Otis Worldwide (OTIS) 10-K risk factor changes: FY2022 vs FY2021

Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical [removed: risks,] [added: risks (see discussion of risks associated with the ongoing conflict between Russia and Ukraine below),] including global credit market conditions, levels of consumer and business confidence, commodity prices, raw material and energy costs, supply chain issues, foreign currency exchange rates, interest rates, labor costs, levels of government spending and deficits, trade policies, tariffs and trade barriers, political conditions, regulatory changes, fluctuations in residential and commercial construction activity, pandemic health issues (see discussion of COVID-19 below), natural disasters, [added: including weather events caused by climate change,] actual or anticipated default on sovereign debt and other challenges that could affect the global economy.

[added: Since 2020,] COVID-19, including variants of the original virus, has continued to spread throughout the world, [added: impacting various geographies at varying levels of severity, and] resulting in [removed: prolonged] travel restrictions and shutdowns, occupancy limits or other restrictions of non-essential businesses, including construction and hospitality venues, impacting to various extents our factory operations, new equipment installations and access to units under maintenance.

The ultimate impact of the COVID-19 pandemic on our business is uncertain at this time and will depend on future developments, including the [added: severity of evolving variants,] availability, efficacy and distribution of various vaccines and treatments for COVID-19, but further [removed: prolonged] restrictions or the rollback of reopening measures due to higher infection rates may further disrupt our operations and the operations of our suppliers, distributors and customers.

Similarly, COVID-19 and the [removed: ongoing] [added: uncertain] economic recovery from the virus have adversely affected and may further affect our supply base and increase the potential for one or more of our suppliers to experience production constraints, distribution challenges, financial distress or bankruptcy, which could impact our ability to fulfill orders on time or at anticipated cost.

[removed: Furthermore,] [added: Additionally,] it is unclear what longer term effects the virus will have on the global economy, including the commercial building industry.

We conduct our business on a global basis, with approximately [removed: 74%] [added: 72%] of our [removed: 2021] [added: 2022] net sales derived from international operations.

Accordingly, fluctuations in exchange rates [added: have given and] may [removed: also] [added: 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 sales are non-U.S. based, a strengthening of the U.S. Dollar against other major foreign currencies [added: has adversely affected and] could [added: in the future] adversely affect our results of operations.

Changes to market and economic conditions in China, including credit conditions for our customers, [removed: or] an escalation of trade conflicts between the U.S. and [removed: China,] [added: China or changes in the government's COVID-19 policies,] may impact our ability to continue New Equipment net sales in China at rates consistent with prior years.

In addition, as part of our global business model, we operate in certain countries, including Argentina, Brazil, China, India, Indonesia, Malaysia, Mexico, Poland, [removed: Russia,] South Africa, Ukraine, Turkey and certain countries in the Middle East, that carry high levels of currency, political, compliance and economic risk.

Issues with suppliers, (such as a disruption in deliveries, capacity constraints, production disruptions, quality issues and supplier closings or bankruptcies, including in connection with the [added: ongoing] impact of COVID-19 and the [removed: ongoing] [added: unsettled] economic recovery), price increases or [added: decreased availability of raw materials or commodities (including in connection with the ongoing conflict between Russia and Ukraine) could 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.]

Our ability to realize the anticipated benefits of our technological advancements, such as the development and execution of advanced digital technologies for the benefit of our New Equipment or Service segment or the development of new products [removed: depend] [added: 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; achieving cost and production efficiencies; validation of innovative technologies; and customer interest in new technologies and products and acceptance of products we manufacture or that incorporate technologies we develop.

[removed: Any delays could] result in increased development costs or divert resources from other projects.

To generate an acceptable return on our investment [removed: in] [added: 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.

As of December 31, [removed: 2021,] [added: 2022,] we had [removed: $7.2] [added: $6.6] billion outstanding long-term debt.

Volatility in the world financial markets, including as a result of inflation concerns from the [removed: ongoing] [added: unsettled] recovery from the COVID-19 [removed: pandemic,] [added: pandemic or the ongoing conflict between Russia and Ukraine,] could increase borrowing costs or affect our ability to access the capital markets.

We also have authority to repurchase our shares under a share repurchase [removed: program, which we have suspended in connection with the Tender Offer.][added: program.]

We are party to joint ventures [removed: and other strategic alliances,] which may not be successful and may expose us to special risks and restrictions.

Our business operations depend on [removed: various strategic alliances and] [added: forming] joint ventures.

In certain regions, we operate our business through joint venture relationships or non-wholly owned subsidiaries, including: Otis Electric Elevator Company Limited and Otis Elevator (China) Investment Limited in [removed: China; and Zardoya Otis in Spain.][added: China.]

[removed: 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 [removed: ventures, strategic alliances] [added: 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 [removed: venture’s, strategic alliance’s] [added: venture’s] or non-wholly owned subsidiary’s best interests, (3) take action contrary to our policies or objectives with respect to our [removed: investments or] [added: investments,] business or [added: compliance practices or] (4) be unable or unwilling (including as a result of financial or other difficulties) to fulfill their obligations, such as contributing [added: capital to expansion or maintenance projects, under the joint venture or other agreement.]

There can be no assurance that any particular joint venture or [removed: strategic alliance] [added: non-wholly owned subsidiary] will be beneficial to us.

In addition, we are subject to the U.S. Foreign Corrupt Practices Act [removed: ("FCPA")] [added: (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.

Violations of [added: the] FCPA, antitrust or other anti-corruption or anti-collusion 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.

[removed: 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 and have experienced cyber-attacks in the past, both our] [added: Our] internal systems and products may be vulnerable to [removed: hacking or] further cyber-attacks, [removed: material] security breaches, theft, programming errors or employee errors, which could lead to the compromise of [removed: such] [added: 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.

In addition, any such event could harm our reputation, cause unfavorable publicity or otherwise adversely affect certain potential customers’ perception of the security and reliability [removed: of our services as well as our credibility and reputation, which could result in lost sales.]

The efficient operation of our business [removed: will require] [added: 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.

We [added: 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 rely on a combination of patents, trademarks, copyrights, trade secrets, nondisclosure agreements, customer and supplier agreements, license agreements, [added: non-compete agreements,] information technology security systems, internal controls and compliance systems and other measures to protect our intellectual property.

See “Business Overview” and “Results of Operations [removed: -] [added: –] Income Taxes” in Item 7 and "Note 2: Significant Accounting Policies" and "Note 16: Income Taxes" in Item 8 in this Form 10-K, for further discussion on income taxes and related contingencies.

In addition, we are subject to Section 203 of the Delaware General Corporation Law [removed: (“DGCL”),] [added: (the “DGCL”),] which could have the effect of delaying or preventing a change of control that you may favor.

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 [removed: ("Exchange] [added: (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.

In connection [added: 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.

[added: 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.

[removed: 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 [added: 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.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

Risks associated with the ongoing conflict between Russia and Ukraine

The ongoing conflict between Russia and Ukraine has resulted in worldwide geopolitical and macroeconomic uncertainty, and we cannot predict how the conflict will evolve.

If the conflict continues for a significant time or expands to other countries, it 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 conflict could give rise to disruptions to our or our business partners’ global technology infrastructure, including through cyber-attack 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.

See Item 7 "Business Overview" in this Form 10-K for more information regarding the recent sale of our business in Russia.

Any delays could

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

If we are not successful in maintaining

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

We are impacted by increasing stakeholder interest in public company performance, disclosure, and goal-setting with respect to ESG matters.

We have increased reporting of our ESG programs and performance, as required by applicable law and voluntarily, and have established and announced goals and other objectives related to ESG matters.

These goal statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.

Our ability to achieve any goal or objective, including with respect to ESG 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) evolving regulatory requirements affecting ESG standards or disclosures, (3) the availability of suppliers that can meet our sustainability, diversity and other standards, and (4) our ability to recruit, develop, and retain diverse talent in our labor markets.

In addition, standards for tracking and reporting on ESG matters have not been harmonized and continue to evolve.

Our processes and controls for reporting of ESG matters may not always comply with evolving and disparate standards for identifying, measuring, and reporting ESG 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, goals or reported progress in achieving such goals and increased compliance costs and risks.

If our ESG practices do not meet evolving 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.

In addition, our failure or perceived failure to pursue or fulfill our goals, targets, and objectives within the timelines we announce, or at all, could have similar negative impacts.

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 cyber-attacks, which have not to our knowledge had a material adverse impact on the Company to date.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

of our services as well as our credibility and reputation, which could result in lost sales.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

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.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

Even if the distribution of Common Stock pursuant to the Separation

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

Additionally, governments, including in the U.S., have enacted, or may enact, vaccine mandates.

While the U.S. Supreme Court has recently blocked enforcement of one mandate, other mandates remain in effect, and uncertainty remains around whether additional mandates may be adopted in the future.

Such mandates could result in labor disruptions, employee attrition, difficulty securing future labor needs and loss of government contracts.

decreased availability of raw materials or commodities could have a material adverse effect on our ability to meet our commitments to customers, could damage our reputation or could increase our operating costs, any of which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

The Tender Offer of Zardoya Otis may not be completed at the price per share anticipated or result in the financial benefit in the time frame expected.

The Tender Offer is subject to approval by the CNMV and other uncertainties.

Zardoya Otis shareholders may not tender their shares or there may be competing offers.

The Company may not be able to complete the Tender Offer at the anticipated price or, if it does complete the Tender Offer, to realize certain cost and other expected benefits.

If the Company is unable to complete the Tender Offer on the anticipated terms, time frame, or at all, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, and the value of the Company's Common Stock may decline.

(See the Risk Factor above regarding the Tender Offer).

capital to expansion or maintenance projects, under the joint venture, strategic alliance or other agreement.

In addition, an acquisition or issuance of our stock could trigger the application of Section 355(e) of the Internal Revenue Code ("Code"), causing the distribution of Common Stock pursuant to the Separation to be taxable to RTX.

Under the TMA, we would be required to indemnify RTX for the resulting tax, and this indemnity obligation might discourage, delay or prevent a change of control that our shareholders may consider favorable.

Our historical information is not necessarily indicative of the results that we will achieve as a separate, publicly traded company and may not be a reliable indicator of our future results.

The historical information in this Form 10-K for the periods prior to the Separation is derived from the combined financial statements and accounting records of our former parent UTC and is based on a number of estimates and assumptions.

Accordingly, such historical financial information does not necessarily reflect the financial condition, results of operations or cash flows that we will achieve as a separate, publicly traded company.

Prior to the Separation, our business had been operated by UTC as part of its broader corporate organization, rather than as an independent company.

As part of our former parent UTC, we were able to enjoy certain benefits from UTC’s operating diversity, purchasing power and opportunities to pursue integrated strategies with UTC’s other businesses.

Additionally, UTC or one of its affiliates performed or helped perform various corporate functions for us, such as accounting, auditing, tax, legal, human resources, investor relations, risk management, treasury and other general and administrative functions.

Our historical and pro forma financial results reflect allocations of corporate expenses from UTC for such functions, which are likely to be less than the expenses we will incur as a separate publicly traded company.

In addition, the diversification of our sales, costs, and cash flows have diminished as a stand-alone company, such that our results of operations, cash flows, working capital and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments, and service debt may be diminished and we are no longer able to use cash flow from UTC's other businesses as part of its centralized cash management systems to fund our investments and operations.

Accordingly, for these reasons, as well as the additional Risks Related to the Separation noted below, we may not achieve the expected benefits of the Separation.

We may not be able to engage in desirable capital-raising or strategic transactions as a result of the Separation and the related TMA.

Under current U.S. federal income tax law, a spin-off that otherwise qualifies for tax-free treatment can be rendered taxable to the parent corporation and its shareholders as a result of certain post-spin-off transactions, including certain acquisitions of shares or assets of the spun-off corporation.

To preserve the tax-free treatment of the Separation, and in addition to Otis’ indemnity obligation described below, the TMA restricts us, for the two-year period following the Separation, except in specific circumstances, from (1) entering into any transaction pursuant to which all or a portion of the shares of Otis stock would be acquired, whether by merger or otherwise; (2) issuing equity securities beyond certain thresholds; (3) repurchasing shares of Otis stock other than in certain open-market transactions; and (4) ceasing to actively conduct certain of our businesses.

The TMA also prohibits us from taking or failing to take any other action that would prevent the Separation and certain related transactions from qualifying 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 or for applicable non-U.S. income tax purposes.

Further, the TMA imposes similar restrictions on us and our subsidiaries during the two-year period following the Separation that are intended to prevent certain transactions undertaken as part of the internal reorganization from failing to qualify as transactions that are generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code or for applicable non-U.S. income tax purposes.

These restrictions may limit our ability to pursue certain equity issuances, strategic transactions, repurchases or other transactions that we may otherwise believe to be in the best interests of our shareholders or that might increase the value of our business.

The IRS ruling and the opinion of counsel were based upon and rely on, among other

[removed: The] [added: As previously disclosed, the] Company announced [removed: a tender offer] [added: the Tender Offer] to acquire all [removed: of the] issued and outstanding shares of Zardoya Otis not owned by [removed: Otis (the "Tender Offer").][added: Otis, at an offer price of €7.07 per share in cash, after adjusting for dividends.]

See [removed: "Note 1: Business] [added: Note 1, "Business] Overview" and [removed: "Note 10: Borrowings] [added: Note 10, "Borrowings] and Lines of Credit" [added: to the Consolidated Financial Statements] in Item 8 in this Form [removed: 10-K, as well as "Liquidity and Financial Condition" in this item,] [added: 10-K] for further details regarding this [removed: pending] transaction and financing arrangements entered into in connection with the Tender [removed: Offer and Item 1A in this Form 10-K for additional risks related to thereto.][added: Offer.]

COVID-19 [removed: has] [added: related trends impacting our business, customers and suppliers have] had, and could continue to have, an impact on our business, including impacts to overall financial performance in [removed: 2022,] [added: 2023,] as a result of the following, among other things:

- Customer demand impacting our new equipment, maintenance and repair, and modernization [removed: businesses][added: businesses;]

- Cancellations or delays of customer [removed: orders][added: orders.]

- Customer liquidity constraints and related credit [removed: reserves][added: reserves; and]

- Supplier and raw material capacity constraints, delays and related [removed: costs][added: costs;]

As previously disclosed, on April 3, 2020, Otis became an independent, publicly-traded company and its Common Stock is listed under the symbol "OTIS" on the New York Stock Exchange [removed: ("NYSE")] as a result of the separation [removed: ("the Separation")] [added: (the "Separation")] of each of Otis and Carrier Global Corporation ("Carrier") from United Technologies Corporation, subsequently renamed Raytheon Technologies Corporation ("UTC" or "RTX", as applicable).

We entered into a transition services agreement [removed: ("TSA")] [added: (the "TSA")] and tax matters agreement [removed: ("TMA")] [added: (the "TMA")] with our former parent, UTC, and Carrier on April 2, 2020.

The TSA and the related trailing exit costs [removed: are] [added: were] substantially completed as of December 31, 2021.

| (dollars in millions) | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Net sales | | | | | | $ | [removed: 14,298] [added: 13,685] | | | | | $ | [removed: 12,756] [added: 14,298] | | | | | $ | [removed: 13,118] [added: 12,756] | |

| Percentage change year-over-year | | | | | | [removed: 12.1] [added: (4.3)] | | % | | | | [removed: (2.8)] [added: 12.1] | | % | | | | [removed: 1.6] [added: (2.8)] | | % |

| | | | | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Foreign currency translation | | | | | | [removed: 3.0] [added: (5.9)] | | % | | | | [removed: (0.4)] [added: 3.0] | | % |

| Acquisitions and divestitures, net | | | [removed: | | | 0.2] [added: (1.0)] | | % | | | | [removed: (0.2)] [added: 0.2] | | % |

| Total % change | | | | | | [removed: 12.1] [added: (4.3)] | | % | | | | [removed: (2.8)] [added: 12.1] | | % |

The Organic volume increase of [removed: 8.9%] [added: 9.0%] for 2021 was driven by increases [removed: in organic sales] of [removed: 15.5%] [added: 15.8%] in New Equipment and 4.1% in Service.

| Cost of products and services sold | | | | | | $ | [removed: 10,105] [added: 9,765] | | | | | $ | [removed: 8,977] [added: 10,105] | | | | | $ | [removed: 9,292] [added: 8,977] | |

| Percentage change year-over-year | | | | | | [removed: 12.6] [added: (3.4)] | | % | | | | [removed: (3.4)] [added: 12.6] | | % | | | | [removed: 1.1] [added: (3.4)] | | % |

[removed: | | | | 2021 | | | | | |] [added: 2021 compared to] 2020 [removed: | | |]

| Organic volume | | | [removed: 9.1] [added: 3.7] | | % | | | | [removed: (2.7)] [added: 9.1] | | % |

| Foreign currency translation | | | [removed: 3.3] [added: (6.1)] | | % | | | | [removed: (0.5)] [added: 3.3] | | % |

| [removed: Acquisitions and divestitures,] [added: Acquisitions/Divestitures,] net [added: and Other] | | | [removed: 0.2] | | [added: | (2.2) | |] % | | | | (0.2) | | % | [added: | | |]

| Total % change | | | [removed: 12.6] [added: (3.4)] | | % | | | | [removed: (3.4)] [added: 12.6] | | % |

| Gross margin | | | | | | $ | [removed: 4,193] [added: 3,920] | | | | | $ | [removed: 3,779] [added: 4,193] | | | | | $ | [removed: 3,826] [added: 3,779] | |

| Gross margin percentage | | | | | | [removed: 29.3] [added: 28.6] | | % | | | | [removed: 29.6] [added: 29.3] | | % | | | | [removed: 29.2] [added: 29.6] | | % |

Gross margin decreased 30 basis points in 2021 [removed: when] compared to 2020, as improvements in gross margin in both New Equipment and Service were more than offset by overall segment mix.

| Research and development | | | | | | $ | [removed: 159] [added: 150] | | | | | $ | [removed: 152] [added: 159] | | | | | $ | [removed: 163] [added: 152] | |

| Percentage of Net sales | | | | | | 1.1 | | % | | | | [removed: 1.2] [added: 1.1] | | % | | | | 1.2 | | % |

Research and development [removed: spending increased $7 million, or 4.6%,] [added: was relatively flat] in [removed: 2021] [added: 2022] compared to [added: 2021 and] 2020.

| Selling, general and administrative | | | | | | $ | [removed: 1,948] [added: 1,763] | | | | | $ | [removed: 1,924] [added: 1,948] | | | | | $ | [removed: 1,810] [added: 1,924] | |

| Percentage of Net sales | | | | | | [removed: 13.6] [added: 12.9] | | % | | | | [removed: 15.1] [added: 13.6] | | % | | | | [removed: 13.8] [added: 15.1] | | % |

[removed: 2021 Compared] [added: 2021 Compared] with 2020

[removed: - Higher] [added: Selling, general and administrative expenses increased $24 million in 2021 compared to 2020, as higher] employment and information technology costs, including incremental standalone public company costs, and the absence of cost containment actions taken during 2020 in response to [removed: COVID-19;][added: COVID-19, as well as the impact of unfavorable foreign exchange of $38 million compared to 2020.]

[removed: -] These increases were partially offset by lower non-recurring Separation-related costs and the absence of UTC allocations of $105 million.

Selling, general and administrative expenses as a percentage of Net sales decreased [added: 70 basis points in 2022 compared to 2021, and decreased] 150 basis points in 2021 compared to [removed: 2020, as Net sales increased at a faster rate than expenses.][added: 2020.]

[removed: | Restructuring costs | | | | | | $ | 56 | | | | | $ | 77 | | | | | $ | 54 | |][added: Restructuring Costs]

We generally expect to achieve annual recurring savings within the two-year period subsequent to initiating the actions, including [removed: $41] [added: $67] million for the [removed: 2021] [added: 2022] actions and [removed: $55] [added: $37] million for the [removed: 2020] [added: 2021] actions, of which approximately [removed: $66] [added: $68] million was realized for the [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] actions during the [removed: current year.][added: year ended December 31, 2022.]

| Other income (expense), net | | | | | | $ | [removed: 22] [added: 26] | | | | | $ | [removed: (64)] [added: 22] | | | | | $ | [removed: (39)] [added: (64)] | |

Sale of Russia business and risks associated with ongoing conflict between Russia and Ukraine

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 cyber 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).

To the extent possible, we continue to operate our business in Ukraine, which represented less than 1% of our 2022, 2021 and 2020 revenue and operating profit.

As previously disclosed, we stopped taking new equipment orders in Russia and making new investments in the country in March 2022, while reassessing our operations in the country, which represented approximately 1% and 2% of both our revenue and operating profit in 2022 and 2021, respectively.

The operations were comprised mostly of New Equipment.

In June 2022, we entered into an agreement to sell our business in Russia to a third party, resulting in classification of the business' assets and liabilities as held for sale as of June 30, 2022 and recording an impairment loss of $18 million.

On July 27, 2022, we completed the sale of our business in Russia to the third party.

We recorded losses from the sale and conflict-related charges totaling $28 million (including the impairment loss of $18 million), primarily in Other income (expense), net in the Consolidated Statements of Operations in 2022.

See Note 9, "Business Acquisitions, Dispositions, Goodwill and Intangible Assets" for further details.

Consistent with our risk management process, the Otis Board of Directors and its Audit Committee received numerous updates on the ongoing conflict between Russia and Ukraine and have reviewed, and continue to review, with management the financial, operational, compliance, reputational and cyber risks associated therewith and related mitigation actions.

The Otis Board of Directors oversaw the process of selling our business in Russia, including reviewing the terms and conditions thereof, and the Audit Committee approved the sale.

The Otis Board of Directors continued to receive updates on the sale process until the completion of the sale.

See Item 1A in this Form 10-K for risks associated with ongoing conflict between Russia and Ukraine.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

The results of the Tender Offer were announced on April 7, 2022, with tenders of 45.49% of the shares outstanding accepted.

The shares tendered to the Company were settled in cash on April 12, 2022 for approximately €1.5 billion from the Company's restricted cash held in escrow, resulting in the Company owning 95.51% of Zardoya Otis.

The acquisition and settlement of the remaining issued and outstanding shares not owned by the Company for approximately €150 million (based on the adjusted tender price of €7.07 per share) and the automatic delisting of Zardoya Otis shares both occurred during the second quarter of 2022.

Zardoya Otis was renamed Otis Mobility upon completion of the Tender Offer and delisting.

Environmental, Social and Governance ("ESG")

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 ESG initiatives.

Increased regulation (including pending SEC and European Union requirements) and 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 ESG matters, see Item 1A in this Form 10-K.

For a discussion of Otis’ ESG goals, see the discussion under “Environmental, Social and Governance (“ESG”)” in Item 1 in this Form 10-K.

The COVID-19 pandemic has impacted, and continues to impact, aspects of the Company's operations and overall financial performance.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

As a result of our business in Russia being sold during 2022, the results of the operations in Russia are excluded from the organic volume changes for 2022 and 2021 and are reflected in Acquisitions and divestitures, net.

See Note 9, "Business Acquisitions, Dispositions, Goodwill and Intangible Assets" to the Consolidated Financial Statements, for further details.

| | | | | | | 2022 | | | | | | 2021 | | |

| Organic volume | | | | | | 2.5 | | % | | | | 9.0 | | % |

The Organic volume increase of 2.5% for 2022 was driven by an increase of 6.0% in Service, offset by a decrease of (1.7)% in New Equipment.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| | | | 2022 | | | | | | 2021 | | |

The organic increase in total cost of products and services sold in 2022 was driven primarily by the organic sales increases noted above and inflationary pressures including higher commodity prices of $107 million, primarily driven by steel, higher freight and fuel costs and annual wage increases, partially mitigated by productivity.

Gross margin decreased 70 basis points in 2022 compared to 2021, due to the inflationary pressures described above, partially offset by favorable Service pricing, productivity and the benefit from Service sales growing faster than New Equipment sales.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

Selling, general and administrative expenses decreased $185 million in 2022 compared to 2021, as other employment related cost reductions, cost containment actions, lower credit loss reserves, as well as the impact from foreign exchange of $104 million, were partially offset by annual wage increases.

| Restructuring costs | | | | | | $ | 60 | | | | | $ | 56 | | | | | $ | 77 | |

The table below presents approximate cash outflows related to the restructuring actions during the year ended December 31, 2022, and the expected cash payments to complete the actions announced:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

The offer price is €7.07 per share in cash after adjusting for dividends.

As of February 4, 2022, the Tender Offer remains outstanding and has not yet been completed.

The results of our operations and overall financial performance were impacted due to the COVID-19 pandemic during the years ended December 31, 2021 and 2020.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Organic volume | | | | | | 8.9 | | % | | | | (2.1) | | % |

| Other | | | | | | — | | % | | | | (0.1) | | % |

The Organic volume decrease of (2.1)% for 2020 was driven by decreases in organic sales of (4.0)% in New Equipment and (0.7)% in Service.

The organic volume decrease in total cost of products and services sold in 2020 was driven by the organic sales decrease noted above, productivity and cost containment actions.

Gross margin increased 40 basis points in 2020 when compared to 2019, primarily driven by improvement in the Service margin and overall segment mix, partially offset by a decrease in the New Equipment margin.

Research and development expense as a percentage of net sales has remained relatively flat year-over-year.

Research and development spending decreased approximately $11 million, or (6.7)%, in 2020 compared to 2019 primarily as a result of cost containment actions taken in 2020.

Research and development expenses remained relatively consistent as a percentage of Net sales.

Selling, general and administrative expenses increased $24 million, or 1.2%, in 2021.

The primary drivers of the change are the following:

- Impact of unfavorable foreign exchange of $38 million compared to 2020;

2020 Compared with 2019

Selling, general and administrative expenses increased approximately $114 million, or 6.3%, in 2020, The primary drivers of the change are the following:

- Lower employment costs and lower discretionary spending, including cost containment actions taken in response to COVID-19, and the absence of corporate allocations from UTC, being more than offset by

- Higher non-recurring Separation-related costs and incremental standalone public company costs.

Selling, general and administrative expenses as a percentage of Net sales increased 130 basis points in 2020 compared to 2019, primarily driven by the increase in non-recurring Separation-related costs, incremental standalone public company costs and lower Net sales.

Restructuring Costs

Total 2021 restructuring costs include $41 million of costs related to 2021 actions, $13 million of costs related to 2020 actions and $2 million of costs related to pre-2020 actions.

During 2021, we had cash outflows of approximately $51 million related to the restructuring actions and expect to make cash payments of $47 million to complete the actions announced, which is comprised of $7 million of additional restructuring expenses and $40 million of existing restructuring accruals as of December 31, 2021.

The change in Other income (expense), net of $(25) million in 2020 compared to 2019, was driven by fixed asset impairments of $(71) million and related license costs of $(14) million and non-recurring Separation-related expenses.

These were partially offset by favorable mark-to-market adjustments on foreign currency derivatives of $46 million when compared to 2019, the absence of the loss on the sale of a business of $19 million included in the 2019 results and a non-recurring gain of $17 million related to an expected insurance recovery recognized for property damage as a result of the fire in our manufacturing facility in Germany in 2020.

The increase in Interest expense (income), net in 2020 compared to 2019 was primarily driven by interest expense of $124 million on our external debt and debt issuance cost amortization of $5 million in 2020.

These expenses were partially offset by interest income on short-term investments.

| | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

The 2021 effective tax rate is lower than the 2020 effective tax rate primarily due to the following:

- $16 million decrease in U.S. tax related to base erosion and anti-abuse tax in 2021;

- The net impact of income tax settlements related to the Separation, as discussed in Note 5, "Related Parties".

The 2020 effective tax rate is lower than the 2019 effective tax rate primarily due to a $10 million tax benefit related to our change in assertion of no longer intending to reinvest certain undistributed earnings of our international subsidiaries made during 2020 as compared to the liability previously recorded by UTC, a decrease as a result of tax regulations related to the TCJA that were enacted during 2020, as well as a recognition of a Separation-related foreign tax loss, all partially offset by incremental withholding taxes in 2020.

| Noncontrolling interest in subsidiaries' earnings | | | | | | $ | 174 | | | | | $ | 150 | | | | | $ | 151 | |

Ownership interest in the underlying non-wholly owned subsidiaries has remained generally consistent year-over-year.

Noncontrolling interest in subsidiaries' earnings remained consistent in 2020 in comparison to 2019.

| Diluted earnings per share | | | | | | $ | 2.89 | | | | | $ | 2.08 | | | | | $ | 2.55 | |

Net income attributable to Otis Worldwide Corporation decreased in 2020, compared to the same period in 2019, primarily driven by non-recurring Separation-related costs, fixed asset impairments, non-recurring Separation-related tax

benefits, the impact of non-recurring tax items, and incremental standalone public company costs incurred in 2020 after the Separation.

As previously disclosed in our Quarterly Report on Form 10-Q for the quarter ending June 30, 2021, we changed how we present and discuss operating profit in our Segment Review of the Management’s Discussion and Analysis.

[removed: We] [added: Our primary market exposures] are [removed: exposed] to fluctuations in foreign currency exchange [removed: rates and] [added: rates,] commodity [removed: prices.][added: prices and interest rates.]

[removed: Additionally, any] [added: Such] losses or gains [removed: on derivative instruments] would be [removed: mostly] offset by corresponding gains or losses in the remeasurement of the underlying transactions being hedged.

Refer to "Note 2: Summary of Significant Accounting Policies", "Note 10: Borrowings and Lines of Credit" and "Note 18: Financial Instruments" in Item 8 in this Form 10-K for additional discussion of foreign currency exchange, interest rates and financial instruments, including the [added: average] aggregate notional amount of our outstanding foreign currency and commodity price [removed: hedges.][added: hedges during 2022 and 2021.]

International sales were approximately [removed: $10.6] [added: $9.9] billion, [removed: $9.3] [added: $10.6] billion and [removed: $9.5] [added: $9.3] billion in [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] respectively.

As discussed in "Note 18: Financial Instruments" in Item 8 in this Form 10-K, as of December 31, [removed: 2021] [added: 2022] we have ¥21.5 billion [removed: ($189] [added: ($163] million) of Japanese Yen denominated long-term debt, which qualifies as a net investment hedge against our investments in Japanese businesses.

As of December 31, [removed: 2021,] [added: 2022,] the net investment hedge is deemed to be effective.

As discussed in "Note 10: Borrowings and Lines of Credit" in Item 8 in this Form 10-K, as of December 31, [removed: 2021] [added: 2022] we have [removed: €1,600 million ($1,807 million)] [added: €1.6 billion ($1.7 billion)] of Euro denominated long-term debt.

However, products and services delivered to our customers [removed: are often] [added: 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.

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

The aggregate notional amount of our outstanding foreign currency hedges was $3.7 billion and $3.2 billion as of December 31, 2022 and 2021, 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 $39 million and $8 million as of December 31, 2022 and 2021, respectively.

We believe these foreign currency forward exchange contracts and the offsetting underlying commitments, when taken together, do not create material market risk.

This debt was issued by a subsidiary with Euro functional currency and the proceeds were used to fund the Tender Offer for Zardoya Otis.

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.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

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.

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.

A 100 basis points increase in interest rates would have had an approximate $400 million and $600 million reduction on the fair value of our fixed-rate debt as of December 31, 2022 and 2021, respectively.

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.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

We have evaluated our exposure to changes in foreign currency exchange rates, commodity prices and interest rates in our market risk sensitive instruments, which are primarily cash, debt and derivative instruments, using a value at risk analysis.

Based on a 95% confidence level and one-day holding period, as of December 31, 2021, the potential loss in fair value on our market risk sensitive instruments was not material in relation to our financial position, results of operations or cash flows.

Our calculated value at risk exposure represents an estimate of reasonably possible net losses based on volatilities and correlations, and is not necessarily indicative of actual results.

Our long-term debt portfolio primarily consists of fixed-rate instruments.

For any variable rate debt, interest rate changes in the London Interbank Offered Rate ("LIBOR") will impact future earnings and cash flows.

For information concerning market risk sensitive instruments, see discussion under the headings "Foreign Exchange Exposures" and "Derivatives and Hedging Activity" in "Note 2: Summary of Accounting Policies," as well as "Note 18: Financial Instruments" in Item 8 in this Form 10-K for additional discussion on unrecognized tax benefits.

Our Company is organized into two segments, New Equipment and Service, which, for the year ended December 31, [removed: 2021,] [added: 2022,] contributed [removed: 45%] [added: 43%] and [removed: 55%] [added: 57%] of our net sales, and [removed: 21%] [added: 17%] and [removed: 79%] [added: 83%] of our segment operating profit, respectively.

Our international operations represented approximately [removed: 74%] [added: 72%] of our net sales for the year ended December 31, [removed: 2021.][added: 2022.]

In [removed: 2021,] [added: 2022,] our New Equipment segment had sales of [removed: $6.4] [added: $5.9] billion and operating profit of [removed: $459] [added: $358] million.

In [removed: 2021,] [added: 2022,] our New Equipment sales in China [removed: and the Americas each] represented approximately one-third of our new equipment net [removed: sales, respectively, while] [added: sales and] China represented over half of our global New Equipment unit volume.

These platforms enhance 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 [removed: adding] [added: offering] additional safety features for [removed: the] passengers and our colleagues who maintain the elevator.

[added: Otis ONE is designed] to continuously monitor equipment health and performance in real time to provide proactive, predictive and transparent information to our technicians and customers.

The [removed: new] Otis [removed: One] [added: ONE] IoT solution [removed: turns the elevator into] [added: adds] a network of sensors for real-time status updates.

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 [added: allowing] for a flat roof design.

Otis offers a range of technologies for improving the passenger [removed: experience as well as the safety and efficiency of the building itself.][added: experience.]

The system's algorithms anticipate traffic demand within a building and [removed: improves] [added: improve] traffic flow.

Otis eView in-car display streams live, customizable infotainment to passengers and [removed: connects] [added: can connect] them to [removed: OTISLINE] [added: OTISLINE, Otis' 24-hour service call center,] during an emergency.

We [removed: have also] [added: previously] rolled out new voice and gesturing technologies for summoning elevators to customers in China and North America, with other geographies to follow.

Due to the [removed: large and widespread] nature of the customer base in China and certain other geographies, our direct sales force is augmented by agents and distributors.

[removed: Most] New Equipment orders are [added: generally] delivered within 12 months of booking, though larger projects can take longer to deliver based on customer construction [removed: schedules.][added: schedules, and in some regions, mostly in China, the order to delivery window is shorter.]

We have a maintenance portfolio of [removed: over 2.1] [added: approximately 2.2] million units globally, which includes Otis equipment manufactured and sold by us, as well as equipment from other original equipment manufacturers.

In [removed: 2021,] [added: 2022,] our Service segment had net sales of [removed: $7.9] [added: $7.8] billion and operating profit of $1.8 billion.

[removed: With over 2.1 million maintenance units under contract globally,] [added: 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 material to Otis as a whole.

We [added: 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.

As elevator equipment ages, we work with customers to help renew or refresh their elevators with modernization solutions that enhance equipment [removed: operation and] [added: operation,] improve building [removed: functionality.][added: functionality and contribute to more sustainable building systems.]

In [removed: 2022,] [added: 2023,] 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.

For the year ended December 31, [removed: 2021,] [added: 2022,] research and development ("R&D") expense was [removed: $159] [added: $150] million and 1.1% as a percentage of net sales.

In addition to [removed: research and development] [added: R&D] expense, we made investments in digital and strategic initiatives of approximately [removed: $59] [added: $55] million, which in combination with [removed: research and development] [added: R&D] expense was 1.5% as a percentage of net sales.

We have 11 R&D centers and [removed: 18] [added: 17] factories around the world, including major locations in China, India, France, Spain and the United States.

We have approximately [removed: 1,300] [added: 1,200] engineers globally, with increasing focus on digital initiatives, software, design of the user interface and the user experience.

We currently own approximately [removed: 3,700] [added: 4,200] globally issued patents, and we have approximately [removed: 2,700] [added: 2,300] patent applications pending [removed: globally, of which approximately 2,600 applications were filed in the last three years.][added: globally.]

In addition to [removed: China and Spain,] [added: China,] as discussed below, we also operate through joint ventures and non-wholly owned subsidiaries in [removed: other countries, including Italy, Russia, Malaysia, and] certain [removed: countries in the Middle East.][added: other countries.]

We are a majority owner of Otis China, and Tianjin Tai Kang Investment Co. Ltd. [removed: (“Tianjin Tai Kang”)] is our joint venture partner.

[removed: Zardoya Otis][added: Otis Mobility (formerly Zardoya Otis)]

[removed: We conduct our operations based in Spain through Zardoya] Otis [removed: S.A. (“Zardoya Otis”), which] [added: Mobility] manufactures, installs and services elevators and elevator equipment in Spain, and exports elevator equipment it manufactures for installation by certain of our subsidiaries outside of Spain.

[added: Prior to completion of the Tender Offer,] Zardoya Otis’ shares [removed: are] [added: were] listed on Spanish stock exchanges, and the company [removed: is] [added: was] subject to the supervision of the Spanish Securities Exchange Commission (Comisión Nacional del Mercado de Valores (the "CNMV")).

We [removed: own] [added: owned] a majority equity stake in Zardoya Otis, with Euro Syns S.A. owning a minority position and the remaining shares being held by public shareholders.

In September 2021, the Company announced [removed: a] [added: its] tender offer [added: (the "Tender Offer")] to acquire all of the issued and outstanding shares of Zardoya Otis not owned by [removed: Otis.][added: the Company.]

See [removed: Item 1A and] "Note 1: Business Overview" [removed: in Item 8 in this Form 10-K] for further details regarding this [removed: pending transaction, including risks associated therewith.][added: transaction.]

We believe our business strategies [added: allow us to] sustain New Equipment growth, accelerate Service portfolio growth, advance the digitalization of Otis, focus and empower the organization, support our ability to successfully compete across the New Equipment and Service segments, and will help deliver sustainable earnings growth.

Additionally, the slowdown of economic activity due to [removed: COVID-19] [added: coronavirus ("COVID-19")] and subsequent [removed: ongoing] [added: unsettled] recovery in certain regions, [removed: as well as the] [added: including their] impact [removed: of COVID-19 more broadly] on [removed: employment and the economy,] [added: employment,] have created long lead times and product shortages for certain components and [removed: supplier.][added: suppliers.]

We [removed: implemented] [added: 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 [removed: long term] [added: long-term] supplier agreements.

Although at times high prices for some [added: important] raw materials [removed: important to our business] have caused margin and cost pressures for our business, including in connection with the impact of COVID-19-and the [removed: ongoing] [added: uncertain] recovery, we do not expect near-term unavailability or pricing of materials, components or supplies that would have a material adverse effect on our business.

Our ESG goals and alignment to [removed: U.N. Sustainable Development Goals] [added: SDGs] are categorized into four areas: Health & Safety, [removed: Environmental] [added: Environment] & Impact, People & Communities and Governance & Accountability.

[removed: We have published our] [added: Our] ESG [removed: goals, which] [added: goals] can be found in the Investor section of our corporate [removed: website.][added: website, where we make updates from time to time.]

[removed: In 2022, our] [added: Our] progress towards reducing Scope 1 and Scope 2 greenhouse gases [removed: will be] [added: is included as] a [removed: factor] [added: performance multiplier] in determining payouts under our executive short-term incentive plan.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

The same is true for our broad and geographically dispersed network of agents and distributors.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

As of the end of 2022, approximately 800,000 units of our global portfolio, including units under the warranty period, are connected.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

We filed approximately 1,300 patent applications in the last three years.

As discussed further below, we acquired the remaining interest in Zardoya Otis during 2022.

We conduct our operations based in Spain through Otis Mobility S.A. ("Otis Mobility", formerly Zardoya Otis S.A. (“Zardoya Otis”)).

As a result of the Tender Offer, the Company acquired the remaining issued and outstanding shares of Zardoya Otis not owned by the Company in exchange for cash during April and May 2022.

As a result, the Company owns 100% of Zardoya Otis.

Zardoya Otis shares were automatically delisted on May 9, 2022 and has been renamed Otis Mobility.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

ESG is part of our culture and embedded in our long-term strategy.

The principles of ESG align with the foundation of our business: our Absolutes of Safety, Ethics, and Quality.

We are committed to the health and safety of our colleagues and the riding public.

We strive to reduce the environmental impact of our own products, operations and services and those of our customers.

We foster a culture that embraces all voices and diverse points of view and proactively engages in the communities we serve.

In 2021, we became a signatory to the U.N. Global Compact and published our thirteen ESG goals (including the four Environment & Impact goals below) aligned with the U.N. Sustainable Development Goals ("SDGs").

We set goals within each of these areas and aligned to the U.N. SDGs on which we can have the greatest impact.

Our Environment & Impact goals are as follows:

- Achieve a 50% reduction of Scope 1 and Scope 2 emissions by 2030

- Reach carbon neutrality for factory electricity by 2030

- Achieve 100% factory eligibility for zero-waste-to-landfill certification by 2025

- Complete ISO 14001 certification for all factories by 2025 (goal completed in 2021)

In April 2022, we published our inaugural ESG report on our ESG activities, metrics and progress towards our goals in accordance with the Global Reporting Initiative Standards, as well as in alignment with the Sustainability Accounting Standards Board guidelines and the Task Force on Climate-related Financial Disclosures.

Our ESG goals, our ESG report and our corporate website are not incorporated by reference into this Form 10-K.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

Our Board of Directors and its committees engage in extensive review and oversight of ESG-related topics.

The Company's ESG Council monitors our performance towards our ESG goals.

The ESG Council is composed of senior leaders representing multiple functions within the Company, including Communications, Engineering, Human Resources, Investor Relations, Legal, and Operations (Environmental, Health & Safety, Supply Chain and Quality & Continuous Improvement).

Also, an internal ESG Working Group, comprised of subject matter experts assists the ESG Council in developing and effectuating the Company's ESG strategy.

Both the ESG Council and ESG Working Group meet frequently, with the ESG Council reporting regularly to our CEO and the Executive Leadership Team on our ESG progress and actions.

For a discussion of risks associated with ESG matters, see Item 1A in this Form 10-K.

Health and Safety is one of the four focus areas of our ESG goals.

See the “Environmental, Social and Governance ("ESG")” section of this Form 10-K above for more information regarding our ESG goals.

We now provide employee assistance plan benefits to all of our colleagues worldwide.

We also offer flexible work arrangements to many salaried colleagues.

Our “Employee Scholar

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

Otis ONE is designed

And the new Otis Cab Air Purifier significantly reduces airborne bacteria and viruses, another innovation designed to address customer needs and passenger preferences as the result of the COVID-19 pandemic.

We also rely on agents and distributors to sell our new equipment in certain other countries and territories.

Our network of agents and distributors is broad and geographically dispersed, and we do not rely on or have any contracts material to Otis as a whole with any single agent or distributor.

By the end of 2021, approximately 35% of our global portfolio is connected.

Otis is committed to working for the global good of our passengers, customers, colleagues and society.

In order to align our ESG initiatives with our broader strategy, we completed a materiality assessment in 2020 to determine our most critical ESG areas for management, goal-setting and reporting.

This allows us to focus on the topics most important to our business.

We also became a signatory to the U.N. Global Compact in March 2021.

Additionally, we expect to publish an ESG report on our ESG activities, metrics and progress towards our goals starting in 2022.

set to expire in July 2022.

Although some previous contract renegotiations have had a significant impact on our financial condition or results of operations, we do not anticipate that the renegotiation of this contract will have a material adverse effect on our competitive position, cash flows, financial condition or results of operations.

We believe this is an important initiative to continue and we are striving to provide employee assistance plan benefits to all of our colleagues by the end of 2022.

During 2020 and 2021, we covered the cost of COVID-19 testing and treatment for our U.S. based colleagues and their covered family members under our welfare plans.

We have, where possible, also offered remote work flexibility for our colleagues.

Since the program's inception in 1997, Otis, as a business unit of UTC and following the Separation, has supported Otis colleagues in receiving more than 5,500 degrees across 60 countries through an investment of over $95 million in the Employee Scholar Program.

To help us attract talent and provide us with a pipeline of trained mechanics in China, we have partnered with five technology schools in the country to offer the Otis Technology Academy.

The students in the technology schools are provided with technical training, certifications, hands-on access to our equipment and an Otis apprenticeship period.

We want to be a business whose workforce mirrors the diversity of our customers and the communities where we live and work and a place where every voice feels safe, welcomed and heard.

To help us achieve these objectives, we:

- Conducted an independent review of our Company to uncover and eliminate biases affecting any colleagues in our hiring, compensation, professional development and other business practices;

- Accelerated anti-racism, unconscious bias and inclusion learning for colleagues at all levels of the organization and throughout their Otis careers;

- Created a diversity, equity & inclusion ("DE&I") advisory group at the enterprise level and regional DE&I councils to ensure transparency and to hold us accountable for achieving measurable progress towards a diverse, inclusive culture;

- Amplified our ongoing commitment to STEM and vocational education, by joining with community and business partners to invest in and build a diverse talent pipeline;

- Made social justice and racial equality an integral part of our community giving, volunteerism and external reporting programs; and

- Promoted and expanded mental health and well-being benefits, policies and practices to support our colleagues.

- the timing of closing, if any, of the Tender Offer and the ability to achieve the expected benefits of the Tender Offer and the timing thereof;

- the ability to achieve the expected benefits of the Separation;

For the fiscal year ended December 31, [removed: 2021][added: 2022]

[removed: ][added: ]

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 [added: file such reports), and (2) has been subject to such filing requirements for the past 90 days.]

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. [added: §] 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

The aggregate market value of the voting Common Stock held by non-affiliates at June 30, [removed: 2021] [added: 2022] was approximately [removed: $34,888,309,556] [added: $29,680,794,287] based on the New York Stock Exchange closing price for such shares on that date.

At January [removed: 21, 2022,] [added: 20, 2023,] there were [removed: 424,962,356] [added: 414,869,461] shares of Common Stock outstanding.

Part III hereof incorporates by reference portions of the Otis Worldwide Corporation Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareholders (the [removed: "2022] [added: "2023] Proxy Statement").

The [removed: 2022] [added: 2023] 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.

For the Year Ended December 31, [removed: 2021][added: 2022]

| [Item 1. [removed: Business](#idc4b2caa96904285bf081581639af231_13)] [added: Business](#ie58f6088f1054085949b920a1d0e6bb5_13)] | | | [removed: [4](#idc4b2caa96904285bf081581639af231_13)] [added: [4](#ie58f6088f1054085949b920a1d0e6bb5_13)] | | |

| [Cautionary Note Concerning Factors That May Affect Future [removed: Results](#idc4b2caa96904285bf081581639af231_16)] [added: Results](#ie58f6088f1054085949b920a1d0e6bb5_16)] | | | [removed: [12](#idc4b2caa96904285bf081581639af231_16)] [added: [12](#ie58f6088f1054085949b920a1d0e6bb5_16)] | | |

| [Item 1A. Risk [removed: Factors](#idc4b2caa96904285bf081581639af231_19)] [added: Factors](#ie58f6088f1054085949b920a1d0e6bb5_19)] | | | [removed: [13](#idc4b2caa96904285bf081581639af231_19)] [added: [13](#ie58f6088f1054085949b920a1d0e6bb5_19)] | | |

| [Item 1B. Unresolved Staff [removed: Comments](#idc4b2caa96904285bf081581639af231_22)] [added: Comments](#ie58f6088f1054085949b920a1d0e6bb5_22)] | | | [removed: [25](#idc4b2caa96904285bf081581639af231_22)] [added: [25](#ie58f6088f1054085949b920a1d0e6bb5_22)] | | |

| [Item 2. [removed: Properties](#idc4b2caa96904285bf081581639af231_25)] [added: Properties](#ie58f6088f1054085949b920a1d0e6bb5_25)] | | | [removed: [25](#idc4b2caa96904285bf081581639af231_25)] [added: [25](#ie58f6088f1054085949b920a1d0e6bb5_25)] | | |

| [Item 3. Legal [removed: Proceedings](#idc4b2caa96904285bf081581639af231_28)] [added: Proceedings](#ie58f6088f1054085949b920a1d0e6bb5_28)] | | | [removed: [25](#idc4b2caa96904285bf081581639af231_28)] [added: [25](#ie58f6088f1054085949b920a1d0e6bb5_28)] | | |

| [Item 4. Mine Safety [removed: Disclosures](#idc4b2caa96904285bf081581639af231_31)] [added: Disclosures](#ie58f6088f1054085949b920a1d0e6bb5_31)] | | | [removed: [25](#idc4b2caa96904285bf081581639af231_31)] [added: [25](#ie58f6088f1054085949b920a1d0e6bb5_31)] | | |

| [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer of Purchases of Equity [removed: Securities](#idc4b2caa96904285bf081581639af231_37)] [added: Securities](#ie58f6088f1054085949b920a1d0e6bb5_37)] | | | [removed: [26](#idc4b2caa96904285bf081581639af231_37)] [added: [26](#ie58f6088f1054085949b920a1d0e6bb5_37)] | | |

| [Item 6. [removed: \[Reserved\]](#idc4b2caa96904285bf081581639af231_40)] [added: \[Reserved\]](#ie58f6088f1054085949b920a1d0e6bb5_46)] | | | [removed: [28](#idc4b2caa96904285bf081581639af231_40)] [added: [28](#ie58f6088f1054085949b920a1d0e6bb5_46)] | | |

| [Item 7. Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#idc4b2caa96904285bf081581639af231_43)] [added: Operations](#ie58f6088f1054085949b920a1d0e6bb5_49)] | | | [removed: [28](#idc4b2caa96904285bf081581639af231_43)] [added: [28](#ie58f6088f1054085949b920a1d0e6bb5_49)] | | |

| [Item 7A. Quantitative and Qualitative Disclosures About Market [removed: Risk](#idc4b2caa96904285bf081581639af231_46)] [added: Risk](#ie58f6088f1054085949b920a1d0e6bb5_88)] | | | [removed: [50](#idc4b2caa96904285bf081581639af231_46)] [added: [49](#ie58f6088f1054085949b920a1d0e6bb5_88)] | | |

| [Item 8. Financial Statements and Supplementary [removed: Data](#idc4b2caa96904285bf081581639af231_49)] [added: Data](#ie58f6088f1054085949b920a1d0e6bb5_91)] | | | [removed: [52](#idc4b2caa96904285bf081581639af231_49)] [added: [51](#ie58f6088f1054085949b920a1d0e6bb5_91)] | | |

| [Item 9. Changes in and Disagreements with Accountants [added: on Accounting] and Financial [removed: Disclosure](#idc4b2caa96904285bf081581639af231_52)] [added: Disclosure](#ie58f6088f1054085949b920a1d0e6bb5_2199023256390)] | | | [removed: [102](#idc4b2caa96904285bf081581639af231_52)] [added: [101](#ie58f6088f1054085949b920a1d0e6bb5_2199023256390)] | | |

| [Item 9A. Controls and [removed: Procedures](#idc4b2caa96904285bf081581639af231_55)] [added: Procedures](#ie58f6088f1054085949b920a1d0e6bb5_205)] | | | [removed: [102](#idc4b2caa96904285bf081581639af231_55)] [added: [101](#ie58f6088f1054085949b920a1d0e6bb5_205)] | | |

| [Item 9B. Other [removed: Information](#idc4b2caa96904285bf081581639af231_58)] [added: Information](#ie58f6088f1054085949b920a1d0e6bb5_208)] | | | [removed: [102](#idc4b2caa96904285bf081581639af231_58)] [added: [101](#ie58f6088f1054085949b920a1d0e6bb5_208)] | | |

| [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#idc4b2caa96904285bf081581639af231_954)] [added: Inspections](#ie58f6088f1054085949b920a1d0e6bb5_211)] | | | [removed: [102](#idc4b2caa96904285bf081581639af231_954)] [added: [101](#ie58f6088f1054085949b920a1d0e6bb5_211)] | | |

| [Item 10. Directors, Executive Officers and Corporate [removed: Governance](#idc4b2caa96904285bf081581639af231_64)] [added: Governance](#ie58f6088f1054085949b920a1d0e6bb5_217)] | | | [removed: [102](#idc4b2caa96904285bf081581639af231_64)] [added: [101](#ie58f6088f1054085949b920a1d0e6bb5_217)] | | |

| [Item 11. Executive [removed: Compensation](#idc4b2caa96904285bf081581639af231_67)] [added: Compensation](#ie58f6088f1054085949b920a1d0e6bb5_220)] | | | [removed: [104](#idc4b2caa96904285bf081581639af231_67)] [added: [103](#ie58f6088f1054085949b920a1d0e6bb5_220)] | | |

| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#idc4b2caa96904285bf081581639af231_70)] [added: Matters](#ie58f6088f1054085949b920a1d0e6bb5_223)] | | | [removed: [104](#idc4b2caa96904285bf081581639af231_70)] [added: [103](#ie58f6088f1054085949b920a1d0e6bb5_223)] | | |

| [Item 13. Certain Relationships and Related Transactions, and Director [removed: Independence](#idc4b2caa96904285bf081581639af231_73)] [added: Independence](#ie58f6088f1054085949b920a1d0e6bb5_226)] | | | [removed: [104](#idc4b2caa96904285bf081581639af231_73)] [added: [103](#ie58f6088f1054085949b920a1d0e6bb5_226)] | | |

| [Item 14. Principal Accounting Fees and [removed: Services](#idc4b2caa96904285bf081581639af231_76)] [added: Services](#ie58f6088f1054085949b920a1d0e6bb5_229)] | | | [removed: [105](#idc4b2caa96904285bf081581639af231_76)] [added: [104](#ie58f6088f1054085949b920a1d0e6bb5_229)] | | |

| [Item 15. Exhibits and Financial Statement [removed: Schedule](#idc4b2caa96904285bf081581639af231_82)] [added: Schedule](#ie58f6088f1054085949b920a1d0e6bb5_235)] | | | [removed: [106](#idc4b2caa96904285bf081581639af231_82)] [added: [105](#ie58f6088f1054085949b920a1d0e6bb5_235)] | | |

| [Item 16. Form 10-K [removed: Summary](#idc4b2caa96904285bf081581639af231_85)] [added: Summary](#ie58f6088f1054085949b920a1d0e6bb5_238)] | | | [removed: [110](#idc4b2caa96904285bf081581639af231_85)] [added: [110](#ie58f6088f1054085949b920a1d0e6bb5_238)] | | |

| [removed: [SIGNATURES](#idc4b2caa96904285bf081581639af231_91)] [added: [SIGNATURES](#ie58f6088f1054085949b920a1d0e6bb5_241)] | | | [removed: [111](#idc4b2caa96904285bf081581639af231_91)] [added: [111](#ie58f6088f1054085949b920a1d0e6bb5_241)] | | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

file such reports), and (2) has been subject to such filing requirements for the past 90 days.

We have a direct physical presence in approximately 80 countries with an overall property portfolio comprising approximately 15 million square feet of [removed: space as of December 31, 2021, compared to approximately 16 million square feet of space as of December 31, 2020.][added: space.]

We have approximately 2,300 facilities, of which approximately [removed: 50%, 37%] [added: 46%, 41%] and 13% of which are located in EMEA, Asia and the Americas, respectively.

We operate over 1,400 branches and offices, 11 R&D centers and [removed: 18] [added: 17] manufacturing facilities globally.

Our principal manufacturing facilities are located across Brazil, China, [removed: Czech Republic,] [added: Japan,] France, India, Korea, [removed: Russia,] Spain, and the United States, of which 10 are owned.

Our fixed assets as of December 31, [removed: 2021] [added: 2022] 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, [removed: 2021] [added: 2022] are substantially in good operating condition.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

There were approximately [removed: 22,100] [added: 21,100] registered shareholders [removed: at] [added: as of] January [removed: 21, 2022.][added: 20, 2023.]

The following table and graph illustrate the total return from April 3, 2020 (date of Separation) through December 31, [removed: 2021,] [added: 2022,] for (1) our Common Stock, (2) the Standard and Poor's [removed: ("S&P")] [added: (the "S&P")] 500 Index, and (3) the S&P 500 [removed: Industrial] [added: Industrials] Sector Index.

The graph and table assume that $100.00 was invested on April 3, 2020 in each of our Common Stock, the S&P 500 Index and the S&P 500 [removed: Industrial Select] [added: Industrials] Sector Index, and that any dividends were reinvested.

Comparison of Cumulative Total Return [removed: -] [added: —] Table

| | | | April 3, 2020 | | | [removed: June 30, 2020] | | | | | | December 31, 2020 | | | [removed: June 30, 2021] | | | December 31, 2021 | | | [added: December 31, 2022 | | |]

| Otis | | | $ | 100 | | [removed: $] | [removed: 121] | | | | | $ | 144 | | [removed: $] | [removed: 176] | | $ | 188 | | [added: $ | 172 | |]

| S&P 500 Index | | | 100 | | | [removed: 125] | | | | | | 153 | | | [removed: 176] | | | 197 | | | [added: 161 | | |]

| S&P 500 [removed: Industrial] [added: Industrials] Sector Index | | | 100 | | | [removed: 122] | | | | | | [removed: 158] [added: 160] | | | [removed: 186] | | | 193 | | | [added: 183 | | |]

Comparison of Cumulative Total Return [removed: -] [added: —] Graph

[removed: ][added: ]

The following table provides information about our purchases during the quarter ended December 31, [removed: 2021] [added: 2022] of equity securities that are registered by us pursuant to Section 12 of the Exchange Act.

| [removed: 2021] [added: 2022] | | | | | | Total Number of Shares Purchased (thousands) | | | | | | Average Price Paid per Share (1) | | | | | | Total Number of Shares Purchased as Part of a Publicly Announced Program (thousands) | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (dollars in millions) | | |

As of December 31, [removed: 2021,] [added: 2022,] the maximum dollar value of shares that may yet be purchased under this current program was [removed: approximately $275 million.][added: $2.0 billion.]

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| October 1 — October 31 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 500 | |

| November 1 — November 30 | | | | | | 2,006 | | | | | | 74.79 | | | | | | 2,006 | | | | | | $ | 350 | |

| December 1 — December 31 | | | | | | — | | | | | | — | | | | | | — | | | | | | $ | 2,000 | |

| Total | | | | | | 2,006 | | | | | | $ | 74.79 | | | | | 2,006 | | | | | | | | |

On December 1, 2022, our Board of Directors revoked any remaining share repurchase authority under the prior share repurchase program and approved a new share repurchase program for up to $2.0 billion of Common Stock.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October 1 - October 31 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 275 | |

| November 1 - November 30 | | | | | | — | | | | | | — | | | | | | — | | | | | | $ | 275 | |

| December 1 - December 31 | | | | | | — | | | | | | — | | | | | | — | | | | | | $ | 275 | |

| Total | | | | | | — | | | | | | $ | — | | | | | — | | | | | | | | |

On April 27, 2020, our Board of Directors authorized a share repurchase program for up to $1 billion of Common Stock.

As a result of the increased debt incurred to fund the Tender Offer, we have temporarily suspended our share repurchases as we focus on deleveraging.

| [Management's Report on Internal Control Over Financial [removed: Reporting](#idc4b2caa96904285bf081581639af231_991)] [added: Reporting](#ie58f6088f1054085949b920a1d0e6bb5_97)] | | | | | | [removed: [53](#idc4b2caa96904285bf081581639af231_991)] [added: [52](#ie58f6088f1054085949b920a1d0e6bb5_97)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#idc4b2caa96904285bf081581639af231_601)] [added: Fir](#ie58f6088f1054085949b920a1d0e6bb5_100)[m](#ie58f6088f1054085949b920a1d0e6bb5_100)] (PCAOB ID 238) | | | | | | [removed: [54](#idc4b2caa96904285bf081581639af231_601)] [added: [53](#ie58f6088f1054085949b920a1d0e6bb5_100)] | | |

[removed: | [Consolidated] [added: The Consolidated] Statements of Operations for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019](#idc4b2caa96904285bf081581639af231_637) | | | | | | [56](#idc4b2caa96904285bf081581639af231_637) | | |][added: 2020 reflects the following:]

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2021, 2020 and 2019](#idc4b2caa96904285bf081581639af231_632)] [added: 202](#ie58f6088f1054085949b920a1d0e6bb5_106)[2](#ie58f6088f1054085949b920a1d0e6bb5_106)[, 202](#ie58f6088f1054085949b920a1d0e6bb5_106)[1](#ie58f6088f1054085949b920a1d0e6bb5_106) [and 20](#ie58f6088f1054085949b920a1d0e6bb5_106)[20](#ie58f6088f1054085949b920a1d0e6bb5_106)] | | | | | | [removed: [57](#idc4b2caa96904285bf081581639af231_632)] [added: [56](#ie58f6088f1054085949b920a1d0e6bb5_106)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 2021 and 2020](#idc4b2caa96904285bf081581639af231_627)] [added: 202](#ie58f6088f1054085949b920a1d0e6bb5_109)[2](#ie58f6088f1054085949b920a1d0e6bb5_109) [and 20](#ie58f6088f1054085949b920a1d0e6bb5_109)[21](#ie58f6088f1054085949b920a1d0e6bb5_109)] | | | | | | [removed: [58](#idc4b2caa96904285bf081581639af231_627)] [added: [57](#ie58f6088f1054085949b920a1d0e6bb5_109)] | | |

| [Consolidated Statements of Changes in Equity for the years ended December 31, [removed: 2021, 2020 and 2019](#idc4b2caa96904285bf081581639af231_622)] [added: 202](#ie58f6088f1054085949b920a1d0e6bb5_112)[2](#ie58f6088f1054085949b920a1d0e6bb5_112)[, 202](#ie58f6088f1054085949b920a1d0e6bb5_112)[1](#ie58f6088f1054085949b920a1d0e6bb5_112) [and 20](#ie58f6088f1054085949b920a1d0e6bb5_112)[20](#ie58f6088f1054085949b920a1d0e6bb5_112)] | | | | | | [removed: [59](#idc4b2caa96904285bf081581639af231_622)] [added: [58](#ie58f6088f1054085949b920a1d0e6bb5_112)] | | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2021, 2020 and 2019](#idc4b2caa96904285bf081581639af231_671)] [added: 202](#ie58f6088f1054085949b920a1d0e6bb5_118)[2](#ie58f6088f1054085949b920a1d0e6bb5_118)[, 202](#ie58f6088f1054085949b920a1d0e6bb5_118)[1](#ie58f6088f1054085949b920a1d0e6bb5_118) [and 20](#ie58f6088f1054085949b920a1d0e6bb5_118)[20](#ie58f6088f1054085949b920a1d0e6bb5_118)] | | | | | | [removed: [60](#idc4b2caa96904285bf081581639af231_671)] [added: [59](#ie58f6088f1054085949b920a1d0e6bb5_118)] | | |

| [Notes to Consolidated Financial [removed: Statements](#idc4b2caa96904285bf081581639af231_681)] [added: Statements](#ie58f6088f1054085949b920a1d0e6bb5_121)] | | | | | | [removed: [61](#idc4b2caa96904285bf081581639af231_681)] [added: [60](#ie58f6088f1054085949b920a1d0e6bb5_121)] | | |

| [Financial Statement Schedule - Schedule II — Valuation and Qualifying Accounts for the years ended December 31, [removed: 2021, 2020 and 2019](#idc4b2caa96904285bf081581639af231_97)] [added: 202](#ie58f6088f1054085949b920a1d0e6bb5_199)[2](#ie58f6088f1054085949b920a1d0e6bb5_199)[, 202](#ie58f6088f1054085949b920a1d0e6bb5_199)[1](#ie58f6088f1054085949b920a1d0e6bb5_199) [and 20](#ie58f6088f1054085949b920a1d0e6bb5_199)[20](#ie58f6088f1054085949b920a1d0e6bb5_199)] | | | | | | [removed: [101](#idc4b2caa96904285bf081581639af231_97)] [added: [100](#ie58f6088f1054085949b920a1d0e6bb5_199)] | | |

Management has assessed the effectiveness of Otis' internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Management concluded that based on its assessment, Otis' internal control over financial reporting was effective as of December 31, [removed: 2021.][added: 2022.]

The effectiveness of Otis' internal control over financial reporting, as of December 31, [removed: 2021,] [added: 2022,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

We have audited the accompanying consolidated balance sheets of Otis Worldwide Corporation and its subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] 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, [removed: 2021,] [added: 2022,] 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, [removed: 2021,] [added: 2022,] 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, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] 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, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

As described in Notes 2 and 23 to the consolidated financial statements, the Company recognized [removed: $6.4] [added: $5.9] billion of revenue from new equipment contracts for the year ended December 31, [removed: 2021.][added: 2022.]

| (dollars in millions, except per share [removed: amounts)] [added: amounts; shares in millions)] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Product sales | | | | | | $ | [removed: 6,428] [added: 5,864] | | | | | $ | [removed: 5,371] [added: 6,428] | | | | | $ | [removed: 5,648] [added: 5,371] | |

| Service sales | | | | | | [removed: 7,870] [added: 7,821] | | | | | | [removed: 7,385] [added: 7,870] | | | | | | [removed: 7,470] [added: 7,385] | | |

| | | | | | | [removed: 14,298] [added: 13,685] | | | | | | [removed: 12,756] [added: 14,298] | | | | | | [removed: 13,118] [added: 12,756] | | |

| Cost of products sold | | | | | | [removed: 5,293] [added: 4,949] | | | | | | [removed: 4,439] [added: 5,293] | | | | | | [removed: 4,640] [added: 4,439] | | |

| Cost of services sold | | | | | | [removed: 4,812] [added: 4,816] | | | | | | [removed: 4,538] [added: 4,812] | | | | | | [removed: 4,652] [added: 4,538] | | |

| Research and development | | | | | | [removed: 159] [added: 150] | | | | | | [removed: 152] [added: 159] | | | | | | [removed: 163] [added: 152] | | |

| Selling, general and administrative | | | | | | [removed: 1,948] [added: 1,763] | | | | | | [removed: 1,924] [added: 1,948] | | | | | | [removed: 1,810] [added: 1,924] | | |

| | | | | | | [removed: 12,212] [added: 11,678] | | | | | | [removed: 11,053] [added: 12,212] | | | | | | [removed: 11,265] [added: 11,053] | | |

| Other income (expense), net | | | | | | [removed: 22] [added: 26] | | | | | | [removed: (64)] [added: 22] | | | | | | [removed: (39)] [added: (64)] | | |

| Operating profit | | | | | | [removed: 2,108] [added: 2,033] | | | | | | [removed: 1,639] [added: 2,108] | | | | | | [removed: 1,814] [added: 1,639] | | |

| Non-service pension cost (benefit) | | | | | | [removed: 11] [added: 2] | | | | | | [removed: 6] [added: 11] | | | | | | [removed: (33)] [added: 6] | | |

| Interest expense (income), net | | | | | | [removed: 136] [added: 143] | | | | | | [removed: 122] [added: 136] | | | | | | [removed: (14)] [added: 122] | | |

| Net income before income taxes | | | | | | [removed: 1,961] [added: 1,888] | | | | | | [removed: 1,511] [added: 1,961] | | | | | | [removed: 1,861] [added: 1,511] | | |

| Income tax expense | | | | | | [removed: 541] [added: 519] | | | | | | [removed: 455] [added: 541] | | | | | | [removed: 594] [added: 455] | | |

| Net income | | | | | | [removed: 1,420] [added: 1,369] | | | | | | [removed: 1,056] [added: 1,420] | | | | | | [removed: 1,267] [added: 1,056] | | |

| Less: Noncontrolling interest in subsidiaries' earnings | | | | | | [removed: 174] [added: 116] | | | | | | [removed: 150] [added: 174] | | | | | | [removed: 151] [added: 150] | | |

| Net income attributable to Otis Worldwide Corporation | | | | | | $ | [removed: 1,246] [added: 1,253] | | | | | $ | [removed: 906] [added: 1,246] | | | | | $ | [removed: 1,116] [added: 906] | |

| Basic | | | | | | $ | [removed: 2.91] [added: 2.98] | | | | | $ | [removed: 2.09] [added: 2.91] | | | | | $ | [removed: 2.55] [added: 2.09] | |

| Diluted | | | | | | $ | [removed: 2.89] [added: 2.96] | | | | | $ | [removed: 2.08] [added: 2.89] | | | | | $ | [removed: 2.55] [added: 2.08] | |

| Basic shares | | | | | | [removed: 427.7] [added: 420.0] | | | | | | [removed: 433.2] [added: 427.7] | | | | | | [removed: 433.1] [added: 433.2] | | |

| Diluted shares | | | | | | [removed: 431.4] [added: 423.0] | | | | | | [removed: 434.6] [added: 431.4] | | | | | | [removed: 433.1] [added: 434.6] | | |

| (dollars in millions) | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| by: | | | /s/ ANURAG MAHESHWARI | | |

| | | | Anurag Maheshwari | | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

February 3, 2023

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| (dollars in millions) | | | | | | 2022 | | | | | | 2021 | | |

| Short-term borrowings and current portion of long-term debt | | | | | | $ | 670 | | | | | $ | 24 | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| Net income | | | | | | — | | | | | | — | | | | | | 1,253 | | | | | | — | | | | | | — | | | | | | 1,253 | | | | | | 101 | | | | | | 1,354 | | | | | | 15 | | |

| Stock-based compensation and Common Stock issued under employer plans | | | | | | 61 | | | | | | — | | | | | | (2) | | | | | | — | | | | | | — | | | | | | 59 | | | | | | — | | | | | | 59 | | | | | | — | | |

| Cash dividends declared ($1.11 per Common Share) | | | | | | — | | | | | | — | | | | | | (465) | | | | | | — | | | | | | — | | | | | | (465) | | | | | | — | | | | | | (465) | | | | | | — | | |

| Repurchase of Common Shares | | | | | | — | | | | | | (850) | | | | | | — | | | | | | — | | | | | | — | | | | | | (850) | | | | | | — | | | | | | (850) | | | | | | — | | |

| Reclassification of noncontrolling interest to forward purchase agreement and redeemable noncontrolling interest (Note 1) | | | | | | — | | | | | | — | | | | | | (1,482) | | | | | | — | | | | | | — | | | | | | (1,482) | | | | | | (403) | | | | | | (1,885) | | | | | | 1,476 | | |

| Balance as of December 31, 2022 | | | | | | $ | 162 | | | | | $ | (1,575) | | | | | $ | (2,865) | | | | | $ | — | | | | | $ | (592) | | | | | $ | (4,870) | | | | | $ | 71 | | | | | $ | (4,799) | | | | | $ | 135 | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| Dispositions of businesses, net of cash (Note 9) | | | | | | 61 | | | | | | — | | | | | | — | | |

| Acquisition of Zardoya Otis shares (Note 1) | | | | | | (1,802) | | | | | | — | | | | | | — | | |

| Interest paid | | | | | | $ | 134 | | | | | $ | 129 | | | | | $ | 81 | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

Sale of Russia Business

The Company sold its business in Russia during 2022.

See Note 9, "Business Acquisitions, Dispositions, Goodwill and Intangible Assets" for additional information regarding the sale of our Russia business.

The Tender Offer was approved by the Spanish regulator on February 28, 2022.

As a result of the Tender Offer approval, the issued and outstanding shares of Zardoya Otis owned by Euro Syns, S.A. ("Euro Syns") were reclassified to current liabilities as Forward purchase agreement, and the remaining shares not owned by the Company were deemed redeemable at the option of the other shareholders and were reclassified from Noncontrolling interest to Redeemable noncontrolling interest on our Consolidated Financial Statements.

The difference between the historical noncontrolling interest carrying value in the balance sheet and the fair value of the Tender Offer was recorded to Accumulated deficit.

The results of the Tender Offer were announced on April 7, 2022, with tenders, including Euro Syns' shares, of 45.49% of the shares outstanding accepted, resulting in the Company owning 95.51% of Zardoya Otis.

The shares tendered to the Company were settled in cash on April 12, 2022 for approximately €1.5 billion from the Company's restricted cash held in escrow.

The acquisition and settlement of the remaining issued and outstanding shares of Zardoya Otis not owned by the Company occurred in the second quarter for approximately €150 million.

The automatic delisting of Zardoya Otis shares occurred on May 9, 2022.

Zardoya Otis was then renamed Otis Mobility S.A. ("Otis Mobility").

The Company owned 50.02% of Otis Mobility prior to the Tender Offer and 100% after completion of the Tender Offer.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| by: | | | /s/ RAHUL GHAI | | |

| | | | Rahul Ghai | | |

February 4, 2022

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance as of January 1, 2019 | | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 2,262 | | | | | $ | (708) | | | | | $ | 1,554 | | | | | $ | 458 | | | | | $ | 2,012 | | | | | $ | 203 | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,116 | | | | | | — | | | | | | 1,116 | | | | | | 147 | | | | | | 1,263 | | | | | | 4 | | |

| Net transfers to UTC | | | | | | — | | | | | | (6,330) | | | | | | (972) | | |

| Interest paid (including related party interest of $0, $0 and $18) | | | | | | $ | 129 | | | | | $ | 81 | | | | | $ | 18 | |

For further discussion on these agreements, see Note 5, "Related Parties".

The price per share of the Tender Offer was first adjusted to €6.93 for the dividend paid on October 11, 2021.

On December 21, 2021, the Company announced it reached an agreement for Euro Syns S.A. (a non-controlling equity owner in Zardoya Otis) to irrevocably tender its shares in the Tender Offer at an offer price of €7.14 per share in cash (€7.07 per share after adjusting for dividends paid by Zardoya Otis on January 10, 2022).

The Tender Offer is subject to approval by the CNMV, which is still pending as of February 4, 2022.

The value of the issued and outstanding shares of Zardoya Otis not owned by the Company is €1.66 billion based on the adjusted tender price of €7.07.

As of December 31, 2021, the Company owned 50.02% of Zardoya Otis.

Risks and Uncertainties. As the global COVID-19 pandemic continues and the economic recovery is ongoing, the Company continues to closely monitor and manage the impact of the COVID-19 pandemic on its business globally.

It is difficult to estimate at this time the duration and extent of the continued impact of the pandemic and ongoing economic recovery on the Company's business, financial position, cash flow and results of operations.

The results of our operations and overall financial performance were impacted during the years ended December 31, 2021 and 2020, including impacts to customer demand for our new equipment, maintenance and repair and modernization businesses, cancellations or delays of customer orders, customer liquidity constraints and related credit reserves, and supplier and raw material capacity constraints, delays and related costs.

Primarily in 2020, there were also temporary closures and reduced capacity of our operations, limited new equipment job site closures and challenges in accessing units to provide maintenance and repair services that also impacted our results.

Due to existing conditions and uncertainty, COVID-19 and ongoing economic recovery could have an impact on our business, cash flow and results of operations into 2022.

The extent of the impact will depend largely on future developments, which are highly uncertain, including the severity of the outbreak and variants of COVID-19, efficacy, availability and distribution of vaccines, actions taken by government authorities to further contain the outbreak or address its impact and its longer-term impacts on the global economy, among other factors.

Offer, which is expected to be completed in 2022.

The changes in the fair value of these embedded derivatives are recorded in Other income (expense), net in the Consolidated Statements of Operations.

Pension and postretirement obligation balances

Additional Paid-in Capital.

In 2021, the Company identified a misclassification between noncontrolling interest and redeemable noncontrolling interest.

The impact of the correction of the misclassification to the Consolidated Balance Sheets as of January 1, 2019 was an increase to redeemable noncontrolling interest of $94 million, a decrease to noncontrolling interest of $79 million and a decrease to UTC Net Investment of $15 million.

The impact of the correction of the misclassification to the Consolidated Balance Sheets as of December 31, 2019 was an increase to redeemable noncontrolling interest of $103 million, a decrease to noncontrolling interest of $75 million and a decrease to UTC Net Investment of $28 million.

The impact of the correction of the misclassification to the Consolidated Balance Sheets as of December 31, 2020 was an increase to redeemable noncontrolling interest of $111 million, a decrease to noncontrolling interest of $81 million and a decrease to Accumulated Deficit of $30 million.

Additionally, the impact of redeemable noncontrolling interest to net income attributable to common shareholders was a reduction of $0.03 to basic and diluted earnings per share of Common Stock in 2019.

There was no impact to basic or diluted earnings per share of Common Stock in 2020.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—*Changes to the Disclosure Requirements for Fair Value Measurement*.

The new standard removes the disclosure requirements for the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy.

The provisions of this ASU were effective for years beginning after December 15, 2019, with early adoption permitted.

The Company adopted this standard effective January 1, 2020.

The adoption of this ASU did not have a material impact on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): *Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract*.

The new standard provides updated guidance surrounding implementation costs associated with cloud computing arrangements that are service contracts.

The Company adopted this standard prospectively effective January 1, 2020.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220).

The new standard allows companies to reclassify to retained earnings the stranded tax effects in Accumulated other comprehensive income from the then-newly-enacted TCJA.

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 President and Chief Executive Officer ("CEO"), the Executive Vice President and Chief Financial Officer ("CFO") and the 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, [removed: 2021.][added: 2022.]

Based upon our evaluation, our CEO, our CFO and our CAO have concluded that, as of December 31, [removed: 2021,] [added: 2022,] 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.

There has been no change in our internal control over financial reporting during the quarter ended December 31, [removed: 2021,] [added: 2022,] that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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 [removed: 2022] [added: 2023] Annual Meeting of Shareholders titled "Corporate governance" (under the subheadings "Proposal 1: Election of directors", "Our Board leadership structure", "Board committees" and "Our board nominees").

| Name | | | | | | Position | | | | | | Other Business Experience Since [removed: 1/1/2017] [added: 1/1/2018] | | | | | | Age as of [removed: 2/4/2022] [added: 2/3/2023] | | |

| Bernardo Calleja Fernandez | | | | | | President, Otis EMEA (since November 2020) | | | | | | President of Otis South Europe & Africa, Otis; President, Otis South Europe & Turkey, Otis | | | | | | [removed: 59] [added: 60] | | |

| James F. Cramer | | | | | | President, Otis Americas (since June 2020) | | | | | | Regional Vice President, U.S. Western Region, Otis | | | | | | [removed: 57] [added: 58] | | |

| [removed: Rahul Ghai] [added: Anurag Maheshwari] | | | | | | Executive Vice President and Chief Financial Officer (since [removed: April 2020)] [added: August 2022)] | | | | | | Vice [removed: President] [added: President, Finance, IT] and Chief [removed: Financial] [added: Transformation] Officer, [removed: Otis; Senior] [added: Otis Asia Pacific;] Vice [removed: President] [added: President, Investor Relations, L3 Harris Technologies] and [removed: Chief Financial Officer,] Harris Corporation | | | | | | [removed: 50] [added: 49] | | |

| Nora E. LaFreniere | | | | | | Executive Vice President and General Counsel (since July 2021) | | | | | | Executive Vice President, Chief General Counsel and Corporate Secretary, Vice President, General Counsel, Otis | | | | | | [removed: 50] [added: 51] | | |

| Abbe Luersman | | | | | | Executive Vice President and Chief People Officer (since July 2021) | | | | | | Chief Human Resource Officer, Ahold Delhaize | | | | | | [removed: 54] [added: 55] | | |

| Judith F. Marks | | | | | | Chair, President and Chief Executive Officer (since February 2022) | | | | | | President and Chief Executive Officer; President, Otis; Chief Executive Officer, Siemens USA and Dresser-Rand (a Siemens company); Executive Vice President, New Equipment Solutions, Dresser-Rand | | | | | | [removed: 58] [added: 59] | | |

| Stephane de Montlivault | | | | | | President, Otis Asia Pacific (since April 2020) | | | | | | President, Otis Asia Pacific; President, Otis Northeast Asia, Otis President, Northeast Asia and President of Nippon Otis Elevator Company | | | | | | [removed: 62] [added: 63] | | |

| Michael P. Ryan | | | | | | Vice President and Chief Accounting Officer (since April 2020) | | | | | | Vice President and Assistant Controller, UTC; and Executive Director, Corporate Accounting and Controls, UTC | | | | | | [removed: 52] [added: 53] | | |

| Peiming Zheng (Perry) | | | | | | President, Otis China and Chief Customer Product Officer (since December 2021) | | | | | | President, Otis China; President, Business & Industrial Systems China, Otis | | | | | | [removed: 54] [added: 55] | | |

Information concerning Section 16(a) compliance is incorporated herein by reference to the section of our Proxy Statement for the [removed: 2022] [added: 2023] 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.

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 [removed: http://www.otis.com/Who-We-Are/Corporate-Governance/Pages/default.aspx.][added: https://www.otisinvestors.com/governance/governance-documents.]

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

This code is publicly available on our website at https://www.otisinvestors.com/governance/governance-documents.

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

This code is publicly available on our website at http://www.otis.com/How-We-Work/Ethics-And-Compliance/Pages/Default.aspx.

The information required by Item 11 is incorporated herein by reference to the sections of our Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareholders titled "Executive compensation", "Compensation of directors" and "Report of the compensation committee".

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 [removed: 2022] [added: 2023] 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”).

The following table provides information as of December 31, [removed: 2021] [added: 2022] 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 [removed: (a)] [added: (a))] (c) | | | | | | | | |

(1) 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 [removed: Stock Appreciation Rights] [added: 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 [removed: 330,204] [added: 583,286] 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.

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 [removed: 31, 2021] [added: 30, 2022] of [removed: $87.07.][added: $78.31.]

(2) Represents the maximum number of shares of Common Stock available to be awarded under the LTIP as of December 31, [removed: 2021.][added: 2022.]

| Equity compensation plans approved by shareholders | | | | | | 3,983,814 | | | | | | (1) | | | $65.05 | | | | | | | | | | | | 24,111,597 | | | | | | (2) | | |

| Equity compensation plans approved by shareholders | | | | | | 5,221,275 | | | | | | (1) | | | $52.97 | | | | | | | | | | | | 25,645,407 | | | | | | (2) | | |

The information required by Item 13 is incorporated herein by reference to the sections of our Proxy Statement for the [removed: 2022] [added: 2023] 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").

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

The information required by Item 14 is incorporated by reference to the section of our Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareholders titled "Proposal 3: Appoint an independent auditor for [removed: 2022",] [added: 2023",] including the information provided in that section with regard to "Audit Fees", "Audit-Related Fees", "Tax Fees" and "All Other Fees".

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| [removed: 4.6] [added: 21] | | | | | | [removed: [Description] [added: [Subsidiaries] of [removed: Securities*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit462021-12x3110xk.htm)] [added: the Registrant.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit212022-12x3110xk.htm)] | | |

| | | | | | | [Amendment No. 1 to the Otis Worldwide Corporation Deferred Compensation [removed: Plan.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10172021-12x3110xk.htm)] [added: 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)] | | |

| | | | | | | [Amendment No. 2 to the Otis Worldwide Corporation Amended and Restated Savings Restoration [removed: Plan.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10182021-12x3110xk.htm)] [added: 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)] | | |

| | | | | | | [Amendment No. 1 to the Otis Worldwide Corporation Company Automatic Contribution Excess [removed: Plan.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10192021-12x3110xk.htm)] [added: 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)] | | |

| | | | | | | [Amendment No. 1 to the Otis Worldwide Corporation LTIP Performance Share Unit Deferral [removed: Plan.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10202021-12x3110xk.htm)] [added: 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)] | | |

| | | | | | | [Letter of Assignment Extension with Stephane de Montlivault dated October 1, [removed: 2021.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10242021-12x3110xk.htm)] [added: 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)] | | |

| 10.27 | | | | | | [Summary of [removed: Compensation](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10272021-12x3110xk.htm) [and] [added: Compensation and] Benefits for Non-Employee [removed: Director](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10272021-12x3110xk.htm)[s.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10272021-12x3110xk.htm)[*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10272021-12x3110xk.htm)] [added: 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)] | | |

| 10.29 | | | | | | [Letter of Assignment for Peiming (Perry) Zheng, effective January 1, [removed: 2021](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000023/exhibit10332020-12x3110xk.htm)[,] [added: 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) [removed: filed](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000023/exhibit10332020-12x3110xk.htm) [with] [added: filed with] the SEC on February 5, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000023/exhibit10332020-12x3110xk.htm) | | |

| 10.30 | | | | | | [Employment Contract (Foreign National or Hong Kong, Macao or Taiwan Resident) for Peiming (Perry) Zheng, effective January 1, [removed: 2021](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000023/exhibit10342020-12x3110xk.htm)[,] [added: 2021,] incorporated by reference to Exhibit [removed: 10.3](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000023/exhibit10342020-12x3110xk.htm)[4](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000023/exhibit10342020-12x3110xk.htm) [of] [added: 10.34 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/exhibit10342020-12x3110xk.htm) | | |

| | | | | | | [Suspension of Rights Agreement to the Revolving Credit Agreement, incorporated by reference to Exhibit 10.4 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, [removed: 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000062/exhibit1042021-09x3010xq.htm)] [added: 2021;](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000062/exhibit1042021-09x3010xq.htm)] | | |

| 10.32 | | | | | | [removed: [Employment Contract] [added: [Service Agreement] between [added: Zardoya] Otis [removed: Elevator Worldwide SRL] [added: S.A] and Bernardo Calleja Fernández, dated January [removed: 29,] [added: 26,] 2021, incorporated by reference to Exhibit [removed: 10.2] [added: 10.3] 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, [removed: 2021;](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000034/exhibit1022021-03x3110xq.htm)] [added: 2021;](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000034/exhibit1032021-03x3110xq.htm)] | | |

| 10.33 | | | | | | [removed: [Service Agreement] [added: [Employment Contract] between [removed: Zardoya] Otis [removed: S.A] [added: International Sàrl] and Bernardo Calleja Fernández, [removed: dated January 26,] [added: effective November 15,] 2021, incorporated by reference to Exhibit [removed: 10.3] [added: 10.34] to Otis' [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] for the [removed: quarter] [added: year] ended [removed: March] [added: December] 31, 2021 (Commission file number 001-39221) filed with the SEC on [removed: April 28, 2021;](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000034/exhibit1032021-03x3110xq.htm)] [added: February 4, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10342021-12x3110xk.htm)] | | |

| [removed: 10.35] [added: 10.34] | | | | | | [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) | | |

| [removed: 10.36] [added: 10.35] | | | | | | [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) | | |

| [removed: 10.37] [added: 10.36] | | | | | | [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) | | |

| [removed: 10.38] [added: 10.37] | | | | | | [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) | | |

| [removed: 10.40] [added: 10.38] | | | | | | [removed: [Company Guarantee Agreement, dated September 22, 2021,] [added: [Offer Letter] between Otis Worldwide Corporation and [removed: Morgan Stanley Senior Funding, Inc., as administrative agent,] [added: Abbe L. Luersman, dated March 27, 2021,] incorporated by reference to Exhibit [removed: 10.2 of Otis’ Current] [added: 10.5 to Otis' Quarterly] Report on Form [removed: 8-K] [added: 10-Q for the quarter ended September 30, 2021] (Commission file number 001-39221) filed with the SEC on [removed: September 23, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000114036121032145/ny20000774x1_ex10-2.htm)] [added: October 26, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000062/exhibit1052021-09x3010xq.htm)] | | |

| [removed: 10.42] | | | | | | [removed: [Offer] [added: [Termination] Letter [removed: between Otis Worldwide Corporation] [added: of the Services Agreement Between Zardoya Otis, S.A.] and [removed: Abbe L. Luersman,] [added: the Chairman] dated [removed: March] [added: May] 27, [removed: 2021,] [added: 2022,] incorporated by reference to Exhibit [removed: 10.5] [added: 10.2] to Otis' Quarterly Report on Form 10-Q for the quarter ended [removed: September] [added: June] 30, [removed: 2021] [added: 2022] (Commission file number 001-39221) filed with the SEC on [removed: October 26, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000178133521000062/exhibit1052021-09x3010xq.htm)] [added: July 27, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000037/exhibit1022022-06x3010xq.htm)] | | |

| 14 | | | | | | The Otis Absolutes. The Otis Absolutes may be accessed via Otis’ website at [removed: https://www.otisinvestors.com/static-files/d4712262-a281-4b8b-8430-a35803762de3] [added: https://www.otisinvestors.com/governance/governance-documents.] | | |

| [removed: 21] [added: 23] | | | | | | [removed: [Subsidiaries] [added: [Consent] of [removed: the Registrant.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit212021-12x3110xk.htm)] [added: PricewaterhouseCoopers LLP.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit232022-12x3110xk.htm)] | | |

| [removed: 23] [added: 32] | | | | | | [removed: [Consent of PricewaterhouseCoopers LLP.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit232021-12x3110xk.htm)] [added: [Section 1350 Certifications.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit322022-12x3110xk.htm)] | | |

| 24 | | | | | | [Powers of Attorney of Jeffrey H. Black, [added: Nelda J. Connors,] Kathy Hopinkah Hannan, Shailesh G. Jejurikar, Christopher J. Kearney, Judith F. Marks, Harold W. McGraw III, Margaret M.V. Preston, Shelley Stewart, Jr. and John H. [removed: Walker.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit242021-12x3110xk.htm)] [added: Walker.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit242022-12x3110xk.htm)] | | |

| 31.1 | | | | | | [Rule 13a-14(a)/15d-14(a) [removed: Certification.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit3112021-12x3110xk.htm)] [added: Certification.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit3112022-12x3110xk.htm)] | | |

| 31.2 | | | | | | [Rule 13a-14(a)/15d-14(a) [removed: Certification.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit3122021-12x3110xk.htm)] [added: Certification.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit3122022-12x3110xk.htm)] | | |

| 31.3 | | | | | | [Rule 13a-14(a)/15d-14(a) [removed: Certification.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit3132021-12x3110xk.htm)] [added: Certification.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit3132022-12x3110xk.htm)] | | |

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, [removed: 2021,] [added: 2022,] (ii) Consolidated Statements of Comprehensive Income for the three years ended December 31, [removed: 2021,] [added: 2022,] (iii) Consolidated Balance Sheets as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] (iv) Consolidated Statements of Cash Flows for the three years ended December 31, [removed: 2021,] [added: 2022,] (v) Consolidated Statements of Changes in Equity for the three years ended December 31, [removed: 2021,] [added: 2022,] (vi) Notes to Consolidated Financial Statements, and (vii) Financial Schedule of Valuation and Qualifying Accounts.

| 4.6 | | | | | | [Description of Securities, incorporated by reference to Exhibit 4.6 of 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/exhibit462021-12x3110xk.htm) | | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| | | | | | | [Extension of Letter of Assignment for Peiming (Perry) Zheng, effective January 1, 2023.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit10292022-12x3110xk.htm) | | |

| | | | | | | [Employment Contract (Foreign National or Hong Kong, Macao or Taiwan Resident) for Peiming (Perry) Zheng, effective January 1, 2023.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit10302022-12x3110xk.htm) | | |

| | | | | | | [Second Amendment dated as of April 20, 2022, to Revolving Credit Agreement, dated February 10, 2020 (as amended), among Otis Worldwide Corporation, the subsidiary borrowers party thereto, the lenders and other parties party thereto and JPMorgan Chase Bank, N.A.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000016/exhibit1012022-03x3110xq.htm)[, incorporated by referen](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000016/exhibit1012022-03x3110xq.htm)[ce to Ex](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000016/exhibit1012022-03x3110xq.htm)[hibit 10.1 to Otis' Quarterly Report on Form 10-Q for the quarter ended March 31, 2022](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000016/exhibit1012022-03x3110xq.htm) [(Commission file number 001-39221) filed wi](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000016/exhibit1012022-03x3110xq.htm)[th the SEC on](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000016/exhibit1012022-03x3110xq.htm) [April 27, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000016/exhibit1012022-03x3110xq.htm) | | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| 10.39 | | | | | | [Offer Letter, dated as of June 23, 2022, by and between Anurag Maheshwari and Otis Worldwide Corporation, incorporated by reference to Exhibit 10.1 of Otis’ Current Report on Form 8-K (Commission File No. 001-39221) filed with the Commission on June 27, 2022.](https://www.sec.gov/Archives/edgar/data/1781335/000114036122024055/brhc10039083_ex10-1.htm) | | |

| 22 | | | | | | [Subsidiary guarantors and issuers of guaranteed securities and affiliates whose securities collateralize securities of the Registrant.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133523000009/exhibit222022-12x3110xk.htm) | | |

[Table](#ie58f6088f1054085949b920a1d0e6bb5_7) [o](#ie58f6088f1054085949b920a1d0e6bb5_7)[f Content](#ie58f6088f1054085949b920a1d0e6bb5_7)[s](#ie58f6088f1054085949b920a1d0e6bb5_7)

| | | | | | | | | |

| | | | | | | [Termination of Employment Contract between Otis Elevator Worldwide SRL and Bernardo Calleja Fernández, dated November 14, 2021.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10322021-12x3110xk.htm) | | |

| 10.34 | | | | | | [Employment Contract between Otis International Sàrl and Bernardo Calleja Fernández, effective November 15, 2021.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit10342021-12x3110xk.htm) | | |

| 10.39 | | | | | | [CNMV Guarantees Issuance Agreement, dated 22 September 2021, among Opal Spanish Holdings, S.A.U., Morgan Stanley Bank AG, as CNMV guarantee provider, Morgan Stanley Bank Senior Funding, Inc., as administrative agent, and the other financial institutions from time to time party thereto, 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 23, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000114036121032145/ny20000774x1_ex10-1.htm) | | |

| 10.41 | | | | | | [Bridge Loan Credit Agreement, dated September 22, 2021, among Opal Spanish Holdings, S.A.U., Otis Worldwide Corporation, the lenders from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, 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 September 23, 2021.](https://www.sec.gov/Archives/edgar/data/1781335/000114036121032145/ny20000774x1_ex10-3.htm) | | |

| 32 | | | | | | [Section 1350 Certifications.*](https://www.sec.gov/Archives/edgar/data/1781335/000178133522000007/exhibit322021-12x3110xk.htm) | | |

| Dated: | | | February [removed: 4, 2022] [added: 3, 2023] | | | by: | | | /s/ MICHAEL P. RYAN | | |

| /s/ JUDITH F. MARKS | | | Director, Chair, President and Chief Executive Officer | | | February [removed: 4, 2022] [added: 3, 2023] | | |

| /s/ [removed: RAHUL GHAI] [added: ANURAG MAHESHWARI] | | | Executive Vice President and Chief Financial Officer | | | February [removed: 4, 2022] [added: 3, 2023] | | |

| /s/ MICHAEL P. RYAN | | | Vice President and Chief Accounting Officer | | | February [removed: 4, 2022] [added: 3, 2023] | | |

| Date: February [removed: 4, 2022] [added: 3, 2023] | | | | | | | | |

| Dated: | | | February 3, 2023 | | | by: | | | /s/ ANURAG MAHESHWARI | | |

| | | | | | | | | | Anurag Maheshwari | | |

| Anurag Maheshwari | | | | | | | | |

| /s/ NELDA J. CONNORS* | | | Director | | | | | |

| Nelda J. Connors | | | | | | | | |

| | | | | | | | | |

| Dated: | | | February 4, 2022 | | | by: | | | /s/ RAHUL GHAI | | |

| | | | | | | | | | Rahul Ghai | | |

| Rahul Ghai | | | | | | | | |