COVER
COVER - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 26, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-41708 | |
Entity Registrant Name | PHINIA INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 92-2483604 | |
Entity Address, Address Line One | 3000 University Drive | |
Entity Address, City or Town | Auburn Hills, | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48326 | |
City Area Code | (248) | |
Local Phone Number | 732-1900 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | PHIN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,677,801 | |
Entity Central Index Key | 0001968915 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
ASSETS | ||
Cash and cash equivalents | $ 339 | $ 365 |
Receivables, net | 964 | 1,017 |
Inventories | 471 | 487 |
Prepayments and other current assets | 84 | 58 |
Total current assets | 1,858 | 1,927 |
Property, plant and equipment, net | 870 | 921 |
Investments and long-term receivables | 123 | 115 |
Goodwill | 483 | 499 |
Other intangible assets, net | 393 | 417 |
Other non-current assets | 146 | 162 |
Total assets | 3,873 | 4,041 |
LIABILITIES AND EQUITY | ||
Short-term borrowings and current portion of long-term debt | 13 | 89 |
Accounts payable | 572 | 639 |
Other current liabilities | 420 | 420 |
Total current liabilities | 1,005 | 1,148 |
Long-term debt | 821 | 709 |
Retirement-related liabilities | 132 | 132 |
Other non-current liabilities | 168 | 165 |
Total liabilities | 2,126 | 2,154 |
Commitments and contingencies (Note 15) | ||
Common stock | 1 | 1 |
Additional paid-in capital | 2,019 | 2,031 |
Retained earnings | 29 | 9 |
Accumulated other comprehensive loss | (172) | (131) |
Treasury stock | (130) | (23) |
Total equity | 1,747 | 1,887 |
Total liabilities and equity | $ 3,873 | $ 4,041 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Net sales | $ 868 | $ 887 | $ 1,731 | $ 1,722 |
Cost of sales | 680 | 698 | 1,351 | 1,361 |
Gross profit | 188 | 189 | 380 | 361 |
Selling, general and administrative expenses | 112 | 103 | 216 | 202 |
Other operating expense, net | 5 | 30 | 22 | 45 |
Operating income | 71 | 56 | 142 | 114 |
Equity in affiliates’ earnings, net of tax | (2) | (3) | (5) | (6) |
Interest expense | 39 | 6 | 61 | 12 |
Interest income | (4) | (2) | (8) | (5) |
Other postretirement expense (income), net | 1 | (1) | 1 | (1) |
Earnings before income taxes | 37 | 56 | 93 | 114 |
Provision for income taxes | 23 | 21 | 50 | 44 |
Net earnings | $ 14 | $ 35 | $ 43 | $ 70 |
Earnings per share — basic (in dollars per share) | $ 0.31 | $ 0.74 | $ 0.95 | $ 1.49 |
Earnings per share— diluted (in dollar per share) | $ 0.31 | $ 0.74 | $ 0.93 | $ 1.49 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 44.8 | 47 | 45.5 | 47 |
Diluted (in shares) | 45.7 | 47 | 46.1 | 47 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net earnings | $ 14 | $ 35 | $ 43 | $ 70 | |
Other comprehensive (loss) income | |||||
Foreign currency translation adjustments | [1] | (18) | 10 | (39) | 30 |
Defined benefit pension plans | [1] | (1) | 0 | (2) | (1) |
Hedge instruments | [1] | 0 | (4) | 0 | (2) |
Total other comprehensive (loss) income | (19) | 6 | (41) | 27 | |
Comprehensive (loss) income | $ (5) | $ 41 | $ 2 | $ 97 | |
[1]Net of income taxes. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
OPERATING | ||
Net earnings | $ 43 | $ 70 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and tooling amortization | 67 | 70 |
Intangible asset amortization | 14 | 14 |
Restructuring expense, net of cash paid | 5 | 2 |
Loss on extinguishment of debt | 20 | 0 |
Stock-based compensation expense | 8 | 4 |
Deferred income tax expense | 7 | 8 |
Other non-cash adjustments, net | (2) | 4 |
Changes in assets and liabilities, excluding foreign currency translation adjustments: | ||
Receivables | 19 | (64) |
Inventories | 4 | (52) |
Prepayments and other current assets | (11) | (10) |
Accounts payable and other current liabilities | (23) | (16) |
Prepaid taxes and income taxes payable | 6 | 29 |
Other assets and liabilities | (16) | (26) |
Retirement benefit plan contributions | (1) | 0 |
Net cash provided by operating activities | 140 | 33 |
INVESTING | ||
Capital expenditures, including tooling outlays | (60) | (80) |
Payments for investment in equity securities | 0 | (2) |
Proceeds from asset disposals and other, net | 1 | 2 |
Net cash used in investing activities | (59) | (80) |
FINANCING | ||
Net decrease in notes payable | (75) | 0 |
Proceeds from issuance of long-term debt | 525 | 0 |
Payments for debt issuance costs | (9) | 0 |
Repayments of debt, including current portion | (428) | 0 |
Dividends paid to PHINIA stockholders | (23) | 0 |
Payments for purchase of treasury stock | (113) | 0 |
Payments for stock-based compensation items | (3) | |
Net cash used in financing activities | (126) | 0 |
Effect of exchange rate changes on cash | 19 | 9 |
Net decrease in cash and cash equivalents | (26) | (38) |
Cash and cash equivalents at beginning of year | 365 | 251 |
Cash and cash equivalents at end of period | 339 | 213 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Interest, net | 17 | (1) |
Income taxes, net of refunds | 27 | 18 |
Related Party | ||
FINANCING | ||
Cash outflows related to debt due to former parent | 0 | (94) |
Cash inflows related to debt due from former parent | $ 0 | 36 |
Net transfers to former parent | $ 58 |
INTRODUCTION AND TRANSITION TO
INTRODUCTION AND TRANSITION TO STANDALONE COMPANY | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
INTRODUCTION AND TRANSITION TO STANDALONE COMPANY | INTRODUCTION The accompanying Condensed Consolidated Financial Statements and notes present the condensed consolidated statements of operations, balance sheets, and cash flows of PHINIA Inc. (PHINIA or the Company). PHINIA is a leader in the development, design and manufacture of integrated components and systems that are designed to optimize performance, increase efficiency and reduce emissions for combustion and hybrid propulsion systems for commercial vehicles and industrial applications (medium-duty and heavy-duty trucks, off-highway construction, marine, aviation, and agricultural) and light vehicles (passenger cars, trucks, vans and sport-utility). The Company is a global supplier to most major original equipment manufacturers (OEMs) seeking to meet evolving and increasingly stringent global regulatory requirements and satisfy consumer demands for an enhanced user experience. Additionally, the Company offers a wide range of original equipment service (OES) solutions and remanufactured products as well as an expanded range of products for the independent (non-OEM) aftermarket. Transition to Standalone Company On December 6, 2022, BorgWarner Inc., a manufacturer and supplier of automotive industry components and parts (BorgWarner, or Former Parent) announced plans for the complete legal and structural separation of its Fuel Systems and Aftermarket businesses by the spin-off of its wholly-owned subsidiary, PHINIA, which was formed on February 9, 2023 (the Spin-Off). |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Prior to the Spin-Off on July 3, 2023, the historical financial statements of PHINIA were prepared on a standalone combined basis and were derived from BorgWarner’s consolidated financial statements and accounting records as if the Fuel Systems and Aftermarket businesses of BorgWarner had been part of PHINIA for all periods presented. Accordingly, for periods prior to July 3, 2023, our financial statements are presented on a combined basis and for the periods subsequent to July 3, 2023 are presented on a consolidated basis (all periods hereinafter are referred to as “consolidated financial statements”). The Company's Condensed Consolidated Financial Statements were prepared in accordance with accounting principles in the United States of America (U.S. GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Certain information and footnote disclosures normally included in annual financial statements were condensed or omitted as permitted by such rules and regulations. In the opinion of management, all normal recurring adjustments necessary for a fair statement of results have been included. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The balance sheet as of December 31, 2023 was derived from the audited financial statements as of that date. Certain amounts for the prior periods presented were reclassified to conform to the current period presentation. The Company has also corrected for certain immaterial errors that impacted balance sheet footnote disclosures as of December 31, 2023. Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and accompanying notes, as well as amounts of revenues and expenses reported during the periods covered by those financial statements and accompanying notes. The Condensed Consolidated Financial Statements may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as a standalone company during the periods presented prior to the Spin-Off. The Condensed Consolidated Statements of Operations include all revenues and costs directly attributable to the Company, including costs for facilities, functions, and services utilized. Costs for certain centralized functions and programs provided and administered by BorgWarner were charged directly to the Company prior to Spin-Off. These centralized functions and programs included, but were not limited to, research and development and information technology. A portion of BorgWarner’s total corporate expenses were allocated to the Company for services rendered by BorgWarner prior to the Spin-Off. These expenses included the cost of corporate functions and resources, including, but not limited to, executive management, finance, accounting, legal, human resources, research and development and sales. Additionally, a portion of the Company’s corporate expenses were allocated to BorgWarner for charges incurred related to subsidiaries of BorgWarner historically supported by the Company, primarily related to information technology. These expenses were allocated based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional net revenues, legal entities, headcount or weighted-square footage, as applicable. The Company considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to, or the benefit received by, both the Company and BorgWarner during the periods presented. However, the allocations may not reflect the expenses the Company would have incurred if the Company had been a standalone company for the periods presented prior to July 3, 2023. For the three and six months ended June 30, 2023, net corporate allocation expenses totaled $54 million and $89 million, respectively. Corporate allocation expenses were primarily included in Selling, general and administrative expenses. New Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” It requires incremental disclosures related to an entity’s reportable segments, primarily through enhanced disclosures about significant segment expenses. This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this ASU on its financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance requires entities to disaggregate information related to the effective tax rate reconciliation and income taxes paid. This guidance is effective for annual reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this ASU on its financial statements. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS The Company manufactures and sells products and solutions, primarily to OEMs of commercial vehicle, industrial applications and light vehicles, to certain Tier One vehicle systems suppliers and into the aftermarket. The Company’s payment terms are based on customary business practices and vary by customer type and products offered. The Company has evaluated the terms of its arrangements and determined that they do not contain significant financing components. Generally, revenue is recognized upon shipment or delivery; however, a limited number of the Company’s customer arrangements for its highly customized products with no alternative use provide the Company with the right to payment during the production process. As a result, for these limited arrangements, revenue is recognized as goods are produced and control transfers to the customer using the input cost- to-cost method. The Company recorded a contract asset of $1 million at June 30, 2024 and December 31, 2023 for these arrangements. These amounts are reflected in Prepayments and other current assets in the Company’s Condensed Consolidated Balance Sheets. In limited instances, certain customers have provided payments in advance of receiving related products, typically at the onset of an arrangement prior to the beginning of production. As of June 30, 2024, the balance of contract liabilities was $7 million, of which $1 million was reflected in Other current liabilities and $6 million was reflected in Other non-current liabilities. As of December 31, 2023, the balance of contract liabilities was $7 million, of which $6 million was reflected in Other current liabilities and $1 million was reflected as Other non-current liabilities. These amounts are reflected as revenue over the term of the arrangement (typically three The following table represents a disaggregation of revenue from contracts with customers by reportable segment and region for the three and six months ended June 30, 2024 and 2023. Refer to Note 18, “Reportable Segments And Related Information” to the Condensed Consolidated Financial Statements, for more information. Three Months Ended June 30, 2024 (In millions) Fuel Systems Aftermarket Total Americas $ 177 $ 192 $ 369 Europe 227 137 364 Asia 114 21 135 Total $ 518 $ 350 $ 868 Three Months Ended June 30, 2023 (In millions) Fuel Systems Aftermarket Total Americas $ 171 $ 200 $ 371 Europe 256 116 372 Asia 124 20 144 Total $ 551 $ 336 $ 887 Six Months Ended June 30, 2024 (In millions) Fuel Systems Aftermarket Total Americas $ 364 $ 384 $ 748 Europe 454 262 716 Asia 227 40 267 Total $ 1,045 $ 686 $ 1,731 Six Months Ended June 30, 2023 (In millions) Fuel Systems Aftermarket Total Americas $ 338 $ 398 $ 736 Europe 479 228 707 Asia 243 36 279 Total $ 1,060 $ 662 $ 1,722 |
RESEARCH AND DEVELOPMENT COSTS
RESEARCH AND DEVELOPMENT COSTS | 6 Months Ended |
Jun. 30, 2024 | |
Research and Development [Abstract] | |
RESEARCH AND DEVELOPMENT COSTS | RESEARCH AND DEVELOPMENT COSTS The Company’s net Research & Development (R&D) expenditures are primarily included in Selling, general and administrative expenses of the Condensed Consolidated Statements of Operations. Customer reimbursements are netted against gross R&D expenditures as they are considered a recovery of cost. Customer reimbursements for prototypes are recorded net of prototype costs based on customer contracts, typically either when the prototype is shipped or when it is accepted by the customer. Customer reimbursements for engineering services are recorded when performance obligations are satisfied in accordance with the contract. Financial risks and rewards transfer upon shipment, acceptance of a prototype component by the customer or upon completion of the performance obligation as stated in the respective customer agreement. The Company has various customer arrangements relating to R&D activities that it performs at its various R&D locations. The following table presents the Company’s gross and net expenditures on R&D activities: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Gross R&D expenditures $ 52 $ 49 $ 104 $ 98 Customer reimbursements (22) (21) (47) (41) Net R&D expenditures $ 30 $ 28 $ 57 $ 57 |
OTHER OPERATING EXPENSE, NET
OTHER OPERATING EXPENSE, NET | 6 Months Ended |
Jun. 30, 2024 | |
Other Income and Expenses [Abstract] | |
OTHER OPERATING EXPENSE, NET | OTHER OPERATING EXPENSE, NET Items included in Other operating expense, net consist of: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Separation and transaction costs $ 3 $ 41 $ 20 $ 59 Restructuring 3 2 5 6 Royalty income from Former Parent — (12) — (17) R&D income from Former Parent — (1) — (2) Other operating income, net (1) — (3) (1) Other operating expense, net $ 5 $ 30 $ 22 $ 45 Separation and transaction costs: During the three and six months ended June 30, 2024, the Company recorded separation and transaction costs of $3 million and $20 million, respectively. Separation and transaction costs primarily relate to professional fees and other costs associated with the separation of the Company, including the management of certain historical liabilities allocated to the Company in connection with the Spin-Off. During the three and six months ended June 30, 2023, the Company recorded separation and transaction costs of $41 million and $59 million, respectively, primarily related to professional fees and other costs associated with the separation of the Company. Restructuring: During the three and six months ended June 30, 2024, the Company recorded $3 million and $5 million, respectively, of restructuring costs for individually approved restructuring actions that primarily related to reductions in headcount in the Fuel Systems segment. During the three and six months ended June 30, 2023, the Company recorded $2 million and $6 million, respectively, of restructuring costs for individually approved restructuring actions that primarily related to reductions in headcount in the Fuel Systems segment. Royalty income from Former Parent: The Company participated in royalty arrangements with BorgWarner businesses prior to the Spin-Off, which involved the licensing of the Delphi Technologies trade name and product-related intellectual properties. R&D income from Former Parent: The Company provided application testing and other R&D services for other BorgWarner businesses prior to the Spin-Off. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s provision for income taxes is based upon an estimated annual effective tax rate for the year applied to domestic and foreign income. On a quarterly basis, the annual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter. The Company’s effective tax rate for the three months ended June 30, 2024 and 2023 was 62% and 38%, respectively. The effective tax rate for the three months ended June 30, 2024 increased as compared to the prior year as a result of a change and reduction in the jurisdictional mix of pre-tax earnings, most notably an increase in pre-tax losses where no benefit is recognized. The Company’s effective tax rate for the six months ended June 30, 2024 and 2023 was 54% and 39%, respectively. The effective tax rate for the six months ended June 30, 2024 increased as compared to the prior year as a result of a change and reduction in the jurisdictional mix of pre-tax earnings, most notably an increase in pre-tax losses where no benefit is recognized. The annual effective tax rates differ from the U.S. statutory rate primarily due to foreign rates which vary from those in the U.S., jurisdictions with pretax losses for which no tax benefit could be realized, U.S. taxes on foreign earnings, and permanent differences between book and tax treatment for certain items including enhanced deduction of research and development expenses in certain jurisdictions. For periods ended on or prior to July 3, 2023, the Company’s operations have been included in Former Parent’s U.S. federal consolidated tax return, certain foreign tax returns, and certain state tax returns. For the purposes of these financial statements, the Company’s income tax provision was computed as if the Company filed separate tax returns (i.e., as if the Company had not been included in the consolidated income tax return group with the Former Parent). The separate return method applies ASC 740 to the Condensed Consolidated Financial Statements of each member of a consolidated tax group as if the group member were a separate taxpayer. As a result, actual tax transactions included in the consolidated financial statements of the Former Parent may not be included in these Condensed Consolidated Financial Statements. Further, the Company’s tax results as presented in the Condensed Consolidated Financial Statements may not be reflective of the results that the Company expects to generate in the future. Also, the tax treatment of certain items reflected in the Condensed Consolidated Financial Statements may not be reflected in the Consolidated Financial Statements and tax returns of the Former Parent. Items such as net operating losses, other deferred taxes, income taxes payable, liabilities for uncertain tax positions and valuation allowances may exist in the Consolidated Financial Statements that may or may not exist in the Former Parent’s Consolidated Financial Statements. For periods subsequent to July 3, 2023, these items are reported based on tax filings and tax attributes of the Company’s legal entities. Indemnification assets and liabilities have been reported for amounts payable to or recoverable from the Former Parent under the Tax Matters Agreement for taxes associated with the period prior to the Spin-Off. The Tax Matters Agreement generally governs the Company’s and the Former Parent’s respective rights, responsibilities and obligations after the distribution with respect to taxes for any tax period ending on or before the distribution date, as well as tax periods beginning before and ending after the distribution date. Generally, the Former Parent is liable for all pre-distribution U.S. income taxes, foreign income taxes, certain non-income taxes attributable to the company’s business, and liabilities for taxes that were incurred as a result of restructuring activities undertaken to effectuate the separation. The Company is generally liable for all other taxes attributable to its business. The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar Two), with certain aspects of Pillar Two effective January 1, 2024 and other aspects effective January 1, 2025. While it is uncertain whether the U.S. will enact legislation to adopt Pillar Two, certain countries in which the Company operates have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two. The Company does not expect Pillar Two to have a material impact on its effective tax rate or its consolidated results of operation, financial position or cash flows. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES A summary of Inventories is presented below: (in millions) June 30, December 31, Raw material and supplies $ 256 $ 286 Work-in-progress 47 46 Finished goods 168 155 Inventories $ 471 $ 487 |
OTHER CURRENT AND NON-CURRENT A
OTHER CURRENT AND NON-CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT AND NON-CURRENT ASSETS | OTHER CURRENT AND NON-CURRENT ASSETS (in millions) June 30, December 31, Prepayments and other current assets: Prepaid taxes $ 42 $ 26 Prepaid software 9 5 Prepaid engineering 9 3 Customer return assets 7 8 Prepaid customer tooling 5 3 Deposits 2 3 Prepaid insurance 2 3 Other 8 7 Total prepayments and other current assets $ 84 $ 58 Investments and long-term receivables: Investment in equity affiliates $ 52 $ 48 Long-term receivables 50 46 Due from Former Parent 17 17 Investment in equity securities 4 4 Total investments and long-term receivables $ 123 $ 115 Other non-current assets: Operating leases $ 57 $ 63 Deferred income taxes 56 61 Customer incentive payments 10 10 Other 23 28 Total other non-current assets $ 146 $ 162 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES During the fourth quarter of each year, the Company assesses its goodwill and indefinite-lived intangibles assigned to each of its reporting units for impairment by either performing a qualitative assessment or a quantitative analysis. No events or circumstances were noted in the first six months of 2024 requiring additional assessment or testing. A summary of the components in the carrying amount of goodwill as of June 30, 2024 and December 31, 2023 is as follows: (in millions) Fuel Systems Aftermarket Total Gross goodwill balance, December 31, 2023 $ 61 $ 551 $ 612 Accumulated impairment losses — (113) (113) Net goodwill balance, December 31, 2023 $ 61 $ 438 $ 499 Goodwill during the period: Translation adjustment (2) (14) (16) Net goodwill balance, June 30, 2024 $ 59 $ 424 $ 483 The Company’s other intangible assets, primarily from acquisitions, consist of the following: June 30, 2024 December 31, 2023 (in millions) Estimated useful lives (years) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Amortized intangible assets: Patented and unpatented technology 14 - 15 $ 145 $ 46 $ 99 $ 149 $ 41 $ 108 Customer relationships 14 - 15 262 110 152 268 104 164 Total amortized intangible assets 407 156 251 417 145 272 Unamortized trade names 142 — 142 145 — 145 Total other intangible assets $ 549 $ 156 $ 393 $ 562 $ 145 $ 417 |
PRODUCT WARRANTY
PRODUCT WARRANTY | 6 Months Ended |
Jun. 30, 2024 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTY | PRODUCT WARRANTY The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one The following table summarizes the activity in the product warranty accrual accounts: (in millions) 2024 2023 Beginning balance, January 1 $ 56 $ 60 Provisions for current period sales 18 20 Payments (20) (23) Other, primarily translation adjustment (1) (1) Ending balance, June 30, $ 53 $ 56 The product warranty liability is classified in the Condensed Consolidated Balance Sheets as follows: (in millions) June 30, December 31, 2023 Other current liabilities $ 30 $ 30 Other non-current liabilities 23 26 Total product warranty liability $ 53 $ 56 |
NOTES PAYABLE AND DEBT
NOTES PAYABLE AND DEBT | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND DEBT | NOTES PAYABLE AND DEBT As of June 30, 2024 and December 31, 2023, the Company had debt outstanding as follows: (in millions) June 30, December 31, 2023 Short-term debt Short-term borrowings $ — $ 75 Long-term debt 5.000% Senior Notes due 10/01/25 ($24 million par value) $ 24 $ 25 6.750% Senior Secured Notes due 04/15/29 ($525 million par value) 517 — Term Loan A Facility ($294 million and $298 million par value, respectively) 292 295 Term Loan B Facility ($424 million par value) — 403 Finance leases 1 — Total long-term debt $ 834 $ 723 Less: current portion 13 14 Long-term debt, net of current portion $ 821 $ 709 As of June 30, 2024, the estimated fair values of the Company’s long-term debt totaled $853 million, which is $20 million higher than carrying value for the same period. As of December 31, 2023, the estimated fair value of the Company’s long-term debt totaled $758 million, which is $35 million higher than carrying value for the same period. Fair market values of the long-term debt are developed using observable values for similar debt instruments, which are considered Level 2 inputs as defined by ASC Topic 820. The carrying values of the Company’s other debt facilities approximate fair value. The fair value estimates do not necessarily reflect the values the Company could realize in the current markets. Credit Agreement On July 3, 2023, the Company entered into a $1.225 billion Credit Agreement (the Credit Agreement) consisting of a $500 million revolving credit facility (the Revolving Facility), a $300 million Term Loan A Facility (the Term Loan A Facility) and a $425 million Term Loan B Facility (the Term Loan B Facility; together with the Revolving Facility and the Term Loan A Facility, collectively, the Facilities) in connection with the Spin-Off that occurred on the same date. As of June 30, 2024, the Company had no outstanding borrowings under the Revolving Facility, and availability of $499 million. The Term Loan B Facility was fully repaid in connection with the issuance of the 6.75% Senior Secured Notes due 2029 on April 4, 2024, as discussed below. The Company was in compliance with all covenants as of June 30, 2024. On April 4, 2024, the Company, as borrower, and certain subsidiaries of the Company, each acting as guarantors, entered into Amendment No. 1 to the Credit Agreement (the Credit Agreement Amendment). The Credit Agreement Amendment, among other things, modifies certain covenants in the Credit Agreement to be more favorable to the Company, and increases the total net leverage ratio required to be satisfied under the Company’s financial covenant from 3.00:1.00 to 3.25:1.00 (subject to a step-up to 3.75:1.00 in connection with a qualifying acquisition for the fiscal quarter when such qualifying acquisition is consummated and the following three fiscal quarters). Senior Secured Notes due 2029 On April 4, 2024, the Company issued $525 million aggregate principal amount of 6.75% Senior Secured Notes due 2029 (the “2029 Notes”) pursuant to an indenture among the Company, as issuer, certain subsidiaries of the Company named as guarantors, and U.S. Bank Trust Company, National Association, as trustee and collateral agent. The 2029 Notes were sold to investors at 100% plus accrued interest, if any, from April 4, 2024 in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended. The net proceeds of the offering of the 2029 Notes were used to repay all of the Company’s outstanding borrowings and accrued interest under the Term Loan B Facility and the Revolving Facility and to pay fees and expenses in connection with the offering. During the second quarter of 2024, the Company recorded a non-cash pre-tax loss on extinguishment of $20 million related to the difference between the repayment amount and net carrying amount of the Term Loan B Facility, which is included in the Interest expense line item on the Condensed Consolidated Statements of Operations. The 2029 Notes bear interest at a rate of 6.75% per annum. Interest on the 2029 Notes is payable semiannually on April 15 and October 15 of each year, commencing on October 15, 2024. The 2029 Notes will mature on April 15, 2029. The 2029 Notes are senior secured obligations of the Company and are jointly and severally, fully and unconditionally, guaranteed on a senior secured basis by each of the Company’s existing and future direct and indirect domestic subsidiaries that incurs or guarantees indebtedness under the Facilities. The 2029 Notes and the guarantees are secured by a first-priority security interest in substantially all of the Company’s and the guarantors’ assets, subject to certain excluded assets, exceptions and permitted liens, which security interest ranks equally with the first-priority security interest securing the Facilities. Senior Notes due 2025 In 2020, the Former Parent completed its acquisition of Delphi Technologies PLC (Delphi Technologies). In connection therewith, the Former Parent completed its offer to exchange Delphi Technologies’ outstanding 5.0% Senior Notes due 2025 (the 2025 Notes). Approximately 97% of the $800 million total outstanding principal amount of the 2025 Notes, were validly exchanged and cancelled for new BorgWarner notes. In connection with the Spin-Off, the obligations under the remaining $24 million in aggregate principal amount of the 2025 Notes were assumed by the Company. |
OTHER CURRENT AND NON-CURRENT L
OTHER CURRENT AND NON-CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2024 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT AND NON-CURRENT LIABILITIES | OTHER CURRENT AND NON-CURRENT LIABILITIES Additional detail related to liabilities is presented in the table below: (in millions) June 30, December 31, Other current liabilities: Customer related $ 108 $ 109 Payroll and employee related 87 92 Income taxes payable 61 39 Product warranties (Note 9) 30 30 Accrued freight 20 21 Operating leases 17 17 Supplier related 13 14 Accrued interest 9 1 Employee termination benefits 5 9 Other non-income taxes 4 8 Legal and professional fees 3 6 Other 63 74 Total other current liabilities $ 420 $ 420 Other non-current liabilities: Deferred income taxes $ 63 $ 56 Operating leases 43 49 Product warranties (Note 9) 23 26 Uncertain tax positions 14 15 Deferred income 11 7 Other 14 12 Total other non-current liabilities $ 168 $ 165 |
RETIREMENT BENEFIT PLANS
RETIREMENT BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2024 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFIT PLANS | RETIREMENT BENEFIT PLANS PHINIA sponsors various defined contribution savings plans, primarily in the U.S., that allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with plan specified guidelines. The Company also has a number of defined benefit pension plans, and in connection with the completion of the Spin-Off was required to assume additional defined benefit plan liabilities, along with the associated deferred costs in Accumulated other comprehensive income (loss). Under specified conditions, the Company will make contributions to the plans and/or match a percentage of the employee contributions up to certain limits. The estimated contributions to the defined benefit pension plans for 2024 range from $4 million to $8 million, of which $1 million has been contributed through the first six months of the year. The components of net periodic benefit income recorded in the Condensed Consolidated Statements of Operations are as follows: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Service cost $ 1 $ 1 $ 2 $ 1 Interest cost 12 11 23 21 Expected return on plan assets (11) (11) (21) (21) Amortization of unrecognized loss — (1) (1) (1) Net periodic benefit cost $ 2 $ — $ 3 $ — The non-service cost components of net periodic benefit cost are included in Other postretirement expense (income), net in the Condensed Consolidated Statements of Operations. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY The changes of the Stockholders’ Equity items during the three and six months ended June 30, 2024 and 2023, are as follows: (in millions) Issued common stock Additional paid-in-capital Treasury stock Retained earnings Accumulated other comprehensive loss Total equity Balance, March 31, 2024 $ 1 $ 2,018 $ (42) $ 26 (153) $ 1,850 Dividends declared (0.25 per share) — — — (11) — (11) Spin-Off related adjustments — (1) — — — (1) Share-based compensation expense — 4 — — — 4 Purchase of treasury stock — — (90) — — (90) Net issuance of executive stock plan — (2) 2 — — — Net earnings — — — 14 — 14 Other comprehensive loss — — — — (19) (19) Balance, June 30, 2024 $ 1 $ 2,019 $ (130) $ 29 $ (172) $ 1,747 (in millions) Former Parent investment Accumulated other comprehensive income (loss) Total equity Balance, March 31, 2023 $ 1,859 $ (67) $ 1,792 Net earnings 35 — 35 Other comprehensive income — 6 6 Net transfers from Former Parent 159 — 159 Balance, June 30, 2023 $ 2,053 $ (61) $ 1,992 (in millions) Issued common stock Additional paid-in-capital Treasury stock Retained earnings Accumulated other comprehensive loss Total equity Balance, December 31, 2023 $ 1 $ 2,031 $ (23) $ 9 $ (131) $ 1,887 Dividends declared (0.50 per share) $ — $ — $ — $ (23) $ — $ (23) Spin-Off related adjustments — (11) — — — (11) Share-based compensation expense — 8 — — — 8 Purchase of treasury stock — — (113) — — (113) Net issuance of executive stock plan — (9) 6 — — (3) Net earnings — — — 43 — 43 Other comprehensive loss — — — — (41) (41) Balance, June 30, 2024 $ 1 $ 2,019 $ (130) $ 29 $ (172) $ 1,747 (in millions) Former parent investment Accumulated other comprehensive income (loss) Total equity Balance, December 31, 2022 $ 1,731 $ (88) $ 1,643 Net earnings 70 — 70 Other comprehensive income — 27 27 Net transfers from former parent 252 — 252 Balance, June 30, 2023 $ 2,053 $ (61) $ 1,992 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables summarize the activity within accumulated other comprehensive loss during the three and six months ended June 30, 2024 and 2023: (in millions) Foreign currency translation adjustments Defined benefit pension plans Hedge instruments Total Beginning balance, March 31, 2024 $ (119) $ (34) $ — $ (153) Comprehensive loss before reclassifications (18) (1) — (19) Ending Balance, June 30, 2024 $ (137) $ (35) $ — $ (172) (in millions) Foreign currency translation adjustments Defined benefit pension plans Hedge instruments Total Beginning balance, March 31, 2023 $ (65) $ (7) $ 5 $ (67) Comprehensive income (loss) 10 — (4) 6 Ending Balance, June 30, 2023 $ (55) $ (7) $ 1 $ (61) (in millions) Foreign currency translation adjustments Defined benefit pension plans Hedge instruments Total Beginning Balance, December 31, 2023 $ (98) $ (33) $ — $ (131) Comprehensive loss (39) (3) — (42) Reclassification from accumulated other comprehensive loss — 1 — 1 Ending Balance, June 30, 2024 $ (137) $ (35) $ — $ (172) (in millions) Foreign currency translation adjustments Defined benefit pension plans Hedge instruments Total Beginning Balance, December 31, 2022 $ (85) $ (6) $ 3 $ (88) Comprehensive income (loss) 30 (1) (2) 27 Ending Balance, June 30, 2023 $ (55) $ (7) $ 1 $ (61) |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES In the normal course of business, the Company is party to various commercial and legal claims, actions and complaints, including matters involving warranty claims, intellectual property claims, governmental investigations and related proceedings, including relating to alleged or actual violations of vehicle emissions standards, general liability and various other risks. It is not possible to predict with certainty whether or not the Company will ultimately be successful in any of these commercial and legal matters or, if not, what the impact might be. The Company’s management does not expect that an adverse outcome in any of these commercial and legal claims, actions and complaints that are currently pending will have a material adverse effect on the Company’s results of operations, financial position or cash flows. An adverse outcome could, nonetheless, be material to the results of operations, financial position or cash flows. BorgWarner Dispute In July 2024, the Former Parent made a legal demand under the Tax Matters Agreement that the Company remit to the Former Parent monies received, or to be received, by the Company from tax authorities that relate to certain indirect tax payments made prior to the Spin-Off arising from the Company’s business. The Company is contesting this demand. Nevertheless, an adverse outcome is reasonably possible, but not probable, and this matter could have a material effect on the Company’s financial position or cash flows. Due to the uncertainty inherent in this matter, an estimate of the loss is not currently determinable. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Pursuant to the Spin-Off, the Former Parent ceased to be a related party to PHINIA and accordingly, no related party transactions or balances have been reported subsequent to July 3, 2023. In connection with the Spin-Off, we entered into a number of agreements with the Former Parent to govern the Spin-Off and provide a framework for the relationship between the parties going forward, including a Transition Services Agreement, Tax Matters Agreement, and certain Contract Manufacturing Agreements. The following discussion summarizes activity between the Company and the Former Parent that occurred prior to the completion of the Spin-Off. Allocation of General Corporate and Other Expenses The Condensed Consolidated Statements of Operations include expenses for certain centralized functions and other programs provided and administered by the Former Parent that were charged directly to the Company prior to the Spin-Off. In addition, for purposes of preparing the financial statements on a carve-out basis, a portion of the Former Parent’s total corporate expenses was allocated to the Company. Similarly, certain centralized expenses incurred by the Company prior to the Spin-Off on behalf of subsidiaries of the Former Parent had been allocated to the Former Parent. See Note 1, “Basis Of Presentation,” for a discussion of the methodology used to allocate corporate expenses for purposes of preparing these financial statements on a carve-out basis for periods prior to July 3, 2023. Net corporate allocation expenses, primarily related to separation and transaction costs, in the three and six months ended June 30, 2023 totaled $54 million and $89 million, respectively. These expenses were primarily included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. Royalty Income and R&D Income from Former Parent The Company participated in royalty arrangements and provided applications testing and other R&D services to the Former Parent prior to the Spin-Off. See Note 4, “Other operating expense, net” for additional information. Net Transfers from (to) Former Parent Net transfers from (to) Former Parent are included within Former Parent investment in the Condensed Consolidated Statements of Changes in Equity. The components of the transfers from (to) Former Parent are as follows: Six Months Ended June 30, (in millions) 2023 General financing activities $ (63) Cash pooling and other equity settled balances with Former Parent (32) Related-party notes converted to equity 260 Corporate allocations 89 Research and development income from Former Parent (2) Total net transfers from Former Parent $ 252 Exclude non-cash items: Stock-based compensation $ (4) Other non-cash activities with Former Parent, net 15 Related-party notes converted to equity (260) Cash pooling and intercompany financing activities with Former Parent, net 55 Total net transfers to Former Parent per Condensed Consolidated Statements of Cash Flow $ 58 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The Company presents both basic and diluted earnings per share of common stock (EPS) amounts. Basic EPS is calculated by dividing net earnings by the weighted average shares of common stock outstanding during the reporting period. Diluted EPS is calculated by dividing net earnings by the weighted average shares of common stock and common stock equivalents outstanding during the reporting period. For periods prior to July 3, 2023, the denominator for basic and diluted earnings per share was calculated using the 47.0 million PHINIA ordinary shares outstanding immediately following the Spin-Off. The same number of shares was used to calculate basic and diluted earnings per share in those periods since no PHINIA equity awards were outstanding prior to the Spin-Off. The dilutive impact of stock-based compensation is calculated using the treasury stock method. The treasury stock method assumes that the Company uses the assumed proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future and compensation cost for future service that the Company has not yet recognized. The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock: Three Months Ended June 30, Six Months Ended June 30, ( in millions, except per share amounts ) 2024 2023 2024 2023 Basic earnings per share: Net earnings $ 14 $ 35 $ 43 $ 70 Weighted average shares of common stock outstanding 44.8 47.0 45.5 47.0 Basic earnings per share of common stock $ 0.31 $ 0.74 $ 0.95 $ 1.49 Diluted earnings per share: Net earnings $ 14 $ 35 $ 43 $ 70 Weighted average shares of common stock outstanding 44.8 47.0 45.5 47.0 Effect of stock-based compensation 0.9 — 0.6 — Weighted average shares of common stock outstanding including dilutive shares 45.7 47.0 46.1 47.0 Diluted earnings per share of common stock $ 0.31 $ 0.74 $ 0.93 $ 1.49 |
REPORTABLE SEGMENTS AND RELATED
REPORTABLE SEGMENTS AND RELATED INFORMATION | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
REPORTING SEGMENTS AND RELATED INFORMATION | REPORTABLE SEGMENTS AND RELATED INFORMATION The Company’s business is comprised of two reportable segments, which are further described below. These segments are strategic business groups, which are managed separately as each represents a specific grouping of related automotive components and systems. • Fuel Systems. This segment provides advanced fuel injection systems, fuel delivery modules, canisters, sensors, electronic control modules and associated software. Our highly engineered fuel injection systems portfolio includes pumps, injectors, fuel rail assemblies, engine control modules, and complete systems, including software and calibration services, that are designed to reduce emissions and improve fuel economy for traditional and hybrid applications. • Aftermarket. Through this segment, the Company sells products to independent aftermarket customers and OES customers. Its product portfolio includes a wide range of products as well as maintenance, test equipment and vehicle diagnostics solutions. The Aftermarket segment also includes sales of starters and alternators to OEMs. Segment Adjusted Operating Income (AOI) is the measure of segment income or loss used by the Company. Segment AOI is comprised of segment operating income adjusted for restructuring, separation and transaction costs, intangible asset amortization expense, impairment charges, other net expenses and other items not reflective of ongoing operating income or loss. The Company believes Segment AOI is most reflective of the operational profitability or loss of its reportable segments. Segment AOI excludes certain corporate costs, which primarily represent corporate expenses not directly attributable to the individual segments. The following tables show segment information and Segment AOI for the Company’s reportable segments: Net Sales by Reportable Segment Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 (in millions) Customers Inter-segment Net Customers Inter-segment Net Fuel Systems $ 518 $ 69 $ 587 $ 1,045 $ 118 $ 1,163 Aftermarket 350 5 355 686 7 693 Inter-segment eliminations — (74) (74) — (125) (125) Total $ 868 $ — $ 868 $ 1,731 $ — $ 1,731 Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 (in millions) Customers Inter-segment Net Customers Inter-segment Net Fuel Systems $ 551 $ 56 $ 607 $ 1,060 $ 114 $ 1,174 Aftermarket 336 3 339 662 7 669 Inter-segment eliminations — (59) (59) — (121) (121) Total $ 887 $ — $ 887 $ 1,722 $ — $ 1,722 Segment Adjusted Operating Income Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Fuel Systems $ 52 $ 62 $ 107 $ 105 Aftermarket 53 49 113 97 Segment AOI 105 111 220 202 Corporate, including stock-based compensation 21 5 39 9 Separation and transaction costs 3 41 20 59 Intangible asset amortization expense 7 7 14 14 Restructuring expense 3 2 5 6 Equity in affiliates' earnings, net of tax (2) (3) (5) (6) Interest expense 39 6 61 12 Interest income (4) (2) (8) (5) Other postretirement expense (income), net 1 (1) 1 (1) Earnings before income taxes 37 56 93 114 Provision for income taxes 23 21 50 44 Net earnings $ 14 $ 35 $ 43 $ 70 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net earnings | $ 14 | $ 35 | $ 43 | $ 70 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Prior to the Spin-Off on July 3, 2023, the historical financial statements of PHINIA were prepared on a standalone combined basis and were derived from BorgWarner’s consolidated financial statements and accounting records as if the Fuel Systems and Aftermarket businesses of BorgWarner had been part of PHINIA for all periods presented. Accordingly, for periods prior to July 3, 2023, our financial statements are presented on a combined basis and for the periods subsequent to July 3, 2023 are presented on a consolidated basis (all periods hereinafter are referred to as “consolidated financial statements”). |
Basis of Presentation | The Company's Condensed Consolidated Financial Statements were prepared in accordance with accounting principles in the United States of America (U.S. GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Certain information and footnote disclosures normally included in annual financial statements were condensed or omitted as permitted by such rules and regulations. In the opinion of management, all normal recurring adjustments necessary for a fair statement of results have been included. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The balance sheet as of December 31, 2023 was derived from the audited financial statements as of that date. Certain amounts for the prior periods presented were reclassified to conform to the current period presentation. The Company has also corrected for certain immaterial errors that impacted balance sheet footnote disclosures as of December 31, 2023. |
Use of Estimates | Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and accompanying notes, as well as amounts of revenues and expenses reported during the periods covered by those financial statements and accompanying notes. The Condensed Consolidated Financial Statements may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as a standalone company during the periods presented prior to the Spin-Off. |
New Accounting Pronouncements | New Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” It requires incremental disclosures related to an entity’s reportable segments, primarily through enhanced disclosures about significant segment expenses. This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this ASU on its financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance requires entities to disaggregate information related to the effective tax rate reconciliation and income taxes paid. This guidance is effective for annual reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this ASU on its financial statements. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table represents a disaggregation of revenue from contracts with customers by reportable segment and region for the three and six months ended June 30, 2024 and 2023. Refer to Note 18, “Reportable Segments And Related Information” to the Condensed Consolidated Financial Statements, for more information. Three Months Ended June 30, 2024 (In millions) Fuel Systems Aftermarket Total Americas $ 177 $ 192 $ 369 Europe 227 137 364 Asia 114 21 135 Total $ 518 $ 350 $ 868 Three Months Ended June 30, 2023 (In millions) Fuel Systems Aftermarket Total Americas $ 171 $ 200 $ 371 Europe 256 116 372 Asia 124 20 144 Total $ 551 $ 336 $ 887 Six Months Ended June 30, 2024 (In millions) Fuel Systems Aftermarket Total Americas $ 364 $ 384 $ 748 Europe 454 262 716 Asia 227 40 267 Total $ 1,045 $ 686 $ 1,731 Six Months Ended June 30, 2023 (In millions) Fuel Systems Aftermarket Total Americas $ 338 $ 398 $ 736 Europe 479 228 707 Asia 243 36 279 Total $ 1,060 $ 662 $ 1,722 |
RESEARCH AND DEVELOPMENT COSTS
RESEARCH AND DEVELOPMENT COSTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Research and Development [Abstract] | |
Schedule of Research and Development Arrangement, Contract to Perform for Others | The following table presents the Company’s gross and net expenditures on R&D activities: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Gross R&D expenditures $ 52 $ 49 $ 104 $ 98 Customer reimbursements (22) (21) (47) (41) Net R&D expenditures $ 30 $ 28 $ 57 $ 57 |
OTHER OPERATING EXPENSE, NET (T
OTHER OPERATING EXPENSE, NET (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Operating Expense, Net | Items included in Other operating expense, net consist of: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Separation and transaction costs $ 3 $ 41 $ 20 $ 59 Restructuring 3 2 5 6 Royalty income from Former Parent — (12) — (17) R&D income from Former Parent — (1) — (2) Other operating income, net (1) — (3) (1) Other operating expense, net $ 5 $ 30 $ 22 $ 45 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | A summary of Inventories is presented below: (in millions) June 30, December 31, Raw material and supplies $ 256 $ 286 Work-in-progress 47 46 Finished goods 168 155 Inventories $ 471 $ 487 |
OTHER CURRENT AND NON-CURRENT_2
OTHER CURRENT AND NON-CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | (in millions) June 30, December 31, Prepayments and other current assets: Prepaid taxes $ 42 $ 26 Prepaid software 9 5 Prepaid engineering 9 3 Customer return assets 7 8 Prepaid customer tooling 5 3 Deposits 2 3 Prepaid insurance 2 3 Other 8 7 Total prepayments and other current assets $ 84 $ 58 Investments and long-term receivables: Investment in equity affiliates $ 52 $ 48 Long-term receivables 50 46 Due from Former Parent 17 17 Investment in equity securities 4 4 Total investments and long-term receivables $ 123 $ 115 Other non-current assets: Operating leases $ 57 $ 63 Deferred income taxes 56 61 Customer incentive payments 10 10 Other 23 28 Total other non-current assets $ 146 $ 162 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | A summary of the components in the carrying amount of goodwill as of June 30, 2024 and December 31, 2023 is as follows: (in millions) Fuel Systems Aftermarket Total Gross goodwill balance, December 31, 2023 $ 61 $ 551 $ 612 Accumulated impairment losses — (113) (113) Net goodwill balance, December 31, 2023 $ 61 $ 438 $ 499 Goodwill during the period: Translation adjustment (2) (14) (16) Net goodwill balance, June 30, 2024 $ 59 $ 424 $ 483 |
Schedule of Intangible Assets Gross Roll Forward | The Company’s other intangible assets, primarily from acquisitions, consist of the following: June 30, 2024 December 31, 2023 (in millions) Estimated useful lives (years) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Amortized intangible assets: Patented and unpatented technology 14 - 15 $ 145 $ 46 $ 99 $ 149 $ 41 $ 108 Customer relationships 14 - 15 262 110 152 268 104 164 Total amortized intangible assets 407 156 251 417 145 272 Unamortized trade names 142 — 142 145 — 145 Total other intangible assets $ 549 $ 156 $ 393 $ 562 $ 145 $ 417 |
PRODUCT WARRANTY (Tables)
PRODUCT WARRANTY (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | The following table summarizes the activity in the product warranty accrual accounts: (in millions) 2024 2023 Beginning balance, January 1 $ 56 $ 60 Provisions for current period sales 18 20 Payments (20) (23) Other, primarily translation adjustment (1) (1) Ending balance, June 30, $ 53 $ 56 The product warranty liability is classified in the Condensed Consolidated Balance Sheets as follows: (in millions) June 30, December 31, 2023 Other current liabilities $ 30 $ 30 Other non-current liabilities 23 26 Total product warranty liability $ 53 $ 56 |
NOTES PAYABLE AND DEBT (Tables)
NOTES PAYABLE AND DEBT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | As of June 30, 2024 and December 31, 2023, the Company had debt outstanding as follows: (in millions) June 30, December 31, 2023 Short-term debt Short-term borrowings $ — $ 75 Long-term debt 5.000% Senior Notes due 10/01/25 ($24 million par value) $ 24 $ 25 6.750% Senior Secured Notes due 04/15/29 ($525 million par value) 517 — Term Loan A Facility ($294 million and $298 million par value, respectively) 292 295 Term Loan B Facility ($424 million par value) — 403 Finance leases 1 — Total long-term debt $ 834 $ 723 Less: current portion 13 14 Long-term debt, net of current portion $ 821 $ 709 |
OTHER CURRENT AND NON-CURRENT_3
OTHER CURRENT AND NON-CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Additional Details Related to Other Liabilities | Additional detail related to liabilities is presented in the table below: (in millions) June 30, December 31, Other current liabilities: Customer related $ 108 $ 109 Payroll and employee related 87 92 Income taxes payable 61 39 Product warranties (Note 9) 30 30 Accrued freight 20 21 Operating leases 17 17 Supplier related 13 14 Accrued interest 9 1 Employee termination benefits 5 9 Other non-income taxes 4 8 Legal and professional fees 3 6 Other 63 74 Total other current liabilities $ 420 $ 420 Other non-current liabilities: Deferred income taxes $ 63 $ 56 Operating leases 43 49 Product warranties (Note 9) 23 26 Uncertain tax positions 14 15 Deferred income 11 7 Other 14 12 Total other non-current liabilities $ 168 $ 165 |
RETIREMENT BENEFIT PLANS (Table
RETIREMENT BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost | The components of net periodic benefit income recorded in the Condensed Consolidated Statements of Operations are as follows: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Service cost $ 1 $ 1 $ 2 $ 1 Interest cost 12 11 23 21 Expected return on plan assets (11) (11) (21) (21) Amortization of unrecognized loss — (1) (1) (1) Net periodic benefit cost $ 2 $ — $ 3 $ — |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders Equity | The changes of the Stockholders’ Equity items during the three and six months ended June 30, 2024 and 2023, are as follows: (in millions) Issued common stock Additional paid-in-capital Treasury stock Retained earnings Accumulated other comprehensive loss Total equity Balance, March 31, 2024 $ 1 $ 2,018 $ (42) $ 26 (153) $ 1,850 Dividends declared (0.25 per share) — — — (11) — (11) Spin-Off related adjustments — (1) — — — (1) Share-based compensation expense — 4 — — — 4 Purchase of treasury stock — — (90) — — (90) Net issuance of executive stock plan — (2) 2 — — — Net earnings — — — 14 — 14 Other comprehensive loss — — — — (19) (19) Balance, June 30, 2024 $ 1 $ 2,019 $ (130) $ 29 $ (172) $ 1,747 (in millions) Former Parent investment Accumulated other comprehensive income (loss) Total equity Balance, March 31, 2023 $ 1,859 $ (67) $ 1,792 Net earnings 35 — 35 Other comprehensive income — 6 6 Net transfers from Former Parent 159 — 159 Balance, June 30, 2023 $ 2,053 $ (61) $ 1,992 (in millions) Issued common stock Additional paid-in-capital Treasury stock Retained earnings Accumulated other comprehensive loss Total equity Balance, December 31, 2023 $ 1 $ 2,031 $ (23) $ 9 $ (131) $ 1,887 Dividends declared (0.50 per share) $ — $ — $ — $ (23) $ — $ (23) Spin-Off related adjustments — (11) — — — (11) Share-based compensation expense — 8 — — — 8 Purchase of treasury stock — — (113) — — (113) Net issuance of executive stock plan — (9) 6 — — (3) Net earnings — — — 43 — 43 Other comprehensive loss — — — — (41) (41) Balance, June 30, 2024 $ 1 $ 2,019 $ (130) $ 29 $ (172) $ 1,747 (in millions) Former parent investment Accumulated other comprehensive income (loss) Total equity Balance, December 31, 2022 $ 1,731 $ (88) $ 1,643 Net earnings 70 — 70 Other comprehensive income — 27 27 Net transfers from former parent 252 — 252 Balance, June 30, 2023 $ 2,053 $ (61) $ 1,992 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive loss | The following tables summarize the activity within accumulated other comprehensive loss during the three and six months ended June 30, 2024 and 2023: (in millions) Foreign currency translation adjustments Defined benefit pension plans Hedge instruments Total Beginning balance, March 31, 2024 $ (119) $ (34) $ — $ (153) Comprehensive loss before reclassifications (18) (1) — (19) Ending Balance, June 30, 2024 $ (137) $ (35) $ — $ (172) (in millions) Foreign currency translation adjustments Defined benefit pension plans Hedge instruments Total Beginning balance, March 31, 2023 $ (65) $ (7) $ 5 $ (67) Comprehensive income (loss) 10 — (4) 6 Ending Balance, June 30, 2023 $ (55) $ (7) $ 1 $ (61) (in millions) Foreign currency translation adjustments Defined benefit pension plans Hedge instruments Total Beginning Balance, December 31, 2023 $ (98) $ (33) $ — $ (131) Comprehensive loss (39) (3) — (42) Reclassification from accumulated other comprehensive loss — 1 — 1 Ending Balance, June 30, 2024 $ (137) $ (35) $ — $ (172) (in millions) Foreign currency translation adjustments Defined benefit pension plans Hedge instruments Total Beginning Balance, December 31, 2022 $ (85) $ (6) $ 3 $ (88) Comprehensive income (loss) 30 (1) (2) 27 Ending Balance, June 30, 2023 $ (55) $ (7) $ 1 $ (61) |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Net transfers from (to) Former Parent are included within Former Parent investment in the Condensed Consolidated Statements of Changes in Equity. The components of the transfers from (to) Former Parent are as follows: Six Months Ended June 30, (in millions) 2023 General financing activities $ (63) Cash pooling and other equity settled balances with Former Parent (32) Related-party notes converted to equity 260 Corporate allocations 89 Research and development income from Former Parent (2) Total net transfers from Former Parent $ 252 Exclude non-cash items: Stock-based compensation $ (4) Other non-cash activities with Former Parent, net 15 Related-party notes converted to equity (260) Cash pooling and intercompany financing activities with Former Parent, net 55 Total net transfers to Former Parent per Condensed Consolidated Statements of Cash Flow $ 58 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share of common stock: Three Months Ended June 30, Six Months Ended June 30, ( in millions, except per share amounts ) 2024 2023 2024 2023 Basic earnings per share: Net earnings $ 14 $ 35 $ 43 $ 70 Weighted average shares of common stock outstanding 44.8 47.0 45.5 47.0 Basic earnings per share of common stock $ 0.31 $ 0.74 $ 0.95 $ 1.49 Diluted earnings per share: Net earnings $ 14 $ 35 $ 43 $ 70 Weighted average shares of common stock outstanding 44.8 47.0 45.5 47.0 Effect of stock-based compensation 0.9 — 0.6 — Weighted average shares of common stock outstanding including dilutive shares 45.7 47.0 46.1 47.0 Diluted earnings per share of common stock $ 0.31 $ 0.74 $ 0.93 $ 1.49 |
REPORTABLE SEGMENTS AND RELAT_2
REPORTABLE SEGMENTS AND RELATED INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales and Total Assets by Reporting Segment | Net Sales by Reportable Segment Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 (in millions) Customers Inter-segment Net Customers Inter-segment Net Fuel Systems $ 518 $ 69 $ 587 $ 1,045 $ 118 $ 1,163 Aftermarket 350 5 355 686 7 693 Inter-segment eliminations — (74) (74) — (125) (125) Total $ 868 $ — $ 868 $ 1,731 $ — $ 1,731 Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 (in millions) Customers Inter-segment Net Customers Inter-segment Net Fuel Systems $ 551 $ 56 $ 607 $ 1,060 $ 114 $ 1,174 Aftermarket 336 3 339 662 7 669 Inter-segment eliminations — (59) (59) — (121) (121) Total $ 887 $ — $ 887 $ 1,722 $ — $ 1,722 |
Schedule of Segment Earnings Before Interest and Income Taxes | Segment Adjusted Operating Income Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Fuel Systems $ 52 $ 62 $ 107 $ 105 Aftermarket 53 49 113 97 Segment AOI 105 111 220 202 Corporate, including stock-based compensation 21 5 39 9 Separation and transaction costs 3 41 20 59 Intangible asset amortization expense 7 7 14 14 Restructuring expense 3 2 5 6 Equity in affiliates' earnings, net of tax (2) (3) (5) (6) Interest expense 39 6 61 12 Interest income (4) (2) (8) (5) Other postretirement expense (income), net 1 (1) 1 (1) Earnings before income taxes 37 56 93 114 Provision for income taxes 23 21 50 44 Net earnings $ 14 $ 35 $ 43 $ 70 |
INTRODUCTION AND TRANSITION T_2
INTRODUCTION AND TRANSITION TO STANDALONE COMPANY (Details) | Jun. 23, 2023 shares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Conversion of stock, shares issued (in shares) | 1 |
Conversion of stock, shares converted (in shares) | 5 |
Stock conversion from Borgwarner to PHINIA (in shares) | 0.2 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | $ 112 | $ 103 | $ 216 | $ 202 |
Corporate Expense Allocation | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | $ 54 | $ 89 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Revenue from External Customer [Line Items] | ||
Contract with customer, contract asset | $ 1 | $ 1 |
Liability, noncurrent | 11 | 7 |
Contract Liabilities | ||
Revenue from External Customer [Line Items] | ||
Liability, current | 7 | 7 |
Other Current Liabilities | ||
Revenue from External Customer [Line Items] | ||
Liability, current | 1 | 6 |
Other non-current liabilities | ||
Revenue from External Customer [Line Items] | ||
Liability, noncurrent | $ 6 | $ 1 |
Minimum | ||
Revenue from External Customer [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction (in years) | 3 years | |
Maximum | ||
Revenue from External Customer [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction (in years) | 7 years |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue from External Customer [Line Items] | ||||
Net sales | $ 868 | $ 887 | $ 1,731 | $ 1,722 |
Fuel Systems | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 518 | 551 | 1,045 | 1,060 |
Aftermarket | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 350 | 336 | 686 | 662 |
Americas | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 369 | 371 | 748 | 736 |
Americas | Fuel Systems | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 177 | 171 | 364 | 338 |
Americas | Aftermarket | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 192 | 200 | 384 | 398 |
Europe | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 364 | 372 | 716 | 707 |
Europe | Fuel Systems | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 227 | 256 | 454 | 479 |
Europe | Aftermarket | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 137 | 116 | 262 | 228 |
Asia | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 135 | 144 | 267 | 279 |
Asia | Fuel Systems | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 114 | 124 | 227 | 243 |
Asia | Aftermarket | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 21 | $ 20 | $ 40 | $ 36 |
RESEARCH AND DEVELOPMENT COST_2
RESEARCH AND DEVELOPMENT COSTS - Schedule of Research and Development Arrangement, Contract to Perform for Others (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Research and Development [Abstract] | ||||
Gross R&D expenditures | $ 52 | $ 49 | $ 104 | $ 98 |
Customer reimbursements | (22) | (21) | (47) | (41) |
Net R&D expenditures | $ 30 | $ 28 | $ 57 | $ 57 |
OTHER OPERATING EXPENSE, NET -
OTHER OPERATING EXPENSE, NET - Schedule of Other Operating Expense (Income), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||||
Separation and transaction costs | $ 3 | $ 41 | $ 20 | $ 59 |
Restructuring | 3 | 2 | 5 | 6 |
R&D income from Former Parent | (22) | (21) | (47) | (41) |
Other operating income, net | (1) | 0 | (3) | (1) |
Other operating expense, net | 5 | 30 | 22 | 45 |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Royalty income from Former Parent | 0 | (12) | 0 | (17) |
R&D income from Former Parent | $ 0 | $ (1) | $ 0 | $ (2) |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation (in percent) | 62% | 38% | 54% | 39% |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventory (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw material and supplies | $ 256 | $ 286 |
Work-in-progress | 47 | 46 |
Finished goods | 168 | 155 |
Inventories | $ 471 | $ 487 |
OTHER CURRENT AND NON-CURRENT_4
OTHER CURRENT AND NON-CURRENT ASSETS - Schedule of Other Assets (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Prepayments and other current assets: | ||
Prepaid taxes | $ 42 | $ 26 |
Prepaid software | 9 | 5 |
Prepaid engineering | 9 | 3 |
Customer return assets | 7 | 8 |
Prepaid customer tooling | 5 | 3 |
Deposits | 2 | 3 |
Prepaid insurance | 2 | 3 |
Other | 8 | 7 |
Total prepayments and other current assets | 84 | 58 |
Investments and long-term receivables: | ||
Investment in equity affiliates | 52 | 48 |
Long-term receivables | 50 | 46 |
Due from Former Parent | 17 | 17 |
Investment in equity securities | 4 | 4 |
Total investments and long-term receivables | 123 | 115 |
Other non-current assets: | ||
Operating leases | 57 | 63 |
Deferred income taxes | 56 | 61 |
Customer incentive payments | 10 | 10 |
Other | 23 | 28 |
Total other non-current assets | $ 146 | $ 162 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES - Schedule of Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Goodwill [Line Items] | ||
Gross goodwill balance | $ 612 | |
Accumulated impairment losses | (113) | |
Net goodwill balance | $ 483 | 499 |
Goodwill [Roll Forward] | ||
Translation adjustment | (16) | |
Net goodwill balance, June 30, 2024 | 483 | |
Fuel Systems | ||
Goodwill [Line Items] | ||
Gross goodwill balance | 61 | |
Accumulated impairment losses | 0 | |
Net goodwill balance | 59 | 61 |
Goodwill [Roll Forward] | ||
Translation adjustment | (2) | |
Net goodwill balance, June 30, 2024 | 59 | |
Aftermarket | ||
Goodwill [Line Items] | ||
Gross goodwill balance | 551 | |
Accumulated impairment losses | (113) | |
Net goodwill balance | 424 | $ 438 |
Goodwill [Roll Forward] | ||
Translation adjustment | (14) | |
Net goodwill balance, June 30, 2024 | $ 424 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES - Schedule of Intangible Assets Gross Roll Forward (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortized intangible assets, gross carrying amount | $ 407 | $ 417 |
Total other intangible assets, accumulated amortization | 156 | 145 |
Total amortized intangible assets, net carrying amount | 251 | 272 |
Unamortized trade names | 142 | 145 |
Total other intangible assets, gross carrying amount | 549 | 562 |
Net carrying amount | 393 | 417 |
Patented and unpatented technology | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortized intangible assets, gross carrying amount | 145 | 149 |
Total other intangible assets, accumulated amortization | 46 | 41 |
Total amortized intangible assets, net carrying amount | 99 | 108 |
Customer relationships | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortized intangible assets, gross carrying amount | 262 | 268 |
Total other intangible assets, accumulated amortization | 110 | 104 |
Total amortized intangible assets, net carrying amount | $ 152 | $ 164 |
Minimum | Patented and unpatented technology | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Estimated useful lives (years) | 14 years | |
Minimum | Customer relationships | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Estimated useful lives (years) | 14 years | |
Maximum | Patented and unpatented technology | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Estimated useful lives (years) | 15 years | |
Maximum | Customer relationships | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Estimated useful lives (years) | 15 years |
PRODUCT WARRANTY - Narrative (D
PRODUCT WARRANTY - Narrative (Details) | 6 Months Ended |
Jun. 30, 2024 | |
Minimum | |
Guarantor Obligations [Line Items] | |
Standard product warranty term (in years) | 1 year |
Maximum | |
Guarantor Obligations [Line Items] | |
Standard product warranty term (in years) | 3 years |
PRODUCT WARRANTY - Schedule of
PRODUCT WARRANTY - Schedule of Product Warranty Liability (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance, January 1 | $ 56 | $ 60 | |
Provisions for current period sales | 18 | 20 | |
Payments | (20) | (23) | |
Other, primarily translation adjustment | (1) | (1) | |
Ending balance, June 30, | 53 | 56 | |
Other current liabilities | 30 | $ 30 | |
Other non-current liabilities | 23 | 26 | |
Total product warranty liability | $ 53 | $ 56 | $ 56 |
NOTES PAYABLE AND DEBT - Schedu
NOTES PAYABLE AND DEBT - Schedule of Long-term Debt Instruments (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Jul. 03, 2023 |
Short-term debt | |||
Short-term borrowings | $ 0 | $ 75,000,000 | |
Long-term debt | |||
Long-term debt | 821,000,000 | 709,000,000 | |
Finance Lease, Liability | 1,000,000 | 0 | |
Nonrelated Party | |||
Long-term debt | |||
Long-term debt | 834,000,000 | 723,000,000 | |
Less: current portion | 13,000,000 | 14,000,000 | |
Long-term debt, net of current portion | $ 821,000,000 | 709,000,000 | |
5.000% Senior Notes due 10/01/25 ($24 million par value) | Senior Notes | |||
Long-term debt | |||
Debt instrument stated interest rate (percent) | 5% | ||
Debt instrument face value | $ 24,000,000 | ||
5.000% Senior Notes due 10/01/25 ($24 million par value) | Senior Notes | Nonrelated Party | |||
Long-term debt | |||
Long-term debt | $ 24,000,000 | 25,000,000 | |
6.750% Senior Secured Notes due 04/15/29 ($525 million par value) | Senior Notes | |||
Long-term debt | |||
Debt instrument stated interest rate (percent) | 6.75% | ||
Debt instrument face value | $ 525,000,000 | ||
6.750% Senior Secured Notes due 04/15/29 ($525 million par value) | Senior Notes | Nonrelated Party | |||
Long-term debt | |||
Long-term debt | 517,000,000 | 0 | |
Senior Unsecured Term Loan A Facility | Line of Credit | |||
Long-term debt | |||
Debt instrument face value | 294,000,000 | 298,000,000 | $ 300,000,000 |
Long-term debt | 292,000,000 | 295,000,000 | |
Senior Unsecured Term Loan B Facility | Line of Credit | |||
Long-term debt | |||
Debt instrument face value | 424,000,000 | $ 425,000,000 | |
Long-term debt | $ 0 | $ 403,000,000 |
NOTES PAYABLE AND DEBT - Narrat
NOTES PAYABLE AND DEBT - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2020 USD ($) | Apr. 04, 2024 USD ($) | Apr. 03, 2024 | Dec. 31, 2023 USD ($) | Jul. 03, 2023 USD ($) | |
Line of Credit Facility [Line Items] | ||||||||
Short-term borrowings | $ 0 | $ 0 | $ 75,000,000 | |||||
Leverage ratio, maximum | 3.25 | 3 | ||||||
Leverage ratio, Step up for qualifying acquisition, maximum | 3.75 | |||||||
Loss on extinguishment of debt | 20,000,000 | $ 0 | ||||||
Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Short-term borrowings | 0 | 0 | ||||||
Additional availability | 499,000,000 | 499,000,000 | ||||||
Senior Notes Due October 2025 | Senior Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument face value | $ 24,000,000 | $ 24,000,000 | ||||||
Debt instrument stated interest rate | 5% | 5% | ||||||
Senior Notes Due October 2025 | Estimate of Fair Value Measurement | Senior Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Estimated fair value of senior unsecured notes | $ 853,000,000 | $ 853,000,000 | ||||||
Debt, difference between fair value and carrying value | 20,000,000 | 20,000,000 | ||||||
Credit Agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Revolving credit facility | $ 1,225,000,000 | |||||||
Credit Agreement | Revolving Credit Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Revolving credit facility | 500,000,000 | |||||||
Senior Unsecured Term Loan A Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument face value | 294,000,000 | 294,000,000 | 298,000,000 | 300,000,000 | ||||
Senior Unsecured Term Loan B Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument face value | 424,000,000 | $ 424,000,000 | $ 425,000,000 | |||||
Term Loan A & B Facility | Estimate of Fair Value Measurement | Senior Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Estimated fair value of senior unsecured notes | 758,000,000 | |||||||
Debt, difference between fair value and carrying value | $ 35,000,000 | |||||||
Senior Notes Due 2029 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest, basis spread on variable rate (percent) | 6.75% | |||||||
Senior Notes Due 2029 | Senior Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument face value | $ 525,000,000 | |||||||
Debt instrument stated interest rate | 6.75% | |||||||
Accrued interest | 100% | |||||||
Senior Notes Due 2029 | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Loss on extinguishment of debt | $ 20,000,000 | |||||||
Senior Notes Due 2025 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest, basis spread on variable rate (percent) | 5% | |||||||
Senior Notes Due 2025 | Senior Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Percentage of exchanged and cancelled notes | 97% | |||||||
Long-term debt, gross | $ 800,000,000 | |||||||
Liabilities assumed in connection with spin-off transaction | $ 24,000,000 |
OTHER CURRENT AND NON-CURRENT_5
OTHER CURRENT AND NON-CURRENT LIABILITIES - Schedule of Additional Details Related to Other Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Other current liabilities: | ||
Customer related | $ 108 | $ 109 |
Payroll and employee related | 87 | 92 |
Income taxes payable | 61 | 39 |
Product warranties | 30 | 30 |
Accrued freight | 20 | 21 |
Operating leases | 17 | 17 |
Supplier related | 13 | 14 |
Accrued interest | 9 | 1 |
Employee termination benefits | 5 | 9 |
Other non-income taxes | 4 | 8 |
Legal and professional fees | 3 | 6 |
Other | 63 | 74 |
Total other current liabilities | 420 | 420 |
Other non-current liabilities: | ||
Deferred income taxes | 63 | 56 |
Operating leases | 43 | 49 |
Product warranties | 23 | 26 |
Uncertain tax positions | 14 | 15 |
Deferred income | 11 | 7 |
Other | 14 | 12 |
Total other non-current liabilities | $ 168 | $ 165 |
RETIREMENT BENEFIT PLANS - Narr
RETIREMENT BENEFIT PLANS - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual contribution to defined benefit pension plans | $ 1 |
Minimum | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plan, expected future employer contributions, current fiscal year | 4 |
Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plan, expected future employer contributions, current fiscal year | $ 8 |
RETIREMENT BENEFIT PLANS - Sche
RETIREMENT BENEFIT PLANS - Schedule of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 1 | $ 1 | $ 2 | $ 1 |
Interest cost | 12 | 11 | 23 | 21 |
Expected return on plan assets | (11) | (11) | (21) | (21) |
Amortization of unrecognized loss | 0 | $ (1) | (1) | (1) |
Net periodic benefit cost | $ 2 | $ 3 | $ 0 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Stockholders Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 1,850 | $ 1,792 | $ 1,887 | $ 1,643 |
Dividends declared | (11) | (23) | ||
Spin-Off related adjustments | (1) | (11) | ||
Share-based compensation expense | 4 | 8 | ||
Purchase of treasury stock | (90) | (113) | ||
Net issuance of executive stock plan | 0 | (3) | ||
Net earnings | 14 | 35 | 43 | 70 |
Other comprehensive income (loss) | (19) | 6 | (41) | 27 |
Net transfers from Former Parent | 159 | 252 | ||
Ending balance | $ 1,747 | 1,992 | $ 1,747 | 1,992 |
Dividends declared (in dollar per share) | $ 0.25 | $ 0.50 | ||
Issued common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 1 | $ 1 | ||
Ending balance | 1 | 1 | ||
Additional paid-in-capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 2,018 | 2,031 | ||
Spin-Off related adjustments | (1) | (11) | ||
Share-based compensation expense | 4 | 8 | ||
Net issuance of executive stock plan | (2) | (9) | ||
Ending balance | 2,019 | 2,019 | ||
Treasury stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (42) | (23) | ||
Purchase of treasury stock | (90) | (113) | ||
Net issuance of executive stock plan | 2 | 6 | ||
Ending balance | (130) | (130) | ||
Retained earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 26 | 9 | ||
Dividends declared | (11) | (23) | ||
Net earnings | 14 | 43 | ||
Ending balance | 29 | 29 | ||
Former Parent investment | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 1,859 | 1,731 | ||
Net earnings | 35 | 70 | ||
Net transfers from Former Parent | 159 | 252 | ||
Ending balance | 2,053 | 2,053 | ||
Accumulated other comprehensive income (loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (153) | (67) | (131) | (88) |
Other comprehensive income (loss) | (19) | 6 | (41) | 27 |
Ending balance | $ (172) | $ (61) | $ (172) | $ (61) |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | $ 1,850 | $ 1,792 | $ 1,887 | $ 1,643 | ||
Comprehensive loss before reclassifications | (19) | 6 | (42) | 27 | ||
Reclassification from accumulated other comprehensive loss | 1 | |||||
Ending balance | 1,747 | 1,992 | 1,747 | 1,992 | ||
Accumulated other comprehensive income (loss) | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | (153) | (67) | (131) | (88) | ||
Ending balance | (172) | (61) | (172) | (61) | ||
Foreign currency translation adjustments | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | (119) | (65) | (98) | (85) | ||
Comprehensive loss before reclassifications | (18) | 10 | (39) | [1] | 30 | [1] |
Reclassification from accumulated other comprehensive loss | 0 | |||||
Ending balance | (137) | (55) | (137) | (55) | ||
Defined benefit pension plans | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | (34) | (7) | (33) | (6) | ||
Comprehensive loss before reclassifications | (1) | 0 | (3) | (1) | ||
Reclassification from accumulated other comprehensive loss | 1 | |||||
Ending balance | (35) | (7) | (35) | (7) | ||
Hedge instruments | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | 5 | 0 | 3 | ||
Comprehensive loss before reclassifications | 0 | (4) | 0 | [1] | (2) | [1] |
Reclassification from accumulated other comprehensive loss | 0 | |||||
Ending balance | $ 0 | $ 1 | $ 0 | $ 1 | ||
[1]Net of income taxes. |
RELATED-PARTY TRANSACTIONS - Al
RELATED-PARTY TRANSACTIONS - Allocation of General Corporate and Other Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | $ 112 | $ 103 | $ 216 | $ 202 |
Corporate Expense Allocation | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | $ 54 | $ 89 |
RELATED-PARTY TRANSACTIONS - Sc
RELATED-PARTY TRANSACTIONS - Schedule of Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||
Net transfers from Former Parent | $ 159 | $ 252 |
Total net transfers to Former Parent per Condensed Consolidated Statements of Cash Flow | 58 | |
Related Party | General financing activities | ||
Related Party Transaction [Line Items] | ||
Net transfers from Former Parent | (63) | |
Related Party | Cash pooling and other equity settled balances with Former Parent | ||
Related Party Transaction [Line Items] | ||
Net transfers from Former Parent | (32) | |
Related Party | Related-party notes converted to equity | ||
Related Party Transaction [Line Items] | ||
Net transfers from Former Parent | 260 | |
Total net transfers to Former Parent per Condensed Consolidated Statements of Cash Flow | (260) | |
Related Party | Corporate allocations | ||
Related Party Transaction [Line Items] | ||
Net transfers from Former Parent | 89 | |
Related Party | Research and development income from Former Parent | ||
Related Party Transaction [Line Items] | ||
Net transfers from Former Parent | (2) | |
Related Party | Stock-based compensation | ||
Related Party Transaction [Line Items] | ||
Total net transfers to Former Parent per Condensed Consolidated Statements of Cash Flow | (4) | |
Related Party | Other non-cash activities with Former Parent, net | ||
Related Party Transaction [Line Items] | ||
Total net transfers to Former Parent per Condensed Consolidated Statements of Cash Flow | 15 | |
Related Party | Cash pooling and intercompany financing activities with Former Parent, net | ||
Related Party Transaction [Line Items] | ||
Total net transfers to Former Parent per Condensed Consolidated Statements of Cash Flow | $ 55 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |||||
Weighted average shares of common stock outstanding (in shares) | 47 | 44.8 | 47 | 45.5 | 47 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share Reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |||||
Net earnings | $ 14 | $ 35 | $ 43 | $ 70 | |
Weighted average shares of common stock outstanding (in shares) | 47 | 44.8 | 47 | 45.5 | 47 |
Basic earnings per share of common stock (in dollar per share) | $ 0.31 | $ 0.74 | $ 0.95 | $ 1.49 | |
Effect of stock-based compensation (in shares) | 0.9 | 0 | 0.6 | 0 | |
Weighted average shares of common stock outstanding including dilutive shares (in shares) | 45.7 | 47 | 46.1 | 47 | |
Diluted earnings per share of common stock (in dollars per share) | $ 0.31 | $ 0.74 | $ 0.93 | $ 1.49 |
REPORTABLE SEGMENTS AND RELAT_3
REPORTABLE SEGMENTS AND RELATED INFORMATION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2024 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
REPORTABLE SEGMENTS AND RELAT_4
REPORTABLE SEGMENTS AND RELATED INFORMATION - Schedule of Net Sales and Total Assets by Reporting Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 868 | $ 887 | $ 1,731 | $ 1,722 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 868 | 887 | 1,731 | 1,722 |
Operating Segments | Customers | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 868 | 887 | 1,731 | 1,722 |
Operating Segments | Inter-segment | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Inter-segment eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (74) | (59) | (125) | (121) |
Inter-segment eliminations | Customers | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Inter-segment eliminations | Inter-segment | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (74) | (59) | (125) | (121) |
Fuel Systems | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 518 | 551 | 1,045 | 1,060 |
Fuel Systems | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 587 | 607 | 1,163 | 1,174 |
Fuel Systems | Operating Segments | Customers | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 518 | 551 | 1,045 | 1,060 |
Fuel Systems | Operating Segments | Inter-segment | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 69 | 56 | 118 | 114 |
Aftermarket | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 350 | 336 | 686 | 662 |
Aftermarket | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 355 | 339 | 693 | 669 |
Aftermarket | Operating Segments | Customers | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 350 | 336 | 686 | 662 |
Aftermarket | Operating Segments | Inter-segment | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 5 | $ 3 | $ 7 | $ 7 |
REPORTABLE SEGMENTS AND RELAT_5
REPORTABLE SEGMENTS AND RELATED INFORMATION - Schedule of Segment Earnings Before Interest and Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Segment AOI | $ 71 | $ 56 | $ 142 | $ 114 |
Corporate, including stock-based compensation | 21 | 5 | 39 | 9 |
Separation and transaction costs | 3 | 41 | 20 | 59 |
Intangible asset amortization expense | 7 | 7 | 14 | 14 |
Restructuring expense | 3 | 2 | 5 | 6 |
Equity in affiliates' earnings, net of tax | 2 | 3 | 5 | 6 |
Interest expense | 39 | 6 | 61 | 12 |
Interest income | (4) | (2) | (8) | (5) |
Other postretirement expense (income), net | 1 | (1) | 1 | (1) |
Earnings before income taxes | 37 | 56 | 93 | 114 |
Provision for income taxes | 23 | 21 | 50 | 44 |
Net earnings | 14 | 35 | 43 | 70 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment AOI | 105 | 111 | 220 | 202 |
Fuel Systems | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment AOI | 52 | 62 | 107 | 105 |
Aftermarket | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment AOI | $ 53 | $ 49 | $ 113 | $ 97 |