Garrett Motion Reports First Quarter 2026 Financial Results, Raises 2026 Outlook
Rhea-AI Summary
Garrett Motion (Nasdaq: GTX) reported Q1 2026 results with net sales of $985 million (up 12% reported, 6% constant currency), net income $95 million (9.6% margin), Adjusted EBIT $151 million (15.3% margin) and adjusted free cash flow $49 million. The board declared a $0.08/share cash dividend payable June 15, 2026. The company repurchased $87 million of stock in Q1 and raised full‑year 2026 guidance, including GAAP net sales target of $3.6–$3.9 billion and Adjusted EBIT of $520–$600 million.
Q1 drivers included new turbo and electrification awards, commercial vehicle and industrial strength, partially offset by productivity and tariff impacts.
Positive
- Net sales +12% reported ($985M vs $878M)
- Net income +53% ($95M vs $62M)
- Adjusted EBIT +15% ($151M vs $131M)
- Adjusted free cash flow +36% ($49M vs $36M)
- Raised 2026 outlook for net sales and Adjusted EBIT ranges
Negative
- Cost of goods sold +$90M (789M vs 699M), driven by tariffs, FX and lower productivity
- Productivity headwinds reduced margins (~$21M impact)
- Repurchased $87M of shares, reducing cash and lowering available liquidity versus year‑end
News Market Reaction – GTX
In the Apr 30 session, GTX gained 24.99%, reflecting a significant positive market reaction. Argus tracked a peak move of +18.6% during that session. Our momentum scanner triggered 97 alerts that day, indicating high trading interest and price volatility. Trading volume was elevated at 3.0x the daily average, suggesting notable buying interest.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jul 24 | Q2 2025 earnings | Positive | +3.4% | Strong Q2 2025 results, raised FY2025 outlook and continued buybacks, dividend. |
| May 01 | Q1 2025 earnings | Positive | +10.6% | Q1 2025 margins and first major electric motor award despite lower sales. |
| Oct 24 | Q3 2024 earnings | Negative | -7.4% | Q3 2024 sales decline and reduced full‑year 2024 outlook weighed on shares. |
| Jul 25 | Q2 2024 earnings | Neutral | -11.6% | Mixed Q2 2024 results with lower sales but steady outlook and buybacks. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Earnings releases have usually driven directionally aligned moves, with some volatility and an average same‑tag move of -1.25% over the last four events.
Across the last four earnings events from Jul 2024 to Jul 2025, Garrett mixed periods of revenue pressure with margin resilience and consistent capital returns. The company twice raised or reaffirmed full‑year outlooks while expanding adjusted profitability and executing sizeable share repurchases and dividends. Occasional guidance reductions in 2024 led to negative price reactions, but strong 2025 quarters with upgraded outlooks and electrification wins were rewarded with solid gains, framing today’s raised 2026 outlook in a continuing pattern.
Key Terms
adjusted ebit financial
adjusted ebitda financial
adjusted free cash flow financial
non-gaap financial measures financial
cash flow hedges financial
net investment hedges financial
restricted stock units financial
long-term incentive plan financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
First Quarter 2026 Financial Highlights
- Net sales totaled
$985 million , up12% on a reported basis and6% on a constant currency* basis vs prior year, driven by share of demand gains in passenger vehicles and strong performance in commercial vehicle off-highway and industrial - Net income totaled
$95 million ; Net income margin of9.6% - Adjusted EBIT* totaled
$151 million ; Adjusted EBIT margin* of15.3% - Net cash provided by operating activities totaled
$98 million - Adjusted free cash flow* totaled
$49 million - Raising 2026 full-year outlook
First Quarter 2026 Business Highlights
- Secured several new light vehicle turbo programs, including an additional award for range extended electric vehicles
- Won a significant volume extension for light commercial vehicle diesel application with a European OEM
- Multiple commercial vehicle and industrial awards including power generation applications
- Continued to win in E-Powertrain; second commercial vehicle production award
- Growing industrial engagement for E-Cooling, including a production award for battery energy storage system
PLYMOUTH, Mich. and ROLLE, Switzerland, April 30, 2026 (GLOBE NEWSWIRE) -- Garrett Motion Inc. (Nasdaq: GTX) ("Garrett" or the "Company"), a leading automotive and industrial technology provider, today announced its financial results for the three months ended March 31, 2026. Additionally, the Company's Board of Directors declared a cash dividend of
“Garrett had a strong start to 2026, delivering
“We also continued to secure new business across both our turbo and zero‑emission technology portfolios,” Mr. Rabiller added. “This included an additional commercial vehicle award for our high‑speed E‑Powertrain, alongside growing industrial engagement for our oil‑free E‑Cooling compressor, supporting our strategy to scale our differentiated electrification and industrial offerings.”
| $ millions (unless otherwise noted) | Q1 2026 | Q1 2025 | ||||
| Net sales | 985 | 878 | ||||
| Cost of goods sold | 789 | 699 | ||||
| Gross profit | 196 | 179 | ||||
| Gross profit % | 19.9 | % | 20.4 | % | ||
| Selling, general and administrative expenses | 58 | 59 | ||||
| Income before taxes | 118 | 85 | ||||
| Net income | 95 | 62 | ||||
| Net income margin | 9.6 | % | 7.1 | % | ||
| Adjusted EBIT* | 151 | 131 | ||||
| Adjusted EBIT margin* | 15.3 | % | 14.9 | % | ||
| Adjusted EBITDA* | 183 | 159 | ||||
| Adjusted EBITDA margin* | 18.6 | % | 18.1 | % | ||
| Net cash provided by operating activities | 98 | 56 | ||||
| Adjusted free cash flow* | 49 | 36 | ||||
* See reconciliations to the nearest GAAP measures below.
Results of Operations
Net sales for the first quarter of 2026 were
Cost of goods sold for the first quarter of 2026 increased to
Gross profit totaled
Selling, general and administrative (“SG&A”) expenses for the first quarter of 2026 decreased to
Other expense in the first quarter of 2026 was
Interest expense in the first quarter of 2026 was
Non-operating income for the first quarter of 2026 was
Tax expense for the first quarter of 2026 of
Net income for the first quarter of 2026 was
Net cash provided by operating activities totaled
Non-GAAP Financial Measures
Adjusted EBIT increased to
Adjusted free cash flow was
Liquidity and Capital Resources
As of March 31, 2026, Garrett had
As of March 31, 2026, total principal amount of debt outstanding was
During the first quarter of 2026, we repurchased
Full Year 2026 Outlook
Garrett is providing the following outlook for the full year 2026 for certain GAAP and Non-GAAP financial measures.
| Full Year 2026 Outlook | Prior Outlook | |
| Net sales (GAAP) | ||
| Net sales growth at constant currency (Non-GAAP)* | - | - |
| Net income (GAAP) | ||
| Adjusted EBIT (Non-GAAP)* | ||
| Net cash provided by operating activities (GAAP) | ||
| Adjusted free cash flow (Non-GAAP)* |
* See reconciliations to the nearest GAAP measures below.
Garrett’s full year 2026 outlook, as of April 30, 2026, includes the following expectations:
- 2026 light vehicle industry production down
1% to3% from 2025; - 2026 commercial vehicle industry, including both on- and off-highway, up
1% to2% from 2025; - 2026 average light vehicle battery electric vehicle penetration of ~
19% ; - 2026 Euro/dollar exchange rate of 1.17 USD to 1.00 EUR versus 1.13 in 2025;
- RD&E investment at ~
4.2% of sales; - Capital expenditures at ~
2.5% of sales
Conference Call
Garrett will hold a conference call at 8:30 am EDT / 2:30 pm CET on Thursday, April 30, 2026, to discuss its results. To participate on the conference call, please dial +1-877-883-0383 (US) or +1-412-902-6506 (international) and use the passcode 3761849.
The conference call will also be broadcast over the internet and include a slide presentation. To access the webcast and supporting material, please visit the investor relations section of the Garrett Motion website at http://investors.garrettmotion.com. A replay of the conference call will be available by dialing +1-855-669-9658 (US) or +1-412-317-0088 (international) using the access code 7390409. The webcast will also be archived on Garrett’s website.
Forward-Looking Statements
This communication and related comments by management may include “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact and can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar expressions. Forward-looking statements represent our current judgment about possible future activities, events, or developments that we intend, expect, project, believe, or anticipate will or may occur in the future. In making these statement, we rely upon assumptions and analysis based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future performance, events, or results, and actual performance, events, or results may differ materially from those envisaged by our forward-looking statements due to a variety of important factors, many of which are described in our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission, including risks related to the automotive industry, the competitive landscape and our ability to compete, and macroeconomic and geopolitical conditions, among others. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events, or other factors that affect the subject of these statement, except where we are expressly required to do so by law.
Non-GAAP Financial Measures
This communication includes the following non-GAAP financial measures, which are not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”): Constant currency sales growth, Adjusted EBIT, Adjusted EBITDA, Adjusted EBIT margin, Adjusted EBITDA margin and Adjusted free cash flow. We believe these measures are useful to investors and management in understanding our ongoing operations and analysis of ongoing operating trends and are important indicators of operating performance because they exclude the effects of certain non-operating items, therefore making them more closely reflect our operational performance. Our calculation of these non-GAAP measures, including a reconciliation of such measures to the most closely related GAAP measure, are set forth in the Appendix to this presentation. These non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related GAAP measures. For additional information regarding our non-GAAP financial measures, see our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission.
About Garrett Motion Inc.
A differentiated technology leader, Garrett Motion has a 70-year history of innovation in the automotive sector (cars, trucks) and beyond (off-highway equipment, marine, power generators). Its well-recognized expertise in turbocharging has enabled significant reductions in engine size, fuel consumption, and CO2 emissions. Garrett is committed to advancing turbo applications while leveraging its unique technology solutions, such as fuel cell compressors for hydrogen fuel cell vehicles, as well as electric propulsion and thermal management systems for automotive and industrial applications. Garrett has six R&D centers, 13 manufacturing facilities and a team of more than 8,700 employees in more than 20 countries. For more information, please visit www.garrettmotion.com.
| Contacts: | ||
| INVESTOR RELATIONS | ||
| Cyril Grandjean | ||
| +1.734.392.5504 | ||
| investorrelations@garrettmotion.com |
| CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS | |||||||
| For the Three Months Ended March 31, | |||||||
| 2026 | 2025 | ||||||
| (Dollars in millions, except per share amounts) | |||||||
| Net sales | $ | 985 | $ | 878 | |||
| Cost of goods sold | 789 | 699 | |||||
| Gross profit | 196 | 179 | |||||
| Selling, general and administrative expenses | 58 | 59 | |||||
| Other expense, net | 1 | 7 | |||||
| Interest expense | 27 | 29 | |||||
| Non-operating income, net | (8 | ) | (1 | ) | |||
| Income before taxes | 118 | 85 | |||||
| Tax expense | 23 | 23 | |||||
| Net income | $ | 95 | $ | 62 | |||
| Earnings per common share | |||||||
| Basic | $ | 0.50 | $ | 0.30 | |||
| Diluted | 0.49 | 0.30 | |||||
| Weighted average common shares outstanding | |||||||
| Basic | 189,248,149 | 205,113,600 | |||||
| Diluted | 193,202,620 | 207,571,011 | |||||
| CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME | |||||||
| Three Months Ended March 31, | |||||||
| 2026 | 2025 | ||||||
| (Dollars in millions) | |||||||
| Net income | $ | 95 | $ | 62 | |||
| Foreign exchange translation adjustment | (5 | ) | (29 | ) | |||
| Changes in fair value of effective cash flow hedges, net of tax | 14 | 2 | |||||
| Changes in fair value of net investment hedges, net of tax | 31 | (35 | ) | ||||
| Total other comprehensive income (loss), net of tax | 40 | (62 | ) | ||||
| Comprehensive income | $ | 135 | $ | — | |||
| CONSOLIDATED INTERIM BALANCE SHEETS | |||||||
| March 31, 2026 | December 31, 2025 | ||||||
| (Dollars in millions) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 142 | $ | 177 | |||
| Restricted cash | 2 | 2 | |||||
| Accounts, notes and other receivables – net | 810 | 703 | |||||
| Inventories – net | 313 | 339 | |||||
| Other current assets | 108 | 98 | |||||
| Total current assets | 1,375 | 1,319 | |||||
| Investments and long-term receivables | 11 | 11 | |||||
| Property, plant and equipment – net | 437 | 462 | |||||
| Goodwill | 193 | 193 | |||||
| Deferred income taxes | 184 | 210 | |||||
| Other assets | 173 | 172 | |||||
| Total assets | $ | 2,373 | $ | 2,367 | |||
| LIABILITIES | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,077 | $ | 1,061 | |||
| Current maturities of long-term debt | 7 | 7 | |||||
| Accrued liabilities | 322 | 295 | |||||
| Total current liabilities | 1,406 | 1,363 | |||||
| Long-term debt | 1,410 | 1,411 | |||||
| Deferred income taxes | 34 | 32 | |||||
| Other liabilities | 304 | 363 | |||||
| Total liabilities | $ | 3,154 | $ | 3,169 | |||
| COMMITMENTS AND CONTINGENCIES | |||||||
| EQUITY (DEFICIT) | |||||||
| Common Stock, par value | — | — | |||||
| Additional paid – in capital | 1,247 | 1,240 | |||||
| Retained deficit | (1,305 | ) | (1,384 | ) | |||
| Accumulated other comprehensive (loss) income | (98 | ) | (138 | ) | |||
| Treasury Stock, at cost; 57,428,922 and 51,993,388 shares as of March 31, 2026 and December 31, 2025, respectively | (625 | ) | (520 | ) | |||
| Total deficit | (781 | ) | (802 | ) | |||
| Total liabilities and deficit | $ | 2,373 | $ | 2,367 | |||
| CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS | Three Months Ended March 31, | ||||||
| 2026 | 2025 | ||||||
| (Dollars in millions) | |||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 95 | $ | 62 | |||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||
| Deferred income taxes | 5 | 6 | |||||
| Depreciation | 25 | 22 | |||||
| Amortization of deferred issuance costs | 1 | 2 | |||||
| Foreign exchange loss (gain) | 13 | (19 | ) | ||||
| Stock compensation expense | 7 | 6 | |||||
| Unrealized (gain) loss on derivatives | (11 | ) | 35 | ||||
| Other | 2 | 2 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts, notes and other receivables | (112 | ) | (56 | ) | |||
| Inventories | 17 | 25 | |||||
| Other assets | (7 | ) | (3 | ) | |||
| Accounts payable | 48 | (34 | ) | ||||
| Accrued liabilities | 19 | (3 | ) | ||||
| Other liabilities | (4 | ) | 11 | ||||
| Net cash provided by operating activities | $ | 98 | $ | 56 | |||
| Cash flows from investing activities: | |||||||
| Expenditures for property, plant and equipment | (29 | ) | (26 | ) | |||
| Proceeds from cross-currency swap contracts | 3 | 4 | |||||
| Net cash used for investing activities | $ | (26 | ) | $ | (22 | ) | |
| Cash flows from financing activities: | |||||||
| Proceeds from issuance of long-term debt, net of deferred financing costs | — | 68 | |||||
| Bank overdrafts | — | 17 | |||||
| Payments of long-term debt | (2 | ) | (71 | ) | |||
| Repurchases of Common Stock | (87 | ) | (30 | ) | |||
| Dividend payments | (16 | ) | (12 | ) | |||
| Payments for debt and revolving facility financing costs | — | (1 | ) | ||||
| Other | — | (2 | ) | ||||
| Net cash used for financing activities | $ | (105 | ) | $ | (31 | ) | |
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (2 | ) | 2 | ||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (35 | ) | 5 | ||||
| Cash, cash equivalents and restricted cash at beginning of the period | 179 | 126 | |||||
| Cash, cash equivalents and restricted cash at end of the period | $ | 144 | $ | 131 | |||
| Supplemental cash flow disclosure: | |||||||
| Income taxes paid (net of refunds) | 13 | 12 | |||||
| Interest paid | 10 | 7 | |||||
| Supplemental disclosure of non-cash investing activities: | |||||||
| Expenditures for property, plant and equipment in accounts payable | 38 | 28 | |||||
| Reconciliation of Net Income to Adjusted EBIT(1)and Adjusted EBITDA(1) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| (Dollars in millions) | ||||||||
| Net income | $ | 95 | $ | 62 | ||||
| Interest expense, net of interest income(2) | 26 | 29 | ||||||
| Tax expense | 23 | 23 | ||||||
| EBIT | 144 | 114 | ||||||
| Repositioning costs | 12 | 7 | ||||||
| Foreign exchange gain on debt, net of related hedging loss | — | 1 | ||||||
| Factoring and notes receivables discount fees | 1 | 1 | ||||||
| Other non-operating income(3) | (6 | ) | (1 | ) | ||||
| Debt refinancing and redemption costs(4) | — | 6 | ||||||
| Acquisition and divestiture expenses | — | 3 | ||||||
| Adjusted EBIT | 151 | 131 | ||||||
| Depreciation | 25 | 22 | ||||||
| Stock compensation expense(5) | 7 | 6 | ||||||
| Adjusted EBITDA | $ | 183 | $ | 159 | ||||
| Net sales | $ | 985 | $ | 878 | ||||
| Net income margin | 9.6 | % | 7.1 | % | ||||
| Adjusted EBIT margin(6) | 15.3 | % | 14.9 | % | ||||
| Adjusted EBITDA margin(7) | 18.6 | % | 18.1 | % | ||||
(1) We evaluate performance on the basis of Adjusted EBIT and Adjusted EBITDA. We define “EBIT” as our net income calculated in accordance with U.S. GAAP, plus the sum of (i) interest expense net of interest income and (ii) tax expense. We define Adjusted EBIT as EBIT, plus the sum of (i) repositioning costs, (ii) foreign exchange (gain) loss on debt net of related hedging gain/loss, (iii) discounting costs on factoring, (iv) gain on sale of equity investment, (v) acquisition and divestiture expenses, (vi) other non-operating income, and (vii) debt refinancing and redemption costs, if any. We define Adjusted EBITDA as EBIT, plus the sum of (i) repositioning costs, (ii) foreign exchange (gain) loss on debt net of related hedging gain/loss, (iii) discounting costs on factoring, (iv) gain on sale of equity investment, (v) acquisition and divestiture expenses, (vi) other non-operating income, and (vii) debt refinancing and redemption costs, if any, plus (viii) depreciation and (ix) stock compensation expense. We believe that Adjusted EBIT and Adjusted EBITDA are important indicators of operating performance and provide useful information for investors because:
- Adjusted EBIT and Adjusted EBITDA exclude the effects of income taxes, as well as the effects of financing activities by eliminating the effects of interest;
- certain adjustment items, while periodically affecting our results, may vary significantly from period to period and have disproportionate effect in a given period, which affects the comparability of our results; and
- Adjusted EBITDA also excludes the effects of investing activities by eliminating the effects of depreciation.
In addition, our management may use Adjusted EBIT and Adjusted EBITDA in setting performance incentive targets to align performance measurement with operational performance.
(2) Reflects interest income of
(3) Reflects the non-service component of net periodic pension income and, for the three months ended March 31, 2026, also includes
(4) Reflects third-party costs directly attributable to the refinancing of our credit facilities and any amendments.
(5) Stock compensation expense includes only non-cash expenses.
(6) Adjusted EBIT margin represents Adjusted EBIT as a percentage of net sales.
(7) Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales.
Reconciliation of Constant Currency Sales % Change(1)
| Three Months Ended March 31, | |||||
| 2026 | 2025 | ||||
| Garrett | |||||
| Reported sales % change | 12 | % | (4)% | ||
| Less: Foreign currency translation | 6 | % | |||
| Constant currency sales % change | 6 | % | (2)% | ||
| Gasoline | |||||
| Reported sales % change | 10 | % | |||
| Less: Foreign currency translation | 7 | % | (2)% | ||
| Constant currency sales % change | 3 | % | |||
| Diesel | |||||
| Reported sales % change | 12 | % | (14)% | ||
| Less: Foreign currency translation | 9 | % | (3)% | ||
| Constant currency sales % change | 3 | % | (11)% | ||
| Commercial vehicle / Industrial | |||||
| Reported sales % change | 17 | % | (4)% | ||
| Less: Foreign currency translation | 4 | % | (2)% | ||
| Constant currency sales % change | 13 | % | (2)% | ||
| Aftermarket | |||||
| Reported sales % change | 16 | % | (13)% | ||
| Less: Foreign currency translation | 6 | % | (3)% | ||
| Constant currency sales % change | 10 | % | (10)% | ||
| Other Sales | |||||
| Reported sales % change | 7 | % | |||
| Less: Foreign currency translation | 7 | % | (3)% | ||
| Constant currency sales % change | 0 | % | |||
(1) 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. 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 to Adjusted Free Cash Flow(1) | |||||||
| Three Months Ended March 31, | |||||||
| 2026 | 2025 | ||||||
| (Dollars in millions) | |||||||
| Net cash provided by operating activities | $ | 98 | $ | 56 | |||
| Expenditures for property, plant and equipment | (29 | ) | (26 | ) | |||
| Net cash provided by operating activities less expenditures for property, plant and equipment | 69 | 30 | |||||
| Acquisition and divestiture expenses | — | 1 | |||||
| Cash payments for repositioning | 8 | 3 | |||||
| Proceeds from cross currency swap contracts | 3 | 4 | |||||
| Cash payments for debt refinancing costs | — | 6 | |||||
| Factoring and P-notes | (31 | ) | (8 | ) | |||
| Adjusted free cash flow(1) | $ | 49 | $ | 36 | |||
(1) Adjusted free cash flow reflects an additional way of viewing liquidity that management believes is useful to investors in analyzing the Company’s ability to service and repay its debt. The Company defines adjusted free cash flow as cash flow provided from operating activities less capital expenditures and additionally adjusted for other discretionary items including cash flow impacts for capital structure transformation expenses, acquisition and divestiture expenses, debt refinancing costs, and factoring and guaranteed bank notes activity.
| Full Year 2026 Outlook Reconciliation of Reported Net Sales to Net Sales Growth at Constant Currency | ||||||
| 2026 Full Year | ||||||
| Low End | High End | |||||
| Reported net sales (% change) | 1% | 9% | ||||
| Foreign currency translation | ||||||
| Full year 2026 Outlook Net sales growth at constant currency | (2)% | 6% | ||||
| Full Year 2026 Outlook Reconciliation of Net Income to Adjusted EBIT and Adjusted EBITDA | ||||||||
| 2026 Full Year | ||||||||
| Low End | High End | |||||||
| (Dollars in millions) | ||||||||
| Net income | $ | 300 | $ | 360 | ||||
| Interest expense, net of interest income * | 101 | 101 | ||||||
| Tax expense | 101 | 121 | ||||||
| Other non-operating income | (6 | ) | (6 | ) | ||||
| Factoring and notes receivables discount fees | 1 | 1 | ||||||
| Repositioning costs | 23 | 23 | ||||||
| Full Year 2026 Outlook Adjusted EBIT | $ | 520 | $ | 600 | ||||
| Depreciation | 100 | 100 | ||||||
| Stock compensation expense | 27 | 27 | ||||||
| Full Year 2026 Outlook Adjusted EBITDA | $ | 647 | $ | 727 | ||||
* Excludes the effects of marked-to-market fluctuations from our interest rate swap contracts
| Full Year 2026 Outlook Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow | ||||||||
| 2026 Full Year | ||||||||
| Low End | High End | |||||||
| (Dollars in millions) | ||||||||
| Net cash provided by operating activities | $ | 407 | $ | 522 | ||||
| Expenditures for property, plant and equipment | (90 | ) | (90 | ) | ||||
| Net cash provided by operating activities less expenditures for property, plant and equipment | 317 | 432 | ||||||
| Cash payments for repositioning | 25 | 25 | ||||||
| Proceeds from cross currency swap contracts | 13 | 18 | ||||||
| Full Year 2026 Outlook Adjusted free cash flow | $ | 355 | $ | 475 | ||||
