What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-15 · 383 added, 377 removed, 1117 unchanged (40% of the section changed)

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Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

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Critical Audit Matter

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

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was 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 a critical audit matter 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 they relate.

Net Sales and Accrued Liabilities - Customer Pricing Reserve related to 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 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 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.

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.

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

Given the significant estimates and assumptions management makes to estimate future discounts and rebates, auditing managements estimate of the amount related to variable consideration to recognize as net sales required a high degree of auditor judgement.

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 requires significant

judgments by management that affect the amount of revenue recorded in the financial statements.

The amount of customer pricing reserve as of December 31, 2024 is $77 million.

Given the significant estimates and assumptions management makes to estimate future discounts and rebates, auditing management's estimates of the amount of customer pricing reserve related to variable consideration to recognize as net sales required a high degree of auditor judgement.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the estimate of revenue variable considerations included the following, among others:

• We tested the effectiveness of relevant controls over the estimation of the variable consideration net sales.

Our audit procedures related to the estimate of variable consideration and the customer pricing reserve included the following, among others:

• We tested the effectiveness of relevant controls over the estimation of the variable consideration within net sales including review of discounts and rebates which impact the customer pricing reserve.

• 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 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 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.

◦ Performed inquiries with individuals in the Company’s finance, operations and sales departments regarding the customer negotiations and corroborated the inquiries by examining supporting evidence as applicable.

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

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

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

◦ Evaluated historical information to determine management’s ability to accurately estimate sales volumes and future concessions.

◦ Inquired with individuals in the Company’s finance, operations and sales departments regarding the customer negotiations and examined supporting evidence as applicable.

◦ Performed retrospective assessment of the previous year's accruals within the customer pricing reserve to ensure they were appropriately utilized throughout the current period, in order to conclude on management's ability to make reliable forecasts.

◦ Tested the mathematical accuracy of the variable consideration calculation.

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

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Loss on extinguishment of debt (Note 17)

Non-operating income (Note 6)

Gain on sale of equity investment (Note 28) ( 27 ) — —

Non-operating income, net (Note 6)

( 13 ) ( 2 ) ( 47 )

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preferred stock deemed dividends (Note 21)

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

(Loss) Earnings per share (Note 24)

Net income (loss) available for distribution $ 282 $ ( 51 ) $ 233

Earnings (Loss) per share (Note 24)

Basic $ 1.27 $ ( 0.31 ) $ 0.75

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Changes in fair value of effective cash flow hedges, net of tax (Note 19)

( 8 ) ( 15 ) 6

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

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

Total other comprehensive income (loss) 76 ( 39 ) 40

Comprehensive income $ 358 $ 222 $ 430

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Deferred income taxes (Note 7)

Other liabilities

Other liabilities (Note 20)

Total liabilities $ 2,949 $ 3,262

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EQUITY (DEFICIT)

Series A Preferred Stock, par value $ 0.001 ;

0 and 245,089,671 shares issued and outstanding as of December 31, 2023 and 2022, respectively (Note 21)

Common Stock, par value $ 0.001 ;

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Retained deficit ( 1,653 ) ( 1,922 )

Accumulated other comprehensive (loss) income (Note 22)

Accumulated other comprehensive income (loss) (Note 22)

Treasury Stock, at cost;

34,599,391 and 0 shares as of December 31, 2024 and 2023, respectively (Note 21)

Total deficit ( 673 ) ( 735 )

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

Reorganization items, net — — ( 435 )

Deferred income taxes 7 24 46

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Loss on remeasurement of forward purchase contract — 13 —

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

Gain on sale of equity investment ( 27 ) — —

Foreign exchange loss (gain) 27 ( 15 ) ( 1 )

Stock compensation expense 23 14 11

Pension expense ( 6 ) ( 1 ) ( 28 )

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

Unrealized (gain) loss on derivatives ( 2 ) 51 ( 65 )

Other ( 6 ) 7 1

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Accrued liabilities 26 ( 8 ) ( 17 )

Obligations payable to Honeywell — — ( 375 )

Other liabilities ( 7 ) ( 10 ) ( 32 )

Net cash provided by (used for) operating activities 465 375 ( 310 )

Net cash provided by operating activities 408 465 375

Cash flows from investing activities:

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Proceeds from cross-currency swap contracts 31 28 —

Proceeds from sale of equity investment 46 — —

Net cash used for investing activities ( 14 ) ( 55 ) ( 91 )

Cash flows from financing activities:

Proceeds from issuance of Series A Preferred Stock — — 1,301

Proceeds from issuance of long-term debt, net of deferred financing costs 794 667 —

Payments of long-term debt ( 992 ) ( 207 ) ( 7 )

Payments of revolving credit facilities — — ( 370 )

Payments for dividends — ( 42 ) ( 83 )

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Repurchases of Common Stock ( 296 ) ( 213 ) —

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

Excise tax on Common Stock repurchase ( 8 ) — —

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

Redemption of Series B Preferred stock — — ( 381 )

Payments for Cash-Out election — — ( 69 )

Payments for debt and revolving facility financing costs ( 8 ) ( 2 ) ( 4 )

Other ( 10 ) ( 1 ) —

Net cash (used for) provided by financing activities ( 403 ) ( 482 ) 139

Net cash used for financing activities ( 520 ) ( 403 ) ( 482 )

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash ( 8 ) 5 ( 18 )

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

Net (decrease) increase in cash, cash equivalents and restricted cash ( 134 ) 12 ( 216 )

Cash, cash equivalents and restricted cash at beginning of period 260 248 464

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Reorganization items paid — — 5

Supplemental schedule of non-cash investing and financing activities:

Issuance of Series B Preferred Stock — — 577

Supplemental disclosure of non-cash financing activities:

Dividends declared, not paid $ 13 $ — $ —

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

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CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

Preferred Stock Common Stock Additional

Preferred Stock Common Stock Treasury Stock Additional

Capital Retained

Earnings Other

Deficit Accumulated Other

Comprehensive

Income/(Loss) Total

Shares Amount Shares Amount

Shares Amount Shares (1)

Amount Shares Amount

(in millions)

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Net income — — — — — — — 390 — 390

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

Balance at December 31, 2021

246 $ — 64 $ — $ 1,326 $ ( 1,790 ) $ ( 4 ) $ ( 468 )

Net income — — — — — 390 — 390

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

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

Dividends — — — — — ( 83 ) — ( 83 )

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

Preferred Stock dividends — — — — — — — ( 83 ) — ( 83 )

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

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

Dividends — — — — — ( 42 ) — ( 42 )

Preferred Stock dividends — — — — — — — ( 42 ) — ( 42 )

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

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— $ — 238 $ — $ — $ — $ 1,190 $ ( 1,922 ) $ ( 3 ) $ ( 735 )

Net income — — — — — — — 282 — 282

Share repurchases — — — — 34 ( 296 ) — — — ( 296 )

Excise tax on share repurchases — — — — — ( 3 ) — — — ( 3 )

Shares issued under stock plan, net of shares withheld for employee taxes — — 3 — 1 ( 7 ) — — — ( 7 )

Other comprehensive income, net of tax — — — — — — — — 76 76

Common Stock dividends — — — — — — — ( 13 ) — ( 13 )

Stock-based compensation — — — — — — 23 — — 23

Balance at December 31, 2024

— $ — 241 $ — 35 $ ( 306 ) $ 1,213 $ ( 1,653 ) $ 73 $ ( 673 )

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

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

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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

On September 20, 2020 (the "Petition Date"), the Company and certain of its subsidiaries each filed a voluntary petition for relief under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).

On September 20, 2020 (the "Petition Date"), the Company and certain of its subsidiaries each filed a voluntary petition for relief under Chapter 11 of title 11 of the United States Code (the "Chapter 11 Cases") in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).

A Revised Amended Plan of Reorganization ("Plan") was confirmed by the Bankruptcy Court on April 26, 2021, and the Company emerged from bankruptcy (“Emergence”) on April 30, 2021 (the "Effective Date").

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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.

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.

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 for the year ended December 31, 2022.

There were no Reorganization items, net for the years ended December 31, 2024 and 2023.

Summary of Significant Accounting Policies

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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.

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).

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Operating leases are included in Other assets, Accrued liabilities, and Other liabilities in our Consolidated Balance Sheets.

No finance leases have been recognized.

Finance leases are included in Property, plant and equipment - net in our Consolidated Balance Sheets.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We use the implicit rate when readily determinable.

The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

The lease ROU asset also includes any lease payments made and excludes lease incentives.

Our lease terms may include options to extend or terminate the lease where it is reasonably certain that we will exercise that option.

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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.

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We estimate variable consideration at the most likely amount we will receive from customers and reduce revenues recognized accordingly.

We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

We include estimated amounts in the transaction price to the extent it is probable that a significant

reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.

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Such costs are included in Cost of goods sold and were $ 187 million, $ 175 million and $ 153 million, for the years ended December 31, 2024, 2023 and 2022, 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.

Additionally, the Company incurs engineering-related expenses which are also included in Cost of goods sold and amounted to $( 26 ) million, $( 12 ) million and $ 11 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Engineering-related expenses included customer reimbursements of $ 67 million, $ 46 million and $ 25 million for the years ended December 31, 2024, 2023 and 2022, 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.

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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 $ 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.

The Company recognized government incentives of $ 19 million, $ 14 million and $ 25 million for the years ended December 31, 2024, 2023 and 2022, respectively.

These amounts are recorded in Cost of goods sold and Selling, general and administrative expenses in the Consolidated Statements of Operations.

Supplier Financing

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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.

Supplier financing obligations outstanding and guaranteed bank notes outstanding are recorded within Accounts payable.

The following table summarizes the activity related to our supplier financing obligations and guaranteed bank notes:

Supplier Financing Obligations Outstanding Guaranteed Bank Notes Outstanding

(Dollars in millions)

Balance at December 31, 2023 $ 68 $ 193

Obligations added to the program 249 340

Obligations settled ( 250 ) ( 386 )

Foreign currency translation ( 3 ) ( 6 )

Balance at December 31, 2024 $ 64 $ 141

Environmental Matters

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Estimated costs are recorded at undiscounted amounts, based on experience and assessments and are regularly evaluated.

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

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 Sheets.

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A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.

ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.

We reclassify taxes from AOCI to earnings as the items to which the tax effects relate are similarly reclassified.

Earnings per share

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, which was converted into Common Stock pursuant to the Transaction, to the extent that each security may share in the Company's earnings.

For the year ended December 31, 2024, basic earnings per share are calculated using the weighted-average number of common shares outstanding during the period.

For the years ended December 31, 2023 and 2022, basic earnings per share were 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 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 are calculated using the more dilutive of the two-class or if-converted methods.

Diluted earnings per share for the year ended December 31, 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 yeas ended December 31, 2023 and 2022 were 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.

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Related Party Transactions

We contract with Trane Technologies ("Trane") for the occasional purchase of goods and services.

Paul Camuti, a director on our Board of Directors, served as an executive officer of Trane through December 31, 2024, and was considered a related party until that time.

Our payments under the agreements with Trane amounted to $ 1 million for the year ended December 31, 2024, and were included in Cost of goods sold in our Consolidated Statement of Operations.

The liability balance due to Trane as of December 31, 2024, was immaterial .

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 .

1 unchanged sentence

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

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.

Honeywell is not considered a related party subsequent to the Transaction, which occurred on June 6, 2023.

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, and were included in Cost of goods sold, and Selling, general and administrative expenses, in our Consolidated Statements of Operations.

As discussed in Note 21, Equity , in order to effect the Transaction, on April 12, 2023, the Company entered into separate definitive agreements (the "Series A Preferred Stock 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.

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

Each of Centerbridge and Oaktree is a holder of our Common Stock and appoints a director to our Board of Directors.

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

Steven Tesoriere, who serves as a Managing Director and Co-Portfolio Manager 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.

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.

John Petry, a director on our Board in 2023, 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.

During 2024, we also repurchased from Centerbridge a total of 2,808,988 shares of Common Stock for $ 25 million under our share repurchase program.

The repurchased shares are held as treasury stock.

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Standards

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

Disclosure of Supplier Finance Purchase Obligations.

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 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.

The amendments in this update require companies with a single reportable segment to provide all existing segment disclosures, and the disclosure of incremental segment information.

The Company adopted the new guidance as of January 1, 2024.

See Note 27, Segments and Concentrations for further detail.

Accounting Standards Issued But Not Yet Adopted

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

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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.

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.

In March 2024, the SEC adopted a final rule under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors , to enhance and standardize climate-related disclosures.

The rule will require companies to disclose material Scope 1 and Scope 2 greenhouse gas emissions;

climate-related risks, governance, and oversight;

and the financial effects of severe weather events and other natural conditions.

These disclosures are required to be phased in starting with annual reporting periods beginning in 2025;

however, this rule has been stayed pending the outcome of legal challenges.

The Company is currently evaluating the guidance to determine the impact of adoption on its disclosures in the event that the stay is lifted.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The amendments in this update require disclosure of specified information about certain costs and expenses.

The guidance is effective for fiscal years beginning after December 15, 2026 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.

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Disaggregated Revenue

For Net sales by region (determined based on country of shipment) and channel, refer to Note 27, Concentrations .

For Net sales by region (determined based on country of shipment) and channel, refer to Note 27, Segments and Concentrations .

We recognize virtually all of our revenues arising from performance obligations at a point in time.

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Supplier financing fees 1 1 —

Non-operating income

Other $ 1 $ — $ —

Non-Operating Income, Net

Year Ended December 31,

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$ ( 13 ) $ ( 2 ) $ ( 47 )

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

(1) Relates to the loss on remeasurement of the Series A Preferred Stock Agreements 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:

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

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Tax expense (benefit) consists of:

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

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federal statutory income tax rate is reconciled to our effective income tax rate as follows:

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

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17.8 % 24.8 % 21.4 %

The effective tax rate decreased by 7.0 percentage points in 2024 compared to 2023.

The decrease was primarily due to releases of reserves due to statute of limitation expirations and settlements with taxing authorities and release of valuation allowance related to deferred tax assets in Brazil (net of US branch taxes).

In addition, there was prior year expense due to 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.

These increases were partially offset by prior 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 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.

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

These increases were partially offset by 2023 tax benefits in Switzerland due to law changes (net of valuation allowance) and in Korea for prior year tax settlements.

Deferred tax assets (liabilities)

The tax effects of temporary differences and tax carryforwards which give rise to future income tax benefits and payables are as follows:

The tax effects of temporary differences and tax carryforwards which give rise to future income tax benefits and

payables are as follows:

(Dollars in millions)

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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 valuation allowance decreased $ 23 million from the prior period primarily attributable to a determination that we can ultimately benefit net deferred tax assets recorded in Brazil due to current and future forecasted earnings.

Our balance sheet presents a deferred tax asset of $ 207 million and a deferred tax liability of $ 25 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 Company does not intend to permanently reinvest the undistributed earnings of our foreign subsidiaries and have recorded a deferred tax liability, mainly consisting of withholding taxes, of approximately $ 18 million as of December 31, 2024.

The company has historically considered a portion of its undistributed foreign earnings in China as permanently reinvested.

In the fourth quarter of 2024 the Company changed this assertion and these earnings are no longer considered permanently reinvested.

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

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As of December 31, 2024, 2023, and 2022 there were $ 48 million, $ 66 million, and $ 71 million, respectively, of unrecognized tax benefits that, if recognized, would be recorded as a component of tax expense.

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 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.

The amount of unrecognized tax benefits that is reasonably possible to be resolved in the next twelve months (inclusive of interest and penalties) 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 Statements of Operations and totaled $ 2 million of benefit, $ 5 million of expense, and $ 2 million of expense for the years ended December 31, 2024, 2023, and 2022, respectively.

Accrued interest and penalties were $ 32 million, $ 34 million, and $ 29 million, as of December 31, 2024, 2023, and 2022, respectively.

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

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

Bank notes sold to third-party financial institutions without recourse are

likewise accounted for as true sales.

Year Ended December 31,

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Foreign exchange forward contracts 13 12

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.

Refer to Note 21, Equity.

(Dollars in millions)

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Accrued Liabilities

2023 December 31,

(Dollars in millions)

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Income and other taxes

Advanced discounts from suppliers, current 2 8

Customer advances and deferred income (1)

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Freight accrual 9 9

Dividends declared on Series A Preferred Stock — 42

Dividends declared (Note 21)

Designated and undesignated derivatives 8 12

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Balance at December 31, 2022

$ 10 $ — $ 10

Charges 11 2 13

Usage—cash ( 11 ) — ( 11 )

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

Balance at December 31, 2023

1 unchanged sentence

Usage—cash ( 18 ) — ( 18 )

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

Balance at December 31, 2024

$ 12 $ — $ 12

Long-term Debt and Credit Agreements

Long Term Debt

On May 21, 2024, Garrett Motion Holdings Inc.

and Garrett LX I S.à.r.l.

(the "Issuers"), wholly owned subsidiaries of the Company, completed an offering of $ 800 million in aggregate principal amount of 7.75 % Senior Unsecured Notes due 2032 (the "2032 Senior Notes").

The 2032 Senior Notes mature on May 31, 2032.

The Company incurred $ 12 million of debt issuance costs, which have been capitalized and will be amortized on a straight-line basis.

The 2032 Senior Notes are guaranteed by the Company and each of the Company's wholly owned subsidiaries that guarantee obligations under the existing Credit Agreement (as defined below), subject to certain exceptions.

from the sale of the 2032 Senior Notes, together with cash on hand, were used to repay approximately $ 800 million of term loan indebtedness, as described below, and to pay related fees and expenses.

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.

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

Dollar term loan facility for $ 715 million;

Dollar term loan facility for $ 715 million (the "2021 Dollar Term Facility");

• 2023 Dollar Facility :

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

Dollar term loan facility for $ 700 million;

Dollar term loan facility for $ 700 million (the "2023 Dollar Term Facility");

• Euro Facility :

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

a seven-year secured first-lien Euro term loan facility for € 450 million (the "Euro Term Facility").

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

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

(Dollars in millions) Maturity Date Interest Rate 2024 2023

2021 Dollar Term Facility April 30, 2028 SOFR plus 275 bps

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Euro Term Facility April 30, 2028 EURIBOR plus 350 bps

2032 Senior Notes May 31, 2032 7.75 % 800 —

Total principal outstanding 1,493 1,696

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(Dollars in millions)

Thereafter 800

Total payments on long-term debt $ 1,493

Revolving Facility and Letters of Credit

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 Credit Agreement also provides for a 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 $ 600 million.

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

See discussion in " Amendments 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, 2024, the Company had no borrowings outstanding under the Revolving Facility, no outstanding letters of credit, and available

borrowing capacity of $ 600 million.

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 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.

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

Separate from the Revolving Facility, the Company has a bilateral letter of credit facility with outstanding letters of credit of $ 8 million and $ 12 million at December 31, 2024 and 2023, respectively.

The letters of credit typically support customs arrangements and other obligations at its local affiliates.

Amendments to the Credit Agreement

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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 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.

4 unchanged sentences

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.

On May 21, 2024, the Company entered into Amendment No.

4 (the "Fourth Amendment") and Amendment No.

5 (the "Fifth Amendment") to the Credit Agreement.

The Fourth Amendment (i) removed the credit spread adjustment with respect to certain US dollar denominated term loan borrowings that are Term Benchmark Loans (as defined in the Credit Agreement) and (ii) reduced the Applicable Rate (as defined in the Credit Agreement) on certain US dollar denominated term loans to 2.75 % for Term Benchmark Loans and 1.75 % for ABR Loans (as defined in the Credit Agreement).

The Fifth Amendment increased the amount of revolving loan commitments available to the Company under the Credit Agreement by $ 30 million ("Incremental Revolving Commitment") to an aggregate amount of $ 600 million, as discussed below.

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

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

(i) a perfected security interest in the equity interests of each direct material subsidiary of each guarantor under the Credit Facilities and (ii) perfected security interests in, and mortgages on, substantially all tangible and intangible personal property and material real property of each of the guarantors under the Credit Facilities, subject, in each case, to certain exceptions and limitations, including the agreed guaranty and security principles.

The guarantors organized under the laws of England and Wales, Luxembourg, Switzerland and the United States entered into security documents securing the obligations of each borrower concurrently with the effectiveness of the Credit Agreement.

The guarantors organized under the laws of England and Wales, Luxembourg,

Switzerland and the United States entered into security documents securing the obligations of each borrower concurrently with the effectiveness of the Credit Agreement.

The guarantors organized under the laws of Australia, Ireland, Japan, Mexico, Romania and Slovakia have subsequently executed security documents.

Interest Rate and Fees

The 2032 Senior Notes bear interest at a rate of 7.75 % per annum.

Interest on the 2032 Senior Notes is payable semi-annually in arrears on May 31 and November 30 of each year, commencing on November 30, 2024.

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 2.75 % in the case of SOFR loans and 1.75 % 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, 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 .

As of December 31, 2024, 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 that may vary 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, SOFR 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 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.

2032 Senior Notes

The Issuers may redeem some or all of the 2032 Senior Notes at its option prior to May 31, 2027, at a redemption price equal to 100 % of the principal amount of the 2032 Senior Notes redeemed, plus a customary "make-whole" premium, plus accrued and unpaid interest excluding, the redemption date.

At any time prior to May 31, 2027, the Issuers may also redeem up to 40 % of the aggregate principal amount of the 2032 Senior Notes with funds in an aggregate amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 107.750 % of principal plus accrued and unpaid interest.

The issuers may redeem the 2032 Senior Notes at its option, in whole at any time or in part from time to time, at the following redemption prices:

• from May 31, 2027 to May 30, 2028:

Redemption Price equal to 103.875 % of principal plus accrued and unpaid interest;

• from May 31, 2028 to May 30, 2029:

Redemption Price equal to 101.938 % of principal plus accrued and unpaid interest;

• from May 31, 2029 and Thereafter:

Redemption Price equal to 100 % of principal plus accrued and unpaid interest

Additionally, the Issuers may redeem all, but not part, of the 2032 Senior Notes upon the occurrence of specified tax events as described in the indenture.

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.

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.

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.

During the year ended December 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.

During the year ended December 31, 2024, we made early debt repayments totalling $ 985 million on our Euro Term Facility and our 2023 Dollar Term Facility.

Both term loans were fully repaid as of December 31, 2024.

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

Representations and Warranties

1 unchanged sentence

Certain Covenants

2032 Senior Notes

The 2032 Senior Notes contain certain covenants that limit the ability of the Company and its restricted subsidiaries to incur certain additional debt, incur certain liens securing debt, pay certain dividends or make other restricted payments, make certain investments, make certain asset sales, and enter into certain transactions with affiliates.

These covenants are subject to a number of exceptions, limitations, and qualifications as set forth in the 2032 Senior Notes indenture.

Additionally, the indenture contains certain change of control provisions that, under certain conditions, would require the Company to make an offer to repurchase all of the outstanding 2032 Senior Notes at a price equal to 101 % of the aggregate principal amount, plus accrued and unpaid interest.

The indenture also contains customary events of default.

The Credit Agreement contains certain affirmative and negative covenants customary for financing of this type.

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

Recent changes in our term loan are discussed in Note 29, Subsequent Events .

As of December 31, 2024, the Company was in compliance with all its financing covenants.

1 unchanged sentence

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.

During the year ended December 31, 2022, the Company further redeemed 488,811,503 shares of Series B Preferred Stock, representing the entirety of the remaining outstanding shares, for a total aggregate price of $ 409 million, of which $ 28 million related to settlement of accrued interest.

During the year ended December 31, 2022, the Company redeemed 488,811,503 shares of Series B Preferred Stock, representing the entirety of the remaining outstanding shares, for a total aggregate price of $ 409 million, of which $ 28 million related to settlement of accrued interest.

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

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

There were no shares of Series B Preferred Stock outstanding as of December 31, 2024, 2023 and 2022.

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

As of December 31, 2024, the Company has not identified any material finance leases.

Our leases have remaining lease terms of up to 13 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.

40 unchanged sentences

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 Company uses fixed-to-fixed cross-currency swap contracts to mitigate the foreign currency risk on its 2032 Senior Notes.

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.

The Company also uses 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.

30 unchanged sentences

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.

The Company also entered into a float-to-fixed cross-currency swap contract comprised of an amortizing swap with an aggregate notional amount of € 280 million ($ 300 million) and notional exchanges in June 2026, June 2027, and June 2028.

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 Statement of Operations.

The Company also has outstanding forward currency exchange contracts with maturities up to 18 months and an aggregate notional amount of $ 331 million and $ 456 million as of December 31, 2024 and 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 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.

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.

Changes in the fair value of the cross-currency swap contracts 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.

For the years ended December 31, 2024 and 2023, the Company recorded a loss of $ 8 million, net of tax, and a loss of $ 15 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 Company has designated cross-currency swaps with an aggregate notional amount of € 858 million ($ 965 million) and € 615 million ($ 715 million) as of December 31, 2024 and 2023, respectively, as net investment hedges of the Company’s 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 of $ 70 million and $ 37 million as of December 31, 2024 and 2023, 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.

Our Consolidated Statements of Comprehensive Income includes Changes in fair value of net investment hedges, net of tax, of a $ 49 million gain and a $ 9 million loss for the years ended December 31, 2024, and 2023, respectively.

No ineffectiveness has been recorded on the net investment hedges.

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.

As of December 31, 2024 and 2023, the Company has outstanding float-to-fixed interest rate swap contracts with an aggregate notional amount of € 450 million ($ 470 million) and € 830 million ($ 917 million), respectively, and maturities of April 2025, April 2026 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.

For the years ended December 31, 2024 and 2023, the Company recorded losses of $ 37 million and $ 33 million, respectively, in Interest expense.

The Company also has outstanding forward currency exchange contracts with maturities generally up to 3 months and an aggregate notional amount of $ 597 million and $ 715 million as of December 31, 2024 and 2023, respectively.

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

For the years ended December 31, 2024 and 2023, the Company recorded a gain of $ 12 million and a loss of $ 8 million, respectively, in Non-operating income.

Fair Value Measurement

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Term Loan Facilities

$ 1,650 $ 1,692

2032 Senior Notes 800 810

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.

As such, the fair value of the Term Loan Facilities and related current maturities is considered Level 2.

The fair value of the 2032 Senior Notes was determined using quoted prices from daily exchange traded markets and is classified as a Level 1 measurement.

Other liabilities

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Pension and other employee related 18 23

L ong-term lease liability (Note 18)

Long-term lease liability (Note 18)

Advanced discounts from suppliers 2 3

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Long-term accounts payable 5 7

Issuance of Series A Preferred Stock

In connection with the Company’s emergence from bankruptcy and pursuant to the Plan, the Company issued 247,757,290 shares of the Company’s Series A Preferred Stock to affiliated funds of Centerbridge, affiliated funds of Oaktree and certain other investors and parties, including in connection with the consummation of two rights offerings and that certain replacement equity backstop commitment agreement.

The Company is authorized to grant 1,200,000,000 shares of preferred stock in the reorganized company.

Series A Preferred Stock

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.

On April 30, 2021, in connection with the Emergence, the Company issued 247,757,290 shares of the Company's Series A Preferred Stock to affiliated funds of Centerbridge, affiliated funds of Oaktree (together with Centerbridge, the "C&O Investors"), and certain other investors and parties.

On April 12, 2023 (the “Transaction Date”), the Company entered into separate definitive agreements (the “Agreements”) with each of Centerbridge and Oaktree to effect a series of integrated transactions (collectively, the “Transaction”) designed to simplify the Company’s capital structure by converting all outstanding shares of Series A Preferred Stock into a single class of Common Stock, subject to certain conditions.

Under the terms of the Agreements, the Company agreed to purchase a total of $ 570 million in shares of SeriesA Preferred Stock from the C&O Investors at a cash price per share to be based on 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.

Additionally, under the terms of the Agreements, all holders of Series A Preferred Stock, including the C&O Investors, were entitled to receive (i) $ 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”), which would be paid out in shares of Common Stock valued at the 15 Days VWAP, and (ii) $ 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”), which would be paid out in cash.

In the second quarter of 2023, the Company completed the following steps in connection with the Transaction:

• The Company issued 25,577,517 shares of Common Stock to holders of the Series A Preferred Stock in respect of the Accumulated Dividends, with immaterial cash payments made in lieu of issuing fractional shares;

• The Company paid approximately $ 35 million in aggregate to holders of the Series A Preferred Stock in respect of the Additional Amounts, consisting of $ 10 million to the C&O Investors in consideration of shares to be repurchased and $ 25 million to all holders in consideration of shares to be converted, which Additional Amounts were considered to be a deemed dividend;

• The Company repurchased 69,707,719 shares of Series A Preferred Stock from the C&O Investors at the 15 Days VWAP for an aggregate purchase price of $ 570 million;

• The remaining 175,337,712 shares of Series A Preferred Stock were converted into 175,337,712 shares of Common Stock, and trading of the Series A Preferred Stock on Nasdaq was subsequently suspended.

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

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(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.

and (iv) a starting share price of $ 8.25 based on the market price of the Common Stock as of the Transaction Date.

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

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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 :

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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.

The Company 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.

On December 5, 2024, the Board of Directors declared a cash dividend of $ 0.06 per share of Common Stock, payable on January 31, 2025, to shareholders of record as of January 15, 2025.

The total amount of dividends paid on January 31, 2025, amounted to $ 12 million.

Dividends payable on shares of Common Stock to be distributed under the Company's Long-Term Incentive Plan will be paid if and when such shares are distributed.

See also Note 23, Stock-Based Compensation for further discussion.

Treasury Stock

Treasury stock represents shares of the Company's Common Stock that have been issued and subsequently repurchased by the Company or withheld to satisfy withholding tax obligations in connection with equity award vestings, and that have not been retired or cancelled.

The Company accounts for treasury stock under the cost method and includes treasury stock as a component of Equity (Deficit) on the Consolidated Balance Sheet.

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 year ended December 31, 2024.

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 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.

On February 15, 2024, the Company announced that the Board of Directors had authorized a $ 350 million share repurchase program valid from February 13, 2024, until December 31, 2024.

The Company may repurchase shares from time to time under the program through various methods, including in open market transactions, block trades, privately negotiated transactions, and otherwise.

The timing, as well as the number and value of shares repurchased under the program, will depend on a variety of factors.

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 year ended December 31, 2024, the Company repurchased 33,493,224 shares of Common Stock for $ 296 million under the program.

The repurchased shares are held as treasury stock.

The 2024 share repurchase program expired on December 31, 2024.

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

On December 4, 2024, the Board of Directors authorized a new $ 250 million share repurchase program valid January 1, 2025 until December 31, 2025.

Accumulated Other Comprehensive Income (Loss)

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Other comprehensive income (loss) before reclassifications 35 ( 13 ) ( 1 )

Amounts reclassified from AOCI ( 5 ) — —

Balance at end of year ( 27 ) ( 57 ) ( 44 )

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(Dollars in millions)

Foreign Exchange Translation Adjustment

Reclassification adjustments recognized in income (1)

$ ( 5 ) $ — $ —

Amounts reclassified from AOCI ( 5 ) — —

Pension Adjustments

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Total reclassifications for the year $ ( 43 ) $ ( 16 ) $ ( 45 )

(1) Cumulative translation losses reclassified to Net income related to the sale of an equity interest in an unconsolidated joint venture.

See Note 28, Acquisitions and Divestitures for discussion.

Stock-Based Compensation

Cancellation of Incentive Awards

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:

• Restricted stock units ("RSUs") - 1,205,650 RSUs were settled for consideration of $ 6.25 per share, for a total cash settlement of $ 8 million of which $ 7 million was recorded to equity, and $ 1 million was recorded to Reorganization items, net in the Consolidated Statement of Operations.

Measurement of the cash settlement value of RSU awards was performed on an individual grant basis.

As of the Effective Date, unamortized stock compensation expense of $ 7 million was charged to Reorganization items, net in the Consolidated Statement of Operations.

• Performance stock units - 228,765 PSUs were settled for consideration of $ 6.25 per share, for a total cash settlement of $ 1 million which was recorded to Reorganization items, net in the Consolidated Statement of Operations.

• Stock options - All unvested stock options were considered “out of the money” and cancelled for no consideration.

Unamortized stock compensation expense of $ 1 million was charged to Reorganization items, net in the Consolidated Statement of Operations.

• Cash performance stock units ("CPSUs") - 2,069,897 CPSUs were settled for consideration of $ 1.00 per unit, for a total cash settlement of $ 2 million which was charged to Reorganization items, net in the Consolidated Statement of Operations.

The cash settlement of an equity award is treated as the repurchase of an outstanding equity instrument.

In accordance with ASC 718, all outstanding awards were cancelled with no replacement grant, therefore modification accounting was not applied.

Continuity Awards

In September 2020, one-time cash continuity awards (“Continuity Awards”) were granted to certain employees in exchange for the forfeiture of RSUs and PSUs that had been granted in February 2020.

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.

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

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

2021 Long-Term Incentive Plan

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As of December 31, 2024, an aggregate of 8,931,710 shares of our Common Stock were awarded, net of forfeitures and 22,348,766 shares of our Common Stock were available for future issuance under the Long-Term Incentive Plan.

Restricted Stock Units

Restricted Stock Units ("RSUs")

RSUs are issued to certain key employees and directors at fair market value at the date of grant.

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

RSUs typically vest over 3 to 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:

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As of December 31, 2024, there was $ 15 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.74 years.

Performance Stock Units

Performance Stock Units ("PSUs")

As of December 31, 2024, an aggregate of 4,150,849 PSU awards were granted to officers and certain key employees under the Long-Term Incentive Plan, which, upon vesting, entitles the holder to shares of our Common Stock.

The actual number of shares an employee receives for each PSU depends on the Company’s performance against various measures.

For PSUs granted in 2021, the performance measures are related to absolute total shareholder return (“TSR”) with stock price hurdles, Adjusted EBITDA and Adjusted EBITDA margin, weighted 60 %, 20 % and 20 %, respectively, over a two-year performance period from January 1, 2022 through December 31, 2023 for the TSR measure and a three-year performance period from January 1, 2021 through December 31, 2023 for the Adjusted EBITDA and Adjusted EBITDA margin measures.

Each grantee is granted a target level of PSUs and may earn between 0 % and 100 % of the target level depending on achievement of the performance measures.

For PSUs granted in 2022, the performance measures are based on Adjusted EBITDA and Adjusted EBITDA margin, weighted 50 % each, over a three-year performance period from January 1, 2022 through December 31, 2024.

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

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.

For PSUs, the performance measures are based on Adjusted EBITDA and Adjusted EBITDA margin, weighted 50 % each, over a three-year performance period.

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.

Additionally, certain PSUs were also granted in 2023 and 2024 that included a performance measure for relative total shareholder return (“rTSR”) with stock price hurdles measured over a three-year performance period.

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.

The awards associated with the 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.

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The Company’s volatility estimate was based on the historical volatilities of peers over a historical period consistent with the simulation term.

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

The dividend yield in the model is set to zero as recipients of the award are entitled to dividend equivalents on shares that vest.

The fair value of the PSUs granted in 2023 and 2024 were estimated using the following assumptions:

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Granted 1,171,883 10.89

Vested ( 1,031,104 ) 8.67

Forfeited ( 499,160 ) 8.61

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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.

As of December 31, 2024, there was $ 12 million of total unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a weighted average period of 1.81 years.

Dividend Equivalents

All RSUs and PSUs granted contain rights that entitle the recipient of an award to a dividend equivalent in the amount and form equal to any dividends that would have been paid on the shares of Common Stock underlying the awards had such shares been outstanding on the record dates.

Dividend equivalents are accrued on each award from the grant date until the award vests.

The accrual is based on the dividends declared on the Company's Common Stock during the vesting period.

The dividend equivalents are not paid out until the underlying award has vested and settled.

The dividend equivalents are subject to the same vesting and settlement conditions as the awards.

If the award does not vest, the accrued dividend equivalent is forfeited.

Stock-Based Compensation Expense

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Stock-based compensation expense 23 14 11

Continuity Awards — — 5

Reorganization items, net — — 9

Future income tax benefits recognized 3 2 1

Earnings Per Share

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, 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.

For the year ended December 31, 2024, basic earnings per share ("EPS") is computed using the weighted average number of common shares outstanding during the period.

For the years ended December 31, 2023 and 2022, 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.

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 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.

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

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

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preferred stock deemed dividends — ( 232 ) —

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

Net income (loss) available for distribution 282 ( 51 ) 233

earnings allocated to participating securities — — ( 184 )

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

Net income (loss) available to common shareholders 282 ( 51 ) 49

Weighted average common shares outstanding - Basic 222,316,484 166,595,397 64,708,635

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Diluted earnings per share:

Two-class Two-class If-converted

Two-class Two-class

Weighted average common shares outstanding - Basic 222,316,484 166,595,397 64,708,635

Dilutive effect of unvested RSUs and other contingently issuable shares 1,804,672 — 367,357

Dilutive effect of participating securities — — 247,768,962

Weighted average common shares outstanding – Diluted 224,121,156 166,595,397 65,075,992

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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, 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

We are involved in various lawsuits, claims and proceedings incident to the operation of our businesses, including those pertaining to product liability, product safety, environmental, health and safety, intellectual property, employment, commercial and contractual matters and various other matters.

We regularly assess the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses based on a careful analysis of each matter.

We identify below the individual proceedings where we believe a material loss is reasonably possible or probable, and we accrue for matters when we believe that losses are probable and the amount of the potential loss is reasonably estimable.

It is inherently difficult to determine whether a loss is probable or reasonably possible or to estimate the size or range of the potential loss.

Accordingly, while we believe that appropriate accruals have been established for losses that are probable

and can be reasonably estimated, it is possible that adverse outcomes from such proceedings could exceed the amounts accrued by an amount that could be material to our financial position, results of operations or cash flows.

Securities Litigation

On September 25, 2020, a putative securities class action complaint was filed against Garrett Motion Inc.

and certain current and former Garrett officers and directors in the United States District Court for the Southern District of New York.

The case bears the caption :

Steven Husson, Individually and On Behalf of All Others Similarly Situated, v.

Garrett Motion Inc., Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, and Su Ping Lu , Case No.

1:20-cv-07992-JPC (SDNY) (the “Husson Action”).

The Husson Action asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for securities fraud and control person liability.

On September 28, 2020, the plaintiff sought to voluntarily dismiss his claim against Garrett Motion Inc.

in light of the Company’s bankruptcy;

this request was granted.

On October 5, 2020, another putative securities class action complaint was filed against certain current and former Garrett officers and directors in the United States District Court for the Southern District of New York.

This case bears the caption:

The Gabelli Asset Fund, The Gabelli Dividend & Income Trust, The Gabelli Value 25 Fund Inc., The Gabelli Equity Trust Inc., SM Investors LP and SM Investors II LP, on behalf of themselves and all others similarly situated, v.

Su Ping Lu, Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, Craig Balis, Thierry Mabru, Russell James, Carlos M.

Cardoso, Maura J.

Clark, Courtney M.

Enghauser, Susan L.

Main, Carsten Reinhardt, and Scott A.

Tozier , Case No.

1:20-cv-08296-JPC (SDNY) (the “Gabelli Action”).

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

On November 5, 2020, another putative securities class action complaint was filed against certain current and former Garrett officers and directors in the United States District Court for the Southern District of New York.

This case bears the caption:

Joseph Froehlich, Individually and On Behalf of All Others Similarly Situated, v.

Olivier Rabiller, Allesandro Gili, Peter Bracke, Sean Deason, and Su Ping Lu , Case No.

1:20-cv-09279-JPC (SDNY) (the “Froehlich Action”).

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

The actions were assigned to Judge John P.

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

On December 8, 2020, counsel for the plaintiffs in the Gabelli Action — the Entwistle & Cappucci law firm — filed an unopposed stipulation and proposed order that would (1) appoint the plaintiffs in the Gabelli Action — the “Gabelli Entities” — the lead plaintiffs;

(2) would appoint Entwistle & Cappucci as lead counsel for the plaintiff class;

and (3) consolidate the Gabelli Action, the Husson Action, and the Froehlich Action (the “Consolidated D&O Action”).

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

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

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

The Company agreed with the Gabelli Entities and their lead counsel to permit a class claim to be recognized in the bankruptcy court and to have securities claims against the Company to be litigated in the district court alongside the Consolidated D&O Action.

The Gabelli Entities have agreed that any recoveries against Garrett Motion Inc.

on account of securities claims litigated through the class claim are limited to available insurance policy proceeds.

On July 2, 2021, the bankruptcy court entered an order approving the joint request from the Company and the Gabelli Entities to handle the securities claims against Garrett Motion Inc.

in this manner.

The Gabelli Entities were authorized, and on July 22, 2021 filed a second amended complaint to add claims against Garrett Motion Inc.

On August 11, 2021, Garrett Motion Inc., Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, Russell James, Carlos Cardoso, Maura Clark, Courtney Enghauser, Susan Main, Carsten Reinhardt, and Scott Tozier filed a motion to dismiss with respect to claims asserted against them.

On the same day, Su Ping Lu, who is represented separately, filed a motion to dismiss with respect to the claims asserted against her.

Lead plaintiffs’ opposition to the motions to dismiss was filed on October 26, 2021, and the defendant's reply briefs were filed on or before December 8, 2021.

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

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.

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

On September 22, 2022, the action was reassigned from Judge John P.

Cronan to Judge Jennifer L.

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.

In 2020, various securities class action complaints were filed against Garrett Motion Inc.

and certain current and former Garrett officers and directors in the United States District Court for the Southern District of New York asserting claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, for alleged securities fraud and control person liability.

In March 2022, the trial court dismissed with prejudice the claims against certain of the defendants, and in March 2023, the trial court dismissed with prejudice all remaining claims.

In April 2023, the plaintiffs appealed the trial court’s decision to the United States Court of Appeals for the Second Circuit.

In April 2024, the Second Circuit affirmed dismissal of the claims, and the deadline for further appeals has passed.

Brazilian Tax Matters

3 unchanged sentences

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

Accordingly, no accrual is required at this time.

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.

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.

Accordingly, no accrual has been taken at this time.

Warranties and Guarantees

6 unchanged sentences

(Dollars in millions)

Beginning of year $ 28 $ 32

Warranty and product performance guarantees at beginning of year $ 27 $ 28

Accruals for warranties/guarantees issued during the year 10 13

1 unchanged sentence

Foreign currency translation ( 1 ) —

Warranty and product performance guarantees at end of year $ 23 $ 27

Defined Benefit Pension Plans

3 unchanged sentences

employees are provided through a non-contributory, qualified defined benefit plan.

We also sponsor defined benefit pension plans which cover non-U.S.

employees who are not U.S.

citizens, in Switzerland and Ireland.

We also sponsor defined benefit pension plans in Switzerland and Ireland.

Other pension plans outside of the U.S.

are not material to the Company either individually or in the aggregate.

The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with our significant pension plans.

The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with our pension plans.

Pension Benefits

7 unchanged sentences

Interest cost 8 8 4 5

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

Actuarial (gains) losses ( 10 ) 5 ( 1 ) 7

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

24 unchanged sentences

(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:

Amounts recognized in AOCI associated with our pension and other postretirement benefit plans as of December 31, 2024 and 2023 are as follow:

Pension Benefits

3 unchanged sentences

(Dollars in millions)

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

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

Net actuarial loss (gain) 9 11 ( 14 ) ( 12 )

Net amount recognized $ 9 $ 11 $ ( 21 ) $ ( 19 )

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

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

Pension Benefits

9 unchanged sentences

Net periodic benefit (income) cost $ — $ — $ ( 3 ) $ ( 6 ) $ ( 1 ) $ ( 26 )

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 and other amounts recognized in Other comprehensive (income) loss for our pension and other postretirement benefit plans include the following components:

Other Changes in Plan Assets and Benefits Obligations Recognized in

10 unchanged sentences

Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss $ ( 3 ) $ ( 1 ) $ 11 $ ( 7 ) $ — $ ( 28 )

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.

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

Pension Benefits

13 unchanged sentences

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

The discount rates for our significant pension plans reflect the current rates at which the associated liabilities could be settled at the measurement date of December 31, 2023 .

The discount rates for the pension plans reflect the current rates at which the associated liabilities could be settled at the measurement date of December 31, 2024 .

To determine the discount rates, we use a modeling process that involves matching the expected cash outflows of our benefit plans to a yield curve constructed from a portfolio of high quality, fixed-income debt instruments.

4 unchanged sentences

benefit plans, actuarial assumptions reflect economic and market factors relevant to each country.

The following amounts relate to our significant pension plans with accumulated benefit obligations exceeding the fair value of plan assets.

The following amounts relate to our pension plans with accumulated benefit obligations exceeding the fair value of plan assets.

Plans Non-U.S.

6 unchanged sentences

Our target allocations are as follows:

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

91 % liability-hedging 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.

13 unchanged sentences

Corporate bond funds 93 — 93 —

Liability driven investment fund 13 — 13 —

Real estate funds 2 — 2 —

18 unchanged sentences

Government bond funds 6 — 6 —

Corporate bond funds 13 — 13 —

Real estate funds 19 — 19 —

6 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 —

1 unchanged sentence

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.

Other includes private equity and hedge funds.

These investments are valued at estimated fair value based on quarterly financial information received from the investment advisor and/or general partner.

13 unchanged sentences

2030-2034 61 44

Concentrations

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

Segments and Concentrations

The Company has identified our CODM as the Chief Executive Officer.

The CODM reviews consolidated net income when assessing the Company's performance, allocating resources and establishing management's compensation.

In addition to consolidated net income, the CODM receives discrete information for net sales by product and by geographical location.

Consolidated net income is used to monitor budget versus actual results.

The accounting policies of our operating segment are the same as those described in the Company's summary of significant accounting policies.

The Company derives revenues from customers through sales of air and fluid compression and high-speed electric motor technologies for OEMs and distributors within the mobility and industrial space.

In addition to consolidated net income, the CODM regularly reviews sales by region and product line.

Sales concentration — Net sales by region (determined based on country of shipment) and product line are as follows:

Year Ended December 31,

OEM Aftermarket Other Total

(Dollars in millions)

United States $ 539 $ 200 $ 5 $ 744

Europe 1,654 179 41 1,874

Asia 1,132 52 17 1,201

Other International 42 25 — 67

2024 2023 2022

Year Ended December 31, 2022

OEM Aftermarket Other Total

(Dollars in millions)

1 unchanged sentence

Europe 1,642 1,874 1,734

Asia 1,031 47 24 1,102

China 643 768 701

Rest of Asia 413 433 401

Other International 77 67 73

1 unchanged sentence

Year Ended December 31,

OEM Aftermarket Other Total

2024 2023 2022

(Dollars in millions)

United States $ 383 $ 176 $ 6 $ 565

Europe 1,602 155 27 1,784

Asia 1,153 50 28 1,231

Other International 28 25 — 53

Diesel $ 827 $ 992 $ 949

Gas 1,505 1,720 1,485

Commercial Vehicle 629 656 673

Aftermarket 459 456 442

Other 55 62 54

$ 3,475 $ 3,886 $ 3,603

5 unchanged sentences

Customer B 354 10 364 9 350 10

Others 3,048 79 2,809 78 2,806 77

2,720 78 3,048 79 2,809 78

$ 3,475 100 $ 3,886 100 $ 3,603 100

(1) No other customer had sales individually exceeding 10%.

The table below provides segment information about the Company:

Year Ended December 31,

2024 2023 2022

(Dollars in millions)

Net sales $ 3,475 $ 3,886 $ 3,603

Material costs 2,022 2,323 2,142

Variable manufacturing costs (1)

Fixed manufacturing costs (2)

Research, development and engineering costs 161 163 165

Selling, general and administrative costs 240 247 216

Interest expense 156 159 8

Income tax expense 61 86 106

Other segment items (3)

( 34 ) 2 ( 37 )

Consolidated net income $ 282 $ 261 $ 390

(1) Variable manufacturing costs include freight, duties, direct and indirect labor costs, repairs and maintenance, repositioning costs and variable overhead costs.

(2) Fixed manufacturing costs include depreciation and amortization, rent, overhead labor costs, utilities and other fixed costs.

(3) Other segment items consist of gain on sale of equity interest in unconsolidated joint venture, non-service components of net periodic expense, interest income, equity income, loss on extinguishment of debt, reorganization and other non-operating income items (if any).

Long-lived assets concentration — Long-lived assets (1) by region are as follows:

Long-lived Assets (1)

(Dollars in millions)

United States $ 18 $ 19

Europe 288 276

Slovakia 83 89

Romania 43 46

Rest of Europe 96 101

China 110 117

Rest of Asia 50 53

Other International 49 52

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

Supplier concentration —The Company’s largest supplier accounted for 6 %, 7 % and 6 % of direct materials purchases for the years ended December 31, 2023, 2022 and 2021, respectively.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The Company had capital expenditure purchases of $ 91 million, $ 83 million and $ 91 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company had depreciation and amortization expense in the amount of $ 90 million, $ 90 million and $ 84 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company reports significant non-cash adjustments in its Consolidated Statement of Cash Flows.

Acquisitions and Divestitures

On April 3, 2024, the Company divested its equity interest in an unconsolidated joint venture for approximately $ 58 million, subject to customary debt and working capital adjustments.

We received cash consideration on the divestiture

date of $ 46 million, with an additional $ 7 million to be received in two equal installments due twelve months and thirty-six months from the divestiture date.

A pre-tax gain of $ 27 million was recognized related to this divestiture, including $ 5 million of cumulative translation losses reclassified from AOCI to Net income.

Transaction fees of $ 1 million were incurred in connection with the divestiture and are included in Selling, general, and administrative expenses in our Consolidated Statement of Operations.

Subsequent Events

On January 30, 2025, the Company entered into an amendment and restatement of the Credit Agreement (the "Restatement Agreement").

Under the Restatement Agreement, the Company refinanced in full its 2021 Dollar Term Facility in an aggregate principal amount of $ 692 million (the "2025 Dollar Term Facility").

The 2025 Dollar Term Facility will mature on January 30, 2032, and will bear interest at a spread equal to, at the Company's option, 2.25 % per annum in the case of Term Benchmark Loans or 1.25 % per annum in the case of ABR Loans.

The Company also terminated and replaced its existing Revolving Facility with new revolving commitments (the "New Revolving Facility").

The New Revolving Facility has a maximum borrowing capacity of $ 630 million and matures on January 30, 2030.

On January 31, 2025, the Company paid $ 12 million in settlement of the cash dividends declared on December 5, 2024.

Unaudited Quarterly Financial Information

6 unchanged sentences

Net income 66 64 52 100 282

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

Net income available for distribution 66 64 52 100 282

Earnings per share - basic 0.28 0.29 0.24 0.47 1.27

Earnings per share - diluted 0.28 0.28 0.24 0.47 1.26

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

(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.

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

(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 are 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