Tear Sheet: Garrett Motion Inc.

GMI reported $422 million of company-adjusted free cash flow in 2023, an improvement from an already comfortable level of $313 million in the previous year. We expect the company to achieve similar levels of cash conversion in 2024-2025, supported by inflation recovery from auto and truck original equipment manufacturers (OEMs) and continued productivity improvements. This should translate into $300 million-$350 million of S&P Global Ratings-adjusted free operating cash flow (FOCF), down from about $392 million in 2023. In our view, this will provide the company with flexibility for reaching its leverage target of 2x. Although the recently announced share repurchase program is unfavorable for creditors in principle, we believe solid free cash flow generation will allow GMI to continue balancing

...Foreign currency issuer credit rating ##-/Stable/-- Local currency issuer credit rating ##-/Stable/-- Business risk Fair Country risk Low Industry risk Moderately High Competitive position Fair Financial risk Significant Cash flow/leverage Significant Anchor ## Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy FS-4 (no impact) Liquidity Adequate (no impact) Management and governance Neutral (no impact) Comparable rating analysis Negative (-1 notch) Stand-alone credit profile ##-...

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