Garrett Motion (GTX) - 2025 Q1 - Quarterly Report

Sales Performance - For the three months ended March 31, 2025, net sales decreased by $37 million or 4% to $878 million compared to $915 million in the prior period[112][113]. - Diesel product sales decreased by $33 million or 14% to $208 million, primarily due to a transition to gasoline hybrids in Europe[110][115]. - Gasoline product sales increased by $15 million or 4% to $403 million, driven by new application launches in North America and recovery in Japan[110][114]. Profitability - Gross profit increased by $7 million to $179 million, with a gross profit margin of 20.4%, up from 18.8% in the prior year[118][119]. - Net income for the three months ended March 31, 2025, decreased by $4 million to $62 million, with a net income margin of 7.1%[128]. - Adjusted EBIT increased by $10 million to $131 million, driven by productivity improvements and lower costs, despite lower volumes across all product lines except gasoline[137]. Expenses - Selling, general and administrative expenses decreased by $5 million to $59 million, representing 6.7% of sales[120]. - Cash provided by operating activities decreased by $28 million to $56 million, primarily due to unfavorable working capital changes[147]. - R&D expenses remained flat, reflecting a shift in investment focus from turbo technology to zero-emission technologies[140]. Shareholder Actions - The company repurchased $30 million of common stock under its share repurchase program, with $220 million remaining authorized[107]. - Cash used for financing activities was $31 million, significantly lower than $112 million in the prior year, with $30 million allocated for common stock repurchases[149]. - The company repurchased $30 million of common stock during the three months ended March 31, 2025, with $220 million remaining under the share repurchase program[145]. Debt and Taxation - The company refinanced its debt, replacing the 2021 Dollar Term Facility with a new 2025 Dollar Term Facility of $692 million[106]. - The effective tax rate increased to 27.1% from 18.5% in the prior year, primarily due to higher U.S. taxes on international operations[125]. - The company refinanced its $692 million 2021 Dollar Term Facility with a new 2025 Dollar Term Facility, maturing on January 30, 2032[143]. Currency Effects - Losses from foreign currency effects accounted for a $7 million decrease in Adjusted EBIT for the three months ended March 31, 2025[142]. - The net fair value of financial instruments with exposure to currency risk was $21 million, with potential losses or gains of $276 million and $(259) million from a hypothetical 10% change in exchange rates[156]. Transition in Reporting Metrics - The company transitioned from Adjusted EBITDA to Adjusted EBIT as its non-GAAP reporting metric to better reflect core operating performance[130].