Segments and Concentrations

12 Months Ended

Dec. 31, 2024

Risks and Uncertainties [Abstract]

Segments and Concentrations

Note 27. Segments and Concentrations

The Company has identified our CODM as the Chief Executive Officer. The CODM reviews consolidated net income when assessing the Company's performance, allocating resources and establishing management's compensation. In addition to consolidated net income, the CODM receives discrete information for net sales by product and by geographical location. Consolidated net income is used to monitor budget versus actual results.

The accounting policies of our operating segment are the same as those described in the Company's summary of significant accounting policies.

The Company derives revenues from customers through sales of air and fluid compression and high-speed electric motor technologies for OEMs and distributors within the mobility and industrial space. In addition to consolidated net income, the CODM regularly reviews sales by region and product line.

Sales concentration — Net sales by region (determined based on country of shipment) and product line are as follows:

	Year Ended December 31,
	2024		2023		2022
	(Dollars in millions)
United States	$	700	$	744	$	694
Europe	1,642		1,874		1,734
Asia
China	643		768		701
Rest of Asia	413		433		401
Other International	77		67		73
	$	3,475	$	3,886	$	3,603

	Year Ended December 31,
	2024		2023		2022
	(Dollars in millions)
Diesel	$	827	$	992	$	949
Gas	1,505		1,720		1,485
Commercial Vehicle	629		656		673
Aftermarket	459		456		442
Other	55		62		54
	$	3,475	$	3,886	$	3,603

Customer concentration — Net sales to Garrett’s largest customers and the corresponding percentage of total net sales are as follows:

	Net sales Year Ended December 31,
	2024		%	2023		%	2022		%
	(Dollars in millions)
Customer A	$	401	12	$	474	12	$	444	12
Customer B	354		10	364		9	350		10
Others (1)	2,720		78	3,048		79	2,809		78
	$	3,475	100	$	3,886	100	$	3,603	100

(1) No other customer had sales individually exceeding 10%.

The table below provides segment information about the Company:

	Year Ended December 31,
	2024		2023		2022
	(Dollars in millions)
Net sales	$	3,475	$	3,886	$	3,603
Less:
Material costs	2,022		2,323		2,142
Variable manufacturing costs (1)	386		417		414
Fixed manufacturing costs (2)	201		228		199
Research, development and engineering costs	161		163		165
Selling, general and administrative costs	240		247		216
Interest expense	156		159		8
Income tax expense	61		86		106
Other segment items (3)	(34)		2		(37)
Consolidated net income	$	282	$	261	$	390

(1)    Variable manufacturing costs include freight, duties, direct and indirect labor costs, repairs and maintenance, repositioning costs and variable overhead costs.

(2)     Fixed manufacturing costs include depreciation and amortization, rent, overhead labor costs, utilities and other fixed costs.

(3)     Other segment items consist of gain on sale of equity interest in unconsolidated joint venture, non-service components of net periodic expense, interest income, equity income, loss on extinguishment of debt, reorganization and other non-operating income items (if any).

Long-lived assets concentration — Long-lived assets (1) by region are as follows:

	December 31
	2024		2023
	(Dollars in millions)
United States	$	18	$	19
Europe
Slovakia	83		89
Romania	43		46
Rest of Europe	96		101
Asia
China	110		117
Rest of Asia	50		53
Other International	49		52
	$	449	$	477

(1)Long-lived assets are comprised of property, plant and equipment–net.

The measure of segment assets is reported on the balance sheet as total consolidated assets. The Company had capital expenditure purchases of $91 million, $83 million and $91 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company had depreciation and amortization expense in the amount of $90 million, $90 million and $84 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company reports significant non-cash adjustments in its Consolidated Statement of Cash Flows.