Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 22, 2021 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | GTX | |
Entity Registrant Name | Garrett Motion Inc. | |
Entity Central Index Key | 0001735707 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 65,062,181 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-38636 | |
Entity Tax Identification Number | 82-4873189 | |
Entity Address, Address Line One | La Pièce 16 | |
Entity Address, City or Town | Rolle | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Country | CH | |
Entity Address, Postal Zip Code | 1180 | |
City Area Code | 41 21 | |
Local Phone Number | 695 30 00 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED INTERIM STATEMENTS
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales (Note 4) | $ 935,000,000 | $ 477,000,000 | $ 1,932,000,000 | $ 1,222,000,000 |
Cost of goods sold | 742,000,000 | 397,000,000 | 1,543,000,000 | 1,004,000,000 |
Gross profit | 193,000,000 | 80,000,000 | 389,000,000 | 218,000,000 |
Selling, general and administrative expenses | 51,000,000 | 47,000,000 | 106,000,000 | 104,000,000 |
Other expense, net (Note 6) | 15,000,000 | 1,000,000 | 31,000,000 | |
Interest expense | 24,000,000 | 20,000,000 | 45,000,000 | 36,000,000 |
Non-operating (income) expense | (26,000,000) | (4,000,000) | (8,000,000) | |
Reorganization items, net (Note 2) | (295,000,000) | 0 | (121,000,000) | 0 |
Income before taxes | 439,000,000 | 2,000,000 | 358,000,000 | 55,000,000 |
Tax expense (Note 7) | 30,000,000 | 11,000,000 | 54,000,000 | 12,000,000 |
Net income (loss) | 409,000,000 | (9,000,000) | 304,000,000 | 43,000,000 |
Less: preferred dividend (Note 18) | (24,000,000) | (24,000,000) | ||
Net income (loss) available to common shareholders | $ 385,000,000 | $ (9,000,000) | $ 280,000,000 | $ 43,000,000 |
Earnings income (loss) per common share | ||||
Basic | $ 5.53 | $ (0.12) | $ 3.84 | $ 0.57 |
Diluted | $ 1.73 | $ (0.12) | $ 1.94 | $ 0.57 |
Weighted average common shares outstanding | ||||
Basic | 69,667,651 | 75,595,991 | 72,862,102 | 75,316,827 |
Diluted | 235,754,538 | 75,845,511 | 156,364,349 | 75,837,459 |
CONSOLIDATED INTERIM STATEMEN_2
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 409 | $ (9) | $ 304 | $ 43 |
Foreign exchange translation adjustment | (67) | (50) | 43 | (11) |
Changes in fair value of effective cash flow hedges, net of tax (Note 17) | 4 | (2) | 5 | (2) |
Changes in fair value of net investment hedges, net of tax | 15 | 15 | ||
Total other comprehensive (loss) income, net of tax | (48) | (52) | 63 | (13) |
Comprehensive income (loss) | $ 361 | $ (61) | $ 367 | $ 30 |
CONSOLIDATED INTERIM BALANCE SH
CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 401 | $ 592 |
Restricted cash | 215 | 101 |
Accounts, notes and other receivables – net (Note 8) | 784 | 841 |
Inventories – net (Note 10) | 275 | 235 |
Other current assets | 59 | 110 |
Total current assets | 1,734 | 1,879 |
Investments and long-term receivables | 30 | 30 |
Property, plant and equipment – net | 481 | 505 |
Goodwill | 193 | 193 |
Deferred income taxes | 261 | 275 |
Other assets (Note 11) | 138 | 135 |
Total assets | 2,837 | 3,017 |
Current liabilities: | ||
Accounts payable | 1,114 | 1,019 |
Borrowings under revolving credit facility (Note 2) | 370 | |
Current maturities of long-term debt (Note 15) | 5 | |
Debtor-in-possession Term Loan (Note 2) | 200 | |
Accrued liabilities (Note 12) | 338 | 248 |
Total current liabilities | 1,492 | 1,837 |
Long-term debt (Note 15) | 1,204 | 1,082 |
Deferred income taxes | 20 | 2 |
Other liabilities (Note 13) | 277 | 114 |
Total liabilities not subject to compromise | 3,543 | 3,035 |
Liabilities subject to compromise (Note 2) | 2,290 | |
Total liabilities | 3,543 | 5,325 |
COMMITMENTS AND CONTINGENCIES (Note 22) | ||
EQUITY (DEFICIT) | ||
Common Stock, par value $0.001; 1,000,000,000 and 400,000,000 shares authorized, 65,050,367 and 76,229,578 issued and 65,050,367 and 75,813,634 outstanding as of June 30, 2021 and December 31, 2020, respectively (Note 18) | ||
Additional paid – in capital | 1,332 | 28 |
Retained deficit | (1,972) | (2,207) |
Accumulated other comprehensive loss (Note 19) | (66) | (129) |
Total deficit | (706) | (2,308) |
Total liabilities and deficit | 2,837 | 3,017 |
Series B Preferred Stock | ||
Current liabilities: | ||
Mandatorily redeemable Series B Preferred Stock (Note 16) | 35 | |
Mandatorily redeemable Series B Preferred Stock – long-term (Note 16) | 550 | |
Series A Preferred Stock | ||
EQUITY (DEFICIT) | ||
Series A Preferred Stock, par value $0.001; 247,768,962 shares issued and outstanding as of June 30, 2021 (Note 18) |
CONSOLIDATED INTERIM BALANCE _2
CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 400,000,000 |
Common stock, shares, issued | 65,050,367 | 76,229,578 |
Common stock, shares, outstanding | 65,050,367 | 75,813,634 |
Series A Preferred Stock | ||
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares issued | 247,768,962 | |
Preferred stock, shares outstanding | 247,768,962 |
CONSOLIDATED INTERIM STATEMEN_3
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 304 | $ 43 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Reorganization items, net | (373) | |
Deferred income taxes | 3 | (5) |
Depreciation | 47 | 37 |
Amortization of deferred financing costs | 4 | 3 |
Foreign exchange loss | 9 | 3 |
Stock compensation expense | 3 | 6 |
Pension expense | (1) | |
Other | 1 | 4 |
Changes in assets and liabilities: | ||
Accounts, notes and other receivables | 17 | 114 |
Inventories | (51) | (23) |
Other assets | 58 | (11) |
Accounts payable | (52) | (231) |
Accrued liabilities | (2) | (16) |
Obligations payable to Honeywell | (375) | (8) |
Other liabilities | 17 | (11) |
Net cash used for operating activities | (391) | (95) |
Cash flows from investing activities: | ||
Expenditures for property, plant and equipment | (40) | (63) |
Other | 1 | (1) |
Net cash used for investing activities | (39) | (64) |
Cash flows from financing activities: | ||
Proceeds from issuance of Series A Preferred Stock | 1,301 | |
Proceeds from issuance of long-term debt, net of deferred financing costs | 1,221 | |
Proceeds from revolving credit facility | 1,023 | |
Payments of long-term debt | (1,515) | (2) |
Payments of revolving credit facility | (370) | (904) |
Payments of debtor-in-possession financing | (200) | |
Payments for Cash-Out election | (69) | |
Revolving facility financing costs | (8) | |
Debtor-in-possession financing fees | (1) | |
Other | (3) | |
Net cash provided by financing activities | 359 | 114 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (6) | (3) |
Net decrease in cash, cash equivalents and restricted cash | (77) | (48) |
Cash, cash equivalents and restricted cash at beginning of period | 693 | 187 |
Cash, cash equivalents and restricted cash at end of period | 616 | 139 |
Supplemental cash flow disclosure: | ||
Income taxes paid (net of refunds) | 32 | 7 |
Interest expense paid | 57 | $ 30 |
Reorganization items paid | 252 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance of Mandatorily redeemable Series B Preferred Stock | $ 577 |
CONSOLIDATED INTERIM STATEMEN_4
CONSOLIDATED INTERIM STATEMENTS OF EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Millions | Total | Cumulative-Effect Adjustment | Series A Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative-Effect Adjustment | Accumulated Other Comprehensive Income/(loss) |
Beginning balance at Dec. 31, 2019 | $ (2,133) | $ 19 | $ (2,282) | $ 130 | ||||
Beginning balance, Shares at Dec. 31, 2019 | 75,000,000 | |||||||
Net income (loss) | 52 | 52 | ||||||
Other comprehensive income (loss), net of tax | 39 | 39 | ||||||
Stock-based compensation | 2 | 2 | ||||||
Tax withholding related to vesting of restricted stock units and other | (1) | (1) | ||||||
Ending balance at Mar. 31, 2020 | (2,046) | $ (5) | 20 | (2,235) | $ (5) | 169 | ||
Ending balance, Shares at Mar. 31, 2020 | 75,000,000 | |||||||
Beginning balance at Dec. 31, 2019 | (2,133) | 19 | (2,282) | 130 | ||||
Beginning balance, Shares at Dec. 31, 2019 | 75,000,000 | |||||||
Net income (loss) | 43 | |||||||
Other comprehensive income (loss), net of tax | (13) | (13) | ||||||
Ending balance at Jun. 30, 2020 | (2,103) | 24 | (2,244) | 117 | ||||
Ending balance, Shares at Jun. 30, 2020 | 75,000,000 | |||||||
Beginning balance at Mar. 31, 2020 | (2,046) | $ (5) | 20 | (2,235) | $ (5) | 169 | ||
Beginning balance, Shares at Mar. 31, 2020 | 75,000,000 | |||||||
Net income (loss) | (9) | (9) | ||||||
Other comprehensive income (loss), net of tax | (52) | (52) | ||||||
Stock-based compensation | 4 | 4 | ||||||
Ending balance at Jun. 30, 2020 | (2,103) | 24 | (2,244) | 117 | ||||
Ending balance, Shares at Jun. 30, 2020 | 75,000,000 | |||||||
Beginning balance at Dec. 31, 2020 | (2,308) | 28 | (2,207) | (129) | ||||
Beginning balance, Shares at Dec. 31, 2020 | 76,000,000 | |||||||
Net income (loss) | (105) | (105) | ||||||
Other comprehensive income (loss), net of tax | 111 | 111 | ||||||
Stock-based compensation | 2 | 2 | ||||||
Ending balance at Mar. 31, 2021 | (2,300) | 30 | (2,312) | (18) | ||||
Ending balance, Shares at Mar. 31, 2021 | 76,000,000 | |||||||
Beginning balance at Dec. 31, 2020 | (2,308) | 28 | (2,207) | (129) | ||||
Beginning balance, Shares at Dec. 31, 2020 | 76,000,000 | |||||||
Net income (loss) | 304 | |||||||
Issuance of Series A Preferred Stock | $ 69 | |||||||
Issuance of Series A Preferred Stock, Shares | 247,768,962 | 65,035,801 | ||||||
Other comprehensive income (loss), net of tax | 63 | 63 | ||||||
Ending balance at Jun. 30, 2021 | (706) | 1,332 | (1,972) | (66) | ||||
Ending balance, Shares at Jun. 30, 2021 | 248,000,000 | 65,000,000 | ||||||
Beginning balance at Mar. 31, 2021 | (2,300) | 30 | (2,312) | (18) | ||||
Beginning balance, Shares at Mar. 31, 2021 | 76,000,000 | |||||||
Net income (loss) | 409 | 409 | ||||||
Cash-Out election | (69) | (69) | ||||||
Cash-Out election, Shares | (11,000,000) | |||||||
Issuance of Series A Preferred Stock | 1,301 | 1,301 | ||||||
Issuance of Series A Preferred Stock, Shares | 248,000,000 | |||||||
Other comprehensive income (loss), net of tax | (48) | (48) | ||||||
Stock-based compensation | 1 | 1 | ||||||
Ending balance at Jun. 30, 2021 | $ (706) | $ 1,332 | $ (1,972) | $ (66) | ||||
Ending balance, Shares at Jun. 30, 2021 | 248,000,000 | 65,000,000 |
Background and Basis of Present
Background and Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Background and Basis of Presentation | Note 1. Background and Basis of Presentation 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. These OEMs in turn ship to consumers globally. We are a global technology leader with significant expertise in delivering products across gasoline, diesel, natural gas and electric (hybrid and fuel cell) powertrains. These products are key enablers for fuel economy and emission standards compliance. Voluntary Filing Under Chapter 11 On September 20, 2020 (the “Petition Date”), the Company and certain of its subsidiaries (collectively, the “Debtors”) each filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the “Chapter 11 Cases”) are being jointly administered under the caption “In re: Garrett Motion Inc., 20-12212.” On April 20, 2021, the Debtors filed the Revised Amended Plan of Reorganization (the “Plan”). On April 26, 2021, the Bankruptcy Court entered an order (the “Confirmation Order”) among other things, confirming the Plan. On April 30, 2021 (the “Effective Date”), the conditions to effectiveness of the Plan were satisfied or waived and the Company emerged from bankruptcy. See Note 2, Plan of Reorganization, for further details. Basis of Presentation The Consolidated Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All amounts presented are in millions, except per share amounts. The accompanying Consolidated Interim Financial Statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern was contingent upon the Company’s ability to successfully implement a Plan of Reorganization in the Chapter 11 Cases, among other factors. As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities were subject to uncertainty. While we were operating as debtors-in-possession under the Bankruptcy Code, we have sold or otherwise disposed of or liquidated assets or settled liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business, for amounts other than those reflected in our Consolidated Interim Financial Statements. As a result of our improved liquidity , and removal of the risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt no longer exists that we will be able to continue as a going concern. Upon emergence from the Chapter 11 bankruptcy proceedings, the Company did not meet the requirements under ASC 852 for fresh start accounting. Fresh start accounting is applicable if both of the following criteria are met: i) The reorganization value of the assets of the emerging entity immediately before the date of confirmation of the Plan of Reorganization is less than the total of all post-petition liabilities and allowed claims; and ii) The holders of existing voting shares immediately before confirmation of the Plan of Reorganization receive less than 50% of the voting shares of the emerging entity. Based on the Company’s analysis, the Company was not required to apply fresh start accounting based on the provisions of ASC 852 since holders of the Company’s outstanding voting shares immediately before confirmation of the Plan received more than 50% of the Company’s outstanding voting shares upon emergence. Accordingly, a new reporting entity was not created for accounting purposes. While the Company was a Debtor-in-possession, it applied ASC 852 in preparing Consolidated Interim Financial Statements. ASC 852 required the financial statements for periods subsequent to the Petition Date to distinguish transactions and events that were directly associated with the Company's reorganization from the ongoing operations of the business. Accordingly, revenues, expenses, realized gains and losses, and provisions for losses directly resulting from the reorganization and restructuring were reported separately as Reorganization items, net in the Consolidated Interim Statements of Operations. In addition, the balance sheet distinguished pre-petition liabilities subject to compromise from those pre-petition liabilities that were not subject to compromise and post-petition liabilities. Pre-petition liabilities that were not fully secured or those that have at least a possibility of not being repaid at the allowed claim amount were classified as liabilities subject to compromise on the Consolidated Interim Balance Sheet at December 31, 2020. The Consolidated 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 Interim Financial Statements should be read in conjunction with the audited annual Consolidated and Combined Financial Statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 16, 2020 (our “2020 Form 10-K”). The results of operations for the three and six months ended June 30, 2021 and cash flows for the six months ended June 30, 2021 should not necessarily be taken as indicative of the entire year. 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. For differences in actual closing dates that are material to year-over-year comparisons of quarterly or year-to-date results, such differences have been adjusted for the three months ended June 30, 2021. Our actual closing dates for the three months ended June 30, 2021 and 2020 were July 3, 2021 and June 27, 2020, respectively. The preparation of the financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances, including considerations for the impact from the outbreak of the COVID-19 pandemic on the Company's business due to various global macroeconomic, operational and supply chain risks as a result of COVID-19. Actual results could differ from the original estimates, requiring adjustments to these balances in future periods. |
Plan of Reorganization
Plan of Reorganization | 6 Months Ended |
Jun. 30, 2021 | |
Reorganizations [Abstract] | |
Plan of Reorganization | Note 2. Plan of Reorganization Emergence from Chapter 11 As previously reported, on the Petition Date, the Debtors each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. On April 20, 2021, the Debtors filed the Plan. On April 26, 2021, the Bankruptcy Court entered the Confirmation Order among other things, confirming the Plan. On the Effective Date, April 30, 2021, the conditions to effectiveness of the Plan were satisfied or waived and the Company emerged from bankruptcy. On the Effective Date, pursuant to the Plan: • All shares of the Common Stock of the Company outstanding prior to the Effective Date (the “Old Common Stock”) were cancelled; • The Company paid $69 million to holders of old Common Stock who had made the cash-out election under the Plan (the “Cash-Out Election”) in consideration of the cancellation of the Old Common Stock held by such holders; • The Company issued 65,035,801 shares of its new Common Stock (the “Common Stock”), to holders of the Old Common Stock who had not made the Cash-Out Election under the Plan in consideration of the cancellation of the Old Common Stock held by such holders; • The Company issued 247,768,962 shares of its new convertible series A preferred stock (the “Series A Preferred Stock”) to the parties to the Plan Support Agreement, the Backstop Commitment Agreement and participants in the rights offering by the Company for aggregate consideration of $1,301 million; • The Company issued 834,800,000 shares of its new mandatorily redeemable series B preferred stock (the “Series B Preferred Stock”) to Honeywell International Inc. (“Honeywell”) in satisfaction and discharge of certain claims of Honeywell, which shares are to be redeemed in installments of $35 million in 2022 and $100 million annually in 2023-2030; • The Company also paid $375 million to Honeywell in addition to the issuance of the Series B Preferred Stock in satisfaction and discharge of certain claims of Honeywell; • The Company was authorized to grant up to 10% of the equity in the reorganized Company (on a fully-diluted basis) from time to time to the directors, officers and other employees of the reorganized Company; • The Company paid in full $101 million of interest and principal outstanding on, and terminated, that certain Senior Secured Super-Priority Debtor-in-Possession Credit Agreement (the “Debtor-in-possession Term Loan”); • The obligations of the Debtors under the Credit Agreement, dated as of September 27, 2018, by and among the Company, as holdings, Garrett LX III S.à r.l., as Lux Borrower, Garrett Borrowing LLC, as U.S. Co-Borrower, Garrett Motion Sàrl (f/k/a Honeywell Technologies Sàrl), as Swiss Borrower, the Lenders and Issuing Banks party thereto and the Pre-petition Credit Agreement Agent (as defined in the Plan), as Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms (the “Pre-petition Credit Agreement”) were cancelled, the applicable agreements governing such obligations were terminated and holders of Allowed Pre-petition Credit Agreement Claims (as defined in the Plan) received payment in cash in an amount equal to such holder’s Allowed Pre-petition Credit Agreement Claim. With respect to the Pre-petition Credit Agreement: o The Company repaid its outstanding principal balance, accrued pre-petition and default interest of $307 million on its five-year o The Company repaid its outstanding principal balance, accrued pre-petition and default interest of (i) $374 million with respect to the EUR tranche and (ii) $422 million with respect to the USD tranche, on its seven-year o The Company repaid its outstanding principal balance and accrued interest of $374 million on its revolving credit facility (the “Old Revolving Facility”); and o The Company repaid its accrued pre-petition hedge obligations of $20 million. • The obligations of the Debtors under that certain Indenture, dated as of September 27, 2018, among the Company, as Parent, Garrett LX I S.à r.l., as Issuer, Garrett Borrowing LLC, as Co-Issuer, the guarantors named therein, Deutsche Trustee Company Limited, as Trustee, Deutsche Bank AG, as Security Agent and Paying Agent, and Deutsche Bank Luxembourg S.A., as Registrar and Transfer Agent, as may be amended, supplemented or otherwise modified from time to time (the “Indenture”), were cancelled, the applicable agreements governing such obligations were terminated and holders of Allowed Pre-petition Credit Agreement Claims (as defined in the Plan) received payment in cash in an amount equal to such holder’s Allowed Senior Subordinated Noteholder Claims (as defined in the Plan). With respect to the Indenture and the Allowed Senior Subordinated Noteholder Claims, the Company repaid its outstanding principal balance of €350 million, or $423 million, (the “Senior Notes”), accrued pre-petition interest of $10 million, post-petition interest of $13 million, and payment of $15 million in connection with the Make-Whole Litigation (as defined below). • The Company and certain of its subsidiaries entered into secured debt facilities consisting of: o a seven-year o a seven-year o a five-year • The Com pany obtained a $35 million letter of credit facility for a term of five years with BNP Paribas; • The proceeds drawn under the Credit Facilities were reduced by deferred financing costs of $38 million, and deferred financing costs of $25 million on repaid historical debt were expensed; • The Company paid or will pay certain pre-petition claims, transaction fees, stock incentive payments and other expenses incurred in connection with the Plan. See note 16, Mandatorily Redeemable Series B Preferred Stock for further discussion of the Series B Preferred Stock . See note 18, Equity for further discussion of the Common Stock and the Series A Preferred Stock. See note 15, Long-term Debt and Credit Agreements for further discussion of the Credit Facilities. See note 22, Commitments and Contingencies for further discussion of obligations payable to Honeywell. Reorganization Items, Net Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of the following for the three and six months ended June 30, 2021: Three Months Ended June 30, Six Months Ended June 30, 2021 2021 (Dollars in millions) Gain on settlement of Honeywell claims ( 1) $ (502 ) $ (502 ) Advisor fees 96 180 Director’s and officers insurance 39 39 Write off pre-petition debt issuance cost 25 25 Employee stock cash out 13 13 Expenses related to Senior Notes ( 2) 28 28 DIP Financing fees — 1 Bid termination and expense reimbursement — 79 Other 6 16 Total reorganization items, net $ (295 ) $ (121 ) (1) The gain on settlement of Honeywell claims of $502 million is comprised of the pre-emergence Honeywell claims of $1,459 million, less the $375 million payment to Honeywell, less the Series B Preferred Stock issued to Honeywell which was recorded at $577 million, less a currency translation adjustment of $5 million. (2) Includes $15 million in connection with Make-Whole Litigation and $13 million related to post-petition interest. There were no charges for reorganization items recorded in the statement of operations for the three and six months ended June 30, 2020. Exit Financing and Entry into Credit Facilities On the Effective Date, in accordance with the Plan, the Company and certain of its subsidiaries entered into secured debt facilities consisting of: • a seven-year • a seven-year • a five-year The Company may use up to $125 million under the Revolving Facility for the issuance of letters of credit to Swiss Borrower or any of its subsidiaries. Letters of credit are available for issuance under the Credit Agreement on terms and conditions customary for financings of this kind, which issuances will reduce availability under the Revolving Facility. The proceeds of the Term Loan Facilities were used on the Effective Date (i) for the payment of fees and expenses payable in connection with entry into the Credit Agreement, the effectiveness of the Plan, the refinancing of the Company’s existing indebtedness and the preferred equity investments that were made on the Effective Date, (ii) to fund distributions in accordance with the Plan, (iii) to payoff the Company’s existing indebtedness, including under its Pre-petition Credit Agreement, notes indenture and Debtor-in-possession Term Loan The table below presents changes to our debt outstanding as a result of the Plan: Debt as of December 31, 2020 Movement (1) Less debt repaid Exit financing (2) Debt as of June 30, 2021 (Dollars in millions) Secured Term Loan Facilities and accrued interest $ 1,082 $ 21 $ (1,103 ) $ — $ — Borrowings under Old Revolving Facility 370 4 (374 ) — — Senior Notes and accrued interest 429 32 (461 ) — — Debtor-in-possession Term Loan 200 — (200 ) — — Term Loan Facilities — — — 1,209 1,209 Total long-term debt $ 2,081 $ 57 $ (2,138 ) $ 1,209 $ 1,209 (1) (2) Exit financing amounts as of the Effective Date of $1,221 million were adjusted to June 30, 2021 foreign exchange rate and reflect amortization of deferred financing costs. Financial Statement Classification of Liabilities Subject to Compromise As a result of the Chapter 11 Cases, the payment of pre-petition liabilities is generally subject to compromise pursuant to a Plan of Reorganization. Generally, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities are enjoined. Although payment of pre-petition claims generally was not permitted during the Chapter 11 Cases, the Bankruptcy Court granted the Debtors authority to pay certain pre-petition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of the Debtors’ business and assets. Among other things, the Bankruptcy Court authorized, but did not require, the Debtors to pay certain pre-petition claims relating to employee wages and benefits, taxes, critical vendors and foreign vendors. The amounts classified as liabilities subject to compromise may be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determination of secured status of certain claims, the determination as to the value of any collateral securing claims, proof of claims or other events. Prior to emergence, pre-petition liabilities that were subject to compromise were required to be reported at the amounts expected to be allowed. Therefore, liabilities subject to compromise in the table below reflected management’s estimates of amounts expected to be allowed by the Bankruptcy Court, based upon the status of negotiations with creditors. Upon emergence or shortly thereafter, amounts recorded as liabilities subject to compromise were either settled, as reflected in the table below or such amounts have been reinstated to current or non-current liabilities in the Condensed Consolidated Balance Sheet, based upon management’s judgment as to the timing for settlement of such claims. The following table presents liabilities subject to compromise as reported in the Consolidated Interim Balance Sheet at June 30, 2021 and December 31, 2020, respectively: December 31, 2020 Change in estimated allowed claims Cash payment Issuance of Series B Preferred Stock Reinstatements Reorganization OCI June 30, 2021 (Dollars in millions) Obligations payable to Honeywell (Note 22) $ 1,482 $ (23 ) $ (375 ) $ (577 ) $ — $ (502 ) $ (5 ) $ — Senior Notes (Note 15) 429 32 (461 ) — — — — — Pension, compensation, benefit and other employee related 92 (10 ) — — (82 ) — — — Uncertain tax positions and deferred taxes 69 (8 ) — (61 ) — — — Accounts payable 82 (50 ) — — (32 ) — — — Advanced discounts from suppliers 33 (6 ) — — (27 ) — — — Lease liabilities (Note 14) 19 (2 ) — — (17 ) — — — Product warranties and performance guarantees 16 — — — (16 ) — — — Freight Accrual 27 (27 ) — — — — — — Other 41 (14 ) — — (27 ) — — — Total liabilities subject to compromise $ 2,290 $ (108 ) $ (836 ) $ (577 ) $ (262 ) $ (502 ) $ (5 ) $ — As discussed above, the Confirmation Order has been entered, the Company emerged on the Effective Date of April 30, 2021. The amounts in the table above represent the best estimate of our pre-petition liabilities prior to emergence on the Effective Date. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies The accounting policies of the Company are set forth in Note 3 to the audited annual Consolidated and Combined Financial Statements for the year ended December 31, 2020 included in our 2020 Form 10-K. There were no new accounting pronouncements adopted during the six months ended June 30, 2021. Restricted Cash Upon emergence from bankruptcy, the Company has classified $85 million of funds designated to pay advisor fees related to the bankruptcy proceedings as Restricted cash. The remaining balance primarily consists of bank deposits used to pledge as collateral in order to be able to issue bank notes as payment to certain suppliers in the Asia Pacific region (refer to note 9, Factoring and Notes Receivable). Related Party Transactions We lease certain facilities and receive property maintenance services from Honeywell, which as of emergence from Chapter 11 is the owner of our Series B Preferred Stock and appoints a Director to the Board. Lease and service agreements were made at commercial terms prevalent in the market at the time they were executed. Our payments under the agreements with Honeywell were $2 million and $4 million for the three and six months ended June 30, 2021, respectively and were included in Cost of goods sold in our Consolidated Interim Statements of Operations. Related to the agreements with Honeywell, our Consolidated Interim Balance Sheets includes liabilities of $15 million During the three and six months ended June 30, 2021, certain of our related parties participated in our Plan as follows, as more fully discussed in Note 2, Plan of Reorganization and Note 18, Equity: • We reimbursed Centerbridge and Oaktree, who are significant shareholders, and Honeywell for professional fees and expenses related to their support of our emergence from Chapter 11 bankruptcy; • We reimbursed Centerbridge and Oaktree for their participation in the Equity Backstop; and • Centerbridge and Oaktree were parties to our Registration Rights Agreement for the registration of our Series A Preferred Stock and to our Series A Investor Rights Agreement. Series A Preferred Stock Our Series A Preferred Stock is not a mandatorily redeemable financial instrument and is classified as permanent equity in our Consolidated Interim Balance Sheets. The Series A Preferred stock contains a conversion feature which is not required to be bifurcated, is not a derivative, and does not contain a beneficial conversion feature. It is not a participating security with the Company’s Common Stock. See Note 2, Reorganization and Chapter 11 Proceedings and Note 18, Equity, of the Consolidated Interim Financial Statements for further details. Series B Preferred Stock Our Series B Preferred Stock is a mandatorily redeemable financial instrument and is classified as debt in our Consolidated Interim Balance Sheets. The Series B Preferred stock does not require physical settlement by repurchase of a fixed number of the issuer’s equity shares in exchange for cash, and therefore not required to be subsequently remeasured. The Series B Preferred Stock redemption options are not required to be bifurcated and are not considered derivatives. See Note 2, Reorganization and Chapter 11 Proceedings and Note 16, Mandatorily Redeemable Series B Preferred Stock, of the Consolidated Interim Financial Statements for further details. Reclassifications Certain reclassifications have been made to prior year amounts to conform to current year classifications, specifically certain items that had been previously recorded in selling, general and administrative expenses presented now within cost of goods sold. The reclassifications had no impact on net income, equity, or cash flows as previously reported. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In January 2021, the FASB issued clarification on the scope of relief related to the reference rate reform. The Company is currently evaluating the impact of the guidance related to certain existing debt agreements on our Consolidated Financial Statements. There are no other recently issued, but not yet adopted, accounting pronouncements which are expected to have a material impact on the Company’s Consolidated Interim Financial Statements and related disclosures. |
Revenue Recognition and Contrac
Revenue Recognition and Contracts with Customers | 6 Months Ended |
Jun. 30, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition and Contracts with Customers | Note 4. Revenue Recognition and Contracts with Customers Disaggregated Revenue Net sales by region (determined based on country of shipment) and channel are as follows: Three months ended June 30, 2021 OEM Aftermarket Other Total (Dollars in millions) United States $ 98 $ 44 $ — $ 142 Europe 434 38 8 480 Asia 280 14 7 301 Other International 6 6 — 12 $ 818 $ 102 $ 15 $ 935 Six months ended June 30, 2021 OEM Aftermarket Other Total (Dollars in millions) United States $ 198 $ 80 $ 2 $ 280 Europe 915 77 16 1,008 Asia 582 24 14 620 Other International 12 12 — 24 $ 1,707 $ 193 $ 32 $ 1,932 Three months ended June 30, 2020 OEM Aftermarket Other Total (Dollars in millions) United States 33 32 1 66 Europe 160 22 6 188 Asia 202 11 5 218 Other International — 5 — 5 $ 395 $ 70 $ 12 $ 477 Six months ended June 30, 2020 OEM Aftermarket Other Total (Dollars in millions) United States $ 125 $ 72 $ 1 $ 198 Europe 554 52 15 621 Asia 361 19 11 391 Other International 3 9 — 12 $ 1,043 $ 152 $ 27 $ 1,222 Contract Balances The following table summarizes our contract assets and liabilities balances: 2021 (Dollars in millions) Contract assets—January 1 $ 61 Contract assets—June 30 56 Change in contract assets—Increase/(Decrease) $ (5 ) Contract liabilities—January 1 $ (2 ) Contract liabilities—June 30 (2 ) Change in contract liabilities—(Increase)/Decrease $ — |
Research, Development & Enginee
Research, Development & Engineering | 6 Months Ended |
Jun. 30, 2021 | |
Research And Development [Abstract] | |
Research, Development & Engineering | Note 5. Research, Development & Engineering Garrett conducts research, development and engineering (“RD&E”) activities, which consist primarily of the development of new products and product applications. RD&E costs are charged to expense as incurred unless the Company has a contractual guarantee for reimbursement from the customer. Customer reimbursements are netted against gross RD&E expenditures as they are considered a recovery of cost. Such costs are included in Cost of goods sold as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Research and development costs $ 33 $ 26 $ 66 $ 56 Engineering-related expenses 5 6 11 12 $ 38 $ 32 $ 77 $ 68 |
Other Expense, Net
Other Expense, Net | 6 Months Ended |
Jun. 30, 2021 | |
Other Income And Expenses [Abstract] | |
Other Expense, Net | Note 6. Other Expense, Net Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Indemnification related — post Spin-Off $ — $ 12 $ — $ 27 Indemnification related — litigation — 2 — 3 Factoring and notes receivables discount fees — 1 1 1 $ — $ 15 $ 1 $ 31 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7. Income Taxes For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Tax expense $ 30 $ 11 $ 54 $ 12 Effective tax rate 6.8 % 550 % 15.1 % 21.8 % The decrease in the effective tax rate for the three months and six months ended June 30, 2021 compared to the prior year periods primarily related to the nontaxable gain on the settlement of the Honeywell claims recorded in the current period and higher overall earnings from improved economic conditions during the COVID-19 crisis. The effective tax rate for the three months and six months ended June 30, 2021 was lower than the U.S. federal statutory rate of 21% primarily because of the nontaxable gain on the settlement of the Honeywell claims. For the period ended June 30, 2020 the Company computed its effective tax rate using actual year to date information rather than a full year forecast to compute an annual effective tax rate. Based on available forecasts which take into account a range of potential impacts from COVID-19, the Company’s effective tax rate was expected to be highly sensitive to changes in pre-tax book income because of non-deductible asbestos related expenses which have no correlation to earnings. Accordingly, the Company concluded that computing its effective tax rate using year to date actual results is its best estimate of tax expense for the period ended June 30, 2020 . The effective tax rate can vary from quarter to quarter due to changes in the Company’s global mix of earnings, impacts of Covid -19 In connection with the global outbreak of COVID-19, many countries have enacted legislation to provide various forms of emergency economic relief, including the CARES Act in the United States, that may provide financial benefits to the Company. At this time, we do not expect such benefits to have a material impact to the Company. |
Accounts, Notes and Other Recei
Accounts, Notes and Other Receivables-Net | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Accounts, Notes and Other Receivables-Net | Note 8. Accounts, Notes and Other Receivables—Net June 30, 2021 December 31, 2020 (Dollars in millions) Trade receivables $ 620 $ 625 Notes receivable 96 152 Other receivables 78 77 794 854 Less—Allowance for doubtful accounts (10 ) (13 ) $ 784 $ 841 Trade Receivables include $56 million and $61 million of unbilled customer contract asset balances as of June 30, 2021 and December 31, 2020, respectively. These amounts are billed in accordance with the terms of customer contracts to which they relate. |
Factoring and Notes Receivable
Factoring and Notes Receivable | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Factoring and Notes Receivable | Note 9. Factoring and Notes Receivable The Company has entered into arrangements with financial institutions to sell eligible trade receivables. During the periods ended June 30, 2021 and December 31, 2020, the Company sold $153 million and $473 million of eligible receivables, respectively, without recourse, and accounted for these arrangements as true sales. The Company also received guaranteed bank notes without recourse, in settlement of accounts receivables, primarily in the Asia Pacific region. The Company can hold the bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash. During the periods ended June 30, 2021 and December 31, 2020, the Company sold $0 and $160 million of bank notes, respectively, without recourse, and accounted for these as true sales. As of June 30, 2021 and December 31, 2020, the Company has pledged as collateral $27 million and $18 million of guaranteed bank notes which have not been sold in order to be able to issue bank notes as payment to certain suppliers. Such pledged amounts are included as Notes receivables in our Consolidated Interim Balance Sheet. |
Inventories-Net
Inventories-Net | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories-Net | Note 10. Inventories—Net June 30, 2021 December 31, 2020 (Dollars in millions) Raw materials $ 158 $ 160 Work in process 19 19 Finished products 134 97 311 276 Less—Reserves (36 ) (41 ) $ 275 $ 235 |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2021 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Assets | Note 11. Other Assets June 30, December 31, 2021 2020 (Dollars in millions) Advanced discounts to customers, non-current $ 68 $ 70 Operating right-of-use assets (Note 14) 38 36 Other 32 29 $ 138 $ 135 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Accrued Liabilities Current [Abstract] | |
Accrued Liabilities | Note 12. Accrued Liabilities June 30, 2021 December 31, 2020 (Dollars in millions) Customer pricing reserve $ 87 $ 82 Compensation, benefit and other employee related 71 62 Repositioning 14 7 Product warranties and performance guarantees 32 14 Taxes 35 37 Advanced discounts from suppliers, current 17 5 Customer advances and deferred income (a) 18 8 Accrued interest 8 — Short-term lease liability (Note 14) 11 5 Other (primarily operating expenses) 45 28 $ 338 $ 248 (a) Customer advances and deferred income include $2 million and $2 million The Company accrued repositioning costs related to projects to optimize its product costs and right-size its organizational structure. Expenses related to the repositioning accruals are included in Cost of goods sold in our Consolidated Interim Statements of Operations. Severance Costs Exit Costs Total (Dollars in millions) Balance at December 31, 2019 $ 3 $ 1 $ 4 Charges 6 — 6 Usage—cash (4 ) — (4 ) Balance at June 30, 2020 $ 5 $ 1 $ 6 Severance Costs Exit Costs Total (Dollars in millions) Balance at December 31, 2020 $ 7 $ — $ 7 Charges 11 — 11 Usage—cash (4 ) — (4 ) Balance at June 30, 2021 $ 14 $ — $ 14 |
Other Liabilities
Other Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 13. Other Liabilities June 30, December 31, 2021 2020 (Dollars in millions) Income taxes $ 96 $ 45 Designated and undesignated derivatives — 22 Pension and other employee related 100 14 Long-term lease liability (Note 14) 28 15 Advanced discounts from suppliers 23 11 Other 30 7 $ 277 $ 114 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases | Note 14. Leases We have operating leases that primarily consist of real estate, machinery and equipment. Our leases have remaining lease terms of up to 10 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Operating lease cost $ 4 $ 3 $ 8 $ 6 Supplemental cash flow information related to operating leases is as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 3 $ 3 $ 6 $ 5 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 4 $ 5 $ 5 $ 5 Supplemental balance sheet information related to operating leases is as follows: June 30, 2021 December 31, 2020 (Dollars in millions) Other assets $ 38 $ 36 Accrued liabilities 11 5 Other liabilities 28 15 Liabilities subject to compromise — 19 June 30, 2021 December 31, 2020 Weighted-average lease term (in years) 4.87 5.14 Weighted-average discount rate 6.18 % 6.16 % Maturities of operating lease liabilities were as follows: (Dollars in millions) 2021 $ 7 2022 11 2023 8 2024 6 2025 5 Thereafter 8 Total lease payments 45 Less imputed interest (7 ) $ 38 |
Long-term Debt and Credit Agree
Long-term Debt and Credit Agreements | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Credit Agreements | Note 15. Long-term Debt and Credit Agreements Exit Credit Facilities On the Effective Date, in accordance with the Plan, the Company entered into a Credit Agreement, by and among the Company, Garrett LX I S.à r.l. (the “Lux Borrower”), Garrett Motion Holdings Inc. (the “U.S. Co-Borrower”) and Garrett Motion Sàrl (the “Swiss Borrower”), the lenders and issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”), which provides for senior secured financing. • Dollar Facility : a seven-year • Euro Facility : a seven-year • Revolving Facility : a five-year On the Effective Date, Credit Facilities, net of deferred financing costs were $1,221 million , after proceeds from the Credit Facilities and issuance of Series A Preferred Stock (see Note 18) were used to pay off the Company’s pre-emergence indebtedness. For more information, see Note 2, Plan of Reorganization The principal outstanding and carrying amount of our long-term debt as of June 30, 2021 are as follows: Due Interest Rate June 30, 2021 Dollar Facility 4/30/2028 3.75 % $ 715 Euro Facility 4/30/2028 3.50 % 532 Total principal outstanding 1,247 Less: unamortized deferred financing costs (38 ) Less: current portion of long-term debt (5 ) Total long-term debt $ 1,204 Revolving Facility and Letters of Credit The Revolving facility allows maximum borrowings of $300 million and matures on April 30, 2026. The interest rate on the Revolving Facility is 2.75% per annum. On June 30, 2021, the Company had no borrowings outstanding under the Revolving Facility and had available borrowing capacity of $261 million. Under the Revolving F acility, t he Company may use up to $ 125 million under the Revolving F acility for the issuance of letters of credit to Swiss Borrower or any of its subsidiaries. Letters of credit are available for issuance under the Credit Agreement on terms and conditions customary for financings of this kind, which issuances will reduce availability under the Revolving F acility. In addition, the Company obtained a $35 million letter of credit facility for a term of five years. Future Repayments Minimum scheduled principal repayments of the Credit Facilities as of June 30, 2021 are as follows: June 30, 2021 (Dollars in millions) 2021 $ 2 2022 7 2023 7 2024 7 2025 7 Thereafter 1,217 Total debt payments $ 1,247 Guarantees All obligations under the Credit Facilities are or will be unconditionally guaranteed jointly and severally, by: (a) the Company; (b) each direct and indirect material wholly owned subsidiary of the Company that is organized under the laws of any state of the United States and (c) substantially all of the direct and indirect material wholly owned subsidiaries of the Company that are organized under the laws of certain other jurisdictions, including Australia, England and Wales, Ireland, Italy, Japan, Luxembourg (including Lux Borrower), Mexico, Romania, Slovakia, Switzerland (including Swiss Borrower), and any other jurisdiction at the Swiss Borrower’s option from time to time agreed with the administrative agent, subject in each case to certain exceptions and limitations and agreed guaranty and security principles. The guarantors organized under the laws of England and Wales, Luxembourg, Switzerland and the United States entered into a guarantee under the Credit Agreement concurrently with the effectiveness of the Credit Agreement. The guarantors organized under the laws of Australia, Ireland, Italy, Japan, Mexico, Romania and Slovakia have acceded or are expected to accede to such guarantee within 120 days following the Effective Date (or such longer period as agreed between the Company and the administrative agent under the Credit Agreement). Security The Credit Facilities are or will be secured on a first priority basis by: (x) a perfected security interest in the equity interests of each direct material subsidiary of each guarantor under the Credit Facilities and (y) perfected security interests in, and mortgages on, substantially all tangible and intangible personal property and material real property of each of the guarantors under the Credit Facilities, subject, in each case, to certain exceptions and limitations, including the agreed guaranty and security principles. The guarantors organized under the laws of England and Wales, Luxembourg, Switzerland and the United States entered into security documents securing the obligations of each borrower concurrently with effectiveness of the Credit Agreement. The guarantors organized under the laws of Australia, Ireland, Japan, Mexico, Romania and Slovakia have executed, or are expected to execute security documents within 120 days following the Effective Date (or such longer period as agreed between the Company and the administrative agent under the Credit Agreement). Maturity The Revolving Facility matures five years after the Effective Date of the Credit Agreement, with certain extension rights in the discretion of each lender. The Term Loan Facilities mature seven years after the Effective Date of the Credit Agreement, with certain extension rights in the discretion of each lender. Interest Rate and Fees The Dollar Facility is subject to an interest rate, at our option, of either (a) an alternate base rate (“ABR”) (which shall not be less than 1.50%) or (b) an adjusted LIBOR rate (“LIBOR”) (which shall not be less than 0.50%), in each case, plus an applicable margin equal to 3.25% in the case of LIBOR loans and 2.25% in the case of ABR loans. The Euro Facility is subject to an interest rate equal to an adjusted EURIBOR rate (“EURIBOR”) (which shall not be less than zero) plus an applicable margin equal to 3.50%. The Revolving Facility is subject to an interest rate comprised of an applicable benchmark rate (which shall not be less than 1.00% if such benchmark is the ABR rate and not less than 0.00% in the case of other applicable benchmark rates) that is selected based on the currency in which borrowings are outstanding thereunder, in each case, plus an applicable margin. The applicable margin for the Revolving Facility varies based on our leverage ratio. Accordingly, the interest rates for the Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, LIBOR, EURIBOR and other applicable benchmark rates or future changes in our leverage ratio. Interest payments with respect to the Term Loan Facilities are required either on a quarterly basis (for ABR loans) or at the end of each interest period (for LIBOR and EURIBOR loans) or, if the duration of the applicable interest period exceeds three months, then every three months. In addition to paying interest on outstanding borrowings under the Revolving Facility, the Borrowers are required to pay a quarterly commitment fee based on the unused portion of the Revolving Facility, which is determined by our leverage ratio and ranges from 0.25% to 0.50% per annum. Prepayments The Borrowers are obligated to make quarterly principal payments throughout the term of the Dollar Facility according to the amortization provisions in the Credit Agreement, as such payments may be reduced from time to time in accordance with the terms of the Credit Agreement as a result of the application of loan prepayments made by us, if any, prior to the scheduled date of payment thereof. We may voluntarily prepay borrowings under the Credit Agreement without premium or penalty, subject to a 1.00% prepayment premium in connection with any repricing transaction with respect to the Term Loan Facilities in the first six months after the Effective Date of the Credit Agreement and customary “breakage” costs with respect to LIBOR and EURIBOR loans. We may also reduce the commitments under the Revolving Facility, in whole or in part, in each case, subject to certain minimum amounts and increments. The Credit Agreement also contains certain mandatory prepayment provisions in the event that we incur certain types of indebtedness, receive net cash proceeds from certain non-ordinary course asset sales or other dispositions of property or, starting with the fiscal year ending on December 31, 2022, 50% of excess cash flow on an annual basis (with step-downs to 25% and 0% subject to compliance with certain leverage ratios), in each case subject to terms and conditions customary for financings of this kind. Representations and Warranties The Credit Agreement contains certain representations and warranties (subject to certain agreed qualifications) that are customary for financings of this kind. Certain Covenants The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of our and our subsidiaries’ equity interests. The Credit Agreement expressly permits payments-in-kind on our Series A Preferred Stock as well as mandatory cash redemptions in respect of our Series B Preferred Stock. During the fiscal years ending December 31, 2021 and December 31, 2022, the Credit Agreement restricts the Company’s ability to pay cash dividends on or to redeem or otherwise acquire for cash the Series A Preferred Stock unless a ratable payment (on an as-converted basis) is made to holders of our common equity and such payments would otherwise be permitted under the terms of the Credit Agreement. On July 21, 2021, the terms of the Certificate of Designations of the Series A Preferred Stock were amended to allow the payment of a ratable dividend on the Series A Preferred Stock and the Common Stock prior to December 31, 2022 so long as the full board of directors of the Company ratifies the Disinterested Directors’ Committee’s declaration of any such dividend or distribution. In addition, the Revolving Facility also contains a financial covenant requiring the maintenance of a consolidated total leverage ratio of not greater than 4.70 to 1.00 as of the end of each fiscal quarter if, on the last day of any such fiscal quarter, the aggregate amount of loans and letters of credit (excluding backstopped or cash collateralized letters of credit and other letters of credit with an aggregate face amount not exceeding $30 million) outstanding under the Revolving Facility exceeds 35% of the aggregate commitments thereunder. As of June 30, 2021, the Company is in compliance with all its financing covenants. Events of Default The Credit Agreement contains customary events of default, including with respect to a failure to make payments under the Credit Facilities, cross-default, certain bankruptcy and insolvency events and customary change of control events. Prepetition Indebtedness Pursuant to the Plan, on the Effective Date, the obligations of the Debtors under each of the following debt instruments were cancelled and the applicable agreements governing such obligations were terminated: (a) that certain Credit Agreement, dated as of September 27, 2018, by and among the Company, as holdings, Garrett LX III S.à r.l., as Lux Borrower, Garrett Borrowing LLC, as U.S. Co-Borrower, Garrett Motion Sàrl (f/k/a Honeywell Technologies Sàrl), as Swiss Borrower, the Lenders and Issuing Banks party thereto and the Pre-petition Credit Agreement Agent, as Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms; and (b) that certain Indenture, dated as of September 27, 2018, among GMI, as Parent, Garrett LX I S.à r.l., as Issuer, Garrett Borrowing LLC, as Co-Issuer, the guarantors named therein, Deutsche Trustee Company Limited, as Trustee, Deutsche Bank AG, as Security Agent and Paying Agent, and Deutsche Bank Luxembourg S.A., as Registrar and Transfer Agent, pursuant to which the Senior Subordinated Notes were issued, as may be amended, supplemented or otherwise modified from time to time. Holders of Allowed Pre-petition Credit Agreement Claims (as defined in the Plan) received payment in cash in an amount equal to such Holder’s Allowed Pre-petition Credit Agreement Claim. Holders of Allowed Senior Subordinated Noteholder Claims (as defined in the Plan) received payment in cash in an amount equal to such Holder’s Allowed Senior Subordinated Noteholder Claim. DIP Facility On the Effective Date, that certain Senior Secured Super-Priority Debtor-in-Possession Credit Agreement, dated as of October 9, 2020, by and among the Company, as borrower, each lender party thereto from time to time, and the DIP Agent, as amended, supplemented or otherwise modified from time to time was paid in full and terminated. |
Mandatorily Redeemable Series B
Mandatorily Redeemable Series B Preferred Stock | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Mandatorily Redeemable Series B Preferred Stock | Note 16. Mandatorily Redeemable Series B Preferred Stock Series B Preferred Stock Pursuant to the Plan and the Plan Support Agreement, on the Effective Date the Company issued 834,800,000 shares of Series B Preferred Stock to Honeywell in satisfaction of its claims arising from the Honeywell Agreements (as defined below). The company is authorized to grant 1,200,000,000 shares of preferred stock in the reorganized company. The Series B Preferred Stock will not be entitled to any dividends or other distributions or payments other than the scheduled redemption payments and payments upon liquidation as provided in the Series B Certificate of Designations. On April 30 of each year, beginning on April 30, 2022 and ending on April 30, 2030, on which any shares of Series B Preferred Stock are outstanding (each a “Scheduled Redemption Date”), the Company will redeem, pro rata from each holder, an aggregate number of shares of Series B Preferred Stock equal to a scheduled redemption amount with respect to such Scheduled Redemption Date as set forth in the Series B Certificate of Designations divided by $1.00 per share (the “Scheduled Redemption Amounts”), provided that the Company will not be obligated to redeem the shares of Series B Preferred Stock on a Scheduled Redemption Date if, as of such date, (i) the Consolidated EBITDA of the Company and its subsidiaries measured as of the end of the most recently completed fiscal year is less than $425 million or (ii) the Company does not have sufficient funds legally available to pay the redemption amount due on such Scheduled Redemption Date. Shares of Series B Preferred Stock whose redemption on a Scheduled Redemption Date is deferred, and which are not thereafter redeemed in accordance with the applicable Initial Deferral Payment Schedule (as defined in the Series B Certificate of Designations) will accrue interest from and after the time that the Company fails to make redemption payments in accordance with the applicable Initial Deferral Payment Schedule. Any shares of Series B Preferred Stock that have not been redeemed on a Scheduled Redemption Date outstanding as of April 30, 2030, will be redeemed on April 30, 2030. Except as required by law, the holders of Series B Preferred Stock will have no voting rights, provided that a vote or the consent of the holders representing a majority of the Series B Preferred Stock will be required to effect or validate (i) any amendment, modification or alteration to the Certificate of Incorporation that would authorize or create, or increase the authorized amount of, any shares of any class or series or any securities convertible into shares of any class or series of capital stock that would rank senior to the Series B Preferred Stock, (ii) any amendment, modification or alteration to the Certificate of Incorporation that would authorize or create, or increase the authorized amount of, any shares of any class or series of capital stock that would rank pari passu to the Series B Preferred Stock on the occurrence of a liquidation, (iii) entry by the Company or any of its subsidiaries into any agreement containing or imposing, directly or indirectly, any restrictions (including, but not limited to, any covenant or agreement) on the Company’s ability to make required payments on or redeem the shares of Series B Preferred Stock, (iv) any amendment, modification, alteration or repeal of any provision of the Certificate of Incorporation or any other certificate of designations of the Company that would have an adverse effect, in any material respect, on the rights, preferences, privileges or voting power of the shares of Series B Preferred Stock or any holder thereof or any amendment, modification, alteration or repeal of the Series B Certificate of Designations, (iv) any increase in the number of members of the Board at a time when the sum of (x) the aggregate value of deferred Scheduled Redemption Amounts relating to past Scheduled Redemption Dates (plus any unpaid interest accruing thereon) plus (y) the aggregate present value of future Scheduled Redemption Amounts, calculated using a discount rate of 7.25 % (such sum, the “Aggregate Series B Liquidation Preference”) is greater than $ 125 million or (vi) any action or inaction that would reduce the stated amount of any share of Series B Preferred Stock to below $ 1.00 per share. The scheduled redemptions are $ 35 million for April 30, 2022 and $ 100 million for April 30 th of each year from April 30, 2023 to April 30, 2030 , totaling $835 million . This amount is recorded on our Consolidated Interim Balance Sheet as of June 30, 2021 at the net present value of the redemptions, discounted at 7.25% , of $ 585 million. Of the amount recorded on our Consolidated Interim Balance Sheet as of June 30, 2021, $ 550 million is classified as a long-term liability. If the Company has Consolida ted EBITDA (as defined in the Series B Certificate of Designations) for the twelve months ended June 30, 2021 and for the twelve months ended September 30, 2021 of over $ 600 million, the entire recorded amount will be classified as current on our September 30, 2021 Consolidated Interim Balance Sheet. Upon liquidation, Series B Preferred Stock will rank (A) senior to the Common Stock and (B) junior to the Series A Preferred Stock and will have a right to be paid the Aggregate Series B Liquidation Preference. The Company will be automatically obligated to redeem all shares of Series B Preferred Stock upon (i) a change of control, (ii) an assertion from the Company or the Board that any portion of the Series B Preferred Stock or any of the Company’s obligations under the Series B Certificate of Designations are invalid or unenforceable, (iii) if indebtedness outstanding under the Credit Agreement is accelerated (and such acceleration is not rescinded), or (iv) the Company or any of its material subsidiaries enters bankruptcy or similar proceedings affecting creditors’ or equity holders’ rights. Each holder of Series B Preferred Stock will have the right to require the Company to redeem all, but not less than all, of such holder’s shares of Series B Preferred Stock if the Consolidated EBITDA (as defined in the Series B Certificate of Designations) of the Company and its subsidiaries exceeds $600 million for two consecutive fiscal quarters. Under the terms of the Series B Certificate of Designations, the Majority in Interest (as defined in the Series B Certificate of Designations) has the exclusive right, voting separately as a class, to elect or appoint one director to the Board (such director the “Series B Director”) on the Effective Date. The Majority in Interest has a continuing right, voting separately as a class, to elect or appoint the Series B Director, and an exclusive right to remove Series B director at any time for any reason or no reason (with or without cause), subject to the rights of other holders to remove any Series B Director for cause to the extent provided by the DGCL, until the first date on which the Aggregate Series B Liquidation Preference is not greater than $125 million (the “Series B Threshold Date”). From and after the Series B Threshold Date, the Majority in Interest will have no right to elect or appoint any directors to the Board. If the Majority in Interest is no longer entitled to elect or appoint a Series B Director, then the then-serving Series B Director will automatically be deemed to have resigned from the Board. So long as any shares of Series B Preferred Stock are outstanding, the Company may not take certain actions without the written consent of the Majority in Interest (as defined in the Series B Certificate of Designations), including, among other things, increase the size of the Board of Directors so long as the Aggregate Series B Liquidation Preference is greater than $125 million. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measures | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Fair Value Measures | Note 17. Financial Instruments and Fair Value Measures Our credit, market and foreign currency risk management policies are described in Note 18, Financial Instruments and Fair Value Measures, of the notes to the audited annual Consolidated and Combined Financial Statements for the year ended December 31, 2020 included in our 2020 Form 10-K. At June 30, 2021 and December 31, 2020, we had contracts with aggregate gross notional amounts of $2,252 million and Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2021 and December 31, 2020: Fair Value Notional Amounts Assets Liabilities June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 Designated forward currency exchange contracts $ 212 $ — $ 2 $ — $ — $ — Designated cross-currency swap 715 — 2 — — — Undesignated instruments: Undesignated interest rate swap 981 — — — — — Undesignated forward currency exchange contracts 344 19 2 — 2 — Total undesignated instruments 1,325 19 2 — 2 — Total designated and undesignated instruments $ 2,252 $ 19 $ 6 $ — $ 2 $ — On June 11, 2021 the Company entered into interest rate swap contracts to partially mitigate market value risk associated with interest rate fluctuations on its variable rate term loan debt. As of June 30, 2021, the company had outstanding interest rate swaps with an aggregate notional amount of €830 million, with respective maturities April 2023, April 2024, April 2025, April 2026 and April 2027. The company utilizes interest rate swaps specifically to mitigate variable interest risk exposure on its long-term debt portfolio and have not designated them as hedging instruments for accounting purposes. Effective with our entry into the Credit Agreement (see Note 15, Long-term Debt and Credit Agreements), the Company entered into floating-floating cross-currency swap contracts to limit its exposure to investments in certain foreign subsidiaries exposed to foreign exchange fluctuations. The cross currency swaps have been designated as net investment hedges of its Euro-denominated operations. As of June 30, 2021, an aggregate notional amount of €606 million was designated as net investment hedges of the Company's investment in Euro-denominated operations. The cross-currency swaps fair values were net assets of $2 million at June 30, 2021. Our Consolidated Interim Statements of Comprehensive Income (loss) includes Changes in fair value of net investment hedges, net of tax of The foreign currency exchange, interest rate swap 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, cash equivalents and restricted cash, Account receivables and Notes and Other receivables contained in the Consolidated Balance Sheets approximates fair value. The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value: June 30, 2021 Carrying Value Fair Value (Dollars in millions) Terms Loans B (Secured) $ 1,209 $ 1,254 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. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Equity | Note 18. Equity Issuance of Common Stock As discussed in Note 2, Plan of Reorganization, upon the effectiveness of and pursuant to the Plan, all Old Common Stock of the Company was cancelled and the Company issued 65,035,801 shares of Common Stock to holders of Old Common Stock that did not exercise the Cash-Out Option. Each holder of Existing Common Stock that did not exercise the Cash-Out Option received a number of shares of new Common Stock equal to the number of shares of Existing Common Stock held by such holder in consideration for the cancellation of their shares of Common Stock. The Company paid $69 million to holders of Old Common Stock who had made the Cash-Out Election. Issuance of Series A Preferred Stock In connection with the Company’s emergence from bankruptcy and pursuant to the Plan, the Company issued 247,768,962 shares of the Company’s Series A Preferred Stock to affiliated funds of Centerbridge Partners, L.P. (“Centerbridge”), affiliated funds of Oaktree Capital Management, L.P. (“Oaktree”) and certain other investors and parties, including in connection with the consummation of two rights offerings and the related Replacement Equity Backstop Commitment Agreement (such parties to the Replacement Equity Backstop Commitment Agreement, the “Additional Investors”). The company is authorized to grant 1,200,000,000 shares of preferred stock in the reorganized company. Series A Preferred Stock Holders of the Series A Preferred Stock will be entitled to receive, when, as and if declared by a committee of disinterested directors of the Board (which initially consisted of Daniel Ninivaggi, Julia Steyn, Robert Shanks, and D’aun Norman) out of funds legally available for such dividend, cumulative cash dividends at an annual rate of 11% on the stated amount per share plus the amount of any accrued and unpaid dividends on such share, accumulating on a daily basis and payable quarterly on January 1, April 1, July 1 and October 1, respectively, in each year. Such a dividend will not be declared at any time when Consolidated EBITDA (as defined in the Series A Certificate of Designations) of the Company and its subsidiaries for the most recent four fiscal quarters for which financial statements of the Company are available is less than $425 million. Dividends on the Series A Preferred Stock will accumulate whether or not declared. Under the terms of our Series B Preferred Stock, a dividend on the Series A Preferred Stock may not be declared so long as the Company has not satisfied or cannot satisfy in full any deferred redemption payments or redemption payments owed on the next scheduled redemption date to holders of Series B Preferred Stock. Holders of the Series A Preferred Stock will also be entitled to such dividends paid to holders of Common Stock to the same extent as if such holders of Series A Preferred Stock had converted their shares of Series A Preferred Stock into Common Stock (without regard to any limitations on conversions) and had held such shares of Common Stock on the record date for such dividends and distributions. Such payments will be made concurrently with the dividend or distribution to the holders of the Common Stock. The Company is restricted from paying or declaring any Under the terms of the Credit Agreement, during the fiscal years ending December 31, 2021, and December 31, 2022, the Company may not make payments or redemptions in cash solely with respect to the Series A Preferred Stock unless a ratable payment (on an as-converted basis) is made to holders of the Common Stock and such payments would otherwise be permitted under the terms of the Credit Agreement. On July 21, 2021, the terms of the Certificate of Designations of the Series A Preferred Stock were amended to allow the payment of a ratable dividend on the Series A Preferred Stock and the Common Stock prior to December 31, 2022 so long as the full board of directors of the Company ratifies the Disinterested Directors’ Committee’s declaration of any such dividend or distribution. On June 17, 2021 the Board determined that the amount of preference dividends which will accumulate for the preference dividend period ended June 30, 2021 is $0.09625 per share. As there were 247,768,962 shares of Series A Preferred Stock as of June 30, 2021, the aggregate accumulated dividend as of and for the three and six months ended June 30, 2021 is approximately $24 million and is presented as a reduction to Net income (loss) available to common shareholders in our Consolidated Interim Statements of Operations. Voting Holders of the Series A Preferred Stock will be entitled to vote together as a single class with the holders of Common Stock, with each such holder entitled to cast the number of votes equal to the number of votes such holder would have been entitled to cast if such holder were the holder of a number of shares of Common Stock equal to the whole number of shares of Common Stock that would be issuable upon conversion of such holder’s shares of Series A Preferred Stock in addition to a number of shares of Common Stock equal to the amount of cumulative unpaid preference dividends (whether or not authorized or declared) divided by the lesser of (i) the fair market value per share of such additional shares and (ii) the fair market value per share of the Common Stock. So long as any shares of Series A Preferred Stock are outstanding, a vote or the consent of the holders representing a majority of the Series A Preferred Stock will be required for (i) effecting or validating any amendment, modification or alteration to the Certificate of Incorporation that would authorize or create, or increase the authorized amount of, any shares of any class or series or any securities convertible into shares of any class or series of capital stock that would rank senior or pari passu to the Series A Preferred Stock with respect to dividend payments or upon the occurrence of a liquidation, (ii) any increase in the authorized number of shares of Series A Preferred Stock or of any series of capital stock that ranks pari passu with Series A Preferred Stock, (iii) effecting or validating any amendment, alteration or repeal of any provision of the Certificate of Incorporation or Bylaws that would have an adverse effect on the rights, preferences, privileges or voting power of Series A Preferred Stock or the holders thereof in any material respect, or (iv) any action or inaction that would reduce the stated amount of any share of Series A Preferred Stock to below $5.25 per share. Liquidation Upon liquidation, Series A Preferred Stock will rank senior to the Common Stock and to the Series B Preferred Stock, and will have the right to be paid, out of the assets of the Company legally available for distribution to its stockholders, an amount equal to the Aggregate Liquidation Entitlement (as defined in the Series A Certificate of Designations) for all outstanding shares of Series A Preferred Stock. Other Rights All shares of Series A Preferred Stock will automatically convert to shares of Common Stock, at an initial conversion price of $5.25 per share of Common Stock (subject to adjustment as described in the Series A Certificate of Designations) (the “Conversion Price”) upon either (i) the election of holders representing a majority of the then-outstanding Series A Preferred Stock or (ii) the occurrence of a Trading Day (as defined in the Series A Certificate of Designations) at any time on or after the date which is two years after the Effective Date on which (A) the aggregate stated amount of all outstanding shares of Series B Preferred Stock is an amount less than or equal to $125 million, (B) the Common Stock is traded on a Principal Exchange, a Fallback Exchange or an Over-the-Counter Market (each as defined in the Series A Certificate of Designations) and, in each case, the Automatic Conversion Fair Market Value (as defined in the Series A Certificate of Designations) of the Common Stock exceeds 150% of the Conversion Price, and (C) the Consolidated EBITDA (as defined in the Series A Certificate of Designations) of the Company and its subsidiaries for the last twelve months ended as of the last day of each of the two most recent fiscal quarters is greater than or equal to $600 million. Shares of Series A Preferred Stock are also convertible into Common Stock at any time at the option of the holder, effective on January 1, April 1, July 1 and October 1 in each year, or on the third business day prior to the date of redemption of the outstanding shares of the Series A Preferred Stock as described in the following paragraph. The Company may, at its election, redeem all but not less than all of the outstanding shares of Series A Preferred Stock (i) at any time following the date which is six years after the Effective Date or (ii) in connection with the consummation of a Change of Control (as defined in the Series A Certificate of Designations), in either case for a cash purchase price equal to $5.25 per share plus cumulative unpaid preference dividends (whether or not authorized or declared) as of the redemption date. Registration Rights Agreement In connection with our emergence from bankruptcy, on April 30, 2021, we entered into a registration rights agreement (the “Registration Rights Agreement”) with the holders of our Common Stock and Series A Preferred Stock named therein to provide for resale registration rights for the holders’ Registrable Securities (as defined in the Registration Rights Agreement). Pursuant to the terms of the Registration Rights Agreement, we filed a registration statement on Form S-1 (Registration No. 333-256659), registering (i) 243,265,707 shares of our Series A Preferred Stock, (ii) 52,471,709 shares of our Common Stock and (iii) 243,265,707 shares of our Common Stock issuable upon conversion of our Series A Preferred Stock (the “Resale Registration Statement), in each case initially issued to the Registration Rights Holders in connection with our emergence from bankruptcy on April 30, 2021. The Resale Registration Statement was declared effective by the SEC on June 11, 2021, which may result in the resale of a substantial number of shares of our Common Stock or Series A Preferred Stock by the relevant Registration Rights Holders. At any time following the Effective Date, any Registration Rights Holders who, directly or indirectly, together with their respective affiliates, have beneficial ownership of at least 7.5% of the then issued and outstanding shares of Common Stock, after giving effect to the conversion of the Series A Preferred Stock (such Registration Rights Holders, the “Required Investors”), may request registration of all or any portion of the Registrable Securities beneficially owned by such Required Investors on Form S-1 or, if available, on Form S-3 (each, a “Demand Registration”). Unless there is a currently effective Shelf Registration Statement covering such Registrable Securities, the Company will effect such Demand Registration by filing with the SEC a registration statement within (i) 60 days in the case of a registration statement on Form S-1 and (ii) 30 days in the case of a registration statement on Form S-3. The aggregate number of Demand Registrations on Form S-1 that may be requested by the Required Investors shall not exceed four; the Required Investors may request an unlimited number of Demand Registrations on Form S-3. The relevant Required Investors may request to effectuate any offering of Registrable Securities by means of an underwritten offering, provided that the aggregate gross proceeds of such public offering are expected to be at least $50 million. The Company will not be required to effect more than one underwritten offering in any 90-day period. In the event the Company proposes to file a Shelf Registration Statement with respect to any offering of its equity securities, the Company will give written notice of such proposed filing to the Registration Rights Holders as soon as practicable (but in no event less than five business days prior to the proposed date of public filing of such shelf), and such notice shall offer the Registration Rights Holders the opportunity to register under such registration statement the resale of such number of Registrable Securities as each such Registration Rights Holder may request in writing (a “Piggyback Registration”). If the Company proposes to file a registration statement that is not a Shelf Registration Statement with respect to any offering of its equity securities, the Company will give written notice of such proposed filing to certain of the Registration Rights Holders (the “Piggyback Eligible Investors”), and such notice shall offer the Piggyback Eligible Investors the opportunity to make a Piggyback Registration. If the Company proposes to undertake an underwritten offering pursuant to a registration statement for which there was a Piggyback Registration, the Piggyback Eligible Investors may be entitled to participate in such underwritten offering, subject to customary “cutback” provisions in certain circumstances. If requested by the managing underwriter or underwriters in the event of any underwritten public offering of equity securities by the Company, each holder of Registrable Securities participating in such sale agrees, as a condition to such holder’s participation in the offering, to execute a lock-up agreement, which will provide for restrictions on transferring the Company’s capital stock as specified in the Registration Rights Agreement. Additionally, in connection with any underwritten public offering of Registrable Securities and upon the request of the managing underwriter or underwriters, the Company will agree not to effect any public sale or distribution of any Lock-Up Securities (as defined in the Registration Rights Agreement). The Registration Rights Agreement includes customary indemnification provisions. The Company will be responsible for its own expenses associated with the performance of its obligations under the Registration Rights Agreement and certain fees and expenses of legal counsel to the relevant Registration Rights Holders. Except as described in the preceding sentence, the Registration Rights Holders will bear their own expenses, including any underwriting discounts, selling commissions and transfer taxes applicable to any sale of Registrable Securities. The Registration Rights Agreement will automatically terminate upon the later of (i) the expiration of the Shelf Period (as defined in the Registration Rights Agreement) and (ii) at such time as no Registrable Securities remain outstanding. Series A Investor Rights Agreement Pursuant to the Plan, the Company entered into a Series A Investor Rights Agreement (the “Series A Investor Rights Agreement”) with Centerbridge Credit Partners Master, L.P. (“Centerbridge Credit”), Centerbridge Special Credit Partners III-Flex, L.P. (“Centerbridge Special Credit” and, together with Centerbridge Credit, the “Centerbridge Investors”), OCM Opps GTM Holdings, LLC (“OCM Opps”), Oaktree Value Opportunities Fund Holdings, L.P. (“Oaktree Value”), Oaktree Phoenix Investment Fund, L.P. (“Oaktree Phoenix”) and Oaktree Opportunities Fund Xb Holdings (Delaware), L.P. (“Oaktree Opportunities” and, together with OCM Opps, Oaktree Value and Oaktree Phoenix, the “Oaktree Investors”) and the other signatories thereto (the “Additional Investors” and, together with the Centerbridge Investors and the Oaktree Investors, the “Series A Investors”). Pursuant to the Series A Investor Rights Agreement, as of the Effective Date, the Centerbridge Investors and Oaktree Investors each have the right to designate three directors for election to the Board and the Additional Investors have the right to designate one director for election to the Board. One director will be the chief executive officer of the Company. The Centerbridge Investors and Oaktree Investors each have a continuing right to designate three directors to the Board, subject to their respective (and permitted transferees’) beneficial ownership of at least 60% of their respective aggregate initial ownership interest as of the Effective Date (the “Initial Investor Interest”), at least one of which will not be employed by Centerbridge Investors or Oaktree Investors, as applicable, or their respective affiliates. If the Centerbridge Investors or Oaktree Investors, as applicable, beneficially own less than 60% but at least 40% of their respective Initial Investor Interest, then they will each have the right to designate at least two directors to the Board. If the Centerbridge Investors or Oaktree Investors, as applicable, beneficially own less than 40% but at least 20% of their respective Initial Investor Interest, then they will each have the right to designate at least one director to the Board. If the Centerbridge Investors or Oaktree Investors, as applicable, cease to own at least 20% of their respective Initial Investor Interest, then they will have no right to designate any directors to the Board. Pursuant to the Series A Investor Rights Agreement, the Additional Investors have a continuing right to designate one director for election to the Board, subject to their (and permitted transferees’) beneficial ownership of at least 60% of their Initial Investor Interest. If the Additional Investors beneficially own less than 60% of their Initial Investor Interest, then they have no right to designate any directors to the Board. The designee of the Additional Investors shall be the person nominated, separately and not jointly, by those Additional Investors holding at least 65% of the shares of Series A Preferred Stock held by the Additional Investors at such time. After the Additional Investors no longer have a right to designate a director as described above, if the Company becomes aware that at least 20% of the Series A Preferred Stock issued as of the Effective Date is held by stockholders other than the Centerbridge Investors and Oaktree Investors, then the holders of a majority of the Series A Preferred Stock then outstanding (excluding Series A Preferred Stock held by the Centerbridge Investors and the Oaktree Investors) will collectively have the right to designate one director to the Board. If the number of individuals that any Series A Investor has the right to designate for election to the Board is decreased in accordance with the foregoing, then the corresponding number of directors designated by such Investor will immediately offer to resign from the Board under the terms of the Series A Investor Rights Agreement. The Company is restricted under the Series A Investor Rights Agreement from increasing the size of the Board without the written consent of the Series A Investors holding a majority of the then-outstanding Series A Preferred Stock for so long as the outstanding Series A Preferred Stock represents, in the aggregate, a majority of the combined voting power of the then-outstanding shares of all classes and series of capital stock of the Company entitled generally to vote in the election of directors of the Company. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2021 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 19. 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) (Dollars in millions) Balance at December 31, 2019 $ 153 $ 4 $ (27 ) $ 130 Other comprehensive income (loss) before reclassifications (11 ) (2 ) — (13 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — Net current period other comprehensive income (loss) (11 ) (2 ) — (13 ) Balance at June 30, 2020 $ 142 $ 2 $ (27 ) $ 117 Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Changes in Fair Value of Net Investment Hedges Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) (Dollars in millions) Balance at December 31, 2020 $ (81 ) $ (3 ) $ — $ (45 ) $ (129 ) Other comprehensive income (loss) before reclassifications 43 2 15 — 60 Amounts reclassified from accumulated other comprehensive income (loss) — 3 — — 3 Net current period other comprehensive income (loss) 43 5 15 — 63 Balance at June 30, 2021 $ (38 ) $ 2 $ 15 $ (45 ) $ (66 ) |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 20. Stock-Based Compensation 2018 Stock Incentive Plan On September 14, 2018, our Board adopted, and Honeywell, as our sole stockholder, approved, the 2018 Stock Incentive Plan of Garrett Motion Inc. and its Affiliates (the “Stock Incentive Plan”) and the 2018 Stock Plan for Non-Employee Directors (the “Director Equity Plan”). The Stock Incentive Plan provides for the grant of stock options, stock appreciation rights, performance awards, restricted stock units, restricted stock, other stock-based awards, and cash-based awards to employees of Garrett or its affiliates, and independent contractors or consultants of Garrett. The maximum aggregate number of shares of our Common Stock that may be issued under the Stock Incentive Plan is 10,000,000 shares and, for the Director Equity Plan, 400,000 shares. Up to 5,000,000 shares may be granted as incentive stock options under the Stock Incentive Plan. As part of emergence from Chapter 11 (Note 2, Plan of Reorganization), the Plan provided for the acceleration of all outstanding awards under the Stock Incentive Plan. As of the Effective Date all outstanding awards pursuant to the Stock Incentive Plan were cancelled. The Plan provided for the following: • Acceleration and vesting of all outstanding equity awards; • Vested equity awards were deemed to be exercised on a net settled basis; and • Common Stock provided upon the exercise of stock options were deemed outstanding as of the Effective Date. In addition: • Award holders are deemed to have exercised the Cash Out Option defined in the Plan, and therefore entitled to a cash payment of $6.25 per share; • Awards that were “Out of the money” were deemed cancelled for no consideration; and • Cash performance stock unit (“CPSU”) awards accelerated and vested based on target performance without proration and settled in cash in accordance with the Plan and are not classified as equity awards. The cash settlement of an equity award (stock options, stock appreciation rights, performance awards, restricted stock units, restricted stock, other stock-based awards) is treated as the repurchase of an outstanding equity instrument. In accordance with ASC 718, all outstanding awards were cancelled, with no replacement grant, therefore modification accounting was not applied. Restricted stock units As of the Effective Date, 1,205,650 restricted stock units (“RSU”) awards were settled for consideration of $6.25 per share, for a total cash settlement of $8 million, of which $7 million was recorded to equity, and $1 million was recorded to Reorganization Items, net in the Consolidated Statement of Operations. Measurement of the cash settlement value of RSU awards was performed on an individual grant basis. As of the Effective Date, all unamortized stock compensation expense of $7 million was charged to Reorganization items, net in the Consolidated Statement of Operations. Performance stock units As of the Effective Date, 228,765 performance stock units (“PSU”) awards were settled for consideration of $6.25 per share, for a total cash settlement of $1 million which was recorded to Reorganization items, net in the Consolidated Statement of Operations. Stock options As of the Effective Date all unvested stock options were considered “Out of the money” and cancelled for no consideration. all unamortized stock compensation expense of $1 million was charged to Reorganization items, net in the Consolidated Statement of Operations. Cash performance stock units As of the Effective Date, 2,069,897 CPSU awards were settled for consideration $1.00 per unit, for a total cash settlement of $2 million which was charged to Reorganization items, net in the Consolidated Statement of Operations. 2021 Long Term Incentive Plan On May 25, 2021, our Board adopted, the Garrett Motion Inc. 2021 Long-Term Incentive Plan (the “Long-Term Incentive Plan”). The Long-Term Incentive Plan provides for the grant of stock options, stock appreciation rights, performance awards, restricted stock units, restricted stock, other stock-based awards, and cash-based awards to employees and non-employee directors of Garrett or its affiliates, and independent contractors or consultants of Garrett. The maximum aggregate number of shares of our Common Stock that may be issued under the Long-Term Incentive Plan is 31,280,476 shares. As of June 30, 2021, 2,992,199 shares of our Common Stock were awarded and 28,288,277 shares of our Common Stock were available for future issuance under the Long-Term Incentive Plan. Restricted Stock Units — Restricted stock unit (“RSU”) awards are issued to certain key employees and directors at fair market value at the date of grant. RSUs typically vest over a period of three or five years, and when vested, each unit entitles the holder to one share of our Common Stock. As of June 30, 2021, an aggregate of 1,519,324 RSU awards were granted to officers, certain key employees, and non-employee directors under the Long-Term Incentive Plan. The following table summarizes information about RSU activity related to both the Stock Incentive Plan and the Long-Term Incentive Plan for the six months ended June 30, 2021: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested at December 31, 2020 1,538,969 $ 13.11 Granted 1,519,324 8.67 Vested (326,058 ) 13.10 Forfeited (7,261 ) 15.61 Vested and cancelled (1,205,650 ) 13.10 Non-vested at June 30, 2021 1,519,324 $ 8.67 The following table summarizes the impact to the Consolidated Statement of Operations from RSUs: For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Compensation expense $ — $ 3 $ 2 $ 6 Reorganization items, net (Note 2) 8 — 8 — Future income tax benefit recognized 1 1 1 2 As of June 30, 2021, there was $13 million of total unrecognized compensation cost related to unvested RSUs granted under our Long-Term Incentive Plan, which is expected to be recognized over a weighted-average period of 4.26 years. There was no unrecognized compensation expense outstanding related the Stock Incentive Plan. Awards granted under the Stock Incentive plan were cancelled pursuant to the Plan as part of emergence from Chapter 11 noted above. Performance Stock Units — As of June 30, an aggregate of 1,472,875 PSU awards were granted to officers and certain key employees under the Long-Term Incentive Plan, which upon vesting, entitles the holder to shares of our Common Stock. The actual number of shares an employee receives for each PSU depends on the Company’s performance against various measures. For the 2021 plan, the performance measures are related to absolute total shareholder return (“TSR”) with stock price hurdles, adjusted EBITDA and adjusted EBITDA margin, weighted 60%, 20%, and 20%, respectively over a two year performance period from January 1, 2022 through December 31, 2023 for the TSR measure and a three year performance period from January 1, 2021 through December 31, 2023 for the adjusted EBITDA and adjusted EBITDA margin measures. Each grantee is granted a target level of PSUs and may earn between 0% and 100% of the target level depending on the Company’s performance against the financial measures. The awards associated with the TSR performance measure are considered to have a market condition. A Monte-Carlo simulation model was used to determine the grant date fair value by simulating a range of possible future stock prices for the Company and each member of a selected peer group over the performance period. The following table summarizes information about PSU activity related to both the Stock Incentive Plan and the Long-Term Incentive Plan for the six months ended June 30, 2021: Number of Performance Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested at December 31, 2020 314,111 $ 16.17 Granted 1,472,875 8.67 Vested — — Forfeited (85,346 ) $ 14.00 Vested and cancelled (228,765 ) — Non-vested at June 30, 2021 1,472,875 $ 8.67 The fair value of the PSUs is based on the fair market value of the Company’s stock at the grant date. The number of underlying shares to be issued will be based on actual performance achievement over the performance period. The per unit weighted average fair value at the date of grant for PSUs granted during the period ended June 30, 2021 was $8.67. The fair value of each PSU grant is amortized monthly into compensation expense on a graded vesting (accelerated) basis over a vesting period of 36 months. The accrual of compensation costs is based on our estimate of the final expected value of the award and is adjusted as required for the performance-based condition. The Company estimates forfeitures at time of issuance, which results in a reduction in compensation expense. As the payout of PSUs includes dividend equivalents, no separate dividend yield assumption is required in calculating the fair value of the PSUs. The Company currently does not pay dividends. The following table summarizes the impact to the Consolidated Statement of Operations from PSUs: For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Reorganization items, net (Note 2) 1 — 1 — As of June 30, 2021, there was $13 million of total unrecognized compensation cost related to unvested PSUs granted under our Long-Term Incentive Plan, which is expected to be recognized over a weighted-average period of 2.42 years. There was no unrecognized compensation expense outstanding related the Stock Incentive Plan. Awards granted under the Stock Incentive plan were cancelled pursuant to the Plan as part of emergence from Chapter 11 noted above. Continuity Awards — In June 2020, in response to the unprecedented and ongoing market uncertainty resulting from the COVID-19 pandemic and in connection with the Board’s evaluation of strategic alternatives for the Company, the Compensation Committee approved one-time cash continuity awards (“Continuity Awards”) to ensure retention of key individuals in exchange for the forfeiture of RSUs and PSUs granted in February 2020. The Continuity Awards total $11 million, with $9 million paid in June 2020 and the remaining $2 million paid in 2021. The Continuity Awards were subject to repayment if prior to June 2021, the recipient has a qualifying termination of employment. Given the Continuity Awards had a 1-year service requirement, the combined transaction was accounted for as a modification to liability-classified awards. The total incremental compensation cost resulting from the modification was $5 million. As of June 30, 2021, there was no unrecognized compensation cost related to the Continuity Awards. The following table summarizes information about Continuity Award activity for the period ended June 30, 2021: Number of Awards Weighted Average Grant Date Fair Value Per Award Non-vested at December 31, 2020 43 $ 257,536 Granted — — Vested (43 ) (257,536 ) Forfeited — — Non-vested at June 30, 2020 — — The following table summarizes the impact to the Consolidated Statement of Operations from Continuity Awards for the period ended June 30, 2021. For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Compensation expense $ 3 $ 2 $ 5 $ 2 Future income tax benefit recognized — — 1 — |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 21. Earnings Per Share The details of the earnings per share (“EPS”) calculations for the three and six months ended June 30, 2021 and 2020 are as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions except per share) Basic Net income (loss) $ 409 $ (9 ) $ 304 $ 43 Less: preferred stock dividend (24 ) — (24 ) — Net income (loss) available to common shareholders $ 385 $ (9 ) $ 280 $ 43 Weighted average common shares outstanding 69,667,651 75,595,991 72,862,102 75,316,827 EPS – Basic $ 5.53 $ (0.12 ) $ 3.84 $ 0.57 Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions except per share) Diluted Net income (loss) $ 409 $ (9 ) $ 304 $ 43 Less: preferred stock dividend (24 ) — (24 ) — Net income (loss) available to common shareholders $ 385 $ (9 ) $ 280 $ 43 Weighted average common shares outstanding – Basic 69,667,651 75,595,991 72,862,102 75,316,827 Dilutive effect of unvested RSUs and other contingently issuable shares — 249,520 — 520,632 Dilutive effect of Series A Preferred Stock 166,086,887 — 83,502,247 — Weighted average common shares outstanding – Diluted 235,754,538 75,845,511 156,364,349 75,837,459 EPS – Diluted $ 1.73 $ (0.12 ) $ 1.94 $ 0.57 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 EPS 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 and six months ended June 30, 2021, the weighted number of stock options excluded from the computations was 128,499 and 263,245 respectively. As described in Note 20, Stock-Based Compensation, as part of emergence from Chapter 11, these stock options were cancelled under the Plan as of the effective date . The diluted EPS calculations assume the Series A Preferred Stock are converted into Common Stock under the if-converted method and are included in Weighted average common shares outstanding – Diluted if they are dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 22. Commitments and Contingencies Chapter 11 Cases On the Petition Date, the Debtors each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Cases are jointly administered under the caption “In re Garrett Motion Inc., 20-12212.” On April 20, 2021, the Debtors filed the Plan. On April 26, 2021, the Bankruptcy Court entered the Confirmation Order among other things, confirming the Plan. On the Effective Date, the conditions to effectiveness of the Plan were satisfied or waived and the Company emerged from bankruptcy. See Note 2, Plan of Reorganization, for more information. 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, Garrett ASASCO, a wholly owned indirect subsidiary of the Company, entered into the Honeywell Indemnity Agreement with Honeywell on September 12, 2018. As of the Spin-Off date of October 1, 2018, Garrett ASASCO was obligated to make payments to Honeywell in amounts equal to 90% of certain Honeywell 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 Honeywell Indemnity Agreement, Garrett ASASCO was 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 Garrett ASASCO would have been required to make to Honeywell pursuant to the terms of the Honeywell Indemnity Agreement would not have been deductible for U.S. federal income tax purposes. The Honeywell Indemnity Agreement provided that the agreement would 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 2020, Garrett ASASCO paid Honeywell the Euro-equivalent of $35 million in connection with the Honeywell Indemnity Agreement. Honeywell and Garrett agreed to defer the payment under the Honeywell Indemnity Agreement due May 1, 2020 to December 31, 2020 (the “Q2 Payment”). On December 2, 2019, the Company and its subsidiary Garrett ASASCO, filed a Summons with Notice in the Commercial Division of the Supreme Court of the State of New York, County of New York (the “NY Supreme Court”) commencing an action (the “Action”) against Honeywell, certain of Honeywell’s subsidiaries and certain of Honeywell’s employees for declaratory judgment, breach of contract, breach of fiduciary duties, aiding and abetting breach of fiduciary duties, corporate waste, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. On January 15, 2020, the Company and Garrett ASASCO, filed a Complaint in the NY Supreme Court in connection with the Action. The lawsuit arose from the Honeywell Indemnity Agreement. The Company sought declaratory relief; compensatory damages in an amount to be determined at trial; rescission of the Honeywell Indemnity Agreement; attorneys’ fees and costs and such other and further relief as the Court deemed just and proper. Among other claims, Garrett asserted that Honeywell was not entitled to indemnification because it improperly sought indemnification for amounts attributable to punitive damages and intentional misconduct, and because it failed to establish other prerequisites for indemnification under New York law. Specifically, the claim asserted that Honeywell had failed to establish its right to indemnity for each and every asbestos settlement of the thousands for which it seeks indemnification. The Action sought to establish that the Honeywell Indemnity Agreement was not enforceable, in whole or in part. On March 5, 2020, Honeywell filed a “Notice of Motion to Dismiss Garrett’s Complaint”. On September 20, 2020, Garrett and certain of its subsidiaries each filed the Chapter 11 Cases. On September 23, 2020, Garrett removed the case to the United States District Court for the Southern District of New York, and on September 24, 2020, the case was referred to the Bankruptcy Court. On October 13, 2020, Honeywell filed a motion to dismiss in the Bankruptcy Court. A pre-trial conference took place on October 22, 2020. The Court heard argument on Honeywell’s pending motion to dismiss on November 18, 2020. On November 2, 2020, the Garrett entities that are Debtors and Debtors in Possession filed a Motion Pursuant to Sections 105(a) and 502(c) To Establish Procedures For Estimating The Maximum Amount Of Honeywell’s Claims And Related Relief (“Motion”). The Court heard argument on the Motion on November 18. The Court ordered an estimation proceeding to take place to estimate all of Honeywell’s claims against the Garrett entities that were Debtors and Debtors in Possession. 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 provided that, following the Spin-Off date of October 1, 2018, we were responsible and would indemnify Honeywell for all taxes, including income taxes, sales taxes, value-added 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, Garrett ASASCO was 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. Additionally, the Tax Matters Agreement provided that Garrett ASASCO was to make payments to a subsidiary of Honeywell for a portion of Honeywell’s net tax liability under Section 965(h)(6)(A) of the Internal Revenue Code for mandatory transition taxes that Honeywell determined is attributable to us (the “MTT Claim”). Following the Spin-Off, Honeywell asserted that Garrett ASASCO was obligated to pay $240 million to Honeywell for the MTT Claim under the Tax Matters Agreement. Accordingly, and in connection with the Tax Matters Agreement, we made payments to Honeywell, under protest, for the Euro-equivalent of $18 million and $19 million during 2019 and the fourth quarter of 2018, respectively, for the MTT Claim. On October 30, 2020, however, Honeywell filed an SEC Form 10-Q for the quarterly period ended September 30, 2020, reporting that its claim against us under the Tax Matters Agreement, including the MTT Claim, was $273 million. Under the terms of the Tax Matters Agreement, Garrett ASASCO was 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 2018, Garrett ASASCO paid the first annual installment in October 2018, with subsequent annual installments to be paid in April of each year. The annual installment due on April 1, 2020 was initially deferred to December 31, 2020 in agreement with Honeywell, and subsequently not paid as a result of the automatic stay applicable to the Debtors under the Bankruptcy Code as a result of the Chapter 11 Cases. On July 17, 2020, we provided notice to Honeywell asserting that Honeywell had caused material breaches of the Tax Matters Agreement and that the Tax Matters Agreement is unenforceable. The value and validity of Honeywell’s claims under the Tax Matters Agreement, including the MTT Claim, were subsequently litigated in the Chapter 11 Cases. As described above, the Plan, as confirmed by the Bankruptcy Court, includes a global settlement with Honeywell providing for, among other things, the full and final satisfaction, settlement, release, and discharge of all liabilities under or related to the Tax Matters Agreement. 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. On December 18, 2020, Honeywell filed proofs of claim in the Chapter 11 Cases, asserting that the Company owes at least $1.9 billion. The Bankruptcy Court was scheduled to estimate the amount of Honeywell’s claims in an estimation proceeding that was scheduled to commence on February 1, and subsequently cancelled. On January 11, 2021, the Company announced that it had agreed to settle Honeywell’s claims as part of the Plan. The Plan was confirmed by the Bankruptcy Court and went effective on the Effective Date, April 30, 2021. The Company emerged from bankruptcy on the Effective Date. Under the Plan settlement, which is now binding and effective, Honeywell received a $375 million cash payment as well as Series B Preferred Stock payable in instalments of $35 million in 2022, and $100 million annually from 2023-2030. The Company has the option to prepay the Series B Preferred Stock in full at any time at a call price equivalent to $584 million as of the Effective Date (representing the present value of the instalments at a 7.25% discount rate). The Company also has the option to make a partial payment of the Series B Preferred Stock, reducing the present value to $400 million, at any time within 18 months of the Effective Date. Pursuant to the Plan, on the Effective Date, the obligations of the Debtors under each of the following agreements were cancelled and the applicable agreements governing such obligations were terminated: (a) that certain Indemnification Guarantee Agreement, dated September 27, 2018, by and among Honeywell ASASCO 2 Inc., Garrett ASASCO Inc., and the other Guarantors party thereto, as may be amended, restated, supplemented or otherwise modified from time to time prior to the Effective Date (the “Honeywell Indemnification Guarantee Agreement”); (b) (i) that certain Indemnification and Reimbursement Agreement, dated September 12, 2018 (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time), by and among Honeywell ASASCO Inc., Honeywell ASASCO 2 Inc. and Honeywell International Inc.; and (ii) that certain Contribution and Assignment Agreement, dated September 14, 2018 (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time), by and between Honeywell ASASCO Inc. and Garrett ASASCO Inc., as each may be amended, restated, supplemented or otherwise modified from time to time prior to the Effective Date (collectively, the “Honeywell Indemnity Agreement”); (c) that certain Tax Matters Agreement, dated September 12, 2018, by and among Honeywell International Inc., GMI, Honeywell ASASCO Inc. and Honeywell ASASCO 2 Inc., as may be amended, supplemented or otherwise modified from time to time (the “Tax Matters Agreement” and, together with the Honeywell Indemnification Guarantee Agreement and the Honeywell Indemnity Agreement, the “Honeywell Agreements”). Securities Litigation On September 25, 2020, a putative securities class action complaint was filed against Garrett Motion Inc. and certain current and former Garrett officers and directors, in the United States District Court for the Southern District of New York. The case bears the caption : Steven Husson, Individually and On Behalf of All Others Similarly Situated, v. Garrett Motion Inc., Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, and Su Ping Lu On October 5, 2020, another putative securities class action complaint was filed against certain current and former Garrett officers and directors, in the United States District Court for the Southern District of New York. This case bears the caption: The Gabelli Asset Fund, The Gabelli Dividend & Income Trust, The Gabelli Value 25 Fund Inc., The Gabelli Equity Trust Inc., SM Investors LP and SM Investors II LP, on behalf of themselves and all others similarly situated, v. Su Ping Lu, Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, Craig Balis, Thierry Mabru, Russell James, Carlos M. Cardoso, Maura J. Clark, Courtney M. Enghauser, Susan L. Main, Carsten Reinhardt, and Scott A. Tozier On November 5, 2020, another putative securities class action complaint was filed against certain current and former Garrett officers and directors, in the United States District Court for the Southern District of New York. This case bears the caption: Joseph Froehlich, Individually and On Behalf of All Others Similarly Situated, v. Olivier Rabiller, Allesandro Gili, Peter Bracke, Sean Deason, and Su Ping Lu All three actions are currently assigned to Judge John P. Cronan. Su Ping Lu filed a waiver of service in the Gabelli Action on November 10, 2020. On November 24, 2020, competing motions were filed seeking the appointment of lead plaintiff and lead counsel and the consolidation of the Husson, Gabelli, and Froehlich Actions. On December 8, 2020, counsel for the plaintiffs in the Gabelli Action – the Entwistle & Cappucci law firm – filed an unopposed stipulation and proposed order that would (1) appoint the plaintiffs in the Gabelli Action – the “Gabelli Entities” – the lead plaintiffs; (2) would appoint Entwistle & Cappucci as lead counsel for the plaintiff class; and (3) consolidate the Gabelli Action, the Husson Action, and the Froehlich Action (the “Consolidated D&O Action”). On January 21, 2021, the Court granted the motion to consolidate the actions and granted the Gabelli Entities’ motions for appointment as lead plaintiff and for selection of lead counsel. On February 25, 2021, plaintiffs filed a Consolidated Amended Complaint for Violation of the Federal Securities Laws. The Company’s insurer, AIG has accepted the defense, subject the customary reservation of rights. The bankruptcy court set a bar date of March 1, 2021 for current and former shareholders to file claims against the Debtors arising from rescission of a purchase or sale of Common Stock of Garrett Motion Inc., for damages arising from the purchase or sale of Common Stock of Garrett Motion Inc., or for reimbursement or contribution allowed under section 502 of the Bankruptcy Code on account of such claims arising (or deemed to have arisen) prior to the Petition Date for all securities claims arising prior to the Petition Date. We are not yet able to assess the likelihood that any such claims will be allowed. To the extent allowed, each holder of such claims pursuant to the Plan would be entitled to receive, (x) its pro rata share of the aggregate cash payments received or recoverable from any insurance policies of the Company on account of any such allowed claims and (y) solely to the extent that such payments are less than the amount of its allowed claim, payment in full of the remaining amount of its allowed claim, at the option of the reorganized Debtors, in cash or a number of shares of Garrett Common Stock at a value of $6.25 per share. The Company has agreed with the Gabelli Entities and their lead counsel to permit a class claim to be recognized in the bankruptcy court and to have securities claims against Garrett Motion Inc. to be litigated in the district court alongside the Consolidated D&O Action. The Gabelli Entities have agreed that any recoveries against Garrett Motion Inc. on account of securities claims litigated through the class claim are limited to available insurance policy proceeds. On July 2, 2021, the bankruptcy court entered an order approving the joint request from the Company and the Gabelli Entities to handle the securities claims against Garrett Motion Inc. in this manner. The Gabelli Entities were authorized and on July 22, 2021 filed a second amended complaint to add claims against Garrett Motion Inc. Defendants’ motion to dismiss with respect to claims asserted against all defendants (current and former officers and directors and Garrett Motion Inc.) is currently expected to be filed on or before August 11, 2021. Lead plaintiffs’ opposition to the motion to dismiss is due on or before October 11, 2021, and the defendants’ reply briefing is due on or before November 24, 2021. Make-Whole Litigation On November 13, 2020, certain of the Debtors (the “Plaintiffs”) filed a complaint in the Bankruptcy Court against the indenture trustee (the “Indenture Trustee”) of the 5.125% senior notes due 2026 (the “Senior Notes”) seeking declaratory judgment on two claims for relief that the Debtors did not owe, and the holders of the Senior Notes (the “Noteholders”) were not entitled to, any make-whole premium under the Indenture (the “Make-Whole” and such litigation, the “Make-Whole Litigation”). Certain Noteholders contended in the Chapter 11 Cases that the Noteholders were entitled to payment of the Make-Whole under the terms of the Indenture, which provided for the payment of the Make-Whole if the Debtors exercised their right to redeem the Senior Notes prior to maturity, as a result of the Debtors’ commencement of their Chapter 11 Cases. The Plaintiffs’ position was that the Noteholders were not entitled to any Make-Whole because the Debtors had not exercised their right of redemption as contemplated by the Indenture and, in the alternative, that the Make-Whole should be disallowed as unmatured interest pursuant to Section 502(b)(2) of the Bankruptcy Code. On January 8, 2021, the Indenture Trustee filed an answer to the Debtors’ complaint. On January 11, 2021, the Company announced that it had agreed to settle the Make-Whole Litigation as part of the transactions and settlements embodied in the Plan. The Plan was approved by the Bankruptcy Court and went effective on the Effective Date, April 30, 2021. Pursuant to the settlement embodied in the Plan, the Make-Whole was allowed as a claim in the amount of $15 million. The Make-Whole Litigation was dismissed with prejudice on the Effective Date, in accordance with the approved settlement terms. Brazilian Tax Matters In September 2020, the Brazilian tax authorities issued an infraction notice against Garrett Motion Industria Automotiva Brasil Ltda, challenging the use of certain tax credits (“ Befiex Befiex Other Commitments and Contingencies We are subject to other lawsuits, investigations and disputes arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability, prior acquisitions and divestitures, employee benefit plans, intellectual property and environmental, health and safety matters. We 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. |
Pension Benefits
Pension Benefits | 6 Months Ended |
Jun. 30, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension Benefits | Note 23. Pension Benefits 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 2021. We expect to make contributions of cash and/or marketable securities of approximately $7 million to our non-U.S. pension plans to satisfy regulatory funding standards in 2021, of which $3 million has been contributed through the first six months of the year. Net periodic benefit costs for our significant defined benefit plans include the following components: Three Months Ended June 30, Six Months Ended June 30, U.S. Plans Non-U.S. Plan, U.S. Plans Non-U.S. Plan, 2021 2020 2021 2020 2021 2020 2021 2020 (Dollars in millions) Service cost $ — $ — $ 3 $ 2 $ 1 $ 1 $ 5 $ 5 Interest cost 1 1 — — 2 3 1 1 Expected return on plan assets (3 ) (3 ) (2 ) (1 ) (5 ) (5 ) (3 ) (3 ) $ (2 ) $ (2 ) $ 1 $ 1 $ (2 ) $ (1 ) $ 3 $ 3 For both our U.S. and non-U.S. defined benefit pension plans, we estimate the service and interest cost components of net period benefit (income) cost by utilizing a full yield curve approach in the estimation of these cost components by applying the specific spot rates along the yield curve used in the determination of the pension benefit obligation to their underlying projected cash flows. 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Restricted Cash | Restricted Cash Upon emergence from bankruptcy, the Company has classified $85 million of funds designated to pay advisor fees related to the bankruptcy proceedings as Restricted cash. The remaining balance primarily consists of bank deposits used to pledge as collateral in order to be able to issue bank notes as payment to certain suppliers in the Asia Pacific region (refer to note 9, Factoring and Notes Receivable). |
Related Party Transactions | Related Party Transactions We lease certain facilities and receive property maintenance services from Honeywell, which as of emergence from Chapter 11 is the owner of our Series B Preferred Stock and appoints a Director to the Board. Lease and service agreements were made at commercial terms prevalent in the market at the time they were executed. Our payments under the agreements with Honeywell were $2 million and $4 million for the three and six months ended June 30, 2021, respectively and were included in Cost of goods sold in our Consolidated Interim Statements of Operations. Related to the agreements with Honeywell, our Consolidated Interim Balance Sheets includes liabilities of $15 million During the three and six months ended June 30, 2021, certain of our related parties participated in our Plan as follows, as more fully discussed in Note 2, Plan of Reorganization and Note 18, Equity: • We reimbursed Centerbridge and Oaktree, who are significant shareholders, and Honeywell for professional fees and expenses related to their support of our emergence from Chapter 11 bankruptcy; • We reimbursed Centerbridge and Oaktree for their participation in the Equity Backstop; and • Centerbridge and Oaktree were parties to our Registration Rights Agreement for the registration of our Series A Preferred Stock and to our Series A Investor Rights Agreement. |
Preferred Stock | Series A Preferred Stock Our Series A Preferred Stock is not a mandatorily redeemable financial instrument and is classified as permanent equity in our Consolidated Interim Balance Sheets. The Series A Preferred stock contains a conversion feature which is not required to be bifurcated, is not a derivative, and does not contain a beneficial conversion feature. It is not a participating security with the Company’s Common Stock. See Note 2, Reorganization and Chapter 11 Proceedings and Note 18, Equity, of the Consolidated Interim Financial Statements for further details. Series B Preferred Stock Our Series B Preferred Stock is a mandatorily redeemable financial instrument and is classified as debt in our Consolidated Interim Balance Sheets. The Series B Preferred stock does not require physical settlement by repurchase of a fixed number of the issuer’s equity shares in exchange for cash, and therefore not required to be subsequently remeasured. The Series B Preferred Stock redemption options are not required to be bifurcated and are not considered derivatives. See Note 2, Reorganization and Chapter 11 Proceedings and Note 16, Mandatorily Redeemable Series B Preferred Stock, of the Consolidated Interim Financial Statements for further details. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year amounts to conform to current year classifications, specifically certain items that had been previously recorded in selling, general and administrative expenses presented now within cost of goods sold. The reclassifications had no impact on net income, equity, or cash flows as previously reported. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In January 2021, the FASB issued clarification on the scope of relief related to the reference rate reform. The Company is currently evaluating the impact of the guidance related to certain existing debt agreements on our Consolidated Financial Statements. There are no other recently issued, but not yet adopted, accounting pronouncements which are expected to have a material impact on the Company’s Consolidated Interim Financial Statements and related disclosures. |
Plan of Reorganization (Tables)
Plan of Reorganization (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Reorganizations [Abstract] | |
Schedule of Reorganization Items Net | Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of the following for the three and six months ended June 30, 2021: Three Months Ended June 30, Six Months Ended June 30, 2021 2021 (Dollars in millions) Gain on settlement of Honeywell claims ( 1) $ (502 ) $ (502 ) Advisor fees 96 180 Director’s and officers insurance 39 39 Write off pre-petition debt issuance cost 25 25 Employee stock cash out 13 13 Expenses related to Senior Notes ( 2) 28 28 DIP Financing fees — 1 Bid termination and expense reimbursement — 79 Other 6 16 Total reorganization items, net $ (295 ) $ (121 ) (1) The gain on settlement of Honeywell claims of $502 million is comprised of the pre-emergence Honeywell claims of $1,459 million, less the $375 million payment to Honeywell, less the Series B Preferred Stock issued to Honeywell which was recorded at $577 million, less a currency translation adjustment of $5 million. (2) Includes $15 million in connection with Make-Whole Litigation and $13 million related to post-petition interest. |
Schedule of Changes to Debt Outstanding | The table below presents changes to our debt outstanding as a result of the Plan: Debt as of December 31, 2020 Movement (1) Less debt repaid Exit financing (2) Debt as of June 30, 2021 (Dollars in millions) Secured Term Loan Facilities and accrued interest $ 1,082 $ 21 $ (1,103 ) $ — $ — Borrowings under Old Revolving Facility 370 4 (374 ) — — Senior Notes and accrued interest 429 32 (461 ) — — Debtor-in-possession Term Loan 200 — (200 ) — — Term Loan Facilities — — — 1,209 1,209 Total long-term debt $ 2,081 $ 57 $ (2,138 ) $ 1,209 $ 1,209 The principal outstanding and carrying amount of our long-term debt as of June 30, 2021 are as follows: Due Interest Rate June 30, 2021 Dollar Facility 4/30/2028 3.75 % $ 715 Euro Facility 4/30/2028 3.50 % 532 Total principal outstanding 1,247 Less: unamortized deferred financing costs (38 ) Less: current portion of long-term debt (5 ) Total long-term debt $ 1,204 |
Schedule of Liabilities Subject to Compromise | The following table presents liabilities subject to compromise as reported in the Consolidated Interim Balance Sheet at June 30, 2021 and December 31, 2020, respectively: December 31, 2020 Change in estimated allowed claims Cash payment Issuance of Series B Preferred Stock Reinstatements Reorganization OCI June 30, 2021 (Dollars in millions) Obligations payable to Honeywell (Note 22) $ 1,482 $ (23 ) $ (375 ) $ (577 ) $ — $ (502 ) $ (5 ) $ — Senior Notes (Note 15) 429 32 (461 ) — — — — — Pension, compensation, benefit and other employee related 92 (10 ) — — (82 ) — — — Uncertain tax positions and deferred taxes 69 (8 ) — (61 ) — — — Accounts payable 82 (50 ) — — (32 ) — — — Advanced discounts from suppliers 33 (6 ) — — (27 ) — — — Lease liabilities (Note 14) 19 (2 ) — — (17 ) — — — Product warranties and performance guarantees 16 — — — (16 ) — — — Freight Accrual 27 (27 ) — — — — — — Other 41 (14 ) — — (27 ) — — — Total liabilities subject to compromise $ 2,290 $ (108 ) $ (836 ) $ (577 ) $ (262 ) $ (502 ) $ (5 ) $ — |
Revenue Recognition and Contr_2
Revenue Recognition and Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Net Sales by Region and Channel | Net sales by region (determined based on country of shipment) and channel are as follows: Three months ended June 30, 2021 OEM Aftermarket Other Total (Dollars in millions) United States $ 98 $ 44 $ — $ 142 Europe 434 38 8 480 Asia 280 14 7 301 Other International 6 6 — 12 $ 818 $ 102 $ 15 $ 935 Six months ended June 30, 2021 OEM Aftermarket Other Total (Dollars in millions) United States $ 198 $ 80 $ 2 $ 280 Europe 915 77 16 1,008 Asia 582 24 14 620 Other International 12 12 — 24 $ 1,707 $ 193 $ 32 $ 1,932 Three months ended June 30, 2020 OEM Aftermarket Other Total (Dollars in millions) United States 33 32 1 66 Europe 160 22 6 188 Asia 202 11 5 218 Other International — 5 — 5 $ 395 $ 70 $ 12 $ 477 Six months ended June 30, 2020 OEM Aftermarket Other Total (Dollars in millions) United States $ 125 $ 72 $ 1 $ 198 Europe 554 52 15 621 Asia 361 19 11 391 Other International 3 9 — 12 $ 1,043 $ 152 $ 27 $ 1,222 |
Summary of Contract Assets and Liabilities | The following table summarizes our contract assets and liabilities balances: 2021 (Dollars in millions) Contract assets—January 1 $ 61 Contract assets—June 30 56 Change in contract assets—Increase/(Decrease) $ (5 ) Contract liabilities—January 1 $ (2 ) Contract liabilities—June 30 (2 ) Change in contract liabilities—(Increase)/Decrease $ — |
Research, Development & Engin_2
Research, Development & Engineering (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Research And Development [Abstract] | |
Summary of Research, Development & Engineering Activities | Garrett conducts research, development and engineering (“RD&E”) activities, which consist primarily of the development of new products and product applications. RD&E costs are charged to expense as incurred unless the Company has a contractual guarantee for reimbursement from the customer. Customer reimbursements are netted against gross RD&E expenditures as they are considered a recovery of cost. Such costs are included in Cost of goods sold as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Research and development costs $ 33 $ 26 $ 66 $ 56 Engineering-related expenses 5 6 11 12 $ 38 $ 32 $ 77 $ 68 |
Other Expenses, Net (Tables)
Other Expenses, Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Income And Expenses [Abstract] | |
Schedule of Other Operating Cost and Expense | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Indemnification related — post Spin-Off $ — $ 12 $ — $ 27 Indemnification related — litigation — 2 — 3 Factoring and notes receivables discount fees — 1 1 1 $ — $ 15 $ 1 $ 31 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Tax Expense (Benefit) and Effective Tax Rate | For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Tax expense $ 30 $ 11 $ 54 $ 12 Effective tax rate 6.8 % 550 % 15.1 % 21.8 % |
Accounts, Notes and Other Rec_2
Accounts, Notes and Other Receivables-Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes and Other Receivables-Net | June 30, 2021 December 31, 2020 (Dollars in millions) Trade receivables $ 620 $ 625 Notes receivable 96 152 Other receivables 78 77 794 854 Less—Allowance for doubtful accounts (10 ) (13 ) $ 784 $ 841 |
Inventories-Net (Tables)
Inventories-Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | June 30, 2021 December 31, 2020 (Dollars in millions) Raw materials $ 158 $ 160 Work in process 19 19 Finished products 134 97 311 276 Less—Reserves (36 ) (41 ) $ 275 $ 235 |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | June 30, December 31, 2021 2020 (Dollars in millions) Advanced discounts to customers, non-current $ 68 $ 70 Operating right-of-use assets (Note 14) 38 36 Other 32 29 $ 138 $ 135 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accrued Liabilities Current [Abstract] | |
Summary of Accrued Liabilities | June 30, 2021 December 31, 2020 (Dollars in millions) Customer pricing reserve $ 87 $ 82 Compensation, benefit and other employee related 71 62 Repositioning 14 7 Product warranties and performance guarantees 32 14 Taxes 35 37 Advanced discounts from suppliers, current 17 5 Customer advances and deferred income (a) 18 8 Accrued interest 8 — Short-term lease liability (Note 14) 11 5 Other (primarily operating expenses) 45 28 $ 338 $ 248 (a) Customer advances and deferred income include $2 million and $2 million |
Summary of Expenses Related to the Repositioning Accruals | The Company accrued repositioning costs related to projects to optimize its product costs and right-size its organizational structure. Expenses related to the repositioning accruals are included in Cost of goods sold in our Consolidated Interim Statements of Operations. Severance Costs Exit Costs Total (Dollars in millions) Balance at December 31, 2019 $ 3 $ 1 $ 4 Charges 6 — 6 Usage—cash (4 ) — (4 ) Balance at June 30, 2020 $ 5 $ 1 $ 6 Severance Costs Exit Costs Total (Dollars in millions) Balance at December 31, 2020 $ 7 $ — $ 7 Charges 11 — 11 Usage—cash (4 ) — (4 ) Balance at June 30, 2021 $ 14 $ — $ 14 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | June 30, December 31, 2021 2020 (Dollars in millions) Income taxes $ 96 $ 45 Designated and undesignated derivatives — 22 Pension and other employee related 100 14 Long-term lease liability (Note 14) 28 15 Advanced discounts from suppliers 23 11 Other 30 7 $ 277 $ 114 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense are as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Operating lease cost $ 4 $ 3 $ 8 $ 6 |
Summary of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases is as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 3 $ 3 $ 6 $ 5 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 4 $ 5 $ 5 $ 5 |
Summary of Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to operating leases is as follows: June 30, 2021 December 31, 2020 (Dollars in millions) Other assets $ 38 $ 36 Accrued liabilities 11 5 Other liabilities 28 15 Liabilities subject to compromise — 19 June 30, 2021 December 31, 2020 Weighted-average lease term (in years) 4.87 5.14 Weighted-average discount rate 6.18 % 6.16 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities were as follows: (Dollars in millions) 2021 $ 7 2022 11 2023 8 2024 6 2025 5 Thereafter 8 Total lease payments 45 Less imputed interest (7 ) $ 38 |
Long-term Debt and Credit Agr_2
Long-term Debt and Credit Agreements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Changes to Debt Outstanding | The table below presents changes to our debt outstanding as a result of the Plan: Debt as of December 31, 2020 Movement (1) Less debt repaid Exit financing (2) Debt as of June 30, 2021 (Dollars in millions) Secured Term Loan Facilities and accrued interest $ 1,082 $ 21 $ (1,103 ) $ — $ — Borrowings under Old Revolving Facility 370 4 (374 ) — — Senior Notes and accrued interest 429 32 (461 ) — — Debtor-in-possession Term Loan 200 — (200 ) — — Term Loan Facilities — — — 1,209 1,209 Total long-term debt $ 2,081 $ 57 $ (2,138 ) $ 1,209 $ 1,209 The principal outstanding and carrying amount of our long-term debt as of June 30, 2021 are as follows: Due Interest Rate June 30, 2021 Dollar Facility 4/30/2028 3.75 % $ 715 Euro Facility 4/30/2028 3.50 % 532 Total principal outstanding 1,247 Less: unamortized deferred financing costs (38 ) Less: current portion of long-term debt (5 ) Total long-term debt $ 1,204 |
Schedule of Principal Repayments Of Credit Facilities | Minimum scheduled principal repayments of the Credit Facilities as of June 30, 2021 are as follows: June 30, 2021 (Dollars in millions) 2021 $ 2 2022 7 2023 7 2024 7 2025 7 Thereafter 1,217 Total debt payments $ 1,247 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measures (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 and December 31, 2020: Fair Value Notional Amounts Assets Liabilities June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 Designated forward currency exchange contracts $ 212 $ — $ 2 $ — $ — $ — Designated cross-currency swap 715 — 2 — — — Undesignated instruments: Undesignated interest rate swap 981 — — — — — Undesignated forward currency exchange contracts 344 19 2 — 2 — Total undesignated instruments 1,325 19 2 — 2 — Total designated and undesignated instruments $ 2,252 $ 19 $ 6 $ — $ 2 $ — |
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: June 30, 2021 Carrying Value Fair Value (Dollars in millions) Terms Loans B (Secured) $ 1,209 $ 1,254 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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) (Dollars in millions) Balance at December 31, 2019 $ 153 $ 4 $ (27 ) $ 130 Other comprehensive income (loss) before reclassifications (11 ) (2 ) — (13 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — Net current period other comprehensive income (loss) (11 ) (2 ) — (13 ) Balance at June 30, 2020 $ 142 $ 2 $ (27 ) $ 117 Foreign Exchange Translation Adjustment Changes in Fair Value of Effective Cash Flow Hedges Changes in Fair Value of Net Investment Hedges Pension Adjustments Total Accumulated Other Comprehensive Income (Loss) (Dollars in millions) Balance at December 31, 2020 $ (81 ) $ (3 ) $ — $ (45 ) $ (129 ) Other comprehensive income (loss) before reclassifications 43 2 15 — 60 Amounts reclassified from accumulated other comprehensive income (loss) — 3 — — 3 Net current period other comprehensive income (loss) 43 5 15 — 63 Balance at June 30, 2021 $ (38 ) $ 2 $ 15 $ (45 ) $ (66 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Restricted Stock Activity Related to Stock Incentive Plan and Long-Term Incentive Plan | The following table summarizes information about RSU activity related to both the Stock Incentive Plan and the Long-Term Incentive Plan for the six months ended June 30, 2021: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested at December 31, 2020 1,538,969 $ 13.11 Granted 1,519,324 8.67 Vested (326,058 ) 13.10 Forfeited (7,261 ) 15.61 Vested and cancelled (1,205,650 ) 13.10 Non-vested at June 30, 2021 1,519,324 $ 8.67 |
Summary of Performance Stock Unit Activity Related to Stock Incentive Plan and Long-Term Incentive Plan | The following table summarizes information about PSU activity related to both the Stock Incentive Plan and the Long-Term Incentive Plan for the six months ended June 30, 2021: Number of Performance Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested at December 31, 2020 314,111 $ 16.17 Granted 1,472,875 8.67 Vested — — Forfeited (85,346 ) $ 14.00 Vested and cancelled (228,765 ) — Non-vested at June 30, 2021 1,472,875 $ 8.67 |
Summary of Continuity Award Activity | The following table summarizes information about Continuity Award activity for the period ended June 30, 2021: Number of Awards Weighted Average Grant Date Fair Value Per Award Non-vested at December 31, 2020 43 $ 257,536 Granted — — Vested (43 ) (257,536 ) Forfeited — — Non-vested at June 30, 2020 — — |
Restricted Stock Units | |
Summary of Information about Income Statement Impact | The following table summarizes the impact to the Consolidated Statement of Operations from RSUs: For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Compensation expense $ — $ 3 $ 2 $ 6 Reorganization items, net (Note 2) 8 — 8 — Future income tax benefit recognized 1 1 1 2 |
Performance Stock Units | |
Summary of Information about Income Statement Impact | The following table summarizes the impact to the Consolidated Statement of Operations from PSUs: For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Reorganization items, net (Note 2) 1 — 1 — |
Continuity Awards | |
Summary of Continuity Award Activity | The following table summarizes the impact to the Consolidated Statement of Operations from Continuity Awards for the period ended June 30, 2021. For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Compensation expense $ 3 $ 2 $ 5 $ 2 Future income tax benefit recognized — — 1 — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The details of the earnings per share (“EPS”) calculations for the three and six months ended June 30, 2021 and 2020 are as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions except per share) Basic Net income (loss) $ 409 $ (9 ) $ 304 $ 43 Less: preferred stock dividend (24 ) — (24 ) — Net income (loss) available to common shareholders $ 385 $ (9 ) $ 280 $ 43 Weighted average common shares outstanding 69,667,651 75,595,991 72,862,102 75,316,827 EPS – Basic $ 5.53 $ (0.12 ) $ 3.84 $ 0.57 Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in millions except per share) Diluted Net income (loss) $ 409 $ (9 ) $ 304 $ 43 Less: preferred stock dividend (24 ) — (24 ) — Net income (loss) available to common shareholders $ 385 $ (9 ) $ 280 $ 43 Weighted average common shares outstanding – Basic 69,667,651 75,595,991 72,862,102 75,316,827 Dilutive effect of unvested RSUs and other contingently issuable shares — 249,520 — 520,632 Dilutive effect of Series A Preferred Stock 166,086,887 — 83,502,247 — Weighted average common shares outstanding – Diluted 235,754,538 75,845,511 156,364,349 75,837,459 EPS – Diluted $ 1.73 $ (0.12 ) $ 1.94 $ 0.57 |
Pension Benefits (Tables)
Pension Benefits (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, Six Months Ended June 30, U.S. Plans Non-U.S. Plan, U.S. Plans Non-U.S. Plan, 2021 2020 2021 2020 2021 2020 2021 2020 (Dollars in millions) Service cost $ — $ — $ 3 $ 2 $ 1 $ 1 $ 5 $ 5 Interest cost 1 1 — — 2 3 1 1 Expected return on plan assets (3 ) (3 ) (2 ) (1 ) (5 ) (5 ) (3 ) (3 ) $ (2 ) $ (2 ) $ 1 $ 1 $ (2 ) $ (1 ) $ 3 $ 3 |
Background and Basis of Prese_2
Background and Basis of Presentation - Additional Information (Details) | Apr. 25, 2021 |
Minimum | |
Background And Basis Of Presentation [Line Items] | |
Bankruptcy, percentage of voting shares issued to existing share holders. | 50.00% |
Plan of Reorganization - Additi
Plan of Reorganization - Additional Information (Details) | Apr. 30, 2021USD ($) | Apr. 26, 2021USD ($)shares | Sep. 27, 2018USD ($) | Sep. 27, 2018EUR (€) | Jun. 30, 2021USD ($)shares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)shares | Jun. 30, 2020USD ($) | Dec. 31, 2022USD ($) | Apr. 30, 2022USD ($) | Apr. 26, 2021EUR (€) |
Plan Of Reorganization [Line Items] | |||||||||||
Bankruptcy proceedings, date petition for bankruptcy Filed | Apr. 20, 2021 | ||||||||||
Bankruptcy court, date of confirmation order | Apr. 26, 2021 | ||||||||||
Cash paid for holders of old Common stock | $ 69,000,000 | ||||||||||
Post-petition interest | $ 13,000,000 | $ 13,000,000 | |||||||||
Deferred financing costs | 38,000,000 | 1,221,000,000 | 1,221,000,000 | ||||||||
Deferred financing costs on repaid historical debt expensed | 25,000,000 | ||||||||||
Reorganization items, net (Note 2) | (295,000,000) | $ 0 | (121,000,000) | $ 0 | |||||||
Make-Whole Litigation | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Payment in connection with litigation | $ 15,000,000 | 15,000,000 | |||||||||
Revolving Credit Facility | Letter of Credit | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Line of credit, maximum borrowing capacity | 125,000,000 | ||||||||||
Debtor-in-Possession Term Loan | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Payment of interest and principal outstanding | 101,000,000 | ||||||||||
Credit Agreement | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Deferred financing costs | $ 1,221,000,000 | ||||||||||
Credit Agreement | Senior Secured Credit Facilities | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Repayment of accrued pre-petition hedge obligations | $ 20,000,000 | ||||||||||
Credit Agreement | Term A Facility | Senior Secured Credit Facilities | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Repayment of outstanding principal balance, accrued pre-petition and default interest | $ 307,000,000 | ||||||||||
Line of credit, term | 5 years | 5 years | |||||||||
Credit Agreement | Term B Facility | Senior Secured Credit Facilities | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Repayment of outstanding principal balance, accrued pre-petition and default interest | $ 422,000,000 | € 374,000,000 | |||||||||
Line of credit, term | 7 years | 7 years | |||||||||
Credit Agreement | Revolving Credit Facility | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Line of credit, maximum borrowing capacity | $ 300,000,000 | ||||||||||
Credit Agreement | Revolving Credit Facility | Senior Secured Credit Facilities | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Repayments of outstanding principal balance and accrued interest | $ 374,000,000 | ||||||||||
Credit Agreement | Revolving Credit Facility | Secured Debt | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Line of credit, term | 5 years | 5 years | |||||||||
Line of credit, maximum borrowing capacity | $ 300,000,000 | $ 300,000,000 | |||||||||
Credit Agreement | Term Loan Facility | Secured Debt | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Line of credit, term | 7 years | ||||||||||
Line of credit, maximum borrowing capacity | $ 715,000,000 | € 450,000,000 | |||||||||
Debtors | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Accrued pre-petition interest | 10,000,000 | ||||||||||
Post-petition interest | 13,000,000 | ||||||||||
Debtors | Make-Whole Litigation | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Payment in connection with litigation | 15,000,000 | ||||||||||
Debtors | Senior Notes | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Repayment of outstanding principal balance | $ 423,000,000 | € 350,000,000 | |||||||||
BNP Paribas | Letter of Credit | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Line of credit, term | 5 years | ||||||||||
Line of credit, maximum borrowing capacity | $ 35,000,000 | ||||||||||
PSA and The Transaction, The Amended Plan | Directors, Officers and Other Employees | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Maximum percentage of equity authorized to grant | 10.00% | 10.00% | |||||||||
PSA and The Transaction, The Amended Plan | Honeywell International Inc | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Litigation cash payment | $ 375,000,000 | $ 375,000,000 | |||||||||
Series A Preferred Stock | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Stock issued | shares | 247,768,962 | 248,000,000 | 247,768,962 | ||||||||
Aggregate consideration in rights offering | $ 1,301,000,000 | ||||||||||
Series B Preferred Stock | PSA and The Transaction, The Amended Plan | Honeywell International Inc | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Stock issued | shares | 834,800,000 | ||||||||||
Preferred stock issued payable annually in 2023 | $ 100,000,000 | $ 100,000,000 | |||||||||
Preferred stock issued payable annually in 2024 | 100,000,000 | 100,000,000 | |||||||||
Preferred stock issued payable annually in 2025 | 100,000,000 | 100,000,000 | |||||||||
Preferred stock issued payable annually in 2026 | 100,000,000 | 100,000,000 | |||||||||
Preferred stock issued payable annually in 2027 | 100,000,000 | 100,000,000 | |||||||||
Preferred stock issued payable annually in 2028 | 100,000,000 | 100,000,000 | |||||||||
Preferred stock issued payable annually in 2029 | 100,000,000 | 100,000,000 | |||||||||
Preferred stock issued payable annually in 2030 | $ 100,000,000 | $ 100,000,000 | |||||||||
Series B Preferred Stock | PSA and The Transaction, The Amended Plan | Honeywell International Inc | Scenario Forecast | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Preferred stock issued payable in instalments | $ 35,000,000 | $ 35,000,000 | |||||||||
Common Stock | |||||||||||
Plan Of Reorganization [Line Items] | |||||||||||
Stock issued | shares | 65,035,801 | 65,035,801 |
Plan of Reorganization - Schedu
Plan of Reorganization - Schedule of Reorganization Items Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Reorganizations [Abstract] | ||||
Gain on settlement of Honeywell claims | $ (502,000,000) | $ (502,000,000) | ||
Advisor fees | 96,000,000 | 180,000,000 | ||
Director’s and officers insurance | 39,000,000 | 39,000,000 | ||
Write off pre-petition debt issuance cost | 25,000,000 | 25,000,000 | ||
Employee stock cash out | 13,000,000 | 13,000,000 | ||
Expenses related to Senior Notes | 28,000,000 | 28,000,000 | ||
DIP Financing fees | 1,000,000 | |||
Bid termination and expense reimbursement | 79,000,000 | |||
Other | 6,000,000 | 16,000,000 | ||
Total reorganization items, net | $ (295,000,000) | $ 0 | $ (121,000,000) | $ 0 |
Plan of Reorganization - Sche_2
Plan of Reorganization - Schedule of Reorganization Items Net (Parenthetical) (Details) - USD ($) $ in Millions | Apr. 26, 2021 | Jun. 30, 2021 | Jun. 30, 2021 |
Plan Of Reorganization [Line Items] | |||
Gain on settlement of Honeywell claims | $ 502 | $ 502 | |
Post-petition interest | 13 | 13 | |
Make-Whole Litigation | |||
Plan Of Reorganization [Line Items] | |||
Payment in connection with litigation | $ 15 | 15 | |
PSA and The Transaction, The Amended Plan | Honeywell International Inc | |||
Plan Of Reorganization [Line Items] | |||
Gain on settlement of Honeywell claims | 502 | ||
Pre-emergence Honeywell claims | 1,459 | ||
Litigation cash payment | $ 375 | 375 | |
Series B Preferred Stock issued | 577 | ||
Currency translation adjustment | $ 5 |
Plan of Reorganization - Sche_3
Plan of Reorganization - Schedule of Changes to Debt Outstanding (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Debt Instrument [Line Items] | |
Debt as of December 31, 2020 | $ 2,081 |
Movement | 57 |
Less debt repaid | (2,138) |
Exit financing | 1,209 |
Debt as of June 30, 2021 | 1,209 |
Borrowings Under Old Revolving Facility | |
Debt Instrument [Line Items] | |
Debt as of December 31, 2020 | 370 |
Movement | 4 |
Less debt repaid | (374) |
Term Loan Facilities | |
Debt Instrument [Line Items] | |
Exit financing | 1,209 |
Debt as of June 30, 2021 | 1,209 |
Secured Term Loan Facilities And Accrued Interest | |
Debt Instrument [Line Items] | |
Debt as of December 31, 2020 | 1,082 |
Movement | 21 |
Less debt repaid | (1,103) |
Senior Notes And Accrued Interest | |
Debt Instrument [Line Items] | |
Debt as of December 31, 2020 | 429 |
Movement | 32 |
Less debt repaid | (461) |
Debtor-in-possession Term Loan | |
Debt Instrument [Line Items] | |
Debt as of December 31, 2020 | 200 |
Less debt repaid | $ (200) |
Plan of Reorganization - Sche_4
Plan of Reorganization - Schedule of Changes to Debt Outstanding (Parenthetical) (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Apr. 26, 2021 |
Reorganizations [Abstract] | ||
Deferred financing costs | $ 1,221 | $ 38 |
Plan of Reorganization - Sche_5
Plan of Reorganization - Schedule of Liabilities Subject to Compromise (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Liabilities subject to compromise | $ 2,290 |
Change in estimated allowed claims | (108) |
Cash payment | (836) |
Issuance of Series B Preferred Stock | (577) |
Reinstatements | (262) |
Reorganization | (502) |
OCI | (5) |
Senior Notes | |
Liabilities subject to compromise | 429 |
Change in estimated allowed claims | 32 |
Cash payment | (461) |
Obligations Payable to Honeywell | |
Liabilities subject to compromise | 1,482 |
Change in estimated allowed claims | (23) |
Cash payment | (375) |
Issuance of Series B Preferred Stock | (577) |
Reorganization | (502) |
OCI | (5) |
Accounts Payable | |
Liabilities subject to compromise | 82 |
Change in estimated allowed claims | (50) |
Reinstatements | (32) |
Pension, Compensation, Benefit and Other Employee Related | |
Liabilities subject to compromise | 92 |
Change in estimated allowed claims | (10) |
Reinstatements | (82) |
Uncertain Tax Positions and Deferred Taxes | |
Liabilities subject to compromise | 69 |
Change in estimated allowed claims | (8) |
Reinstatements | (61) |
Advanced Discounts from Suppliers | |
Liabilities subject to compromise | 33 |
Change in estimated allowed claims | (6) |
Reinstatements | (27) |
Lease Liabilities | |
Liabilities subject to compromise | 19 |
Change in estimated allowed claims | (2) |
Reinstatements | (17) |
Product Warranties and Performance Guarantees | |
Liabilities subject to compromise | 16 |
Reinstatements | (16) |
Freight Accrual | |
Liabilities subject to compromise | 27 |
Change in estimated allowed claims | (27) |
Other | |
Liabilities subject to compromise | 41 |
Change in estimated allowed claims | (14) |
Reinstatements | $ (27) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($) | |
Significant Accounting Policies [Line Items] | ||
Restricted cash funds designated to pay advisor fees | $ 85 | $ 85 |
Honeywell International Inc | ||
Significant Accounting Policies [Line Items] | ||
Related party costs | 2 | 4 |
Related party liabilities | 15 | 15 |
Related party, lease contracts | $ 13 | $ 13 |
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 | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 935 | $ 477 | $ 1,932 | $ 1,222 |
United States | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 142 | 66 | 280 | 198 |
Europe | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 480 | 188 | 1,008 | 621 |
Asia | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 301 | 218 | 620 | 391 |
Other International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 12 | 5 | 24 | 12 |
OEM | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 818 | 395 | 1,707 | 1,043 |
OEM | United States | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 98 | 33 | 198 | 125 |
OEM | Europe | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 434 | 160 | 915 | 554 |
OEM | Asia | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 280 | 202 | 582 | 361 |
OEM | Other International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 6 | 12 | 3 | |
Aftermarket | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 102 | 70 | 193 | 152 |
Aftermarket | United States | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 44 | 32 | 80 | 72 |
Aftermarket | Europe | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 38 | 22 | 77 | 52 |
Aftermarket | Asia | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 14 | 11 | 24 | 19 |
Aftermarket | Other International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 6 | 5 | 12 | 9 |
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 15 | 12 | 32 | 27 |
Other | United States | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 1 | 2 | 1 | |
Other | Europe | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 8 | 6 | 16 | 15 |
Other | Asia | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 7 | $ 5 | $ 14 | $ 11 |
Revenue Recognition and Contr_4
Revenue Recognition and Contracts with Customers - Summary of Contract Assets and Liabilities (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Contract With Customer Asset And Liability [Abstract] | |
Contract assets—January 1 | $ 61 |
Contract assets—June 30 | 56 |
Change in contract assets—Increase/(Decrease) | (5) |
Contract liabilities—January 1 | (2) |
Contract liabilities—June 30 | $ (2) |
Research, Development & Engin_3
Research, Development & Engineering - Summary of Research, Development & Engineering Activities (Details) - Cost of Goods Sold - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||
Research, development & engineering expense, total | $ 38 | $ 32 | $ 77 | $ 68 |
Research and Development Costs | ||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||
Research, development & engineering expense, total | 33 | 26 | 66 | 56 |
Engineering-Related Expenses | ||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||
Research, development & engineering expense, total | $ 5 | $ 6 | $ 11 | $ 12 |
Other Expense, Net - Schedule o
Other Expense, Net - Schedule of Other Operating Cost and Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other Income And Expenses [Abstract] | |||
Indemnification related — post Spin-Off | $ 12 | $ 27 | |
Indemnification related — litigation | 2 | 3 | |
Factoring and notes receivables discount fees | 1 | $ 1 | 1 |
Other Expense, Net | $ 15 | $ 1 | $ 31 |
Income Taxes - Tax Expense and
Income Taxes - Tax Expense and Effective Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Tax expense | $ 30 | $ 11 | $ 54 | $ 12 |
Effective tax rate | 6.80% | 550.00% | 15.10% | 21.80% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
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 | Jun. 30, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Trade receivables | $ 620 | $ 625 |
Notes receivable | 96 | 152 |
Other receivables | 78 | 77 |
Accounts, notes and other receivables, gross | 794 | 854 |
Less—Allowance for doubtful accounts | (10) | (13) |
Accounts, notes and other receivables, net | $ 784 | $ 841 |
Accounts, Notes and Other Rec_4
Accounts, Notes and Other Receivables-Net - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Unbilled balances | $ 56 | $ 61 |
Factoring and Notes Receivable
Factoring and Notes Receivable - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Sale of trade receivables | $ 153 | $ 473 |
Proceeds from sale of bank notes | 0 | 160 |
Guaranteed bank notes pledged as collateral | $ 27 | $ 18 |
Inventories-Net - Summary of In
Inventories-Net - Summary of Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory Combining Work In Process And Raw Materials Alternative Gross [Abstract] | ||
Raw materials | $ 158 | $ 160 |
Work in process | 19 | 19 |
Finished products | 134 | 97 |
Inventory, gross | 311 | 276 |
Less—Reserves | (36) | (41) |
Inventories | $ 275 | $ 235 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Advanced discounts to customers, non-current | $ 68 | $ 70 |
Operating right-of-use assets (Note 14) | $ 38 | $ 36 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Total | Total |
Other | $ 32 | $ 29 |
Total | $ 138 | $ 135 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Accrued Liabilities Current [Abstract] | ||
Customer pricing reserve | $ 87 | $ 82 |
Compensation, benefit and other employee related | 71 | 62 |
Repositioning | 14 | 7 |
Product warranties and performance guarantees | 32 | 14 |
Taxes | 35 | 37 |
Advanced discounts from suppliers, current | 17 | 5 |
Customer advances and deferred income | 18 | 8 |
Accrued interest | 8 | |
Short-term lease liability (Note 14) | 11 | 5 |
Other (primarily operating expenses) | 45 | 28 |
Accrued Liabilities | $ 338 | $ 248 |
Accrued Liabilities - Summary_2
Accrued Liabilities - Summary of Accrued Liabilities (Parenthetical) (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
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 | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | $ 7 | $ 4 |
Charges | 11 | 6 |
Usage—cash | (4) | (4) |
Balance at end of period | 14 | 6 |
Severance Costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | 7 | 3 |
Charges | 11 | 6 |
Usage—cash | (4) | (4) |
Balance at end of period | $ 14 | 5 |
Exit Costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Balance at beginning of period | 1 | |
Usage—cash | 0 | |
Balance at end of period | $ 1 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Income taxes | $ 96 | $ 45 |
Designated and undesignated derivatives | 22 | |
Pension and other employee related | 100 | 14 |
Long-term lease liability (Note 14) | 28 | 15 |
Advanced discounts from suppliers | 23 | 11 |
Other | 30 | 7 |
Other Liabilities | $ 277 | $ 114 |
Leases - Additional Information
Leases - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2021 | |
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 [Member] | |
Lessee Lease Description [Line Items] | |
Operating lease, remaining lease terms | 10 years |
Operating lease, options to extend, years | 2 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 4 | $ 3 | $ 8 | $ 6 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Leases [Abstract] | ||||
Operating cash outflows from operating leases | $ 3 | $ 3 | $ 6 | $ 5 |
Right-of-use assets obtained in exchange for lease obligations, operating leases | $ 4 | $ 5 | $ 5 | $ 5 |
Leases - Summary of Supplemen_2
Leases - Summary of Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Other assets | $ 38 | $ 36 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets (Note 11) | Other assets (Note 11) |
Accrued liabilities | $ 11 | $ 5 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities (Note 12) | Accrued liabilities (Note 12) |
Other liabilities | $ 28 | $ 15 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities (Note 13) | Other liabilities (Note 13) |
Liabilities subject to compromise | $ 19 | |
Weighted-average lease term (in years) | 4 years 10 months 13 days | 5 years 1 month 20 days |
Weighted-average discount rate | 6.18% | 6.16% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Millions | Jun. 30, 2021USD ($) |
Leases [Abstract] | |
2021 | $ 7 |
2022 | 11 |
2023 | 8 |
2024 | 6 |
2025 | 5 |
Thereafter | 8 |
Total lease payments | 45 |
Less imputed interest | (7) |
Operating lease, liabilities | $ 38 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | gtx:AccruedAndOtherNonCurrentLiabilitiesMember |
Long-term Debt and Credit Agr_3
Long-term Debt and Credit Agreements - Additional Information (Details) | Apr. 30, 2021USD ($) | Apr. 26, 2021USD ($) | Jun. 30, 2021USD ($) | Apr. 30, 2021EUR (€) | Apr. 26, 2021EUR (€) |
Debt Instrument [Line Items] | |||||
Deferred financing costs | $ 38,000,000 | $ 1,221,000,000 | |||
Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate at option | 3.50% | ||||
Maximum [Member] | ABR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate at option | 0.00% | ||||
Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Deferred financing costs | $ 1,221,000,000 | ||||
Number of days expected guarantee | 120 days | ||||
Number of days expected to execute Security | 120 days | ||||
Percentage of prepayment premium | 1.00% | ||||
Percentage of excess cash flow proceeds starting December 31, 2022 | 50.00% | ||||
Percentage of excess cash flow proceeds thereafter year 1 | 25.00% | ||||
Percentage of excess cash flow proceeds thereafter year 2 | 0.00% | ||||
Line of credit facility, covenant terms | the Revolving Facility also contains a financial covenant requiring the maintenance of a consolidated total leverage ratio of not greater than 4.70 to 1.00 as of the end of each fiscal quarter if, on the last day of any such fiscal quarter, | ||||
Consolidated total leverage ratio | 4.70% | ||||
Debt instrument face amount | $ 30,000,000 | ||||
Aggregate commitment percentage | 35.00% | ||||
Credit Agreement | ABR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate at option | 2.25% | ||||
Credit Agreement | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate at option | 3.25% | ||||
Credit Agreement | Maximum [Member] | ABR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate at option | 1.50% | ||||
Credit Agreement | Maximum [Member] | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate at option | 0.50% | ||||
U.S. Dollar Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | Apr. 30, 2028 | ||||
Debt instrument interest rate stated percentage | 3.75% | ||||
U.S. Dollar Term Loan Facility | Credit Agreement | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, term | 7 years | ||||
Line of credit, maximum borrowing capacity | $ 715,000,000 | ||||
Euro Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | Apr. 30, 2028 | ||||
Debt instrument interest rate stated percentage | 3.50% | ||||
Euro Term Loan Facility | Credit Agreement | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, term | 7 years | ||||
Line of credit, maximum borrowing capacity | € | € 450,000,000 | ||||
Revolving Credit Facility | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate at option | 1.00% | ||||
Unused commitment fee percentage | 0.50% | ||||
Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee percentage | 0.25% | ||||
Revolving Credit Facility | Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit, maximum borrowing capacity | 125,000,000 | ||||
Revolving Credit Facility | Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Line of credit, maximum borrowing capacity | $ 300,000,000 | ||||
Debt instrument maturity date | Apr. 30, 2026 | ||||
Debt instrument interest rate stated percentage | 2.75% | 2.75% | |||
Line of credit | $ 0 | ||||
Line of credit, available borrowing capacity | $ 261,000,000 | ||||
Debt instrument, term | 5 years | ||||
Revolving Credit Facility | Credit Agreement | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, term | 5 years | 5 years | |||
Line of credit, maximum borrowing capacity | $ 300,000,000 | $ 300,000,000 | |||
Undrawn Letters of Credit | Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Line of credit | $ 39,000,000 | ||||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit | $ 35,000,000 | ||||
Letter of credit facility, term | 5 years | ||||
Term Loan Facility | Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 7 years | ||||
Term Loan Facility | Credit Agreement | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit, term | 7 years | ||||
Line of credit, maximum borrowing capacity | $ 715,000,000 | € 450,000,000 |
Long-term Debt and Credit Agr_4
Long-term Debt and Credit Agreements - Schedule of Principal Outstanding And Carrying Amount of Long term Debt (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Total principal outstanding | $ 1,247 | |
Less: unamortized deferred financing costs | (38) | |
Less: current portion of long-term debt | (5) | |
Total long-term debt | 1,204 | $ 1,082 |
Dollar Facility | ||
Debt Instrument [Line Items] | ||
Total principal outstanding | $ 715 | |
Long term debt Interest rate | 3.75% | |
Long term debt due date | Apr. 30, 2028 | |
Euro Facility | ||
Debt Instrument [Line Items] | ||
Total principal outstanding | $ 532 | |
Long term debt Interest rate | 3.50% | |
Long term debt due date | Apr. 30, 2028 |
Long-term Debt and Credit Agr_5
Long-term Debt and Credit Agreements - Schedule of Principal Repayments Of Credit Facilities (Details) $ in Millions | Jun. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 2 |
2022 | 7 |
2023 | 7 |
2024 | 7 |
2025 | 7 |
Thereafter | 1,217 |
Total debt payments | $ 1,247 |
Mandatorily Redeemable Series_2
Mandatorily Redeemable Series B Preferred Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 26, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Apr. 30, 2022 | Sep. 30, 2021 |
Class Of Stock [Line Items] | ||||||
Preferred stock authorized to grant | 1,200,000,000 | |||||
Threshold consolidated EBITDA | $ 600 | |||||
Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Consolidated EBITDA | $ 425 | |||||
Minimum | ||||||
Class Of Stock [Line Items] | ||||||
Consolidated EBITDA | 600 | |||||
Series B Preferred Stock | ||||||
Class Of Stock [Line Items] | ||||||
Mandatorily redeemable Series B Preferred Stock – long-term (Note 16) | 550 | |||||
Mandatorily redeemable Series B Preferred Stock (Note 16) | $ 35 | |||||
PSA and The Transaction, The Amended Plan | Honeywell International Inc | Series B Preferred Stock | ||||||
Class Of Stock [Line Items] | ||||||
Stock issued | 834,800,000 | |||||
Preferred stock, redemption value per share | $ 1 | |||||
Discount rate | 7.25% | |||||
Liquidation preference | $ 125 | |||||
Preferred stock issued payable annually in 2023 | 100 | |||||
Preferred stock issued payable annually in 2024 | 100 | |||||
Preferred stock issued payable annually in 2025 | 100 | |||||
Preferred stock issued payable annually in 2026 | 100 | |||||
Preferred stock issued payable annually in 2027 | 100 | |||||
Preferred stock issued payable annually in 2028 | 100 | |||||
Preferred stock issued payable annually in 2029 | 100 | |||||
Preferred stock issued payable annually in 2030 | 100 | |||||
Preferred stock issued payable | 835 | |||||
Net present value of redemptions of shares | 585 | |||||
Mandatorily redeemable Series B Preferred Stock – long-term (Note 16) | $ 550 | |||||
PSA and The Transaction, The Amended Plan | Honeywell International Inc | Series B Preferred Stock | Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Preferred stock, redemption value per share | $ 1 | |||||
PSA and The Transaction, The Amended Plan | Honeywell International Inc | Series B Preferred Stock | Scenario Forecast | ||||||
Class Of Stock [Line Items] | ||||||
Preferred stock issued payable in instalments | $ 35 | $ 35 | ||||
Mandatorily redeemable Series B Preferred Stock (Note 16) | $ 600 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measures - Additional Information (Details) € in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2021EUR (€) | Dec. 31, 2020USD ($) | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||||
Derivative, aggregate gross notional amount | $ 2,252,000,000 | $ 2,252,000,000 | $ 19,000,000 | |
Interest Rate Swap | ||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||||
Derivative, aggregate gross notional amount | € | € 830 | |||
Cross-currency Interest Rate Swaps | ||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||||
Derivative, aggregate gross notional amount | € | € 606 | |||
Fair value of derivative assets, net | 2,000,000 | 2,000,000 | ||
Changes in fair value of net investment hedges, net of tax | $ 15,000,000 | 15,000,000 | ||
Ineffectiveness on net investment hedges | $ 0 |
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) € in Millions | Jun. 30, 2021USD ($) | Jun. 30, 2021EUR (€) | Dec. 31, 2020USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | $ 2,252,000,000 | $ 19,000,000 | |
Interest Rate Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | € | € 830 | ||
Fair Value Measurements Recurring | Level 2 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 2,252,000,000 | 19,000,000 | |
Fair Value, Assets | 6,000,000 | ||
Fair Value, Liabilities | 2,000,000 | ||
Fair Value Measurements Recurring | Level 2 | Designated as Hedging | Forward Currency Exchange Contracts | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 212,000,000 | ||
Fair Value, Assets | 2,000,000 | ||
Fair Value Measurements Recurring | Level 2 | Designated as Hedging | Cross-currency Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 715,000,000 | ||
Fair Value, Assets | 2,000,000 | ||
Fair Value Measurements Recurring | Level 2 | Not Designated as Hedging Instrument | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 1,325,000,000 | 19,000,000 | |
Fair Value, Assets | 2,000,000 | ||
Fair Value, Liabilities | 2,000,000 | ||
Fair Value Measurements Recurring | Level 2 | Not Designated as Hedging Instrument | Forward Currency Exchange Contracts | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | 344,000,000 | $ 19,000,000 | |
Fair Value, Assets | 2,000,000 | ||
Fair Value, Liabilities | 2,000,000 | ||
Fair Value Measurements Recurring | Level 2 | Not Designated as Hedging Instrument | Interest Rate Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional Amounts | $ 981,000,000 |
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 | Jun. 30, 2021USD ($) |
Carrying Value | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Terms Loans B (Secured) | $ 1,209 |
Fair Value | Level 2 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Terms Loans B (Secured) | $ 1,254 |
Equity - Additional Information
Equity - Additional Information (Details) $ / shares in Units, $ in Millions | Apr. 26, 2021shares | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2021USD ($)Director$ / sharesshares | Dec. 31, 2020USD ($)shares | Apr. 30, 2021shares |
Cash paid to holders | $ | $ 1,301 | ||||
Preferred stock authorized to grant | shares | 1,200,000,000 | ||||
Common stock, shares authorized | shares | 1,000,000,000 | 1,000,000,000 | 400,000,000 | ||
Right to designate directors | 1 | ||||
Chief Executive Officer | |||||
Right to designate directors | 1 | ||||
Centerbridge Investors | |||||
Right to designate directors | 3 | ||||
Centerbridge Investors | Beneficial Ownership of At Least 60% | |||||
Right to designate directors | 3 | ||||
Centerbridge Investors | Beneficial Ownership of At Least 40% but Less Than 60% | |||||
Right to designate directors | 2 | ||||
Centerbridge Investors | Beneficial Ownership of At Least 20% but Less Than 40% | |||||
Right to designate directors | 1 | ||||
Centerbridge Investors | Beneficial Ownership Cease to Own At Least 20% | |||||
Right to designate directors | 0 | ||||
Oaktree Investors | |||||
Right to designate directors | 3 | ||||
Oaktree Investors | Beneficial Ownership of At Least 60% | |||||
Right to designate directors | 3 | ||||
Oaktree Investors | Beneficial Ownership of At Least 40% but Less Than 60% | |||||
Right to designate directors | 2 | ||||
Oaktree Investors | Beneficial Ownership of At Least 20% but Less Than 40% | |||||
Right to designate directors | 1 | ||||
Oaktree Investors | Beneficial Ownership Cease to Own At Least 20% | |||||
Right to designate directors | 0 | ||||
Additional Investors | |||||
Right to designate directors | 1 | ||||
Additional Investors | Beneficial Ownership of At Least 60% | |||||
Right to designate directors | 1 | ||||
Additional Investors | Beneficial Ownership Less Than 60% | |||||
Right to designate directors | 0 | ||||
Registration Rights Agreement | |||||
Common stock, shares authorized | shares | 52,471,709 | ||||
Gross proceeds from underwritten public offering | $ | $ 50 | ||||
Maximum [Member] | |||||
Consolidated EBITDA | $ | $ 425 | ||||
Minimum | |||||
Percentage of automatic conversion fair market value of common stock | 150.00% | ||||
Consolidated EBITDA | $ | $ 600 | ||||
Series A Preferred Stock | |||||
Shares issued | shares | 247,768,962 | 248,000,000 | 247,768,962 | ||
Rights offerings | two | ||||
Cumulative cash dividends at an annual rate | 11.00% | ||||
Dividends | $ | $ 425 | ||||
Preferred dividend per share | $ / shares | $ 0.09625 | ||||
Aggregate accumulated dividend | $ | $ 24 | $ 24 | |||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||
Initial conversion price | $ / shares | 5.25 | ||||
Conversion price | $ / shares | $ 5.25 | ||||
Preferred stock, redemption terms | The Company may, at its election, redeem all but not less than all of the outstanding shares of Series A Preferred Stock (i) at any time following the date which is six years after the Effective Date or (ii) in connection with the consummation of a Change of Control (as defined in the Series A Certificate of Designations), in either case for a cash purchase price equal to $5.25 per share plus cumulative unpaid preference dividends (whether or not authorized or declared) as of the redemption date. | ||||
Series A Preferred Stock | Registration Rights Agreement | |||||
Preferred stock authorized to grant | shares | 243,265,707 | ||||
Common stock issuable upon conversion of preferred stock | shares | 243,265,707 | ||||
Series A Preferred Stock | Maximum [Member] | |||||
Preferred stock, par value | $ / shares | $ 5.25 | $ 5.25 | |||
Series B Preferred Stock | Maximum [Member] | |||||
Preferred stock value outstanding | $ | $ 125 | $ 125 | |||
Common Stock | |||||
Shares issued | shares | 65,035,801 | 65,035,801 | |||
Cash paid to holders | $ | $ 69 |
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 | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance | $ (2,300) | $ (2,308) | $ (2,046) | $ (2,133) | $ (2,308) | $ (2,133) |
Total other comprehensive (loss) income, net of tax | (48) | 111 | (52) | 39 | 63 | (13) |
Ending balance | (706) | (2,300) | (2,103) | (2,046) | (706) | (2,103) |
Foreign Exchange Translation Adjustment | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance | (81) | 153 | (81) | 153 | ||
Other comprehensive income (loss) before reclassifications | 43 | (11) | ||||
Total other comprehensive (loss) income, net of tax | 43 | (11) | ||||
Ending balance | (38) | 142 | (38) | 142 | ||
Changes in Fair Value of Effective Cash Flow Hedges | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance | (3) | 4 | (3) | 4 | ||
Other comprehensive income (loss) before reclassifications | 2 | (2) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 3 | |||||
Total other comprehensive (loss) income, net of tax | 5 | (2) | ||||
Ending balance | 2 | 2 | 2 | 2 | ||
Changes in Fair Value of Net Investment Hedges | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Other comprehensive income (loss) before reclassifications | 15 | |||||
Total other comprehensive (loss) income, net of tax | 15 | |||||
Ending balance | 15 | 15 | ||||
Pension Adjustments | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance | (45) | (27) | (45) | (27) | ||
Ending balance | (45) | (27) | (45) | (27) | ||
Total Accumulated Other Comprehensive Income (Loss) | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance | (18) | (129) | 169 | 130 | (129) | 130 |
Other comprehensive income (loss) before reclassifications | 60 | (13) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 3 | |||||
Total other comprehensive (loss) income, net of tax | (48) | 111 | (52) | 39 | 63 | (13) |
Ending balance | $ (66) | $ (18) | $ 117 | $ 169 | $ (66) | $ 117 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | Apr. 26, 2021 | Sep. 14, 2018 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | May 25, 2021 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Cash payment price per share | $ 6.25 | |||||||
Stock compensation expense | $ 3,000,000 | $ 6,000,000 | ||||||
Stock Options | Reorganization Items, Net | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Unamortized stock compensation expense | $ 1,000,000 | |||||||
Restricted Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Awards settled for consideration | 1,205,650 | |||||||
Share price per share /unit | $ 6.25 | |||||||
Awards settled for total cash settlement | $ 8,000,000 | |||||||
Stock-based compensation expense | $ 3,000,000 | $ 2,000,000 | 6,000,000 | |||||
Restricted Stock Units | Equity | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Awards settled for total cash settlement | 7,000,000 | |||||||
Restricted Stock Units | Reorganization Items, Net | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Awards settled for total cash settlement | 1,000,000 | |||||||
Unamortized stock compensation expense | $ 7,000,000 | |||||||
Restricted Stock Units | Maximum [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 5 years | |||||||
Restricted Stock Units | Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 3 years | |||||||
Performance Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Awards settled for consideration | 228,765 | |||||||
Share price per share /unit | $ 6.25 | |||||||
Performance Stock Units | Reorganization Items, Net | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Awards settled for total cash settlement | $ 1,000,000 | |||||||
Performance Stock Units | Maximum [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Percentage of target level to grant performance stock units | 100.00% | |||||||
Performance Stock Units | Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Percentage of target level to grant performance stock units | 0.00% | |||||||
Cash Performance Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Awards settled for consideration | 2,069,897 | |||||||
Share price per share /unit | $ 1 | |||||||
Cash Performance Stock Units | Reorganization Items, Net | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Awards settled for total cash settlement | $ 2,000,000 | |||||||
Continuity Awards | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 11,000,000 | $ 3,000,000 | $ 2,000,000 | $ 5,000,000 | $ 2,000,000 | |||
Stock compensation expense | $ 9,000,000 | |||||||
Share-based compensation expected to be paid in 2021 | 2,000,000 | |||||||
Incremental compensation cost | $ 5,000,000 | |||||||
Share-based compensation award service period | 1 year | |||||||
Total unrecognized compensation cost | 0 | $ 0 | ||||||
Stock Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Total unrecognized compensation cost | 0 | $ 0 | ||||||
Stock Incentive Plan | Maximum [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate number of shares of common stock that may be issued | 10,000,000 | |||||||
Stock Incentive Plan | Stock Options | Maximum [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate number of shares of common stock that may be issued | 5,000,000 | |||||||
Stock Incentive Plan | Performance Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 36 months | |||||||
Total unrecognized compensation cost | $ 0 | $ 0 | ||||||
Weighted average grant date fair value of options granted | $ 8.67 | |||||||
Director Equity Plan | Maximum [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate number of shares of common stock that may be issued | 400,000 | |||||||
2021 Long Term Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Common stock available for future issuance | 28,288,277 | 28,288,277 | ||||||
Common stock awarded | 2,992,199 | 2,992,199 | ||||||
2021 Long Term Incentive Plan | Maximum [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate number of shares of common stock that may be issued | 31,280,476 | |||||||
Long Term Incentive Plan | Restricted Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Total unrecognized compensation cost | $ 13,000,000 | $ 13,000,000 | ||||||
Weighted-average recognition period | 4 years 3 months 3 days | |||||||
Long Term Incentive Plan | Restricted Stock Units | Officers, Certain Key Employees, and Non-employee Directors | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate awards granted | 1,519,324 | |||||||
Long Term Incentive Plan | Performance Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Total unrecognized compensation cost | $ 13,000,000 | $ 13,000,000 | ||||||
Weighted-average recognition period | 2 years 5 months 1 day | |||||||
Long Term Incentive Plan | Performance Stock Units | Officers and Certain Key Employees | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate awards granted | 1,472,875 | |||||||
2021 PSUs | Performance Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting rights percentage depends on performance measures are related to absolute total shareholder return with stock price hurdles | 60.00% | |||||||
Vesting rights percentage depends on performance measures are related to adjusted EBITDA | 20.00% | |||||||
Vesting rights percentage depends on performance measures are related to adjusted EBITDA margin | 20.00% | |||||||
2021 PSUs for TSR measure | Performance Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 2 years | |||||||
2021 PSUs for Adjusted EBITDA and Adjusted EBITDA Margin Measures | Performance Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 3 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Activity Related to Stock Incentive Plan and Long-Term Incentive Plan (Details) - Restricted Stock Units - Stock Incentive Plan and Long-Term Incentive Plan | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Number of Restricted Stock Units | |
Non-vested, Beginning Balance | shares | 1,538,969 |
Granted | shares | 1,519,324 |
Vested | shares | (326,058) |
Forfeited | shares | (7,261) |
Vested and cancelled | shares | (1,205,650) |
Non-vested Ending Balance | shares | 1,519,324 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested, Beginning Balance | $ / shares | $ 13.11 |
Granted | $ / shares | 8.67 |
Vested | $ / shares | 13.10 |
Forfeited | $ / shares | 15.61 |
Vested and cancelled | $ / shares | 13.10 |
Non-vested, Ending Balance | $ / shares | $ 8.67 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Impact to Consolidated and Combined Statement of Operations from RSUs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Reorganization items, net (Note 2) | $ (295,000,000) | $ 0 | $ (121,000,000) | $ 0 |
Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Compensation expense | 3,000,000 | 2,000,000 | 6,000,000 | |
Reorganization items, net (Note 2) | 8,000,000 | 8,000,000 | ||
Future income tax benefit recognized | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | $ 2,000,000 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Performance Stock Units Related to Stock Incentive Plan and Long-Term Incentive Plan (Details) - Performance Stock Units - Stock Incentive Plan and Long-Term Incentive Plan | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Number of Restricted Stock Units | |
Non-vested, Beginning Balance | 314,111 |
Granted | 1,472,875 |
Forfeited | (85,346) |
Vested and cancelled | (228,765) |
Non-vested Ending Balance | 1,472,875 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested, Beginning Balance | $ / shares | $ 16.17 |
Granted | $ / shares | 8.67 |
Forfeited | $ / shares | 14 |
Non-vested, Ending Balance | $ / shares | $ 8.67 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Impact to Consolidated and Combined Statement of Operations from PSUs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Reorganization items, net (Note 2) | $ (295,000,000) | $ 0 | $ (121,000,000) | $ 0 |
Performance Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Reorganization items, net (Note 2) | $ 1,000,000 | $ 1,000,000 |
Stock-Based Compensation - Su_5
Stock-Based Compensation - Summary of Continuity Award Activity (Details) - Continuity Awards | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Number of Restricted Stock Units | |
Non-vested, Beginning Balance | shares | 43 |
Vested | shares | (43) |
Weighted Average Grant Date Fair Value Per Award | |
Non-vested, Beginning Balance | $ / shares | $ 257,536 |
Vested | $ / shares | $ (257,536) |
Stock-Based Compensation - Su_6
Stock-Based Compensation - Summary of Information about Income Statement Impact from Continuity Awards (Details) - Continuity Awards - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Compensation expense | $ 11 | $ 3 | $ 2 | $ 5 | $ 2 |
Future income tax benefit recognized | $ 1 |
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 | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Basic | ||||||
Net income (loss) | $ 409 | $ (105) | $ (9) | $ 52 | $ 304 | $ 43 |
Less: preferred stock dividend | 24 | 24 | ||||
Net income (loss) available to common shareholders | $ 385 | $ (9) | $ 280 | $ 43 | ||
Weighted average common shares outstanding - Basic | 69,667,651 | 75,595,991 | 72,862,102 | 75,316,827 | ||
EPS – Basic | $ 5.53 | $ (0.12) | $ 3.84 | $ 0.57 | ||
Diluted | ||||||
Net income (loss) | $ 409 | $ (105) | $ (9) | $ 52 | $ 304 | $ 43 |
Less: preferred stock dividend | 24 | 24 | ||||
Net income (loss) available to common shareholders | $ 385 | $ (9) | $ 280 | $ 43 | ||
Weighted average common shares outstanding - Basic | 69,667,651 | 75,595,991 | 72,862,102 | 75,316,827 | ||
Dilutive effect of unvested RSUs and other contingently issuable shares | 249,520 | 520,632 | ||||
Dilutive effect of Series A Preferred Stock | 166,086,887 | 83,502,247 | ||||
Weighted average common shares outstanding – Diluted | 235,754,538 | 75,845,511 | 156,364,349 | 75,837,459 | ||
EPS – Diluted | $ 1.73 | $ (0.12) | $ 1.94 | $ 0.57 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from computation of diluted EPS | 128,499 | 263,245 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Apr. 26, 2021USD ($) | Dec. 18, 2020USD ($) | Oct. 01, 2018USD ($)Installment | Sep. 12, 2018USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2021USD ($)$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2022USD ($) | Apr. 30, 2022USD ($) | Jan. 11, 2021USD ($) | Sep. 30, 2020USD ($) |
Loss Contingencies [Line Items] | ||||||||||||
Make-whole premium claim amount | $ 15,000,000 | |||||||||||
Brazilian Tax Authorities | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Estimated amount of contingency including penalties and interest | $ 31,000,000 | |||||||||||
Right to offset federal tax | $ 31,000,000 | |||||||||||
Debtors | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Common stock exchange rate for cancellation per share | $ / shares | $ 6.25 | |||||||||||
Honeywell Indemnity Agreement | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss contingency payable | $ 175,000,000 | |||||||||||
Minimum amount agreed to maintain for termination | $ 25,000,000 | |||||||||||
Agreement termination description | The Honeywell Indemnity Agreement provided that the agreement would 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 International Inc | Minimum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss contingency, owes | $ 1,900,000,000 | |||||||||||
Honeywell International Inc | Tax Matters Agreement | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Obligation payment connection with mandatory transition tax claim | $ 240,000,000 | $ 273,000,000 | ||||||||||
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% | |||||||||||
Payments related Tax Matters Agreement | $ 19,000,000 | $ 18,000,000 | ||||||||||
Honeywell International Inc | PSA and The Transaction, The Amended Plan | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss contingency, owes | $ 1,459,000,000 | |||||||||||
Litigation cash payment at emergence | $ 375,000,000 | $ 375,000,000 | ||||||||||
Option for partial payment period at emergence | 18 months | |||||||||||
Honeywell International Inc | PSA and The Transaction, The Amended Plan | Series B Preferred Stock | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Preferred stock issued payable annually in 2023 | $ 100,000,000 | |||||||||||
Preferred stock issued payable annually in 2024 | 100,000,000 | |||||||||||
Preferred stock issued payable annually in 2025 | 100,000,000 | |||||||||||
Preferred stock issued payable annually in 2026 | 100,000,000 | |||||||||||
Preferred stock issued payable annually in 2027 | 100,000,000 | |||||||||||
Preferred stock issued payable annually in 2028 | 100,000,000 | |||||||||||
Preferred stock issued payable annually in 2029 | 100,000,000 | |||||||||||
Preferred stock issued payable annually in 2030 | 100,000,000 | |||||||||||
Option to prepay preferred stock at call price | $ 584,000,000 | |||||||||||
Discount rate | 7.25% | |||||||||||
Option for partial payment of preferred stock reducing present value | $ 400,000,000 | |||||||||||
Honeywell International Inc | PSA and The Transaction, The Amended Plan | Series B Preferred Stock | Scenario Forecast | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Preferred stock issued payable in instalments | $ 35,000,000 | $ 35,000,000 | ||||||||||
Honeywell International Inc | Honeywell Indemnity Agreement | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Percentage of net insurance receipts | 90.00% | |||||||||||
Payment made in connection with the Indemnification and Reimbursement Agreement | $ 35,000,000 | |||||||||||
Description of indemnification agreement | As of the Spin-Off date of October 1, 2018, Garrett ASASCO was obligated to make payments to Honeywell in amounts equal to 90% of certain Honeywell 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 Honeywell Indemnity Agreement, Garrett ASASCO was 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 | Honeywell International Inc | Honeywell Indemnity Agreement | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Percentage of asbestos and environmental liabilities liable to pay | 90.00% |
Pension Benefits - Additional I
Pension Benefits - Additional Information (Details) - Pension Benefits - Non-U.S. Plans $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected pension contribution in the next fiscal year | $ 7 |
Pension contribution | $ 3 |
Pension Benefits - Summary of N
Pension Benefits - Summary of Net Periodic Benefit Cost (Details) - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 1 | ||
Interest cost | $ 1 | $ 1 | 2 | 3 |
Expected return on plan assets | (3) | (3) | (5) | (5) |
Net periodic benefit costs | (2) | (2) | (2) | (1) |
Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 3 | 2 | 5 | 5 |
Interest cost | 1 | 1 | ||
Expected return on plan assets | (2) | (1) | (3) | (3) |
Net periodic benefit costs | $ 1 | $ 1 | $ 3 | $ 3 |