Document and Entity Information
Document and Entity Information - shares | 12 Months Ended | |
Dec. 31, 2018 | Feb. 26, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | FY | |
Trading Symbol | GTX | |
Entity Registrant Name | Garrett Motion Inc. | |
Entity Central Index Key | 1,735,707 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 74,019,825 |
CONSOLIDATED AND COMBINED STATE
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Net sales (Note 4) | $ 3,375 | $ 3,096 | $ 2,997 |
Cost of goods sold | 2,599 | 2,361 | 2,365 |
Gross profit | 776 | 735 | 632 |
Selling, general and administrative expenses | 249 | 249 | 197 |
Other expense, net (Note 5) | 120 | 130 | 183 |
Interest expense | 19 | 8 | 7 |
Non-operating (income) expense (Note 6) | (8) | (18) | (5) |
Income before taxes | 396 | 366 | 250 |
Tax (benefit) expense (Note 7) | (784) | 1,349 | 51 |
Net income (loss) | $ 1,180 | $ (983) | $ 199 |
Earnings (losses) per common share | |||
Basic | $ 15.93 | $ (13.27) | $ 2.69 |
Diluted | $ 15.86 | $ (13.27) | $ 2.69 |
Weighted average common shares outstanding | |||
Basic | 74,059,240 | 74,070,852 | 74,070,852 |
Diluted | 74,402,148 | 74,070,852 | 74,070,852 |
CONSOLIDATED AND COMBINED STA_2
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income (loss) | $ 1,180 | $ (983) | $ 199 |
Foreign exchange translation adjustment | (198) | 72 | 29 |
Defined benefit pension plan adjustment, net of tax (Note 22) | (2) | (12) | |
Changes in fair value of effective cash flow hedges, net of tax (Note 16) | 35 | (77) | 33 |
Total other comprehensive (loss) income, net of tax | (165) | (5) | 50 |
Comprehensive income (loss) | $ 1,015 | $ (988) | $ 249 |
CONSOLIDATED AND COMBINED BALAN
CONSOLIDATED AND COMBINED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 196 | $ 300 |
Accounts, notes and other receivables—net (Note 8) | 750 | 745 |
Inventories—net (Note 9) | 172 | 188 |
Due from related parties, current (Note 3) | 530 | |
Other current assets (Note 10) | 71 | 321 |
Total current assets | 1,189 | 2,084 |
Due from related parties, non-current (Note 3) | 23 | |
Investments and long-term receivables | 39 | 38 |
Property, plant and equipment—net (Note 11) | 438 | 442 |
Goodwill (Note 12) | 193 | 193 |
Insurance recoveries for asbestos-related liabilities (Note 21) | 174 | |
Deferred income taxes (Note 7) | 165 | 41 |
Other assets | 80 | 2 |
Total assets | 2,104 | 2,997 |
Current liabilities: | ||
Accounts payable | 916 | 860 |
Due to related parties, current (Note 3) | 1,117 | |
Current maturities of long-term debt (Note 14) | 23 | |
Obligations payable to Honeywell, current (Note 21) | 127 | |
Accrued liabilities (Note 13) | 426 | 571 |
Total current liabilities | 1,492 | 2,548 |
Long-term debt (Note 14) | 1,569 | |
Deferred income taxes (Note 7) | 27 | 956 |
Obligations payable to Honeywell (Note 21) | 1,399 | |
Asbestos-related liabilities (Note 21) | 1 | 1,527 |
Other liabilities (Note 17) | 209 | 161 |
Total liabilities | 4,697 | 5,192 |
COMMITMENTS AND CONTINGENCIES (Note 21) | ||
EQUITY (DEFICIT) | ||
Additional paid-in capital | 5 | |
Retained earnings | (2,671) | |
Invested equity (deficit) | (2,433) | |
Accumulated other comprehensive income (Note 18) | 73 | 238 |
Total stockholders' deficit | (2,593) | (2,195) |
Total liabilities and stockholders' deficit | $ 2,104 | $ 2,997 |
CONSOLIDATED AND COMBINED BAL_2
CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares, issued | 74,070,852 | 74,070,852 |
Common stock, shares, outstanding | 74,019,825 | 74,019,825 |
CONSOLIDATED AND COMBINED STA_3
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net (loss) income | $ 1,180 | $ (983) | $ 199 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Deferred income taxes | (905) | 973 | (39) |
Depreciation and amortization | 72 | 64 | 59 |
Foreign exchange (gain) loss | 15 | (24) | (15) |
Stock compensation expense | 21 | 15 | 12 |
Pension expense | 10 | 9 | 13 |
Other | 39 | (2) | (24) |
Changes in assets and liabilities: | |||
Accounts, notes and other receivables | (30) | (42) | (90) |
Receivables from related parties | 57 | 3 | |
Inventories | 2 | (46) | 2 |
Other assets | (46) | 1 | 6 |
Accounts payable | 63 | 88 | 82 |
Payables to related parties | (50) | 32 | (5) |
Accrued liabilities | 49 | 41 | 43 |
Obligations payable to Honeywell | (76) | ||
Asbestos-related liabilities | (1) | (69) | 16 |
Other liabilities | (27) | 14 | 43 |
Net cash provided by operating activities | 373 | 71 | 305 |
Cash flows from investing activities: | |||
Expenditures for property, plant and equipment | (95) | (103) | (84) |
Issuance of related party notes receivables | (63) | ||
Proceeds from related party notes receivables | 66 | 72 | |
Increase in marketable securities | (21) | (651) | (659) |
Decrease in marketable securities | 312 | 712 | 575 |
Other | (4) | 6 | (23) |
Net cash provided by (used for) investing activities | 192 | 30 | (182) |
Cash flows from financing activities: | |||
Net increase in Invested deficit | (1,493) | (19) | (95) |
Proceeds from revolving credit facility | 331 | ||
Payments of revolving credit facility | (331) | ||
Proceeds from issuance of long-term debt | 1,631 | ||
Payments of long-term debt | (6) | ||
Proceeds for related party notes payable | 671 | 656 | |
Payments related to related party notes payable | (493) | (670) | (655) |
Net change to cash pooling and short-term notes | (300) | 78 | (55) |
Other | 3 | ||
Net cash provided by (used for) financing activities | (658) | 60 | (149) |
Effect of foreign exchange rate changes on cash and cash equivalents | (11) | 20 | (1) |
Net increase (decrease) in cash and cash equivalents | (104) | 181 | (27) |
Cash and cash equivalents at beginning of period | 300 | 119 | 146 |
Cash and cash equivalents at end of period | 196 | 300 | 119 |
Supplemental cash flow disclosures: | |||
Income taxes paid (net of refunds) | 76 | 430 | 73 |
Interest expense paid | 12 | 5 | 5 |
Supplemental schedule of non-cash investing and financing activities: | |||
Expenditures for property, plant and equipment in accounts payable | $ 43 | $ 42 | $ 35 |
CONSOLIDATED AND COMBINED STA_4
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY (DEFICIT) - USD ($) shares in Millions, $ in Millions | Total | Before Spin-Off | Afer Spin-Off | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsAfer Spin-Off | Invested Deficit | Invested DeficitBefore Spin-Off | Accumulated Other Comprehensive Income/(loss) |
Beginning balance at Dec. 31, 2015 | $ (1,359) | $ (1,552) | $ 193 | |||||||
Net (loss) income | 199 | 199 | ||||||||
Other comprehensive income, net of tax | 50 | 50 | ||||||||
Change in Invested deficit | (111) | (111) | ||||||||
Ending balance at Dec. 31, 2016 | (1,221) | (1,464) | 243 | |||||||
Net (loss) income | (983) | (983) | ||||||||
Other comprehensive income, net of tax | (5) | (5) | ||||||||
Change in Invested deficit | 14 | 14 | ||||||||
Ending balance at Dec. 31, 2017 | (2,195) | (2,433) | 238 | |||||||
Net (loss) income | 1,180 | $ 1,137 | $ 43 | $ 43 | $ 1,137 | |||||
Other comprehensive income, net of tax | (165) | (165) | ||||||||
Change in Invested deficit | (1,168) | (1,168) | ||||||||
Spin-Off related adjustments | (250) | (250) | ||||||||
Issuance of common stock and reclassification of invested deficit | $ (2,714) | $ 2,714 | ||||||||
Issuance of common stock and reclassification of invested deficit, Shares | 74 | |||||||||
Stock-based compensation | 5 | $ 5 | ||||||||
Ending balance at Dec. 31, 2018 | $ (2,593) | $ 5 | $ (2,671) | $ 73 | ||||||
Ending balance, Shares at Dec. 31, 2018 | 74 |
Organization, Operations and Ba
Organization, Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization, Operations and Basis of Presentation | Note 1. Organization, Background Garrett Motion Inc. (the “Company” or “Garrett”) designs, manufactures and sells highly engineered turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers (“OEMs”) and the aftermarket. We are a global technology leader with significant expertise in delivering products across gasoline and diesel propulsion systems and hybrid and fuel cell powertrains. On October 1, 2018, the Company became an independent publicly-traded company through a pro rata distribution by Honeywell International Inc. (“Former Parent” or “Honeywell”) of 100% of the then-outstanding shares of Garrett to Honeywell’s stockholders (the “Spin-Off”). Each Honeywell stockholder of record received one share of Garrett common stock for every 10 shares of Honeywell common stock held on the record date. Approximately 74 million shares of Garrett common stock were distributed on October 1, 2018 to Honeywell stockholders. In connection with the Spin-Off, Garrett´s common stock began trading “regular-way” under the ticker symbol “GTX” on the New York Stock Exchange on October 1, 2018. The Spin-Off was completed pursuant to a Separation and Distribution Agreement and other agreements with Honeywell related to the Spin-Off, including but not limited to an indemnification and reimbursement agreement (the “Indemnification and Reimbursement Agreement”) and a tax matters agreement (the “Tax Matters Agreement”). Refer to Note 21 Commitments and Contingencies for additional details related to the Indemnification and Reimbursement Agreement and Tax Matters Agreement. Unless the context otherwise requires, references to “Garrett,” “we,” “us,” “our,” and “the Company” refer to (i) Honeywell’s Transportation Systems Business (the “Transportation Systems Business” or the “Business”) prior to the Spin-Off and (ii) Garrett Motion Inc. and its subsidiaries following the Spin-Off, as applicable. Basis of Presentation Prior to the Spin-Off on October 1, 2018, our historical financial statements were prepared on a stand-alone combined basis and were derived from the consolidated financial statements and accounting records of Honeywell. Accordingly, for periods prior to October 1, 2018, our financial statements are presented on a combined basis and for the periods subsequent to October 1, 2018 are presented on a consolidated basis (collectively, the historical financial statements for all periods presented are referred to as “Consolidated and Combined Financial Statements”). The Consolidated and Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Asbestos-related expenses, net of probable insurance recoveries, are presented within Other expense, net in the Consolidated and Combined Statement of Operations. Honeywell is subject to certain asbestos-related and environmental-related liabilities, primarily related to its legacy Bendix business. In conjunction with the Spin-Off, certain operations that were part of the Bendix business, along with the ownership of the Bendix trademark, as well as certain operations that were part of other legacy elements of the Business, were transferred to us. For the periods prior to the Spin-Off, these Consolidated and Combined Financial Statements reflect an estimated liability for resolution of pending and future asbestos-related and environmental liabilities primarily related to the Bendix legacy Honeywell business, calculated as if we were responsible for 100% of the Bendix asbestos-liability payments. However, this recognition model differs from the recognition model applied subsequent to the Spin-Off, with the difference recognized through equity as of the Spin-Off date. In periods subsequent to the Spin-Off, the accounting for the majority of our asbestos-related liability payments and accounts payable reflect the terms of the Indemnification and Reimbursement Agreement with Honeywell entered into on September 12, 2018, under which we are required to make payments to Honeywell in amounts equal to 90% of Honeywell’s asbestos-related liability payments and accounts payable, primarily related to the Bendix business in the United States, as well as certain environmental-related liability payments and accounts payable and non-United States asbestos-related liability payments and accounts payable, in each case related to legacy elements of the Business, including the legal costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts and, as may be applicable, certain other recoveries associated with such liabilities. The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. We evaluated (“ASC”) (“CODM”) All intracompany Honeywell used a centralized approach to cash management and financing of its operations. For the periods prior to the Spin-Off, the majority of the Business’s cash was transferred to Honeywell daily and Honeywell funded its operating and investing activities as needed. This arrangement is not reflective of the manner in which the Business would have been able to finance its operations had it been a stand-alone business separate from Honeywell during the periods presented prior to the Spin-Off. Cash transfers to and from Honeywell’s cash management accounts are reflected in the Consolidated and Combined Balance Sheet as Due to and Due from related parties, current and in the Consolidated and Combined Statements of Cash Flows as net financing activities. For the periods prior to the Spin-Off, the Consolidated and Combined Financial Statements include certain assets and liabilities that have historically been held at the Honeywell corporate level but are specifically identifiable or otherwise attributable to Garrett. The cash and cash equivalents held by Honeywell at the corporate level are not specifically identifiable to Garrett and therefore were not attributed for any of the periods presented. Honeywell third-party debt and the related interest expense have not been allocated for any of the periods presented as Honeywell’s borrowings were not directly attributable to Garrett. For the periods prior to the Spin-Off, Honeywell provided |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Principles — For the periods subsequent to the Spin-Off, the Consolidated and Combined Financial Statements include the accounts of Garrett Motion Inc. and all of its subsidiaries in which a controlling financial interest is maintained. We consolidate entities that we control due to ownership of a majority voting interest, and we consolidate variable interest entities (“VIEs”) when we have variable interests and are the primary beneficiary. Our consolidation policy requires equity investments that we exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee’s activities to be accounted for using the equity method. Investments through which we are not able to exercise significant influence over the investee and which we do not have readily determinable fair values are accounted for under the cost method. All intercompany transactions and balances are eliminated in consolidation. For the periods prior to the Spin-Off, the Consolidated and Combined Financial Statements were prepared on a stand-alone basis and include our business units and wholly owned direct and indirect subsidiaries and entities in which we had a controlling financial interest. Cash —Cash and cash equivalents include cash on hand and highly liquid investments having an original maturity of three months or less. Trade Receivables —Trade accounts receivable are recorded at the invoiced amount as a result of transactions with customers. Garrett maintains allowances for doubtful accounts for estimated losses as a result of customer’s inability to make required payments. Garrett estimates anticipated losses from doubtful accounts based on days past due as measured from the contractual due date and historical collection history. Garrett also takes into consideration changes in economic conditions that may not be reflected in historical trends (for example, customers in bankruptcy, liquidation or reorganization). Receivables are written-off against the allowance for doubtful accounts when they are determined uncollectible. Such determination includes analysis and consideration of the particular conditions of the account, including time intervals since last collection, customer performance against agreed upon payment plans, solvency of customer and any bankruptcy proceedings. Inventories —Inventories are stated at the lower of cost, determined on a first-in, first-out basis, including direct material costs and direct and indirect manufacturing costs, or net realizable value. Obsolete inventory is identified based on analysis of inventory for known obsolescence issues. The original equipment inventory on hand in excess of one year’s forecasted usage is fully reserved. Property, —Property, plant and equipment are recorded at cost less accumulated depreciation and amortization. For financial reporting, the straight-line method of depreciation is used over the estimated useful lives of 10 to 50 years for buildings and improvements, 2 to 16 years for machinery and equipment, 3 to 10 years for tooling equipment and 5 to 7 years for software. Goodwill —Goodwill is subject to impairment testing annually as of March 31, and whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. This testing compares carrying value to fair value of our single reporting unit. The Company recognizes an impairment charge for the amount by which the carrying value of the reporting unit exceeds the reporting unit´s fair value. However, any impairment should not exceed the amount of goodwill allocated to the reporting unit. We completed our annual goodwill impairment test as of March 31, 2018, as well as an interim impairment test immediately following the Spin-Off and determined that there was no impairment as of these dates. Warranties —Expected warranty costs for products sold are recognized based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, length of the warranty and various other considerations. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of our warranty accrual at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. For additional information, see Note 21, Commitments and Contingencies. Sales Recognition —On January 1, 2018, we adopted the FASB´s updated guidance on revenue from contracts with customers, ASC 606 Revenue from Contracts With Customers (“ASC 606”), using the modified retrospective method applied to contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting. Product sales are recognized when we transfer control of the promised goods to our customer, which is based on shipping terms. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the promised goods. In the sale of products in the OEM channel, the transaction price for these goods is equal to the agreed price of each unit and represents the standalone selling price for the unit. In the sale of products in the aftermarket channel, the terms of a contract or the historical business practice can give rise to variable consideration due to, but not limited to, discounts and bonuses. 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. 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. Prior to January 1, 2018, sales were recognized when there was evidence of a sales agreement, the delivery of goods had occurred, the sales price was fixed or determinable and the collectability of revenue was reasonably assured. Sales were generally recorded upon shipment of product to customers and transfer of title under standard commercial terms. Sales incentives and allowances were recognized as a reduction to revenue at the time of the related sale. In addition, payments made to customers were generally recognized as a reduction to revenue at the time these payments are made or committed to the customers. Research and —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 of $128 million, $119 million, and $112 million for the years ended December 31, 2018, 2017, and 2016, respectively. Additionally, the Company incurs engineering-related expenses which are also included in Cost of goods sold of $10 million, $19 million, and $21 million for the years ended December 31, 2018, 2017, and 2016. The prior year amounts have been reclassified to conform to the current year Asbestos-Related —Honeywell is subject to certain asbestos-related and environmental-related liabilities, primarily related to its legacy Bendix business. In conjunction with the Spin-Off, certain operations that were part of the Bendix business, along with the ownership of the Bendix trademark, as well as certain operations that were part of other legacy elements of the Business, were transferred to us. For periods prior to the Spin-Off, we reflect an estimated liability for resolution of pending and future asbestos-related and environmental liabilities primarily related to the Bendix legacy Honeywell business, calculated as if we were responsible for 100% of the Bendix asbestos-liability payments. We recognized a liability for any asbestos-related contingency that was probable of occurrence and reasonably estimable. In connection with the recognition of liabilities for asbestos-related matters, we recorded asbestos-related insurance recoveries that are deemed probable. Asbestos-related expenses, net of probable insurance recoveries, are presented within Other expense, net in the Consolidated and Combined Statement of Operations. The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. In periods subsequent to the Spin-Off, the accounting for the majority of our asbestos-related liability payments and accounts payable reflect the terms of the Indemnification and Reimbursement Agreement with Honeywell entered into on September 12, 2018, under which we are required to make payments to Honeywell in amounts equal to 90% of Honeywell’s asbestos-related liability payments and accounts payable, primarily related to the Bendix business in the United States, as well as certain environmental-related liability payments and accounts payable and non-United States asbestos-related liability payments and accounts payable, in each case related to legacy elements of the Business, including the legal costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts and, as may be applicable, certain other recoveries associated with such liabilities. Net charges for asbestos-related and environmental-related matters in connection with the Indemnification and Reimbursement Agreement are presented within Other expense, net in the Consolidated and Combined Statement of Operations. Stock-Based Compensation Plans —The principal awards issued under our stock-based compensation plans, which are described in Note 19 Stock-Based Compensation Plans, are restricted stock units. The cost for such awards is measured at the grant date based on the fair value of the award. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods (generally the vesting period of the equity award) and is included in Selling, general and administrative expenses in the Consolidated and Combined Statements of Operations. Forfeitures are estimated at the time of grant to recognize expense for those awards that are expected to vest and are based on our historical forfeiture rates under our Former Parent´s plans. For periods prior to the Spin-Off, certain employees within the Business participated in stock-based compensation plans sponsored by the Former Parent. The Former Parent’s stock-based compensation plans primarily include incentive compensation plans. Awards granted under the plans consist of stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) and are based on the Former Parent’s common shares and, as such, are reflected in Invested deficit within the Consolidated and Combined Statements of Equity (Deficit). Pension Benefits —Following the Spin-Off, we sponsor defined benefit pension plans covering certain employees, primarily in Switzerland, the US and Ireland. For such plans, 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), and, if applicable, in any quarter in which an interim remeasurement is triggered. The remaining components of pension expense, primarily service and interest costs and assumed return on plan assets, are recognized on a quarterly basis. On January 1, 2018, we retrospectively adopted the new accounting guidance on presentation of net periodic pension costs. That guidance requires that we disaggregate the service cost component of net benefit costs and report those costs in the same line item or items in the Consolidated Statement of Operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other nonservice components of net benefit costs are required to be presented separately from the service cost component. Following the adoption of this guidance, we continue to record the service cost component of Pension ongoing (income) expense in Costs of goods sold or Selling, general and administrative expenses. The remaining components of net benefit costs within Pension ongoing (income) expense, primarily interest costs and assumed return on plan assets, are now recorded in Non-operating (income) expense. We will continue to 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 will also be reported in Non-operating (income) expense. For periods prior to the Spin-Off, we sponsored a defined benefit pension plan covering certain employees in Ireland. Additionally, certain Garrett employees participated in defined benefit pension plans (the “Shared Plans”) sponsored by Honeywell which includes participants of other Honeywell subsidiaries and operations. We accounted for our participation in the Shared Plans as a multiemployer benefit plan. Accordingly, we did not record an asset or liability to recognize the funded status of the Shared Plans. The related pension expense was based on annual service cost of active Garrett participants and reported within Cost of goods sold in the Consolidated and Combined Statements of Operations. The pension expense specifically identified for the active Garrett participants in the Shared Plans for the years ended December 31, 2018, 2017 and 2016 was $5 million, $7 million and $6 million, respectively. Foreign Currency Translation —Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using year-end exchange rates. Sales, costs and expenses are translated at the average exchange rates in effect during the year. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive income (loss). Derivative —We minimize our risks from foreign currency exchange rate fluctuations through our normal operating and financing activities and, when deemed appropriate through the use of derivative financial instruments. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. Derivative financial instruments that qualify for hedge accounting must be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. All derivatives are recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in Accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged items impact earnings. Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item. On September 27, 2018, we early adopted the new accounting guidance contained in ASU 2017-12 on a modified retrospective approach. The new standard is intended to improve and simplify rules relating to hedge accounting, including the elimination of periodic hedge ineffectiveness, recognition of components excluded from hedge effectiveness assessment, the ability to elect to perform subsequent effectiveness assessments qualitatively, and other provisions designed to provide more transparency around the economics of a company’s hedging strategy. Income Taxes —We account for income taxes pursuant to the asset and liability method which requires us to recognize current tax liabilities or receivables for the amount of taxes we estimate are payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. Prior to the Spin-Off, the tax provision was presented on a separate company basis as if we were a separate filer. The effects of tax adjustments and settlements from taxing authorities are presented in our Consolidated and Combined Financial Statements in the period to which they relate as if we were a separate filer. Our current obligations for taxes are settled with our Former Parent on an estimated basis and adjusted in later periods as appropriate. All income taxes due to or due from our Former Parent that have not been settled or recovered by the end of the period are reflected in Invested deficit within the Consolidated and Combined Financial Statements. We are subject to income tax in the United States (federal, state and local) as well as other jurisdictions in which we operate. The tax provision has been calculated as if the carve-out entity was operating on a stand-alone basis and filed separate tax returns in the jurisdiction in which it operates. Therefore, cash tax payments and items of current and deferred taxes may not be reflective of the actual tax balances prior to or subsequent to the carve-out. Earnings per share —Basic earnings per share is based on the weighted average number of common shares outstanding. Diluted earnings per share is based on the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. On October 1, 2018, the date of consummation of the Spin-Off, 74,070,852 shares of the Company’s Common Stock were distributed to Honeywell stockholders of record as of September 18, 2018 who held their shares through the Distribution Date. Basic and diluted EPS for all periods prior to the Spin-Off reflect the number of distributed shares, or 74,070,852 shares. For 2018, the distributed shares were treated as issued and outstanding from January 1, 2018 for purposes of calculating historical basic earnings per share. Use of Estimates —The preparation of the Consolidated and Combined Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the Consolidated and Combined Financial Statements and related disclosures in the accompanying notes. Actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of changes are reflected in the Consolidated and Combined Financial Statements in the period they are determined to be necessary. Recently Adopted Accounting Pronouncements In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory. The ASU requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, at the time the entity transfer occurs rather than when the asset is ultimately transferred to a third party, as required under current U.S. GAAP. The guidance is intended to reduce diversity in practice, particularly for transfers involving intellectual property. Subsequent to 2017 fiscal year, we adopted the accounting standard update as of January 1, 2018. The guidance requires application on a modified retrospective basis. The adoption of this guidance increased our deferred tax assets by $191 million with a cumulative-effect adjustment to retained earnings of the same amount. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350). The ASU eliminates Step 2 of the goodwill impairment test, which requires determining the fair value of assets acquired or liabilities assumed in a business combination. Under the amendments in this update, a goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We have early adopted this guidance during the fourth quarter of 2018. The adoption did not have an impact on our Consolidated and Combined Balance Sheets, Statements of Operations and related Notes to Consolidated and Combined Financial Statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. These amendments are intended to better align a company’s risk management strategies and financial reporting for hedging relationships. As further noted in our Derivative financial instruments accounting policy above, we early adopted during the third quarter of 2018 the new accounting guidance contained in ASU 2017-12 on a modified retrospective approach. In relation to the Company’s foreign currency exchange forward and option contracts (foreign currency exchange contracts), the adoption did not have an impact on our Consolidated and Combined Balance Sheets and Statements of Operations. Recently Issued Accounting Pronouncements In February 2016, the FASB issued guidance on accounting for leases which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing and uncertainty of cash flows arising from leases that will be effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We expect to adopt the requirements of the new standard effective January 1, 2019, and we will elect to not recast comparative periods in the transition. We estimate the adoption will result in the addition of $33 million to $43 million of right-of-use assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. In adopting the new leases standard as per January 1, 2019, the Company has applied the practical expedients as per ASC 842-10-65-1(f) and (g). In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for us in our first quarter of fiscal 2020, and earlier adoption is permitted beginning in the first quarter of fiscal 2019. We are currently evaluating the impact of the guidance on our Consolidated and Combined Balance Sheets, Statements of Operations and related Notes to Consolidated and Combined Financial Statements. In February 2018, the FASB issued guidance that allows for an entity to elect to reclassify the income tax effects on items within Accumulated other comprehensive income resulting from U.S. tax reform to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The guidance allows for adoption (i) at the beginning of the period of adoption or (ii) retrospective to each period in which the income tax effects of the U.S. tax reform related to items recognized in Accumulated other comprehensive income are recognized. We are currently evaluating the impact of this standard on our Consolidated and Combined Financial Statements and whether we will elect to reclassify the income tax effects on items within Accumulated other comprehensive income resulting from U.S. tax reform to retained earnings. |
Related Party Transactions with
Related Party Transactions with Honeywell | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions with Honeywell | Note 3. Related Party Transactions with Honeywell Subsequent to Spin-Off Following the Spin-Off, Honeywell is no longer considered a related party. We have Obligations payable to Honeywell related to the Indemnification and Reimbursement Agreement and Tax Matters Agreement. See Note 21 Commitments and Contingencies for further details. Prior to Spin-Off The Consolidated and Combined Financial Statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Honeywell. Prior to the Spin-Off, Honeywell provided certain services, such as legal, accounting, information technology, human resources and other infrastructure support, on behalf of the Business. The cost of these services has been allocated to the Business on the basis of the proportion of revenues. We consider the allocations to be a reasonable reflection of the benefits received by the Business. During the years ended December 31, 2018, 2017 and 2016, Garrett was allocated $87 million, $127 million and $75 million, respectively, of general corporate expenses incurred by Honeywell, and such amounts are included within Selling, general and administrative expenses in the Consolidated and Combined Statements of Operations. As certain expenses reflected in the Consolidated and Combined Financial Statements include allocations of corporate expenses from Honeywell, these statements could differ from those that would have been prepared had Garrett operated on a stand-alone basis. Honeywell used a centralized approach for the purpose of cash management and financing of its operations. Prior to the Spin-Off, the Business’ cash was historically transferred to Honeywell daily, and Honeywell funded its operating and investing activities as needed. Honeywell had operated a centralized non-interest-bearing cash pool in U.S. and regional interest-bearing cash pools outside of U.S. As of December 31, 2017, the Company had non-interest-bearing cash pooling balances of $51 million which are presented in Invested deficit within the Consolidated and Combined Balance Sheets. The Company received interest income for related party notes receivables of $1 million, $1 million and $4 million for the years ended December 31, 2018, 2017 and 2016, respectively. Additionally, the Company incurred interest expense for related party notes payable of $1 million, $6 million and $6 million for the years ended December 31, 2018, 2017 and 2016, respectively. Honeywell centrally hedged its exposure to changes in foreign exchange rates principally with forward contracts. Certain contracts were specifically designated to and entered on behalf of the Business with the Former Parent as a counterparty and were used to hedge known or probable anticipated foreign currency sales and purchases. The Business designated these hedges as cash flow hedges. These hedges were marked-to-market with the effective portion of the changes in fair value of the derivatives recorded in Accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged items impact earnings. See Note 6 Non-Operating (Income) Expense, and Note 18 Accumulated Other Comprehensive Income (Loss), for the net impact of these economic foreign currency hedges in Non-Operating (Income) Expense and Accumulated Other Comprehensive Income, respectively, and Note 16 Financial Instruments and Fair Value Measures, for further details of these financial instruments. Due from related parties, current consists of the following: December 31, 2018 December 31, 2017 Cash pooling and short-term notes receivables $ — $ 495 Other tax receivables from Former Parent — 26 Receivables from related parties — 8 Related party notes receivables, current — 1 Foreign currency exchange contracts — — $ — $ 530 Due from related parties, non-current consists of the following: December 31, 2018 December 31, 2017 Other tax receivables from Former Parent $ — $ 23 $ — $ 23 Due to related parties, current consists of the following: December 31, 2018 December 31, 2017 Cash pooling and short-term notes payables $ — $ 545 Related party notes payables, current — 484 Payables to related parties — 51 Foreign currency exchange contracts — 37 $ — $ 1,117 Net transfers to and from Honeywell are included within Invested deficit on the Consolidated and Combined Balance Sheet. The components of the net transfers to and from Honeywell for the years ended December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, 2018 2017 2016 General financing activities $ 1,774 $ (363 ) $ (151 ) Distribution to Former Parent (2,994 ) (97 ) (117 ) Unbilled corporate allocations 41 70 37 Stock compensation expense and other compensation awards 17 19 16 Pension expense 7 9 13 Mandatory Transition Tax (13 ) 354 — Other Income Tax — 22 91 Spin-Off related adjustments (250 ) — — Issuance of common stock and reclassification of invested deficit 2,714 — — Total net decrease (increase) in Invested deficit $ 1,296 $ 14 $ (111 ) |
Revenue Recognition and Contrac
Revenue Recognition and Contracts with Customers | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition and Contracts with Customers | Note 4. Revenue Recognition and Contracts with Customers The Company generates revenue through the sale of products to customers in the OEM and aftermarket channels. OEM and aftermarket contracts generally include scheduling agreements that stipulate the pricing and delivery terms that identify the quantity and timing of the product to be transferred. Revenue recognition will be generally consistent with the previous standard, with the exception of how we account for payments made to customers in conjunction with future business. Historically these payments were recognized as a reduction of revenue at the time the payments were made. Under ASC 606, these payments result in deferred reductions to revenue that are subsequently recognized when the products are delivered to the customer. The Company evaluates the amounts capitalized each period end for recoverability and expenses any amounts that are no longer expected to be recovered over the term of the business arrangement. These payments are recorded in Other current assets and Other assets in our Consolidated and Combined Balance Sheet. Upon adoption the cumulative impact of this change is as follows: December 31, 2017 As reported Adjustments As adjusted Consolidated and Combined Balance Sheet Assets Current assets: Other current assets $ 321 $ 7 $ 328 Other assets 2 53 55 Liabilities Non-current liabilities: Deferred income taxes 956 6 962 Equity (Deficit) Invested deficit (2,433 ) 54 (2,379 ) Under the modified retrospective method of adoption, we are required to disclose the impact to revenues had we continued to follow our accounting policies under the previous revenue recognition guidance. We estimate the impact to revenues for the year ended December 31, 2018 would have been a decrease of $6 million. As of December 31, 2018, deferred payments to customers recorded in Other current assets and Other assets in our Consolidated and Combined Balance Sheet were $9 million and $56 million. Refer to Note 2, Summary of Significant Accounting Policies for a summary of our significant policies for revenue recognition. Disaggregated Revenue For Net sales by region (determined based on country of shipment) and channel, refer to Note 24, Concentrations. We recognize virtually all of our revenues arising from performance obligations at a point in time. Less than 1% of our revenue is satisfied over time. Contract Balances The timing of revenue recognition, billings and cash collections results in unbilled receivables (contract assets) and billed accounts receivable, reported in Accounts, notes and other receivables – net, and customer advances and deposits (contract liabilities), reported in Accrued Liabilities, on the Consolidated and Combined Balance Sheet. Contract assets arise when the timing of cash collected from customers differs from the timing of revenue recognition. 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 generally derecognized when revenue is recognized. These assets and liabilities are reported on the Consolidated and Combined Balance Sheet on a contract-by-contract basis at the end of each reporting period. The following table summarizes our contract assets and liabilities balances: 2018 Contract assets—January 1 $ 5 Contract assets—December 31 5 Change in contract assets—Increase/(Decrease) — Contract liabilities—January 1 $ (7 ) Contract liabilities—December 31 (2 ) Change in contract liabilities—(Increase)/Decrease $ 5 Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is defined as the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For product sales, typically each product sold to a customer represents a distinct performance obligation. Virtually all of our performance obligations are satisfied as of a point in time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. All performance obligations are expected to be satisfied within one year, with substantially all performance obligations being satisfied within a month. The timing of satisfaction of our performance obligations does not significantly vary from the typical timing of payment, with cash advances (contract liabilities) and unbilled receivables (contract assets) being settled within 3 months. For some contracts, we may be entitled to receive an advance payment. We have applied the practical expedient to not disclose the value of remaining performance obligations for contracts with an original expected term of one year or less. |
Other Income and Expenses
Other Income and Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Other Income And Expenses [Abstract] | |
Other Expense, Net | Note 5. Other Years Ended December 31, 2018 2017 2016 Indemnification related — post Spin-Off $ (16 ) $ — $ — Asbestos related, net of probable insurance recoveries 131 132 181 Environmental remediation, non-active sites 5 (2 ) 2 $ 120 $ 130 $ 183 |
Non-Operating (Income) Expense
Non-Operating (Income) Expense | 12 Months Ended |
Dec. 31, 2018 | |
Non Operating Income Expense [Abstract] | |
Non-Operating (Income) Expense | Note 6. Non-Operating Years Ended December 31, 2018 2017 2016 Equity income of affiliated companies $ (5 ) $ (4 ) $ (6 ) Interest income (7 ) (14 ) (16 ) Pension ongoing (income) expense—non service 2 (1 ) 5 Foreign exchange 6 — 9 Others, net (4 ) 1 3 $ (8 ) $ (18 ) $ (5 ) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7. Income Taxes The sources of income (loss) from continuing operations, before income taxes, classified between domestic entities and those entities domiciled outside of the U.S., are as follows: Years Ended December 31, Income before taxes 2018 2017 2016 Domestic entities $ (99 ) $ (105 ) $ (181 ) Entities outside the U.S. 495 471 431 $ 396 $ 366 $ 250 Tax Tax expense (benefit) Years Ended December 31, 2018 2017 2016 Current: Federal $ 7 $ 311 $ 13 State 1 (2 ) 2 Foreign 113 67 75 $ 121 $ 376 $ 90 Deferred: Federal (3 ) 3 — State — 6 — Foreign (902 ) 964 (39 ) $ (905 ) $ 973 $ (39 ) $ (784 ) $ 1,349 $ 51 The U.S. Years Ended December 31, 2018 2017 2016 U.S. federal statutory income tax rate 21.0 % 35.0 % 35.0 % Taxes on non-U.S. earnings different from U.S. tax rate, net of changes in valuation allowance 1.1 % (28.0 )% (46.1 )% Reserves for tax contingencies 1.0 % (14.3 )% 7.0 % Enactment of the Tax Act 1.0 % 364.7 % — Non-deductible expenses 6.0 % 11.6 % 25.3 % Restructuring/Foreign Unremitted Earnings (227.7 )% — — All other items (0.4 )% (0.4 )% (0.8 )% (198.0 )% 368.6 % 20.4 % The effective tax rate decreased by 566.6 percentage points in 2018 compared to 2017. The decrease was primarily attributable to the impacts of U.S. tax reform from 2017 (see "The Tax Act" further below) and due to tax benefits from the mitigation of certain potential tax liabilities as part of the internal restructuring of Garrett’s business in advance of the Spin-Off. The Company's non-U.S. effective tax rate was (197.6)%, a decrease of approximately 417 percentage points compared to 2017. The year-over-year decrease in the non-U.S. effective tax rate was primarily driven by the Company's change in assertion regarding foreign unremitted earnings in connection with the Tax Act, decreased expense for tax reserves in various jurisdictions, and higher earnings taxed at lower rates. The effective tax rate increased by 348.2 percentage points in 2017 compared to 2016. The increase was primarily attributable to the provisional impact of U.S. tax reform (see "The Tax Act" further below), partially offset by increased tax benefits from the resolution of tax audits. The Company's non-U.S. effective tax rate was 218.9%, an increase of approximately 210.5 percentage points compared to 2016. The year-over-year increase in the non-U.S. effective tax rate was primarily driven by the Company's change in assertion regarding foreign unremitted earnings in connection with the Tax Act, partially offset by decreased expense for tax reserves in various jurisdictions and higher earnings taxed at lower rates. Deferred The tax effects December 31, 2018 2017 Deferred tax assets: Pension $ — $ 7 Other accruals and reserves 38 22 Net operating and capital losses 27 77 Depreciation and amortization 158 (8 ) Other 10 15 Total Deferred tax assets 233 113 Valuation allowance (24 ) (48 ) Net deferred tax assets $ 209 $ 65 Deferred tax liabilities: Investment basis differences $ (56 ) $ (980 ) Other liabilities (15 ) — Total deferred tax liabilities (71 ) (980 ) Net deferred tax asset/(liability) $ 138 $ (915 ) As discussed further below, under “The Tax Act”, the Company no longer intends to reinvest the historical earnings of its foreign subsidiaries as of December 31, 2018 and has recorded a deferred tax liability, mainly comprised of non-US withholding taxes of approximately $56 million. Our deferred tax assets of $209 million relate primarily to non-U.S. operations comprised principally of deductible temporary differences and net operating loss carryforwards (mainly in Brazil, France, Germany and Portugal). We maintain a valuation allowance of $24 million against a portion of the non-U.S. gross 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 balance sheets present a deferred tax asset of $165 million and a deferred tax liability of $27 million after taking into account jurisdictional netting. As Expiration Net Operating Period Loss Jurisdiction Carryforwards Non-U.S. 2027 $ 3 Non-U.S. Indefinite 85 $ 88 Many jurisdictions impose limitations on the timing and utilization of net operating loss carryforwards. In those instances whereby there is an expected permanent limitation on the utilization of the net operating loss or tax credit carryforward, the deferred tax asset and amount of the carryforward have been reduced. The following table summarizes the activity related to the Company’s uncertain tax positions (excluding interest and penalties and related tax attributes): 2018 2017 2016 Change in unrecognized tax benefits: Balance at beginning of year $ 100 $ 152 $ 136 Gross increases related to current period tax positions 7 11 21 Gross increases related to prior periods tax positions 5 1 1 Gross decreases related to prior periods tax positions (8 ) (64 ) (5 ) Decrease related to resolutions of audits with tax authorities — (2 ) — Expiration of the statute of limitations for the assessment of taxes — — — Potential Indemnifications to Honeywell for US and foreign taxes as contractually obligated in connection with Tax Matters Agreement (71 ) — — Foreign currency translation (1 ) 2 (1 ) Balance at end of year $ 32 $ 100 $ 152 As of December 31, 2018, 2017, and 2016 there were $32 million, $100 million, and $152 million, respectively, of unrecognized tax benefits that if recognized would be recorded as a component of Tax expense. The following Open Tax Years Based on Originally Filed Returns Examination Examination in Progress Not Yet Jurisdiction Initiated U.S. Federal 2015-2016 2017-2018 U.S. State 2015-2017 2018 Germany 2008-2015 2016-2018 India 1999-2016 2017-2018 United Kingdom 2013-2015 2016-2018 * Based on the outcome of these examinations, or as a result of the expiration of statutes of limitations for specific jurisdictions, it is reasonably possible that certain unrecognized tax benefits for tax positions taken on previously filed tax returns will materially change from those recorded as liabilities in our financial statements. In addition, the outcome of these examinations may impact the valuation of certain deferred tax assets (such as net operating losses) in future periods. Estimated interest and penalties related to the underpayment of income taxes are classified as a component of Tax expense in the Consolidated and Combined Statement of Operations and totaled $2 million of income attributed to recognition of previously unrecognized tax benefits, $6 million of income, and $5 million of expense for the years ended December 31, 2018, 2017, and 2016, respectively. Accrued interest and penalties were $29 million, $35 million, and $43 million, as of December 31, 2018, 2017, and 2016, respectively. The On December 22, 2017, the U.S. enacted H.R. 1, commonly known as the Tax Cuts and Jobs Act (“Tax Act”) that instituted fundamental changes to the taxation of multinational corporations. The Tax Act changed the taxation of foreign earnings by implementing a dividend exemption system, expansion of the current anti-deferral rules, a minimum tax on low-taxed foreign earnings and new measures to deter base erosion. The Tax Act also included a permanent reduction in the corporate tax rate to 21%, repeal of the corporate alternative minimum tax, expensing of capital investment and limitation of the deduction for interest expense. Furthermore, as part of the transition to the new tax system, a one-time transition tax was imposed on a U.S. shareholder’s historical undistributed earnings of foreign affiliates. Although the Tax Act was generally effective January 1, 2018, GAAP required recognition of the tax effects of new legislation during the reporting period that includes the enactment date, which was December 22, 2017. As a result of the impacts of the Tax Act, the SEC provided guidance that allowed the Company to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment. As of December 31, 2018, the Company has completed the accounting for the tax effects of the Tax Act. The primary impacts of the Tax Act relate to the re-measurement of deferred tax assets and liabilities resulting from the change in the corporate tax rate (“Corporate Tax Rate Change”); the one-time mandatory transition tax on undistributed earnings of foreign affiliates (“MTT”); and deferred taxes in connection with a change in the Company’s intent to permanently reinvest the historical undistributed earnings of its foreign affiliates (“Undistributed Foreign Earnings”). Corporate Tax Change —For the year ended December 31, 2017 when the Business was still part of Honeywell and its consolidated tax return filings, we recorded a tax expense of less than $1 million due to the decrease in the corporate tax rate from 35 At the date of enactment, the Company had a deferred tax asset for the excess of its tax basis over net book value of its U.S. assets and liabilities that will generate future tax deductions in excess of book value. Due to the Tax Act, these additional tax deductions will be subject to tax at a lower corporate tax rate, consequently reducing the Company’s deferred tax asset as of the date of enactment. Mandatory Transition Tax— For the year ended December 31, 2017, we recorded a provisional tax charge of approximately $354 million determined as if the Company was a stand-alone business due to the imposition of the MTT on the deemed repatriation of undistributed foreign earnings. The Tax Act imposes a one-time tax on undistributed and previously untaxed post-1986 foreign earnings and profits (“E&P”) as determined in accordance with U.S. tax principles of certain foreign corporations owned by U.S. shareholders. In general, we estimated $1.7 billion of E&P related to our foreign affiliates that is subject to the MTT. The MTT is imposed at a rate of 15.5% to the extent of the cash and cash equivalents that are held by the foreign affiliates at certain testing dates; the remaining E&P is taxed at a rate of 8.0%. As a result of Honeywell finalizing its computation of the MTT, Garrett was allocated an indemnity obligation of $240 million. The Company has completed its analysis of the impact of the Tax Act and fully recorded this impact. In addition, pursuant to the Tax Matters Agreement, we will be required to make payments to a subsidiary of Honeywell in an amount payable in Euros (calculated by reference to the Distribution Date Currency Exchange Rate) representing the net tax liability of Honeywell under the mandatory transition tax attributable to the Business, as determined by Honeywell. Following the Spin-Off which occurred in October 2018, Honeywell has determined the portion of its net tax liability attributable to the Business is $240 million. The amount will be payable in installments over 8 years and may be adjusted at Honeywell’s discretion in the event of an audit adjustment or otherwise. Furthermore, Honeywell will control any subsequent tax audits or legal proceedings with respect to the mandatory transition tax, and accordingly we do not expect to be able to make definitive decisions regarding settlements or other outcomes that could influence our potential related exposure. Undistributed Earnings —For the year ended December 31, 2017, we recorded a tax charge of $980 million due to the Company’s intent to not permanently reinvest the historical undistributed earnings of its foreign affiliates. The amount was calculated as if the Company was operating on a stand-alone basis for the full year and filed separate tax returns in the jurisdictions in which it operates. The Company has completed its analysis of the impact of the Tax Act and fully recorded this impact. We previously considered substantially all of the earnings in our non-U.S. subsidiaries to be permanently reinvested and, accordingly, recorded no deferred income taxes on such earnings. As a result of the fundamental changes to the taxation of multinational corporations created by the Tax Act, the Company no longer intends to permanently reinvest the historical undistributed earnings of its foreign affiliates which amount to approximately $1.7 billion as of December 31, 2018 (including current year earnings). GAAP requires recognition of a deferred tax liability in the reporting period in which its intent to no longer permanently reinvest its historical undistributed foreign earnings is made. Although no U.S. federal taxes will be imposed on such future distributions of foreign earnings, in many cases the cash transfer will be subject to foreign withholding and other local taxes. Accordingly, at December 31, 2018, the Company has included a deferred tax liability of $56 million, mostly related to non-U.S. withholding taxes. Further, the Company previously recorded its provisional estimate based on E&P as distributable reserves was not available at that time. We have finalized our analysis using distributable reserves to compute the deferred tax liability. Global Intangible —In addition to the changes described above, the Tax Act imposes a U.S. tax on global intangible low-taxed income (“GILTI”) that is earned by certain foreign affiliates owned by a U.S. shareholder. The computation of GILTI is still subject to interpretation and additional clarifying guidance is expected, but is generally intended to impose tax on earnings of a foreign corporation that are deemed to exceed a certain threshold return relative to the underlying business investment. For purposes of the Consolidated and Combined Financial Statements, future taxes related to GILTI have not been included as they are being recorded as a current period expense in the reporting period in which the tax is incurred. Supplemental — Included in Income taxes paid, net of refunds for 2017 on the Consolidated and Combined Statements of Cash Flows is the provisional tax charge settled with the Former Parent of $354 million due to the imposition of the mandatory transition tax on the deemed repatriation of certain undistributed foreign earnings. As noted above within the Mandatory Transition Tax section, this liability was ultimately reduced to $240 million in 2018 as an adjustment to equity in connection with the opening balance sheet (and will be paid to Honeywell over an 8 year period). Additionally, included within the change in 2017 deferred income taxes is the provisional tax charge of $980 million related to a reduction of estimated foreign and state taxes on undistributed earnings of its foreign affiliates. As noted above under “Tax expense (benefit)”, the Company recorded a tax benefit due to the mitigation of certain potential tax liabilities as part of the internal restructuring of Garrett’s business in advance of the Spin-Off. The balance as of December 31, 2018 is $56 million |
Accounts, Notes and Other Recei
Accounts, Notes and Other Receivables—Net | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Accounts, Notes and Other Receivables—Net | Note 8. Accounts, Notes and Other Receivables—Net December 31, 2018 December 31, 2017 Trade receivables $ 593 $ 592 Notes receivables 93 83 Other receivables 67 73 $ 753 $ 748 Less—Allowance for doubtful accounts (3 ) (3 ) $ 750 $ 745 Trade Receivables include $5 million and $6 million of unbilled balances as of December 31, 2018 and 2017, respectively. These amounts are billed in accordance with the terms of customer contracts to which they relate. See Note 4 Revenue Recognition and Contracts with Customers. |
Inventories-Net
Inventories-Net | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories-Net | Note 9. Inventories—Net December 31, 2018 December 31, 2017 Raw materials $ 112 $ 118 Work in process 19 20 Finished products 64 73 $ 195 $ 211 Less—Reserves (23 ) (23 ) $ 172 $ 188 |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Current Assets | Note 10. Other Current Assets December 31, 2018 2017 Marketable securities (a) $ — $ 298 Insurance recoveries for asbestos-related liabilities — 17 Prepaid expenses 14 3 Taxes receivable 35 — Advanced discounts to customers, current 9 — Customer reimbursable engineering 10 3 Other 3 — $ 71 $ 321 (a) Represents |
Property, Plant and Equipment -
Property, Plant and Equipment - Net | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment - Net | Note 11. Property, Plant and Equipment—Net December 31, 2018 2017 Machinery and equipment $ 623 $ 720 Tooling 306 291 Buildings and improvements 136 145 Construction in progress 57 65 Software 54 54 Land and improvements 16 14 Others 24 25 1,216 1,314 Less—Accumulated depreciation and amortization (778 ) (872 ) $ 438 $ 442 Depreciation and amortization |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 12. Goodwill The change in the carrying December 31, 2017 Currency Translation Adjustment December 31, 2018 Goodwill $ 193 — $ 193 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities Current [Abstract] | |
Accrued Liabilities | Note 13. Accrued Liabilities December 31, 2018 December 31, 2017 Asbestos-related liabilities (a) $ — $ 185 Customer pricing reserve 107 114 Compensation, benefit and other employee related 71 65 Repositioning 15 60 Product warranties and performance guarantees 32 28 Other taxes 113 22 Advanced discounts from suppliers, current 17 12 Customer advances and deferred income (b) 14 21 Accrued interest 6 — Other (primarily operating expenses) 51 64 $ 426 $ 571 (a) For periods prior to the Spin-Off, we reflect an estimated liability for resolution of pending and future asbestos-related liabilities primarily related to the Bendix legacy Honeywell business, calculated as if we were responsible for 100% of the Bendix asbestos-liability payments. In periods subsequent to the Spin-Off, the accounting for the majority of our asbestos-related liability payments and accounts payable reflect the terms of the Indemnification and Reimbursement Agreement with Honeywell. Such liabilities are recorded in Obligations payable to Honeywell. Refer to Note 21 Commitments and Contingencies. (b) Customer advances and deferred income include $2 million and $7 million of contract liabilities as of December 31, 2018 and 2017, respectively. See Note 4 Revenue Recognition and Contracts with Customers. The Company accrued repositioning costs related to projects to optimize our product costs and to right-size our organizational structure. Expenses related to the repositioning accruals are included in Cost of goods sold in our Consolidated and Combined Statement of Operations. Severance Costs Exit Costs Total Balance at December 31, 2016 $ 35 $ 8 $ 43 Charges 20 — 20 Usage—cash (6 ) (2 ) (8 ) Foreign currency translation 4 1 5 Balance at December 31, 2017 53 7 60 Charges 2 — 2 Usage—cash (42 ) (5 ) (47 ) Foreign currency translation — — — Balance at December 31, 2018 $ 13 $ 2 $ 15 |
Long-term Debt and Credit Agree
Long-term Debt and Credit Agreements | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Credit Agreements | Note 14. Long-term Debt and Credit Agreements The principal amounts outstanding on long-term debt and the revolving credit facility are as follows: December 31, 2018 Term Loan A $ 374 Term Loan B 853 Senior Notes 401 1,628 Less: current portion (23 ) $ 1,605 On September 27, 2018, we entered into a Credit Agreement, by and among us, Garrett LX I S.à r.l., Garrett LX II S.à r.l. (“Lux Guarantor”), Garrett LX III S.à r.l. (“Lux Borrower”), Garrett Borrowing LLC (in such capacity, the “US Co-Borrower”), and Honeywell Technologies Sàrl (“Swiss Borrower” and, together with Lux Borrower and US Co-Borrower, the “Borrowers”), the lenders and issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”). The Credit Agreement provides for senior secured financing of approximately the Euro equivalent of $1,254 million, consisting of (i) a seven-year senior secured first-lien term B loan facility, which consists of a tranche denominated in Euro of €375 million and a tranche denominated in U.S. Dollars of $425 million (the “Term B Facility”), (ii) five-year senior secured first-lien term A loan facility in an aggregate principal amount of €330 million (the “Term A Facility” and, together with the Term B Facility, the “Term Loan Facilities”) and (iii) a five-year senior secured first-lien revolving credit facility in an aggregate principal amount of €430 million with revolving loans to Swiss Borrower, to be made available in a number of currencies including Australian Dollars, Euros, Pounds Sterling, Swiss Francs, U.S. Dollars and Yen (the “Revolving Facility” and, together with the Term Loan Facilities, the “Senior Credit Facilities”). Each of the Revolving Facility and the Term A Facility matures five years after the effective date of the Credit Agreement, in each case with certain extension rights in the discretion of each lender. The Term B Facility matures seven years after the effective date of the Credit Agreement, with certain extension rights in the discretion of each lender. The Senior Credit Facilities are subject to an interest rate, at our option, of either (a) base rate determined by reference to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the United States, (2) the greater of the federal funds effective rate and the overnight bank funding rate, plus 0.5% and (3) the one month adjusted LIBOR rate, plus 1% per annum (“ABR”), (b) an adjusted LIBOR rate (“LIBOR”) (which shall not be less than zero), or (c) an adjusted EURIBOR rate (“EURIBOR”) (which shall not be less than zero), in each case, plus an applicable margin. The applicable margin for the U.S. Dollar tranche of the Term B Facility is currently 2.50% per annum (for LIBOR loans) and 1.50% per annum (for ABR loans) while that for the Euro tranche of the Term B Facility is currently 2.75% per annum (for EURIBOR loans). The applicable margin for each of the Term A Facility and the Revolving Credit Facility varies based on our leverage ratio. Accordingly, the interest rates for the Senior Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, LIBOR, EURIBOR 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 LIBOR and EURIBOR loans) or, if the duration of the applicable interest period exceeds three months, then every three months. We are obligated to make quarterly principal payments throughout the term of the Term Loan Facilities according to the amortization provisions in the Credit Agreement. Borrowings under the Credit Agreement are prepayable at our option without premium or penalty, subject to a 1.00% prepayment premium in connection with any repricing transaction with respect to the Term B Facility in the first six months after the effective date of the Credit Agreement. We may request to extend the maturity date of all or a portion of the Senior Credit Facilities subject to certain conditions customary for financings of this type. The Credit Agreement also contains certain mandatory prepayment provisions in the event that we incur certain types of indebtedness or receive net cash proceeds from certain non-ordinary course asset sales or other dispositions of property, in each case subject to terms and conditions customary for financings of this type. The schedule of principal payments on long-term debt and the revolving credit facility is as follows: December 31, 2018 2019 $ 23 2020 28 2021 47 2022 65 2023 231 Thereafter 1,234 $ 1,628 Less: current portion (23 ) $ 1,605 The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends, to make other distributions or redemptions/ repurchases, in respect of the our and our subsidiaries’ equity interests, to engage in transactions with affiliates, amend certain material documents or to permit the International Financial Reporting Standards equity amount of Lux Borrower to decrease below a certain amount. The Credit Agreement also contains financial covenants requiring the maintenance of a consolidated total leverage ratio of not greater than 4.25 to 1.00 (with step-downs to (i) 4.00 to 1.00 in approximately 2019, (ii) 3.75 to 1.00 in approximately 2020 and (iii) 3.50 to 1.00 in approximately 2021), and a consolidated interest coverage ratio of not less than 2.75 to 1.00. We are in compliance with our financial covenants as of December 31, 2018. On September 27, 2018, we completed the offering of €350 million (approximately $400 million) in aggregate principal amount of 5.125% senior notes due 2026 (the “Senior Notes”). The Senior Notes bear interest at a fixed annual interest rate of 5.125% and mature on October 15, 2026. The Senior Notes were issued pursuant to an Indenture, dated September 27, 2018 (the “Indenture”), which, among other things and subject to certain limitations and exceptions, limits our ability and the ability of our restricted subsidiaries to: (i) incur, assume or guarantee additional indebtedness or issue certain disqualified equity interests and preferred shares, (ii) pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments, (iii) make investments, (iv) consummate certain asset sales or transfers, (v) engage in certain transactions with affiliates, (vi) grant or assume certain liens on assets to secure debt unless the Senior Notes are secured equally and ratably (vii) restrict dividends and other payments by certain of their subsidiaries and (vii) consolidate, merge, sell or otherwise dispose of all or substantially all of our or our restricted subsidiaries’ assets. All debt issuance costs, except for those associated to the Revolving Credit Facility, are deferred and recognized as a direct deduction to the related debt liability and are amortized to interest expense over the debt term. The company paid approximately $37 million of debt issuance costs in connection with the Term A Facility, Term B Facility, and Senior Notes. The unutilized portion of the Revolving Credit Facility is subject to an annual commitment fee of 0.40% to 0.50% depending on the Company’s consolidated leverage ratio. Debt issuance costs associated with the Revolving Credit Facility were capitalized in Other assets and are amortized to interest expense over the debt term. Approximately, $6 million of debt issuance costs were paid in connection with the Revolving Credit Facility. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Lease Commitments | Note 15. Lease Commitments Future minimum December 31, 2018 2019 $ 12 2020 8 2021 5 2022 4 2023 4 Thereafter 15 $ 48 Rent expense was $14 million, $10 million and |
Financial Instruments and Fair
Financial Instruments and Fair Value Measures | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Fair Value Measures | Note 16. Financial Instruments and Fair Value Measures Credit and Market Risk —We continually monitor the creditworthiness of our customers to which we grant credit terms in the normal course of business. The terms and conditions of our credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. Foreign Currency Risk Management —We are exposed to market risks from changes in currency exchange rates. These exposures may impact future earnings and/or operating cash flows. Our exposure to market risk for changes in foreign currency exchange rates arises from international financing activities between subsidiaries, foreign currency denominated monetary assets and liabilities and transactions arising from international trade. For the periods prior to the Spin-Off, as part of Honeywell´s centralized treasury function, the primary objective was to preserve the U.S. Dollar value of foreign currency denominated cash flows and earnings. We hedged major exposures to foreign currency denominated cash flows to smoothen the effects of fluctuations in foreign currency exchange rates on earnings. We designated the related hedging instruments as cash flow hedges, except in cases where the hedged item was recognized on balance sheet. The gain or loss from a derivative financial instrument designated as a cash flow hedge was classified in the same line of the Consolidated and Combined Statements of Operations as the offsetting loss or gain on the hedged item. The historical treasury strategies implemented by Honeywell’s centralized treasury function differ from our treasury strategy as a standalone company, which is described below. We hedge currency exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign currency exchange forward contracts (foreign currency exchange contracts). We hedge monetary assets and liabilities denominated in non-functional currencies. Prior to conversion into U.S. dollars, these assets and liabilities are remeasured at spot exchange rates in effect on the balance sheet date. The effects of changes in spot rates are recognized in earnings and included in Non-operating (income) expense. Open foreign currency exchange contracts (excluding the below cross-currency swap) mature in the next four months. At December 31, 2018 and December 31, 2017, we had contracts with aggregate gross notional amounts of $838 million and $928 million, respectively, to exchange foreign currencies, principally the U.S. Dollar, Euro, Chinese Yuan, Japanese Yen, Mexican Peso, New Romanian Leu, Australian Dollar and Korean Won. Fair Value of Financial Instruments —The FASB’s accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2018 and December 31, 2017: Fair Value Notional Amounts Assets Liabilities December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Designated forward currency exchange contracts $ — $ 556 $ — $ — $ — $ 35 (d) Undesignated instruments: Undesignated cross-currency swap 425 — 16 (a) — — — Undesignated forward currency exchange contracts 413 372 4 (b) — 1 (c) 2 (d) 838 372 20 — 1 2 $ 838 $ 928 $ 20 $ — $ 1 $ 37 (a) Recorded within Other assets in the Company’s Consolidated and Combined Balance Sheets (b) Recorded within Other current assets in the Company’s Consolidated and Combined Balance Sheets (c) Recorded within Accrued liabilities in the Company’s Consolidated and Combined Balance Sheets (d) Recorded within Due to related parties in the Company’s Consolidated and Combined Balance Sheet On September 27, 2018, the Company entered into a floating-floating cross-currency swap contract to hedge the foreign currency exposure from foreign currency-denominated debt which will mature on September 27, 2025. The gain or loss on this derivative instrument is recognized in earnings and included in Non-operating (income) expense. For the year ended December 31, 2018, gains recorded in Non-operating (income) expense, under the cross-currency swap contract were $16 million. The foreign currency exchange and cross-currency swap contracts are valued using market observable inputs. As such, these derivative instruments are classified within Level 2. The assumptions used in measuring fair value of the cross-currency swap are considered level 2 inputs, which are based upon market observable interest rate curves, cross currency basis curves, credit default swap curves, and foreign exchange rates. The carrying value of Cash and cash equivalents, Marketable securities (Level 2), Account receivables, notes and other receivables, Due from related parties, Account payables, and Due to related parties contained in the Consolidated and Combined Balance Sheets approximates fair value. The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value: December 31, 2018 Carrying Value Fair Value Long-term debt and related current maturities $ 1,592 $ 1,548 The Company determined the fair value of certain of its long-term debt and related current maturities utilizing transactions in the listed markets for similar liabilities. As such, the fair value of the long-term debt and related current maturities is considered level 2. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 17. Other Liabilities Years Ended December 31, 2018 2017 Pension and other employee related $ 71 $ 54 Advanced discounts from suppliers 63 53 Income taxes 59 42 Other 16 12 $ 209 $ 161 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Comprehensive Income (Loss) | Note 18. Accumulated Other The changes in accumulated Pre-Tax Tax After-Tax Year Ended December 31, 2016 Foreign exchange translation adjustment $ 29 $ — $ 29 Pension adjustments (12 ) — (12 ) Changes in fair value of effective cash flow hedges 38 (5 ) 33 $ 55 $ (5 ) $ 50 Year Ended December 31, 2017 Foreign exchange translation adjustment $ 72 $ — $ 72 Pension adjustments — — — Changes in fair value of effective cash flow hedges (84 ) 7 (77 ) $ (12 ) $ 7 $ (5 ) Year Ended December 31, 2018 Foreign exchange translation adjustment $ (198 ) $ — $ (198 ) Pension adjustments (2 ) — (2 ) Changes in fair value of effective cash flow hedges 37 (2 ) 35 $ (163 ) $ (2 ) $ (165 ) Changes Total Foreign Changes in Fair Accumulated Exchange Value of Other Translation Effective Cash Pension Comprehensive Adjustment Flow Hedges Adjustments Income (Loss) Balance at December 31, 2016 $ 212 $ 42 $ (11 ) $ 243 Other comprehensive income (loss) before reclassifications 72 (66 ) — 6 Amounts reclassified from accumulated other comprehensive income (loss) — (11 ) — (11 ) Net current period other comprehensive income (loss) 72 (77 ) — (5 ) Balance at December 31, 2017 $ 284 $ (35 ) $ (11 ) $ 238 Other comprehensive income (loss) before reclassifications (198 ) 12 (5 ) (191 ) Amounts reclassified from accumulated other comprehensive income — 23 3 26 Net current period other comprehensive income (loss) (198 ) 35 (2 ) (165 ) Balance at December 31, 2018 $ 86 $ — $ (13 ) $ 73 Reclassifications Year ended December 31, 2018 Affected Line in the Consolidated and Combined Statement of Operations Selling, Cost of General and Net Goods Administrative Non-Operating (Income) Sales Sold Expenses Expense Total Amortization of Pension and Other Postretirement Items: Actuarial losses recognized $ — $ — $ — $ 3 $ 3 Losses (gains) on cash flow hedges (1 ) 26 — — 25 Tax expense (benefit) (2 ) Total reclassifications for the period, net of tax $ 26 Year ended December 31, 2017 Affected Line in the Consolidated and Combined Statement of Operations Selling, Cost of General and Net Goods Administrative Non-Operating (Income) Sales Sold Expenses Expense Total Amortization of Pension and Other Postretirement Items: Actuarial losses recognized $ — $ — $ — $ — $ — Losses (gains) on cash flow hedges — (14 ) — — (14 ) Tax expense (benefit) 3 Total reclassifications for the period, net of tax $ (11 ) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 19. Stock-Based Compensation On September 14, 2018, our Board adopted, and Honeywell, as our sole stockholder, approved, the 2018 Stock Incentive Plan of Garrett Motion Inc. and its Affiliates (the “Stock Incentive Plan”) and the 2018 Stock Plan for Non-Employee Directors (the “Director Equity Plan”). The Stock Incentive Plan provides for the grant of stock options, stock appreciation rights, performance awards, restricted stock units, restricted stock, other stock-based awards, and cash-based awards to employees of Garrett or its affiliates, and independent contractors or consultants of Garrett. The maximum aggregate number of shares of our common stock that may be issued under the Stock Incentive Plan is 10,000,000 shares and, for the Director Equity Plan, 400,000 shares. Up to 5,000,000 shares may be granted as incentive stock options under the Stock Incentive Plan. As of December 31, 2018, 6,620,619 shares of our common stock were available for future issuance under the Stock Incentive Plan. As of December 31, 2018, no awards have been granted to members of our Board under the Director Equity Plan and 400,000 shares of our common stock remain available for future issuance under such plan. Restricted Stock Units — Restricted stock unit (“RSU”) awards are issued to certain key employees and directors at fair market value at the date of grant. RSUs typically vest over a period of three or four years, and when vested, each unit entitles the holder to one share of our common stock. • I n 496,240 • In connection with the Spin-Off, any Honeywell equity awards held by our employees that were outstanding and unvested as of the date of the Spin-Off were terminated and canceled in accordance with their terms and we issued replacement RSU awards in the amount of 2,848,541 RSUs under our Stock Incentive Plan. The vesting schedule for each replacement award is substantially the same as that of the forfeited award. These replacement awards were intended to preserve the intrinsic value of the forfeited awards as of the Spin-Off. As a result, there was no incremental stock-based compensation expense recorded. Compensation expense for these awards will continue to be recognized ratably over the remaining term of the unvested awards, which ranges from 0 to 5.4 years as of the date of the Spin-Off, and shall be based on management's estimate of the number of shares expected to vest. The following table summarizes information about RSU activity related to our Stock Incentive Plan for the year ended December 31, 2018: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested at October 1, 2018 2,848,541 $ 8.70 Granted 530,840 17.76 Vested (4,452 ) 6.67 Forfeited (5,307 ) 14.16 Non-vested at December 31, 2018 3,369,622 $ 10.12 As of December 31, 2018, there was approximately $25 million of total unrecognized compensation cost related to unvested RSUs granted under our Stock Incentive Plan, which is expected to be recognized over a weighted-average period of 2.8 years. The following table summarizes information about the income statement impact from RSUs for the year ended December 31, 2018: Compensation expense $ 5 Future income tax benefit recognized 1 Stock Based Awards Granted by Honeywell — For periods prior to the Spin-Off, Honeywell maintained stock-based compensation plans for the benefit of its officers, directors and employees. Under the Former Parent´s stock-based compensation plans, Honeywell awarded RSUs, stock options and PSUs to certain employees. Stock-based compensation expense related to awards granted by Honeywell recognized in the Consolidated and Combined Statements of Operations amounted to $16 million, $15 million and $12 million for the years ended December 31, 2018, 2017 and 2016, respectively, of which approximately $10 million, $8 million and $5 million are specifically identified for employees within the Business, respectively and $6 million, $7 million and $7 million is related to shared employees not specifically identifiable to the Business, respectively. These amounts represent stock-based compensation expenses attributable to the Business based on the awards and terms previously granted under the incentive compensation plans to employees within the Business and an allocation of Former Parent’s corporate and shared functional employee stock based compensation expenses. Accordingly, the amounts presented are not necessarily indicative of current and future awards and do not necessarily reflect the results that the Business would have experienced as an independent company for the periods presented. The activity related to stock based awards granted by Honeywell to employees of the Business for the year ended December 31, 2017 consisted of the following: RSUs Options Wtd Avg Number of Grant Date Number of Wtd Avg RSUs Fair Value Options Exercise Price Outstanding as of December 31, 2016 163,110 $ 96 475,476 $ 87 Granted (a) 45,503 131 162,600 125 Vested/exercised (41,137 ) 83 (121,231 ) 79 Outstanding as of December 31, 2017 167,476 (b)(c) $ 108 516,845 (d) $ 101 (a) Primarily represents awards granted by Honeywell in February and July 2017. (b) Aggregate unrecognized compensation expense related to RSUs was $9.4 million as of December 31, 2017, which is expected to be recognized over a weighted average period of 3.6 years. (c) Substantially all RSUs outstanding as of December 31, 2017 are expected to vest over time. (d) Aggregate unrecognized compensation expense related to stock options was $4.2 million as of December 31, 2017, which is expected to be recognized over a weighted average period of 2.5 years. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 20. Earnings Per Share On October 1, 2018, the date of consummation of the Spin-Off, 74,070,852 shares of the Company’s common stock were distributed to Honeywell stockholders of record as of September 18, 2018 who held their shares through the Distribution Date. Basic and Diluted EPS for all historical periods prior to the Spin-Off reflect the number of distributed shares, or 74,070,852 shares. For 2018, these shares are treated as issued and outstanding from January 1, 2018 to the Spin-Off for purposes of calculating basic earnings per share. The details of the earnings per share calculations for the years ended December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, 2018 2017 2016 Basic Net Income $ 1,180 $ (983 ) $ 199 Weighted average common shares outstanding 74,059,240 74,070,852 74,070,852 EPS – $ 15.93 $ (13.27 ) $ 2.69 Years Ended December 31, 2018 2017 2016 Diluted Net Income $ 1,180 $ (983 ) $ 199 Weighted average common shares outstanding – Basic 74,059,240 74,070,852 74,070,852 Dilutive effect of unvested RSUs 342,908 — — Weighted average common shares outstanding – Diluted 74,402,148 74,070,852 74,070,852 EPS – Diluted $ 15.86 $ (13.27 ) $ 2.69 Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. There were no anti-dilutive shares excluded from the computation of Diluted EPS for any of the periods presented. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 21. Commitments Obligations payable to Honeywell Honeywell is a defendant in asbestos-related personal injury actions mainly related to its legacy Bendix friction materials (“Bendix”) business. The Bendix business manufactured automotive brake linings that contained chrysotile asbestos in an encapsulated form. Claimants consist largely of individuals who allege exposure to asbestos from brakes from either performing or being in the vicinity of individuals who performed brake replacements. Certain operations that were part of the Bendix business were transferred to Garrett. In connection with the Spin-Off, we entered into an Indemnification and Reimbursement Agreement with Honeywell on September 12, 2018. As of the Spin-Off date of October 1, 2018, we are obligated to make payments to Honeywell in amounts equal to 90% of Honeywell’s asbestos-related liability payments and accounts payable, primarily related to the Bendix business in the United States, as well as certain environmental-related liability payments and accounts payable and non-United States asbestos-related liability payments and accounts payable, in each case related to legacy elements of the Business, including the legal costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts and, as may be applicable, certain other recoveries associated with such liabilities. Pursuant to the terms of this Indemnification and Reimbursement Agreement, we are responsible for paying to Honeywell such amounts, up to a cap of an amount equal to the Euro-to-U.S. dollar exchange rate determined by Honeywell as of a date within two business days prior to the date of the Distribution (1.16977 USD = 1 EUR) equivalent of $175 million in respect of such liabilities arising in any given calendar year. The payments that we are required to make to Honeywell pursuant to the terms of this agreement will not be deductible for U.S. federal income tax purposes. The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. During the fourth quarter of 2018, we paid Honeywell the Euro-equivalent of $41 million in connection with the Indemnification and Reimbursement Agreement. On September 12, 2018, we also entered into a Tax Matters Agreement with Honeywell (the “Tax Matters Agreement”), which governs the respective rights, responsibilities and obligations of Honeywell and us after the Spin-Off with respect to all tax matters (including tax liabilities, tax attributes, tax returns and tax contests). The Tax Matters Agreement generally provides that, following the Spin-Off date of October 1, 2018, we are responsible and will indemnify Honeywell for all taxes, including income taxes, sales taxes, VAT and payroll taxes, relating to Garrett for all periods, including periods prior to the completion date of the Spin-Off. Among other items, as a result of the mandatory transition tax imposed by the Tax Cuts and Jobs Act, one of our subsidiaries is required to make payments to a subsidiary of Honeywell in the amount representing the net tax liability of Honeywell under the mandatory transition tax attributable to us, as determined by Honeywell. We currently estimate that our aggregate payments to Honeywell with respect to the mandatory transition tax will be $240 million. Under the terms of the Tax Matters Agreement, we are required to pay this amount in Euros, without interest, in five annual installments, each equal to 8% of the aggregate amount, followed by three additional annual installments equal to 15%, 20% and 25% of the aggregate amount, respectively. In connection with this agreement, we paid Honeywell the Euro-equivalent of $19 million during the fourth quarter of 2018. In addition, the Tax Matters Agreement addresses the allocation of liability for taxes incurred as a result of restructuring activities undertaken to effectuate the Spin-Off. The Tax Matters Agreement also provides that we are required to indemnify Honeywell for certain taxes (and reasonable expenses) resulting from the failure of the Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal, state and local income tax law, as well as foreign tax law. Further, the Tax Matters Agreement also imposes certain restrictions on us and our subsidiaries (including restrictions on share issuances, redemptions or repurchases, business combinations, sales of assets and similar transactions) that are designed to address compliance with Section 355 of the Internal Revenue Code of 1986, as amended, and are intended to preserve the tax-free nature of the Spin-Off. The following table summarizes our Obligation payable to Honeywell related to these agreements following the Spin-Off: 2018 Asbestos and environmental Tax Matters Total Beginning of year $ — $ — $ — Spin-Off related adjustments 1,328 308 1,636 Accrual for update to estimated liability (30 ) — (30 ) Legal fees expensed 14 — 14 Payments to Honeywell (41 ) (19 ) (60 ) Currency translation adjustment (27 ) (7 ) (34 ) End of year $ 1,244 $ 282 $ 1,526 Current 108 19 127 Non-current 1,136 263 1,399 Total $ 1,244 $ 282 $ 1,526 Asbestos Matters For the periods prior to the Spin-Off, these Consolidated and Combined Financial Statements reflect an estimated liability for resolution of pending and future asbestos-related and environmental liabilities primarily related to the Bendix legacy Honeywell business, calculated as if we were responsible for 100% of the Bendix asbestos-liability payments. However, this recognition model differs from the recognition model applied subsequent to the Spin-Off as outlined above. In periods subsequent to the Spin-Off, the accounting for the majority of our asbestos-related liability payments and accounts payable reflect the terms of the Indemnification and Reimbursement Agreement with Honeywell entered into on September 12, 2018, under which we are required to make payments to Honeywell in amounts equal to 90% of Honeywell’s asbestos-related liability payments and accounts payable, primarily related to the Bendix business in the United States, as well as certain environmental-related liability payments and accounts payable and non-United States asbestos-related liability payments and accounts payable, in each case related to legacy elements of the Business, including the legal costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts and, as may be applicable, certain other recoveries associated with such liabilities. The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. The following Asbestos-Related Year ended December 31, 2018 Year ended December 31, 2017 Year ended December 31, 2016 Bendix Other Total Bendix Other Total Bendix Other Total Beginning of year $ 1,703 $ 9 $ 1,712 $ 1,789 $ 6 $ 1,795 $ 1,793 $ 6 $ 1,799 Accrual for update to estimated liabilities 141 — 141 199 4 203 203 — 203 Change in estimated cost of future claims — — — (65 ) — (65 ) (10 ) — (10 ) Update of expected resolution values for pending claims — — — 3 — 3 4 — 4 Asbestos-related liability payments (151 ) (4 ) (155 ) (223 ) (1 ) (224 ) (201 ) — (201 ) Spin-Off related adjustments (1,693 ) (4 ) (1,697 ) — — — — — — End of year $ — $ 1 $ 1 $ 1,703 $ 9 $ 1,712 $ 1,789 $ 6 $ 1,795 Insurance Recoveries 2018 2017 2016 Bendix Bendix Bendix Beginning of year $ 191 $ 201 $ 222 Probable insurance recoveries related to estimated liability 10 10 8 Insurance receipts for asbestos-related liabilities (24 ) (20 ) (37 ) Insurance receivables settlements and write-offs 1 — 7 Other — — 1 Spin-Off related adjustments (178 ) — — $ — $ 191 $ 201 Asbestos balances December 31, 2018 2017 Other current assets $ — $ 17 Insurance recoveries for asbestos-related liabilities — 174 $ — $ 191 Accrued liabilities $ — $ 185 Asbestos-related liabilities 1 1,527 $ 1 $ 1,712 The following Years Ended December 31, Claims Activity 2018 2017 Claims Unresolved at the beginning of year 6,280 7,724 Claims Filed 2,430 2,645 Claims Resolved (2,501 ) (4,089 ) Claims Unresolved at the end of the year 6,209 6,280 December 31, Disease Distribution of Unresolved Claims 2018 2017 Mesothelioma and Other Cancer Claims 2,949 3,062 Nonmalignant Claims 3,260 3,218 Total Claims 6,209 6,280 Honeywell has experienced Years Ended December 31, 2018 2017 2016 2015 2014 (in whole dollars) Malignant claims $ 55,300 $ 56,000 $ 44,000 $ 44,000 $ 53,500 Nonmalignant claims $ 4,700 $ 2,800 $ 4,485 $ 100 $ 120 It is not possible Other Matters We are subject Warranties In the normal Years Ended December 31, 2018 2017 2016 Beginning of year $ 28 $ 22 $ 19 Accruals for warranties/guarantees issued during the year 33 14 14 Settlement of warranty/guarantee claims (29 ) (8 ) (11 ) $ 32 $ 28 $ 22 |
Defined Benefit Pension Plans
Defined Benefit Pension Plans | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Defined Benefit Pension Plans | Note 22. Defined Benefit We sponsor several funded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of our U.S. employees are provided through a non-contributory, qualified defined benefit plan. All non-union hourly and salaried employees joining the Business for the first time after December 31, 2012, are not eligible to participate in our U.S. defined benefit pension plans. We also sponsor defined benefit pension plans which cover non-U.S. employees who are not U.S. citizens, in Switzerland and Ireland. Other pension plans outside of the U.S. are not material to the Company either individually or in the aggregate. For periods prior to the Spin-Off, we only accounted for our pension plan in Ireland as a defined benefit pension plan. Our other pension plans were accounted for as multiemployer plans. On October 1, 2018, in connection with the Spin-Off, we performed an interim remeasurement of our defined benefit pension plan in Ireland to update the discount rate as of the date immediately prior to the Spin-Off as mandated by the Employee Matters Agreement. The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with our significant pension plans. Pension Benefits U.S. Plans Non-U.S. Plans Non-U.S. Plans 2018 2018 (1) 2017 (1) Change in benefit obligation: Benefit obligation at beginning of the year $ — $ 107 $ 89 Transfer of plan obligations from Former Parent 181 65 — Spin-Off remeasurement adjustment — 2 — Service cost — 4 2 Interest cost 2 2 2 Plan amendments — 1 — Actuarial (gains) losses (3 ) (5 ) 3 Benefits paid (2 ) (3 ) (1 ) Foreign currency translation — (5 ) 12 Other — 4 — Benefit obligation at end of the year 178 172 107 Change in plan assets: Fair value of plan assets at beginning of the year — 64 50 Transfer of plan assets from Former Parent 181 54 — Spin-Off remeasurement adjustment — (10 ) — Actual return on plan assets (2 ) 2 4 Employer contributions — 16 3 Benefits paid (2 ) (3 ) — Foreign currency translation — (4 ) 7 Other — 4 — Fair value of plan assets at end of year 177 123 64 Funded status of plans $ (1 ) $ (49 ) $ (43 ) Amounts recognized in Consolidated Balance Sheet consist of: Accrued pension liabilities - current — — (3 ) Accrued pension liabilities - noncurrent (2) (1 ) (49 ) (40 ) Net amount recognized $ (1 ) $ (49 ) $ (43 ) (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. (2) Included in Other liabilities in the Consolidated and Combined Balance Sheet Amounts recognized in Accumulated other comprehensive (income) loss associated with our significant pension and other postretirement benefit plans at December 31, 2018 are as follows: Pension Benefits U.S. Plans Non-U.S. Plans Non-U.S. Plans 2018 2018 (1) 2017 (1) Prior service (credit) $ (2 ) $ — $ — Net actuarial loss 4 7 11 Net amount recognized $ 2 $ 7 $ 11 (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. The components of net periodic benefit (income) cost and other amounts recognized in Other comprehensive (income) loss for our significant pension and other postretirement benefit plans include the following components: Pension Benefits U.S. Plans Non-U.S. Plans Net Periodic Benefit Cost 2018 2018 (1) 2017 (1) Service cost $ — $ 4 $ 2 Interest cost 2 2 2 Expected return on plan assets (3 ) (3 ) (2 ) Recognition of actuarial losses — 3 — Net periodic benefit (income) cost $ (1 ) $ 6 $ 2 (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. Other Changes in Plan Assets and Benefits Obligations Recognized in U.S. Plans Non-U.S. Plans Other Comprehensive (Income) Loss 2018 2018 (1) 2017 (1) Actuarial (gains) losses $ 2 $ (4 ) $ — Prior service (credit) — 1 — Actuarial losses recognized during year — (3 ) — Total recognized in other comprehensive (income) loss $ 2 $ (6 ) $ — Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss $ 1 $ — $ 2 (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. The estimated prior service (credit) for pension benefits that will be amortized from Accumulated other comprehensive (income) loss into net periodic benefit (income) cost in 2019 are expected to be less than $1 million for both the U.S. and non-U.S. pension plans. Major actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for our significant benefit plans are presented in the following table as weighted averages. Pension Benefits U.S. Plans Non-U.S. Plans 2018 2018 (1) 2017 (1) Actuarial assumptions used to determine benefit obligations as of December 31: Discount rate 4.33 % 1.50 % 1.80 % Expected annual rate of compensation increase 3.74 % 1.77 % 2.00 % Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: Discount rate—benefit obligation 4.33 % 1.50 % 1.80 % Discount rate—service cost 4.11 % 1.50 % 1.80 % Discount rate—interest cost 4.02 % 1.50 % 1.80 % Expected rate of return on plan assets 6.00 % 3.77 % 4.00 % Expected annual rate of compensation increase 3.74 % 1.77 % 2.00 % (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. The discount rate for our significant pension plans reflects the current rate at which the associated liabilities could be settled at the measurement date of December 31, 2018 and 2017, respectively. 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. We use the single weighted-average yield of this hypothetical portfolio as a discount rate benchmark. For our U.S. defined benefit pension plan, 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. 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. For our Switzerland and Ireland defined benefit pension plans, we estimated such cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the pension benefit obligation. In 2019, we expect to update the approach for estimating the service and interest cost components of net period benefit (income) cost for the Switzerland and Ireland plans to the full yield curve approach. For non-U.S. benefit plans, actuarial assumptions reflect economic and market factors relevant to each country. The following amounts relate to our significant pension plans with accumulated benefit obligations exceeding the fair value of plan assets. December 31, U.S. Plans Non-U.S. Plans 2018 2018 (1) 2017 (1) Projected benefit obligation $ 178 $ 172 $ 107 Accumulated benefit obligation 177 164 104 Fair value of plan assets 177 123 64 (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. Our asset investment strategy for our U.S. pension plan focuses on maintaining a diversified portfolio using various asset classes in order to achieve market exposure and diversification on an interim basis as we complete an asset liability study and develop our long-term investment objectives on a risk adjusted basis. Once finalized, we will implement our long-term strategy. Our interim target allocations are as follows: 35% equity securities, 50% fixed income securities and cash, 10% real estate investments, and 5% high yield bonds. Equity securities include mutual funds that invest in companies located both inside and outside the United States. Fixed income securities include exposure to medium and high quality investment grade corporate bonds, pooled consumer loans and U.S. government bonds with an average maturity of 5 – 25 years. The real estate fund invests in real estate investment trusts – companies that purchase office buildings, hotels and other real estate property. The high yield bond fund invests in a diversified portfolio of intermediate term below investment-grade debt securities. 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. Our non-U.S. pension assets are typically managed by decentralized fiduciary committees. Our non-U.S. 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. and non-U.S. pension plans assets by asset category are as follows: U.S. Plans December 31, 2018 Total Level 1 Level 2 Level 3 Equity funds $ 60 $ — $ 60 $ — Short-term investments 8 — 8 — Corporate bond funds 92 — 92 — Real estate funds 17 — 17 — Total assets at fair value $ 177 $ — $ 177 $ — Non-U.S. Plans December 31, 2018 Total Level 1 Level 2 Level 3 Equity funds $ 48 $ — $ 48 $ — Short-term investments 12 — 12 — Government bond funds 28 — 28 — Corporate bond funds 16 — 16 — Real estate funds 11 — 11 — Other 8 — 8 — Total assets at fair value $ 123 $ — $ 123 $ — Non-U.S. Plans December 31, 2017 Total Level 1 Level 2 Level 3 Equity funds $ 33 $ — $ 33 $ — Government bond funds 19 — 19 — Corporate bond funds 6 — 6 — Other 6 — 6 — Total assets at fair value $ 64 $ — $ 64 $ — Equity funds, corporate bond funds, government bond funds, real estate funds and short-term investments are valued either by bids provided by brokers or dealers or quoted prices of securities with similar characteristics. Other includes diversified mutual funds. These investments are valued at estimated fair value based on quarterly financial information received from the investment advisor and/or general partner. Our general funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. We are not required to make any contributions to our U.S. pension plan in 2019. In 2018, contributions of $16 million were made to our non-U.S. pension plans to satisfy regulatory funding requirements. In 2019, we expect to make contributions of cash and/or marketable securities of approximately $6 million to our non-U.S. pension plans to satisfy regulatory funding standards. Contributions for both our U.S. and non-U.S. pension 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: U.S. Plans Non-U.S. Plans 2019 $ 9 $ 3 2020 10 3 2021 10 3 2022 10 3 2023 11 3 2024-2028 56 18 |
China Variable Interest Entity
China Variable Interest Entity | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
China Variable Interest Entity | Note 23. China Variable Interest Entity On September 20, 2018 in preparation of the Spin-Off, we entered into an agreement by and between Honeywell International Inc. and Garrett Motion Inc. (the “China Purchase Agreement”) in which Honeywell agreed to sell to Garrett 100% of the equity interests of Honeywell Transportation Investment (China) Co., Ltd. (“Garrett China”) consisting of our primary operations in China, in exchange for upfront consideration of 8,444,077 shares of our common stock. No further consideration from Garrett is due. The transfer of the equity interests in Garrett China from Honeywell to Garrett will occur following the current share lock-up period, one year from the date of the agreement. Garrett China is considered a variable interest entity for which Garrett is the primary beneficiary because the China Purchase Agreement provides Garrett, prior to the transfer of the equity interests, control to direct the management and operation of Garrett China as well as all economic benefits and losses. The intent of the agreement is to place Garrett in the same position as if it already owned 100% of the equity interests of Garrett China. As the agreement was effective prior to the Spin-Off date while the Company and Garrett China were under common control of Honeywell, the assets and liabilities of Garrett China are recognized at their carrying amounts. Additionally, the assets and liabilities and related operations of Garrett China were included in our Consolidated and Combined Balance Sheets and Consolidated and Consolidated and Combined Statements of Operations as of and for the years ended December 31, 2017 and 2016 which were prepared on a carve-out basis. The following table summarizes the consolidated assets and liabilities of Garrett China: December 31, 2018 2017 (Dollars in millions) ASSETS Current assets: Cash and cash equivalents $ 70 $ 78 Accounts, notes and other receivables—net 224 240 Inventories—net 19 21 Due from related parties, current — 73 Total current assets 313 412 Property, plant and equipment—net 67 66 Deferred income taxes 20 8 Other assets 1 — Total assets $ 401 $ 486 LIABILITIES Current liabilities: Accounts payable $ 261 $ 245 Due to related parties, current — 37 Accrued liabilities 77 84 Total current liabilities 338 366 Other liabilities 13 16 Total liabilities $ 351 $ 382 Net sales from Garrett China were $ 470 million million 340 million million 19 million million 24 |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2018 | |
Risks And Uncertainties [Abstract] | |
Concentrations | Note 24. Concentrations Sales concentration —Net sales by region (determined based on country of shipment (1) Year ended December 31, 2018 OEM Aftermarket Other Total United States $ 338 $ 175 $ 5 $ 518 Europe 1,686 151 54 1,891 Asia 847 50 26 923 Other International 22 21 — 43 $ 2,893 $ 397 $ 85 $ 3,375 Year ended December 31, 2017 (1) OEM Aftermarket Other Total United States $ 277 $ 178 $ 6 $ 461 Europe 1,568 140 54 1,762 Asia 750 49 33 832 Other International 19 22 — 41 $ 2,614 $ 389 $ 93 $ 3,096 Year ended December 31, 2016 (1) OEM Aftermarket Other Total United States $ 296 $ 164 $ 6 $ 466 Europe 1,622 149 35 1,806 Asia 611 53 28 692 Other International 12 21 — 33 $ 2,541 $ 387 $ 69 $ 2,997 (1) The sales concentration information was previously presented based on the customer’s origin and is now presented based on country of shipment. As a result, the prior periods presented were recast to conform to the current year presentation. Customer concentration —Net sales to Garrett’s largest customers and the corresponding percentage of total net sales are as follows: Net sales Years ended December 31, 2018 % 2017 % 2016 % Customer A $ 455 13 $ 423 14 $ 436 15 Customer B 254 8 246 8 303 10 Others 2,666 79 2,427 78 2,258 75 $ 3,375 100 $ 3,096 100 $ 2,997 100 Long-lived assets —Long-lived assets by region are as follows: Long-lived Assets (1) December 31, 2018 2017 2016 United States $ 26 $ 23 $ 21 Europe 273 273 219 Asia 123 124 109 Other International 16 22 22 $ 438 $ 442 $ 371 (1) Long-lived Supplier concentration —The Company’s largest supplier accounted for 14%, 16% and 17% of direct materials purchases for the years ended December 31, 2018, 2017 and 2016, respectively. |
Unaudited Quarterly Financial I
Unaudited Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Information | Note 25. Unaudited Quarterly Financial Information The following tables show selected unaudited quarterly results of operations for 2018 and 2017. The quarterly data have been prepared on the same basis as the audited annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our results of operations for these periods. 2018 March 31 June 30 September 30 (b) December 31 Year Ended December 31, Net Sales $ 915 $ 877 $ 784 $ 799 $ 3,375 Gross Profit 211 215 178 172 776 Net Income (Loss) 58 150 929 43 1,180 Earnings (loss) per share - basic (a) 0.78 2.03 12.54 0.58 15.93 Earnings (loss) per share - diluted (a) 0.78 2.03 12.54 0.57 15.86 2017 March 31 June 30 September 30 December 31 (c) Year Ended December 31, Net Sales $ 772 $ 775 $ 745 $ 804 $ 3,096 Gross Profit 188 197 177 173 735 Net Income (Loss) 75 105 57 (1,220 ) (983 ) Earnings (Loss) per share - basic (a) 1.01 1.42 0.77 (16.47 ) (13.27 ) Earnings per share - diluted (a) 1.01 1.42 0.77 (16.47 ) (13.27 ) (a) On October 1, 2018, the date of consummation of the Spin-Off, 74,070,852 shares of the Company’s common stock were distributed to Honeywell stockholders of record as of September 18, 2018 who held their shares through the Distribution Date. Basic and Diluted EPS for all periods prior to the Spin-Off reflect the number of distributed shares, or 74,070,852 shares. (b) Net income for three months ended September 30, 2018 was impacted by an $870 million reduction in tax expense primarily due to tax benefits from an internal restructuring of Garrett’s business in advance of the Spin-Off and tax benefits related to the currency impacts on withholding taxes on undistributed foreign earnings, partially offset by adjustments to the provisional tax amount related to U.S. tax reform and non-deductible expenses. (c) Net Loss for the quarter ended December 31, 2017 was impacted by the Tax Act in the amount of $1,335 million. Refer to Note 7 Income Taxes. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Combination | Principles — For the periods subsequent to the Spin-Off, the Consolidated and Combined Financial Statements include the accounts of Garrett Motion Inc. and all of its subsidiaries in which a controlling financial interest is maintained. We consolidate entities that we control due to ownership of a majority voting interest, and we consolidate variable interest entities (“VIEs”) when we have variable interests and are the primary beneficiary. Our consolidation policy requires equity investments that we exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee’s activities to be accounted for using the equity method. Investments through which we are not able to exercise significant influence over the investee and which we do not have readily determinable fair values are accounted for under the cost method. All intercompany transactions and balances are eliminated in consolidation. For the periods prior to the Spin-Off, the Consolidated and Combined Financial Statements were prepared on a stand-alone basis and include our business units and wholly owned direct and indirect subsidiaries and entities in which we had a controlling financial interest. |
Cash and Cash Equivalents | Cash —Cash and cash equivalents include cash on hand and highly liquid investments having an original maturity of three months or less. |
Trade Receivables and Allowance for Doubtful Accounts | Trade Receivables —Trade accounts receivable are recorded at the invoiced amount as a result of transactions with customers. Garrett maintains allowances for doubtful accounts for estimated losses as a result of customer’s inability to make required payments. Garrett estimates anticipated losses from doubtful accounts based on days past due as measured from the contractual due date and historical collection history. Garrett also takes into consideration changes in economic conditions that may not be reflected in historical trends (for example, customers in bankruptcy, liquidation or reorganization). Receivables are written-off against the allowance for doubtful accounts when they are determined uncollectible. Such determination includes analysis and consideration of the particular conditions of the account, including time intervals since last collection, customer performance against agreed upon payment plans, solvency of customer and any bankruptcy proceedings. |
Inventories | Inventories —Inventories are stated at the lower of cost, determined on a first-in, first-out basis, including direct material costs and direct and indirect manufacturing costs, or net realizable value. Obsolete inventory is identified based on analysis of inventory for known obsolescence issues. The original equipment inventory on hand in excess of one year’s forecasted usage is fully reserved. |
Property, Plant and Equipment | Property, —Property, plant and equipment are recorded at cost less accumulated depreciation and amortization. For financial reporting, the straight-line method of depreciation is used over the estimated useful lives of 10 to 50 years for buildings and improvements, 2 to 16 years for machinery and equipment, 3 to 10 years for tooling equipment and 5 to 7 years for software. |
Goodwill | Goodwill —Goodwill is subject to impairment testing annually as of March 31, and whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. This testing compares carrying value to fair value of our single reporting unit. The Company recognizes an impairment charge for the amount by which the carrying value of the reporting unit exceeds the reporting unit´s fair value. However, any impairment should not exceed the amount of goodwill allocated to the reporting unit. We completed our annual goodwill impairment test as of March 31, 2018, as well as an interim impairment test immediately following the Spin-Off and determined that there was no impairment as of these dates. |
Warranties and Guarantees | Warranties —Expected warranty costs for products sold are recognized based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, length of the warranty and various other considerations. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of our warranty accrual at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. For additional information, see Note 21, Commitments and Contingencies. |
Sales Recognition | Sales Recognition —On January 1, 2018, we adopted the FASB´s updated guidance on revenue from contracts with customers, ASC 606 Revenue from Contracts With Customers (“ASC 606”), using the modified retrospective method applied to contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting. Product sales are recognized when we transfer control of the promised goods to our customer, which is based on shipping terms. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the promised goods. In the sale of products in the OEM channel, the transaction price for these goods is equal to the agreed price of each unit and represents the standalone selling price for the unit. In the sale of products in the aftermarket channel, the terms of a contract or the historical business practice can give rise to variable consideration due to, but not limited to, discounts and bonuses. 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. 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. Prior to January 1, 2018, sales were recognized when there was evidence of a sales agreement, the delivery of goods had occurred, the sales price was fixed or determinable and the collectability of revenue was reasonably assured. Sales were generally recorded upon shipment of product to customers and transfer of title under standard commercial terms. Sales incentives and allowances were recognized as a reduction to revenue at the time of the related sale. In addition, payments made to customers were generally recognized as a reduction to revenue at the time these payments are made or committed to the customers. |
Research and Development | Research and —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 of $128 million, $119 million, and $112 million for the years ended December 31, 2018, 2017, and 2016, respectively. Additionally, the Company incurs engineering-related expenses which are also included in Cost of goods sold of $10 million, $19 million, and $21 million for the years ended December 31, 2018, 2017, and 2016. The prior year amounts have been reclassified to conform to the current year |
Asbestos-Related Contingencies and Insurance Recoveries | Asbestos-Related —Honeywell is subject to certain asbestos-related and environmental-related liabilities, primarily related to its legacy Bendix business. In conjunction with the Spin-Off, certain operations that were part of the Bendix business, along with the ownership of the Bendix trademark, as well as certain operations that were part of other legacy elements of the Business, were transferred to us. For periods prior to the Spin-Off, we reflect an estimated liability for resolution of pending and future asbestos-related and environmental liabilities primarily related to the Bendix legacy Honeywell business, calculated as if we were responsible for 100% of the Bendix asbestos-liability payments. We recognized a liability for any asbestos-related contingency that was probable of occurrence and reasonably estimable. In connection with the recognition of liabilities for asbestos-related matters, we recorded asbestos-related insurance recoveries that are deemed probable. Asbestos-related expenses, net of probable insurance recoveries, are presented within Other expense, net in the Consolidated and Combined Statement of Operations. The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. In periods subsequent to the Spin-Off, the accounting for the majority of our asbestos-related liability payments and accounts payable reflect the terms of the Indemnification and Reimbursement Agreement with Honeywell entered into on September 12, 2018, under which we are required to make payments to Honeywell in amounts equal to 90% of Honeywell’s asbestos-related liability payments and accounts payable, primarily related to the Bendix business in the United States, as well as certain environmental-related liability payments and accounts payable and non-United States asbestos-related liability payments and accounts payable, in each case related to legacy elements of the Business, including the legal costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts and, as may be applicable, certain other recoveries associated with such liabilities. Net charges for asbestos-related and environmental-related matters in connection with the Indemnification and Reimbursement Agreement are presented within Other expense, net in the Consolidated and Combined Statement of Operations. |
Stock-Based Compensation Plans | Stock-Based Compensation Plans —The principal awards issued under our stock-based compensation plans, which are described in Note 19 Stock-Based Compensation Plans, are restricted stock units. The cost for such awards is measured at the grant date based on the fair value of the award. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods (generally the vesting period of the equity award) and is included in Selling, general and administrative expenses in the Consolidated and Combined Statements of Operations. Forfeitures are estimated at the time of grant to recognize expense for those awards that are expected to vest and are based on our historical forfeiture rates under our Former Parent´s plans. For periods prior to the Spin-Off, certain employees within the Business participated in stock-based compensation plans sponsored by the Former Parent. The Former Parent’s stock-based compensation plans primarily include incentive compensation plans. Awards granted under the plans consist of stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) and are based on the Former Parent’s common shares and, as such, are reflected in Invested deficit within the Consolidated and Combined Statements of Equity (Deficit). |
Pension Benefits | Pension Benefits —Following the Spin-Off, we sponsor defined benefit pension plans covering certain employees, primarily in Switzerland, the US and Ireland. For such plans, 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), and, if applicable, in any quarter in which an interim remeasurement is triggered. The remaining components of pension expense, primarily service and interest costs and assumed return on plan assets, are recognized on a quarterly basis. On January 1, 2018, we retrospectively adopted the new accounting guidance on presentation of net periodic pension costs. That guidance requires that we disaggregate the service cost component of net benefit costs and report those costs in the same line item or items in the Consolidated Statement of Operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other nonservice components of net benefit costs are required to be presented separately from the service cost component. Following the adoption of this guidance, we continue to record the service cost component of Pension ongoing (income) expense in Costs of goods sold or Selling, general and administrative expenses. The remaining components of net benefit costs within Pension ongoing (income) expense, primarily interest costs and assumed return on plan assets, are now recorded in Non-operating (income) expense. We will continue to 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 will also be reported in Non-operating (income) expense. For periods prior to the Spin-Off, we sponsored a defined benefit pension plan covering certain employees in Ireland. Additionally, certain Garrett employees participated in defined benefit pension plans (the “Shared Plans”) sponsored by Honeywell which includes participants of other Honeywell subsidiaries and operations. We accounted for our participation in the Shared Plans as a multiemployer benefit plan. Accordingly, we did not record an asset or liability to recognize the funded status of the Shared Plans. The related pension expense was based on annual service cost of active Garrett participants and reported within Cost of goods sold in the Consolidated and Combined Statements of Operations. The pension expense specifically identified for the active Garrett participants in the Shared Plans for the years ended December 31, 2018, 2017 and 2016 was $5 million, $7 million and $6 million, respectively. |
Foreign Currency Translation | Foreign Currency Translation —Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using year-end exchange rates. Sales, costs and expenses are translated at the average exchange rates in effect during the year. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive income (loss). |
Derivative Financial Instruments | Derivative —We minimize our risks from foreign currency exchange rate fluctuations through our normal operating and financing activities and, when deemed appropriate through the use of derivative financial instruments. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. Derivative financial instruments that qualify for hedge accounting must be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. All derivatives are recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in Accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged items impact earnings. Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item. On September 27, 2018, we early adopted the new accounting guidance contained in ASU 2017-12 on a modified retrospective approach. The new standard is intended to improve and simplify rules relating to hedge accounting, including the elimination of periodic hedge ineffectiveness, recognition of components excluded from hedge effectiveness assessment, the ability to elect to perform subsequent effectiveness assessments qualitatively, and other provisions designed to provide more transparency around the economics of a company’s hedging strategy. |
Income Taxes | Income Taxes —We account for income taxes pursuant to the asset and liability method which requires us to recognize current tax liabilities or receivables for the amount of taxes we estimate are payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. Prior to the Spin-Off, the tax provision was presented on a separate company basis as if we were a separate filer. The effects of tax adjustments and settlements from taxing authorities are presented in our Consolidated and Combined Financial Statements in the period to which they relate as if we were a separate filer. Our current obligations for taxes are settled with our Former Parent on an estimated basis and adjusted in later periods as appropriate. All income taxes due to or due from our Former Parent that have not been settled or recovered by the end of the period are reflected in Invested deficit within the Consolidated and Combined Financial Statements. We are subject to income tax in the United States (federal, state and local) as well as other jurisdictions in which we operate. The tax provision has been calculated as if the carve-out entity was operating on a stand-alone basis and filed separate tax returns in the jurisdiction in which it operates. Therefore, cash tax payments and items of current and deferred taxes may not be reflective of the actual tax balances prior to or subsequent to the carve-out. |
Earnings per share | Earnings per share —Basic earnings per share is based on the weighted average number of common shares outstanding. Diluted earnings per share is based on the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. On October 1, 2018, the date of consummation of the Spin-Off, 74,070,852 shares of the Company’s Common Stock were distributed to Honeywell stockholders of record as of September 18, 2018 who held their shares through the Distribution Date. Basic and diluted EPS for all periods prior to the Spin-Off reflect the number of distributed shares, or 74,070,852 shares. For 2018, the distributed shares were treated as issued and outstanding from January 1, 2018 for purposes of calculating historical basic earnings per share. |
Use of Estimates | Use of Estimates —The preparation of the Consolidated and Combined Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the Consolidated and Combined Financial Statements and related disclosures in the accompanying notes. Actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of changes are reflected in the Consolidated and Combined Financial Statements in the period they are determined to be necessary. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory. The ASU requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, at the time the entity transfer occurs rather than when the asset is ultimately transferred to a third party, as required under current U.S. GAAP. The guidance is intended to reduce diversity in practice, particularly for transfers involving intellectual property. Subsequent to 2017 fiscal year, we adopted the accounting standard update as of January 1, 2018. The guidance requires application on a modified retrospective basis. The adoption of this guidance increased our deferred tax assets by $191 million with a cumulative-effect adjustment to retained earnings of the same amount. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350). The ASU eliminates Step 2 of the goodwill impairment test, which requires determining the fair value of assets acquired or liabilities assumed in a business combination. Under the amendments in this update, a goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We have early adopted this guidance during the fourth quarter of 2018. The adoption did not have an impact on our Consolidated and Combined Balance Sheets, Statements of Operations and related Notes to Consolidated and Combined Financial Statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. These amendments are intended to better align a company’s risk management strategies and financial reporting for hedging relationships. As further noted in our Derivative financial instruments accounting policy above, we early adopted during the third quarter of 2018 the new accounting guidance contained in ASU 2017-12 on a modified retrospective approach. In relation to the Company’s foreign currency exchange forward and option contracts (foreign currency exchange contracts), the adoption did not have an impact on our Consolidated and Combined Balance Sheets and Statements of Operations. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued guidance on accounting for leases which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing and uncertainty of cash flows arising from leases that will be effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We expect to adopt the requirements of the new standard effective January 1, 2019, and we will elect to not recast comparative periods in the transition. We estimate the adoption will result in the addition of $33 million to $43 million of right-of-use assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. In adopting the new leases standard as per January 1, 2019, the Company has applied the practical expedients as per ASC 842-10-65-1(f) and (g). In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for us in our first quarter of fiscal 2020, and earlier adoption is permitted beginning in the first quarter of fiscal 2019. We are currently evaluating the impact of the guidance on our Consolidated and Combined Balance Sheets, Statements of Operations and related Notes to Consolidated and Combined Financial Statements. In February 2018, the FASB issued guidance that allows for an entity to elect to reclassify the income tax effects on items within Accumulated other comprehensive income resulting from U.S. tax reform to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The guidance allows for adoption (i) at the beginning of the period of adoption or (ii) retrospective to each period in which the income tax effects of the U.S. tax reform related to items recognized in Accumulated other comprehensive income are recognized. We are currently evaluating the impact of this standard on our Consolidated and Combined Financial Statements and whether we will elect to reclassify the income tax effects on items within Accumulated other comprehensive income resulting from U.S. tax reform to retained earnings. |
Related Party Transactions wi_2
Related Party Transactions with Honeywell (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Due from related parties, current consists of the following: December 31, 2018 December 31, 2017 Cash pooling and short-term notes receivables $ — $ 495 Other tax receivables from Former Parent — 26 Receivables from related parties — 8 Related party notes receivables, current — 1 Foreign currency exchange contracts — — $ — $ 530 Due from related parties, non-current consists of the following: December 31, 2018 December 31, 2017 Other tax receivables from Former Parent $ — $ 23 $ — $ 23 Due to related parties, current consists of the following: December 31, 2018 December 31, 2017 Cash pooling and short-term notes payables $ — $ 545 Related party notes payables, current — 484 Payables to related parties — 51 Foreign currency exchange contracts — 37 $ — $ 1,117 |
Schedule of Components of Net Transfers From (To) Parent [Table Text Block] | The components of the net transfers to and from Honeywell for the years ended December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, 2018 2017 2016 General financing activities $ 1,774 $ (363 ) $ (151 ) Distribution to Former Parent (2,994 ) (97 ) (117 ) Unbilled corporate allocations 41 70 37 Stock compensation expense and other compensation awards 17 19 16 Pension expense 7 9 13 Mandatory Transition Tax (13 ) 354 — Other Income Tax — 22 91 Spin-Off related adjustments (250 ) — — Issuance of common stock and reclassification of invested deficit 2,714 — — Total net decrease (increase) in Invested deficit $ 1,296 $ 14 $ (111 ) |
Revenue Recognition and Contr_2
Revenue Recognition and Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Cumulative Impact of New Accounting Pronouncements and Changes in Accounting on Consolidated and Combined Balance Sheet | Upon adoption the cumulative impact of this change is as follows: December 31, 2017 As reported Adjustments As adjusted Consolidated and Combined Balance Sheet Assets Current assets: Other current assets $ 321 $ 7 $ 328 Other assets 2 53 55 Liabilities Non-current liabilities: Deferred income taxes 956 6 962 Equity (Deficit) Invested deficit (2,433 ) 54 (2,379 ) |
Summary of Contract Assets and Liabilities | The following table summarizes our contract assets and liabilities balances: 2018 Contract assets—January 1 $ 5 Contract assets—December 31 5 Change in contract assets—Increase/(Decrease) — Contract liabilities—January 1 $ (7 ) Contract liabilities—December 31 (2 ) Change in contract liabilities—(Increase)/Decrease $ 5 |
Other Expenses, Net (Tables)
Other Expenses, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income And Expenses [Abstract] | |
Schedule of Other Operating Cost and Expense | Years Ended December 31, 2018 2017 2016 Indemnification related — post Spin-Off $ (16 ) $ — $ — Asbestos related, net of probable insurance recoveries 131 132 181 Environmental remediation, non-active sites 5 (2 ) 2 $ 120 $ 130 $ 183 |
Non-Operating (Income) Expense
Non-Operating (Income) Expense (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Non Operating Income Expense [Abstract] | |
Schedule of Non-Operating (Income) Expense | Years Ended December 31, 2018 2017 2016 Equity income of affiliated companies $ (5 ) $ (4 ) $ (6 ) Interest income (7 ) (14 ) (16 ) Pension ongoing (income) expense—non service 2 (1 ) 5 Foreign exchange 6 — 9 Others, net (4 ) 1 3 $ (8 ) $ (18 ) $ (5 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (loss) Before Income Taxes | The sources of income (loss) from continuing operations, before income taxes, classified between domestic entities and those entities domiciled outside of the U.S., are as follows: Years Ended December 31, Income before taxes 2018 2017 2016 Domestic entities $ (99 ) $ (105 ) $ (181 ) Entities outside the U.S. 495 471 431 $ 396 $ 366 $ 250 |
Schedule of Income Tax Expense (Benefit) | Tax Tax expense (benefit) Years Ended December 31, 2018 2017 2016 Current: Federal $ 7 $ 311 $ 13 State 1 (2 ) 2 Foreign 113 67 75 $ 121 $ 376 $ 90 Deferred: Federal (3 ) 3 — State — 6 — Foreign (902 ) 964 (39 ) $ (905 ) $ 973 $ (39 ) $ (784 ) $ 1,349 $ 51 |
Schedule of Effective Income Tax Rate Reconciliation | The U.S. Years Ended December 31, 2018 2017 2016 U.S. federal statutory income tax rate 21.0 % 35.0 % 35.0 % Taxes on non-U.S. earnings different from U.S. tax rate, net of changes in valuation allowance 1.1 % (28.0 )% (46.1 )% Reserves for tax contingencies 1.0 % (14.3 )% 7.0 % Enactment of the Tax Act 1.0 % 364.7 % — Non-deductible expenses 6.0 % 11.6 % 25.3 % Restructuring/Foreign Unremitted Earnings (227.7 )% — — All other items (0.4 )% (0.4 )% (0.8 )% (198.0 )% 368.6 % 20.4 % |
Schedule of Deferred Tax Assets (Liabilities) and Effects of Temporary Differences | Deferred The tax effects December 31, 2018 2017 Deferred tax assets: Pension $ — $ 7 Other accruals and reserves 38 22 Net operating and capital losses 27 77 Depreciation and amortization 158 (8 ) Other 10 15 Total Deferred tax assets 233 113 Valuation allowance (24 ) (48 ) Net deferred tax assets $ 209 $ 65 Deferred tax liabilities: Investment basis differences $ (56 ) $ (980 ) Other liabilities (15 ) — Total deferred tax liabilities (71 ) (980 ) Net deferred tax asset/(liability) $ 138 $ (915 ) |
Summary of Net Operating Loss Carryforwards | As Expiration Net Operating Period Loss Jurisdiction Carryforwards Non-U.S. 2027 $ 3 Non-U.S. Indefinite 85 $ 88 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to the Company’s uncertain tax positions (excluding interest and penalties and related tax attributes): 2018 2017 2016 Change in unrecognized tax benefits: Balance at beginning of year $ 100 $ 152 $ 136 Gross increases related to current period tax positions 7 11 21 Gross increases related to prior periods tax positions 5 1 1 Gross decreases related to prior periods tax positions (8 ) (64 ) (5 ) Decrease related to resolutions of audits with tax authorities — (2 ) — Expiration of the statute of limitations for the assessment of taxes — — — Potential Indemnifications to Honeywell for US and foreign taxes as contractually obligated in connection with Tax Matters Agreement (71 ) — — Foreign currency translation (1 ) 2 (1 ) Balance at end of year $ 32 $ 100 $ 152 |
Schedule of Income Tax Expense Benefit by Jurisdiction | The following Open Tax Years Based on Originally Filed Returns Examination Examination in Progress Not Yet Jurisdiction Initiated U.S. Federal 2015-2016 2017-2018 U.S. State 2015-2017 2018 Germany 2008-2015 2016-2018 India 1999-2016 2017-2018 United Kingdom 2013-2015 2016-2018 |
Accounts, Notes and Other Rec_2
Accounts, Notes and Other Receivables—Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes and Other Receivables Net | December 31, 2018 December 31, 2017 Trade receivables $ 593 $ 592 Notes receivables 93 83 Other receivables 67 73 $ 753 $ 748 Less—Allowance for doubtful accounts (3 ) (3 ) $ 750 $ 745 |
Inventories-Net (Tables)
Inventories-Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | December 31, 2018 December 31, 2017 Raw materials $ 112 $ 118 Work in process 19 20 Finished products 64 73 $ 195 $ 211 Less—Reserves (23 ) (23 ) $ 172 $ 188 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | December 31, 2018 2017 Marketable securities (a) $ — $ 298 Insurance recoveries for asbestos-related liabilities — 17 Prepaid expenses 14 3 Taxes receivable 35 — Advanced discounts to customers, current 9 — Customer reimbursable engineering 10 3 Other 3 — $ 71 $ 321 (a) Represents |
Property, Plant and Equipment_2
Property, Plant and Equipment - Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property, Plant and Equipment - Net | December 31, 2018 2017 Machinery and equipment $ 623 $ 720 Tooling 306 291 Buildings and improvements 136 145 Construction in progress 57 65 Software 54 54 Land and improvements 16 14 Others 24 25 1,216 1,314 Less—Accumulated depreciation and amortization (778 ) (872 ) $ 438 $ 442 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amount of Goodwill | The change in the carrying December 31, 2017 Currency Translation Adjustment December 31, 2018 Goodwill $ 193 — $ 193 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities Current [Abstract] | |
Summary of Accrued Liabilities | December 31, 2018 December 31, 2017 Asbestos-related liabilities (a) $ — $ 185 Customer pricing reserve 107 114 Compensation, benefit and other employee related 71 65 Repositioning 15 60 Product warranties and performance guarantees 32 28 Other taxes 113 22 Advanced discounts from suppliers, current 17 12 Customer advances and deferred income (b) 14 21 Accrued interest 6 — Other (primarily operating expenses) 51 64 $ 426 $ 571 (a) For periods prior to the Spin-Off, we reflect an estimated liability for resolution of pending and future asbestos-related liabilities primarily related to the Bendix legacy Honeywell business, calculated as if we were responsible for 100% of the Bendix asbestos-liability payments. In periods subsequent to the Spin-Off, the accounting for the majority of our asbestos-related liability payments and accounts payable reflect the terms of the Indemnification and Reimbursement Agreement with Honeywell. Such liabilities are recorded in Obligations payable to Honeywell. Refer to Note 21 Commitments and Contingencies. (b) Customer advances and deferred income include $2 million and $7 million of contract liabilities as of December 31, 2018 and 2017, respectively. See Note 4 Revenue Recognition and Contracts with Customers. |
Summary of Expenses Related to the Repositioning Accruals | The Company accrued repositioning costs related to projects to optimize our product costs and to right-size our organizational structure. Expenses related to the repositioning accruals are included in Cost of goods sold in our Consolidated and Combined Statement of Operations. Severance Costs Exit Costs Total Balance at December 31, 2016 $ 35 $ 8 $ 43 Charges 20 — 20 Usage—cash (6 ) (2 ) (8 ) Foreign currency translation 4 1 5 Balance at December 31, 2017 53 7 60 Charges 2 — 2 Usage—cash (42 ) (5 ) (47 ) Foreign currency translation — — — Balance at December 31, 2018 $ 13 $ 2 $ 15 |
Long-term Debt and Credit Agr_2
Long-term Debt and Credit Agreements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Amounts Outstanding on Long-term Debt and Revolving Credit Facility | The principal amounts outstanding on long-term debt and the revolving credit facility are as follows: December 31, 2018 Term Loan A $ 374 Term Loan B 853 Senior Notes 401 1,628 Less: current portion (23 ) $ 1,605 |
Schedule of Principal Payments on Long-term Debt and Revolving Credit Facility | The schedule of principal payments on long-term debt and the revolving credit facility is as follows: December 31, 2018 2019 $ 23 2020 28 2021 47 2022 65 2023 231 Thereafter 1,234 $ 1,628 Less: current portion (23 ) $ 1,605 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments Under Operating Leases | Future minimum December 31, 2018 2019 $ 12 2020 8 2021 5 2022 4 2023 4 Thereafter 15 $ 48 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Summary of Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis | The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2018 and December 31, 2017: Fair Value Notional Amounts Assets Liabilities December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Designated forward currency exchange contracts $ — $ 556 $ — $ — $ — $ 35 (d) Undesignated instruments: Undesignated cross-currency swap 425 — 16 (a) — — — Undesignated forward currency exchange contracts 413 372 4 (b) — 1 (c) 2 (d) 838 372 20 — 1 2 $ 838 $ 928 $ 20 $ — $ 1 $ 37 (a) Recorded within Other assets in the Company’s Consolidated and Combined Balance Sheets (b) Recorded within Other current assets in the Company’s Consolidated and Combined Balance Sheets (c) Recorded within Accrued liabilities in the Company’s Consolidated and Combined Balance Sheets (d) Recorded within Due to related parties in the Company’s Consolidated and Combined Balance Sheet |
Summary of Financial Assets and Liabilities Not Carried at Fair Value | The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value: December 31, 2018 Carrying Value Fair Value Long-term debt and related current maturities $ 1,592 $ 1,548 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | Years Ended December 31, 2018 2017 Pension and other employee related $ 71 $ 54 Advanced discounts from suppliers 63 53 Income taxes 59 42 Other 16 12 $ 209 $ 161 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated Pre-Tax Tax After-Tax Year Ended December 31, 2016 Foreign exchange translation adjustment $ 29 $ — $ 29 Pension adjustments (12 ) — (12 ) Changes in fair value of effective cash flow hedges 38 (5 ) 33 $ 55 $ (5 ) $ 50 Year Ended December 31, 2017 Foreign exchange translation adjustment $ 72 $ — $ 72 Pension adjustments — — — Changes in fair value of effective cash flow hedges (84 ) 7 (77 ) $ (12 ) $ 7 $ (5 ) Year Ended December 31, 2018 Foreign exchange translation adjustment $ (198 ) $ — $ (198 ) Pension adjustments (2 ) — (2 ) Changes in fair value of effective cash flow hedges 37 (2 ) 35 $ (163 ) $ (2 ) $ (165 ) Changes Total Foreign Changes in Fair Accumulated Exchange Value of Other Translation Effective Cash Pension Comprehensive Adjustment Flow Hedges Adjustments Income (Loss) Balance at December 31, 2016 $ 212 $ 42 $ (11 ) $ 243 Other comprehensive income (loss) before reclassifications 72 (66 ) — 6 Amounts reclassified from accumulated other comprehensive income (loss) — (11 ) — (11 ) Net current period other comprehensive income (loss) 72 (77 ) — (5 ) Balance at December 31, 2017 $ 284 $ (35 ) $ (11 ) $ 238 Other comprehensive income (loss) before reclassifications (198 ) 12 (5 ) (191 ) Amounts reclassified from accumulated other comprehensive income — 23 3 26 Net current period other comprehensive income (loss) (198 ) 35 (2 ) (165 ) Balance at December 31, 2018 $ 86 $ — $ (13 ) $ 73 Reclassifications Year ended December 31, 2018 Affected Line in the Consolidated and Combined Statement of Operations Selling, Cost of General and Net Goods Administrative Non-Operating (Income) Sales Sold Expenses Expense Total Amortization of Pension and Other Postretirement Items: Actuarial losses recognized $ — $ — $ — $ 3 $ 3 Losses (gains) on cash flow hedges (1 ) 26 — — 25 Tax expense (benefit) (2 ) Total reclassifications for the period, net of tax $ 26 Year ended December 31, 2017 Affected Line in the Consolidated and Combined Statement of Operations Selling, Cost of General and Net Goods Administrative Non-Operating (Income) Sales Sold Expenses Expense Total Amortization of Pension and Other Postretirement Items: Actuarial losses recognized $ — $ — $ — $ — $ — Losses (gains) on cash flow hedges — (14 ) — — (14 ) Tax expense (benefit) 3 Total reclassifications for the period, net of tax $ (11 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Restricted Stock Activity Related to Stock Incentive Plan | The following table summarizes information about RSU activity related to our Stock Incentive Plan for the year ended December 31, 2018: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested at October 1, 2018 2,848,541 $ 8.70 Granted 530,840 17.76 Vested (4,452 ) 6.67 Forfeited (5,307 ) 14.16 Non-vested at December 31, 2018 3,369,622 $ 10.12 |
Summary of Information about Income Statement Impact from RSUs | The following table summarizes information about the income statement impact from RSUs for the year ended December 31, 2018: Compensation expense $ 5 Future income tax benefit recognized 1 |
Activity Related to Stock Based Awards Granted by Honeywell to Employees of Business | The activity related to stock based awards granted by Honeywell to employees of the Business for the year ended December 31, 2017 consisted of the following: RSUs Options Wtd Avg Number of Grant Date Number of Wtd Avg RSUs Fair Value Options Exercise Price Outstanding as of December 31, 2016 163,110 $ 96 475,476 $ 87 Granted (a) 45,503 131 162,600 125 Vested/exercised (41,137 ) 83 (121,231 ) 79 Outstanding as of December 31, 2017 167,476 (b)(c) $ 108 516,845 (d) $ 101 (a) Primarily represents awards granted by Honeywell in February and July 2017. (b) Aggregate unrecognized compensation expense related to RSUs was $9.4 million as of December 31, 2017, which is expected to be recognized over a weighted average period of 3.6 years. (c) Substantially all RSUs outstanding as of December 31, 2017 are expected to vest over time. (d) Aggregate unrecognized compensation expense related to stock options was $4.2 million as of December 31, 2017, which is expected to be recognized over a weighted average period of 2.5 years. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The details of the earnings per share calculations for the years ended December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, 2018 2017 2016 Basic Net Income $ 1,180 $ (983 ) $ 199 Weighted average common shares outstanding 74,059,240 74,070,852 74,070,852 EPS – $ 15.93 $ (13.27 ) $ 2.69 Years Ended December 31, 2018 2017 2016 Diluted Net Income $ 1,180 $ (983 ) $ 199 Weighted average common shares outstanding – Basic 74,059,240 74,070,852 74,070,852 Dilutive effect of unvested RSUs 342,908 — — Weighted average common shares outstanding – Diluted 74,402,148 74,070,852 74,070,852 EPS – Diluted $ 15.86 $ (13.27 ) $ 2.69 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Obligation Payable to Honeywell | The following table summarizes our Obligation payable to Honeywell related to these agreements following the Spin-Off: 2018 Asbestos and environmental Tax Matters Total Beginning of year $ — $ — $ — Spin-Off related adjustments 1,328 308 1,636 Accrual for update to estimated liability (30 ) — (30 ) Legal fees expensed 14 — 14 Payments to Honeywell (41 ) (19 ) (60 ) Currency translation adjustment (27 ) (7 ) (34 ) End of year $ 1,244 $ 282 $ 1,526 Current 108 19 127 Non-current 1,136 263 1,399 Total $ 1,244 $ 282 $ 1,526 |
Summary of Asbestos Related Liabilities and Insurance Recoveries | The following Asbestos-Related Year ended December 31, 2018 Year ended December 31, 2017 Year ended December 31, 2016 Bendix Other Total Bendix Other Total Bendix Other Total Beginning of year $ 1,703 $ 9 $ 1,712 $ 1,789 $ 6 $ 1,795 $ 1,793 $ 6 $ 1,799 Accrual for update to estimated liabilities 141 — 141 199 4 203 203 — 203 Change in estimated cost of future claims — — — (65 ) — (65 ) (10 ) — (10 ) Update of expected resolution values for pending claims — — — 3 — 3 4 — 4 Asbestos-related liability payments (151 ) (4 ) (155 ) (223 ) (1 ) (224 ) (201 ) — (201 ) Spin-Off related adjustments (1,693 ) (4 ) (1,697 ) — — — — — — End of year $ — $ 1 $ 1 $ 1,703 $ 9 $ 1,712 $ 1,789 $ 6 $ 1,795 Insurance Recoveries 2018 2017 2016 Bendix Bendix Bendix Beginning of year $ 191 $ 201 $ 222 Probable insurance recoveries related to estimated liability 10 10 8 Insurance receipts for asbestos-related liabilities (24 ) (20 ) (37 ) Insurance receivables settlements and write-offs 1 — 7 Other — — 1 Spin-Off related adjustments (178 ) — — $ — $ 191 $ 201 |
Summary of Asbestos Balances Included in Balance Sheet Accounts | Asbestos balances December 31, 2018 2017 Other current assets $ — $ 17 Insurance recoveries for asbestos-related liabilities — 174 $ — $ 191 Accrued liabilities $ — $ 185 Asbestos-related liabilities 1 1,527 $ 1 $ 1,712 |
Summary of Asbestos Claim Activity | The following Years Ended December 31, Claims Activity 2018 2017 Claims Unresolved at the beginning of year 6,280 7,724 Claims Filed 2,430 2,645 Claims Resolved (2,501 ) (4,089 ) Claims Unresolved at the end of the year 6,209 6,280 December 31, Disease Distribution of Unresolved Claims 2018 2017 Mesothelioma and Other Cancer Claims 2,949 3,062 Nonmalignant Claims 3,260 3,218 Total Claims 6,209 6,280 |
Summary of Average Resolutions Per Claim Excluding Legal Costs | Honeywell has experienced Years Ended December 31, 2018 2017 2016 2015 2014 (in whole dollars) Malignant claims $ 55,300 $ 56,000 $ 44,000 $ 44,000 $ 53,500 Nonmalignant claims $ 4,700 $ 2,800 $ 4,485 $ 100 $ 120 |
Summary Information Concerning Our Recorded Obligations For Product Warranties and Product Performance Guarantees | The following Years Ended December 31, 2018 2017 2016 Beginning of year $ 28 $ 22 $ 19 Accruals for warranties/guarantees issued during the year 33 14 14 Settlement of warranty/guarantee claims (29 ) (8 ) (11 ) $ 32 $ 28 $ 22 |
Defined Benefit Pension Plans (
Defined Benefit Pension Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of Balance Sheet Impact, Including Benefit Obligations, Assets and Funded Status | The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with our significant pension plans. Pension Benefits U.S. Plans Non-U.S. Plans Non-U.S. Plans 2018 2018 (1) 2017 (1) Change in benefit obligation: Benefit obligation at beginning of the year $ — $ 107 $ 89 Transfer of plan obligations from Former Parent 181 65 — Spin-Off remeasurement adjustment — 2 — Service cost — 4 2 Interest cost 2 2 2 Plan amendments — 1 — Actuarial (gains) losses (3 ) (5 ) 3 Benefits paid (2 ) (3 ) (1 ) Foreign currency translation — (5 ) 12 Other — 4 — Benefit obligation at end of the year 178 172 107 Change in plan assets: Fair value of plan assets at beginning of the year — 64 50 Transfer of plan assets from Former Parent 181 54 — Spin-Off remeasurement adjustment — (10 ) — Actual return on plan assets (2 ) 2 4 Employer contributions — 16 3 Benefits paid (2 ) (3 ) — Foreign currency translation — (4 ) 7 Other — 4 — Fair value of plan assets at end of year 177 123 64 Funded status of plans $ (1 ) $ (49 ) $ (43 ) Amounts recognized in Consolidated Balance Sheet consist of: Accrued pension liabilities - current — — (3 ) Accrued pension liabilities - noncurrent (2) (1 ) (49 ) (40 ) Net amount recognized $ (1 ) $ (49 ) $ (43 ) (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. (2) Included in Other liabilities in the Consolidated and Combined Balance Sheet |
Summary of Accumulated Other Comprehensive (Income) Loss Associated with Pension Plan | Amounts recognized in Accumulated other comprehensive (income) loss associated with our significant pension and other postretirement benefit plans at December 31, 2018 are as follows: Pension Benefits U.S. Plans Non-U.S. Plans Non-U.S. Plans 2018 2018 (1) 2017 (1) Prior service (credit) $ (2 ) $ — $ — Net actuarial loss 4 7 11 Net amount recognized $ 2 $ 7 $ 11 (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. |
Summary of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive (Income) Loss | The components of net periodic benefit (income) cost and other amounts recognized in Other comprehensive (income) loss for our significant pension and other postretirement benefit plans include the following components: Pension Benefits U.S. Plans Non-U.S. Plans Net Periodic Benefit Cost 2018 2018 (1) 2017 (1) Service cost $ — $ 4 $ 2 Interest cost 2 2 2 Expected return on plan assets (3 ) (3 ) (2 ) Recognition of actuarial losses — 3 — Net periodic benefit (income) cost $ (1 ) $ 6 $ 2 (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. |
Summary of Net Periodic Benefit (Income) Cost Other Than The Service Cost Included in Other Expense, Net | Other Changes in Plan Assets and Benefits Obligations Recognized in U.S. Plans Non-U.S. Plans Other Comprehensive (Income) Loss 2018 2018 (1) 2017 (1) Actuarial (gains) losses $ 2 $ (4 ) $ — Prior service (credit) — 1 — Actuarial losses recognized during year — (3 ) — Total recognized in other comprehensive (income) loss $ 2 $ (6 ) $ — Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss $ 1 $ — $ 2 (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. |
Summary of Major Actuarial Assumptions Used in Determining Benefit Obligations and Net Periodic Benefit (Income) Cost | Major actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for our significant benefit plans are presented in the following table as weighted averages. Pension Benefits U.S. Plans Non-U.S. Plans 2018 2018 (1) 2017 (1) Actuarial assumptions used to determine benefit obligations as of December 31: Discount rate 4.33 % 1.50 % 1.80 % Expected annual rate of compensation increase 3.74 % 1.77 % 2.00 % Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: Discount rate—benefit obligation 4.33 % 1.50 % 1.80 % Discount rate—service cost 4.11 % 1.50 % 1.80 % Discount rate—interest cost 4.02 % 1.50 % 1.80 % Expected rate of return on plan assets 6.00 % 3.77 % 4.00 % Expected annual rate of compensation increase 3.74 % 1.77 % 2.00 % (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. |
Summary of Amounts Relate to Significant Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of Plan Assets | The following amounts relate to our significant pension plans with accumulated benefit obligations exceeding the fair value of plan assets. December 31, U.S. Plans Non-U.S. Plans 2018 2018 (1) 2017 (1) Projected benefit obligation $ 178 $ 172 $ 107 Accumulated benefit obligation 177 164 104 Fair value of plan assets 177 123 64 (1) For the periods prior to the Spin-Off, only the pension plan in Ireland is reflected as a non-U.S. defined benefit pension plan as all other pension plans were accounted for as multiemployer plans. Following the Spin-Off, the defined benefit pension plan in Switzerland is also reflected. |
Summary of Fair Values of Both U.S. and Non-U.S. Pension Plans Assets by Asset Category | The fair values of both our U.S. and non-U.S. pension plans assets by asset category are as follows: U.S. Plans December 31, 2018 Total Level 1 Level 2 Level 3 Equity funds $ 60 $ — $ 60 $ — Short-term investments 8 — 8 — Corporate bond funds 92 — 92 — Real estate funds 17 — 17 — Total assets at fair value $ 177 $ — $ 177 $ — Non-U.S. Plans December 31, 2018 Total Level 1 Level 2 Level 3 Equity funds $ 48 $ — $ 48 $ — Short-term investments 12 — 12 — Government bond funds 28 — 28 — Corporate bond funds 16 — 16 — Real estate funds 11 — 11 — Other 8 — 8 — Total assets at fair value $ 123 $ — $ 123 $ — Non-U.S. Plans December 31, 2017 Total Level 1 Level 2 Level 3 Equity funds $ 33 $ — $ 33 $ — Government bond funds 19 — 19 — Corporate bond funds 6 — 6 — Other 6 — 6 — Total assets at fair value $ 64 $ — $ 64 $ — |
Summary of Benefit Payments | Benefit payments, including amounts to be paid from Company assets, and reflecting expected future service, as appropriate, are expected to be paid as follows: U.S. Plans Non-U.S. Plans 2019 $ 9 $ 3 2020 10 3 2021 10 3 2022 10 3 2023 11 3 2024-2028 56 18 |
China Variable Interest Entity
China Variable Interest Entity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Consolidated Assets and Liabilities | The following table summarizes the consolidated assets and liabilities of Garrett China: December 31, 2018 2017 (Dollars in millions) ASSETS Current assets: Cash and cash equivalents $ 70 $ 78 Accounts, notes and other receivables—net 224 240 Inventories—net 19 21 Due from related parties, current — 73 Total current assets 313 412 Property, plant and equipment—net 67 66 Deferred income taxes 20 8 Other assets 1 — Total assets $ 401 $ 486 LIABILITIES Current liabilities: Accounts payable $ 261 $ 245 Due to related parties, current — 37 Accrued liabilities 77 84 Total current liabilities 338 366 Other liabilities 13 16 Total liabilities $ 351 $ 382 |
Concentrations (Tables)
Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks And Uncertainties [Abstract] | |
Summary of Net Sales by Region | Sales concentration —Net sales by region (determined based on country of shipment (1) Year ended December 31, 2018 OEM Aftermarket Other Total United States $ 338 $ 175 $ 5 $ 518 Europe 1,686 151 54 1,891 Asia 847 50 26 923 Other International 22 21 — 43 $ 2,893 $ 397 $ 85 $ 3,375 Year ended December 31, 2017 (1) OEM Aftermarket Other Total United States $ 277 $ 178 $ 6 $ 461 Europe 1,568 140 54 1,762 Asia 750 49 33 832 Other International 19 22 — 41 $ 2,614 $ 389 $ 93 $ 3,096 Year ended December 31, 2016 (1) OEM Aftermarket Other Total United States $ 296 $ 164 $ 6 $ 466 Europe 1,622 149 35 1,806 Asia 611 53 28 692 Other International 12 21 — 33 $ 2,541 $ 387 $ 69 $ 2,997 (1) The sales concentration information was previously presented based on the customer’s origin and is now presented based on country of shipment. As a result, the prior periods presented were recast to conform to the current year presentation. |
Summary of Net Sales to Largest Customers and Corresponding Percentage of Total Net Sales | Customer concentration —Net sales to Garrett’s largest customers and the corresponding percentage of total net sales are as follows: Net sales Years ended December 31, 2018 % 2017 % 2016 % Customer A $ 455 13 $ 423 14 $ 436 15 Customer B 254 8 246 8 303 10 Others 2,666 79 2,427 78 2,258 75 $ 3,375 100 $ 3,096 100 $ 2,997 100 |
Summary of Long-lived Assets by Region | Long-lived assets —Long-lived assets by region are as follows: Long-lived Assets (1) December 31, 2018 2017 2016 United States $ 26 $ 23 $ 21 Europe 273 273 219 Asia 123 124 109 Other International 16 22 22 $ 438 $ 442 $ 371 (1) Long-lived |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Quarterly Financial Information | The following tables show selected unaudited quarterly results of operations for 2018 and 2017. The quarterly data have been prepared on the same basis as the audited annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our results of operations for these periods. 2018 March 31 June 30 September 30 (b) December 31 Year Ended December 31, Net Sales $ 915 $ 877 $ 784 $ 799 $ 3,375 Gross Profit 211 215 178 172 776 Net Income (Loss) 58 150 929 43 1,180 Earnings (loss) per share - basic (a) 0.78 2.03 12.54 0.58 15.93 Earnings (loss) per share - diluted (a) 0.78 2.03 12.54 0.57 15.86 2017 March 31 June 30 September 30 December 31 (c) Year Ended December 31, Net Sales $ 772 $ 775 $ 745 $ 804 $ 3,096 Gross Profit 188 197 177 173 735 Net Income (Loss) 75 105 57 (1,220 ) (983 ) Earnings (Loss) per share - basic (a) 1.01 1.42 0.77 (16.47 ) (13.27 ) Earnings per share - diluted (a) 1.01 1.42 0.77 (16.47 ) (13.27 ) (a) On October 1, 2018, the date of consummation of the Spin-Off, 74,070,852 shares of the Company’s common stock were distributed to Honeywell stockholders of record as of September 18, 2018 who held their shares through the Distribution Date. Basic and Diluted EPS for all periods prior to the Spin-Off reflect the number of distributed shares, or 74,070,852 shares. (b) Net income for three months ended September 30, 2018 was impacted by an $870 million reduction in tax expense primarily due to tax benefits from an internal restructuring of Garrett’s business in advance of the Spin-Off and tax benefits related to the currency impacts on withholding taxes on undistributed foreign earnings, partially offset by adjustments to the provisional tax amount related to U.S. tax reform and non-deductible expenses. (c) Net Loss for the quarter ended December 31, 2017 was impacted by the Tax Act in the amount of $1,335 million. Refer to Note 7 Income Taxes. |
Organization, Operations and _2
Organization, Operations and Basis of Presentation - Additional Information (Details) shares in Millions | Oct. 01, 2018shares | Sep. 12, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017 |
Indemnification and Reimbursement Agreement | ||||
Organizations Operations And Basis Of Presentation [Line Items] | ||||
Agreement termination date | Dec. 31, 2048 | |||
Agreement termination description | The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. | The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. | ||
Bendix | ||||
Organizations Operations And Basis Of Presentation [Line Items] | ||||
Percentage of asbestos and environmental liabilities liable to pay | 100.00% | 100.00% | 100.00% | |
Honeywell | ||||
Organizations Operations And Basis Of Presentation [Line Items] | ||||
Conversion common stock shareowner received ratio | 0.1 | |||
Description of conversion common stock shareowner received ratio | Each Honeywell stockholder of record received one share of Garrett common stock for every 10 shares of Honeywell common stock held on the record date. | |||
Shares of Garrett common stock distributed | shares | 74 | |||
Liability for asbestos and environmental claims maximum amount converted into euros | $ 25,000,000 | |||
Honeywell | Indemnification and Reimbursement Agreement | ||||
Organizations Operations And Basis Of Presentation [Line Items] | ||||
Percentage of net insurance receipts | 90.00% | |||
Honeywell | Indemnification and Reimbursement Agreement | Maximum | ||||
Organizations Operations And Basis Of Presentation [Line Items] | ||||
Liability for asbestos and environmental claims maximum amount converted into euros | $ 25,000,000 | |||
Honeywell | Bendix | Indemnification and Reimbursement Agreement | ||||
Organizations Operations And Basis Of Presentation [Line Items] | ||||
Percentage of asbestos and environmental liabilities liable to pay | 90.00% | |||
Honeywell | Garrett Motion Inc. | ||||
Organizations Operations And Basis Of Presentation [Line Items] | ||||
Pro rata distribution of outstanding shares, percentage | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | Oct. 01, 2018 | Sep. 12, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 29, 2016 |
Significant Accounting Policies [Line Items] | ||||||||
Goodwill, impairment | $ 0 | |||||||
Basic and diluted shares | 74,070,852 | |||||||
ASU 2016-16 | Retained Earnings | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Increased in deferred tax assets for cumulative effect adjustment | $ 191,000,000 | |||||||
Shared Plan | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Pension expense | 5,000,000 | $ 7,000,000 | $ 6,000,000 | |||||
Honeywell | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Liability for asbestos and environmental claims maximum amount converted into euros | $ 25,000,000 | |||||||
Number of spin-off common Stock distributed | 74,070,852 | |||||||
Indemnification and Reimbursement Agreement | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Agreement termination description | The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. | The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. | ||||||
Reimbursement agreement termination date | Dec. 31, 2048 | |||||||
Indemnification and Reimbursement Agreement | Honeywell | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of net insurance receipts | 90.00% | |||||||
Bendix | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of asbestos and environmental liabilities liable to pay | 100.00% | 100.00% | 100.00% | |||||
Bendix | Indemnification and Reimbursement Agreement | Honeywell | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of asbestos and environmental liabilities liable to pay | 90.00% | |||||||
Cost of goods sold | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Research and development cost | $ 128,000,000 | $ 119,000,000 | 112,000,000 | |||||
Engineering-related expenses | $ 10,000,000 | $ 19,000,000 | $ 21,000,000 | |||||
Minimum | ASU 2016-02 | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Operating Lease, Right-of-Use Assets | $ 33,000,000 | |||||||
Operating Lease, Liabilities | 33,000,000 | |||||||
Maximum | ASU 2016-02 | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Operating Lease, Right-of-Use Assets | 43,000,000 | |||||||
Operating Lease, Liabilities | $ 43,000,000 | |||||||
Maximum | Indemnification and Reimbursement Agreement | Honeywell | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Liability for asbestos and environmental claims maximum amount converted into euros | $ 25,000,000 | |||||||
Buildings and Improvements | Minimum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 10 years | |||||||
Buildings and Improvements | Maximum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 50 years | |||||||
Machinery and Equipment | Minimum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 2 years | |||||||
Machinery and Equipment | Maximum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 16 years | |||||||
Tooling Equipment | Minimum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 3 years | |||||||
Tooling Equipment | Maximum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 10 years | |||||||
Software | Minimum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 5 years | |||||||
Software | Maximum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 7 years |
Related Party Transactions wi_3
Related Party Transactions with Honeywell - Additional Information (Details) - Honeywell International Inc - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Notes Receivables | |||
Related Party Transaction [Line Items] | |||
Interest income received for related party | $ 1 | $ 1 | $ 4 |
Notes Payable | |||
Related Party Transaction [Line Items] | |||
Interest expense incurred for related party | 1 | 6 | 6 |
Invested Deficit | |||
Related Party Transaction [Line Items] | |||
Non-interest-bearing cash pooling balances | 51 | ||
Selling, General and Administrative Expenses | |||
Related Party Transaction [Line Items] | |||
General corporate expenses included within selling, general and administrative expenses | $ 87 | $ 127 | $ 75 |
Related Party Transactions wi_4
Related Party Transactions with Honeywell - Summary of Due from Related Parties, Current (Details) $ in Millions | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |
Due from related parties, current | $ 530 |
Honeywell International Inc | |
Related Party Transaction [Line Items] | |
Cash pooling and short-term notes receivables | 495 |
Other tax receivables from Former Parent | 26 |
Receivables from related parties | 8 |
Related party notes receivables, current | 1 |
Due from related parties, current | $ 530 |
Related Party Transactions wi_5
Related Party Transactions with Honeywell - Summary of Due from Related Parties, Non-Current (Details) $ in Millions | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |
Due from related parties, non-current | $ 23 |
Honeywell International Inc | |
Related Party Transaction [Line Items] | |
Other tax receivables from Former Parent | 23 |
Due from related parties, non-current | $ 23 |
Related Party Transactions wi_6
Related Party Transactions with Honeywell - Summary of Due to Related Parties, Current (Details) $ in Millions | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |
Due to related parties, current | $ 1,117 |
Honeywell International Inc | |
Related Party Transaction [Line Items] | |
Cash pooling and short-term notes payables | 545 |
Related party notes payables, current | 484 |
Payables to related parties | 51 |
Foreign currency exchange contracts | 37 |
Due to related parties, current | $ 1,117 |
Related Party Transactions wi_7
Related Party Transactions with Honeywell - Summary of Components of Net Transfers to and from Honeywell (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Total net decrease (increase) in Invested deficit | $ (1,168) | $ 14 | $ (111) |
Honeywell International Inc | |||
Related Party Transaction [Line Items] | |||
General financing activities | 1,774 | (363) | (151) |
Distribution to Former Parent | (2,994) | (97) | (117) |
Unbilled corporate allocations | 41 | 70 | 37 |
Stock compensation expense and other compensation awards | 17 | 19 | 16 |
Pension expense | 7 | 9 | 13 |
Mandatory Transition Tax | (13) | 354 | |
Other Income Tax | 22 | 91 | |
Spin-Off related adjustments | (250) | ||
Issuance of common stock and reclassification of invested deficit | 2,714 | ||
Total net decrease (increase) in Invested deficit | $ 1,296 | $ 14 | $ (111) |
Revenue Recognition and Contr_3
Revenue Recognition and Contracts with Customers -Summary of Cumulative Impact of New Accounting Pronouncements and Changes in Accounting on Consolidated and Combined Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Other current assets | $ 71 | $ 321 |
Other assets | 80 | 2 |
Non-current liabilities: | ||
Deferred income taxes | $ 27 | 956 |
EQUITY (DEFICIT) | ||
Invested deficit | (2,433) | |
Adjustments | ||
Current assets: | ||
Other current assets | 7 | |
Other assets | 53 | |
Non-current liabilities: | ||
Deferred income taxes | 6 | |
EQUITY (DEFICIT) | ||
Invested deficit | 54 | |
As Adjusted | ||
Current assets: | ||
Other current assets | 328 | |
Other assets | 55 | |
Non-current liabilities: | ||
Deferred income taxes | 962 | |
EQUITY (DEFICIT) | ||
Invested deficit | $ (2,379) |
Revenue Recognition and Contr_4
Revenue Recognition and Contracts with Customers - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition And Contracts With Customers [Line Items] | ||
Decrease in revenues | $ 6 | |
Deferred payments to customers | $ 2 | $ 7 |
Revenue performance obligation, description of timing | The timing of satisfying the performance obligation is typically indicated by the terms of the contract. All performance obligations are expected to be satisfied within one year, with substantially all performance obligations being satisfied within a month | |
Contract with customer cash advances and unbilled receivables settlement period | 3 months | |
Revenue performance obligation, description of payment terms | The timing of satisfaction of our performance obligations does not significantly vary from the typical timing of payment, with cash advances (contract liabilities) and unbilled receivables (contract assets) being settled within 3 months. For some contracts, we may be entitled to receive an advance payment. | |
Revenue, Practical Expedient, Initial Application and Transition, Nondisclosure of Transaction Price Allocation to Remaining Performance Obligation [true false] | true | |
Maximum | ||
Revenue Recognition And Contracts With Customers [Line Items] | ||
Revenue performance obligation satisfied over time percentage | 1.00% | |
Other Current Assets | ||
Revenue Recognition And Contracts With Customers [Line Items] | ||
Deferred payments to customers | $ 9 | |
Other Assets | ||
Revenue Recognition And Contracts With Customers [Line Items] | ||
Deferred payments to customers | $ 56 |
Revenue Recognition and Contr_5
Revenue Recognition and Contracts with Customers - Summary of Contract Assets and Liabilities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Contract With Customer Asset And Liability [Abstract] | |
Contract assets—January 1 | $ 5 |
Contract assets—December 31 | 5 |
Contract liabilities—January 1 | (7) |
Contract liabilities—December 31 | (2) |
Change in contract liabilities—(Increase)/Decrease | $ 5 |
Revenue Recognition and Contr_6
Revenue Recognition and Contracts with Customers - Additional Information (Details 1) | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01 | |
Revenue Recognition And Contracts With Customers [Line Items] | |
Performance obligation expected to be satisfied, period | 1 year |
Other Expense, Net - Schedule o
Other Expense, Net - Schedule of Other Operating Cost and Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income And Expenses [Abstract] | |||
Indemnification related — post Spin-Off | $ (16) | ||
Asbestos related, net of probable insurance recoveries | 131 | $ 132 | $ 181 |
Environmental remediation, non-active sites | 5 | (2) | 2 |
Other operating income (expense), net | $ 120 | $ 130 | $ 183 |
Non-Operating (Income) Expens_2
Non-Operating (Income) Expense - Schedule of Non-Operating (Income) Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Non Operating Income Expense [Abstract] | |||
Equity income of affiliated companies | $ (5) | $ (4) | $ (6) |
Interest income | (7) | (14) | (16) |
Pension ongoing (income) expense—non service | 2 | (1) | 5 |
Foreign exchange | 6 | 9 | |
Others, net | (4) | 1 | 3 |
Other non-operating (income) expense | $ (8) | $ (18) | $ (5) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (loss) Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income before taxes | |||
Domestic entities | $ (99) | $ (105) | $ (181) |
Entities outside the U.S. | 495 | 471 | 431 |
Income before taxes | $ 396 | $ 366 | $ 250 |
Income Taxes - Schedule of Tax
Income Taxes - Schedule of Tax Expense (Benefits) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 7 | $ 311 | $ 13 |
State | 1 | (2) | 2 |
Foreign | 113 | 67 | 75 |
Total current income tax expense (benefit) | 121 | 376 | 90 |
Deferred: | |||
Federal | (3) | 3 | |
State | 6 | ||
Foreign | (902) | 964 | (39) |
Total deferred income tax expense (benefit) | (905) | 973 | (39) |
Income tax expense (benefit) | $ (784) | $ 1,349 | $ 51 |
Income Taxes - Schedule of U.S
Income Taxes - Schedule of U.S Federal Statutory Income Tax Rate Reconciled to Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21.00% | 35.00% | 35.00% |
Taxes on non-U.S. earnings different from U.S. tax rate, net of changes in valuation allowance | 1.10% | (28.00%) | (46.10%) |
Reserves for tax contingencies | 1.00% | (14.30%) | 7.00% |
Enactment of the Tax Act | 1.00% | 364.70% | |
Non-deductible expenses | 6.00% | 11.60% | 25.30% |
Restructuring/Foreign Unremitted Earnings | (227.70%) | ||
All other items | (0.40%) | (0.40%) | (0.80%) |
Effective income tax rate | (198.00%) | 368.60% | 20.40% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Line Items] | ||||
Increase (decrease) to the effective tax rate, percentage | (566.60%) | 348.20% | ||
Non-U.S. effective income tax rate | (197.60%) | 218.90% | ||
Deferred tax liability, withholding taxes | $ 56 | $ 980 | ||
Deferred tax assets | 209 | 65 | ||
Valuation allowance | 24 | 48 | ||
Deferred tax asset | 165 | 41 | ||
Deferred income taxes | 27 | 956 | ||
Unrecognized tax benefits | 32 | 100 | $ 152 | |
Interest and penalties expense | 2 | 6 | 5 | |
Accrued interest and penalties | $ 29 | $ 35 | $ 43 | |
U.S. federal statutory income tax rate | 21.00% | 35.00% | 35.00% | |
Provisional tax charge due to the imposition of the mandatory transition tax (“MTT”) | $ 354 | |||
Estimated foreign affiliates | $ 1,700 | |||
Undistributed foreign earnings tax rate | 15.50% | |||
Remaining Undistributed foreign earning tax rate | 8.00% | |||
Undistributed earnings indemnity obligation | $ 240 | |||
Net tax liability attributable to the business | $ 240 | |||
Amount payable in installments over the years | 8 years | |||
Tax charge on unremitted earnings of foreign affiliates | 980 | |||
Tax charge due to liability reduced to mandatory transition tax | 240 | |||
Maximum | ||||
Income Taxes [Line Items] | ||||
Increase (decrease) in income taxes | $ 1 | |||
Non-US | ||||
Income Taxes [Line Items] | ||||
Deferred tax liability, withholding taxes | 56 | |||
Deferred tax assets | 209 | |||
Valuation allowance | $ 24 | |||
Foreign | ||||
Income Taxes [Line Items] | ||||
Increase (decrease) to the effective tax rate, percentage | (417.00%) | 210.50% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Pension | $ 7 | |
Other accruals and reserves | $ 38 | 22 |
Net operating and capital losses | 27 | 77 |
Depreciation and amortization | 158 | (8) |
Other | 10 | 15 |
Total Deferred tax assets | 233 | 113 |
Valuation allowance | (24) | (48) |
Net deferred tax assets | 209 | 65 |
Deferred tax liabilities: | ||
Investment basis differences | (56) | (980) |
Other liabilities | (15) | |
Total deferred tax liabilities | (71) | (980) |
Net deferred tax asset/(liability) | $ 138 | |
Net deferred tax asset/(liability) | $ (915) |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Operating Loss Carryforwards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 88 |
Non-US Expiration Period 2027 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 3 |
Expiration period | 2,027 |
Non-Us Indefinite Expiration Period | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 85 |
Expiration period | Indefinite |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in unrecognized tax benefits: | |||
Balance at beginning of year | $ 100 | $ 152 | $ 136 |
Gross increases related to current period tax positions | 7 | 11 | 21 |
Gross increases related to prior periods tax positions | 5 | 1 | 1 |
Gross decreases related to prior periods tax positions | (8) | (64) | (5) |
Decrease related to resolutions of audits with tax authorities | (2) | ||
Potential Indemnifications to Honeywell for US and foreign taxes as contractually obligated in connection with Tax Matters Agreement | (71) | ||
Foreign currency translation | (1) | 2 | (1) |
Balance at end of year | $ 32 | $ 100 | $ 152 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Examinations (Details) | 12 Months Ended |
Dec. 31, 2018 | |
U.S. Federal | 2015 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,015 |
U.S. Federal | 2016 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,016 |
U.S. Federal | 2017 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,017 |
U.S. Federal | 2018 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,018 |
U.S. State | 2015 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,015 |
U.S. State | 2016 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,016 |
U.S. State | 2017 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,017 |
U.S. State | 2018 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,018 |
Germany | 2015 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,015 |
Germany | 2016 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,016 |
Germany | 2017 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,017 |
Germany | 2018 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,018 |
Germany | Tax Year 2008 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,008 |
Germany | Tax Year 2009 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,009 |
Germany | Tax Year 2010 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,010 |
Germany | Tax Year 2011 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,011 |
Germany | Tax Year 2012 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,012 |
Germany | Tax Year 2013 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,013 |
Germany | Tax Year 2014 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,014 |
India | 2015 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,015 |
India | 2016 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,016 |
India | 2017 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,017 |
India | 2018 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,018 |
India | Tax Year 2008 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,008 |
India | Tax Year 2009 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,009 |
India | Tax Year 2010 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,010 |
India | Tax Year 2011 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,011 |
India | Tax Year 2012 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,012 |
India | Tax Year 2013 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,013 |
India | Tax Year 2014 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,014 |
India | 1999 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 1,999 |
India | 2000 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,000 |
India | 2001 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,001 |
India | 2002 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,002 |
India | 2003 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,003 |
India | 2004 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,004 |
India | 2005 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,005 |
India | 2006 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,006 |
India | 2007 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,007 |
United Kingdom | 2015 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,015 |
United Kingdom | 2016 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,016 |
United Kingdom | 2017 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,017 |
United Kingdom | 2018 | |
Income Taxes [Line Items] | |
Income Tax Examinations Not Yet Initiated Years | 2,018 |
United Kingdom | Tax Year 2013 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,013 |
United Kingdom | Tax Year 2014 | |
Income Taxes [Line Items] | |
Income Tax Examinations In Progress, Years | 2,014 |
Accounts, Notes and Other Rec_3
Accounts, Notes and Other Receivables Net - Schedule of Accounts, Notes and Other Receivables Net (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Trade receivables | $ 593 | $ 592 |
Notes receivables | 93 | 83 |
Other receivables | 67 | 73 |
Accounts, notes and other receivables, gross | 753 | 748 |
Less—Allowance for doubtful accounts | (3) | (3) |
Accounts, notes and other receivables, net | $ 750 | $ 745 |
Accounts, Notes and Other Rec_4
Accounts, Notes and Other Receivables Net - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Unbilled balances | $ 5 | $ 6 |
Inventories-Net - Summary of In
Inventories-Net - Summary of Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Combining Work In Process And Raw Materials Alternative Gross [Abstract] | ||
Raw materials | $ 112 | $ 118 |
Work in process | 19 | 20 |
Finished products | 64 | 73 |
Inventory, gross | 195 | 211 |
Less—Reserves | (23) | (23) |
Inventories | $ 172 | $ 188 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Marketable securities | $ 298 | |
Insurance recoveries for asbestos-related liabilities | 17 | |
Prepaid expenses | $ 14 | 3 |
Taxes receivable | 35 | |
Advanced discounts to customers, current | 9 | |
Customer reimbursable engineering | 10 | 3 |
Other | 3 | |
Other current assets | $ 71 | $ 321 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Net - Schedule of Property, Plant and Equipment - Net (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,216 | $ 1,314 |
Less—Accumulated depreciation and amortization | (778) | (872) |
Total property, plant and equipment-net | 438 | 442 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 623 | 720 |
Tooling | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 306 | 291 |
Buildings and improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 136 | 145 |
Construction in progress | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 57 | 65 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 54 | 54 |
Land and improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 16 | 14 |
Others | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 24 | $ 25 |
Property, Plant and Equipment_4
Property, Plant and Equipment - Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |||
Depreciation and amortization expense | $ 72 | $ 64 | $ 59 |
Goodwill - Schedule of Carrying
Goodwill - Schedule of Carrying Amount of Goodwill (Details) $ in Millions | Dec. 31, 2018USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 193 |
Ending balance | $ 193 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities Current [Abstract] | ||
Asbestos-related liabilities | $ 185 | |
Customer pricing reserve | $ 107 | 114 |
Compensation, benefit and other employee related | 71 | 65 |
Repositioning | 15 | 60 |
Product warranties and performance guarantees | 32 | 28 |
Other taxes | 113 | 22 |
Advanced discounts from suppliers, current | 17 | 12 |
Customer advances and deferred income | 14 | 21 |
Accrued interest | 6 | |
Other (primarily operating expenses) | 51 | 64 |
Accrued Liabilities | $ 426 | $ 571 |
Accrued Liabilities - Summary_2
Accrued Liabilities - Summary of Accrued Liabilities (Parenthetical) (Details) - USD ($) $ in Millions | Sep. 12, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities Current [Line Items] | |||
Contract liabilities | $ 2 | $ 7 | |
Bendix | |||
Accrued Liabilities Current [Line Items] | |||
Percentage of asbestos and environmental liabilities liable to pay | 100.00% | 100.00% | 100.00% |
Accrued Liabilities - Summary_3
Accrued Liabilities - Summary of Expenses Related to the Repositioning Accruals (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | $ 60 | $ 43 |
Charges | 2 | 20 |
Usage—cash | (47) | (8) |
Foreign currency translation | 5 | |
Balance at end of period | 15 | 60 |
Severance Costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | 53 | 35 |
Charges | 2 | 20 |
Usage—cash | (42) | (6) |
Foreign currency translation | 4 | |
Balance at end of period | 13 | 53 |
Exit Costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | 7 | 8 |
Usage—cash | (5) | (2) |
Foreign currency translation | 1 | |
Balance at end of period | $ 2 | $ 7 |
Long-term Debt and Credit Agr_3
Long-term Debt and Credit Agreements - Summary of Amounts Outstanding on Long-term Debt and Revolving Credit Facility (Details) $ in Millions | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
Long-term debt | $ 1,628 |
Less: current portion | (23) |
Debt face amount | 1,605 |
Term Loan A | |
Debt Instrument [Line Items] | |
Long-term debt | 374 |
Term Loan B | |
Debt Instrument [Line Items] | |
Long-term debt | 853 |
Senior Notes | |
Debt Instrument [Line Items] | |
Long-term debt | $ 401 |
Long-term Debt and Credit Agr_4
Long-term Debt and Credit Agreements - Additional Information (Details) | Sep. 27, 2018USD ($) | Dec. 31, 2018USD ($) | Sep. 27, 2018EUR (€) |
Debt Instrument [Line Items] | |||
Line of credit, interest rate terms | Senior Credit Facilities are subject to an interest rate, at our option, of either (a) base rate determined by reference to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the United States, (2) the greater of the federal funds effective rate and the overnight bank funding rate, plus 0.5% and (3) the one month adjusted LIBOR rate, plus 1% per annum (“ABR”), (b) an adjusted LIBOR rate (“LIBOR”) (which shall not be less than zero), or (c) an adjusted EURIBOR rate (“EURIBOR”) (which shall not be less than zero), in each case, plus an applicable margin. | ||
Line of credit, frequency of interest payment description | 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 LIBOR and EURIBOR loans) or, if the duration of the applicable interest period exceeds three months, then every three months | ||
Line of credit, frequency of principal payments | quarterly | ||
Payment of debt issuance costs | $ 37,000,000 | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Consolidated total leverage ratio | 425.00% | ||
Consolidated total leverage ratio in 2019 | 400.00% | ||
Consolidated total leverage ratio in 2020 | 375.00% | ||
Consolidated total leverage ratio in 2021 | 350.00% | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Consolidated interest coverage ratio | 275.00% | ||
Term B Facility | |||
Debt Instrument [Line Items] | |||
Percentage of prepayment premium | 1.00% | ||
Term B Facility | LIBOR Loans | |||
Debt Instrument [Line Items] | |||
Debt instrument applicale margin rate | 2.50% | ||
Term B Facility | ABR Loans | |||
Debt Instrument [Line Items] | |||
Debt instrument applicale margin rate | 1.50% | ||
Term B Facility | EURIBOR Loans | |||
Debt Instrument [Line Items] | |||
Debt instrument applicale margin rate | 2.75% | ||
5.125% Senior Notes Due 2026 | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 400,000,000 | € 350,000,000 | |
Debt instrument, annual fixed interest rate | 5.125% | 5.125% | |
Debt instrument maturity date | Oct. 15, 2026 | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Payment of debt issuance costs | $ 6,000,000 | ||
Revolving Credit Facility [Member] | Maximum | |||
Debt Instrument [Line Items] | |||
Percentage of annual commitment fee | 0.50% | ||
Revolving Credit Facility [Member] | Minimum | |||
Debt Instrument [Line Items] | |||
Percentage of annual commitment fee | 0.40% | ||
Credit Agreement | Euro Equivalent Senior Secured Financing | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 1,254,000,000 | ||
Credit Agreement | Term B Facility | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 425,000,000 | € 375,000,000 | |
Line of credit, term | 7 years | ||
Credit Agreement | Term A Facility | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | € | 330,000,000 | ||
Line of credit, term | 5 years | ||
Credit Agreement | Revolving Facility | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | € | € 430,000,000 | ||
Line of credit, term | 5 years |
Long-term Debt and Credit Agr_5
Long-term Debt and Credit Agreements - Schedule of Principal Payments on Long-term Debt and Revolving Credit Facility (Details) $ in Millions | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 23 |
2,020 | 28 |
2,021 | 47 |
2,022 | 65 |
2,023 | 231 |
Thereafter | 1,234 |
Long-term debt | 1,628 |
Less: current portion | (23) |
Debt face amount | $ 1,605 |
Lease Commitments - Schedule of
Lease Commitments - Schedule of Future Minimum Lease Payments Under Operating Leases (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2,019 | $ 12 |
2,020 | 8 |
2,021 | 5 |
2,022 | 4 |
2,023 | 4 |
Thereafter | 15 |
Total | $ 48 |
Lease Commitments - Additional
Lease Commitments - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases [Abstract] | |||
Rent expense | $ 14 | $ 10 | $ 11 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measures - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Derivative, aggregate gross notional amount | $ 838,000,000 | $ 928,000,000 |
Cross-currency Swap Contract | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Floating cross-currency swap contract entered date | Sep. 27, 2018 | |
Floating cross-currency swap contract maturity date | Sep. 27, 2025 | |
Cross-currency Swap Contract | Nonoperating (Income) Expense | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Gains on derivative instrument | $ 16,000,000 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measures - Summary of Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Notional Amounts | $ 838,000,000 | $ 928,000,000 |
Fair Value Measurements Recurring [Member] | Significant Observable Inputs (Level 2) [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Notional Amounts | 838,000,000 | 928,000,000 |
Fair Value, Assets | 20,000,000 | |
Fair Value, Liabilities | 1,000,000 | 37,000,000 |
Fair Value Measurements Recurring [Member] | Significant Observable Inputs (Level 2) [Member] | Designated as Hedging [Member] | Forward Currency Exchange Contracts [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Notional Amounts | 556,000,000 | |
Fair Value, Liabilities | 35,000,000 | |
Fair Value Measurements Recurring [Member] | Significant Observable Inputs (Level 2) [Member] | Undesignated as Hedging [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Notional Amounts | 838,000,000 | 372,000,000 |
Fair Value, Assets | 20,000,000 | |
Fair Value, Liabilities | 1,000,000 | 2,000,000 |
Fair Value Measurements Recurring [Member] | Significant Observable Inputs (Level 2) [Member] | Undesignated as Hedging [Member] | Cross-currency Swap [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Notional Amounts | 425,000,000 | |
Fair Value, Assets | 16,000,000 | |
Fair Value Measurements Recurring [Member] | Significant Observable Inputs (Level 2) [Member] | Undesignated as Hedging [Member] | Forward Currency Exchange Contracts [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Notional Amounts | 413,000,000 | 372,000,000 |
Fair Value, Assets | 4,000,000 | |
Fair Value, Liabilities | $ 1,000,000 | $ 2,000,000 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measures - Summary of Financial Assets and Liabilities Not Carried at Fair Value (Details) $ in Millions | Dec. 31, 2018USD ($) |
Carrying Value [Member] | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Long-term debt and related current maturities | $ 1,592 |
Fair Value [Member] | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Long-term debt and related current maturities | $ 1,548 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Pension and other employee related | $ 71 | $ 54 |
Advanced discounts from suppliers | 63 | 53 |
Income taxes | 59 | 42 |
Other | 16 | 12 |
Other Liabilities | $ 209 | $ 161 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |||
Foreign exchange translation adjustment, pre-tax | $ (198) | $ 72 | $ 29 |
Pension adjustments, pre-tax | (2) | (12) | |
Changes in fair value of effective cash flow hedges, pre-tax | 37 | (84) | 38 |
Other Comprehensive Income (Loss),pre-tax | (163) | (12) | 55 |
Changes in fair value of effective cash flow hedges, tax | (2) | 7 | (5) |
Other Comprehensive Income (Loss), tax | (2) | 7 | (5) |
Foreign exchange translation adjustment | (198) | 72 | 29 |
Defined benefit pension plan adjustment, net of tax (Note 22) | (2) | (12) | |
Changes in fair value of effective cash flow hedges, after-tax | 35 | (77) | 33 |
Other comprehensive income, net of tax | $ (165) | $ (5) | $ 50 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | $ (2,593) | $ (2,195) | $ (1,221) | $ (1,359) |
Other comprehensive income, net of tax | (165) | (5) | 50 | |
Foreign Exchange Translation Adjustment | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | 86 | 284 | 212 | |
Other comprehensive income (loss) before reclassifications | (198) | 72 | ||
Other comprehensive income, net of tax | (198) | 72 | ||
Change in Fair Value of Effective Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | (35) | 42 | ||
Other comprehensive income (loss) before reclassifications | 12 | (66) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 23 | (11) | ||
Other comprehensive income, net of tax | 35 | (77) | ||
Pension Adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | (13) | (11) | (11) | |
Other comprehensive income (loss) before reclassifications | (5) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | 3 | |||
Other comprehensive income, net of tax | (2) | |||
Accumulated Other Comprehensive Income/(loss) | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | 73 | 238 | 243 | $ 193 |
Other comprehensive income (loss) before reclassifications | (191) | 6 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 26 | (11) | ||
Other comprehensive income, net of tax | $ (165) | $ (5) | $ 50 |
Accumulated Other Comprehensi_5
Accumulated Other Comprehensive Income (Loss) - Reclassification Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Net Sales | $ 799 | $ 784 | $ 877 | $ 915 | $ 804 | $ 745 | $ 775 | $ 772 | $ 3,375 | $ 3,096 | $ 2,997 |
Cost of goods sold | 2,599 | 2,361 | 2,365 | ||||||||
Selling, general and administrative expenses | 249 | 249 | 197 | ||||||||
Non-operating (income) expense | 8 | 18 | 5 | ||||||||
Income before taxes | 396 | 366 | 250 | ||||||||
Tax (benefit) expense | (784) | 1,349 | 51 | ||||||||
Net income (loss) | $ 43 | $ 929 | $ 150 | $ 58 | $ (1,220) | $ 57 | $ 105 | $ 75 | 1,180 | (983) | $ 199 |
Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Tax (benefit) expense | (2) | 3 | |||||||||
Net income (loss) | 26 | (11) | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | |||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Non-operating (income) expense | 3 | ||||||||||
Income before taxes | 3 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income | Change in Fair Value of Effective Cash Flow Hedges | |||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Net Sales | (1) | ||||||||||
Cost of goods sold | 26 | (14) | |||||||||
Income before taxes | $ 25 | $ (14) |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 14, 2018 | |
Honeywell | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 16,000,000 | $ 15,000,000 | $ 12,000,000 | ||
Employees | Honeywell | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation expense | 10,000,000 | 8,000,000 | 5,000,000 | ||
Shared Employees | Honeywell | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 6,000,000 | $ 7,000,000 | $ 7,000,000 | ||
Restricted Stock Units | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Weighted-average recognition period | 2 years 9 months 18 days | ||||
Total unrecognized compensation cost | $ 25,000,000 | $ 25,000,000 | |||
Stock-based compensation expense | $ 5,000,000 | ||||
Restricted Stock Units | Honeywell | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of restricted stock units granted | 2,848,541 | 45,503 | |||
Incremental stock-based compensation expense | $ 0 | ||||
Weighted-average recognition period | 3 years 7 months 6 days | ||||
Total unrecognized compensation cost | $ 9,400,000 | ||||
Restricted Stock Units | Officer | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of restricted stock units granted | 496,240 | ||||
Restricted Stock Units | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Restricted Stock Units | Maximum | Honeywell | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Weighted-average recognition period | 5 years 4 months 24 days | ||||
Restricted Stock Units | Maximum | Officer | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Restricted Stock Units | Minimum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Restricted Stock Units | Minimum | Honeywell | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Weighted-average recognition period | 0 years | ||||
Restricted Stock Units | Minimum | Officer | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Stock Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock available for future issuance | 6,620,619 | 6,620,619 | |||
Stock Incentive Plan | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Aggregate number of shares of common stock that may be issued | 10,000,000 | ||||
Stock Incentive Plan | Stock Options | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Aggregate number of shares of common stock that may be issued | 5,000,000 | ||||
Stock Incentive Plan | Restricted Stock Units | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of restricted stock units granted | 530,840 | ||||
Director Equity Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock available for future issuance | 400,000 | 400,000 | |||
Shares granted | 0 | ||||
Director Equity Plan | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Aggregate number of shares of common stock that may be issued | 400,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Activity Related to Stock Incentive Plan (Details) - Restricted Stock Units - Stock Incentive Plan | 3 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of Restricted Stock Units | |
Non-vested, Beginning Balance | shares | 2,848,541 |
Granted | shares | 530,840 |
Vested | shares | (4,452) |
Forfeited | shares | (5,307) |
Non-vested Ending Balance | shares | 3,369,622 |
Weighted Average Grant Date Fair ValuePer Share | |
Non-vested, Beginning Balance | $ / shares | $ 8.70 |
Granted | $ / shares | 17.76 |
Vested | $ / shares | 6.67 |
Forfeited | $ / shares | 14.16 |
Non-vested, Ending Balance | $ / shares | $ 10.12 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Information about Income Statement Impact from RSUs (Details) - Restricted Stock Units $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Compensation expense | $ 5 |
Future income tax benefit recognized | $ 1 |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activity Related to Stock Based Awards Granted by Honeywell to Employees of Business (Details) - Honeywell - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options | ||
Number of Options | ||
Outstanding as of December 31, 2016 | 516,845 | 475,476 |
Shares granted | 162,600 | |
Vested/exercised | (121,231) | |
Outstanding as of December 31, 2017 | 516,845 | |
Wtd Avg Exercise Price | ||
Outstanding as of December 31, 2016 | $ 101 | $ 87 |
Granted | 125 | |
Vested/exercised | 79 | |
Outstanding as of December 31, 2017 | $ 101 | |
Restricted Stock Units | ||
Number of RSUs | ||
Non-vested, Beginning Balance | 167,476 | 163,110 |
Granted | 2,848,541 | 45,503 |
Vested/exercised | (41,137) | |
Non-vested Ending Balance | 167,476 | |
Wtd Avg Grant Date Fair value | ||
Non-vested, Beginning Balance | $ 108 | $ 96 |
Granted | 131 | |
Vested/exercised | 83 | |
Non-vested, Ending Balance | $ 108 |
Stock-Based Compensation - Ac_2
Stock-Based Compensation - Activity Related to Stock Based Awards Granted by Honeywell to Employees of Business (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total unrecognized compensation cost | $ 25 | |
Weighted-average recognition period | 2 years 9 months 18 days | |
Honeywell | Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Weighted-average recognition period | 2 years 6 months | |
Total unrecognized compensation cost | $ 4.2 | |
Honeywell | Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total unrecognized compensation cost | $ 9.4 | |
Weighted-average recognition period | 3 years 7 months 6 days |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 9 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2018 | Oct. 01, 2018 | Dec. 31, 2017 | |
Shares of common stock distributed | 74,070,852 | 74,070,852 | ||
Basic and diluted shares | 74,070,852 | |||
Honeywell | Exit Costs | ||||
Shares of common stock distributed | 74,070,852 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic | |||||||||||
Net income (loss) | $ 43 | $ 929 | $ 150 | $ 58 | $ (1,220) | $ 57 | $ 105 | $ 75 | $ 1,180 | $ (983) | $ 199 |
Weighted average common sharesoutstanding – Basic | 74,059,240 | 74,070,852 | 74,070,852 | ||||||||
EPS – Basic | $ 0.58 | $ 12.54 | $ 2.03 | $ 0.78 | $ (16.47) | $ 0.77 | $ 1.42 | $ 1.01 | $ 15.93 | $ (13.27) | $ 2.69 |
Diluted | |||||||||||
Net income (loss) | $ 43 | $ 929 | $ 150 | $ 58 | $ (1,220) | $ 57 | $ 105 | $ 75 | $ 1,180 | $ (983) | $ 199 |
Weighted average common sharesoutstanding – Basic | 74,059,240 | 74,070,852 | 74,070,852 | ||||||||
Dilutive effect of unvested RSUs | 342,908 | ||||||||||
Weighted average common shares outstanding – Diluted | 74,402,148 | 74,070,852 | 74,070,852 | ||||||||
EPS – Diluted | $ 0.57 | $ 12.54 | $ 2.03 | $ 0.78 | $ (16.47) | $ 0.77 | $ 1.42 | $ 1.01 | $ 15.86 | $ (13.27) | $ 2.69 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Oct. 01, 2018USD ($)Installment | Sep. 12, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Loss Contingencies [Line Items] | |||||||
Loss contingency payable | $ 1 | $ 1 | $ 1,712 | $ 1,795 | $ 1,799 | ||
Payment made in connection with the Indemnification and Reimbursement Agreement | $ 155 | $ 224 | 201 | ||||
Indemnification and Reimbursement Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency payable | $ 175 | ||||||
Minimum amount agreed to maintain for termination | $ 25 | ||||||
Agreement termination description | The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. | The Indemnification and Reimbursement Agreement provides that the agreement will terminate upon the earlier of (x) December 31, 2048 or (y) December 31st of the third consecutive year during which certain amounts owed to Honeywell during each such year were less than $25 million as converted into Euros in accordance with the terms of the agreement. | |||||
Honeywell | Tax Matters Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Aggregate payments connection with mandatory transition tax | $ 240 | ||||||
Number of annual installments | Installment | 5 | ||||||
Mandatory transition tax rate first installment | 8.00% | ||||||
Mandatory transition tax rate second installment | 8.00% | ||||||
Mandatory transition tax rate third installment | 15.00% | ||||||
Mandatory transition tax rate fourth installment | 20.00% | ||||||
Mandatory transition tax rate fifth installment | 25.00% | ||||||
Payment to Honeywell | 19 | ||||||
Honeywell | Indemnification and Reimbursement Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Percentage of net insurance receipts | 90.00% | ||||||
Payment made in connection with the Indemnification and Reimbursement Agreement | $ 41 | ||||||
Description of indemnification agreement | As of the Spin-Off date of October 1, 2018, we are obligated to make payments to Honeywell in amounts equal to 90% of Honeywell’s asbestos-related liability payments and accounts payable, primarily related to the Bendix business in the United States, as well as certain environmental-related liability payments and accounts payable and non-United States asbestos-related liability payments and accounts payable, in each case related to legacy elements of the Business, including the legal costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts and, as may be applicable, certain other recoveries associated with such liabilities. Pursuant to the terms of this Indemnification and Reimbursement Agreement, we are responsible for paying to Honeywell such amounts, up to a cap of an amount equal to the Euro-to-U.S. dollar exchange rate determined by Honeywell as of a date within two business days prior to the date of the Distribution (1.16977 USD = 1 EUR) equivalent of $175 million in respect of such liabilities arising in any given calendar year. | ||||||
Bendix | |||||||
Loss Contingencies [Line Items] | |||||||
Percentage of asbestos and environmental liabilities liable to pay | 100.00% | 100.00% | 100.00% | ||||
Loss contingency payable | $ 1,703 | 1,789 | $ 1,793 | ||||
Payment made in connection with the Indemnification and Reimbursement Agreement | $ 151 | $ 223 | $ 201 | ||||
Bendix | Honeywell | Indemnification and Reimbursement Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Percentage of asbestos and environmental liabilities liable to pay | 90.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Obligation Payable to Honeywell (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | |
Obligations payable to Honeywell, current (Note 21) | $ 127 |
Obligations payable to Honeywell (Note 21) | 1,399 |
Exit Costs | Honeywell | |
Loss Contingencies [Line Items] | |
Spin-Off related adjustments | 1,636 |
Accrual for update to estimated liability | (30) |
Legal fees expensed | 14 |
Payments to Honeywell | (60) |
Currency translation adjustment | (34) |
End of year | 1,526 |
Obligations payable to Honeywell, current (Note 21) | 127 |
Obligations payable to Honeywell (Note 21) | 1,399 |
Total | 1,526 |
Exit Costs | Honeywell | Asbestos and Environmental | |
Loss Contingencies [Line Items] | |
Spin-Off related adjustments | 1,328 |
Accrual for update to estimated liability | (30) |
Legal fees expensed | 14 |
Payments to Honeywell | (41) |
Currency translation adjustment | (27) |
End of year | 1,244 |
Obligations payable to Honeywell, current (Note 21) | 108 |
Obligations payable to Honeywell (Note 21) | 1,136 |
Total | 1,244 |
Exit Costs | Honeywell | Tax Matters Agreement | |
Loss Contingencies [Line Items] | |
Spin-Off related adjustments | 308 |
Payments to Honeywell | (19) |
Currency translation adjustment | (7) |
End of year | 282 |
Obligations payable to Honeywell, current (Note 21) | 19 |
Obligations payable to Honeywell (Note 21) | 263 |
Total | $ 282 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Asbestos Related Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |||
Beginning of year | $ 1,712 | $ 1,795 | $ 1,799 |
Accrual for update to estimated liabilities | 141 | 203 | 203 |
Change in estimated cost of future claims | (65) | (10) | |
Update of expected resolution values for pending claims | 3 | 4 | |
Asbestos-related liability payments | (155) | (224) | (201) |
Spin-Off related adjustments | (1,697) | ||
End of year | 1 | 1,712 | 1,795 |
Bendix | |||
Loss Contingencies [Line Items] | |||
Beginning of year | 1,703 | 1,789 | 1,793 |
Accrual for update to estimated liabilities | 141 | 199 | 203 |
Change in estimated cost of future claims | (65) | (10) | |
Update of expected resolution values for pending claims | 3 | 4 | |
Asbestos-related liability payments | (151) | (223) | (201) |
Spin-Off related adjustments | (1,693) | ||
End of year | 1,703 | 1,789 | |
Other Asbestos Related Liabilities | |||
Loss Contingencies [Line Items] | |||
Beginning of year | 9 | 6 | 6 |
Accrual for update to estimated liabilities | 4 | ||
Asbestos-related liability payments | (4) | (1) | |
Spin-Off related adjustments | (4) | ||
End of year | $ 1 | $ 9 | $ 6 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Insurance Recoveries for Asbestos Related Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |||
Beginning of year | $ 191 | ||
End of the period | $ 191 | ||
Bendix | |||
Loss Contingencies [Line Items] | |||
Beginning of year | 191 | 201 | $ 222 |
Probable insurance recoveries related to estimated liability | 10 | 10 | 8 |
Insurance receipts for asbestos-related liabilities | (24) | (20) | (37) |
Insurance receivables settlements and write-offs | 1 | 7 | |
Other | 1 | ||
Spin-Off related adjustments | $ (178) | ||
End of the period | $ 191 | $ 201 |
Commitments and Contingencies_5
Commitments and Contingencies - Summary of Asbestos Balances Included in Balance Sheet Accounts (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Commitments And Contingencies Disclosure [Abstract] | ||||
Other current assets | $ 17 | |||
Insurance recoveries for asbestos-related liabilities (Note 21) | 174 | |||
Total Assets | 191 | |||
Accrued liabilities | 185 | |||
Asbestos-related liabilities (Note 21) | $ 1 | 1,527 | ||
Total Liabilities | $ 1 | $ 1,712 | $ 1,795 | $ 1,799 |
Commitments and Contingencies_6
Commitments and Contingencies - Summary of Asbestos Claims Activity (Details) - Bendix - Claim | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Claims Activity | ||
Claims Unresolved at the beginning of year | 6,280 | 7,724 |
Claims Filed | 2,430 | 2,645 |
Claims Resolved | (2,501) | (4,089) |
Claims Unresolved at the end of the year | 6,209 | 6,280 |
Commitments and Contingencies_7
Commitments and Contingencies - Summary of Asbestos Disease Distribution of Unresolved Claims (Details) - Bendix - Claim | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disease Distribution of Unresolved Claims | |||
Mesothelioma and Other Cancer Claims | 2,949 | 3,062 | |
Nonmalignant Claims | 3,260 | 3,218 | |
Total Claims | 6,209 | 6,280 | 7,724 |
Commitments and Contingencies_8
Commitments and Contingencies - Summary of Average Resolutions Per Claim Excluding Legal Costs (Details) - $ / Claim | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments And Contingencies Disclosure [Abstract] | |||||
Malignant claims | 55,300 | 56,000 | 44,000 | 44,000 | 53,500 |
Nonmalignant claims | 4,700 | 2,800 | 4,485 | 100 | 120 |
Commitments and Contingencies_9
Commitments and Contingencies - Summary Information Concerning Our Recorded Obligations For Product Warranties and Product Performance Guarantees (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Beginning of year | $ 28 | $ 22 | $ 19 |
Accruals for warranties/guarantees issued during the year | 33 | 14 | 14 |
Settlement of warranty/guarantee claims | (29) | (8) | (11) |
End of year | $ 32 | $ 28 | $ 22 |
Defined Benefit Pension Plans -
Defined Benefit Pension Plans - Summary of Balance Sheet Impact, Including Benefit Obligations, Assets and Funded Status Associated with Significant Pension Plans (Details) - Pension Benefits - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. Plans | ||
Change in benefit obligation: | ||
Transfer of plan obligations from Former Parent | $ 181 | |
Interest cost | 2 | |
Actuarial (gains) losses | (3) | |
Benefits paid | (2) | |
Benefit obligation at end of the year | 178 | |
Change in plan assets: | ||
Transfer of plan assets from Former Parent | 181 | |
Actual return on plan assets | (2) | |
Benefits paid | (2) | |
Fair value of plan assets at end of year | 177 | |
Funded status of plans | (1) | |
Amounts recognized in Consolidated Balance Sheet consist of: | ||
Accrued pension liabilities - noncurrent(2) | (1) | |
Net amount recognized | (1) | |
Non-U.S. Plans | ||
Change in benefit obligation: | ||
Benefit obligation at beginning of the year | 107 | $ 89 |
Transfer of plan obligations from Former Parent | 65 | |
Spin-Off remeasurement adjustment | 2 | |
Service cost | 4 | 2 |
Interest cost | 2 | 2 |
Plan amendments | 1 | |
Actuarial (gains) losses | (5) | 3 |
Benefits paid | (3) | (1) |
Foreign currency translation | (5) | 12 |
Other | 4 | |
Benefit obligation at end of the year | 172 | 107 |
Change in plan assets: | ||
Fair value of plan assets at beginning of the year | 64 | 50 |
Transfer of plan assets from Former Parent | 54 | |
Spin-Off remeasurement adjustment | (10) | |
Actual return on plan assets | 2 | 4 |
Employer contributions | 16 | 3 |
Benefits paid | (3) | |
Foreign currency translation | (4) | 7 |
Other | 4 | |
Fair value of plan assets at end of year | 123 | 64 |
Funded status of plans | (49) | (43) |
Amounts recognized in Consolidated Balance Sheet consist of: | ||
Accrued pension liabilities - current | (3) | |
Accrued pension liabilities - noncurrent(2) | (49) | (40) |
Net amount recognized | $ (49) | $ (43) |
Defined Benefit Pension Plans_2
Defined Benefit Pension Plans - Schedule of Amounts Recognized in Accumulated Other Comprehensive (Income) Loss (Details) - Pension Benefits - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Prior service (credit) | $ (2) | |
Net actuarial loss | 4 | |
Net amount recognized | 2 | |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss | 7 | $ 11 |
Net amount recognized | $ 7 | $ 11 |
Defined Benefit Pension Plans_3
Defined Benefit Pension Plans - Summary of Net Periodic Benefit (Income) Cost and Other Amounts Recognized in Other Comprehensive (Income) Loss (Details) - Pension Benefits - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 2 | |
Expected return on plan assets | (3) | |
Net periodic benefit (income) cost | (1) | |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 4 | $ 2 |
Interest cost | 2 | 2 |
Expected return on plan assets | (3) | (2) |
Recognition of actuarial losses | 3 | |
Net periodic benefit (income) cost | $ 6 | $ 2 |
Defined Benefit Pension Plans_4
Defined Benefit Pension Plans - Summary of Net Periodic Benefit (Income) Cost Other Than The Service Cost Included in Other Expense, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss | |||
Total recognized in other comprehensive (income) loss | $ (2) | $ (12) | |
Pension Benefits | U.S. Plans | |||
Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss | |||
Actuarial (gains) losses | 2 | ||
Total recognized in other comprehensive (income) loss | 2 | ||
Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss | 1 | ||
Pension Benefits | Non-U.S. Plans | |||
Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss | |||
Actuarial (gains) losses | (4) | ||
Prior service (credit) | 1 | ||
Actuarial losses recognized during year | (3) | ||
Total recognized in other comprehensive (income) loss | $ (6) | ||
Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss | $ 2 |
Defined Benefit Pension Plans_5
Defined Benefit Pension Plans - Additional Information (Details) - Pension Benefits $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Equity Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocations percentage | 35.00% |
Defined Benefit Plan Fixed Income Securities And Cash | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocations percentage | 50.00% |
Real Estate Investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocations percentage | 10.00% |
High Yield Bonds | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocations percentage | 5.00% |
Fixed Income Securities | Minimum | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan Plan Assets Maturity Period | 5 years |
Fixed Income Securities | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan Plan Assets Maturity Period | 25 years |
U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net periodic benefit (income) cost expected in 2019 | $ 1 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net periodic benefit (income) cost expected in 2019 | 1 |
Pension contribution | 16 |
Expected pension contribution in the next fiscal year | $ 6 |
Defined Benefit Pension Plans_6
Defined Benefit Pension Plans - Summary of Major Actuarial Assumptions Used in Determining Benefit Obligations and Net Periodic Benefit (Income) Cost (Details) - Pension Benefits | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. Plans | ||
Actuarial assumptions used to determine benefit obligations as of December 31: | ||
Discount rate | 4.33% | |
Expected annual rate of compensation increase | 3.74% | |
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: | ||
Expected rate of return on plan assets | 6.00% | |
Expected annual rate of compensation increase | 3.74% | |
Non-U.S. Plans | ||
Actuarial assumptions used to determine benefit obligations as of December 31: | ||
Discount rate | 1.50% | 1.80% |
Expected annual rate of compensation increase | 1.77% | 2.00% |
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: | ||
Expected rate of return on plan assets | 3.77% | 4.00% |
Expected annual rate of compensation increase | 1.77% | 2.00% |
Beneftit Obligation | U.S. Plans | ||
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: | ||
Discount rate | 4.33% | |
Beneftit Obligation | Non-U.S. Plans | ||
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: | ||
Discount rate | 1.50% | 1.80% |
Service Cost | U.S. Plans | ||
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: | ||
Discount rate | 4.11% | |
Service Cost | Non-U.S. Plans | ||
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: | ||
Discount rate | 1.50% | 1.80% |
Interest Cost | U.S. Plans | ||
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: | ||
Discount rate | 4.02% | |
Interest Cost | Non-U.S. Plans | ||
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: | ||
Discount rate | 1.50% | 1.80% |
Defined Benefit Pension Plans_7
Defined Benefit Pension Plans - Summary of Amounts Relate to Significant Pension Plans with Accumulated Benefit Obligations Exceeding Fair Value of plan Assets (Details) - Pension Benefits - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
UNITED STATES | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 178 | |
Accumulated benefit obligation | 177 | |
Fair value of plan assets | 177 | |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | 172 | $ 107 |
Accumulated benefit obligation | 164 | 104 |
Fair value of plan assets | $ 123 | $ 64 |
Defined Benefit Pension Plans_8
Defined Benefit Pension Plans - Summary of Fair Values of Both U.S. and Non-U.S. Pension Plans Assets by Asset Category (Details) - Pension Benefits - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Equity Funds | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | $ 60 | |
Equity Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 48 | $ 33 |
Short-Term Investments | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 8 | |
Short-Term Investments | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 12 | |
Corporate Bond Funds | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 92 | |
Corporate Bond Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 16 | 6 |
Real Estate Funds | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 17 | |
Real Estate Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 11 | |
Assets at Fair Value | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 177 | |
Assets at Fair Value | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 123 | 64 |
Government Bond Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 28 | 19 |
Other | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 8 | 6 |
Significant Observable Inputs (Level 2) [Member] | Equity Funds | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 60 | |
Significant Observable Inputs (Level 2) [Member] | Equity Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 48 | 33 |
Significant Observable Inputs (Level 2) [Member] | Short-Term Investments | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 8 | |
Significant Observable Inputs (Level 2) [Member] | Short-Term Investments | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 12 | |
Significant Observable Inputs (Level 2) [Member] | Corporate Bond Funds | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 92 | |
Significant Observable Inputs (Level 2) [Member] | Corporate Bond Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 16 | 6 |
Significant Observable Inputs (Level 2) [Member] | Real Estate Funds | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 17 | |
Significant Observable Inputs (Level 2) [Member] | Real Estate Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 11 | |
Significant Observable Inputs (Level 2) [Member] | Assets at Fair Value | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 177 | |
Significant Observable Inputs (Level 2) [Member] | Assets at Fair Value | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 123 | 64 |
Significant Observable Inputs (Level 2) [Member] | Government Bond Funds | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | 28 | 19 |
Significant Observable Inputs (Level 2) [Member] | Other | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total assets at fair value | $ 8 | $ 6 |
Defined Benefit Pension Plans_9
Defined Benefit Pension Plans - Summary of Benefit Payments (Details) - Pension Benefits $ in Millions | Dec. 31, 2018USD ($) |
U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | $ 9 |
2,020 | 10 |
2,021 | 10 |
2,022 | 10 |
2,023 | 11 |
2024-2028 | 56 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 3 |
2,020 | 3 |
2,021 | 3 |
2,022 | 3 |
2,023 | 3 |
2024-2028 | $ 18 |
China Variable Interest Entit_2
China Variable Interest Entity - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Variable Interest Entity [Line Items] | ||||||||||||
Net Sales | $ 799 | $ 784 | $ 877 | $ 915 | $ 804 | $ 745 | $ 775 | $ 772 | $ 3,375 | $ 3,096 | $ 2,997 | |
Cost of goods sold | 2,599 | 2,361 | 2,365 | |||||||||
Selling, general and administrative expenses | 249 | 249 | 197 | |||||||||
Tax (benefit) expense | (784) | 1,349 | 51 | |||||||||
Garrett China | Variable Interest Entity, Primary Beneficiary | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Variable interest ownership percentage | 100.00% | |||||||||||
Equity interests in exchange for shares of common stock issued | 8,444,077 | |||||||||||
Net Sales | 470 | 393 | 279 | |||||||||
Cost of goods sold | 340 | 310 | 199 | |||||||||
Selling, general and administrative expenses | 19 | 20 | 17 | |||||||||
Tax (benefit) expense | $ 24 | $ 28 | $ 14 |
China Variable Interest Entit_3
China Variable Interest Entity - Schedule of Consolidated Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 196 | $ 300 | $ 119 | $ 146 |
Accounts, notes and other receivables—net | 750 | 745 | ||
Inventories—net | 172 | 188 | ||
Due from related parties, current | 530 | |||
Property, plant and equipment—net | 438 | 442 | ||
Deferred income taxes | 165 | 41 | ||
Other assets | 80 | 2 | ||
Current liabilities: | ||||
Accounts payable | 916 | 860 | ||
Due to related parties, current | 1,117 | |||
Accrued liabilities | 426 | 571 | ||
Other liabilities | 209 | 161 | ||
Variable Interest Entity, Primary Beneficiary | Garrett China | ||||
Current assets: | ||||
Cash and cash equivalents | 70 | 78 | ||
Accounts, notes and other receivables—net | 224 | 240 | ||
Inventories—net | 19 | 21 | ||
Due from related parties, current | 73 | |||
Total current assets | 313 | 412 | ||
Property, plant and equipment—net | 67 | 66 | ||
Deferred income taxes | 20 | 8 | ||
Other assets | 1 | |||
Total assets | 401 | 486 | ||
Current liabilities: | ||||
Accounts payable | 261 | 245 | ||
Due to related parties, current | 37 | |||
Accrued liabilities | 77 | 84 | ||
Total current liabilities | 338 | 366 | ||
Other liabilities | 13 | 16 | ||
Total liabilities | $ 351 | $ 382 |
Concentrations - Summary of Net
Concentrations - Summary of Net Sales by Region and Channel (Details) - Sales Concentration - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Net sales | $ 3,375 | $ 3,096 | $ 2,997 |
OEM | |||
Concentration Risk [Line Items] | |||
Net sales | 2,893 | 2,614 | 2,541 |
Aftermarket | |||
Concentration Risk [Line Items] | |||
Net sales | 397 | 389 | 387 |
Other | |||
Concentration Risk [Line Items] | |||
Net sales | 85 | 93 | 69 |
U.S. Plans | |||
Concentration Risk [Line Items] | |||
Net sales | 518 | 461 | 466 |
U.S. Plans | OEM | |||
Concentration Risk [Line Items] | |||
Net sales | 338 | 277 | 296 |
U.S. Plans | Aftermarket | |||
Concentration Risk [Line Items] | |||
Net sales | 175 | 178 | 164 |
U.S. Plans | Other | |||
Concentration Risk [Line Items] | |||
Net sales | 5 | 6 | 6 |
Europe | |||
Concentration Risk [Line Items] | |||
Net sales | 1,891 | 1,762 | 1,806 |
Europe | OEM | |||
Concentration Risk [Line Items] | |||
Net sales | 1,686 | 1,568 | 1,622 |
Europe | Aftermarket | |||
Concentration Risk [Line Items] | |||
Net sales | 151 | 140 | 149 |
Europe | Other | |||
Concentration Risk [Line Items] | |||
Net sales | 54 | 54 | 35 |
Asia | |||
Concentration Risk [Line Items] | |||
Net sales | 923 | 832 | 692 |
Asia | OEM | |||
Concentration Risk [Line Items] | |||
Net sales | 847 | 750 | 611 |
Asia | Aftermarket | |||
Concentration Risk [Line Items] | |||
Net sales | 50 | 49 | 53 |
Asia | Other | |||
Concentration Risk [Line Items] | |||
Net sales | 26 | 33 | 28 |
Non-US | |||
Concentration Risk [Line Items] | |||
Net sales | 43 | 41 | 33 |
Non-US | OEM | |||
Concentration Risk [Line Items] | |||
Net sales | 22 | 19 | 12 |
Non-US | Aftermarket | |||
Concentration Risk [Line Items] | |||
Net sales | $ 21 | $ 22 | $ 21 |
Concentrations - Summary of N_2
Concentrations - Summary of Net Sales to Largest Customers and Corresponding Percentage of Total Net Sales (Details) - Customer Concentration - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Net sales | $ 3,375 | $ 3,096 | $ 2,997 |
Net sales, percentage | 100.00% | 100.00% | 100.00% |
Customer A | |||
Concentration Risk [Line Items] | |||
Net sales | $ 455 | $ 423 | $ 436 |
Net sales, percentage | 13.00% | 14.00% | 15.00% |
Customer B | |||
Concentration Risk [Line Items] | |||
Net sales | $ 254 | $ 246 | $ 303 |
Net sales, percentage | 8.00% | 8.00% | 10.00% |
Others | |||
Concentration Risk [Line Items] | |||
Net sales | $ 2,666 | $ 2,427 | $ 2,258 |
Net sales, percentage | 79.00% | 78.00% | 75.00% |
Concentrations - Summary of Lon
Concentrations - Summary of Long Lived Assets by Region (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Concentration Risk [Line Items] | |||
Long-lived assets | $ 438 | $ 442 | |
Long-lived Assets Concentration | |||
Concentration Risk [Line Items] | |||
Long-lived assets | 438 | 442 | $ 371 |
Long-lived Assets Concentration | U.S. Plans | |||
Concentration Risk [Line Items] | |||
Long-lived assets | 26 | 23 | 21 |
Long-lived Assets Concentration | Europe | |||
Concentration Risk [Line Items] | |||
Long-lived assets | 273 | 273 | 219 |
Long-lived Assets Concentration | Asia | |||
Concentration Risk [Line Items] | |||
Long-lived assets | 123 | 124 | 109 |
Long-lived Assets Concentration | Non-US | |||
Concentration Risk [Line Items] | |||
Long-lived assets | $ 16 | $ 22 | $ 22 |
Concentrations - Additional Inf
Concentrations - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplier Concentration | Purchases | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14.00% | 16.00% | 17.00% |
Unaudited Quarterly Financial_3
Unaudited Quarterly Financial Information - Summary of Unaudited Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net Sales | $ 799 | $ 784 | $ 877 | $ 915 | $ 804 | $ 745 | $ 775 | $ 772 | $ 3,375 | $ 3,096 | $ 2,997 |
Gross Profit | 172 | 178 | 215 | 211 | 173 | 177 | 197 | 188 | 776 | 735 | 632 |
Net income (loss) | $ 43 | $ 929 | $ 150 | $ 58 | $ (1,220) | $ 57 | $ 105 | $ 75 | $ 1,180 | $ (983) | $ 199 |
EPS – Basic | $ 0.58 | $ 12.54 | $ 2.03 | $ 0.78 | $ (16.47) | $ 0.77 | $ 1.42 | $ 1.01 | $ 15.93 | $ (13.27) | $ 2.69 |
EPS – Diluted | $ 0.57 | $ 12.54 | $ 2.03 | $ 0.78 | $ (16.47) | $ 0.77 | $ 1.42 | $ 1.01 | $ 15.86 | $ (13.27) | $ 2.69 |
Unaudited Quarterly Financial_4
Unaudited Quarterly Financial Information - Summary of Unaudited Quarterly Financial Information (Parenthetical) (Details) - USD ($) $ in Millions | Oct. 01, 2018 | Sep. 18, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Conversion Of Stock [Line Items] | ||||
Reduction in tax expense | $ (870) | |||
Impact of tax cut jobs act on net loss | $ 1,335 | |||
Honeywell | Exit Costs | ||||
Conversion Of Stock [Line Items] | ||||
Shares issued | 74,070,852 | 74,070,852 | ||
Distribution made at spin-off date of record | Sep. 18, 2018 |