Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 21, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38636 | |
Entity Registrant Name | Garrett Motion Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4873189 | |
Entity Address, Address Line One | La Pièce 16 | |
Entity Address, City or Town | Rolle | |
Entity Address, Country | CH | |
Entity Address, Postal Zip Code | 1180 | |
City Area Code | 41 21 | |
Local Phone Number | 695 30 00 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 64,506,104 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001735707 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | GTX | |
Security Exchange Name | NASDAQ | |
Series A Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Series A Cumulative Convertible Preferred Stock, par value $0.001 per share | |
Trading Symbol | GTXAP | |
Security Exchange Name | NASDAQ |
CONSOLIDATED INTERIM STATEMENTS
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales (Note 3) | $ 901 | $ 997 |
Cost of goods sold | 726 | 801 |
Gross profit | 175 | 196 |
Selling, general and administrative expenses | 53 | 55 |
Other expense, net | 1 | 1 |
Interest expense | 23 | 21 |
Non-operating (income) expense | (28) | 26 |
Reorganization items, net (Note 1) | 1 | 174 |
Income (loss) before taxes | 125 | (81) |
Tax expense (Note 5) | 37 | 24 |
Net income (loss) | 88 | (105) |
Less: preferred stock dividend (Note 17) | (38) | 0 |
Net income (loss) available for distribution | $ 50 | $ (105) |
Earnings per share | ||
Earnings (loss) per common share, basic (in USD per share) | $ 0.15 | $ (1.38) |
Earnings (loss) per common share, diluted (in USD per share) | $ 0.15 | $ (1.38) |
Weighted average common shares outstanding | ||
Weighted average common shares outstanding, basic (in shares) | 64,538,527 | 75,904,898 |
Weighted average common shares outstanding, diluted (in shares) | 64,732,090 | 75,904,898 |
CONSOLIDATED INTERIM STATEMEN_2
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 88 | $ (105) |
Foreign exchange translation adjustment | 2 | 110 |
Changes in fair value of effective cash flow hedges, net of tax (Note 15) | 8 | 1 |
Changes in fair value of net investment hedges, net of tax (Note 15) | 13 | 0 |
Total other comprehensive income, net of tax | 23 | 111 |
Comprehensive income | $ 111 | $ 6 |
CONSOLIDATED INTERIM BALANCE SH
CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 315 | $ 423 |
Restricted cash | 5 | 41 |
Accounts, notes and other receivables – net (Note 6) | 786 | 747 |
Inventories – net (Note 8) | 301 | 244 |
Other current assets | 73 | 56 |
Total current assets | 1,480 | 1,511 |
Investments and long-term receivables | 33 | 28 |
Property, plant and equipment – net | 469 | 485 |
Goodwill | 193 | 193 |
Deferred income taxes | 278 | 289 |
Other assets (Note 9) | 235 | 200 |
Total assets | 2,688 | 2,706 |
Current liabilities: | ||
Accounts payable | 1,071 | 1,006 |
Current maturities of long-term debt (Note 13) | 7 | 7 |
Accrued liabilities (Note 10) | 302 | 295 |
Total current liabilities | 1,380 | 1,508 |
Long-term debt (Note 13) | 1,166 | 1,181 |
Deferred income taxes | 24 | 21 |
Other liabilities (Note 11) | 271 | 269 |
Total liabilities | 3,045 | 3,174 |
COMMITMENTS AND CONTINGENCIES (Note 19) | ||
EQUITY (DEFICIT) | ||
Common Stock, par value $0.001; 1,000,000,000 and 1,000,000,000 shares authorized, 64,506,104 and 64,570,950 issued and 64,506,104 and 64,570,950 outstanding as of March 31, 2022 and December 31, 2021, respectively | 0 | 0 |
Additional paid–in capital | 1,327 | 1,326 |
Retained deficit | (1,703) | (1,790) |
Accumulated other comprehensive income (loss) (Note 16) | 19 | (4) |
Total deficit | (357) | (468) |
Total liabilities and deficit | 2,688 | 2,706 |
Series A Preferred Stock | ||
EQUITY (DEFICIT) | ||
Series A Preferred Stock, par value $0.001; 245,715,735 and 245,921,617 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | $ 0 | $ 0 |
Preferred stock, shares issued (in shares) | 245,715,735 | 245,921,617 |
Preferred stock, shares outstanding (in shares) | 245,715,735 | 245,921,617 |
Series B Preferred Stock | ||
Current liabilities: | ||
Mandatorily redeemable Series B Preferred Stock (Note 14) | $ 0 | $ 200 |
Mandatorily redeemable Series B Preferred Stock – long-term (Note 14) | $ 204 | $ 195 |
CONSOLIDATED INTERIM BALANCE _2
CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares, issued (in shares) | 64,506,104 | 64,570,950 |
Common stock, shares, outstanding (in shares) | 64,506,104 | 64,570,950 |
Series A Preferred Stock | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 245,715,735 | 245,921,617 |
Preferred stock, shares outstanding (in shares) | 245,715,735 | 245,921,617 |
CONSOLIDATED INTERIM STATEMEN_3
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 88 | $ (105) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||
Reorganization items, net | 0 | 19 |
Deferred income taxes | 13 | 4 |
Depreciation | 22 | 23 |
Amortization of deferred issuance costs | 2 | 2 |
Interest payments, net of debt discount accretion | (6) | 0 |
Foreign exchange (gain) loss | (4) | 33 |
Stock compensation expense | 2 | 2 |
Other | 12 | (6) |
Changes in assets and liabilities: | ||
Accounts, notes and other receivables | (61) | (2) |
Inventories | (62) | (34) |
Other assets | (42) | 14 |
Accounts payable | 116 | 74 |
Accrued liabilities | 0 | 17 |
Other liabilities | (7) | (9) |
Net cash provided by operating activities | 73 | 32 |
Cash flows from investing activities: | ||
Expenditures for property, plant and equipment | (29) | (18) |
Other | 0 | 1 |
Net cash used for investing activities | (29) | (17) |
Cash flows from financing activities: | ||
Payments of long-term debt | (2) | 0 |
Payments of debtor-in-possession financing | 0 | (100) |
Redemption of Series B Preferred stock | (186) | 0 |
Payments for share repurchases | (2) | 0 |
Debt financing costs | (6) | (1) |
Net cash used for financing activities | (196) | (101) |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 8 | (30) |
Net decrease in cash, cash equivalents and restricted cash | (144) | (116) |
Cash, cash equivalents and restricted cash at beginning of the period | 464 | 693 |
Cash, cash equivalents and restricted cash at end of the period | 320 | 577 |
Supplemental cash flow disclosure: | ||
Income taxes paid (net of refunds) | 14 | 15 |
Interest paid | 21 | 16 |
Reorganization items paid | $ 2 | $ 145 |
CONSOLIDATED INTERIM STATEMEN_4
CONSOLIDATED INTERIM STATEMENTS OF EQUITY (DEFICIT) (UNAUDITED) - USD ($) shares in Millions, $ in Millions | Total | Series A Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive (Loss)/Income |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 76 | ||||
Beginning balance at Dec. 31, 2020 | $ (2,308) | $ 0 | $ 0 | $ 28 | $ (2,207) | $ (129) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (105) | (105) | ||||
Other comprehensive income, net of tax | 111 | 111 | ||||
Stock-based compensation | 2 | 2 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 0 | 76 | ||||
Ending balance at Mar. 31, 2021 | (2,300) | $ 0 | $ 0 | 30 | (2,312) | (18) |
Beginning balance (in shares) at Dec. 31, 2021 | 246 | 64 | ||||
Beginning balance at Dec. 31, 2021 | (468) | $ 0 | $ 0 | 1,326 | (1,790) | (4) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | 88 | 88 | ||||
Share repurchases | (2) | (1) | (1) | |||
Other comprehensive income, net of tax | 23 | 23 | ||||
Stock-based compensation | 2 | 2 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 246 | 64 | ||||
Ending balance at Mar. 31, 2022 | $ (357) | $ 0 | $ 0 | $ 1,327 | $ (1,703) | $ 19 |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Note 1. Background and Basis of Presentation Background Garrett Motion Inc., (the “Company” or “Garrett”) designs, manufactures and sells highly engineered turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers (“OEMs”) and the global vehicle independent aftermarket, as well as automotive software solutions. These OEMs in turn ship to consumers globally. We are a global technology leader with significant expertise in delivering products across gasoline, diesel, natural gas and electric (hybrid and fuel cell) power trains. These products are key enablers for fuel economy and emission standards compliance. Basis of Presentation The accompanying unaudited Consolidated Interim Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statements. The unaudited Consolidated Interim Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2021 included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 14, 2022 (our “2021 Form 10-K”). The results of operations and cash flows for the three months ended March 31, 2022 should not necessarily be taken as indicative of the entire year. All amounts presented are in millions, except per share amounts. We report our quarterly financial information using a calendar convention: the first, second and third quarters are consistently reported as ending on March 31, June 30 and September 30. It has been our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday to minimize the potentially disruptive effects of quarterly closing on our business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a reporting year. For differences in actual closing dates that are material to year-over-year comparisons of quarterly or year-to-date results, such differences have been adjusted for the three months ended March 31, 2022. Our actual closing dates for the three months ended March 31, 2022 and 2021 were April 2, 2022 and April 3, 2021, respectively. The preparation of the financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances, including considerations for the impact of the outbreak of the COVID-19 pandemic on the Company's business due to various global macroeconomic, operational and supply-chain risks as a result of COVID-19. Actual results could differ from the original estimates, requiring adjustments to these balances in future periods. Voluntary Filing Under Chapter 11 On September 20, 2020 (the “Petition Date”), the Company and certain of its subsidiaries (collectively, the “Debtors”) each filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the “Chapter 11 Cases”) were jointly administered under the caption “In re: Garrett Motion Inc., 20-12212.” On April 20, 2021, the Debtors filed the Revised Amended Plan of Reorganization (the “Plan”). On April 26, 2021, the Bankruptcy Court entered an order among other things, confirming the Plan. On April 30, 2021 (the “Effective Date”), the conditions to the effectiveness of the Plan were satisfied or waived and the Company emerged from bankruptcy (“Emergence”). Emergence from Chapter 11 Upon Emergence or shortly thereafter, amounts recorded as liabilities subject to compromise were either settled, or such amounts have been reinstated to current or non-current liabilities in the Consolidated Interim Balance Sheet, based upon management’s judgment as to the timing for settlement of such claims. Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of the following for the three months ended March 31, 2022 and March 31, 2021, respectively: Three Months Ended 2022 2021 (Dollars in millions) Advisor fees $ 1 $ 84 Bid termination and expense reimbursement — 79 Debtor in Possession ("DIP") financing fees — 1 Other — 10 Total reorganization items, net $ 1 $ 174 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The accounting policies of the Company are set forth in Note 3 to the Consolidated Financial Statements for the year ended December 31, 2021 included in our 2021 Form 10-K. Recently Adopted Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards update ("ASU") 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance . The amendments in this update increase the transparency surrounding government assistance by requiring disclosure of 1) the types of assistance received, 2) an entity’s accounting for the assistance, and 3) the effect of the assistance on the entity’s financial statements. The update is effective for annual periods beginning after December 15, 2021. The Company adopted the new guidance as of January 1, 2022. The adoption did not have a material impact on our Consolidated Interim Financial Statements; however, the Company expects to increase its disclosures with respect to government assistance beginning with our Annual Report on Form 10-K for the year ended December 31, 2022. Recently Issued Accounting Pronouncements We consider the applicability and impact of all recent ASU’s issued by the FASB. For the three months ended March 31, 2022, there were no recently issued, but not yet adopted accounting pronouncements that are expected to have a material impact on the Company’s Consolidated Interim Financial Statements and related disclosures. |
Revenue Recognition and Contrac
Revenue Recognition and Contracts with Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition and Contracts with Customers | Note 3. Revenue Recognition and Contracts with Customers Disaggregated Revenue Net sales by region (determined based on country of shipment) and channel are as follows: Three Months Ended March 31, 2022 OEM Aftermarket Other Total (Dollars in millions) United States $ 102 $ 51 $ — $ 153 Europe 406 38 7 451 Asia 266 10 6 282 Other International 9 6 — 15 $ 783 $ 105 $ 13 $ 901 Three Months Ended March 31, 2021 OEM Aftermarket Other Total (Dollars in millions) United States $ 100 $ 36 $ 2 $ 138 Europe 481 39 8 528 Asia 302 10 7 319 Other International 6 6 — 12 $ 889 $ 91 $ 17 $ 997 Contract Balances The following table summarizes our contract assets and liabilities balances: 2022 2021 (Dollars in millions) Contract assets—January 1 $ 63 $ 61 Contract assets—March 31 60 65 Change in contract assets—(Decrease)/Increase $ (3) $ 4 Contract liabilities—January 1 $ (5) $ (2) Contract liabilities—March 31 (9) (1) Change in contract liabilities—(Increase)/Decrease $ (4) $ 1 |
Research, Development & Enginee
Research, Development & Engineering | 3 Months Ended |
Mar. 31, 2022 | |
Research and Development [Abstract] | |
Research, Development & Engineering | Note 4. Research, Development & Engineering Garrett conducts research, development and engineering (“RD&E”) activities, which consist primarily of the development of new products and product applications. RD&E costs are charged to expense as incurred unless the Company has a contractual guarantee for reimbursement from the customer. Customer reimbursements are netted against gross RD&E expenditures as they are considered a recovery of cost. Such costs are included in Cost of goods sold as follows: Three Months Ended 2022 2021 (Dollars in millions) Research and development costs $ 36 $ 33 Engineering-related expenses 6 6 $ 42 $ 39 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5. Income Taxes Three Months Ended March 31, 2021 (Dollars in millions) Tax expense $ 37 $ 24 Effective tax rate 29.6 % (29.6) % The effective tax rates for the three months ended March 31, 2022 and 2021 were 29.6% an d (29.6)%, respectively. The effective tax rate for the three months ended March 31, 2022 was higher than the U.S. federal statutory rate of 21% primarily because of withholding taxes and tax reserves, partially offset by lower taxes on non-U.S. earnings. The negative effective tax rate for three months ended March 31, 2021 reflects a tax expense in a period of an overall pre-tax loss. The change in the effective tax rate for the three months ended March 31, 2022 compared to the prior period is primarily related to the decrease of nondeductible bankruptcy costs, partially offset by true ups to prior year tax reserves. The effective tax rate can vary from quarter to quarter due to changes in the Company’s global mix of earnings, the resolution of income tax audits, changes in tax laws (including updated guidance on U.S. tax reform), deductions related to employee share-based payments, internal restructurings and pension mark-to-market adjustments. |
Accounts, Notes and Other Recei
Accounts, Notes and Other Receivables-Net | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Accounts, Notes and Other Receivables-Net | Note 6. Accounts, Notes and Other Receivables—Net March 31, December 31, (Dollars in millions) Trade receivables $ 606 $ 553 Notes receivable 110 $ 121 Other receivables 76 $ 78 792 752 Less—Allowance for expected credit losses (6) (5) $ 786 $ 747 Trade receivables include $60 million and $63 million of unbilled customer contract asset balances as of March 31, 2022 and December 31, 2021, respectively. These amounts are billed in accordance with the terms of customer contracts to which they relate. See Note 3 , Revenue Recognition and Contracts with Customers . Notes receivable is related to guaranteed bank notes without recourse that the Company receives in settlement of accounts receivables, primarily in the Asia Pacific region. See Note 7, Factoring and Notes Receivable for further information. |
Factoring and Notes Receivable
Factoring and Notes Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Factoring and Notes Receivable | Note 7. Factoring and Notes Receivable The Company entered into arrangements with financial institutions to sell eligible trade receivables. During the three months ended March 31, 2022 and 2021, the Company sold $143 million and $180 million of eligible receivables, respectively, without recourse, and accounted for these arrangements as true sales. Expense of less than $1 million was recognized within Other expense, net for both the three months ended March 31, 2022 and 2021. As of March 31, 2022 and 2021, the amount of accounts receivable sold but not yet collected by the bank from the customer was $23 million and $64 million, respectively. The Company also receives guaranteed bank notes without recourse, in settlement of accounts receivables, primarily in the Asia Pacific region. The Company can hold the bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third-party financial institutions in exchange for cash. During the three months ended March 31, 2022, the Company sold $28 million of bank notes without recourse and accounted for these as true sales. No bank notes were sold during the three months ended March 31, 2021. Expense of less than $1 million was recognized within Other expense, net for the three months ended March 31, 2022. As of March 31, 2022, the amount of bank notes receivable sold but not yet collected by the bank from the customer was $15 million. As of March 31, 2021, there were no bank notes receivable sold which had not yet been collected by the bank from the customer. As of March 31, 2022 and December 31, 2021, the Company has pledged as collateral $31 million and $5 million of guaranteed bank notes, respectively, which have not been sold in order to be able to issue bank notes as payment to certain suppliers. Such pledged amounts are included as Notes receivable in our Consolidated Interim Balance Sheet. |
Inventories-Net
Inventories-Net | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories-Net | Note 8. Inventories—Net March 31, December 31, (Dollars in millions) Raw materials $ 192 $ 162 Work in process 20 19 Finished products 112 92 324 273 Less—Reserves (23) (29) $ 301 $ 244 |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Note 9. Other Assets March 31, December 31, (Dollars in millions) Advanced discounts to customers, non-current $ 57 $ 61 Operating right-of-use assets 50 51 Income tax receivable 27 27 Pension and other employee related 15 15 Designated cross-currency swaps 44 30 Designated and undesignated derivatives 31 7 Other 11 9 $ 235 $ 200 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Note 10. Accrued Liabilities March 31, December 31, (Dollars in millions) Customer pricing reserve $ 72 $ 72 Compensation, benefit and other employee related 63 76 Repositioning 8 10 Product warranties and performance guarantees - short-term (Note 19) 21 21 Income and other taxes 29 25 Advanced discounts from suppliers, current 12 14 Customer advances and deferred income (1) 34 23 Accrued interest 8 8 Short-term lease liability 10 9 Other (primarily operating expenses) (2) 45 37 $ 302 $ 295 (1) Customer advances and deferred income include $9 million and $5 million of contract liabilities as of March 31, 2022 and December 31, 2021, respectively. See Note 3, Revenue Recognition and Contracts with Customers . (2) Includes $4 million and $3 million of environmental liabilities as of March 31, 2022 and December 31, 2021, respectively. The Company accrued repositioning costs related to projects to optimize its product costs and right-size our organizational structure. Expenses related to the repositioning accruals are included in Cost of goods sold in our Consolidated Interim Statements of Operations. Severance Costs Exit Costs Total (Dollars in millions) Balance at December 31, 2021 $ 10 $ — $ 10 Charges 1 — 1 Usage—cash (3) — (3) Balance at March 31, 2022 $ 8 $ — $ 8 Severance Costs Exit Costs Total (Dollars in millions) Balance at December 31, 2020 $ 7 $ — $ 7 Charges 8 — 8 Usage—cash (2) — (2) Balance at March 31, 2021 $ 13 $ — $ 13 |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 11. Other Liabilities March 31, December 31, (Dollars in millions) Income taxes $ 114 $ 106 Pension and other employee related 58 61 L ong-term lease liability 42 42 Advanced discounts from suppliers 13 16 Product warranties and performance guarantees – long-term (Note 19) 11 11 Environmental remediation – long term 15 15 Other 18 18 $ 271 $ 269 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 12. Leases We have operating leases that primarily consist of real estate, machinery and equipment. Our leases have remaining lease terms of up to 16 years, some of which include options to extend the leases for up to two years, and some of which include options to terminate the leases within the year. The components of lease expense are as follows: Three Months Ended 2022 2021 (Dollars in millions) Operating lease cost $ 4 $ 4 Supplemental cash flow information related to operating leases is as follows: Three Months Ended 2022 2021 (Dollars in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 3 $ 3 Right-of-use assets obtained in exchange for lease obligations: Operating leases 1 1 Supplemental balance sheet information related to operating leases is as follows: March 31, December 31, (Dollars in millions) Other assets $ 50 $ 51 Accrued liabilities 10 9 Other liabilities 42 42 March 31, December 31, 2021 Weighted-average remaining lease term (in years) 8.98 8.88 Weighted-average discount rate 5.57 % 5.65 % Maturities of operating lease liabilities as of March 31, 2022 were as follows: (Dollars in millions) 2022 $ 9 2023 10 2024 8 2025 7 2026 6 Thereafter 26 Total lease payments 66 Less imputed interest (14) $ 52 |
Long-term Debt and Credit Agree
Long-term Debt and Credit Agreements | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Credit Agreements | Note 13. Long-term Debt and Credit Agreements The principal outstanding and carrying amounts of our long-term debt as of March 31, 2022 are as follows: Due Interest Rate March 31, 2022 Dollar Facility 4/30/2028 3.75 % $ 711 Euro Facility 4/30/2028 3.50 % 497 Total principal outstanding 1,208 Less: unamortized deferred financing costs (35) Less: current portion of long-term debt (7) Total long-term debt $ 1,166 Credit Facilities On the Effective Date, in accordance with the Plan, the Company entered into a credit agreement (as amended from time to time, the "Credit Agreement") providing for senior secured financing, consisting of a seven-year secured first-lien U.S. Dollar term loan facility initially in the amount of $715 million (the “Dollar Term Facility”), a seven-year secured first-lien Euro term loan facility initially in the amount of €450 million (the “Euro Term Facility,” and together with the Dollar Facility, the “Term Loan Facilities”); and a five-year senior secured first-lien revolving credit facility initially in the amount of $300 million providing for multi-currency revolving loans, (the “Revolving Facility,” and together with the Term Loan Facilities, the “Credit Facilities”) . On January 11, 2022 and March 22, 2022, the Company amended the Credit Agreement, increasing the maximum amount of borrowings available under the Revolving Facility from $300 million to approximately $475 million. The maturity date of the Revolving Facility remains unchanged at April 30, 2026, with certain extension rights at the discretion of each lender. Under the first amendment, LIBOR was replaced as an available rate at which borrowings under the Revolving Facility could accrue with, for loans borrowed in U.S. Dollars, the daily overnight secured financing rate (“SOFR”) published by the Federal Reserve Bank of New York and for loans borrowed in Australian Dollars, the average bid reference rate administered by ASX Benchmarks Pty Limited. The Term Loan Facilities under the Credit Agreement continue to be able to accrue interest under the London Inter-bank Offered Rate (“LIBOR”), but will switch to an alternative benchmark rate upon the cessation of LIBOR after June 30, 2023. The Euro Facilities under the Credit Agreement continue to accrue interest under the Euro Interbank Offered Rate (“EURIBOR”). The second amendment also removed the requirement that payments made in cash for the benefit of holders of the Series A Preferred Stock on or before December 31, 2022 be made on a ratable basis to the holders of the Common Stock, and made additional clarifying amendments to certain provisions. The amendments to our Credit Agreement as described above were accounted under ASC 470-50, Debt Modifications and Extinguishments as a debt modification that did not result in an extinguishment or have a material impact on our Consolidated Interim Financial Statements. Under the Revolving Facility, the Company may use up to $125 million for the issuance of letters of credit to the Swiss Borrower or any of its subsidiaries. Letters of credit are available for issuance under the Credit Agreement on terms and conditions customary for financings of this kind, which issuances reduce availability under the Revolving Facility. As of March 31, 2022 the Company had no loans outstanding under the Revolving Facility, $2 million of outstanding letters of credit, and available borrowing capacity of approximately $473 million. Separate from the Revolving Facility, the Company has a $35 million bilateral letter of credit facility, which also matures on April 30, 2026. As of March 31, 2022, the Company had $10 million utilized and $25 million of remaining available capacity under such facility. Interest Rate and Fees The Dollar Term Facility is subject to an interest rate, at our option, of either (a) an alternate base rate (“ABR”) (which shall not be less than 1.50%) or (b) an adjusted LIBOR rate (“LIBOR”) (which shall not be less than 0.50%), in each case, plus an applicable margin equal to 3.25% in the case of LIBOR loans and 2.25% in the case of ABR loans. The Euro Term Facility is subject to an interest rate equal to an adjusted EURIBOR rate (“EURIBOR”) (which shall not be less than zero) plus an applicable margin equal to 3.50%. Interest payments with respect to the Dollar and Euro Term Facilities are required either on a quarterly basis (for ABR loans) or at the end of each interest period (for LIBOR and EURIBOR loans) or, if the duration of the applicable interest period exceeds three months, then every three months. The Revolving Facility is subject to an interest rate comprised of an applicable benchmark rate as provided under the Credit Agreement (which shall not be less than 1.00% if such benchmark is the ABR rate and not less than 0.00% in the case of other applicable benchmark rates) that is selected based on the currency in which borrowings are outstanding thereunder, in each case, plus an applicable margin, that may vary based on our leverage ratio. In addition to paying interest on outstanding borrowings under the Revolving Facility, we are also required to pay a quarterly commitment fee based on the average daily unused portion of the Revolving Facility during such quarter, which is determined by our leverage ratio and ranges from 0.25% to 0.50% per annum. Prepayments The Credit Agreement also contains certain mandatory prepayment provisions in the event that we incur certain types of indebtedness, receive net cash proceeds from certain non-ordinary course asset sales or other dispositions of property or, starting with the fiscal year ending on December 31, 2022, have excess cash flow (calculated on an annual basis with the required prepayment equal to 50%, 25% or 0% of such excess cash flow, subject to compliance with certain leverage ratios), in each case subject to terms and conditions customary for financings of this kind. Certain Covenants The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type. The Revolving Facility also contains a financial covenant requiring the maintenance of a consolidated total leverage ratio of not greater than 4.7 times as of the end of each fiscal quarter if, on the last day of any such fiscal quarter, the aggregate amount of loans and letters of credit (excluding backstopped or cash collateralized letters of credit and other letters of credit with an aggregate face amount not exceeding $30 million) outstanding under the Revolving Facility exceeds 35% of the aggregate commitments in effect thereunder on such date. As of March 31, 2022, the Company was in compliance with all covenants. The Credit Agreement also contained certain restrictions on the Company’s ability to pay cash dividends on or to redeem or otherwise acquire for cash the Series A Preferred Stock unless a ratable payment (on an as-converted basis) was made to holders of our common equity and such payments would otherwise be permitted under the terms of the Credit Agreement. These restrictions were removed as part of the credit amendments noted above. The Company's ability to pay cash dividends on shares of Common Stock is also subject to conditions set forth in the Certificate of Designations for the Series A Cumulative Convertible Preferred Stock (the "Series A Certificate of Designations") as described in Note 21, Equity |
Mandatorily Redeemable Series B
Mandatorily Redeemable Series B Preferred Stock | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Mandatorily Redeemable Series B Preferred Stock | Note 14. Mandatorily Redeemable Series B Preferred Stock On February 18, 2022, Garrett completed a second planned partial early redemption of its Series B Preferred Stock. Under this partial early redemption, the Company redeemed 217,183,244 shares of its Series B Preferred Stock for an aggregate price of $197 million. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measures | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Fair Value Measures | Note 15. Financial Instruments and Fair Value Measures Our credit, market and foreign currency risk management policies are described in Note 19, Financial Instruments and Fair Value Measures , to the Consolidated Financial Statements for the year ended December 31, 2021 included in our 2021 Form 10-K. As of March 31, 2022 and December 31, 2021, we had contracts with aggregate gross notional amounts of $2,553 million and $2,788 million, respectively, to hedge interest rates and foreign currencies, principally the U.S. Dollar, Swiss Franc, British Pound, Euro, Chinese Yuan, Japanese Yen, Mexican Peso, New Romanian Leu, Czech Koruna, Australian Dollar and Korean Won. Fair Value of Financial Instruments The FASB’s accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2022 and December 31, 2021: Fair Value Notional Amounts Assets Liabilities March 31, December 31, 2021 March 31, December 31, 2021 March 31, December 31, 2021 Designated instruments: Designated forward currency exchange contracts $ 569 $ 382 $ 20 $ 9 (a) $ 3 $ 1 (c) Designated cross-currency swap 715 715 44 30 (b) — — Total designated instruments 1,284 1,097 64 39 3 1 Undesignated instruments: Undesignated interest rate swap 917 940 31 7 (a) — — Undesignated forward currency exchange contracts 352 751 3 2 (a) 3 4 (c) Total undesignated instruments 1,269 1,691 34 9 3 4 Total designated and undesignated instruments $ 2,553 $ 2,788 $ 98 $ 48 $ 6 $ 5 (a) Recorded within Other current assets (b) Recorded within Other assets (c) Recorded within Accrued liabilities As of March 31, 2022, the Company had outstanding interest rate swaps with an aggregate notional amount of €830 million, with maturities of April 2023, April 2024, April 2025, April 2026 and April 2027. The Company uses interest rate swaps specifically to mitigate variable interest risk exposure on its long-term debt portfolio and has not designated them as hedging instruments for accounting purposes. The cross-currency swaps have been designated as net investment hedges of its Euro-denominated operations. As of March 31, 2022, an aggregate notional amount of €606 million was designated as net investment hedges of the Company’s investment in Euro-denominated operations. The cross-currency swaps’ fair values were net assets of $44 million at March 31, 2022. Our Consolidated Interim Statements of Comprehensive Income include Changes in fair value of net investment hedges, net of tax of $13 million, during the three months ended March 31, 2022, related to these net investment hedges. No ineffectiveness has been recorded on the net investment hedges. The Company's forward currency exchange contracts under our cash flow hedging program are assessed as highly effective and are designated as cash flow hedges. Gains and losses on derivatives qualifying as cash flow hedges are recorded in Accumulated other comprehensive income (loss) until the underlying transactions are recognized in earnings. The foreign currency exchange, interest rate swap and cross-currency swap contracts are valued using market observable inputs. As such, these derivative instruments are classified within Level 2. The assumptions used in measuring the fair value of the cross-currency swap are considered Level 2 inputs, which are based upon market-observable interest rate curves, cross-currency basis curves, credit default swap curves, and foreign exchange rates. The carrying value of Cash, cash equivalents and restricted cash, Account receivables and Notes and Other receivables contained in the Consolidated Interim Balance Sheet approximates fair value. The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value: March 31, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value (Dollars in millions) Term Loan Facilities $ 1,173 $ 1,198 $ 1,188 $ 1,227 The Company determined the fair value of certain of its long-term debt and related current maturities utilizing transactions in the listed markets for similar liabilities. As such, the fair value of the long-term debt and related current maturities is considered Level 2. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 16. Accumulated Other Comprehensive Income (Loss) The changes in Accumulated Other Comprehensive Income (Loss) by component are set forth below: Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Changes in Fair Value of Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) (Dollars in millions) Balance at December 31, 2020 $ (81) $ (3) $ — $ (45) $ (129) Other comprehensive income before reclassifications 110 — — — 110 Amounts reclassified from accumulated other comprehensive income — 1 — — 1 Net current period other comprehensive income 110 1 — — 111 Balance at March 31, 2021 $ 29 $ (2) $ — $ (45) $ (18) Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Changes in Fair Value of Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) (Dollars in millions) Balance at December 31, 2021 $ (43) $ 7 $ 41 $ (9) $ (4) Other comprehensive income before reclassifications 2 13 13 — 28 Amounts reclassified from accumulated other comprehensive income — (5) — — (5) Net current period other comprehensive income 2 8 13 — 23 Balance at March 31, 2022 $ (41) $ 15 $ 54 $ (9) $ 19 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 17. Earnings Per Share Earnings per share ("EPS") is calculated using the two-class method pursuant to the issuance of our Series A Preferred Stock on the Effective Date. Our Series A Preferred Stock is considered a participating security because holders of the Series A Preferred Stock will also be entitled to such dividends paid to holders of Common Stock to the same extent on an as-converted basis. The two-class method requires an allocation of earnings to all securities that participate in dividends with common shares, such as our Series A Preferred Stock, to the extent that each security may share in the entity’s earnings. Basic earnings per share are then calculated by dividing undistributed earnings allocated to common stock by the weighted average number of common shares outstanding for the period. The Series A Preferred Stock is not included in the computation of basic earnings per share in periods in which we have a net loss, as the Series A Preferred Stock is not contractually obligated to share in our net losses. Diluted earnings per share for the three months ended March 31, 2022 is calculated using the more dilutive of the two-class or if-converted methods. The two-class method uses net income available to common shareholders and assumes conversion of all potential shares other than the participating securities. The if-converted method uses net income and assumes conversion of all potential shares including the participating securities. Diluted earnings per share for the three months ended March 31, 2021 is computed based upon the weighted average number of common shares outstanding and all dilutive potential common shares outstanding and all potentially issuable performance stock units at the end of the period (if any) based on the number of shares issuable if it were the end of the vesting period using the treasury stock method and the average market price of our Common Stock for the year. The details of the EPS calculations for the three months ended March 31, 2022 and 2021 are as follows: Three Months Ended 2022 2021 (Dollars in millions except per share) Basic earnings per share: Net income (loss) $ 88 $ (105) Less: preferred stock dividend (38) — Net income available for distribution 50 (105) Less: earnings allocated to participating securities (40) — Net income (loss) available to common shareholders $ 10 $ (105) Weighted average common shares outstanding- Basic 64,538,527 75,904,898 EPS – Basic $ 0.15 $ (1.38) Diluted earnings per share: Method used: Two-class Weighted average common shares outstanding - Basic 64,538,527 75,904,898 Dilutive effect of unvested RSUs and other contingently issuable shares 193,563 — Weighted average common shares outstanding – Diluted 64,732,090 75,904,898 EPS – Diluted $ 0.15 $ (1.38) |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 18. Related Party Transactions We lease certain facilities and receive property maintenance services from Honeywell, which is the owner of our Series B Preferred Stock and appoints a director to our board of directors (the “Board”). We also contract with Honeywell for the occasional purchase of certain goods and services. Lease and service agreements were made at commercial terms prevalent in the market at the time they were executed. Our payments under the agreements with Honeywell were $2 million for the three months ended March 31, 2022, and were included in Cost of goods sold and Selling, general and |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 19. Commitments and Contingencies Chapter 11 Cases On the Effective Date, the conditions to effectiveness of the Plan were satisfied or waived and the Company emerged from bankruptcy. Since the Effective Date, the reorganized Debtors have been administering and reconciling outstanding proofs of claim and proofs of interest filed against the Debtors. All of the Chapter 11 Cases other than the main lead Chapter 11 Case of the Company have been closed. The main Chapter 11 Case of the Company will remain open until all proofs of claim and proofs of interest are fully administered. Refer to Note 1, Background and Basis of Presentation , for additional information. Securities Litigation On September 25, 2020, a putative securities class action complaint was filed against Garrett Motion Inc. and certain current and former Garrett officers and directors in the United States District Court for the Southern District of New York. The case bears the caption : Steven Husson, Individually and On Behalf of All Others Similarly Situated, v. Garrett Motion Inc., Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, and Su Ping Lu , Case No. 1:20-cv-07992-JPC (SDNY) (the “Husson Action”). The Husson Action asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as amended (the "Exchange Act"), for securities fraud and control person liability. On September 28, 2020, the plaintiff sought to voluntarily dismiss his claim against Garrett Motion Inc. in light of the Company’s bankruptcy; this request was granted. On October 5, 2020, another putative securities class action complaint was filed against certain current and former Garrett officers and directors in the United States District Court for the Southern District of New York. This case bears the caption: The Gabelli Asset Fund, The Gabelli Dividend & Income Trust, The Gabelli Value 25 Fund Inc., The Gabelli Equity Trust Inc., SM Investors LP and SM Investors II LP, on behalf of themselves and all others similarly situated, v. Su Ping Lu, Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, Craig Balis, Thierry Mabru, Russell James, Carlos M. Cardoso, Maura J. Clark, Courtney M. Enghauser, Susan L. Main, Carsten Reinhardt, and Scott A. Tozier , Case No. 1:20-cv-08296-JPC (SDNY) (the “Gabelli Action”). The Gabelli Action also asserted claims under Sections 10(b) and 20(a) of the Exchange Act. On November 5, 2020, another putative securities class action complaint was filed against certain current and former Garrett officers and directors in the United States District Court for the Southern District of New York. This case bears the caption: Joseph Froehlich, Individually and On Behalf of All Others Similarly Situated, v. Olivier Rabiller, Allesandro Gili, Peter Bracke, Sean Deason, and Su Ping Lu , Case No. 1:20-cv-09279-JPC (SDNY) (the “Froehlich Action”). The Froehlich Action also asserted claims under Sections 10(b) and 20(a) of the Exchange Act. The actions were assigned to Judge John P. Cronan. On November 24, 2020, competing motions were filed seeking the appointment of lead plaintiff and lead counsel and the consolidation of the Husson, Gabelli, and Froehlich Actions. On December 8, 2020, counsel for the plaintiffs in the Gabelli Action — the Entwistle & Cappucci law firm — filed an unopposed stipulation and proposed order that would (1) appoint the plaintiffs in the Gabelli Action — the “Gabelli Entities” — the lead plaintiffs; (2) would appoint Entwistle & Cappucci as lead counsel for the plaintiff class; and (3) consolidate the Gabelli Action, the Husson Action, and the Froehlich Action (the “Consolidated D&O Action”). On January 21, 2021, the Court granted the motion to consolidate the actions and granted the Gabelli Entities’ motions for appointment as lead plaintiff and for selection of lead counsel. On February 25, 2021, plaintiffs filed a Consolidated Amended Complaint. The Company’s insurer, AIG, has accepted the defense, subject to the customary reservation of rights. The Company agreed with the Gabelli Entities and their lead counsel to permit a class claim to be recognized in the bankruptcy court and to have securities claims against the Company to be litigated in the district court alongside the Consolidated D&O Action. The Gabelli Entities have agreed that any recoveries against Garrett Motion Inc. on account of securities claims litigated through the class claim are limited to available insurance policy proceeds. On July 2, 2021, the bankruptcy court entered an order approving the joint request from the Company and the Gabelli Entities to handle the securities claims against Garrett Motion Inc. in this manner. The Gabelli Entities were authorized, and on July 22, 2021 filed a second amended complaint to add claims against Garrett Motion Inc. On August 11, 2021, Garrett Motion Inc., Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, Russell James, Carlos Cardoso, Maura Clark, Courtney Enghauser, Susan Main, Carsten Reinhardt, and Scott Tozier filed a motion to dismiss with respect to claims asserted against them. On the same day, Su Ping Lu, who is represented separately, filed a motion to dismiss with respect to the claims asserted against her. Lead plaintiffs’ opposition to the motions to dismiss was filed on October 26, 2021, and the defendant's reply briefs were filed on or before December 8, 2021. On March 31, 2022, the judge dismissed the complaints entirely - Su Ping Lu's motion to dismiss was granted with prejudice while the court granted the plaintiffs 30 days to file a third amended complaint against the Company and the other defendants. Brazilian Tax Matter In September 2020, the Brazilian tax authorities issued an infraction notice against Garrett Motion Industria Automotiva Brasil Ltda, challenging the use of certain tax credits (“Befiex Credits”) between January 2017 and February 2020. The infraction notice results in a loss contingency that may or may not ultimately be incurred by the Company. The estimated total amount of the contingency as of March 31, 2022 was $34 million, including penalties and interest. The Company appealed the infraction notice on October 23, 2020. In March 2021, in response to our request, the Brazilian Tax Authorities reconsidered their position for a portion of the $34 million mentioned above and allowed Garrett Motion Brazil the right to offset Federal Tax with the Befiex Credits. The letter does not qualify as a formal decision and requires formal recognition from the Judge and from the Federal Judgement Office in charge of the disputes. In August 2021, the $34 million claim was however suspended until Garrett Motion Brazil receives a final judicial decision. The Company believes, based on management’s assessment and the advice of external legal counsel, that it has meritorious arguments in connection with the infraction notice and any liability for the infraction notice is currently not probable. Accordingly, no accrual is required at this time. Warranties and Guarantees In the normal course of business, we issue product warranties and product performance guarantees. We accrue for the estimated cost of product warranties and performance guarantees based on contract terms and historical experience at the time of sale to the customer. Adjustments to initial obligations for warranties and guarantees are made as changes to the obligations become reasonably estimable. Product warranties and product performance guarantees are included in Accrued Liabilities and Other Liabilities. The following table summarizes information concerning our recorded obligations for product warranties and product performance guarantees. Three Months Ended 2022 2021 (Dollars in millions) Balance at December 31 $ 32 $ 14 Accruals for warranties/guarantees issued during the year 3 5 Settlement of warranty/guarantee claims (3) (4) Amounts reclassified from Liabilities subject to compromise — 17 Balance at March 31 $ 32 $ 32 Other Commitments and Contingencies We are subject to other lawsuits, investigations and disputes arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability, prior acquisitions and divestitures, employee benefit plans, intellectual property and environmental, health and safety matters. We recognize a liability for any contingency that is probable of occurring and reasonably estimable. We continually assess the likelihood of adverse judgments of outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. |
Pension Benefits
Pension Benefits | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Pension Benefits | Note 20. Pension Benefits We sponsor several funded U.S. and non-U.S. defined benefit pension plans. Significant plans outside the U.S. are in Switzerland and Ireland. Other pension plans outside the U.S. are not material to the Company, either individually or in the aggregate. Our general funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. We are not required to make any contributions to our U.S. pension plan in 2022. We expect to make contributions of cash and/or marketable securities of approximately $7 million to our non-U.S. pension plans to satisfy regulatory funding standards in 2022, of which $1 million has been contributed as of March 31, 2022. Net periodic benefit costs for our significant defined benefit plans include the following components: Three Months Ended March 31, U.S. Plans Non-U.S. Plan 2022 2021 2022 2021 (Dollars in millions) Service cost $ — $ — $ 2 $ 3 Interest cost 1 1 — — Expected return on plan assets (2) (3) (2) (2) $ (1) $ (2) $ — $ 1 For both our U.S. and non-U.S. defined benefit pension plans, we estimate the service and interest cost components of net periodic benefit (income) cost by utilizing a full yield curve approach in the estimation of these cost components by applying the specific spot rates along the yield curve used in the determination of the pension benefit obligation to their underlying projected cash flows. This approach provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Consolidated Interim Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statements. The unaudited Consolidated Interim Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2021 included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 14, 2022 (our “2021 Form 10-K”). The results of operations and cash flows for the three months ended March 31, 2022 should not necessarily be taken as indicative of the entire year. All amounts presented are in millions, except per share amounts. We report our quarterly financial information using a calendar convention: the first, second and third quarters are consistently reported as ending on March 31, June 30 and September 30. It has been our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday to minimize the potentially disruptive effects of quarterly closing on our business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a reporting year. For differences in actual closing dates that are material to year-over-year comparisons of quarterly or year-to-date results, such differences have been adjusted for the three months ended March 31, 2022. Our actual closing dates for the three months ended March 31, 2022 and 2021 were April 2, 2022 and April 3, 2021, respectively. The preparation of the financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances, including considerations for the impact of the outbreak of the COVID-19 pandemic on the Company's business due to various global macroeconomic, operational and supply-chain risks as a result of COVID-19. Actual results could differ from the original estimates, requiring adjustments to these balances in future periods. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards update ("ASU") 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance . The amendments in this update increase the transparency surrounding government assistance by requiring disclosure of 1) the types of assistance received, 2) an entity’s accounting for the assistance, and 3) the effect of the assistance on the entity’s financial statements. The update is effective for annual periods beginning after December 15, 2021. The Company adopted the new guidance as of January 1, 2022. The adoption did not have a material impact on our Consolidated Interim Financial Statements; however, the Company expects to increase its disclosures with respect to government assistance beginning with our Annual Report on Form 10-K for the year ended December 31, 2022. Recently Issued Accounting Pronouncements We consider the applicability and impact of all recent ASU’s issued by the FASB. For the three months ended March 31, 2022, there were no recently issued, but not yet adopted accounting pronouncements that are expected to have a material impact on the Company’s Consolidated Interim Financial Statements and related disclosures. |
Background and Basis of Prese_2
Background and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Reorganization Items, Net | Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of the following for the three months ended March 31, 2022 and March 31, 2021, respectively: Three Months Ended 2022 2021 (Dollars in millions) Advisor fees $ 1 $ 84 Bid termination and expense reimbursement — 79 Debtor in Possession ("DIP") financing fees — 1 Other — 10 Total reorganization items, net $ 1 $ 174 |
Revenue Recognition and Contr_2
Revenue Recognition and Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Net Sales by Region and Channel | Net sales by region (determined based on country of shipment) and channel are as follows: Three Months Ended March 31, 2022 OEM Aftermarket Other Total (Dollars in millions) United States $ 102 $ 51 $ — $ 153 Europe 406 38 7 451 Asia 266 10 6 282 Other International 9 6 — 15 $ 783 $ 105 $ 13 $ 901 Three Months Ended March 31, 2021 OEM Aftermarket Other Total (Dollars in millions) United States $ 100 $ 36 $ 2 $ 138 Europe 481 39 8 528 Asia 302 10 7 319 Other International 6 6 — 12 $ 889 $ 91 $ 17 $ 997 |
Summary of Contract Assets and Liabilities | The following table summarizes our contract assets and liabilities balances: 2022 2021 (Dollars in millions) Contract assets—January 1 $ 63 $ 61 Contract assets—March 31 60 65 Change in contract assets—(Decrease)/Increase $ (3) $ 4 Contract liabilities—January 1 $ (5) $ (2) Contract liabilities—March 31 (9) (1) Change in contract liabilities—(Increase)/Decrease $ (4) $ 1 |
Research, Development & Engin_2
Research, Development & Engineering (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Research and Development [Abstract] | |
Summary of Research, Development & Engineering Activities | Such costs are included in Cost of goods sold as follows: Three Months Ended 2022 2021 (Dollars in millions) Research and development costs $ 36 $ 33 Engineering-related expenses 6 6 $ 42 $ 39 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Tax Expense (Benefit) and Effective Tax Rate | Three Months Ended March 31, 2021 (Dollars in millions) Tax expense $ 37 $ 24 Effective tax rate 29.6 % (29.6) % |
Accounts, Notes and Other Rec_2
Accounts, Notes and Other Receivables-Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes and Other Receivables Net | March 31, December 31, (Dollars in millions) Trade receivables $ 606 $ 553 Notes receivable 110 $ 121 Other receivables 76 $ 78 792 752 Less—Allowance for expected credit losses (6) (5) $ 786 $ 747 |
Inventories-Net (Tables)
Inventories-Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | March 31, December 31, (Dollars in millions) Raw materials $ 192 $ 162 Work in process 20 19 Finished products 112 92 324 273 Less—Reserves (23) (29) $ 301 $ 244 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | March 31, December 31, (Dollars in millions) Advanced discounts to customers, non-current $ 57 $ 61 Operating right-of-use assets 50 51 Income tax receivable 27 27 Pension and other employee related 15 15 Designated cross-currency swaps 44 30 Designated and undesignated derivatives 31 7 Other 11 9 $ 235 $ 200 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Summary of Accrued Liabilities | March 31, December 31, (Dollars in millions) Customer pricing reserve $ 72 $ 72 Compensation, benefit and other employee related 63 76 Repositioning 8 10 Product warranties and performance guarantees - short-term (Note 19) 21 21 Income and other taxes 29 25 Advanced discounts from suppliers, current 12 14 Customer advances and deferred income (1) 34 23 Accrued interest 8 8 Short-term lease liability 10 9 Other (primarily operating expenses) (2) 45 37 $ 302 $ 295 (1) Customer advances and deferred income include $9 million and $5 million of contract liabilities as of March 31, 2022 and December 31, 2021, respectively. See Note 3, Revenue Recognition and Contracts with Customers . (2) Includes $4 million and $3 million of environmental liabilities as of March 31, 2022 and December 31, 2021, respectively. |
Summary of Expenses Related to the Repositioning Accruals | Severance Costs Exit Costs Total (Dollars in millions) Balance at December 31, 2021 $ 10 $ — $ 10 Charges 1 — 1 Usage—cash (3) — (3) Balance at March 31, 2022 $ 8 $ — $ 8 Severance Costs Exit Costs Total (Dollars in millions) Balance at December 31, 2020 $ 7 $ — $ 7 Charges 8 — 8 Usage—cash (2) — (2) Balance at March 31, 2021 $ 13 $ — $ 13 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | March 31, December 31, (Dollars in millions) Income taxes $ 114 $ 106 Pension and other employee related 58 61 L ong-term lease liability 42 42 Advanced discounts from suppliers 13 16 Product warranties and performance guarantees – long-term (Note 19) 11 11 Environmental remediation – long term 15 15 Other 18 18 $ 271 $ 269 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense are as follows: Three Months Ended 2022 2021 (Dollars in millions) Operating lease cost $ 4 $ 4 |
Summary of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases is as follows: Three Months Ended 2022 2021 (Dollars in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 3 $ 3 Right-of-use assets obtained in exchange for lease obligations: Operating leases 1 1 |
Summary of Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to operating leases is as follows: March 31, December 31, (Dollars in millions) Other assets $ 50 $ 51 Accrued liabilities 10 9 Other liabilities 42 42 March 31, December 31, 2021 Weighted-average remaining lease term (in years) 8.98 8.88 Weighted-average discount rate 5.57 % 5.65 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of March 31, 2022 were as follows: (Dollars in millions) 2022 $ 9 2023 10 2024 8 2025 7 2026 6 Thereafter 26 Total lease payments 66 Less imputed interest (14) $ 52 |
Long-term Debt and Credit Agr_2
Long-term Debt and Credit Agreements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Principal Outstanding And Carrying Amount of Long term Debt | The principal outstanding and carrying amounts of our long-term debt as of March 31, 2022 are as follows: Due Interest Rate March 31, 2022 Dollar Facility 4/30/2028 3.75 % $ 711 Euro Facility 4/30/2028 3.50 % 497 Total principal outstanding 1,208 Less: unamortized deferred financing costs (35) Less: current portion of long-term debt (7) Total long-term debt $ 1,166 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measures (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis | The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2022 and December 31, 2021: Fair Value Notional Amounts Assets Liabilities March 31, December 31, 2021 March 31, December 31, 2021 March 31, December 31, 2021 Designated instruments: Designated forward currency exchange contracts $ 569 $ 382 $ 20 $ 9 (a) $ 3 $ 1 (c) Designated cross-currency swap 715 715 44 30 (b) — — Total designated instruments 1,284 1,097 64 39 3 1 Undesignated instruments: Undesignated interest rate swap 917 940 31 7 (a) — — Undesignated forward currency exchange contracts 352 751 3 2 (a) 3 4 (c) Total undesignated instruments 1,269 1,691 34 9 3 4 Total designated and undesignated instruments $ 2,553 $ 2,788 $ 98 $ 48 $ 6 $ 5 (a) Recorded within Other current assets (b) Recorded within Other assets (c) Recorded within Accrued liabilities |
Summary of Financial Assets and Liabilities Not Carried at Fair Value | The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value: March 31, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value (Dollars in millions) Term Loan Facilities $ 1,173 $ 1,198 $ 1,188 $ 1,227 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | The changes in Accumulated Other Comprehensive Income (Loss) by component are set forth below: Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Changes in Fair Value of Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) (Dollars in millions) Balance at December 31, 2020 $ (81) $ (3) $ — $ (45) $ (129) Other comprehensive income before reclassifications 110 — — — 110 Amounts reclassified from accumulated other comprehensive income — 1 — — 1 Net current period other comprehensive income 110 1 — — 111 Balance at March 31, 2021 $ 29 $ (2) $ — $ (45) $ (18) Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Changes in Fair Value of Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) (Dollars in millions) Balance at December 31, 2021 $ (43) $ 7 $ 41 $ (9) $ (4) Other comprehensive income before reclassifications 2 13 13 — 28 Amounts reclassified from accumulated other comprehensive income — (5) — — (5) Net current period other comprehensive income 2 8 13 — 23 Balance at March 31, 2022 $ (41) $ 15 $ 54 $ (9) $ 19 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The details of the EPS calculations for the three months ended March 31, 2022 and 2021 are as follows: Three Months Ended 2022 2021 (Dollars in millions except per share) Basic earnings per share: Net income (loss) $ 88 $ (105) Less: preferred stock dividend (38) — Net income available for distribution 50 (105) Less: earnings allocated to participating securities (40) — Net income (loss) available to common shareholders $ 10 $ (105) Weighted average common shares outstanding- Basic 64,538,527 75,904,898 EPS – Basic $ 0.15 $ (1.38) Diluted earnings per share: Method used: Two-class Weighted average common shares outstanding - Basic 64,538,527 75,904,898 Dilutive effect of unvested RSUs and other contingently issuable shares 193,563 — Weighted average common shares outstanding – Diluted 64,732,090 75,904,898 EPS – Diluted $ 0.15 $ (1.38) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary Information Concerning our Recorded Obligations for Product Warranties and Product Performance Guarantees | The following table summarizes information concerning our recorded obligations for product warranties and product performance guarantees. Three Months Ended 2022 2021 (Dollars in millions) Balance at December 31 $ 32 $ 14 Accruals for warranties/guarantees issued during the year 3 5 Settlement of warranty/guarantee claims (3) (4) Amounts reclassified from Liabilities subject to compromise — 17 Balance at March 31 $ 32 $ 32 |
Pension Benefits (Tables)
Pension Benefits (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Summary of Net Periodic Benefit Cost | Net periodic benefit costs for our significant defined benefit plans include the following components: Three Months Ended March 31, U.S. Plans Non-U.S. Plan 2022 2021 2022 2021 (Dollars in millions) Service cost $ — $ — $ 2 $ 3 Interest cost 1 1 — — Expected return on plan assets (2) (3) (2) (2) $ (1) $ (2) $ — $ 1 |
Background and Basis of Prese_3
Background and Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Advisor fees | $ 1 | $ 84 |
Bid termination and expense reimbursement | 0 | 79 |
Debtor in Possession ("DIP") financing fees | 0 | 1 |
Other | 0 | 10 |
Total reorganization items, net | $ 1 | $ 174 |
Revenue Recognition and Contr_3
Revenue Recognition and Contracts with Customers - Summary of Net Sales by Region and Channel (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Net sales | $ 901 | $ 997 |
United States | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 153 | 138 |
Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 451 | 528 |
Asia | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 282 | 319 |
Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 15 | 12 |
OEM | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 783 | 889 |
OEM | United States | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 102 | 100 |
OEM | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 406 | 481 |
OEM | Asia | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 266 | 302 |
OEM | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 9 | 6 |
Aftermarket | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 105 | 91 |
Aftermarket | United States | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 51 | 36 |
Aftermarket | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 38 | 39 |
Aftermarket | Asia | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 10 | 10 |
Aftermarket | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 6 | 6 |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 13 | 17 |
Other | United States | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 0 | 2 |
Other | Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 7 | 8 |
Other | Asia | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 6 | 7 |
Other | Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | $ 0 | $ 0 |
Revenue Recognition and Contr_4
Revenue Recognition and Contracts with Customers - Summary of Contract Assets and Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Change in Contract with Customer, Asset [Abstract] | ||
Contract assets—January 1 | $ 63 | $ 61 |
Contract assets—March 31 | 60 | 65 |
Change in contract assets—(Decrease)/Increase | (3) | 4 |
Change in Contract with Customer, Liability [Abstract] | ||
Contract liabilities—January 1 | (5) | (2) |
Contract liabilities—March 31 | (9) | (1) |
Change in contract liabilities—(Increase)/Decrease | $ (4) | $ 1 |
Research, Development & Engin_3
Research, Development & Engineering (Details) - Cost of goods sold - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||
Research, development & engineering expense, total | $ 42 | $ 39 |
Research and development costs | ||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||
Research, development & engineering expense, total | 36 | 33 |
Engineering-related expenses | ||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||
Research, development & engineering expense, total | $ 6 | $ 6 |
Income Taxes - Tax Expense (Ben
Income Taxes - Tax Expense (Benefit) and Effective Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Tax expense | $ 37 | $ 24 |
Effective tax rate | 29.60% | (29.60%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 29.60% | (29.60%) |
U.S. federal statutory income tax rate | 21.00% |
Accounts, Notes and Other Rec_3
Accounts, Notes and Other Receivables-Net - Schedule of Accounts, Notes and Other Receivables-Net (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Trade receivables | $ 606 | $ 553 |
Notes receivable | 110 | 121 |
Other receivables | 76 | 78 |
Accounts, notes and other receivables, gross | 792 | 752 |
Less—Allowance for expected credit losses | (6) | (5) |
Accounts, notes and other receivables, net | $ 786 | $ 747 |
Accounts, Notes and Other Rec_4
Accounts, Notes and Other Receivables-Net - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Unbilled balances | $ 60 | $ 63 |
Factoring and Notes Receivable
Factoring and Notes Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Receivables [Abstract] | |||
Sale of trade receivables | $ 143 | $ 180 | |
Factoring and notes receivables discount fees, notes | 1 | 1 | |
Accounts receivable sold but not yet collected | 23 | 64 | |
Proceeds from sale of bank notes | 28 | 0 | |
Factoring and notes receivables discount fees, receivables | 1 | ||
Bank notes receivable sold but not yet collected | 15 | $ 0 | |
Guaranteed bank notes pledged as collateral | $ 31 | $ 5 |
Inventories-Net (Details)
Inventories-Net (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 192 | $ 162 |
Work in process | 20 | 19 |
Finished products | 112 | 92 |
Inventories, gross | 324 | 273 |
Less—Reserves | (23) | (29) |
Inventories, net | $ 301 | $ 244 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Advanced discounts to customers, non-current | $ 57 | $ 61 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Total other assets | Total other assets |
Operating right-of-use assets (Note 12) | $ 50 | $ 51 |
Income tax receivable | 27 | 27 |
Pension and other employee related | 15 | 15 |
Designated cross-currency swaps | 44 | 30 |
Designated and undesignated derivatives | 31 | 7 |
Other | 11 | 9 |
Total other assets | $ 235 | $ 200 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Customer pricing reserve | $ 72 | $ 72 |
Compensation, benefit and other employee related | 63 | 76 |
Repositioning | 8 | 10 |
Product warranties and performance guarantees - short-term (Note 19) | 21 | 21 |
Income and other taxes | 29 | 25 |
Advanced discounts from suppliers, current | 12 | 14 |
Customer advances and deferred income | 34 | 23 |
Accrued interest | $ 8 | $ 8 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total accrued liabilities | Total accrued liabilities |
Short-term lease liability (Note 12) | $ 10 | $ 9 |
Other (primarily operating expenses) | 45 | 37 |
Total accrued liabilities | 302 | 295 |
Contract liabilities | 9 | 5 |
Accrued environmental liability | $ 4 | $ 3 |
Accrued Liabilities - Summary_2
Accrued Liabilities - Summary of Expenses Related to the Repositioning Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | $ 10 | $ 7 |
Charges | 1 | 8 |
Usage—cash | (3) | (2) |
Balance at end of period | 8 | 13 |
Severance Costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 10 | 7 |
Charges | 1 | 8 |
Usage—cash | (3) | (2) |
Balance at end of period | 8 | 13 |
Exit Costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 0 | 0 |
Charges | 0 | 0 |
Usage—cash | 0 | 0 |
Balance at end of period | $ 0 | $ 0 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Income taxes | $ 114 | $ 106 |
Pension and other employee related | $ 58 | $ 61 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Total other liabilities | Total other liabilities |
Long-term lease liability (Note 12) | $ 42 | $ 42 |
Advanced discounts from suppliers | 13 | 16 |
Product warranties and performance guarantees – long-term (Note 19) | 11 | 11 |
Environmental remediation – long term | 15 | 15 |
Other | 18 | 18 |
Total other liabilities | $ 271 | $ 269 |
Leases - Additional Information
Leases - Additional Information (Details) - Maximum | 3 Months Ended |
Mar. 31, 2022 | |
Lessee Lease Description [Line Items] | |
Operating lease, remaining lease terms | 16 years |
Operating lease, options to extend, years | 2 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 4 | $ 4 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows from operating leases | $ 3 | $ 3 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 1 | $ 1 |
Leases - Summary of Supplemen_2
Leases - Summary of Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets (Note 9) | Other assets (Note 9) |
Other assets | $ 50 | $ 51 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities (Note 10) | Accrued liabilities (Note 10) |
Accrued liabilities | $ 10 | $ 9 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities (Note 11) | Other liabilities (Note 11) |
Other liabilities | $ 42 | $ 42 |
Weighted-average remaining lease term (in years) | 8 years 11 months 23 days | 8 years 10 months 17 days |
Weighted-average discount rate | 5.57% | 5.65% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Millions | Mar. 31, 2022USD ($) |
Leases [Abstract] | |
2022 | $ 9 |
2023 | 10 |
2024 | 8 |
2025 | 7 |
2026 | 6 |
Thereafter | 26 |
Total lease payments | 66 |
Less imputed interest | (14) |
Operating lease, liabilities | $ 52 |
Long-term Debt and Credit Agr_3
Long-term Debt and Credit Agreements - Additional Information (Details) € in Millions | Apr. 26, 2021USD ($) | Mar. 31, 2022USD ($) | Mar. 22, 2022USD ($) | Jan. 11, 2022USD ($) | Apr. 26, 2021EUR (€) |
Debt Instrument [Line Items] | |||||
Debt instrument, interest payment period if applicable period exceeds three months | 3 months | ||||
Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate at option | 3.50% | ||||
Minimum | ABR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate at option | 0.00% | ||||
Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Percentage of excess cash flow proceeds starting December 31, 2022 | 50.00% | ||||
Percentage of excess cash flow proceeds thereafter year 1 | 25.00% | ||||
Percentage of excess cash flow proceeds thereafter year 2 | 0.00% | ||||
Debt instrument face amount | $ 30,000,000 | ||||
Aggregate commitment percentage | 35.00% | ||||
Credit Agreement | ABR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate at option | 2.25% | ||||
Credit Agreement | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate at option | 3.25% | ||||
Credit Agreement | Maximum | |||||
Debt Instrument [Line Items] | |||||
Consolidated total leverage ratio | 4.7 | ||||
Credit Agreement | Minimum | ABR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate at option | 1.50% | ||||
Credit Agreement | Minimum | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate at option | 0.50% | ||||
Credit Agreement | Minimum | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate at option | 0.00% | ||||
Term Loan Facility | Credit Agreement, USD Tranche | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, term | 7 years | ||||
Line of credit, maximum borrowing capacity | $ 715,000,000 | ||||
Term Loan Facility | Credit Agreement, EUR Tranche | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, term | 7 years | ||||
Line of credit, maximum borrowing capacity | € | € 450 | ||||
Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee percentage | 0.50% | ||||
Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate at option | 1.00% | ||||
Unused commitment fee percentage | 0.25% | ||||
Revolving Credit Facility | Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit, maximum borrowing capacity | $ 125,000,000 | ||||
Revolving Credit Facility | Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Line of credit | $ 0 | ||||
Line of credit, available borrowing capacity | 473,000,000 | ||||
Revolving Credit Facility | Credit Agreement | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, term | 5 years | ||||
Line of credit, maximum borrowing capacity | $ 300,000,000 | ||||
Revolving Credit Facility | Credit Agreement, first amendment | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, maximum borrowing capacity | $ 300,000,000 | ||||
Revolving Credit Facility | Credit Agreement, second amendment | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, maximum borrowing capacity | $ 475,000,000 | ||||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit | 10,000,000 | ||||
Line of credit, available borrowing capacity | 25,000,000 | ||||
Line of credit, current borrowing capacity | 35,000,000 | ||||
Undrawn Letters of Credit | Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Line of credit | $ 2,000,000 |
Long-term Debt and Credit Agr_4
Long-term Debt and Credit Agreements - Schedule of Principal Outstanding And Carrying Amount of Long term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total debt payments | $ 1,208 | |
Less: unamortized deferred financing costs | (35) | |
Less: current portion of long-term debt | (7) | $ (7) |
Total long-term debt | $ 1,166 | $ 1,181 |
Dollar Facility | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 3.75% | |
Total debt payments | $ 711 | |
Euro Facility | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 3.50% | |
Total debt payments | $ 497 |
Mandatorily Redeemable Series_2
Mandatorily Redeemable Series B Preferred Stock (Details) - USD ($) $ in Millions | Feb. 18, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Class Of Stock [Line Items] | |||
Payments for redemption of Series B preferred stock | $ 186 | $ 0 | |
PSA and Transaction, Second Amended Plan 2021 | Series B Preferred Stock | |||
Class Of Stock [Line Items] | |||
Series B preferred stock redeemed (in shares) | 217,183,244 | ||
Payments for redemption of Series B preferred stock | $ 197 | ||
PSA and Transaction, Second Amended Plan 2021 | Honeywell International Inc | Series B Preferred Stock | |||
Class Of Stock [Line Items] | |||
Preferred stock issued payable annually in 2024 | 18 | ||
Preferred stock issued payable annually in 2025 | 100 | ||
Preferred stock issued payable annually in 2026 | 100 | ||
Preferred stock issued payable annually in 2027 | 54 | ||
Preferred stock issued payable | 272 | ||
Net present value of redemptions of shares | $ 204 | ||
Preferred stock, effective interest rate | 7.71% |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measures - Additional Information (Details) € in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($) | Mar. 31, 2022EUR (€) | Dec. 31, 2021USD ($) | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||
Derivative, aggregate gross notional amount | $ 2,553,000,000 | $ 2,788,000,000 | |
Interest rate swap | |||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||
Derivative, aggregate gross notional amount | € | € 830 | ||
Cross-currency interest rate swaps | |||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||
Derivative, aggregate gross notional amount | € | € 606 | ||
Fair value of derivative assets, net | 44,000,000 | ||
Changes in fair value of net investment hedges, net of tax | 13,000,000 | ||
Ineffectiveness on net investment hedges | $ 0 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measures - Summary of Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Details) € in Millions, $ in Millions | Mar. 31, 2022USD ($) | Mar. 31, 2022EUR (€) | Dec. 31, 2021USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | $ 2,553 | $ 2,788 | |
Cross-currency interest rate swaps | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | € | € 606 | ||
Interest rate swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | € | € 830 | ||
Fair value measurements recurring | Level 2 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 2,553 | 2,788 | |
Fair Value, Assets | 98 | 48 | |
Fair Value, Liabilities | 6 | 5 | |
Fair value measurements recurring | Level 2 | Designated as hedging | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 1,284 | 1,097 | |
Fair Value, Assets | 64 | 39 | |
Fair Value, Liabilities | 3 | 1 | |
Fair value measurements recurring | Level 2 | Designated as hedging | Forward currency exchange contracts | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 569 | 382 | |
Fair Value, Assets | 20 | 9 | |
Fair Value, Liabilities | 3 | 1 | |
Fair value measurements recurring | Level 2 | Designated as hedging | Cross-currency interest rate swaps | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 715 | 715 | |
Fair Value, Assets | 44 | 30 | |
Fair Value, Liabilities | 0 | 0 | |
Fair value measurements recurring | Level 2 | Undesignated as Hedging | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 1,269 | 1,691 | |
Fair Value, Assets | 34 | 9 | |
Fair Value, Liabilities | 3 | 4 | |
Fair value measurements recurring | Level 2 | Undesignated as Hedging | Forward currency exchange contracts | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 352 | 751 | |
Fair Value, Assets | 3 | 2 | |
Fair Value, Liabilities | 3 | 4 | |
Fair value measurements recurring | Level 2 | Undesignated as Hedging | Interest rate swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 917 | 940 | |
Fair Value, Assets | 31 | 7 | |
Fair Value, Liabilities | $ 0 | $ 0 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measures - Summary of Financial Assets and Liabilities Not Carried at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Term Loan Facilities | $ 1,173 | $ 1,188 |
Level 2 | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Term Loan Facilities | $ 1,198 | $ 1,227 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ (468) | $ (2,308) |
Other comprehensive income before reclassifications | 28 | 110 |
Amounts reclassified from accumulated other comprehensive income | (5) | 1 |
Total other comprehensive income, net of tax | 23 | 111 |
Ending balance | (357) | (2,300) |
Foreign Exchange Translation Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (43) | (81) |
Other comprehensive income before reclassifications | 2 | 110 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Total other comprehensive income, net of tax | 2 | 110 |
Ending balance | (41) | 29 |
Changes in Fair Value of Effective Cash Flow Hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 7 | (3) |
Other comprehensive income before reclassifications | 13 | 0 |
Amounts reclassified from accumulated other comprehensive income | (5) | 1 |
Total other comprehensive income, net of tax | 8 | 1 |
Ending balance | 15 | (2) |
Changes in Fair Value of Net Investment Hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 41 | 0 |
Other comprehensive income before reclassifications | 13 | 0 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Total other comprehensive income, net of tax | 13 | 0 |
Ending balance | 54 | 0 |
Pension Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (9) | (45) |
Other comprehensive income before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Total other comprehensive income, net of tax | 0 | 0 |
Ending balance | (9) | (45) |
Total Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (4) | (129) |
Total other comprehensive income, net of tax | 23 | 111 |
Ending balance | $ 19 | $ (18) |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Basic earnings per share: | ||
Net income (loss) | $ 88 | $ (105) |
Less: preferred stock dividend | (38) | 0 |
Net income (loss) available for distribution | 50 | (105) |
Less: earnings allocated to participating securities | (40) | 0 |
Net income (loss) available to common shareholders | $ 10 | $ (105) |
Weighted average common shares outstanding - Basic (in shares) | 64,538,527 | 75,904,898 |
EPS – Basic (in USD per share) | $ 0.15 | $ (1.38) |
Diluted earnings per share: | ||
Weighted average common shares outstanding - Basic (in shares) | 64,538,527 | 75,904,898 |
Dilutive effect of unvested RSUs and other contingently issuable shares (in shares) | 193,563 | 0 |
Weighted average common shares outstanding - Diluted (in shares) | 64,732,090 | 75,904,898 |
EPS – Diluted (in USD per share) | $ 0.15 | $ (1.38) |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Options outstanding (in shares) | 0 | |
Antidilutive shares excluded from computation of diluted EPS (in shares) | 399,489 |
Related Party Transactions (Det
Related Party Transactions (Details) - Honeywell International Inc - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Related party, costs | $ 2 | |
Related party, liabilities | 11 | $ 15 |
Related party, lease contracts | $ 8 | $ 12 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Mar. 31, 2021 |
Brazilian Tax Authorities | ||
Loss Contingencies [Line Items] | ||
Estimated amount of contingency including penalties and interest | $ 34 | |
Right to offset federal tax | $ 34 | |
Securities Litigation | ||
Loss Contingencies [Line Items] | ||
Period to file a third complaint | 30 days |
Commitments and Contingencies_2
Commitments and Contingencies - Summary Information Concerning our Recorded Obligations for Product Warranties and Product Performance Guarantees (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of year | $ 32 | $ 14 |
Accruals for warranties/guarantees issued during the year | 3 | 5 |
Settlement of warranty/guarantee claims | (3) | (4) |
Amounts reclassified from Liabilities subject to compromise | 0 | 17 |
Balance at end of year | $ 32 | $ 32 |
Pension Benefits - Additional I
Pension Benefits - Additional Information (Details) - Pension Benefits - Non-U.S. Plan $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected pension contribution in the next fiscal year | $ 7 |
Pension contribution | $ 1 |
Pension Benefits - Summary of N
Pension Benefits - Summary of Net Periodic Benefit Cost (Details) - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 1 | 1 |
Expected return on plan assets | (2) | (3) |
Net periodic (income) benefit costs | (1) | (2) |
Non-U.S. Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 2 | 3 |
Interest cost | 0 | 0 |
Expected return on plan assets | (2) | (2) |
Net periodic (income) benefit costs | $ 0 | $ 1 |