 and 2024, respectively. The four-quarter average of the notional amount of contracts hedging commodity purchases was $12 million and $14 million as of December 31, 2025 and 2024, respectively.

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The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for derivative instruments as of December 31:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **Balance Sheet Classification** | **2025** | **2024** |
| **Derivatives designated as Cash flow hedging instruments:** |  |  |  |
|  | <u>Asset Derivatives:</u> |  |  |
| Foreign exchange contracts | Other current assets | $**4** | $5 |
| Foreign exchange contracts | Other assets | **2** | 4 |
|  | &nbsp;&nbsp;&nbsp;Total asset derivatives | $**6** | $9 |
|  | <u>Liability Derivatives:</u> |  |  |
| Foreign exchange contracts | Accrued liabilities | $**(3)** | $(4) |
| Foreign exchange contracts | Other long-term liabilities | **(2)** | (1) |
|  | &nbsp;&nbsp;Total liability derivatives | $**(5)** | $(5) |
| **Derivatives not designated as Cash flow hedging instruments:** |  |  |  |
|  | <u>Asset Derivatives:</u> |  |  |
| Foreign exchange contracts | Other current assets | $**11** | $53 |
| Commodity contracts | Other current assets | **1** |  |
| Foreign exchange contracts | Other assets | **2** | 6 |
|  | &nbsp;&nbsp;&nbsp;Total asset derivatives | $**14** | $59 |
|  | <u>Liability Derivatives:</u> |  |  |
| Foreign exchange contracts | Accrued liabilities | $**(25)** | $(39) |
| Foreign exchange contracts | Other long-term liabilities | **(2)** | (6) |
|  | &nbsp;&nbsp;&nbsp;Total liability derivatives | $**(27)** | $(45) |

---

**Derivatives designated as Cash flow hedging instruments.** The amount of gain or (loss) attributable to foreign exchange and commodity contract activity reclassified from Accumulated other comprehensive income (loss) was immaterial for 2025, 2024 and 2023, and is presented in Note 13, "Accumulated Other Comprehensive Income (Loss)".

The effect of cash flow hedging relationships on Accumulated other comprehensive income (loss) as of December 31, 2025 and 2024 are presented in the table below:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Gain (loss) recorded in Accumulated other comprehensive income (loss) | $**1** | $3 |

---

The Company utilizes the critical terms match method in assessing firm commitment derivatives and regression testing in assessing commodity derivatives for hedge effectiveness. Accordingly, the hedged items and derivatives designated as hedging instruments are highly effective.

Assuming current market conditions continue, a pre-tax gain of $1 million is expected to be reclassified from Accumulated other comprehensive income (loss) into Cost of products sold to reflect the fixed prices obtained from foreign exchange and commodity hedging within the next 12 months. All derivative contracts accounted for as cash flow hedges as of December 31, 2025 will mature by November 2029.

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**Net Investment Hedges.** We may use non-derivative instruments (foreign currency denominated borrowings) and derivative instruments (foreign exchange forward contracts) to hedge portions of the Company's investments in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as a hedge of net investment in foreign operations and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in foreign currency translation within Other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income, and will remain in Accumulated other comprehensive income (loss) until the hedged investment is sold or substantially liquidated. The remainder of the change in value of such instruments is recorded in earnings, including to the extent foreign currency denominated borrowings are not designated in, or are de-designated from, a net investment hedge relationship.

Our use of derivative instruments designated as hedges of net investment in foreign subsidiaries can vary depending on the Company's desired foreign exchange risk coverage.

We have ¥21.5 billion of Japanese Yen denominated long-term debt that qualifies as a net investment hedge against our investments in Japanese businesses, as well as derivative instruments that qualify as net investment hedges against our investments in certain European businesses (notional amount of €169 million) and Asian businesses (notional amount of HK$2.2 billion). The net investment hedges are deemed to be effective. The maturity dates of the current non-derivative and derivative instruments designated in net investment hedges range from 2026 to 2027.

In 2025, we de-designated six derivative instruments that qualified as net investment hedges in certain European businesses with notional amount totaling €150 million, and in certain Asian businesses with notional amounts of ¥2.1 billion and HK$1.3 billion, respectively. These de-designated instruments were deemed to be effective until de-designation.

In 2024, we de-designated a derivative instrument that qualified as a net investment hedge in certain Asian businesses with a notional amount of HK$1.5 billion, which was deemed to be effective until de-designation.

Additionally, we had derivative instruments with notional amount of €95 million that matured during 2023. These derivative instruments qualified as net investment hedges which were deemed to be effective until maturity.

The following table summarizes the amounts of gains (losses) recognized in other comprehensive income (loss) related to non-derivative and derivative instruments designated as net investment hedges in 2025, 2024 and 2023:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Foreign currency denominated long-term debt | $**1** | $13 | $13 |
| Foreign currency forward contracts | **(7)** | 10 | 4 |
| Total | $**(6)** | $23 | $17 |

---

**Derivatives not designated as Cash flow hedging instruments.** The net effect of derivatives not designated as Cash flow hedging instruments within Other income (expense) net, in the Consolidated Statements of Operations in 2025, 2024 and 2023 was as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Foreign exchange contracts | $**25** | $7 | $20 |

---

The effects of derivatives not designated as Cash flow hedge instruments within Cost of products sold in the Consolidated Statements of Operations were as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Commodity and foreign exchange contracts | $**5** | $(1) | $(5) |

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**Note 17: Fair Value Measurements**

In accordance with the provisions of ASC 820: *Fair Value Measurements*, the following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring and non-recurring basis in our Consolidated Balance Sheets as of December 31, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|<br>***(dollars in millions)*** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **Recurring fair value measurements:** | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Marketable securities | $**55** | $**55** | $**—** | $**—** |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative assets | **20** | **—** | **20** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | **(32)** | **—** | **(32)** | **—** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|<br>***(dollars in millions)*** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **Recurring fair value measurements:** | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Marketable securities | $44 | $44 | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative assets | 68 |  | 68 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | (50) |  | (50) |  |

---

**Valuation Techniques.** Our marketable securities include investments that are traded in active markets, either domestically or internationally, and are measured at fair value using closing stock prices from active markets. The fair value gains or losses related to our marketable securities are recorded through net income. Our derivative assets and liabilities include foreign exchange and commodity contracts that are measured at fair value using internal and third party models based on observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties' credit risks.

As of December 31, 2025, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk. Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties' credit risks.

The fair values of the current portion of the Company's financial instruments not carried at fair value approximated their carrying values because of the short-term nature of the current portion. The fair value of receivables, including customer financing notes receivable, net, that were issued long-term are based on the discounted values of their related cash flows at interest rates reflecting the attributes of the counterparties, including geographic location. Customer-specific risk, including credit risk, is already considered in the carrying value of those receivables. Our long-term debt, as described in Note 8, "Borrowings and Lines of Credit", is measured at fair value using closing bond prices from active markets.

The following table provides carrying amounts and fair values of financial instruments that are not carried at fair value in our Consolidated Balance Sheets as of December 31, 2025 and 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
|<br>***(dollars in millions)*** | **Carrying<br>Amount** | **Fair<br>Value** | **Carrying<br>Amount** | **Fair<br>Value** |
| Long-term receivables, net | $**49** | $**48** | $47 | $46 |
| Customer financing notes receivable, net | **16** | **14** | 21 | 19 |
| Short-term borrowings | **(214)** | **(214)** | (51) | (51) |
| Long-term debt, including current portion (excluding leases and other) | **(7779)** | **(7269)** | (8316) | (7600) |
| Long-term liabilities, including current portion | **(84)** | **(81)** | (132) | (123) |

---

Long-term liabilities, including current portion, as of December 31, 2025 and 2024 is primarily $80 million and $131 million, respectively, of payables to RTX for reimbursement of tax payments that RTX is responsible to pay after the Separation as a result of the TMA.

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The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in the Consolidated Balance Sheets as of December 31, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|<br>***(dollars in millions)*** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| Long-term receivables, net | $**48** | $**—** | $**48** | $**—** |
| Customer financing notes receivable, net | **14** | **—** | **14** | **—** |
| Short-term borrowings | **(214)** | **—** | **(214)** | **—** |
| Long-term debt, including current portion (excluding leases and other) | **(7269)** | **—** | **(7269)** | **—** |
| Long-term liabilities, including current portion | **(81)** | **—** | **(81)** | **—** |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|<br>***(dollars in millions)*** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| Long-term receivables, net | $46 | $— | $46 | $— |
| Customer financing notes receivable, net | 19 |  | 19 |  |
| Short-term borrowings | (51) |  | (51) |  |
| Long-term debt, including current portion (excluding leases and other) | (7600) |  | (7600) |  |
| Long-term liabilities, including current portion | (123) |  | (123) |  |

---

**Note 18: Guarantees**

The Company provides service and warranty on its products beyond normal service and warranty policies. The carrying amounts of service and product guarantees were $10 million and $16 million as of December 31, 2025 and 2024, respectively.

The Company provides certain financial guarantees to third parties. As of December 31, 2025, Otis has stand-by letters of credit with maximum potential payment totaling $181 million. We accrue costs associated with guarantees when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts, and where no amount within a range of estimates is more likely, the minimum is accrued. In accordance with the FASB ASC Topic 460: *Guarantees*, we record these liabilities at fair value. As of December 31, 2025, Otis has determined there are no estimated costs probable under these guarantees.

**Note 19: Leases** 

ASU 2016-02, *Leases (Topic 842)* and its related amendments (collectively, "Lease Accounting Standard") establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability in the Consolidated Balance Sheets for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements of Operations.

We enter into lease agreements for the use of real estate space, vehicles and certain other equipment under operating and finance leases. We determine if an arrangement contains a lease at inception. Operating leases are included in Operating lease ROU assets, Accrued liabilities, and Operating lease liabilities in our Consolidated Balance Sheets. Finance leases are not considered significant to our Consolidated Balance Sheets or Consolidated Statements of Operations. We apply the practical expedient for short-term leases, whereby a lease ROU asset and liability is not recognized and the expense is recognized in a straight-line basis over the lease term.

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ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments, and use the implicit rate when readily determinable. We determine our incremental borrowing rate through market sources including relevant industry rates. Our lease ROU assets also include any lease pre-payments and exclude lease incentives. Certain of our leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. We exclude variable payments from lease ROU assets and lease liabilities, to the extent not considered fixed, and instead, expense variable payments as incurred. Variable lease expense and lease expense for short duration contracts is not a material component of lease expense. Our leases generally have remaining lease terms of 1 to 20 years, some of which include options to extend leases. The majority of our leases with options to extend are up to five years with the ability to terminate the lease within one year. The exercise of lease renewal options is at our sole discretion and our lease ROU assets and liabilities reflect only the options we are reasonably certain that we will exercise. Lease expense is recognized on a straight-line basis over the lease term.

Operating lease cost for 2025, 2024 and 2023 was $206 million, $166 million and $153 million, respectively.

Supplemental cash flow information related to operating leases for 2025, 2024 and 2023 was as follows:

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| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| Cash paid for amounts included in the measurement of operating lease liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating cash outflows from operating leases | $**(188)** | $(129) | $(129) |
| Non-cash operating lease activity: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;ROU assets obtained in exchange for operating lease liabilities | **323** | 150 | 93 |

---

Operating lease ROU assets and liabilities are reflected on our Consolidated Balance Sheets as of December 31, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Operating lease ROU assets | $**554** | $422 |
| Accrued liabilities | $**158** | $120 |
| Operating lease liabilities | **397** | 298 |
| &nbsp;&nbsp;Total operating lease liabilities | $**555** | $418 |

---

Supplemental information related to operating leases as of December 31, 2025 and 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
| Weighted Average Remaining Lease Term (in years) | **3.9** |  | 4.1 |  |
| Weighted Average Discount Rate | **4.2** | **%** | 4.0 | % |

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Undiscounted maturities of operating lease liabilities, including options to extend lease terms that are reasonably certain of being exercised, as of December 31, 2025 are as follows:

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| | |
|:---|:---|
| ***(dollars in millions)*** | **Total** |
| 2026 | $178 |
| 2027 | 153 |
| 2028 | 116 |
| 2029 | 73 |
| 2030 | 38 |
| Thereafter | 47 |
| &nbsp;&nbsp;&nbsp;Total undiscounted lease payments | 605 |
| Less: imputed interest | (50) |
| &nbsp;&nbsp;&nbsp;Total discounted lease payments | $555 |

---

**Note 20: Contingent Liabilities**

Except as otherwise noted, while we are unable to predict the final outcome, based on information currently available, we do not believe that resolution of any of the following matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. In addition to the specific amounts noted below, where we have recorded loss contingency accruals for other matters described below and other matters, the amounts in aggregate are not material. Legal costs generally are expensed when incurred.

**Environmental.** As previously disclosed, the Company's operations are subject to environmental regulation by authorities with jurisdiction over its operations. The Company has accrued for the costs of environmental remediation activities, including, but not limited to, investigatory, remediation, operating and maintenance costs and performance guarantees, and periodically reassesses these amounts. Management believes that the likelihood of incurring losses materially in excess of amounts accrued is remote. The outstanding liability for environmental obligations was $5 million as of December 31, 2025 and 2024, and is principally included in Other long-term liabilities in the Consolidated Balance Sheets.

**Legal Proceedings.**

*German Tax Litigation*

In the third quarter of 2024, Otis prevailed in a German tax litigation case stemming from the 1998 reorganization of the Company's operations in Germany. As a result of winning the case, the Company expects to receive total refunds of prepaid tax, prepaid interest, overpayment interest, and court fees of approximately €308 million net of tax (approximately $362 million) as of December 31, 2025. The Company has started to receive refunds and anticipates the refund process to continue into 2026.

The recoveries related to this matter are allocated between RTX and the Company pursuant to the terms of the TMA with our former parent, UTC, by way of indemnification payments. The Company has established an indemnity payable to RTX, which is intended to cover RTX's tax and interest payable to the IRS. Interest on RTX's liability to the IRS will continue to accrue until RTX's tax liability is paid. The Company and RTX disagree about both the scope of the indemnity payable to RTX and the Company's liability for interest accruing on amounts already paid to RTX. The Company expects this dispute to be resolved pursuant to the dispute resolution procedures of the TMA.

---

| | | |
|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** |
| Indemnity Payable (in Accrued liabilities) | $**56** | $194 |

---

As of December 31, 2024, the Company estimated its indemnity payable to RTX to be $194 million and recorded this amount in its financial statements for the year ended December 31, 2024.

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Based on additional information received from RTX during the year, which resulted in additional indemnification expense of $67 million, offset by indemnity payments made to RTX of $205 million, the Company now estimates the remaining amount payable to RTX to be $56 million. The indemnification expense is included in Other income (expense), net in the Consolidated Statements of Operations in 2025 and 2024, and the amounts payable to RTX are included in Accrued liabilities in the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively.

This estimate could further change due to the parties' continuing dispute concerning the scope of the final indemnity amount, which will be resolved pursuant to the procedures set forth in the TMA.

See Note 1, "Business Overview" for additional information on the impacts of the litigation and TMA activity to the Consolidated Financial Statements as of December 31, 2025.

*Asbestos Matters*

We have been named as defendants in lawsuits alleging personal injury as a result of exposure to asbestos. While we have never manufactured any asbestos-containing component parts, and no longer incorporate asbestos in any current products, certain of our historical products have contained components manufactured by third parties incorporating asbestos. A substantial majority of these asbestos-related claims have been dismissed without payment or were covered in full or in part by insurance or other forms of indemnity. Additional cases were litigated and settled without any insurance reimbursement. The amounts involved in asbestos related claims were not material individually or in the aggregate for 2025 and 2024.

The estimated range of total liabilities to resolve all pending and unasserted potential future asbestos claims through 2059 is approximately $11 million to $31 million as of December 31, 2025, and approximately $11 million to $21 million as of December 31, 2024. Since no amount within the range of estimates is more likely to occur than any other, we have recorded the minimum amount of $11 million as of December 31, 2025 and 2024, which is principally recorded in Other long-term liabilities on our Consolidated Balance Sheets. Amounts are on a pre-tax basis, not discounted, and exclude the Company's legal fees to defend the asbestos claims (which will continue to be expensed as they are incurred). In addition, the Company has an insurance recovery receivable for probable asbestos related recoveries of approximately $3 million, which is principally included in Other assets on our Consolidated Balance Sheets as of December 31, 2025 and 2024.

**Other.** We have commitments and contingent liabilities related to legal proceedings, self-insurance programs and matters arising out of the normal course of business. We accrue contingencies based on a range of possible outcomes. If no amount within this range is a better estimate than any other, we accrue the minimum amount. While it is not possible to determine the ultimate disposition of each of these claims and whether they will be resolved consistent with our beliefs, we expect that the outcome of such claims, individually or in the aggregate, will not have a material adverse effect on our business, financial condition, cash flows or results of operations.

In certain European countries, claims for overcharges on elevators and escalators related to civil cartel cases have been made, which we have accrued for based on our evaluation of the claims. While it is not possible to determine the ultimate disposition of each of these claims and whether they will be resolved consistent with our beliefs, historical settlement experience of these cases have not been material to the business, financial condition, cash flows or results of operations. However, the future outcome of these cases cannot be determined.

In the ordinary course of business, the Company is also routinely a defendant in, party to or otherwise subject to many pending and threatened legal actions, claims, disputes and proceedings. These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax and other laws. In some of these proceedings, claims for substantial monetary damages are asserted against the Company and its subsidiaries and could result in fines, penalties, compensatory or treble damages or non-monetary relief. We do not believe that these matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition.

Refer to Note 21, "Segment Financial Data" for information about Litigation-related settlement costs recognized in 2025 for certain legal matters that are outside of the ordinary course of business.

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**Note 21: Segment Financial Data**

Our operations are classified into two operating segments: New Equipment and Service. Through the New Equipment segment, we design, manufacture, sell and install a wide range of passenger and freight elevators as well as escalators and moving walkways to customers in the residential, commercial and infrastructure projects. The Service segment provides maintenance and repair services for both our products and those of other manufacturers, and provides modernization services to upgrade elevators and escalators. The operating segments are generally based on the management structure of the Company, as well as how management allocates resources, assesses performance and makes strategic and operational decisions.

**Segment Information.** Otis discloses segment operating profit as its measure of segment performance, reconciled to Net income before income taxes. Segment operating profit excludes certain expenses and income that are not allocated to segments (as described below in "Corporate and Unallocated").

Otis' Chief Operating Decision Maker ("CODM") is the Company's Chief Executive Officer. The CODM assesses the performance of each operating segment and allocates resources to those segments based on net sales and segment operating profit. The CODM compares segment operating profit results to prior periods and forecasted amounts to assess performance and to make decisions regarding the allocation of capital and other investments. Discrete asset information for each segment is not presented to, or reviewed by, the CODM.

Segment information for 2025 is as follows:

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| | | | |
|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** |
|<br>***(dollars in millions)*** | **New Equipment** | **Service** | **Total** |
| Net sales | $**4989** | $**9442** | $**14431** |
| Costs and expenses: |  |  |  |
| &nbsp;&nbsp;Cost of sales | **4157** | **5860** | **10017** |
| &nbsp;&nbsp;Selling, general and administrative | **485** | **1184** | **1669** |
| &nbsp;&nbsp;Other including research and development | **107** | **24** | **131** |
| Total segment operating profit | $**240** | $**2374** | **2614** |
| Corporate and Unallocated: |  |  |  |
| &nbsp;&nbsp;&nbsp;General corporate expenses and other |  |  | **180** |
| &nbsp;&nbsp;&nbsp;UpLift restructuring |  |  | **76** |
| &nbsp;&nbsp;&nbsp;Other restructuring |  |  | **54** |
| &nbsp;&nbsp;&nbsp;UpLift transformation costs |  |  | **69** |
| &nbsp;&nbsp;&nbsp;Separation-related adjustments |  |  | **70** |
| &nbsp;&nbsp;&nbsp;Litigation-related settlement costs |  |  | **21** |
| &nbsp;&nbsp;&nbsp;Held for sale impairment |  |  | **10** |
| &nbsp;&nbsp;&nbsp;Other, net |  |  | **1** |
| Total company operating profit |  |  | **2133** |
| Non-service pension cost (benefit) |  |  | **3** |
| Interest expense (income), net |  |  | **196** |
| Net income before income taxes |  |  | $**1934** |

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Segment information for 2024 is as follows:

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| | | | |
|:---|:---|:---|:---|
| | **2024** | **2024** | **2024** |
|<br>***(dollars in millions)*** | **New Equipment** | **Service** | **Total** |
| Net sales | $5367 | $8894 | $14261 |
| Costs and expenses: |  |  |  |
| &nbsp;&nbsp;Cost of sales | 4443 | 5533 | 9976 |
| &nbsp;&nbsp;Selling, general and administrative | 490 | 1144 | 1634 |
| &nbsp;&nbsp;Other including research and development | 105 | 32 | 137 |
| Total segment operating profit | $329 | $2185 | 2514 |
| Corporate and Unallocated: |  |  |  |
| &nbsp;&nbsp;&nbsp;General corporate expenses and other |  |  | 158 |
| &nbsp;&nbsp;&nbsp;UpLift restructuring |  |  | 31 |
| &nbsp;&nbsp;&nbsp;Other restructuring |  |  | 40 |
| &nbsp;&nbsp;&nbsp;UpLift transformation costs |  |  | 65 |
| &nbsp;&nbsp;&nbsp;Separation-related adjustments |  |  | 177 |
| &nbsp;&nbsp;&nbsp;Litigation-related settlement costs |  |  | 18 |
| &nbsp;&nbsp;&nbsp;Held for sale impairment |  |  | 18 |
| &nbsp;&nbsp;&nbsp;Other, net |  |  | (1) |
| Total company operating profit |  |  | 2008 |
| Non-service pension cost (benefit) |  |  |  |
| Interest expense (income), net |  |  | (31) |
| Net income before income taxes |  |  | $2039 |

---

Segment information for 2023 is as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **2023** | **2023** | **2023** |
|<br>***(dollars in millions)*** | **New Equipment** | **Service** | **Total** |
| Net sales | $5812 | $8397 | $14209 |
| Costs and expenses: |  |  |  |
| &nbsp;&nbsp;Cost of sales | 4837 | 5173 | 10010 |
| &nbsp;&nbsp;Selling, general and administrative | 498 | 1174 | 1672 |
| &nbsp;&nbsp;Other including research and development | 96 | 36 | 132 |
| Total segment operating profit | $381 | $2014 | 2395 |
| Corporate and Unallocated: |  |  |  |
| &nbsp;&nbsp;&nbsp;General corporate expenses and other |  |  | 126 |
| &nbsp;&nbsp;&nbsp;UpLift restructuring |  |  | 25 |
| &nbsp;&nbsp;&nbsp;Other restructuring |  |  | 42 |
| &nbsp;&nbsp;&nbsp;UpLift transformation costs |  |  | 16 |
| Total company operating profit |  |  | 2186 |
| Non-service pension cost (benefit) |  |  | 5 |
| Interest expense (income), net |  |  | 150 |
| Net income before income taxes |  |  | $2031 |

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Corporate and Unallocated includes adjustments related to the Separation, Litigation-related settlement costs, impairment loss for held for sale net assets, restructuring costs and UpLift transformation costs.

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Separation-related adjustments represent net adjustments of amounts due to and from RTX in accordance with the TMA, including amounts due to RTX related to a favorable ruling received in August 2024 regarding the German tax litigation. Separation-related adjustments in 2024 also include a reduction of our contractual indemnity obligation payable to RTX that resulted from the TMA and receipts from RTX in accordance with the TMA. These adjustments are recorded in Other income (expense), net in our Consolidated Statements of Operations in 2025 and 2024, respectively. See Note 14, "Income Taxes" and Note 20, "Contingent Liabilitie**s**" for additional information about the German tax litigation.

Litigation-related settlement costs in 2025 and 2024 represent the aggregate amount of settlement costs and increase in loss contingency accruals, excluding legal costs, for certain legal matters that are outside of the ordinary course of business due to the size, complexity and unique facts of these matters.

Impairment loss related to net assets held for sale is recorded in Other income (expense), net in the Consolidated Statements of Operations in 2025 and 2024, respectively. See Note 7, "Business Acquisitions, Dispositions, Goodwill and Intangible Assets" for additional information about the held for sale assets and liabilities.

Refer to Note 15, "Restructuring and Transformation Costs" for more information about restructuring and UpLift transformation costs.

**Geographic External Sales and Long-Lived Assets.** Geographic Net sales are attributed to the geographic regions based on their location of origin. Long-lived assets are Fixed assets, net attributed to the specific geographic regions. With the exception of the U.S. and China, there were no individually significant countries with Net sales exceeding 10% of the Company's consolidated Net sales during 2025, 2024 and 2023.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **External Net Sales** | **External Net Sales** | **External Net Sales** | **Long Lived Assets** | **Long Lived Assets** | **Long Lived Assets** |
|<br>***(dollars in millions)*** | **2025** | **2024** | **2023** | **2025** | **2024** | **2023** |
| United States Operations | $**4192** | $4239 | $4030 | $**323** | $315 | $325 |
| International Operations |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;China | **1650** | 1919 | 2444 | **70** | 72 | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | **8589** | 8103 | 7735 | **350** | 314 | 319 |
| &nbsp;&nbsp;&nbsp;Total | $**14431** | $14261 | $14209 | $**743** | $701 | $727 |

---

**Disaggregated Net sales by type.** Net sales disaggregated by product and service type for 2025, 2024 and 2023 are as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(dollars in millions)*** | **2025** | **2024** | **2023** |
| New Equipment | $**4989** | $5367 | $5812 |
| Maintenance and Repair | **7584** | 7211 | 6870 |
| Modernization | **1858** | 1683 | 1527 |
| &nbsp;&nbsp;Total Service | **9442** | 8894 | 8397 |
| Total | $**14431** | $14261 | $14209 |

---

**Major Customers.** There were no customers that individually accounted for 10% or more of the Company's consolidated Net sales for 2025, 2024 and 2023.

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**OTIS WORLDWIDE CORPORATION**

**SCHEDULE II - Valuation and Qualifying Accounts**

**Three years ended December 31, 2025**

**(dollars in millions)**

---

| | |
|:---|:---|
| **Future Income Tax Benefits - Valuation Allowance** | |
| Balance, December 31, 2022 | $240 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions charged to income tax expense | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reductions credited to income tax expense | (22) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other adjustments | 5 |
| Balance, December 31, 2023 | 239 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions charged to income tax expense | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reductions credited to income tax expense | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other adjustments | (10) |
| Balance, December 31, 2024 | 250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions charged to income tax expense | **17** |
| &nbsp;&nbsp;&nbsp;&nbsp;Reductions credited to income tax expense | **(38)** |
| &nbsp;&nbsp;&nbsp;&nbsp;Other adjustments | **27** |
| Balance, December 31, 2025 | $**256** |

---

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**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures**

As required by Rule 13a-15(e) under the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management, including the Chair, President and Chief Executive Officer ("CEO"), the Executive Vice President and Chief Financial Officer ("CFO") and the Senior Vice President and Chief Accounting Officer ("CAO"), of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our CEO, our CFO and our CAO have concluded that, as of December 31, 2025, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO, our CFO and our CAO, as appropriate, to allow timely decisions regarding required disclosure.

**Management Report on Internal Control over Financial Reporting**

The information required by Item 9A relating to Management's Annual Report on Internal Control Over Financial Reporting and Attestation Report of the Registered Public Accounting Firm is found in Item 8 Financial Statements and Supplementary Data of this Form 10-K and incorporated herein by reference.

**Changes in Internal Control over Financial Reporting**

There has been no change in our internal control over financial reporting during the quarter ended December 31, 2025, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B. Other Information**

None.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not Applicable.

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**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance**

The information required by Item 10 with respect to directors, the Audit Committee of the Board of Directors and audit committee financial experts is incorporated herein by reference to the section of our Proxy Statement for the 2026 Annual Meeting of Shareholders titled "Corporate governance" (under the subheadings "Proposal 1: Election of directors", "Our Board leadership structure", "Areas of Board oversight" and "Our Board nominees").

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**Information about our Executive Officers**

The following persons are executive officers of Otis Worldwide Corporation:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Position** | **Other Business Experience<br>Since 1/1/2021** | **Age as of 2/5/2026** |
| Joseph Armas | President, Otis Americas (since January 2026) | President, Otis U.S. & Canada; Senior Vice President and GM, North America; Senior Vice President, Western Region, Otis Americas; Vice President, Sales and Marketing, APAC; Executive Director and Managing Director, Hong Kong, Macau, and Taiwan | 50 |
| Kimberly Gosk | Executive Vice President and Chief People Officer (since August 2025) | Senior Vice President, Human Resources ("HR") EMEA & Latin America; Vice President, HR, Global Functions; Interim Vice President, HR, EMEA; Executive Director, Organizational Design & Change Management | 52 |
| Neil Green | Executive Vice President and Chief Digital Officer (since April 2020) | n/a | 55 |
| Nora E. LaFreniere | Executive Vice President and General Counsel (since July 2021) | Executive Vice President, Chief General Counsel and Corporate Secretary, Otis | 54 |
| Thibault Lefébure | President, Otis EMEA (since January 2026) | Senior Vice President & General Manager Western Europe; Senior Vice President & General Manager, Otis Japan; Vice President & General Manager, Otis Japan | 47 |
| Sally A. Loh | President, Otis China (since March 2023) | Chief Operating Officer and Chief Financial Officer, Otis China; Chief Financial Officer, Otis China | 52 |
| Judith F. Marks | Chair, President and Chief Executive Officer (since February 2022) | President and Chief Executive Officer, Otis | 62 |
| Cristina Méndez | Executive Vice President and Chief Financial Officer (since August 2024) | Senior Vice President Finance and Transformation EMEA; Chief Controlling Officer and Deputy CFO, Telefónica Deutschland | 45 |
| Enrique Miñarro Viseras | Chief Operating Officer (since January 2026) | President, Otis EMEA; President, Otis EMEA & Latin America; Senior Vice President and General Manager ("GM"), Global Precision and Science Technologies, Ingersoll Rand; Senior Vice President and GM, Industrial Technologies & Services EMEIA and Pressure & Vacuum Solutions, Ingersoll Rand | 48 |
| Stephane de Montlivault | President, Otis Asia Pacific (since April 2020) | n/a | 66 |
| Michael P. Ryan | Senior Vice President and Chief Accounting Officer (since April 2020) | n/a | 56 |
| Peiming Zheng (Perry) | Executive Vice President, Chief Product, Delivery and Customer Officer (since March 2023) | Chief Customer Product Officer, Otis; President, Otis China | 57 |

---

All of the officers serve at the pleasure of the Board of Directors of Otis Worldwide Corporation.

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Information concerning Section 16(a) compliance is incorporated herein by reference to the section of our Proxy Statement for the 2026 Annual Meeting of Shareholders titled "Other important information" under the subheading "Delinquent section 16(a) reports." We have adopted a code of ethics, the Otis Absolutes, that applies to all our directors, officers, employees and representatives. This code is publicly available on our website at https://www.otisinvestors.com/governance/governance-documents. Amendments to the code of ethics and any grant of a waiver from a provision of the code requiring disclosure under applicable SEC rules will be disclosed on our website. Our Corporate Governance Guidelines and the charters of our Board of Directors' Audit Committee, Compensation Committee and Nominations and Governance Committee are available on our website at https://www.otisinvestors.com/governance/governance-documents. These materials may also be requested in print free of charge by writing to our Investor Relations Department at Otis Worldwide Corporation, One Carrier Place, Investor Relations, Farmington, CT 06032.

The Company has adopted an insider trading policy which governs the purchase, sale, and/or any other dispositions of our securities by its directors, officers, employees and subsidiaries and is designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of our insider trading policy is filed with this Annual Report on Form 10-K as Exhibit 19. Additionally, our Board of Directors has approved a share repurchase program, which allows the Company to purchase shares 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 Exchange Act. While the Company does not have a formal written policy governing the purchase, sale, and/or any other dispositions of its securities by the Company, the Company has developed procedures that are designed to promote compliance with insider trading laws, rules and regulations with respect to the Company's share repurchase program. For more information regarding our share repurchase program, see Part II. Item 5 of this Form 10-K.

**Item 11. Executive Compensation**

The information required by Item 11 is incorporated herein by reference to the sections of our Proxy Statement for the 2026 Annual Meeting of Shareholders titled "Compensation of directors", "Executive compensation" and "Report of the compensation committee".

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**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

The information relating to security ownership of certain beneficial owners and management is incorporated herein by reference to the section of our Proxy Statement for the 2026 Annual Meeting of Shareholders titled "Other important information" under the subheading "Stock ownership" ("Beneficial stock ownership of directors and executive officers" and "Certain beneficial owners").

**Equity Compensation Plan Information**

The following table provides information as of December 31, 2025 concerning Common Stock issuable under Otis' equity compensation plans.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Plan category** | **Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)** | | **Weighted-average exercise price of outstanding options, warrants and rights (b)** | **Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)** | |
| Equity compensation plans approved by shareholders | 3147522 | (1) | $74.05 | 18066895 | (2) |
| Equity compensation plans not approved by shareholders | - |  | - | - |  |

---

 <sup>(1) &nbsp;&nbsp;&nbsp;&nbsp;</sup>Consists of the following issuable shares of Common Stock awarded under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan ("LTIP"): (i) shares of Common Stock issuable upon the exercise of outstanding non-qualified stock options; (ii) shares of Common Stock issuable upon the exercise of outstanding stock appreciation rights ("SARs"); (iii) shares of Common Stock issuable pursuant to outstanding restricted stock unit and performance share unit awards, assuming performance at the target level (up to an additional 803,575 shares of Common Stock could be issued if performance goals are achieved above target); and (iv) shares of Common Stock issuable upon the settlement of outstanding deferred stock units and restricted stock units under the Otis Worldwide Corporation Board of Directors Stock Unit Plan. Under the LTIP, each SAR is exercisable for a number of shares of Common Stock having a value equal to the increase in the market price of a share of such stock from the date the SAR was granted. For purposes of determining the total number of shares to be issued in respect of outstanding SARs, we have used the New York Stock Exchange ("NYSE") closing price for a share of Common Stock on December 31, 2025 of $87.35. The weighted-average exercise price shown in the column above takes into account only the shares identified in clauses (i) and (ii). 

 <sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Represents the maximum number of shares of Common Stock available to be awarded under the LTIP as of December 31, 2025. Performance share units, deferred stock units and restricted stock units ("Full Share Awards") will result in a reduction in the number of shares of Common Stock available for delivery under the LTIP in an amount equal to twice the number of shares to which the award corresponds under the terms of the LTIP. Stock options and SARs do not constitute Full Share Awards and will result in a reduction in the number of shares of Common Stock available for delivery under the 2020 LTIP on a one-for-one basis.

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**Item 13. Certain Relationships and Related Transactions, and Director Independence**

The information required by Item 13 is incorporated herein by reference to the sections of our Proxy Statement for the 2026 Annual Meeting of Shareholders titled "Corporate governance" under the subheading "Our board nominees" (including under the subheading "Director independence") and "Other important information" (under the subheading "Transactions with related persons").

**Item 14. Principal Accounting Fees and Services**

The information required by Item 14 is incorporated by reference to the section of our Proxy Statement for the 2026 Annual Meeting of Shareholders titled "Proposal 3: Appoint an independent auditor for 2026", including the information provided in that section with regard to "Audit Fees", "Audit-Related Fees", "Tax Fees" and "All Other Fees".

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**PART IV**

**Item 15. Exhibits and Financial Statement Schedules**

(a) The following documents are filed as part of this Form 10-K:

&nbsp;&nbsp;&nbsp;&nbsp;(1) &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements. The financial statements are set forth in Item 8. "Financial Statements and Supplementary Data" in this Form 10-K.

&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;Financial Statement Schedules. The following financial statement schedule is set forth in Item 8. "Financial Statements and Supplementary Data" in this Form 10-K. All other schedules have been omitted because they are not required, are not applicable or the required information is shown in the financial statements or the notes thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Schedule II — Valuation and Qualifying Accounts

&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;Exhibits. The following list of exhibits includes exhibits submitted with this Form 10-K as filed with the SEC and those incorporated by reference to other filings.

---

| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit Description** |
| 2.1 | <u>[Separation and Distribution Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation, incorporated by reference to Exhibit 2.1 of the Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex2-1.htm)</u> |
| 3.1 | <u>[Amended and Restated Certificate of Incorporation of Otis Worldwide Corporation, incorporated by reference to Exhibit 3.1(b) of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex3-1b.htm)</u> |
| 3.2 | <u>[Amended and Restated Bylaws of Otis Worldwide Corporation, adopted March 19, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000114036125010060/ef20046011_ex3-1.htm)[, incorporated by reference to Exhibit 3.](https://www.sec.gov/Archives/edgar/data/1781335/000114036125010060/ef20046011_ex3-1.htm)[1](https://www.sec.gov/Archives/edgar/data/1781335/000114036125010060/ef20046011_ex3-1.htm)[of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on](https://www.sec.gov/Archives/edgar/data/1781335/000114036125010060/ef20046011_ex3-1.htm)[March 19, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000114036125010060/ef20046011_ex3-1.htm)[.](https://www.sec.gov/Archives/edgar/data/1781335/000114036125010060/ef20046011_ex3-1.htm)</u> |
| 4.1 | <u>[Indenture, dated February 27, 2020, between Otis Worldwide Corporation and The Bank of New York Mellon Trust Company, N.A., incorporated by reference to Exhibit 4.1 to Otis' Amendment No. 1 to Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on March 11, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120005505/nt10003666x13_ex4-1.htm)</u> |
| 4.2 | <u>[Supplemental Indenture No. 1, dated February 27, 2020, between Otis Worldwide Corporation and The Bank of New York Mellon Trust Company, N.A., incorporated by reference to Exhibit 4.2 to Otis' Amendment No. 1 to Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on March 11, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120005505/nt10003666x13_ex4-2.htm)</u> |
| 4.3 | <u>[Supplemental Indenture No. 2, dated as of March 11, 2021, between Otis Worldwide Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 to Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on March 11, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000114036121008126/nt10020973x4_ex4-1.htm)</u> |
| 4.4 | <u>[Indenture, dated as of November 12, 2021, among Otis Worldwide Corporation, Highland Holdings S.à r.l. and The Bank of New York Mellon Trust Company, N.A., as trustee., incorporated by reference to Exhibit 4.1 to Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on November 12, 2021.](https://www.sec.gov/Archives/edgar/data/0001781335/000114036121037676/ny20001079x6_ex4-1.htm)</u> |
| 4.5 | <u>[Supplemental Indenture No. 1, dated as of November 12, 2021, among Otis Worldwide Corporation, Highland Holdings S.à r.l and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.2 of Otis' Current Report on 8-K (Commission file number 001-39221) filed with the SEC on November 12, 2021).](https://www.sec.gov/Archives/edgar/data/0001781335/000114036121037676/ny20001079x6_ex4-2.htm)</u> |
| 4.6 | <u>[Supplemental Indenture No. 3, dated as of August 16, 2023, between Otis Worldwide Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 to Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on August 16, 2023.](https://www.sec.gov/Archives/edgar/data/1781335/000114036123040089/ny20009893x4_ex4-1.htm)</u> |

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| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit Description** |
| 4.7 | <u>[Supplemental Indenture No. 4, dated as of November 19, 2024, between Otis Worldwide Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.2 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on November 19, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000114036124047294/ny20038264x8_ex4-2.htm)</u> |
| 4.8 | <u>[Supplemental Indenture No. 2, dated as of November 19, 2024, among Otis Worldwide Corporation, Highland Holdings S.à r.l. and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.5 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on November 19, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000114036124047294/ny20038264x8_ex4-5.htm)</u> |
| 4.9 | <u>[Supplemental Indenture No. 5, dated as of September 4, 2025, between Otis Worldwide Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.2 of Otis' Current Report on Form 8-K (Commission File No. 001-39221) filed with the SEC on September 4, 2025.](https://www.sec.gov/Archives/edgar/data/0001781335/000114036125033998/ny20054558x4_ex4-2.htm)</u> |
| 4.10 | <u>[Description of Securities.\*](exhibit4102025-12x3110xk.htm)</u> |
| 10.1 | <u>[Tax Matters Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation incorporated by reference to Exhibit 10.2 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-2.htm)</u> |
| 10.2 | <u>[Employee Matters Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation incorporated by reference to Exhibit 10.3 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-3.htm)</u> |
| 10.3 | <u>[Intellectual Property Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation, incorporated by reference to Exhibit 10.4 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-4.htm)</u> |
| 10.4 | <u>[Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.5 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-5.htm)</u> |
|  | <u>[Otis Worldwide Corporation 2020 Long-Term Incentive Plan (As Amended and Restated as of January 1, 2024), incorporated by reference to Exhibit 10.1 of Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (Commission file number 001-39221) filed with the SEC on April 25, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000022/exhibit1012024-03x3110xq.htm)</u> |
| 10.5 | <u>[Otis Worldwide Corporation Change in Control Severance Plan, incorporated by reference to Exhibit 10.6 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-6.htm)</u> |
| 10.6 | <u>[Otis Worldwide Corporation Executive Annual Bonus Plan incorporated by reference to Exhibit 10.7 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-7.htm)</u> |
|  | <u>[Amendment No. 1 to Otis Worldwide Corporation Executive Annual Bonus Plan, incorporated by reference to Exhibit 10.3 to Otis' Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (Commission file number 001-39221) filed with the SEC on July 28, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000051/exhibit1032021-06x3010xq.htm)</u> |
|  | <u>[Otis Worldwide Corporation Short-Term Incentive Plan (As Amended and Restated as of January 1, 2024), incorporated by reference to Exhibit 10.2 of Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (Commission file number 001-39221) filed with the SEC on April 25, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000022/exhibit1022024-03x3110xq.htm)</u> |
| 10.7 | <u>[Otis Worldwide Corporation Pension Preservation Plan, incorporated by reference to Exhibit 10.8 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-8.htm)</u> |
| 10.8 | <u>[Otis Worldwide Corporation Retirement Plan for Third Country National Employees, incorporated by reference to Exhibit 10.9 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-9.htm)</u> |

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| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit Description** |
| 10.9 | <u>[Otis Worldwide Corporation Board of Directors Deferred Stock Unit Plan (Amended and Restated effective as of February 4, 2021), incorporated by reference to Exhibit 10.4 to Otis' Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (Commission file number 001-39221) filed with the SEC on July 28, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000051/exhibit1042021-06x3010xq.htm)</u> |
| 10.10 | <u>[French Sub-Plan for Restricted Stock Units Granted Under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.11 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on April 3, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120007885/nc10010458x4_ex10-11.htm)</u> |
| 10.11 | <u>[Schedule of Terms for Restricted Stock Unit Awards (Off-Cycle) granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.9 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-9.htm)</u> |
| 10.12 | <u>[Schedule of Terms for Stock Appreciation Right Awards granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.10 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-10.htm)</u> |
| 10.13 | <u>[Schedule of Terms for Stock Appreciation Right Awards (Off-Cycle) granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.11 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-11.htm)</u> |
| 10.14 | <u>[Otis Worldwide Corporation Deferred Compensation Plan, incorporated by reference to Exhibit 10.14 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-14.htm)</u> |
|  | <u>[Amendment No. 1 to the Otis Worldwide Corporation Deferred Compensation Plan, incorporated by reference to Exhibit 10.17 to Otis' Annual Report on Form 10-K for the year ended December 31, 2021 (Commission file number 001-39221) filed with the SEC on February 4, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10172021-12x3110xk.htm)</u> |
| 10.15 | <u>[Otis Worldwide Corporation Amended and Restated Savings Restoration Plan, incorporated by reference to Exhibit 10.15 to Otis' Amendment No. 1 to Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on March 11, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120005505/nt10003666x13_ex10-15.htm)</u> |
|  | <u>[Amendment No. 1 to Otis Worldwide Corporation Amended and Restated Savings Restoration Plan, incorporated by reference to Exhibit 10.1 to Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (Commission file number 001-39221) filed with the SEC on April 28, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000034/exhibit1012021-03x3110xq.htm)</u> |
|  | <u>[Amendment No. 2 to the Otis Worldwide Corporation Amended and Restated Savings Restoration Plan, incorporated by reference to Exhibit 10.18 to Otis' Annual Report on Form 10-K for the year ended December 31, 2021 (Commission file number 001-39221) filed with the SEC on February 4, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10182021-12x3110xk.htm)</u> |
| 10.16 | <u>[Otis Worldwide Corporation Company Automatic Contribution Excess Plan, incorporated by reference to Exhibit 10.16 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-16.htm)</u> |
|  | <u>[Amendment No. 1 to the Otis Worldwide Corporation Company Automatic Contribution Excess Plan, incorporated by reference to Exhibit 10.19 to Otis' Annual Report on Form 10-K for the year ended December 31, 2021 (Commission file number 001-39221) filed with the SEC on February 4, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10192021-12x3110xk.htm)</u> |
| 10.17 | <u>[Otis Worldwide Corporation LTIP Performance Share Unit Deferral Plan, incorporated by reference to Exhibit 10.17 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-17.htm)</u> |
|  | <u>[Amendment No. 1 to the Otis Worldwide Corporation LTIP Performance Share Unit Deferral Plan, incorporated by reference to Exhibit 10.20 to Otis' Annual Report on Form 10-K for the year ended December 31, 2021 (Commission file number 001-39221) filed with the SEC on February 4, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10202021-12x3110xk.htm)</u> |
| 10.18 | <u>[Legacy United Technologies Corporation Executive Leadership Group Agreements, incorporated by reference to Exhibit 10.19 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-19.htm)</u> |

---

------

<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

---

| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit Description** |
| 10.19 | <u>[Legacy Schedule of Terms for United Technologies Corporation Executive Leadership Group Restricted Stock Unit Retention Awards, incorporated by reference to Exhibit 10.20 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-20.htm)</u> |
| 10.20 | <u>[Letter of Assignment with Stephane de Montlivault, dated December 18, 2019, incorporated by reference to Exhibit 10.25 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-25.htm)</u> |
|  | <u>[Letter of Assignment Extension with Stephane de Montlivault dated October 1, 2021, incorporated by reference to Exhibit 10.24 to Otis' Annual Report on Form 10-K for the year ended December 31, 2021 (Commission file number 001-39221) filed with the SEC on February 4, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10242021-12x3110xk.htm)</u> |
|  | <u>[Extension of Letter of Assignment for Stephane de Montlivault, effective October 1, 2023, incorporated by reference to Exhibit 10.23 of Otis' Annual Report on Form 10-K for the year ended December 31, 2023 (Commission file number 001-39221) filed with the SEC on February 2, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000178133524000013/exhibit10232023-12x3110xk.htm)</u> |
|  | <u>[Extension of Letter of Assignment for Stephane de Montlivault effective September 24, 2025, incorporated by reference to Exhibit 10.4 of Otis' Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (Commission file number 001-39221) filed with the SEC on October 30, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000049/exhibit1042025-09x3010xq.htm)</u>. |
| 10.21 | <u>[Letter of Appointment/Employment with Stephane de Montlivault, dated December 18, 2019, incorporated by reference to Exhibit 10.26 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-26.htm)</u> |
| 10.22 | <u>[Letter Agreement with Judith F. Marks regarding LTIP award amendment, dated February 3, 2020, incorporated by reference to Exhibit 10.29 to Otis' Registration Statement on Form 10 (Commission file number 001-39221) filed with the SEC on February 7, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120002547/nt10003666x11_ex10-29.htm)</u> |
| 10.23 | <u>[Summary of Compensation and Benefits for Non-Employee Directors, incorporated by reference to Exhibit 10.27 to Otis' Annual Report on Form 10-K for the year ended December 31, 2021 (Commission file number 001-39221) filed with the SEC on February 4, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10272021-12x3110xk.htm)</u> |
| 10.24 | <u>[Otis Worldwide Corporation Executive Leadership Group Severance Plan, incorporated by reference to Exhibit 10.1 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on September 18, 2020.](https://www.sec.gov/Archives/edgar/data/1781335/000114036120020899/brhc10015261_ex10-1.htm)</u> |
| 10.25 | <u>[Letter of Assignment for Peiming (Perry) Zheng, effective January 1, 2021, incorporated by reference to Exhibit 10.33 of Otis' Annual Report on Form 10-K for the year ended December 31, 2020 (Commission file number 001-39221) filed with the SEC on February 5, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000023/exhibit10332020-12x3110xk.htm)</u> |
|  | <u>[Extension of Letter of Assignment for Peiming (Perry) Zheng, effective January 1, 2023, incorporated by reference to Exhibit 10.29 to Otis' Annual Report on Form 10-K for the year ended December 31, 2022 (Commission file number 001-39221) filed with the SEC on February 3, 2023.](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit10292022-12x3110xk.htm)</u> |
| 10.26 | <u>[Revolving Credit Agreement, dated as of August 8, 2025, by and among Otis Worldwide Corporation, as borrower, Otis Intercompany Lending Designated Activity Company, as subsidiary borrower, each other subsidiary borrower party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and the other parties thereto from time to time, incorporated by reference to Exhibit 10.01 of Otis' Current Report on Form 8-K (Commission File No. 001-39221) filed with the SEC on August](https://www.sec.gov/Archives/edgar/data/1781335/000114036125029921/ef20053618_ex10-01.htm)[8](https://www.sec.gov/Archives/edgar/data/1781335/000114036125029921/ef20053618_ex10-01.htm)[, 2025.](https://www.sec.gov/Archives/edgar/data/1781335/000114036125029921/ef20053618_ex10-01.htm)</u> |
| 10.27 | <u>[Schedule of Terms for Restricted Stock Unit Awards (February 5, 2021) granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.5 to Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (Commission file number 001-39221) filed with the SEC on April 28, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000034/exhibit1052021-03x3110xq.htm)</u> |
| 10.28 | <u>[Schedule of Terms for Stock Appreciation Right Awards (February 5, 2021) granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.6 to Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (Commission file number 001-39221) filed with the SEC on April 28, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000034/exhibit1062021-03x3110xq.htm)</u> |
| 10.29 | <u>[Schedule of Terms for Performance Share Unit Awards (February 5, 2021) granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.7 to Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (Commission file number 001-39221) filed with the SEC on April 28, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000034/exhibit1072021-03x3110xq.htm)</u> |

---

------

<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

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| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit Description** |
| 10.30 | <u>[Form of Executive Award Statement under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.8 to Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (Commission file number 001-39221) filed with the SEC on April 28, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000034/exhibit1082021-03x3110xq.htm)</u> |
| 10.31 | <u>[Offer Letter between Otis Worldwide Corporation and Abbe L. Luersman, dated March 27, 2021, incorporated by reference to Exhibit 10.5 to Otis' Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (Commission file number 001-39221) filed with the SEC on October 26, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000062/exhibit1052021-09x3010xq.htm)</u> |
| 10.32 | <u>[Offer Letter, dated as of August 22, 2023, by and between Tracy Embree and Otis Worldwide Corporation, incorporated by reference to Exhibit 10.36 of Otis' Annual Report on Form 10-K for the year ended December 31, 2023 (Commission file number 001-39221) filed with the SEC on February 2, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000178133524000013/exhibit10362023-12x3110xk.htm)</u> |
| 10.33 | <u>[Service Agreement between Otis Mobility, S.A. and Enrique Minarro Viseras, dated October 26, 2023, incorporated by reference to Exhibit 10.37 of Otis' Annual Report on Form 10-K for the year ended December 31, 2023 (Commission file number 001-39221) filed with the SEC on February 2, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000178133524000013/exhibit10372023-12x3110xk.htm)</u> |
| 10.34 | <u>[Employment Contract (Foreign National or Hong Kong, Macao or Taiwan Resident) for Sally Loh, effective January 1, 2024, incorporated by reference to Exhibit 10.38 of Otis' Annual Report on Form 10-K for the year ended December 31, 2023 (Commission file number 001-39221) filed with the SEC on February 2, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000178133524000013/exhibit10382023-12x3110xk.htm)</u> |
|  | <u>[Employment Contract (Foreign National or Hong Kong, Macao or Taiwan Resident) for Sally Loh, effective January 1, 2026, incorporated by reference to Exhibit 10.6 of Otis' Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (Commission file number 001-39221) filed with the SEC on October 30, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000049/exhibit1062025-09x3010xq.htm)</u>. |
| 10.35 | <u>[Letter of Assignment for Sally Loh, effective January 1, 2024, incorporated by reference to Exhibit 10.39 of Otis' Annual Report on Form 10-K for the year ended December 31, 2023 (Commission file number 001-39221) filed with the SEC on February 2, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000178133524000013/exhibit10392023-12x3110xk.htm)</u> |
|  | <u>[Extension of Letter of Assignment for Sally Loh effective September 24, 2025, incorporated by reference to Exhibit 10.5 of Otis' Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (Commission file number 001-39221) filed with the SEC on October 30, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000049/exhibit1052025-09x3010xq.htm)</u>. |
| 10.36 | <u>[Schedule of Terms for Performance Share Unit Awards granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan (Effective February 6, 2024), incorporated by reference to Exhibit 10.3 of Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (Commission file number 001-39221) filed with the SEC on April 25, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000022/exhibit1032024-03x3110xq.htm)</u> |
| 10.37 | <u>[Schedule of Terms for Restricted Stock Unit Awards granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan (Effective February 6, 2024), incorporated by reference to Exhibit 10.4 of Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (Commission file number 001-39221) filed with the SEC on April 25, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000022/exhibit1042024-03x3110xq.htm)</u> |
| 10.38 | <u>[Schedule of Terms for Stock Appreciation Right Awards granted under the Otis Worldwide Corporation 2020 Long - Term Incentive Plan (Effective February 6, 2024), incorporated by reference to Exhibit 10.5 of Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (Commission file number 001-39221) filed with the SEC on April 25, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000022/exhibit1052024-03x3110xq.htm)</u> |
| 10.39 | <u>[Schedule of Terms (July 2024) for Performance Share Unit Award (CEO one-time supplemental) granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, as amended and restated as of January 1, 2024, incorporated by reference to Exhibit 10.1 of Otis' Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (Commission file number 001-39221) filed with the SEC on July 25, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000039/exhibit1012024-06x3010xq.htm)</u> |
| 10.40 | <u>[Schedule of Terms (July 2024) for Restricted Stock Unit Award (CEO one-time supplemental) granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, as amended and restated as of January 1, 2024, incorporated by reference to Exhibit 10.2 of Otis' Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (Commission file number 001-39221) filed with the SEC on July 25, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000039/exhibit1022024-06x3010xq.htm)</u> |
| 10.41 | <u>[Amended and Restated Employment Agreement, dated September 18, 2024, between Cristina Méndez and Otis International Sàrl, incorporated by reference to Exhibit 10.1 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on September 20, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000045/exhibit101.htm)</u> |

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------

<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

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| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit Description** |
| 10.42 | <u>[Letter of Assignment for Cristina Méndez, effective December 1, 2024, incorporated by reference to Exhibit 10.2 of Otis' Current Report on Form 8-K (Commission file number 001-39221) filed with the SEC on September 20, 2024.](https://www.sec.gov/Archives/edgar/data/0001781335/000178133524000045/exhibit102.htm)</u> |
| 10.43 | <u>[Schedule of Terms for Restricted Stock Unit Awards (Off-Cycle) granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, as amended and restated as of January 1, 2024, incorporated by reference to Exhibit 10.46 of Otis' Annual Report on Form 10-K for the year ended December 31, 2024 (Commission file number 001-39221) filed with the SEC on February 4, 2025.](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000010/exhibit10462024-12x3110xk.htm)</u> |
| 10.44 | <u>[Schedule of Terms for Performance Share Unit Awards granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan (Effective February 4, 2025), incorporated by reference to Exhibit 10.1 of Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (Commission file number 001-39221) filed with the SEC on April 24, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000021/exhibit1012025-03x3110xq.htm)</u>. |
| 10.45 | <u>[Schedule of Terms for Restricted Stock Unit Awards granted under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan (Effective February 4, 2025), incorporated by reference to Exhibit 10.2 of Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (Commission file number 001-39221) filed with the SEC on April 24, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000021/exhibit1022025-03x3110xq.htm)</u>. |
| 10.46 | <u>[Offer Letter between Otis Worldwide Corporation and Joseph Armas, incorporated by reference to Exhibit 10.2 of Otis' Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (Commission file number 001-39221) filed with the SEC on July 24, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000038/exhibit1012025-06x3010xq.htm)</u>. |
| 10.47 | <u>[Letter of Assignment for Kimberly Gosk effective December 22, 2022, incorporated by reference to Exhibit 10.2 of Otis' Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (Commission file number 001-39221) filed with the SEC on October 30, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000049/exhibit1022025-09x3010xq.htm)</u>. |
| 10.48 | <u>[Offer Letter between Otis Worldwide Corporation and Kimberly Gosk, incorporated by reference to Exhibit 10.3 of Otis' Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (Commission file number 001-39221) filed with the SEC on October 30, 2025](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000049/exhibit1032025-09x3010xq.htm)</u>. |
| 14 | The Otis Absolutes. The Otis Absolutes may be accessed via Otis' website at https://www.otisinvestors.com/governance/governance-documents. |
| 19 | <u>[Insider trading policies and procedures, incorporated by reference to Exhibit 19 of Otis' Annual Report on Form 10-K for the year ended December 31, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000178133525000010/exhibit192024-12x3110xk.htm)</u> |
| 21 | <u>[Subsidiaries of the Registrant.\*](exhibit212025-12x3110xk.htm)</u> |
| 22 | <u>[Subsidiary guarantors and issuers of guaranteed securities and affiliates whose securities collateralize securities of the Registrant.\*](exhibit222025-12x3110xk.htm)</u> |
| 23 | <u>[Consent of PricewaterhouseCoopers LLP.\*](exhibit232025-12x3110xk.htm)</u> |
| 24 | <u>[Powers of Attorney of Thomas A. Bartlett, Jeffrey H. Black, Jill C. Brannon, Nelda J. Connors, Kathy Hopinkah Hannan](exhibit242025-12x3110xk.htm)[, Christopher J. Kearney, Judith F. Marks, Margaret M.V. Preston, Shelley Stewart, Jr. and John H. Walker.\*](exhibit242025-12x3110xk.htm)</u> |
| 31.1 | <u>[Rule 13a-14(a)/15d-14(a) Certification.\*](exhibit3112025-12x3110xk.htm)</u> |
| 31.2 | <u>[Rule 13a-14(a)/15d-14(a) Certification.\*](exhibit3122025-12x3110xk.htm)</u> |
| 31.3 | <u>[Rule 13a-14(a)/15d-14(a) Certification.\*](exhibit3132025-12x3110xk.htm)</u> |
| 32 | <u>[Section 1350 Certifications.\*](exhibit322025-12x3110xk.htm)</u> |
| 97 | <u>[Erroneously Awarded Compensation Recovery Policy, effective September 13, 2023, incorporated by reference to Exhibit 97 of Otis' Annual Report on Form 10-K for the year ended December 31, 2023 (Commission file number 001-39221) filed with the SEC on February 2, 2024.](https://www.sec.gov/Archives/edgar/data/1781335/000178133524000013/exhibit972023-12x3110xk.htm)</u>  |
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\* |
| 101.SCH | XBRL Taxonomy Extension Schema Document.\* |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document.\* |

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<u>[**Table of Contents**](#i7d81bd48a9ed4a2d8ed5e4d7d5cba44b_7)</u>

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| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit Description** |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document.\* |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document.\* |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document.\* |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |

---

**Notes to Exhibits List:**

<sup>\*</sup>&nbsp;&nbsp;&nbsp;&nbsp;Submitted electronically herewith.

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Operations for the three years ended December 31, 2025, (ii) Consolidated Statements of Comprehensive Income for the three years ended December 31, 2025, (iii) Consolidated Balance Sheets as of December 31, 2025 and 2024, (iv) Consolidated Statements of Changes in Equity for the three years ended December 31, 2025, (v) Consolidated Statements of Cash Flows for the three years ended December 31, 2025, (vi) Notes to Consolidated Financial Statements, and (vii) Financial Schedule of Valuation and Qualifying Accounts.

**Item 16. Form 10-K Summary**

Not applicable.

------

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| | | **OTIS WORLDWIDE CORPORATION<br>(Registrant)** | **OTIS WORLDWIDE CORPORATION<br>(Registrant)** |
| Dated: | February 5, 2026 | by: | /s/ Cristina Méndez |
|  |  |  | **Cristina Méndez** |
|  |  |  | **Executive Vice President and Chief Financial Officer** |
|  |  |  | (on behalf of the Registrant and as the Registrant's Principal Financial Officer) |
| Dated: | February 5, 2026 | by: | /s/ Michael P. Ryan |
|  |  |  | **Michael P. Ryan** |
|  |  |  | **Senior Vice President and Chief Accounting Officer** |
|  |  |  | (on behalf of the Registrant and as the Registrant's Principal Accounting Officer) |

---

------

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Judith F. Marks | Director, Chair, President and Chief Executive Officer | **February 5, 2026** |
| **Judith F. Marks** |  |  |
| /s/ Cristina Méndez | Executive Vice President and Chief Financial Officer | **February 5, 2026** |
| **Cristina Méndez** |  |  |
| /s/ Michael P. Ryan | Senior Vice President and Chief Accounting Officer | **February 5, 2026** |
| **Michael P. Ryan** |  |  |
| /s/ Thomas A. Bartlett\* | Director |  |
| **Thomas A. Bartlett** |  |  |
| /s/ Jeffrey H. Black\* | Director |  |
| **Jeffrey H. Black** |  |  |
| /s/ Jill C. Brannon\* | Director |  |
| **Jill C. Brannon** |  |  |
| /s/ Nelda J. Connors\* | Director |  |
| **Nelda J. Connors** |  |  |
| /s/ Kathy Hopinkah Hannan\* | Director |  |
| **Kathy Hopinkah Hannan** |  |  |
| /s/ Christopher J. Kearney\* | Director |  |
| **Christopher J. Kearney** |  |  |
| /s/ Margaret M.V. Preston\* | Director |  |
| **Margaret M.V. Preston** |  |  |
| /s/ Shelley Stewart, Jr.\* | Director |  |
| **Shelley Stewart, Jr.** |  |  |
| /s/ John H. Walker\* | Director |  |
| **John H. Walker** |  |  |
| \*By:  **<u>/s/ Nora E. Lafreniere</u>** |  |  |
| **Executive Vice President and General Counsel, as Attorney-in-fact** |  |  |
| Date: February 5, 2026 |  |  |

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## Exhibit 4.10

**Exhibit 4.10**

**DESCRIPTION OF THE REGISTRANT'S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934**

As of the date of the Annual Report on Form 10-K of which this exhibit is a part, Otis Worldwide Corporation (the "Company," "Otis," "we," "us," and "our") has four classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"): (1) our common stock, par value $0.01 per share; (2) our 0.318% Notes due 2026 (the "2026 Notes"); (3) our 2.875% Notes due 2027 (the "2027 Notes") and (4) our 0.934% Notes due 2031 (the "2031 Notes", and together with the 2026 Notes and the 2027 Notes, the "Notes").

**Common Stock**

*The following briefly summarizes certain terms of Otis' common stock. This summary does not describe every aspect of our common stock and is subject, and is qualified in its entirety by reference, to all the provisions of our amended and restated certificate of incorporation and our amended and restated bylaws.* 

Otis' common stock is listed on the New York Stock Exchange under the symbol "OTIS."

Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders.

Holders of common stock are entitled to share equally in the dividends, if any, that may be declared by Otis' board of directors out of funds that are legally available to pay dividends, but only after payment of any dividends required to be paid on outstanding preferred stock. Upon any voluntary or involuntary liquidation, dissolution or winding up of Otis, the holders of common stock will be entitled to share ratably in all assets of Otis remaining after we pay:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•all of our debts and other liabilities and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•any amounts we may owe to the holders of our preferred stock.

Holders of common stock do not have any preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any series of preferred stock that we may designate and issue.

Delaware law and our amended and restated bylaws permit us to issue uncertificated shares of common stock.

The rights, preferences and privileges of common shareholders may be affected by the rights, preferences and privileges granted to holders of preferred stock. The Otis board of directors has the authority, without further action by the shareholders, to issue shares of preferred stock in one

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or more series, and to fix the rights, preferences and privileges (including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences) of each series, which may be greater than the rights of the common stock. It is not possible to state the actual effect of the issuance of any additional series of preferred stock upon the rights of common shareholders until the board of directors determines the specific rights of the holders of that series. However, the effects might include, among other things (1) restricting dividends on the common stock, (2) diluting the voting power of the common stock, (3) impairing the liquidation rights of the common stock or (4) delaying or preventing a change in control of Otis without further action by the shareholders.

At each annual meeting of shareholders, the entire Otis board of directors is elected for a term of one year. Otis' amended and restated bylaws provide that the board of directors may, from time to time, designate the number of directors; however, the number may not be less than five nor more than fourteen. Vacancies on the board (except in an instance where a director is removed by holders of common stock and the resulting vacancy is filled by holders of common stock) may be filled by a vote of the majority of the directors then in office, even if less than a quorum.

Otis' amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election of directors, other than nominations made by or at the direction of Otis' board of directors. Eligible shareholders will be permitted to include their own director nominees in Otis' proxy materials under the circumstances set forth in the amended and restated bylaws. Generally, a stockholder or a group of up to 20 shareholders, who has maintained continuous qualifying ownership of at least 3% of Otis' outstanding common stock for at least three years, will be permitted to include director nominees constituting up to 20% of the board of directors in the proxy materials for an annual meeting of shareholders if such stockholder or group of shareholders complies with the other requirements set forth in the proxy access provision.

Otis' amended and restated bylaws include an exclusive forum provision. This provision provides that, unless Otis consents in writing to the selection of an alternative forum, the sole and exclusive forum for various types of suits will be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware). Such suits include (1) any derivative action or proceeding brought on behalf of Otis, (2) any action asserting a claim of breach of a fiduciary duty owed by any director or officer or other employee of Otis to the company or to Otis' shareholders, (3) any action asserting a claim against Otis or any director or officer or other employee of Otis arising pursuant to any provision of the Delaware General Corporation Law (the "DGCL") or Otis' amended and restated certificate of incorporation or amended and restated bylaws (as either may be amended from time to time), (4) any action asserting a claim against Otis or any director or officer or other employee of Otis governed by the internal affairs doctrine or (5) any action asserting an "internal corporate claim" as that term is defined in Section 115 of the DGCL. Under Otis' amended and restated bylaws, to the fullest extent permitted by law, this exclusive forum provision applies to state and federal law claims, including claims under the federal securities laws, including the Exchange Act, although Otis shareholders will not be deemed to have waived Otis' compliance with the federal securities laws and the rules and

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regulations thereunder. The enforceability of exclusive forum provisions in other companies' organizational documents has been challenged in legal proceedings, and it is possible that, in connection with claims subject to exclusive federal jurisdiction, a court could find the exclusive forum provision contained in Otis' amended and restated bylaws to be inapplicable or unenforceable.

Otis' amended and restated certificate of incorporation and amended and restated bylaws provide that any action permitted to be taken at an annual or special meeting of shareholders may be effected by the written consent of shareholders if shareholders representing 25 percent of the outstanding voting power of Otis capital stock have requested a record date for such action and certain other conditions are satisfied in accordance with Otis' amended and restated certificate of incorporation and amended and restated bylaws.

Otis' amended and restated certificate of incorporation and amended and restated bylaws provide that special meetings of shareholders may be called only by the board of directors, the chairman of the board of directors, or the Chief Executive Officer. The Secretary may also call a special meeting of shareholders in response to a written request of a stockholder or a group of shareholders who has maintained continuous qualifying ownership of at least 15% of Otis' outstanding common stock for at least one year, subject to the provisions and conditions set forth in Otis' amended and restated certificate of incorporation and amended and restated bylaws.

Under Delaware law, the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation's certificate of incorporation or bylaws, unless a corporation's certificate of incorporation or bylaws, as the case may be, requires a greater percentage.

Certain of the provisions of Otis' amended and restated certificate of incorporation and amended and restated bylaws discussed above and below could discourage a proxy contest or the acquisition of control of a substantial block of our stock. These provisions could also have the effect of discouraging a third party from making a tender offer or otherwise attempting to obtain control of Otis, even though an attempt to obtain control of Otis might be beneficial to Otis and its shareholders.

Otis' amended and restated certificate of incorporation includes provisions eliminating the personal liability of our directors for monetary damages resulting from breaches of their fiduciary duty to the extent permitted by Delaware law. The amended and restated bylaws include provisions indemnifying our directors and officers to the fullest extent permitted by Delaware law, including under circumstances in which indemnification is otherwise discretionary. The amended and restated bylaws additionally include provisions permitting the Chief Executive Officer or the General Counsel and the Chief Financial Officer acting together to reimburse the expenses of our current and former employees, agents and fiduciaries in advance of the final disposition of any such proceeding.

Section 203 of the DGCL, under certain circumstances, may make it more difficult for a person who is an "Interested Stockholder," as defined in Section 203, to effect various business

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combinations with a corporation for a three-year period. Under Delaware law, a corporation's certificate of incorporation or bylaws may exclude a corporation from the restrictions imposed by Section 203. However, Otis' amended and restated certificate of incorporation and amended and restated bylaws do not exclude us from these restrictions, and these restrictions apply to us.

**Description of Debt Securities**

The Notes were issued under that certain Indenture, dated November 12, 2021 (the "Base Indenture"), among Highland Holdings S.à r.l., as issuer ("Issuer"), Otis, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), as supplemented by (i) in the case of the 2026 Notes, and 2031 Notes, that certain Supplemental Indenture No. 1, dated November 12, 2021 (the "First Supplemental Indenture"), and (ii) in the case of the 2027 Notes, that certain Supplemental Indenture No. 2, dated November 19, 2024 (the "Second Supplemental Indenture") (the Base Indenture, as so supplemented by the First Supplemental Indenture and the Second Supplemental Indenture, the "Indenture"). The following summary of certain provisions of the Indenture and the Notes does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Indenture and the Notes. In this "Description of Debt Securities" section, when we refer to the "Issuer," "Highland," "we," "our," or "us," we refer to Highland Holdings S.à r.l. and any successor obligor and not to Otis or any of its other subsidiaries. In this "Description of Debt Securities" section, when we refer to "Otis," we refer to Otis Worldwide Corporation and any successor obligor and not to any subsidiaries of Otis.

The Base Indenture and the First Supplemental Indenture were filed with the SEC on November 12, 2021. The Second Supplemental Indenture was filed with the SEC on November 19, 2024. The Indenture is qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and you should refer to the Trust Indenture Act for provisions that apply to the Notes and the Parent Guarantees.

**General**

On November 12, 2021, we issued €600,000,000 in aggregate principal amount of the 2026 Notes. The 2026 Notes mature on December 15, 2026, and bear interest at a rate of 0.318% per annum.

On November 12, 2021, we issued €500,000,000 in aggregate principal amount of the 2031 Notes. The 2031 Notes mature on December 15, 2031, and bear interest at a rate of 0.934% per annum.

On November 19, 2024, we issued €850,000,000 in aggregate principal amount of the 2027 Notes. The 2027 Notes mature on November 19, 2027, and bear interest at a rate of 2.875% per annum.

Each of the 2026 Notes, the 2027 Notes and the 2031 Notes constitute separate series under the Indenture.

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The Notes were issued in fully registered form, without coupons, in minimum denominations of €100,000 and any integral multiple of €1,000 in excess thereof. Each series of Notes was issued in the form of one or more Global Notes (as defined in "Book-Entry, Delivery and Form") registered in the name of a nominee of, and deposited with, a common depositary for Clearstream and Euroclear. See "Book-Entry, Delivery and Form."

The Notes are not subject to any sinking fund or mandatory redemption provisions.

The place of payment for the Notes is the office of the Paying Agent maintained for that purpose in the City of London, initially the corporate trust office of the Paying Agent, located at (i) in the case of the 2026 Notes and 2031 Notes, One Canada Square, London, E14 5AL, United Kingdom and (ii) in the case of the 2027 Notes, 160 Queen Victoria Street, London, EC4V 4LA, United Kingdom. The place where notices and demands to or upon the Issuer or Otis in respect of the Notes and the Indenture may be served is the principal corporate trust office of the Trustee (i) in the case of the 2026 Notes and 2031 Notes, in the City of Pittsburgh, Pennsylvania and (ii) in the case of the 2027 Notes, in the City of Houston, Texas. All notices and communications to be given to the holders and all payments to be made to holders under the Notes will be given or made only to the registered holders (which will be Euroclear, Clearstream or a nominee, in the case of a Global Note).

Otis and Highland may at any time and from time to time purchase Notes in the open market, by tender offer, through privately negotiated transactions or otherwise.

**Issuance in Euro** 

Payments of principal, interest and Additional Amounts, if any, in respect of the Notes or the Parent Guarantees, as applicable, are payable in euro. If the euro is unavailable to the Issuer or Otis due to the imposition of exchange controls or other circumstances beyond the Issuer's or Otis' control, then all payments in respect of the Notes or the Parent Guarantees, as applicable, will be made in U.S. dollars until the euro is again available to the Issuer or Otis or so used. The amount payable on any date in euro will be converted into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business on the second Business Day prior to the relevant payment date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the basis of the then-most recent U.S. dollar/euro exchange rate published in the *Wall Street Journal* on or prior to the second Business Day prior to the relevant payment date or, in the event the *Wall Street Journal* has not published such exchange rate, the rate will be determined by Otis in its sole discretion on the basis of the most recently available market exchange rate for euro. Any payment in respect of the Notes so made in U.S. dollars will not constitute an event of default under the Notes or the Indenture. Neither the Trustee nor the Paying Agent will have any responsibility for any calculation or conversion in connection with the foregoing.

Investors will be subject to foreign exchange risks as to payments of principal, interest and Additional Amounts, if any, that may have important economic and tax consequences to them.

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**Interest on the Notes**

The Notes bear interest at the applicable annual rate described above under the heading "-General" and accrue interest from the date of original issuance or from the most recent date to which interest has been paid or duly provided for.

Interest will be payable on the Notes annually in arrears on the dates set forth in this paragraph and on the Maturity of such series, to the persons in whose names such Notes are registered on the relevant Record Date; provided that interest payable at the Maturity will be payable to the persons to whom the principal of such Notes is payable. Interest on the 2026 Notes is payable on December 15 of each year, beginning December 15, 2022. Interest on the 2027 Notes is payable on November 19 of each year, beginning November 19, 2025. Interest on the 2031 Notes is payable on December 15 of each year, beginning December 15, 2022. If the date on which a payment of interest or principal on the Notes is scheduled to be paid is not a Business Day, then the interest or principal payable on that date will be paid on the next succeeding Business Day, and no further interest will accrue as a result of such delay. Interest on the Notes shall be computed on the basis of the actual number of days in the period for which interest is being calculated, and including the last date on which interest was paid or duly provided for in the notes (or from the issue date, if no interest has been paid on the Notes), but excluding the next following interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA), as defined in the rulebook of the International Capital Markets Association. The amount of interest payable for any period shorter than a full monthly period will be computed on the basis of the actual number of calendar days elapsed in such a period.

**Guarantee** 

Otis fully and unconditionally guarantees to each holder of the Notes and to the Trustee the full and punctual payment when due, whether at stated maturity, by acceleration, by redemption or otherwise, of all obligations of Highland under the Indenture and the Notes, whether for payment of principal of, or interest on or premium, if any, on, the Notes and all other monetary obligations of Highland under the Indenture and the Notes (Otis' guarantee of each such series, a "Parent Guarantee" and, collectively, the "Parent Guarantees"). The Notes are not guaranteed by any of Otis' or the Issuer's subsidiaries. The Parent Guarantees are set forth in the Indenture.

Otis' guarantee of the Notes of any series shall be automatically released and discharged upon (a) the exercise by the Issuer of its legal defeasance option or (b) the discharge of the Issuer's obligations under the Indenture in accordance with the terms of the Indenture.

**Ranking** 

The Notes are our unsecured and unsubordinated obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness, liabilities and other obligations and senior in right of payment to all of our future indebtedness that is subordinated to the Notes. The Notes will be effectively subordinated in right of payment to any of our future secured indebtedness to the extent of the value of the assets securing such indebtedness, and are structurally subordinated in right of payment to any existing and future indebtedness, liabilities and other obligations of our subsidiaries.

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The Parent Guarantees are Otis' unsecured and unsubordinated obligations and rank equally in right of payment with all of Otis' existing and future unsecured and unsubordinated indebtedness, liabilities and other obligations and senior in right of payment to all of Otis' future indebtedness that is subordinated to the Parent Guarantees. The Parent Guarantees are and will be effectively subordinated in right of payment to any of Otis' existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness, and are and will be structurally subordinated in right of payment to any existing and future indebtedness, liabilities and other obligations of Otis' subsidiaries (other than, by virtue of the Issuer's obligations as issuer of the Notes, the Issuer).

**Optional Redemption**

At any time, and from time to time, prior to the Par Call Date, in respect of each series of Notes, we may redeem Notes of such series, in whole or in part, at a redemption price equal to the greater of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

•  100% of the principal amount of the Notes to be redeemed, and

•  the sum of the Remaining Scheduled Payments of the Notes to be redeemed from the redemption date to the Par Call Date of such series of Notes discounted to the redemption date on an annual basis (ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate plus the number of basis points set forth below under the heading "Make-Whole Basis Points" across from the name of such series of Notes,

plus, in each case, accrued and unpaid interest, if any, on the principal amount of the Notes being redeemed to, but excluding, the redemption date.

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| | |
|:---|:---|
| **Series of Notes** | **Make-Whole Basis Points** |
| 2026 Notes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;+15 |
| 2027 Notes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;+15 |
| 2031 Notes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;+20 |

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At any time on or after the Par Call Date in respect of a series of Notes, we may redeem the Notes of such series, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest, if any, on the principal amount of the Notes being redeemed to, but excluding, the redemption date (each such redemption, a "Par Call").

For purposes of this Description of Debt Securities, "Par Call Date" in respect of a series of Notes shall mean the date set forth below under the heading "Par Call Date" across from the name of such series of Notes.

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| | |
|:---|:---|
| **Series of Notes** | **Par Call Date** |
| 2026 Notes | September 15, 2026 (3 months prior to the stated maturity of such Notes) |
| 2027 Notes | October 19, 2027 (1 month prior to the stated maturity of such Notes) |
| 2031 Notes | September 15, 2031 (3 months prior to the stated maturity of such Notes) |

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Notice of redemption shall be mailed or otherwise delivered in accordance with the applicable procedures of the depository not less than 10 days nor more than 60 days prior to the redemption date to each registered holder of the Notes to be redeemed.

If the redemption date is on or after a Record Date and on or before the related Interest Payment Date, the accrued and unpaid interest, if any, will be paid to the person in whose name the Note is registered at the close of business on such Record Date, and no additional interest will be payable to holders whose Notes are subject to redemption by the Issuer.

Any notice of redemption of any series of Notes may, at the Issuer's discretion, be subject to one or more conditions precedent with respect to completion of a corporate transaction (including, but not limited to, any merger, acquisition, disposition, asset sale or corporate restructuring or reorganization) or financing (including, but not limited to, any incurrence of indebtedness (or entering into a commitment with respect thereto), sale and leaseback transaction, issuance of securities, equity offering or contribution, liability management transaction or other capital raise) and may be given prior to the completion thereof. If a redemption is subject to satisfaction of one or more conditions precedent, the notice shall describe each condition, and the notice may be rescinded in the event that any or all of the conditions shall not have been satisfied by the redemption date. Any notice of redemption may provide that payment of the redemption price and the Issuer's obligations with respect to the redemption may be performed by another person.

Unless we default in payment of the redemption price, interest will cease to accrue on the Notes or portion of the Notes called for redemption on and after the redemption date.

**Additional Amounts**

All payments of principal and interest in respect of the Notes by us or, in the case of the Parent Guarantee, Otis, or by a paying agent on our or Otis' behalf, will be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, duties, assessments or other similar governmental charges (collectively, "Taxes") imposed or levied by Luxembourg, the United States or any other jurisdiction in which we or Otis may be organized, engaged in business for tax purposes or resident for tax purposes, or any political subdivision or taxing authority thereof or therein (a "Taxing Jurisdiction"), unless such deduction or withholding is required by law or the official interpretation or administration thereof.

In the event such deduction or withholding for Taxes is so required, subject to the exceptions and limitations described below, we will pay such additional amounts ("Additional Amounts") on the Notes as may be necessary to ensure that the net amount received by any holder, after withholding or deduction for such Taxes, will be equal to the amount such person would have received in the absence of such deduction or withholding.

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However, no Additional Amounts shall be payable with respect to any Taxes if such Taxes are imposed, withheld, deducted or levied for reasons unrelated to the holder's or beneficial owner's ownership or disposition of Notes, nor shall Additional Amounts be payable for or on account of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| | | | |
|:---|:---|:---|:---|
| (a) | (a) | any Taxes which would not have been so imposed, withheld, deducted or levied but for: | any Taxes which would not have been so imposed, withheld, deducted or levied but for: |
| (i) | the existence of any present or former connection between the holder or beneficial owner (or between a fiduciary, settlor, beneficiary, member or shareholder or other equity owner of, or a person having a power over, such holder or beneficial owner, if such holder or beneficial owner is an estate, a trust, a limited liability company, a partnership, a corporation or other entity) and the relevant Taxing Jurisdiction, including, without limitation, such holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder or other equity owner or person having such a power) being or having been a citizen or resident or treated as a resident of the relevant Taxing Jurisdiction, being or having been engaged in a trade or business in the relevant Taxing Jurisdiction, being or having been present in the relevant Taxing Jurisdiction, or having or having had a permanent establishment in the relevant Taxing Jurisdiction; | the existence of any present or former connection between the holder or beneficial owner (or between a fiduciary, settlor, beneficiary, member or shareholder or other equity owner of, or a person having a power over, such holder or beneficial owner, if such holder or beneficial owner is an estate, a trust, a limited liability company, a partnership, a corporation or other entity) and the relevant Taxing Jurisdiction, including, without limitation, such holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder or other equity owner or person having such a power) being or having been a citizen or resident or treated as a resident of the relevant Taxing Jurisdiction, being or having been engaged in a trade or business in the relevant Taxing Jurisdiction, being or having been present in the relevant Taxing Jurisdiction, or having or having had a permanent establishment in the relevant Taxing Jurisdiction; | the existence of any present or former connection between the holder or beneficial owner (or between a fiduciary, settlor, beneficiary, member or shareholder or other equity owner of, or a person having a power over, such holder or beneficial owner, if such holder or beneficial owner is an estate, a trust, a limited liability company, a partnership, a corporation or other entity) and the relevant Taxing Jurisdiction, including, without limitation, such holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder or other equity owner or person having such a power) being or having been a citizen or resident or treated as a resident of the relevant Taxing Jurisdiction, being or having been engaged in a trade or business in the relevant Taxing Jurisdiction, being or having been present in the relevant Taxing Jurisdiction, or having or having had a permanent establishment in the relevant Taxing Jurisdiction; |
| (ii) | (ii) | (ii) | the failure of the holder or beneficial owner to comply with any applicable certification, information, documentation or other reporting requirement, if compliance is required under the tax laws and regulations of the relevant Taxing Jurisdiction or any taxing authority thereof or therein or by an applicable income tax treaty to which the relevant Taxing Jurisdiction is a party as a precondition to exemption from such Taxes; or |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(iii) the holder's or beneficial owner's present or former status as a personal holding company or a foreign personal holding company with respect to the United States, as a controlled foreign corporation with respect to the United States, as a passive foreign investment company with respect to the United States, as a foreign tax-exempt organization with respect to the United States, or as a corporation that accumulates earnings to avoid U.S. federal income tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) any Taxes which would not have been imposed, withheld, deducted or levied but for the failure of the holder or beneficial owner to meet the requirements (including the certification requirements) of Section 871(h) or Section 881(c)(3)(C) of the Internal Revenue Code of 1986, as amended (the "Code");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) any Taxes which would not have been imposed, withheld, deducted or levied but for the presentation by the holder or beneficial owner of such Note for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for and notice is given to holders, whichever occurs later;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (d) any estate, inheritance, gift, sales, excise, transfer, capital gains, personal property, wealth or similar Taxes;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(e) any Taxes which are payable other than by withholding or deducting from a payment of principal of or interest on such Note;

(f) any Taxes which are imposed, withheld, deducted or levied with respect to, or payable by, a holder that is not the beneficial owner of the Note, or a portion of the Note, or that is a fiduciary, partnership, limited liability company or other similar entity, but only to the extent that a beneficial owner, a beneficiary or settlor with respect to such fiduciary or member of such partnership, limited liability company or similar entity would not have been entitled to the payment of an Additional Amount had such beneficial owner, settlor, beneficiary or member received directly its beneficial or distributive share of the payment;

(g) any Taxes required to be withheld or deducted by any paying agent from any payment if such payment can be made without such withholding or deduction by at least one other paying agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(h) any Taxes imposed, withheld, deducted or levied under Sections 1471 through 1474 of the Code (or any amended or successor provisions), any current or future regulations or official interpretations thereof ("FATCA"), any agreement (including any intergovernmental agreement) entered into in connection therewith or any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA or an intergovernmental agreement in respect of FATCA;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(i) any Taxes that would not have been imposed, withheld, deducted or levied but for a change in any law, treaty, regulation, or administrative or judicial interpretation that becomes effective after the applicable payment becomes due or is duly provided for, whichever occurs later; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(j) a Tax deduction on account of Tax imposed by Luxembourg if on the date on which the payment falls due such Tax deduction is required in respect of the Luxembourg law of 23 December 2005, as amended, introducing in Luxembourg a 20% withholding tax as regards Luxembourg resident individuals; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (k) any combination of items (a), (b), (c), (d), (e), (f), (g), (h), (i) and (j).

Any Additional Amounts paid on the Notes and the Parent Guarantees will be paid in euro, subject to the provisions described under "-Issuance in Euro."

For purposes of this section, the acquisition, ownership, enforcement, or holding of or the receipt of any payment with respect to a Note or a Parent Guarantee, as applicable, will not constitute a connection (a) between the holder or beneficial owner and the relevant Taxing Jurisdiction or (b) between a fiduciary, settlor, beneficiary, member or shareholder or other equity owner of, or a person having a power over, such holder or beneficial owner if such holder or beneficial owner is an estate, a trust, a limited liability company, a partnership, a corporation or other entity and a Taxing Jurisdiction. As used under this heading "Additional Amounts" and under the heading "Redemption for Tax Reasons," the term "United States" means the United States of America, any state thereof and the District of Columbia.

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Any reference in this Description of Debt Securities, in the prospectus supplement and the accompanying prospectus, in the Indenture or in the Notes to principal or interest shall be deemed to refer also to Additional Amounts which may be payable under the provisions of this section.

Except as specifically provided in the Notes, neither we nor Otis will be required to make any payment with respect to any tax, duty, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority.

**Redemption for Tax Reasons**

We may redeem any series of Notes at our option, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, together with any accrued and unpaid interest on the Notes to be redeemed to, but excluding, the redemption date, at any time, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) we or Otis have or will become obliged to pay Additional Amounts with respect to the Notes of such series as a result of any change in, or amendment to, the laws, regulations, treaties, or rulings of a Taxing Jurisdiction affecting taxation, or any change in, or amendment to, the official application, official interpretation, administration or enforcement of such laws, regulations, treaties or rulings (including a holding by a court of competent jurisdiction in a Taxing Jurisdiction), which change or amendment is enacted, adopted, announced or becomes effective on or after (i) in the case of the 2026 Notes and 2031 Notes, November 4, 2021 or (ii) in the case of the 2027 Notes, November 13, 2024; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) on or after (i) in the case of the 2026 Notes and 2031 Notes, November 4, 2021 or (ii) in the case of the 2027 Notes, November 13, 2024, any action is taken by a taxing authority of, or any action has been brought in a court of competent jurisdiction in, a Taxing Jurisdiction or any taxing authority thereof or therein, including any of those actions specified in clause (a) above, whether or not such action was taken or brought with respect to us or Otis or there is any change, amendment, clarification, application or interpretation of such laws, regulations, treaties or rulings, which in any such case, will result in a material probability that we or Otis will be required to pay Additional Amounts with respect to such Notes (it being understood that such material probability will be deemed to result if the written opinion of independent tax counsel described in clause (b) below to such effect is delivered to the Trustee and the Paying Agent).

Notice of any such redemption will be mailed, or delivered electronically if held by any depositary in accordance with such depositary's customary procedures, at least 10 days but not more than 60 days before the redemption date to each registered holder of Notes to be redeemed; provided that the notice of redemption shall not be given earlier than 90 days before the earliest date on which we would be obligated to pay such Additional Amounts if a payment in respect of the Notes to be redeemed was then due. Any notice of redemption may provide that payment of the redemption price and the Issuer's obligations with respect to the redemption may be performed by another person.

Prior to the mailing or delivery of any notice of redemption pursuant to this section "-Redemption for Tax Reasons," we will deliver to the Trustee and the Paying Agent:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) a certificate signed by one of our officers stating that we are entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to our right to so redeem have occurred; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) a written opinion of independent tax counsel of nationally recognized standing to the effect that we or Otis have or will become obligated to pay such Additional Amounts as a result of a change or amendment described in clause (a) above or that there is a material probability that we or Otis will be required to pay Additional Amounts as a result of an action, change, amendment, clarification, application or interpretation described in clause (b) above, as the case may be.

Such notice, once delivered by us, will be irrevocable.

**Offer to Purchase Upon Change of Control Triggering Event** 

Upon the occurrence of a Change of Control Triggering Event with respect to a series of Notes, unless we have exercised our right to redeem the Notes of such series by giving irrevocable notice on or prior to the 30th day after the Change of Control Triggering Event in accordance with the Indenture, each holder of the Notes of such series will have the right to require us to purchase all or a portion of such holder's Notes of such series pursuant to the offer described

below (the "Change of Control Offer"), at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, thereon to, but excluding, the Change of Control Payment Date (as defined below) (the "Change of Control Payment"). If the Change of Control Payment Date is (a) on a day that is not a Business Day, the related payment of the Change of Control Payment will be made on the next Business Day as if it were made on the date such payment was due, and no interest will accrue on the amounts so payable for the period from and after such date to the next Business Day and/or (b) on or after a Record Date and on or before the related Interest Payment Date, the accrued and unpaid interest, if any, will be paid to the person in whose name the Note is registered at the close of business on such Record Date, and no additional interest will be payable to holders whose Notes are subject to purchase by the Issuer.

Within 30 days following the date upon which the Change of Control Triggering Event occurs or, at our option, prior to any Change of Control but after the public announcement of the pending Change of Control, we will be required to mail or otherwise deliver in accordance with the applicable procedures of Clearstream and Euroclear a notice to each holder of Notes of the applicable series, which notice will govern the terms of the Change of Control Offer. Such notice will state the purchase date, which must be no earlier than 15 days nor later than 60 days from the date such notice is mailed or otherwise delivered in accordance with the applicable procedures of Clearstream and Euroclear (or, in the case of a notice mailed or otherwise delivered in accordance with the applicable procedures of Clearstream and Euroclear prior to the date of consummation of a Change of Control, no earlier than 15 days nor later than 60 days from the date of the Change of Control Triggering Event), other than as may be required by law (the "Change of Control Payment Date"). The notice, if mailed or otherwise delivered in accordance with the applicable procedures of Clearstream and Euroclear prior to the date of consummation of the Change of Control, will state that the Change of Control Offer is

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conditioned on the Change of Control being consummated on or prior to the Change of Control Payment Date.

On the Change of Control Payment Date, we will, to the extent lawful:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> • accept or cause a third party to accept for payment all the Notes of the applicable series properly tendered pursuant to the Change of Control Offer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

•  deposit or cause a third party to deposit with the applicable paying agent an amount equal to the Change of Control Payment in respect of all the Notes of the applicable series properly tendered; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

•  deliver or cause to be delivered to the Trustee the Notes of the applicable series properly accepted together with an officer's certificate stating the aggregate principal amount of the Notes being purchased.

We will not be required to make a Change of Control Offer with respect to the Notes of the applicable series if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for such an offer made by us and such third party purchases all the Notes of the applicable series properly tendered and not withdrawn under its offer. In addition, we will not purchase any Notes of the applicable series if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other than an Event of Default in the payment of the Change of Control Payment on the Change of Control Payment Date.

In connection with any Change of Control Offer for any series, if holders of not less than 90% in aggregate principal amount of the outstanding Notes of such series validly tender and do not withdraw such Notes in the Change of Control Offer and the Issuer, or any third party making

the Change of Control Offer in lieu of the Issuer as described above, purchases all of those Notes validly tendered and not withdrawn by the holders, the Issuer or such third party will have the right, upon not less than 15 but not more than 60 days' notice mailed or otherwise delivered in accordance with the applicable procedures of Clearstream and Euroclear by the Issuer to each holder of such Notes (provided, that the notice is given not more than 30 days following the purchase date in respect of such Change of Control Offer), to redeem all the Notes of such series that remain outstanding following such purchase at a price in cash equal to 101% of the outstanding principal amount of the Notes plus accrued and unpaid interest, if any, to, but excluding, the applicable purchase date (it being agreed that if the purchase date is (a) on a day that is not a Business Day, the related payment will be made on the next Business Day as if it were made on the date such payment was due, and no interest will accrue on the amounts so payable for the period from and after such date to the next Business Day and/or (b) on or after a Record Date and on or before the related Interest Payment Date, the accrued and unpaid interest, if any, will be paid to the person in whose name the Note is registered at the close of business on such Record Date, and no additional interest will be payable to holders whose Notes are subject to purchase by the Issuer).

We must comply in all material respects with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended, and any other securities laws and regulations thereunder to

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the extent those laws and regulations are applicable in connection with the purchase of the Notes of the applicable series as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the Notes of the applicable series, we will be required to comply with those securities laws and regulations and will not be deemed to have breached our obligations under the Indenture with respect to the Notes of such series by virtue of any such conflict.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the assets of Otis and its subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise, established definition of the phrase under applicable law. Accordingly, the applicability of the requirement that we offer to purchase the Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Otis and its subsidiaries taken as a whole to another "person" (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) may be uncertain.

**Additional Notes**

We may from time to time, without notice to or the consent of the holders of any series of Notes, create and issue further notes of any such series ranking equally with the Notes of such series (and being treated as a single class with the Notes of such series already outstanding) in all respects and having the same terms as the Notes of such series already outstanding except for issue date, issue price and, under some circumstances, the first Interest Payment Date thereof or the date from which interest first accrues thereon. If any additional notes of such series are not fungible with the initial Notes for U.S. federal income tax purposes, then those additional notes will have a separate CUSIP/Common Code/ISIN number. The Notes of each series and any additional notes of such series will be treated as a single series for all purposes under the Indenture, including, without limitation, waivers, amendments and redemptions.

**Limitation Upon Liens**

Otis will not itself, and will not permit any Wholly-Owned Domestic Manufacturing Subsidiary to, create, incur, issue or assume any Debt secured by a Lien on any Principal Property owned by Otis or any Wholly-Owned Domestic Manufacturing Subsidiary, and Otis will not itself, and will not permit any subsidiary to, create, incur, issue or assume any Debt secured by any Lien on any equity interests or Debt of any Wholly-Owned Domestic Manufacturing Subsidiary, without in any such case effectively providing that, the Notes (together with, if Otis shall so determine, any

other Debt of Otis then existing or thereafter created that is not subordinate in right of payment to the Notes) will be secured equally and ratably with (or prior to) such secured Debt, so long as such secured Debt shall be so secured, unless, after giving effect thereto, the aggregate principal amount of all such secured Debt then outstanding plus Attributable Debt of Otis and its Wholly-Owned Domestic Manufacturing Subsidiaries in respect of sale and leaseback transactions involving Principal Properties entered into after the date of the issuance of the Notes (other than such sale and leaseback transactions as are permitted by the Indenture) would not exceed an amount equal to 10% of Consolidated Net Total Assets of Otis; provided that nothing contained in this covenant will prevent, restrict or apply to, and there will be excluded from secured Debt in any computation under this covenant, Debt secured by:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) Liens on any property or assets of Otis or any subsidiary (including equity interests or Debt owned by Otis or any subsidiary of Otis) existing as of the date of the issuance of the Notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) Liens on any property or assets of, or on any equity interests or Debt of, any person existing at the time such person becomes a Wholly-Owned Domestic Manufacturing Subsidiary, or arising thereafter (i) otherwise than in connection with the borrowing of money arranged thereafter and (ii) pursuant to contractual commitments entered into prior to and not in contemplation of such person's becoming a Wholly-Owned Domestic Manufacturing Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) Liens on any property or assets or equity interests or Debt existing at the time of acquisition thereof (including acquisition through merger or consolidation) or securing the payment of all or any part of the purchase price or construction cost thereof or securing any Debt incurred prior to, at the time of or within 120 days after, the acquisition of such property or assets or equity interests or Debt or the completion of any such construction, whichever is later, for the purpose of financing all or any part of the purchase price or construction cost thereof (provided that such Liens are limited to such equity interests or Debt or such other property or assets, improvements thereon and the land upon which such property, assets and improvements are located and any other property or assets not then constituting a Principal Property);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(d) Liens on any property or assets to secure all or any part of the cost of development, operation, construction, alteration, repair or improvement of all or any part of such property or assets, or to secure Debt incurred prior to, at the time of or within 120 days after, the completion of such development, operation, construction, alteration, repair or improvement, whichever is later, for the purpose of financing all or any part of such cost (provided that such Liens are limited to such property or assets, improvements thereon and the land upon which such property, assets and improvements are located and any other property or assets not then constituting a Principal Property);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (e) Liens which secure Debt owing by a subsidiary to Otis or to a Wholly-Owned Domestic Manufacturing Subsidiary;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(f) Liens arising from the assignment of moneys due and to become due under contracts between Otis or any subsidiary of Otis and the United States, any State, Commonwealth, Territory or possession thereof or any agency, department, instrumentality or political subdivision of any thereof; or Liens in favor of the United States, any State, Commonwealth, Territory or possession thereof or any agency, department, instrumentality or political subdivision of any thereof, pursuant to the provisions of any contract not directly or indirectly in connection with securing Debt;

(g) any materialmen's, carriers', mechanics', workmen's, repairmen's or other like Liens arising in the ordinary course of business in respect of obligations which are not overdue or which are being contested in good faith by appropriate proceedings; any deposit or pledge as security for the performance of any bid, tender, contract, lease, or undertaking not directly or indirectly in connection with the securing of Debt; any deposit or pledge with any governmental agency required or permitted to qualify Otis or any subsidiary of Otis to conduct business, to maintain self-insurance or to obtain the benefits of any law pertaining to workmen's compensation, unemployment insurance, old age pensions, social security or similar matters, or to obtain any stay or discharge in any legal or administrative proceedings; deposits or pledges to obtain the release of materialmen's, carriers', mechanics', workmen's, repairmen's Liens or the release of property in the possession of a common carrier; any security interest created in connection with the sale, discount or guarantee of notes, chattel mortgages, leases, accounts receivable, trade acceptances or other paper, or contingent repurchase obligations, arising out of sales of merchandise in the ordinary course of business; Liens for Taxes levied or imposed upon Otis or any Wholly-Owned Domestic Manufacturing Subsidiary or upon the income, profits or property of Otis or any Wholly-Owned Domestic Manufacturing Subsidiary or Liens on any Principal Property of Otis or any Wholly-Owned Domestic Manufacturing Subsidiary arising from claims from labor, materials or supplies; provided that either such Tax is not overdue or that the amount, applicability or validity of such Tax or claim is being contested in good faith by appropriate proceedings; or other deposits or pledges similar to those referred to in this clause (g);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(h) Liens arising by reason of any judgment, decree or order of any court, so long as any appropriate legal proceedings which may have been initiated for the review of such judgment, decree or order shall not have been finally terminated or so long as the period within which such proceedings may be initiated shall not have expired; any deposit or pledge with any surety company or clerk of any court, or in escrow, as collateral in connection with, or in lieu of, any bond on appeal from any judgment or decree against Otis or any subsidiary of Otis, or in connection with other proceedings or actions at law or in equity by or against Otis or any subsidiary of Otis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(i) any extension, renewal, substitution or replacement (or successive extensions, renewals, substitutions or replacements), as a whole or in part, of any of the Liens referred to in clauses (a) through (h) above or the Debt secured thereby; provided that (i) such extension, renewal, substitution or replacement Lien shall be limited to all or any part of the same property or assets or equity interests or Debt that secured the Lien extended, renewed, substituted or replaced (plus improvements on such property, and plus any other property or assets not then constituting a Principal Property) and (ii) in the case of clauses (a) through (c) above, the Debt secured by such Lien at such time is not increased.

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For the purposes of this covenant and the covenant described under the caption "-Limitations upon Sales and Leasebacks," the giving of a guarantee which is secured by a Lien on a Principal Property, and the creation of a Lien on a Principal Property or equity interests or Debt to secure Debt which existed prior to the creation of such Lien, will be deemed to involve the creation of Debt in an amount equal to the principal amount guaranteed or secured by the Lien; however, the amount of Debt secured by Liens on Principal Properties and equity interests and Debt will be computed without cumulating the underlying indebtedness with any guarantee thereof or Lien securing the same.

For purposes of this covenant and the covenant described under the caption "-Limitations upon Sales and Leasebacks," the following will not be deemed to be Liens securing Debt, and, accordingly, nothing contained in this covenant and the covenant described under the caption "-Limitations upon Sales and Leasebacks" will prevent, restrict or apply to: (a) any acquisition by Otis or any Wholly-Owned Domestic Manufacturing Subsidiary of any property or assets subject to any reservation or exception under the terms of which any vendor, lessor or assignor creates, reserves or excepts or has created, reserved or excepted an interest in oil, gas and/or any other mineral and/or the process thereof, (b) any conveyance or assignment under the terms of which Otis or any Wholly-Owned Domestic Manufacturing Subsidiary conveys or assigns to any person or persons an interest in oil, gas and/or any other mineral and/or the proceeds thereof, or (c) any Lien upon any property or assets owned or leased by Otis or any Wholly-Owned Domestic Manufacturing Subsidiary or in which Otis or any Wholly-Owned Domestic Manufacturing Subsidiary owns an interest to secure to the person or persons paying the expenses of developing and/or conducting operations for the recovery, storage, transportation and/or sale of the mineral resources of the said property (or property with which it is utilized) the payment to such person or persons of Otis' or the Wholly-Owned Domestic Manufacturing Subsidiary's proportionate part of such development and/or operating expense.

**Limitations upon Sales and Leasebacks**

Otis will not itself, and will not permit any Wholly-Owned Domestic Manufacturing Subsidiary to, enter into any arrangement on or after the date of the issuance of the Notes with any bank, insurance company or other lender or investor (other than Otis or another Wholly-Owned Domestic Manufacturing Subsidiary) providing for the leasing by Otis or any Wholly-Owned Domestic Manufacturing Subsidiary of any Principal Property (except a lease for a temporary period not to exceed three years by the end of which it is intended that the use of such Principal Property by the lessee will be discontinued), which was or is owned by Otis or a Wholly-Owned Domestic Manufacturing Subsidiary and which has been or is to be sold or transferred, more than 365 days after the completion of construction and commencement of full operation thereof by Otis or such Wholly-Owned Domestic Manufacturing Subsidiary, to such bank, insurance company, lender or investor or to any person to whom funds have been or are to be advanced by such bank, insurance company, lender or investor on the security of such Principal Property (herein referred to as a "sale and leaseback transaction") unless, either:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) the Attributable Debt of Otis and its Wholly-Owned Domestic Manufacturing Subsidiaries in respect of such sale and leaseback transaction and all other sale and leaseback transactions entered into after the date of the issuance of the Notes (other than such sale and leaseback transactions as are permitted by the provisions described in the following paragraph), plus the aggregate principal amount of Debt secured by Liens on Principal Properties then outstanding (excluding any such Debt secured by Liens covered by the provisions described in clauses (a) through (i) of the first paragraph of the covenant described under the caption "-Limitation upon Liens") without equally and ratably securing the Notes, would not exceed 10% of Consolidated Net Total Assets, or

(b) Otis, within 365 days after the sale or transfer, applies or causes a Wholly-Owned Domestic Manufacturing Subsidiary to apply an amount equal to the greater of the net proceeds of such sale or transfer or fair market value of the Principal Property so sold and leased back at the time of entering into such sale and leaseback transaction (in either case as determined by any two of the following: the Chairman, Chief Executive Officer, Chief Financial Officer, the President, any Vice President, the Treasurer and the Controller of Otis) to the retirement of securities of any series outstanding under the Indenture or other indebtedness of Otis (other than indebtedness subordinated in right of payment to the Notes) or indebtedness of a Wholly-Owned Domestic Manufacturing Subsidiary, for money borrowed, having a stated maturity more than 12 months from the date of such application or which is extendible at the option of the obligor thereon to a date more than 12 months from the date of such application (and, unless otherwise expressly provided with respect to any one or more series of securities outstanding under the Indenture, any redemption of securities pursuant to this provision shall not be deemed to constitute a refunding operation or anticipated refunding operation for the purposes of any provision limiting Otis' right to redeem securities of any one or more such series when such redemption involves a refunding operation or anticipated refunding operation); provided that the amount to be so applied will be reduced by (i) the principal amount of securities outstanding under the Indenture delivered within 120 days after such sale or transfer to the Trustee for retirement and cancellation, and (ii) the principal amount of any such indebtedness of Otis or a Wholly-Owned Domestic Manufacturing Subsidiary, other than such securities, voluntarily retired by Otis or a Wholly-Owned Domestic Manufacturing Subsidiary within 120 days after such sale or transfer. Notwithstanding the foregoing, no retirement referred to in this clause (b) may be effected by payment at maturity or pursuant to any mandatory sinking fund payment or any mandatory prepayment provision.

Notwithstanding the foregoing, where Otis or any Wholly-Owned Domestic Manufacturing Subsidiary is the lessee in any sale and leaseback transaction, Attributable Debt will not include any Debt resulting from the guarantee by Otis or any other Wholly-Owned Domestic Manufacturing Subsidiary of the lessee's obligation thereunder.

**Existence**

Subject to the covenant described under the caption "-Consolidation, Merger and Sale of Assets," each of the Issuer and Otis will do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence.

**Reports by Otis**

Otis shall file with the Trustee, within 15 days after Otis is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports

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(or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) which Otis is required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended. Otis will be deemed to have complied with the obligations described in the immediately previous sentence to the extent that the information, documents and reports are filed with the Commission via EDGAR (or any successor electronic delivery procedure) and posted on the Otis' website or otherwise publicly available.

Delivery of the reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt shall not constitute constructive or actual knowledge or notice of any information contained therein or determinable from information contained therein, including Otis' compliance with any of its covenants under the Indenture (as to which the Trustee is entitled to rely exclusively on officer's certificates of Otis).

During any time period in which the Trust Indenture Act does not apply to the Indenture or the Notes, for so long as any such Notes remain outstanding, Otis will furnish to the holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act of 1933, as amended (the "Securities Act").

**Consolidation, Merger and Sale of Assets**

The Issuer will not consolidate with or merge into any other person or convey, transfer or lease all or substantially all of its properties and assets to any person, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) the person formed by the consolidation or into which the Issuer is merged or the person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Issuer is a person organized and existing under the laws of Luxembourg, the United States, any State thereof or the District of Columbia, or any country which is, on the issue date of the Notes, a member state of the European Union, and expressly assumes, by an indenture supplemental to the Indenture, executed and delivered to the Trustee, the Issuer's obligation for the due and punctual payment of the principal of (and premium, if any) and interest on all the Notes and the performance of every covenant of the Indenture on the part of the Issuer to be performed or observed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) the Issuer has delivered to the Trustee an officer's certificate and an opinion of counsel, each stating that the consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with the covenant described in this section.

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Otis will not consolidate with or merge into any other person or convey, transfer or lease all or substantially all of its properties and assets to any person, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) the person formed by the consolidation or into which Otis is merged or the person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of Otis is a person organized and existing under the laws of the United States, any State thereof or the District of Columbia and expressly assumes, by an indenture supplemental to the Indenture, executed and delivered to the Trustee, Otis' obligation under the Parent Guarantee and the performance of every covenant of the Indenture on the part of Otis to be performed or observed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) Otis has delivered to the Trustee an officer's certificate and an opinion of counsel, each stating that the consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with the covenant described in this section.

The covenant described in this section will only apply to a merger or consolidation in which the Issuer or Otis, as applicable, is not the surviving person and to conveyances, leases and transfers by the Issuer or Otis, as applicable, as transferor or lessor.

Upon any consolidation by the Issuer or Otis with or merger by the Issuer or Otis into any other person or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Issuer or Otis in accordance with the covenant described in this section, the successor person formed by the consolidation or into which the Issuer or Otis is merged or to which the conveyance, transfer or lease is made will succeed to, and be substituted for, and may exercise every right and power of, the Issuer or Otis, as applicable, under the Indenture with the same effect as if the successor person had been named as the issuer or guarantor, as applicable, in the Indenture. In the event of any such conveyance or transfer, the Issuer or Otis, except in the case of a lease, will be discharged of all obligations and covenants under the Indenture and the Notes. In case of any such consolidation, merger, conveyance, transfer or lease, certain changes in phraseology and form may be made in the Notes thereafter to be issued as may be appropriate.

**Events of Default**

When we use the term "Event of Default" with respect to Notes of any series, we mean:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (a) default in the payment of any interest upon the Notes of such series when it becomes due and payable, and continuance of the default for a period of 30 days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (b) default in the payment of the principal of (or premium, if any, on) any Note of such series at its Maturity;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) default in the performance, or breach, of any covenant or warranty of the Issuer or Otis in the Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this section specifically dealt with or which has been expressly included in the Indenture for the benefit of one or more series of securities other than the Notes), and continuance of that default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Issuer and Otis by the Trustee or to the Issuer, Otis and the Trustee by the holders of at least 25% in principal amount of all affected securities of any series issued under the Indenture then outstanding (taking such action as one class) (including any affected Notes), a written notice specifying the default or breach and requiring it to be remedied and stating that the notice is a "Notice of Default" under the Indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(d) the entry of a decree or order by a court having jurisdiction in the premises adjudging the Issuer or Otis a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer or Otis under any applicable federal or state bankruptcy, insolvency, reorganization or similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Issuer or Otis or of all or substantially all of their property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(e) the institution by the Issuer or Otis of proceedings to be adjudicated a bankrupt or insolvent, or the consent by either of them to the institution of bankruptcy or insolvency proceedings against either of them, or the filing by either of them of a petition or answer or consent seeking reorganization or relief under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law, or the consent by either of them to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Issuer or Otis or all or substantially all of their respective properties, or the making by either of them of an assignment for the benefit of creditors, or the admission by either of them in writing of their respective inability to pay their respective debts generally as they become due; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(f) other than by reason of release of the Guarantor in accordance with the terms of the Indenture, the Parent Guarantee being held in any judicial proceeding to be unenforceable or invalid or ceasing for any reason to be in full force and effect, in each case, relating to the Notes of any series, or Otis denying or disaffirming in writing its obligation under the Parent Guarantee relating to the Notes of any series, and such Parent Guarantee not being issued or returned to full force and effect within, or the denial or disaffirmation not being rescinded, by the date that is 10 days after receipt of a specified written notice to Otis from the Trustee or a holder of Notes of the relevant series.

An Event of Default with respect to the Notes of a particular series may not constitute an Event of Default with respect to the Notes of any other series.

If an Event of Default described above in clause (a), (b) or (f) of the definition of "Event of Default" occurs with respect to the Notes of any series at the time outstanding and is continuing, then in every such case the Trustee or the holders of not less than 25% in principal amount of the

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outstanding Notes of such series may declare the principal amount of all of the Notes of such series to be due and payable immediately, by a notice in writing to the Issuer and Otis (and to the Trustee if given by the holders), and upon such declaration the principal amount of all of the Notes of such series will become immediately due and payable.

If an Event of Default described above in clause (c) of the definition of "Event of Default" occurs and is continuing, then in every such case the Trustee or the holders of not less than 25% in principal amount of all affected securities of any series issued under the Indenture (including any affected series of the Notes) then outstanding (taking such action as one class) may declare the principal amount of all affected outstanding securities to be due and payable immediately, by a notice in writing to the Issuer and Otis (and to the Trustee if given by the holders), and upon any such declaration the principal amount of all affected outstanding securities will become immediately due and payable.

If an Event of Default described above in clause (d) or (e) of the definition of "Event of Default" occurs, then the outstanding principal amount and any accrued interest upon all the outstanding Notes will automatically, and without any declaration or other action on the part of the Trustee or any holder, become immediately due and payable.

Under certain circumstances, the holders of a majority in aggregate principal amount of the outstanding Notes of a series (or of more than one series of affected securities outstanding (including any affected series of Notes) (acting as one class), as the case may be), by written notice to the Issuer, Otis and the Trustee, may rescind and annul an acceleration and its consequences.

The Issuer covenants that if (a) default is made in the payment of any interest on any Note when such interest becomes due and payable and such default continues for a period of 30 days, or (b) default is made in the payment of the principal of (or premium, if any, on) any Note at the Maturity thereof, the Issuer will, upon demand of the Trustee, pay to it or cause to be paid to it, for the benefit of the holders of such Notes, the whole amount then due and payable on such Notes for principal (and premium, if any) and interest and, to the extent that payment of such interest is legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Notes, and, in addition thereto, such further amount as is sufficient to cover the reasonable costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Issuer or Otis fails to pay such amounts forthwith upon such demand, the Trustee, in its own name as trustee of an express trust, may institute a judicial proceeding for the collection of the sums due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Issuer or Otis or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Issuer or Otis or any other obligor upon the Notes, wherever situated.

If an Event of Default with respect to the Notes of any series (or of all series issued under the Indenture, as the case may be) occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the holders of Notes of such series (or of all series under the Indenture, as the case may be) by appropriate judicial proceedings as the Trustee

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deems most effectual to protect and enforce those rights, whether for the specific enforcement of any covenant or agreement in the Indenture or in aid of the exercise of any power granted therein, or to enforce any other proper remedy.

The Indenture contains a provision entitling the Trustee, subject to the duty of the Trustee during a default to act with the required standard of care, to be indemnified by the holders of Notes before proceeding to exercise any right or power under the Indenture at the request of the holders. Subject to provisions in the Indenture for the indemnification of the Trustee and certain other limitations, (a) with respect to the Notes of any series, the holders of not less than a majority in principal amount of the outstanding Notes of such series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, relating to or arising under clause (a), (b) or (f) of the definition of "Event of Default" and (b) with respect to all securities issued under the Indenture, the holders of not less than a majority in principal amount of all affected outstanding securities of any series issued under the Indenture (including any affected series of the Notes) (taking such action as one class) will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, not relating to or arising under clause (a), (b) or (f) of the definition of "Event of Default."

The Indenture provides that the Trustee may withhold notice to the holders of the Notes of any default (except in payment of principal (or premium, if any) or interest, if any) if the Trustee in good faith considers it in the interest of the holders of the Notes to do so.

The Indenture provides that no holder of any Notes of any series will have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture, for the appointment of a receiver or trustee or for any other remedy hereunder, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (a) the holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Notes of such series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) the holders of not less than 25% in principal amount of the outstanding Notes of such series in the case of any Event of Default described in clause (a), (b) or (f) of the definition of "Event of Default," or, in the case of any Event of Default not described in clause (a), (b) or (f) of the definition of "Event of Default," the holders of not less than 25% in principal amount of all affected outstanding securities of any series issued under the Indenture (including any affected series of the Notes) (making such request as one class), will have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee under the Indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) the holder or holders have offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(e) no direction inconsistent with the written request has been given to the Trustee during the 60-day period by the holders of not less than a majority in principal amount of the outstanding Notes of such series in the case of any Event of Default described in clause (a), (b) or (f) of the definition of "Event of Default," or, in the case of any Event of Default not described in clause (a), (b) or (f) of the definition of "Event of Default," by the holders of not less than a majority in principal amount of all affected outstanding securities of any series issued under the Indenture (including any affected series of the Notes) (making the direction as one class);

it being understood and intended that no one or more of such holders will have any right in any manner whatever by virtue of, or by availing of, any provision of the Indenture to affect, disturb or prejudice the rights of any other holders of Notes of the same series, in the case of any Event of Default described in clause (a), (b) or (f) of the definition of "Event of Default," or of holders of all affected securities of any series issued under the Indenture (including any affected series of the Notes), in the case of any Event of Default not described in clause (a), (b) or (f) of the definition of "Event of Default," or to obtain or to seek to obtain priority or preference over any other of such holders or to enforce any right under the Indenture, except in the manner therein provided and for the equal and ratable benefit of all holders of the Notes of the same series, in the case of any Event of Default described in clause (a), (b) or (f) of the definition of "Event of Default," or of holders of all affected securities of any series issued under the Indenture (including any affected series of the Notes), in the case of any Event of Default not described in clause (a), (b) or (f) of the definition of "Event of Default."

The Indenture contains a covenant under which we are required to furnish to the Trustee an annual statement as to the compliance with all conditions and covenants of the Indenture.

**Modification and Waiver**

The Indenture provides that, without the consent of the holders of Notes, we, Otis and the Trustee, at any time and from time to time, may enter into one or more supplemental indentures or other instruments, in form reasonably satisfactory to the Trustee, for any of the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) to evidence the succession of another person to the Issuer or Otis and provide for the assumption by a successor person of the Issuer's or Otis' obligations under the Indenture and the Notes, in each case in compliance with the provisions thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (b) to add to the covenants of the Issuer or Otis or to surrender any right or power conferred upon the Issuer or Otis in the Indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (c) to add any additional Events of Default;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(d) to add to, change or eliminate any of the provisions of the Indenture; provided that any such addition, change or elimination shall (i) neither (A) apply to any securities of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision nor (B) modify the rights of the holder of any such securities with respect to such provision or (ii) become effective only when there are no securities of any series outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (e) to secure the Notes pursuant to the requirements of the covenant described under the caption "-Limitation upon Liens" or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (f) to establish the form or terms of the Notes as permitted under the Indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(g) to evidence and provide for the acceptance of appointment under the Indenture by a successor Trustee with respect to the Notes of one or more series and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one Trustee, pursuant to the requirements of the Indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(h) to cure any ambiguity, to correct or supplement any provision under the Indenture which may be defective or inconsistent with any other provision therein, or to make any other provisions with respect to matters or questions arising under the Indenture; provided such action will not adversely affect the interests of the holders of the Notes of any particular series in any material respect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(i) to supplement any of the provisions of the Indenture to the extent as necessary to permit or facilitate the defeasance and/or discharge of any series of the Notes pursuant to the Indenture; provided that any such action does not adversely affect the interests of the holders of the Notes of such series or any other series of the Notes in any material respect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (j) to provide for the guarantee by any person of any outstanding Notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(k) to add to the Indenture such provisions as may be expressly permitted by the Trust Indenture Act, excluding, however, the provisions referred to in Section 316(a)(2) of the Trust Indenture Act as in effect at the date as of which the Indenture is executed or any corresponding provision in any similar federal statute thereafter enacted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(l) to conform to any mandatory provisions of law and in particular to comply with the requirements of the Commission in connection with the qualification of this Indenture under the Trust Indenture Act;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(m) to conform the terms of the Indenture and the Notes to any provision or other description of the Notes, as the case may be, contained in an offering document related thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (n) to provide for the issuance of any additional Notes under the Indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (o) to comply with the rules of any applicable securities depositary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(p) to make any change in any series of Notes or to add to the Indenture such provisions that do not adversely affect in any material respect the interests of the holders of such series of Notes.

Other amendments and modifications of the Indenture may be made with the consent of the holders of not less than a majority in principal amount of outstanding securities of all series issued under the Indenture affected by the amendment or modification (including any affected series of the Notes) (voting as one class); provided, no modification or amendment may, without the consent of the holder of each outstanding Note affected thereby:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) change the stated maturity of the principal of, or any installment of interest on, any Note, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an original issue discount security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to the Indenture or the amount thereof provable in bankruptcy pursuant to the Indenture, or change any Place of Payment where, or the coin, currency, currencies, currency units or composite currency in which, any Note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption or repayment at the option of the holder, on or after the redemption date or repayment date, as the case may be);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) reduce the percentage in principal amount of the outstanding Notes of any series, the consent of whose holders is required for any such supplemental indenture, or the consent of whose holders is required for any waiver (of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences) provided for in the Indenture; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) modify (i) the requirements of the section of the Indenture described in this paragraph, (ii) provisions with respect to waiving compliance with specified provisions of the Indenture or (iii) provisions with respect to waiving specified defaults, except to increase any applicable percentage or to provide that other specified provisions of this Indenture cannot be modified or waived without the consent of the holder of each outstanding Note affected thereby, provided, that this clause will not be deemed to require the consent of any holder with respect to changes in the references to "the Trustee" and concomitant changes in the foregoing requirements and provisions with respect to waiving compliance with certain provisions of the Indenture, or the deletion of this proviso, in accordance with the requirements of the Indenture.

A supplemental indenture that changes or eliminates any covenant or other provision of the Indenture that has expressly been included solely for the benefit of one or more particular series of Notes, or that modifies the rights of the holders of Notes of such series with respect to such covenant or other provision, will be deemed not to affect the rights under the Indenture of the holders of Notes of any other series.

It will not be necessary for any act of holders described in the foregoing provisions to approve the particular form of any proposed supplemental indenture, but it will be sufficient if the act approves the substance thereof.

**Satisfaction and Discharge**

The Indenture will upon the Issuer's request cease to be of further effect with respect to any series of Notes (except as to any surviving rights of registration of transfer or exchange of Notes of such series as expressly provided for in the Indenture) and the Trustee, at the expense of the Issuer, will execute proper instruments acknowledging satisfaction and discharge of the Indenture as to the applicable series of Notes when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (a) either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(i) all Notes of the applicable series theretofore authenticated and delivered (other than Notes that have been mutilated, destroyed, lost or stolen and that have been replaced or paid as provided in Indenture and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in the Indenture) have been cancelled or delivered to the Trustee for cancellation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (ii) all Notes of the applicable series not theretofore cancelled or delivered to the Trustee for cancellation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (A) have become due and payable, or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(B) will become due and payable at their stated maturity within one year, or

(C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer,

and the Issuer, in the case of clauses (ii)(A), (ii)(B) or (ii)(C) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose (x) an amount of cash (in the currency, currencies or currency units in which the applicable Notes are then specified as payable at stated maturity), or (y) Government Obligations applicable to the applicable Notes (determined on the basis of the currency, currencies or currency units in which the applicable Notes are then specified as payable at stated maturity), which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide money in an amount, or (z) a combination thereof, sufficient, in the case of clauses (y) and (z), in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the entire indebtedness on the Notes of the applicable series not theretofore cancelled or delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to, but excluding, the date of the deposit (in the case of Notes that have become due and payable) or to, but excluding, the stated maturity or redemption date, as the case may be; provided that if on the date of the deposit, the interest payable to, but excluding, or any premium payable on, the stated maturity or redemption date cannot be calculated, the amount deposited shall be sufficient to the extent that an amount is deposited with the Trustee equal to the interest payable to, but excluding, or the premium payable on, the stated maturity or the redemption date calculated as of the date of the deposit, with any deficit on the stated maturity or redemption date, as applicable (any such amount, the "Applicable Deficit"), only required to be deposited with the Trustee on or prior to the stated maturity or redemption date, as applicable; provided, further, any Applicable Deficit shall be set forth in an officer's certificate of the Issuer delivered to the Trustee simultaneously with the deposit of the Applicable Deficit that confirms that the Applicable Deficit shall be applied to the interest or other amounts payable at the stated maturity or on the redemption date, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (b) the Issuer has paid or caused to be paid all other sums payable under the Indenture by the Issuer in respect of the Notes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (c) the Issuer has delivered to the Trustee an officer's certificate and an opinion of counsel (as specified in the Indenture).

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**Defeasance and Covenant Defeasance** 

The Indenture provides that the Issuer may elect either "defeasance" or "covenant defeasance" and Otis may elect "covenant defeasance", in each case of the Notes of or within a series, as applicable, as described below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) "defeasance" means that the Issuer may elect to defease and be discharged from any and all obligations with respect to the applicable Notes except for the obligations to register the transfer or exchange of the applicable Notes, to replace temporary or mutilated, destroyed, lost or stolen Notes and any related coupons, to maintain an office or agency in respect of the applicable Notes and to hold moneys for payment in trust; and

(b) "covenant defeasance" means that the Issuer or Otis may elect to be released from its obligations, as applicable, with respect to the applicable Notes that are described under the captions "-Consolidation, Merger and Sale of Assets," "-Existence," "-Limitation upon Liens," "-Limitations upon Sales and Leasebacks," as applicable, and any omission to comply with these obligations will not constitute a default or an Event of Default with respect to the Notes.

To elect either defeasance or covenant defeasance under the Indenture, the Issuer must deposit or cause to be deposited with the Trustee, as trust funds in trust, (a) an amount of cash (in such currency, currencies or currency units in which the applicable Notes are then specified as payable at stated maturity), (b) Government Obligations applicable to the applicable Notes (determined on the basis of the currency, currencies or currency units in which the applicable Notes are then specified as payable at stated maturity), which through the payment of principal and interest in respect thereof in accordance with their terms will provide money in an amount, or (c) a combination thereof, sufficient, in the case of clauses (b) and (c), in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the principal of (and premium, if any) and interest on the outstanding applicable Notes on their scheduled due dates.

A trust of this kind may only be established if, among other things, the Issuer has delivered to the applicable trustee an opinion of counsel to the effect that the beneficial owners of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance or covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance or covenant defeasance had not occurred. In the case of defeasance, an opinion of counsel must refer to and be based upon a ruling of the Internal Revenue Service (the "IRS") or a change in applicable U.S. federal income tax law occurring after the date of the Indenture.

**No Personal Liability of Incorporators, Stockholders, Officers, Directors, Managers, Employees or Agents**

The Indenture provides that no recourse will be had for the payment of principal, premium, if any, or interest, if any, on any Note, or for any claim based on or in respect of any Note or the Indenture or any supplemental indenture, against any incorporator, stockholder, officer, director, manager, employee or agent, as such, past, present or future, of the Issuer or Otis or of any successor person thereof under any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise. Each holder, by accepting the Notes, waives and releases all such liability.

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**Concerning Our Relationship with the Trustee, Securities Registrar and Paying Agent**

The Bank of New York Mellon Trust Company, N.A. acts as Trustee, securities registrar and paying agent under the Indenture. The Bank of New York Mellon, London Branch acts as Paying Agent under the Indenture. We maintain customary banking relationships in the ordinary course of business with the Trustee and its affiliates.

**Governing Law**

The Indenture and the Notes are governed by and construed in accordance with the laws of the State of New York. The provisions of articles 470-1 to 470-19 of the Luxembourg act dated 10 August 1915 on commercial companies, as amended (the "Luxembourg Companies Act 1915") are not applicable to the Notes. No holder of any Notes may initiate proceedings against the Issuer based on article 470-21 of the Luxembourg Companies Act 1915.

**Book-Entry, Delivery and Form**

We issued the Notes in the form of one or more permanent global notes (the "Global Notes") in definitive, fully registered, book-entry form without coupons. The Global Notes were deposited with a common depositary (and registered in the name of the common depositary or its nominee) for, and in respect of interests held through, CLEARSTREAM BANKING S.A., which we refer to as "Clearstream," or Euroclear Bank SA/NV, which we refer to as "Euroclear." Except as described herein, definitive notes in registered form will not be issued in exchange for beneficial interests in the Global Notes.

Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to a common depositary for Clearstream and Euroclear or its nominee. None of the Notes may be held through, no trades of the Notes will be settled through, and no payments with respect to the Notes will be made through, The Depository Trust Company ("DTC") in the United States and no link is expected to be established among DTC and Clearstream or Euroclear in connection with the issuance of the Notes.

Beneficial interests in the Global Notes are represented, and transfers of such beneficial interests will be effected, through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in Clearstream or Euroclear. Those beneficial interests are and will be in minimum denominations of €100,000 and any integral multiple of €1,000 in excess thereof. Should definitive notes in registered form be issued to individual holders of Notes, a holder of Notes who, as a result of trading or otherwise, holds a principal amount of any series of Notes that is less than the minimum denomination would be required to purchase an additional principal amount of such series of Notes such that its holding of such series of Notes amounts to the minimum specified denomination. Investors may hold interests in the Global Notes through Clearstream or Euroclear either directly if they are participants in such systems or indirectly through organizations that are participants in such systems.

Except as set forth in the Indenture, owners of beneficial interests in the Global Notes are not entitled to have Notes registered in their names, and will not receive or be entitled to receive physical delivery of Notes in definitive form. Except as provided below, beneficial owners will

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not be considered the owners or holders of the Notes under the Indenture. Accordingly, each beneficial owner must rely on the procedures of the clearing systems and, if such person is not a participant of the clearing systems, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder of Notes under the Indenture. Under existing industry practices, if we request any action of holders or a beneficial owner desires to give or take any action that a holder is entitled to give or take under the Indenture, the clearing systems would authorize their participants holding the relevant beneficial interests to give or take action and the participants would authorize beneficial owners owning through the participants to give or take such action or would otherwise act upon the instructions of beneficial owners. Conveyance of notices and other communications by the clearing systems to their participants, by the participants to indirect participants and by the participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Persons who are not Euroclear or Clearstream participants may beneficially own Notes held by the common depositary for Euroclear and Clearstream only through direct or indirect participants in Euroclear and Clearstream.

*Clearstream and Euroclear*

We understand that Clearstream is incorporated and existing under the laws of Luxembourg as a professional depositary. Clearstream holds securities for its participants and facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. As a professional depositary, Clearstream is subject to supervision by the CSSF. Clearstream participants are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and other organizations and may include the underwriters. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream participant either directly or indirectly.

We understand that Euroclear was created in 1968 to hold securities for participants of Euroclear and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear provides various other services, including securities lending and borrowing and interfaces with domestic markets in several countries. Euroclear is operated by Euroclear Bank SA/NV, which we refer to as the "Euroclear Operator," under contract with Euroclear Clearance Systems S.C., a Belgian cooperative corporation, which we refer to as the "Cooperative." All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks (including central banks), securities brokers and dealers, and other professional financial intermediaries and may include the underwriters.

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Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

We understand that the Euroclear Operator is licensed by the Belgian Banking and Finance Commission to carry out banking activities on a global basis. As a Belgian bank, it is regulated and examined by the Belgian Banking and Finance Commission.

Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law (collectively, the "Terms and Conditions"). The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants.

We have provided the descriptions of the operations and procedures of Clearstream and Euroclear in this Description of Debt Securities solely as a matter of convenience, and we make no representation or warranty of any kind with respect to these operations and procedures. These operations and procedures are solely within the control of those organizations and are subject to change by them from time to time. None of us, Otis, the underwriters, the Trustee or the Paying Agent takes any responsibility for these operations or procedures, and you are urged to contact Clearstream and Euroclear or their participants directly to discuss these matters.

We, Otis, the Trustee, the Paying Agent and the securities registrar will not have any responsibility or liability for any aspect of the records relating to or payments made on account of Notes by Clearstream or Euroclear, or for maintaining, supervising or reviewing any records of those organizations relating to the Notes.

So long as the common depositary or its nominee is the registered holder of the Global Notes, the common depositary or such nominee, as the case may be, will be considered the sole owner or holder of Notes represented by such Global Notes for all purposes under the Indenture and the Notes. Payments of principal, interest and Additional Amounts, if any, in respect of the Global Notes will be made to the common depositary or such nominee, as the case may be, as registered holder thereof.

Distributions of principal, interest and Additional Amounts, if any, with respect to the Global Notes will be credited in euro to the extent received by Euroclear or Clearstream to the cash accounts of Euroclear or Clearstream customers in accordance with the relevant system's rules and procedures.

Because Euroclear and Clearstream can only act on behalf of participants, who in turn act on behalf of indirect participants, the ability of a person having an interest in the Global Notes to pledge such interest to persons or entities which do not participate in the relevant clearing system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate in respect of such interest.

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Initial settlement for the Notes were made in immediately available funds. Secondary market trading between Clearstream and/or Euroclear participants will occur in the ordinary way in accordance with the applicable rules and operating procedures of Clearstream and Euroclear, as applicable, and will be settled using the procedures applicable to conventional euro-denominated bonds in immediately available funds.

You should be aware that investors will only be able to make and receive deliveries, payments and other communications involving the Notes through the Clearstream and Euroclear systems on days when those systems are open for business. Those systems may not be open for business on days on which banks, brokers and other institutions are open for business in the United States or London. In addition, because of time-zone differences, there may be problems with completing transactions involving the Clearstream and Euroclear systems on the same Business Day as in the United States. U.S. investors who wish to transfer their interests in the Notes, or to make or receive a payment or delivery of the Notes, on a particular day, may find that the transactions will not be performed until the next business day in Luxembourg or Brussels, depending on whether the Clearstream or Euroclear system is used.

Because the purchaser determines the place of delivery, it is important to establish at the time of trading of any Notes where both the purchaser's and seller's accounts are located to ensure that settlement can be made on the desired date.

Secondary market sales of book-entry interests in the Notes held through Clearstream or Euroclear to purchasers of book-entry interests in a Global Note through Clearstream or Euroclear will be conducted in accordance with the normal rules and operating procedures of Clearstream and Euroclear and will be settled using the procedures applicable to conventional euro-denominated bonds in same-day funds.

We have obtained the information in this section concerning Clearstream and Euroclear and the book-entry system and procedures from sources that we believe to be reliable, but neither we nor the underwriters take any responsibility for the accuracy of this information.

In a few special situations described below, the book-entry system for the Notes will terminate and interests in the Global Notes will be exchanged for definitive notes in registered form. You must consult your bank, broker or other financial institution to find out how to have your interests in the Notes transferred to your name, so that you will be a direct holder.

The special situations for termination of the book-entry system for the Notes are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

•  the depositary for any of the Notes represented by a registered Global Note notifies us that it is unwilling or unable to continue as depositary or clearing system for the Global Notes, and we are unable to find a qualified replacement for such depositary within 90 days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> • we in our sole discretion determine to allow Global Notes to be exchangeable for definitive notes in registered form; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

•  there has occurred and is continuing an event of default with respect to the Notes and the depositary notifies the trustee of its decision to exchange the Global Notes for definitive notes in registered form.

**Certain Definitions**

For purposes of this "Description of the Notes," the following definitions are applicable:

"Attributable Debt" means, as to any particular lease under which any person is at the time liable for a term of more than 12 months, at any date as of which the amount thereof is to be determined, the total net amount of rent required to be paid by such person under such lease during the remaining term thereof (excluding any subsequent renewal or other extension options held by the lessee), discounted from the respective due dates thereof to such date at the rate of 15% per annum, compounded monthly. The net amount of rent required to be paid under any such lease for any such period shall be the aggregate amount of the rent payable by the lessee with respect to such period after excluding amounts required to be paid on account of maintenance and repairs, services, insurance, taxes, assessments, water rates and similar charges and contingent rents (such as those based on sales). In the case of any lease which is terminable by the lessee upon the payment of a penalty in an amount which is less than the total discounted net amount of rent required to be paid from the later of the first date upon which such lease may be so terminated or the date of the determination of such net amount of rent, as the case may be, such net amount shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions or trust companies in the City of New York or the City of London, or the relevant Place of Payment, are authorized or required by law, regulation or executive order to close, and that is a day on which the Trans-European Automated Real-time Gross Settlement Express Transfer System (the T2 system), or any successor or replacement thereto, operates.

"Change of Control" means the occurrence of any of the following after the date of issuance of the Notes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Otis and its subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) other than to Otis or one of its subsidiaries, and other than any such transaction or series of related transactions in which the holders of Otis' Voting Stock outstanding immediately prior thereto hold Voting Stock of the transferee person representing a majority of the voting power of the transferee person's Voting Stock immediately after giving effect thereto;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(b) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other than Otis or one of its subsidiaries) becomes the "beneficial owner" (as defined in Rule 13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of Otis' Voting Stock representing a majority of the voting power of the Otis' outstanding Voting Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c) Otis consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, Otis, in any such event pursuant to a transaction in which any of Otis' outstanding Voting Stock is converted into or exchanged for cash, securities or other property, other than any such transaction where Otis' Voting Stock outstanding immediately prior to such transaction constitutes, or is converted into or exchanged for, Voting Stock representing a majority of the voting power of the Voting Stock of the surviving person (or its parent) immediately after giving effect to such transaction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 <br> (d) the adoption by Otis' shareholders of a plan relating to Otis' liquidation or dissolution.

Notwithstanding the foregoing, a transaction will not be deemed to involve a change of control under clause (b) above if (i) Otis becomes a direct or indirect wholly-owned subsidiary of a holding company or other person and (ii) (A) the direct or indirect holders of the Voting Stock of such holding company or other person immediately following that transaction are substantially the same as the holders of Otis' Voting Stock immediately prior to that transaction or (B) immediately following that transaction, no "person" (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other than a holding company or other person satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company or other person.

"Change of Control Triggering Event" means, with respect to the applicable series of Notes, the Notes of such series cease to be rated Investment Grade by each of the Rating Agencies on any date during the period (the "Trigger Period") commencing 60 days prior to the first public announcement by Otis of any Change of Control (or pending Change of Control) and ending 60 days following consummation of such Change of Control (which Trigger Period will be extended following consummation of a Change of Control for so long as any of the Rating Agencies has publicly announced that it is considering a possible ratings downgrade or withdrawal). However, a Change of Control Triggering Event otherwise arising by virtue of a particular reduction in, or withdrawal of, rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Change of Control Triggering Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in, or withdrawal of, rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at Otis' request that the reduction or withdrawal was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Change of Control

------

Triggering Event). If a Rating Agency is not providing a rating for the Notes at the commencement of any Trigger Period, the Notes will be deemed to have ceased to be rated "Investment Grade" by such Rating Agency during that Trigger Period.

Notwithstanding the foregoing, no Change of Control Triggering Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated.

"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of the Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

"Comparable Government Bond" means, in relation to any Comparable Government Bond Rate calculation, at the discretion of an independent investment bank selected by the Issuer, a German federal government bond whose maturity is closest to the maturity of the Notes to be redeemed, assuming for such purpose that the Notes to be redeemed matured on the applicable Par Call Date, or if such independent investment bank in its discretion determines that such similar bond is not in issue, such other German federal government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German federal government bonds selected by the Issuer, determine to be appropriate for determining the Comparable Government Bond Rate.

"Comparable Government Bond Rate" means, with respect to any redemption date, the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded upwards), at which the gross redemption yield on the notes to be redeemed, if they were to be purchased at such price on the third business day prior to the date of the notice of redemption relating to such redemption date, would be equal to the gross redemption yield on such business day of the Comparable Government Bond (as defined above) on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by an independent investment bank selected by the Issuer.

"Consolidated Net Total Assets" means the total amount of assets of Otis and its consolidated subsidiaries (less applicable reserves and other properly deductible items) after deducting therefrom all current liabilities (excluding any thereof that are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed), all as set forth on the most recent consolidated balance sheet of Otis and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles (which calculation shall give pro forma effect to any Material Acquisition or Material Disposition consummated by Otis or its consolidated subsidiaries since the date of such balance sheet and on or prior to the date of determination, as if such Material Acquisition or Material Disposition had occurred on the date of such consolidated balance sheet).

"Debt" means notes, bonds, debentures or other similar evidences of indebtedness for borrowed money.

------

"Government Obligations" means (x) any security that is (i) a direct and unconditional obligation of the European Union, (ii) backed by the European Union's budgetary and cash resources and by the European Commission's right to call for additional resources from member states, (iii) a direct obligation of the German government or (iv) an obligation of a person controlled or supervised by and acting as an agency or instrumentality of the German government the payment of which is fully and unconditionally guaranteed by the German government or the central bank of the German government, which, in each case of (x)(i), (ii), (iii) or (iv), is not revocable, callable or redeemable at the option of the issuer thereof, and (y) certificates, depositary receipts or other instruments which evidence a direct ownership interest in obligations described in clause (x)(i), (ii), (iii) or (iv) above or in any specific principal or interest payments due in respect thereof.

"Industrial Development Bonds" means obligations issued by a State, a Commonwealth, a Territory or a possession of the United States, or any political subdivision of any of the foregoing, or the District of Columbia, the interest on which is excludable from gross income of the holders thereof pursuant to the provisions of Section 103(a) of the Internal Revenue Code of 1986, as amended (or any similar provision), as in effect at the time of the issuance of such obligations.

"Interest Payment Date," when used with respect to any Notes, means the date specified in such Notes as the fixed date on which an installment of interest is due and payable.

"Investment Grade" means a rating of Baa3 or better by Moody's (or its equivalent under any successor rating category of Moody's) and a rating of BBB- or better by S&P (or its equivalent under any successor rating category of S&P), and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by us under the circumstances permitting us to select a replacement rating agency and in the manner for selecting a replacement rating agency, in each case as set forth in the definition of "Rating Agency."

"Lien" means any pledge, mortgage, lien, encumbrance and security interest.

"Material Acquisition" means any acquisition by Otis or any of its subsidiaries of (a) equity interests in any person if, after giving effect thereto, such person will become a subsidiary of Otis or (b) assets comprising all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of) any person (in the case of clauses (a) and (b), including as a result of a merger or consolidation); provided that, in the case of clauses (a) and (b), the aggregate consideration therefor exceeds $50,000,000.

"Material Disposition" means any sale, transfer or other disposition by Otis or any of its subsidiaries of (a) all or substantially all the issued and outstanding equity interests in any person that are owned by Otis or any of its subsidiaries or (b) assets comprising all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of) any person; provided that, in the case of clauses (a) and (b), such sale, transfer or other disposition yields net proceeds to Otis or any of its subsidiaries in excess of $50,000,000.

"Maturity" means the date on which the principal (or premium, if any) of such Note or an installment of principal becomes due and payable as provided by the Indenture or the Note, whether at the stated maturity or by declaration of acceleration, call for redemption or otherwise.

------

"Moody's" means Moody's Investors Service, Inc., a subsidiary of Moody's Corporation, and its successors.

"person" means any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof or any other entity of whatever nature.

"Place of Payment," when used with respect to the Notes of or within any series, means the place or places where the principal of (and premium, if any), interest and Additional Amounts owed on such Notes are payable, as contemplated by the Indenture.

"Principal Property" means any manufacturing plant or warehouse, together with the land upon which it is erected and fixtures comprising a part thereof, owned by Otis or any Wholly-Owned Domestic Manufacturing Subsidiary and located in the United States, the gross book value (without deduction of any reserve for depreciation) of which on the date as of which the determination is being made is an amount which exceeds 1% of Consolidated Net Total Assets, other than any such manufacturing plant or warehouse or any portion thereof or any such fixture (together with the land upon which it is erected and fixtures comprising a part thereof) (a) which is financed by Industrial Development Bonds or (b) which, in the opinion of the board of directors of Otis (or any duly authorized committee thereof), is not of material importance to the total business conducted by Otis and its subsidiaries, taken as a whole.

"Rating Agency" means each of Moody's and S&P; provided that, if either Moody's or S&P cease to provide rating services to issuers or investors, Otis may appoint another "nationally recognized statistical rating organization," as defined under Section 3(a)(62) of the Securities Exchange Act of 1934, as amended, as a replacement agency for such Rating Agency; provided that Otis shall give notice of such appointment to the Trustee.

"Record Date" means the close of business on the date that is 15 calendar days prior to the date on which interest is scheduled to be paid, regardless of whether such date is a Business Day; provided that, if any of the Notes are held by a securities depositary in book-entry form, the Record Date for those Notes will be the close of business on the Business Day immediately preceding the date on which interest is scheduled to be paid.

"Remaining Scheduled Payments" means, with respect to each Note being redeemed, the remaining scheduled payments of principal and interest (excluding interest accrued to, but excluding, the redemption date) of such Note that would be due after the related redemption date but for the redemption.

"S&P" means S&P Global Ratings, and its successors.

"Voting Stock" of any specified person as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

"Wholly-Owned Domestic Manufacturing Subsidiary" means any subsidiary of which, at the time of determination, all of the outstanding capital stock (other than directors' qualifying shares) is owned by Otis directly and/or indirectly and which, at the time of determination, is primarily engaged in manufacturing, except a subsidiary that (a) neither transacts any substantial portion of its business nor regularly maintains any substantial portion of its fixed assets within the United States, (b) is engaged primarily in the finance business, including, without limitation

------

thereto, financing the operations of, or the purchase of products that are products of or incorporate products of, Otis and/or its subsidiaries, or (c) is primarily engaged in ownership and development of real estate, construction of buildings, or related activities, or a combination of the foregoing. In the event that there shall at any time be a question as to whether a subsidiary is primarily engaged in manufacturing or is described in the foregoing clause (a), (b) or (c), such matter shall be determined for all purposes of the Indenture by a board resolution.

## Ex-21

**Exhibit 21**

**OTIS WORLDWIDE CORPORATION&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**

**Subsidiary and Affiliate Listing**

**December 31, 2025**

---

| | |
|:---|:---|
| **<u>Entity Name</u>** | **<u>Place of Incorporation</u>** |
| 9G Elevator Pte. Ltd. | Singapore |
| Alder Holdings SAS | France |
| Alder Paris Holdings SAS | France |
| Allyn Holdings, Inc. | Delaware |
| CEAM Costruzioni Elettromeccaniche Ascensori e Montacarichi Srl | Italy |
| Cypress Holdings Srl | Italy |
| Highland Holdings S.à r.l. | Luxembourg |
| Juniper Holdings S.à r.l. | Luxembourg |
| Madison Holdings B.V. | Netherlands |
| Nippon Otis Elevator Company | Japan |
| Opal Spanish Holdings, S.A. | Spain |
| Otis a.s. | Czech Republic |
| Otis Canada, Inc. | Canada |
| Otis Electric Elevator Company Limited | China |
| Otis Elevator Company | New Jersey |
| Otis Elevator Company (H.K.) Limited | Hong Kong |
| Otis Elevator Company (India) Limited | India |
| Otis Elevator (China) Investment Company Limited | China |
| Otis Elevator Holdings Limited | United Kingdom |
| Otis Elevator Korea | Korea, Republic of |
| Otis Far East Holdings Limited | Hong Kong |
| Otis Gesellschaft m.b.H. | Austria |
| Otis Holding GmbH | Germany |
| Otis International Holdings GmbH | Germany |
| Otis International Asia Pacific Pte. Ltd. | Singapore |
| Otis Investments Limited | United Kingdom |
| Otis Limited | United Kingdom |
| OTIS MOBILITY, S.A. | Spain |
| Otis Pacific Holdings B.V. | Netherlands |
| Otis S.A. | Switzerland |
| Otis S.C.S. | France |
| Otis Servizi, S.r.l. | Italy |
| Ridgefield Holdings Corporation | Canada |

---

------

**OTIS WORLDWIDE CORPORATION&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**

**Subsidiary and Affiliate Listing**

**December 31, 2025**

---

| | |
|:---|:---|
| **<u>Entity Name</u>** | **<u>Place of Incorporation</u>** |
| Sigma Elevator (HK) Limited | Hong Kong |
| Sirius (Korea) Limited | United Kingdom |

---

Other subsidiaries of the Registrant have been omitted from this listing since, considered in the aggregate as a single subsidiary, they would not constitute a significant subsidiary, as defined by Rule 1-02 of Regulation S-K.

## Ex-22

**Exhibit 22**

**List of Guarantor Subsidiaries**

Highland Holdings S.à r.l. ("Highland") is a wholly-owned, indirect consolidated subsidiary of Otis Worldwide Corporation ("OWC") and, as of December 31, 2025, the issuer of certain registered debt securities which are guaranteed by OWC. As of December 31, 2025, the registered debt securities were as follows:

**Registered Debt Securities Guaranteed by OWC and Highland**

**(Title / Trading Symbol / CUSIP)**

0.318% Notes due 2026 / OTIS.26 / L47988 AB

2.875% Notes due 2027/ OTIS.27 / L47988 AD9

0.934% Notes due 2031/ OTIS.31 / L47988 AC1

## Ex-23

**Exhibit 23**

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-270830 and 333-270834) and Form S-8 (No. 333-237551) of Otis Worldwide Corporation of our report dated February 5, 2026 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Hartford, Connecticut

February 5, 2026

## Ex-24

**Exhibit 24**

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

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| |
|:---|
| /s/ Thomas A. Bartlett |
| Thomas A. Bartlett |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

---

| |
|:---|
| /s/ Jeffrey H. Black |
| Jeffrey H. Black |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

---

| |
|:---|
| /s/ Jill C. Brannon |
| Jill C. Brannon |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

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| |
|:---|
| /s/ Nelda J. Connors |
| Nelda J. Connors |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

---

| |
|:---|
| /s/ Kathy Hopinkah Hannan |
| Kathy Hopinkah Hannan |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

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| |
|:---|
| /s/ Christopher J. Kearney |
| Christopher J. Kearney |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

---

| |
|:---|
| /s/ Judith F. Marks |
| Judith F. Marks |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

---

| |
|:---|
| /s/ Margaret M.V. Preston |
| Margaret M.V. Preston |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

---

| |
|:---|
| /s/ Shelley Stewart, Jr. |
| Shelley Stewart, Jr. |

---

------

**OTIS WORLDWIDE CORPORATION**

**Power of Attorney**

The undersigned, as a member of the Board of Directors, or as an officer of OTIS WORLDWIDE CORPORATION, a Delaware corporation (the "Corporation"), or as a member of a committee of said Board, or in all of said capacities, hereby constitutes and appoints CRISTINA MÉNDEZ, NORA E. LAFRENIERE, and MICHAEL P. RYAN, or any one of them, his or her true and lawful attorneys and agents to do any and all acts and things and execute any and all instruments which the said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934 and any rules and regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2025, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned, in the capacities aforesaid or in any other capacity, to such Form 10-K Annual Report filed or to be filed with the Securities and Exchange Commission, and any and all amendments to the said Form 10-K Annual Report, and any and all instruments and documents filed as a part of or in connection with the said Form 10-K Annual Report or any amendments thereto; hereby ratifying and confirming all that the said attorneys and agents, or any one of them, have done, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney this **3rd** day of December 2025.

---

| |
|:---|
| /s/ John H. Walker |
| John H. Walker |

---

## Exhibit 31.1

**Exhibit 31.1**

CERTIFICATION

I, Judith F. Marks, certify that:

1. I have reviewed this annual report on Form 10-K of Otis Worldwide Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 5, 2026 | /s/ Judith F. Marks |
| | | Judith F. Marks |
| | | Chair, President and Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

CERTIFICATION

I, Cristina Méndez, certify that:

1. I have reviewed this annual report on Form 10-K of Otis Worldwide Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. &nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. &nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 5, 2026 | /s/ Cristina Méndez |
| | | Cristina Méndez |
| | | Executive Vice President and Chief Financial Officer |

---

## Exhibit 31.3

**Exhibit 31.3**

CERTIFICATION

I, Michael P. Ryan, certify that:

1. I have reviewed this annual report on Form 10-K of Otis Worldwide Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 5, 2026 | /s/ Michael P. Ryan |
| | | Michael P. Ryan |
| | | Senior Vice President and Chief Accounting Officer |

---

## Ex-32

**Exhibit 32**

**Section 1350 Certifications**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

**(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)**

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Otis Worldwide Corporation, a Delaware corporation (the "<u>Corporation</u>"), does hereby certify that:

The annual report on Form 10-K for the year ended December 31, 2025 (the "<u>Form 10-K</u>") of the Corporation fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

---

| | | |
|:---|:---|:---|
| Date: | February 5, 2026 | /s/ Judith F. Marks |
|  |  | Judith F. Marks |
|  |  | Chair, President and Chief Executive Officer |
| Date: | February 5, 2026 | /s/ Cristina Méndez |
|  |  | Cristina Méndez |
|  |  | Executive Vice President and Chief Financial Officer |
| Date: | February 5, 2026 | /s/ Michael P. Ryan |
|  |  | Michael P. Ryan |
|  |  | Senior Vice President and Chief Accounting Officer |

---

<br>