What changed in this filing

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Item 1. Financial Statements

2025-07-24 compared with 2025-05-01 · 192 added, 98 removed, 571 unchanged (34% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

2025 2024 2025 2024

(Dollars in millions, except per share amounts)

Net sales (Note 3)

$ 913 $ 890 $ 1,791 $ 1,805

Cost of goods sold 732 705 1,431 1,448

3 unchanged sentences

Interest expense 25 62 54 93

Gain on sale of equity investment (Note 22)

— ( 27 ) — ( 27 )

Non-operating income, net ( 6 ) ( 1 ) ( 7 ) ( 6 )

12 unchanged sentences

Three Months Ended

Six Months Ended

2025 2024 2025 2024

(Dollars in millions)

3 unchanged sentences

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

17 ( 2 ) 19 1

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

( 128 ) 8 ( 163 ) 27

Total other comprehensive (loss) income, net of tax ( 170 ) 8 ( 232 ) 49

Comprehensive income $ — $ 107

Comprehensive (loss) income $ ( 83 ) $ 72 $ ( 83 ) $ 179

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

28 unchanged sentences

Common Stock, par value $ 0.001 ;

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

1,000,000,000 and 1,000,000,000 shares authorized, 242,405,426 and 240,987,329 issued and 201,727,919 and 206,387,938 outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid–in capital 1,226 1,213

1 unchanged sentence

( 1,517 ) ( 1,653 )

Accumulated other comprehensive income (Note 17)

Accumulated other comprehensive (loss) income (Note 17)

Treasury Stock, at cost;

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

40,677,507 and 34,599,391 shares as of June 30, 2025 and December 31, 2024, respectively (Note 15)

( 362 ) ( 306 )

4 unchanged sentences

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

4 unchanged sentences

Amortization of deferred issuance costs 3 33

Gain on sale of equity investment — ( 27 )

Foreign exchange (gain) loss ( 65 ) 13

Stock compensation expense 13 13

Unrealized loss (gain) on derivatives 35 ( 17 )

Pension expense

Unrealized loss on derivatives 81 1

Changes in assets and liabilities:

9 unchanged sentences

Proceeds from cross-currency swap contracts

Net cash used for investing activities

Proceeds from sale of equity investment — 46

Net cash (used for) provided by investing activities

$ ( 26 ) $ 18

1 unchanged sentence

Proceeds from issuance of long-term debt, net of debt financing costs 68 794

Bank overdrafts 17 —

Payments of long-term debt ( 73 ) ( 989 )

Repurchases of Common Stock ( 52 ) ( 173 )

Excise tax on Common Stock repurchase ( 3 ) —

Dividend payments ( 25 ) —

23 unchanged sentences

Share repurchases — — 3 ( 30 ) — — — ( 30 )

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

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

3 unchanged sentences

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

Net income — — — — — 87 — 87

Share repurchases — — 3 ( 22 ) — — — ( 22 )

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

Other comprehensive loss, net of tax — — — — — — ( 170 ) ( 170 )

Dividends — — — — — ( 13 ) — ( 13 )

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

Balance at June 30, 2025

242 $ — 41 $ ( 362 ) $ 1,226 $ ( 1,517 ) $ ( 159 ) $ ( 812 )

Common Stock Treasury Stock Additional

14 unchanged sentences

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 )

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

14 unchanged sentences

The unaudited Consolidated Interim Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 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.

The results of operations for the three and six months ended June 30, 2025 and cash flows for the six months ended June 30, 2025 should not necessarily be taken as indicative of the entire year.

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

30 unchanged sentences

Disaggregated Revenue

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

Net sales by region (determined based on country of shipment) and channel is included in Note 21, Segments and Concentrations .

Contract Balances

2 unchanged sentences

Contract assets—January 1 $ 40 $ 38

Contract assets—March 31

Contract assets—June 30

Change in contract assets—Increase/(Decrease) $ 11 $ 13

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

Contract liabilities—March 31

Contract liabilities—June 30

( 15 ) ( 14 )

6 unchanged sentences

Three Months Ended

Six Months Ended

2025 2024 2025 2024

(Dollars in millions)

1 unchanged sentence

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

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

( 2 ) ( 5 ) ( 5 ) ( 4 )

$ 45 $ 41 $ 85 $ 85

(1) Engineering-related expenses include customer reimbursements of $ 13 million and $ 16 million for the three months ended June 30, 2025 and 2024, respectively, and $ 25 million and $ 24 million for the six months ended June 30, 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 March 31, 2025 and December 31, 2024 , $ 33 million and $ 29 million , respectively, of such contractually reimbursable costs were capitalized.

As of June 30, 2025 and December 31, 2024 , $ 40 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

Six Months Ended

2025 2024 2025 2024

(Dollars in millions)

1 unchanged sentence

Effective tax rate 14.7 % 26.4 % 20.3 % 22.6 %

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.

The effective tax rates for the three months ended June 30, 2025 and 2024 were 14.7 % and 26.4 %, respectively.

The effective tax rates for the six months ended June 30, 2025 and 2024 were 20.3 % and 22.6 %, respectively.

The change in the effective tax rate for the three months ended June 30, 2025 compared to the prior period is primarily related to a one-time sale of an equity interest in an unconsolidated joint venture in the prior year and a one-time benefit attributable to the revaluation of deferred tax assets in China, partially offset by an increase in U.S.

taxes on international operations.

The change in the effective tax rate for the six months ended June 30, 2025 compared to the prior period is primarily related to a one-time sale of an equity interest in an unconsolidated joint venture in the prior year and a one-time benefit attributable to the revaluation of deferred tax assets in China, partially offset by an increase in U.S.

taxes on international operations and additional tax reserve positions in the current year.

The effective tax rate for the three months ended June 30, 2025 was lower than the U.S.

federal statutory rate of 21% as a result of a one-time benefit attributable to the revaluation of deferred tax assets in China, partially offset by U.S.

taxes on international operations.

The effective tax rate for the six months ended June 30, 2025 was lower than the U.S.

federal statutory rate of 21% as a result of a one-time benefit attributable to the revaluation of deferred tax assets in China, partially offset by U.S.

taxes on international operations and additional tax reserve positions.

Accounts, Notes and Other Receivables—Net

5 unchanged sentences

Less—Allowance for expected credit losses

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

Trade receivables include $ 51 million and $ 40 million of unbilled customer contract asset balances as of June 30, 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 $ 44 million and $ 50 million as of March 31, 2025 and December 31, 2024, respectively.

Other receivables includes VAT receivables of $ 41 million and $ 50 million as of June 30, 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 March 31,

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

2025 2024 2025 2024

(Dollars in millions)

1 unchanged sentence

Guaranteed bank notes sold without recourse 80 52 96 52

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.

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 for the three months ended June 30, 2025 and 2024, respectively, and $ 2 million for the six months ended June 30, 2025 and 2024 , respectively.

2025 December 31,

2 unchanged sentences

Guaranteed bank notes sold but not yet collected by the bank from the customer 43 —

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

As of June 30, 2025 and December 31, 2024, the Company had no guaranteed bank notes pledged as collateral .

Inventories—Net

37 unchanged sentences

Environmental reserve 5 6

Bank overdrafts (2)

Other (primarily operating expenses)

(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.

(1) Customer advances and deferred inco me inc lude $ 15 million and $ 8 million of contract liabilities as of June 30, 2025 and December 31, 2024, respectively.

See Note 3, Revenue Recognition and Contracts with Customers .

(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.

7 unchanged sentences

Usage—cash ( 6 ) — ( 6 )

Balance at March 31, 2025

Balance at June 30, 2025

$ 11 $ — $ 11

4 unchanged sentences

Usage—cash ( 12 ) — ( 12 )

Balance at March 31, 2024

$ 11 $ — $ 11

Balance at June 30, 2024

Other Liabilities

11 unchanged sentences

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

As of March 31, 2025, the Company does not have any material finance leases.

As of June 30, 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

Six Months Ended

2025 2024 2025 2024

(Dollars in millions)

Operating lease cost $ 5 $ 4 $ 9 $ 7

Short-term lease cost 1 — 1 —

Total lease cost $ 6 $ 4 $ 10 $ 7

Supplemental cash flow information related to operating leases is as follows:

Three Months Ended

Six Months Ended

2025 2024 2025 2024

(Dollars in millions)

1 unchanged sentence

Operating cash outflows from operating leases

$ 4 $ 3 $ 8 $ 6

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

9 unchanged sentences

Weighted-average discount rate 6.53 % 6.71 %

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

Maturities of operating lease liabilities as of June 30, 2025 were as follows:

(Dollars in millions)

5 unchanged sentences

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.

22 unchanged sentences

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,

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 June 30, 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 June 30, 2025 and December 31, 2024 are as follows:

Due Interest Rate June 30,

2025 December 31,

6 unchanged sentences

Total long-term debt $ 1,460 $ 1,464

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.

Separate from the Revolving Facility, the Company has a bilateral letter of credit facility with outstanding letters of credit in the amount of $ 8 million at June 30, 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:

Minimum scheduled principal repayments of long-term debt as of June 30, 2025 are as follow:

(Dollars in millions)

3 unchanged sentences

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

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.

The total amount of dividends paid on June 16, 2025 amounted to $ 13 million.

Treasury Stock

1 unchanged sentence

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 months ended March 31, 2025.

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

The Company did not reissue or retire any shares of treasury stock during the three and six months ended June 30, 2025.

Share Repurchase Program

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 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 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.

During the six months ended June 30, 2025, the Company repurchased $ 52 million of Common Stock, and had $ 198 million remaining under the share repurchase program as of that date.

The repurchased shares are held as treasury stock.

1 unchanged sentence

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

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.

As of June 30, 2025 and December 31, 2024, we had contracts with aggregate gross notional amounts of $ 973 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.

2 unchanged sentences

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

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

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:

Notional Amounts Assets Liabilities

5 unchanged sentences

Designated cross-currency swaps 2,040 1,515 2 82 (b) 173 — (d)

Designated interest-rate swaps 675 — — — 12 —

Designated interest-rate swaps 675 — — — 16 — (d)

Total designated instruments 3,235 1,846 17 86 202 6

11 unchanged sentences

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 the second quarter of 2024.

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

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.

The Company also has outstanding forward currency exchange contracts with maturities up to 18 months and an aggregate notional amount of $ 520 million and $ 331 million as of June 30, 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.

5 unchanged sentences

Net Investment Hedges

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.

The Company has designated cross-currency swaps with aggregate notional amounts of € 1,381 million ($ 1,490 million) and € 858 million ($ 965 million) as of June 30, 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.

The fair values of the net investment hedges were a net liability o f $ 123 million and a net asset of $ 70 million as of June 30, 2025 and December 31, 2024 , respectively.

No ineffectiveness has been recorded on the net investment hedges.

3 unchanged sentences

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 .

The Company also has outstanding forward currency exchange contracts with maturities generally up to 3 months and an aggregate notional amount of $ 453 million and $ 597 million as of June 30, 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.

1 unchanged sentence

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)

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

2025 2024 2025 2024

(Dollars in millions)

Cash flow hedges

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

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

Gain (loss) reclassified from AOCI to

Cost of goods sold $ — $ ( 2 ) $ — $ ( 4 )

Interest expense (1)

( 4 ) 1 ( 4 ) ( 1 )

Non-operating income (2)

45 ( 6 ) 64 ( 13 )

Gain (loss) recognized in other comprehensive

income (loss) ( 8 ) ( 3 ) ( 8 ) 2

Net investment hedges

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

Gain (loss) recognized in other comprehensive

income (loss) ( 134 ) 10 ( 178 ) 33

(1) Includes a settlement loss of $ 3 million for the three and six months ended June 30, 2024, respectively.

(2) Includes a settlement loss of $ 4 million for the three and six months ended June 30, 2024, respectively.

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,

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

2025 2024 2025 2024

Contract Type Location (Dollars in millions)

Interest rate swaps Interest expense (1)

$ — $ 5 $ — $ 13

Forward currency exchange contracts Non-operating income ( 20 ) 4 ( 26 ) 13

(1) Includes settlement gain of $ 21 million and interest income of $ 8 million, partially offset by marked-to-market remeasurement losses of $ 24 million, for the three months ended June 30, 2024.

Includes settlement gain of $ 21 million and interest income of $ 16 million, partially offset by marked-to-market remeasurement losses of $ 24 million, for the six months ended June 30, 2024.

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:

March 31, 2025

June 30, 2025

December 31, 2024

5 unchanged sentences

The Company determined the fair value of its Term Loan Facilities and related current maturities utilizing transactions in the listed markets for similar liabilities.

As such, the fair value of the Term Loan Facilities 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 exchange traded markets and is classified as a Level 1 measurement.

2 unchanged sentences

Three Months Ended

Six Months Ended

2025 2024 2025 2024

(Dollars in millions)

1 unchanged sentence

Balance at beginning of period $ ( 56 ) $ ( 39 ) $ ( 27 ) $ ( 57 )

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

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

Other comprehensive (loss) income before

reclassifications ( 59 ) 5 ( 88 ) 23

Income tax benefit (expense) associated with

comprehensive income (loss) before reclassifications — — — —

Amounts reclassified from AOCI — ( 5 ) — ( 5 )

Balance at end of period ( 115 ) ( 39 ) ( 115 ) ( 39 )

1 unchanged sentence

Balance at beginning of period ( 15 ) ( 19 ) ( 15 ) ( 20 )

Other comprehensive income (loss) before reclassifications — 1

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

Other comprehensive income (loss) before

reclassifications — 2 — 3

Income tax benefit (expense) associated with

comprehensive income (loss) before reclassifications — — — —

Balance at end of period ( 15 ) ( 17 ) ( 15 ) ( 17 )

1 unchanged sentence

Balance at beginning of period ( 8 ) 1 ( 10 ) ( 2 )

Other comprehensive (loss) income before reclassifications 17 16

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

Other comprehensive (loss) income before

reclassifications 29 8 46 24

Income tax benefit (expense) associated with

comprehensive income (loss) before reclassifications 24 ( 2 ) 26 ( 6 )

Amounts reclassified from AOCI ( 41 ) ( 7 ) ( 60 ) ( 18 )

3 unchanged sentences

Balance at beginning of period 90 95 125 76

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

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

Other comprehensive (loss) income before

reclassifications ( 133 ) 10 ( 177 ) 33

Income tax benefit (expense) associated with

comprehensive income (loss) before reclassifications 5 ( 2 ) 14 ( 6 )

Balance at end of period ( 38 ) 103 ( 38 ) 103

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

Accumulated other comprehensive (loss) income, end of

period $ ( 159 ) $ 46 $ ( 159 ) $ 46

Reclassifications from AOCI to income were as follows:

Three Months Ended

Six Months Ended

2025 2024 2025 2024

(Dollars in millions)

Foreign Exchange Translation Adjustment

Reclassification adjustments recognized in income (1)

$ — $ ( 5 ) $ — $ ( 5 )

Amounts reclassified from AOCI — ( 5 ) — ( 5 )

Changes in Fair Value of Effective Cash Flow Hedges

Reclassification forward currency exchange contracts to Cost of goods sold $ — $ ( 2 )

Reclassification forward currency exchange contracts to

Cost of goods sold $ — $ ( 2 ) $ — $ ( 4 )

Reclassification cross-currency swaps to Interest expense 4 1 4 ( 1 )

Reclassification cross-currency swaps to Non-operating (income) expense ( 19 ) ( 7 )

Reclassification cross-currency swaps to Non-operating

(income) expense ( 45 ) ( 6 ) ( 64 ) ( 13 )

Tax effect on reclassification to income 5 ( 1 ) 7 1

1 unchanged sentence

Total reclassifications for the period $ ( 36 ) $ ( 13 ) $ ( 53 ) $ ( 22 )

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

See Note 22 for discussion.

Earnings Per Share

1 unchanged sentence

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:

The details of the EPS calculations for the three and six months ended June 30, 2025 and 2024 are as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(Dollars in millions except per share)

17 unchanged sentences

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 between January 2017 and February 2020.

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 estimated total amount of the loss contingency arising from this matter as of June 30, 2025 was $ 25 million, including penalties and interest.

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

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(Dollars in millions)

2 unchanged sentences

Settlement of warranty/guarantee claims

( 5 ) ( 3 ) ( 8 ) ( 6 )

Foreign currency translation 2 — 2 ( 1 )

Warranty and product performance guarantees at end of period

$ 23 $ 25 $ 23 $ 25

Other Commitments and Contingencies

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

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

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

We regularly assess the likelihood of adverse judgments or 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.

Pension Benefits

9 unchanged sentences

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 2025, of which less than $ 1 million has been contributed as of March 31, 2025.

pension plans to satisfy regulatory funding standards in 2025, of which $ 2 million has been contributed as of June 30, 2025.

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

Three Months Ended March 31,

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

Plans Non-U.S.

2025 2024 2025 2024 2025 2024 2025 2024

17 unchanged sentences

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

Three Months Ended March 31,

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

2025 2024 2025 2024

(Dollars in millions)

United States $ 178 $ 174 $ 354 $ 352

Germany 89 91

United Kingdom 92 80 177 164

Rest of Europe 369 354 709 739

2 unchanged sentences

Other International 24 19 44 35

Three Months Ended March 31,

$ 913 $ 890 $ 1,791 $ 1,805

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

2025 2024 2025 2024

(Dollars in millions)

Diesel $ 217 $ 220 $ 425 $ 461

Gas 398 375 801 763

Commercial Vehicle 170 161 325 322

Aftermarket 111 121 209 233

Other 17 13 31 26

$ 913 $ 890 $ 1,791 $ 1,805

The table below provides segment information about the Company:

Three Months Ended March 31,

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

2025 2024 2025 2024

(Dollars in millions)

2 unchanged sentences

Variable manufacturing costs (1)

123 95 221 191

Fixed manufacturing costs (2)

Research, development and engineering costs 40 44

51 52 110 118

Research, development and engineering

costs 45 41 85 85

Selling, general and administrative costs 59 61 118 125

2 unchanged sentences

Other segment items (3)

( 5 ) ( 25 ) 2 ( 29 )

Consolidated net income $ 87 $ 64 $ 149 $ 130

1 unchanged sentence

(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).

(3) Other segment items consist of gain on sale of equity interest in unconsolidated joint venture, 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.

The Company had capital expenditures of $ 15 million and $ 17 million for the three months ended June 30, 2025 and 2024, respectively, and $ 41 million and $ 49 million for the six months ended June 30, 2025 and 2024, respectively.

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 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.

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.

On July 4, 2025, the United States enacted H.R.

1, comprehensive legislation that introduced changes to federal tax law, among other things.

The Company is currently evaluating the implications of the new tax law and the impact on its Consolidated Interim Financial Statements.

On July 24, 2025, the Board of Directors declared a cash dividend of $ 0.06 per share of Common Stock, payable on September 16, 2025, to shareholders of record as of September 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