Okay, great. We're moving right along here with Otis and Cristina Méndez, CFO. Thank you so much for making it here. I think you're gonna give a little bit of intro, and then we'll jump right into the Q&A. Absolutely. Thank you, Steve, and thank you for having me. I appreciate the opportunity of talking with you today. Let me read a statement first. Please note that except as otherwise noted, I will speak to results from continuing operations, excluding restructuring and significant non-recurring items. Reconciliation can be found in our fourth quarter earnings presentation on our investor website. We also remind listeners that today's discussion contains forward-looking statements. Otis' SEC filings provide details on important factors that could cause actual results to differ materially. Thank you, Steve. Let me start by saying that service is the foundation of our business, as we all know, and we are very pleased to see the Service business growing. It has grown mid-single digits since it's been, with expanding margins of fifty basis points per annum, and we see this growth continuing thanks to the growing opportunity we see in the market. Thanks to this resiliency, despite of the challenges we have faced in New Equipment in the last years, New Equipment has declined, especially in China. From the top-line perspective, it has been a drag of approximately $400 million a year in 2024 and in 2025. Despite of that, we have delivered ongoing and a steady EPS growth, and that's thanks to the resiliency of our Service business. Looking ahead, we are very excited about the opportunity we see. We see an opportunity in the addressable market, what we call the TAM, and that is thanks to the aging population of units. We have all of these units that were installed in the major Western construction cycles back 30 years ago, and in the construction cycle that started in the 2000s. We are talking about 9 million units out of the 23 million units global installed base. These are in the prime age of modernization. That means 15, 20 years or older. This population is growing high single-digit. Besides, the portion of the market that is actually being served is significantly smaller, and that's why modernization revenues are growing double-digit. We see this as an evergreen opportunity because by the time we complete the cycle of modernization of all of these units, we will have new units that require modernization again. In addition to that, repair is also growing because of all of the units that are not being modernized, and repair is our highest margin activity in the P&L. We see this happening simultaneously, repair and modernization growing in the four regions in the globe. We are also executing on a strategy that is based on value. We are addressing value growth instead of volume growth, and we are very excited about an opportunity in pricing. We have been very disciplined in passing inflation to customers, but the opportunity is to do micro-pricing, to be much more targeted, and to segment and align the price with the willingness to pay and to the value the customers receive. Because of all of this, we are excited about the growth opportunity in Service. We see the acceleration happening as early as in 2026 and as early as in Q1. Q1 is growing maintenance and repair sequentially from Q4, as we expected. We are convinced that with our scale, with our industry-leading margins, and with our strong brand, we are very well positioned to capture this opportunity. I guess the Services business obviously very strong in line with the guidance. Maybe you could just talk about the just broadly the other parts of the business, what you're seeing out there, and are you reaffirming the total company guidance to Yeah. No, absolutely. Look, as you said, Service is super strong. Yeah. We see an acceleration of repair. Repair in the quarter in Q1 is trending towards approximately 10% growth, exactly as expected. We are also seeing an ongoing demand. Our repair orders continue growing high single digits, so we have good line of sight for the high single-digit repair growth we have guided for 2026. In order to do that, we are hiring mechanics. We hired last year 1,000 mechanics. In the two first months of the year, we have onboarded 200, together with the 250 we onboarded in Q4. We are in good pace, and we are accelerating as much as we can because we need those mechanics to execute our growth plan. In addition to that, I've talked about pricing. I'm super excited about the pricing opportunity because here what we are doing is piloting pricing in maintenance and repair in high-value markets. We are very focused on the markets that move the needle, and we are essentially adapting the price to the value we deliver to the customer. It's super segmented, very analytical, thanks to an AI algorithm that we are rolling out in these particular markets. We see the results in the orders, and this is flowing through in the P&L as we convert those orders. With price, we expect this year to be 4% versus 3% in the past, so 1 point incremental. That together with portfolio growth that is expected to be around 3%, we will continue growing our maintenance business. Last but not least, you ask outside in Service, New Equipment is also performing very well. In New Equipment in particular, we are positive about the Americas. As you know, Americas has had strong quarters of orders in the last 6 quarters. Their backlog is growing. As of Q1, the backlog will be growing low teens. You have seen probably today the ABI numbers. They are also very promising. ABI is going up sequentially 49+, so still below 50, but getting there. Highest ABI number we have seen in the last 12 months. We remain very bullish about the new equipment market in Americas growing mid-single digit. Now, on the New Equipment and mod side, we are impacted by the geopolitical situation in the Middle East. We are present in the Middle East, but it's a small portion of our business. It's only a low single-digit of our revenues. We are present in UAE, Saudi, Egypt, Qatar, Bahrain, Kuwait, and we also have distributors or indirect presence in Lebanon, Jordan, Israel, Cyprus and Oman. It's a small part of the business, but the job sites are closed. We see some delays in the recognition of revenues, and we also see some disruption in shipments from Asia to Europe and vice versa because of the shipments of units, components and parts. This is just temporary. We are rerouting the shipments all along Africa instead of following the Suez, and we also see increase of logistics costs and some FX headwinds. We guided FX for euro at 1.18, and we see today, we're trading at 1.15. Having said that, all of these impacts are temporary. The orders are in place. The units have been produced. It's just a matter of the situation stabilizing in the area and being back to normal. We quantify this impact for the quarter in approximately $20 million for New Equipment and modernization each, which is a small portion of our quarterly revenues. For New Equipment, it represents 2% of our revenues. For modernization, it's 1% of our revenues. At profit level, there is a flow-through because of the delay of shipments, and we also have a calendarization of investments. I said before, we are investing in mechanics. We are not taking the foot off the gas. We are accelerating investments because it's the right thing to do for the business. It's a key enabler for us to grow. Because of these mechanics that have onboarded at the beginning and are productive, and because of the investment in pricing, in the AI algorithm and training the sales force, we see some calendarization of profit into the second half of the year. Currently, we are seeing EPS in Q1 around -3% to -5% down, but it's just calendarization in the year. 3%-5% down EPS, that's a year-over-year figure? Correct. Okay. For the first quarter. For the first quarter. Anything kind of calendar-wise in the second quarter? Should we expect a nice steady ramp from there? Yeah. How do you see that seasonality playing out? Second quarter, of course, will depend on how the situation evolves in the Middle East. Assuming we come back to normal, it's just a matter of time for the job sites to be reopened there. Look, we are prioritizing the safety of our employees. The employees are not in the job site, so it will take some time for job site readiness. The rest of Europe, the shipments are in place. It's a matter of facing the logistics, the FX, and also some commodities are a headwind because of the conflict, particularly aluminum, but we are talking about the small numbers. It's only mid-single-digit dollar impact. I would say first half of the year would be -3% to -5%, so Q2 in line with Q1 EPS growth. We already had a backloaded profile in the year, and the reason for that is because New Equipment is gradually turning around into positive. We expect Americas to be positive in New Equipment sales Q2, albeit Q3. We also have a tariff comparison that is easier in the second half of the year, and we also see the acceleration of Service that is in the second half, particularly because of the pricing benefits coming later in the year. That's what was planned. With the conflict, there is some revenue and profit shifted to the right, but kind of essentially in line with the calendarization we had initially. The good thing, Steve, is we are very encouraged by the strong performance of the core of the business, that is maintenance and repair, the acceleration in Q1, and also we have a new organization in place. This was announced in January. We have now a Chief Operating Officer and a Chief Growth Officer, new roles that are focused on the one side on operational performance and on the other side on growth initiatives, and we believe this is the right organization for us to execute our plan in the year. Just thinking about the repair growth, you mentioned it was gonna be up 10% in the first quarter. How are you thinking about it for the year, for the total year? For full year, we said around high single-digit growth, so first quarter probably a little bit stronger. It has also an easier compare with first quarter last year. It will slow down but still in the high single-digit level for the full year. As I said before, our orders for the quarter are trending in that direction. Got it. As far as the pricing on service, can you just take a bit of a step back? You said there's gonna be a price point this year. Yeah ... that's incremental to what, you guided to, or is that in line with guide and you just feel better about it? That was already baked into the guide. Yeah. We feel very good about it because we see the results of the first pilots in the first two months of the year. It's coming in orders. It's just making its way through the P&L as we compare those orders. We are also going to scale up to other branches and always focus on maintenance and repair and always focus on high-value customers to get started. Okay. As far as mods are concerned, how are you feeling about orders there in the first quarter and the expectation there for the year as well on sales? As I said before, mod for us is evergreen. We see mod growing low teens, and we expect the first quarter to be kind of around that ballpark. Conversion is coming as we ramp up resources. We ended up last year with a backlog growing 30%, so we are very positive about mod. The good thing of mod is we are industrializing our packages. That makes everything easier in the factory. We benefit from supply chain scale, material productivity, and this is especially easier on the field because it's the same installation method as for New Equipment. We can shift mechanics from New Equipment to mod very easily, and we also capture field efficiency. We said in the past, two years ago, that mod was going to surpass New Equipment margins. At that point, New Equipment was at 6% with a midterm target to get to 10%. We are very close to that 10% margin in mod, and we will not stop there. We will continue capturing efficiencies. We think we can do more than that. On that front, there was obviously a pretty big subsidy program in China. Yeah. How are you guys thinking about that in 2026? What's the outlook for the sustainability of a program like that? Those programs are notorious for turning on. Yeah. Shutting off. How do you guys think about that outlook? Yeah, no, you are totally right. The program in China. First, China is growing modernization in all the verticals, not only residential. This program is focused on residential, but we are also growing in commercial, in infra, and in offices. On the residential side, the program started in 2024. At that point, the government subsidized 80,000 units. Last year it was 120,000 units, and this year in December 2025, the government announced the plan to subsidize 180,000 units. In February, the Ministry of Housing and Urban-Rural Development announced the first release of a batch of 61,500, as part of the 180,000 for the year. We see this very positive as an ongoing support of the government to continue promoting modernization in China. The difference this year that we welcome is that there is no fixed price. The subsidy will depend on the number of stops. The higher the number of stops, the higher the subsidy. They have announced that for more than 19 stops, it's going to be RMB 200,000. Okay. This will help the mix and therefore the margin, and we are quantifying that with the more volume and this tiered approach, the program this year is going to be 15%-40% bigger than last year. We are going to take that opportunity, and we are going to take our larger share of segment in this growing segment. Remember that China has a faster conversion rate, so we'll get more orders, we can convert faster in the year. We are still evaluating and see what it means for us in the year, but this is a good opportunity. You expect it to be up 40% for you guys? Fifteen to 40% bigger- Got it. than what it was last year. Got it. Okay. Got it. Is there any visibility on, I mean, this seems like it's huge for you guys. Is there any visibility on 2027 and how they approach 2027? 'Cause it's a lot of units. Yeah, it's a lot. They're putting in the base. Look, first. I'm sorry. How big is your China mod business today-ish, roughly? It's small. We don't disclose China mod, but it's small relative to New Equipment. Okay. Growing. Well, last year. Yeah, of course. China grew 80% mod sales. Right. 100% in Q4, so it's really booming. Right. Back to your question, we expect the program to continue and maybe winding down over time in the sense of probably not having a full subsidy, but a partial subsidy. The good thing of this program is creating the demand and it's creating the interest in the marketplace. It's now monopolizing all the residential modernization. As it winds down, we are very prepared to continue generating this demand and growing over time. You don't see a hit when the program comes to an end. Right. Okay. Let's talk about attrition rates. Maybe just talk about what's happened. This is kind of the maintenance side, the maintenance portfolio side. Okay. How's the attrition rate trending, and what are the actions you're taking to kind of stabilize that? Yeah, no, attrition rate is one of the key focus areas at the moment, and we are pleased to see outside of China attrition rate stabilized in 2025. At a very good level, by the way, we had a retention rate of 94.5%. That is a good rate. That is because we are putting much more focus on quality. We have realized that customers do not leave because of price or because of competitive pressure. They leave because they are not satisfied with the quality of the service. Putting the right focus on quality and ensuring that all the branches are looking at the quality KPIs and assigning enough mechanics to follow those contractual commitments, it is fundamental to improve retention. We have started investing on that last year, and that's linked to hiring mechanics, and I mentioned that we have hired 450 in the last five months. We see good results, and going forward, we expect this to improve. Now, China is different. China is a very price-sensitive market. The contracts are only annual, therefore, every year you renegotiate. In China, we are pivoting into a value-driven strategy. We are not chasing units for the sake of units. Not all the units count the same. We are focusing on the right customer segments, on the right verticals, on the right tiers. Not a surprise, Tier 1, Tier 2 cities are much more profitable because they are more dense than Tier 5 and 6. With this strategy, we may slow down the growth of volumes in China, but with an acceleration of dollars because we get more value from the customer base. I guess, do you have, do you need to tweak the headcount there as well because of that? Because you have kind of an infrastructure to serve a certain level of growth, or do you just kind of stop building that infrastructure and, you know, leverage it, to the extent? We are talking about service. The good thing is that we will be able to be more efficient. As you rightly say, we have less growth, but more dense, therefore is more productive. But that means we can free up resources to do more activities on repair and modernization. It's kind of freeing up resources for more growth. I see. Got it. As far as that, the cost of those mechanics, how does that kind of filter into the P&L? Like, what's the annual rough cost of one of those mechanics, and how does it. When do you see that, like, kind of breaking even? It depends on where you are in the world. It's not the same a mechanic in China than a mechanic in- Yeah the U.S., of course. You know, for example, U.S., you know, is under a union agreement that is a multi-employer agreement. Right All the players in the industry follow the same rules. I would say as an average pattern, at the beginning, hiring a mechanic is a cost because you need to train and they are not productive, they are not billing revenues. After, I would say, three to six months, depending on where you are in the world, they become productive and they are fully absorbed with revenue generation. Got it. When we think about the portfolio growth rate here, I guess the 94.5% that you have outside of China, where was that before and can that go back to where it was before, or are you pretty satisfied with the 94.5%? Well, I think it's a good number. We have been a little bit higher in the past, and we think a good target would be 96%. Going beyond that is complicated because you have natural attrition coming from aging and or buildings that are changing, right? 96% would be a good target. You're still thinking in this kind of construct, you're thinking portfolio growth in units. Is that four or three? I think you said three plus a point of price or something and That's exactly what we are thinking. Okay. That is probably going to be around 3% with a different mix. Yep. Means China is slowing down and accelerating in other regions and with much more price, and that will help long term to reduce the headwinds and to also accelerate total maintenance as growth. Right. I think that makes a lot of sense. The Services business, if you kind of break that down. You said 50 basis points of margin expansion is because of all these costs that are kind of loading in here this year. Is that 50 basis points a little bit lower this year, or are you pretty much on track for the That's a good question. We are not focusing so much on margin expansion anymore. We are focusing on dollar growth, top line and bottom line. On the Service side, we still expect margin expansion because as we grow the portfolio, we increase density, we increase productivity, and also pricing has a higher flow through. All the pricing upsides are 100% flowing through the P&L. Having said that, in Service, we also have two headwinds from a margin rate perspective. One is modernization that is growing faster and has a lower margin rate, and the other one are all of these investments. They are headwinds from the rate. They are not headwinds from the dollar side. To your question, we expect margins to expand, not to the extent of the 50 basis points we saw in the past, maybe 10-20 basis points, but there is still room to continue expanding. That would be the annual, you know, framework. That would be the annual. You have calendarization. Okay Seasonal effects when you compare the different quarters. Right. You would expect, though, after these, you hire these 1,000 service people, they kind of get up to speed, you can start to leverage them a little bit more in the rate- Absolutely All else equal. Absolutely That would be a little bit of a lift with everything else being pretty stable. Absolutely. Having said that, as we continue growing, we continue onboarding. Right. This is going to be a natural process. Okay. Got it. It doesn't sound like the 50 basis points from a longer term perspective in Services is really we should kind of build back up to that over time. Yeah As opposed to going from up 10% to 20% to up 50% in an inflection. Exactly. Okay. Look, at the end of the day, the question is Service will continue. We'd accelerate growth- Right from mid-single-digit to mid-single-digit plus. Okay. Margin will not expand 50 basis points, will be 10-20, but total profit will continue growing in Service. Right. On the New Equipment side, New Equipment has been a drag, I said it at the beginning, both revenue and profit. This is coming to an end. We think the worst is behind us. We see China stabilizing. In the moment New Equipment stops being a drag, together with acceleration of service growth, you can see the growth in EPS. Okay. How are you exposed, I guess just stepping back for a second to the Services side, how are you exposed to fuel prices on that front? You got a lot of guys driving around in trucks. Yeah. It's not a big amount, so we have approximately $60 million-$70 million fuel cost per annum. If you assume a 10% increase, this is mid-to-high single-digit impact, and by the way, we have the ability to pass part of this to our customers. Got it. Not a big impact. Not a big issue. No for you guys. Okay. Got it. Anything on the tariffs front that stands out for you guys this year? Well, tariffs, I mean, it, the situation remains fluid, but based on what we know today, it should be a positive impact to our guide. The Supreme Court decision regarding IEEPA, together with the newly implemented Section 122, this could represent $5 million-$10 million upside to our guide. This is excluding any refunds from the previously paid IEEPA, that is. As I said before, it's very fluid, so we continue to evaluate, and we wait until we see the final scenario. Just remind us again on kind of the non-fundamental stuff, the FX, what were you expecting and what would that be now? Yeah. That is at the moment a headwind because we guided according to euro being 1.18. Yep. We see it's 1.15, 1.16, so that can be a headwind to the guide this year. Okay. Got it. Any magnitude there? We see how it goes. It also depends on how the conflict evolves in the next weeks. Okay. I'm not gonna ask you about that, timing on that. Mm. On the New Equipment side, you're saying that China's stabilizing. Just talk a little bit more about the orders there and what you're seeing? Yeah so far this year in China. What gives you confidence? China market last year declined 13%, and we are expecting this year to decline approximately 8%. A little bit more at the beginning of the year, around 5% decline in the second half of the year. Of course, the situation is very volatile, and it may get better. If it gets better, because of the lower conversion rates, we can move it into the P&L faster. Our expectation is that China is going to continue declining. At the same time, we are very much focused on service to growth modernization and service and to focus on New Equipment projects that gives us the conversion into service. Got it. How's pricing there? Are you seeing pricing stabilize at all on the equipment front? It is. I would say stability is too much to say, but it is price-cost neutral. Got it. Okay. In the rest of the world you were pretty optimistic. You talked a little bit about the U.S. What are you guys seeing? Yeah in Europe? Europe is growing low single digit all across the board, leaving aside the situation in Middle East that of course may impact demand if it stays for long term. APAC is growing. APAC is growing in India. It's high single digits. Southeast Asia is growing. Japan is slightly growing. Even Korea that has been declining, we see some signals of a stabilization in Korea. As far as the margins here, just remind us of what you guys guided to and how you see that playing out? Yeah for this year. We guided slightly below 4%. That would be the same level of margin rate we saw in Q4. It's going to continue this year. Okay. No change to that. No to that. Okay. Just one last one to kinda wrap up the the guide. I know some of this stuff is temporary in the first half. How much of this, you know, impact in the first half can you make up in the second half? On an annual basis, are you kinda reaffirming the year? No. Is the slow start kind of you gain some of that back, but you don't gain it all back in the second half, or are you- Look, I would say it's too early to say because, again, I cannot predict how long the situation is going to last. Okay. Having said that, all of the impact we are seeing is temporary. There is no impact on the demand. We see the orders continue. By the way, the orders we are now executing are in place. We have a backlog, and we have the shipments. It's a matter of, for the rest of Europe, navigating the macro. For the Middle East, it's for the job sites to be reopened. In the moment this happens, we can recover everything. It's only a matter of the calendarization that we expect now a more backloaded profile in the second half of the year. Okay. You guys had a really strong performance in free cash flow in the fourth quarter. Maybe talk about the moving parts on cash flow as you move into this year and then into, you know, for the annual. Yeah on cash conversion. No, we are very pleased with the cash flow conversion. Last year we ended up at 100%, back to our normal levels. That at the end is a result of New Equipment that is moderating the decline, plus modernization is growing. Modernization has the same working capital pattern as New Equipment, which is essentially we collect advances when we book the orders, and we also collect before shipping the material to the field. As modernization grows, this is a tailwind in working capital. We see the 100% conversion rate from 2025 continuing in 2026. New Equipment is also going to moderate. We're expecting the guide New Equipment sales to be flat to low single digit down versus -7% last year, and mod continues growing at low teens. From that perspective, good line of sight to continue cash flow conversion at 100%. What are you... How are you thinking about capital allocation priorities? There's some assets out there that are being talked about. Yeah. Is there any M&A on the agenda? We have a very consistent capital allocation strategy. We generate an incredible amount of cash, and we have said to our shareholders that we will continue with a 40% payout of dividend, subject to board approval, plus also share buyback to give the excess of cash to shareholders. From the M&A perspective, the bread and butter of our M&A and the most accretive deals are small ISPs that we can easily integrate into a branch. We synergize SG&A, we synergize the field routes, and we will continue doing that. We see more ISPs knocking on the doors because the industry gets more sophisticated technology-wise and there are generational refresh, right? They are calling us, and we are taking opportunity when it comes up. From a big M&A perspective. There are rumors in the market, I'm not going to comment on any rumor transaction. I can only say that whatever scenario happens, we will welcome the transparency on that asset, and this will happen either in an IPO or in a consolidation scenario. If it is consolidation, it's going to be a very complex deal which will trigger destruction, and we are going to take advantage of that, from our side. I don't want to comment on potential very serious questions about whether this is in the best interest of customers or employees. Right. Last but not least, we have competed in a very consolidated industry for more than 100 years. We know these players very well, and we know how to win. We are essentially going to remain focused to execute our winning strategy that is being customer-centric and continue leading the market with the best-in-class margins. What are you seeing from the ISPs as far as, you know, how competitive they're being on price? They have a different value proposition. They are more local, they have proximity, and they are also less sophisticated. They cannot run the big modernization. They cannot run complex repairs. They are kind of more bread and butter. We are not so concerned about the competitive environment. As I said at the beginning, retention is typically very high if you do the right things for the customer. That's not an issue. What we do see, and I said it before, is more ISPs trying to leave the market because of technology sophistication and because of the generational refresh. Right. Really the competitive dynamics that you're seeing out there, or at least the attrition rates you're seeing out there, I mean in China, it's a bit of a pivot in strategy that you're undertaking, and then here in the U.S., it's really not a competitive issue, it's more of a, you know, you guys needed more boots on the ground and better service effectively. Absolutely. You got it right. Okay. That makes sense. Any questions out there? Everybody's shy. I mean we have one question the entire day. That's all right. I can keep going. On the other raw materials, metals or, you know, steel or anything like that, any- No ... anything to- Look- Anything to note? Last year commodities was a tailwind for us of approximately $10 million. This year we anticipated it was going to be a headwind in the similar amount. Essentially copper is trending up, but very small in the broader scheme of things, so we are talking about $10 million. Nothing to do with the commodity crisis we saw three years ago. Right. Far from what we saw in COVID and. Absolutely. Nothing to do with that. The inflation there. Anything else that you wanted to talk about that we really didn't touch on? No. Look. I think we covered a lot. Again, we are very encouraged by the trends we see in the first quarter in the core of the business, that is maintenance and repair. Leaving aside all the noise for the geopolitical conflict that in the broader scheme of things is small, I said before $20 million-ish in New Equipment and in modernization, and it's just calendarization within the year. We continue investing. We see the good results of investment in pricing and in mechanics, and with the new organization in place, we are very confident on delivering what we said. Right. I guess this first quarter shallow start is really centered within the Middle East region and things having trouble going back and forth and some delays as opposed to anything to do with, like, underlying demand. Exactly in China or anything like that. Exactly. It's essentially the Middle East region, shipments to Europe impacted by the Middle East conflict. Yep plus the calendarization of investments. Yep, the investments, right, 'cause you're starting off the year on a pretty strong foot. Yeah. Okay. Anything else? Anybody? Any questions? Okay, I think that's all we have. Thank you very much. Thank you so much. Thank you, Steve.