DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

The historical results of operations and the financial position of PHINIA for periods prior to the Spin-Off are presented as discontinued operations in these Consolidated Financial Statements.

The following table summarizes the assets and liabilities from discontinued operations of PHINIA.

(in millions)	December 31, 2022
ASSETS
Cash, cash equivalents and restricted cash	$	255
Receivables, net	852
Inventories, net	470
Prepayments and other current assets	39
Total current assets of discontinued operations	$	1,616
Property, plant and equipment, net	939
Investments and long-term receivables	77
Goodwill	419
Other intangible assets, net	432
Other non-current assets	179
Total non-current assets of discontinued operations	$	2,046
LIABILITIES
Notes payable and other short-term debt	$	2
Accounts payable	538
Other current liabilities	406
Total current liabilities of discontinued operations	$	946
Long-term debt	26
Retirement-related liabilities	94
Other non-current liabilities	175
Total non-current liabilities of discontinued operations	$	295

The following table summarizes the financial results from discontinued operations of PHINIA.

(in millions)	Year Ended December 31,
	2023		2022		2021
Net sales	$	1,723	$	3,348	$	3,227
Cost of sales	1,362		2,616		2,545
Gross profit	361		732		682
Selling, general and administrative expenses	173		320		375
Restructuring expense	7		11		55
Other operating expense, net	132		36		15
Operating (loss) income	49		365		237
Equity in affiliates’ earnings, net of tax	(5)		(10)		(6)
Interest expense, net	—		1		2
Other postretirement expense (income)	—		(31)		(38)
Earnings from discontinued operations before income taxes	54		405		279
Provision for income taxes	61		97		85
Net (loss) earnings from discontinued operations attributable to PHINIA	$	(7)	$	308	$	194

In connection with the Spin-Off, the Company entered into a transition services agreement through which the Company and PHINIA will continue to provide certain services to each other following the Spin-Off. These services are related to information technology, human resources, finance, facilities, procurement, sales, intellectual properties and engineering. The combined impact of these services is reported in results of continuing operations in the Consolidated Financial Statements. From the date of the Spin-Off through the year ended December 31, 2023, the Company provided services at a cost of $13 million to PHINIA, and PHINIA provided services at a cost of $3 million to the Company .

The Company incurred $134 million and $30 million of costs relating to the Spin-Off during the year ended December 31, 2023 and 2022, respectively, which are reflected within Net (loss) earnings from discontinued operations in the Company’s Consolidated Statements of Operations. Spin-Off costs are primarily comprised of professional fees and costs to separate certain operational activities.