Garrett Motion Reports Strong Second Quarter 2026 Results, Increases 2026 Outlook
Rhea-AI Summary
Garrett Motion (Nasdaq: GTX) reported second quarter 2026 net sales of $976 million, up 7% year over year (5% at constant currency), with net income of $101 million and a net income margin of 10.3%. Adjusted EBIT rose to $152 million, lifting adjusted EBIT margin to 15.6%, while adjusted EBITDA reached $183 million. Net cash from operating activities was $145 million and adjusted free cash flow was $122 million.
The Board declared a $0.08 per-share cash dividend, payable September 15, 2026, and repurchased $28 million of stock, leaving $135 million of remaining authorization. As of June 30, 2026, liquidity totaled $788 million and total debt principal was $1,386 million. According to Garrett Motion, the 2026 outlook was raised across net sales, net income, adjusted EBIT, cash from operations and adjusted free cash flow.
Positive
- Net sales +7% YoY to $976 million in Q2 2026
- Net income $101 million, margin 10.3% vs 9.5% in Q2 2025
- Adjusted EBIT $152 million, margin up 200 bps to 15.6%
- 2026 guidance raised for net sales, net income, adjusted EBIT and cash flow
- $0.08 cash dividend declared, payable September 15, 2026
- $28 million share repurchases in Q2; $135 million authorization remaining
Negative
- Operating cash flow down $13 million YoY to $145 million in Q2
- $84 million unfavorable working capital impact on operating cash flow in Q2 2026
- Available liquidity slightly lower, $788 million vs $807 million at December 31, 2025
News Explained
June 30 share counts show issued shares up but outstanding shares down, leaving the ownership effect mixed.
On
The release also reports 245,457,621 issued and 186,800,685 outstanding shares at
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Apr 30 | Q1 2026 results | Positive | +25.0% | Results and raised full-year outlook produced a 24.99% 24-hour gain. |
| Jul 24 | Q2 2025 results | Positive | +3.4% | Strong quarterly results and raised outlook produced a 3.39% 24-hour gain. |
| May 01 | Q1 2025 results | Positive | +10.6% | Electric-motor award and operational improvements coincided with a 10.63% 24-hour gain. |
| Oct 24 | Q3 2024 results | Negative | -7.4% | Lower sales and reduced outlook coincided with a 7.39% 24-hour decline. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Earnings-specific reactions were positive in three of four historical events, with one negative reaction.
Key Terms
constant currency financial
adjusted ebit financial
adjusted free cash flow financial
e-powertrain technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
Second Quarter 2026 Financial Highlights
- Net sales totaled
$976 million , up5% on a constant currency* basis vs prior year, driven by share of demand gains in passenger vehicles and strong performance in commercial vehicle and industrial - Net income totaled
$101 million ; net income margin of10.3% - Adjusted EBIT* totaled
$152 million ; adjusted EBIT margin* of15.6% - Net cash provided by operating activities totaled
$145 million - Adjusted free cash flow* totaled
$122 million - Increased 2026 full-year outlook
Second Quarter 2026 Business Highlights
- Secured multiple turbo wins, including a large light vehicle program in North America and several on- and off-highway commercial vehicle applications in China and India
- Won a major award for Garrett MEG used in gensets for data centers, along with several additional genset awards in different regions
- Kicked off pre-development of a commercial vehicle e- powertrain with a Japanese truck maker
- Secured a production award for industrial air compression, using Garrett’s centrifugal compressor technology
PLYMOUTH, Mich. and ROLLE, Switzerland, July 29, 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 June 30, 2026. Additionally, the Company's Board of Directors declared a cash dividend of
“Garrett delivered a strong second quarter, highlighting the power of our differentiated technology portfolio and continued share-of-demand gains,” said Olivier Rabiller, President and CEO of Garrett. “Net sales were
"We also secured multiple turbo wins in industrial for power generation, as well as in passenger and commercial vehicle, while advancing our e-compressor and e-powertrain offerings. Combined with strong profitability and cash generation, these results reinforce our confidence in Garrett’s long-term growth trajectory.”
| $ millions (unless otherwise noted) | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 | ||||
| Net sales | 976 | 913 | 1,961 | 1,791 | ||||
| Cost of goods sold | 764 | 732 | 1,553 | 1,431 | ||||
| Gross profit | 212 | 181 | 408 | 360 | ||||
| Gross profit % | ||||||||
| Selling, general and administrative expenses | 63 | 59 | 121 | 118 | ||||
| Income before taxes | 126 | 102 | 244 | 187 | ||||
| Net income | 101 | 87 | 196 | 149 | ||||
| Net income margin | ||||||||
| Adjusted EBIT* | 152 | 124 | 303 | 255 | ||||
| Adjusted EBIT margin* | ||||||||
| Adjusted EBITDA* | 183 | 154 | 366 | 313 | ||||
| Adjusted EBITDA margin* | ||||||||
| Net cash provided by operating activities | 145 | 158 | 243 | 214 | ||||
| Adjusted free cash flow* | 122 | 121 | 171 | 157 | ||||
* See reconciliations to the nearest GAAP measures below.
Results of Operations
Net sales for the second quarter of 2026 were
Cost of goods sold for the second quarter of 2026 increased to
Gross profit totaled
Selling, general and administrative (“SG&A”) expenses for the second quarter of 2026 increased to
Other expense in the second quarter of 2026 was consistent with the the second quarter of 2025.
Interest expense in the second quarter of 2026 was
Non-operating income for the second quarter of 2026 was
Tax expense for the second quarter of 2026 was
Net income for the second 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 June 30, 2026, Garrett had
As of June 30, 2026, total principal amount of debt outstanding was
During the second 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 July 29, 2026, includes the following expectations:
- 2026 light vehicle industry production down
2% to4% 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 1.16 USD (down from 1.17 in prior outlook)
- RD&E investment at ~
4.1% of sales; - Capital expenditures at ~
2.4% of sales
Conference Call
Garrett will hold a conference call at 8:30 am EDT / 2:30 pm CET on Thursday, July 29, 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 7065303.
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 2467399. 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 June 30, | For the Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| (Dollars in millions, except per share amounts) | |||||||||||||||
| Net sales | $ | 976 | $ | 913 | $ | 1,961 | $ | 1,791 | |||||||
| Cost of goods sold | 764 | 732 | 1,553 | 1,431 | |||||||||||
| Gross profit | 212 | 181 | 408 | 360 | |||||||||||
| Selling, general and administrative expenses | 63 | 59 | 121 | 118 | |||||||||||
| Other expense, net | 1 | 1 | 2 | 8 | |||||||||||
| Interest expense | 24 | 25 | 51 | 54 | |||||||||||
| Non-operating income, net | (2 | ) | (6 | ) | (10 | ) | (7 | ) | |||||||
| Income before taxes | 126 | 102 | 244 | 187 | |||||||||||
| Tax expense | 25 | 15 | 48 | 38 | |||||||||||
| Net income | $ | 101 | $ | 87 | $ | 196 | $ | 149 | |||||||
| Earnings per common share | |||||||||||||||
| Basic | $ | 0.54 | $ | 0.43 | $ | 1.04 | $ | 0.73 | |||||||
| Diluted | 0.53 | 0.42 | 1.02 | 0.72 | |||||||||||
| Weighted average common shares outstanding | |||||||||||||||
| Basic | 187,252,451 | 202,672,945 | 188,244,787 | 203,886,530 | |||||||||||
| Diluted | 190,594,777 | 205,255,033 | 191,970,322 | 206,433,975 | |||||||||||
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| (Dollars in millions) | |||||||||||||||
| Net income | $ | 101 | $ | 87 | $ | 196 | $ | 149 | |||||||
| Foreign exchange translation adjustment | 43 | (59 | ) | 38 | (88 | ) | |||||||||
| Changes in fair value of effective cash flow hedges, net of tax | (1 | ) | 17 | 13 | 19 | ||||||||||
| Changes in fair value of net investment hedges, net of tax | 2 | (128 | ) | 33 | (163 | ) | |||||||||
| Total other comprehensive income (loss), net of tax | 44 | (170 | ) | 84 | (232 | ) | |||||||||
| Comprehensive income (loss) | $ | 145 | $ | (83 | ) | $ | 280 | $ | (83 | ) | |||||
CONSOLIDATED INTERIM BALANCE SHEETS
| June 30, 2026 | December 31, 2025 | ||||||
| (Dollars in millions) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 158 | $ | 177 | |||
| Restricted cash | 2 | 2 | |||||
| Accounts, notes and other receivables – net | 836 | 703 | |||||
| Inventories – net | 350 | 339 | |||||
| Other current assets | 124 | 98 | |||||
| Total current assets | 1,470 | 1,319 | |||||
| Investments and long-term receivables | 10 | 11 | |||||
| Property, plant and equipment – net | 426 | 462 | |||||
| Goodwill | 193 | 193 | |||||
| Deferred income taxes | 207 | 210 | |||||
| Other assets | 167 | 172 | |||||
| Total assets | $ | 2,473 | $ | 2,367 | |||
| LIABILITIES | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,135 | $ | 1,061 | |||
| Current maturities of long-term debt | 7 | 7 | |||||
| Accrued liabilities | 325 | 295 | |||||
| Total current liabilities | 1,467 | 1,363 | |||||
| Long-term debt | 1,360 | 1,411 | |||||
| Deferred income taxes | 35 | 32 | |||||
| Other liabilities | 286 | 363 | |||||
| Total liabilities | $ | 3,148 | $ | 3,169 | |||
| COMMITMENTS AND CONTINGENCIES | |||||||
| EQUITY (DEFICIT) | |||||||
| Common Stock, par value | — | — | |||||
| Additional paid – in capital | 1,254 | 1,240 | |||||
| Retained deficit | (1,220 | ) | (1,384 | ) | |||
| Accumulated other comprehensive (loss) income | (54 | ) | (138 | ) | |||
| Treasury Stock, at cost; 58,666,936 and 51,993,388 shares as of June 30, 2026 and December 31, 2025, respectively | (655 | ) | (520 | ) | |||
| Total deficit | (675 | ) | (802 | ) | |||
| Total liabilities and deficit | $ | 2,473 | $ | 2,367 | |||
| CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS | Six Months Ended June 30, | ||||||
| 2026 | 2025 | ||||||
| (Dollars in millions) | |||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 196 | $ | 149 | |||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||
| Deferred income taxes | 10 | (3 | ) | ||||
| Depreciation | 49 | 45 | |||||
| Amortization of deferred issuance costs | 3 | 3 | |||||
| Foreign exchange loss (gain) | 17 | (65 | ) | ||||
| Stock compensation expense | 14 | 13 | |||||
| Pension expense | — | 1 | |||||
| Unrealized (gain) loss on derivatives | (37 | ) | 81 | ||||
| Other | 8 | 4 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts, notes and other receivables | (137 | ) | 8 | ||||
| Inventories | (23 | ) | 20 | ||||
| Other assets | 5 | (7 | ) | ||||
| Accounts payable | 109 | (13 | ) | ||||
| Accrued liabilities | 12 | (44 | ) | ||||
| Other liabilities | 17 | 22 | |||||
| Net cash provided by operating activities | $ | 243 | $ | 214 | |||
| Cash flows from investing activities: | |||||||
| Expenditures for property, plant and equipment | (46 | ) | (41 | ) | |||
| Proceeds from cross-currency swap contracts | 8 | 15 | |||||
| Net cash used for investing activities | $ | (38 | ) | $ | (26 | ) | |
| Cash flows from financing activities: | |||||||
| Proceeds from issuance of long-term debt, net of deferred financing costs | 56 | 68 | |||||
| Payments of long-term debt | (110 | ) | (73 | ) | |||
| Repurchases of Common Stock | (115 | ) | (52 | ) | |||
| Excise tax on Common Stock repurchase | (1 | ) | (3 | ) | |||
| Dividend payments | (31 | ) | (25 | ) | |||
| Withholdings on shares issued under stock plan | (20 | ) | — | ||||
| Payments for debt and revolving facility financing costs | — | (2 | ) | ||||
| Other | (1 | ) | (2 | ) | |||
| Net cash used for financing activities | $ | (222 | ) | $ | (89 | ) | |
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (2 | ) | 8 | ||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (19 | ) | 107 | ||||
| Cash, cash equivalents and restricted cash at beginning of the period | 179 | 126 | |||||
| Cash, cash equivalents and restricted cash at end of the period | $ | 160 | $ | 233 | |||
| Supplemental cash flow disclosure: | |||||||
| Income taxes paid (net of refunds) | 34 | 37 | |||||
| Interest paid | 50 | 46 | |||||
| Supplemental disclosure of non-cash investing activities: | |||||||
| Expenditures for property, plant and equipment in accounts payable | 38 | 24 | |||||
Reconciliation of Net Income to Adjusted EBIT(1) and Adjusted EBITDA(1)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| (Dollars in millions) | |||||||||||||||
| Net income | $ | 101 | $ | 87 | $ | 196 | $ | 149 | |||||||
| Interest expense, net of interest income(2) | 25 | 23 | 51 | 52 | |||||||||||
| Tax expense | 25 | 15 | 48 | 38 | |||||||||||
| EBIT | 151 | 125 | 295 | 239 | |||||||||||
| Repositioning costs | 1 | (2 | ) | 13 | 5 | ||||||||||
| Foreign exchange gain on debt, net of related hedging loss | — | (1 | ) | — | — | ||||||||||
| Factoring and notes receivables discount fees | 1 | 1 | 2 | 2 | |||||||||||
| Other non-operating income(3) | (2 | ) | (2 | ) | (8 | ) | (3 | ) | |||||||
| Debt refinancing and redemption costs(4) | 1 | — | 1 | 6 | |||||||||||
| Acquisition and divestiture expenses | — | 3 | — | 6 | |||||||||||
| Adjusted EBIT | 152 | 124 | 303 | 255 | |||||||||||
| Depreciation | 24 | 23 | 49 | 45 | |||||||||||
| Stock compensation expense(5) | 7 | 7 | 14 | 13 | |||||||||||
| Adjusted EBITDA | $ | 183 | $ | 154 | $ | 366 | $ | 313 | |||||||
| Net sales | $ | 976 | $ | 913 | $ | 1,961 | $ | 1,791 | |||||||
| Net income margin | 10.3 | % | 9.5 | % | 10.0 | % | 8.3 | % | |||||||
| Adjusted EBIT margin(6) | 15.6 | % | 13.6 | % | 15.5 | % | 14.2 | % | |||||||
| Adjusted EBITDA margin(7) | 18.8 | % | 16.9 | % | 18.7 | % | 17.5 | % | |||||||
| (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: | |
| ||
| 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 six months ended June 30, 2026, also includes | |
| (4) | Reflects third-party costs directly attributable to the refinancing of our credit facilities and any amendments thereto. | |
| (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 June 30, | Six Months Ended June 30, | ||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| Garrett | |||||||||||
| Reported sales % change | 7 | % | 3 | % | 9 | % | (1 | )% | |||
| Less: Foreign currency translation | 2 | % | 3 | % | 4 | % | 0 | % | |||
| Constant currency sales % change | 5 | % | 0 | % | 5 | % | (1 | )% | |||
| Gasoline | |||||||||||
| Reported sales % change | 5 | % | 6 | % | 7 | % | 5 | % | |||
| Less: Foreign currency translation | 2 | % | 2 | % | 4 | % | 0 | % | |||
| Constant currency sales % change | 3 | % | 4 | % | 3 | % | 5 | % | |||
| Diesel | |||||||||||
| Reported sales % change | 8 | % | (1 | )% | 10 | % | (8 | )% | |||
| Less: Foreign currency translation | 2 | % | 4 | % | 6 | % | 0 | % | |||
| Constant currency sales % change | 6 | % | (5 | )% | 4 | % | (8 | )% | |||
| Commercial vehicle / Industrial | |||||||||||
| Reported sales % change | 10 | % | 6 | % | 14 | % | 1 | % | |||
| Less: Foreign currency translation | 0 | % | 2 | % | 2 | % | 0 | % | |||
| Constant currency sales % change | 10 | % | 4 | % | 12 | % | 1 | % | |||
| Aftermarket | |||||||||||
| Reported sales % change | 8 | % | (8 | )% | 11 | % | (10 | )% | |||
| Less: Foreign currency translation | 1 | % | 2 | % | 3 | % | 0 | % | |||
| Constant currency sales % change | 7 | % | (10 | )% | 8 | % | (10 | )% | |||
| Other Sales | |||||||||||
| Reported sales % change | 6 | % | 31 | % | 6 | % | 19 | % | |||
| Less: Foreign currency translation | 0 | % | 5 | % | 3 | % | 1 | % | |||
| Constant currency sales % change | 6 | % | 26 | % | 3 | % | 18 | % | |||
| (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 June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| (Dollars in millions) | |||||||||||||||
| Net cash provided by operating activities | $ | 145 | $ | 158 | $ | 243 | $ | 214 | |||||||
| Expenditures for property, plant and equipment | (17 | ) | (15 | ) | (46 | ) | (41 | ) | |||||||
| Net cash provided by operating activities less expenditures for property, plant and equipment | 128 | 143 | 197 | 173 | |||||||||||
| Acquisition and divestiture expenses | — | 4 | — | 5 | |||||||||||
| Cash payments for repositioning | 4 | 3 | 12 | 6 | |||||||||||
| Proceeds from cross currency swap contracts | 5 | 11 | 8 | 15 | |||||||||||
| Cash payments for debt refinancing costs | 1 | — | 1 | 6 | |||||||||||
| Factoring and P-notes | (16 | ) | (40 | ) | (47 | ) | (48 | ) | |||||||
| Adjusted free cash flow (1) | $ | 122 | $ | 121 | $ | 171 | $ | 157 | |||||||
| (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) | 3 | % | 9 | % | |
| Foreign currency translation | 2 | % | 2 | % | |
| Full year 2026 Outlook Net sales growth at constant currency | 1 | % | 7 | % | |
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 | $ | 330 | $ | 360 | |||
| Interest expense, net of interest income * | 99 | 99 | |||||
| Tax expense | 111 | 121 | |||||
| Other non-operating income | (8 | ) | (8 | ) | |||
| Factoring and notes receivables discount fees | 2 | 2 | |||||
| Debt refinancing and redemption costs | 1 | 1 | |||||
| Repositioning costs | 25 | 25 | |||||
| Full Year 2026 Outlook Adjusted EBIT | $ | 560 | $ | 600 | |||
| Depreciation | 100 | 100 | |||||
| Stock compensation expense | 28 | 28 | |||||
| Full Year 2026 Outlook Adjusted EBITDA | $ | 688 | $ | 728 | |||
* 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 | $ | 435 | $ | 525 | |||
| Expenditures for property, plant and equipment | (90 | ) | (90 | ) | |||
| Net cash provided by operating activities less expenditures for property, plant and equipment | 345 | 435 | |||||
| Cash payments for repositioning | 25 | 25 | |||||
| Proceeds from cross currency swap contracts | 14 | 14 | |||||
| Cash payments for debt refinancing costs | 1 | 1 | |||||
| Full Year 2026 Outlook Adjusted free cash flow | $ | 385 | $ | 475 | |||
