The Company undertakes restructuring activities, 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 following tables display the Company’s restructuring expense by reportable segment:


	Three Months Ended September 30, 2026
(in millions)	Turbos & Thermal Technologies		Drivetrain & Morse Systems		PowerDrive Systems		Battery Energy Systems		Corporate		Total
Employee termination benefits	$	8	$	10	$	24	$	1	$	2	$	45
Other	—		3		2		—		—		5
Total restructuring expense	$	8	$	13	$	26	$	1	$	2	$	50

	Three Months Ended September 30, 2025
(in millions)	Turbos & Thermal Technologies		Drivetrain & Morse Systems		PowerDrive Systems		Battery Energy Systems		Corporate		Total
Employee termination benefits	$	5	$	—	$	10	$	4	$	—	$	19
Other	—		1		2		1		—		4
Total restructuring expense	$	5	$	1	$	12	$	5	$	—	$	23

	Nine Months Ended September 30, 2026
(in millions)	Turbos & Thermal Technologies		Drivetrain & Morse Systems		PowerDrive Systems		Battery Energy Systems		Corporate		Total
Employee termination benefits	$	18	$	12	$	27	$	16	$	4	$	77
Other	3		7		1		1		—		12
Total restructuring expense	$	21	$	19	$	28	$	17	$	4	$	89

	Nine Months Ended September 30, 2025
(in millions)	Turbos & Thermal Technologies		Drivetrain & Morse Systems		PowerDrive Systems		Battery Energy Systems		Corporate		Total
Employee termination benefits	$	18	$	1	$	19	$	13	$	1	$	52
Other	4		2		10		3		—		19
Total restructuring expense	$	22	$	3	$	29	$	16	$	1	$	71


(in millions)	Employee Termination Benefits		Other		Total
Balance at January 1, 2026	$	42	$	12	$	54
Restructuring expense, net	77		12		89
Cash payments	(54)		(17)		(71)
Foreign currency translation adjustment and other	(1)		—		(1)
Balance at September 30, 2026	64		7		71
Less: Non-current restructuring liability	4		—		4
Current restructuring liability at September 30, 2026	$	60	$	7	$	67

2026 Voluntary Separation Program In the third quarter of 2026, the Company approved a $26 million restructuring plan for a voluntary separation program (“VSP”). The VSP was made available to employees in the U.S. who met certain requirements and included a separation package based upon years of service. During the three and nine months ended September 30, 2026, the Company recorded $25 million of restructuring costs related to this plan. The actions under this plan are expected to be completed in 2027.

2024 Structural Cost Plan In June 2024, the Company approved an approximately $75 million restructuring plan to address the cost structure in its PowerDrive Systems reportable segment due to electric vehicle adoption volatility across different regions, which could include realignment of the segment’s manufacturing footprint. During the three and nine months ended September 30, 2026, the Company recorded $17 million and $19 million, respectively, of restructuring charges related to this plan. During the three and nine months ended September 30, 2025, the Company recorded $12 million and $29 million, respectively, of restructuring costs related to this plan. Cumulatively, the Company has incurred $63 million of restructuring charges related to this plan as of September 30, 2026. The actions under this plan are expected to be completed in 2027.

2023 Structural Cost Plan In 2023, the Company announced a restructuring plan to address structural costs primarily in its Foundational products businesses. During the nine months ended September 30, 2025, the Company recorded $8 million of restructuring costs related to this plan. Cumulatively, the Company incurred $148 million of restructuring charges related to this plan. The actions under this plan are complete.

Other Actions During the three and nine months ended September 30, 2026, the Company recorded $8 million and $45 million, respectively, of restructuring costs for individually approved restructuring actions. During the three and nine months ended September 30, 2025, the Company recorded $11 million and $34 million, respectively, of restructuring costs related to individually approved restructuring actions, as more fully described below.

•During the nine months ended September 30, 2025, the segment recorded $7 million of restructuring costs under this plan. These costs primarily related to $5 million of employee termination benefits and $2 million of professional fees for facilities in Europe and Asia.

•During the three and nine months ended September 30, 2026, the segment recorded $3 million and $16 million, respectively, of restructuring costs for individually approved restructuring actions. For the nine months ended September 30, 2026, these costs were primarily comprised of $13 million of employee termination benefits and $3 million of

•During the three and nine months ended September 30, 2025, the segment recorded $5 million and $15 million, respectively, of restructuring costs for individually approved restructuring actions. For the nine months ended September 30, 2025, these costs were primarily comprised of $13 million of employee termination benefits and $2 million of contractual settlement expense for facilities in Europe and Asia.

•During the three and nine months ended September 30, 2026, the segment recorded $4 million and $10 million, respectively, of restructuring costs for individually approved restructuring actions. For the nine months ended September 30, 2026, these costs were primarily comprised of $3 million of employee termination benefits and $7 million primarily for equipment relocation costs for a facility in North America.

•During the three and nine months ended September 30, 2025, the segment recorded $1 million and $2 million, respectively, of restructuring costs for individually approved restructuring actions. For the nine months ended September 30, 2025, these costs were primarily comprised of $2 million related to equipment relocation costs for a facility in North America.

•During the three and nine months ended September 30, 2026, the segment recorded $17 million and $19 million, respectively, of restructuring costs under this plan. For the nine months ended September 30, 2026, the majority of these costs were comprised of $18 million of employee termination benefits, primarily for a facility in Europe.

•During the three and nine months ended September 30, 2025, the segment recorded $12 million and $29 million, respectively, of restructuring costs under this plan. For the nine months ended September 30, 2025, these costs were primarily comprised of $19 million of employee termination benefits and $10 million of equipment relocation costs and professional fees for facilities in North America, Asia and Europe.

•During the three and nine months ended September 30, 2025, the segment recorded $5 million and $16 million, respectively, of individually approved restructuring costs. For the nine months ended September 30, 2025, these costs were primarily comprised of $13 million of employee termination benefits and $3 million of contract cancellations and professional fees for facilities in North America and Asia, including the consolidation of the Company’s North American battery systems business footprint and the exit of its charging business. Refer to Note 3, “Acquisitions and Dispositions” for more information.

•During the nine months ended September 30, 2026, $2 million of individually approved restructuring costs were recorded. For the nine months ended September 30, 2026, these costs primarily related to employee termination benefits associated with a global overhead cost reduction initiative.

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.