Company Quick10K Filing
Garrett Motion
Price10.31 EPS3
Shares76 P/E4
MCap781 P/FCF6
Net Debt1,291 EBIT351
TEV2,072 TEV/EBIT6
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-02
10-Q 2020-06-30 Filed 2020-07-30
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-02-27
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-07-30
10-Q 2019-03-31 Filed 2019-05-08
10-K 2018-12-31 Filed 2019-03-01
10-Q 2018-09-30 Filed 2018-11-06
8-K 2020-11-23
8-K 2020-11-20
8-K 2020-10-26
8-K 2020-10-26
8-K 2020-10-19
8-K 2020-10-12
8-K 2020-10-09
8-K 2020-09-20
8-K 2020-09-20
8-K 2020-07-30
8-K 2020-06-15
8-K 2020-06-12
8-K 2020-06-05
8-K 2020-05-29
8-K 2020-05-28
8-K 2020-05-14
8-K 2020-05-11
8-K 2020-04-03
8-K 2020-03-26
8-K 2020-02-27
8-K 2020-01-15
8-K 2019-12-02
8-K 2019-11-08
8-K 2019-09-02
8-K 2019-07-30
8-K 2019-06-04
8-K 2019-05-07
8-K 2019-02-20
8-K 2018-11-06
8-K 2018-11-06
8-K 2018-11-01
8-K 2018-10-22
8-K 2018-10-01
8-K 2018-09-27
8-K 2018-09-21
8-K 2018-09-12
8-K 2018-09-06

GTX 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Note 1. Background and Basis of Presentation
Note 3. Summary of Significant Accounting Policies
Note 4. Revenue Recognition and Contracts with Customers
Note 5. Research, Development & Engineering
Note 6. Other Expense, Net
Note 7. Income Taxes
Note 8. Accounts, Notes and Other Receivables - Net
Note 9. Factoring and Notes Receivable
Note 10. Inventories - Net
Note 11. Other Assets
Note 12. Accrued Liabilities
Note 13. Other Liabilities
Note 14. Leases
Note 15. Financial Instruments and Fair Value Measures
Note 16. Accumulated Other Comprehensive Income (Loss)
Note 17. Earnings per Share
Note 18. Commitments and Contingencies
Note 19. Pension Benefits
Note 20. China Variable Interest Entity
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 gtx-ex311_9.htm
EX-31.2 gtx-ex312_11.htm
EX-32.1 gtx-ex321_10.htm
EX-32.2 gtx-ex322_7.htm

Garrett Motion Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
2.31.30.3-0.6-1.6-2.62016201720182020
Assets, Equity
1.00.80.60.40.20.02016201720182020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12016201720182020
Ops, Inv, Fin

gtx-10q_20200930.htm
false Q3 0001735707 --12-31 false true false true true true true P7Y P5Y P5Y us-gaap:AccountingStandardsUpdate201613Member us-gaap:AccountingStandardsUpdate201613Member us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent us-gaap:AccruedLiabilitiesCurrent us-gaap:AccruedLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent us-gaap:OtherLiabilitiesNoncurrent P5Y2M23D P6Y3M18D 0001735707 2020-01-01 2020-09-30 xbrli:shares 0001735707 2020-10-26 iso4217:USD 0001735707 2020-07-01 2020-09-30 0001735707 2019-07-01 2019-09-30 0001735707 2019-01-01 2019-09-30 iso4217:USD xbrli:shares 0001735707 2020-09-30 0001735707 2019-12-31 0001735707 2018-12-31 0001735707 2019-09-30 0001735707 us-gaap:CommonStockMember 2018-12-31 0001735707 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001735707 us-gaap:RetainedEarningsMember 2018-12-31 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001735707 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001735707 2019-01-01 2019-03-31 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001735707 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001735707 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001735707 us-gaap:CommonStockMember 2019-03-31 0001735707 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001735707 us-gaap:RetainedEarningsMember 2019-03-31 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001735707 2019-03-31 0001735707 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001735707 2019-04-01 2019-06-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001735707 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001735707 us-gaap:CommonStockMember 2019-06-30 0001735707 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001735707 us-gaap:RetainedEarningsMember 2019-06-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001735707 2019-06-30 0001735707 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2019-09-30 0001735707 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001735707 us-gaap:CommonStockMember 2019-09-30 0001735707 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001735707 us-gaap:RetainedEarningsMember 2019-09-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0001735707 us-gaap:CommonStockMember 2019-12-31 0001735707 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001735707 us-gaap:RetainedEarningsMember 2019-12-31 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001735707 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001735707 2020-01-01 2020-03-31 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001735707 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001735707 us-gaap:RetainedEarningsMember srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-12-31 0001735707 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-12-31 0001735707 us-gaap:CommonStockMember 2020-03-31 0001735707 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001735707 us-gaap:RetainedEarningsMember 2020-03-31 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001735707 2020-03-31 0001735707 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001735707 2020-04-01 2020-06-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001735707 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001735707 us-gaap:CommonStockMember 2020-06-30 0001735707 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001735707 us-gaap:RetainedEarningsMember 2020-06-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001735707 2020-06-30 0001735707 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-07-01 2020-09-30 0001735707 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001735707 us-gaap:CommonStockMember 2020-09-30 0001735707 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001735707 us-gaap:RetainedEarningsMember 2020-09-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-09-30 iso4217:EUR 0001735707 gtx:TwoThousandAndTwentyAmendmentCreditAgreementMember gtx:TermBLoanFacilityMember 2020-06-12 0001735707 gtx:TwoThousandAndTwentyAmendmentCreditAgreementMember gtx:TermALoanFacilityMember 2020-06-12 0001735707 gtx:TwoThousandAndTwentyAmendmentCreditAgreementMember us-gaap:RevolvingCreditFacilityMember 2020-06-12 xbrli:pure 0001735707 gtx:BendixAsbestosRelatedLiabilitiesMember gtx:TheSubordinatedAsbestosIndemnityAgreementMember gtx:HoneywellInternationalIncMember 2018-09-11 2018-09-12 0001735707 gtx:TheSubordinatedAsbestosIndemnityAgreementMember gtx:HoneywellInternationalIncMember 2018-09-11 2018-09-12 0001735707 gtx:TheSubordinatedAsbestosIndemnityAgreementMember 2018-09-11 2018-09-12 0001735707 gtx:TheSubordinatedAsbestosIndemnityAgreementMember 2020-01-01 2020-09-30 0001735707 gtx:TheSubordinatedAsbestosIndemnityAgreementMember srt:MaximumMember gtx:HoneywellInternationalIncMember 2018-09-12 0001735707 gtx:StalkingHorseBidderMember 2020-09-30 0001735707 gtx:StalkingHorseBidderMember us-gaap:SubsequentEventMember 2020-10-24 2020-10-24 0001735707 gtx:StalkingHorseBidderMember us-gaap:SubsequentEventMember 2020-10-24 0001735707 gtx:StalkingHorseBidderMember 2020-01-01 2020-09-30 0001735707 gtx:StalkingHorseBidderMember us-gaap:SubsequentEventMember 2020-10-19 2020-10-19 0001735707 gtx:StalkingHorseBidderMember us-gaap:SubsequentEventMember 2020-10-19 0001735707 gtx:StalkingHorseBidderMember us-gaap:SubsequentEventMember srt:MaximumMember 2020-10-19 0001735707 gtx:CreditAgreementMember gtx:ConsentingLendersMember 2018-09-27 0001735707 gtx:CreditAgreementMember gtx:TermBFacilityMember gtx:SeniorSecuredCreditFacilitiesMember 2018-09-27 2018-09-27 0001735707 gtx:CreditAgreementMember gtx:TermBFacilityMember gtx:SeniorSecuredCreditFacilitiesMember 2018-09-27 0001735707 gtx:CreditAgreementMember gtx:TermAFacilityMember gtx:SeniorSecuredCreditFacilitiesMember 2018-09-27 2018-09-27 0001735707 gtx:CreditAgreementMember gtx:TermAFacilityMember gtx:SeniorSecuredCreditFacilitiesMember 2018-09-27 0001735707 gtx:CreditAgreementMember us-gaap:RevolvingCreditFacilityMember gtx:SeniorSecuredCreditFacilitiesMember 2018-09-27 2018-09-27 0001735707 gtx:CreditAgreementMember us-gaap:RevolvingCreditFacilityMember gtx:SeniorSecuredCreditFacilitiesMember 2018-09-27 0001735707 gtx:FivePointOneTwoFivePercentSeniorNotesDueTwoThousandTwentySixMember 2018-09-27 0001735707 gtx:TermLoansMember 2020-09-30 0001735707 gtx:TermLoansMember 2019-12-31 0001735707 us-gaap:RevolvingCreditFacilityMember 2020-09-30 gtx:Claim 0001735707 us-gaap:SubsequentEventMember 2020-10-26 0001735707 us-gaap:SubsequentEventMember gtx:CitibankNAAndDebtorInPossessionLendersMember gtx:DebtorInPossessionTermLoanFacilityMember 2020-10-06 2020-10-06 0001735707 us-gaap:SubsequentEventMember gtx:CitibankNAAndDebtorInPossessionLendersMember gtx:DebtorInPossessionTermLoanFacilityMember srt:MaximumMember 2020-10-09 0001735707 us-gaap:SubsequentEventMember gtx:CitibankNAAndDebtorInPossessionLendersMember gtx:DebtorInPossessionTermLoanFacilityMember 2020-10-09 0001735707 us-gaap:SubsequentEventMember gtx:CitibankNAAndDebtorInPossessionLendersMember gtx:DebtorInPossessionTermLoanFacilityMember 2020-10-22 0001735707 gtx:DebtorInPossessionTermLoanFacilityMember gtx:CitibankNAAndDebtorInPossessionLendersMember 2020-01-01 2020-09-30 0001735707 gtx:DebtorInPossessionTermLoanFacilityMember us-gaap:SubsequentEventMember gtx:CitibankNAAndDebtorInPossessionLendersMember 2020-10-06 0001735707 gtx:DebtorInPossessionTermLoanFacilityMember gtx:CitibankNAAndDebtorInPossessionLendersMember 2020-09-30 0001735707 gtx:DebtorInPossessionTermLoanFacilityMember gtx:CitibankNAAndDebtorInPossessionLendersMember us-gaap:SubsequentEventMember 2020-10-09 2020-10-09 0001735707 gtx:DebtorInPossessionTermLoanFacilityMember gtx:CitibankNAAndDebtorInPossessionLendersMember us-gaap:SubsequentEventMember 2020-10-22 2020-10-22 0001735707 gtx:DebtorsMember 2020-07-01 2020-09-30 0001735707 gtx:DebtorsMember 2019-01-01 2019-09-30 0001735707 gtx:DebtorsMember 2020-09-30 0001735707 gtx:DebtorsMember 2020-01-01 2020-09-30 0001735707 gtx:DebtorsMember 2019-12-31 0001735707 us-gaap:AccountingStandardsUpdate201613Member 2020-09-30 0001735707 us-gaap:AccountingStandardsUpdate201813Member 2020-09-30 0001735707 us-gaap:AccountingStandardsUpdate201613Member srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2020-01-01 0001735707 country:US gtx:OriginalEquipmentManufacturersMember 2020-07-01 2020-09-30 0001735707 country:US gtx:AftermarketMember 2020-07-01 2020-09-30 0001735707 country:US gtx:OtherMember 2020-07-01 2020-09-30 0001735707 country:US 2020-07-01 2020-09-30 0001735707 srt:EuropeMember gtx:OriginalEquipmentManufacturersMember 2020-07-01 2020-09-30 0001735707 srt:EuropeMember gtx:AftermarketMember 2020-07-01 2020-09-30 0001735707 srt:EuropeMember gtx:OtherMember 2020-07-01 2020-09-30 0001735707 srt:EuropeMember 2020-07-01 2020-09-30 0001735707 srt:AsiaMember gtx:OriginalEquipmentManufacturersMember 2020-07-01 2020-09-30 0001735707 srt:AsiaMember gtx:AftermarketMember 2020-07-01 2020-09-30 0001735707 srt:AsiaMember gtx:OtherMember 2020-07-01 2020-09-30 0001735707 srt:AsiaMember 2020-07-01 2020-09-30 0001735707 us-gaap:NonUsMember gtx:OriginalEquipmentManufacturersMember 2020-07-01 2020-09-30 0001735707 us-gaap:NonUsMember gtx:AftermarketMember 2020-07-01 2020-09-30 0001735707 us-gaap:NonUsMember 2020-07-01 2020-09-30 0001735707 gtx:OriginalEquipmentManufacturersMember 2020-07-01 2020-09-30 0001735707 gtx:AftermarketMember 2020-07-01 2020-09-30 0001735707 gtx:OtherMember 2020-07-01 2020-09-30 0001735707 country:US gtx:OriginalEquipmentManufacturersMember 2020-01-01 2020-09-30 0001735707 country:US gtx:AftermarketMember 2020-01-01 2020-09-30 0001735707 country:US gtx:OtherMember 2020-01-01 2020-09-30 0001735707 country:US 2020-01-01 2020-09-30 0001735707 srt:EuropeMember gtx:OriginalEquipmentManufacturersMember 2020-01-01 2020-09-30 0001735707 srt:EuropeMember gtx:AftermarketMember 2020-01-01 2020-09-30 0001735707 srt:EuropeMember gtx:OtherMember 2020-01-01 2020-09-30 0001735707 srt:EuropeMember 2020-01-01 2020-09-30 0001735707 srt:AsiaMember gtx:OriginalEquipmentManufacturersMember 2020-01-01 2020-09-30 0001735707 srt:AsiaMember gtx:AftermarketMember 2020-01-01 2020-09-30 0001735707 srt:AsiaMember gtx:OtherMember 2020-01-01 2020-09-30 0001735707 srt:AsiaMember 2020-01-01 2020-09-30 0001735707 us-gaap:NonUsMember gtx:OriginalEquipmentManufacturersMember 2020-01-01 2020-09-30 0001735707 us-gaap:NonUsMember gtx:AftermarketMember 2020-01-01 2020-09-30 0001735707 us-gaap:NonUsMember 2020-01-01 2020-09-30 0001735707 gtx:OriginalEquipmentManufacturersMember 2020-01-01 2020-09-30 0001735707 gtx:AftermarketMember 2020-01-01 2020-09-30 0001735707 gtx:OtherMember 2020-01-01 2020-09-30 0001735707 country:US gtx:OriginalEquipmentManufacturersMember 2019-07-01 2019-09-30 0001735707 country:US gtx:AftermarketMember 2019-07-01 2019-09-30 0001735707 country:US gtx:OtherMember 2019-07-01 2019-09-30 0001735707 country:US 2019-07-01 2019-09-30 0001735707 srt:EuropeMember gtx:OriginalEquipmentManufacturersMember 2019-07-01 2019-09-30 0001735707 srt:EuropeMember gtx:AftermarketMember 2019-07-01 2019-09-30 0001735707 srt:EuropeMember gtx:OtherMember 2019-07-01 2019-09-30 0001735707 srt:EuropeMember 2019-07-01 2019-09-30 0001735707 srt:AsiaMember gtx:OriginalEquipmentManufacturersMember 2019-07-01 2019-09-30 0001735707 srt:AsiaMember gtx:AftermarketMember 2019-07-01 2019-09-30 0001735707 srt:AsiaMember gtx:OtherMember 2019-07-01 2019-09-30 0001735707 srt:AsiaMember 2019-07-01 2019-09-30 0001735707 us-gaap:NonUsMember gtx:OriginalEquipmentManufacturersMember 2019-07-01 2019-09-30 0001735707 us-gaap:NonUsMember gtx:AftermarketMember 2019-07-01 2019-09-30 0001735707 us-gaap:NonUsMember 2019-07-01 2019-09-30 0001735707 gtx:OriginalEquipmentManufacturersMember 2019-07-01 2019-09-30 0001735707 gtx:AftermarketMember 2019-07-01 2019-09-30 0001735707 gtx:OtherMember 2019-07-01 2019-09-30 0001735707 country:US gtx:OriginalEquipmentManufacturersMember 2019-01-01 2019-09-30 0001735707 country:US gtx:AftermarketMember 2019-01-01 2019-09-30 0001735707 country:US gtx:OtherMember 2019-01-01 2019-09-30 0001735707 country:US 2019-01-01 2019-09-30 0001735707 srt:EuropeMember gtx:OriginalEquipmentManufacturersMember 2019-01-01 2019-09-30 0001735707 srt:EuropeMember gtx:AftermarketMember 2019-01-01 2019-09-30 0001735707 srt:EuropeMember gtx:OtherMember 2019-01-01 2019-09-30 0001735707 srt:EuropeMember 2019-01-01 2019-09-30 0001735707 srt:AsiaMember gtx:OriginalEquipmentManufacturersMember 2019-01-01 2019-09-30 0001735707 srt:AsiaMember gtx:AftermarketMember 2019-01-01 2019-09-30 0001735707 srt:AsiaMember gtx:OtherMember 2019-01-01 2019-09-30 0001735707 srt:AsiaMember 2019-01-01 2019-09-30 0001735707 us-gaap:NonUsMember gtx:OriginalEquipmentManufacturersMember 2019-01-01 2019-09-30 0001735707 us-gaap:NonUsMember gtx:AftermarketMember 2019-01-01 2019-09-30 0001735707 us-gaap:NonUsMember 2019-01-01 2019-09-30 0001735707 gtx:OriginalEquipmentManufacturersMember 2019-01-01 2019-09-30 0001735707 gtx:AftermarketMember 2019-01-01 2019-09-30 0001735707 gtx:OtherMember 2019-01-01 2019-09-30 0001735707 gtx:ResearchAndDevelopmentOfNewProductCostsMember us-gaap:CostOfSalesMember 2020-07-01 2020-09-30 0001735707 gtx:ResearchAndDevelopmentOfNewProductCostsMember us-gaap:CostOfSalesMember 2019-07-01 2019-09-30 0001735707 gtx:ResearchAndDevelopmentOfNewProductCostsMember us-gaap:CostOfSalesMember 2020-01-01 2020-09-30 0001735707 gtx:ResearchAndDevelopmentOfNewProductCostsMember us-gaap:CostOfSalesMember 2019-01-01 2019-09-30 0001735707 gtx:EngineeringRelatedExpensesMember us-gaap:CostOfSalesMember 2020-07-01 2020-09-30 0001735707 gtx:EngineeringRelatedExpensesMember us-gaap:CostOfSalesMember 2019-07-01 2019-09-30 0001735707 gtx:EngineeringRelatedExpensesMember us-gaap:CostOfSalesMember 2020-01-01 2020-09-30 0001735707 gtx:EngineeringRelatedExpensesMember us-gaap:CostOfSalesMember 2019-01-01 2019-09-30 0001735707 us-gaap:CostOfSalesMember 2020-07-01 2020-09-30 0001735707 us-gaap:CostOfSalesMember 2019-07-01 2019-09-30 0001735707 us-gaap:CostOfSalesMember 2020-01-01 2020-09-30 0001735707 us-gaap:CostOfSalesMember 2019-01-01 2019-09-30 0001735707 2019-01-01 2019-12-31 0001735707 us-gaap:EmployeeSeveranceMember 2018-12-31 0001735707 us-gaap:SpinoffMember 2018-12-31 0001735707 us-gaap:EmployeeSeveranceMember 2019-01-01 2019-09-30 0001735707 us-gaap:SpinoffMember 2019-01-01 2019-09-30 0001735707 us-gaap:EmployeeSeveranceMember 2019-09-30 0001735707 us-gaap:SpinoffMember 2019-09-30 0001735707 us-gaap:EmployeeSeveranceMember 2019-12-31 0001735707 us-gaap:SpinoffMember 2019-12-31 0001735707 us-gaap:EmployeeSeveranceMember 2020-01-01 2020-09-30 0001735707 us-gaap:SpinoffMember 2020-01-01 2020-09-30 0001735707 us-gaap:EmployeeSeveranceMember 2020-09-30 0001735707 us-gaap:SpinoffMember 2020-09-30 0001735707 srt:MaximumMember 2020-01-01 2020-09-30 0001735707 srt:MaximumMember 2020-09-30 0001735707 us-gaap:ForeignExchangeForwardMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-09-30 0001735707 us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:NondesignatedMember 2020-09-30 0001735707 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:NondesignatedMember 2020-09-30 0001735707 us-gaap:ForeignExchangeForwardMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:NondesignatedMember 2020-09-30 0001735707 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001735707 us-gaap:ForeignExchangeForwardMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001735707 us-gaap:CurrencySwapMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:NondesignatedMember 2019-12-31 0001735707 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:NondesignatedMember 2019-12-31 0001735707 us-gaap:ForeignExchangeForwardMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:NondesignatedMember 2019-12-31 0001735707 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001735707 us-gaap:CarryingReportedAmountFairValueDisclosureMember gtx:TermsLoansAAndBMember 2020-09-30 0001735707 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel2Member gtx:TermsLoansAAndBMember 2020-09-30 0001735707 us-gaap:CarryingReportedAmountFairValueDisclosureMember gtx:FivePointOneTwoFivePercentSeniorNotesDueTwoThousandTwentySixMember 2020-09-30 0001735707 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel2Member gtx:FivePointOneTwoFivePercentSeniorNotesDueTwoThousandTwentySixMember 2020-09-30 0001735707 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0001735707 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-12-31 0001735707 us-gaap:AccumulatedTranslationAdjustmentMember 2019-01-01 2019-09-30 0001735707 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-01-01 2019-09-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-09-30 0001735707 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-01-01 2019-09-30 0001735707 us-gaap:AccumulatedTranslationAdjustmentMember 2019-09-30 0001735707 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-09-30 0001735707 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-09-30 0001735707 us-gaap:AccumulatedTranslationAdjustmentMember 2019-12-31 0001735707 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2019-12-31 0001735707 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-12-31 0001735707 us-gaap:AccumulatedTranslationAdjustmentMember 2020-01-01 2020-09-30 0001735707 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-01-01 2020-09-30 0001735707 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-09-30 0001735707 us-gaap:AccumulatedTranslationAdjustmentMember 2020-09-30 0001735707 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2020-09-30 0001735707 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-09-30 0001735707 gtx:TheSubordinatedAsbestosIndemnityAgreementMember 2018-09-12 0001735707 gtx:TheSubordinatedAsbestosIndemnityAgreementMember gtx:HoneywellInternationalIncMember 2020-01-01 2020-03-31 0001735707 gtx:TheSubordinatedAsbestosIndemnityAgreementMember gtx:HoneywellInternationalIncMember 2020-01-01 2020-09-30 0001735707 gtx:TaxMattersAgreementMember gtx:HoneywellInternationalIncMember 2018-10-01 2018-10-01 0001735707 gtx:TaxMattersAgreementMember gtx:HoneywellInternationalIncMember 2020-09-30 gtx:Installment 0001735707 gtx:TaxMattersAgreementMember gtx:HoneywellInternationalIncMember 2018-10-01 0001735707 gtx:HoneywellInternationalIncMember gtx:AsbestosAndEnvironmentalMember us-gaap:SpinoffMember 2019-12-31 0001735707 gtx:HoneywellInternationalIncMember gtx:TaxMattersAgreementMember us-gaap:SpinoffMember 2019-12-31 0001735707 gtx:HoneywellInternationalIncMember us-gaap:SpinoffMember 2019-12-31 0001735707 gtx:HoneywellInternationalIncMember gtx:AsbestosAndEnvironmentalMember us-gaap:SpinoffMember 2020-01-01 2020-09-30 0001735707 gtx:HoneywellInternationalIncMember us-gaap:SpinoffMember 2020-01-01 2020-09-30 0001735707 gtx:HoneywellInternationalIncMember gtx:TaxMattersAgreementMember us-gaap:SpinoffMember 2020-01-01 2020-09-30 0001735707 gtx:HoneywellInternationalIncMember gtx:AsbestosAndEnvironmentalMember us-gaap:SpinoffMember 2020-09-30 0001735707 gtx:HoneywellInternationalIncMember gtx:TaxMattersAgreementMember us-gaap:SpinoffMember 2020-09-30 0001735707 gtx:HoneywellInternationalIncMember us-gaap:SpinoffMember 2020-09-30 0001735707 gtx:BendixAsbestosRelatedLiabilitiesMember 2019-12-31 0001735707 gtx:BendixAsbestosRelatedLiabilitiesMember 2018-12-31 0001735707 gtx:BendixAsbestosRelatedLiabilitiesMember 2020-01-01 2020-09-30 0001735707 gtx:BendixAsbestosRelatedLiabilitiesMember 2019-01-01 2019-12-31 0001735707 gtx:BendixAsbestosRelatedLiabilitiesMember 2020-09-30 iso4217:USD gtx:Claim 0001735707 2018-01-01 2018-12-31 0001735707 2017-01-01 2017-12-31 0001735707 2016-01-01 2016-12-31 0001735707 us-gaap:SecretariatOfTheFederalRevenueBureauOfBrazilMember 2020-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember us-gaap:ForeignPlanMember 2020-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember us-gaap:ForeignPlanMember 2020-01-01 2020-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember us-gaap:ForeignPlanMember 2020-07-01 2020-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember us-gaap:ForeignPlanMember 2019-07-01 2019-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember country:US 2020-01-01 2020-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember us-gaap:ForeignPlanMember 2019-01-01 2019-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember country:US 2020-07-01 2020-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember country:US 2019-01-01 2019-09-30 0001735707 us-gaap:PensionPlansDefinedBenefitMember country:US 2019-07-01 2019-09-30 0001735707 gtx:GarrettChinaMember us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2018-09-01 2018-09-30 0001735707 gtx:GarrettChinaMember gtx:HoneywellInternationalIncMember 2020-06-03

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2020

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____ to ______

Commission File Number: 001-38636

 

Garrett Motion Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

82-4873189

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

La Pièce 16, Rolle, Switzerland

1180

(Address of principal executive offices)

(Zip Code)

 

+41 21 695 30 00

(Registrant’s telephone number, including area code)

 

N/A

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

None

None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes      No  

As of October 26, 2020, the registrant had 75,788,279 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 

 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

6

Item 1.

Financial Statements (Unaudited)

6

 

Consolidated Interim Statements of Operations (Unaudited)

6

 

Consolidated Interim Statements of Comprehensive Income (Loss) (Unaudited)

7

 

Consolidated Interim Balance Sheets (Unaudited)

8

 

Consolidated Interim Statements of Cash Flows (Unaudited)

9

 

Consolidated Interim Statements of Equity (Deficit) (Unaudited)

10

 

Notes to Unaudited Consolidated Interim Financial Statements

11

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

34

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

48

Item 4.

Controls and Procedures

49

PART II.

OTHER INFORMATION

50

Item 1.

Legal Proceedings

50

Item 1A.

Risk Factors

50

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

55

Item 3.

Defaults Upon Senior Securities

55

Item 4.

Mine Safety Disclosures

55

Item 5.

Other Information

55

Item 6.

Exhibits

56

Signatures

58

 

 

 

i


 

EXPLANATORY NOTE

On September 20, 2020 (the “Petition Date”), Garrett Motion Inc. (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 the Petition Date, the Debtors entered into a Restructuring Support Agreement (the “RSA”) with consenting lenders (the “Consenting Lenders”) holding, in the aggregate, approximately 61% of the aggregate outstanding principal amount of loans under that certain Credit Agreement, dated as of September 27, 2018, (as amended, restated, supplemented or otherwise modified from time to time, the “Prepetition Credit Agreement”) 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 S.à r.l., as Swiss Borrower, the Lenders and Issuing Banks party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Pursuant to the RSA, the Consenting Lenders and the Debtors have agreed to the principal terms of a financial restructuring, to be implemented through a plan of reorganization under the Bankruptcy Code (the “Plan”), and is expected to include the sale of all or substantially all of the assets of certain Debtors and of the stock of certain Debtors and other subsidiaries, as further described below.

On the Petition Date, certain of the Debtors also entered into a share and asset purchase agreement (the “Stalking Horse Purchase Agreement”) with AMP Intermediate B.V. (the “Stalking Horse Bidder”) and AMP U.S. Holdings, LLC, each affiliates of KPS Capital Partners, LP, pursuant to which the Stalking Horse Bidder has agreed to purchase, subject to the terms and conditions contained therein, all of the equity interests in each of Garrett LX I S.à r.l., and Garrett Transportation I Inc. (subject to an election by the Stalking Horse Bidder to purchase substantially all of the assets of Garrett Transportation I Inc., instead of its equity), along with certain other assets and liabilities of the Debtors pursuant to the Plan. On October 19, 2020, the Company received a proposal from the Stalking Horse Bidder to revise its bid following the Bankruptcy Court’s entry on October 24, 2020 of an order approving bidding procedures and stalking horse protections to, among other things, increase consideration by $500 million (for total consideration of $2.6 billion) and offer the Company’s existing stockholders the opportunity to co-invest in the reorganized business (the “Stalking Horse Bidder Revised Proposal”). The Stalking Horse Purchase Agreement and the Stalking Horse Bidder Revised Proposal are subject to Bankruptcy Court approval and are intended to constitute a “stalking horse” bid that is subject to higher and better bids by third parties in accordance with bidding procedures approved by the Bankruptcy Court. Such bids by third parties may include proposals for stand-alone plans of reorganization.

On October 6, 2020, the Bankruptcy Court entered an order granting interim approval of the Debtors’ entry into a Senior Secured Super-Priority Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”), with the lenders party thereto (the “DIP Lenders”) and Citibank N.A. as administrative agent (the “DIP Agent”). On October 9, 2020 (the “Closing Date”), the Company, the DIP Agent and the DIP Lenders entered into the DIP Credit Agreement. The DIP Credit Agreement provides for a senior secured, super-priority term loan (the “DIP Term Loan Facility”) in the principal amount of $200 million, $100 million of which was funded on the Closing Date and $100 million of which was subsequently funded on October 26, 2020, following entry of the Bankruptcy Court’s final order approving the DIP Term Loan Facility on October 23, 2020. The proceeds of the DIP Term Loan Facility are to be used by the Debtors to (a) pay certain costs, premiums, fees and expenses related to the Chapter 11 Cases, (b) make payments pursuant to any interim or final order entered by the Bankruptcy Court pursuant to any “first day” motions permitting the payment by the Debtors of any prepetition amounts then due and owing; (c) make certain adequate protection payments in accordance with the DIP Credit Agreement and (d) fund working capital needs of the Debtors and their subsidiaries to the extent permitted by the DIP Credit Agreement.

See Note 1 Background and Basis of Presentation of the Notes to the Company’s Condensed Consolidated Interim Financial Statements for additional information regarding the Chapter 11 Cases, the RSA, the Stalking Horse Purchase Agreement and the DIP Credit Agreement. The disclosures in this Quarterly Report on Form 10-Q should be read in the context of the Chapter 11 Cases. All documents filed with the Bankruptcy Court are available for inspection at the Office of the Clerk of the Bankruptcy Court or online (a) for a fee on the Bankruptcy Court’s website at www.ecf.uscourts.gov and (b) free of charge on the website of the Debtors’ claims and noticing agent, Kurtzman Carson Consultants LLC at http://www.kccllc.net/garrettmotion.

 

BASIS OF PRESENTATION

On October 1, 2018, Garrett Motion Inc. became an independent publicly-traded company through a pro rata distribution (the “Distribution”) by Honeywell International Inc. (“Former Parent” or “Honeywell”) of 100% of the then-outstanding shares of Garrett to Honeywell’s stockholders (the “Spin-Off”). Each Honeywell stockholder of record received one share of Garrett common stock for every 10 shares of Honeywell common stock held on the record date.

2


 

Unless the context otherwise requires, references to “Garrett,” “we,” “us,” “our,” and “the Company” in this Quarterly Report on Form 10-Q refer to Garrett Motion Inc. and its subsidiaries following the Spin-Off.

3


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including without limitation statements regarding our future results of operations and financial position, the consequences and outcome of the Chapter 11 Cases, other potential claims against the Debtors related to the Chapter 11 Cases, the impact of the delisting of our common stock from the New York Stock Exchange, the anticipated impact of the novel coronavirus (“COVID-19”) pandemic on our business, results of operations and financial position, expectations regarding the growth of the turbocharger and electric vehicle markets and other industry trends, the sufficiency of our cash and cash equivalents, anticipated sources and uses of cash, anticipated investments in our business, our business strategy, pending litigation, anticipated payments under our agreements with Honeywell, and the expected timing of those payments, anticipated interest expense, and the plans and objectives of management for future operations and capital expenditures are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including:

 

 

1.

changes in the automotive industry and economic or competitive conditions;

 

2.

our ability to develop new technologies and products, and the development of either effective alternative turbochargers or new replacement technologies;

 

3.

failure to protect our intellectual property or allegations that we have infringed the intellectual property of others, and our ability to license necessary intellectual property from third parties;

 

4.

potential material losses and costs as a result of any warranty claims and product liability actions brought against us;

 

5.

significant failure or inability to comply with the specifications and manufacturing requirements of our original equipment manufacturer customers or by increases or decreases to the inventory levels maintained by our customers;

 

6.

volume of products we produce and market demand for such products and prices we charge and the margins we realize from our sales of our products;

 

7.

loss of or a significant reduction in purchases by our largest customers, material nonpayment or nonperformance by any our key customers, and difficulty collecting receivables;

 

8.

inaccuracies in estimates of volumes of awarded business;

 

9.

work stoppages, other disruptions or the need to relocate any of our facilities;

 

10.

supplier dependency;

 

11.

failure to meet our minimum delivery requirements under our supply agreements;

 

12.

failure to increase productivity or successfully execute repositioning projects or manage our workforce;

 

13.

potential material environmental liabilities and hazards;

 

14.

natural disasters and physical impacts of climate change;

 

15.

pandemics, including without limitation the COVID-19 pandemic, and effects on our workforce and supply chain;

 

16.

technical difficulties or failures, including cybersecurity risks;

 

17.

the outcome of and costs associated with pending and potential material litigation matters, including our pending lawsuit against Honeywell;

 

18.

changes in legislation or government regulations or policies, including with respect to CO2 reduction targets in Europe as part of the Green Deal objectives or other similar changes which may contribute to a proportionately higher level of battery electric vehicles;

4


 

 

19.

risks related to international operations and our investment in foreign markets, including risks related to the withdrawal of the United Kingdom from the European Union;

 

20.

risks related to our agreements with Honeywell, such as the indemnification and reimbursement agreement and tax matters agreement;

 

21.

the terms of our indebtedness and our ability to access capital markets;

 

22.

unforeseen adverse tax effects;

 

23.

costs related to operating as a standalone public company and failure to achieve benefits expected from the Spin-Off;

 

24.

our leveraged capital structure and liabilities to Honeywell may pose significant challenges to our overall strategic and financial flexibility and have a material adverse effect on our business, liquidity position and financial position;

 

25.

inability to recruit and retain qualified personnel;

 

26.

the ability to obtain Bankruptcy Court approval in the Chapter 11 Cases with respect to the Debtors’ motions, the outcome of the Bankruptcy Court’s rulings in the Chapter 11 Cases and the outcome of the Chapter 11 Cases in general, including the length of time the Debtors will operate in the Chapter 11 Cases;

 

27.

restrictions on our operations as a result of the Chapter 11 Cases, the Stalking Horse Purchase Agreement and the DIP Credit Agreement;

 

28.

ability to complete a sale transaction (including in accordance with the Stalking Horse Purchase Agreement) or realize adequate consideration for such sale with the approval of the Bankruptcy Court;

 

29.

the outcome of our litigation against Honeywell in the Chapter 11 Cases;

 

30.

the potential adverse effects of extended operation during the Chapter 11 Cases on our business, financial condition, results of operations and liquidity, including potential loss of customers and suppliers, management and other key personnel;

 

31.

the availability of additional financing to maintain our operations if the DIP Term Loan Facility should become unavailable or insufficient;

 

32.

the potential to experience increased levels of employee attrition as a result of the Chapter 11 Cases;

 

33.

ability to utilize our net operating loss carryforwards in future years;

 

34.

other litigation and the inherent risks involved in a bankruptcy process, including the possibility of converting to a proceeding under Chapter 7 of the Bankruptcy Code;

 

35.

the effect of the Chapter 11 Cases on the trading price and liquidity of our securities; and

 

36.

the other factors described under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated in this Quarterly Report on Form 10-Q, and in our other filings with the Securities and Exchange Commission.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

5


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

GARRETT MOTION INC.

(Debtor-in-Possession)

CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in millions, except per share amounts)

 

Net sales (Note 4)

 

 

804

 

 

 

781

 

 

 

2,026

 

 

 

2,418

 

Cost of goods sold

 

 

652

 

 

 

609

 

 

 

1,648

 

 

 

1,868

 

Gross profit

 

$

152

 

 

$

172

 

 

$

378

 

 

$

550

 

Selling, general and administrative expenses

 

 

103

 

 

 

68

 

 

 

215

 

 

 

186

 

Other expense, net (Note 6)

 

 

14

 

 

 

18

 

 

 

45

 

 

 

54

 

Interest expense (excludes contractual interest for the three and nine months ended September 30, 2020 of $0) (Note 2)

 

 

20

 

 

 

18

 

 

 

56

 

 

 

52

 

Non-operating expense (income)

 

 

1

 

 

 

(4

)

 

 

(7

)

 

 

2

 

Reorganization items, net

 

 

4

 

 

 

 

 

 

4

 

 

 

 

Income before taxes

 

$

10

 

 

$

72

 

 

$

65

 

 

$

256

 

Tax (benefit) expense (Note 7)

 

 

(1

)

 

 

34

 

 

 

11

 

 

 

79

 

Net income

 

$

11

 

 

$

38

 

 

$

54

 

 

$

177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.15

 

 

$

0.51

 

 

$

0.72

 

 

$

2.37

 

Diluted

 

$

0.14

 

 

$

0.50

 

 

$

0.71

 

 

$

2.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

75,739,152

 

 

 

74,753,593

 

 

 

75,456,358

 

 

 

74,528,740

 

Diluted

 

 

75,943,994

 

 

 

75,704,457

 

 

 

76,123,548

 

 

 

75,700,652

 

 

The Notes to the Consolidated Interim Financial Statements are an integral part of this statement.

6


 

GARRETT MOTION INC.

(Debtor-in-Possession)

CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

 

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in millions)

 

Net income

 

$

11

 

 

$

38

 

 

$

54

 

 

$

177

 

Foreign exchange translation adjustment

 

 

(100

)

 

 

102

 

 

 

(111

)

 

 

127

 

Defined benefit pension plan adjustment, net of tax (Note 19)

 

 

 

 

 

 

 

 

 

 

 

1

 

Changes in fair value of effective cash flow hedges, net of tax

   (Note 15)

 

 

(6

)

 

 

8

 

 

 

(8

)

 

 

10

 

Total other comprehensive (loss) income, net of tax

 

$

(106

)

 

$

110

 

 

$

(119

)

 

$

138

 

Comprehensive (loss) income

 

$

(95

)

 

$

148

 

 

$

(65

)

 

$

315

 

 

The Notes to the Consolidated Interim Financial Statements are an integral part of this statement.

7


 

GARRETT MOTION INC.

(Debtor-in-Possession)

CONSOLIDATED INTERIM BALANCE SHEETS

(Unaudited)

 

 

 

September 30,

2020

 

 

December 31,

2019

 

 

 

(Dollars in millions)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

312

 

 

$

187

 

Restricted cash

 

 

3

 

 

 

 

Accounts, notes and other receivables – net (Note 8)

 

 

710

 

 

 

707

 

Inventories – net (Note 10)

 

 

237

 

 

 

220

 

Other current assets

 

 

130

 

 

 

85

 

Total current assets

 

 

1,392

 

 

 

1,199

 

Investments and long-term receivables

 

 

34

 

 

 

36

 

Property, plant and equipment – net

 

 

465

 

 

 

471

 

Goodwill

 

 

193

 

 

 

193

 

Deferred income taxes

 

 

265

 

 

 

268

 

Other assets (Note 11)

 

 

118

 

 

 

108

 

Total assets

 

$

2,467

 

 

$

2,275

 

LIABILITIES

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

461

 

 

$

1,009

 

Borrowings under revolving credit facility

 

 

370

 

 

 

 

Current maturities of long-term debt

 

 

 

 

 

4

 

Obligations payable to Honeywell, current (Note 18)

 

 

 

 

 

69

 

Accrued liabilities (Note 12)

 

 

201

 

 

 

310

 

Total current liabilities

 

 

1,032

 

 

 

1,392

 

Long-term debt

 

 

1,045

 

 

 

1,409

 

Deferred income taxes

 

 

2

 

 

 

51

 

Obligations payable to Honeywell (Note 18)

 

 

 

 

 

1,282

 

Other liabilities (Note 13)

 

 

114

 

 

 

274

 

Total liabilities not subject to compromise

 

$

2,193

 

 

$

4,408

 

Liabilities subject to compromise

 

 

2,470

 

 

 

 

Total liabilities

 

$

4,663

 

 

$

4,408

 

COMMITMENTS AND CONTINGENCIES (Note 18)

 

 

 

 

 

 

 

 

EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Common stock, par value $0.001; 400,000,000 shares authorized, 76,202,169 and

  74,911,139 issued and 75,788,279 and 74,826,329 outstanding as of September 30,

  2020 and December 31, 2019, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

26

 

 

 

19

 

Retained earnings

 

 

(2,233

)

 

 

(2,282

)

Accumulated other comprehensive income (Note 16)

 

 

11

 

 

 

130

 

Total stockholders' deficit

 

 

(2,196

)

 

 

(2,133

)

Total liabilities and stockholders' deficit

 

$

2,467

 

 

$

2,275

 

 

The Notes to the Consolidated Interim Financial Statements are an integral part of this statement.

8


 

GARRETT MOTION INC.

(Debtor-in-Possession)

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended September30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in millions)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

54

 

 

$

177

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Non-cash reorganization items, net

 

 

4

 

 

 

 

Deferred income taxes

 

 

(25

)

 

 

4

 

Depreciation

 

 

60

 

 

 

55

 

Amortization of deferred issuance costs

 

 

5

 

 

 

5

 

Foreign exchange loss

 

 

(15

)

 

 

32

 

Stock compensation expense

 

 

8

 

 

 

14

 

Pension expense

 

 

1

 

 

 

4

 

Other

 

 

9

 

 

 

7

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts, notes and other receivables

 

 

(35

)

 

 

(29

)

Inventories

 

 

(26

)

 

 

(33

)

Other assets

 

 

(54

)

 

 

7

 

Accounts payable

 

 

(126

)

 

 

18

 

Accrued liabilities

 

 

(22

)

 

 

(48

)

Obligations payable to Honeywell

 

 

6

 

 

 

(84

)

Other liabilities

 

 

20

 

 

 

(4

)

Net cash (used for) provided by operating activities

 

$

(136

)

 

$

125

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Expenditures for property, plant and equipment

 

 

(79

)

 

 

(74

)

Other

 

 

 

 

 

12

 

Net cash used for investing activities

 

$

(79

)

 

$

(62

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from revolving credit facility

 

 

1,449

 

 

 

550

 

Payments of revolving credit facility

 

 

(1,100

)

 

 

(550

)

Payments of long-term debt

 

 

(2

)

 

 

(62

)

Debtor-in-possession financing fees

 

 

(4

)

 

 

 

Other

 

 

(3

)

 

 

 

Net cash provided by (used for) financing activities

 

 

340

 

 

 

(62

)

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

 

 

3

 

 

 

(7

)

Net increase/(decrease) in cash, cash equivalents and restricted cash

 

 

128

 

 

 

(6

)

Cash and cash equivalents at beginning of period

 

 

187

 

 

 

196

 

Cash, cash equivalents and restricted cash at end of period

 

$

315

 

 

$

190

 

Supplemental Cash Flow Disclosure:

 

 

 

 

 

 

 

 

Reorganization items paid

 

 

 

 

 

 

 

The Notes to the Consolidated Interim Financial Statements are an integral part of this statement.

 

 

9


 

GARRETT MOTION INC.

(Debtor-in-Possession)

CONSOLIDATED INTERIM STATEMENTS OF EQUITY (DEFICIT)

(Unaudited)

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Income/(Loss)

 

 

Deficit

 

 

 

(in millions)

 

Balance at December 31, 2018

 

 

74

 

 

 

 

 

 

5

 

 

 

(2,595

)

 

 

73

 

 

 

(2,517

)

Net income

 

 

 

 

 

 

 

 

 

 

 

73

 

 

 

 

 

 

73

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

63

 

 

 

63

 

Stock-based compensation

 

 

1

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

5

 

Balance at March 31, 2019

 

 

75

 

 

 

 

 

 

10

 

 

 

(2,522

)

 

 

136

 

 

 

(2,376

)

Net income

 

 

 

 

 

 

 

 

 

 

 

66

 

 

 

 

 

 

66

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35

)

 

 

(35

)

Stock-based compensation