What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-15 compared with 2023-02-14 · 431 added, 397 removed, 1063 unchanged (44% of the section changed)

45 unchanged sentences

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Net Sales and Accrued Liabilities - Variable Consideration– Refer to Notes 3 and 15 to the Financial Statements

Critical Audit Matter Description

As disclosed in Notes 3 and 15 to the consolidated financial statements, the Company records net sales at the amount of consideration the Company expects to receive in exchange for transferring the promised goods, which includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur.

As disclosed in Notes 3 and 15 to the financial statements, the Company records net sales at the amount of consideration the Company expects to receive in exchange for transferring the promised goods, which includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur.

Variability in consideration typically results from discounts and rebates provided to customers.

The estimated variable consideration is based primarily on management’s best available information regarding customer negotiations, historical

experience, and anticipated future customer pricing strategies.

The estimated variable consideration is based primarily on management’s best available information regarding customer negotiations, historical experience, and

anticipated future customer pricing strategies.

Estimating variable consideration to be received requires significant judgments by management that affect the amount of revenue recorded in the financial statements.

4 unchanged sentences

• We selected a sample of revenue contracts with variable consideration and performed the following:

◦ Obtained contractual documents, including master agreements and other related documents, and evaluated whether managements calculations for variable consideration were consistent with the terms of the contracts.

◦ Obtained contractual documents, including master agreements and other related documents, and evaluated whether management's calculations for variable consideration were consistent with the terms of the contracts.

◦ Compared transaction prices to the consideration expected to be received and determined that variable consideration was completely and accurately recorded.

• We tested the accuracy of managements estimate of the variable consideration by performing the following:

• We tested the accuracy of management's estimate of the variable consideration and performed the following:

◦ Performed an evaluation on historical information to determine management’s ability to accurately estimate sales volumes and future concessions.

1 unchanged sentence

◦ Tested the mathematical accuracy of the variable consideration calculation.

• Inspected manual revenue journal entries for unusual entries affecting revenue and examined supporting evidence.

• We inspected manual revenue journal entries for unusual entries affecting revenue and examined supporting evidence.

Capital Structure Transformation Transaction – Series A Preferred Stock Repurchase and Conversion - Refer to Notes 1 and 21 to the Financial Statements

Critical Audit Matter Description

As disclosed in Notes 1 and 21 to the financial statements, on April 12, 2023 (the “Transaction Date”), the Company entered into separate definitive agreements (the “Agreements”) with Centerbridge Partners L.P.

and funds managed by Oaktree Capital Management L.P.

to effect a series of integrated transactions (the “Transaction”) to repurchase shares of Series A Preferred Stock and convert the remaining shares of Series A Preferred Stock into an equivalent number of common stock, requiring analysis of the appropriate accounting treatment.

The agreements were accounted for as freestanding physically settled forward purchase contracts and recorded at fair value and remeasured through earnings.

A Monte-Carlo simulation model was used to determine the Transaction Date fair value of the financial instruments related to 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 included a dividend yield, expected volatility, risk free interest rate and share price.

Given the complex accounting analysis behind the Series A Preferred Stock repurchase and conversion, as well as the valuation of the associated financial instruments and respective assumptions used in the valuation, a high degree of auditor judgment was required.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Series A Preferred Stock repurchase and conversion as well as the valuation of the associated financial instruments, included the following, among others:

• We tested the effectiveness of controls over management’s evaluation of the Series A Preferred Stock repurchase and conversion as well as controls over the valuation of the forward purchase agreement.

• We read the transaction agreements and together with technical accounting specialists, we reviewed the accounting treatment of the complex financial instruments.

We analyzed the transaction agreements to determine if all

arrangement terms that may have an impact on accounting treatment were identified and independently evaluated management's accounting for the transaction agreements.

• We tested the cash proceeds (including dividend settlements) from the transaction and tested the mathematical accuracy of the impact of the transaction on the Company’s period end equity balances and period to date changes in equity.

• We engaged valuation specialists in testing the appropriateness of the various input factors used in the Monte Carlo valuation and the amounts recorded.

We engaged valuation specialists to develop an independent range of expectations and compared against the Company’s Monte Carlo valuation.

/s/ Deloitte SA

21 unchanged sentences

Net income 261 390 495

preferred stock dividend (Note 21)

preferred stock dividends (Note 21)

( 80 ) ( 157 ) ( 97 )

Net income available for distribution $ 233 $ 398 $ 80

Earnings per share (Note 24)

preferred stock deemed dividends (Note 21) ( 232 ) — —

Net (loss) income available for distribution $ ( 51 ) $ 233 $ 398

(Loss) Earnings per share (Note 24)

Basic $ ( 0.31 ) $ 0.75 $ 1.69

15 unchanged sentences

Changes in fair value of net investment hedges, net of tax (Note 19)

Total other comprehensive income (loss) 40 125 ( 259 )

Comprehensive income (loss) $ 430 $ 620 $ ( 179 )

Total other comprehensive (loss) income ( 39 ) 40 125

Comprehensive income $ 222 $ 430 $ 620

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

18 unchanged sentences

Current maturities of long-term debt (Note 16)

Mandatorily redeemable Series B Preferred Stock (Note 17)

Accrued liabilities (Note 15)

1 unchanged sentence

Long-term debt (Note 16)

Mandatorily redeemable Series B Preferred Stock (Note 17)

Deferred income taxes (Note 7)

9 unchanged sentences

Retained deficit ( 1,922 ) ( 1,485 )

Accumulated other comprehensive income (loss) (Note 22)

Accumulated other comprehensive (loss) income (Note 22)

Total deficit ( 735 ) ( 116 )

7 unchanged sentences

Net income $ 261 $ 390 $ 495

Adjustments to reconcile net income to net cash provided by (used for) operating activities

Adjustments to reconcile net income to net cash provided by operating activities

Reorganization items, net — — ( 435 )

1 unchanged sentence

Depreciation 90 84 92

Amortization of deferred issuance costs

Accretion of debt discount, net of interest payments ( 19 ) 19 —

Amortization of deferred debt issuance costs

Interest payments on Series B Preferred Stock, net of debt discount accretion — ( 19 ) 19

Loss on extinguishment of debt — 5 —

Foreign exchange loss (gain) ( 1 ) 7 ( 58 )

Loss on remeasurement of forward purchase contract 13 — —

Foreign exchange (gain) loss ( 15 ) ( 1 ) 7

Stock compensation expense 14 11 7

Pension (income) expense ( 28 ) ( 2 ) 15

Change in fair value of derivatives ( 65 ) 1 20

Pension expense ( 1 ) ( 28 ) ( 2 )

Unrealized loss (gain) on derivatives 51 ( 65 ) 1

Other 7 1 ( 11 )

10 unchanged sentences

Expenditures for property, plant and equipment ( 83 ) ( 91 ) ( 72 )

Proceeds from cross-currency swap contracts 28 — 1

Net cash used for investing activities ( 55 ) ( 91 ) ( 71 )

2 unchanged sentences

Proceeds from issuance of long-term debt, net of deferred financing costs 667 — 1,221

Proceeds from revolving credit facilities — — 1,449

Payments of long-term debt ( 207 ) ( 7 ) ( 1,517 )

1 unchanged sentence

Payments for dividends ( 42 ) ( 83 ) —

Payments for share repurchases ( 7 ) ( 19 ) —

(Repayments) proceeds from debtor-in-possession financing — ( 200 ) 200

Repurchases of Series A Preferred Stock ( 580 ) ( 7 ) ( 15 )

Repurchases of Common Stock ( 213 ) — ( 4 )

Repayments of debtor-in-possession financing — — ( 200 )

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

Redemption of Series B Preferred stock — ( 381 ) ( 201 )

Payments for Cash-Out election — — ( 69 )

Debt financing costs ( 4 ) ( 7 ) ( 13 )

Payments for debt and revolving facility financing costs ( 2 ) ( 4 ) ( 7 )

Other ( 1 ) — —

1 unchanged sentence

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 5 ( 18 ) 13

Net (decrease) increase in cash, cash equivalents and restricted cash ( 216 ) ( 229 ) 506

Net increase (decrease) in cash, cash equivalents and restricted cash 12 ( 216 ) ( 229 )

Cash, cash equivalents and restricted cash at beginning of period 248 464 693

2 unchanged sentences

Income taxes paid (net of refunds) $ 60 $ 42 $ 61

Interest expense paid 65 61 63

Interest paid 89 65 61

Reorganization items paid — 5 350

1 unchanged sentence

Issuance of Series B Preferred Stock — — 577

Expenditures for property, plant and equipment in accounts payable 33 32 47

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

11 unchanged sentences

Net income — — — — — 495 — 495

Cash-Out election — — ( 11 ) — — ( 69 ) — ( 69 )

Issuance of Series A Preferred Stock 248 — — — 1,301 — — 1,301

Repurchases of Series A Preferred Stock ( 2 ) — — — ( 10 ) ( 5 ) — ( 15 )

Repurchases of Common Stock — — ( 1 ) — — ( 4 ) — ( 4 )

Other comprehensive income, net of tax — — — — — — 125 125

Stock-based compensation — — — — 7 — — 7

Tax withholding related to vesting of restricted stock units and other — — — — ( 1 ) — — ( 1 )

Adoption impact of ASU 2016-13 , Financial Instruments - Credit Losses

— — — — — ( 5 ) — ( 5 )

Balance at December 31, 2021

1 unchanged sentence

Net income — — — — — 390 — 390

Cash-Out election — — ( 11 ) — — ( 69 ) — ( 69 )

Issuance of Series A Preferred Stock 248 — — — 1,301 — — 1,301

Share repurchases — — — — ( 4 ) ( 2 ) — ( 6 )

Other comprehensive income, net of tax — — — — — — 125 125

Other comprehensive loss, net of tax — — — — — — 40 40

Dividends — — — — — ( 83 ) — ( 83 )

Stock-based compensation — — — — 11 — — 11

2 unchanged sentences

Net income — — — — — 261 — 261

Share repurchases — — — — ( 4 ) ( 2 ) — ( 6 )

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

Repurchases of Common Stock — — ( 28 ) — — ( 213 ) — ( 213 )

Excise tax on share repurchases — — — — — ( 8 ) — ( 8 )

Other comprehensive loss, net of tax — — — — — — ( 39 ) ( 39 )

Dividends — — — — — ( 42 ) — ( 42 )

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 — — — — 14 — — 14

6 unchanged sentences

Garrett Motion Inc.

(the “Company” or “Garrett”) designs, manufactures and sells highly engineered turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers (“OEMs”) and the global vehicle independent aftermarket, as well as automotive software solutions.

These OEMs in turn ship to consumers globally.

We are a global technology leader with significant expertise in delivering products across gasoline, diesel, natural gas and electric (hybrid and fuel cell) power trains.

These products are key enablers for fuel economy and emission standards compliance.

(the "Company" or "Garrett") is a cutting-edge technology leader delivering differentiated solutions for emission reduction and energy efficiency.

We design, manufacture and sell highly engineered turbocharging, air and fluid compression, and high-speed electric motor technologies for OEMs and distributors within the mobility and industrial space.

We have significant expertise in delivering products at scale for ICE using gasoline, diesel, natural gas and hydrogen, as well as for zero emission technologies using hydrogen fuel cell systems, both for mobility and industrial use.

As our customers continue to progress on electrification, we are applying our technological pillars to develop highly engineered E-Powertrain and E-Cooling compressor products to support their ambition.

These products are key enablers for fuel economy, energy efficiency, thermal management, and compliance with emissions standards and overall greenhouse gas and other emission reduction targets.

Basis of Presentation

4 unchanged sentences

The CODM makes operational performance assessments and resource allocation decisions on a consolidated basis, inclusive of all of the Company’s products across channels and geographies.

Capital Structure Transformation Transaction

On April 12, 2023, the Company entered into the Transaction (as defined in Note 21, Equity ) 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.

As part of the Transaction, the Company repurchased an aggregate of 69,707,719 shares of Series A Preferred Stock from the C&O Investors (as defined below), and converted all remaining outstanding 175,337,712 shares of Series A Preferred Stock into an equivalent number of shares of Common Stock.

The total amounts paid to holders of Series A Preferred Stock in connection with the Transaction included aggregate 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.

See Note 21, Equity .

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

Movements for the Year Ended

December 31, 2023

Consolidated Balance Sheet:

(Dollars in millions)

Cash and cash equivalents $ ( 605 )

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

Retained earnings ( 441 )

December 31, 2023

Consolidated Statement of Operations:

(Dollars in millions)

Non-operating expenses $ 13

The Company also incurred $ 9 million of Transaction-related costs for the year ended December 31, 2023 , primarily for legal and advisory services that are included in Selling, general and administrative expenses in the Consolidated Statement of Operations.

See Note 16, Long-term Debt and Credit Agreements for discussion on the new 2023 Dollar Facility and Note 21, Equity for further discussion of the Transaction.

Plan of Reorganization

4 unchanged sentences

Upon Emergence, the Company did not meet the requirements under ASC 852 for fresh start accounting and in accordance with ASC 852, a new reporting entity was not created for accounting purposes.

On the Effective Date, pursuant to the Plan:

• All shares of the common stock of the Company outstanding prior to the Effective Date (the “Old Common Stock”) were cancelled;

• The Company paid $ 69 million to holders of Old Common Stock who had made the cash-out election under the Plan (the “Cash-Out Election”) in consideration of the cancellation of the common stock held by such holders;

• The Company issued 65,035,801 shares of its new common stock ("Common Stock") to the holders of Old Common Stock who had not made the Cash-Out Election under the Plan;

• The Company issued 247,768,962 shares of Series A Preferred Stock to the parties to the Plan Support Agreement, the Equity Backstop Commitment Agreement (as both defined in the Plan) and participants in the rights offering by the Company for aggregate consideration of $ 1,301 million;

• The Company issued 834,800,000 shares of Series B Preferred Stock to Honeywell International Inc.

(“Honeywell”) in satisfaction and discharge of certain claims of Honeywell;

• The Company also paid $ 375 million to Honeywell in addition to the issuance of the Series B Preferred Stock in satisfaction and discharge of certain claims of Honeywell;

• The Company p aid in full $ 101 million of interest and principal outstanding on, and terminated, the Senior Secured Super-Priority Debtor-in-Possession Credit Agreement (the “ DIP Credit Agreement ”);

• The Company repaid, and terminated, its pre-petition credit agreement including:

• Outstanding principal balance, accrued pre-petition and default interest on its five-year term A loan facility of $ 307 million;

• Outstanding principal balance, accrued pre-petition and default interest of (i) $ 374 million with respect to the EUR tranche and (ii) $ 422 million with respect to the USD tranche, on its seven -year term B loan facility;

• Outstanding principal balance and accrued interest of $ 374 million on its revolving credit facility;

• Accrued pre-petition hedge obligations of $ 20 million.

• The Company repaid the outstanding principal balance on its senior subordinated notes of € 350 million, or $ 423 million.

The Company also paid accrued pre-petition interest of $ 10 million, post-petition interest of $ 13 million, and $ 15 million in connection with a complaint in the Bankruptcy Court against the indenture trustee of the 5.125 % senior notes due 2026 (the "Make-Whole Litigation").

• The Company entered into certain secured debt facilities, see Note 16, Long-term Debt and Credit Agreements for discussion.

The Company further paid $ 75 million in connection with the reimbursement of Centerbridge Partners, L.P.

(together with its affiliated funds, “Centerbridge”) and Oaktree Capital Management, L.P.

(together with its affiliated funds, “Oaktree”), who are significant shareholders, and Honeywell for professional fees and expenses related to their support of our emergence from Chapter 11 bankruptcy, as well as reimbursement to Centerbridge and Oaktree for their participation in the Equity Backstop Commitment Agreement.

Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of the following for the years ended December 31, 2022 and 2021:

Year Ended December 31,

(Dollars in millions)

Gain on settlement of Honeywell claims (1)

$ — $ ( 502 )

Advisor fees 1 174

Bid termination and expense reimbursement — 79

Director's and officers insurance — $ — 39

Expenses related to senior notes (2)

Write off of pre-petition debt issuance cost — $ — 25

Employee stock cash out — $ — 13

DIP financing fees — $ — 1

Other 2 $ — 18

Total reorganization items, net $ 3 $ 2 $ ( 125 )

(1) The gain on settlement of Honeywell claims of $ 502 million is comprised of the pre-emergence Honeywell claims of $ 1,459 million, less a $ 375 million payment made to Honeywell pursuant to the Plan, less the Series B Preferred Stock issued to Honeywell, which was recorded at $ 577 million, less a currency translation adjustment of $ 5 million.

(2) Includes $ 15 million in connection with Make-Whole Litigation and $ 13 million related to post-petition interest.

Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and amounted to an expense of $ 3 million and a gain of $ 125 million for the years ended December 31, 2022 and 2021, respectively.

There were no Reorganization items, net for the year ended December 31, 2023.

Summary of Significant Accounting Policies

16 unchanged sentences

Trade accounts receivable are recorded at the invoiced amount as a result of transactions with customers.

In accordance with ASC 326, Financial Instruments - Credit Losses , the Company maintains allowances for doubtful accounts for losses as a result of a customer’s inability to make required payments, estimated based on the expected credit losses over the contractual life of the receivables based on days past due as measured from the contractual due date and collection history.

collection history.

The Company also takes into consideration changes in economic conditions that may not be reflected in historical trends (for example, customers in bankruptcy, liquidation or reorganization).

16 unchanged sentences

Property, plant and equipment are recorded at cost less accumulated depreciation and amortization.

Depreciation is calculated using the straight-line method over the estimated useful lives assets, which are 10 to 50 years for buildings and improvements, 2 to 16 years for machinery and equipment, 3 to 10 years for tooling equipment, and 5 to 7 years for software.

Depreciation is calculated using the straight-line method over the estimated useful lives of assets, which are 10 to 50 years for buildings and improvements, 2 to 16 years for machinery and equipment, 3 to 10 years for tooling equipment, and 5 to 7 years for software.

Maintenance and repairs are expensed as incurred.

1 unchanged sentence

The testing is completed when a triggering event occurs, or at least on an annual basis to assess if any impairment triggering events existed during the year.

If a triggering event is occurs or is identified, the impairment testing is completed using the two-step impairment model.

If a triggering event occurs or is identified, the impairment testing is completed using the two-step impairment model.

Asset classes are identified and tested for recoverability by comparing the net carrying value of the asset group to the undiscounted net cash flows to be generated from the use and eventual disposition of that asset group.

13 unchanged sentences

We have lease agreements with lease and non-lease components, which are generally accounted for separately.

For machinery and equipment, we account for the lease and non-lease components as a single lease component.

For machinery and equipment, we account for the lease and non-lease components as a

single lease component.

We account for short-term leases by recognizing lease payments in net income on a straight-line basis over the lease term and will not recognize any ROU assets and lease liabilities on the Consolidated Balance Sheet.

23 unchanged sentences

R&D costs are charged to expense as incurred.

Such costs are included in Cost of goods sold and wer e $ 153 million, $ 136 million and $ 111 million, for the years ended December 31, 2022, 2021 and 2020, respectively.

Additionally, the Company incurs engineering-related expenses which are also included in Cost of goods sold and were $ 11 million, $ 22 million and $ 13 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Such costs are included in Cost of goods sold and were $ 175 million, $ 153 million and $ 136 million, for the years ended December 31, 2023, 2022 and 2021, respectively.

Additionally, the Company incurs engineering-related expenses which are also included in Cost of goods sold and we re $( 12 ) million , $ 11 million and $ 22 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Engineering-related expenses include customer reimbursements of $ 46 million, $ 25 million and $ 21 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Certain engineering expenses related to long-term supply arrangements are capitalized when defined criteria, such as the existence of a contractual guarantee for reimbursement, are met.

As of December 31, 2023 and 2022 , $ 12 million and $ 1 million, respectively, of such contractually reimbursable costs were capitalized.

These amounts are recorded within Other current assets in the Consolidated Balance Sheets.

Government Incentives

4 unchanged sentences

Government incentives received prior to being earned are recognized as deferred income whereas incentives earned prior to being received are recognized as receivables.

The Company recognized government incentives of $ 25 million in Cost of goods sold for the year ended December 31, 2022.

The Company recognized government incentives of $ 14 million and $ 25 million in Cost of goods sold and Selling, general and administrative expenses for the years ended December 31, 2023 and 2022, respectively.

Supplier Financing

The Company has supplier financing arrangements with two third-party financial institutions under which certain suppliers may factor their receivables from Garrett.

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.

Our Consolidated Balance Sheets include supplier financing obligations outstanding of $ 68 million and $ 33 million as of December 31, 2023 and 2022, respectively, and guaranteed bank notes outstanding of $ 193 million and $ 171 million as of December 31, 2023 and 2022, respectively, recorded within Accounts payable.

Environmental Matters

2 unchanged sentences

To the extent that the required remediation procedures change, or additional contamination is identified, the Company’s estimated environmental liabilities may also change.

The liabilities are recorded in Accrued liabilities and Other liabilities in the Consolidated Balance Sheet.

The liabilities are recorded in Accrued liabilities and Other liabilities in the Consolidated Balance Sheets.

Stock-Based Compensation

1 unchanged sentence

The cost for such awards is measured at the grant date based on the fair value of the award.

The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods (generally the vesting period of the equity award) and is included in Selling, general and administrative expenses in the Consolidated Statements of Operations.

Compensation expense is recognized over the requisite service periods (generally the vesting period of the equity award) based on the Company's best estimate of ultimate performance against the award targets, and is included in Selling, general and administrative expenses in the Consolidated Statements of Operations.

The Company accounts for forfeitures as they occur.

Pension Benefits

2 unchanged sentences

The other non service components of net benefit costs are required to be presented separately from the service cost component.

We record the service cost component of Pension ongoing (income) expense in Cost of goods sold or Selling, general and administrative expenses.

The remaining components of net benefit costs within Pension ongoing (income) expense, primarily interest costs and assumed return on plan assets, are recorded in Non-operating expense (income).

We record the service cost component of Pension expense (income) in Cost of goods sold or Selling, general and administrative expenses.

The remaining components of net benefit costs within Pension expense (income), primarily interest costs and assumed return on plan assets, are recorded in Non-operating expense (income).

We recognize net actuarial gains or losses in excess of 10 % of the greater of the fair value of plan assets or the plans’ projected benefit obligation (the corridor) annually in the fourth quarter each year (“MTM Adjustment”).

The MTM Adjustment is recorded in Non-operating (income) expense.

The MTM Adjustment is recorded in Non-operating expense (income).

Foreign Currency Translation

3 unchanged sentences

Sales, costs and expenses are translated at the average exchange rates in effect during the year.

Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive income (loss).

Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive income ("AOCI").

Derivative Financial Instruments

3 unchanged sentences

Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract.

All derivatives are recorded on the balance sheet as assets or liabilities and measured at fair value.

For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in Accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged items impact earnings.

Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item.

For derivatives designated as net investment hedges, provided the hedging relationship is highly effective, the changes in fair value of the derivatives and the periodic settlements are recorded in Accumulated other comprehensive income (loss).

All derivatives are recorded on the Consolidated Balance Sheets as assets or liabilities and measured at fair value.

For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in AOCI and subsequently recognized in earnings when the hedged items impact earnings.

Cash flows of such derivative financial instruments are classified consistent with the underlying hedged items.

For derivatives designated as net investment hedges, provided the hedging relationship is highly effective, the changes in fair value of the derivatives are recorded in AOCI until the net investment is liquidated or sold.

We account for income taxes pursuant to the asset and liability method which requires us to recognize current tax liabilities or receivables for the amount of taxes we estimate are payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards.

5 unchanged sentences

Basic earnings per share are calculated using the two-class method, pursuant to the issuance of our Series A Preferred Stock on the Effective Date.

The calculation of basic earnings per share requires an allocation of earnings to all securities that participate in dividends with common shares, such as our Series A Preferred Stock, to the extent that each security may share in the entity’s earnings.

The calculation of basic earnings per share requires an allocation of earnings to all securities that participate in dividends with common shares, such as our Series A Preferred Stock, which was converted into Common Stock pursuant to the Transaction, to the extent that each security may share in the Company's earnings.

Basic earnings per share are calculated by dividing undistributed earnings allocated to Common Stock by the weighted average number of common shares.

Diluted earnings per share for the years ended December 31, 2022 and 2021 are calculated using the more dilutive of the two-class or if-converted methods.

Diluted earnings per share are calculated using the more dilutive of the two-class or if-converted methods.

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

The if-converted method uses net income

and assumes conversion of all potential shares including the participating securities.

Diluted earnings per share for the year ended December 31, 2020 are computed based upon the weighted average number of common shares and dilutive potential common share equivalents outstanding during the year, whereby common share equivalents from equity-based awards are calculated using the treasury stock method.

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

See Note 24, Earnings Per Share for further details.

Related Party Transactions

We lease certain facilities and receive property maintenance services from Honeywell, which as of Emergence was the owner of our Series B Preferred Stock that has since been fully redeemed by the Company, is a holder of our common stock and Series A Preferred Stock, and appoints a director to the Board of Directors ("the Board").

We lease certain facilities and receive property maintenance services from Honeywell International ("Honeywell"), which as of Emergence was the owner of our Series B Preferred Stock that has since been fully redeemed by the Company, is a holder of our Common Stock and was also a holder of our Series A Preferred Stock prior to the Transaction, as discussed below and in Note 21, Equity .

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

Lease and service agreements were made at commercial terms prevalent in the market at the time they were executed.

Our payments under the agreements with Honeywell amounted to $ 9 million for the year ended December 31, 2022, as well as for the period from Emergence through December 31, 2021, and were included in Cost of goods sold, and Selling, general and administrative expenses, in our Consolidated Statements of Operations.

Related to the agreements with Honeywell, our Consolidated Balance Sheet includes liabilities of $ 10 million and $ 15 million as of December 31, 2022 and 2021, respectively.

Liability balances are primarily related to lease contracts of $ 7 million and $ 12 million as of December 31, 2022 and 2021, respectively.

Series A Preferred Stock

Our Series A Preferred Stock is not a mandatorily redeemable financial instrument and is classified as permanent equity in our Consolidated Balance Sheets.

The Series A Preferred Stock contains a conversion feature which is not required to be bifurcated, is not a derivative, and does not contain a beneficial conversion feature.

It is considered a participating security with the Company’s Common Stock as holders of the Series A Preferred Stock will also be entitled to such dividends paid to holders of Common Stock to the same extent as if such holders of Series A Preferred Stock had converted their shares of Series A Preferred Stock into Common Stock (without regard to any limitations on conversions) and had held such shares of Common Stock on the record date for such dividends and distributions.

See Note 21, Equity for further details.

We declared dividends on the Series A Preferred Stock for the first time in September 2022 and again in December 2022.

The dividends are recorded in the financial statements when declared, and are reflected as an increase in the retained deficit on the Consolidated Balance Sheet.

Honeywell is not considered a related party subsequent to the Transaction.

Our payments under the agreements with Honeywell during the period that they were considered a related party amounted to $ 2 million for the year ended December 31, 2023 and $ 9 million for the year ended December 31, 2022, as well as for the period from Emergence through December 31, 2021, and were included in Cost of goods sold, and Selling, general and administrative expenses, in our Consolidated Statements of Operations.

Related to the agreements with Honeywell, our Consolidated Balance Sheet includes liabilities of $ 10 million as of December 31, 2022.

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

As discussed in Note 21, Equity , 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.

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 21, Equity , 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 that each of Centerbridge and Oaktree held as of the conversion date, we issued to Centerbridge and Oaktree an aggregate of 65,334,277 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 $ 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.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year classification in order to increase comparability across periods.

Specifically, amounts related to changes in the fair value of undesignated interest derivatives that had previously been recorded in Non-operating income are presented now within Interest expense in the Consolidated Statements of Operations.

As a result of such reclassification, Interest expense decreased by $ 74 million and $ 10 million for the years ended December 31, 2022 and 2021, respectively, while Non-operating income decreased by $ 74 million and $ 10 million for the years ended December 31, 2022 and 2021, respectively.

The reclassification had no impact on net income, assets, liability, equity, or cash flows as previously reported.

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Standards

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance .

The amendments in this update increase the transparency surrounding government assistance by requiring disclosure of 1) the types of assistance received, 2) an entity’s accounting for the assistance, and 3) the effect of the assistance on the entity’s financial statements.

The Company adopted the new guidance prospectively as of January 1, 2022.

Accounting Standards Issued But Not Yet Adopted

In September 2022, the FASB issued ASU 2022-04, Disclosure of Supplier Finance Program Obligations (Topic 405-50):

1 unchanged sentence

The amendment in this update requires companies to disclose key terms of supplier financing programs used in connection with the purchase of goods and services, along with information about their obligations under these programs including a rollforward of those obligations.

The guidance is effective for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose rollforward information, which is effective on a prospective basis for fiscal years beginning after December 15, 2023.

The Company adopted the new guidance as of January 1, 2023.

See the Supplier Financing section above for further detail.

Accounting Standards Issued But Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The amendments in this update require companies with a single reportable segment to provide all existing segment disclosures, as well as requires incremental segment information to be disclosed.

The guidance is effective for fiscal years beginning after December 15, 2023 on a retrospective basis, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the guidance to determine the impact on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The amendments in this update increase the transparency around income tax information through improvements to disclosures primarily related to the rate reconciliation and income taxes paid information.

The guidance is

effective for fiscal years beginning after December 15, 2024 on a prospective basis.

Early adoption is permitted.

The Company is currently evaluating the guidance to determine the impact on its disclosures.

There are no other recently issued, but not yet adopted, accounting pronouncements which are expected to have a material impact on the Company’s Consolidated Financial Statements and related disclosures.

28 unchanged sentences

All performance obligations are expected to be satisfied within one year , with substantially all performance obligations being satisfied within a month.

The timing of satisfaction of our performance obligations does not significantly vary from the typical timing of payment, with cash advances (contract liabilities) and unbilled receivables (contract assets) being settled within 3 months.

The timing of satisfaction of our performance obligations does not significantly vary from the typical timing of payment, with most cash advances (contract liabilities) and unbilled receivables (contract assets) being settled within 3 months.

For some contracts, we may be entitled to receive an advance payment.

4 unchanged sentences

(Dollars in millions)

Indemnification related — post Spin-Off $ — $ — $ 41

Indemnification related — litigation — — 3

Environmental remediation, non-active sites — — 1

Factoring and notes receivables discount fees $ 4 $ 2 $ 1

Non-operating (income) expense

Supplier financing fees 1 — —

Non-operating income

Year Ended December 31,

3 unchanged sentences

Interest income ( 7 ) ( 2 ) ( 1 )

Pension (income) expense — non service ( 37 ) ( 13 ) 5

Foreign exchange 3 14 ( 35 )

Pension (income) — non service ( 7 ) ( 37 ) ( 13 )

Foreign exchange loss 6 2 14

Loss on remeasurement (1)

Others, net — ( 3 ) 1

$ ( 2 ) $ ( 47 ) $ ( 6 )

(1) Relates to the loss on remeasurement of the Series A Preferred Stock Agreement related to the Transaction.

Refer to Note 21, Equity.

The sources of income (loss) from continuing operations, before income taxes, classified between domestic entities and those entities domiciled outside of the U.S., are as follows:

34 unchanged sentences

The effective tax rate increased by 3.4 percentage points in 2023 compared to 2022.

The increase was primarily due to the rate change impact on deferred tax assets attributable to the certification by the Chinese government of the High and New Technology Enterprise status of the Company’s China operations, which reduced the tax rate to 15% for the respective entity.

Further, withholding tax and other taxes on foreign earnings have comparatively increased due to a one-time non-recurring benefit recorded in 2022 related to accrued taxes on distributable reserves.

These increases were partially offset by current year tax benefits in Switzerland due to law changes (net of valuation allowance) and in Korea for prior year tax settlements.

The effective tax rate increased by 13.5 percentage points in 2022 compared to 2021.

The increase was primarily attributable to the nontaxable gain on the settlement of the Honeywell claims (partially offset by non-deductible transaction costs) and increased tax benefits from an internal restructuring, both of which occurred in 2021 and are non-recurring.

This increase was partially offset by tax benefits in the current year due to release of reserves for statute of limitation expirations.

The effective tax rate decreased by 24.9 percentage points in 2021 compared to 2020.

The decrease was primarily attributable to the nontaxable gain on the settlement of the Honeywell claims during the year, increased tax benefits from an internal restructuring and fewer losses in jurisdictions that we do not expect to benefit from such losses;

partially offset by increases in withholding taxes on unrepatriated earnings.

The internal restructuring occurred predominantly in the fourth quarter of 2021 which involved transfers of certain rights to intellectual property and various intercompany financing arrangements resulting in an approximate 11 percentage point decrease to the effective tax rate during 2021.

The overall increase in earnings from 2020 was also a contributing factor to a lower effective tax rate because the tax impacts as a percentage to earnings is less sensitive.

Deferred tax assets (liabilities)

14 unchanged sentences

Net deferred tax asset $ 189 $ 207

As of December 31, 2022, the Company had net operating loss carryforwards of $ 85 million with the majority in the below jurisdictions:

As of December 31, 2023, the Company had foreign net operating loss carryforwards of approximately $ 88 million with the majority in the below jurisdictions:

Jurisdiction Expiration

4 unchanged sentences

Luxembourg 2038 23

United Kingdom Indefinite 6

Other Various 4

We also have net operating loss carryforwards in certain US state jurisdictions, the tax effect of which is not significant.

We maintain a valuation allowance of $ 52 million against a portion of total deferred tax assets.

1 unchanged sentence

Conversely, if we determine that we will be able to realize net deferred tax assets in excess of the carrying amounts, we will decrease the recorded valuation allowance through a reduction to tax expense in the period that such determination is made.

Our balance sheets present a deferred tax asset of $ 232 million and a deferred tax liability of $ 25 million after considering jurisdictional netting.

Historically, the Company has not made the assertion to permanently reinvest its undistributed earnings.

In the second quarter of 2022, we changed our assertion to permanently reinvest a portion (approximately $ 300 million) of our undistributed foreign earnings for China specific to the entity’s investment in intellectual property.

For the portion of undistributed earnings that are not permanently reinvested, Garrett has recorded a deferred tax liability mainly consisting of withholding taxes of approximately $ 13 million as of December 31, 2022.

Our balance sheet presents a deferred tax asset of $ 216 million and a deferred tax liability of $ 27 million after considering jurisdictional netting.

We do not intend to permanently reinvest the majority of undistributed earnings of our foreign subsidiaries and have recorded a deferred tax liability, mainly consisting of withholding taxes, of approximately $ 15 million as of December 31, 2023.

The following table summarizes the activity related to the Company’s uncertain tax positions (excluding interest and penalties and related tax attributes):

12 unchanged sentences

The amount of unrecognized tax benefits that is reasonably possible to be resolved in the next twelve months is expected to be approximately $ 22 million, all of which, if recognized, would reduce tax expense and the effective tax rate.

Estimated interest and penalties related to uncertain tax benefits are classified as a component of tax expense in the Consolidated and Combined Statements of Operations and totaled $ 2 million of expense, $ 3 million of benefit and $ 5 million of expense for the years ended December 31, 2022, 2021, and 2020, respectively.

Estimated interest and penalties related to uncertain tax benefits are classified as a component of tax expense in the Consolidated Statements of Operations and totaled $ 5 million of expense, $ 2 million of expense and $ 3 million of benefit for the years ended December 31, 2023, 2022, and 2021, respectively.

Accrued interest and penalties were $ 34 million, $ 29 million, and $ 26 million, as of December 31, 2023, 2022, and 2021, respectively.

We are currently under audit in multiple jurisdictions, primarily India for tax years 2020 through 2022 and U.S.

for tax years 2018 and 2019.

Based on the outcome of these examinations, or as a result of the expiration of statutes of limitations for specific jurisdictions, it is possible that certain unrecognized tax benefits for tax positions taken on previously filed tax returns will materially change from those recorded as liabilities in our financial statements.

for tax years 2018 through 2020.

Based on the outcome of these examinations, or as a result of the expiration of statutes of limitations for specific jurisdictions, it is possible that certain unrecognized tax benefits for tax positions taken on previously filed tax returns will significantly change from those recorded as liabilities in our financial statements.

Accounts, Notes and Other Receivables—Net

16 unchanged sentences

Guaranteed bank notes sold without recourse 92 102 —

The expenses related to the sale of trade receivables and guaranteed bank notes are recognized within Other expense, net in the consolidated statements of operations, and were $ 2 million, $ 1 million and $ 1 million for the years ended December 31, 2022, 2021 and 2020, respective.

The expenses related to the sale of trade receivables and guaranteed bank notes are recognized within Other expense, net in the Consolidated Statements of Operations, and were $ 4 million, $ 2 million and $ 1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

(Dollars in millions)

1 unchanged sentence

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

As of December 31, 2022 the Company has no guaranteed bank notes pledged as collateral and as of December 31, 2021 and 2020, the Company has pledged as collateral $ 5 million and $ 18 million, respectively, of guaranteed bank notes, which have not been sold in order to be able to issue bank notes as payment to certain suppliers.

Such pledged amounts are included as Notes receivable in our Consolidated Balance Sheet.

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

Inventories—Net

12 unchanged sentences

Receivable from transfer agent (1)

________________________________

(1) Receivable from transfer agent includes the Series A Preferred Stock dividend that was paid to the transfer agent in December 2022, and settled with shareholders on January 3, 2023.

5 unchanged sentences

Pension and other employee related 11 4

Designated cross-currency swap 74 30

Derivatives designated as net investment hedges 37 74

Designated and undesignated derivatives 46 76

10 unchanged sentences

There were no changes to the carrying amount of goodwill for the years ended December 31, 2023 and 2022 :

2022 December 31,

(Dollars in millions)

14 unchanged sentences

Dividends declared on Series A Preferred Stock — 42

Designated and undesignated derivatives 12 8

Other (primarily operating expenses) (2)

1 unchanged sentence

See Note 4, Revenue Recognition and Contracts with Customers .

(2) Other accrued liabilities includes $ 3 million of environmental liabilities as of December 31, 2022 and 2021.

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

Expenses related to the repositioning accruals are included in Cost of goods sold in our Consolidated Statements of Operations.

(2) Includes $ 5 million and $ 3 million of environmental liabilities as of December 31, 2023 and 2022, respectively.

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

Expenses related to the repositioning costs are included in Cost of goods sold and Selling, general and administrative expenses in our Consolidated Statements of Operations.

Costs Other Costs Total

(Dollars in millions)

Balance at December 31, 2021

$ 10 $ — $ 10

Charges 4 — 4

3 unchanged sentences

Usage—cash ( 11 ) — ( 11 )

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

Balance at December 31, 2023

1 unchanged sentence

Long Term Debt

On the Effective Date, in accordance with the Plan, the Company entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A.

as administrative agent, which provides for long-term senior secured financing consisting of :

On the Effective Date, in accordance with the Plan, the Company entered into a credit agreement (as amended from time to time, the “Credit Agreement”) with JPMorgan Chase Bank, N.A.

as administrative agent.

The Credit Agreement provides for the following long-term senior secured financing (collectively, the "Term Loan Facilities") :

• 2021 Dollar Facility :

1 unchanged sentence

Dollar term loan facility for $ 715 million;

• 2023 Dollar Facility :

a five-year secured first-lien U.S.

Dollar term loan facility for $ 700 million;

• Euro Facility :

a seven-year secured first-lien Euro term loan facility for € 450 million.

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

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

(Dollars in millions) Maturity Date Interest Rate December 31, 2023 December 31, 2022

Dollar Facility April 30, 2028 LIBOR plus 325 bps $ 706 $ 713

Euro Facility April 30, 2028 EURIBOR plus 350 bps 480 510

2021 Dollar Term Facility April 30, 2028 SOFR plus 351 bps

2023 Dollar Term Facility April 30, 2028 SOFR plus 450 bps

Euro Term Facility April 30, 2028 EURIBOR plus 350 bps

Total principal outstanding 1,696 1,186

4 unchanged sentences

(Dollars in millions)

Thereafter 1,151

Total payments on long-term debt $ 1,696

Revolving Facility and Letters of Credit

The Credit Agreement also provides for a five-year multi-currency senior secured first-lien Revolving Facility which matures on April 30, 2026.

In 2022, the maximum borrowing capacity under the Revolving Facility was increased from $ 300 million to $ 475 million.

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

The Credit Agreement also provides for a five-year senior secured first-lien revolving credit facility providing for multi-currency revolving loans (the "Revolving Facility", and together with the Term Loan Facilities, the "Credit Facilities").

The Revolving Facility matures on April 30, 2028 and has a maximum borrowing capacity of $ 570 million.

See discussion in "—A mendments to the Credit Agreement" , below).

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 will reduce availability under the Revolving Facility.

As of December 31, 2023, the Company had no borrowings outstanding under the Revolving Facility, no outstanding letters of credit, and available borrowing capacity of $ 570 million.

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

Separate from the Revolving Facility, the Company has a bilateral letter of credit facility, which 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 December 31, 2022, the Company had $ 14 million utilized and $ 1 million of re maining available capacity.

As of December 31, 2023, the Company had utilized $ 12 million and had remaining available capacity of $ 3 million .

Amendments to the Credit Agreement

On the Effective Date, in accordance with the Plan, the Company entered into a credit agreement (as amended from time to time, the "Credit Agreement") providing for senior secured financing, consisting of a seven-year secured first-lien U.S.

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

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

On January 11, 2022 and March 22, 2022, the Company amended the Credit Agreement, increasing the maximum amount of borrowings available under the Revolving Facility from $ 300 million to approximately $ 475 million.

The maturity date of the Revolving Facility remains unchanged at April 30, 2026, with certain extension rights at the discretion of each lender.

Under the first amendment, London Inter-bank Offered Rate ("LIBOR") was replaced as an available rate at which borrowings under the Revolving Facility could accrue with, for loans borrowed in U.S.

Dollars, the daily Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York and for loans borrowed in

Australian Dollars, the average bid reference rate administered by ASX Benchmarks Pty Limited.

The Term Loan Facilities under the Credit Agreement continue to be able to accrue interest under the LIBOR, but will switch to an alternative benchmark rate upon the cessation of LIBOR after June 30, 2023.

The Euro Facilities under the Credit Agreement continue to accrue interest under the Euro Interbank Offered Rate (“EURIBOR”).

The second amendment also removed the requirement that payments made in cash for the benefit of holders of shares of the Company's Series A Preferred Stock, par value $ 0.001 per share (the "Series A Preferred Stock") on or before December 31, 2022 be made on a ratable basis to the holders of the Common Stock, and made additional clarifying amendments to certain provisions.

The amendments to our Credit Agreement as described above were accounted under ASC 470-50, Debt Modifications and Extinguishments , as debt modifications that did not result in an extinguishment or have a material impact on our Consolidated Financial Statements.

The Company entered into a first and second amendment of the Credit Agreement on January 11, 2022 and March 22, 2022, respectively.

Under the first amendment, the maximum borrowing capacity under the Revolving Facility was increased from $ 300 million to $ 475 million.

The London Inter-bank Offered Rate ("LIBOR") was replaced as an available rate at which borrowings under the Revolving Facility could accrue with, for loans borrowed in U.S.

Dollars, the daily Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York and for loans borrowed in Australian Dollars, the average bid reference rate administered by ASX Benchmarks Pty Limited.

The second amendment removed the requirement that payments made in cash for the benefit of holders of shares of the Company's Series A Preferred Stock on or before December 31, 2022 be made on a ratable basis to the holders of the Common Stock, and made additional clarifying amendments to certain provisions.

On April 27, 2023, the Company entered into a third amendment to the Credit Agreement (the "Third Amendment") which provided for additional financing consisting of the 2023 Dollar Term Facility.

The full amount of the 2023 Dollar

Term Facility was drawn on June 6, 2023 (the "Third Amendment 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 this 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 Third Amendment Closing Date, 7.50 % per annum of the aggregate principal amount, and thereafter, 10.00 % per annum.

The Company may 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) certain repricing events occurring during the period from the Third Amendment Closing Date to the date that is twelve months following the Third Amendment Closing Date).

The Third Amendment also provided for (i) a further 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.

The Credit Facilities are secured on a first-priority basis by:

3 unchanged sentences

Interest Rate and Fees

The Dollar 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 (which shall not be less than 0.50 %), in each case, plus an applicable margin equal to 3.25 % in the case of LIBOR loans and 2.25 % in the case of ABR loans.

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

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 Euro Interbank Offered Rate (“EURIBOR”) (which shall not be less than zero ) plus an applicable margin equal to 3.50 %.

The 2023 Dollar Term Facility bears 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.

As of December 31, 2023, the Revolving Facility is subject to an interest rate comprised of an applicable benchmark rate (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.

The applicable margin for the Revolving Facility varies based on our leverage ratio.

Accordingly, the interest rates for the Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, LIBOR, EURIBOR and other applicable benchmark rates or future changes in our leverage ratio.

The Credit Agreement provides the Benchmark Replacement, given the reference rate reform discontinuing LIBOR.

Interest payments with respect to the Term Loan 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 .

See discussion of the amendment to the Revolving Facility in Amendments to the Credit Agreement, above.

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

The Borrowers are obligated to make quarterly principal payments throughout the term of the Dollar Facility according to the amortization provisions in the Credit Agreement, as such payments may be reduced from time to time in accordance with the terms of the Credit Agreement as a result of the application of loan prepayments made by us, if any, prior to the scheduled date of payment thereof.

We may voluntarily prepay borrowings under the Credit Agreement without premium or penalty, subject to a 1.00 % prepayment premium in connection with any repricing transaction with respect to the Term Loan Facilities in the first six months after the Effective Date of the Credit Agreement and customary breakage” costs with respect to LIBOR and EURIBOR loans.

Accordingly, the interest rates for the Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, EURIBOR and other applicable benchmark rates or future changes in our leverage ratio.

Interest payments with respect to the Term Loan 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 .

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

The Company is obligated to make quarterly principal payments throughout the term of the 2021 Dollar Facility and the 2023 Dollar Term Facility according to the amortization provisions in the Credit Agreement.

Such payments may be reduced from time to time in accordance with the terms of the Credit Agreement as a result of the application of loan prepayments made by us, if any, prior to the scheduled date of payment thereof.

We may voluntarily prepay borrowings under the Credit Agreement without premium or penalty, subject to a 1.00 % prepayment premium in connection with certain repricing events in connection with the 2023 Dollar Term facility during the period from the Third Amendment Closing Date to the date that is twelve months following the Third Amendment Closing Date and customary "breakage” costs with respect to SOFR and EURIBOR loans.

We may also reduce the commitments under the Revolving Facility, in whole or in part, in each case, subject to certain minimum amounts and increments.

See discussion of the amendment to the Revolving Facility in Amendments to the Credit Agreement, above.

The Credit Agreement also contains certain mandatory prepayment provisions in the event that we incur certain types of indebtedness, receive net cash proceeds from certain non-ordinary course asset sales or other dispositions of property or, starting with the fiscal year ending on December 31, 2022, 0.50 % of excess cash flow on an annual basis (with step-downs to 25 % and 0 % subject to compliance with certain leverage ratios), in each case subject to terms and conditions customary for financings of this kind.

On July 31, 2023, the Company made an early repayment in the amount of $ 200 million on the 2023 Dollar Term Facility.

The early repayment resulted in incremental amortization on debt issuance cost of $ 9 million, included within Interest Expense in the Consolidated Statement of Operations.

Representations and Warranties

4 unchanged sentences

As of December 31, 2023, the Company was in compliance with all its financing covenants.

The Credit Agreement also contained certain restrictions on the Company’s ability to pay cash dividends on or to redeem or otherwise acquire for cash the Series A Preferred Stock unless a ratable payment (on an as-converted basis) was made to holders of our common equity and such payments would otherwise be permitted under the terms of the Credit Agreement.

These restrictions were removed as part of the credit amendments noted above.

The Company's ability to pay cash dividends on shares of Common Stock is also subject to conditions set forth in the Certificate of Designations for the Series A Cumulative Convertible Preferred Stock (the "Series A Certificate of Designations") as described in Note 21, Equity.

On March 3, 2022, the terms of the Series A Certificate of Designations were further amended to (i) expand the scope of permitted Distributions on Dividend Junior Stock (each as defined in the Series A Certificate of Designations) to include purchases by the Company of shares of Dividend Junior Stock in individually negotiated transactions, (ii) remove the requirement that dividends or Distributions on Dividend Junior Stock must occur on or prior to December 31, 2022, and (iii) expressly permit the purchase, redemption or other acquisition for cash by the Company of shares of Dividend Junior Stock without requiring ratable participation by holders of Series A Preferred Stock.

Mandatorily Redeemable Series B Preferred Stock

On the Effective Date, pursuant to the Plan, the Company issued 834,800,000 shares of Series B Preferred Stock to Honeywell International Inc.

("Honeywell") in satisfaction of certain claims of Honeywell.

Under the Certificate of Designations of the Series B Preferred Stock, the Company is required to redeem on April 30 each year, beginning on April 30, 2022 and ending on April 30, 2030, an aggregate number of shares of Series B Preferred Stock based on a scheduled redemption amount determined in the Certificate of Designations.

Any shares of Series B Preferred Stock that have not been redeemed as of April 30, 2030, will be redeemed on that date.

The Series B Preferred Stock is not entitled to any dividends or other distributions or payments other than the scheduled redemption payments and payments upon liquidation as provided in the Certificate of Designations of the Series B Preferred Stock.

On the Effective Date, pursuant to the Plan, the Company issued 834,800,000 shares of Series B Preferred Stock to Honeywell in satisfaction of certain claims of Honeywell.

On December 28, 2021, the Company completed a partial early redemption of 345,988,497 shares of Series B Preferred Stock for a cash payment of $ 211 million including $ 10 million as interest.

1 unchanged sentence

A loss on extinguishment of debt of $ 5 million was recognized in the Consolidated Statement of Operations related to the final early redemption.

There were no shares of Series B Preferred Stock outstanding as of December 31, 2022.

There are no shares of Series B Preferred Stock outstanding as of December 31, 2023 and 2022.

We have opera ting leases that primarily consist of real estate, machinery and equipment.

22 unchanged sentences

Weighted-average discount rate 5.69 % 5.61 %

Maturities of operating lease liabilities were as follows:

Maturities of operating lease liabilities are as follows:

Year Ended December 31, 2023

8 unchanged sentences

Foreign Currency Risk Management

We are exposed to market risks from changes in currency exchange rates.

The Company is exposed to market risks from changes in currency exchange rates.

These exposures may impact future earnings and/or operating cash flows.

Our exposure to market risk for changes in foreign currency exchange rates arises from international financing activities between subsidiaries, foreign currency denominated monetary assets and liabilities and transactions arising from international trade.

We hedge currency exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign currency exchange forward contracts (foreign currency exchange contracts).

These forward currency exchange contracts are assessed as effective and are designated as cash flow hedges.

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

The Company also entered into float to float cross-currency swaps exchange contracts to hedge net investments in foreign subsidiaries.

These cross-currency swaps exchange contracts are assessed as effective and are designated as net investment hedges.

Gains and losses on derivatives qualifying as net investment hedges are recorded in Accumulated other comprehensive income (loss) until the net investment is liquidated or sold.

As of December 31, 2022 and 2021, we had contracts with aggregate gross notional amounts of $ 2,621 million and $ 2,788 million, respectively, to hedge foreign currencies, principally the U.S.

We hedge currency exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign currency exchange forward contracts.

The forward currency exchange contracts are intended to mitigate exposure to foreign exchange rate volatility and the associated impact on earnings related to forecasted foreign currency commitments.

Certain of these forward currency exchange contracts are designated as cash flow hedges, whereby the gains and losses on these derivatives are recorded in AOCI until the underlying transactions are recognized in earnings.

As of December 31, 2023 and 2022, we had outstanding designated and undesignated forward currency exchange contracts with aggregate gross notional amounts of $ 1,171 million and $ 882 million, respectively, to hedge 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.

The Company uses a float-to-fixed cross-currency swap contract to mitigate the foreign currency risk, as well as interest rate risk, on its 2023 Dollar Facility.

The cross-currency swap contract is designated as a cash flow hedge, with changes in the fair value of the derivative recorded in AOCI and reclassified into earnings based upon changes in the spot rate remeasurement of the underlying debt.

The Company also uses float-to-float cross-currency swap contracts to hedge net investments in foreign subsidiaries.

These cross-currency swap contracts are designated as net investment hedges, and the gains and losses on these derivatives are recorded in AOCI until the net investment is liquidated or sold.

Interest Rate Risk Management

The Company is also exposed to market value risk associated with interest rate fluctuations on its variable rate term loan debt.

To manage interest rate exposure, the Company enters into interest rate swap contracts.

Certain of these interest rate swap contracts are designated as cash flow hedges, whereby the gains and losses on these derivatives are recorded in AOCI until the underlying transactions are recognized in earnings.

Fair Value of Financial Instruments

10 unchanged sentences

Designated instruments:

Designated forward currency exchange contracts $ 565 $ 382 $ 22 $ 9 (a) $ 6 $ 1 (c)

Designated cross-currency swap 715 715 74 30 (b) — —

Total designated instruments 1,280 1,097 96 39 6 1

Forward currency exchange contracts $ 456 $ 565 $ 11 $ 22 (a) $ 6 $ 6 (c)

Cross-currency swaps 1,015 715 37 74 (b) 17 — (d)

Interest rate swaps 200 — — — (b) — —

Subtotal 1,671 1,280 48 96 23 6

Undesignated instruments:

Undesignated interest rate swap 1,024 940 76 7 (a) — —

Undesignated forward currency exchange contracts 317 751 4 2 (a) 2 4 (c)

Total undesignated instruments 1,341 1,691 80 9 2 4

Interest rate swaps 917 1,024 46 76 (b) 3 — (d)

Forward currency exchange contracts 715 317 1 4 (a) 6 2 (c)

Subtotal 1,632 1,341 47 80 9 2

Total designated and undesignated instruments $ 3,303 $ 2,621 $ 95 $ 176 $ 32 $ 8

2 unchanged sentences

The Company entered into interest rate swap and forward interest rate swap contracts to partially mitigate market value risk associated with interest rate fluctuations on its variable rate term loan debt.

As of December 31, 2022, the Company had outstanding interest rate and forward interest rate swaps with an aggregate notional amount of € 960 million, with respective 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 Company has floating-floating cross-currency swap contracts to limit its exposure to investments in certain foreign subsidiaries exposed to foreign exchange fluctuations.

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

As of December 31, 2022, an aggregate notional amount of € 606 million was designated as net investment hedges of the Company’s investment in Euro-denominated operations, with mandatory termination options in April 2023, April 2024, April 2025 and April 2026.

The cross-currency swaps’ fair values were net assets of $ 74 million at December 31, 2022.

Our Consolidated Statements of Comprehensive Income (loss) includes Changes in fair value of net investment hedges, net of tax, of $ 44 million during the year ended December 31, 2022 related to these net investment hedges.

(d) Recorded within Other liabilities in the Company's Consolidated Balance Sheets

Cash Flow Hedges

During 2023, the Company entered into float-to-fixed interest rate swap contracts with an aggregate notional amount of $ 200 million and maturities in July 2024 and October 2024.

Changes in the fair value of the interest rate swap contracts are recorded in AOCI and will be reclassified to Interest expense in the Consolidated Statement of Operations upon maturity.

The Company also has outstanding forward currency exchange contracts with maturities up to 18 months and an aggregate notional amount of $ 456 million as of December 31, 2023.

These forward currency exchange contracts have been designated as cash flow hedges to mitigate foreign currency exposures primarily on our inventory purchases and manufacturing costs.

The gains and losses on the forward currency exchange contracts are recorded in AOCI and reclassified to Cost of goods sold in the Consolidated Statement of Operations when the underlying transactions are recognized in earnings.

In order to mitigate interest rate and foreign currency risk on its 2023 Dollar Facility, the Company also entered during 2023 into a float-to-fixed cross-currency swap contract comprised of an amortizing swap with aggregate notional amount of € 280 million ($ 300 million) and notional exchanges in June 2026, June 2027 and June 2028.

Changes in the fair values of the cross-currency swap contract are recognized in AOCI and reclassified to Non-operating income in the Consolidated Statement of Operations, based upon changes in the spot rate remeasurement of the underlying debt.

The net interest settlements on the cross-currency swap contract are recorded in Interest expense in the Consolidated Statements of Operations.

All of the Company’s cash flow hedges are assessed as highly effective.

For the years ended December 31, 2023 and 2022, the Company recorded a loss of $ 15 million, net of tax, and a gain of $ 6 million, net of tax, respectively, in Other comprehensive income.

Net Investment Hedges

The Company has designated float-to-float cross-currency swap contracts with an aggregate notional amount of € 615 million ($ 715 million) as net investment hedges of the Company’s Euro-denominated operations.

The fair values of the net investment hedges were net assets of $ 37 million and $ 74 million as of December 31, 2023 and 2022, respectively.

Our Consolidated Statements of Comprehensive Income includes Changes in fair value of net investment hedges, net of tax, of a $ 9 million loss and a $ 44 million gain for the years ended December 31, 2023 and 2022, respectively.

No ineffectiveness has been recorded on the net investment hedges.

The Company also enters into forward currency exchange contracts with maturities up to 18 months to mitigate exposure to foreign currency exchange rate volatility and the associated impact on earnings related to forecasted foreign currency commitments.

As of December 31, 2022, the Company had outstanding forward currency exchange contracts with an aggregate notional amount of $ 565 million.

These forward currency exchange contracts are designated as cash flow hedges and are assessed as highly effective.

Gains and losses on the derivatives qualifying as cash flow hedges are recorded in Accumulated other comprehensive income (loss) until the underlying transactions are recognized in earnings, and amounted to a gain of $ 6 million, net of tax, for the year ended December 31, 2022.

Non-Designated Derivatives

As of December 31, 2023, the Company has outstanding float-to-fixed interest rate swap contracts with an aggregate notional amount of € 830 million ($ 917 million) and maturities of April 2024, July 2024, October 2024, April 2025, April 2026, April 2027 and April 2028.

Changes in the fair value of the undesignated interest rate swap contracts are recorded in Interest expense in the Consolidated Statements of Operations.

The Company also has outstanding forward currency exchange contracts with maturities generally up to 3 months and an aggregate notional amount of $ 715 million.

These derivatives are not designated as hedging instruments and are adjusted to fair value through Non-operating income in the Consolidated Statements of Operations.

Fair Value Measurement

The foreign currency exchange, interest rate swap and cross-currency swap contracts are valued using market observable inputs.

As such, these derivative instruments are classified within Level 2.

The assumptions used in measuring fair value of the cross-currency swap are considered Level 2 inputs, which are based upon market observable interest rate curves, cross currency basis curves, credit default swap curves, and foreign exchange rates.

The assumptions used in measuring fair value of the cross-currency swap contracts are considered Level 2 inputs, which are based upon market observable interest rate curves, cross currency basis curves, credit default swap curves, and foreign exchange rates.

The carrying value of Cash, cash equivalents and restricted cash, Account receivables and Notes and Other receivables contained in the Consolidated Balance Sheets approximates fair value.

5 unchanged sentences

$ 1,650 $ 1,692

The Company determined the fair value of certain of its long-term debt and related current maturities utilizing transactions in the listed markets for similar liabilities.

The Company determined the fair value of its long-term debt and related current maturities utilizing transactions in the listed markets for similar liabilities.

As such, the fair value of the long-term debt and related current maturities is considered Level 2.

2 unchanged sentences

Income taxes $ 99 $ 99

Designated and undesignated derivatives 20 —

Pension and other employee related 23 21

3 unchanged sentences

Environmental Remediation – Long-term

Long-term accounts payable 7 8

Issuance of Series A Preferred Stock

2 unchanged sentences

Series A Preferred Stock

Holders of the Series A Preferred Stock will be entitled to receive, when, as and if declared by a committee of disinterested directors of the Board (which initially consisted of Daniel Ninivaggi, Julia Steyn, Robert Shanks, and D’aun Norman) out of funds legally available for such dividend, cumulative cash dividends at an annual rate of 11 % on the stated amount per share plus the amount of any accrued and unpaid dividends on such share, accumulating daily and payable quarterly on January 1, April 1, July 1 and October 1, respectively, in each year.

Such a dividend will not be declared at any time when Consolidated EBITDA (as defined in the Series A Certificate of Designations) of the Company and its subsidiaries for the most recent four fiscal quarters for which financial statements of the Company are available is less than $ 425 million.

Dividends on the Series A Preferred Stock will accumulate whether or not declared.

Holders of the Series A Preferred Stock will also be entitled to such dividends paid to holders of Common Stock to the same extent as if such holders of Series A Preferred Stock had converted their shares of Series A Preferred Stock into Common Stock (without regard to any limitations on conversions) and had held such shares of Common Stock on the record date for such dividends and distributions.

Such payments will be made concurrently with the dividend or distribution to the holders of the Common Stock.

The Company is restricted from paying or declaring any dividend, or making any distribution, on any class of Common Stock or any future class of preferred stock established thereafter by the Board (other than any series of capital

stock that ranks pari passu to the Series A Preferred Stock) (such stock, “Dividend Junior Stock”), other than a dividend payable solely in Dividend Junior Stock, unless (i) all cumulative accrued and unpaid preference dividends on all outstanding shares of Series A Preferred Stock have been paid in full and the full dividend thereon due has been paid or declared and set aside for payment and (ii) all prior redemption requirements with respect to Series A Preferred Stock have been complied with, provided, notwithstanding the foregoing, that the Company may pay a dividend or make a distribution on Dividend Junior Stock if (a) the holders of the Series A Preferred Stock also participate in such dividends or distributions, (b) such dividends or distributions are made on or prior to December 31, 2022, and (c) the full Board of the Company has ratified the Disinterested Directors’ Committee’s declaration of any such dividend or distribution.

On March 3, 2022, the terms of the Series A Certificate of Designations were further amended to provide the Company with greater flexibility to pay dividends and make certain distributions on, and to purchase, redeem or otherwise acquire, including in individually negotiated transactions, shares of the Company’s Common Stock or any future class of preferred stock that ranks junior to the Series A Preferred Stock in right of payment of dividends.

Specifically, the amendments (i) expanded the scope of permitted Distributions on Dividend Junior Stock (as each term is defined in the Series A Certificate of Designations) to include purchases by the Company of shares of Dividend Junior Stock in individually negotiated transactions, (ii) removed the requirement that dividends or Distributions on Dividend Junior Stock must occur on or prior to December 31, 2022, and (iii) expressly permitted the purchase, redemption or other acquisition for cash by the Company of shares of Dividend Junior Stock without requiring ratable participation by holders of Series A Preferred Stock.

On September 8, 2022, 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 September 23, 2022, a total of 245,413,317 shares of Series A Preferred Stock were outstanding, resulting in an aggregate dividend amount of $ 42 million.

This dividend was settled in full on October 3, 2022.

On December 6, 2022, the Board declared a cash divide nd of $ 0.17 per share on the Company's Series A Preferred Stock.

As of the record date of December 20, 2022, a total of 245,171,837 shares of Series A Preferred Stock were outstanding, resulting in an aggregate dividend amount of $ 42 million.

Cash was transferred on December 28, 2022, 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 January 3, 2023.

As of December 31, 2022, 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.

The Board determined that the amount of preference dividends which will accumulate for the preference dividend for the year ended December 31, 2022 is $ 0.251772 per share, amounting to $ 157 million and is presented as a reduction to Net income available to common shareholders in our Consolidated Statements of Operations.

There were 247,757,290 shares of Series A Preferred Stock outstanding as of December 31, 2022, with an the aggregate accumulated dividend as of December 31, 2022 of $ 171 million.

Holders of the Series A Preferred Stock will be entitled to vote together as a single class with the holders of Common Stock, with each such holder entitled to cast the number of votes equal to the number of votes such holder would have been entitled to cast if such holder were the holder of a number of shares of Common Stock equal to the whole number of shares of Common Stock that would be issuable upon conversion of such holder’s shares of Series A Preferred Stock in addition to a number of shares of Common Stock equal to the amount of cumulative unpaid preference dividends (whether or not authorized or declared) divided by the lesser of (i) the fair market value per share of such additional shares and (ii) the fair market value per share of the Common Stock.

So long as any shares of Series A Preferred Stock are outstanding, a vote or the consent of the holders representing a majority of the Series A Preferred Stock will be required for (i) effecting or validating any amendment, modification or alteration to the Certificate of Incorporation that would authorize or create, or increase the authorized amount of, any shares of any class or series or any securities convertible into shares of any class or series of capital stock that would rank senior or pari passu to the Series A Preferred Stock with respect to dividend payments or upon the occurrence of a liquidation, (ii) any increase in the authorized number of shares of Series A Preferred Stock or of any series of capital stock that ranks pari passu with Series A Preferred Stock, (iii) effecting or validating any amendment, alteration or repeal of any provision of the Certificate of Incorporation or Bylaws that would have an adverse effect on the rights, preferences, privileges or voting power of Series A Preferred Stock or the holders thereof in any material respect, or (iv) any action or inaction that would reduce the stated amount of any share of Series A Preferred Stock to below $ 5.25 per share.

Upon liquidation, Series A Preferred Stock will rank senior to the Common Stock and the Series B Preferred Stock, and will have the right to be paid, out of the assets of the Company legally available for distribution to its stockholders, an amount equal to the Aggregate Liquidation Entitlement (as defined in the Series A Certificate of Designations) for all outstanding shares of Series A Preferred Stock.

All shares of Series A Preferred Stock will automatically convert to shares of Common Stock, at an initial conversion price of $ 5.25 per share of Common Stock (subject to adjustment as described in the Series A Certificate of Designations) (the “Conversion Price”) upon either (i) the election of holders representing a majority of the then-outstanding Series A Preferred Stock or (ii) the occurrence of a Trading Day (as defined in the Series A Certificate of Designations) at any time on or after the date which is two years after the Effective Date on which (A) the aggregate stated amount of all outstanding shares of Series B Preferred Stock is an amount less than or equal to $ 125 million, (B) the Common Stock is traded on a Principal Exchange, a Fallback Exchange or an Over-the-Counter Market (each as defined in the Series A Certificate of Designations) and, in each case, the Automatic Conversion Fair Market Value (as defined in the Series A Certificate of Designations) of the Common Stock exceeds 150 % of the Conversion Price, and (C) the Consolidated EBITDA (as defined in the Series A Certificate of Designations) of the Company and its subsidiaries for the last twelve months ended as of the last day of each of the two most recent fiscal quarters is greater than or equal to $ 600 million.

Shares of Series A Preferred Stock are also convertible into Common Stock at any time at the option of the holder, effective on January 1, April 1, July 1 and October 1 in each year, or on the third business day prior to the date of redemption of the outstanding shares of the Series A Preferred Stock as described in the following paragraph.

The Company may, at its election, redeem all but not less than all of the outstanding shares of Series A Preferred Stock (i) at any time following the date which is six years after the Effective Date or (ii) in connection with the consummation of a Change of Control (as defined in the Series A Certificate of Designations), in either case for a cash purchase price equal to $ 5.25 per share plus cumulative unpaid preference dividends (whether or not authorized or declared) as of the redemption date.

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 repurchased a total of $ 570 million (“Base Repurchase Price”) from the C&O Investors at a cash price of $ 8.10 per share which was 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, received an amount equal to $ 0.853509 per share of Series A Preferred Stock, representing accumulated and unpaid preference dividends through June 30, 2023 on each share of Series A Preferred Stock (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 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, and trading of the Series A Preferred Stock on Nasdaq was subsequently suspended;

• 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 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.

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 following table summarizes the effects of the Transaction on the Consolidated Financial Statements as of and for the year ended December 31, 2023 :

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

(Dollars in millions)

Consolidated 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 Statement of Operations:

Non-operating expenses 13 — — — 13

Consolidated 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 also incurred $ 9 million of Transaction-related costs for the year ended December 31, 2023, primarily for legal and advisory services that are included in Selling, general and administrative expenses in the Consolidated Statement of Operations.

Share Repurchase Program

On November 16, 2021, the Board of Directors authorized a $ 100 million share repurchase program valid until November 15, 2022, providing for the purchase of shares of Series A Preferred Stock and Common Stock.

The share repurchase program was subsequently extended by one year, to November 15, 2023.

Through December 31, 2022, the Company has repurchased 2,669,335 shares of Series A Preferred Stock for $ 22 million, and 559,749 shares of Common Stock for $ 4 million.

The share repurchase program was subsequently extended twice until December 31, 2023, and increased to an aggregate amount of $ 250 million.

During the year ended December 31, 2023, the Company repurchased 38,574 shares of Series A Preferred Stock for less than $ 1 million, and 28,132,785 shares of Common Stock for $ 213 million under the program.

The share repurchase program expired on December 31, 2023.

On February 13, 2024, the Board of Directors authorized a new $ 350 million share repurchase program valid until December 31, 2024 .

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) are provided in the tables below:

Pre-Tax Tax After-Tax

(Dollars in millions)

The changes in AOCI by component are shown below:

Year Ended December 31,

Foreign exchange translation adjustment $ ( 234 ) $ — $ ( 234 )

Pension adjustments ( 17 ) ( 1 ) ( 18 )

Changes in fair value of effective cash flow hedges ( 8 ) 1 ( 7 )

2023 2022 2021

Year Ended December 31, 2021

(Dollars in millions)

Foreign Exchange Translation Adjustment

Balance at beginning of year $ ( 44 ) $ ( 43 ) $ ( 81 )

Other comprehensive income (loss) before reclassifications ( 13 ) ( 1 ) 38

Balance at end of year ( 57 ) (57) ( 44 ) ( 43 )

Pension Adjustments

Balance at beginning of year ( 18 ) ( 9 ) ( 45 )

Other comprehensive income (loss) before reclassifications, net (1)

Amounts reclassified from AOCI, net ( 3 ) ( 27 ) 1

Balance at end of year ( 20 ) ( 18 ) ( 9 )

Changes in Fair Value of Effective Cash Flow Hedges

Balance at beginning of year 13 7 ( 3 )

Other comprehensive income (loss) before reclassifications, net (2)

Amounts reclassified from AOCI, net ( 13 ) ( 18 ) ( 1 )

Balance at end of year ( 2 ) 13 7

Changes in Fair Value of Net Investment Hedges

$ 143 $ ( 18 ) $ 125

Balance at beginning of year 85 41 —

Other comprehensive income (loss) before reclassifications, net (3)

Balance at end of year 76 85 41

Accumulated other comprehensive income (loss), end of year $ ( 3 ) $ 36 $ ( 4 )

(1) Net of tax expense (benefit) of $( 1 ) million, $ 2 million, and $( 7 ) million for the years ended December 31, 2023, 2022 and 2021, respectively.

Amounts are included in the computation of net periodic benefit cost.

See Note 26, Defined Benefit Pension Plans.

(2) Net of tax expense (benefit) of $ 3 million, $( 2 ) million, and $( 1 ) million for the years ended December 31, 2023, 2022 and 2021, respectively.

(3) Net of tax expense (benefit) of $ 1 million, $( 13 ) million, and $( 10 ) million for the years ended December 31, 2023, 2022 and 2021, respectively.

Reclassifications from accumulated other comprehensive income (loss) to income were as follows:

Year Ended December 31,

Foreign exchange translation adjustment $ ( 1 ) $ — $ ( 1 )

Pension adjustments ( 11 ) 2 ( 9 )

Changes in fair value of effective cash flow hedges 8 ( 2 ) 6

Changes in fair value of net investment hedges 57 ( 13 ) 44

2023 2022 2021

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Adjustment Changes in Fair

Effective Cash

Flow Hedges Changes in Fair Value of Net Investment Hedges Pension

Adjustments Total

Comprehensive

Income (Loss)

(Dollars in millions)

Balance at December 31, 2020

$ ( 81 ) $ ( 3 ) $ — $ ( 45 ) $ ( 129 )

Other comprehensive income before reclassifications 38 11 41 35 125

Amounts reclassified from accumulated other comprehensive income — ( 1 ) — 1 —

Net current period other comprehensive income 38 10 41 36 125

Balance at December 31, 2021

$ ( 43 ) $ 7 $ 41 $ ( 9 ) $ ( 4 )

Other comprehensive income before reclassifications ( 1 ) 27 44 ( 11 ) 59

Amounts reclassified from accumulated other comprehensive income — ( 21 ) — 2 ( 19 )

Net current period other comprehensive income ( 1 ) (1) 6 44 ( 9 ) 40

Balance at December 31, 2022

$ ( 44 ) $ 13 $ 85 $ ( 18 ) $ 36

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Year Ended December 31, 2022

Sales Cost of

Sold Selling,

Administrative

Expenses Non-Operating (Income) Expense Total

(Dollars in millions)

Amortization of Pension and Other Postretirement Items:

Actuarial losses recognized $ — $ — $ — $ 2 $ 2

Losses (gains) on cash flow hedges — ( 21 ) — — ( 21 )

Tax expense (benefit) — — — — —

Total reclassifications for the period, net of tax $ — $ ( 21 ) $ — $ 2 $ ( 19 )

Sales Cost of

Sold Selling,

Administrative

Expenses Non-Operating (Income) Expense Total

Year Ended December 31, 2021

(Dollars in millions)

Amortization of Pension and Other Postretirement Items:

Actuarial losses recognized $ — $ — $ — $ 1 $ 1

Losses (gains) on cash flow hedges — ( 1 ) — — ( 1 )

Tax expense (benefit) — — — — —

Total reclassifications for the period, net of tax $ — $ ( 1 ) $ — $ 1 $ —

Pension Adjustments

Reclassification to Non-operating (income) expense ( 3 ) ( 31 ) 1

Tax effect on reclassification to income — 4 —

Amounts reclassified from AOCI, net ( 3 ) (3) ( 27 ) 1

Changes in Fair Value of Effective Cash Flow Hedges

Reclassification forward currency exchange contracts to Cost of goods sold $ ( 23 ) $ ( 21 ) $ ( 1 )

Reclassification cross-currency swaps to Interest expense ( 3 ) — —

Reclassification cross-currency swaps to Non-operating expense (income) 10 — —

Tax effect on reclassification to income 3 3 —

Amounts reclassified from AOCI, net ( 13 ) ( 18 ) ( 1 )

Total reclassifications for the year $ ( 16 ) $ ( 45 ) $ —

Stock-Based Compensation

Cancellation of Incentive Awards

As part of the Company's emergence from Chapter 11, the Plan provided for the acceleration of all outstanding awards under the Stock Incentive Plan.

As part of the Company's Emergence, the Plan provided for the acceleration of all outstanding awards under the Stock Incentive Plan.

As of the Effective Date, all outstanding awards were cancelled as follows:

11 unchanged sentences

The Continuity Awards amounted to $ 11 million, with $ 9 million paid in September 2020 and the remaining $ 2 million paid in 2021.

As the Continuity Awards were subject to a one-year service requirement, the combined transaction was accounted for as a modification to liability-classified awards.

As the Continuity Awards were subject to a one-year service requirement, the combined transaction was accounted for as a modification to

liability-classified awards.

The total incremental compensation cost resulting from the modification was $ 5 million.

The Continuity Awards were fully vested as of December 31, 2021.

The following table summarizes information about the Continuity Awards:

Average Grant

Date Fair Value

Non-vested at December 31, 2020

Vested ( 43 ) ( 257,536 )

Forfeited — —

Non-vested at December 31, 2021

2021 Long-Term Incentive Plan

7 unchanged sentences

RSUs typically vest over 3 years or 5 years and when vested, each unit entitles the holder to one share of our Common Stock.

The following table summarizes information about RSU activity including for periods prior to Emergence:

The following table summarizes information about RSU activity:

Average Grant

1 unchanged sentence

Non-vested at December 31, 2021 1,818,309 $ 8.31

1,538,969 $ 13.11

Granted 1,096,012 6.46

1 unchanged sentence

Forfeited ( 75,429 ) 7.38

Vested and cancelled ( 1,205,650 ) 13.10

Non-vested at December 31, 2022 2,401,900 $ 7.48

1,818,309 $ 8.31

Granted 1,522,111 8.20

11 unchanged sentences

The PSUs vest at levels ranging from 0 % to 200 % of the target level depending on the Company’s performance against the financial measures.

The awards associated with the TSR performance measure are considered to have a market condition.

For PSUs granted in 2023, the performance measures are based on Adjusted EBITDA and Adjusted EBITDA margin, weighted 50 % each, over a three-year performance period from January 1, 2023 through December 31, 2025.

The PSUs vest at levels ranging from 0 % to 200 % of the target level depending on the Company’s performance against the financial measures.

Additionally, certain PSUs were also granted in 2023 that included a performance measure for relative total shareholder return (“rTSR”) with stock price hurdles measured over a three-year performance period from January 1, 2023 to December 31, 2025.

Each grantee is granted a target level of PSUs and may earn between 0 % and 200 % of the target level depending on the achievement of the rTSR.

The awards associated with the TSR and rTSR performance measures are considered to have a market condition.

A Monte-Carlo simulation model was used to determine the grant date fair value by simulating a range of possible future stock prices for the Company over the performance period.

4 unchanged sentences

The Company does not expect to pay a dividend on the Common Stock during the applicable term.

The fair value of the PSUs granted in 2021 was estimated using the following assumptions:

Monte Carlo Assumptions PSUs Granted in 2021

The fair value of the PSUs granted in 2021 and 2023 were estimated using the following assumptions:

Monte Carlo Assumptions PSUs Granted in 2021 PSUs Granted in 2023

Volatility 64.01 % 85.01 %

5 unchanged sentences

Non-vested at December 31, 2021 1,472,875 $ 8.67

314,111 $ 16.17

Granted 301,260 6.79

Forfeited ( 52,092 ) 8.15

Vested and cancelled ( 228,765 ) —

Non-vested at December 31, 2022 1,722,043 $ 8.60

1,472,875 $ 8.67

Granted 1,204,831 9.37

5 unchanged sentences

The fair value of each PSU grant is amortized monthly into compensation expense on a graded vesting (accelerated) basis over a vesting period of 36 months.

The accrual of compensation costs is based on our estimate of the final expected value of the award and is adjusted as required for the performance-based condition.

As the payout of PSUs granted in 2021

includes dividend equivalents, no separate dividend yield assumption is required in calculating the fair value of those PSUs.

The accrual of compensation costs is based on our estimate of the final expected value of the award and is adjusted as required for the performance-based conditions.

As the payout of PSUs granted in 2021 includes dividend equivalents, no separate dividend yield assumption is required in calculating the fair value of those PSUs.

The Company currently does not pay dividends on its common stock.

6 unchanged sentences

RSUs $ 9 $ 6 $ 4

Stock options — — 1

Stock-based compensation expense 14 11 6

4 unchanged sentences

Earnings per share is calculated using the two-class method pursuant to the issuance of our Series A Preferred Stock on the Effective Date.

Our Series A Preferred Stock is considered a participating security because holders of the Series A Preferred Stock will also be entitled to such dividends paid to holders of Common Stock to the same extent on an as-converted basis.

Our Series A Preferred Stock, which was converted into Common Stock pursuant to the Transaction, was considered a participating security because holders of the Series A Preferred Stock were entitled to such dividends paid to holders of Common Stock to the same extent on an as-converted basis.

The two-class method requires an allocation of earnings to all securities that participate in dividends with common shares, such as our Series A Preferred Stock, to the extent that each security may share in the entity’s earnings.

Basic earnings per share are then calculated by dividing undistributed earnings allocated to common stock by the weighted average number of common shares outstanding for the period.

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

Diluted earnings per share for the years ended December 31, 2022 and 2021 are calculated using the more dilutive of the two-class or if-converted methods.

The Series A Preferred Stock was 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 was not contractually obligated to share in our net losses.

Diluted earnings per share are calculated using the more dilutive of the two-class or if-converted methods.

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

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

Diluted earnings per share for the year ended December 31, 2020 are computed based upon the weighted average number of common shares outstanding and all dilutive potential common shares outstanding and all potentially issuable PSUs at the end of the period (if any) based on the number of shares issuable if it were the end of the vesting period using the treasury stock method and the average market price of our Common Stock for the year.

The details of the earnings per share calculations for the years ended December 31, 2023, 2022 and 2021 are as follows:

5 unchanged sentences

preferred stock dividend ( 80 ) ( 157 ) ( 97 )

Net income available for distribution 233 398 80

preferred stock deemed dividends ( 232 ) — —

Net (loss) income available for distribution ( 51 ) 233 398

earnings allocated to participating securities — ( 184 ) ( 280 )

Net income available to common shareholders 49 118 80

Net (loss) income available to common shareholders ( 51 ) 49 118

Weighted average common shares outstanding - Basic 166,595,397 64,708,635 69,706,183

1 unchanged sentence

Diluted earnings per share:

Two-class If-converted

Two-class Two-class If-converted

Weighted average common shares outstanding - Basic 166,595,397 64,708,635 69,706,183

3 unchanged sentences

EPS – Diluted $ ( 0.31 ) $ 0.75 $ 1.56

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 year ended December 31, 2023, the weighted-average number of unvested RSUs and other contingently issuable shares excluded from the computations was 1,490,117 shares.

The diluted earnings per share calculations exclude the effect of stock options when the options’ assumed proceeds exceed the average market price of the common shares during the period.

For the years ended December 31, 2021 and 2020, the weighted average number of stock options excluded from the computations was 131,623 and 428,690 respectively.

There were no options outstanding as of December 31, 2022 and 2021, and 403,517 options outstanding as of December 31, 2020.

For the years ended December 31, 2021, the weighted average number of stock options excluded from the computations was 131,623 .

There were no options outstanding as of December 31, 2023 and 2022, 2021.

Commitments and Contingencies

27 unchanged sentences

The Froehlich Action also asserted claims under Sections 10(b) and 20(a) of the Exchange Act.

All 3 actions are currently assigned to Judge John P.

Su Ping Lu filed a waiver of service in the Gabelli Action on November 10, 2020.

The actions were assigned to Judge John P.

On November 24, 2020, competing motions were filed seeking the appointment of lead plaintiff and lead counsel and the consolidation of the Husson, Gabelli, and Froehlich Actions.

3 unchanged sentences

On January 21, 2021, the Court granted the motion to consolidate the actions and granted the Gabelli Entities’ motions for appointment as lead plaintiff and for selection of lead counsel.

On February 25, 2021, plaintiffs filed a Consolidated Amended Complaint for Violation of the federal securities laws.

On February 25, 2021, plaintiffs filed a Consolidated Amended Complaint.

The Company’s insurer, AIG, has accepted the defense, subject to the customary reservation of rights.

9 unchanged sentences

On March 31, 2022, the judge dismissed the complaints entirely - Su Ping Lu's motion to dismiss was granted with prejudice while the court granted the plaintiffs 30 days to file a third amended complaint against the Company and the other defendants.

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

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 prejudice.

3 unchanged sentences

Rochon, who was recently appointed.

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.

The plaintiffs filed their opening brief on August 1, 2023.

The defendants filed their opposition on October 31, 2023 and the plaintiffs filed their reply brief on November 21, 2023.

No date for oral argument has yet been set by the Court.

Brazilian Tax Matters

2 unchanged sentences

The estimated total amount of the contingency as of December 31, 2023 was $ 39 million including penalties and interest.

The Company appealed the infraction notice on October 23, 2020.

In March 2021, in response to our request, the Brazilian Tax Authorities reconsidered their position for a portion of the $ 33 million mentioned above and allowed Garrett Motion Brazil the right to offset Federal Tax with the Befiex Credits.

The letter does not qualify as a formal decision and requires formal recognition from the Judge and from the Federal Judgement Office in charge of the disputes.

On August 21, 2021, we requested such formal recognition from the Judge, which request resulted in a suspension of the claims of the Brazilian Tax Authorities as set out in their initial September 2020 letter, until such a time as the Judge makes a formal determination on our request.

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.

1 unchanged sentence

Other Matters

We are subject to other lawsuits, investigations and disputes arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability, prior acquisitions and divestitures, employee benefit plans, intellectual property and environmental, health and safety matters.

employee benefit plans, intellectual property and environmental, health and safety matters.

We recognize a liability for any contingency that is probable of occurrence and reasonably estimable.

We continually assess the likelihood of adverse judgments of outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any

insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts.

We continually assess the likelihood of adverse judgments of outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts.

Warranties and Guarantees

9 unchanged sentences

Settlement of warranty/guarantee claims ( 14 ) ( 17 )

Amounts reclassified from Liabilities subject to compromise — 16

Foreign currency translation — ( 2 )

19 unchanged sentences

Interest cost 8 5 5 2

Actuarial (gains) losses (1)

( 39 ) ( 6 ) ( 65 ) ( 25 )

Benefits paid ( 10 ) ( 11 ) 3 ( 3 )

Actuarial losses (gains) 5 ( 39 ) 7 ( 65 )

Benefits paid and employee contributions ( 10 ) ( 10 ) 2 3

Settlements and curtailments (1)

— — ( 16 ) ( 10 )

Foreign currency translation — — 11 ( 9 )

Transfers — — — ( 1 )

Other — 3 4 10

4 unchanged sentences

Employer contributions — — 7 7

Benefits paid ( 10 ) ( 11 ) 3 ( 3 )

Benefits paid and employee contributions ( 10 ) ( 10 ) 2 3

Settlements and curtailments (1)

— — ( 16 ) ( 10 )

Foreign currency translation — — 10 ( 7 )

Transfers — — — ( 1 )

Other — — 4 5

2 unchanged sentences

Amounts recognized in Consolidated Balance Sheet consist of:

Other assets - non-current (3)

Accrued pension liabilities- non-current (4)

Non-current assets (2)

Non-current liabilities (3)

— — ( 20 ) ( 17 )

Net amount recognized $ 2 $ 1 $ ( 11 ) $ ( 15 )

________________________________

(1) The actuarial gain on the U.S.

plan during 2022 was $ 39 million, driven by higher discount rates.

For the non-US plans, the 2022 actuarial gain amounted to $ 65 million.

The increase in discount rates led to an assumption gain of $ 54 million in Ireland and $ 28 million in Switzerland.

The overall financial gain was offset by a losses of $ 10 million and $ 9 million attributable to changes in interest credited rate demographic assumptions in Switzerland, and increases in salary rates and mortality rate demographic assumptions in Ireland, respectively.

(2) In Switzerland, the total lump sum benefit payments of $ 10 million were greater than the service cost and interest cost for year ended December 31, 2022, therefore settlement accounting was applied.

Following the settlement accounting, part of the previously unrecognized gain amounting to approximately $ 1 million was recognized as a gain on pension settlement.

(3) Included in Other assets in the Consolidated Balance Sheet.

(4) Included in Other liabilities in the Consolidated Balance Sheet.

Amounts recognized in Accumulated other comprehensive (income) loss associated with our significant pension and other postretirement benefit plans as of December 31, 2022 and 2021 are as follow:

(1) In Switzerland, the total lump sum benefit payments of $ 16 million and $ 10 million were greater than the service cost and interest cost for the years ended December 31, 2023 and 2022, respectively, therefore settlement accounting was applied.

Following the settlement accounting, part of the previously unrecognized gain amounting to approximately $ 1 million and $ 1 million, respectively, was recognized as a gain on pension settlement.

(2) Included in Other assets in the Consolidated Balance Sheets.

(3) Included in Other liabilities in the Consolidated Balance Sheets.

Amounts recognized in AOCI associated with our significant pension and other postretirement benefit plans as of December 31, 2023 and 2022 are as follow:

Pension Benefits

3 unchanged sentences

(Dollars in millions)

Prior service (credit) $ ( 1 ) $ ( 1 ) $ ( 7 ) $ ( 8 )

Net actuarial (gain) loss 13 ( 1 ) ( 14 ) ( 11 )

Prior service cost (credit) $ — $ ( 1 ) $ ( 7 ) $ ( 7 )

Net actuarial loss (gain) 11 13 ( 12 ) ( 14 )

Net amount recognized $ 11 $ 12 $ ( 19 ) $ ( 21 )

The components of net periodic benefit (income) cost and other amounts recognized in Other comprehensive (income) loss for our significant pension and other postretirement benefit plans include the following components:

The components of net periodic benefit (income) cost for our significant pension and other postretirement benefit plans are as follow:

Pension Benefits

6 unchanged sentences

Amortization of prior service (credit) cost — — — ( 1 ) ( 1 ) ( 1 )

Recognition of actuarial gains — — — ( 27 ) — 13

Recognition of actuarial (gains) losses — — — ( 1 ) ( 27 ) —

Settlements and curtailments — — — ( 1 ) ( 1 ) —

— — — ( 1 ) — 1

Net periodic (income) benefit cost $ ( 3 ) $ ( 5 ) $ ( 4 ) $ ( 26 ) $ 4 $ 19

________________________________

(1) In Switzerland, the total lump sum benefit payments of $ 10 million were greater than the service cost and interest cost for year ended December 31, 2022, therefore settlement accounting was applied.

Following the settlement accounting, part of the previously unrecognized gain amounting to approximately $ 1 million was recognized as gain on pension settlement.

Net periodic benefit (income) cost $ — $ ( 3 ) $ ( 5 ) $ ( 1 ) $ ( 26 ) $ 4

Other Changes in Plan Assets and Benefits Obligations Recognized in

4 unchanged sentences

Actuarial (gains) losses $ ( 1 ) $ 14 $ ( 10 ) $ — $ ( 33 ) $ ( 34 )

Prior service (credit) — — — — — ( 10 )

Prior service credit recognized during year — — — 1 1 —

Actuarial losses recognized during year — — — 30 — ( 14 )

Prior service (credit) cost — — — — — —

Recognition of prior service credit (cost) — — — 1 1 1

Recognition of actuarial gains (losses) — — — 2 30 —

Foreign currency translation — — — ( 2 ) — —

1 unchanged sentence

Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss $ ( 1 ) $ 11 $ ( 15 ) $ — $ ( 28 ) $ ( 29 )

The main actuarial assumptions used in determining the benefit obligations and net periodic (income) benefit cost for our significant benefit plans are presented in the following table as weighted averages.

The main actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for our significant benefit plans are presented in the following table as weighted averages.

Pension Benefits

12 unchanged sentences

Expected annual rate of compensation increase 3.00 % 3.20 % 3.57 % 2.43 % 1.99 % 1.80 %

________________________________

(1) Only applicable to the defined benefit pension plan in Switzerland.

15 unchanged sentences

Our target allocations are as follows:

60 % global equity securities, 20 % real estate investments, 10 % multi-asset credit income securities, and 10 % hedge funds.

91 % fixed income investments, 8 % global equity securities, and 1 % real estate investments.

Fixed income investments include corporate and government issues with a target duration close to that of the plan liability.

Global equity securities include mutual funds that invest in companies located both inside and outside the United States.

The real estate fund invests in real estate investment trusts – companies that purchase office buildings, hotels and other real estate property.

The multi-asset credit funds invest in diversified geographies, asset classes and credit instruments to capture global credit risk premiums.

The hedge funds are pooled investments structured to reduce volatility of returns and

long-term return enhancements .

Our assets are reviewed on a daily basis to ensure that we are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations.

21 unchanged sentences

Real estate funds 11 — 11 —

Other 3 — 3 —

Total assets at fair value $ 169 $ 1 $ 168 $ —

3 unchanged sentences

Cash and cash equivalents $ 7 $ 7 $ — $ —

Money market funds 28 28 — —

Equity funds 56 — 56 —

Government bond funds 20 — 20 —

Corporate bond funds 9 — 9 —

Real estate funds 17 — 17 —

Diversified mutual funds 40 — 40 —

Other 7 — 7 —

10 unchanged sentences

Total assets at fair value $ 152 $ 3 $ 149 $ —

Equity funds, corporate bond funds, government bond funds, real estate funds and short-term investments are valued either by bids provided by brokers or dealers or quoted prices of securities with similar characteristics.

Equity funds, corporate bond funds, government bond funds, real estate funds, swap funds and short-term investments are valued either by bids provided by brokers or dealers or quoted prices of securities with similar characteristics.

Other includes diversified mutual funds.

1 unchanged sentence

Our general funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards.

We are not required to make any contributions to our U.S.

We were not required to make any contributions to our U.S.

pension plan in 2023.

46 unchanged sentences

Long-lived Assets (1)

2022 2021 2020

(Dollars in millions)

1 unchanged sentence

Europe 288 276

Asia 158 162 151

Other International 23 20

$ 470 $ 486 $ 505

_________________________

(1) Long-lived assets are comprised of property, plant and equipment–net.

2 unchanged sentences

The following tables show selected unaudited quarterly results of operations for the years ended December 31, 2023 and 2022.

The quarterly data have been prepared on the same basis as the audited annual financial statements and include

all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our results of operations for these periods.

The quarterly data have been prepared on the same basis as the audited annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our results of operations for these periods.

March 31 June 30 September 30 December 31 Year Ended December 31

3 unchanged sentences

Net income 81 71 57 52 261

Net Income available for distribution 50 46 65 72 233

Earnings per share - basic 0.15 0.15 0.21 0.23 0.75

Earnings per share - diluted 0.15 0.15 0.21 0.23 0.75

Earnings per share - diluted method Two-class Two-class Two-class Two-class Two-class

Net income (loss) available for distribution 41 ( 201 ) 57 52 ( 51 )

Earnings (loss) per share - basic 0.13 ( 1.88 ) 0.23 0.22 ( 0.31 )

Earnings (loss) per share - diluted 0.13 ( 1.88 ) 0.23 0.22 ( 0.31 )

Earnings (loss) per share - diluted method (1)

Two-class Two-class Two-class

March 31 June 30 September 30 December 31 Year Ended December 31

2 unchanged sentences

Gross profit 175 169 178 161 683

Net Income (Loss) ( 105 ) 409 63 128 495

Net Income (Loss) available to common shareholders ( 105 ) 385 27 91 398

Earnings (loss) per share - basic ( 1.38 ) 1.63 0.09 0.29 1.69

Earnings (loss) per share - diluted ( 1.38 ) 1.29 0.09 0.29 1.56

Earnings (loss) per share - diluted method If-converted Two-class Two-class If-converted

Net income 88 85 105 112 390

Net income available for distribution 50 46 65 72 233

Earnings per share - basic 0.15 0.15 0.21 0.23 0.75

Earnings per share - diluted 0.15 0.15 0.21 0.23 0.75

Earnings per share - diluted method Two-class Two-class Two-class Two-class Two-class

(1) As our Series A Preferred Stock was converted into Common Stock pursuant to the Transaction, diluted earnings per share for the quarters ended September 30, 2023 and December 31, 2023 is computed using the weighted-average number of common shares outstanding during the period plus the dilutive effect of common stock equivalents using the treasury stock method.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data