Meritor Acquisition and 2022 Financial Results
Table of Contents
Future Uses of Cash
A summary of our contractual obligations and other commercial commitments at December 31, 2022, are as follows:
Contractual Cash Obligations
In millions
Long-term debt and finance lease obligations (1)
Payments Due by Period
Current
Long-Term
$
765 $
6,486
Operating leases (1)
Capital expenditures
Purchase commitments for inventory
Other purchase commitments
Transitional tax liability
Other postretirement benefits
145
412
547
1,024
2
438
116
43
185
22
136
International and other domestic letters of credit
60
50
Performance and excise bonds
27
80
Guarantees and other commitments
34
12
Total
$
3,105
$
7,479
(Includes principal payments and expected interest payments based on the terms of the obligations.
The contractual obligations reported above exclude our unrecognized tax benefits of $283 million as of December 31, 2022, which includes $104 million of current tax
liabilities and $179 million of long-term deferred tax liabilities. We are not able to reasonably estimate the period in which cash outflows relating to uncertain tax contingencies
could occur. See NOTE 5, "INCOME TAXES," to the Consolidated Financial Statements for additional information.
Redeemable Noncontrolling Interests
A 19 percent minority shareholder in one of our businesses, Hydrogenics Corporation (Hydrogenics), has, among other rights and subject to related obligations and restrictive
covenants, rights that are exercisable between September 2022 and September 2026 to require us to (1) purchase such shareholder's shares (put option) at an amount up to the
fair market value (calculated pursuant to a process outlined in the shareholders' agreement) and (2) sell to such shareholder Hydrogenics' electrolyzer business at an amount up
to the fair market value of the electrolyzer business (calculated pursuant to a process outlined in the shareholders' agreement). We recorded the estimated fair value of the put
option as redeemable noncontrolling interests in our Consolidated Financial Statements with an offset to additional paid-in capital. At December 31, 2022, the redeemable
noncontrolling interest balance was $258 million.
Credit Ratings
Our rating and outlook from each of the credit rating agencies as of the date of filing are shown in the table below:
Credit Rating Agency (1)
Standard & Poor's Rating Services
Moody's Investors Service, Inc.
Long-Term
Senior Debt
Rating
Short-Term
A+
Debt Rating
Al
Outlook
Stable
A2
Pl
Stable
(1) Credit ratings are not recommendations to buy, are subject to change, and each rating should be evaluated independently of any other
rating. In addition, we undertake no obligation to update disclosures concerning our credit ratings, whether as a result of new information,
future events or otherwise.
Management's Assessment of Liquidity
Our financial condition and liquidity remain strong. Our solid balance sheet and credit ratings enable us to have ready access to credit and the capital markets. We assess our
liquidity in terms of our ability to generate adequate cash to fund our operating, investing and financing activities. We believe our access to capital markets, our existing cash
and marketable securities, operating cash flow and revolving credit facilities provide us with the financial flexibility needed to fund acquisitions, dividend payments, common
stock repurchases, targeted capital expenditures, projected pension obligations, working capital and debt service obligations through 2023 and beyond. We continue to generate
significant cash from operations and maintain access to our revolving credit facilities and commercial paper programs as noted above.
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