What changed in this filing

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Item 1. Financial Statements

2025-05-01 compared with 2024-10-24 · 214 added, 320 removed, 455 unchanged (54% of the section changed)

3 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions, except per share amounts)

Net sales (Note 3)

$ 826 $ 960 $ 2,631 $ 2,941

Cost of goods sold 699 743

3 unchanged sentences

Interest expense 29 31

Gain on sale of equity investment (Note 21)

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

Non-operating income, net ( 1 ) ( 5 )

Income before taxes 85 81

1 unchanged sentence

Net income $ 62 $ 66

preferred stock dividends — — — ( 80 )

preferred stock deemed dividends — — — ( 232 )

Net income (loss) available for distribution $ 52 $ 57 $ 182 $ ( 103 )

Earnings (loss) per common share

Earnings per common share

Basic $ 0.30 $ 0.28

7 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions)

3 unchanged sentences

Changes in fair value of effective cash flow hedges, net of tax (Note 16)

4 ( 2 ) 5 ( 3 )

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

( 31 ) 20 ( 4 ) 18

Total other comprehensive (loss) income, net of tax ( 62 ) 41

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

Comprehensive income $ — $ 107

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

1 unchanged sentence

CONSOLIDATED INTERIM BALANCE SHEETS

September 30,

2025 December 31,

25 unchanged sentences

Common Stock, par value $ 0.001 ;

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

1,000,000,000 and 1,000,000,000 shares authorized, 242,028,536 and 240,987,329 issued and 203,929,236 and 206,387,938 outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid–in capital 1,219 1,213

1 unchanged sentence

( 1,591 ) ( 1,653 )

Accumulated other comprehensive loss (Note 17)

Accumulated other comprehensive income (Note 17)

Treasury Stock, at cost;

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

38,099,300 and 34,599,391 shares as of March 31, 2025 and December 31, 2024, respectively (Note 15)

( 339 ) ( 306 )

Total deficit ( 700 ) ( 673 )

3 unchanged sentences

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in millions)

4 unchanged sentences

Amortization of deferred issuance costs 2 3

Loss on remeasurement of forward purchase contract — 13

Gain on sale of equity investment ( 27 ) —

Foreign exchange gain ( 10 ) —

Foreign exchange (gain) loss ( 19 ) 7

Stock compensation expense 6 8

Pension expense

Unrealized loss on derivatives 39 21

Unrealized loss (gain) on derivatives 35 ( 17 )

Changes in assets and liabilities:

9 unchanged sentences

Proceeds from cross-currency swap contracts

Proceeds from sale of equity investment 46 $ —

Net cash provided by (used for) investing activities

Net cash used for investing activities

$ ( 22 ) $ ( 28 )

Cash flows from financing activities:

Proceeds from issuance of long-term debt, net of debt financing costs 68 —

Bank overdrafts 17 —

Payments of long-term debt ( 71 ) ( 2 )

Repurchases of Series A Preferred Stock — ( 580 )

Repurchases of Common Stock ( 30 ) ( 107 )

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

Payments for preference dividends — ( 42 )

Dividend payments ( 12 ) —

Payments for debt and revolving facility financing costs ( 1 ) —

3 unchanged sentences

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 2 ( 7 )

Net decrease in cash, cash equivalents and restricted cash

( 163 ) ( 85 )

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

Cash, cash equivalents and restricted cash at beginning of the period 126 260

6 unchanged sentences

CONSOLIDATED INTERIM STATEMENTS OF EQUITY (DEFICIT)

Preferred Stock Common Stock Treasury Stock Additional

Common Stock Treasury Stock Additional

Capital Retained

Deficit Accumulated Other

Comprehensive (Loss) / Income Total

Shares Amount Shares (1)

Comprehensive Income / (Loss) Total

Amount Shares Amount

6 unchanged sentences

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

Other comprehensive income, net of tax — — — — — — — — 41 41

Stock-based compensation — — — — — — 8 — — 8

Balance at March 31, 2024 — $ — 240 $ — 13 $ ( 115 ) $ 1,198 $ ( 1,856 ) $ 38 $ ( 735 )

Net income — — — — — — — 64 — 64

Share repurchases — — — — 7 ( 65 ) — — — ( 65 )

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

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

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

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

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

Net income — — — — — — — 52 — 52

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

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

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

Other comprehensive loss, net of tax — — — — — — ( 62 ) ( 62 )

Stock-based compensation — — — — 6 — — 6

Balance at September 30, 2024

Balance at March 31, 2025

242 $ — 38 $ ( 339 ) $ 1,219 $ ( 1,591 ) $ 11 $ ( 700 )

Preferred Stock Common Stock Treasury Stock Additional

Common Stock Treasury Stock Additional

Capital Retained

Deficit Accumulated Other

Comprehensive

Shares Amount Shares (1)

Comprehensive (Loss) / Income Total

Amount Shares Amount

3 unchanged sentences

Net income — — — — — 66 — 66

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

Dividends — — — — — — — ( 42 ) — ( 42 )

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

Balance at March 31, 2023

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

Net income — — — — — — — 71 — 71

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

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

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

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

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

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

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

Balance at June 30, 2023

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

Net income — — — — — — — 57 — 57

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

Share repurchases — — 12 ( 109 ) — — — ( 109 )

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

Shares issued under stock plan, net of shares withheld for employee taxes 2 — 1 ( 5 ) — — — ( 5 )

Other comprehensive income, net of tax — — — — — — 41 41

Stock-based compensation — — — — 8 — — 8

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

Balance at March 31, 2024

240 $ — 13 $ ( 115 ) $ 1,198 $ ( 1,856 ) $ 38 $ ( 735 )

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

11 unchanged sentences

Basis of Presentation

The accompanying unaudited Consolidated Interim Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission applicable to interim financial statements.

While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statements.

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

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

The unaudited Consolidated Interim Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2024 included in our Annual Report on Form 10-K, as filed with the SEC on February 20, 2025 (our “2024 Form 10-K”).

The results of operations for the three months ended March 31, 2025 and cash flows for the three months ended March 31, 2025 should not necessarily be taken as indicative of the entire year.

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

We report our quarterly financial information using a calendar convention:

the first, second, and third quarters are consistently reported as ending on March 31, June 30 and September 30.

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

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

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

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

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

6 unchanged sentences

The accounting policies of the Company are set forth in Note 3 to the Consolidated Financial Statements for the year ended December 31, 2024 included in our 2024 Form 10-K.

Accounting Standards Issued But Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB ” ) issued accounting standards update ( “ ASU") 2023-07, Segment Reporting (Topic 280) :

Improvements to Reportable Segment Disclosures.

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.

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

Recently Adopted Accounting Pronouncements

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

1 unchanged sentence

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 Company adopted the new guidance prospectively as of January 1, 2025.

Accounting Standards Issued But Not Yet Adopted

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, and on March 27, 2025, the SEC withdrew its legal defense of the rule.

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.

4 unchanged sentences

Disaggregated Revenue

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

Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

OEM Aftermarket Other Total OEM Aftermarket Other Total

(Dollars in millions)

United States $ 129 $ 46 $ 3 $ 178 $ 147 $ 54 $ 2 $ 203

Europe 318 53 5 376 382 45 9 436

Asia 233 13 6 252 287 13 5 305

Other 15 5 — 20 9 6 1 16

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

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

OEM Aftermarket Other Total OEM Aftermarket Other Total

(Dollars in millions)

United States $ 374 $ 150 $ 6 $ 530 $ 412 $ 150 $ 4 $ 566

Europe 1,114 145 20 1,279 1,265 136 26 1,427

Asia 714 39 14 767 846 38 12 896

Other 39 16 — 55 33 18 1 52

$ 2,241 $ 350 $ 40 $ 2,631 $ 2,556 $ 342 $ 43 $ 2,941

For Net sales by region (determined based on country of shipment) and channel, refer to Note 21, Segments and Concentrations .

Contract Balances

2 unchanged sentences

Contract assets—January 1 $ 40 $ 38

Contract assets—September 30

Contract assets—March 31

Change in contract assets—Increase/(Decrease) $ 12 $ 10

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

Contract liabilities—September 30

Contract liabilities—March 31

( 12 ) ( 10 )

Change in contract liabilities—Decrease/(Increase) $ ( 4 ) $ 1

5 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions)

1 unchanged sentence

Engineering-related expenses, net of customer (reimbursements) (1)

( 6 ) ( 3 ) ( 10 ) ( 8 )

$ 43 $ 39 $ 128 $ 120

(1) Engineering-related expenses include customer reimbursements of $ 17 million and $ 10 million for the three months ended September 30, 2024 and 2023, respectively, and $ 41 million and $ 34 million for the nine months ended September 30, 2024 and 2023, respectively.

(1) Engineering-related expenses include customer reimbursements of $ 12 million and $ 8 million for the three months ended March 31, 2025 and 2024, respectively.

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

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

As of March 31, 2025 and December 31, 2024 , $ 33 million and $ 29 million , respectively, of such contractually reimbursable costs were capitalized.

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions)

1 unchanged sentence

Effective tax rate 27.1 % 18.5 %

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

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

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

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

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

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

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

earnings, and global research and development benefits.

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

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

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

The effective tax rates for the three months ended March 31, 2025 and 2024 were 27.1 % and 18.5 %, respectively.

The change in the effective tax rate for the three months ended March 31, 2025 compared to the prior period is primarily related to higher U.S.

taxes on international operations and reversal of tax reserves in 2024.

The effective tax rate for the three months ended March 31, 2025 was higher than the U.S.

federal statutory rate of 21% primarily related to higher U.S.

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

earnings and global research and development benefits.

Accounts, Notes and Other Receivables—Net

September 30,

2025 December 31,

4 unchanged sentences

Less—Allowance for expected credit losses

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

Trade receivables include $ 52 million and $ 40 million of unbilled customer contract asset balances as of March 31, 2025 and December 31, 2024, respectively.

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

2 unchanged sentences

See Note 7, Factoring and Notes Receivable .

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

Other receivables includes VAT receivables of $ 44 million and $ 50 million as of March 31, 2025 and December 31, 2024, respectively.

Factoring and Notes Receivable

4 unchanged sentences

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

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

2024 2023 2024 2023

Three Months Ended March 31,

(Dollars in millions)

1 unchanged sentence

Guaranteed bank notes sold without recourse 16 —

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

September 30,

The expenses related to the sale of trade receivables and guaranteed bank notes are recognized within Other expense, net in the Consolidated Interim Statements of Operations, and were $ 1 million and immaterial for the three months ended March 31, 2025 and 2024 , respectively.

2025 December 31,

2 unchanged sentences

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

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

As of March 31, 2025 and December 31, 2024, the Company had no guaranteed bank notes pledged as collateral .

Inventories—Net

September 30,

2025 December 31,

4 unchanged sentences

Less—Reserves ( 42 ) ( 41 )

September 30,

2025 December 31,

11 unchanged sentences

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

September 30,

2025 December 31,

3 unchanged sentences

Accrued Liabilities

September 30,

2025 December 31,

9 unchanged sentences

Accrued freight 10 9

Dividends declared — 12

Designated and undesignated derivatives (Note 16)

Environmental reserve 5 6

Bank overdrafts (2)

Other (primarily operating expenses)

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

(1) Customer advances and deferred inco me inc lude $ 12 million and $ 8 million of contract liabilities as of March 31, 2025 and December 31, 2024, respectively.

See Note 3, Revenue Recognition and Contracts with Customers .

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

(2) The Company classifies bank overdrafts as accrued liabilities.

Bank overdrafts are generally cash pooling and other intercompany financing arrangements where the legal right to offset does not exist.

Bank overdrafts are considered short-term financing with changes in the related balance reflected in financing activities in the Interim Consolidated Statements of Cash Flows.

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

4 unchanged sentences

Balance at December 31, 2024

$ 12 $ — $ 12

Charges 7 — 7

Usage—cash ( 3 ) — ( 3 )

Balance at September 30, 2024

Balance at March 31, 2025

$ 16 $ — $ 16

4 unchanged sentences

Usage—cash ( 9 ) — ( 9 )

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

Balance at September 30, 2023

Balance at March 31, 2024

$ 11 $ — $ 11

Other Liabilities

September 30,

2025 December 31,

8 unchanged sentences

Long-term accounts payable 3 5

Asset retirement obligation 8 8

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

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

As of March 31, 2025, the Company does not have 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.

1 unchanged sentence

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions)

2 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions)

1 unchanged sentence

Operating cash outflows from operating leases

$ 4 $ 3 $ 10 $ 10

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

1 unchanged sentence

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

September 30,

2025 December 31,

3 unchanged sentences

Other liabilities 41 42

September 30,

2025 December 31, 2024

1 unchanged sentence

Weighted-average discount rate 6.69 % 6.71 %

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

Maturities of operating lease liabilities as of March 31, 2025 were as follows:

(Dollars in millions)

3 unchanged sentences

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 "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.

The proceeds 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 April 30, 2021, the Company entered into a credit agreement (as amended from time to time, the "Credit Agreement") with JPMorgan Chase Bank, N.A.

as administrative agent.

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

• 2021 Dollar Term Facility:

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

Dollar term loan facility for $ 715 million;

• 2023 Dollar Term Facility :

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

Dollar term loan facility for $ 500 million;

• Euro Term Facility :

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

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

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

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

On May 21, 2024, in addition to the above transactions, the Company entered into Amendment No.

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

5 (the "Fifth Amendment" and, together with the Fourth Amendment, the "Amendments") to the Credit Agreement (as amended by the Amendments, the "Amended 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 Amended Credit Agreement) and (ii) reduced the Applicable Rate (as defined in the Amended 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 Amended 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 Amended Credit Agreement.

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

Due Interest Rate September 30,

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

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

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 2032 Senior Notes indenture contains 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.

Credit Facilities

On January 30, 2025, the Company entered into that certain Restatement Agreement (the "Restatement Agreement"), which amends and restates that certain Credit Agreement, dated as of April 30, 2021 (as amended from time to time, the "Existing Credit Agreement" and as amended and restated by the Restatement Agreement, the "Credit Agreement"), by and among the Company, Garrett Motion Holdings Inc., Garrett Motion S àrl and Garrett LX I S.à.r.l., as borrowers (the "Borrowers"), the lenders and issuing banks part thereto from time to time, and JPMorgan Chase Bank, N.A., as administrative agent.

Under the Restatement Agreement, the Company refinanced in full its $ 692 million U.S.

Dollar term loan facility (the "2021 Dollar Term Facility") under the Existing Credit Agreement with a new $ 692 million term loan (the "2025 Dollar Term Facility") in an aggregate principal amount of $ 692 million.

The 2025 Dollar Term Facility will mature on January 30, 2032, and bear interest at a rate equal to, at the Company's option, the Adjusted Term SOFR Rate (as defined in the Restatement Agreement) plus 2.25 % per annum in the case of Term Benchmark Loans (as defined in the Restatement Agreement) and the Alternate Base Rate (as defined in the Restatement Agreement) plus 1.25 % per annum in the case of ABR Loans (as defined in the Restatement Agreement).

Also on January 30, 2025, pursuant to the Restatement Agreement, the Company replaced its existing $ 600 million revolving commitments under the Existing Credit Agreement with new revolving commitments under the Credit Agreement in an aggregate principal amount of $ 630 million (the "New Revolving Facility" and, together with the New Term Loans, the "Credit Facilities").

The maturity date of the New Revolving Facility is January 30, 2030.

The New Revolving Facility, when drawn, will bear interest at a rate equal to the applicable benchmark plus an applicable margin that varies based on the Company's leverage ratio.

The applicable margin for revolving borrowings ranges from 2.25 % to 1.75 % per annum in the case of Term Benchmark Loans and 1.25 % to 0.75 % per annum in the case of ABR Loans.

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

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

The Credit Agreement also contains certain customary events of default.

The New Revolving Facility is subject to a financial covenant requiring the maintenance of a consolidated total leverage ratio of not greater than 4.7 to 1.00 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 New Revolving Facility exceeds 35 % of the aggregate commitments in effect thereunder on such date.

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

(1) 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.

As of March 31, 2025, the Company was in compliance with all covenants under the 2032 Senior Notes indenture and Credit Agreement.

The principal outstanding and carrying amounts of our long-term debt as of March 31, 2025 and December 31, 2024 are as follows:

Due Interest Rate March 31,

2025 December 31,

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2025 Dollar Term Facility 1/30/2032 SOFR plus 225 bps

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

2032 Senior Notes 5/31/2032 7.75 % 800 800

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Total long-term debt $ 1,462 $ 1,464

Revolving Facility and Letters of Credit

The Amended Credit Agreement also provides for a senior secured first-lien revolving credit facility providing for multi-currency re volving loans (the “Revolving Facility”).

The Revolving Facility matures on April 30, 2028 and has a maximum borrowing amount available of $ 600 million.

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

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

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

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

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

September 30,

Separate from the Revolving Facility, the Company has a bilateral letter of credit facility with outstanding letters of credit in the amount of $ 9 million and $ 8 million at March 31, 2025 and December 31, 2024, respectively.

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

Minimum scheduled principal repayments of long-term debt as of March 31, 2025 are as follow:

(Dollars in millions)

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Total debt payments $ 1,494

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

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

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.

The indenture also contains customary events of default.

The Amended Credit Agreement contains certain affirmative and negative covenants customary for financings 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 in effect thereunder on such date.

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

Preferred Stock

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

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

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

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

Please refer to Note 21, Equity , to the Consolidated Financial Statements for the year ended December 31, 2023 included in our 2023 Form 10-K.

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.

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.

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 the vesting of equity awards, 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 Interim 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 three and nine months ended September 30, 2024.

The Company did not reissue or retire any shares of treasury stock during the three months ended March 31, 2025.

Share Repurchase Program

On February 12, 2024, the Board of Directors authorized a $ 350 million share repurchase program valid 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.

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

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

During the three months ended March 31, 2025, the Company repurchased $ 30 million of Common Stock, and had $ 220 million remaining under the share repurchase program as of that date.

The repurchased shares are held as treasury stock.

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Our credit, market, and foreign currency risk management policies are described in Note 19, Financial Instruments and Fair Value Measures , to the Consolidated Financial Statements for the year ended December 31, 2024 included in our 2024 Form 10-K.

As of September 30, 2024 and December 31, 2023, we had contracts with aggregate gross notional amounts of $ 790 million and $ 1,171 million, respectively, to hedge foreign currencies, principally the U.S.

As of March 31, 2025 and December 31, 2024, we had contracts with aggregate gross notional amounts of $ 1,003 million and $ 928 million, respectively, to hedge foreign currencies, principally the U.S.

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

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

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

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2025 and December 31, 2024:

Notional Amounts Assets Liabilities

September 30,

2025 December 31, 2024

September 30,

2025 December 31, 2024

September 30,

2025 December 31, 2024

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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 Interim Statement of Operations.

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

The interest rate swap and cross-currency swap contracts were early settled in the second quarter of 2024.

During 2025, the Company entered into float-to-fixed interest rate swap contracts with an aggregate notional amount of $ 675 million and maturities in January 2027, January 2028, January 2029, January 2030 and January 2031.

Changes in the fair value of the interest rate swap contracts are recorded in Accumulated Other Comprehensive Income ("AOCI") and will be reclassified to Interest expense in the Consolidated Interim 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 $ 540 million and $ 331 million as of March 31, 2025 and December 31, 2024, respectively.

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

The gains and losses on the forward currency exchange contracts are recorded in Accumulated Other Comprehensive Income ("AOCI") and reclassified to Cost

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

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

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

Changes in the fair value of the cross-currency swap contracts are recognized in AOCI and reclassified to Non-operating (income) expense in the Consolidated Interim Statement of Operations, based upon changes in the spot rate remeasurement of the underlying debt.

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

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

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

Net Investment Hedges

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

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

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

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

The Company has designated cross-currency swaps with aggregate notional amounts of € 1,508 million ($ 1,640 million) and € 858 million ($ 965 million) as of March 31, 2025 and December 31, 2024, respectively, as net investment hedges of its Euro-denominated operations.

Changes in the fair value of the net investment hedges are recorded in AOCI until the net investment is liquidated or sold.

The fair values of the net investment hedges were net assets o f $ 22 million and $ 70 million as of March 31, 2025 and December 31, 2024 , respectively.

No ineffectiveness has been recorded on the net investment hedges.

Non-Designated Derivatives

As of September 30, 2024 and December 31, 2023, the Company has outstanding float-to-fixed interest rate swap contracts with an aggregate notional amount of € 450 million ($ 502 million) and € 830 million ($ 917 million), respectively, and maturities of October 2024, April 2025, April 2026, April 2027, and April 2028.

As of December 31, 2024, the Company had outstanding float-to-fixed interest rate swap contracts with an aggregate notional amount of € 450 million ($ 470 million) and maturities of April 2025, April 2026, April 2027, and April 2028.

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

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

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

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

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

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

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

These interest rate swap contracts were early settled in 2025.

The Company also has outstanding forward currency exchange contracts with maturities generally up to 3 months and an aggregate notional amount of $ 463 million and $ 597 million as of March 31, 2025 and December 31, 2024 , respectively .

Changes in the fair value of the forward currency exchange contracts are recorded in Non-operating (income) expense in the Consolidated Interim Statements of Operations.

Effect of Derivatives on the Statements of Operations and Statements of Comprehensive Income (Loss)

The following tables present the pretax impact that changes in the fair values of derivatives designated as cash flow hedges and net investment hedges had on OCI, AOCI and earnings:

Three Months Ended March 31, 2025

(Dollars in millions) Cost of goods sold Interest expense Non-operating income Other comprehensive income (loss)

Cash flow hedges

Gain (loss) recognized in other comprehensive income $ — $ — $ — $ 17

Gain (loss) reclassified from AOCI to income — — 19 —

Net investment hedges

Gain (loss) recognized in other comprehensive income — — — ( 44 )

Three Months Ended March 31, 2024

(Dollars in millions) Cost of goods sold Interest expense Non-operating income Other comprehensive income (loss)

Cash flow hedges

Gain (loss) recognized in other comprehensive income $ — $ — $ — $ 16

Gain (loss) reclassified from AOCI to income 2 2 7 —

Net investment hedges

Gain (loss) recognized in other comprehensive income — — — 23

The following table summarizes the pretax gain (loss) that changes in the fair values of derivatives not designated as hedging instruments had on earnings:

Three Months Ended March 31,

Contract Type Location (Dollars in millions)

Interest rate swaps Interest expense $ — $ —

Forward currency exchange contracts Non-operating income ( 10 ) 11

Fair Value Measurement

4 unchanged sentences

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

September 30, 2024

March 31, 2025

December 31, 2024

6 unchanged sentences

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.

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

Accumulated Other Comprehensive Income

1 unchanged sentence

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions)

1 unchanged sentence

Balance at beginning of period $ ( 27 ) $ ( 57 )

Other comprehensive (loss) income before

Other comprehensive (loss) income before reclassifications ( 29 ) 18

Income tax benefit (expense) associated with comprehensive income (loss) before

reclassifications — —

Amounts reclassified from AOCI — — ( 5 ) —

Balance at end of period ( 56 ) ( 39 )

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Balance at beginning of period ( 15 ) ( 20 )

Other comprehensive income (loss) before

Other comprehensive income (loss) before reclassifications — 1

Income tax benefit (expense) associated with comprehensive income (loss) before

reclassifications — —

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Balance at beginning of period ( 10 ) ( 2 )

Other comprehensive (loss) income before

Other comprehensive (loss) income before reclassifications 17 16

Income tax benefit (expense) associated with comprehensive income (loss) before

reclassifications 2 ( 4 )

( 19 ) 3 ( 1 ) 17

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

Amounts reclassified from AOCI ( 19 ) ( 11 )

Income taxes associated with reclassifications from AOCI 2 2

Balance at end of period ( 8 ) 1

1 unchanged sentence

Balance at beginning of period 125 76

Other comprehensive (loss) income before

reclassifications, net (3)

( 31 ) 20 ( 4 ) 18

Other comprehensive (loss) income before reclassifications ( 44 ) 23

Income tax benefit (expense) associated with comprehensive income (loss) before

reclassifications 9 ( 4 )

Balance at end of period 90 95

Accumulated other comprehensive income, end of period $ 11 $ 38

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

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

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

Reclassifications from AOCI to income were as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions)

Foreign Exchange Translation Adjustment

Reclassification adjustments recognized in income (1)

$ — $ — $ ( 5 ) $ —

Amounts reclassified from AOCI — — ( 5 ) —

Changes in Fair Value of Effective Cash Flow Hedges

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Total reclassifications for the period $ ( 17 ) $ ( 9 )

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

See Note 21 for discussion.

Earnings Per Share

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

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

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

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

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

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

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

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

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

Basic earnings per share ("EPS") is computed using the weighted-average number of common shares outstanding during the period.

Diluted earnings per share 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.

The details of the EPS calculations for the three months ended March 31, 2025 and 2024 are as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions except per share)

1 unchanged sentence

Net income $ 62 $ 66

preferred stock dividend — — — ( 80 )

preferred stock deemed dividends — — — ( 232 )

Net income (loss) available to common shareholders

$ 52 $ 57 $ 182 $ ( 103 )

Weighted average common shares outstanding - Basic 205,113,600 236,664,129

6 unchanged sentences

EPS – Diluted $ 0.30 $ 0.28

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

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

Commitments and Contingencies

Securities Litigation

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.

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 any 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.

Brazilian Tax Matter

In September 2020, the Brazilian tax authorities issued an infraction notice against Garrett Motion Industria Automotiva Brasil Ltda, challenging the use of certain tax credits (“Befiex Credits”) between January 2017 and February 2020.

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

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

The estimated total amount of the loss contingency arising from this matter as of March 31, 2025 was $ 23 million, including penalties and interest.

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

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In the normal course of business, we issue product warranties and product performance guarantees.

We accrue for the estimated cost of product warranties and performance guarantees based on contract terms and historical experience at the

time of sale to the customer.

We accrue for the estimated cost of product warranties and performance guarantees based on contract terms and historical experience at the time of sale to the customer.

Adjustments to initial obligations for warranties and guarantees are made as changes to the obligations become reasonably estimable.

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(Dollars in millions)

2 unchanged sentences

Settlement of warranty/guarantee claims

( 4 ) ( 2 ) ( 10 ) ( 9 )

Foreign currency translation — ( 1 )

Warranty and product performance guarantees at end of period

$ 25 $ 26 $ 25 $ 26

Other Commitments and Contingencies

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We expect to make contributions of cash and/or marketable securities of approximately $ 5 million to our non-U.S.

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

pension plans to satisfy regulatory funding standards in 2025, of which less than $ 1 million has been contributed as of March 31, 2025.

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

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

Plans Non-U.S.

Three Months Ended March 31,

Plans Non-U.S.

9 unchanged sentences

This approach provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates.

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 Interim Statement of Operations.

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:

Three Months Ended March 31,

(Dollars in millions)

United States $ 176 $ 178

Germany 89 91

Rest of Europe 336 378

China 153 158

Rest of Asia 104 94

Other International 20 16

Three Months Ended March 31,

(Dollars in millions)

Diesel $ 208 $ 241

Commercial Vehicle 155 161

Aftermarket 98 112

The table below provides segment information about the Company:

Three Months Ended March 31,

(Dollars in millions)

Net sales $ 878 $ 915

Material costs 501 537

Variable manufacturing costs (1)

Fixed manufacturing costs (2)

Research, development and engineering costs 40 44

Selling, general and administrative costs 59 64

Interest expense 29 31

Income tax expense 23 15

Other segment items (3)

Consolidated net income $ 62 $ 66

(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 non-service components of net periodic pension expense, interest income, equity income and other non-operating income items (if any).

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

The Company had capital expenditures of $ 26 million and $ 32 million for the three months ended March 31, 2025 and 2024, respectively.

Subsequent Events

On May 1, 2025, the Board of Directors declared a cash dividend of $ 0.06 per share of Common Stock, payable on June 16, 2025, to shareholders of record as of June 2, 2025.

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

What changed 10-Q

Item 1. Financial Statements