Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 16, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39221 | |
Entity Registrant Name | OTIS WORLDWIDE CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-3789412 | |
Entity Address, Address Line One | One Carrier Place | |
Entity Address, City or Town | Farmington | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06032 | |
City Area Code | 860 | |
Local Phone Number | 674-3000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 409,258,823 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001781335 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock ($0.01 par value) | |
Trading Symbol | OTIS | |
Security Exchange Name | NYSE | |
0.000% Notes due 2023 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 0.000% Notes due 2023 | |
Trading Symbol | OTIS/23 | |
Security Exchange Name | NYSE | |
0.318% Notes due 2026 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 0.318% Notes due 2026 | |
Trading Symbol | OTIS/26 | |
Security Exchange Name | NYSE | |
0.934% Notes due 2031 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 0.934% Notes due 2031 | |
Trading Symbol | OTIS/31 | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net sales: | ||||
Revenues | $ 3,523 | $ 3,344 | $ 10,589 | $ 10,246 |
Costs and expenses: | ||||
Research and development | 36 | 37 | 107 | 112 |
Selling, general and administrative | 452 | 417 | 1,386 | 1,315 |
Costs and expenses | 2,965 | 2,827 | 8,957 | 8,713 |
Other income (expense), net | 13 | 12 | 32 | 9 |
Operating profit | 571 | 529 | 1,664 | 1,542 |
Non-service pension cost (benefit) | 0 | 1 | 1 | 2 |
Interest expense (income), net | 39 | 35 | 109 | 107 |
Net income before income taxes | 532 | 493 | 1,554 | 1,433 |
Income tax expense | 137 | 143 | 400 | 382 |
Net income | 395 | 350 | 1,154 | 1,051 |
Less: Noncontrolling interest in subsidiaries' earnings | 19 | 26 | 71 | 95 |
Net income attributable to Otis Worldwide Corporation | $ 376 | $ 324 | $ 1,083 | $ 956 |
Earnings per share (Note 2): | ||||
Basic (in usd per share) | $ 0.92 | $ 0.77 | $ 2.62 | $ 2.27 |
Diluted (in usd per share) | $ 0.91 | $ 0.77 | $ 2.60 | $ 2.25 |
Weighted average number of shares outstanding: | ||||
Basic shares (in shares) | 410,800,000 | 418,500,000 | 412,600,000 | 421,300,000 |
Diluted shares (in shares) | 413,700,000 | 421,200,000 | 415,800,000 | 424,300,000 |
Product sales | ||||
Net sales: | ||||
Revenues | $ 1,435 | $ 1,447 | $ 4,346 | $ 4,403 |
Costs and expenses: | ||||
Cost of products and services sold | 1,195 | 1,208 | 3,621 | 3,689 |
Service sales | ||||
Net sales: | ||||
Revenues | 2,088 | 1,897 | 6,243 | 5,843 |
Costs and expenses: | ||||
Cost of products and services sold | $ 1,282 | $ 1,165 | $ 3,843 | $ 3,597 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 395 | $ 350 | $ 1,154 | $ 1,051 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 33 | 151 | (71) | 56 |
Pension and postretirement benefit plan adjustments | 0 | 2 | 0 | 6 |
Change in unrealized cash flow hedging | 2 | (4) | (1) | (4) |
Other comprehensive income (loss), net of tax | 35 | 149 | (72) | 58 |
Comprehensive income (loss), net of tax | 430 | 499 | 1,082 | 1,109 |
Less: Comprehensive (income) loss attributable to noncontrolling interest | (13) | (7) | (55) | 30 |
Comprehensive income attributable to Otis Worldwide Corporation | $ 417 | $ 492 | $ 1,027 | $ 1,139 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 1,636 | $ 1,189 |
Accounts receivable (net of allowance for expected credit losses of $126 and $152) | 3,455 | 3,357 |
Contract assets | 733 | 664 |
Inventories | 624 | 617 |
Other current assets | 301 | 316 |
Total Current Assets | 6,749 | 6,143 |
Future income tax benefits | 290 | 285 |
Fixed assets (net of accumulated depreciation of $1,196 and $1,151) | 708 | 719 |
Operating lease right-of-use assets | 417 | 449 |
Intangible assets, net | 336 | 369 |
Goodwill | 1,547 | 1,567 |
Other assets | 343 | 287 |
Total Assets | 10,390 | 9,819 |
Liabilities and Equity (Deficit) | ||
Short-term borrowings and current portion of long-term debt | 585 | 670 |
Accounts payable | 1,655 | 1,717 |
Accrued liabilities | 1,725 | 1,794 |
Contract liabilities | 2,784 | 2,662 |
Total Current Liabilities | 6,749 | 6,843 |
Long-term debt | 6,822 | 6,098 |
Future pension and postretirement benefit obligations | 390 | 392 |
Operating lease liabilities | 293 | 315 |
Future income tax obligations | 258 | 279 |
Other long-term liabilities | 488 | 556 |
Total Liabilities | 15,000 | 14,483 |
Commitments and contingent liabilities (Note 16) | ||
Redeemable noncontrolling interest | 123 | 135 |
Shareholders' Equity (Deficit): | ||
Common Stock and additional paid-in capital | 198 | 162 |
Treasury Stock | (2,155) | (1,575) |
Accumulated deficit | (2,183) | (2,865) |
Accumulated other comprehensive income (loss) | (648) | (592) |
Total Shareholders' Equity (Deficit) | (4,788) | (4,870) |
Noncontrolling interest | 55 | 71 |
Total Equity (Deficit) | (4,733) | (4,799) |
Total Liabilities and Equity (Deficit) | $ 10,390 | $ 9,819 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for expected credit losses | $ 126 | $ 152 |
Accumulated depreciation | $ 1,196 | $ 1,151 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Total | Total Shareholders' (Deficit) Equity | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Beginning balance at Dec. 31, 2021 | $ (3,144) | $ (3,625) | $ 119 | $ (725) | $ (2,256) | $ (763) | $ 481 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,038 | 956 | 956 | 82 | |||
Other comprehensive income (loss), net of tax, and foreign currency reclassifications | 166 | 183 | 183 | (17) | |||
Stock-based compensation and Common Stock issued under employee plans | 31 | 31 | 32 | (1) | |||
Cash dividends declared | (345) | (345) | (345) | ||||
Repurchase of Common Shares | (700) | (700) | (700) | ||||
Dividends attributable to noncontrolling interest | (80) | (80) | |||||
Reclassification of noncontrolling interest to redeemable noncontrolling interest | (1,885) | (1,482) | (1,482) | (403) | |||
Acquisitions, disposals and other changes | 58 | 69 | (17) | 86 | (11) | ||
Ending balance at Sep. 30, 2022 | (4,861) | (4,913) | 134 | (1,425) | (3,042) | (580) | 52 |
Beginning balance at Dec. 31, 2021 | 160 | ||||||
Redeemable Noncontrolling Interest | |||||||
Net income | 13 | ||||||
Other comprehensive income (loss), net of tax | (108) | ||||||
Dividends attributable to noncontrolling interest | (11) | ||||||
Reclassification of noncontrolling interest to redeemable noncontrolling interest | 1,476 | ||||||
Acquisitions, disposals and other changes | (1,402) | ||||||
Ending balance at Sep. 30, 2022 | 128 | ||||||
Beginning balance at Jun. 30, 2022 | (4,888) | (4,997) | 121 | (1,125) | (3,245) | (748) | 109 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 348 | 324 | 324 | 24 | |||
Other comprehensive income (loss), net of tax, and foreign currency reclassifications | 159 | 168 | 168 | (9) | |||
Stock-based compensation and Common Stock issued under employee plans | 13 | 13 | 13 | ||||
Cash dividends declared | (121) | (121) | (121) | ||||
Repurchase of Common Shares | (300) | (300) | (300) | ||||
Dividends attributable to noncontrolling interest | (68) | (68) | |||||
Acquisitions, disposals and other changes | (4) | (4) | |||||
Ending balance at Sep. 30, 2022 | (4,861) | (4,913) | 134 | (1,425) | (3,042) | (580) | 52 |
Beginning balance at Jun. 30, 2022 | 136 | ||||||
Redeemable Noncontrolling Interest | |||||||
Net income | 2 | ||||||
Other comprehensive income (loss), net of tax | (10) | ||||||
Ending balance at Sep. 30, 2022 | 128 | ||||||
Beginning balance at Dec. 31, 2022 | (4,799) | (4,870) | 162 | (1,575) | (2,865) | (592) | 71 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,147 | 1,083 | 1,083 | 64 | |||
Other comprehensive income (loss), net of tax, and foreign currency reclassifications | (63) | (56) | (56) | (7) | |||
Stock-based compensation and Common Stock issued under employee plans | 35 | 35 | 36 | (1) | |||
Cash dividends declared | (400) | (400) | (400) | ||||
Repurchase of Common Shares | (580) | (580) | (580) | ||||
Dividends attributable to noncontrolling interest | (70) | (70) | |||||
Acquisitions, disposals and other changes | (3) | (3) | |||||
Ending balance at Sep. 30, 2023 | (4,733) | (4,788) | 198 | (2,155) | (2,183) | (648) | 55 |
Beginning balance at Dec. 31, 2022 | 135 | ||||||
Redeemable Noncontrolling Interest | |||||||
Net income | 7 | ||||||
Other comprehensive income (loss), net of tax | (9) | ||||||
Dividends attributable to noncontrolling interest | (9) | ||||||
Acquisitions, disposals and other changes | (1) | ||||||
Ending balance at Sep. 30, 2023 | 123 | ||||||
Beginning balance at Jun. 30, 2023 | (4,751) | (4,852) | 183 | (1,927) | (2,419) | (689) | 101 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 393 | 376 | 376 | 17 | |||
Other comprehensive income (loss), net of tax, and foreign currency reclassifications | 39 | 41 | 41 | (2) | |||
Stock-based compensation and Common Stock issued under employee plans | 15 | 15 | 15 | ||||
Cash dividends declared | (139) | (139) | (139) | ||||
Repurchase of Common Shares | (228) | (228) | (228) | ||||
Dividends attributable to noncontrolling interest | (61) | (61) | |||||
Acquisitions, disposals and other changes | (1) | (1) | (1) | ||||
Ending balance at Sep. 30, 2023 | (4,733) | $ (4,788) | $ 198 | $ (2,155) | $ (2,183) | $ (648) | $ 55 |
Beginning balance at Jun. 30, 2023 | 126 | ||||||
Redeemable Noncontrolling Interest | |||||||
Net income | 2 | ||||||
Other comprehensive income (loss), net of tax | (4) | ||||||
Acquisitions, disposals and other changes | (1) | ||||||
Ending balance at Sep. 30, 2023 | $ 123 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared (in usd per share) | $ 0.34 | $ 0.29 | $ 0.97 | $ 0.82 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Activities: | ||
Net income | $ 1,154 | $ 1,051 |
Adjustments to reconcile net income to net cash flows provided by operating activities, net of acquisitions and dispositions: | ||
Depreciation and amortization | 145 | 145 |
Deferred income tax expense (benefit) | (34) | 6 |
Stock compensation cost | 49 | 41 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | (214) | (171) |
Contract assets and liabilities, current | 68 | 143 |
Inventories | (8) | (80) |
Other current assets | (4) | (14) |
Accounts payable | (35) | 137 |
Accrued liabilities | (66) | (166) |
Pension contributions | (32) | (28) |
Other operating activities, net | 7 | 32 |
Net cash flows provided by (used in) operating activities | 1,030 | 1,096 |
Investing Activities: | ||
Capital expenditures | (96) | (81) |
Acquisitions of businesses and intangible assets, net of cash | (27) | (38) |
Dispositions of businesses, net of cash | 0 | 61 |
Proceeds from the sale of (investments in) marketable securities | (2) | (7) |
Receipts (payments) on settlements of derivative contracts | (21) | 121 |
Other investing activities, net | 14 | 6 |
Net cash flows provided by (used in) investing activities | (132) | 62 |
Financing Activities: | ||
Net proceeds from (repayments of) borrowings (maturities of 90 days or less) | (90) | 80 |
Proceeds from issuance of long-term debt | 747 | 0 |
Payment of debt issuance costs | (6) | 0 |
Repayment of long-term debt | 0 | (500) |
Dividends paid on Common Stock | (400) | (345) |
Repurchases of Common Stock | (575) | (700) |
Dividends paid to noncontrolling interest | (76) | (107) |
Acquisition of Zardoya Otis shares | 0 | (1,802) |
Other financing activities, net | (18) | (28) |
Net cash flows provided by (used in) financing activities | (418) | (3,402) |
Effect of exchange rate changes on cash and cash equivalents | (34) | (191) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 446 | (2,435) |
Cash, cash equivalents and restricted cash, beginning of year | 1,195 | 3,477 |
Cash, cash equivalents and restricted cash, end of period | 1,641 | 1,042 |
Less: Restricted cash | 5 | 8 |
Cash and cash equivalents | $ 1,636 | $ 1,034 |
General
General | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The Condensed Consolidated Financial Statements as of September 30, 2023 and for the quarters and nine months ended September 30, 2023 and 2022 are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the interim periods. The Condensed Consolidated Balance Sheet as of December 31, 2022 was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles ("GAAP") in the United States ("U.S."). The results reported in these Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the Company's annual consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for fiscal year 2022 ("2022 Form 10-K" or "Form 10-K"). Unless the context otherwise requires, references to "Otis," "we," "us," "our" and "the Company" refer to Otis Worldwide Corporation and its subsidiaries. There have been no changes to the Company's significant accounting policies described in the Company's 2022 Form 10-K that have a material impact on the Company's Condensed Consolidated Financial Statements and the related notes. Certain amounts presented in the prior period have been reclassified to conform to the current period presentation, which are immaterial. Use of Estimates. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. We assessed certain accounting matters that generally require consideration of forecasted financial information in the context of the information reasonably available to us and the unknown future impacts of macroeconomic developments, including inflationary pressures, higher interest rates and tighter credit conditions, as of September 30, 2023 and through the date of this report. The accounting matters assessed included, but were not limited to, our allowance for credit losses, the carrying value of our goodwill and other long-lived assets, financial assets and revenue recognition. While there was not a material impact to our Condensed Consolidated Financial Statements as of September 30, 2023 and for the quarters and nine months ended September 30, 2023 and 2022 resulting from our assessments of these matters, future assessment of our expectations of the magnitude and duration of these macroeconomic developments, as well as other factors, could result in material impacts to our Condensed Consolidated Financial Statements in future reporting periods. We also assessed certain accounting matters as they relate to the ongoing conflict between Russia and Ukraine and the war in Israel and Gaza, including, but not limited to, our allowance for credit losses, the carrying value of long-lived assets, revenue recognition and the classification of assets. There was not a material impact to our Condensed Consolidated Financial Statements as of September 30, 2023 and for the quarters and nine months ended September 30, 2023 and 2022 resulting from our assessment of these matters. We continue to assess the impact on our results of operations, financial position and overall performance as the situations develop and any broader implications they may have on the global economy. Supplier Finance Programs. On January 1, 2023, we adopted ASU No. 2022-04, Liabilities - Supplier Finance Programs (Topic 450-50) : Disclosure of Supplier Finance Program Obligations that requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period. Certain Otis subsidiaries participate in supplier finance programs, under which we agree to pay third-party financial institutions the stated amounts of confirmed invoices from suppliers on the original maturity dates of the invoices, while the participating suppliers generally have the ability to sell, or otherwise pledge as collateral, their receivables from the Company to the participating financial institutions. Our obligations to suppliers, including the amounts due and scheduled payment dates, are not impacted by the suppliers' decisions to sell their receivables to the financial institutions, or otherwise pledge their receivables as collateral, under these arrangements. The Company is not a party to the arrangements between the suppliers and the financial institutions, and the Company's payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. Based on the applicable supplier agreements, the maturity dates of these supplier invoices can range between 30 and 120 days from the invoice date. The outstanding obligations confirmed by the Company as valid to the financial institutions under our supplier finance programs were $537 million and $564 million as of September 30, 2023 and December 31, 2022, respectively. These obligations are included in Accounts payable in the Condensed Consolidated Balance Sheets, and all activity related to the obligations is presented within operating activities on the Condensed Consolidated Statements of Cash Flows. The Company or the financial institutions may terminate the agreements with advanced notice. Otis has pledged no assets in connection with its supplier finance programs. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions, except per share amounts; shares in millions) 2023 2022 2023 2022 Net income attributable to Otis Worldwide Corporation $ 376 $ 324 $ 1,083 $ 956 Impact of redeemable noncontrolling interest — — — — Net income attributable to common shareholders $ 376 $ 324 $ 1,083 $ 956 Basic weighted average number of shares outstanding 410.8 418.5 412.6 421.3 Stock awards and equity units (share equivalent) 2.9 2.7 3.2 3.0 Diluted weighted average number of shares outstanding 413.7 421.2 415.8 424.3 Earnings Per Share of Common Stock: Basic $ 0.92 $ 0.77 $ 2.62 $ 2.27 Diluted $ 0.91 $ 0.77 $ 2.60 $ 2.25 The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock appreciation rights and stock options, when the average market price of the Common Stock is lower than the exercise price of the related stock awards during the period because the effect would be anti-dilutive. In addition, the computation of diluted earnings per share excludes the effect of the potential exercise of stock awards when the awards' assumed proceeds exceed the average market price of the common shares during the period. There were 1.0 million of anti-dilutive stock awards excluded from the computation for the quarter and nine months ended September 30, 2023, and 2.4 million for the quarter and nine months ended September 30, 2022. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition We account for revenue in accordance with Accounting Standards Codification ("ASC") Topic 606: Revenue from Contracts with Customers. Contract Assets and Liabilities. Contract assets reflect revenue recognized in advance of customer billing. Contract liabilities are recognized when a customer pays consideration, or we have a right to receive an amount of unconditional consideration, in advance of the satisfaction of performance obligations under the contract. We typically receive progress payments from our customers as we perform our work over time. Total Contract assets and Contract liabilities as of September 30, 2023 and December 31, 2022 are as follows: (dollars in millions) September 30, 2023 December 31, 2022 Contract assets, current $ 733 $ 664 Total contract assets 733 664 Contract liabilities, current 2,784 2,662 Contract liabilities, non-current (included within Other long-term liabilities) 47 52 Total contract liabilities 2,831 2,714 Net contract liabilities $ 2,098 $ 2,050 Contract assets increased by $69 million during the nine months ended September 30, 2023 as a result of the progression of current contracts and timing of billing on customer contracts. Contract liabilities increased by $117 million during the nine months ended September 30, 2023 primarily due to billings on contracts in excess of revenue earned. In the nine months ended September 30, 2023 and 2022, we recognized revenue of $1.8 billion related to contract liabilities as of January 1, 2023 and 2022, respectively. Remaining Performance Obligations ("RPO"). RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of September 30, 2023, our total RPO was $17.8 billion. Of the total RPO as of September 30, 2023, we expect approximately 90% will be recognized as sales over the following 24 months. |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net consisted of the following as of September 30, 2023 and December 31, 2022: (dollars in millions) September 30, 2023 December 31, 2022 Trade receivables $ 3,295 $ 3,231 Unbilled receivables 123 103 Miscellaneous receivables 100 91 Customer financing notes receivable 63 84 3,581 3,509 Less: allowance for expected credit losses 126 152 Accounts receivable, net $ 3,455 $ 3,357 The changes in allowance for expected credit losses related to Accounts receivable, net for the nine months ended September 30, 2023 and 2022, respectively, are as follows: Nine Months Ended September 30, (dollars in millions) 2023 2022 Balance as of January 1 $ 152 $ 175 Provision for expected credit losses 21 4 Write-offs charged against the allowance for expected credit losses (42) (14) Foreign exchange and other (5) (9) Balance as of September 30 $ 126 $ 156 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following as of September 30, 2023 and December 31, 2022: (dollars in millions) September 30, 2023 December 31, 2022 Raw materials and work-in-process $ 162 $ 166 Finished goods 462 451 Total $ 624 $ 617 Raw materials, work-in-process and finished goods are net of valuation write-downs of $89 million and $96 million as of September 30, 2023 and December 31, 2022, respectively. |
Business Acquisitions, Disposal
Business Acquisitions, Disposals, Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations, Goodwill, and Intangible Assets [Abstract] | |
Business Acquisitions, Disposals, Goodwill and Intangible Assets | Business Acquisitions, Disposals, Goodwill and Intangible Assets Business Acquisitions. Our acquisitions of businesses and intangible assets, net of cash, totaled $27 million and $38 million in the nine months ended September 30, 2023 and 2022, respectively, and were primarily in our Service segment. Transaction costs incurred were not considered significant. Goodwill. Changes in our Goodwill balances during the nine months ended September 30, 2023 were as follows: (dollars in millions) Balance as of December 31, 2022 Goodwill Resulting Foreign Currency Balance as of September 30, 2023 New Equipment $ 292 $ — $ (5) $ 287 Service 1,275 6 (21) 1,260 Total $ 1,567 $ 6 $ (26) $ 1,547 Intangible Assets. Intangible assets cost and accumulated amortization were $2,010 million and $1,674 million, respectively, as of September 30, 2023, and $2,026 million and $1,657 million, respectively, as of December 31, 2022. Amortization of intangible assets for the quarter and nine months ended September 30, 2023 was $17 million and $51 million, respectively, compared to $18 million and $55 million for the same periods in 2022. Excluding the impact of currency translation adjustments, there were no other significant changes in our Intangible assets during the quarters and nine months ended September 30, 2023 and 2022. Held For Sale Assets and Liabilities. As of September 30, 2023 and December 31, 2022, assets held for sale were $11 million and $9 million, respectively, and are included in Other current assets in the Condensed Consolidated Balance Sheets. In June 2022, we entered into an agreement to sell our business in Russia to a third party, which was then sold on July 27, 2022. As of June 30, 2022, our operations in Russia, primarily in the New Equipment segment, were classified as assets and liabilities held for sale of $157 million and $136 million, respectively. The Company recorded the loss on sale and related charges of $6 million and $24 million in Other expense (income), net in the Condensed Consolidated Statements of Operations for the quarter and nine months ended September 30, 2022, respectively, including an impairment loss of $18 million related to the net assets held for sale during the nine months ended September 30, 2022. |
Borrowings and Lines of Credit
Borrowings and Lines of Credit | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings and Lines of Credit | Borrowings and Lines of Credit (dollars in millions) September 30, 2023 December 31, 2022 Commercial paper $ — $ 94 Other borrowings 54 45 Total short-term borrowings $ 54 $ 139 Commercial Paper. As of September 30, 2023, there were no borrowings outstanding under the Company's $1.5 billion commercial paper programs. We use our commercial paper borrowings for general corporate purposes including to finance acquisitions, pay dividends, repurchase shares and for debt refinancing. The need for commercial paper borrowings may arise if the use of domestic cash for general corporate purposes exceeds the sum of domestic cash generation and foreign cash repatriated to the U.S. For details regarding the Company's short-term borrowing activity in 2022, refer to Note 10 of the Company's audited consolidated financial statements and notes thereto included in our 2022 Form 10-K . Long-term debt. On March 10, 2023, the Company entered into a new credit agreement ("Credit Agreement") with various banks providing for a $1.5 billion unsecured, unsubordinated five-year revolving credit facility, with an interest rate on US Dollar denominated borrowings at Otis' option of the Term Secured Overnight Financing Rate ("SOFR") plus 0.10% or a base rate, and an interest rate on Euro denominated borrowings at Otis' option of the EURIBO rate or a daily simple Euro Short Term Rate ("ESTR"), plus, in each case, an applicable margin. The applicable margin initially is 1.25% for Term SOFR rate, EURIBO rate and daily simple ESTR rate borrowings, and 0.25% for base rate borrowings, and can fluctuate determined by reference to Otis' public debt ratings, as specified in the Credit Agreement. As of September 30, 2023, there were no borrowings under the Credit Agreement. The undrawn portion of the Credit Agreement serves as a backstop for the issuance of commercial paper. On March 10, 2023, we also terminated all commitments outstanding under the previous credit agreement, which was scheduled to expire on April 3, 2025. On August 16, 2023, we issued $750 million unsecured, unsubordinated five-year notes due August 16, 2028 (the "Notes") with an interest rate of 5.25%. The net proceeds of the Notes were used to fund the repayment of Otis' commercial paper borrowings and will be used to fund the repayment at maturity of the €500 million 0.000% notes due November 12, 2023, with the remainder used for other general corporate purposes. As of September 30, 2023, the Company is in compliance with all covenants in the revolving credit agreement and the indentures governing all outstanding long-term debt. Long-term debt consisted of the following: (dollars in millions) September 30, 2023 December 31, 2022 0.000% notes due 2023 (€500 million principal value) $ 531 $ 531 2.056% notes due 2025 1,300 1,300 0.37% notes due 2026 (¥21.5 billion principal value) 145 163 0.318% notes due 2026 (€600 million principal value) 637 638 2.293% notes due 2027 500 500 5.250% notes due 2028 750 — 2.565% notes due 2030 1,500 1,500 0.934% notes due 2031 (€500 million principal value) 531 531 3.112% notes due 2040 750 750 3.362% notes due 2050 750 750 Other (including finance leases) 4 8 Total principal long-term debt 7,398 6,671 Other (discounts and debt issuance costs) (45) (42) Total long-term debt 7,353 6,629 Less: current portion 531 531 Long-term debt, net of current portion $ 6,822 $ 6,098 We may redeem any series of notes at our option pursuant to certain terms. For additional details regarding the Company's debt activity in 2022, refer to Note 10 of the Company's audited consolidated financial statements and notes thereto included in our 2022 Form 10-K . Debt discounts and debt issuance costs are presented as a reduction of debt on the Condensed Consolidated Balance Sheets and are amortized as a component of interest expense over the term of the related debt using the effective interest method. The Condensed Consolidated Statements of Operations for the quarters and nine months ended September 30, 2023 and 2022 reflects the following: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Debt issuance costs amortization $ 2 $ 1 $ 5 $ 6 Total interest expense on external debt 38 35 105 106 The unamortized debt issuance costs as of September 30, 2023 and December 31, 2022 were $43 million and $42 million, respectively. The weighted average maturity of our long-term debt as of September 30, 2023 is approximately 7.5 years. The weighted average interest expense rate on our borrowings outstanding as of September 30, 2023 and December 31, 2022 was as follows: September 30, 2023 December 31, 2022 Short-term commercial paper —% 4.7% Total long-term debt 2.3% 2.0% The weighted average interest expense rate on our borrowings during the quarters and nine months ended September 30, 2023 and 2022 was as follows: Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Short-term commercial paper 5.4% 2.5% 5.0% 1.3% Total long-term debt 2.1% 2.0% 2.0% 2.0% |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Pension and Postretirement Plans. The Company sponsors both funded and unfunded domestic and foreign defined benefit pension and other postretirement benefit plans, and defined contribution plans. Contributions to our plans were as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Defined benefit plans $ 8 $ 7 $ 32 $ 28 Defined contribution plans 16 14 50 49 Multi-employer pension and postretirement plans 42 40 117 101 The following table illustrates the components of net periodic benefit cost for the Company's defined benefit pension plans: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Service cost $ 7 $ 10 $ 22 $ 30 Interest cost 8 4 24 13 Expected return on plan assets (8) (8) (24) (21) Recognized actuarial net loss — 3 — 8 Net settlement and curtailment (gain) loss — 1 — 1 Total net periodic benefit cost $ 7 $ 10 $ 22 $ 31 Postretirement Benefit Plans. The Company sponsors postretirement benefit plans that provide health benefits to eligible retirees. The postretirement plans are unfunded. The net periodic benefit cost was less than $1 million for the quarters and nine months ended September 30, 2023 and 2022, respectively. Stock-based Compensation. The Company adopted the 2020 Long-Term Incentive Plan (the "Plan") effective April 3, 2020. As of September 30, 2023, approximately 23 million shares remain available for awards under the Plan. Stock-based Compensation Expense The Company measures the cost of all share-based payments, including stock options, at fair value on the grant date and recognizes this cost in the Condensed Consolidated Statements of Operations over the award's applicable vesting period. A forfeiture rate assumption is applied on grant date to adjust the expense recognition for awards that are not expected to vest. Stock-based compensation expense and the resulting tax benefits were as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Stock-based compensation expense (Share Based) $ 15 $ 13 $ 49 $ 41 Stock-based compensation expense (income) (Liability Awards) — — — (1) Total gross stock-based compensation expense 15 13 49 40 Less: future tax benefit 2 2 6 5 Stock-based compensation expense, net of tax $ 13 $ 11 $ 43 $ 35 As of September 30, 2023, following our annual grant issuance on February 7, 2023, there was approximately $76 million of total unrecognized compensation cost related to non-vested equity awards granted under the Plan. This cost is expected to be recognized ratably over a weighted-average period of 1.9 years. |
Stock
Stock | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stock | Stock Preferred Stock. There are 125 million shares of $0.01 par value Preferred Stock authorized, of which none were issued as of September 30, 2023 and December 31, 2022. Common Stock. There are 2 billion shares of $0.01 par value Common Stock authorized. As of September 30, 2023, 436.9 million shares of Common Stock were issued, which includes 27.6 million shares of Treasury Stock. As of December 31, 2022, 435.6 million shares of Common Stock were issued, which included 20.8 million shares of Treasury Stock. Treasury Stock. As of September 30, 2023, the Company was authorized by the Board of Directors to purchase up to $2.0 billion of Common Stock under a share repurchase program, of which approximately $1.4 billion was remaining at such time. During the quarter and nine months ended September 30, 2023, the Company repurchased 2.6 million and 6.8 million shares, respectively, for $225 million and $575 million, respectively, compared to 3.8 million and 9.1 million shares in the same periods of 2022 for $300 million and $700 million, respectively. Beginning January 1, 2023, share repurchases in excess of issuances are subject to a 1% excise tax, which is included as part of the cost basis of the shares acquired in Treasury Stock on the Condensed Consolidated Balance Sheets as of September 30, 2023. The Company's share repurchase program does not obligate it to acquire any specific number of shares. Under this program, shares may be purchased in the open market, in privately negotiated transactions, under accelerated share repurchase programs or under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) A summary of the changes in each component of Accumulated other comprehensive income (loss), net of tax, for the quarters and nine months ended September 30, 2023 and 2022 is provided below: (dollars in millions) Foreign Defined Benefit Unrealized Accumulated Quarter Ended September 30, 2023 Balance as of June 30, 2023 $ (681) $ (8) $ — $ (689) Other comprehensive income (loss) before reclassifications, net 39 — 1 40 Amounts reclassified, pre-tax — — 1 1 Tax benefit reclassified — — — — Balance as of September 30, 2023 $ (642) $ (8) $ 2 $ (648) Nine Months Ended September 30, 2023 Balance as of December 31, 2022 $ (587) $ (8) $ 3 $ (592) Other comprehensive income (loss) before reclassifications, net (56) — (7) (63) Amounts reclassified, pre-tax 1 — 8 9 Tax benefit reclassified — — (2) (2) Balance as of September 30, 2023 $ (642) $ (8) $ 2 $ (648) (dollars in millions) Foreign Defined Benefit Unrealized Accumulated Quarter Ended September 30, 2022 Balance as of June 30, 2022 $ (631) $ (124) $ 7 $ (748) Other comprehensive income (loss) before reclassifications, net 93 — (5) 88 Amounts reclassified, pre-tax 77 3 1 81 Tax benefit reclassified — (1) — (1) Balance as of September 30, 2022 $ (461) $ (122) $ 3 $ (580) Nine Months Ended September 30, 2022 Balance as of December 31, 2021 $ (642) $ (128) $ 7 $ (763) Other comprehensive income (loss) before reclassifications, net 173 — (2) 171 Amounts reclassified upon change in Otis' share of Zardoya Otis ownership (69) — — (69) Amounts reclassified, pre-tax 77 8 (2) 83 Tax benefit reclassified — (2) — (2) Balance as of September 30, 2022 $ (461) $ (122) $ 3 $ (580) Amounts reclassified that relate to defined benefit pension and postretirement plans include amortization of prior service costs and actuarial net losses recognized during each period presented. These costs are recorded as components of net periodic pension cost for each period presented. See Note 8, "Employee Benefit Plans" for additional information. Amounts reclassified that relate to foreign currency translation in the quarter and nine months ended September 30, 2022 are related to our Russia business sold during the quarter ended September 30, 2022. See Note 6, "Business Acquisitions, Dispositions, Goodwill and Intangible Assets" for additional information regarding the sale of our Russia business. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The decrease in the effective tax rate for the quarter ended September 30, 2023, is primarily due to a reduction in the deferred tax liability related to repatriation of foreign earnings, reversal of tax reserves related to the U.S. foreign tax credit regulations, and the closure of a foreign tax audit. The decrease in the effective tax rate for the nine months ended September 30, 2023 is due to a lower forecasted tax cost on repatriation in 2023. This is partially offset by the absence of a tax reserve release related to a forward transfer pricing agreement with a European tax authority and the elimination of Base Erosion Anti-Abuse Tax in the U.S., recorded in 2022. Otis conducts business globally and, as a result, Otis or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the ordinary course of business, Otis could be subject to examination by taxing authorities throughout the world, including such major jurisdictions as Austria, Belgium, Brazil, Canada, China, France, Germany, Hong Kong, India, Italy, Japan, Mexico, Netherlands, Portugal, South Korea, Spain, Switzerland, the United Kingdom, and the United States. With a few exceptions, Otis is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2010. A subsidiary of Otis engaged in tax-related litigation in Belgium received a favorable appellate court decision in 2018. The Belgian tax authorities appealed the decision to the Court of Cassation (the equivalent of the Supreme Court in Belgium). On December 4, 2020, the Court of Cassation overturned the decision of the appellate court and remanded the case to the appellate court for reconsideration. Following a hearing on March 20, 2023, the Antwerp Appellate Court ruled against the Company. Otis has decided not to appeal the decision, which marks the end of this litigation. Otis expects to receive the assessment for tax and interest in the quarter ending December 31, 2023. The associated tax and interest have been fully reserved and are included in the range below. In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. The evaluation considers any additional worldwide uncertain tax positions, the closure of tax statutes or the re-valuation of current uncertain tax positions arising from the issuance of legislation, regulatory or other guidance or developments in examinations, in appeals, or in the courts. Based on the preceding factors, it is reasonably possible that within the next 12 months unrecognized tax benefits could change within the range of a $10 million increase to a $330 million decrease and associated interest could change within the range of a $5 million increase to a $140 million decrease. See Note 16, “Contingent Liabilities” for discussion regarding uncertain tax positions, included in the above range, related to pending litigation with respect to certain deductions claimed in Germany. |
Restructuring and Transformatio
Restructuring and Transformation Costs | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Transformation Costs | Restructuring and Transformation Costs We initiate restructuring actions to keep our cost structure competitive. Charges generally arise from severance related to workforce reductions, and to a lesser degree, facility exit and lease termination costs associated with the consolidation of office and manufacturing operations. During the quarter ended September 30, 2023, we announced the UpLift program to transform our operating model. The program will include, among other aspects, the standardization of our processes and improving our supply chain procurement, as well as restructuring actions. During the quarter and nine months ended September 30, 2023, we incurred $4 million of incremental non-restructuring costs associated with the program ("transformation costs"), including consulting and personnel costs, which were recorded in Other income (expense), net in the Condensed Consolidated Statements of Operations. There were no UpLift restructuring actions initiated in the nine months ended September 30, 2023. See Note 19, "Subsequent Events," for discussion regarding UpLift restructuring actions approved following period-end. During the quarters and nine months ended September 30, 2023 and 2022, we recorded restructuring costs for new and ongoing restructuring actions as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 New Equipment $ 10 $ 2 $ 15 $ 18 Service 11 4 21 27 Total $ 21 $ 6 $ 36 $ 45 Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Cost of products and services sold $ 9 $ 2 $ 11 $ 16 Selling, general and administrative 12 4 25 29 Total $ 21 $ 6 $ 36 $ 45 The restructuring expenses incurred during the quarter and nine months ended September 30, 2023 and 2022, were primarily the result of restructuring programs initiated during 2023 and 2022. We are targeting to complete by the end of 2024 the majority of remaining restructuring actions initiated in the quarter and nine months ended September 30, 2023 and the full year 2022, with certain utilization beyond 2023 due to legal requirements in the applicable jurisdictions. Expected total costs for the restructuring actions initiated are $120 million, including $43 million to New Equipment and $77 million to Service operating segments, respectively. Remaining costs to incur for the restructuring actions initiated are expected to be $28 million, including $6 million to New Equipment and $22 million to Service operating segments, respectively. The following table summarizes the accrual balance and utilization for restructuring actions, which are primarily for severance costs and most will require cash payment: (dollars in millions) Restructuring accruals as of December 31, 2022 $ 41 Net restructuring costs 36 Utilization, foreign exchange and other costs (35) Balance as of September 30, 2023 $ 42 |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments We enter into derivative instruments primarily for risk management purposes, including derivatives designated as hedging instruments under ASC 815, Derivatives and Hedging . We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, commodity prices and foreign exchange rates. These fluctuations can increase the costs of financing, investing in and operating the business. We may use derivative instruments, including swaps, forward contracts and options, to manage certain foreign currency, commodity price and interest rate exposures. The four-quarter average of the notional amount of foreign exchange contracts hedging foreign currency transactions was $4.3 billion and $3.9 billion as of September 30, 2023 and December 31, 2022, respectively. The four-quarter average of the notional amount of contracts hedging commodity purchases was $24 million and $20 million as of September 30, 2023 and December 31, 2022, respectively. The following table summarizes the fair value and presentation on the Condensed Consolidated Balance Sheets for derivative instruments as of September 30, 2023 and December 31, 2022: (dollars in millions) Balance Sheet Classification September 30, 2023 December 31, 2022 Derivatives designated as Cash flow hedging instruments: Asset Derivatives: Foreign exchange contracts Other current assets $ 2 $ 3 Foreign exchange contracts Other assets 3 2 Total asset derivatives $ 5 $ 5 Liability Derivatives: Foreign exchange contracts Accrued liabilities $ (3) $ (4) Commodity contracts Accrued liabilities — (1) Foreign exchange contracts Other long-term liabilities (1) — Total liability derivatives $ (4) $ (5) Derivatives not designated as Cash flow hedging instruments: Asset Derivatives: Foreign exchange contracts Other current assets $ 31 $ 25 Foreign exchange contracts Other assets 5 3 Total asset derivatives $ 36 $ 28 Liability Derivatives: Foreign exchange contracts Accrued liabilities $ (17) $ (20) Commodity contracts Accrued liabilities — (4) Foreign exchange contracts Other long-term liabilities (4) (2) Total liability derivatives $ (21) $ (26) Derivatives designated as Cash flow hedging instruments . The amounts of gain or (loss) attributable to foreign exchange and commodity contract activity reclassified from Accumulated other comprehensive income (loss) were immaterial for the quarters and nine months ended September 30, 2023 and 2022, respectively. The effect of cash flow hedging relationships on Accumulated other comprehensive income (loss) as of September 30, 2023 and December 31, 2022 are presented in the table below: (dollars in millions) September 30, 2023 December 31, 2022 Gain (loss) recorded in Accumulated other comprehensive income (loss) $ 2 $ 3 The Company utilizes the critical terms match method in assessing firm commitment derivatives and regression testing in assessing commodity derivatives for hedge effectiveness. Accordingly, the hedged items and derivativ es designated as hedging instruments are highly effective. Assuming current market conditions continue, a pre-tax loss of $1 million is expected to be reclassified from Accumulated other comprehensive income (loss) into Cost of products sold to reflect the fixed prices obtained from foreign exchange and commodity hedging within the next 12 months. All derivative contracts accounted for as cash flow hedges as of September 30, 2023 will mature by December 2028. Net Investment Hedges. We may use non-derivative (foreign currency denominated debt) and derivative (foreign exchange forward contracts) instruments to hedge portions of the Company's investment in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as hedges of net investments in foreign operations and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in foreign currency translation within Other comprehensive income (loss) on the Condensed Consolidated Statements of Comprehensive Income, and will remain in Accumulated other comprehensive income (loss) until the hedged investment is sold or substantially liquidated. The remainder of the change in value of such instruments is recorded in earnings, including to the extent foreign currency denominated debt is not designated in or is de-designated from a net investment hedge relationship. Our use of foreign exchange forward contracts designated as hedges of the Company's net investment in foreign subsidiaries can vary depending on the Company's desired foreign exchange risk coverage. We have ¥21.5 billion of Japanese Yen denominated long-term debt, which qualifies as a net investment hedge against our investments in Japanese businesses, as well as notional amounts of foreign exchange forward contracts of €120 million and HK$2 billion which qualify as net investment hedges against our investments in certain European and Asian businesses, respectively. The net investment hedges are deemed to be effective. Additionally, we had a notional amount of a foreign exchange forward contract of €95 million that qualified as a net investment hedge, which matured during the quarter ended June 30, 2023 and the net investment hedge was deemed to be effective until maturity. The maturity dates of the current non-derivative and derivative instruments designated in net investment hedges range from 2024 to 2026. The amounts of gains (losses) recognized in other comprehensive income (loss) related to non-derivative and derivative instruments designated as net investment hedges are as follows. Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Foreign currency denominated long-term debt $ 6 $ 10 $ 18 $ 40 Foreign currency forward contracts 2 — 3 — Total $ 8 $ 10 $ 21 $ 40 Derivatives not designated as Cash flow hedging instruments. The net effect of derivatives not designated as Cash flow hedging instruments within Other income (expense) net, o n the Condensed Consolidated Statements of Operations was as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Foreign exchange contracts $ 4 $ 9 $ 16 $ 12 The effects of derivatives not designated as Cash flow hedge instruments within Cost of products sold on the Condensed Consolidated Statements of Operations were gains of $1 million in the quarter ended September 30, 2023 and losses of $8 million in the nine months ended September 30, 2023, compared to losses of $3 million and $11 million in the same periods of 2022, respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Valuation Techniques . Our marketable securities include investments that are traded in active markets, either domestically or internationally, and are measured at fair value using closing stock prices from active markets. The fair value gains or losses related to our marketable securities are recorded through net income. Our derivative assets and liabilities include foreign exchange and commodity contracts that are measured at fair value using internal models based on observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties' credit risks. As of September 30, 2023, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk. Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties' credit risks. Due to their short-term nature, the carrying value approximated fair value for the current portion of the Company’s financial instruments not carried at fair value. The fair value of receivables, including customer financing notes receivable, net, that were issued long-term are based on the discounted values of their related cash flows at interest rates reflecting the attributes of the counterparties, including geographic location. Customer-specific risk, including credit risk, is already considered in the carrying value of those receivables. Our notes, as described in Note 7, "Borrowings and Lines of Credit," are measured at fair value using closing bond prices from active markets. Recurring Fair Value Measurements. In accordance with the provisions of ASC 820: Fair Value Measurements , the following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring and non-recurring basis in our Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022: September 30, 2023 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurements: Marketable securities $ 31 $ 31 $ — $ — Derivative assets 41 — 41 — Derivative liabilities (25) — (25) — December 31, 2022 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurements: Marketable securities $ 30 $ 30 $ — $ — Derivative assets 33 — 33 — Derivative liabilities (31) — (31) — Fair Value of Financial Instruments. The following table provides carrying amounts and fair values of financial instruments that are not carried at fair value as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 (dollars in millions) Carrying Fair Carrying Fair Long-term receivables, net $ 49 $ 49 $ 55 $ 53 Customer financing notes receivable, net 31 27 55 51 Short-term borrowings (54) (54) (139) (139) Long-term debt, including current portion (excluding leases and other) (7,394) (6,343) (6,663) (5,661) Long-term liabilities, including current portion (197) (184) (222) (197) The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022: September 30, 2023 (dollars in millions) Total Level 1 Level 2 Level 3 Long-term receivables, net $ 49 $ — $ 49 $ — Customer financing notes receivable, net 27 — 27 — Short-term borrowings (54) — (54) — Long-term debt, including current portion (excluding leases and other) (6,343) — (6,343) — Long-term liabilities, including current portion (184) — (184) — December 31, 2022 (dollars in millions) Total Level 1 Level 2 Level 3 Long-term receivables, net $ 53 $ — $ 53 $ — Customer financing notes receivable, net 51 — 51 — Short-term borrowings (139) — (139) — Long-term debt, including current portion (excluding leases and other) (5,661) — (5,661) — Long-term liabilities, including current portion (197) — (197) — |
Guarantees
Guarantees | 9 Months Ended |
Sep. 30, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Guarantees | Guarantees The Company provides service and warranty on its products beyond normal service and warranty policies. The changes in the carrying amount of service and product guarantees for the nine months ended September 30, 2023 and 2022 are as follows: (dollars in millions) 2023 2022 Balance as of December 31 $ 13 $ 20 Warranties 3 1 Settlements made (5) (7) Foreign exchange and other (1) (1) Balance as of September 30 $ 10 $ 13 The Company provides certain financial guarantees to third parties. As of September 30, 2023, Otis has stand-by letters of credit with maximum potential payment totaling $128 million. We accrue costs associated with guarantees when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts, and where no amount within a range of estimates is more likely, the minimum is accrued. In accordance with ASC Topic 460: Guarantees , we record these liabilities at fair value. As of September 30, 2023, Otis has determined there are no estimated costs probable under these guarantees. |
Contingent Liabilities
Contingent Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities Except as otherwise noted, while we are unable to predict the final outcome, based on information currently available, we do not believe that resolution of any of the following matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. In addition to the specific amounts noted below, where we have recorded loss contingency accruals for the below and other matters, the amounts in aggregate are not material. Legal costs generally are expensed when incurred. Environmental. As previously disclosed, the Company's operations are subject to environmental regulation by authorities with jurisdiction over its operations. The Company has accrued for the costs of environmental remediation activities, including, but not limited to, investigatory, remediation, operating and maintenance costs and performance guarantees, and periodically reassesses these amounts. Management believes that the likelihood of incurring losses materially in excess of amounts accrued is remote. The outstanding liability for environmental obligations w as $5 million as of September 30, 2023 and December 31, 2022, and is principally included in Other long-term liabilities on the Condensed Consolidated Balance Sheets. Legal Proceedings. German Tax Litigation As previously disclosed, we have been involved in administrative review proceedings with the German Tax Office, which concern approximately €215 million (approximately $229 million as of September 30, 2023) of tax benefits that we have claimed related to a 1998 reorganization of the corporate structure of our operations in Germany. Upon audit, these tax benefits were disallowed by the German Tax Office. We estimate interest associated with the aforementioned tax benefits is an additional approximately €118 million (approximately $126 million as of September 30, 2023). In August 2012, a suit was filed in the local German Tax Court (Berlin-Brandenburg). In 2015, our former parent United Technologies Corporation ("UTC"), now RTX Corporation ("RTX"), made tax and interest payments to German tax authorities of €275 million (approximately $300 million) in order to avoid additional interest accruals pending final resolution of this matter. In March 2016, the local German Tax Court dismissed the suit, and we appealed this decision to the German Federal Tax Court. Following a hearing in July 2018, the German Federal Tax Court remanded the matter to the local German Tax Court for further proceedings. In December 2020, the local German Tax Court ruled against the Company. On January 26, 2021, the Company filed an appeal with the German Federal Tax Court. On February 8, 2022, the Company received the decision of the German Federal Tax Court, in which the Court remanded the case for reconsideration by the local German Tax Court. The local German Tax Court held a hearing on June 12, 2023, and issued a decision in favor of Otis on July 21, 2023. On September 14, 2023, the German tax authorities filed an appeal to the German Federal Tax Court. The German Federal Tax Court is expected to rule on the appeal in 2024. As a result of the appeal filing, this matter remains contested, and the Company cannot assess the ultimate outcome of this case. Pursuant to the Tax Matters Agreement ("TMA") with our former parent, UTC, the Company retains the liability associated with the remaining interest, and has recorded an interest accrual of €45 million (approximately $47 million as of September 30, 2023), net of payments and other deductions, included within Accrued liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2023. If the Company prevails in this matter, any recoveries would be allocated between RTX and the Company pursuant to the terms of the TMA. Asbestos Matters As previously disclosed, we have been named as defendants in lawsuits alleging personal injury as a result of exposure to asbestos. While we have never manufactured any asbestos-containing component parts, and no longer incorporate asbestos in any current products, certain of our historical products have contained components manufactured by third parties incorporating asbestos. A substantial majority of these asbestos-related claims have been dismissed without payment or were covered in full or in part by insurance or other forms of indemnity. Additional cases were litigated and settled without any insurance reimbursement. The amounts involved in asbestos-related claims were not material individually or in the aggregate as of and for the periods ended September 30, 2023 and December 31, 2022. The estimated range of total liabilities to resolve all pending and unasserted potential future asbestos claims through 2059 is approximately $21 million to $43 million as of September 30, 2023 and December 31, 2022. Since no amount within the range of estimates is more likely to occur than any other, we have recorded the minimum amount of $21 million, which is principally recorded in Other long-term liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022. Amounts are on a pre-tax basis, not discounted, and exclude the Company's legal fees to defend the asbestos claims (which will continue to be expensed as they are incurred). In addition, the Company has an insurance recovery receivable for probable asbestos-related recoveries of approximately $5 million, which is principally included in Other assets on our Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022. Putative Class Action Lawsuit On August 12, 2020, a putative class action lawsuit, (Geraud Darnis et al. v. Raytheon Technologies Corporation et al.), was filed in the United States District Court for the District of Connecticut (the "Court") against Otis, RTX, Carrier Global Corporation ("Carrier"), each of their directors, and various incentive and deferred compensation plans in connection with the separation of Otis and Carrier from UTC (the "Separation") in April 2020. On September 13, 2021, plaintiffs filed an amended complaint against the three company defendants only. The named plaintiffs are former employees of UTC and its current and former subsidiaries, including Otis and Carrier. They seek to recover monetary damages, as well as related declaratory and equitable relief, based on claimed decreases in the value of long-term incentive awards and deferred compensation under nonqualified deferred compensation plans allegedly caused by the formula used to calculate the adjustments to such awards and deferred compensation from RTX, Carrier, and Otis following the spin-offs of Carrier and Otis and the subsequent combination of UTC and Raytheon Company. On September 30, 2022, in response to motions to dismiss filed by the defendants, the Court dismissed the class action in its entirety with prejudice. The plaintiffs appealed the decision on October 26, 2022. On August 24, 2023, the Second Circuit Court of Appeals entered judgment in defendants’ favor, upholding the trial court’s decision. This action is concluded. Other. As previously disclosed, we have commitments and contingent liabilities related to legal proceedings, self-insurance programs and matters arising out of the normal course of business. We accrue contingencies based on a range of possible outcomes. If no amount within this range is a better estimate than any other, we accrue the minimum amount. While it is not possible to determine the ultimate disposition of each of these claims and whether they will be resolved consistent with our beliefs, we expect that the outcome of such claims, individually or in the aggregate, will not have a material adverse effect on our business, financial condition, cash flows or results of operations. As previously disclosed, in certain European countries, claims for overcharges on elevators and escalators related to civil cartel cases have been made, which we have accrued for based on our evaluation of the claims. While it is not possible to determine the ultimate disposition of each of these claims and whether they will be resolved consistent with our beliefs, historical settlement experience of these cases has not been material to the business, financial condition, cash flows or results of operations. However, the future outcome of these cases cannot be determined. As previously disclosed, in the ordinary course of business, the Company is also routinely a defendant in, party to or otherwise subject to many pending and threatened legal actions, claims, disputes and proceedings. These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax and other laws. In some of these proceedings, claims for substantial monetary damages are asserted against the Company and its subsidiaries and could result in fines, penalties, compensatory or treble damages or non-monetary relief. We do not believe that these matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. |
Segment Financial Data
Segment Financial Data | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Financial Data | Segment Financial Data Our operations are classified into two operating segments: New Equipment and Service. Through the New Equipment segment, we design, manufacture, sell and install a wide range of passenger and freight elevators as well as escalators and moving walkways to customers in the residential and commercial building and infrastructure projects. The Service segment provides maintenance and repair services for both our products and those of other manufacturers, and provides modernization services to upgrade elevators and escalators. The operating segments are generally based on the management structure of the Company, how management allocates resources, assesses performance and makes strategic and operational decisions. Segment Information. Segment information for the quarters ended September 30, 2023 and 2022 are as follows: Net Sales Operating Profit Operating Profit Margin (dollars in millions) 2023 2022 2023 2022 2023 2022 New Equipment $ 1,435 $ 1,447 $ 94 $ 100 6.6 % 6.9 % Service 2,088 1,897 507 446 24.3 % 23.5 % Total segments 3,523 3,344 601 546 17.1 % 16.3 % General corporate expenses and other — — (30) (17) — — Total $ 3,523 $ 3,344 $ 571 $ 529 16.2 % 15.8 % Segment information for the nine months ended September 30, 2023 and 2022 are as follows: Net Sales Operating Profit Operating Profit Margin (dollars in millions) 2023 2022 2023 2022 2023 2022 New Equipment $ 4,346 $ 4,403 $ 277 $ 292 6.4 % 6.6 % Service 6,243 5,843 1,475 1,328 23.6 % 22.7 % Total segments 10,589 10,246 1,752 1,620 16.5 % 15.8 % General corporate expenses and other — — (88) (78) — — Total $ 10,589 $ 10,246 $ 1,664 $ 1,542 15.7 % 15.0 % Total assets are not presented for each segment as they are not presented to, or reviewed by, the Chief Operating Decision Maker. Geographic Sales. Geographic Net sales are attributed to the geographic regions based on their location of origin. With the exception of the U.S. and China, there were no individually significant countries with sales exceeding 10% of Net sales during the quarters and nine months ended September 30, 2023 and 2022. Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 United States Operations $ 1,004 $ 943 $ 3,015 $ 2,873 International Operations China 596 672 1,832 1,951 Other 1,923 1,729 5,742 5,422 Total $ 3,523 $ 3,344 $ 10,589 $ 10,246 Disaggregated Sales by Type . Segment Net sales disaggregated by product and service type for the quarters and nine months ended September 30, 2023 and 2022 are as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 New Equipment $ 1,435 $ 1,447 $ 4,346 $ 4,403 Maintenance and Repair 1,715 1,555 5,116 4,784 Modernization 373 342 1,127 1,059 Total Service 2,088 1,897 6,243 5,843 Total $ 3,523 $ 3,344 $ 10,589 $ 10,246 Major Customers. There were no customers that individually accounted for 10% or more of the Company's consolidated Net sales for the quarters and nine months ended September 30, 2023 and 2022. |
Accounting Pronouncements
Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Accounting Pronouncements | Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, with early application permitted. The Company adopted ASU 2021-08 effective January 1, 2023. The adoption of this ASU did not have a material impact on our Condensed Consolidated Financial Statements. In September 2022, the FASB issued ASU No. 2022-04, Liabilities - Supplier Finance Programs (Topic 450-50) : Disclosure of Supplier Finance Program Obligations, which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted ASU 2022-04 effective January 1, 2023. The adoption of this ASU did not have a material impact on our Condensed Consolidated Financial Statements, as disclosed in Note 1, "General." In March 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reportin g ("ASU 2020-04") , which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform . Additionally, in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 ("ASU 2022-06"), which allows ASU 2020-04 to be adopted and applied prospectively to contract modifications made on or before December 31, 2024. We do not expect the adoption of this standard to have a material impact on our Condensed Consolidated Financial Statements. In August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Ventures Formations (Subtopic 805-60): Recognition and initial measurement ("ASU 2023-05"), which requires that joint ventures, upon formation, apply a new basis of accounting by initially measuring assets and liabilities at fair value. The amendments in ASU 2023-05 are effective for joint ventures that are formed on or after January 1, 2025. Early adoption is permitted. We are currently evaluating the impact of this standard, however we do not expect it to have a material impact on our Condensed Consolidated Financial Statements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsFollowing period end, on October 5, 2023, UpLift restructuring actions of approximately $55 million were approved, which are expected to be incurred beginning in the fourth quarter of 2023 through 2024. These are primarily severance related costs. We expect these actions to be mostly completed and cash to be paid by the end of 2024, with certain actions to be completed beyond 2024 due to legal requirements in the applicable jurisdictions. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 376 | $ 324 | $ 1,083 | $ 956 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 shares | Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Ms. Marks [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On July 28, 2023, Ms. Marks adopted a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Under this plan, the shares received by Ms. Marks upon the vesting of the performance stock units ("PSUs") granted to her by the Company on February 5, 2021 (after giving effect to tax withholding and a previous election to defer 50% of the PSU shares earned) will be sold at the market price so long as the Company’s common stock is trading at or above a limit price. The plan will terminate at the close of business on the day the shares become available for sale even if the Company’s common stock is trading below the limit price and the shares are not sold. We expect that the plan will terminate in early February 2024, shortly after the date the PSUs are expected to vest.The number of shares that may be sold by Ms. Marks upon vesting of the PSUs will depend upon the Company’s achievement of the underlying financial performance goals and the application of a multiplier factor based on our relative total shareowner return over the 2021-2023 performance period, and can range from 0 to 200% of the sum of the target PSUs granted plus additional PSUs credited for dividend equivalents. Ms. Marks was granted 65,355 “target” PSUs on February 5, 2021. However, because Ms. Marks previously elected to defer receipt of 50% of the PSUs to be earned under our PSU Deferral Plan, the number of shares delivered to her at vesting and available for sale will be accordingly reduced. Assuming the shares are sold under the plan, we estimate, based on our projected performance against the underlying financial performance goals, our relative total shareholder return through the last trading day of the quarter ending September 30, 2023, current tax withholding rates, future crediting of dividend equivalents assuming our current dividend remains unchanged and a stock price of $80.31 (the closing price of our stock on the last trading day of the quarter ending September 30, 2023), and Ms. Marks election to defer 50% of the PSUs, that 37,080 shares could be sold under the plan. | |
Name | Ms. Marks | |
Title | Chair, President and Chief Executive Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | July 28, 2023 | |
Arrangement Duration | 215 days | |
Aggregate Available | 37,080 | 37,080 |
General (Policies)
General (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions, except per share amounts; shares in millions) 2023 2022 2023 2022 Net income attributable to Otis Worldwide Corporation $ 376 $ 324 $ 1,083 $ 956 Impact of redeemable noncontrolling interest — — — — Net income attributable to common shareholders $ 376 $ 324 $ 1,083 $ 956 Basic weighted average number of shares outstanding 410.8 418.5 412.6 421.3 Stock awards and equity units (share equivalent) 2.9 2.7 3.2 3.0 Diluted weighted average number of shares outstanding 413.7 421.2 415.8 424.3 Earnings Per Share of Common Stock: Basic $ 0.92 $ 0.77 $ 2.62 $ 2.27 Diluted $ 0.91 $ 0.77 $ 2.60 $ 2.25 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of contract assets and liabilities | Total Contract assets and Contract liabilities as of September 30, 2023 and December 31, 2022 are as follows: (dollars in millions) September 30, 2023 December 31, 2022 Contract assets, current $ 733 $ 664 Total contract assets 733 664 Contract liabilities, current 2,784 2,662 Contract liabilities, non-current (included within Other long-term liabilities) 47 52 Total contract liabilities 2,831 2,714 Net contract liabilities $ 2,098 $ 2,050 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of accounts, notes, loans and financing receivable | Accounts receivable, net consisted of the following as of September 30, 2023 and December 31, 2022: (dollars in millions) September 30, 2023 December 31, 2022 Trade receivables $ 3,295 $ 3,231 Unbilled receivables 123 103 Miscellaneous receivables 100 91 Customer financing notes receivable 63 84 3,581 3,509 Less: allowance for expected credit losses 126 152 Accounts receivable, net $ 3,455 $ 3,357 |
Accounts receivable, allowance for credit loss | The changes in allowance for expected credit losses related to Accounts receivable, net for the nine months ended September 30, 2023 and 2022, respectively, are as follows: Nine Months Ended September 30, (dollars in millions) 2023 2022 Balance as of January 1 $ 152 $ 175 Provision for expected credit losses 21 4 Write-offs charged against the allowance for expected credit losses (42) (14) Foreign exchange and other (5) (9) Balance as of September 30 $ 126 $ 156 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consisted of the following as of September 30, 2023 and December 31, 2022: (dollars in millions) September 30, 2023 December 31, 2022 Raw materials and work-in-process $ 162 $ 166 Finished goods 462 451 Total $ 624 $ 617 |
Business Acquisitions, Dispos_2
Business Acquisitions, Disposals, Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations, Goodwill, and Intangible Assets [Abstract] | |
Schedule of goodwill | Changes in our Goodwill balances during the nine months ended September 30, 2023 were as follows: (dollars in millions) Balance as of December 31, 2022 Goodwill Resulting Foreign Currency Balance as of September 30, 2023 New Equipment $ 292 $ — $ (5) $ 287 Service 1,275 6 (21) 1,260 Total $ 1,567 $ 6 $ (26) $ 1,547 |
Borrowings and Lines of Credit
Borrowings and Lines of Credit (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of short-term debt | (dollars in millions) September 30, 2023 December 31, 2022 Commercial paper $ — $ 94 Other borrowings 54 45 Total short-term borrowings $ 54 $ 139 |
Schedule of long-term debt | Long-term debt consisted of the following: (dollars in millions) September 30, 2023 December 31, 2022 0.000% notes due 2023 (€500 million principal value) $ 531 $ 531 2.056% notes due 2025 1,300 1,300 0.37% notes due 2026 (¥21.5 billion principal value) 145 163 0.318% notes due 2026 (€600 million principal value) 637 638 2.293% notes due 2027 500 500 5.250% notes due 2028 750 — 2.565% notes due 2030 1,500 1,500 0.934% notes due 2031 (€500 million principal value) 531 531 3.112% notes due 2040 750 750 3.362% notes due 2050 750 750 Other (including finance leases) 4 8 Total principal long-term debt 7,398 6,671 Other (discounts and debt issuance costs) (45) (42) Total long-term debt 7,353 6,629 Less: current portion 531 531 Long-term debt, net of current portion $ 6,822 $ 6,098 |
Schedule of debt | Debt discounts and debt issuance costs are presented as a reduction of debt on the Condensed Consolidated Balance Sheets and are amortized as a component of interest expense over the term of the related debt using the effective interest method. The Condensed Consolidated Statements of Operations for the quarters and nine months ended September 30, 2023 and 2022 reflects the following: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Debt issuance costs amortization $ 2 $ 1 $ 5 $ 6 Total interest expense on external debt 38 35 105 106 September 30, 2023 December 31, 2022 Short-term commercial paper —% 4.7% Total long-term debt 2.3% 2.0% The weighted average interest expense rate on our borrowings during the quarters and nine months ended September 30, 2023 and 2022 was as follows: Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Short-term commercial paper 5.4% 2.5% 5.0% 1.3% Total long-term debt 2.1% 2.0% 2.0% 2.0% |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of defined benefit plans disclosures | Contributions to our plans were as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Defined benefit plans $ 8 $ 7 $ 32 $ 28 Defined contribution plans 16 14 50 49 Multi-employer pension and postretirement plans 42 40 117 101 The following table illustrates the components of net periodic benefit cost for the Company's defined benefit pension plans: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Service cost $ 7 $ 10 $ 22 $ 30 Interest cost 8 4 24 13 Expected return on plan assets (8) (8) (24) (21) Recognized actuarial net loss — 3 — 8 Net settlement and curtailment (gain) loss — 1 — 1 Total net periodic benefit cost $ 7 $ 10 $ 22 $ 31 |
Share-based payment arrangement, expensed and capitalized, amount | Stock-based compensation expense and the resulting tax benefits were as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Stock-based compensation expense (Share Based) $ 15 $ 13 $ 49 $ 41 Stock-based compensation expense (income) (Liability Awards) — — — (1) Total gross stock-based compensation expense 15 13 49 40 Less: future tax benefit 2 2 6 5 Stock-based compensation expense, net of tax $ 13 $ 11 $ 43 $ 35 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | A summary of the changes in each component of Accumulated other comprehensive income (loss), net of tax, for the quarters and nine months ended September 30, 2023 and 2022 is provided below: (dollars in millions) Foreign Defined Benefit Unrealized Accumulated Quarter Ended September 30, 2023 Balance as of June 30, 2023 $ (681) $ (8) $ — $ (689) Other comprehensive income (loss) before reclassifications, net 39 — 1 40 Amounts reclassified, pre-tax — — 1 1 Tax benefit reclassified — — — — Balance as of September 30, 2023 $ (642) $ (8) $ 2 $ (648) Nine Months Ended September 30, 2023 Balance as of December 31, 2022 $ (587) $ (8) $ 3 $ (592) Other comprehensive income (loss) before reclassifications, net (56) — (7) (63) Amounts reclassified, pre-tax 1 — 8 9 Tax benefit reclassified — — (2) (2) Balance as of September 30, 2023 $ (642) $ (8) $ 2 $ (648) (dollars in millions) Foreign Defined Benefit Unrealized Accumulated Quarter Ended September 30, 2022 Balance as of June 30, 2022 $ (631) $ (124) $ 7 $ (748) Other comprehensive income (loss) before reclassifications, net 93 — (5) 88 Amounts reclassified, pre-tax 77 3 1 81 Tax benefit reclassified — (1) — (1) Balance as of September 30, 2022 $ (461) $ (122) $ 3 $ (580) Nine Months Ended September 30, 2022 Balance as of December 31, 2021 $ (642) $ (128) $ 7 $ (763) Other comprehensive income (loss) before reclassifications, net 173 — (2) 171 Amounts reclassified upon change in Otis' share of Zardoya Otis ownership (69) — — (69) Amounts reclassified, pre-tax 77 8 (2) 83 Tax benefit reclassified — (2) — (2) Balance as of September 30, 2022 $ (461) $ (122) $ 3 $ (580) |
Restructuring and Transformat_2
Restructuring and Transformation Costs (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and related costs | During the quarters and nine months ended September 30, 2023 and 2022, we recorded restructuring costs for new and ongoing restructuring actions as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 New Equipment $ 10 $ 2 $ 15 $ 18 Service 11 4 21 27 Total $ 21 $ 6 $ 36 $ 45 Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Cost of products and services sold $ 9 $ 2 $ 11 $ 16 Selling, general and administrative 12 4 25 29 Total $ 21 $ 6 $ 36 $ 45 |
Schedule of restructuring reserve by type of cost | The following table summarizes the accrual balance and utilization for restructuring actions, which are primarily for severance costs and most will require cash payment: (dollars in millions) Restructuring accruals as of December 31, 2022 $ 41 Net restructuring costs 36 Utilization, foreign exchange and other costs (35) Balance as of September 30, 2023 $ 42 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments in statement of financial position, fair value | The following table summarizes the fair value and presentation on the Condensed Consolidated Balance Sheets for derivative instruments as of September 30, 2023 and December 31, 2022: (dollars in millions) Balance Sheet Classification September 30, 2023 December 31, 2022 Derivatives designated as Cash flow hedging instruments: Asset Derivatives: Foreign exchange contracts Other current assets $ 2 $ 3 Foreign exchange contracts Other assets 3 2 Total asset derivatives $ 5 $ 5 Liability Derivatives: Foreign exchange contracts Accrued liabilities $ (3) $ (4) Commodity contracts Accrued liabilities — (1) Foreign exchange contracts Other long-term liabilities (1) — Total liability derivatives $ (4) $ (5) Derivatives not designated as Cash flow hedging instruments: Asset Derivatives: Foreign exchange contracts Other current assets $ 31 $ 25 Foreign exchange contracts Other assets 5 3 Total asset derivatives $ 36 $ 28 Liability Derivatives: Foreign exchange contracts Accrued liabilities $ (17) $ (20) Commodity contracts Accrued liabilities — (4) Foreign exchange contracts Other long-term liabilities (4) (2) Total liability derivatives $ (21) $ (26) |
Schedule of cash flow hedges included in accumulated other comprehensive income (loss) | The effect of cash flow hedging relationships on Accumulated other comprehensive income (loss) as of September 30, 2023 and December 31, 2022 are presented in the table below: (dollars in millions) September 30, 2023 December 31, 2022 Gain (loss) recorded in Accumulated other comprehensive income (loss) $ 2 $ 3 |
Schedule of gain (loss) recognized in other comprehensive income (loss) related to derivative and non-derivative instruments designated as net investment hedges | The amounts of gains (losses) recognized in other comprehensive income (loss) related to non-derivative and derivative instruments designated as net investment hedges are as follows. Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Foreign currency denominated long-term debt $ 6 $ 10 $ 18 $ 40 Foreign currency forward contracts 2 — 3 — Total $ 8 $ 10 $ 21 $ 40 |
Derivative instruments, gain (loss) | The net effect of derivatives not designated as Cash flow hedging instruments within Other income (expense) net, o n the Condensed Consolidated Statements of Operations was as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 Foreign exchange contracts $ 4 $ 9 $ 16 $ 12 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements, recurring and nonrecurring | In accordance with the provisions of ASC 820: Fair Value Measurements , the following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring and non-recurring basis in our Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022: September 30, 2023 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurements: Marketable securities $ 31 $ 31 $ — $ — Derivative assets 41 — 41 — Derivative liabilities (25) — (25) — December 31, 2022 (dollars in millions) Total Level 1 Level 2 Level 3 Recurring fair value measurements: Marketable securities $ 30 $ 30 $ — $ — Derivative assets 33 — 33 — Derivative liabilities (31) — (31) — |
Fair value, by balance sheet grouping | The following table provides carrying amounts and fair values of financial instruments that are not carried at fair value as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 (dollars in millions) Carrying Fair Carrying Fair Long-term receivables, net $ 49 $ 49 $ 55 $ 53 Customer financing notes receivable, net 31 27 55 51 Short-term borrowings (54) (54) (139) (139) Long-term debt, including current portion (excluding leases and other) (7,394) (6,343) (6,663) (5,661) Long-term liabilities, including current portion (197) (184) (222) (197) The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022: September 30, 2023 (dollars in millions) Total Level 1 Level 2 Level 3 Long-term receivables, net $ 49 $ — $ 49 $ — Customer financing notes receivable, net 27 — 27 — Short-term borrowings (54) — (54) — Long-term debt, including current portion (excluding leases and other) (6,343) — (6,343) — Long-term liabilities, including current portion (184) — (184) — December 31, 2022 (dollars in millions) Total Level 1 Level 2 Level 3 Long-term receivables, net $ 53 $ — $ 53 $ — Customer financing notes receivable, net 51 — 51 — Short-term borrowings (139) — (139) — Long-term debt, including current portion (excluding leases and other) (5,661) — (5,661) — Long-term liabilities, including current portion (197) — (197) — |
Guarantees (Tables)
Guarantees (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Product warranty disclosure | The changes in the carrying amount of service and product guarantees for the nine months ended September 30, 2023 and 2022 are as follows: (dollars in millions) 2023 2022 Balance as of December 31 $ 13 $ 20 Warranties 3 1 Settlements made (5) (7) Foreign exchange and other (1) (1) Balance as of September 30 $ 10 $ 13 |
Segment Financial Data (Tables)
Segment Financial Data (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | Segment information for the quarters ended September 30, 2023 and 2022 are as follows: Net Sales Operating Profit Operating Profit Margin (dollars in millions) 2023 2022 2023 2022 2023 2022 New Equipment $ 1,435 $ 1,447 $ 94 $ 100 6.6 % 6.9 % Service 2,088 1,897 507 446 24.3 % 23.5 % Total segments 3,523 3,344 601 546 17.1 % 16.3 % General corporate expenses and other — — (30) (17) — — Total $ 3,523 $ 3,344 $ 571 $ 529 16.2 % 15.8 % Segment information for the nine months ended September 30, 2023 and 2022 are as follows: Net Sales Operating Profit Operating Profit Margin (dollars in millions) 2023 2022 2023 2022 2023 2022 New Equipment $ 4,346 $ 4,403 $ 277 $ 292 6.4 % 6.6 % Service 6,243 5,843 1,475 1,328 23.6 % 22.7 % Total segments 10,589 10,246 1,752 1,620 16.5 % 15.8 % General corporate expenses and other — — (88) (78) — — Total $ 10,589 $ 10,246 $ 1,664 $ 1,542 15.7 % 15.0 % |
Schedule of segment reporting information, by geographic markets | Geographic Net sales are attributed to the geographic regions based on their location of origin. With the exception of the U.S. and China, there were no individually significant countries with sales exceeding 10% of Net sales during the quarters and nine months ended September 30, 2023 and 2022. Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 United States Operations $ 1,004 $ 943 $ 3,015 $ 2,873 International Operations China 596 672 1,832 1,951 Other 1,923 1,729 5,742 5,422 Total $ 3,523 $ 3,344 $ 10,589 $ 10,246 |
Segment reporting disclosure, sales type | Segment Net sales disaggregated by product and service type for the quarters and nine months ended September 30, 2023 and 2022 are as follows: Quarter Ended September 30, Nine Months Ended September 30, (dollars in millions) 2023 2022 2023 2022 New Equipment $ 1,435 $ 1,447 $ 4,346 $ 4,403 Maintenance and Repair 1,715 1,555 5,116 4,784 Modernization 373 342 1,127 1,059 Total Service 2,088 1,897 6,243 5,843 Total $ 3,523 $ 3,344 $ 10,589 $ 10,246 |
General (Details)
General (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Outstanding obligations under supplier finance programs | $ 537 | $ 564 |
Minimum | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Maturity term | 30 days | |
Maximum | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Maturity term | 120 days |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net Income (Loss) Attributable to Parent [Abstract] | ||||
Net income attributable to Otis Worldwide Corporation | $ 376 | $ 324 | $ 1,083 | $ 956 |
Impact of redeemable noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to common shareholders | $ 376 | $ 324 | $ 1,083 | $ 956 |
Basic weighted average number of shares outstanding (in shares) | 410,800,000 | 418,500,000 | 412,600,000 | 421,300,000 |
Stock awards and equity units (share equivalent) (in shares) | 2,900,000 | 2,700,000 | 3,200,000 | 3,000,000 |
Diluted weighted average number of shares outstanding (in shares) | 413,700,000 | 421,200,000 | 415,800,000 | 424,300,000 |
Earnings Per Share of Common Stock: | ||||
Basic (in usd per share) | $ 0.92 | $ 0.77 | $ 2.62 | $ 2.27 |
Diluted (in usd per share) | $ 0.91 | $ 0.77 | $ 2.60 | $ 2.25 |
Antidilutive securities excluded from computation of EPS (in shares) | 1,000,000 | 2,400,000 | 1,000,000 | 2,400,000 |
Revenue Recognition - Contract
Revenue Recognition - Contract With Customer, Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets, current | $ 733 | $ 664 |
Total contract assets | 733 | 664 |
Contract liabilities, current | 2,784 | 2,662 |
Contract liabilities, non-current (included within Other long-term liabilities) | 47 | 52 |
Total contract liabilities | 2,831 | 2,714 |
Net contract liabilities | $ 2,098 | $ 2,050 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Increase in contract assets | $ 69 |
Increase in contract liabilities | 117 |
Revenue recognized | 1,800 |
Revenue, remaining performance obligation | $ 17,800 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 90% |
Remaining performance obligation, expected timing of satisfaction period | 24 months |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||||
Trade receivables | $ 3,295 | $ 3,231 | ||
Unbilled receivables | 123 | 103 | ||
Miscellaneous receivables | 100 | 91 | ||
Customer financing notes receivable | 63 | 84 | ||
Total receivables | 3,581 | 3,509 | ||
Less: allowance for expected credit losses | 126 | 152 | $ 156 | $ 175 |
Accounts receivable, net | $ 3,455 | $ 3,357 |
Accounts Receivable, Net - Sc_2
Accounts Receivable, Net - Schedule of Allowance for Credit Losses (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 152 | $ 175 |
Provision for expected credit losses | 21 | 4 |
Write-offs charged against the allowance for expected credit losses | (42) | (14) |
Foreign exchange and other | (5) | (9) |
Ending balance | $ 126 | $ 156 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and work-in-process | $ 162 | $ 166 |
Finished goods | 462 | 451 |
Total | 624 | 617 |
Inventory valuation reserves | $ 89 | $ 96 |
Business Acquisitions, Dispos_3
Business Acquisitions, Disposals, Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | |
Goodwill [Line Items] | ||||||
Investments in businesses, net of cash acquired | $ 27 | $ 38 | ||||
Intangible assets cost | $ 2,010 | 2,010 | $ 2,026 | |||
Intangible assets, accumulated amortization | 1,674 | 1,674 | 1,657 | |||
Amortization of intangible assets | 17 | $ 18 | 51 | 55 | ||
Assets held for sale | $ 11 | $ 11 | $ 9 | |||
RUSSIAN FEDERATION | ||||||
Goodwill [Line Items] | ||||||
Assets held for sale, disposal group | $ 157 | |||||
Liabilities held for sale, disposal group | $ 136 | |||||
Loss on disposal of business | $ 6 | 24 | ||||
Loss on fixed asset impairment | $ 18 |
Business Acquisitions, Dispos_4
Business Acquisitions, Disposals, Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill - Beginning Balance | $ 1,567 |
Goodwill Resulting from Business Combinations | 6 |
Foreign Currency Translation and Other | (26) |
Goodwill - Ending Balance | 1,547 |
New Equipment | |
Goodwill [Roll Forward] | |
Goodwill - Beginning Balance | 292 |
Goodwill Resulting from Business Combinations | 0 |
Foreign Currency Translation and Other | (5) |
Goodwill - Ending Balance | 287 |
Services | |
Goodwill [Roll Forward] | |
Goodwill - Beginning Balance | 1,275 |
Goodwill Resulting from Business Combinations | 6 |
Foreign Currency Translation and Other | (21) |
Goodwill - Ending Balance | $ 1,260 |
Borrowings and Lines of Credi_2
Borrowings and Lines of Credit - Short-Term Borrowings (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Commercial paper | $ 0 | $ 94,000,000 |
Other borrowings | 54,000,000 | 45,000,000 |
Total short-term borrowings | $ 54,000,000 | $ 139,000,000 |
Borrowings and Lines of Credi_3
Borrowings and Lines of Credit - Narrative (Details) ¥ in Millions | 9 Months Ended | ||||
Aug. 16, 2023 USD ($) | Mar. 10, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 JPY (¥) | Dec. 31, 2022 USD ($) | |
Line of Credit Facility [Line Items] | |||||
Commercial paper | $ 0 | $ 94,000,000 | |||
Debt instrument, carrying amount | 7,398,000,000 | 6,671,000,000 | |||
Unamortized debt issuance cost | $ 43,000,000 | 42,000,000 | |||
Long term debt, average remaining maturity | 7 years 6 months | ||||
Unsubordinated Commercial Paper | Unsecured Notes | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 1,500,000,000 | ||||
Five Year Revolving Credit Facility, Amended | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Line of Credit Facility [Line Items] | |||||
Credit spread adjustment | 0.10% | ||||
Debt instrument, basis spread on variable rate | 1.25% | ||||
Five Year Revolving Credit Facility, Amended | Revolving Credit Facility | Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.25% | ||||
Five Year Revolving Credit Facility, Amended | Unsecured Notes | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 1,500,000,000 | ||||
Debt instrument, term | 5 years | ||||
Debt instrument, carrying amount | 0 | ||||
Notes 5.250% due 2028 | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, carrying amount | $ 750,000,000 | 0 | |||
Debt instrument, interest rate, stated percentage | 5.25% | 5.25% | |||
Notes 5.250% due 2028 | Unsecured Notes | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 750,000,000 | ||||
Debt instrument, term | 5 years | ||||
Debt instrument, interest rate, stated percentage | 5.25% | ||||
Notes 0.000% due 2023 | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, carrying amount | $ 531,000,000 | $ 531,000,000 | |||
Debt instrument, interest rate, stated percentage | 0% | 0% | |||
Notes 0.000% due 2023 | Unsecured Notes | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | ¥ | ¥ 500 | ||||
Debt instrument, interest rate, stated percentage | 0% | 0% |
Borrowings and Lines of Credi_4
Borrowings and Lines of Credit - Long-Term Debt (Details) ¥ in Millions, $ in Millions | Sep. 30, 2023 USD ($) | Sep. 30, 2023 JPY (¥) | Aug. 16, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 7,398 | $ 6,671 | ||
Other (discounts and debt issuance costs) | (45) | (42) | ||
Total long-term debt | 7,353 | 6,629 | ||
Less: current portion | 531 | 531 | ||
Long-term debt | 6,822 | 6,098 | ||
Notes 0.000% due 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 531 | 531 | ||
Debt instrument, interest rate, stated percentage | 0% | 0% | ||
Notes 0.000% due 2023 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 0% | 0% | ||
Debt instrument, face amount | ¥ | ¥ 500 | |||
Notes 2.056% due 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 1,300 | 1,300 | ||
Debt instrument, interest rate, stated percentage | 2.056% | 2.056% | ||
Notes 0.37% due 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 145 | 163 | ||
Debt instrument, interest rate, stated percentage | 0.37% | 0.37% | ||
Notes 0.37% due 2026 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | ¥ | ¥ 21,500 | |||
Notes 0.318% due 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 637 | 638 | ||
Debt instrument, interest rate, stated percentage | 0.318% | 0.318% | ||
Notes 0.318% due 2026 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | ¥ | ¥ 600 | |||
Notes 2.293% due 2027 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 500 | 500 | ||
Debt instrument, interest rate, stated percentage | 2.293% | 2.293% | ||
Notes 5.250% due 2028 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 750 | 0 | ||
Debt instrument, interest rate, stated percentage | 5.25% | 5.25% | ||
Notes 5.250% due 2028 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 5.25% | |||
Debt instrument, face amount | $ 750 | |||
Notes 2.565% due 2030 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 1,500 | 1,500 | ||
Debt instrument, interest rate, stated percentage | 2.565% | 2.565% | ||
Notes 0.934% due 2031 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 531 | 531 | ||
Debt instrument, interest rate, stated percentage | 0.934% | 0.934% | ||
Notes 0.934% due 2031 | Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | ¥ | ¥ 500 | |||
Notes 3.112% due 2040 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 750 | 750 | ||
Debt instrument, interest rate, stated percentage | 3.112% | 3.112% | ||
Notes 3.362% due 2050 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 750 | 750 | ||
Debt instrument, interest rate, stated percentage | 3.362% | 3.362% | ||
Other Including Finance Leases | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, carrying amount | $ 4 | $ 8 |
Borrowings and Lines of Credi_5
Borrowings and Lines of Credit - Schedule of Debt Issuance Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Disclosure [Abstract] | ||||
Debt issuance costs amortization | $ 2 | $ 1 | $ 5 | $ 6 |
Total interest expense on external debt | $ 38 | $ 35 | $ 105 | $ 106 |
Borrowings and Lines of Credi_6
Borrowings and Lines of Credit - Schedule of Average Interest Rates on Borrowings (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Long-term Debt | |||||
Debt Instrument [Line Items] | |||||
Average interest expense rate on borrowings | 2.30% | 2.30% | 2% | ||
Average interest expense rate during period | 2.10% | 2% | 2% | 2% | |
Short-term Debt | |||||
Debt Instrument [Line Items] | |||||
Average interest expense rate on borrowings | 0% | 0% | 4.70% | ||
Average interest expense rate during period | 5.40% | 2.50% | 5% | 1.30% |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Defined Benefit Plan Disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plans | $ 8 | $ 7 | $ 32 | $ 28 |
Defined contribution plans | 16 | 14 | 50 | 49 |
Multi-employer pension and postretirement plans | 42 | 40 | 117 | 101 |
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 7 | 10 | 22 | 30 |
Interest cost | 8 | 4 | 24 | 13 |
Expected return on plan assets | (8) | (8) | (24) | (21) |
Recognized actuarial net loss | 0 | 3 | 0 | 8 |
Net settlement and curtailment (gain) loss | 0 | 1 | 0 | 1 |
Total net periodic benefit cost | 7 | 10 | 22 | 31 |
Other Postretirement Benefits Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total net periodic benefit cost | $ 1 | $ 1 | $ 1 | $ 1 |
Employee Benefit Plans - Sche_2
Employee Benefit Plans - Schedule of Share-based Compensation and Related Income Tax Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Stock-based compensation expense | $ 15 | $ 13 | $ 49 | $ 40 |
Less: future tax benefit | 2 | 2 | 6 | 5 |
Stock-based compensation expense, net of tax | 13 | 11 | 43 | 35 |
Share-based Payment Arrangement | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Stock-based compensation expense | 15 | 13 | 49 | 41 |
Liability Awards, Share-Based Compensation Arrangement | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ (1) |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) shares | |
Retirement Benefits [Abstract] | |
Common stock shares available for awards (in shares) | shares | 23 |
Unrecognized compensation cost | $ | $ 76 |
Unrecognized compensation cost, period for recognition | 1 year 10 months 24 days |
Stock (Details)
Stock (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Equity [Abstract] | |||||
Stock repurchased during period | $ 228,000,000 | $ 300,000,000 | $ 580,000,000 | $ 700,000,000 | |
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized (in shares) | 125 | 125 | 125 | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | ||
Common stock, shares authorized (in shares) | 2,000 | 2,000 | 2,000 | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||
Common stock, shares issued (in shares) | 436.9 | 436.9 | 435.6 | ||
Treasury stock (in shares) | 27.6 | 27.6 | 20.8 | ||
Stock repurchase program, authorized amount | $ 2,000,000,000 | $ 2,000,000,000 | |||
Stock repurchase program, remaining authorized shares amount | 1,400,000,000 | 1,400,000,000 | |||
Stock repurchased during period | 228,000,000 | 300,000,000 | 580,000,000 | 700,000,000 | |
Treasury Stock | |||||
Equity [Abstract] | |||||
Stock repurchased during period | $ 225,000,000 | $ 300,000,000 | $ 575,000,000 | $ 700,000,000 | |
Class of Stock [Line Items] | |||||
Stock repurchase during period (in shares) | 2.6 | 3.8 | 6.8 | 9.1 | |
Stock repurchased during period | $ 225,000,000 | $ 300,000,000 | $ 575,000,000 | $ 700,000,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ (4,751) | $ (4,888) | $ (4,799) | $ (3,144) |
Other comprehensive income (loss) before reclassifications, net | 40 | 88 | (63) | 171 |
Amounts reclassified, pre-tax | 1 | 81 | 9 | 83 |
Tax (benefit) expense reclassified | 0 | (1) | (2) | (2) |
Ending balance | (4,733) | (4,861) | (4,733) | (4,861) |
Foreign Currency Translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (681) | (631) | (587) | (642) |
Other comprehensive income (loss) before reclassifications, net | 39 | 93 | (56) | 173 |
Amounts reclassified upon change in Otis' share of Zardoya Otis ownership | (69) | |||
Amounts reclassified, pre-tax | 0 | 77 | 1 | 77 |
Tax (benefit) expense reclassified | 0 | 0 | 0 | 0 |
Ending balance | (642) | (461) | (642) | (461) |
Defined Benefit Pension and Postretirement Plans | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (8) | (124) | (8) | (128) |
Other comprehensive income (loss) before reclassifications, net | 0 | 0 | 0 | 0 |
Amounts reclassified upon change in Otis' share of Zardoya Otis ownership | 0 | |||
Amounts reclassified, pre-tax | 0 | 3 | 0 | 8 |
Tax (benefit) expense reclassified | 0 | (1) | 0 | (2) |
Ending balance | (8) | (122) | (8) | (122) |
Unrealized Hedging Gains (Losses) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | 7 | 3 | 7 |
Other comprehensive income (loss) before reclassifications, net | 1 | (5) | (7) | (2) |
Amounts reclassified upon change in Otis' share of Zardoya Otis ownership | 0 | |||
Amounts reclassified, pre-tax | 1 | 1 | 8 | (2) |
Tax (benefit) expense reclassified | 0 | 0 | (2) | 0 |
Ending balance | 2 | 3 | 2 | 3 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (689) | (748) | (592) | (763) |
Amounts reclassified upon change in Otis' share of Zardoya Otis ownership | (69) | |||
Ending balance | $ (648) | $ (580) | $ (648) | $ (580) |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Income Tax Disclosure [Abstract] | |
Increase in unrecognized tax benefits reasonably possible | $ 10 |
Decrease in unrecognized tax benefits reasonably possible | 330 |
Increase in unrecognized tax benefits, accrued interest, is reasonably possible | 5 |
Decrease in unrecognized tax benefits, accrued interest, is reasonably possible | $ 140 |
Restructuring and Transformat_3
Restructuring and Transformation Costs - Schedule of Pretax Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | $ 21 | $ 6 | $ 36 | $ 45 |
New Equipment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | 10 | 2 | 15 | 18 |
Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | 11 | 4 | 21 | 27 |
Cost of products and services sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | 9 | 2 | 11 | 16 |
Selling, general and administrative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | $ 12 | $ 4 | $ 25 | $ 29 |
Restructuring and Transformat_4
Restructuring and Transformation Costs - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | $ 21 | $ 6 | $ 36 | $ 45 |
UpLift Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Transformation costs | 4 | 4 | ||
New Equipment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | 10 | 2 | 15 | 18 |
Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | 11 | $ 4 | 21 | $ 27 |
2022 Actions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected costs | 120 | 120 | ||
Remaining costs | 28 | 28 | ||
2022 Actions | New Equipment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected costs | 43 | 43 | ||
Remaining costs | 6 | 6 | ||
2022 Actions | Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected costs | 77 | 77 | ||
Remaining costs | $ 22 | $ 22 |
Restructuring and Transformat_5
Restructuring and Transformation Costs - Pre-Tax Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | $ 21 | $ 6 | $ 36 | $ 45 |
Cost of products and services sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | 9 | 2 | 11 | 16 |
Selling, general and administrative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring costs | $ 12 | $ 4 | $ 25 | $ 29 |
Restructuring and Transformat_6
Restructuring and Transformation Costs - Restructuring Roll forward (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Reserve [Roll Forward] | ||||
Net restructuring costs | $ 21 | $ 6 | $ 36 | $ 45 |
Current And Prior Year Actions | Severance costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve, beginning balance | 41 | |||
Net restructuring costs | 36 | |||
Utilization, foreign exchange and other costs | (35) | |||
Restructuring reserve, ending balance | $ 42 | $ 42 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) € in Millions, $ in Millions, ¥ in Billions, $ in Billions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 JPY (¥) | Sep. 30, 2023 EUR (€) | Sep. 30, 2023 HKD ($) | Dec. 31, 2022 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Average of notional amount of foreign exchange contracts hedging foreign currency transactions | $ 4,300 | $ 4,300 | $ 3,900 | |||||
Average of notional amount of commodity contracts hedging commodity purchase transactions | 24 | 24 | $ 20 | |||||
Foreign currency cash flow hedge loss to be reclassified during next 12 months | 1 | 1 | ||||||
Foreign exchange contracts | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Foreign exchange contracts | 4 | $ 9 | 16 | $ 12 | ||||
Foreign Exchange Contract and Commodity | Cost of products and services sold | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Foreign exchange contracts | $ 1 | $ (3) | $ (8) | $ (11) | ||||
Net Investment Hedging | Foreign exchange contracts | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount of foreign exchange forward contracts | € 120 | $ 2 | ||||||
Net Investment Hedging | Foreign currency forward contracts | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount of foreign exchange forward contracts | € | € 95 | |||||||
Yen Denominated Investment Hedge | Net Investment Hedging | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Debt instrument, face amount | ¥ | ¥ 21.5 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | $ 5 | $ 5 |
Liability derivatives | (4) | (5) |
Not Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 36 | 28 |
Liability derivatives | (21) | (26) |
Foreign exchange contracts | Designated as Hedging Instrument | Cash Flow Hedging | Other current assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 2 | 3 |
Foreign exchange contracts | Designated as Hedging Instrument | Cash Flow Hedging | Other assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 3 | 2 |
Foreign exchange contracts | Designated as Hedging Instrument | Cash Flow Hedging | Accrued liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | (3) | (4) |
Foreign exchange contracts | Designated as Hedging Instrument | Cash Flow Hedging | Other long-term liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | (1) | 0 |
Foreign exchange contracts | Not Designated as Hedging Instrument | Other current assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 31 | 25 |
Foreign exchange contracts | Not Designated as Hedging Instrument | Other assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset derivatives | 5 | 3 |
Foreign exchange contracts | Not Designated as Hedging Instrument | Accrued liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | (17) | (20) |
Foreign exchange contracts | Not Designated as Hedging Instrument | Other long-term liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | (4) | (2) |
Commodity contracts | Designated as Hedging Instrument | Cash Flow Hedging | Accrued liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | 0 | (1) |
Commodity contracts | Not Designated as Hedging Instrument | Accrued liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Liability derivatives | $ 0 | $ (4) |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Gain (Loss) on Derivative Instruments Reclassified From OCI (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gain (loss) recorded in Accumulated other comprehensive income (loss) | $ 2 | $ 3 |
Financial Instruments - Sched_3
Financial Instruments - Schedule of Gain (Loss) on Derivative and Non-Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net Investment Hedging | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Net investment hedge, gain (loss) | $ 8 | $ 10 | $ 21 | $ 40 |
Foreign currency denominated long-term debt | Net Investment Hedging | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Net investment hedge, gain (loss) | 6 | 10 | 18 | 40 |
Foreign currency forward contracts | Net Investment Hedging | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Net investment hedge, gain (loss) | 2 | 0 | 3 | 0 |
Foreign exchange contracts | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Foreign exchange contracts | $ 4 | $ 9 | $ 16 | $ 12 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term borrowings | $ (54) | $ (139) |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 49 | 55 |
Customer financing notes receivable, net | 31 | 55 |
Short-term borrowings | (54) | (139) |
Long-term debt, including current portion (excluding leases and other) | (7,394) | (6,663) |
Long-term liabilities, including current portion | (197) | (222) |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 49 | 53 |
Customer financing notes receivable, net | 27 | 51 |
Short-term borrowings | (54) | (139) |
Long-term debt, including current portion (excluding leases and other) | (6,343) | (5,661) |
Long-term liabilities, including current portion | (184) | (197) |
Fair Value Level 1 | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 0 | 0 |
Customer financing notes receivable, net | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term debt, including current portion (excluding leases and other) | 0 | 0 |
Long-term liabilities, including current portion | 0 | 0 |
Fair Value Level 2 | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 49 | 53 |
Customer financing notes receivable, net | 27 | 51 |
Short-term borrowings | (54) | (139) |
Long-term debt, including current portion (excluding leases and other) | (6,343) | (5,661) |
Long-term liabilities, including current portion | (184) | (197) |
Fair Value Level 3 | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term receivables, net | 0 | 0 |
Customer financing notes receivable, net | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term debt, including current portion (excluding leases and other) | 0 | 0 |
Long-term liabilities, including current portion | 0 | 0 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 31 | 30 |
Derivative assets | 41 | 33 |
Derivative liabilities | (25) | (31) |
Fair Value, Recurring | Fair Value Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 31 | 30 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Fair Value Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Derivative assets | 41 | 33 |
Derivative liabilities | (25) | (31) |
Fair Value, Recurring | Fair Value Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
Guarantees - Guarantees and Pro
Guarantees - Guarantees and Product Warranties Rollforward (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Movement Warranties [Roll Forward] | ||
Beginning balance | $ 13 | $ 20 |
Warranties | 3 | 1 |
Settlements made | (5) | (7) |
Foreign exchange and other | (1) | (1) |
Ending balance | $ 10 | $ 13 |
Guarantees - Narrative (Details
Guarantees - Narrative (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Standby Letter of Credit | |
Guarantor Obligations [Line Items] | |
Guarantor obligation, maximum exposure | $ 128 |
Contingent Liabilities (Details
Contingent Liabilities (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 13, 2021 defendent | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 EUR (€) | Sep. 30, 2022 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2015 EUR (€) | Sep. 30, 2023 EUR (€) | Dec. 31, 2022 USD ($) | |
Loss Contingencies [Line Items] | ||||||||||
Income tax benefit | $ (137) | $ (143) | $ (400) | $ (382) | ||||||
Number of defendants | defendent | 3 | |||||||||
Environmental Regulation | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Loss contingency accrual | 5 | 5 | $ 5 | |||||||
German Tax Office Against Otis | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Income tax benefit | 229 | € 215 | ||||||||
Disallowed tax benefit, estimated interest expense | 126 | € 118 | ||||||||
Unrecognized tax benefits, interest on income taxes expense | $ 300 | € 275 | ||||||||
Unrecognized tax benefits, interest on income taxes accrued | 47 | 47 | € 45 | |||||||
Asbestos Matter | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Insurance recovery receivable | 5 | 5 | 5 | |||||||
Asbestos Matter | Minimum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Estimate of possible loss | 21 | 21 | 21 | |||||||
Asbestos Matter | Maximum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Estimate of possible loss | $ 43 | $ 43 | $ 43 |
Segment Financial Data (Details
Segment Financial Data (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Revenues | $ 3,523 | $ 3,344 | $ 10,589 | $ 10,246 |
Operating profit | $ 571 | $ 529 | $ 1,664 | $ 1,542 |
Operating profit margin | 16.20% | 15.80% | 15.70% | 15% |
New Equipment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,435 | $ 1,447 | $ 4,346 | $ 4,403 |
Maintenance and Repair | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,715 | 1,555 | 5,116 | 4,784 |
Modernization | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 373 | 342 | 1,127 | 1,059 |
Service sales | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,088 | 1,897 | 6,243 | 5,843 |
United States Operations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,004 | 943 | 3,015 | 2,873 |
China | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 596 | 672 | 1,832 | 1,951 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,923 | 1,729 | 5,742 | 5,422 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,523 | 3,344 | 10,589 | 10,246 |
Operating profit | $ 601 | $ 546 | $ 1,752 | $ 1,620 |
Operating profit margin | 17.10% | 16.30% | 16.50% | 15.80% |
General corporate expenses and other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Operating profit | $ (30) | $ (17) | $ (88) | $ (78) |
Operating profit margin | 0% | 0% | 0% | 0% |
New Equipment | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,435 | $ 1,447 | $ 4,346 | $ 4,403 |
Operating profit | $ 94 | $ 100 | $ 277 | $ 292 |
Operating profit margin | 6.60% | 6.90% | 6.40% | 6.60% |
Services | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 2,088 | $ 1,897 | $ 6,243 | $ 5,843 |
Operating profit | $ 507 | $ 446 | $ 1,475 | $ 1,328 |
Operating profit margin | 24.30% | 23.50% | 23.60% | 22.70% |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Oct. 05, 2023 USD ($) |
Subsequent Event | UpLift Program | |
Subsequent Event [Line Items] | |
Expected costs | $ 55 |