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Item 1. Financial Statements

2023-07-27 compared with 2023-04-24 · 263 added, 108 removed, 518 unchanged (42% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

2023 2022 2023 2022

(Dollars in millions, except per share amounts)

Net sales (Note 3)

$ 1,011 $ 859 $ 1,981 $ 1,760

Cost of goods sold 809 690 1,590 1,416

3 unchanged sentences

Interest expense 30 20 58 43

Non-operating income ( 4 ) ( 28 )

Loss on extinguishment of debt — 5 — 5

Non-operating expense (income) 7 ( 16 ) 3 ( 44 )

Reorganization items, net — 1 — 2

2 unchanged sentences

Net income 71 85 152 173

preferred stock dividend (Note 18)

preferred stock dividends (Note 15)

( 40 ) ( 39 ) ( 80 ) ( 77 )

Net income available for distribution $ 41 $ 50

Earnings per common share

preferred stock deemed dividends (Note 15)

( 232 ) — ( 232 ) —

Net (loss) income available for distribution $ ( 201 ) $ 46 $ ( 160 ) $ 96

(Loss) Earnings per common share

Basic $ ( 1.88 ) $ 0.15 $ ( 1.86 ) $ 0.31

7 unchanged sentences

Three Months Ended

Six Months Ended

2023 2022 2023 2022

(Dollars in millions)

3 unchanged sentences

Changes in fair value of net investment hedges, net of tax (Note 16)

3 29 ( 2 ) 42

Total other comprehensive (loss) income, net of tax ( 3 ) 39 ( 9 ) 62

30 unchanged sentences

Series A Preferred Stock, par value $ 0.001 ;

245,045,431 and 245,089,671 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

zero and 245,089,671 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Common Stock, par value $ 0.001 ;

1,000,000,000 and 1,000,000,000 shares authorized, 65,099,244 and 64,943,238 issued and 64,959,553 and 64,832,609 outstanding as of March 31, 2023 and December 31, 2022, respectively

1,000,000,000 and 1,000,000,000 shares authorized, 264,653,768 and 64,943,238 issued and 264,403,053 and 64,832,609 outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid–in capital 1,184 1,333

7 unchanged sentences

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions) 2023 2022

(Dollars in millions)

Cash flows from operating activities:

4 unchanged sentences

Interest payments, net of debt discount accretion — ( 19 )

Foreign exchange loss

Loss on extinguishment of debt — 5

Loss on remeasurement of forward purchase contract 13 —

Foreign exchange (gain) loss

Stock compensation expense 8 5

Pension expense

Change in fair value of derivatives 19 ( 35 )

10 unchanged sentences

Expenditures for property, plant and equipment ( 33 ) ( 52 )

Re-couponing of cross-currency swap contract

Net cash used for investing activities

1 unchanged sentence

Cash flows from financing activities:

Proceeds from issuance of long-term debt, net of debt financing costs 667 —

Payments of long-term debt ( 4 ) ( 4 )

Redemption of Series B Preferred Stock — ( 381 )

Payments for share repurchases — ( 2 )

Payments for dividends ( 42 ) —

Debt financing costs — ( 6 )

Repurchases of Series A Preferred Stock ( 580 ) ( 3 )

Repurchases of Common Stock ( 15 ) —

Payments of Additional Amounts for conversion of Series A Preferred Stock ( 25 ) —

Payments for preference dividends ( 42 ) —

Payments for debt and revolving facility financing costs ( 2 ) ( 5 )

Other ( 1 ) —

Net cash used for financing activities

13 unchanged sentences

Deficit Accumulated Other

Comprehensive

(Loss)/Income Total

Comprehensive Income Total

Shares Amount Shares Amount

4 unchanged sentences

Other comprehensive loss, net of tax — — — — — — ( 6 ) ( 6 )

— — — — — — ( 6 ) ( 6 )

Dividends — — — — — ( 42 ) — ( 42 )

2 unchanged sentences

246 $ — 64 $ — $ 1,336 $ ( 1,446 ) $ 30 $ ( 80 )

Net income — — — — — 71 — 71

Repurchases of Series A Preferred Stock ( 70 ) — — — ( 366 ) ( 201 ) — ( 567 )

Repurchases of Common Stock — — ( 2 ) — — ( 18 ) — ( 18 )

Excise tax on share repurchases — — — — — ( 6 ) — ( 6 )

Other comprehensive loss, net of tax — — — — — — ( 3 ) ( 3 )

Issuance of Common Stock for preference dividends — — 26 — 209 ( 209 ) — —

Conversion of Series A Preferred Stock to Common Stock ( 176 ) — 176 — — ( 25 ) — ( 25 )

Stock-based compensation — — — — 5 — — 5

Balance at June 30, 2023

— $ — 264 $ — $ 1,184 $ ( 1,834 ) $ 27 $ ( 623 )

Preferred Stock Common Stock Additional

8 unchanged sentences

Net income — — — — — 88 — 88

Share repurchases — — — — ( 1 ) ( 1 ) — ( 2 )

Repurchases of Series A Preferred Stock — — — — ( 1 ) ( 1 ) — ( 2 )

Other comprehensive income, net of tax — — — — — — 23 23

2 unchanged sentences

246 — 64 — $ 1,327 $ ( 1,703 ) $ 19 $ ( 357 )

Net income — — — — — 85 — 85

Repurchases of Series A Preferred Stock — — — — ( 1 ) — — ( 1 )

Other comprehensive income, net of tax — — — — — — 39 39

Stock-based compensation — — — — 3 — — 3

Balance at June 30, 2022

246 $ — 64 $ — $ 1,329 $ ( 1,618 ) $ 58 $ ( 231 )

The Notes to the Consolidated Interim Financial Statements are an integral part of this statement.

11 unchanged sentences

The unaudited Consolidated Interim Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2022 included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 14, 2023 (our “2022 Form 10-K”).

The results of operations and cash flows for the three months ended March 31, 2023 should not necessarily be taken as indicative of the entire year.

The results of operations for the three and six months ended June 30, 2023 and cash flows for the six months ended June 30, 2023 should not necessarily be taken as indicative of the entire year.

All amounts presented are in millions, except per share amounts.

2 unchanged sentences

It has been our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday to minimize the potentially disruptive effects of quarterly closing on our business processes.

For differences in actual closing dates that are material to year-over-year comparisons of quarterly or year-to-date results have been adjusted for the three months ended March 31, 2023.

Our actual closing dates for the three months ended March 31, 2023 and 2022 were April 1, 2023 and April 2, 2022 , respectively.

For differences in actual closing dates that are material to year-over-year comparisons of quarterly or year-to-date results have been adjusted for the three months ended June 30, 2023.

Our actual closing dates for the three months ended June 30, 2023 and 2022 were July 1, 2023 and July 2, 2022 , respectively.

We evaluate segment reporting in accordance with ASC 280, Segment Reporting .

4 unchanged sentences

Actual results could differ from the original estimates, requiring adjustments to these balances in future periods.

Capital Structure Transformation

On April 12, 2023, the Company entered into separate definitive agreements with each of Centerbridge Partners, L.P.

and funds managed by Oaktree Capital Management, L.P.

to effect a series of integrated transactions (the “Transaction”) designed to increase the attractiveness of the Company to investors, including simplifying the Company’s capital stock by converting all outstanding Series A Preferred Stock into a single class of Common Stock, subject to certain conditions.

Under the Transaction, the Company repurchased 69,707,719 shares of Series A Preferred Stock and converted the remaining 175,337,712 shares of Series A Preferred Stock into an equivalent number of Common Stock.

Total consideration paid to holders of Series A Preferred Stock under the Transaction amounted to cash payments of $ 605 million and the issuance of an additional 25,577,517 shares of Common Stock in settlement of accumulated and

unpaid preference dividends on the Series A Preferred Stock through June 30, 2023.

The Transaction was financed through a new Term Loan B for an aggregate principal amount of $ 700 million under the framework of the Company's existing credit agreement.

The Company recorded the following amounts in the Consolidated Interim Financial Statements related to the repurchase and conversion of its Series A Preferred Stock:

Movements for the Six Months Ended

June 30, 2023

Consolidated Interim Balance Sheet:

(Dollars in millions)

Cash and cash equivalents $ ( 605 )

Preferred stock, Common stock and Additional Paid-in capital ( 157 )

Retained earnings ( 441 )

Six Months Ended June 30, 2023

Consolidated Interim Statement of Operations:

(Dollars in millions)

Non-operating expenses $ 13

The Company also incurred $ 7 million of Transaction-related costs for the six months ended June 30, 2023, primarily for legal and advisory services that are included in Selling, general and administrative expenses in the Consolidated Interim Statement of Operations.

See Note 14, Long-term Debt and Credit Agreement for discussion on the new Term Loan B and Note 15, Series A Preferred Stock for further discussion of the Transaction.

Summary of Significant Accounting Policies

9 unchanged sentences

Net sales by region (determined based on country of shipment) and channel are as follows:

Three Months Ended March 31, 2023

Three Months Ended March 31, 2022

Three Months Ended June 30, 2023

Three Months Ended June 30, 2022

OEM Aftermarket Other Total OEM Aftermarket Other Total

5 unchanged sentences

$ 883 $ 114 $ 14 $ 1,011 $ 736 $ 108 $ 15 $ 859

Six Months Ended June 30, 2023

Six Months Ended June 30, 2022

OEM Aftermarket Other Total OEM Aftermarket Other Total

(Dollars in millions)

United States $ 265 $ 96 $ 2 $ 363 $ 220 $ 105 $ 1 $ 326

Europe 883 91 17 991 800 76 15 891

Asia 559 25 7 591 477 20 12 509

Other 24 12 — 36 22 12 — 34

$ 1,731 $ 224 $ 26 $ 1,981 $ 1,519 $ 213 $ 28 $ 1,760

Contract Balances

2 unchanged sentences

Contract assets—January 1 $ 46 $ 63

Contract assets—March 31

Contract assets—June 30

Change in contract assets—(Decrease)/Increase $ 1 $ ( 5 )

Contract liabilities—January 1 $ ( 8 ) $ ( 5 )

Contract liabilities—March 31

Contract liabilities—June 30

Change in contract liabilities—(Increase)/Decrease $ ( 1 ) $ ( 1 )

5 unchanged sentences

Three Months Ended

Six Months Ended

2023 2022 2023 2022

(Dollars in millions)

1 unchanged sentence

Engineering-related expenses (1)

(1) Engineering-related expenses include customer reimbursements of $ 11 million and $ 3 million for the three months ended March 31, 2023 and 2022, respectively.

( 4 ) 3 ( 5 ) 9

$ 42 $ 41 $ 81 $ 83

(1) Engineering-related expenses include customer reimbursements of $ 13 million and $ 6 million for the three months ended June 30, 2023 and 2022, respectively, and $ 24 million and $ 9 million for the six months ended June 30, 2023 and 2022, respectively.

Three Months Ended

Six Months Ended

2023 2022 2023 2022

(Dollars in millions)

1 unchanged sentence

Effective tax rate 29.7 % 19.0 % 27.3 % 24.8 %

The effective tax rates for the three months ended March 31, 2023 and 2022 were 25.0 % and 29.6 %, respectively.

The change in the effective tax rate for the three months ended March 31, 2023 compared to the prior period is primarily related to a decrease in tax reserve true ups and additional global research and development benefits.

The effective tax rate for the three months ended March 31, 2023 was higher than the U.S.

The effective tax rates for the three months ended June 30, 2023 and 2022 were 29.7 % and 19.0 %, respectively.

The effective tax rates for the six months ended June 30, 2023 and 2022 were 27.3 % and 24.8 %, respectively.

The change in the effective tax rate for the three and six months ended June 30, 2023 compared to the prior period is primarily related to non-deductible Transaction-related expenses and a one-time benefit in 2022 related to a change in assertion to permanently reinvest a portion of undistributed earnings in China.

The effective tax rate for the three and six months ended June 30, 2023 was higher than the U.S.

federal statutory rate of 21% primarily because of U.S.

taxes on international operations and withholding taxes, partially offset by lower taxes on non-U.S.

taxes on international operations, withholding taxes and non-deductible Transaction related expenses, partially offset by lower taxes on non-U.S.

earnings and global research and development benefits.

8 unchanged sentences

Less—Allowance for expected credit losses

Trade receivables include $ 66 million and $ 46 million of unbilled customer contract asset balances as of March 31, 2023 and December 31, 2022, respectively.

Trade receivables include $ 47 million and $ 46 million of unbilled customer contract asset balances as of June 30, 2023 and December 31, 2022, respectively.

These amounts are billed in accordance with the terms of customer contracts to which they relate.

6 unchanged sentences

The Company also receives guaranteed bank notes without recourse, in settlement of accounts receivables, primarily in the Asia Pacific region.

The Company can hold the bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third-party financial institutions in exchange for cash.

The Company can hold the bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third-

party financial institutions in exchange for cash.

Bank notes sold to third-party financial institutions without recourse are likewise accounted for as true sales.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

(Dollars in millions)

1 unchanged sentence

Guaranteed bank notes sold without recourse — 38 — 66

The expenses related to the sale of trade receivables and guaranteed bank notes are recognized within Other expense, net in the Consolidated Interim Statements of Operations, and were immaterial for the three months ended March 31, 2023 and 2022.

2023 December 31,

2 unchanged sentences

Guaranteed bank notes sold but not yet collected by the bank from the customer — —

As of March 31, 2023 and December 31, 2022, the Company has no guaranteed bank notes pledged as collateral .

As of June 30, 2023 and December 31, 2022, the Company had no guaranteed bank notes pledged as collateral .

Inventories—Net

16 unchanged sentences

The Company also enters into arrangements with banking institutions to issue bankers acceptance drafts in settlement of accounts payables, primarily in the Asia Pacific region.

The bankers acceptance drafts, or guaranteed bank notes, have a contractual maturity of six months or less, and may be held by suppliers until maturity, transferred to their suppliers, or discounted with financial institutions in exchange for cash.

supplier financing obligations and guaranteed bank notes outstanding are recorded within Accounts payable in our Consolidated Interim Balance Sheet.

acceptance drafts, or guaranteed bank notes, have a contractual maturity of six months or less, and may be held by suppliers until maturity, transferred to their suppliers, or discounted with financial institutions in exchange for cash.

The supplier financing obligations and guaranteed bank notes outstanding are recorded within Accounts payable in our Consolidated Interim Balance Sheet.

2023 December 31,

15 unchanged sentences

Accrued freight 10 9

Dividends payable (Note 15) 42 42

Dividends payable — 42

Designated and undesignated derivatives 17 8

Other (primarily operating expenses) (2)

(1) Customer advances and deferred inco me include $ 10 million and $ 8 million of contract liabilities as of March 31, 2023 and December 31, 2022, respectively.

(1) Customer advances and deferred inco me include $ 9 million and $ 8 million of contract liabilities as of June 30, 2023 and December 31, 2022, respectively.

See Note 3, Revenue Recognition and Contracts with Customers .

(2) Includes $ 4 million and $ 3 million of environmental liabilities as of March 31, 2023 and December 31, 2022, respectively.

(2) Includes $ 4 million and $ 3 million of environmental liabilities as of June 30, 2023 and December 31, 2022, respectively.

The Company accrues repositioning costs related to projects to optimize its product costs and right-size our organizational structure.

6 unchanged sentences

Non-cash asset write-offs — ( 2 ) ( 2 )

Balance at March 31, 2023

Balance at June 30, 2023

$ 12 $ — $ 12

5 unchanged sentences

Usage—cash ( 4 ) — ( 4 )

Balance at March 31, 2022

Balance at June 30, 2022

Other Liabilities

2 unchanged sentences

Income taxes $ 103 $ 99

Designated and undesignated derivatives 2 —

Pension and other employee related 18 21

8 unchanged sentences

Three Months Ended

Six Months Ended

2023 2022 2023 2022

(Dollars in millions)

2 unchanged sentences

Three Months Ended

Six Months Ended

2023 2022 2023 2022

(Dollars in millions)

1 unchanged sentence

Operating cash outflows from operating leases

$ 3 $ 3 $ 7 $ 6

Right-of-use assets obtained in exchange for lease obligations:

9 unchanged sentences

Weighted-average discount rate 5.71 % 5.61 %

Maturities of operating lease liabilities as of March 31, 2023 were as follows:

Maturities of operating lease liabilities as of June 30, 2023 were as follows:

(Dollars in millions)

3 unchanged sentences

Long-term Debt and Credit Agreements

The principal outstanding and carrying amounts of our long-term debt as of March 31, 2023 and December 31, 2022 are as follows:

Due Interest Rate March 31,

The principal outstanding and carrying amounts of our long-term debt as of June 30, 2023 and December 31, 2022 are as follows:

Due Interest Rate June 30,

2023 December 31,

Dollar Term Facility 4/30/2028 LIBOR plus 325 bps $ 704 $ 706

2021 Dollar Term Facility 4/30/2028 SOFR plus 351 bps $ 703 $ 706

2023 Dollar Term Facility 4/30/2028 SOFR plus 450 bps 700 —

Euro Term Facility 4/30/2028 EURIBOR plus 350 bps 488 480

5 unchanged sentences

On April 30, 2021, the Company entered into a credit agreement (as amended from time to time, the "Credit Agreement") providing for senior secured financing, consisting of a seven-year secured first-lien U.S.

Dollar term loan facility initially in the amount of $ 715 million (the “Dollar Term Facility”), a seven-year secured first-lien Euro term loan facility initially in the amount of € 450 million (the “Euro Term Facility,” and together with the Dollar Term Facility, the “Term Loan Facilities”);

and a five-year senior secured first-lien revolving credit facility initially in the amount of $ 300 million providing for multi-currency re volving loans, (the “Revolving Facility,” and together with the Term Loan Facilities, the “Credit Facilities”).

Following amendments to the Credit Agreement in 2022, the maximum amount of borrowings available under the Revolving Facility is $ 475 million, and the Company may use up to $ 125 million for the issuance of letters of credit to its subsidiaries.

Dollar term loan facility initially in the amount of $ 715 million (the “2021 Dollar Term Facility”), a seven-year secured first-lien Euro term loan facility initially in the amount of € 450 million (the “Euro Term Facility”) and a five-year senior secured first-lien revolving credit facility initially in the amount of $ 300 million providing for multi-currency re volving loans (the “Revolving Facility”).

The maximum amount of borrowings available under the Revolving Facility was increased to $ 475 million in 2022.

On April 27, 2023, the Company entered into Amendment No.

3 (the "Third Amendment") to the Credit Agreement, which provided for additional financing consisting of a five-year secured first-lien U.S.

Dollar term loan facility initially in

the amount of $ 700 million (the “2023 Dollar Term Facility”, together with the 2021 Dollar Term Facility and Euro Term Facility, the "Term Loan Facilities", and together with the Revolving Facility, the "Credit Facilities").

The full amount of the 2023 Dollar Term Facility was drawn on June 6, 2023 (the "Closing Date"), and the proceeds were primarily used to finance the repurchases of the Series A Preferred Stock as part of the Transaction, and pay fees and expenses incurred in connection with the Third Amendment.

The 2023 Dollar Term Facility will mature on April 30, 2028.

Prior to maturity, the 2023 Dollar Term Facility will be repaid quarterly in an amount equal to, during the first two years occurring after the Closing Date, 7.50 % per annum of the aggregate principal amount, and thereafter, 10.00 % per annum.

The Term Borrowers may also prepay the 2023 Dollar Term Facility at any time in whole or in part without premium or penalty, subject to certain exceptions (including for (i) customary breakage and redeployment costs in the case of prepayment of term benchmark rate loans and (ii) 2023 Dollar Term Facility repricing events occurring during the period from the Closing Date to the date that is twelve months following the Closing Date).

The Third Amendment also provided for (i) an increase in the maximum borrowing amount under the Revolving Facility by $ 95 million (the “Incremental Revolving Commitment”) to an aggregate amount of $ 570 million;

and (ii) an extension of the maturity date for the Revolving Facility by two years from April 30, 2026 to April 30, 2028 (or January 30, 2028 if any of the currently outstanding term loans or term loans under the 2023 Dollar Term Facility maturing as of April 30, 2028 remain outstanding as of such date).

The Incremental Revolving Commitment has the same terms and is generally subject to the same conditions applicable to the existing revolving facility under the Credit Agreement, except for fees paid in connection with the arrangement of the increased amount.

Under the Revolving Facility, the Company may use up to $ 125 million for the issuance of letters of credit to its subsidiaries.

Letters of credit are available for issuance under the Credit Agreement on terms and conditions customary for financings of this kind, which issuances reduce availability under the Revolving Facility.

The Revolving Facility matures on April 30, 2026, with certain extension rights at the discretion of each lender.

As of March 31, 2023 the Company had no loans outstanding under the Revolving Facility, no outstanding letters of credit, and available borrowing capacity of approximately $ 475 million.

Separate from the Revolving Facility, the Company has a bilateral letter of credit facility, which also matures on April 30, 2026.

On September 14, 2022, the Company amended the bilateral letter of credit agreement to reduce the available capacity from $ 35 million to $ 15 million.

The maturity date and other terms of the amended agreement remained the same.

As of March 31, 2023, the Company had $ 12 million utilized and $ 3 million of remaining available capacity under such facility.

As of June 30, 2023, the Company had no loans outstanding under the Revolving Facility, no outstanding letters of credit, and available borrowing capacity of approximately $ 570 million.

Separate from the Revolving Facility, the Company has a bilateral letter of credit facility in the amount of $ 15 million, which matures on April 30, 2026.

As of June 30, 2023, the Company had $ 12 million utilized and $ 3 million of remaining available capacity under such facility.

Minimum scheduled principal repayments of the Credit Facilities as of June 30, 2023 are as follow:

(Dollars in millions)

Thereafter 1,579

Total debt payments $ 1,891

Interest Rate and Fees

The Dollar Term Facility is subject to an interest rate, at our option, of either (a) an alternate base rate (“ABR”) (which shall not be less than 1.50 %) or (b) an adjusted LIBOR rate (“LIBOR”) (which shall not be less than 0.50 %), in each case, plus an applicable margin equal to 3.25 % in the case of LIBOR loans and 2.25 % in the case of ABR loans.

The 2021 Dollar Term Facility is subject to an interest rate, at our option, of either (a) an alternate base rate (“ABR”) (which shall not be less than 1.50 %) or (b) an adjusted SOFR rate (“SOFR”) (which shall not be less than 0.50 %), in each case, plus an applicable margin equal to 3.51 % in the case of SOFR loans and 2.25 % in the case of ABR loans.

The Euro Term Facility is subject to an interest rate equal to an adjusted EURIBOR rate (which shall not be less than zero ) plus an applicable margin equal to 3.50 %.

Interest payments with respect to the Dollar and Euro Term Facilities are required either on a quarterly basis (for ABR loans) or at the end of each interest period (for LIBOR and EURIBOR loans) or, if the duration of the applicable interest period exceeds three months, then every three months .

Interest payments with respect to the 2021 Dollar and Euro Term Facilities are required either on a quarterly basis (for ABR loans) or at the end of each interest period (for SOFR and EURIBOR loans) or, if the duration of the applicable interest period exceeds three months, then every three months .

The 2023 Dollar Term Facility will bear interest, at the Term Borrowers’ election, at a rate per annum equal to (i) SOFR (subject to a 0.50 % floor) plus the applicable margin or (ii) the base rate plus the applicable margin.

The applicable margin for loans under the 2023 Dollar Term Facility is 4.50 % for SOFR loans and 3.50 % for base rate loans.

The Revolving Facility is subject to an interest rate comprised of an applicable benchmark rate as provided under the Credit Agreement (which shall not be less than 1.00 % if such benchmark is the ABR rate and not less than 0.00 % in the case of other applicable benchmark rates) that is selected based on the currency in which borrowings are outstanding thereunder, in each case, plus an applicable margin, that may vary based on our leverage ratio.

In addition to paying interest on outstanding borrowings under the Revolving Facility, we are also required to pay a quarterly commitment fee based on the average daily unused portion of the Revolving Facility during such quarter, which is determined by our leverage ratio and ranges from 0.25 % to 0.50 % per annum.

The Credit Agreement also contains certain mandatory prepayment provisions in the event that we incur certain types of indebtedness, receive net cash proceeds from certain non-ordinary course asset sales or other dispositions of property, or have excess cash flow (calculated on an annual basis with the required prepayment equal to 50 %, 25 % or 0 % of such excess cash flow, subject to compliance with certain leverage ratios), in each case subject to terms and conditions customary for financings of this kind.

The Credit Agreement contains certain mandatory prepayment provisions in the event that we incur certain types of indebtedness, receive net cash proceeds from certain non-ordinary course asset sales or other dispositions of property, or have excess cash flow (calculated on an annual basis with the required prepayment equal to 50 %, 25 % or 0 % of such excess cash flow, subject to compliance with certain leverage ratios), in each case subject to terms and conditions customary for financings of this kind.

Certain Covenants

1 unchanged sentence

The Revolving Facility also contains a financial covenant requiring the maintenance of a consolidated total leverage ratio of not greater than 4.7 times as of the end of each fiscal quarter if, on the last day of any such fiscal quarter, the aggregate amount of loans and letters of credit (excluding backstopped or cash collateralized letters of credit and other letters of credit with an aggregate face amount not exceeding $ 30 million) outstanding under the Revolving Facility exceeds 35 % of the aggregate commitments in effect thereunder on such date.

As of March 31, 2023, the Company was in compliance with all covenants.

As of June 30, 2023, the Company was in compliance with all covenants.

Series A Preferred Stock

On March 8, 2023, the Disinterested Directors Committee of the Board of Directors (the "Board") of the Company declared a cash divide nd of $ 0.17 per share on the Company's Series A Preferred Stock.

As of the record date of March 22, 2023, a total of 245,045,431 shares of Series A Preferred Stock were outstanding, resulting in an aggregate dividend amount of $ 42 million.

Cash was transferred on March 29, 2023 to the transfer agent for the Series A Preferred Stock in the amount of $ 42 million for the settlement of the dividend which occurred on April 3, 2023.

As of March 31, 2023, a dividend payable of $ 42 million was recorded within Accrued liabilities, and the cash held by the transfer agent was recorded within Other current assets.

As of March 31, 2023, the remaining unpaid cumulative dividends not yet declared on the shares of Series A Preferred Stock outstanding as of that date was $ 169 million .

On April 12, 2023 (the “Transaction Date”), the Company entered into separate definitive agreements (the “Agreements”) with each of Centerbridge Partners, L.P.

and funds managed by Oaktree Capital Management, L.P.

(collectively, the “C&O Investors”) to effect a series of integrated transactions (the “Transaction”) designed to increase the attractiveness of the Company to investors, including by simplifying the Company’s capital structure by converting all outstanding Series A Preferred Stock into a single class of Common Stock, subject to certain conditions.

As part of the Agreements, the holders of a majority of the outstanding shares of the Series A Preferred Stock authorized and approved the amendment and restatement of the certificate of designations for the Series A Preferred Stock (as amended, the “Certificate of Designations”) to, among other things, require the conversion of all shares of Series A Preferred Stock into shares of the Company’s common stock (the “2023 Conversion”), subject to the repurchase by the Company of a portion of the shares of Series A Preferred Stock held by the C&O Investors (the “Series A Repurchase”).

Under the terms of the Agreements, the Company would repurchase a total of $ 570 million (“Base Repurchase Price”) from the C&O Investors at a cash price of $ 8.10 per share which will be adjusted to equal the volume-weighted average price of the Common Stock for the fifteen trading days following the announcement of the transactions (the “ 15 Days VWAP”), subject to a minimum price of $ 7.875 per share and a maximum price of $ 8.50 per share.

The 15 Days VWAP was subsequently established at a value of $ 8.177 per share.

As part of the Transaction, all holders of Series A Preferred Stock, including the C&O Investors, would receive an amount equal to $ 0.853509 per share of Series A Preferred Stock, representing accumulated and unpaid preference dividends through June 30, 2023 (the “Accumulated Dividends”), as well as $ 0.144375 per share of Series A Preferred Stock, representing the preference dividends that would have accrued on the Series A Preferred Stock from July 1, 2023, through September 30, 2023 (the “Additional Amounts”).

As part of the Transaction, following the effectiveness of the Certificate of Designations which occurred on June 6, 2023, the Company completed all steps of the Transaction as follows:

• The Company paid $ 580 million to the C&O Investors in connection with the repurchase of 69,707,719 shares of Series A Preferred Stock, comprising of the Base Repurchase Price as well as $ 10 million ($ 0.144375 for each repurchased share) in consideration of the Additional Amounts on the repurchased shares of Series A Preferred Stock.

• The remaining 175,337,712 shares of Series A Preferred Stock were converted into 175,337,712 shares of Common Stock in accordance with the customary procedures of the Company’s transfer agent, for shares held in registered form, and of the Depository Trust Company, for shares held in street name;

• As part of the 2023 Conversion, the Company also paid $ 25 million ($ 0.144375 for each converted share) to the holders of Series A Preferred Stock in consideration of the Additional Amounts on the shares of Series A Preferred Stock that were converted;

• The Company issued 25,577,517 shares of Common Stock to all holders of Series A Preferred Stock (equal to $ 0.853509 per share, adjusted to avoid the issuance of fractional shares of Common Stock), in consideration of the Accumulated Dividends of an aggregate amount of $ 209 million.

Cash payments for fractional shares were immaterial.

The Agreements were accounted for as freestanding physically settled forward purchase contracts.

The Agreements were initially recorded at fair value and then remeasured through earnings until the establishment of the 15 Days VWAP, whereupon the Agreements were subsequently measured based on the amount of consideration to be paid at settlement.

A Monte-Carlo simulation model was used to determine the Transaction Date fair value of the Agreements by simulating a range of possible future stock prices for the Company through the expected settlement date of the Agreements.

The significant assumptions utilized in estimating the fair value of the Agreements include:

(i) a dividend yield of 0.0 %;

(ii) an expected volatility of 40.0 %;

(iii) a risk-free interest rate of 4.23 % based on observed interest rates from the Treasury Constant Maturity yield curve consistent with the simulation term;

and (iv) a starting share price of $ 8.25 based on the market price of the Company’s common stock as of the Transaction Date.

The initial fair value of the Agreements represented a forward purchase liability of $ 4 million.

A loss of $ 13 million was recognized in Non-operating expense in the Consolidated Interim Statement of Operations to reflect the subsequent remeasurement of fair value of the Agreements due to changes in the market price of the Company’s Common Stock.

The difference between the fair value of consideration transferred under the Agreements and the carrying value of the repurchased Series A Preferred Stock, amounting to $ 201 million, was recorded to Retained Deficit as a deemed dividend on the repurchase of Series A Preferred Stock from the C&O Investors as part of the Transaction.

A liability for excise tax, amounting to $ 6 million, was also recorded to Retained Deficit as a deemed dividend.

In connection with the 2023 Conversion, the Company also recognized a deemed dividend on the 2023 Conversion for $ 25 million, corresponding to the Additional Amounts paid to the holders of Series A Preferred Stock on the shares of Series A Preferred Stock that were converted.

Effective after the close of market on June 12, 2023, trading of the Series A Preferred Stock on Nasdaq was suspended, and each holder of shares of Series A Preferred Stock as of the conversion was deemed to hold one share of the Company’s Common Stock for each share of Series A Preferred Stock previously held.

As part of the Agreements, the C&O Investors have agreed with the Company to certain changes to their governance rights under the Company’s governance documents, including a reduction of their existing board nomination rights, as well as lock-up restrictions on their equity securities of the Company for up to twelve months , and certain limits on their ability to purchase additional equity securities of the Company and to voting limitations, in each case for a period of up to eighteen months .

The Company also announced an increase in its share repurchase authorization to $ 250 million.

Under the share repurchase program, the Company may repurchase shares of Common Stock in open market transactions, privately negotiated purchases and other transactions from time to time.

The following table summarizes the effects of the Transaction on the Consolidated Interim Balance Sheet as of June 30, 2023 and the Consolidated Interim Statement of Operations for the six months ended June 30, 2023 :

Series A Repurchase 2023 Conversion Settlement of Accumulated Dividends Excise tax on share repurchase Total

(Dollars in millions)

Consolidated Interim Balance Sheet - increase/(decrease):

Cash and cash equivalents $ ( 580 ) $ ( 25 ) $ — $ — $ ( 605 )

Accrued liabilities — — — 6 6

Preferred Stock — — — — —

Common Stock — — — — —

Additional Paid-in capital ( 366 ) — 209 — ( 157 )

Retained earnings ( 201 ) ( 25 ) ( 209 ) ( 6 ) ( 441 )

Consolidated Interim Statement of Operations:

Non-operating expenses 13 — — — 13

Consolidated Interim Statement of Cash Flows

Repurchases of Series A Preferred Stock ( 580 ) — — — ( 580 )

Payments for Additional Amounts for conversion of Series A Preferred Stock — ( 25 ) — — ( 25 )

The Company has also incurred $ 7 million of Transaction-related costs for the six months ended June 30, 2023, primarily for legal and advisory services that are included in Selling, general and administrative expenses in the Consolidated Interim Statement of Operations.

Financial Instruments and Fair Value Measures

Our credit, market and foreign currency risk management policies are described in Note 19, Financial Instruments and Fair Value Measures , to the Consolidated Financial Statements for the year ended December 31, 2022 included in our 2022 Form 10-K.

As of March 31, 2023 and December 31, 2022, we had contracts with aggregate gross notional amounts of $ 2,734 million and $ 2,621 million, respectively, to hedge interest rates and foreign currencies, principally the U.S.

As of June 30, 2023 and December 31, 2022, we had contracts with aggregate gross notional amounts of $ 3,309 million and $ 2,621 million, respectively, to hedge interest rates and foreign currencies, principally the U.S.

Dollar, Swiss Franc, British Pound, Euro, Chinese Yuan, Japanese Yen, Mexican Peso, New Romanian Leu, Czech Koruna, Australian Dollar and Korean Won.

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Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2023 and December 31, 2022:

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:

Notional Amounts Assets Liabilities

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Designated forward currency exchange contracts $ 483 $ 565 $ 19 $ 22 (a) $ 8 $ 6 (c)

Designated cross-currency swap 715 715 60 74 (b) — —

Designated cross-currency swaps 1,015 715 47 74 (b) 2 — (d)

Designated interest-rate swaps 270 — 1 — (b) — —

Total designated instruments 1,768 1,280 67 96 10 6

Undesignated instruments:

Undesignated interest rate swap 1,043 1,024 69 76 (b) — —

Undesignated interest rate swaps 901 1,024 70 76 (b) — —

Undesignated forward currency exchange contracts 640 317 5 4 (a) 8 2 (c)

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As of March 31, 2023, the Company had outstanding interest rate swaps with an aggregate notional amount of € 960 million, with maturities of April 2023, April 2024, April 2025, April 2026, April 2027 and April 2028.

The Company uses interest rate swaps specifically to mitigate variable interest risk exposure on its long-term debt portfolio and has not designated them as hedging instruments for accounting purposes.

The cross-currency swaps have been designated as net investment hedges of its Euro-denominated operations.

As of March 31, 2023, an aggregate notional amount of € 606 million was designated as net investment hedges of the Company’s investment in Euro-denominated operations.

The cross-currency swaps’ fair values were net assets of $ 60 million at March 31, 2023.

Our Consolidated Interim Statements of Comprehensive Income include Changes in fair value of net investment hedges, net of tax, of $( 5 ) million and $ 13 million, during the three months ended March 31, 2023 and 2022, respectively, related to these net investment hedges.

No ineffectiveness has been recorded on the net investment hedges.

The Company's forward currency exchange contracts under our cash flow hedging program are assessed as highly effective and are designated as cash flow hedges.

(d) Recorded within Other liabilities

As of June 30, 2023, the Company had outstanding interest rate swaps with aggregate notional amounts of € 830 million ($ 901 million based on June 30, 2023 foreign exchange rates) and $ 270 million, with maturities of January 2024, April 2024, July 2024, October 2024, April 2025, April 2026, April 2027 and April 2028.

The Company uses interest rate swaps specifically to mitigate variable interest risk exposure on its long-term debt portfolio.

The $ 270 million interest rate swaps have been designated as cash flow hedges.

The designated interest rate swaps' fair value were net assets of $ 1 million as of June 30, 2023.

The Company executed cross-currency swaps which have been designated as net investment hedges of its Euro-denominated operations and cash flow hedges to hedge the foreign currency exposure from foreign currency-denominated debt.

In May 2023, the Company re-couponed the cross-currency swap contracts which have been designated as net investment hedges and received a cash settlement of $ 9 million.

As of June 30, 2023, an aggregate notional amount of € 615 million was designated as net investment hedges of the Company’s investment in Euro-denominated operations and € 280 million was designated as cash flow hedges.

The cross-currency swaps’ fair values were net assets o f $ 45 million as of June 30, 2023.

Our Consolidated Interim Statements of Comprehensive Income include Changes in fair value of net investment hedges and cash flow hedges, net of tax, of $ 3 million and $( 2 ) million, during the three and six months ended June 30, 2023, respectively, related to these designated cross-currency swaps.

No ineffectiveness has been recorded on the designated cross-currency hedges.

The Company's forward currency exchange contract under our cash flow hedging program are assessed as highly effective and are designated as cash flow hedges.

Gains and losses on derivatives qualifying as cash flow hedges are recorded in Accumulated other comprehensive income until the underlying transactions are recognized in earnings.

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The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value:

March 31, 2023

June 30, 2023

December 31, 2022

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Net current period other comprehensive income ( 6 ) ( 1 ) ( 2 ) — ( 9 )

Balance at March 31, 2023

Balance at June 30, 2023

$ ( 50 ) $ 12 $ 83 $ ( 18 ) $ 27

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Net current period other comprehensive income 3 17 42 — 62

Balance at March 31, 2022

Balance at June 30, 2022

$ ( 40 ) $ 24 $ 83 $ ( 9 ) $ 58

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The Series A Preferred Stock is not included in the computation of basic earnings per share in periods in which we have a net loss, as the Series A Preferred Stock is not contractually obligated to share in our net losses.

Diluted earnings per share for the three months ended March 31, 2023 and 2022 is calculated using the more dilutive of the two-class or if-converted methods.

Diluted earnings per share for the three and six months ended June 30, 2023 and 2022 is calculated using the more dilutive of the two-class or if-converted methods.

The two-class method uses net income available to common shareholders and assumes conversion of all potential shares other than the participating securities.

The if-converted method uses net income and assumes conversion of all potential shares including the participating securities.

The details of the EPS calculations for the three months ended March 31, 2023 and 2022 are as follows:

The details of the EPS calculations for the three and six months ended June 30, 2023 and 2022 are as follows:

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(Dollars in millions except per share)

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preferred stock dividend ( 40 ) ( 39 ) ( 80 ) ( 77 )

Net income available for distribution

preferred stock deemed dividends ( 232 ) — ( 232 ) —

Net (loss) income available for distribution

( 201 ) 46 ( 160 ) 96

earnings allocated to participating securities — ( 36 ) — ( 76 )

Net income available to common shareholders

Net (loss) income available to common shareholders

$ ( 201 ) $ 10 $ ( 160 ) $ 20

Weighted average common shares outstanding - Basic 107,408,432 64,839,157 86,269,694 64,689,673

1 unchanged sentence

Diluted earnings per share:

Two-class Two-class

Two-class Two-class Two-class Two-class

Weighted average common shares outstanding - Basic 107,408,432 64,839,157 86,269,694 64,689,673

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EPS – Diluted $ ( 1.88 ) $ 0.15 $ ( 1.86 ) $ 0.31

For the periods where a net loss attributable to common shareholders is present, dilutive securities have been excluded from the calculation of diluted net loss per share attributable to common stockholders as including them would have been anti-dilutive.

For the three and six months ended June 30, 2023, the weighted-average number of unvested RSUs and other contingently issuable shares excluded from the computations were 1,113,778 and 1,358,636 shares, respectively.

Related Party Transactions

We lease certain facilities and receive property maintenance services from Honeywell, which was the owner of our Series B Preferred Stock that was fully redeemed by the Company on June 28, 2022, is a holder of our common stock and Series A Preferred Stock.

We lease certain facilities and receive property maintenance services from Honeywell International Inc.

(“Honeywell”), which is a holder of our Common Stock.

We also contract with Honeywell for the occasional purchase of certain goods and services.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(Dollars in millions)

Payments under agreements with Honeywell

Our payments under the agreements with Honeywell were included in Cost of goods sold and Selling, general and administrative expenses in our Consolidated Interim Statements of Operations.

Related to the agreements with Honeywell, our Consolidated Interim Balance Sheet at March 31, 2023 and our Consolidated Balance Sheet at December 31, 2022 includes liabilities of $ 9 million and $ 10 million, respectively.

Liability balances are primarily related to lease contracts of $ 7 million and $ 7 million as of March 31, 2023 and December 31, 2022, respectively.

$ — $ 2 $ 2 $ 4

Our payments under the agreements with Honeywell are included in Cost of goods sold and Selling, general and administrative expenses in our Consolidated Interim Statements of Operations.

Related to the agreements with Honeywell, our Consolidated Interim Balance Sheet at June 30, 2023 and our Consolidated Balance Sheet at December 31, 2022 includes liabilities of $ 8 million and $ 10 million, respectively.

Liability balances are primarily related to lease contracts of $ 6 million and $ 7 million as of June 30, 2023 and December 31, 2022, respectively.

As discussed in Note 15, Series A Preferred Stock , in order to effect the Transaction, on April 12, 2023, the Company entered into separate definitive agreements with each of Centerbridge Partners, L.P.

(“Centerbridge”) and funds managed by Oaktree Capital Management, L.P.

(“Oaktree”), each of which is a holder of our Common Stock and appoints a director to our Board of Directors.

Additionally, Mr.

Kevin Mahony, who serves as a Managing Director of Centerbridge, and Mr.

Steven Tesoriere, who serves as a Managing Director of Oaktree, have been appointed to our Board of Directors as designees of Centerbridge and Oaktree, respectively.

As described more fully in Note 15, Series A Preferred Stock , in connection with the Transaction, we paid to Centerbridge and Oaktree an aggregate of approximately $ 570 million for the repurchase of shares of Series A Preferred Stock, plus an aggregate of approximately $ 10 million and 7,276,036 shares of Common Stock representing the Additional Amounts and Accumulated Dividends in respect of the repurchased shares of Series A Preferred Stock.

Additionally, in connection with the conversion of the Series A Preferred Stock, we issued to Centerbridge and Oaktree an aggregate of 65,334,277 shares of Common Stock, plus Additional Amounts and Accumulated Dividends of approximately $ 9 million and 6,819,540 shares of Common Stock.

In connection with the conversion of our Series A Preferred Stock, we issued to Honeywell, as a holder of our Series A Preferred Stock, 4,196,330 shares of Common Stock upon the conversion of an equivalent number of shares of Series A Preferred Stock, plus Additional Amounts and Accumulated Dividends of approximately $ 1 million and 438,009 shares of Common Stock.

Additionally, Mr.

John Petry, a director on our Board, serves as Managing Member of Sessa Capital (Master), L.P., which indirectly held shares of our Series A Preferred Stock prior to the conversion.

In connection with the conversion of our Series A Preferred Stock, we issued to Sessa Capital and its affiliates, as holder of our Series A Preferred Stock, 16,592,384 shares of Common Stock upon the conversion of an equivalent number of shares of Series A Preferred Stock, plus Additional Amounts and Accumulated Dividends of approximately $ 2 million and 1,731,900 shares of Common Stock.

Commitments and Contingencies

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On May 2, 2022, the plaintiffs filed a Third Amended Complaint (“TAC”) against all of the foregoing Defendants apart from Alessandro Gili and Su Ping Lu.

On June 24, 2022, defendants moved to dismiss the TAC in its entirety, with

On June 24, 2022, defendants moved to dismiss the TAC in its entirety, with prejudice.

Plaintiffs filed their opposition on August 16, 2022, and defendants filed their reply brief on September 23, 2022.

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Rochon, who was recently appointed.

On March 31, 2023, the action was dismissed with prejudice and the plaintiffs have 30 days to file an appeal.

On March 31, 2023, the action was dismissed with prejudice.

On April 19, 2023, the plaintiffs filed a timely notice of appeal of the trial court's decision to the United States Court of Appeals for the Second Circuit.

No schedule has yet been set by the Appeals Court.

Brazilian Tax Matter

1 unchanged sentence

The infraction notice results in a loss contingency that may or may not ultimately be incurred by the Company.

The estimated total amount of the contingency as of March 31, 2023 was $ 35 million including penalties and interest.

The estimated total amount of the contingency as of June 30, 2023 was $ 38 million including penalties and interest.

The Company believes, based on management’s assessment and the advice of external legal counsel, that it has meritorious arguments in connection with the infraction notice and any liability for the infraction notice is currently not probable.

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(Dollars in millions)

2 unchanged sentences

Settlement of warranty/guarantee claims

( 4 ) ( 5 ) ( 7 ) ( 8 )

Foreign currency translation — ( 1 ) — ( 1 )

Warranty and product performance guarantees at end of period

$ 27 $ 30 $ 27 $ 30

Other Commitments and Contingencies

13 unchanged sentences

We expect to make contributions of cash and/or marketable securities of approximately $ 7 million to our non-U.S.

pension plans to satisfy regulatory funding standards in 2023, of which $ 1 million has been contributed as of March 31, 2023.

pension plans to satisfy regulatory funding standards in 2023, of which $ 3 million has been contributed as of June 30, 2023.

Net periodic benefit costs for our significant defined benefit plans include the following components:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Plans Non-U.S.

2023 2022 2023 2022 2023 2022 2023 2022

9 unchanged sentences

Subsequent Events

On April 12, 2023, the Company entered into separate definitive agreements (the “Agreements”) with each of Centerbridge Partners, L.P.

(“Centerbridge”) and funds managed by Oaktree Capital Management, L.P.

(“Oaktree”) to effect a series of integrated transactions designed to increase the attractiveness of the Company to investors, including by simplifying the Company’s capital stock by converting all outstanding Series A Preferred Stock into a single class of Common Stock, on or about July 3, 2023, subject to certain conditions.

Pursuant to the Agreements and subject to the completion of the debt financing described below, the Company’s Series A Preferred Stock will convert into shares of the Company’s Common Stock in a manner similar to the conversion procedures of an Automatic Conversion Event set forth in the existing Certificate of Designations for the Series A Preferred Stock.

The conversion will occur pursuant to an amendment and restatement of the Certificate of Designations for the Series A Preferred Stock, which has been approved by the Board of Directors and consented to by Centerbridge and Oaktree as the holders of a majority of the Series A Preferred Stock.

The Company will repurchase approximately $ 280 million and $ 290 million of Series A Preferred Stock from Centerbridge and Oaktree, respectively, for a total of $ 570 million, at a cash price of $ 8.10 per share which will be adjusted to equal the volume-weighted average price of the Common Stock for the fifteen trading days following the announcement of the transactions, subject to a minimum price of $ 7.875 per share and a maximum price of $ 8.50 per share.

In addition, all holders of Series A Preferred Stock will receive an amount equal to:

• $ 0.17 per share, representing the preference dividends that will accrue on the Series A Preferred Stock from April 1, 2023 through June 30, 2023;

• Approximately $ 0.6835 per share, representing other accrued and unpaid preference dividends on the Series A Preferred Stock;

• $ 0.144375 per share, representing the preference dividends that would have accrued on the Series A Preferred Stock from July 1, 2023 through September 30, 2023.

Other than the preference dividend that would have accrued through September 30, 2023, which will be paid in cash, these amounts may be paid to all holders in cash, stock, or a combination of cash and stock, at the election of the Company, and any stock issued will be valued at the adjusted purchase price paid to Centerbridge and Oaktree.

The repurchases will be funded with approximately $ 700 million of new debt, which is expected to be in the form of a new term loan B under the Company’s existing credit agreement, subject to certain modifications related to the transaction, and is expected to be consummated in Q2 2023.

The repurchase of the shares of Series A Preferred Stock from Centerbridge and Oaktree pursuant to the Agreements is subject to the completion of the debt financing, the effectiveness of the amended and restated Certificate of Designations for the Series A Preferred Stock, and certain other customary conditions.

The conversion of the Series A Preferred Stock

into shares of Common Stock pursuant to the amended and restated Certificate of Designations for the Series A Preferred Stock is subject to the completion of the repurchases of the shares of Series A Preferred Stock from Centerbridge and Oaktree.

The Company has also announced an increase in its share repurchase authorization to $ 250 million.

Under the share repurchase program, the Company may repurchase shares of Series A Preferred Stock or Common Stock in open market transactions, privately negotiated purchases and other transactions from time to time.

As part of the Agreements, Centerbridge and Oaktree have also agreed with the Company to certain changes to their governance rights under the Company’s governance documents, including a reduction of their existing board nomination rights, as well as lock-up restrictions on their equity securities of the Company for up to twelve months , and certain limits on their ability to purchase additional equity securities of the Company and to voting limitations, in each case for a period of up to eighteen months .

On July 26, 2023, the Board of Directors of the Company approved the early repayment of approximately $ 200 million of our Term Loan Facilities.

The Company expects the repayment to occur in the third quarter of 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements