Otis Worldwide : Q3 2020 Presentation

October 26, 2020 at 09:40 am EDT

Q3 2020 Earnings Call

October 26, 2020

Forward-Looking Statements

Note: All results and expectations in this presentation reflect continuing operations unless otherwise noted.

This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide management's current expectations or plans for Otis' future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "confident" and other words of similar meaning in connection with a discussion of future operating or financial performance or the separation and distribution. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, dividends, share repurchases, tax rates and other measures of financial performance or potential future plans, strategies or transactions of Otis following its separation from United Technologies Corporation, including the estimated costs associated with the separation and distribution and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For those statements, Otis claims the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation: (1) the effect of economic conditions in the industries and markets in which Otis and its businesses operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction, the impact of weather conditions, pandemic health issues (including COVID-19 and its effects, among other things, on global supply, demand, and distribution disruptions as the outbreak continues and results in an increasingly prolonged period of travel, commercial and/or other similar restrictions and limitations), natural disasters and the financial condition of Otis' customers and suppliers; (2) challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services; (3) future levels of indebtedness, and capital spending and research and development spending; (4) future availability of credit and factors that may affect such availability, including credit market conditions and Otis' capital structure; (5) the timing and scope of future repurchases of Otis' common stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash; (6) delays and disruption in delivery of materials and services from suppliers; (7) cost reduction efforts and restructuring costs and savings and other consequences thereof; (8) new business and investment opportunities; (9) the anticipated benefits of moving away from diversification and balance of operations across product lines, regions and industries; (10) the outcome of legal proceedings, investigations and other contingencies; (11) pension plan assumptions and future contributions; (12) the impact of the negotiation of collective bargaining agreements and labor disputes;

the effect of changes in political conditions in the U.S. and other countries in which Otis and its businesses operate, including the effect of changes in U.S. trade policies or the United Kingdom's withdrawal from the European Union, on general market conditions, global trade policies and currency exchange rates in the near term and beyond; (14) the effect of changes in tax, environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which Otis and its businesses operate; (15) the ability of Otis to retain and hire key personnel; (16) the scope, nature, impact or timing of acquisition and divestiture activity, including among other things integration of acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs; (17) the expected benefits of the separation and distribution; (18) a determination by the Internal Revenue Service and other tax authorities that the distribution or certain related transactions should be treated as taxable transactions; (19) risks associated with indebtedness incurred as a result of financing transactions undertaken in connection with the separation; (20) the risk that dis-synergy costs, costs of restructuring transactions and other costs incurred in connection with the separation will exceed
Otis' estimates; and (21) the impact of the separation on Otis' businesses and Otis' resources, systems, procedures and controls, diversion of management's attention and the impact on relationships with customers, suppliers, employees and other business counterparties. The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary from those stated in forward-looking statements, see Otis' registration statements on Form 10 and Form S-3 and the reports of Otis on Forms 10-K,10-Q and 8-K filed with or furnished to the SEC from time to time. Any forward-looking statement speaks only as of the date on which it is made, and Otis assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Highlights

• Executing on long-term strategy

• New Equipment share gain, up ~70 bps1 year-to- date

• Bolt-on M&A, innovative new products, productivity and IoT expansion

• Strong liquidity position

• $1.7 billion cash balance

• Repaid $250M of debt…additional $100M planned in Q4

• Launched social initiative programs

• 'Made to Move Communities'

• 'Our Commitment to Change'

1 Based on Otis internal estimates.

Q3 orders

Salesforce Tower	The Link
Chicago, Illinois	Puteaux, France

Industry 4.0 Escalator factory opening

Optimizing China footprint

Haining, China

Q3 2020 update

Q3 2020

Results

Revised 2020

Outlook

New Equipment orders up slightly at constant currency1…down ~1% on a rolling 12- month basis
New Equipment backlog up 3% versus prior year at constant currency1
Organic1 sales down 1.2%...NE down 1.0%, Service down 1.4%
Adjusted operating profit margin1 expanded 120 bps…Service segment margin expanded 160 bps
Free cash flow1 of $311M…117% conversion
Improved organic1 sales outlook…expected to be down 2 to 3%
Adjusted operating profit1 up $30 to $40M at constant currency1…$60M improvement from the prior outlook at the midpoint
Adjusted operating profit1 margin expansion of 60 bps at the midpoint
Adjusted diluted EPS1 expected to be ~$2.42…$0.17 improvement from the prior midpoint
Free cash flow1 ~$1.15B…$100M improvement from the prior midpoint…~135% conversion1 of GAAP net income

1 See appendix for additional information regarding these non-GAAP financial measures

Q3 2020 results

($ millions, except per share amounts)

Sales

3,3133,268

Q3 2019	Q3 2020
Organic1	(1.2%)
FX	0.2%
Net divestitures/other	(0.4%)
Total net sales	(1.4%)

Operating profit

GAAP	482	454
Adjusted1	470	503
Adjusted	14.2%	15.4%

margin1
	Q3 2019	Q3 2020

Q3 adjusted operating profit1 up $33M…up $30M at constant currency1

Q3 adjusted operating profit margin1 expanded 120 bps…160 bps Service margin expansion

Diluted earnings per share

GAAP $0.73$0.61

$0.69

Adjusted1 $0.55

Q3 2019	Q3 2020
Adj. EPS drivers
Operating profit1	$0.06
Net interest1	$0.01
Tax1	$0.07

1 See appendix for additional information regarding these non-GAAP financial measures

New Equipment

($ millions)

Net sales

1,450		Y/Y
1,423	(1.9%)

Q3 2019Q3 2020

Operating profit

	GAAP	115	95	(17.4%)
	Adjusted1	114	102	(10.5%)

	Adjusted	7.9%	7.2%	(70) bps
	margin1

			Q3 2019	Q3 2020
1	See appendix for additional information regarding these non-GAAP financial measures.
2	Based on Otis internal estimates.

Q3 Results

Orders up slightly at constant currency1
…down ~1% on a rolling 12-month basis
Share up ~40 bps2 …YTD share up ~70 bps2
New Equipment backlog up 3% at constant currency1
Organic1 sales down 1.0%
- Americas down slightly
- EMEA down 2.2%
- Asia down 0.4%…China up MSD
Adjusted operating profit1 down $9M at constant currency1…material productivity and cost containment offset by mix, field inefficiencies and under-absorption

Service

($ millions)

Net sales

		Y/Y
1,863	1,845	(1.0%)

Q3 2019Q3 2020

Operating profit

GAAP	407	409	0.5%
Adjusted1	397	422	6.3%

Adjusted		22.9%	+ 160 bps
margin1	21.3%


		Q3 2019	Q3 2020

1 See appendix for additional information regarding these non-GAAP financial measures.

Q3 Results

Maintenance units up 1% versus prior year
Modernization orders down 7.3% at constant currency1...up double digits in Asia
Organic1 sales down 1.4%
- Maintenance & Repair down 1.3%
- Modernization down 2.1%
Adjusted operating profit1 at constant currency1 up $19M with margin1 expansion of 140 basis points…strong contribution from productivity and cost containment

2020 financial outlook

Improving 2020 outlook across key metrics

Prior outlook		Current outlook

Organic1 sales

Adjusted operating

profit1

Adjusted net

income & EPS1

Free cash flow1 &

capital deployment

Otis down 2 to 4%

New Equipment down mid to high single digits

Service flat to down low single digits

Constant currency1 flat to down $50M Actual currency down $40 to $100M

Adjusted net income1 $955 to $1,000M

Adjusted EPS1 $2.20 to $2.30

Free cash flow1 $1.0 to 1.1B

2020 Debt repayment $350M

Dividend payout ratio ~40%

Otis down 2 to 3%

New Equipment down mid single digits

Service flat to down slightly

Constant currency1 up $30 to $40M

Actual currency up $5 to $15M

Adjusted net income1 ~$1,050M

Adjusted EPS1 ~$2.42

Free cash flow1 ~$1.15B

2020 Debt repayment $350M

Quarterly dividend per share $0.20

1 See appendix for additional information regarding these non-GAAP financial measures.

2020 organic1 sales outlook

	Prior outlook (July 28, 2020)	Updated outlook

New Equipment	down mid to high single	down mid single

Americas	down mid single to ~10%	down mid single

EMEA	down high single	down mid to high single

Asia	down mid single	down low to mid single

Service	flat to down low single	flat to down slightly

Maintenance & repair	flat to down slightly	flat to down slightly

Modernization	flat to down low single	~flat

Otis	down 2 to 4%	down 2 to 3%

1 See appendix for additional information regarding these non-GAAP financial measures.

Sequential improvement in Q4 at the midpoint & high-end

Faster than expected New Equipment recovery in all major regions…Q4 growth at the midpoint & high-end
Resilient maintenance business
Stronger than expected modernization demand in Asia Pacific

2020 adjusted operating profit1 drivers

				up $30 to $40M			up
						$30 - 40M	~$(25M)	$5 to $15M

			$(60) - (70M)		$60 - 70M

			Volume & mix		Cost containment	Cost containment		$1,877 - 1,887M

	$1,872M		Under-absorption		Service productivity	Transactional FX


			Pricing & bad debt		Volume

			Material productivity		Price concessions &

			Cost containment		bad debt

	2019 adjusted		New Equipment		Service	Corporate/other	FX2	2020 adjusted
	operating profit 1							operating
	vs. prior outlook							profit1outlook
		+$10M		+$35M	+$15M	+$20M	+$80M
	(at the midpoint)

1 See appendix for additional information regarding these non-GAAP financial measures.
2 Assumes prospective EUR @ 1.15 and CNY @ 7.00

	© 2020 OTIS WORLDWIDE CORPORATION.				10

Capital deployment outlook

($billions)

2020 Sources and uses of cash

Q3 2020 Leverage

Cash

$1.7

~ 0.35

~ 1.15

~ 0.26

~ 1.75

Debt

$6.1

~ 1.4

~ 0.2

Net debt /

2.1x

EBITDA1,2

2019

Debt

Dividends

NCI / M&A / 2020 free cash

2020

ending cash

repayment

(Q2-Q4)

other

flow1outlook

estimated

balance

cash balance

1 See appendix for additional information regarding these non-GAAP financial measures.

2 Trailing 12 months adjusted earnings before interest, taxes, depreciation and amortization.

Otis fundamentals1

Iconic global brand in a large, growing industry

	Sustainable growth over the medium-term	Gaining share in NE2

	Expanding Service portfolio	Expanding margins through productivity

	Investing through the cycle	Sustainable level of R&D and Capex

	Robust free cash flow3 generation	>100% FCF conversion3

	Focus on creating shareholder value	~40% dividend payout4

1	Based on Otis' current expectations.
2	Based on Otis internal estimates.
3	See appendix for additional information regarding these non-GAAP financial measures.
4 As a percentage of GAAP net income.
		© 2020 OTIS WORLDWIDE CORPORATION.	12

Appendix

Backlog and orders

($billions, at constant currency1)

Remaining performance obligation

				Y/Y
16.2	16.3	16.5	+ 2%
Modernization			+ 1%
Maintenance			+ 1%
& Repair

New Equipment			+ 3%

	Q3	Q2	Q3
2019	2020	2020

New Equipment orders

	Q3 2020	12-month
Region	Y/Y	rolling

Total Otis	0.1%	(1.2%)

Americas	(4.7%)	1.2%

EMEA	4.2%	(1.7%)

Asia	1.7%	(2.4%)

1 See additional information regarding these non-GAAP financial measures.

Appendix

Q3 2020 adjusted operating profit1 drivers

+$30M at constant currency1

$3M

$20M

$(9)M$19M

		Under absorption /		Productivity	Cost containment	$503M

		field inefficiencies		Cost containment	Transactional FX
$470M		Mix		Volume


	Material productivity		Pricing concessions

Cost containment

Q3 2019 adjusted	New	Service	Corporate /	FX	Q3 2020 adjusted
operating profit 1	Equipment		Other		operating profit 1

120 basis points of adjusted operating profit margin1 expansion

1 See additional information regarding these non-GAAP financial measures.

Appendix

Year-to-date 2020 results

($ millions, except per share amounts)

Sales

9,7659,263

YTD 2019	YTD 2020
Organic1	(3.3%)
FX	(1.4%)
Net divestitures	(0.4%)
Total net sales	(5.1%)

Operating profit

GAAP	1,378	1,199
Adjusted1	1,399	1,410
Adjusted	14.3%	15.2%

margin1
	YTD 2019	YTD 2020

YTD adjusted operating profit1 up $11M…up $33M at constant currency1

YTD adjusted operating profit margin1 expanded 90 bps to 15.2%

Diluted earnings per share

GAAP	$2.07	$1.51
Adjusted1	$1.77	$1.86

YTD 2019	YTD 2020
Adj. EPS drivers
Operating profit1	$0.02
Net interest1	$0.04
Tax1	$0.05
NCI	($0.02)

1 See additional information regarding these non-GAAP financial measures

Appendix

New Equipment

($ millions)

Net sales

4,221		Y/Y
3,840	(9.0%)

YTD 2019YTD 2020

Operating profit

GAAP	312	238	(23.7%)
Adjusted1	320	258	(19.4%)

Adjusted	7.6%	6.7%	(90) bps
margin1


		YTD 2019	YTD 2020

See additional information regarding these non-GAAP financial measures.
Based on Otis internal estimates.

YTD Results

Orders down 2.4% at constant currency1
Share up ~70 bps2
Organic1 sales down 7.0%
- Americas down 9.7%
- EMEA down 9.4%
- Asia down 3.5%
Adjusted operating profit1 down $52M at constant currency1

Appendix

Service

($ millions)

Net sales

		Y/Y
5,544	5,423	(2.2%)

YTD 2019YTD 2020

Operating profit

GAAP	1,181	1,190	0.8%
Adjusted1	1,180	1,216	3.1%
Adjusted	21.3%	22.4%	+ 110 bps
margin1

YTD 2019YTD 2020

1 See additional information regarding these non-GAAP financial measures.

YTD Results

Modernization orders down 2.9% at constant currency1
Organic1 sales down 0.5%
- Maintenance & Repair down 0.8%
- Modernization up 0.9%
Adjusted operating profit1 up $47M at constant currency1 with margin1 expansion of 110 basis points

Appendix

Additional information

	Prior FY20 outlook (July 28, 2020)	FY20 outlook

Standalone cost	~$150M	~$130M
	(~$175M run rate)	(~$175M run rate)
Restructuring expense	$70 - 80M	$70 - 80M
Non-service pension expense	$5 - 15M	~$5M
Net interest expense	~$135M	~$125M
Adjusted effective tax rate	~31.5%	~30.5%
Noncontrolling interest expense	~$160M	~$165M
Capital expenditures	$170 - 200M	~$180M
Diluted shares outstanding	~434M	~435M

Appendix

Use and Definitions of Non-GAAP

Financial Measures

Otis Worldwide Corporation ("Otis") reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides investors with additional useful information, but should not be considered in isolation or as substitutes for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. A reconciliation of the non-GAAP measures (referenced in this press release) to the corresponding amounts prepared in accordance with GAAP appears in the attached tables. These tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.

Organic sales, adjusted selling, general and administrative ("SG&A") expense, earnings before interest taxes and depreciation ("EBITDA"), adjusted EBITDA, adjusted operating profit, adjusted net income, adjusted diluted earnings per share ("EPS"), adjusted effective tax rate and free cash flow are non-GAAP financial measures.

Organic sales represents consolidated net sales (a GAAP measure), excluding the impact of foreign currency translation, acquisitions and divestitures completed in the preceding twelve months and other significant

items of a non-recurring and/or nonoperational nature ("other significant items"). Management believes organic sales is a useful measure in providing period-to-period comparisons of the results of the Company's

ongoing operational performance.

Adjusted SG&A expense represents SG&A expense (a GAAP measure), excluding restructuring costs, other significant items and allocated costs for certain functions and services previously performed by United Technologies Corporation ("UTC") prior to our separation ("UTC allocated costs") and including estimated standalone public company costs, as though Otis' operations had been conducted independently from UTC ("standalone costs"). Standalone costs for the 2019 fiscal year are based on quarterly estimates determined during Otis' annual planning process for the 2020 fiscal year.

Adjusted operating profit represents income from continuing operations (a GAAP measure), excluding restructuring costs, other significant items and allocated costs for certain functions and UTC allocated costs and including estimated standalone public company costs.

Adjusted net income represents net income from continuing operations (a GAAP measure), excluding restructuring costs and other significant items and UTC allocated costs and including estimated standalone public company costs, estimated adjustments to non-service pension expense, net interest expense and income tax expense as if Otis was a standalone public company ("standalone operating income adjustments"). Adjusted EPS represents diluted earnings per share from continuing operations (a GAAP measure), adjusted for the per share impact of restructuring, other significant items and standalone operating income adjustments.

The adjusted effective tax rate represents the effective tax rate (a GAAP measure) adjusted for the tax impact of restructuring costs, significant items and the tax impact of the additional adjustments (estimated standalone public company costs, interest expense and non-service pension expense).

EBITDA represents net income from operations (a GAAP measure), adjusted for noncontrolling interests, income tax expense, net interest expense, non-service pension expense and depreciation and amortization. Adjusted EBITDA represents EBITDA, as calculated above, adjusted for the impact of restructuring, other significant items and UTC allocated costs including estimated standalone public company costs. Management believes that adjusted SG&A, EBITDA, adjusted EBITDA, adjusted operating profit, adjusted net income, adjusted EPS and the adjusted effective tax rate are useful measures in providing period-to-period comparisons of the results of the Company's ongoing operational performance as if it had been a standalone public company.

Additionally, GAAP financial results include the impact of changes in foreign currency exchange rates (AFX). We use the non-GAAP measure "at constant currency" or "CFX" to show changes in our financial results without giving effect to period-to-period currency fluctuations. Under U.S. GAAP, income statement results are translated in U.S. dollars at the average exchange rate for the period presented. Management believes that this non-GAAP measure is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing Otis' ability to fund its activities, including the financing of acquisitions, debt service, repurchases of common stock and distribution of earnings to shareholders.

When we provide our expectations for organic sales, adjusted operating profit, adjusted net income, adjusted effective tax rate, adjusted EPS and free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures (expected diluted EPS from continuing operations, operating profit, the effective tax rate, net sales and expected cash flow from operations) generally is not available without unreasonable effort due to potentially high variability, complexity and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.

Appendix

Pro forma standalone financials reconciliation

($millions)

Reflects costs for certain functions and services performed by UTC organizations that are allocated to Otis for purposes of carve-out financial statements.
Adjustments have been made to 2019 to represent estimated standalone public company costs, as though Otis' operations had been conducted independently from UTC. 2020 costs are reflected as a part of GAAP operating profit and are not adjusted.
Non-servicepension expenses included in GAAP net income attributable to Otis includes amounts associated with Otis' participation in UTC retained pension plans. The amounts related to these plans are removed from Otis' results for the 2019 year, as though Otis' operations have been conducted independently from UTC.
2019 Net Interest reflects adjustments as though Otis' February 2020 debt issuance took place in 2019.
The adjusted effective tax rate represents the effective tax rate (a GAAP measure)adjusted for the tax impact of restructuring costs, other significant items and the tax impact of the additional adjustments (standalone costs, additional interest expense and non-service pension expenses)

Appendix

Organic sales reconciliation

Q3 2020	Total Otis	New	Service	Maintenance	Modernization
Equipment	& Repair

Organic	(1.2%)	(1.0%)	(1.4%)	(1.3%)	(2.1%)
FX	0.2%	(0.3%)	0.7%	0.7%	0.6%
Net acquisitions / divestitures	(0.2%)	(0.1%)	(0.3%)	(0.1%)	(0.9%)
Other	(0.2%)	(0.5%)	0.0%	0.0%	0.0%

Total net sales growth	(1.4%)	(1.9%)	(1.0%)	(0.7%)	(2.4%)


YTD 2020	Total Otis	New	Service	Maintenance	Modernization
Equipment	& Repair

Organic	(3.3%)	(7.0%)	(0.5%)	(0.8%)	0.9%
FX	(1.4%)	(1.7%)	(1.1%)	(1.1%)	(0.9%)
Net acquisitions / divestitures	(0.4%)	(0.1%)	(0.6%)	(0.4%)	(1.5%)
Other	0.0%	(0.2%)	0.0%	0.0%	0.0%

Total net sales growth	(5.1%)	(9.0%)	(2.2%)	(2.3%)	(1.5%)


	© 2020 OTIS WORLDWIDE CORPORATION.					23

Appendix

Adjusted operating profit at constant currency reconciliation

($millions)	Q3 2019	Q3 2020	Y/Y		YTD 2019	YTD 2020	Y/Y
New Equipment
Adjusted operating profit	114	102	(12)	320	258	(62)
Impact of foreign exchange		3	3			10	10

Adjusted operating profit at constant currency		105	(9)			268	(52)

Service
Adjusted operating profit	397	422	25	1,180	1,216	36
Impact of foreign exchange		(6)	(6)			11	11

Adjusted operating profit at constant currency		416	19	1,180	1,227	47

Otis Consolidated
Adjusted operating profit	470	503	33	1,399	1,410	11
Impact of foreign exchange		(3)	(3)			22	22

Adjusted operating profit at constant currency		500	30			1,432	33

	© 2020 OTIS WORLDWIDE CORPORATION.							24

Appendix

SG&A reconciliation

($millions)	Q3 2019	Q3 2020	YTD 2019	YTD 2020
SG&A expense	444	481	1,329	1,387
Restructuring	(1)	(11)	(26)	(27)
One-time separation costs	(7)	(18)	(10)	(69)
UTC allocated corporate expenses (a)	(20)	0	(56)	(16)
Standalone public company costs (b)	37	0	95	(1)
Other	2	(1)	1	(2)

Adjusted SG&A	455	451	1,333	1,272

Reflects costs for certain functions and services performed by UTC organizations that are allocated to Otis for purposes of carve-out financial statements.
Adjustments have been made to 2019 to represent estimated standalone public company costs, as though Otis' operations had been conducted independently from UTC. 2020 costs are reflected as a part of GAAP operating profit and are not adjusted.

Appendix

Diluted earnings per share reconciliation

	Q3 2019	Q3 2020	YTD 2019	YTD 2020

GAAP diluted earnings per share	$0.73	$0.61	$2.07	$1.51

Impact of non-recurring items on diluted earnings per share	($0.18)	$0.08	($0.30)	$0.35

Adjusted diluted earnings per share	$0.55	$0.69	$1.77	$1.86

Appendix

Free cash flow1 reconciliation

($millions)	Q3 2019	Q3 2020	YTD 2019	YTD 2020
Operating cash flow1	364	348	1,015	1,171
Capital expenditures	(35)	(37)	(98)	(112)

Free cash flow1	329	311	917	1,059

GAAP net income	317	266	898	655
FCF conversion	104%	117%	102%	162%

1 Operating cash flow excludes dividends paid to noncontrolling interests.

Appendix

Other reconciliations

Trailing 12-month EBITDA

($millions)	Q4	Q1	Q2	Q3
2019	2020	2020	2020

Net income attributable to Otis	218	165	224	266
Noncontrolling interest	36	37	41	44
Income tax expense	183	125	109	103
Net interest expense	-6	5	41	39
Non-service pension expense	5	-3	1	2
Depreciation & amortization	45	43	49	48
EBITDA	481	372	465	502
Restructuring	10	6	20	20
Loss on disposal of businesses	8	0	0	0
One-time separation costs	33	32	21	29
Fixed asset impairment	0	67	0	0
UTC allocated corporate expenses (a)	24	16	0	0
Standalone public company costs (b)	-42	0	0	0
Other	4	0	0	0
Adjusted EBITDA	518	493	506	551
Trailing 12 month adjusted EBITDA (c)				2,068

Remaining performance obligation (RPO)

($billions)	Q3	Q2	Q3
2019	2020	2020

RPO at actual currency	16.2	16.4	16.9
FX	0.0	(0.1)	(0.4)

RPO at constant currency	16.2	16.3	16.5

New Equipment backlog

Growth %	Q3
2020

Constant currency	3%
FX	2%

Actual currency	5%

Reflects costs for certain functions and services performed by UTC organizations that are allocated to Otis for purposes of carve-out financial statements.
Adjustments have been made to 2019 to represent estimated standalone public company costs, as though Otis' operations had been conducted independently from UTC. 2020 costs are reflected as a part of GAAP operating profit and are not adjusted.
Our revolving and term loan credit agreements require that we maintain a maximum consolidated leverage ratio, commencing with the test period ending September 30, 2020. Please review our credit agreements as filed with the SEC from time to time for more information regarding the adjustments and other terms related to the calculation of such ratio, which differ in certain respects from Adjusted EBITDA provided herein.

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Otis Worldwide Corporation published this content on 23 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2020 13:39:06 UTC

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Transcript : Otis Worldwide Corporation, Q1 2024 Earnings Call, Apr 24, 2024	Apr. 24
Otis Worldwide's Q1 Adjusted Earnings, Sales Rise; Updates 2024 Outlook	Apr. 24	MT
Liftmaker Otis beats first-quarter profit estimates on high demand for maintenance	Apr. 24	RE
Earnings Flash (OTIS) OTIS WORLDWIDE CORPORATION Reports Q1 Revenue $3.44B, vs. Street Est of $3.46B	Apr. 24	MT
Earnings Flash (OTIS) OTIS WORLDWIDE CORPORATION Posts Q1 EPS $0.88, vs. Street Est of $0.86	Apr. 24	MT
Otis Worldwide Corporation Provides Earnings Guidance for the Full Year of 2024	Apr. 24	CI
Otis Worldwide Lifts Quarterly Dividend by Almost 15% to $0.39 a Share, Payable June 7 to Holders of Record May 17	Apr. 23	MT
Otis Worldwide Corporation Announces Quarterly Dividend, Payable on June 7, 2024	Apr. 23	CI
Otis Worldwide Greenhouse Gas Reduction Targets Gain Science Based Targets Initiative's Approval	Apr. 22	MT
RBC Adjusts Price Target on Otis Worldwide to $110 From $100, Maintains Outperform Rating	Apr. 15	MT
China to speed up 'new productive forces', vice president says	Mar. 26	RE
Otis Worldwide Wins Contract to Modernize Elevators, Escalators in Burj Khalifa	Mar. 06	MT
Otis Worldwide Corporation Wins Modernization Project and 10-Year Service Contract Extension for Burj Khalifa	Mar. 06	CI
North American Morning Briefing : S&P 500 Futures -2-	Feb. 23	DJ
Argus Upgrades Otis Worldwide to Buy From Hold With $102 Price Target	Feb. 22	MT
Otis Worldwide Insider Sold Shares Worth $2,008,832, According to a Recent SEC Filing	Feb. 21	MT
Otis Worldwide Insider Sold Shares Worth $319,680, According to a Recent SEC Filing	Feb. 21	MT
UBS Adjusts Otis Worldwide Price Target to $95 From $87, Maintains Neutral Rating	Feb. 16	MT
Otis Worldwide Reiterates 2024 Adjusted Earnings Growth Outlook of Up to 10%	Feb. 15	MT
Transcript : Otis Worldwide Corporation - Analyst/Investor Day	Feb. 15
Otis Worldwide Insider Sold Shares Worth $3,426,361, According to a Recent SEC Filing	Feb. 08	MT
Otis Worldwide a 'High Quality' Company Following Q4 Results, RBC Says	Feb. 05	MT
Otis Worldwide Keeps Quarterly Dividend at $0.34 a Share, Payable March 8 to Shareholders as of Feb.16	Feb. 01	MT

	1st Jan change	Capi.
OTIS WORLDWIDE CORPORATION	+4.36%	37.74B
SCHINDLER HOLDING AG	+11.53%	26.49B
DAIFUKU CO., LTD.	+10.60%	7.77B
INTERROLL HOLDING AG	+10.49%	2.66B
KARDEX HOLDING AG	+11.93%	2.06B
FUJITEC CO., LTD.	+4.33%	1.91B
SHANGHAI MECHANICAL & ELECTRICAL INDUSTRY CO.,LTD.	+7.92%	1.63B
GUANGZHOU GUANGRI STOCK CO.,LTD.	+56.87%	1.37B
ATLANTIS GLORY INC.	-99.92%	1.24B
HYUNDAI ELEVATOR CO., LTD	-9.81%	1.05B

Otis Worldwide Corporation

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OTIS

US68902V1070

Heavy Electrical Equipment

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Sector Elevator & Conveying Equipment