What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-24 compared with 2024-07-25 · 158 added, 104 removed, 617 unchanged (30% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

8 unchanged sentences

Gain on sale of equity investment (Note 21)

( 27 ) — ( 27 ) —

Non-operating (income) expense ( 1 ) ( 2 ) ( 7 ) 3

15 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

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

Total other comprehensive income (loss), net of tax 8 ( 3 ) 49 ( 9 )

Comprehensive income $ 72 $ 68 $ 179 $ 143

( 31 ) 20 ( 4 ) 18

Total other comprehensive (loss) income, net of tax ( 56 ) 32 ( 7 ) 23

Comprehensive (loss) income $ ( 4 ) $ 89 $ 175 $ 232

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

1 unchanged sentence

CONSOLIDATED INTERIM BALANCE SHEETS

September 30,

2024 December 31,

25 unchanged sentences

Common Stock, par value $ 0.001 ;

1,000,000,000 and 1,000,000,000 shares authorized, 240,783,003 and 238,543,624 issued and 220,720,522 and 238,249,056 outstanding as of June 30, 2024 and December 31, 2023, respectively

1,000,000,000 and 1,000,000,000 shares authorized, 240,937,724 and 238,543,624 issued and 214,694,934 and 238,249,056 outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid–in capital 1,207 1,190

1 unchanged sentence

( 1,740 ) ( 1,922 )

Accumulated other comprehensive income (loss) (Note 17)

Accumulated other comprehensive loss (Note 17)

Treasury Stock, at cost;

20,062,481 and 0 shares as of June 30, 2024 and December 31, 2023, respectively (Note 15)

26,242,790 and 0 shares as of September 30, 2024 and December 31, 2023, respectively (Note 15)

Total deficit ( 778 ) ( 735 )

3 unchanged sentences

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

6 unchanged sentences

Gain on sale of equity investment ( 27 ) —

Foreign exchange loss (gain) 13 ( 11 )

Foreign exchange gain ( 10 ) —

Stock compensation expense 17 12

14 unchanged sentences

Net cash provided by (used for) investing activities

$ 18 $ ( 24 )

Cash flows from financing activities:

10 unchanged sentences

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash ( 2 ) ( 1 )

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

( 163 ) ( 85 )

Cash, cash equivalents and restricted cash at beginning of the period 260 248

9 unchanged sentences

Deficit Accumulated Other

Comprehensive Income Total

Shares Amount Shares Amount Shares Amount

Comprehensive (Loss) / Income Total

Shares Amount Shares (1)

Amount Shares Amount

(in millions)

12 unchanged sentences

Shares issued under stock plan, net of shares withheld for employee taxes — — 1 — — ( 1 ) — — — ( 1 )

Other comprehensive loss, net of tax — — — — — — — — 8 8

Other comprehensive income, net of tax — — — — — — — — 8 8

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

Balance at June 30, 2024 — $ — 241 $ — 20 $ ( 182 ) $ 1,203 $ ( 1,792 ) $ 46 $ ( 725 )

Net income — — — — — — — 52 — 52

Share repurchases — — — — 6 ( 52 ) — — — ( 52 )

Excise tax on share repurchases — — — — — — — — — —

Shares issued under stock plan, net of shares withheld for employee taxes — — — — — ( 1 ) — — — ( 1 )

Other comprehensive loss, net of tax — — — — — — — — ( 56 ) ( 56 )

Stock-based compensation — — — — — — 4 — — 4

Balance at September 30, 2024

— $ — 241 $ — 26 $ ( 235 ) $ 1,207 $ ( 1,740 ) $ ( 10 ) $ ( 778 )

3 unchanged sentences

Comprehensive

Shares Amount Shares Amount Shares Amount

Shares Amount Shares (1)

Amount Shares Amount

(in millions)

11 unchanged sentences

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

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

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

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

3 unchanged sentences

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

Net income — — — — — — — 57 — 57

Repurchases of Common Stock — — ( 21 ) — — — — ( 161 ) — ( 161 )

Excise tax on share repurchases — — — — — — — ( 1 ) — ( 1 )

Other comprehensive income, net of tax — — — — — — — — 32 32

Stock-based compensation — — — — — — 4 — — 4

Balance at September 30, 2023 — $ — 243 $ — — $ — $ 1,188 $ ( 1,939 ) $ 59 $ ( 692 )

1) Common shares issued less treasury shares equals common shares outstanding

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

13 unchanged sentences

The unaudited Consolidated Interim Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2023 included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 15, 2024 (our “2023 Form 10-K”).

The results of operations for the three and six months ended June 30, 2024 and cash flows for the six months ended June 30, 2024 should not necessarily be taken as indicative of the entire year.

The results of operations for the three and nine months ended September 30, 2024 and cash flows for the nine months ended September 30, 2024 should not necessarily be taken as indicative of the entire year.

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

2 unchanged sentences

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

For differences in actual closing dates that are material to year-over-year comparisons of quarterly or year-to-date results, such differences have been adjusted for the three months ended June 30, 2024.

Our actual closing dates for the three months ended June 30, 2024 and 2023 were June 29, 2024 and July 1, 2023, respectively.

Our actual closing date for the three months ended September 30, 2024 was September 28, 2024.

There was no difference in actual closing date for the three months ended September 30, 2023.

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

18 unchanged sentences

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 Interim Financial Statements and related disclosures.

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

Revenue Recognition and Contracts with Customers

1 unchanged sentence

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

Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

OEM Aftermarket Other Total OEM Aftermarket Other Total

5 unchanged sentences

$ 695 $ 117 $ 14 $ 826 $ 825 $ 118 $ 17 $ 960

Six Months Ended June 30, 2024

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

OEM Aftermarket Other Total OEM Aftermarket Other Total

9 unchanged sentences

Contract assets—January 1 $ 38 $ 46

Contract assets—June 30

Contract assets—September 30

Change in contract assets—Increase/(Decrease) $ 15 $ ( 2 )

Contract liabilities—January 1 $ ( 11 ) $ ( 8 )

Contract liabilities—June 30

Contract liabilities—September 30

Change in contract liabilities—Decrease/(Increase) $ 2 $ ( 4 )

5 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

4 unchanged sentences

$ 43 $ 39 $ 128 $ 120

(1) Engineering-related expenses include customer reimbursements of $ 16 million and $ 13 million for the three months ended June 30, 2024 and 2023, respectively, and $ 24 million and $ 24 million for the six months ended June 30, 2024 and 2023, respectively.

(1) Engineering-related expenses include customer reimbursements of $ 17 million and $ 10 million for the three months ended September 30, 2024 and 2023, respectively, and $ 41 million and $ 34 million for the nine months ended September 30, 2024 and 2023, 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 June 30, 2024 and December 31, 2023, $ 22 million and $ 12 million , respectively, of such contractually reimbursable costs were capitalized.

As of September 30, 2024 and December 31, 2023, $ 30 million and $ 12 million , respectively, of such contractually reimbursable costs were capitalized.

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

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Effective tax rate 31.6 % 18.6 % 25.4 % 25.1 %

The effective tax rates for the three months ended June 30, 2024 and 2023 were 26.4 % and 29.7 % , respectively.

The effective tax rates for the six months ended June 30, 2024 and 2023 were 22.6 % and 27.3 % , respectively.

The change in the effective tax rate for the three months ended June 30, 2024 compared to the prior period is primarily related to lower U.S.

taxes on international operations and lower non-deductible transaction costs, partially offset by tax related to the sale of an equity interest in an unconsolidated joint venture.

The change in the effective tax rate for the six months ended June 30, 2024 compared to the prior period is primarily related to reversal of tax reserves, lower U.S.

taxes on international operations, and lower non-deductible transaction costs, partially offset by tax related to the sale of an equity interest in an unconsolidated joint venture.

The effective tax rate for the three months ended June 30, 2024 was higher than the U.S.

The effective tax rates for the three months ended September 30, 2024 and 2023 were 31.6 % and 18.6 % , respectively.

The effective tax rates for the nine months ended September 30, 2024 and 2023 were 25.4 % and 25.1 % , respectively.

The change in the effective tax rate for the three months ended September 30, 2024 compared to the prior period is primarily related to global mix of earnings, partially offset by adjustments to tax reserves due to expiration of statute of limitations.

The change in the effective tax rate for the nine months ended September 30, 2024 compared to the prior period is primarily related to global mix of earnings and tax expense related to the sale of an equity interest in an unconsolidated joint venture, partially offset by reversal of tax reserves and lower non-deductible transaction costs.

The effective tax rate for the three months ended September 30, 2024 was higher than the U.S.

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

taxes on international operations, withholding taxes, and tax related to sale of an equity interest in an unconsolidated joint venture, partially offset by lower taxes on non-U.S.

taxes on international operations and withholding taxes, partially offset by adjustments to tax reserves due to expiration of statute of limitations, lower taxes on non-U.S.

earnings, and global research and development benefits.

The effective tax rate for the six months ended June 30, 2024 was higher than the U.S.

The effective tax rate for the nine months ended September 30, 2024 was higher than the U.S.

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

taxes on international operations, withholding taxes, and tax related to sale of an equity interest in an unconsolidated joint venture, partially offset by reversals of tax reserves, lower taxes on non-U.S.

taxes on international operations, withholding taxes, and tax expense related to the sale of an equity interest in an unconsolidated joint venture, partially offset by reversal of tax reserves, lower taxes on non-U.S.

earnings, and global research and development benefits.

Accounts, Notes and Other Receivables—Net

September 30,

2024 December 31,

4 unchanged sentences

Less—Allowance for expected credit losses

Trade receivables include $ 51 million and $ 38 million of unbilled customer contract asset balances as of June 30, 2024 and December 31, 2023, respectively.

Trade receivables include $ 53 million and $ 38 million of unbilled customer contract asset balances as of September 30, 2024 and December 31, 2023, respectively.

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

2 unchanged sentences

See Note 7, Factoring and Notes Receivable .

Other receivables includes VAT receivables of $ 62 million and $ 78 million as of June 30, 2024 and December 31, 2023, respectively.

Other receivables includes VAT receivables of $ 59 million and $ 76 million as of September 30, 2024 and December 31, 2023, respectively.

Factoring and Notes Receivable

4 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

2 unchanged sentences

Guaranteed bank notes sold without recourse 95 41 147 41

The expenses related to the sale of trade receivables and guaranteed bank notes are recognized within Other expense, net in the Consolidated Interim Statements of Operations, and were $ 1 million and $ 2 million for the three and six months ended June 30, 2024, respectively, and were immaterial for the three and six months ended June 30, 2023 .

The expenses related to the sale of trade receivables and guaranteed bank notes are recognized within Other expense, net in the Consolidated Interim Statements of Operations, and were $ 1 million and $ 1 million for the three months ended September 30, 2024 and 2023, respectively, and $ 3 million and $ 3 million for the nine months ended September 30, 2024 and 2023, respectively.

September 30,

2024 December 31,

2 unchanged sentences

Guaranteed bank notes sold but not yet collected by the bank from the customer 41 —

As of June 30, 2024 and December 31, 2023, the Company had no guaranteed bank notes pledged as collateral .

As of September 30, 2024 and December 31, 2023, the Company had no guaranteed bank notes pledged as collateral .

Inventories—Net

September 30,

2024 December 31,

4 unchanged sentences

Less—Reserves ( 43 ) ( 41 )

September 30,

2024 December 31,

4 unchanged sentences

Pension and other employee related 11 11

Derivatives designated as net investment hedges 57 37

Designated and undesignated derivatives 19 46

Derivatives designated as net investment hedges (Note 16)

Designated and undesignated derivatives (Note 16)

Supplier Financing

3 unchanged sentences

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

September 30,

2024 December 31,

3 unchanged sentences

Accrued Liabilities

September 30,

2024 December 31,

9 unchanged sentences

Accrued freight 8 9

Designated and undesignated derivatives 10 12

Designated and undesignated derivatives (Note 16)

Other (primarily operating expenses) (2)

(1) Customer advances and deferred inco me include $ 14 million and $ 9 million of contract liabilities as of June 30, 2024 and December 31, 2023, respectively.

(1) Customer advances and deferred inco me inc lude $ 9 million and $ 9 million of contract liabilities as of September 30, 2024 and December 31, 2023, respectively.

See Note 3, Revenue Recognition and Contracts with Customers .

(2) Includes $ 4 million and $ 5 million of environmental liabilities as of June 30, 2024 and December 31, 2023, respectively.

(2) Includes $ 6 million and $ 5 million of environmental liabilities as of September 30, 2024 and December 31, 2023, respectively.

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

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

The following tables summarize the activity in our repositioning accrual:

Severance Costs Other Costs

3 unchanged sentences

Usage—cash ( 15 ) — ( 15 )

Balance at June 30, 2024

Balance at September 30, 2024

$ 10 $ — $ 10

Severance Costs Other Costs

4 unchanged sentences

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

Balance at June 30, 2023

Balance at September 30, 2023

$ 12 $ — $ 12

Other Liabilities

September 30,

2024 December 31,

1 unchanged sentence

Income taxes $ 100 $ 99

Designated and undesignated derivatives — 20

Designated and undesignated derivatives (Note 16)

Pension and other employee related 20 23

5 unchanged sentences

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

As of September 30, 2024, the Company has not identified any material finance leases.

Our leases have remaining lease terms of up to 15 years, some of which include options to extend the leases for up to two years , and some of which include options to terminate the leases within the year.

1 unchanged sentence

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

3 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

Supplemental balance sheet information related to operating leases is as follows:

September 30,

2024 December 31,

3 unchanged sentences

Other liabilities 39 33

September 30,

2024 December 31, 2023

1 unchanged sentence

Weighted-average discount rate 6.11 % 5.69 %

Maturities of operating lease liabilities as of June 30, 2024 were as follows:

Maturities of operating lease liabilities as of September 30, 2024 were as follows:

(Dollars in millions)

22 unchanged sentences

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

In the three months ended June 30, 2024, we made early debt repayments totaling $ 985 million on our Euro Term Facility and our 2023 Dollar Term Facility.

Both term loans were fully repaid as of June 30, 2024.

In the nine months ended September 30, 2024, we made early debt repayments totaling $ 985 million on our Euro Term Facility and our 2023 Dollar Term Facility.

Both term loans were fully repaid as of September 30, 2024.

The early repayments resulted in incremental amortization of debt issuance costs of $ 27 million, included within Interest expense in the Consolidated Interim Statement of Operations.

5 unchanged sentences

The Incremental Revolving Commitment has the same terms and is subject to the same conditions applicable to revolving loans generally under the Amended Credit Agreement.

The principal outstanding and carrying amounts of our long-term debt as of June 30, 2024 and December 31, 2023 are as follows:

Due Interest Rate June 30,

The principal outstanding and carrying amounts of our long-term debt as of September 30, 2024 and December 31, 2023 are as follows:

Due Interest Rate September 30,

2024 December 31,

12 unchanged sentences

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

As of June 30, 2024, the Company had no loans outstanding under the Revolving Facility, no outstanding letters of credit, and available borrowing capacity of $ 600 million.

As of September 30, 2024, the Company had no loans outstanding under the Revolving Facility, no outstanding letters of credit, and available borrowing capacity of $ 600 million.

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

As of June 30, 2024, the Company had $ 12 million utilized and $ 3 million of remaining available capacity under such facility.

Minimum scheduled principal repayments of long-term debt as of June 30, 2024 are as follow:

As of September 30, 2024, the Company had $ 12 million utilized and $ 3 million of remaining available capacity under such facility.

Minimum scheduled principal repayments of long-term debt as of September 30, 2024 are as follow:

September 30,

(Dollars in millions)

15 unchanged sentences

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

As of June 30, 2024, the Company was in compliance with all covenants under the 2032 Senior Notes indenture and Amended Credit Agreement.

As of September 30, 2024, the Company was in compliance with all covenants under the 2032 Senior Notes indenture and Amended Credit Agreement.

Preferred Stock

1 unchanged sentence

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

to effect a series of integrated transactions (collectively, 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.

to effect a series of integrated transactions (collectively, the “Transaction”) designed to simplify the Company’s capital structure by converting all outstanding Series A Preferred Stock into a single class of Common Stock, subject to certain conditions.

On June 6, 2023, the Company completed all steps of the Transaction and had no remaining shares of Series A Preferred Stock outstanding as of that date.

4 unchanged sentences

The Company accounts for the reissuance of treasury stock using the average cost method.

The Company did not reissue or retire any shares of treasury stock during the three and six months ended June 30, 2024.

The Company did not reissue or retire any shares of treasury stock during the three and nine months ended September 30, 2024.

Share Repurchase Program

3 unchanged sentences

The Company is not obligated to purchase any shares under the repurchase program, and the program may be suspended, modified, or discontinued at any time without prior notice.

During the six months ended June 30, 2024, the Company repurchased $ 174

million of Common Stock, and had $ 176 million remaining under the share repurchase program.

During the nine months ended September 30, 2024, the Company repurchased $ 226 million of Common Stock, and had $ 124 million remaining under the share repurchase program.

The repurchased shares are held as treasury stock.

1 unchanged sentence

Our credit, market, and foreign currency risk management policies are described in Note 19, Financial Instruments and Fair Value Measures , to the Consolidated Financial Statements for the year ended December 31, 2023 included in our 2023 Form 10-K.

As of June 30, 2024 and December 31, 2023, we had contracts with aggregate gross notional amounts of $ 1,165 million and $ 1,171 million, respectively, to hedge foreign currencies, principally the U.S.

As of September 30, 2024 and December 31, 2023, we had contracts with aggregate gross notional amounts of $ 790 million and $ 1,171 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.

2 unchanged sentences

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

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2024 and December 31, 2023:

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2024 and December 31, 2023:

Notional Amounts Assets Liabilities

September 30,

2024 December 31, 2023

September 30,

2024 December 31, 2023

September 30,

2024 December 31, 2023

17 unchanged sentences

The interest rate swap and cross-currency swap contracts were early settled in 2024, resulting in net gains of $ 18 million recorded to Interest expense and a $ 4 million loss recorded to Non-operating expense in the Consolidated Interim Statement of Operations.

The Company also has outstanding forward currency exchange contracts with maturities up to 18 months and an aggregate notional amount of $ 392 million and $ 456 million as of June 30, 2024 and December 31, 2023, respectively.

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 Accumulated Other Comprehensive Income ("AOCI") and reclassified to Cost of goods sold in the Consolidated Interim Statement of Operations when the underlying transactions are recognized in earnings.

The Company also has outstanding forward currency exchange contracts with maturities up to 18 months and an aggregate notional amount of $ 369 million and $ 456 million as of September 30, 2024 and December 31, 2023, respectively.

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 Accumulated Other Comprehensive Income ("AOCI") and reclassified to Cost

of goods sold in the Consolidated Interim Statement of Operations when the underlying transactions are recognized in earnings.

In order to mitigate foreign currency risk on its 2032 Senior Notes, the Company entered into fixed-to-fixed cross-currency swap contracts with an aggregate notional amount of € 507 million ($ 550 million) and notional exchanges in May 2027, May 2028, May 2029, and May 2030.

2 unchanged sentences

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

For the three months ended June 30, 2024 and 2023, the Company recorded a loss of $ 2 million, net of tax, and a gain of $ 2 million, net of tax, respectively, in Other comprehensive income.

For the six months ended June 30, 2024 and 2023, the Company recorded a gain of $ 1 million, net of tax, and a loss of $ 1 million, net of tax, respectively, in Other comprehensive income.

For the three months ended September 30, 2024 and 2023, the Company recorded a gain of $ 4 million, net of tax, and a loss of $ 2 million, net of tax, respectively, in Other comprehensive income.

For the nine months ended September 30, 2024 and 2023, the Company recorded a gain of $ 5 million, net of tax, and a loss of $ 3 million, net of tax, respectively, in Other comprehensive income.

Net Investment Hedges

The Company has designated float-to-float cross-currency swaps with aggregate notional amounts of € 858 million ($ 965 million) and € 615 million ($ 715 million) as of June 30, 2024 and December 31, 2023, respectively, as net investment hedges of its Euro-denominated operations.

In April 2024, the Company re-couponed the cross-currency swap contracts which have been designated as net investment hedges and received a cash settlement of $ 13 million.

The fair values of the net investment hedges were net assets o f $ 57 million and $ 37 million as of June 30, 2024 and December 31, 2023 , respectively.

Our Consolidated Interim Statements of Comprehensive Income include Changes in fair value of net investment hedges, net of tax, of a $ 8 million gain and a $ 3 million gain for the three months ended June 30, 2024 and 2023, respectively, and of a $ 27 million gain and a $ 2 million loss for the six months ended June 30, 2024 and 2023 , respectively.

The Company has designated cross-currency swaps with aggregate notional amounts of € 858 million ($ 965 million) and € 615 million ($ 715 million) as of September 30, 2024 and December 31, 2023, respectively, as net investment hedges of its Euro-denominated operations.

In April 2024, the Company re-couponed the cross-currency swap contracts and received a cash settlement of $ 13 million.

The fair values of the net investment hedges were net assets o f $ 10 million and $ 37 million as of September 30, 2024 and December 31, 2023 , respectively.

Our Consolidated Interim Statements of Comprehensive Income include Changes in fair value of net investment hedges, net of tax, of a $ 31 million loss and a $ 20 million gain for the three months ended September 30, 2024 and 2023, respectively, and of a $ 4 million loss and a $ 18 million gain for the nine months ended September 30, 2024 and 2023 , respectively.

No ineffectiveness has been recorded on the net investment hedges.

Non-Designated Derivatives

As of June 30, 2024 and December 31, 2023, the Company has outstanding float-to-fixed interest rate swap contracts with an aggregate notional amount of € 450 million ($ 481 million) and € 830 million ($ 917 million), respectively, and maturities of July 2024, October 2024, April 2025, April 2026, April 2027, and April 2028.

As of September 30, 2024 and December 31, 2023, the Company has outstanding float-to-fixed interest rate swap contracts with an aggregate notional amount of € 450 million ($ 502 million) and € 830 million ($ 917 million), respectively, and maturities of 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 Interim 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 $ 773 million and $ 715 million as of June 30, 2024 and December 31, 2023 , respectively .

For the three months ended September 30, 2024 and 2023, the Company recorded losses of $ 9 million and $ 5 million, net of tax, respectively, in Non-operating (income) expense .

For the nine months ended September 30, 2024 and 2023, the Company recorded losses of $ 33 million and $ 11 million, respectively, in Non-operating (income) expense.

The Company also has outstanding forward currency exchange contracts with maturities generally up to 3 months and an aggregate notional amount of $ 421 million and $ 715 million as of September 30, 2024 and December 31, 2023 , respectively .

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

For the three months ended September 30, 2024 and 2023, the Company recorded a loss of $ 5 million, net of tax, and a gain of $ 4 million, respectively, in Interest expense .

For the nine months ended September 30, 2024 and 2023, the Company recorded a gain of $ 4 million, net of tax, and a loss of $ 1 million, respectively, in Interest Expense.

Fair Value Measurement

4 unchanged sentences

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

June 30, 2024

September 30, 2024

December 31, 2023

10 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Balance at beginning of period $ ( 39 ) $ ( 50 ) $ ( 57 ) $ ( 44 )

Other comprehensive income (loss) before

Other comprehensive (loss) income before

reclassifications ( 30 ) 14 ( 7 ) 8

8 unchanged sentences

Balance at beginning of period ( 1 ) 12 ( 2 ) 13

Other comprehensive income (loss) before

Other comprehensive (loss) income before

reclassifications (2)

( 19 ) 3 ( 1 ) 17

Amounts reclassified from AOCI, net 23 ( 5 ) 6 ( 20 )

2 unchanged sentences

Balance at beginning of period 103 83 76 85

Other comprehensive income (loss) before

Other comprehensive (loss) income before

reclassifications, net (3)

( 31 ) 20 ( 4 ) 18

Balance at end of period 72 103 72 103

Accumulated other comprehensive income, end of period $ ( 10 ) $ 59 $ ( 10 ) $ 59

(1) There were no income tax effects for the three and six months ended June 30, 2024 and 2023.

(2) Net of tax expense (benefit) of $ 2 million and $ 2 million for the three months ended June 30, 2024 and 2023, respectively and $ 6 million and $ 2 million for the six months ended June 30, 2024 and 2023, respectively.

(3) Net of tax expense (benefit) of $ 2 million and $( 3 ) million for the three months ended June 30, 2024 and 2023, respectively, and $ 6 million and $( 6 ) million for the six months ended June 30, 2024 and 2023, respectively.

(1) There were no income tax effects for the three and nine months ended September 30, 2024 and 2023.

(2) Net of tax expense (benefit) of $( 14 ) million and $ 2 million for the three months ended September 30, 2024 and 2023, respectively and $( 8 ) million and $ 4 million for the nine months ended September 30, 2024 and 2023, respectively.

(3) Net of tax expense (benefit) of $( 4 ) million and $ 4 million for the three months ended September 30, 2024 and 2023, respectively, and $ 2 million and $( 2 ) million for the nine months ended September 30, 2024 and 2023, respectively.

Reclassifications from AOCI to income were as follows:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

14 unchanged sentences

Earnings Per Share

For the three and six months ended June 30, 2024, basic earnings per share ("EPS") is computed using the weighted-average number of common shares outstanding during the period.

For the three and six months ended June 30, 2023, basic earnings per share was calculated using the two-class method because our Series A Preferred Stock was considered a participating security prior to its conversion into Common Stock and cancellation pursuant to the Transaction.

For the three and nine months ended September 30, 2024, as well as the three months ended September 30, 2023, basic earnings per share ("EPS") is computed using the weighted-average number of common shares outstanding during the period.

For the nine months ended September 30, 2023, basic earnings per share was calculated using the two-class method because our Series A Preferred Stock was considered a participating security prior to its conversion into Common Stock and cancellation pursuant to the Transaction.

The two-class method requires an allocation of earnings to all securities that participate in dividends with common shares, which included our Series A Preferred Stock, to the extent that each such 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.

Diluted earnings per share for the three and six months ended June 30, 2024 is calculated based on the weighted-average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents using the treasury stock method.

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

Diluted earnings per share for the three and nine months ended September 30, 2024, as well as the three months ended September 30, 2023, is calculated based on the weighted-average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents using the treasury stock method.

Diluted earnings per share for the nine months ended September 30, 2023 is calculated using the more dilutive of the two-class or if-converted methods.

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

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

The details of the EPS calculations for the three and six months ended June 30, 2024 and 2023 are as follows:

The details of the EPS calculations for the three and nine months ended September 30, 2024 and 2023 are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

Diluted earnings per share:

Two-class Two-class

Weighted average common shares outstanding - Basic 217,283,749 250,888,716 226,057,803 141,745,701

4 unchanged sentences

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

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

For the nine months ended September 30, 2023, the weighted-average number of unvested RSUs and other contingently issuable shares excluded from the computations was 1,349,442 shares.

Commitments and Contingencies

8 unchanged sentences

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

The estimated total amount of the contingency as of June 30, 2024 was $ 36 million, including penalties and interest.

The estimated total amount of the contingency as of September 30, 2024 was $ 24 million, including penalties and interest.

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

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

22 unchanged sentences

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

pension plans to satisfy regulatory funding standards in 2024, of which $ 3 million has been contributed as of June 30, 2024.

pension plans to satisfy regulatory funding standards in 2024, of which $ 5 million has been contributed as of September 30, 2024.

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

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

Three Months Ended September 30, Nine Months Ended September 30,

Plans Non-U.S.

16 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements