First Quarter 2020 Highlights
- Net sales totaled $745 million, a decrease of 10.8% on a
reported basis and 8.5% at constant currency*
- Net income totaled $52 million, or $0.69 per basic share and
$0.68 per diluted share
- Adjusted net income* was $68 million, or $0.91 per basic share
and $0.89 per diluted share
- Adjusted EBITDA* decreased to $108 million; Adjusted EBITDA
margin* was 14.5%
- Adjusted free cash flow* totaled $57 million; Adjusted free
cash flow conversion* of 84%
- Net debt to consolidated EBITDA ratio* was 3.01x at March 31,
2020
Garrett Motion Inc. (NYSE: GTX), a cutting-edge technology
provider that enables vehicles to become safer, more connected,
efficient and environmentally friendly, today announced its
financial results for the first quarter ended March 31, 2020.
Q1 2019
$ millions (unless otherwise
noted)
Q1 2020
835
Net sales
745
639
Cost of goods sold
603
196
Gross profit
142
23.5%
Gross profit %
19.1%
60
Selling, general and
administrative
61
97
Income before taxes
53
73
Net income
52
92
Adjusted net income*
68
159
Adjusted EBITDA*
108
19.0%
Adjusted EBITDA margin*
14.5%
21
Expenditures for property, plant
and equipment
39
March 31, 2019
$ millions (unless otherwise
noted)
March 31, 2020
1,542
Long-term debt
1,389
1,598
Consolidated debt*
1,484
1,392
Net debt*
1,230
2.96X
Net debt to consolidated EBITDA
ratio*
3.01X
* See reconciliations to the nearest GAAP
measure in pages 5-13.
“Our financial results for the first quarter demonstrate
Garrett’s flexible operating platform and global capabilities amid
the novel coronavirus outbreak,” said Olivier Rabiller, Garrett
President and CEO. “Both of our production facilities in China have
restarted operations and returned rapidly to full capacity after
closing for a portion of the quarter due to the COVID-19 pandemic.
We remain focused on taking aggressive measures in response to this
unprecedented crisis with a priority on protecting the health and
well-being of our employees and meeting our customer commitments.
Last month, we fully drew down on our revolving credit facility to
increase our financial flexibility and started the current quarter
with $658 million in total liquidity. We are also temporarily
reducing pay for Garrett’s senior leadership team by 20% and
postponing future capital expenditures without impacting near-term
programs. By actively managing our cost structure and preserving
capital, we expect to generate significant cash savings for the
year, and we are evaluating further steps to ensure the continuity
of our operations. Garrett’s positive business fundamentals remain
intact and we will continue to calibrate production schedules in
the near term and flex our cost structure to maintain our agility
and strengthen our position for long-term success.”
Results of Operations
Net sales for the first quarter of 2020 were $745 million
compared to $835 million in the first quarter of 2019, a decrease
of 10.8% (including a negative impact of 2.2% due to foreign
currency translation). Net sales at constant currency decreased
8.5%. During the first quarter of 2020, Garrett’s manufacturing
facility in Wuhan, China was closed for six weeks and the company’s
plant in Shanghai, China experienced a material slowdown in the
quarter due to the COVID-19 pandemic. Additionally, several
manufacturing facilities in Europe and North America were closed or
reduced production during the second half of March 2020 as a result
of COVID-19.
Reported net sales in the first quarter for light vehicles OEM
products decreased $36 million due to lower diesel volumes,
partially offset by higher gasoline volumes stemming from increased
turbocharger penetration in gasoline engines and new product
launches. Reported net sales for commercial vehicle OEM products
and aftermarket products decreased $31 million and $18 million,
respectively. Other products sales in the quarter declined $5
million.
Cost of goods sold for the first quarter of 2020 was $603
million versus $639 million in the first quarter of 2019 primarily
due to lower volumes stemming from the impact of COVID-19. Research
and development expenses in the quarter decreased to $28 million
from $32 million in the first quarter of 2019.
Gross profit percentage for the first quarter of 2020
declined to 19.1% from 23.5% in the first quarter of 2019 primarily
due to the unfavorable impacts from product mix and premium
freight, partially offset by productivity gains net of lower volume
leverage.
Selling, general and administrative (“SG&A”) expenses
for the first quarter of 2020 totaled $61 million versus $60
million in the prior year period. As a percentage of net sales,
SG&A for the quarter was 8.2% versus 7.2% in the first quarter
of 2019.
Other expenses - net for the first quarter of 2020
declined to $16 million from $19 million in the first quarter of
2019. During the first quarter of 2020, the company recognized $15
million in legal fees as part of its Indemnification and
Reimbursement Agreement with Honeywell. Garrett also recognized $1
million in Indemnification-related litigation fees for the first
quarter of 2020.
Interest expense for both the first quarter of 2020 and
first quarter of 2019 was $16 million.
Net income for the first quarter of 2020 was $52 million,
or $0.69 per basic share and $0.68 per diluted share, compared to
net income of $73 million, or $0.98 per basic share and $0.97 per
diluted share, in the first quarter of 2019.
Adjusted net income, which excludes Honeywell indemnity
obligation expenses and litigation fees, for the first quarter of
2020 was $68 million, or $0.91 per basic share and $0.89 per
diluted share. This compares to adjusted net income of $92 million,
or $1.24 per basic share and $1.22 per diluted share, in the first
quarter of 2019.
Expenditures for property, plant and equipment (capital
expenditures) for the first quarter of 2020 totaled $39
million, or 5.2% of net sales, compared to $21 million, or 2.5% of
net sales, in the first quarter of 2019. Capital expenditures paid
in the first quarter of 2020 were mainly comprised of commitments
stemming from the fourth quarter of 2019. Cash flow from operations
less capital expenditures for the first quarter of 2020 was $18
million, compared to $15 million for the first quarter of 2019.
Additional Non-GAAP Financial
Measures
Adjusted EBITDA for the first quarter of 2020 was $108 million
versus $159 million for the same period in 2019. The Adjusted
EBITDA margin decreased to 14.5% in the quarter from 19.0% in the
first quarter of 2019 primarily due to lower volumes stemming from
the impact of COVID-19, unfavorable product mix and higher premium
freight expenses, partially offset by productivity. Adjusted free
cash flow, which excludes Indemnity related payments to Honeywell,
was $57 million for the first quarter of 2020 versus $53 million
for the same period in 2019.
Liquidity and Capital
Resources
As of March 31, 2020, Garrett had $658 million in total
available liquidity, including cash and cash equivalents and funds
available under its revolving credit facility.
As of March 31, 2020, consolidated debt was $1,484 million, an
increase of approximately $41 million compared to December 31,
2019. As of March 31, 2020, net debt totaled $1,230 million, a
decrease of approximately $26 million compared to December 31,
2019. Net Debt to Consolidated EBITDA (as defined in Garrett’s
Credit Agreement) was 3.01x as of March 31, 2020 versus 2.74x as of
December 31, 2019. As a result of the impact of the COVID-19
pandemic, Garrett expects to be unable to comply with this covenant
as early as June 30, 2020. Our management is in the process of
negotiating with our lenders to obtain an amendment to or a waiver
from the covenant. See our Quarterly Report on Form 10-Q for the
period ended March 31, 2020 for additional information. Garrett’s
weighted average stated interest rate was approximately 3.15% as of
March 31, 2020, and the company has no significant debt maturities
before September 2023.
2020 Outlook
On April 7, 2020, Garrett withdrew its full year 2020 guidance
issued on February 27, 2020 due to the highly uncertain operating
environment caused by COVID-19. The Company intends to resume
providing an outlook at a future date.
Conference Call
Garrett will host a conference call on Monday, May 11, 2020 at
8:30 am Eastern Time / 2:30 pm Central European Time. The dial-in
number for callers in the U.S. is +1-844-835-9983 and the dial-in
number for international callers is +1-412-317-5268. The access
code for all callers is 10142849. A live webcast and related slide
presentation will also be available at
http://investors.garrettmotion.com/.
A replay of the conference call can be accessed through May 25,
2020 by dialing +1-877-344-7529 in the U.S. and +1-412-317-0088
outside the U.S., and then entering the access code 10142849. The
webcast will also be archived on Garrett’s website.
Forward-Looking
Statements
This presentation contains “forward-looking statements” within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended. All statements, other than statements of fact, that
address activities, events or developments that we or our
management intend, expect, project, believe or anticipate will or
may occur in the future are forward-looking statements including
without limitation our statements regarding our anticipated
financial performance and covenant compliance, the anticipated
impact of the COVID-19 pandemic on our business, financial results
and financial condition, expected cost savings, expectations
regarding global automotive demand, anticipated growth of our
gasoline business, trends in foreign exchange rates and estimated
Indemnification Liability payments. Although we believe
forward-looking statements are based upon reasonable assumptions,
such statements involve known and unknown risks, uncertainties, and
other factors, which may cause the actual results or performance of
the company to be materially different from any future results or
performance expressed or implied by such forward-looking
statements. Such risks and uncertainties include, but are not
limited to risks related to the COVID-19 pandemic and its impact on
our business, financial results and financial condition, any
failure to comply with the covenants in our credit agreement or
obtain an amendment or waiver, risks related to our ability to
continue as a going concern and those risks described in our annual
report on Form 10-K for the year ended December 31, 2019, as
updated by our quarterly report on Form 10-Q for the period ended
March 31, 2020, as well as our other filings with the Securities
and Exchange Commission, under the headings “Risk Factors” and
“Cautionary Statement Concerning Forward-Looking Statements.” You
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this document.
Forward-looking statements are not guarantees of future
performance, and actual results, developments and business
decisions may differ from those envisaged by our forward-looking
statements.
Non-GAAP Financial
Measures
This presentation includes EBITDA, Adjusted EBITDA, Net Debt,
Consolidated Debt, Net Debt to Consolidated EBITDA ratio,
Consolidated Debt to Consolidated EBITDA ratio, Adjusted Free Cash
Flow, Consolidated EBITDA, Adjusted EBITDA Margin, Adjusted Net
Income, Adjusted Earnings Per Share (“EPS”), Cash flow from
operations minus capital expenditures, Free Cash Flow, Adjusted
Free Cash Flow Conversion, constant currency sales growth and other
financial measures not compliant with generally accepted accounting
principles in the United States (“GAAP”). The Non-GAAP financial
measures provided herein are adjusted for certain items as
presented in the Appendix containing Non-GAAP Reconciliations and
may not be directly comparable to similar measures used by other
companies in our industry, as other companies may define such
measures differently. Management believes that, when considered
together with reported amounts, these measures are useful to
investors and management in understanding our ongoing operations
and in analysis of ongoing operating trends. Garrett believes that
Adjusted EBITDA, Adjusted EBITDA Margin and Consolidated EBITDA are
important indicators of operating performance because they exclude
the effects of income taxes and certain other items, as well as the
effects of financing and investing activities by eliminating the
effects of interest and depreciation expenses and therefore more
closely measures our operational performance. These metrics should
be considered in addition to, and not as replacements for, the most
comparable GAAP measure. For additional information with respect to
our Non-GAAP financial measures, see our annual report on Form 10-K
for the year ended December 31, 2019 and our quarterly report for
the period ended March 31, 2020.
About Garrett Motion
Inc.
Garrett Motion is a differentiated technology leader, serving
customers worldwide for more than 65 years with passenger vehicle,
commercial vehicle, aftermarket replacement and performance
enhancement solutions. Garrett’s cutting-edge technology enables
vehicles to become safer, more connected, efficient and
environmentally friendly. Our portfolio of turbocharging, electric
boosting and automotive software solutions empowers the
transportation industry to redefine and further advance motion. For
more information, please visit www.garrettmotion.com.
GARRETT MOTION INC.
CONSOLIDATED AND COMBINED
STATEMENTS OF OPERATIONS
($ in millions, except per share
data)
For the Three Months Ended
March 31,
2020
2019
Net sales
$
745
$
835
Cost of goods sold
603
639
Gross profit
$
142
$
196
Selling, general and administrative
expenses
61
60
Other expense, net
16
19
Interest expense
16
16
Non-operating expense (income)
(4
)
4
Income before taxes
$
53
$
97
Tax expense
1
24
Net income
$
52
$
73
Earnings per common share
Basic
$
0.69
$
0.98
Diluted
$
0.68
$
0.97
Weighted average common shares
outstanding
Basic
75,040,932
74,229,627
Diluted
76,261,545
75,379,228
GARRETT MOTION INC.
CONSOLIDATED AND COMBINED
STATEMENTS OF COMPREHENSIVE INCOME
($ in millions)
For the Three Months Ended
March 31,
2020
2019
Net income
$
52
$
73
Foreign exchange translation
adjustment
39
59
Defined benefit pension plan adjustment,
net of tax
—
1
Changes in fair value of effective cash
flow hedges, net of tax
—
3
Changes in currency basis reserve
—
—
Total other comprehensive (loss) income,
net of tax
$
39
$
63
Comprehensive income (loss)
$
91
$
136
GARRETT MOTION INC.
CONSOLIDATED AND COMBINED
BALANCE SHEETS
March 31,
December 31,
2020
2019
($ in millions)
ASSETS
Current assets:
Cash and cash equivalents
$
254
$
187
Accounts, notes and other
receivables—net
629
707
Inventories—net
225
220
Other current assets
80
85
Total current assets
1,188
1,199
Investments and long-term receivables
34
36
Property, plant and equipment—net
457
471
Goodwill
193
193
Deferred income taxes
277
268
Other assets
105
108
Total assets
$
2,254
$
2,275
LIABILITIES
Current liabilities:
Accounts payable
935
1,009
Borrowings under revolving credit
facility
66
—
Current maturities of long-term debt
4
4
Obligations payable to Honeywell,
current
68
69
Accrued liabilities
303
310
Total current liabilities
1,376
1,392
Long-term debt
1,389
1,409
Deferred income taxes
37
51
Obligations payable to Honeywell
1,236
1,282
Other liabilities
262
274
Total liabilities
$
4,300
$
4,408
COMMITMENTS AND CONTINGENCIES
EQUITY (DEFICIT)
Common stock, par value $0.001;
400,000,000 shares authorized, 75,939,795 and 74,911,139 issued and
75,571,651 and 74,826,329 outstanding as of March 31, 2020 and
December 31, 2019, respectively
—
—
Additional paid-in capital
20
19
Retained earnings
(2,235
)
(2,282
)
Accumulated other comprehensive income
169
130
Total stockholders' deficit
(2,046
)
(2,133
)
Total liabilities and stockholders'
deficit
$
2,254
$
2,275
GARRETT MOTION INC.
CONSOLIDATED AND COMBINED
STATEMENTS OF CASH FLOWS
Three Months
Ended March 31,
($ in millions)
2020
2019
Cash flows from operating
activities:
Net (loss) income
$
52
$
73
Adjustments to reconcile net (loss) income
to net cash provided by
operating activities:
Deferred income taxes
(15
)
3
Depreciation
19
19
Amortization of deferred issuance
costs
2
2
Foreign exchange (gain) loss
12
7
Stock compensation expense
2
5
Pension expense
—
1
Other
8
4
Changes in assets and liabilities:
Accounts, notes and other receivables
58
(43
)
Receivables from related parties
—
—
Inventories
(14
)
(14
)
Other assets
(10
)
13
Accounts payable
(29
)
(24
)
Payables to related parties
—
—
Accrued liabilities
1
12
Obligations payable to Honeywell
(21
)
(21
)
Asbestos-related liabilities
—
—
Other liabilities
(8
)
(1
)
Net cash provided by (used for)
operating activities
$
57
$
36
Cash flows from investing
activities:
Expenditures for property, plant and
equipment
(39
)
(21
)
Increase in marketable securities
—
—
Decrease in marketable securities
—
—
Other
—
1
Net cash provided by (used for)
investing activities
$
(39
)
$
(20
)
Cash flows from financing
activities:
Net increase in Invested deficit
—
—
Proceeds from revolving credit
facility
621
140
Payments of revolving credit facility
(555
)
(140
)
Payments of long-term debt
(1
)
(6
)
Payments related to related party notes
payable
—
—
Net change to cash pooling and short-term
notes
—
—
Other
(3
)
1
Net cash provided by (used for)
financing activities
62
(5
)
Effect of foreign exchange rate changes on
cash and cash equivalents
(13
)
—
Net increase (decrease) in cash and cash
equivalents
67
11
Cash and cash equivalents at beginning
of period
187
196
Cash and cash equivalents at end of
period
$
254
$
207
Reconciliation of Net Income to
Adjusted EBITDA and Consolidated EBITDA
($ in millions)
For the
Three Months
Ended March 31,
For the
Twelve Months Ended
March 31,
For the
Twelve Months Ended
December 31,
For the
Twelve Months Ended
March 31,
2020
2019
2020
2019
2019
Net income —GAAP
$
52
$
73
$
292
$
313
$
1,221
Tax expense
1
24
10
33
(841
)
Profit before taxes
53
97
302
346
380
Net interest expense (income)
15
15
61
61
28
Depreciation
19
19
73
73
73
EBITDA (Non-GAAP)
87
131
436
480
481
Other expense, net (which primarily
consists of indemnification, asbestos and environmental expenses)
(1)
16
19
37
40
97
Non-operating (income) expense (2)(3)
(2
)
1
6
8
3
Stock compensation expense (4)
2
5
15
18
19
Repositioning charges (5)
5
1
6
2
1
Spin-Off costs (6)(7)
—
2
22
28
8
Foreign exchange (gain) loss on debt, net
of related hedging (gain) loss
—
—
7
7
(7
)
Adjusted EBITDA (Non-GAAP)
$
108
$
159
$
529
$
583
$
602
Adjusted EBITDA Margin (Non-GAAP) %
(8)
14.5
%
19.0
%
16.8
%
17.9
%
18.3
%
FX Hedging (gain) / loss (net)
6
2
10
4
27
Honeywell indemnity obligation payment
(35
)
(38
)
(150
)
(153
)
(166
)
Additional pro forma standalone costs
—
—
—
—
1
Add-back of gross interest expense (9)
2
1
3
7
8
Other non-recurring, non-cash expense
(6
)
—
5
11
(2
)
Add-back of non-cash pension costs
(10)
—
1
12
7
1
Consolidated EBITDA
$
75
$
125
$
409
$
459
$
471
(1)
The accounting for the majority of our
asbestos-related liability payments and accounts payable reflect
the terms of the Indemnification and Reimbursement Agreement with
Honeywell entered into on September 12, 2018, under which we are
required to make payments to Honeywell in amounts equal to 90% of
Honeywell’s asbestos-related liability payments and accounts
payable, primarily related to the Bendix business in the United
States, as well as certain environmental-related liability payments
and accounts payable and non-United States asbestos-related
liability payments and accounts payable, in each case related to
legacy elements of the Business, including the legal costs of
defending and resolving such liabilities, less 90% of Honeywell’s
net insurance receipts and, as may be applicable, certain other
recoveries associated with such liabilities. See Note 17,
Commitments and Contingencies of Notes to the Consolidated Interim
Financial Statements in our quarterly report on Form 10-Q for the
period ended March 31, 2019.
(2)
We have elected to change our definition
of Adjusted EBITDA to exclude the non-service component of pension
expense. Non-service pension expense is comprised of interest
costs, expected return on plan assets and actuarial gains/losses.
The components of non-service pension expense are primarily tied to
financial market performance, changes in market interest rates and
investment performance. The service cost component of our pension
plans remains in Adjusted EBITDA. We consider the non-service
component of pension expense to be outside the performance of our
ongoing core business operations and believe that presenting
Adjusted EBITDA including only the service component of pension
expense, in addition to our GAAP operating results, provides
increased transparency as to the operating costs of providing
pension benefits to our employees and the underlying trends in our
operating business performance. As a result, the prior periods
presented were recast to conform to the current year
presentation.
(3)
Non-operating (income) expense adjustment
includes the non-service component of pension expense and other
expense, net and excludes interest income, equity income of
affiliates, and the impact of foreign exchange.
(4)
Stock compensation expense adjustment
includes only non-cash expenses.
(5)
Repositioning charges adjustment primarily
includes severance costs related to restructuring projects to
improve future productivity.
(6)
During the fourth quarter of 2019
additional spin-off costs related to the first three quarters of
2019 were identified and included within the adjustment for the
three and twelve months end December 31, 2019 as presented in our
annual report on Form 10K. As a result, the three months and twelve
months ended March 31, 2019 were recast to include these additional
costs.
(7)
Spin-Off costs primarily include costs
incurred for the set-up of the IT, Legal, Finance, Communications
and Human Resources functions after the Spin-Off from Honeywell on
October 1, 2018.
(8)
Adjusted EBITDA Margin represents Adjusted
EBITDA as a percentage of net sales.
(9)
Consolidated EBITDA definition permits the
add-back of gross interest expense (i.e. excluding interest
income), vs. net interest expense in Adjusted EBITDA.
(10)
Consolidated EBITDA definition permits the
add-back of non-cash pension service costs.
Reconciliation of Constant Currency
Sales % Change(1)
For the Three Months Ended
March 31,
2020
2019
Garrett
Reported sales % change
(11%)
(9%)
Less: Foreign currency
translation
(2%)
(6%)
Constant currency sales %
change
(9%)
(3%)
Gasoline
Reported sales % change
11%
8%
Less: Foreign currency
translation
(3%)
(7%)
Constant currency sales %
change
14%
15%
Diesel
Reported sales % change
(21%)
(22%)
Less: Foreign currency
translation
(3%)
(6%)
Constant currency sales %
change
(18%)
(16%)
Commercial
vehicles
Reported sales % change
(18%)
(2%)
Less: Foreign currency
translation
(1%)
(4%)
Constant currency sales %
change
(17%)
2%
Aftermarket
Reported sales % change
(18%)
(3%)
Less: Foreign currency
translation
(2%)
(4%)
Constant currency sales %
change
(16%)
1%
Other
Sales
Reported sales % change
(25%)
(23%)
Less: Foreign currency
translation
(2%)
(5%)
Constant currency sales %
change
(23%)
(18%)
1 We previously referred to “constant
currency sales growth” as “organic sales growth.” We define
constant currency sales growth as the year-over-year change in
reported sales relative to the comparable period, excluding the
impact on sales from foreign currency translation. This is the same
definition we previously used for “organic sales growth”. We
believe this measure is useful to investors and management in
understanding our ongoing operations and in analysis of ongoing
operating trends.
Reconciliation of Cash Flow from
Operations less Expenditures for property, plant and
equipment
For the Three Months
Ended March 31,
($ in millions)
2020
2019
Net cash provided by (used for)
operating activities
$
57
$
36
Expenditures for property, plant and
equipment
$
(39
)
$
(21
)
Cash flow from operations less
Expenditures for property plant and equipment
$
18
$
15
Reconciliation of Long-Term Debt to Net
Debt
($ in millions)
March 31,
2020
December 31,
2019
March 31,
2019
Long-term debt
$
1,389
$
1,409
$
1,542
Short-term debt
4
4
23
Deferred finance costs
25
27
33
Overdraft on bank accounts
—
3
—
Revolving cash facility
66
—
—
Consolidated debt
1,484
1,443
1,598
Cash and cash equivalents
(254
)
(187
)
(207
)
Net debt
1,230
1,256
1,392
Reconciliation of Net Debt and
Consolidated Debt, and Related Ratios
($ in millions)
March 31,
2020
December 31,
2019
March 31,
2019
Secured debt
$
1,033
$
1,047
$
1,205
Revolving cash facility
66
—
—
Unsecured debt
385
393
393
Overdraft on bank accounts
—
3
—
Consolidated debt*
1,484
1,443
1,598
Cash and cash equivalent
(254
)
(187
)
(207
)
Net debt
1,230
1,256
1,392
Consolidated EBITDA (last 12
months)
$
409
$
459
$
471
Net debt to Consolidated EBITDA
ratio
3.01X
2.74X
2.96X
Consolidated debt to Consolidated
EBITDA ratio*
3.63X
3.14X
3.39X
* Consolidated debt as of March 31, 2019
has been restated to exclude the net debt related to hedge
obligations as per our Credit Agreement. This change did not impact
our GAAP financial results.
Reconciliation of Net Income – GAAP to
EBITDA and Adjusted EBITDA, and to Adjusted Free Cash Flow and Free
Cash Flow (FCF)
For the Three Months Ended
March 31,
($ in millions)
2020
2019
Net income — GAAP
$
52
$
73
Tax expense
1
24
Profit before taxes
53
97
Net interest (income) expense
15
15
Depreciation
19
19
EBITDA (Non-GAAP)
87
131
Other expense, net (which primarily
consists of indemnification, asbestos and environmental
expenses)
16
19
Non-operating (income) expense
(2
)
1
Stock compensation expense
2
5
Repositioning charges
5
1
Foreign exchange (gain) loss on debt, net
of related hedging (gain) loss
—
—
Spin-Off costs
—
2
Adjusted EBITDA (Non-GAAP)
108
159
Change in working capital
15
(81
)
Taxes (without MTT)
(3
)
(12
)
Capital expenditures
(39
)
(21
)
Other
(17
)
16
Interests
(7
)
(8
)
Adjusted FCF
57
53
Indemnity obligation & MTT to HON
(39
)
(38
)
FCF
$
18
$
15
Reconciliation of Net Income to
Adjusted Net Income and Adjusted EPS
($ in millions)
For the Three Months Ended
March 31,
2020
2019
Net income (loss) - GAAP
$
52
$
73
Special tax matters
—
—
Net income adjusted for special tax
matters (Non-GAAP)
52
73
Add back HON I/O expenses and litigation
fees
16
19
Annualized interest expenses (net of
tax)
—
—
Adjusted net income (Non-GAAP)
$
68
$
92
Weighted average common shares outstanding
- diluted
76,261,545
75,379,228
Adjusted earnings per common share -
diluted (Non-GAAP)
$
0.89
$
1.22
Reconciliation of Net Income to
Adjusted FCF Conversion
($ in millions)
For the Three Months Ended
March 31,
2020
2019
Net income (loss) - GAAP
$
52
$
73
Special tax matters
—
—
Net income adjusted for special tax
matters (Non-GAAP)
52
73
Add back HON I/O expenses and litigation
fees
16
19
Annualized interest expenses (net of
tax)
—
—
Adjusted net income (Non-GAAP)
$
68
$
92
Adjusted free cash flow
$
57
$
53
Adjusted free cash flow
conversion
84
%
58
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200511005446/en/
Media Michael Cimini +1 973 216-3986
michael.cimini@garrettmotion.com
Investor Relations Paul Blalock +1 862 812-5013
paul.blalock@garrettmotion.com
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