Garrett Motion (US:GTX)2020-02-27 21:32Financial Performance - Net sales for 2019 were $3,248 million, a decrease from $3,375 million in 2018, representing a decline of approximately 3.8%[203] - Net income for 2019 was $313 million, significantly lower than $1,206 million in 2018, indicating a decrease of about 74.0%[203] - Adjusted EBITDA for 2019 decreased by $37 million to $583 million compared to $620 million in 2018, primarily due to inflation and foreign exchange impacts[210] - Cash flow from operations less expenditures for property, plant, and equipment was $140 million in 2019, down from $278 million in 2018, a decrease of 49.8%[211] Assets and Liabilities - Total assets as of December 31, 2019, were $2,275 million, an increase from $2,124 million in 2018, reflecting a growth of approximately 7.1%[204] - Long-term debt decreased to $1,409 million in 2019 from $1,569 million in 2018, a reduction of about 10.2%[204] - Total liabilities were $4,408 million in 2019, down from $4,641 million in 2018, indicating a decrease of approximately 5.0%[204] Cash Flow and Interest Expenses - The company recorded a net interest expense of $61 million in 2019, compared to $12 million in 2018, reflecting an increase of 408.3%[207] - The company experienced a decrease in cash provided by operating activities of $131 million in 2019, driven by various factors including higher cash interest payments[212] Risk Management - The company initiated a cash flow hedging program in Q1 2019 to mitigate foreign currency exchange rate volatility[309] - The company entered into a floating-floating cross-currency swap contract with a notional amount of $1,259 million to hedge foreign currency exposure from debt maturing on September 27, 2025[310][311] - A cash settlement of $19 million was received after recouponing the cross-currency swap contract in May 2019, with a gain of $1 million recognized in Non-operating expense for the year ended December 31, 2019[310] - As of December 31, 2019, the net fair value of financial instruments with currency risk exposure was a $1 million asset, with potential losses of $(63) million and gains of $66 million from a hypothetical 10% change in currency exchange rates[312] - The company entered into interest rate swaps with a total notional value of $561 million on June 7, 2019, to manage interest rate risk related to its Credit Agreement[313] - A 25 basis point increase in interest rates would have increased interest expense by $1 million for borrowings under the Credit Agreement as of December 31, 2019[313] - The company is exposed to commodity price risk but passes abnormal changes in component and raw material costs to customers based on contractual terms[314]