What changed in this filing

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Item 1. Financial Statements

2025-10-23 compared with 2025-07-24 · 153 added, 98 removed, 665 unchanged (27% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

8 unchanged sentences

Gain on sale of equity investment (Note 22)

— ( 27 ) — ( 27 )

Non-operating income, net ( 3 ) ( 1 ) ( 10 ) ( 7 )

12 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

4 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)

5 ( 31 ) ( 158 ) ( 4 )

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

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

Total other comprehensive income (loss), net of tax 13 ( 56 ) ( 219 ) ( 7 )

Comprehensive income (loss) $ 90 $ ( 4 ) $ 7 $ 175

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, 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

1,000,000,000 and 1,000,000,000 shares authorized, 242,502,188 and 240,987,329 issued and 195,105,105 and 206,387,938 outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid–in capital 1,232 1,213

3 unchanged sentences

Treasury Stock, at cost;

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

47,397,083 and 34,599,391 shares as of September 30, 2025 and December 31, 2024, respectively (Note 15)

( 447 ) ( 306 )

4 unchanged sentences

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

5 unchanged sentences

Gain on sale of equity investment — ( 27 )

Foreign exchange (gain) loss ( 65 ) 13

Foreign exchange gain ( 66 ) ( 10 )

Stock compensation expense 19 17

14 unchanged sentences

Net cash (used for) provided by investing activities

$ ( 26 ) $ 18

Cash flows from financing activities:

41 unchanged sentences

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

Net income — — — — — 77 — 77

Share repurchases — — 6 ( 84 ) — — — ( 84 )

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

Other comprehensive income, net of tax — — — — — — 13 13

Dividends — — — — — ( 12 ) — ( 12 )

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

Balance at September 30, 2025

242 $ — 47 $ ( 447 ) $ 1,232 $ ( 1,452 ) $ ( 146 ) $ ( 813 )

Common Stock Treasury Stock Additional

22 unchanged sentences

241 $ — 20 $ ( 182 ) $ 1,203 $ ( 1,792 ) $ 46 $ ( 725 )

Net income — — — — — 52 — 52

Repurchases of Common Stock — — 6 ( 52 ) — — — ( 52 )

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

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

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

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

Balance at September 30, 2024

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

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 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.

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

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

27 unchanged sentences

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

In September 2025, FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The amendments revise the capitalization criteria for internal-use software costs and eliminate stage-based development guidance.

The update is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

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

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

6 unchanged sentences

Contract assets—January 1 $ 40 $ 38

Contract assets—June 30

Contract assets—September 30

Change in contract assets—Increase/(Decrease) $ 8 $ 15

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

Contract liabilities—June 30

( 15 ) ( 14 )

Contract liabilities—September 30

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

Research, Development and Engineering

Garrett conducts research, development, and engineering (“RD&E”) activities, which consist primarily of the development of new products and product applications.

Garrett conducts research, development, and engineering (“RD&E”) activities, which consist primarily of the

development of new products and product applications.

RD&E costs are charged to expense as incurred unless the Company has a contractual guarantee for reimbursement from the customer.

2 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

1 unchanged sentence

Research and development costs $ 46 $ 49 $ 136 $ 138

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

Engineering-related expenses, net (1)

( 13 ) ( 6 ) ( 18 ) ( 10 )

$ 33 $ 43 $ 118 $ 128

(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.

(1) Engineering-related expenses are net of customer reimbursements and costs capitalized from contractual guarantees of reimbursement of $ 23 million and $ 17 million for the three months ended September 30, 2025 and 2024, respectively, and $ 48 million and $ 41 million for the nine months ended September 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 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.

As of September 30, 2025 and December 31, 2024 , $ 49 million and $ 29 million , respectively, of such contractually reimbursable costs were capitalized.

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

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

2 unchanged sentences

Effective tax rate 24.5 % 31.6 % 21.8 % 25.4 %

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.

The effective tax rates for the three months ended September 30, 2025 and 2024 were 24.5 % and 31.6 %, respectively.

The effective tax rates for the nine months ended September 30, 2025 and 2024 were 21.8 % and 25.4 %, respectively.

The change in the effective tax rate for the three months ended September 30, 2025 compared to the prior period is primarily related to a decrease in U.S.

taxes on international operations and the global mix of earnings.

The change in the effective tax rate for the nine months ended September 30, 2025 compared to the prior period is primarily related to a one-time benefit attributable to the revaluation of deferred tax assets in China.

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

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

taxes on international operations partially offset by lower taxes on non-U.S.

earnings and global research and development benefits.

The effective tax rate for the nine months ended September 30, 2025 was higher than the U.S.

federal statutory rate of 21% primarily because of 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.

This increase was partially offset by a one-time benefit attributable to the revaluation of deferred tax assets in China as well as lower 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 $ 51 million and $ 40 million of unbilled customer contract asset balances as of June 30, 2025 and December 31, 2024, respectively.

Trade receivables include $ 48 million and $ 40 million of unbilled customer contract asset balances as of September 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 $ 41 million and $ 50 million as of June 30, 2025 and December 31, 2024, respectively.

Other receivables includes VAT receivables of $ 46 million and $ 50 million as of September 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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

2 unchanged sentences

Guaranteed bank notes sold without recourse 61 95 157 147

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.

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 $ — million and $ 1 million for the three months ended September 30, 2025 and 2024, respectively, and $ 2 million and $ 3 million for the nine months ended September 30, 2025 and 2024 , respectively.

September 30,

2025 December 31,

2 unchanged sentences

Guaranteed bank notes sold but not yet collected by the bank from the customer 45 —

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

As of September 30, 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 ( 45 ) ( 41 )

September 30,

2025 December 31,

4 unchanged sentences

Pension and other employee related 26 23

Customer reimbursable engineering costs 23 —

Derivatives designated as net investment hedges (Note 16)

5 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 9 9

Dividends declared — 12

Dividends payable — 12

Designated and undesignated derivatives (Note 16)

1 unchanged sentence

Other (primarily operating expenses)

(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.

(1) Customer advances and deferred inco me inc lude $ 6 million and $ 8 million of contract liabilities as of September 30, 2025 and December 31, 2024, respectively.

See Note 3, Revenue Recognition and Contracts with Customers .

8 unchanged sentences

Usage—cash ( 10 ) — ( 10 )

Balance at June 30, 2025

Balance at September 30, 2025

$ 10 $ — $ 10

4 unchanged sentences

Usage—cash ( 15 ) — ( 15 )

Balance at June 30, 2024

Balance at September 30, 2024

$ 10 $ — $ 10

Other Liabilities

September 30,

2025 December 31,

10 unchanged sentences

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

As of June 30, 2025, the Company does not have any material finance leases.

As of September 30, 2025, the Company does not have any material finance leases.

Our leases have remaining lease terms of up to 12 years, some of which include options to extend the leases for up to two years , and some of which include options to terminate the leases within the year.

1 unchanged sentence

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

5 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

6 unchanged sentences

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

September 30,

2025 December 31,

3 unchanged sentences

Other liabilities 40 42

September 30,

2025 December 31, 2024

1 unchanged sentence

Weighted-average discount rate 6.44 % 6.71 %

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

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

(Dollars in millions)

20 unchanged sentences

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).

The 2025 Dollar Term Facility will mature on January 30, 2032, and initially bore 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).

On August 6, 2025, the Company entered into Amendment No.

1 (the "First Amendment") to the Restatement Agreement, which reduced the Applicable Rate (as defined

in the Restatement Agreement) to the Adjusted Term SOFR Rate plus 2.00 % per annum in the case of Term Benchmark Loans and the Alternate Base Rate plus 1.00 % per annum in the case of ABR Loans.

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").

7 unchanged sentences

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

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,

(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 September 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 September 30, 2025 and December 31, 2024 are as follows:

Due Interest Rate September 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 $ 8 million at June 30, 2025 and December 31, 2024, respectively.

Separate from the New 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 September 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 June 30, 2025 are as follow:

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

September 30,

(Dollars in millions)

5 unchanged sentences

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

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.

The total amount of dividends paid on September 16, 2025 amounted to $ 11 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.

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.

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, 2025.

Share Repurchase Program

3 unchanged sentences

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

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

During the nine months ended September 30, 2025, the Company repurchased $ 136 million of Common Stock, and had $ 114 million remaining under the share repurchase program as of that date.

These repurchases include a total of 5 million shares repurchased from funds affiliated with Oaktree Capital Management, L.P., a related party, for approximately $ 62 million.

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 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.

As of September 30, 2025 and December 31, 2024, we had contracts with aggregate gross notional amounts of $ 889 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 June 30, 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 September 30, 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

2 unchanged sentences

Designated cross-currency swaps 2,040 1,515 2 82 (b) 170 — (d)

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

Designated interest-rate swaps 675 — — — (b) 17 — (d)

Total designated instruments 3,180 1,846 15 86 195 6

14 unchanged sentences

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 $ 520 million and $ 331 million as of June 30, 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 $ 465 million and $ 331 million as of September 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.

1 unchanged sentence

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 occurring in May 2027, May 2028, May 2029, and May 2030.

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

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.

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

1 unchanged sentence

Net Investment Hedges

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.

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 September 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 a net liability o f $ 123 million and a net asset of $ 70 million as of June 30, 2025 and December 31, 2024 , respectively.

The fair values of the net investment hedges were a net liability of $ 122 million and a net asset of $ 70 million as of September 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 $ 453 million and $ 597 million as of June 30, 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 $ 424 million and $ 597 million as of September 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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

4 unchanged sentences

Interest expense (1)

( 4 ) 1 ( 4 ) ( 1 )

Non-operating income (2)

45 ( 6 ) 64 ( 13 )

Gain (loss) recognized in other comprehensive

3 unchanged sentences

income (loss) 6 ( 35 ) ( 171 ) ( 2 )

(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.

(1) Includes a settlement loss of $ 3 million for the nine months ended September 30, 2024.

(2) Includes a settlement loss of $ 4 million for the nine months ended September 30, 2024.

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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

3 unchanged sentences

Forward currency exchange contracts Non-operating income ( 1 ) ( 5 ) ( 27 ) 8

(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.

(1) Includes interest income of $ 5 million, partially offset by marked-to-market remeasurement losses of $ 9 million, for the three months ended September 30, 2024.

Includes settlement gain of $ 21 million and interest income of $ 21 million, partially offset by marked-to-market remeasurement losses of $ 33 million, for the nine months ended September 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:

June 30, 2025

September 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

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

35 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

18 unchanged sentences

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 and six months ended June 30, 2025 and 2024 are as follows:

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

18 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 June 30, 2025 was $ 25 million, including penalties and interest.

The estimated total amount of the loss contingency arising from this matter as of September 30, 2025 was $ 26 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

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

22 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 $ 2 million has been contributed as of June 30, 2025.

pension plans to satisfy regulatory funding standards in 2025, of which $ 5 million has been contributed as of September 30, 2025.

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

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

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

Plans Non-U.S.

19 unchanged sentences

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

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

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

2025 2024 2025 2024

1 unchanged sentence

United States $ 170 $ 178 $ 524 $ 530

United Kingdom 92 80 177 164

Germany 96 76 271 250

Rest of Europe 338 300 1,049 1,029

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$ 902 $ 826 $ 2,693 $ 2,631

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

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

2025 2024 2025 2024

7 unchanged sentences

The table below provides segment information about the Company:

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

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

2025 2024 2025 2024

6 unchanged sentences

62 52 173 168

Research, development and engineering

costs 45 41 85 85

RD&E costs 33 43 118 128

Selling, general and administrative costs 57 53 175 178

4 unchanged sentences

Consolidated net income $ 77 $ 52 $ 226 $ 182

(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.

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

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

(3) Other segment items consist of gain on sale of equity interest in unconsolidated joint venture, non-service components of net periodic 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 $ 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.

The Company had capital expenditures of $ 10 million and $ 20 million for the three months ended September 30, 2025 and 2024, respectively, and $ 51 million and $ 69 million for the nine months ended September 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.

We received cash consideration on the divestiture date of $ 46 million.

An additional $ 7 million of deferred payments is to be received in equal installments due twelve months and thirty-six months from the divestiture date, with the first deferred payment received in 2025.

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.

1 unchanged sentence

Subsequent Events

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.

On October 23, 2025, the Company made a voluntary early debt repayment of $ 50 million on its 2025 Dollar Term Facility.

Also on October 23, 2025, the Board of Directors declared a cash dividend of $ 0.08 per share of Common Stock, payable on December 15, 2025, to shareholders of record as of December 1, 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