What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-19 compared with 2025-02-20 · 312 added, 281 removed, 1219 unchanged (33% of the section changed)

30 unchanged sentences

We have audited the accompanying consolidated balance sheets of Garrett Motion Inc.

and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), cash flows and equity (deficit), for each of the three years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with the accounting principles generally accepted in the United States of America.

19 unchanged sentences

The estimated variable consideration is based primarily on management’s best available information regarding customer negotiations, historical experience, and anticipated future customer pricing strategies.

Estimating variable consideration requires significant

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

Estimating the customer pricing reserve related to variable

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

The amount of customer pricing reserve as of December 31, 2025 is $88 million.

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

How the Critical Audit Matter Was Addressed in the Audit

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

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

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

• We selected a sample of revenue contracts with variable consideration and performed the following:

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

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

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

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

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

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

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

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

◦ Tested the mathematical accuracy of the variable consideration calculation.

We inspected manual revenue journal entries for unusual entries affecting revenue and examined supporting evidence.

/s/ Deloitte SA

14 unchanged sentences

Interest expense 108 156 159

Loss on extinguishment of debt (Note 17)

Gain on sale of equity investment (Note 26)

1 unchanged sentence

( 19 ) ( 13 ) ( 2 )

Reorganization items, net (Note 2)

Income before taxes 392 343 347

2 unchanged sentences

preferred stock dividends (Note 19)

— ( 80 ) ( 157 )

preferred stock deemed dividends (Note 19)

19 unchanged sentences

Changes in fair value of net investment hedges, net of tax (Note 17)

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

( 131 ) 49 ( 9 )

Total other comprehensive (loss) income ( 211 ) 76 ( 39 )

Comprehensive income $ 99 $ 358 $ 222

31 unchanged sentences

Retained deficit ( 1,384 ) ( 1,653 )

Accumulated other comprehensive income (loss) (Note 22)

Accumulated other comprehensive (loss) income (Note 20)

Treasury Stock, at cost;

51,993,388 and 34,599,391 shares as of December 31, 2025 and 2024, respectively (Note 19)

( 520 ) ( 306 )

Total deficit ( 802 ) ( 673 )

11 unchanged sentences

Amortization of deferred debt issuance costs

Interest payments on Series B Preferred Stock, net of debt discount accretion — — ( 19 )

Loss on extinguishment of debt — — 5

Loss on remeasurement of forward purchase contract — — 13

Gain on sale of equity investment — ( 27 ) —

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

Foreign exchange (gain) loss ( 66 ) 27 ( 15 )

Stock compensation expense 27 23 14

Pension expense ( 8 ) ( 6 ) ( 1 )

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

Unrealized loss (gain) on derivatives 73 ( 2 ) 51

Other 10 ( 6 ) 7

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Proceeds from issuance of long-term debt, net of deferred financing costs 80 794 667

Proceeds from revolving credit facilities 70 — —

Payments of long-term debt ( 139 ) ( 992 ) ( 207 )

Payments of revolving credit facilities ( 70 ) — —

Payments for dividends ( 52 ) — ( 42 )

3 unchanged sentences

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

Redemption of Series B Preferred stock — — ( 381 )

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

2 unchanged sentences

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 7 ( 8 ) 5

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

Net increase (decrease) in cash, cash equivalents and restricted cash 53 ( 134 ) 12

Cash, cash equivalents and restricted cash at beginning of period 126 260 248

1 unchanged sentence

Supplemental cash flow disclosures:

Income taxes paid (net of refunds) $ 64 $ 60 $ 42

Income taxes paid (net of refunds and credits) $ 62 $ 64 $ 60

Interest paid 95 88 89

Reorganization items paid — — 5

Supplemental disclosure of non-cash financing activities:

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Net income — — — — — — — 261 — 261

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

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

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

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

Balance at December 31, 2022

246 $ — 64 $ — $ — $ — $ 1,333 $ ( 1,485 ) $ 36 $ ( 116 )

Net income — — — — — — — 261 — 261

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

17 unchanged sentences

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

Net income — — — — — — — 310 — 310

Share repurchases — — — — 17 ( 208 ) — — — ( 208 )

Excise tax on share repurchases — — — — — ( 2 ) — — — ( 2 )

Shares issued under stock plan, net of shares withheld for employee taxes — — 2 — — ( 4 ) — — — ( 4 )

Other comprehensive loss, net of tax — — — — — — — — ( 211 ) ( 211 )

Common Stock dividends — — — — — — — ( 41 ) — ( 41 )

Stock-based compensation — — — — — — 27 — 27

Balance at December 31, 2025

— $ — 243 $ — 52 $ ( 520 ) $ 1,240 $ ( 1,384 ) $ ( 138 ) $ ( 802 )

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

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The CODM makes operational performance assessments and resource allocation decisions on a consolidated basis, inclusive of all of the Company’s products across channels and geographies.

Plan of Reorganization

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

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

The Company applied ASC 852, Reorganizations , in preparing its Consolidated Financial Statements during its Chapter 11 bankruptcy proceedings, which required the financial statements for periods subsequent to filing for Chapter 11 to distinguish transactions and events that were directly associated with the Company's reorganization from the ongoing operations of the business.

Revenues, expenses, realized gains and losses, and provisions for losses directly resulting from the reorganization and restructuring were reported separately as Reorganization items, net in the Consolidated Statements of Operations.

Upon Emergence, the Company did not meet the requirements under ASC 852 for fresh start accounting and in accordance with ASC 852, a new reporting entity was not created for accounting purposes.

Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and amounted to an expense of $ 3 million for the year ended December 31, 2022.

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

Summary of Significant Accounting Policies

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We use the implicit rate when readily determinable.

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

The lease ROU asset also includes any lease payments

made and excludes lease incentives.

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

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

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

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

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

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

We adjust our estimate of revenue at the earlier of when the value of consideration we expect to receive changes or when the consideration becomes fixed.

Research and Development

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

R&D costs are charged to expense as incurred.

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

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

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

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

As of December 31, 2024 and 2023 , $ 29 million and $ 12 million, respectively, of such contractually reimbursable costs were capitalized.

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

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.

RD&E costs are included in Cost of goods sold.

Customer reimbursements are netted against gross RD&E expenses as they are considered a recovery of cost.

RD&E costs are charged to expense as incurred unless the Company has a contractual guarantee of reimbursement from the customer, in which case the related costs are capitalized.

Total RD&E expenses, net of customer reimbursements, amounted to $ 151 million, $ 161 million and $ 163 million for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025 and 2024 , $ 52 million and $ 29 million, respectively, of contractually reimbursable costs were capitalized.

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

Government Incentives

19 unchanged sentences

Balance at December 31, 2024 64 141

Obligations added to the program 279 337

Obligations settled ( 271 ) ( 326 )

Foreign currency translation ( 3 ) 6

Balance at December 31, 2025 $ 69 $ 158

Environmental Matters

1 unchanged sentence

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

To the extent that the

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

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

The liabilities are recorded in Accrued liabilities and Other liabilities in the Consolidated Balance Sheets.

10 unchanged sentences

The remaining components of net benefit costs within Pension expense (income), primarily interest costs and assumed return on plan assets, are recorded in Non-operating expense (income).

We recognize net actuarial gains or losses in excess of 10 % of the greater of the fair value of plan assets or the plans’ projected benefit obligation (the corridor) annually in the fourth quarter each year (“MTM Adjustment”).

The MTM Adjustment is recorded in Non-operating expense (income).

18 unchanged sentences

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

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

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

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

Earnings per share

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

For the years ended December 31, 2023 and 2022, basic earnings per share were calculated using the two-class method, because our Series A Preferred Stock was considered a participating security prior to its conversion into Common Stock and cancellation pursuant to the Transaction.

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

Basic earnings per share for the years ended December 31, 2025, 2024 and 2023 are calculated using the two-class method.

In 2025 and 2024, the deferred stock units related to the stock-based compensation plan contain non-forfeitable rights to dividends and are considered as participating securities, while in 2023 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

to the extent that each such security may share in the Company's earnings.

Basic earnings per share are calculated by dividing undistributed earnings allocated to Common Stock by the weighted average number of common shares.

Diluted earnings per share for the year ended December 31, 2024 is calculated based on the weighted-average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents using the treasury stock method.

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

Diluted earnings per share for the years ended December 31, 2025 and 2024 are calculated by applying the two-class method for participating securities and then incorporating the dilutive effects of other potential common shares, determined using methods such as the treasury stock method, to arrive at the most dilutive EPS.

Diluted earnings per share for the year ended December 31, 2023 are calculated by evaluating the more dilutive impact of both the two-class method and the if-converted method.

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

6 unchanged sentences

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

We lease certain facilities and receive property maintenance services from Honeywell International ("Honeywell"), which as of Emergence was the owner of our Series B Preferred Stock that has since been fully redeemed by the Company, is a holder of our Common Stock and was also a holder of our Series A Preferred Stock prior to the Transaction, as discussed below and in Note 21, Equity .

We lease certain facilities and receive property maintenance services from Honeywell International ("Honeywell") which, as of April 30, 2021 was the owner of our Series B Preferred Stock that has since been fully redeemed by the Company, is a holder of our Common Stock and was also a holder of our Series A Preferred Stock prior to the Transaction, as discussed below and in Note 19, Equity .

We also contract with Honeywell for the occasional purchase of certain goods and services.

1 unchanged sentence

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

Our payments under the agreements with Honeywell during the period that they were considered a related party amounted to $ 2 million for the year ended December 31, 2023 and $ 9 million for the year ended December 31, 2022, and were included in Cost of goods sold, and Selling, general and administrative expenses, in our Consolidated Statements of Operations.

As discussed in Note 21, Equity , in order to effect the Transaction, on April 12, 2023, the Company entered into separate definitive agreements (the "Series A Preferred Stock Agreements") with each of Centerbridge Partners, L.P.

Our payments under the agreements with Honeywell during the period that they were considered a related party amounted to $ 2 million for the year ended December 31, 2023 and were included in Cost of goods sold, and Selling, general and administrative expenses, in our Consolidated Statements of Operations.

As discussed in Note 19, Equity , in order to effect the Transaction, on April 12, 2023 (the "Transaction Date"), the Company entered into separate definitive agreements (the "Series A Preferred Stock Agreements") with each of Centerbridge Partners, L.P.

(“Centerbridge”) and funds managed by Oaktree Capital Management, L.P.

4 unchanged sentences

As described more fully in Note 19, Equity , in connection with the Transaction, we paid to Centerbridge and Oaktree an aggregate of approximately $ 570 million for the repurchase of shares of Series A Preferred Stock, plus an aggregate of approximately $ 10 million and 7,276,036 shares of Common Stock representing the Additional Amounts and Accumulated Dividends in respect of the repurchased shares of Series A Preferred Stock.

conversion of an equivalent number of shares of Series A Preferred Stock, plus Additional Amounts and Accumulated Dividends of approximately $ 9 million and 6,819,540 shares of Common Stock.

Additionally, in connection with the conversion of the Series A Preferred Stock that each of Centerbridge and Oaktree held as of the conversion date, we issued to Centerbridge and Oaktree an aggregate of 65,334,277 shares of Common Stock upon the conversion of an equivalent number of shares of Series A Preferred Stock, plus Additional Amounts and Accumulated Dividends of approximately $ 9 million and 6,819,540 shares of Common Stock.

In connection with the conversion of our Series A Preferred Stock, we issued to Honeywell, as a holder of our Series A Preferred Stock, 4,196,330 shares of Common Stock upon the conversion of an equivalent number of shares of Series A Preferred Stock, plus Additional Amounts and Accumulated Dividends of approximately $ 1 million and 438,009 shares of Common Stock.

2 unchanged sentences

In connection with the conversion of our Series A Preferred Stock, we issued to Sessa Capital and its affiliates, as holder of our Series A Preferred Stock, 16,592,384 shares of Common Stock upon the conversion of an equivalent number of shares of Series A Preferred Stock, plus Additional Amounts and Accumulated Dividends of approximately $ 2 million and 1,731,900 shares of Common Stock.

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

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

During 2025, we also repurchased from Oaktree a total of 7,500,000 shares of Common Stock for $ 103 million under our share repurchase program.

The repurchased shares are held as treasury stock.

1 unchanged sentence

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

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

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

See Note 27, Segments and Concentrations for further detail.

Accounting Standards Issued But Not Yet Adopted

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

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 guidance is effective for fiscal years beginning after December 15, 2024 on a prospective basis.

Early adoption is permitted.

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

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

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

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

climate-related risks, governance, and oversight;

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

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

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

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

The Company adopted the new guidance as of January 1, 2025, and applied the amendments retrospectively to all prior periods presented in our financial statements.

Accounting Standards Issued But Not Yet Adopted

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

1 unchanged sentence

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

The guidance is effective for fiscal years beginning after December 15, 2026 on a prospective basis.

Early adoption is permitted.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date .

The guidance, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026 on a prospective basis, with early adoption permitted.

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

In September 2025, the 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.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities .

The amendments in this update establish the accounting for a government grant received by a business entity.

The guidance is effective for fiscal years beginning after December 15, 2029, 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 which are expected to have a material impact on the Company’s Consolidated Financial Statements and related disclosures.

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Contract assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized once invoiced in accordance with the terms of the contract.

Contract liabilities are recorded in scenarios where we enter into arrangements where customers are contractually obligated to remit cash payments in advance of us satisfying performance obligations and recognizing revenue.

Contract liabilities are recorded in scenarios where we enter into arrangements where customers are

contractually obligated to remit cash payments in advance of us satisfying performance obligations and recognizing revenue.

Contract liabilities are generally derecognized when revenue is recognized.

24 unchanged sentences

Supplier financing fees 1 1 1

Debt refinancing costs $ 6 $ — $ —

Other $ — $ 1 $ —

6 unchanged sentences

Pension income — non service ( 15 ) ( 13 ) ( 7 )

Foreign exchange loss 4 6 2

Foreign exchange (income) loss ( 1 ) 4 6

Loss on remeasurement (1)

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(Dollars in millions)

Current tax expense (benefit):

Federal $ 18 $ ( 3 ) $ 12

Foreign 54 56 50

$ 54 $ 62 $ 60

Total current tax expense (benefit) $ 73 $ 54 $ 62

Deferred tax expense (benefit):

Federal $ ( 6 ) $ ( 9 ) $ ( 14 )

1 unchanged sentence

Foreign 15 17 37

$ 7 $ 24 $ 46

$ 61 $ 86 $ 106

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

Total deferred tax expense (benefit) $ 9 $ 7 $ 24

Total income tax expense (benefit):

Federal $ 12 $ ( 12 ) $ ( 2 )

Foreign 69 73 87

Total income tax expense (benefit) $ 82 $ 61 $ 86

Effective Tax Rate

Effective tax rate includes:

Year Ended December 31,

2025 2024 2023

Amount Percent Amount Percent Amount Percent

(Dollars in millions)

federal statutory income tax rate 21.0 % 21.0 % 21.0 %

Taxes on non-U.S.

earnings different from U.S.

tax ( 3.3 ) % ( 3.6 ) % ( 3.4 ) %

Reserves for tax contingencies ( 4.7 ) % 0.2 % ( 0.4 ) %

Non-deductible and permanent items — % — % 0.7 %

Withholding and other taxes on foreign earnings 7.0 % 7.0 % 3.9 %

Tax law changes 0.1 % ( 1.7 ) % 0.1 %

Changes in valuation allowance ( 4.9 ) % 5.5 % ( 0.6 ) %

All other items 2.6 % ( 3.6 ) % 0.1 %

federal statutory tax rate $ 82 21.0 % $ 72 21.0 % $ 73 21.0 %

Domestic state and local income taxes, net of

federal income tax effect (1)

— 0.1 % — ( 0.1 ) % 1 0.3 %

Tax credits ( 1 ) ( 0.3 ) % ( 2 ) ( 0.7 ) % ( 2 ) ( 0.5 ) %

Nontaxable or nondeductible items — ( 0.1 ) % — ( 0.1 ) % 1 0.3 %

Effect of cross-border tax laws (2)

Global intangible low-taxed income 17 4.3 % 11 3.3 % 19 5.6 %

US effects of foreign partnership ( 1 ) ( 0.2 ) % 6 1.8 % ( 1 ) ( 0.4 ) %

Other ( 2 ) ( 0.4 ) % 3 0.8 % 1 0.2 %

Changes in valuation allowances 3 0.8 % — — % 1 0.4 %

Other ( 4 ) ( 1.0 ) % 1 0.3 % ( 2 ) ( 0.7 ) %

Foreign tax effects

Enacted changes in tax laws or rates — — % — — % 28 7.9 %

Remeasurement deferred taxes ( 11 ) ( 2.9 ) % — — % — — %

Tax on distributions 3 0.8 % 8 2.5 % 2 0.6 %

Other 6 1.6 % — ( 0.1 ) % ( 4 ) ( 1.1 ) %

Statutory tax rate difference between

Switzerland and US ( 30 ) ( 7.7 ) % ( 26 ) ( 7.7 ) % ( 27 ) ( 7.8 ) %

Changes in valuation allowances 1 0.2 % — 0.1 % 8 2.3 %

Enacted changes in tax laws or rates — — % — — % ( 20 ) ( 5.8 ) %

Tax on distributions 1 0.2 % 7 2.2 % — ( 0.1 ) %

Investment in JVs — — % 3 1.0 % ( 2 ) ( 0.5 ) %

Cantonal tax 11 2.8 % 15 4.5 % 4 1.0 %

Statutory impairment of investment in

subsidiary - 2024 RTP ( 7 ) ( 1.7 ) % — — % — — %

Other — — % ( 6 ) ( 1.7 ) % 3 0.8 %

India 8 2.0 % 7 1.9 % 3 0.8 %

Thailand — — % 5 1.3 % — — %

Changes in valuation allowances — — % ( 19 ) ( 5.6 ) % — 0.1 %

Other 3 0.7 % ( 2 ) ( 0.5 ) % 1 0.2 %

Tax refund — — % — — % ( 4 ) ( 1.2 ) %

Other 1 0.2 % 1 0.3 % — ( 0.1 ) %

Stateless — — % ( 6 ) ( 1.7 ) % — — %

Other foreign jurisdictions 4 1.0 % 5 1.5 % 7 2.6 %

Changes in unrecognized tax benefits ( 2 ) ( 0.5 ) % ( 22 ) ( 6.5 ) % ( 4 ) ( 1.1 ) %

Effective Tax Rate $ 82 20.9 % $ 61 17.8 % $ 86 24.8 %

(1) State taxes in Michigan and Indiana make up the majority (greater than 50 percent) of the tax effect in this category.

(2) Amounts reflected as net of related foreign tax credits.

The effective tax rate increased by 3.1 percentage points in 2025 compared to 2024.

The increase was primarily due to additional unrecognized tax benefits in Switzerland and China as well as prior year benefits associated with the release

of valuation allowance related to deferred tax assets in Brazil (net of U.S.

branch taxes) and prior year benefits associated with statute of limitation expiration and settlement of audits in Switzerland and Korea.

These increases were partially offset by the revaluation of deferred tax assets related to intellectual property transferred within China which was subject to tax at different rates.

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

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

branch taxes).

In addition, there was prior year expense due to rate change impact on deferred tax assets attributable to the certification by the Chinese government of the High and New Technology Enterprise status of the Company’s China operations, which reduced the tax rate to 15% for the respective entity.

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

The effective tax rate increased by 3.4 percentage points in 2023 compared to 2022.

The increase was primarily due to the rate change impact on deferred tax assets attributable to the certification by the Chinese government of the High and New Technology Enterprise status of the Company’s China operations, which reduced the tax rate to 15% for the respective entity.

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

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

Deferred tax assets (liabilities)

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

payables are as follows:

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

(Dollars in millions)

20 unchanged sentences

Other Various 3

We also have net operating loss carryforwards in certain US state jurisdictions, the tax effect of which is not significant.

We also have net operating loss carryforwards in certain U.S.

state jurisdictions, the tax effect of which is not significant.

We maintain a valuation allowance of $ 37 million against a portion of total deferred tax assets.

In the event we determine that we will not be able to realize our net deferred tax assets in the future, we will reduce such amounts through an increase to tax expense in the period such determination is made.

Conversely, if we determine that we will be able to realize net deferred tax assets in excess of the carrying amounts, we will decrease the recorded valuation allowance through a reduction to tax expense in the period that such determination is made.

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

Conversely, if we determine that we will be able to

realize net deferred tax assets in excess of the carrying amounts, we will decrease the recorded valuation allowance through a reduction to tax expense in the period that such determination is made.

Our valuation allowance increased $ 8 million from last year.

Our balance sheet presents a deferred tax asset of $ 210 million and a deferred tax liability of $ 32 million after considering jurisdictional netting.

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

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

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

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

11 unchanged sentences

As of December 31, 2025, 2024, and 2023 there were $ 55 million, $ 48 million, and $ 66 million, respectively, of unrecognized tax benefits that, if recognized, would be recorded as a component of tax expense.

The amount of unrecognized tax benefits that is reasonably possible to be resolved in the next twelve months (inclusive of interest and penalties) is expected to be approximately $ 22 million, all of which, if recognized, would reduce tax expense and the effective tax rate.

Estimated interest and penalties related to uncertain tax benefits are classified as a component of tax expense in the Consolidated Statements of Operations and totaled $ 2 million of benefit, $ 5 million of expense, and $ 2 million of expense for the years ended December 31, 2024, 2023, and 2022, respectively.

Estimated interest and penalties related to uncertain tax benefits are classified as a component of tax expense in the Consolidated Statements of Operations and totaled $ 4 million of expense, $ 2 million of benefit, and $ 5 million of expense for the years ended December 31, 2025, 2024, and 2023, respectively.

Accrued interest and penalties were $ 36 million, $ 32 million, and $ 34 million, as of December 31, 2025, 2024, and 2023, respectively.

2 unchanged sentences

Based on the outcome of these examinations, or as a result of the expiration of statutes of limitations for specific jurisdictions, it is possible that certain unrecognized tax benefits for tax positions taken on previously filed tax returns will significantly change from those recorded as liabilities in our financial statements.

Income Taxes Paid (Net of Refunds Received)

Year Ended December 31,

2025 2024 2023

(Dollars in millions)

Federal $ 4 $ 15 $ 17

State & Local 1 — 1

China 16 20 11

Korea 2 ( 1 ) 4

Switzerland - Federal 6 5 9

Switzerland - Cantonal 4 3 6

Other 8 12 12

Total Foreign 57 56 53

Balance at end of year $ 62 $ 71 $ 71

Accounts, Notes and Other Receivables—Net

5 unchanged sentences

Trade receivables include $ 48 million and $ 40 million of unbilled balances as of December 31, 2025 and 2024, respectively.

Other receivables includes VAT receivables of $ 47 million and $ 50 million as of December 31, 2025 and 2024, respectively.

Factoring and Notes Receivable

3 unchanged sentences

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

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

likewise accounted for as true sales.

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

Year Ended December 31,

26 unchanged sentences

Pension and other employee related 28 23

Customer reimbursable engineering costs 34 —

Derivatives designated as net investment hedges — 70

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Depreciation and amortization expense amounted to $ 99 million, $ 90 million and $ 90 million for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025, 2024 and 2023, capital expenditures included in accounts payable totaled $ 53 million, $ 60 million and $ 61 million, respectively.

There were no changes to the carrying amount of goodwill for the years ended December 31, 2025 and 2024 :

12 unchanged sentences

Freight accrual 9 9

Dividends declared (Note 21)

Dividends payable (Note 19)

Designated and undesignated derivatives 11 8

Environmental liabilities 3 6

Other (primarily operating expenses) 9 13

1 unchanged sentence

See Note 3, Revenue Recognition and Contracts with Customers .

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

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

5 unchanged sentences

Usage—cash ( 18 ) — ( 18 )

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

Balance at December 31, 2024

2 unchanged sentences

Balance at December 31, 2025

$ 12 $ — $ 12

Long-term Debt and Credit Agreements

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

On the Effective Date, in accordance with the Plan, the Company entered into a credit agreement (as amended from time to time, the “Credit Agreement”) with JPMorgan Chase Bank, N.A.

as administrative agent.

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

• 2021 Dollar Facility :

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

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

• 2023 Dollar Facility :

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

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

• Euro Facility :

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

On January 30, 2025, the Company entered into the Restatement Agreement, which amended and restated the Existing Credit Agreement.

Pursuant to 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.

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

1 unchanged sentence

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

2023 Dollar Term Facility April 30, 2028 SOFR plus 450 bps

Euro Term Facility April 30, 2028 EURIBOR plus 350 bps

2025 Dollar Term Facility January 30, 2032 SOFR plus 200 bps

2032 Senior Notes May 31, 2032 7.75 % 800 800

7 unchanged sentences

Total payments on long-term debt $ 1,439

Revolving Facility and Letters of Credit

The Credit Agreement also provides for a senior secured first-lien revolving credit facility providing for multi-currency revolving loans (the "Revolving Facility", and together with the Term Loan Facilities, the "Credit Facilities").

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

See discussion in " Amendments to the Credit Agreement" , below).

Under the Revolving Facility, the Company may use up to $ 125 million for the issuance of letters of credit to its subsidiaries.

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

As of December 31, 2024, the Company had no borrowings outstanding under the Revolving Facility, no outstanding letters of credit, and available

borrowing capacity of $ 600 million.

New Revolving Facility and Letters of Credit

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.

Under the New Revolving Facility, the Company may use up to $ 125 million for the issuance of letters of credit to its subsidiaries.

As of December 31, 2025, the Company had no borrowings outstanding under the New Revolving Facility, no outstanding letters of credit, and available borrowing capacity of $ 630 million.

As of December 31, 2024, the Company had no borrowings outstanding under the Revolving Facility, no outstanding letters of credit, and available borrowing capacity of $ 600 million.

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

Separate from the New Revolving Facility, the Company has a bilateral letter of credit facility with outstanding letters of credit of $ 10 million and $ 8 million at December 31, 2025 and 2024, respectively.

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

Amendments to the Credit Agreement

The Company entered into a first and second amendment of the Credit Agreement on January 11, 2022 and March 22, 2022, respectively.

Under the first amendment, the maximum borrowing capacity under the Revolving Facility was increased from $ 300 million to $ 475 million.

The London Inter-bank Offered Rate ("LIBOR") was replaced as an available rate at which borrowings under the Revolving Facility could accrue with, for loans borrowed in U.S.

Dollars, the daily Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York and for loans borrowed in Australian Dollars, the average bid reference rate administered by ASX Benchmarks Pty Limited.

The second amendment removed the requirement that payments made in cash for the benefit of holders of shares of the Company's Series A Preferred Stock on or before December 31, 2022 be made on a ratable basis to the holders of the Common Stock, and made additional clarifying amendments to certain provisions.

On April 27, 2023, the Company entered into a third amendment to the Credit Agreement (the "Third Amendment") which provided for additional financing consisting of the 2023 Dollar Term Facility.

The full amount of the 2023 Dollar Term Facility was drawn on June 6, 2023 (the "Third Amendment Closing Date"), and the proceeds were primarily used to finance the repurchases of the Series A Preferred Stock as part of the Transaction, and pay fees and expenses incurred in connection with this amendment.

The 2023 Dollar Term Facility will mature on April 30, 2028.

Prior to maturity, the 2023 Dollar Term Facility will be repaid quarterly in an amount equal to, during the first two years occurring after the Third Amendment Closing Date, 7.50 % per annum of the aggregate principal amount, and thereafter, 10.00 % per annum.

The Company may prepay the 2023 Dollar Term Facility at any time in whole or in part without premium or penalty, subject to certain exceptions (including for (i) customary breakage and redeployment costs in the case of prepayment of term benchmark rate loans and (ii) certain repricing events occurring during the period from the Third Amendment Closing Date to the date that is twelve months following the Third Amendment Closing Date).

The Third Amendment also provided for (i) a further increase in the maximum borrowing amount under the Revolving Facility by $ 95 million (the “Incremental Revolving Commitment”) to an aggregate amount of $ 570 million;

and (ii) an extension of the maturity date for the Revolving Facility by two years from April 30, 2026 to April 30, 2028 (or January 30, 2028 if any of the currently outstanding term loans or term loans under the 2023 Dollar Term Facility maturing as of April 30, 2028 remain outstanding as of such date).

The Incremental Revolving Commitment has the same terms and is generally subject to the same conditions applicable to the existing revolving facility under the Credit Agreement, except for fees paid in connection with the arrangement of the increased amount.

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

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

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

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

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

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

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

1 (the "First Amendment") to the Credit Agreement, which reduced the Applicable Rate 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.

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

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

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

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

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

Interest Rate and Fees

1 unchanged sentence

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.

As of December 31, 2024, the Revolving Facility is subject to an interest rate comprised of an applicable benchmark rate (which shall not be less than 1.00 % if such benchmark is the ABR rate and not less than 0.00 % in the case of other applicable benchmark rates) that is selected based on the currency in which borrowings are outstanding thereunder, in each case, plus an applicable margin that may vary based on our leverage ratio.

The 2025 Dollar Term Facility is subject to an interest rate equal to, at the Company's option, 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.

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.

Accordingly, the interest rates for the Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, SOFR and other applicable benchmark rates or future changes in our leverage ratio.

Interest payments with respect to the Term Loan Facilities are required either on a quarterly basis (for ABR loans) or at the end of each interest period (for SOFR loans) or, if the duration of the applicable interest period exceeds three months, then every three months .

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

In addition to paying interest on outstanding borrowings under the Revolving Facility, the Company is required to pay a quarterly commitment fee based on the unused portion of the New Revolving Facility, which is determined by our leverage ratio and ranges from 0.25 % to 0.50 % per annum.

2032 Senior Notes

9 unchanged sentences

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

The Company is obligated to make quarterly principal payments throughout the term of the 2021 Dollar Facility and the 2023 Dollar Term Facility according to the amortization provisions in the Credit Agreement.

The Company is obligated to make quarterly principal payments throughout the term of the 2025 Dollar Term Facility according to the amortization provisions in the Credit Agreement.

Such payments may be reduced from time to time in accordance with the terms of the Credit Agreement as a result of the application of loan prepayments made by us, if any, prior to the scheduled date of payment thereof.

the period from the Third Amendment Closing Date to the date that is twelve months following the Third Amendment Closing Date and customary "breakage” costs with respect to SOFR and EURIBOR loans.

We may also reduce the commitments under the Revolving Facility, in whole or in part, in each case, subject to certain minimum amounts and increments.

We may voluntarily prepay borrowings under the Credit Agreement without premium or penalty, subject to a 1.00 % prepayment premium in connection with certain repricing events in connection with the 2025 Dollar Term facility during the period from the Credit Agreement Closing Date to the date that is six months following the First Amendment Closing Date and customary "breakage” costs with respect to SOFR and EURIBOR loans.

We may also reduce the commitments under the New Revolving Facility, in whole or in part, in each case, subject to certain minimum amounts and increments.

The Credit Agreement also contains certain mandatory prepayment provisions in the event that we incur certain types of indebtedness, receive net cash proceeds from certain non-ordinary course asset sales or other dispositions of property or, starting with the fiscal year ending on December 31, 2024, 0.50 % of excess cash flow on an annual basis (with step-downs to 25 % and 0 % subject to compliance with certain leverage ratios), in each case subject to terms and conditions customary for financings of this kind.

During the year ended December 31, 2023, the Company made an early repayment in the amount of $ 200 million on the 2023 Dollar Term Facility.

The early repayment resulted in incremental amortization on debt issuance cost of $ 9 million, included within Interest Expense in the Consolidated Statement of Operations.

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

During the year ended December 31, 2024, we made early debt repayments totaling $ 985 million on our € 450 million secured first-lien Euro term loan facility and our $ 700 million secured first-lien U.S.

Dollar term loan facility.

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

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

During the year ended December 31, 2025, we made an early debt repayment of $ 50 million on our 2025 Dollar Term Facility.

The early repayment resulted in incremental amortization of debt issuance costs of $ 1 million, included within Interest expense in the Consolidated Statement of Operations.

Representations and Warranties

7 unchanged sentences

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

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

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

The New 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 New Revolving Facility exceeds 35 % of the aggregate commitments thereunder.

As of December 31, 2025, the Company was in compliance with all its financing covenants.

Mandatorily Redeemable Series B Preferred Stock

On the Effective Date, pursuant to the Plan, the Company issued 834,800,000 shares of Series B Preferred Stock to Honeywell in satisfaction of certain claims of Honeywell.

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

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

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

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

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

As of December 31, 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.

4 unchanged sentences

Operating lease cost $ 17 $ 17 $ 16

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

Short-term lease cost 3 — —

Total lease cost $ 20 $ 17 $ 16

Supplemental cash flow information related to leases is as follows:

Year Ended December 31,

5 unchanged sentences

Operating leases $ 7 $ 11 $ 3

Finance leases $ 1 $ — $ —

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

27 unchanged sentences

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

The cross-currency swap contract is designated as a cash flow hedge, with changes in the fair value of the derivative recorded in AOCI and reclassified into earnings based upon changes in the spot rate remeasurement of the underlying debt.

The cross-currency swap contracts are designated as cash flow hedges, with changes in the fair value of the derivatives recorded in AOCI and reclassified into earnings based upon changes in the spot rate remeasurement of the underlying debt.

The Company also uses cross-currency swap contracts to hedge net investments in foreign subsidiaries.

18 unchanged sentences

Cross-currency swaps 1,775 1,515 — 82 (b) 169 — (d)

Interest rate swaps — 200 — — (b) — —

Interest rate swaps 625 — — — (b) 16 — (d)

Subtotal 3,037 1,846 15 86 193 6

12 unchanged sentences

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

The Company also has outstanding forward currency exchange contracts with maturities up to 18 months and an aggregate notional amount of $ 331 million and $ 456 million as of December 31, 2024 and 2023, respectively.

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

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

In order to mitigate 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.

During 2024, in order to mitigate foreign currency risk on its 2032 Senior Notes, the Company entered into fixed-to-fixed cross-currency swap contracts with an aggregate notional amount of € 507 million ($ 550 million) and notional exchanges in May 2027, May 2028, May 2029 and May 2030.

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

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

In 2025, the Company entered into float-to-fixed interest rate swap contracts with an aggregate notional amount of $ 675 million and maturities in January 2028, January 2029, January 2030 and January 2031, of which an interest rate swap contract with a notional amount of $ 50 million was early settled during the year.

Changes in the fair value of the interest rate swap contracts are recorded in AOCI and will be reclassified to Interest expense in the Consolidated Statement of Operations upon maturity.

Amounts recognized related to the early settlement of the interest rate swap contract during the year were immaterial.

The Company also has outstanding forward currency exchange contracts with maturities up to 18 months and an aggregate notional amount of $ 637 million and $ 331 million as of December 31, 2025 and 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.

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

For the years ended December 31, 2024 and 2023, the Company recorded a loss of $ 8 million, net of tax, and a loss of $ 15 million, net of tax, respectively, in Other comprehensive income.

Net Investment Hedges

The Company has designated cross-currency swaps with an aggregate notional amount of € 1,157 million ($ 1,225 million) and € 858 million ($ 965 million) as of December 31, 2025 and 2024, respectively, as net investment hedges of the Company’s Euro-denominated operations.

In April 2024, the Company re-couponed the cross-currency swap contracts and

received a cash settlement of $ 13 million.

The fair values of the net investment hedges were net assets of $ 70 million and $ 37 million as of December 31, 2024 and 2023, respectively.

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

In 2025, a cross-currency swap contract with a notional amount of € 224 million ($ 265 million) was early settled.

The fair values of the net investment hedges were net liabilities of $ 124 million and net assets of $ 70 million as of December 31, 2025 and 2024, respectively.

No ineffectiveness has been recorded on the net investment hedges.

Non-Designated Derivatives

As of December 31, 2024 and 2023, the Company has outstanding float-to-fixed interest rate swap contracts with an aggregate notional amount of € 450 million ($ 470 million) and € 830 million ($ 917 million), respectively, and maturities of April 2025, April 2026 and April 2028.

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 and April 2028.

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

For the years ended December 31, 2024 and 2023, the Company recorded losses of $ 37 million and $ 33 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 $ 737 million and $ 597 million as of December 31, 2025 and 2024, respectively.

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

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

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

Year Ended December 31,

2025 2024 2023

(Dollars in millions)

Cash flow hedges

Gain (loss) reclassified from AOCI to income:

Cost of goods sold $ 4 $ 3 $ 23

Interest expense (1)

Non-operating income (2)

( 65 ) 26 ( 10 )

Gain (loss) recognized in other comprehensive income (loss) 1 ( 7 ) ( 18 )

Net investment hedges

Gain (loss) recognized in other comprehensive income (loss) ( 165 ) 63 ( 8 )

(1) Includes a settlement loss of $ 3 million for the year ended December 31, 2024.

(2) Includes a settlement loss of $ 4 million for the year ended December 31, 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:

Year Ended December 31,

2025 2024 2023

Contract Type Location (Dollars in millions)

Interest rate swaps Interest expense (1)

$ — $ 9 $ ( 9 )

Forward currency exchange contracts Non-operating income 24 27 ( 11 )

(1) Includes interest income of $ 6 million offset by marked-to-market remeasurement losses of $ 6 million for the year ended December 31, 2025.

Includes settlement gain of $ 22 million and interest income of $ 24 million partially offset by marked-to-market remeasurement losses of $ 37 million, for the year ended December 31, 2024.

Includes marked-to-market remeasurement losses of $ 33 million partially offset by interest income of $ 24 million for the year ended December 31, 2023.

Fair Value Measurement

15 unchanged sentences

Income taxes $ 90 $ 79

Derivatives designated as net investment hedges 124 —

Designated and undesignated derivatives 61 3

5 unchanged sentences

Long-term accounts payable 4 5

Asset retirement obligation 8 8

Series A Preferred Stock

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

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

Under the terms of the Agreements, the Company agreed to purchase a total of $ 570 million in shares of SeriesA Preferred Stock from the C&O Investors at a cash price per share to be based on the volume-weighted average price of the Common Stock for the fifteen trading days following the announcement of the transactions (the “ 15 Days VWAP”), subject to a minimum price of $ 7.875 per share and a maximum price of $ 8.50 per share.

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

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

Under the terms of the Agreements, the Company agreed to purchase a total of $ 570 million in shares of Series A Preferred Stock from the C&O Investors at a cash price per share to be based on the volume-weighted average price of the Common Stock for the fifteen trading days following the announcement of the transactions (the “ 15 Days VWAP”), subject to a minimum price of $ 7.875 per share and a maximum price of $ 8.50 per share.

The 15 Days VWAP was subsequently established at a value of $ 8.177 per share.

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The Company incurred $ 9 million of Transaction-related costs for the year ended December 31, 2023, primarily for legal and advisory services that are included in Selling, general and administrative expenses in the Consolidated Statement of Operations.

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

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

Cash dividends paid to shareholders of our Common Stock for the year ended December 31, 2025 were as follows (in millions, except per share amounts):

Quarterly Dividends

Per Share Total

First quarter $ 0.06 $ 12

Second quarter 0.06 13

Third quarter 0.06 11

Fourth quarter 0.08 16

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

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

The Company accounts for the

reissuance of treasury stock using the average cost method.

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

The Company did not reissue or retire any shares of treasury stock during the year ended December 31, 2025.

Share Repurchase Program

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

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

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

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

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

During the year ended December 31, 2025, the Company repurchased 16,890,791 shares of Common Stock for $ 208 million under the program.

These repurchases include a total of 7,500,000 shares of Common Stock for $ 103 million from funds affiliated with Oaktree Capital Management, L.P., a related party.

The repurchased shares are held as treasury stock.

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On December 3, 2025, the Board of Directors authorized a new $ 250 million share repurchase program valid January 1, 2026 until December 31, 2026.

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.

Accumulated Other Comprehensive Income (Loss)

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Balance at beginning of year ( 15 ) ( 20 ) ( 18 )

Other comprehensive income (loss) before reclassifications, net (1)

Amounts reclassified from AOCI, net ( 9 ) ( 3 ) ( 27 )

Other comprehensive income (loss) before reclassifications (1)

Income tax benefit (expense) associated with comprehensive income (loss) before reclassifications — ( 1 ) 1

Amounts reclassified from AOCI ( 10 ) ( 10 ) ( 3 )

Income taxes associated with reclassifications from AOCI 1 1 —

Balance at end of year ( 16 ) ( 15 ) ( 20 )

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Balance at beginning of year ( 10 ) ( 2 ) 13

Other comprehensive income (loss) before reclassifications, net (2)

Amounts reclassified from AOCI, net ( 29 ) ( 13 ) ( 18 )

Other comprehensive income (loss) before reclassifications ( 45 ) 20 1

Income tax benefit (expense) associated with comprehensive income (loss) before reclassifications 2 1 ( 3 )

Amounts reclassified from AOCI 54 ( 33 ) ( 16 )

Income taxes associated with reclassifications from AOCI ( 7 ) 4 3

Balance at end of year ( 6 ) ( 10 ) ( 2 )

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Balance at beginning of year 125 76 85

Other comprehensive income (loss) before reclassifications, net (3)

Other comprehensive income (loss) before reclassifications ( 165 ) 63 ( 8 )

Income tax benefit (expense) associated with comprehensive income (loss) before reclassifications 34 ( 14 ) ( 1 )

Balance at end of year ( 6 ) 125 76

Accumulated other comprehensive income (loss), end of year $ ( 138 ) $ 73 $ ( 3 )

(1) Net of tax expense (benefit) of $ 1 million, $( 1 ) million, and $ 2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

(1) Amounts are included in the computation of net periodic benefit cost.

See Note 26, Defined Benefit Pension Plans.

(2) Net of tax expense (benefit) of $( 1 ) million, $ 3 million, and $( 2 ) million for the years ended December 31, 2024, 2023 and 2022, respectively.

(3) Net of tax expense (benefit) of $ 14 million, $ 1 million, and $( 13 ) million for the years ended December 31, 2024, 2023 and 2022, respectively.

See Note 24, Defined Benefit Pension and Post-Employment Plans.

Reclassifications from accumulated other comprehensive income (loss) to income were as follows:

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As of December 31, 2025, an aggregate of 11,011,551 shares of our Common Stock were awarded, net of forfeitures and 20,268,925 shares of our Common Stock were available for future issuance under the Long-Term Incentive Plan.

Restricted Stock Units ("RSUs")

Restricted Stock Units ("RSUs") and Deferred Stock Units ("DSUs")

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

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

The following table summarizes information about RSU activity:

In addition, non-employee directors may elect to receive all or part of their annual retainer fees in the form of DSUs which vest upon grant.

Each DSU represents the right to receive one share of our Common Stock.

DSUs are settled on the earlier of (1) a change in control, or (2) the six months after the director ceases serving on the Board.

The following table summarizes information about RSU and DSU activity:

Restricted and Deferred

Average Grant

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

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

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

PSUs are generally earned based on the Company's performance over a three-year period, measured in terms of Adjusted EBITDA and Adjusted EBITDA margin, with some PSUs earned based on achieving certain criteria over new business awards.

PSU payouts may range from 0 % to 200 % of the target award, depending on the level of achievement of these financial and operational metrics.

Additionally, certain PSUs were also granted in 2023, 2024 and 2025 that included a performance measure for relative total shareholder return (“rTSR”) with stock price hurdles measured over a three-year performance period.

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The fair value of the PSUs granted in 2023, 2024 and 2025 were estimated using the following assumptions:

Monte Carlo Assumptions PSUs Granted in 2023 PSUs Granted in 2024

Monte Carlo Assumptions PSUs Granted in 2025 PSUs Granted in 2024 PSUs Granted in 2023

Volatility 38.02 % 41.35 % 85.01 %

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Granted 1,171,883 10.89

Vested ( 1,031,104 ) 8.67

Forfeited ( 499,160 ) 8.61

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3,237,658 $ 10.49

The fair value of the TSR-based PSUs is based on the output of the Monte Carlo simulation model noted above and the PSUs not containing a market condition are based on the fair market value of the Company’s common stock at the grant date.

The fair value of the TSR-based PSUs is based on the output of the Monte Carlo simulation model noted above.

The fair values of the PSUs not containing a market condition are based on the fair market value of the Company’s common stock at the grant date.

The number of underlying shares to be issued will be based on actual performance achievement over the performance period.

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Dividend Equivalents

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

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

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

Dividend equivalents are accrued on each award from the grant date until the award vests (or the underlying shares are issued in the case of DSUs).

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

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(Dollars in millions)

RSUs $ 11 $ 9 $ 6

RSUs and DSUs $ 13 $ 11 $ 9

Stock-based compensation expense 27 23 14

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Earnings Per Share

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

For the years ended December 31, 2023 and 2022, basic earnings per share was calculated using the two-class method because our Series A Preferred Stock was considered a participating security prior to its conversion into Common Stock and cancellation pursuant to the Transaction.

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

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

Basic earnings per share ("EPS") for the years ended December 31, 2025, and 2024, and 2023 is computed using the two-class method.

In 2025 and 2024, the DSUs related to the stock-based compensation plan contain non-forfeitable rights to dividends and are considered as participating securities, while in 2023 our Series A Preferred Stock was considered a participating security prior to its conversion into Common Stock and cancellation pursuant to the Transaction.

class method requires an allocation of earnings to all securities that participate in dividends with common shares to the extent that each such security may share in the Company's earnings.

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

Under the two-class method, the impact of these participating securities was immaterial for the years ended December 31, 2025 and 2024.

Diluted EPS for the years ended December 31, 2025 and 2024 is calculated by applying the two-class method for participating securities and then incorporating the dilutive effect of other potential common shares, determined using methods such as the treasury stock method, to arrive at the most dilutive EPS.

Diluted EPS for the year ended December 31, 2023 was calculated by evaluating the impact of both the two-class method and the if-converted method.

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 earnings per share calculations for the years ended December 31, 2024, 2023 and 2022 are as follows:

Diluted EPS for the year ended December 31, 2023 was disclosed under the two-class method.

The details of the EPS calculations for the years ended December 31, 2025, 2024 and 2023 are as follows:

Year Ended December 31

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Net income (loss) available for distribution 310 282 ( 51 )

earnings allocated to participating securities — — ( 184 )

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

Weighted average common shares outstanding - Basic 199,758,058 222,316,484 166,595,397

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Diluted earnings per share:

Two-class Two-class

Weighted average common shares outstanding - Basic 199,758,058 222,316,484 166,595,397

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

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

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

Securities Litigation

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.

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 Matters

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Warranty and product performance guarantees at end of year $ 21 $ 23

Defined Benefit Pension Plans

Defined Benefit Pension and Post-Employment Plans

We sponsor several funded U.S.

defined benefit pension plans.

defined benefit pension and post-employment plans.

Pension benefits for many of our U.S.

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

Other pension plans outside of the U.S.

Other pension and post-employment plans outside of the U.S.

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

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

Pension Benefits

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

Pension and Post-Employment Benefits

Plans Non-U.S.

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Interest cost 8 8 5 4

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

Actuarial losses (gains) 5 ( 10 ) ( 20 ) ( 1 )

Benefits paid and employee contributions ( 11 ) ( 10 ) ( 10 ) —

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Settlements and curtailments (1)

— — ( 11 ) ( 16 )

Foreign currency translation — — 24 ( 11 )

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Net amount recognized $ 4 $ 5 $ 16 $ 3

(1) In Switzerland, the total lump sum benefit payments of $ 11 million and $ 16 million were greater than the service cost and interest cost for the years ended December 31, 2024 and 2023, respectively, therefore settlement accounting was applied.

Following the settlement accounting, part of the previously unrecognized gain amounting to approximately $ 1 million and $ 1 million, respectively, was recognized as a gain on pension settlement.

(1) In Switzerland, the total lump sum benefit payments of $ 11 million were greater than the service cost and interest cost for the year ended December 31, 2024, therefore settlement accounting was applied.

Following the settlement accounting, part of the previously unrecognized gain amounting to approximately $ 1 million was recognized as a gain on pension settlement.

(2) Included in Other assets in the Consolidated Balance Sheets.

(3) Included in Other liabilities in the Consolidated Balance Sheets.

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

Amounts recognized in AOCI associated with our pension and other post-employment benefit plans as of December 31, 2025 and 2024 are as follow:

Pension Benefits

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Net amount recognized $ 10 $ 9 $ ( 22 ) $ ( 21 )

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

Pension Benefits

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

Pension and Post-Employment Benefits

Plans Non-U.S.

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

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

The components of net periodic benefit (income) cost and other amounts recognized in Other comprehensive (income) loss for our pension and other post-employment benefit plans include the following components:

Other Changes in Plan Assets and Benefits Obligations Recognized in

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

Pension Benefits

Pension and Post-Employment Benefits

Plans Non-U.S.

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

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

The discount rates for the pension and post-employment plans reflect the current rates at which the associated liabilities could be settled at the measurement date of December 31, 2025 .

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

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For both our U.S.

defined benefit pension plans, we estimate the service and interest cost components of net period benefit (income) cost by utilizing a full yield curve approach in the estimation of these cost components by applying the specific spot rates along the yield curve used in the determination of the pension benefit obligation to their underlying projected cash flows.

defined benefit pension and post-employment plans, we estimate the service and interest cost components of net period benefit (income) cost by utilizing a full yield curve approach in the estimation of these cost components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows.

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.

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Our assets are reviewed on a daily basis to ensure that we are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations.

pension assets are typically managed by decentralized fiduciary committees.

pension and post-employment assets are typically managed by decentralized fiduciary committees.

investment policies are different for each country as local regulations, funding requirements, and financial and tax considerations are part of the funding and investment allocation process in each country.

The fair values of both our U.S.

pension plans assets by asset category are as follows:

pension and post-employment plans assets by asset category are as follows:

December 31, 2025

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Corporate bond funds 93 — 93 —

Liability driven investment fund 13 — 13 —

Real estate funds 2 — 2 —

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Government bond funds 6 — 6 —

Corporate bond funds 13 — 13 —

Real estate funds 19 — 19 —

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Contributions for both our U.S.

pension plans do not reflect benefits paid directly from Company assets.

pension and post-employment plans do not reflect benefits paid directly from Company assets.

Benefit payments, including amounts to be paid from Company assets, and reflecting expected future service, as appropriate, are expected to be paid as follows:

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Customer B 385 11 401 12 474 12

Customer C 377 11 354 10 364 9

2,398 66 2,390 69 2,701 70

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Consolidated net income $ 310 $ 282 $ 261

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

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

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

(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.

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

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Slovakia 99 83

Romania 43 46

Rest of Europe 145 139

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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.

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.

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Subsequent Events

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

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

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

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

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

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

On February 19, 2026, the Board of Directors declared a cash dividend of $ 0.08 per share of Common Stock, payable on March 16, 2026, to shareholders of record as of March 2, 2026.

Unaudited Quarterly Financial Information

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Net income 62 87 77 84 310

Net income available for distribution 66 64 52 100 282

Earnings per share - basic 0.30 0.43 0.39 0.43 1.55

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Net income 66 64 52 100 282

Net income (loss) available for distribution 41 ( 201 ) 57 52 ( 51 )

Earnings (loss) per share - basic 0.28 0.29 0.24 0.47 1.27

Earnings (loss) per share - diluted 0.28 0.28 0.24 0.47 1.26

Earnings (loss) per share - diluted method (1)

Two-class Two-class Two-class

(1) As our Series A Preferred Stock was converted into Common Stock pursuant to the Transaction, diluted earnings per share for the quarters ended September 30, 2023 and December 31, 2023 are computed using the weighted-average number of common shares outstanding during the period plus the dilutive effect of common stock equivalents using the treasury stock method.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data