RESTRUCTURING

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

The Company’s restructuring activities are undertaken, as necessary, to execute management’s strategy and streamline operations, consolidate and take advantage of available capacity and resources, and ultimately achieve net cost reductions. Restructuring activities include efforts to integrate and rationalize the Company’s business and to relocate operations to best-cost locations.

The Company’s restructuring expenses consist primarily of employee termination benefits (principally severance and/or termination benefits) and other costs, which are primarily professional fees and costs

related to facility closures and exits. The balances for the three and nine months ended September 30, 2022 have been recast for a change in reportable segments that was made during the first quarter of 2023. Refer to Note 22, “Reportable Segments And Related Information,” to the Condensed Consolidated Financial Statements for more information.


	Three Months Ended September 30, 2023
(in millions)	Air Management		Drivetrain & Battery Systems		ePropulsion		Corporate		Total
Employee termination benefits	$	53	$	1	$	—	$	—	$	54
Other	1		1		—		—		2
Total restructuring expense	$	54	$	2	$	—	$	—	$	56

	Three Months Ended September 30, 2022
(in millions)	Air Management		Drivetrain & Battery Systems		ePropulsion		Corporate		Total
Employee termination benefits	$	5	$	—	$	—	$	—	$	5
Other	—		—		—		—		—
Total restructuring expense	$	5	$	—	$	—	$	—	$	5

	Nine Months Ended September 30, 2023
(in millions)	Air Management		Drivetrain & Battery Systems		ePropulsion		Corporate		Total
Employee termination benefits	$	62	$	1	$	—	$	—	$	63
Other	4		1		—		—		5
Total restructuring expense	$	66	$	2	$	—	$	—	$	68

	Nine Months Ended September 30, 2022
(in millions)	Air Management		Drivetrain & Battery Systems		ePropulsion		Corporate		Total
Employee termination benefits	$	19	$	14	$	—	$	(1)	$	32
Other	—		9		1		—		10
Total restructuring expense	$	19	$	23	$	1	$	(1)	$	42

The following tables display a roll forward of the restructuring liability recorded within the Company’s Condensed Consolidated Balance Sheets and the related cash flow activity:


(in millions)	Employee Termination Benefits		Other		Total
Balance at January 1, 2023	$	39	$	9	$	48
Restructuring expense, net	63		5		68
Cash payments	(32)		(9)		(41)
Foreign currency translation adjustment and other	(1)		2		1
Balance at September 30, 2023	69		7		76
Less: Non-current restructuring liability	7		—		7
Current restructuring liability at September 30, 2023	$	62	$	7	$	69

(in millions)	Employee Termination Benefits		Other		Total
Balance at January 1, 2022	$	66	$	13	$	79
Restructuring expense, net	32		10		42
Cash payments	(39)		(17)		(56)
Foreign currency translation adjustment and other	(12)		2		(10)
Balance at September 30, 2022	47		8		55
Less: Non-current restructuring liability	13		1		14
Current restructuring liability at September 30, 2022	$	34	$	7	$	41

2023 Structural Costs Plan In 2023, the Company announced a $130 million to $150 million restructuring plan to address structural costs in its Foundational products businesses. Foundational products include all products utilized on internal combustion engines plus those same products and components that are also included in hybrid powertrains. During the three and nine months ended September 30, 2023, the Company recorded $56 million and $68 million, respectively, of restructuring costs related to this plan.

2020 Structural Costs Plan In 2020, the Company announced a $300 million restructuring plan to address structural costs. The actions under this plan are complete.

The following provides details of restructuring expense incurred by the Company’s reportable segments during the three and nine months ended September 30, 2023, and 2022, related to the plans and actions discussed above:

Air Management

2023 Structural Costs Plan

•During the three and nine months ended September 30, 2023, the segment recorded $54 million and $66 million, respectively, of restructuring costs under this plan, primarily related to employee termination benefits associated with the announced closure of a facility in Europe affecting approximately 200 employees.

2020 Structural Costs Plan

•During the three and nine months ended September 30, 2022, the segment recorded $5 million and $19 million, respectively, of restructuring costs under this plan. This primarily related to $11 million during the nine months ended September 30, 2022, for a

voluntary termination program pursuant to which approximately 47 employees accepted termination packages in 2022.

Drivetrain & Battery Systems

2023 Structural Costs Plan

•During the three and nine months ended September 30, 2023, the segment recorded $2 million of restructuring costs under this plan, primarily related to employee termination benefits and equipment moves.

2020 Structural Costs Plan

•During the nine months ended September 30, 2022, the segment recorded $9 million of restructuring costs primarily related to contractual settlements and professional fees. Separate from the 2020 Structural Costs Plan, during the nine months ended September 30, 2022, the segment recorded $14 million of restructuring costs, primarily related to severance costs associated with the announced closure of a technical center in Europe affecting approximately 80 employees.

Estimates of restructuring expense are based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially recorded. Accordingly, the Company may record revisions of previous estimates by adjusting previously established accruals.

The Company continues to evaluate different options across its operations to reduce existing structural costs over the next few years. The Company will recognize restructuring expense associated with any future actions at the time they are approved and become probable or are incurred. Any future actions could result in significant restructuring expense.