Otis Worldwide Corp (OTIS) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that Otis Worldwide Corp surfaced in its latest filing.

• As of December 31, 2025, the company had $7.7 billion in outstanding long-term debt.December 31, 2025
• The company is subject to ongoing civil cartel claims for overcharges on elevators and escalators in certain European countries.
• Otis Elevator (China) Investment Limited is a joint venture in China.
• The company is subject to the U.S. Foreign Corrupt Practices Act (FCPA) and other anti-corruption laws.
• The company complies with the Export Administration Regulations administered by the U.S. Department of Commerce and embargoes and sanctions regulations administered by the U.S. Department of the Treasury.
• The company is subject to Section 203 of the Delaware General Corporation Law, which imposes a three-year moratorium on business combinations with persons acquiring more than 15% of outstanding voting stock.
• The company's amended and restated bylaws designate Delaware state courts as the sole and exclusive forum for certain legal claims, including derivative actions and breaches of fiduciary duty.
• The company has indemnification obligations to RTX and Carrier under the Separation Agreement, Tax Matters Agreement (TMA), and Employee Matters Agreement (EMA), which are not subject to any cap.
• The Internal Revenue Service (IRS) ruling and tax opinion related to the Separation are not binding on the IRS or any court.
• If the distribution fails Sections 355 and 368(a)(1)(D) of the Internal Revenue Code, RTX would recognize taxable gain as if it sold Otis common stock for fair market value.
• Under Section 355(e) of the Internal Revenue Code, if the Separation is part of a plan involving acquisitions of 50% or greater interest in RTX or Otis, RTX could recognize taxable gain.
• UTC obtained non-U.S. tax rulings and external advisor opinions for internal reorganization transactions based on representations including valuation matters.
• The UpLift cost reduction, restructuring, and transformation program is ongoing.
• The China business is undergoing reorganization, transformation, and outsourcing activities.