Note 17 - Other Income (Expense), Net

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Other Income and Other Expense Disclosure [Text Block]

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Non-service cost components of pension and OPEB costs	$	(3	)	$	(3	)	$	(5	)	$	(5	)
Government grants and incentives		5			2			8			6
Foreign exchange gain					2			1			7
Strategic transaction expenses		(5	)		(5	)		(8	)		(11	)
Gain (loss) on investment in Hyliion		3						(14	)
Loss on disposal group held for sale								(7	)
Loss on de-designation of fixed-to-fixed cross currency swaps		(9	)					(9	)
Other, net		(1	)		3			5			6
Other income (expense), net	$	(10	)	$	(1	)	$	(29	)	$	3

Foreign exchange gains and losses on cross-currency intercompany loan balances that are not of a long-term investment nature are included above. Foreign exchange gains and losses on intercompany loans that are permanently invested are reported in OCI. 

Strategic transaction expenses relate primarily to costs incurred in connection with acquisition and divestiture related activities, including costs to complete the transaction and post-closing integration costs. Strategic transaction expenses in 2021 were primarily attributable to our pursuit of the acquisition of a portion of the thermal-management business of Modine Manufacturing Company and certain other strategic initiatives. Strategic transaction expenses in 2020 were primarily attributable to the acquisitions of the Oerlikon Drive Systems segment of the Oerlikon Group (ODS) and Nordresa Motors, Inc. and certain other strategic initiatives.

We held convertible notes receivable from our investment in Hyliion Inc. On October 1, 2020, Hyliion Inc. completed its merger with Tortoise Acquisition Corp. The business combination resulted in the combined company being renamed Hyliion Holdings Corp. (Hyliion), with its common stock being listed on the New York Stock Exchange under the ticker symbol HYLN. Effective with the completed merger, our notes receivable were converted into 2,988,229 common shares of HYLN. Our investment in Hyliion is included in marketable securities and carried at fair value with changes in fair value included in net income. See Note 11 for additional information.

We had previously entered into fixed-to-fixed cross currency swaps as a hedge against our June 2026 Notes. In June 2021, we redeemed all of the June 2026 Notes and de-designated the fixed-to-fixed cross currency swaps. See Note 13 for additional information.

In conjunction with our acquisition of ODS, we acquired a controlling financial interest in a joint venture in China. We were required to divest our interest in this joint venture as it violates competitive restrictions of another of our China joint venture shareholder agreements. During the first quarter of 2021, we recorded an impairment charge of $7, as we determined the carrying value of the disposal group exceeded its fair value less costs to sell. The disposal group had net assets of $2 as of March 31, 2021. Individual asset and liability balances were not material and therefore the amounts were not segregated as held for sale on our consolidated balance sheet. We completed the disposal of this business in April 2021.