Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 02, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | GTX | |
Entity Registrant Name | Garrett Motion Inc. | |
Entity Central Index Key | 0001735707 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 74,578,460 |
CONSOLIDATED AND COMBINED INTER
CONSOLIDATED AND COMBINED INTERIM STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales (Note 4) | $ 835 | $ 915 |
Cost of goods sold | 639 | 704 |
Gross profit | 196 | 211 |
Selling, general and administrative expenses | 60 | 63 |
Other expense, net (Note 6) | 19 | 42 |
Interest expense | 16 | 2 |
Non-operating expense (income) | 4 | (9) |
Income before taxes | 97 | 113 |
Tax expense (Note 7) | 24 | 55 |
Net income | $ 73 | $ 58 |
Earnings per common share | ||
Basic | $ 0.98 | $ 0.78 |
Diluted | $ 0.97 | $ 0.78 |
Weighted average common shares outstanding | ||
Basic | 74,229,627 | 74,070,852 |
Diluted | 75,379,228 | 74,070,852 |
CONSOLIDATED AND COMBINED INT_2
CONSOLIDATED AND COMBINED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 73 | $ 58 |
Foreign exchange translation adjustment | 59 | (177) |
Defined benefit pension plan adjustment, net of tax (Note 15) | 1 | |
Changes in fair value of effective cash flow hedges, net of tax (Note 14) | 3 | (7) |
Total other comprehensive (loss) income, net of tax | 63 | (184) |
Comprehensive income (loss) | $ 136 | $ (126) |
CONSOLIDATED AND COMBINED INT_3
CONSOLIDATED AND COMBINED INTERIM BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 207 | $ 196 |
Accounts, notes and other receivables – net (Note 8) | 790 | 750 |
Inventories – net (Note 9) | 181 | 172 |
Other current assets | 61 | 71 |
Total current assets | 1,239 | 1,189 |
Investments and long-term receivables | 35 | 39 |
Property, plant and equipment – net | 424 | 438 |
Goodwill | 193 | 193 |
Deferred income taxes | 159 | 165 |
Other assets (Note 10) | 122 | 80 |
Total assets | 2,172 | 2,104 |
Current liabilities: | ||
Accounts payable | 881 | 916 |
Current maturities of long-term debt | 23 | 23 |
Obligations payable to Honeywell, current (Note 17) | 124 | 127 |
Accrued liabilities (Note 11) | 433 | 426 |
Total current liabilities | 1,461 | 1,492 |
Long-term debt | 1,542 | 1,569 |
Deferred income taxes | 29 | 27 |
Obligations payable to Honeywell (Note 17) | 1,350 | 1,399 |
Other liabilities (Note 12) | 242 | 210 |
Total liabilities | 4,624 | 4,697 |
COMMITMENTS AND CONTINGENCIES (Note 17) | ||
EQUITY (DEFICIT) | ||
Additional paid-in capital | 10 | 5 |
Retained earnings | (2,598) | (2,671) |
Accumulated other comprehensive income (Note 15) | 136 | 73 |
Total stockholders' deficit | (2,452) | (2,593) |
Total liabilities and stockholders' deficit | $ 2,172 | $ 2,104 |
CONSOLIDATED AND COMBINED INT_4
CONSOLIDATED AND COMBINED INTERIM BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 74,634,286 | 74,070,852 |
Common stock, shares, outstanding | 74,583,259 | 74,019,825 |
CONSOLIDATED AND COMBINED INT_5
CONSOLIDATED AND COMBINED INTERIM STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 73 | $ 58 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Deferred income taxes | 3 | 28 |
Depreciation | 19 | 18 |
Amortization of deferred issuance costs | 2 | |
Foreign exchange (gain) loss | 7 | (8) |
Stock compensation expense | 5 | 7 |
Pension expense | 1 | 2 |
Other | 4 | 1 |
Changes in assets and liabilities: | ||
Accounts, notes and other receivables | (43) | (113) |
Receivables from related parties | 2 | |
Inventories | (14) | 4 |
Other assets | 13 | (29) |
Accounts payable | (24) | 27 |
Payables to related parties | (19) | |
Accrued liabilities | 12 | 27 |
Obligations payable to Honeywell | (21) | |
Asbestos related liabilities | 2 | |
Other liabilities | (1) | 5 |
Net cash provided by (used for) operating activities | 36 | 12 |
Cash flows from investing activities: | ||
Expenditures for property, plant and equipment | (21) | (28) |
Increase in marketable securities | (21) | |
Decrease in marketable securities | 202 | |
Other | 1 | 2 |
Net cash provided by (used for) investing activities | (20) | 155 |
Cash flows from financing activities: | ||
Net increase (decrease) in Invested deficit | 812 | |
Proceeds from revolving credit facility | 140 | |
Payments of revolving credit facility | (140) | |
Payments of long-term debt | (6) | |
Payments related to related party notes payable | (493) | |
Net change related to cash pooling and short-term notes | (482) | |
Other | 1 | |
Net cash provided by (used for) financing activities | (5) | (163) |
Effect of foreign exchange rate changes on cash and cash equivalents | 7 | |
Net increase (decrease) in cash and cash equivalents | 11 | 11 |
Cash and cash equivalents at beginning of period | 196 | 300 |
Cash and cash equivalents at end of period | $ 207 | $ 311 |
CONSOLIDATED AND COMBINED INT_6
CONSOLIDATED AND COMBINED INTERIM STATEMENTS OF EQUITY (DEFICIT) (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Invested Deficit | Accumulated Other Comprehensive Income/(loss) |
Beginning balance at Dec. 31, 2017 | $ (2,195) | $ (2,433) | $ 238 | |||
Net income | 58 | 58 | ||||
Other comprehensive income, net of tax | (184) | (184) | ||||
Change in Invested deficit | 1,080 | 1,080 | ||||
Ending balance at Mar. 31, 2018 | (1,241) | $ (1,295) | 54 | |||
Beginning balance at Dec. 31, 2018 | (2,593) | $ 5 | $ (2,671) | 73 | ||
Beginning balance, Shares at Dec. 31, 2018 | 74 | |||||
Net income | 73 | 73 | ||||
Other comprehensive income, net of tax | 63 | 63 | ||||
Stock-based compensation | 5 | 5 | ||||
Stock based compensation, Shares | 1 | |||||
Ending balance at Mar. 31, 2019 | $ (2,452) | $ 10 | $ (2,598) | $ 136 | ||
Ending balance, Shares at Mar. 31, 2019 | 75 |
Background and Revision of Prev
Background and Revision of Previously Issued Consolidated and Combined Interim Financial Statements for the Three Months Ended March 31, 2018 | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Background and Revision of Previously Issued Consolidated and Combined Interim Financial Statements for the Three Months Ended March 31, 2018 | Note 1A. Background and Revision of Previously Issued Consolidated and Combined Interim Financial Statements for the Three Months Ended March 31, 2018 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 global vehicle independent aftermarket, as well as automotive software solutions. 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”). 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 17, 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. Revision of Previously Issued Consolidated and Combined Interim Financial Statements for the Three Months Ended March 31, 2018 In August 2018, the Business, as part of Honeywell, determined that it had not appropriately applied the provisions of ASC 450, Contingencies, in measuring its asbestos liabilities related to unasserted Bendix claims. For the three months ended March 31, 2018, the Company now reflects the epidemiological projections through 2059 rather than a five-year time horizon when estimating the liability for unasserted Bendix-related asbestos claims. In light of the foregoing, the Company has revised our combined interim financial statements for the three months ended March 31, 2018 included in our Amendment No. 1 to Form 10, as confidentially filed with the Securities and Exchange Commission (“SEC”) on June 8, 2018 to reflect the effects of the revised method for estimating the total liability for unasserted Bendix-related asbestos claims. The Consolidated and Combined Interim Statements of Operations, Consolidated and Combined Interim Statements of Comprehensive Income and Consolidated and Combined Interim Statements of Cash Flows for the three months ended March 31, 2018 included in this Form 10-Q were updated to reflect the revision. The following tables identify each financial statement line item affected by the revision. Three Months Ended, March 31, 2018 Unaudited Consolidated and Combined Interim Statement of Operations (Millions) Previously Reported Adjustment As Revised Unaudited Unaudited Unaudited Other expense, net $ 44 $ (2 ) $ 42 Income before taxes $ 111 $ 2 $ 113 Tax expense $ 55 $ — $ 55 Net income $ 56 $ 2 $ 58 Three Months Ended, March 31, 2018 Unaudited Consolidated and Combined Interim Statement of Comprehensive Income (Millions) Previously Reported Adjustment As Revised Unaudited Unaudited Unaudited Net Income $ 56 $ 2 $ 58 Comprehensive (loss) income $ (128 ) $ 2 $ (126 ) Three Months Ended, March 31, 2018 Unaudited Unaudited Unaudited Unaudited Consolidated and Combined Interim Statement of Cash Flows (Millions) Previously Reported Adjustment As Revised Net Income $ 56 $ 2 $ 58 Changes in assets and liabilities: Asbestos-related liabilities $ 4 $ (2 ) $ 2 Net cash provided by operating activities $ 12 $ — $ 12 Net increase in Invested deficit $ 812 $ — $ 812 Net cash (used for) provided by financing activities $ (163 ) $ — $ (163 ) |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Note 1B. Basis of Presentation 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 Interim Financial Statements”). The Consolidated and Combined Interim 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 Interim 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 Interim Financial Statements reflect an estimated liability for resolution of pending and future asbestos-related and environmental liabilities primarily related to the legacy Bendix 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. The Consolidated and Combined Interim Financial Statements are unaudited; however, in the opinion of management, they contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to state fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP applicable to interim periods. The Consolidated and Combined Interim Financial Statements should be read in conjunction with the audited annual Consolidated and Combined Financial Statements for the year ended December 31, 2018 included in our Annual Report on Form 10-K, as filed with the SEC on March 1, 2019 (our “2018 Form 10-K”). The results of operations We report our quarterly financial information using a calendar convention: the first, second and third quarters are consistently reported as ending on March 31, June 30 and September 30. It has been our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on our business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a reporting year. In the event that differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, we will provide appropriate disclosures. Our actual closing dates for the three months ended March 31, 2019 and 2018 were March 30, 2019 and March 31, 2018, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The accounting policies of the Company are set forth in Note 2 to the audited annual Consolidated and Combined Financial Statements for the year ended December 31, 2018 included in our 2018 Form 10-K. We include herein certain updates to those policies. Leases - Lessee accounting policy For the periods beginning January 1, 2019, right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of a lease (the “commencement date”) based on the present value of lease payments over the lease term. We determine if an arrangement is a lease at inception. Operating leases are included in Other assets, Accrued liabilities, and Other liabilities in our Consolidated and Combined Balance Sheets. No finance leases have been recognized. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed in the period in which they occur. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For machinery and equipment, we account for the lease and non-lease components as a single lease component. We account for short-term leases by recognizing lease payments in net income on a straight-line basis over the lease term and will not recognize any ROU assets and lease liabilities on the Consolidated and Combined Balance Sheet. For the periods prior to January 1, 2019, we accounted for leases in accordance with ASC 840. Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted the new lease accounting standard using the modified retrospective transition option of applying the new standard at the adoption date while electing not to recast comparative periods in the transition. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. In adopting the new leases standard, the Company has applied the practical expedients as per ASC 842-10-65-1(f) and (g). Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities of $34 million as of January 1, 2019. The adoption of this standard did not have a material impact related to existing leases and as a result, a cumulative-effect adjustment was not recorded. 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 The Tax Cuts and Jobs Act (“Tax Act”) to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018. Upon adoption, the Company did not elect to reclassify the stranded income tax effects of the Tax Act from accumulated other comprehensive income to retained earnings. Recently Issued Accounting Pronouncements 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 will be 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 Financial Statements. |
Related Party Transactions with
Related Party Transactions with Honeywell | 3 Months Ended |
Mar. 31, 2019 | |
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. Prior to Spin-Off Prior to the Spin-Off, the Consolidated and Combined Interim Financial Statements were prepared on a stand-alone basis and are derived from the Consolidated Interim Financial Statements and accounting records of Honeywell. 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. The Business and Honeywell consider the allocations to be a reasonable reflection of the benefits received by the Business. During the three months ended March 31, 2018, the Business was allocated $29 million The Company received interest income for related party notes receivables of less than $1 million for the three months ended March 31, 2018. Additionally, the Company incurred interest expense for related party notes payable of $1 million for the three months ended March 31, 2018. Net transfers to and from Honeywell are included within Invested deficit on the Consolidated and Combined Interim Statements of Equity. The components of the net transfers to Three Months Ended March 31, 2018 General financing activities $ 1,841 Distribution to Former Parent (799 ) Unbilled corporate allocations 29 Stock compensation expense and other compensation awards 7 Pension expense 2 Total net decrease in Invested deficit $ 1,080 |
Revenue Recognition and Contrac
Revenue Recognition and Contracts with Customers | 3 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition and Contracts with Customers | Note 4. Revenue Recognition and Contracts with Customers Disaggregated Revenue Sales by region (determined based on country of shipment) and channel are as follows: Three months ended March 31, 2019 OEM Aftermarket Other Total United States $ 83 $ 45 $ 1 $ 129 Europe 429 37 12 478 Asia 199 13 7 219 Other International 4 5 — 9 $ 715 $ 100 $ 20 $ 835 Three months ended March 31, 2018 (1) OEM Aftermarket Other Total United States $ 89 $ 43 $ 1 $ 133 Europe 463 41 17 521 Asia 230 12 8 250 Other International 5 6 — 11 $ 787 $ 102 $ 26 $ 915 (1) The revenue information was previously disaggregated between OEM and Aftermarket and is now disaggregated between OEM, Aftermarket, and Other. As a result, the prior period presented was recast to conform to the current year presentation. Contract Balances The following table summarizes our contract assets and liabilities balances: 2019 Contract assets—January 1 $ 5 Contract assets—March 31 6 Change in contract assets—Increase/(Decrease) $ 1 Contract liabilities—January 1 $ (2 ) Contract liabilities—March 31 (2 ) Change in contract liabilities—(Increase)/Decrease $ — |
Research and Development
Research and Development | 3 Months Ended |
Mar. 31, 2019 | |
Research And Development [Abstract] | |
Research and Development | Note 5. Research and Development Garrett conducts research and development 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 as follows: Three Months Ended March 31, 2019 2018 Research and development costs $ 32 $ 31 Engineering-related expenses 3 2 $ 35 $ 33 |
Other Expense, Net
Other Expense, Net | 3 Months Ended |
Mar. 31, 2019 | |
Other Income And Expenses [Abstract] | |
Other Expense, Net | Note 6. Other Expense, Net Three Months Ended March 31, 2019 2018 Indemnification related — post Spin-Off $ 19 $ — Asbestos related, net of probable insurance recoveries — 41 Environmental remediation, non-active sites — 1 $ 19 $ 42 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7. Income Taxes The effective tax rate decreased for the three months ended March 31, 2019, as compared to the three months ended March 31, 2018, primarily due to a $25 million tax expense attributable to currency impacts for withholding taxes on undistributed foreign earnings which was recorded during the three months ended March 31, 2018. The effective tax rate for the three months ended March 31, 2019 was higher than the U.S. federal statutory rate of 21% due primarily to non-deductible indemnity expenses partially offset by non-U.S. earnings taxed at lower rates. The effective tax rate for the three months ended March 31, 2018 was higher than the U.S. federal statutory rate of 21% due primarily to non-deductible asbestos expenses and tax expense attributable to currency impacts for withholding taxes on undistributed foreign earnings, On December 22, 2017, the U.S. enacted the Tax Act which 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. The effective tax rate can vary from quarter to quarter due to the tax impacts from the resolution of income tax audits, changes in tax laws, employee share-based payments, internal restructurings, pension mark-to-market adjustments, and the current uncertainty regarding state taxes including potential responses of state taxing authorities to legislative changes within the Tax Act. |
Accounts, Notes and Other Recei
Accounts, Notes and Other Receivables—Net | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Accounts, Notes and Other Receivables—Net | Note 8. Accounts, Notes and Other Receivables—Net March 31, 2019 December 31, 2018 Trade receivables $ 641 $ 593 Notes receivables 77 93 Other receivables 77 67 $ 795 $ 753 Less—Allowance for doubtful accounts (5 ) (3 ) $ 790 $ 750 Trade Receivables include $20 million and $5 million of unbilled balances as of March 31, 2019 and December 31, 2018, respectively. These amounts are billed in accordance with the terms of customer contracts to which they relate. Unbilled receivables include $6 million and $5 million of contract assets as of March 31, 2019 and December 31, 2018, respectively. See Note 4, Revenue Recognition and Contracts with Customers. |
Inventories-Net
Inventories-Net | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories-Net | Note 9. Inventories—Net March 31, 2019 December 31, 2018 Raw materials $ 112 $ 112 Work in process 20 19 Finished products 72 64 $ 204 $ 195 Less—Reserves (23 ) (23 ) $ 181 $ 172 |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Assets | Note 10. Other Assets March 31, December 31, 2019 2018 Advanced discounts to customers, non-current $ 53 $ 56 Operating right-of-use assets (Note 13) 37 — Undesignated cross-currency swap at fair value 25 16 Other 7 8 $ 122 $ 80 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities Current [Abstract] | |
Accrued Liabilities | Note 11. Accrued Liabilities March 31, 2019 December 31, 2018 Customer pricing reserve $ 115 $ 107 Compensation, benefit and other employee related 60 71 Repositioning 7 15 Product warranties and performance guarantees 35 32 Taxes 106 113 Advanced discounts from suppliers, current 18 17 Customer advances and deferred income (a) 23 14 Accrued interest 11 6 Short-term lease liability (Note 13) 9 — Other (primarily operating expenses) 49 51 $ 433 $ 426 (a) Customer advances and deferred income include $2 million 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 Interim Statements of Operations. Severance Costs Exit Costs Total Balance at December 31, 2017 $ 53 $ 7 $ 60 Charges 2 — 2 Usage—cash (3 ) — (3 ) Foreign currency translation 2 — 2 Balance at March 31, 2018 $ 54 $ 7 $ 61 Severance Costs Exit Costs Total Balance at December 31, 2018 $ 13 $ 2 $ 15 Charges 1 — 1 Usage—cash (2 ) (2 ) (4 ) Adjustments and reclassifications (6 ) 1 (5 ) Foreign currency translation — — — Balance at March 31, 2019 $ 6 $ 1 $ 7 |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 12. Other Liabilities March 31, December 31, 2019 2018 Pension and other employee related $ 69 $ 71 Advanced discounts from suppliers 61 63 Uncertain tax positions 63 59 Long-term lease liability (Note 13) 27 — Other 22 17 $ 242 $ 210 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 13. Leases We have operating leases for real estate and machinery and equipment. Our leases have remaining lease terms of up to 12 years, some of which include options to extend the leases for up to two years, and some of which include options to terminate the leases within the year. The components of lease expense are as follows: Three Months Ended March 31, 2019 Operating lease cost $ 3 $ 3 Supplemental cash flow information related to operating leases is follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: $ Operating cash outflows from operating leases 3 Right-of-use assets obtained in exchange for lease obligations: Operating leases 5 Supplemental balance sheet information related to operating leases is follows: March 31, 2019 Other assets $ 37 Accrued liabilities 9 Other liabilities 27 March 31, 2019 Weighted-average lease term 6.45 Weighted-average discount rate 6.34 Maturities of operating lease liabilities were as follows: March 31, 2019 2019 $ 9 2020 8 2021 5 2022 5 2023 4 Thereafter 13 Total lease payments 44 Less imputed interest (8 ) $ 36 As of December 31, 2018, in accordance with the previous lease standard, ASC 840, future minimum December 31, 2018 2019 $ 12 2020 8 2021 5 2022 4 2023 4 Thereafter 15 $ 48 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measures | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Fair Value Measures | Note 14. Financial Instruments and Fair Value Measures Our credit, market and foreign currency risk management policies are described in Note 16, Financial Instruments and Fair Value Measures, of the notes to the audited annual Consolidated and Combined Financial Statements for the year ended December 31, 2018 included in our 2018 Form 10-K. At March 31, 2019 and December 31, 2018, we had contracts with aggregate gross notional amounts of $967 million and $838 million, respectively, to exchange foreign currencies, principally the U.S. Dollar, Swiss Franc, British Pound, Euro, Chinese Yuan, Japanese Yen, Mexican Peso, New Romanian Leu, Czech Crown, Australian Dollar and Korean Won. Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2019 and December 31, 2018: Fair Value Notional Amounts Assets Liabilities March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018 Designated forward currency exchange contracts $ 257 $ — $ 3 $ — (b) $ — $ — Undesignated instruments: Undesignated cross-currency swap 423 425 25 16 (a) — — Undesignated forward currency exchange contracts 287 413 2 4 (b) 1 1 (c) 710 838 27 20 1 1 $ 967 $ 838 $ 30 $ 20 $ 1 $ 1 ( 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 During the first quarter of 2019, the Company entered into forward currency exchange contracts to mitigate exposure to foreign currency exchange rate volatility and the associated impact on earnings related to forecasted foreign currency commitments. These forward currency exchange contracts are assessed as highly effective and are designated as cash flow hedges. Gains and losses on derivatives qualifying as cash flow hedges are recorded in Accumulated other comprehensive income (loss) until the underlying transactions are recognized in earnings. 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 expense (income). For the three months ended March 31, 2019, gains recorded in Non-operating expense (income) under the cross-currency swap contract were $8 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, Account receivables, notes and other receivables, and Account payables 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: March 31, 2019 Carrying Value Fair Value Long-term debt and related current maturities $ 1,565 $ 1,564 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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 15. Accumulated Other Comprehensive Income (Loss) Changes in Accumulated Other Comprehensive Income (Loss) by Component Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2017 $ 284 $ (35 ) $ (11 ) $ 238 Other comprehensive income (loss) before reclassifications (177 ) (19 ) — (196 ) Amounts reclassified from accumulated other comprehensive income (loss) — 12 — 12 Net current period other comprehensive income (loss) (177 ) (7 ) — (184 ) Balance at March 31, 2018 $ 107 $ (42 ) $ (11 ) $ 54 Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2018 $ 86 $ — $ (13 ) $ 73 Other comprehensive income (loss) before reclassifications 59 3 — 62 Amounts reclassified from accumulated other comprehensive income (loss) — — 1 1 Net current period other comprehensive income (loss) 59 3 1 63 Balance at March 31, 2019 $ 145 $ 3 $ (12 ) $ 136 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 16. 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. The details of the earnings per share calculations for the three months ended March 31, 2019 and 2018 are as follows: Three Months Ended March 31, 2019 2018 Basic Net Income $ 73 $ 58 Weighted average common shares outstanding 74,229,627 74,070,852 EPS – Basic $ 0.98 $ 0.78 Three Months Ended March 31, 2019 2018 Diluted Net Income $ 73 $ 58 Weighted average common shares outstanding – Basic 74,229,627 74,070,852 Dilutive effect of unvested RSUs and other contingently issuable shares 1,149,601 — Weighted average common shares outstanding – Diluted 75,379,228 74,070,852 EPS – Diluted $ 0.97 $ 0.78 Diluted EPS is computed based upon the weighted average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the period. The diluted earnings per share calculations exclude the effect of stock options when the options’ assumed proceeds exceed the average market price of the common shares during the period. For the three months ended March 31, 2019, the weighted number of stock options excluded from the computations was 146,652. These stock options were outstanding at March 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 17. Commitments and Contingencies 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 first quarter of 2019, we paid Honeywell the Euro-equivalent of $38 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. Following the Spin-Off in October of 2018, we paid our first annual installment in that month. Subsequently, our annual installments will be paid in April of each year. On April 1, 2019, we paid our second annual installment of the Euro-equivalent of $18 million. 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: 2019 Asbestos and environmental Tax Matters Total Beginning of year $ 1,244 $ 282 $ 1,526 Accrual for update to estimated liability — 2 2 Legal fees expensed 15 — 15 Payments to Honeywell (38 ) — (38 ) Currency translation adjustment (25 ) (6 ) (31 ) End of period $ 1,196 $ 278 $ 1,474 Current 106 18 124 Non-current 1,090 260 1,350 Total $ 1,196 $ 278 $ 1,474 Asbestos Matters For the periods prior to the Spin-Off, these Consolidated and Combined Interim 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 tables present information regarding Bendix related asbestos claims activity: Three Months Ended March 31, Year Ended December 31, Claims Activity 2019 2018 Claims Unresolved at the beginning of the period 6,209 6,280 Claims Filed 631 2,430 Claims Resolved (626 ) (2,501 ) Claims Unresolved at the end of the period 6,214 6,209 Three Months Ended March 31, Years Ended December 31, Disease Distribution of Unresolved Claims 2019 2018 Mesothelioma and Other Cancer Claims 3,028 2,949 Nonmalignant Claims 3,186 3,260 Total Claims 6,214 6,209 Honeywell has experienced average resolutions per claim excluding legal costs as follows: 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 to predict whether resolution values for Bendix-related asbestos claims will increase, decrease or stabilize in the future. Other Matters We are subject to other lawsuits, investigations and disputes arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability, prior acquisitions and divestitures, employee benefit plans, intellectual property, and environmental, health and safety matters. We recognize a liability for any contingency that is probable of occurrence and reasonably estimable. We continually assess the likelihood of adverse judgments of outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. To date, no such matters are material to the Consolidated and Combined Interim Statements of Operations. |
Pension Benefits
Pension Benefits | 3 Months Ended |
Mar. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension Benefits | Note 18. Pension Benefits Following the Spin-Off, we sponsor several funded U.S. and non-U.S. defined benefit pension plans. Significant plans outside of the U.S. are in Switzerland and Ireland. Other pension plans outside of the U.S. are not material to the Company either individually or in the aggregate. 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. 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 in 2019, of which $1 million has been contributed through the first three months of the year. 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 as further described below. Net periodic benefit costs for our significant defined benefit plans include the following components: Three Months Ended U.S. Plans March 31, Non-U.S. Plans (1) 2019 2019 2018 Service cost — 1 $ 1 Interest cost 1 1 — Expected return on plan assets (1 ) (1 ) (1 ) Amortization of prior service (credit) — — — — 1 $ — (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. For our U.S. defined benefit pension plan from the date of the Spin-Off, 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 until 2019, 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 updated 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. Prior to the completion of the Spin-Off, 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 multiemployer benefit plans. 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 Combined Statements of Operations. The pension expense specifically identified for the active Garrett participants in the Shared Plans for the three months ended March 31, 2018 was $2 million. |
China Variable Interest Entity
China Variable Interest Entity | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
China Variable Interest Entity | Note 19. 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 related operations of Garrett China were included in our Consolidated and Combined Statements of Operations for the three months ended March 31, 2018 which were prepared on a carve-out basis. The following table summarizes the consolidated assets and liabilities of Garrett China: March 31, December 31, 2019 2018 (Dollars in millions) ASSETS Current assets: Cash and cash equivalents $ 114 $ 70 Accounts, notes and other receivables—net 211 224 Inventories—net 21 19 Total current assets 346 313 Property, plant and equipment—net 68 67 Deferred income taxes 21 20 Other assets 1 1 Total assets $ 436 $ 401 LIABILITIES Current liabilities: Accounts payable $ 261 $ 261 Accrued liabilities 83 77 Total current liabilities 344 338 Other liabilities 12 13 Total liabilities $ 356 $ 351 Net sales from Garrett China were $116 million and $130 million for the three months ended March 31, 2019 and 2018, respectively. Related expenses primarily consisted of Costs of Goods Sold of $79 million million 3 million 7 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Leases - Lessee Accounting Policy | Leases - Lessee accounting policy For the periods beginning January 1, 2019, right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of a lease (the “commencement date”) based on the present value of lease payments over the lease term. We determine if an arrangement is a lease at inception. Operating leases are included in Other assets, Accrued liabilities, and Other liabilities in our Consolidated and Combined Balance Sheets. No finance leases have been recognized. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed in the period in which they occur. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For machinery and equipment, we account for the lease and non-lease components as a single lease component. We account for short-term leases by recognizing lease payments in net income on a straight-line basis over the lease term and will not recognize any ROU assets and lease liabilities on the Consolidated and Combined Balance Sheet. For the periods prior to January 1, 2019, we accounted for leases in accordance with ASC 840. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted the new lease accounting standard using the modified retrospective transition option of applying the new standard at the adoption date while electing not to recast comparative periods in the transition. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. In adopting the new leases standard, the Company has applied the practical expedients as per ASC 842-10-65-1(f) and (g). Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities of $34 million as of January 1, 2019. The adoption of this standard did not have a material impact related to existing leases and as a result, a cumulative-effect adjustment was not recorded. 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 The Tax Cuts and Jobs Act (“Tax Act”) to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018. Upon adoption, the Company did not elect to reclassify the stranded income tax effects of the Tax Act from accumulated other comprehensive income to retained earnings. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements 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 will be 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 Financial Statements. |
Background and Revision of Pr_2
Background and Revision of Previously Issued Consolidated and Combined Interim Financial Statements for the Three Months Ended March 31, 2018 (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Each Financial Statement Line Item Affected by the Revision | The following tables identify each financial statement line item affected by the revision. Three Months Ended, March 31, 2018 Unaudited Consolidated and Combined Interim Statement of Operations (Millions) Previously Reported Adjustment As Revised Unaudited Unaudited Unaudited Other expense, net $ 44 $ (2 ) $ 42 Income before taxes $ 111 $ 2 $ 113 Tax expense $ 55 $ — $ 55 Net income $ 56 $ 2 $ 58 Three Months Ended, March 31, 2018 Unaudited Consolidated and Combined Interim Statement of Comprehensive Income (Millions) Previously Reported Adjustment As Revised Unaudited Unaudited Unaudited Net Income $ 56 $ 2 $ 58 Comprehensive (loss) income $ (128 ) $ 2 $ (126 ) Three Months Ended, March 31, 2018 Unaudited Unaudited Unaudited Unaudited Consolidated and Combined Interim Statement of Cash Flows (Millions) Previously Reported Adjustment As Revised Net Income $ 56 $ 2 $ 58 Changes in assets and liabilities: Asbestos-related liabilities $ 4 $ (2 ) $ 2 Net cash provided by operating activities $ 12 $ — $ 12 Net increase in Invested deficit $ 812 $ — $ 812 Net cash (used for) provided by financing activities $ (163 ) $ — $ (163 ) |
Related Party Transactions wi_2
Related Party Transactions with Honeywell (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Components of Net Transfers to and from Honeywell | The components of the net transfers to Three Months Ended March 31, 2018 General financing activities $ 1,841 Distribution to Former Parent (799 ) Unbilled corporate allocations 29 Stock compensation expense and other compensation awards 7 Pension expense 2 Total net decrease in Invested deficit $ 1,080 |
Revenue Recognition and Contr_2
Revenue Recognition and Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Disaggregation of Revenue | Sales by region (determined based on country of shipment) and channel are as follows: Three months ended March 31, 2019 OEM Aftermarket Other Total United States $ 83 $ 45 $ 1 $ 129 Europe 429 37 12 478 Asia 199 13 7 219 Other International 4 5 — 9 $ 715 $ 100 $ 20 $ 835 Three months ended March 31, 2018 (1) OEM Aftermarket Other Total United States $ 89 $ 43 $ 1 $ 133 Europe 463 41 17 521 Asia 230 12 8 250 Other International 5 6 — 11 $ 787 $ 102 $ 26 $ 915 (1) The revenue information was previously disaggregated between OEM and Aftermarket and is now disaggregated between OEM, Aftermarket, and Other. As a result, the prior period presented was recast to conform to the current year presentation. |
Summary of Contract Assets and Liabilities | The following table summarizes our contract assets and liabilities balances: 2019 Contract assets—January 1 $ 5 Contract assets—March 31 6 Change in contract assets—Increase/(Decrease) $ 1 Contract liabilities—January 1 $ (2 ) Contract liabilities—March 31 (2 ) Change in contract liabilities—(Increase)/Decrease $ — |
Research and Development (Table
Research and Development (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Research And Development [Abstract] | |
Summary of Research and Development Activities | Garrett conducts research and development 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 as follows: Three Months Ended March 31, 2019 2018 Research and development costs $ 32 $ 31 Engineering-related expenses 3 2 $ 35 $ 33 |
Other Expenses, Net (Tables)
Other Expenses, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Income And Expenses [Abstract] | |
Schedule of Other Operating Cost and Expense | Three Months Ended March 31, 2019 2018 Indemnification related — post Spin-Off $ 19 $ — Asbestos related, net of probable insurance recoveries — 41 Environmental remediation, non-active sites — 1 $ 19 $ 42 |
Accounts, Notes and Other Rec_2
Accounts, Notes and Other Receivables—Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes and Other Receivables Net | March 31, 2019 December 31, 2018 Trade receivables $ 641 $ 593 Notes receivables 77 93 Other receivables 77 67 $ 795 $ 753 Less—Allowance for doubtful accounts (5 ) (3 ) $ 790 $ 750 |
Inventories-Net (Tables)
Inventories-Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | March 31, 2019 December 31, 2018 Raw materials $ 112 $ 112 Work in process 20 19 Finished products 72 64 $ 204 $ 195 Less—Reserves (23 ) (23 ) $ 181 $ 172 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | March 31, December 31, 2019 2018 Advanced discounts to customers, non-current $ 53 $ 56 Operating right-of-use assets (Note 13) 37 — Undesignated cross-currency swap at fair value 25 16 Other 7 8 $ 122 $ 80 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities Current [Abstract] | |
Summary of Accrued Liabilities | March 31, 2019 December 31, 2018 Customer pricing reserve $ 115 $ 107 Compensation, benefit and other employee related 60 71 Repositioning 7 15 Product warranties and performance guarantees 35 32 Taxes 106 113 Advanced discounts from suppliers, current 18 17 Customer advances and deferred income (a) 23 14 Accrued interest 11 6 Short-term lease liability (Note 13) 9 — Other (primarily operating expenses) 49 51 $ 433 $ 426 (a) Customer advances and deferred income include $2 million |
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 Interim Statements of Operations. Severance Costs Exit Costs Total Balance at December 31, 2017 $ 53 $ 7 $ 60 Charges 2 — 2 Usage—cash (3 ) — (3 ) Foreign currency translation 2 — 2 Balance at March 31, 2018 $ 54 $ 7 $ 61 Severance Costs Exit Costs Total Balance at December 31, 2018 $ 13 $ 2 $ 15 Charges 1 — 1 Usage—cash (2 ) (2 ) (4 ) Adjustments and reclassifications (6 ) 1 (5 ) Foreign currency translation — — — Balance at March 31, 2019 $ 6 $ 1 $ 7 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | March 31, December 31, 2019 2018 Pension and other employee related $ 69 $ 71 Advanced discounts from suppliers 61 63 Uncertain tax positions 63 59 Long-term lease liability (Note 13) 27 — Other 22 17 $ 242 $ 210 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense are as follows: Three Months Ended March 31, 2019 Operating lease cost $ 3 $ 3 |
Summary of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases is follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: $ Operating cash outflows from operating leases 3 Right-of-use assets obtained in exchange for lease obligations: Operating leases 5 |
Summary of Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to operating leases is follows: March 31, 2019 Other assets $ 37 Accrued liabilities 9 Other liabilities 27 March 31, 2019 Weighted-average lease term 6.45 Weighted-average discount rate 6.34 |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities were as follows: March 31, 2019 2019 $ 9 2020 8 2021 5 2022 5 2023 4 Thereafter 13 Total lease payments 44 Less imputed interest (8 ) $ 36 |
Schedule of Future Minimum Lease Payments Under Operating Leases in Accordance with ASC 840 | As of December 31, 2018, in accordance with the previous lease standard, ASC 840, 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) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018: Fair Value Notional Amounts Assets Liabilities March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018 Designated forward currency exchange contracts $ 257 $ — $ 3 $ — (b) $ — $ — Undesignated instruments: Undesignated cross-currency swap 423 425 25 16 (a) — — Undesignated forward currency exchange contracts 287 413 2 4 (b) 1 1 (c) 710 838 27 20 1 1 $ 967 $ 838 $ 30 $ 20 $ 1 $ 1 ( 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 |
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: March 31, 2019 Carrying Value Fair Value Long-term debt and related current maturities $ 1,565 $ 1,564 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | Changes in Accumulated Other Comprehensive Income (Loss) by Component Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2017 $ 284 $ (35 ) $ (11 ) $ 238 Other comprehensive income (loss) before reclassifications (177 ) (19 ) — (196 ) Amounts reclassified from accumulated other comprehensive income (loss) — 12 — 12 Net current period other comprehensive income (loss) (177 ) (7 ) — (184 ) Balance at March 31, 2018 $ 107 $ (42 ) $ (11 ) $ 54 Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2018 $ 86 $ — $ (13 ) $ 73 Other comprehensive income (loss) before reclassifications 59 3 — 62 Amounts reclassified from accumulated other comprehensive income (loss) — — 1 1 Net current period other comprehensive income (loss) 59 3 1 63 Balance at March 31, 2019 $ 145 $ 3 $ (12 ) $ 136 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The details of the earnings per share calculations for the three months ended March 31, 2019 and 2018 are as follows: Three Months Ended March 31, 2019 2018 Basic Net Income $ 73 $ 58 Weighted average common shares outstanding 74,229,627 74,070,852 EPS – Basic $ 0.98 $ 0.78 Three Months Ended March 31, 2019 2018 Diluted Net Income $ 73 $ 58 Weighted average common shares outstanding – Basic 74,229,627 74,070,852 Dilutive effect of unvested RSUs and other contingently issuable shares 1,149,601 — Weighted average common shares outstanding – Diluted 75,379,228 74,070,852 EPS – Diluted $ 0.97 $ 0.78 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Obligation Payable to Honeywell | The following table summarizes our Obligation payable to Honeywell related to these agreements: 2019 Asbestos and environmental Tax Matters Total Beginning of year $ 1,244 $ 282 $ 1,526 Accrual for update to estimated liability — 2 2 Legal fees expensed 15 — 15 Payments to Honeywell (38 ) — (38 ) Currency translation adjustment (25 ) (6 ) (31 ) End of period $ 1,196 $ 278 $ 1,474 Current 106 18 124 Non-current 1,090 260 1,350 Total $ 1,196 $ 278 $ 1,474 |
Summary of Asbestos Claim Activity | The following tables present information regarding Bendix related asbestos claims activity: Three Months Ended March 31, Year Ended December 31, Claims Activity 2019 2018 Claims Unresolved at the beginning of the period 6,209 6,280 Claims Filed 631 2,430 Claims Resolved (626 ) (2,501 ) Claims Unresolved at the end of the period 6,214 6,209 Three Months Ended March 31, Years Ended December 31, Disease Distribution of Unresolved Claims 2019 2018 Mesothelioma and Other Cancer Claims 3,028 2,949 Nonmalignant Claims 3,186 3,260 Total Claims 6,214 6,209 |
Summary of Average Resolutions Per Claim Excluding Legal Costs | Honeywell has experienced average resolutions per claim excluding legal costs as follows: 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 |
Pension Benefits (Tables)
Pension Benefits (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of Net Periodic Benefit Cost | Net periodic benefit costs for our significant defined benefit plans include the following components: Three Months Ended U.S. Plans March 31, Non-U.S. Plans (1) 2019 2019 2018 Service cost — 1 $ 1 Interest cost 1 1 — Expected return on plan assets (1 ) (1 ) (1 ) Amortization of prior service (credit) — — — — 1 $ — (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. |
China Variable Interest Entity
China Variable Interest Entity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, December 31, 2019 2018 (Dollars in millions) ASSETS Current assets: Cash and cash equivalents $ 114 $ 70 Accounts, notes and other receivables—net 211 224 Inventories—net 21 19 Total current assets 346 313 Property, plant and equipment—net 68 67 Deferred income taxes 21 20 Other assets 1 1 Total assets $ 436 $ 401 LIABILITIES Current liabilities: Accounts payable $ 261 $ 261 Accrued liabilities 83 77 Total current liabilities 344 338 Other liabilities 12 13 Total liabilities $ 356 $ 351 |
Background and Revision of Pr_3
Background and Revision of Previously Issued Consolidated and Combined Interim Financial Statements for the Three Months Ended March 31, 2018 - Additional Information (Details) - Honeywell shares in Millions | Oct. 01, 2018shares |
Background And Revision Of Previously Issued Consolidated And Combined Interim Financial Statements [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 | 74 |
Garrett Motion Inc. | |
Background And Revision Of Previously Issued Consolidated And Combined Interim Financial Statements [Line Items] | |
Pro rata distribution of outstanding shares, percentage | 100.00% |
Background and Revision of Pr_4
Background and Revision of Previously Issued Consolidated and Combined Interim Financial Statements for the Three Months Ended March 31, 2018 - Summary of Each Financial Statement Line Item Affected by the Revision (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Background And Revision Of Previously Issued Consolidated And Combined Interim Financial Statements [Line Items] | ||
Other expense, net (Note 6) | $ 19 | $ 42 |
Income before taxes | 97 | 113 |
Tax expense | 24 | 55 |
Net income | 73 | 58 |
Comprehensive (loss) income | 136 | (126) |
Net income | 73 | 58 |
Changes in assets and liabilities: Asbestos-related liabilities | 2 | |
Net cash provided by operating activities | 36 | 12 |
Net increase in Invested deficit | 812 | |
Net cash (used for) provided by financing activities | $ (5) | (163) |
Previously Reported Unaudited | ||
Background And Revision Of Previously Issued Consolidated And Combined Interim Financial Statements [Line Items] | ||
Other expense, net (Note 6) | 44 | |
Income before taxes | 111 | |
Tax expense | 55 | |
Net income | 56 | |
Comprehensive (loss) income | (128) | |
Net income | 56 | |
Changes in assets and liabilities: Asbestos-related liabilities | 4 | |
Net cash provided by operating activities | 12 | |
Net increase in Invested deficit | 812 | |
Net cash (used for) provided by financing activities | (163) | |
Adjustment Unaudited | ||
Background And Revision Of Previously Issued Consolidated And Combined Interim Financial Statements [Line Items] | ||
Other expense, net (Note 6) | (2) | |
Income before taxes | 2 | |
Net income | 2 | |
Comprehensive (loss) income | 2 | |
Net income | 2 | |
Changes in assets and liabilities: Asbestos-related liabilities | $ (2) |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - USD ($) | Sep. 12, 2018 | Mar. 31, 2019 |
Indemnification and Reimbursement Agreement | ||
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 | ||
Basis Of Presentation [Line Items] | ||
Percentage of asbestos and environmental liabilities liable to pay | 100.00% | 100.00% |
Honeywell | Indemnification and Reimbursement Agreement | ||
Basis Of Presentation [Line Items] | ||
Percentage of net insurance receipts | 90.00% | |
Honeywell | Indemnification and Reimbursement Agreement | Maximum | ||
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 | ||
Basis Of Presentation [Line Items] | ||
Percentage of asbestos and environmental liabilities liable to pay | 90.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 |
Significant Accounting Policies [Line Items] | ||
Operating lease right-of-use assets | $ 37 | |
Operating lease, liabilities | $ 36 | |
ASU 2016-02 | ||
Significant Accounting Policies [Line Items] | ||
Operating lease right-of-use assets | $ 34 | |
Operating lease, liabilities | $ 34 |
Related Party Transactions wi_3
Related Party Transactions with Honeywell - Additional Information (Details) - Honeywell International Inc $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Notes Receivables | Maximum | |
Related Party Transaction [Line Items] | |
Interest income received for related party | $ 1 |
Notes Payable | |
Related Party Transaction [Line Items] | |
Interest expense incurred for related party | 1 |
Selling, General and Administrative Expenses | |
Related Party Transaction [Line Items] | |
General corporate expenses included within selling, general and administrative expenses | $ 29 |
Related Party Transactions wi_4
Related Party Transactions with Honeywell - Summary of Components of Net Transfers to and from Honeywell (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Related Party Transaction [Line Items] | |
Total net decrease in Invested deficit | $ 1,080 |
Honeywell International Inc | |
Related Party Transaction [Line Items] | |
General financing activities | 1,841 |
Distribution to Former Parent | (799) |
Unbilled corporate allocations | 29 |
Stock compensation expense and other compensation awards | 7 |
Pension expense | 2 |
Total net decrease in Invested deficit | $ 1,080 |
Revenue Recognition and Contr_3
Revenue Recognition and Contracts with Customers - Summary of Net Sales by Region and Channel (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
Net sales | $ 835 | $ 915 |
OEM | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 715 | 787 |
Aftermarket | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 100 | 102 |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 20 | 26 |
United States | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 129 | 133 |
United States | OEM | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 83 | 89 |
United States | Aftermarket | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 45 | 43 |
United States | Other | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 1 | 1 |
Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 478 | 521 |
Europe | OEM | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 429 | 463 |
Europe | Aftermarket | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 37 | 41 |
Europe | Other | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 12 | 17 |
Asia | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 219 | 250 |
Asia | OEM | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 199 | 230 |
Asia | Aftermarket | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 13 | 12 |
Asia | Other | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 7 | 8 |
Other International | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 9 | 11 |
Other International | OEM | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | 4 | 5 |
Other International | Aftermarket | ||
Disaggregation Of Revenue [Line Items] | ||
Net sales | $ 5 | $ 6 |
Revenue Recognition and Contr_4
Revenue Recognition and Contracts with Customers - Summary of Contract Assets and Liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Contract With Customer Asset And Liability [Abstract] | |
Contract assets—January 1 | $ 5 |
Contract assets—March 31 | 6 |
Change in contract assets—Increase/(Decrease) | 1 |
Contract liabilities—January 1 | (2) |
Contract liabilities—March 31 | $ (2) |
Research and Development - Summ
Research and Development - Summary of Research and Development Activities (Details) - Cost of Goods Sold - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||
Research and development expense, total | $ 35 | $ 33 |
Research and Development Costs | ||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||
Research and development expense, total | 32 | 31 |
Engineering-Related Expenses | ||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||
Research and development expense, total | $ 3 | $ 2 |
Other Expense, Net - Schedule o
Other Expense, Net - Schedule of Other Operating Cost and Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other Income And Expenses [Abstract] | ||
Indemnification related — post Spin-Off | $ 19 | |
Asbestos related, net of probable insurance recoveries | $ 41 | |
Environmental remediation, non-active sites | 1 | |
Other operating income (expense), net | $ 19 | $ 42 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax expense | $ 25 | |
U.S. federal statutory income tax rate | 21.00% | 21.00% |
Accounts, Notes and Other Rec_3
Accounts, Notes and Other Receivables Net - Schedule of Accounts, Notes and Other Receivables Net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Trade receivables | $ 641 | $ 593 |
Notes receivables | 77 | 93 |
Other receivables | 77 | 67 |
Accounts, notes and other receivables, gross | 795 | 753 |
Less—Allowance for doubtful accounts | (5) | (3) |
Accounts, notes and other receivables, net | $ 790 | $ 750 |
Accounts, Notes and Other Rec_4
Accounts, Notes and Other Receivables Net - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Unbilled balances | $ 20 | $ 5 |
Unbilled contracts assets | $ 6 | $ 5 |
Inventories-Net - Summary of In
Inventories-Net - Summary of Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Combining Work In Process And Raw Materials Alternative Gross [Abstract] | ||
Raw materials | $ 112 | $ 112 |
Work in process | 20 | 19 |
Finished products | 72 | 64 |
Inventory, gross | 204 | 195 |
Less—Reserves | (23) | (23) |
Inventories | $ 181 | $ 172 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Other Assets [Line Items] | ||
Advanced discounts to customers, non-current | $ 53 | $ 56 |
Operating right-of-use assets (Note 13) | $ 37 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent |
Other | $ 7 | $ 8 |
Total | 122 | 80 |
Undesignated as Hedging [Member] | Cross-currency Swap [Member] | ||
Other Assets [Line Items] | ||
Undesignated cross-currency swap at fair value | $ 25 | $ 16 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities Current [Abstract] | ||
Customer pricing reserve | $ 115 | $ 107 |
Compensation, benefit and other employee related | 60 | 71 |
Repositioning | 7 | 15 |
Product warranties and performance guarantees | 35 | 32 |
Taxes | 106 | 113 |
Advanced discounts from suppliers, current | 18 | 17 |
Customer advances and deferred income | 23 | 14 |
Accrued interest | 11 | 6 |
Short-term lease liability (Note 13) | 9 | |
Other (primarily operating expenses) | 49 | 51 |
Accrued Liabilities | $ 433 | $ 426 |
Accrued Liabilities - Summary_2
Accrued Liabilities - Summary of Accrued Liabilities (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities Current [Abstract] | ||
Contract liabilities | $ 2 | $ 2 |
Accrued Liabilities - Summary_3
Accrued Liabilities - Summary of Expenses Related to the Repositioning Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | $ 15 | $ 60 |
Charges | 1 | 2 |
Usage—cash | (4) | (3) |
Adjustments and reclassifications | (5) | |
Foreign currency translation | 2 | |
Balance at end of period | 7 | 61 |
Severance Costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | 13 | 53 |
Charges | 1 | 2 |
Usage—cash | (2) | (3) |
Adjustments and reclassifications | (6) | |
Foreign currency translation | 2 | |
Balance at end of period | 6 | 54 |
Exit Costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | 2 | 7 |
Usage—cash | (2) | 0 |
Adjustments and reclassifications | 1 | |
Balance at end of period | $ 1 | $ 7 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Pension and other employee related | $ 69 | $ 71 |
Advanced discounts from suppliers | 61 | 63 |
Uncertain tax positions | 63 | 59 |
Long-term lease liability (Note 13) | 27 | |
Other | 22 | 17 |
Other Liabilities | $ 242 | $ 210 |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Lessee Lease Description [Line Items] | |
Operating lease, option to extend | true |
Operating lease, option to extend, description | some of which include options to extend the leases for up to two years |
Operating lease, option to terminate | true |
Operating lease, option to terminate, description | some of which include options to terminate the leases within the year |
Maximum | |
Lessee Lease Description [Line Items] | |
Operating lease, remaining lease terms | 12 years |
Operating lease, options to extend, years | 2 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 3 |
Lease cost, total | $ 3 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Operating Leases (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash outflows from operating leases | $ 3 |
Right-of-use assets obtained in exchange for lease obligations, operating leases | $ 5 |
Leases - Summary of Supplemen_2
Leases - Summary of Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Other assets | $ 37 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent |
Accrued liabilities | $ 9 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | |
Other liabilities | $ 27 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | |
Weighted-average lease term | 6 years 5 months 12 days | |
Weighted-average discount rate | 6.34% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Millions | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 9 |
2020 | 8 |
2021 | 5 |
2022 | 5 |
2023 | 4 |
Thereafter | 13 |
Total lease payments | 44 |
Less imputed interest | (8) |
Operating lease, liabilities | $ 36 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Under Operating Leases in Accordance with ASC 840 (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 12 |
2020 | 8 |
2021 | 5 |
2022 | 4 |
2023 | 4 |
Thereafter | 15 |
Total | $ 48 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measures - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
Derivative, aggregate gross notional amount | $ 967,000,000 | $ 838,000,000 |
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 Expense (Income) | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Gains on derivative instrument | $ 8,000,000 |
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 ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Notional Amounts | $ 967,000,000 | $ 838,000,000 |
Undesignated as Hedging [Member] | Cross-currency Swap [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Vale, Assets | 25,000,000 | 16,000,000 |
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 | 967,000,000 | 838,000,000 |
Fair Vale, Assets | 30,000,000 | 20,000,000 |
Fair Value, Liabilities | 1,000,000 | 1,000,000 |
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 | 257,000,000 | |
Fair Vale, Assets | 3,000,000 | |
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 | 710,000,000 | 838,000,000 |
Fair Vale, Assets | 27,000,000 | 20,000,000 |
Fair Value, Liabilities | 1,000,000 | 1,000,000 |
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 | 287,000,000 | 413,000,000 |
Fair Vale, Assets | 2,000,000 | 4,000,000 |
Fair Value, Liabilities | 1,000,000 | 1,000,000 |
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 | 423,000,000 | 425,000,000 |
Fair Vale, Assets | $ 25,000,000 | $ 16,000,000 |
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 | Mar. 31, 2019USD ($) |
Carrying Value [Member] | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Long-term debt and related current maturities | $ 1,565 |
Fair Value [Member] | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Long-term debt and related current maturities | $ 1,564 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | $ (2,452) | $ (1,241) | $ (2,593) | $ (2,195) |
Total other comprehensive (loss) income, net of tax | 63 | (184) | ||
Foreign Exchange Translation Adjustment | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | 145 | 107 | 86 | 284 |
Other comprehensive income (loss) before reclassifications | 59 | (177) | ||
Total other comprehensive (loss) income, net of tax | 59 | (177) | ||
Changes in Fair Value of Effective Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | 3 | (42) | (35) | |
Other comprehensive income (loss) before reclassifications | 3 | (19) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 12 | |||
Total other comprehensive (loss) income, net of tax | 3 | (7) | ||
Pension Adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | (12) | (11) | (13) | (11) |
Amounts reclassified from accumulated other comprehensive income (loss) | 1 | |||
Total other comprehensive (loss) income, net of tax | 1 | |||
Total Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance beginning of period | 136 | 54 | $ 73 | $ 238 |
Other comprehensive income (loss) before reclassifications | 62 | (196) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 1 | 12 | ||
Total other comprehensive (loss) income, net of tax | $ 63 | $ (184) |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Oct. 01, 2018 | |
Shares of common stock distributed | 74,634,286 | 74,070,852 | ||
Basic and diluted shares | 74,070,852 | |||
Weighted number of stock options excluded from computations | 146,652 | |||
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Basic | ||
Net income | $ 73 | $ 58 |
Weighted average common shares outstanding – Basic | 74,229,627 | 74,070,852 |
EPS – Basic | $ 0.98 | $ 0.78 |
Diluted | ||
Net income | $ 73 | $ 58 |
Weighted average common shares outstanding – Basic | 74,229,627 | 74,070,852 |
Dilutive effect of unvested RSUs and other contingently issuable shares | 1,149,601 | |
Weighted average common shares outstanding – Diluted | 75,379,228 | 74,070,852 |
EPS – Diluted | $ 0.97 | $ 0.78 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Apr. 01, 2019USD ($) | Oct. 01, 2018USD ($)Installment | Sep. 12, 2018USD ($) | Mar. 31, 2019USD ($) |
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% | |||
Honeywell | Tax Matters Agreement | Subsequent Event | ||||
Loss Contingencies [Line Items] | ||||
Payment to Honeywell | $ 18 | |||
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 | $ 38 | |||
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 $175 million in respect of such liabilities arising in any given calendar year. | |||
Bendix | ||||
Loss Contingencies [Line Items] | ||||
Percentage of asbestos and environmental liabilities liable to pay | 100.00% | 100.00% | ||
Bendix | Honeywell | Indemnification and Reimbursement Agreement | ||||
Loss Contingencies [Line Items] | ||||
Percentage of asbestos and environmental liabilities liable to pay | 90.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Obligation Payable to Honeywell (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | ||
Current | $ 124 | $ 127 |
Non-current | 1,350 | $ 1,399 |
Honeywell | ||
Loss Contingencies [Line Items] | ||
Beginning of year | 1,526 | |
Accrual for update to estimated liability | 2 | |
Legal fees expensed | 15 | |
Payments to Honeywell | (38) | |
Currency translation adjustment | (31) | |
End of period | 1,474 | |
Current | 124 | |
Non-current | 1,350 | |
Total | 1,474 | |
Honeywell | Asbestos and Environmental | ||
Loss Contingencies [Line Items] | ||
Beginning of year | 1,244 | |
Legal fees expensed | 15 | |
Payments to Honeywell | (38) | |
Currency translation adjustment | (25) | |
End of period | 1,196 | |
Current | 106 | |
Non-current | 1,090 | |
Total | 1,196 | |
Honeywell | Tax Matters Agreement | ||
Loss Contingencies [Line Items] | ||
Beginning of year | 282 | |
Accrual for update to estimated liability | 2 | |
Currency translation adjustment | (6) | |
End of period | 278 | |
Current | 18 | |
Non-current | 260 | |
Total | $ 278 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Asbestos Claims Activity (Details) - Bendix - Claim | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Claims Activity | ||
Claims Unresolved at the beginning of the period | 6,209 | 6,280 |
Claims Filed | 631 | 2,430 |
Claims Resolved | (626) | (2,501) |
Claims Unresolved at the end of the period | 6,214 | 6,209 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Asbestos Disease Distribution of Unresolved Claims (Details) - Bendix - Claim | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Disease Distribution of Unresolved Claims | |||
Mesothelioma and Other Cancer Claims | 3,028 | 2,949 | |
Nonmalignant Claims | 3,186 | 3,260 | |
Total Claims | 6,214 | 6,209 | 6,280 |
Commitments and Contingencies_5
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 |
Pension Benefits - Additional I
Pension Benefits - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Pension Benefits | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected pension contribution in the next fiscal year | $ 6 | |
Pension contribution | $ 1 | |
Shared Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pension expense | $ 2 |
Pension Benefits - Summary of N
Pension Benefits - Summary of Net Periodic Benefit Cost (Details) - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 1 | |
Expected return on plan assets | (1) | |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 1 | $ 1 |
Interest cost | 1 | |
Expected return on plan assets | (1) | $ (1) |
Net periodic benefit costs | $ 1 |
China Variable Interest Entit_2
China Variable Interest Entity - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Variable Interest Entity [Line Items] | |||
Net sales | $ 835 | $ 915 | |
Cost of goods sold | 639 | 704 | |
Selling, general and administrative expenses | 60 | 63 | |
Tax expense | 24 | 55 | |
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 | 116 | 130 | |
Cost of goods sold | 79 | 88 | |
Selling, general and administrative expenses | 3 | 2 | |
Tax expense | $ 7 | $ 10 |
China Variable Interest Entit_3
China Variable Interest Entity - Schedule of Consolidated Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||||
Cash and cash equivalents | $ 207 | $ 196 | $ 311 | $ 300 |
Accounts, notes and other receivables—net | 790 | 750 | ||
Inventories—net | 181 | 172 | ||
Property, plant and equipment—net | 424 | 438 | ||
Deferred income taxes | 159 | 165 | ||
Other assets | 122 | 80 | ||
Current liabilities: | ||||
Accounts payable | 881 | 916 | ||
Accrued liabilities | 433 | 426 | ||
Other liabilities | 242 | 210 | ||
Variable Interest Entity, Primary Beneficiary | Garrett China | ||||
Current assets: | ||||
Cash and cash equivalents | 114 | 70 | ||
Accounts, notes and other receivables—net | 211 | 224 | ||
Inventories—net | 21 | 19 | ||
Total current assets | 346 | 313 | ||
Property, plant and equipment—net | 68 | 67 | ||
Deferred income taxes | 21 | 20 | ||
Other assets | 1 | 1 | ||
Total assets | 436 | 401 | ||
Current liabilities: | ||||
Accounts payable | 261 | 261 | ||
Accrued liabilities | 83 | 77 | ||
Total current liabilities | 344 | 338 | ||
Other liabilities | 12 | 13 | ||
Total liabilities | $ 356 | $ 351 |