Annual report [Section 13 and 15(d), not S-K Item 405]

ACCELERA ACTIONS

v3.25.4
ACCELERA ACTIONS
 12 Months Ended
Dec. 31, 2025
Restructuring and Related Activities [Abstract]  
Accelera Actions
NOTE 22. ACCELERA ACTIONS
2025 Actions
During the third quarter of 2025, in our Accelera segment, we observed rapidly deteriorating conditions in our electrolyzer markets and overall hydrogen markets, along with significant uncertainty in the alternative power markets resulting from reductions in government incentives. As a result, we determined that a triggering event occurred for our electrolyzer reporting unit, warranting an interim impairment test of goodwill and the related asset group. We also re-evaluated the recoverability of certain inventory in this business due to the declining customer demand, resulting in a $30 million excess and obsolete inventory write-down. We concluded that the undiscounted cash flows exceeded the carrying value of the related asset group and thus an impairment did not exist for the related long-lived assets. However, we determined that on a fair value basis our goodwill was fully impaired and recorded a charge of $210 million. The fair value of this reporting unit was determined using primarily a discounted cash flow model (a form of the income approach). This model incorporated a number of assumptions and judgements surrounding current market and economic conditions, internal forecasts of future business performance including short and long-term growth rates, earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests (EBITDA) margins and discount rates.
The continuing deterioration in the electrolyzer markets in the fourth quarter of 2025, prompted a strategic review of this business. As
a result of these market conditions and the current business outlook, we intend to stop new commercial activity in the electrolyzer space, subject to information and consultation in accordance with local legal requirements. We will continue to fulfill existing customer commitments. As a result of this shift, we recorded several non-cash charges in the fourth quarter related to inventory write-downs along with intangible and fixed asset impairments. We also recorded severance of approximately $13 million and contract termination costs of $34 million. Total charges for the fourth quarter actions were $218 million.
The following table presents the full impact of these 2025 actions on our Consolidated Statements of Net Income:
Year ended
In millions December 31,
2025		 Statement of Net Income Location
Impairment of goodwill $ 210  Other operating expense, net
Inventory write-downs 119  Cost of sales
Impairment of property, plant and equipment and leases 55 Other operating expense, net
Contract termination costs 34 Cost of sales
Impairment of other intangible assets 27 Other operating expense, net
Severance 13 Cost of sales, selling, general and administrative expenses and research, development and engineering expenses
Total $ 458 
The majority of the $458 million is reflected in net cash provided by operating activities, as a change in inventory of $119 million and other, net of $292 million. Of the $458 million, $415 million were non-cash charges and the majority of the remaining $43 million cash charge will be paid during 2026. Of the total charges, approximately $445 million occurred in jurisdictions where we receive no tax benefits because of valuation allowances or the charges are attributable to nondeductible goodwill.
2024 Actions
In the fourth quarter of 2024, our Accelera segment underwent a strategic review to better streamline operations as well as pace and re-focus investments on the most promising paths as the adoption of certain zero emission solutions slows. This review resulted in strategic reorganization actions including decisions to consolidate certain manufacturing efforts, focus internal development efforts towards areas of differentiation while continuing to leverage partners and reduce our investments in certain technologies, joint ventures and markets. In addition, declining customer demand in certain key product lines caused us to re-evaluate the recoverability of certain inventory items. As a result of these actions, we recorded several non-cash charges in the fourth quarter related to inventory write-downs, intangible and fixed asset impairments and joint venture impairments. We also recorded severance of approximately $7 million. The following table presents the impact of asset write-downs and impairments on our Consolidated Statements of Net Income:

Year ended
In millions December 31,
2024		 Statement of Net Income Location
Inventory write-downs $ 107  Cost of sales
Impairment of other intangible assets 84 Other operating expense, net
Impairment of property, plant and equipment 61 Other operating expense, net
Impairment of investments in equity method investees 17 Equity, royalty and interest income from investees
Severance 7 Cost of sales and research, development and engineering expenses
Other 36 Other operating expense, net and selling, general and administrative expenses
Total $ 312 

The majority of the $305 million non-cash charge is reflected in net cash provided by operating activities, as a change in inventory of $107 million and other, net of $171 million. Of the total charges, approximately $243 million occurred in jurisdictions where we receive no tax benefits because of valuation allowances, resulting in a $50 million unfavorable discrete tax item. In addition, these actions were considered a triggering event under GAAP which required us to perform an interim impairment test of our fuel cell and electrolyzer reporting unit. The results of this testing indicated that goodwill of this reporting unit was not impaired at that time.