Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 25, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Entity File Number | 001-35456 | |
Entity Registrant Name | ALLISON TRANSMISSION HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-0414014 | |
Entity Address, Address Line One | One Allison Way | |
Entity Address, City or Town | Indianapolis | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 46222 | |
City Area Code | 317 | |
Local Phone Number | 242-5000 | |
Title of 12(b) Security | Common stock, $0.01 par value | |
Trading Symbol | ALSN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 96,244,657 | |
Entity Central Index Key | 0001411207 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 122 | $ 127 |
Accounts receivable - net of allowances for doubtful accounts of $5 and $3, respectively | 363 | 301 |
Inventories | 228 | 204 |
Other current assets | 52 | 39 |
Total Current Assets | 765 | 671 |
Property, plant and equipment, net | 705 | 706 |
Intangible assets, net | 901 | 917 |
Goodwill | 2,076 | 2,064 |
Marketable securities | 33 | 46 |
Other non-current assets | 54 | 53 |
TOTAL ASSETS | 4,534 | 4,457 |
Current Liabilities | ||
Accounts payable | 198 | 179 |
Product warranty liability | 28 | 33 |
Current portion of long-term debt | 6 | 6 |
Deferred revenue | 39 | 37 |
Other current liabilities | 160 | 204 |
Total Current Liabilities | 431 | 459 |
Product warranty liability | 25 | 20 |
Deferred revenue | 96 | 99 |
Long-term debt | 2,502 | 2,504 |
Deferred income taxes | 530 | 514 |
Other non-current liabilities | 201 | 227 |
TOTAL LIABILITIES | 3,785 | 3,823 |
Commitments and contingencies (see NOTE P) | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Paid in capital | 1,839 | 1,832 |
Accumulated deficit | (1,031) | (1,126) |
Accumulated other comprehensive loss, net of tax | (60) | (73) |
TOTAL STOCKHOLDERS’ EQUITY | 749 | 634 |
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | 4,534 | 4,457 |
Voting Common Stock | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | 1 | 1 |
Non-voting Common Stock | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Allowances for doubtful accounts receivable | $ 5 | $ 3 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Voting Common Stock | ||
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,880,000,000 | 1,880,000,000 |
Common stock, shares issued (in shares) | 96,325,571 | 99,262,951 |
Common stock, shares outstanding (in shares) | 96,325,571 | 99,262,951 |
Non-voting Common Stock | ||
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net sales | $ 664 | $ 603 | $ 1,341 | $ 1,191 |
Cost of sales | 353 | 315 | 710 | 612 |
Gross profit | 311 | 288 | 631 | 579 |
Selling, general and administrative | 78 | 80 | 153 | 153 |
Engineering — research and development | 46 | 41 | 89 | 79 |
Operating income | 187 | 167 | 389 | 347 |
Interest expense, net | (30) | (30) | (59) | (59) |
Other (expense) income, net | (3) | 3 | (13) | 6 |
Income before income taxes | 154 | 140 | 317 | 294 |
Income tax expense | (32) | (30) | (66) | (64) |
Net income | $ 122 | $ 110 | $ 251 | $ 230 |
Basic earnings per share attributable to common stockholders | $ 1.26 | $ 1.01 | $ 2.59 | $ 2.09 |
Diluted earnings per share attributable to common stockholders | $ 1.26 | $ 1.01 | $ 2.56 | $ 2.07 |
Comprehensive income, net of tax | $ 118 | $ 113 | $ 264 | $ 236 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 251 | $ 230 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of property, plant and equipment | 53 | 51 |
Amortization of intangible assets | 23 | 23 |
Unrealized loss on marketable securities | 11 | |
Stock-based compensation | 9 | 8 |
Deferred income taxes | 9 | 29 |
Technology-related investments gain | (6) | |
Loss on intercompany foreign exchange | 3 | 1 |
Other | 5 | 1 |
Changes in assets and liabilities: | ||
Accounts receivable | (70) | (73) |
Inventories | (29) | (26) |
Accounts payable | 17 | 2 |
Other assets and liabilities | (47) | 25 |
Net cash provided by operating activities | 229 | 271 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions of long-lived assets | (50) | (69) |
Business acquisitions | (23) | |
Proceeds from technology-related investments | 6 | |
Investment in equity method investee | (1) | |
Net cash used for investing activities | (68) | (69) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchases of common stock | (115) | (226) |
Borrowings on revolving credit facility | 95 | |
Payments on revolving credit facility | (95) | |
Dividend payments | (41) | (42) |
Taxes paid related to net share settlement of equity awards | (4) | (3) |
Payments on long-term debt | (3) | (3) |
Proceeds from exercise of stock options | 1 | 3 |
Payments of acquisition-related contingent liability | (3) | |
Net cash used for financing activities | (162) | (274) |
Effect of exchange rate changes on cash | (4) | |
Net decrease in cash and cash equivalents | (5) | (72) |
Cash and cash equivalents at beginning of period | 127 | 310 |
Cash and cash equivalents at end of period | 122 | 238 |
Supplemental disclosures: | ||
Interest paid | 57 | 38 |
Income taxes paid | $ 59 | $ 45 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock Voting Common Stock | Paid-in Capital | Accumulated (Deficit) Income | Accumulated Other Comprehensive (Loss) Income, net of tax |
Balance at Dec. 31, 2020 | $ 756 | $ 1 | $ 1,818 | $ (974) | $ (89) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 8 | 8 | |||
Pension and OPEB liability adjustment | (4) | (4) | |||
Foreign currency translation adjustment | (2) | (2) | |||
Interest rate swaps | 12 | 12 | |||
Repurchase of common stock | (226) | (226) | |||
Dividends on common stock | (42) | (42) | |||
Net income | 230 | 230 | |||
Balance at Jun. 30, 2021 | 732 | 1 | 1,826 | (1,012) | (83) |
Balance at Mar. 31, 2021 | 764 | 1 | 1,820 | (971) | (86) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 5 | 5 | |||
Pension and OPEB liability adjustment | (2) | (2) | |||
Foreign currency translation adjustment | 4 | 4 | |||
Interest rate swaps | 1 | 1 | |||
Issuance of common stock | 1 | 1 | |||
Repurchase of common stock | (130) | (130) | |||
Dividends on common stock | (21) | (21) | |||
Net income | 110 | 110 | |||
Balance at Jun. 30, 2021 | 732 | 1 | 1,826 | (1,012) | (83) |
Balance at Dec. 31, 2021 | 634 | 1 | 1,832 | (1,126) | (73) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 9 | 9 | |||
Pension and OPEB liability adjustment | (4) | (4) | |||
Foreign currency translation adjustment | (8) | (8) | |||
Interest rate swaps | 25 | 25 | |||
Issuance of common stock | (2) | (2) | |||
Repurchase of common stock | (115) | (115) | |||
Dividends on common stock | (41) | (41) | |||
Net income | 251 | 251 | |||
Balance at Jun. 30, 2022 | 749 | 1 | 1,839 | (1,031) | (60) |
Balance at Mar. 31, 2022 | 679 | 1 | 1,832 | (1,098) | (56) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 6 | 6 | |||
Pension and OPEB liability adjustment | (2) | (2) | |||
Foreign currency translation adjustment | (8) | (8) | |||
Interest rate swaps | 6 | 6 | |||
Issuance of common stock | 1 | 1 | |||
Repurchase of common stock | (34) | (34) | |||
Dividends on common stock | (21) | (21) | |||
Net income | 122 | 122 | |||
Balance at Jun. 30, 2022 | $ 749 | $ 1 | $ 1,839 | $ (1,031) | $ (60) |
Overview
Overview | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Overview | NOTE A. OVERVIEW Overview Allison Transmission Holdings, Inc. and its subsidiaries (“Allison” or the “Company”) design and manufacture vehicle propulsion solutions, including commercial-duty on-highway, off-highway and defense fully automatic transmissions and electric hybrid and fully electric systems. The business was founded in 1915 and has been headquartered in Indianapolis, Indiana since inception. Allison is traded on the New York Stock Exchange under the symbol, “ALSN”. Although approximately 76 % of revenues were generated in North America in 2021, the Company has a global presence by serving customers in Asia, Europe, South America and Africa. The Company serves customers through an independent network of approximately 1,400 independent distributor and dealer locations worldwide. During the first half of 2022, global markets continued to experience supply chain, labor and raw material constraints, as a result of factors including the COVID-19 pandemic and the war in Ukraine, that created volatility in the Company's performance. As a result, the Company experienced, and expects to continue to experience, raw material and component part price inflation, increased freight and logistics costs, increased labor costs as a result of labor shortages and increased foreign exchange volatility. In addition, despite increased customer demand, the Company's net sales for the first half of 2022 were negatively impacted as a result of its customers’ inability to secure components from the broader commercial vehicle supply base which resulted in reduced commercial vehicle build schedules. The Company expects that commercial vehicle build schedules will continue to be negatively impacted by the availability of components throughout the remainder of 2022. To limit the spread of variants and sub-variants of COVID-19, governments have taken, and may in the future take, various actions that have impacted, and may continue to impact, the Company's employees, operations, customers and supply base, including the administration or mandate of vaccinations, travel bans and restrictions, quarantines, curfews, stay-at-home orders, social distancing guidelines and business shutdowns and closures. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The information herein reflects all normal recurring material adjustments, which are, in the opinion of management, necessary for the fair statement of the results for the periods presented. The condensed consolidated financial statements herein consist of all wholly-owned domestic and foreign subsidiaries with all significant intercompany transactions eliminated. These condensed consolidated financial statements present the financial position, results of comprehensive income, cash flows and statements of stockholders’ equity of the Company. The condensed consolidated financial statements sho uld be read in conjunction with the audited consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on February 17, 2022. The interim period financial results for the three- and six- month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Estimates include, but are not limited to, sales allowances, government price adjustments, fair market values and future cash flows associated with goodwill, indefinite life intangibles, definite life intangibles, long-lived asset impairment tests, useful lives for depreciation and amortization, warranty liabilities, core deposit liabilities, environmental liabilities, determination of discount rate and other assumptions for pension and other post-retirement benefit ("OPEB") expense, determination of discount rate and period for leases, income taxes and deferred tax valuation allowances, derivative valuation, assumptions for business combinations and contingencies. The Company’s accounting policies involve the application of judgments and assumptions made by management that include inherent risks and uncertainties. Due to the uncertainty surrounding global economic conditions, including as a result of the ongoing COVID-19 pandemic and the war in Ukraine, and the related impact on our supply chain, demand for our products, foreign exchange rates and the cost and availability of raw materials, labor, and transport, actual results could differ materially from these estimates and assum ptions used in preparation of the financial statements including, but not limited to, future cash flows associated with goodwill, indefinite life intangibles, definite life intangibles, long-lived impairment tests, determination of discount rate and other assumptions for pension and OPEB expense and income taxes. Changes in estimates are recorded in results of operations in the period that the events or circumstances giving rise to such changes occur. Recently Issued Accounting Pronouncements In October 2021, the Financial Accounting Standards Board ("FASB") issued authoritative accounting guidance that requires contract assets and contract liabilities acquired in a business combination to be recognized as if the acquirer originated the contracts. The guidance will be effective for the Company in fiscal year 2023, and the Company does not plan to early adopt. The guidance will be applied prospectively to acquisitions occurring on or after the effective date. In June 2022, the FASB issued authoritative accounting guidance requires that investments in equity securities which are measured at fair value and are subject to contractual sale restrictions should not reflect the contractual sale restriction in its fair value measurement. The guidance will be effective for the Company in fiscal year 2024, and the Company does not plan to early adopt. Management does not expect the adoption of this guidance to have an impact on the Company's consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | NOTE C. REVENUE Revenue is recognized as each distinct performance obligation within a contract is satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company enters into long-term agreements (“LTAs”) and distributor agreements with certain customers. The LTAs and distributor agreements do not include committed volumes until underlying purchase orders are issued; therefore, the Company determined that purchase orders are the contract with a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when the performance obligation is satisfied, as there is no right of return. Some of the Company's contracts include multiple performance obligations, most commonly the sale of both a transmission and extended transmission coverage ("ETC"). The Company allocates the contract’s transaction price to each performance obligation based on the standalone selling price of each distinct good or service in the contract. The Company may also use volume-based discounts and rebates as marketing incentives in the sales of both vehicle propulsion solutions and service parts, which are accounted for as variable consideration. The Company records the impact of the incentives as a reduction to revenue when it is determined that the adjustment is not likely to reverse, historically on a quarterly basis. The Company estimates the impact of all other incentives based on the related sales and market conditions in the end market vocation. The Company recorded no material adjustments based on variable consideration for any of the three or six months ended June 30, 2022 or 2021. Net sales are made on credit terms, generally 30 days , based on an assessment of the customer’s creditworthiness. For certain goods or services, the Company receives consideration prior to satisfying the related performance obligation. Such consideration is recorded as a contract liability in current and non-current deferred revenue as of June 30, 2022 and December 31, 2021. See "Note J. Deferred Revenue” for more information, including the amount of revenue earned during each of the three and six months ended June 30, 2022 and 2021 that had been previously deferred. The Company had no material contract assets as of either June 30, 2022 or December 31, 2021. The Company has one operating segment and reportable segment. The Company is in one line of business, which is the manufacture and distribution of vehicle propulsion solutions. The following presents disaggregated revenue by categories that best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors (dollars in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 North America On-Highway $ 340 $ 302 $ 686 $ 621 North America Off-Highway 20 9 38 11 Defense 29 48 64 93 Outside North America On-Highway 105 98 214 182 Outside North America Off-Highway 32 18 62 34 Service Parts, Support Equipment and Other 138 128 277 250 Total Net Sales $ 664 $ 603 $ 1,341 $ 1,191 NOTE J. DEFERRED REVENUE As of June 30, 2022, current and non-current deferred revenue was $ 39 million and $ 96 million, respectively. As of June 30, 2021, current and non-current deferred revenue was $ 39 million and $ 103 million, respectively. Deferred revenue activity consists of the following (dollars in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Beginning balance $ 132 $ 142 $ 136 $ 143 Increases 13 9 20 16 Revenue earned ( 10 ) ( 9 ) ( 21 ) ( 17 ) Ending balance $ 135 $ 142 $ 135 $ 142 Deferred revenue recorded in current and non-current liabilities related to ETC as of June 30, 2022 was $ 30 million and $ 85 million, respectively. Deferred revenue recorded in current and non-current liabilities related to ETC as of June 30, 2021 was $ 30 million and $ 87 million, respectively |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE D. INVENTORIES Inventories consisted of the following components (dollars in millions): June 30, December 31, Purchased parts and raw materials $ 108 $ 101 Work in progress 12 8 Service parts 45 44 Finished goods 63 51 Total inventories $ 228 $ 204 Inventory components shipped to third parties, primarily cores, parts to re-manufacturers, and parts to contract manufacturers, which the Company has an obligation to buy back, are included in purchased parts and raw materials, with an offsetting liability in Other current liabilities . See "Note L. Other Current Liabilities” for more information. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | NOTE E. GOODWILL AND OTHER INTANGIBLE ASSETS As of June 30, 2022 and December 31, 2021, the carrying value of the Company’s Goodwill was $ 2,076 million and $ 2,064 million, respectively. The following presents a summary of other intangible assets (dollars in millions): June 30, 2022 December 31, 2021 Intangible Accumulated Intangible Intangible Accumulated Intangible Other intangible assets: Trade name $ 791 $ — $ 791 $ 791 $ — $ 791 In-process research and development 25 — 25 25 — 25 Customer relationships — commercial 839 ( 772 ) 67 839 ( 751 ) 88 Proprietary technology 484 ( 477 ) 7 478 ( 477 ) 1 Customer relationships — defense 62 ( 52 ) 10 62 ( 50 ) 12 Non-compete agreements 1 — 1 — — — Total $ 2,202 $ ( 1,301 ) $ 901 $ 2,195 $ ( 1,278 ) $ 917 As of June 30, 2022 and December 31, 2021, the carrying value of the Company’s Goodwill and Intangible assets, net was $ 2,977 million and $ 2,981 million, respectively. Amortization expense related to other intangible assets for the next five fiscal years is expected to be (dollars in millions): 2023 2024 2025 2026 2027 Amortization expense $ 45 $ 9 $ 5 $ 2 $ 1 The following presents a summary of the changes in the goodwill of the Company's single operating and reporting segment (dollars in millions): Goodwill Balance at December 31, 2021 $ 2,064 Acquisitions 13 Foreign currency translation ( 1 ) Net current period impact to goodwill $ 12 Balance at June 30, 2022 $ 2,076 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | NOTE F. FAIR VALUE OF FINANCIAL INSTRUMENTS In accordance with the FASB’s authoritative accounting guidance on fair value measurements, fair value is the price (exit price) that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company primarily applies the market approach for recurring fair value measurements and utilizes the best available information that maximizes the use of observable inputs and minimizes the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The accounting guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the relevant guidance are as follows: Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and publicly traded bonds. Level 2 — Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes financial instruments that are valued using quoted prices in markets that are not active and those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3 — Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. At each balance sheet date, the Company performs an analysis of all instruments subject to authoritative accounting guidance and includes, in Level 3, all of those whose fair value is based on significant unobservable inputs. As of June 30, 2022 and December 31, 2021, the Company did no t have any Level 3 financial assets or liabilities. The Company’s assets and liabilities that are measured at fair value include marketable securities, cash equivalents, derivative instruments, assets held in a rabbi trust and a deferred compensation obligation. The Company's marketable securities consist of publicly traded stock of Jing-Jin Electric Technologies Co. Ltd., which has a readily determinable fair value. The Company's cash equivalents consist of short-term U.S government backed securities. The Company’s derivative instruments consist of interest rate swaps. The Company’s assets held in the rabbi trust consist principally of publicly available mutual funds and target date retirement funds. The Company’s deferred compensation obligation is directly related to the fair value of assets held in the rabbi trust. The Company’s valuation techniques used to calculate the fair value of cash equivalents, assets held in the rabbi trust and the deferred compensation obligation represent a market approach in active markets for identical assets that qualify as Level 1 in the fair value hierarchy. The Company’s valuation techniques used to calculate the fair value of derivative instruments represent a market approach with observable inputs that qualify as Level 2 in the fair value hierarchy. The Company uses valuations from the issuing financial institutions for the fair value measurement of interest rate swaps. The floating-to-fixed interest rate swaps are based on the London Interbank Offered Rate (“LIBOR”), which is observable at commonly quoted intervals. The fair values are included in other current and non-current assets and liabilities in the Condensed Consolidated Balance Sheets. See "Note H. Derivatives” for more information regarding the Company's interest rate swaps. The following table summarizes the fair value of the Company’s financial assets and (liabilities) as of June 30, 2022 and December 31, 2021 (dollars in millions): Fair Value Measurements Using Quoted Prices in Active Significant Other TOTAL June 30, December 31, June 30, December 31, June 30, December 31, Marketable securities $ 33 $ 46 $ — $ — $ 33 $ 46 Cash equivalents 20 — — — 20 — Rabbi trust assets 16 19 — — 16 19 Deferred compensation obligation ( 16 ) ( 19 ) — — ( 16 ) ( 19 ) Derivative assets (liabilities), net — — 2 ( 31 ) 2 ( 31 ) Total $ 53 $ 46 $ 2 $ ( 31 ) $ 55 $ 15 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | NOTE G. DEBT Long-term debt and maturities are as follows (dollars in millions): June 30, December 31, Long-term debt: Senior Secured Credit Facility Term Loan, variable, due 2026 $ 628 $ 631 Senior Notes, fixed 4.75 %, due 2027 400 400 Senior Notes, fixed 5.875 %, due 2029 500 500 Senior Notes, fixed 3.75 %, due 2031 1,000 1,000 Total long-term debt $ 2,528 $ 2,531 Less: current maturities of long-term debt 6 6 deferred financing costs, net 20 21 Total long-term debt, net $ 2,502 $ 2,504 As of June 30, 2022, the Company had $ 2,528 million of indebtednes s associated with Allison Transmission, Inc.’s (“ATI”), the Company’s wholly-owned subsidiary, 4.75 % Senior Notes due October 2027 (“ 4.75 % Senior Notes”), ATI’s 5.875 % Senior Notes due June 2029 (“ 5.875 % Senior Notes”), ATI’s 3.75 % Senior Notes due January 2031 (“ 3.75 % Senior Notes” and, together with the 4.75 % Senior Notes and 5.875 % Senior Notes, the “Senior Notes”) and the Second Amended and Restated Credit Agreement dated as of March 29, 2019, as amended (the “Credit Agreement”), governing ATI’s term loan facility in the amount of $ 628 million due March 2026 (“Term Loan”) and ATI’s revolving credit facility with commitments in the amount of $ 650 million due September 2025 (“Revolving Credit Facility” and, together with the Term Loan, the “Senior Secured Credit Facility”). The fair value of the Company’s long-term debt obligations as of June 30, 2022 was $ 2,281 million. The fair value is based on quoted Level 2 market prices of the Company’s debt as of June 30, 2022. The difference between the fair value and carrying value of the long-term debt is driven primarily by trends in the financial markets. Senior Secured Credit Facility The borrowings under the Senior Secured Credit Facility are collateralized by a lien on substantially all assets of the Company, ATI and each of the existing and future U.S. subsidiary guarantors, with certain exceptions set forth in the Credit Agreement, and ATI’s capital stock and all of the capital stock or other equity interests held by the Company, ATI and each of ATI’s existing and future U.S. subsidiary guarantors (subject to certain limitations for equity interest of foreign subsidiaries and other exceptions set forth in the Credit Agreement). Interest on the Term Loan, as of June 30, 2022 , is either (a) 1.75 % over a LIBOR rate on deposits in U.S. dollars for one-, two-, three- or six-month periods (or twelve-month or shorter periods if, at the time of the borrowing, available from all relevant lenders) (the "LIBOR Rate"), or (b) 0.75 % over the greater of the prime lending rate as quoted by the administrative agent, the LIBOR Rate for an interest period of one month plus 1.00 % and the federal funds effective rate published by the Federal Reserve Bank of New York plus 0.50 %, subject to a 1.00 % floor (the "Base Rate"). As of June 30, 2022, the Company elected to pay the lowest all-in rate of LIBOR plus the applicable margin, or 3.39 % , on the Term Loan. The Credit Agreement requires minimum quarterly principal payments on the Term Loan, as well as prepayments from certain net cash proceeds of non-ordinary course asset sales and casualty and condemnation events, the incurrence of certain debt and from a percentage of excess cash flow, if applicable. The minimum required quarterly principal payment on the Term Loan through its maturity date of March 2026 is $ 2 million. As of June 30, 2022, there had been no payments required for certain net cash proceeds of non-ordinary course asset sales and casualty and condemnation events. The remaining principal balance is due upon maturity. The Senior Secured Credit Facility also provides a Revolving Credit Facility, net of an allowance for up to $ 75 million in outstanding letters of credit commitments. Throughout the six months ended June 30, 2022, the Company made periodic withdrawals and payments on the Revolving Credit Facility as part of the Company's cash management plans. The maximum amount outstanding at any time during the six months ended June 30, 2022 was $ 75 million. As of June 30, 2022, the Company had $ 645 million available under the Revolving Credit Facility, net of $ 5 million in letters of credit. Borrowings un der the Revolving Credit Facility bear interest at a variable base rate plus an applicable margin based on the Company’s first lien net leverage ratio. When the Company’s first lien net leverage ratio is above 4.00 x, interest on the Revolving Credit Facility is (a) 0.75 % over the Base Rate or (b) 1.75 % over the LIBOR Rate; when the Company’s first lien net leverage ratio is equal to or less than 4.00 x and above 3.50 x, interest on the Revolving Credit Facility is (i) 0.50 % over the Base Rate or (ii) 1.50 % over the LIBOR Rate; and when the Company’s first lien net leverage ratio is equal to or below 3.50 x, interest on the Revolving Credit Facility is (y) 0.25 % over the Base Rate or (z) 1.25 % over the LIBOR Rate. As of June 30, 2022, the applicable margin for the Revolving Credit Facility was 1.25 %. In addition, there is an annual commitment fee, based on the Company’s first lien net leverage ratio, on the average unused revolving credit borrowings available under the Revolving Credit Facility. As of June 30, 2022, the commitment fee is 0.25 %. Borrowings under the Revolving Credit Facility are payable at the option of the Company throughout the term of the Senior Secured Credit Facility with the balance due in September 2025. The Senior Secured Credit Facility requires the Company to maintain a specified maximum first lien net leverage ratio of 5.50 x when revolving loan commitments remain outstanding on the Revolving Credit Facility at the end of a fiscal quarter. As of June 30, 2022, the Company had no amounts outstanding under the Revolving Credit Facility; however, the Company would have been in compliance with the maximum first lien net leverage ratio, achieving a 0.58 x ratio. Additionally, within the terms of the Senior Secured Credit Facility, a first lien net leverage ratio at or below 4.00 x results in the elimination of excess cash flow payments on the Senior Secured Credit Facility for the applicable year. In addition, the Credit Agreement, among other things, includes customary restrictions (subject to certain exceptions) on the Company’s ability to incur certain indebtedness, grant certain liens, make certain investments, engage in acquisitions, consolidations and mergers, declare or pay certain dividends or repurchase shares of the Company’s common stock. As of June 30, 2022, the Company was in compliance with all covenants under the Credit Agreement. Senior Notes Each series of the Senior Notes are unsecured and are guaranteed by each of ATI’s domestic subsidiaries that is a borrower under or guarantees the Senior Secured Credit Facility and are unconditionally guaranteed, jointly and severally, by any of ATI’s future domestic subsidiaries that are borrowers under or guarantee the Senior Secured Credit Facility. None of ATI’s domestic subsidiaries currently guarantee its obligations under the Senior Secured Credit Facility, and therefore none of ATI’s domestic subsidiaries currently guarantee any series of the Senior Notes. The indentures governing the Senior Notes contain negative covenants restricting or limiting the Company’s ability to, among other things: incur or guarantee additional indebtedness, incur liens, pay dividends on, redeem or repurchase the Company’s capital stock, make certain investments, permit payment or dividend restrictions on certain of the Company’s subsidiaries, sell assets, engage in certain transactions with affiliates, and consolidate or merge or sell all or substantially all of the Company’s assets. As of June 30, 2022 , the Company was in compliance with all covenants under the indentures governing the Senior Notes. |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE H. DERIVATIVES The Company is subject to interest rate risk related to the Senior Secured Credit Facility and enters into interest rate swaps that are based on LIBOR to manage a portion of this exposure. The interest rate swaps are designated as cash flow hedges that qualify for hedge accounting under the hypothetical derivative method. Fair value adjustments are recorded as a component of Accumulated other comprehensive loss, net of tax (“AOCL”) in the Condensed Consolidated Balance Sheets. Balances in AOCL are reclassified to earnings when transactions related to the underlying risk are settled. As of June 30, 2022 , the Company held interest rate swaps effective from September 2019 to September 2025 with notional values totaling $ 250 million and a weighted average LIBOR fixed rate of 3.04 %, interest rate swaps effective from September 2019 to September 2022 with notional values totaling $ 250 million and a weighted average LIBOR fixed rate of 3.01 % and interest rate swaps effective from September 2022 to September 2025 with notional values totaling $ 250 million and a weighted average LIBOR fixed rate of 2.82 %. See "Note F. Fair Value of Financial Instruments” for information regarding the fair value of the Company’s interest rate swaps. The following tabular disclosures further describe the Company’s interest rate derivatives qualifying and designated for hedge accounting and their impact on the financial condition of the Company (dollars in millions): Fair Value Balance Sheet Location June 30, December 31, Derivative Assets: Interest rate swaps Other current assets $ 1 $ — Other non-current assets 2 — Total derivative assets $ 3 $ — Derivative Liabilities: Interest rate swaps Other current liabilities $ 1 $ 10 Other non-current liabilities — 21 Total derivative liabilities $ 1 $ 31 The balance of net derivative gains and (losses) recorded in AOCL as of June 30, 2022 and December 31, 2021 was $ 2 million and ($ 31 ) million, respectively. See "Note O. Accumulated Other Comprehensive Loss” for information regarding activity recorded as a component of AOCL during the three and six months ended June 30, 2022 and 2021. As of June 30, 2022, the Company had $ 2 million of de rivative losses recorded in AOCL expected to be reclassified to earnings within the next twelve months. |
Product Warranty Liabilities
Product Warranty Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Guarantees And Product Warranties [Abstract] | |
Product Warranty Liabilities | NOTE I. PRODUCT WARRANTY LIABILITIES As of June 30, 2022, current and non-current product warranty liabilities were $ 28 million and $ 25 million, respectively. As of June 30, 2021, current and non-current product warranty liabilities were $ 29 million and $ 31 million, respectively. Product warranty liability activities consist of the following (dollars in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Beginning balance $ 53 $ 62 $ 53 $ 66 Payments ( 8 ) ( 8 ) ( 15 ) ( 16 ) Increase in liability (warranty issued during period) 5 4 9 8 Net adjustments to liability 3 2 6 2 Ending balance $ 53 $ 60 $ 53 $ 60 |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition And Deferred Revenue [Abstract] | |
Deferred Revenue | NOTE C. REVENUE Revenue is recognized as each distinct performance obligation within a contract is satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company enters into long-term agreements (“LTAs”) and distributor agreements with certain customers. The LTAs and distributor agreements do not include committed volumes until underlying purchase orders are issued; therefore, the Company determined that purchase orders are the contract with a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when the performance obligation is satisfied, as there is no right of return. Some of the Company's contracts include multiple performance obligations, most commonly the sale of both a transmission and extended transmission coverage ("ETC"). The Company allocates the contract’s transaction price to each performance obligation based on the standalone selling price of each distinct good or service in the contract. The Company may also use volume-based discounts and rebates as marketing incentives in the sales of both vehicle propulsion solutions and service parts, which are accounted for as variable consideration. The Company records the impact of the incentives as a reduction to revenue when it is determined that the adjustment is not likely to reverse, historically on a quarterly basis. The Company estimates the impact of all other incentives based on the related sales and market conditions in the end market vocation. The Company recorded no material adjustments based on variable consideration for any of the three or six months ended June 30, 2022 or 2021. Net sales are made on credit terms, generally 30 days , based on an assessment of the customer’s creditworthiness. For certain goods or services, the Company receives consideration prior to satisfying the related performance obligation. Such consideration is recorded as a contract liability in current and non-current deferred revenue as of June 30, 2022 and December 31, 2021. See "Note J. Deferred Revenue” for more information, including the amount of revenue earned during each of the three and six months ended June 30, 2022 and 2021 that had been previously deferred. The Company had no material contract assets as of either June 30, 2022 or December 31, 2021. The Company has one operating segment and reportable segment. The Company is in one line of business, which is the manufacture and distribution of vehicle propulsion solutions. The following presents disaggregated revenue by categories that best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors (dollars in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 North America On-Highway $ 340 $ 302 $ 686 $ 621 North America Off-Highway 20 9 38 11 Defense 29 48 64 93 Outside North America On-Highway 105 98 214 182 Outside North America Off-Highway 32 18 62 34 Service Parts, Support Equipment and Other 138 128 277 250 Total Net Sales $ 664 $ 603 $ 1,341 $ 1,191 NOTE J. DEFERRED REVENUE As of June 30, 2022, current and non-current deferred revenue was $ 39 million and $ 96 million, respectively. As of June 30, 2021, current and non-current deferred revenue was $ 39 million and $ 103 million, respectively. Deferred revenue activity consists of the following (dollars in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Beginning balance $ 132 $ 142 $ 136 $ 143 Increases 13 9 20 16 Revenue earned ( 10 ) ( 9 ) ( 21 ) ( 17 ) Ending balance $ 135 $ 142 $ 135 $ 142 Deferred revenue recorded in current and non-current liabilities related to ETC as of June 30, 2022 was $ 30 million and $ 85 million, respectively. Deferred revenue recorded in current and non-current liabilities related to ETC as of June 30, 2021 was $ 30 million and $ 87 million, respectively |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | NOTE K. LEASES Contracts are assessed by the Company to determine if the contract conveys the right to control an identified asset in exchange for consideration during a period of time. The Company classifies all identified leases as either operating or finance leases. As of June 30, 2022, the Company was not a par ty to any finance leases. Contracts that contain leases are assessed to determine if the consideration in the contract is related to a lease component, non-lease component or other components not related to the lease. Lease components are recorded as right-of-use (“ROU”) assets and lease liabilities while any non-lease component is expensed as incurred. The consideration in the contract related to other components not related to the lease is allocated among the lease component and the non-lease component, as applicable, based on the stand-alone selling price of the lease and non-lease components. Certain lease contracts may contain an option to extend or terminate the lease. The Company considers the economic impact of extension and termination options by contract. If the Company concludes it is reasonably certain an option will be exercised, that option is included in the lease term and impacts the amount recorded as an ROU asset and lease liability at inception of the contract. The Company's lease liability is determined by discounting the future cash flows over the lease period. The Company determines its discount rates utilizing current secured financing rates based on the length of the lease period plus the Company's margin over LIBOR on the Term Loan. The Company believes this rate effectively represents a borrowing rate the Company could obtain on a debt instrument possessing similar terms as the lease. Lease liabilities are classified between current and non-current liabilities based on the terms of the underlying leases. The weighted average discount rate on operating leases as of June 30, 2022 and December 31, 2021 was 4.26 % and 4.25 %, respectively. As of June 30, 2022 , the Company recorded current and non-current operating lease liabilities of $ 4 million and $ 11 million, respectively. As of December 31, 2021 , the Company recorded current and non-current operating lease liabilities of $ 4 million and $ 13 million, respectively. The following table reconciles future undiscounted cash flows for operating leases as of June 30, 2022 to total operating lease liabilities: June 30, 2022 $ 2 2023 4 2024 2 2025 2 2026 1 Thereafter 6 Total lease payments $ 17 Less: Interest 2 Present value of lease liabilities $ 15 ROU assets are calculated as the related lease liability adjusted for lease incentives, prepayments and the effect of escalating lease payments on period expense. The below table depicts the ROU assets held by the Company based on the underlying asset: June 30, December 31, Buildings $ 14 $ 16 Land 1 1 Vehicles 1 1 Total ROU assets $ 16 $ 18 The weighted average remaining lease term as of June 30, 2022 and June 30, 2021 was 6.8 years and 7.1 years , respectively. Operating lease expense was $ 2 million for each of the three months ended June 30, 2022 and 2021 and $ 3 million for each of the six months ended June 30, 2022 and 2021, and was recorded within Selling, general and administrative expense and Engineering - research and development on the Company's Condensed Consolidated Statements of Comprehensive Income. There was no material short-term operating lease expense for any of the three or six months ended June 30, 2022 or 2021. The calculation of the Company's ROU assets and lease liabilities did not include cash consideration as of either June 30, 2022 or December 31, 2021. During the six months ended June 30, 2022 and 2021 , the Company recorded zero and $ 1 million, respectively, of new ROU assets obtained in exchange for lease obligations. |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | NOTE L. OTHER CURRENT LIABILITIES Other current liabilities consist of the following (dollars in millions): June 30, December 31, Payroll and related costs $ 48 $ 80 Sales allowances 33 39 Accrued interest payable 24 24 Taxes payable 17 14 Vendor buyback obligation 15 16 OPEB liability 4 4 Lease liability 4 4 Derivative liabilities 1 10 Other accruals 14 13 Total $ 160 $ 204 |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE M. EMPLOYEE BENEFIT PLANS Components of net periodic benefit cost (credit) consist of the following (dollars in millions): Pension Plans Post-retirement Benefits For the Three Months For the Three Months 2022 2021 2022 2021 Net periodic benefit cost (credit): Service cost $ 2 $ 2 $ 1 $ 1 Interest cost 2 2 — 1 Expected return on assets ( 2 ) ( 2 ) — — Prior service credit — — ( 2 ) ( 3 ) Net periodic benefit cost (credit) $ 2 $ 2 $ ( 1 ) $ ( 1 ) Pension Plans Post-retirement Benefits For the Six Months For the Six Months 2022 2021 2022 2021 Net periodic benefit cost (credit): Service cost $ 4 $ 5 $ 1 $ 1 Interest cost 3 3 1 1 Expected return on assets ( 4 ) ( 4 ) — — Prior service credit — — ( 5 ) ( 5 ) Net periodic benefit cost (credit) $ 3 $ 4 $ ( 3 ) $ ( 3 ) The components of net periodic benefit cost (credit) other than the service cost component are included in Other (expense) income, net in the Condensed Consolidated Statements of Comprehensive Income. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE N. INCOME TAXES For the three and six months ended June 30, 2022, the Company recorded total income tax expense of $ 32 million and $ 66 million, respectively. The effective tax rate for each of the three and six months ended June 30, 2022 was 21 %. For the three and six months ended June 30, 2021, the Company recorded total income tax expense of $ 30 million and $ 64 million, respectively. The effective tax rate for the three and six months ended June 30, 2021 was 21 % and 22 %, respectively. The need to establish a valuation allowance against the deferred tax assets is assessed periodically based on a more-likely-than-not realization threshold, in accordance with authoritative accounting guidance. Appropriate consideration is given to all positive and negative evidence related to that realization. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry-forward periods, experience with tax attributes expiring unused, and tax planning alternatives. The weight given to these considerations depends upon the degree to which they can be objectively verified. The Company continues to provide for a valuation allowance on certain of its foreign deferred tax assets and an anticipated capital loss carryforward. The Company has determined, based on the evaluation of both objective and subjective evidence available, that this valuation allowance is necessary and that it is more likely than not that the deferred tax assets are not fully realizable. In accordance with the FASB’s authoritative guidance on accounting for income taxes, the Company has recorded a liability for unrecognized tax benefits related to a 2010 Research and Development Credit as of June 30, 2022 and December 31, 2021 . The accounting guidance prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company's returns will remain subject to examination by various taxing authorities for the duration of the applicable statute of limitations (generally three years from the later of the date of filing or the due date of the return). |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | NOTE O. ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables reconcile changes in AOCL by component (net of tax, dollars in millions): Three months ended Pension Interest Foreign Total AOCL as of March 31, 2021 $ ( 21 ) $ ( 35 ) $ ( 30 ) $ ( 86 ) Other comprehensive (loss) income before reclassifications — ( 2 ) 4 2 Amounts reclassified from AOCL ( 3 ) 3 — — Income tax benefit 1 — — 1 Net current period other comprehensive (loss) income $ ( 2 ) $ 1 $ 4 $ 3 AOCL as of June 30, 2021 $ ( 23 ) $ ( 34 ) $ ( 26 ) $ ( 83 ) AOCL as of March 31, 2022 $ ( 19 ) $ ( 5 ) $ ( 32 ) $ ( 56 ) Other comprehensive income (loss) before reclassifications — 5 ( 8 ) ( 3 ) Amounts reclassified from AOCL ( 2 ) 3 — 1 Income tax expense — ( 2 ) — ( 2 ) Net current period other comprehensive (loss) income $ ( 2 ) $ 6 $ ( 8 ) $ ( 4 ) AOCL as of June 30, 2022 $ ( 21 ) $ 1 $ ( 40 ) $ ( 60 ) Six months ended Pension Interest Foreign Total AOCL as of December 31, 2020 $ ( 19 ) $ ( 46 ) $ ( 24 ) $ ( 89 ) Other comprehensive income (loss) before reclassifications — 8 ( 2 ) 6 Amounts reclassified from AOCL ( 5 ) 7 — 2 Income tax benefit (expense) 1 ( 3 ) — ( 2 ) Net current period other comprehensive (loss) income $ ( 4 ) $ 12 $ ( 2 ) $ 6 AOCL as of June 30, 2021 $ ( 23 ) $ ( 34 ) $ ( 26 ) $ ( 83 ) AOCL as of December 31, 2021 $ ( 17 ) $ ( 24 ) $ ( 32 ) $ ( 73 ) Other comprehensive income (loss) before reclassifications — 27 ( 8 ) 19 Amounts reclassified from AOCL ( 5 ) 6 — 1 Income tax benefit (expense) 1 ( 8 ) — ( 7 ) Net current period other comprehensive (loss) income $ ( 4 ) $ 25 $ ( 8 ) $ 13 AOCL as of June 30, 2022 $ ( 21 ) $ 1 $ ( 40 ) $ ( 60 ) Amounts reclassified from AOCL AOCL Components Three months ended Three months ended Affected line item in the Condensed Interest rate swaps $ ( 3 ) $ ( 3 ) Interest expense, net Prior service cost 2 3 Other (expense) income, net Total reclassifications, before tax $ ( 1 ) $ — Income before income taxes Total reclassifications, net of tax $ ( 1 ) $ — Amounts reclassified from AOCL AOCL Components Six months ended Six months ended Affected line item in the Condensed Interest rate swaps $ ( 6 ) $ ( 7 ) Interest expense, net Prior service cost 5 5 Other (expense) income, net Total reclassifications, before tax $ ( 1 ) $ ( 2 ) Income before income taxes Total reclassifications, net of tax $ ( 1 ) $ ( 2 ) Prior service cost and actuarial loss are included in the computation of the Company’s net periodic benefit cost (credit). See "Note M. Employee Benefit Plans” for additional details. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE P. COMMITMENTS AND CONTINGENCIES Environmental Matters The Company has an agreement with the Environmental Protection Agency to perform remedial activities at the Company’s Indianapolis, Indiana manufacturing facilities related to historical soil and groundwater contamination. As of June 30, 2022, the Company had a liability recorded in the amount of $ 3 million. Claims, Disputes, and Litigation The Company is party to various legal actions and administrative proceedings and subject to various claims arising in the ordinary course of business. These proceedings primarily involve commercial claims, product liability claims, personal injury claims and workers’ compensation claims. The Company believes that the ultimate liability, if any, in excess of amounts already provided for in the condensed consolidated financial statements or covered by insurance on the disposition of these matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE Q. EARNINGS PER SHARE The Company presents both basic and diluted earnings per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted EPS is calculated by dividing net income by the weighted average number of common shares and common equivalent shares outstanding during the reporting period that are calculated using the treasury stock method for stock-based awards. The treasury stock method assumes that the Company uses the proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future and compensation cost for future service that the Company has not yet recognized. For the three and six months ended June 30, 2022, there were 2 million and 1 million, respectively, outstanding stock options excluded from the diluted EPS calculation because they were anti-dilutive. For each of the three and six months ended June 30, 2021, there were 1 million outstanding stock options excluded from the diluted EPS calculation because they were anti-dilutive. The following table reconciles the numerators and denominators used to calculate basic EPS and diluted EPS (in millions, except per share data): Three Months Ended Six Months Ended 2022 2021 2022 2021 Net income $ 122 $ 110 $ 251 $ 230 Weighted average shares of common stock outstanding 97 109 97 110 Dilutive effect of stock-based awards — — 1 1 Diluted weighted average shares of common stock outstanding 97 109 98 111 Basic earnings per share attributable to common stockholders $ 1.26 $ 1.01 $ 2.59 $ 2.09 Diluted earnings per share attributable to common stockholders $ 1.26 $ 1.01 $ 2.56 $ 2.07 |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Common Stock | NOTE R. COMMON STOCK The Company's current stock repurchase program (the "Repurchase Program") was authorized by the Board of Directors in 2016. On February 24, 2022, the Board of Directors authorized the Company to repurchase an additional $ 1,000 million of its common stock, bringing the total amount authorized under the Repurchase Program to $ 4,000 million. During the three and six months ended June 30, 2022, the Company repurchased $ 34 million and $ 115 million, respectively, of its common stock under the Repurchase Program, leaving $ 1,199 million of authorized repurchases remaining under the Repurchase Program as of June 30, 2022 . The Repurchase Program has no termination date, and the timing and amount of stock purchases are subject to market conditions and corporate needs. The Repurchase Program may be modified, suspended or discontinued at any time at the Company’s discretion. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE S. ACQUISITIONS On March 31, 2 022 , the Company acquired transmission portfolio assets of India-based AVTEC Ltd's off-highway business and AVTEC's Madras Export Procession Zone off-highway component machining business ("AVTEC"), for $ 23 m illion in cash. The Company accounted for this transaction under the acquisition method in accordance with authoritative guidance on business combinations. Control was obtained as of the purchase date through the purchase agreement. The acquired business was integrated into the Company's single operating segment. The purchase price allocation for this transaction resulted in the recognition of goodwill, intangible assets and property, plant and equipment of $ 13 million, $ 8 million a nd $ 2 million, respectively. The Company has completed its i nitial accounting for the fair value of the acquired assets and liabilities, and any adjustments identified in the measurement period, which will not exceed one year from the acquisition date, will be accounted for prospectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The information herein reflects all normal recurring material adjustments, which are, in the opinion of management, necessary for the fair statement of the results for the periods presented. The condensed consolidated financial statements herein consist of all wholly-owned domestic and foreign subsidiaries with all significant intercompany transactions eliminated. These condensed consolidated financial statements present the financial position, results of comprehensive income, cash flows and statements of stockholders’ equity of the Company. The condensed consolidated financial statements sho uld be read in conjunction with the audited consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on February 17, 2022. The interim period financial results for the three- and six- month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Estimates include, but are not limited to, sales allowances, government price adjustments, fair market values and future cash flows associated with goodwill, indefinite life intangibles, definite life intangibles, long-lived asset impairment tests, useful lives for depreciation and amortization, warranty liabilities, core deposit liabilities, environmental liabilities, determination of discount rate and other assumptions for pension and other post-retirement benefit ("OPEB") expense, determination of discount rate and period for leases, income taxes and deferred tax valuation allowances, derivative valuation, assumptions for business combinations and contingencies. The Company’s accounting policies involve the application of judgments and assumptions made by management that include inherent risks and uncertainties. Due to the uncertainty surrounding global economic conditions, including as a result of the ongoing COVID-19 pandemic and the war in Ukraine, and the related impact on our supply chain, demand for our products, foreign exchange rates and the cost and availability of raw materials, labor, and transport, actual results could differ materially from these estimates and assum ptions used in preparation of the financial statements including, but not limited to, future cash flows associated with goodwill, indefinite life intangibles, definite life intangibles, long-lived impairment tests, determination of discount rate and other assumptions for pension and OPEB expense and income taxes. Changes in estimates are recorded in results of operations in the period that the events or circumstances giving rise to such changes occur. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In October 2021, the Financial Accounting Standards Board ("FASB") issued authoritative accounting guidance that requires contract assets and contract liabilities acquired in a business combination to be recognized as if the acquirer originated the contracts. The guidance will be effective for the Company in fiscal year 2023, and the Company does not plan to early adopt. The guidance will be applied prospectively to acquisitions occurring on or after the effective date. In June 2022, the FASB issued authoritative accounting guidance requires that investments in equity securities which are measured at fair value and are subject to contractual sale restrictions should not reflect the contractual sale restriction in its fair value measurement. The guidance will be effective for the Company in fiscal year 2024, and the Company does not plan to early adopt. Management does not expect the adoption of this guidance to have an impact on the Company's consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Disaggregated Revenue by Categories | The following presents disaggregated revenue by categories that best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors (dollars in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 North America On-Highway $ 340 $ 302 $ 686 $ 621 North America Off-Highway 20 9 38 11 Defense 29 48 64 93 Outside North America On-Highway 105 98 214 182 Outside North America Off-Highway 32 18 62 34 Service Parts, Support Equipment and Other 138 128 277 250 Total Net Sales $ 664 $ 603 $ 1,341 $ 1,191 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories | Inventories consisted of the following components (dollars in millions): June 30, December 31, Purchased parts and raw materials $ 108 $ 101 Work in progress 12 8 Service parts 45 44 Finished goods 63 51 Total inventories $ 228 $ 204 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | The following presents a summary of other intangible assets (dollars in millions): June 30, 2022 December 31, 2021 Intangible Accumulated Intangible Intangible Accumulated Intangible Other intangible assets: Trade name $ 791 $ — $ 791 $ 791 $ — $ 791 In-process research and development 25 — 25 25 — 25 Customer relationships — commercial 839 ( 772 ) 67 839 ( 751 ) 88 Proprietary technology 484 ( 477 ) 7 478 ( 477 ) 1 Customer relationships — defense 62 ( 52 ) 10 62 ( 50 ) 12 Non-compete agreements 1 — 1 — — — Total $ 2,202 $ ( 1,301 ) $ 901 $ 2,195 $ ( 1,278 ) $ 917 |
Schedule of Amortization Expense Related to Other Intangible Assets for Next Five Fiscal Years | Amortization expense related to other intangible assets for the next five fiscal years is expected to be (dollars in millions): 2023 2024 2025 2026 2027 Amortization expense $ 45 $ 9 $ 5 $ 2 $ 1 |
Summary of Changes in Goodwill of Single Operating and Reporting Segment | The following presents a summary of the changes in the goodwill of the Company's single operating and reporting segment (dollars in millions): Goodwill Balance at December 31, 2021 $ 2,064 Acquisitions 13 Foreign currency translation ( 1 ) Net current period impact to goodwill $ 12 Balance at June 30, 2022 $ 2,076 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Assets and (Liabilities) | The following table summarizes the fair value of the Company’s financial assets and (liabilities) as of June 30, 2022 and December 31, 2021 (dollars in millions): Fair Value Measurements Using Quoted Prices in Active Significant Other TOTAL June 30, December 31, June 30, December 31, June 30, December 31, Marketable securities $ 33 $ 46 $ — $ — $ 33 $ 46 Cash equivalents 20 — — — 20 — Rabbi trust assets 16 19 — — 16 19 Deferred compensation obligation ( 16 ) ( 19 ) — — ( 16 ) ( 19 ) Derivative assets (liabilities), net — — 2 ( 31 ) 2 ( 31 ) Total $ 53 $ 46 $ 2 $ ( 31 ) $ 55 $ 15 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt and Maturities | Long-term debt and maturities are as follows (dollars in millions): June 30, December 31, Long-term debt: Senior Secured Credit Facility Term Loan, variable, due 2026 $ 628 $ 631 Senior Notes, fixed 4.75 %, due 2027 400 400 Senior Notes, fixed 5.875 %, due 2029 500 500 Senior Notes, fixed 3.75 %, due 2031 1,000 1,000 Total long-term debt $ 2,528 $ 2,531 Less: current maturities of long-term debt 6 6 deferred financing costs, net 20 21 Total long-term debt, net $ 2,502 $ 2,504 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and their Impact on Financial Condition | The following tabular disclosures further describe the Company’s interest rate derivatives qualifying and designated for hedge accounting and their impact on the financial condition of the Company (dollars in millions): Fair Value Balance Sheet Location June 30, December 31, Derivative Assets: Interest rate swaps Other current assets $ 1 $ — Other non-current assets 2 — Total derivative assets $ 3 $ — Derivative Liabilities: Interest rate swaps Other current liabilities $ 1 $ 10 Other non-current liabilities — 21 Total derivative liabilities $ 1 $ 31 |
Product Warranty Liabilities (T
Product Warranty Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Guarantees And Product Warranties [Abstract] | |
Product Warranty Liability Activities | Product warranty liability activities consist of the following (dollars in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Beginning balance $ 53 $ 62 $ 53 $ 66 Payments ( 8 ) ( 8 ) ( 15 ) ( 16 ) Increase in liability (warranty issued during period) 5 4 9 8 Net adjustments to liability 3 2 6 2 Ending balance $ 53 $ 60 $ 53 $ 60 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition And Deferred Revenue [Abstract] | |
Summary of Deferred Revenue Activity | Deferred revenue activity consists of the following (dollars in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Beginning balance $ 132 $ 142 $ 136 $ 143 Increases 13 9 20 16 Revenue earned ( 10 ) ( 9 ) ( 21 ) ( 17 ) Ending balance $ 135 $ 142 $ 135 $ 142 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Schedule of Lease Maturity, Current Guidance | The following table reconciles future undiscounted cash flows for operating leases as of June 30, 2022 to total operating lease liabilities: June 30, 2022 $ 2 2023 4 2024 2 2025 2 2026 1 Thereafter 6 Total lease payments $ 17 Less: Interest 2 Present value of lease liabilities $ 15 |
Schedule of Right of Use Assets | The below table depicts the ROU assets held by the Company based on the underlying asset: June 30, December 31, Buildings $ 14 $ 16 Land 1 1 Vehicles 1 1 Total ROU assets $ 16 $ 18 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Current Liabilities | Other current liabilities consist of the following (dollars in millions): June 30, December 31, Payroll and related costs $ 48 $ 80 Sales allowances 33 39 Accrued interest payable 24 24 Taxes payable 17 14 Vendor buyback obligation 15 16 OPEB liability 4 4 Lease liability 4 4 Derivative liabilities 1 10 Other accruals 14 13 Total $ 160 $ 204 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost (Credit) | Components of net periodic benefit cost (credit) consist of the following (dollars in millions): Pension Plans Post-retirement Benefits For the Three Months For the Three Months 2022 2021 2022 2021 Net periodic benefit cost (credit): Service cost $ 2 $ 2 $ 1 $ 1 Interest cost 2 2 — 1 Expected return on assets ( 2 ) ( 2 ) — — Prior service credit — — ( 2 ) ( 3 ) Net periodic benefit cost (credit) $ 2 $ 2 $ ( 1 ) $ ( 1 ) Pension Plans Post-retirement Benefits For the Six Months For the Six Months 2022 2021 2022 2021 Net periodic benefit cost (credit): Service cost $ 4 $ 5 $ 1 $ 1 Interest cost 3 3 1 1 Expected return on assets ( 4 ) ( 4 ) — — Prior service credit — — ( 5 ) ( 5 ) Net periodic benefit cost (credit) $ 3 $ 4 $ ( 3 ) $ ( 3 ) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | The following tables reconcile changes in AOCL by component (net of tax, dollars in millions): Three months ended Pension Interest Foreign Total AOCL as of March 31, 2021 $ ( 21 ) $ ( 35 ) $ ( 30 ) $ ( 86 ) Other comprehensive (loss) income before reclassifications — ( 2 ) 4 2 Amounts reclassified from AOCL ( 3 ) 3 — — Income tax benefit 1 — — 1 Net current period other comprehensive (loss) income $ ( 2 ) $ 1 $ 4 $ 3 AOCL as of June 30, 2021 $ ( 23 ) $ ( 34 ) $ ( 26 ) $ ( 83 ) AOCL as of March 31, 2022 $ ( 19 ) $ ( 5 ) $ ( 32 ) $ ( 56 ) Other comprehensive income (loss) before reclassifications — 5 ( 8 ) ( 3 ) Amounts reclassified from AOCL ( 2 ) 3 — 1 Income tax expense — ( 2 ) — ( 2 ) Net current period other comprehensive (loss) income $ ( 2 ) $ 6 $ ( 8 ) $ ( 4 ) AOCL as of June 30, 2022 $ ( 21 ) $ 1 $ ( 40 ) $ ( 60 ) Six months ended Pension Interest Foreign Total AOCL as of December 31, 2020 $ ( 19 ) $ ( 46 ) $ ( 24 ) $ ( 89 ) Other comprehensive income (loss) before reclassifications — 8 ( 2 ) 6 Amounts reclassified from AOCL ( 5 ) 7 — 2 Income tax benefit (expense) 1 ( 3 ) — ( 2 ) Net current period other comprehensive (loss) income $ ( 4 ) $ 12 $ ( 2 ) $ 6 AOCL as of June 30, 2021 $ ( 23 ) $ ( 34 ) $ ( 26 ) $ ( 83 ) AOCL as of December 31, 2021 $ ( 17 ) $ ( 24 ) $ ( 32 ) $ ( 73 ) Other comprehensive income (loss) before reclassifications — 27 ( 8 ) 19 Amounts reclassified from AOCL ( 5 ) 6 — 1 Income tax benefit (expense) 1 ( 8 ) — ( 7 ) Net current period other comprehensive (loss) income $ ( 4 ) $ 25 $ ( 8 ) $ 13 AOCL as of June 30, 2022 $ ( 21 ) $ 1 $ ( 40 ) $ ( 60 ) |
Reclassification out of Accumulated Other Comprehensive Loss | Amounts reclassified from AOCL AOCL Components Three months ended Three months ended Affected line item in the Condensed Interest rate swaps $ ( 3 ) $ ( 3 ) Interest expense, net Prior service cost 2 3 Other (expense) income, net Total reclassifications, before tax $ ( 1 ) $ — Income before income taxes Total reclassifications, net of tax $ ( 1 ) $ — Amounts reclassified from AOCL AOCL Components Six months ended Six months ended Affected line item in the Condensed Interest rate swaps $ ( 6 ) $ ( 7 ) Interest expense, net Prior service cost 5 5 Other (expense) income, net Total reclassifications, before tax $ ( 1 ) $ ( 2 ) Income before income taxes Total reclassifications, net of tax $ ( 1 ) $ ( 2 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerators and Denominators Used to Calculate Basic EPS and Diluted EPS | The following table reconciles the numerators and denominators used to calculate basic EPS and diluted EPS (in millions, except per share data): Three Months Ended Six Months Ended 2022 2021 2022 2021 Net income $ 122 $ 110 $ 251 $ 230 Weighted average shares of common stock outstanding 97 109 97 110 Dilutive effect of stock-based awards — — 1 1 Diluted weighted average shares of common stock outstanding 97 109 98 111 Basic earnings per share attributable to common stockholders $ 1.26 $ 1.01 $ 2.59 $ 2.09 Diluted earnings per share attributable to common stockholders $ 1.26 $ 1.01 $ 2.56 $ 2.07 |
Overview - Additional Informati
Overview - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2022 Customer | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |
Worldwide independent distributor and dealer locations | 1,400 |
Sales Revenue, Net | North America | Geographic Concentration Risk | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |
Concentration of risk, percentage | 76% |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) Segment | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Revenue From Contract With Customer [Abstract] | |||||
Material adjustments based on variable consideration | $ | $ 0 | $ 0 | $ 0 | $ 0 | |
Credit term period | 30 days | ||||
Contract assets | $ | $ 0 | $ 0 | $ 0 | ||
Number of operating segment | Segment | 1 | ||||
Number of reportable segment | Segment | 1 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue by Categories (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | $ 664 | $ 603 | $ 1,341 | $ 1,191 |
North America On-Highway | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | 340 | 302 | 686 | 621 |
North America Off-Highway | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | 20 | 9 | 38 | 11 |
Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | 29 | 48 | 64 | 93 |
Outside North America On-Highway | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | 105 | 98 | 214 | 182 |
Outside North America Off-Highway | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | 32 | 18 | 62 | 34 |
Service Parts, Support Equipment and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | $ 138 | $ 128 | $ 277 | $ 250 |
Inventories - Schedule of Compo
Inventories - Schedule of Components of Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Purchased parts and raw materials | $ 108 | $ 101 |
Work in progress | 12 | 8 |
Service parts | 45 | 44 |
Finished goods | 63 | 51 |
Total inventories | $ 228 | $ 204 |
Goodwill And Other Intangible_3
Goodwill And Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 2,076 | $ 2,064 |
Net carrying value of Goodwill and intangible assets | $ 2,977 | $ 2,981 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross, Total | $ 2,202 | $ 2,195 |
Accumulated amortization | (1,301) | (1,278) |
Intangible assets, net, Total | 901 | 917 |
Trade name | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Indefinite lived intangible assets | 791 | 791 |
In process research and development | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Indefinite lived intangible assets | 25 | 25 |
Customer relationships - commercial | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 839 | 839 |
Accumulated amortization | (772) | (751) |
Intangible assets, net | 67 | 88 |
Proprietary technology | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 484 | 478 |
Accumulated amortization | (477) | (477) |
Intangible assets, net | 7 | 1 |
Customer relationships - defense | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 62 | 62 |
Accumulated amortization | (52) | (50) |
Intangible assets, net | 10 | $ 12 |
Non-compete agreements | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 1 | |
Intangible assets, net | $ 1 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Amortization Expense Related to Other Intangible Assets for Next Five Fiscal Years (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2023 | $ 45 |
2024 | 9 |
2025 | 5 |
2026 | 2 |
2027 | $ 1 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill of Single Operating and Reporting Segment (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning Balance | $ 2,064 |
Acquisitions | 13 |
Foreign currency translation | (1) |
Net current period impact to goodwill | 12 |
Goodwill, Ending Balance | $ 2,076 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value measurement guidance and hierarchy levels, description | In accordance with the FASB’s authoritative accounting guidance on fair value measurements, fair value is the price (exit price) that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company primarily applies the market approach for recurring fair value measurements and utilizes the best available information that maximizes the use of observable inputs and minimizes the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The accounting guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the relevant guidance are as follows:Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and publicly traded bonds.Level 2 — Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes financial instruments that are valued using quoted prices in markets that are not active and those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.Level 3 — Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. At each balance sheet date, the Company performs an analysis of all instruments subject to authoritative accounting guidance and includes, in Level 3, all of those whose fair value is based on significant unobservable inputs. As of June 30, 2022 and December 31, 2021, the Company did not have any Level 3 financial assets or liabilities. | |
Fair Value, Inputs, Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial assets | $ 0 | $ 0 |
Financial liabilities | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Fair Value of Financial Assets and (Liabilities) (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 33 | $ 46 |
Cash equivalents | 20 | 0 |
Rabbi trust assets | 16 | 19 |
Deferred compensation obligation | (16) | (19) |
Total | 55 | 15 |
Derivatives Designated as Hedging Instruments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | 2 | (31) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 33 | 46 |
Cash equivalents | 20 | 0 |
Rabbi trust assets | 16 | 19 |
Deferred compensation obligation | (16) | (19) |
Total | 53 | 46 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivatives Designated as Hedging Instruments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Cash equivalents | 0 | 0 |
Rabbi trust assets | 0 | 0 |
Deferred compensation obligation | 0 | 0 |
Total | 2 | (31) |
Significant Other Observable Inputs (Level 2) | Derivatives Designated as Hedging Instruments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | $ 2 | $ (31) |
Debt - Summary of Long-Term Deb
Debt - Summary of Long-Term Debt and Maturities (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 2,528 | $ 2,531 |
Current portion of long-term debt | 6 | 6 |
deferred financing costs, net | 20 | 21 |
Long-term debt | 2,502 | 2,504 |
Senior Secured Credit Facility Term Loan, Variable, Due 2026 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 628 | 631 |
Senior Notes, Fixed 4.75%, Due 2027 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 400 | 400 |
Senior Notes, Fixed 5.875%, Due 2029 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 500 | 500 |
Senior Notes, Fixed 3.75%, Due 2031 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 1,000 | $ 1,000 |
Debt - Summary of Long-Term D_2
Debt - Summary of Long-Term Debt and Maturities (Parenthetical) (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Senior Secured Credit Facility Term Loan, Variable, Due 2026 | ||
Debt Instrument [Line Items] | ||
Debt instrument, due date | 2026 | 2026 |
Senior Notes, Fixed 4.75%, Due 2027 | ||
Debt Instrument [Line Items] | ||
Debt instrument, due date | 2027 | 2027 |
Debt instrument, stated interest rate | 4.75% | 4.75% |
Senior Notes, Fixed 5.875%, Due 2029 | ||
Debt Instrument [Line Items] | ||
Debt instrument, due date | 2029 | 2029 |
Debt instrument, stated interest rate | 5.875% | 5.875% |
Senior Notes, Fixed 3.75%, Due 2031 | ||
Debt Instrument [Line Items] | ||
Debt instrument, due date | 2031 | 2031 |
Debt instrument, stated interest rate | 3.75% | 3.75% |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,528 | $ 2,531 |
Fair value of long-term debt obligations | $ 2,281 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, maturity month and year | 2025-09 | |
Credit facility, commitments amount | $ 650 | |
Senior Notes, Fixed 4.75%, Due 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 400 | $ 400 |
Debt instrument, stated interest rate | 4.75% | 4.75% |
Debt instrument, maturity month and year | 2027-10 | |
Senior Notes, Fixed 5.875%, Due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 500 | $ 500 |
Debt instrument, stated interest rate | 5.875% | 5.875% |
Debt instrument, maturity month and year | 2029-06 | |
Senior Notes, Fixed 3.75%, Due 2031 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,000 | $ 1,000 |
Debt instrument, stated interest rate | 3.75% | 3.75% |
Debt instrument, maturity month and year | 2031-01 | |
Senior Secured Credit Facility Term Loan, Variable, Due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 628 | $ 631 |
Debt instrument, maturity month and year | 2026-03 |
Debt - Senior Secured Credit Fa
Debt - Senior Secured Credit Facility - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,528,000,000 | $ 2,531,000,000 |
Letter of Credit | ||
Debt Instrument [Line Items] | ||
Available revolving credit facility | 5,000,000 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility, commitments amount | $ 650,000,000 | |
Debt instrument, maturity month and year | 2025-09 | |
Available revolving credit facility | $ 645,000,000 | |
Commitment fee percentage | 0.25% | |
Amount outstanding | $ 0 | |
Achieved senior secured leverage ratio | 0.58 | |
LIBOR | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 1.25% | |
LIBOR | First Lien Net Leverage Ratio is Above 4.00x | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 1.75% | |
LIBOR | First Lien Net Leverage Ratio is Equal to or Less Than 4.00x and above 3.50x | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 1.50% | |
LIBOR | First Lien Net Leverage Ratio is Equal to or Below 3.50x | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 1.25% | |
Base Rate | First Lien Net Leverage Ratio is Above 4.00x | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 0.75% | |
Base Rate | First Lien Net Leverage Ratio is Equal to or Less Than 4.00x and above 3.50x | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 0.50% | |
Base Rate | First Lien Net Leverage Ratio is Equal to or Below 3.50x | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 0.25% | |
Minimum | First Lien Net Leverage Ratio is Above 4.00x | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Net leverage ratio | 4 | |
Maximum | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum amount outstanding during period | $ 75,000,000 | |
Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Required senior secured leverage ratio | 5.50 | |
Net leverage ratio | 4 | |
Senior Secured Credit Facility | Letter of Credit | ||
Debt Instrument [Line Items] | ||
Credit facility, commitments amount | $ 75,000,000 | |
Senior Secured Credit Facility | Minimum | First Lien Net Leverage Ratio is Equal to or Less Than 4.00x and above 3.50x | ||
Debt Instrument [Line Items] | ||
Net leverage ratio | 3.50 | |
Senior Secured Credit Facility | Maximum | First Lien Net Leverage Ratio is Equal to or Less Than 4.00x and above 3.50x | ||
Debt Instrument [Line Items] | ||
Net leverage ratio | 4 | |
Senior Secured Credit Facility | Maximum | First Lien Net Leverage Ratio is Equal to or Below 3.50x | ||
Debt Instrument [Line Items] | ||
Net leverage ratio | 3.50 | |
Term Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument effective interest rate | 3.39% | |
Debt instrument, maturity month and year | 2026-03 | |
Principal payments on term loans | $ 2,000,000 | |
Term Loan | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 0.75% | |
Term Loan | Base Rate | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 0.50% | |
Term Loan | Minimum | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 1.75% | |
Term Loan | Minimum | Base Rate | ||
Debt Instrument [Line Items] | ||
Applicable margin over base rate | 1% | |
Floor rate | 1% |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | ||
Derivative, description of terms | The Company is subject to interest rate risk related to the Senior Secured Credit Facility and enters into interest rate swaps that are based on LIBOR to manage a portion of this exposure. The interest rate swaps are designated as cash flow hedges that qualify for hedge accounting under the hypothetical derivative method. Fair value adjustments are recorded as a component of Accumulated other comprehensive loss, net of tax (“AOCL”) in the Condensed Consolidated Balance Sheets. Balances in AOCL are reclassified to earnings when transactions related to the underlying risk are settled. As of June 30, 2022, the Company held interest rate swaps effective from September 2019 to September 2025 with notional values totaling $250 million and a weighted average LIBOR fixed rate of 3.04%, interest rate swaps effective from September 2019 to September 2022 with notional values totaling $250 million and a weighted average LIBOR fixed rate of 3.01% and interest rate swaps effective from September 2022 to September 2025 with notional values totaling $250 million and a weighted average LIBOR fixed rate of 2.82%. See "Note F. Fair Value of Financial Instruments” for information regarding the fair value of the Company’s interest rate swaps. | |
Derivative losses in AOCL expected to be reclassified within next twelve months | $ 2,000,000 | |
Interest Rate Swaps A | ||
Derivative [Line Items] | ||
Notional amount | 250,000,000 | |
Interest Rate Swaps B | ||
Derivative [Line Items] | ||
Notional amount | 250,000,000 | |
Interest Rate Swap C | ||
Derivative [Line Items] | ||
Notional amount | 250,000,000 | |
Available-for-sale securities and interest rate swaps | ||
Derivative [Line Items] | ||
Accumulated other comprehensive loss, net of tax | $ 2,000,000 | $ (31,000,000) |
LIBOR | Interest Rate Swaps A | ||
Derivative [Line Items] | ||
Fixed interest rate | 3.04% | |
LIBOR | Interest Rate Swaps B | ||
Derivative [Line Items] | ||
Fixed interest rate | 3.01% | |
LIBOR | Interest Rate Swap C | ||
Derivative [Line Items] | ||
Fixed interest rate | 2.82% |
Derivatives - Derivative Instru
Derivatives - Derivative Instruments and their Impact on Financial Condition (Details) - Derivatives Designated as Hedging Instruments - Interest Rate Swaps - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Total derivative assets | $ 3 | $ 0 |
Total derivative liabilities | 1 | 31 |
Other current assets | ||
Derivative [Line Items] | ||
Interest rate swaps, assets | 1 | 0 |
Other non-current assets | ||
Derivative [Line Items] | ||
Interest rate swaps, assets | 2 | 0 |
Other current liabilities | ||
Derivative [Line Items] | ||
Interest rate swaps, liability | 1 | 10 |
Other non-current liabilities | ||
Derivative [Line Items] | ||
Interest rate swaps, liability | $ 0 | $ 21 |
Product Warranty Liabilities -
Product Warranty Liabilities - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Guarantees [Abstract] | |||
Product warranty liability, current | $ 28 | $ 33 | $ 29 |
Product warranty liability, non-current | $ 25 | $ 20 | $ 31 |
Product Warranty Liabilities _2
Product Warranty Liabilities - Product Warranty Liability Activities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Guarantees [Abstract] | ||||
Beginning balance | $ 53 | $ 62 | $ 53 | $ 66 |
Payments | (8) | (8) | (15) | (16) |
Increase in liability (warranty issued during period) | 5 | 4 | 9 | 8 |
Net adjustments to liability | 3 | 2 | 6 | 2 |
Ending balance | $ 53 | $ 60 | $ 53 | $ 60 |
Deferred Revenue - Additional I
Deferred Revenue - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Disaggregation of Revenue [Line Items] | |||
Deferred revenue current liabilities | $ 39 | $ 37 | $ 39 |
Deferred revenue non-current liabilities | 96 | $ 99 | 103 |
ETC contracts | |||
Disaggregation of Revenue [Line Items] | |||
Deferred revenue current liabilities | 30 | 30 | |
Deferred revenue non-current liabilities | $ 85 | $ 87 |
Deferred Revenue - Summary of D
Deferred Revenue - Summary of Deferred Revenue Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue Recognition And Deferred Revenue [Abstract] | ||||
Beginning balance | $ 132 | $ 142 | $ 136 | $ 143 |
Increases | 13 | 9 | 20 | 16 |
Revenue earned | (10) | (9) | (21) | (17) |
Ending balance | $ 135 | $ 142 | $ 135 | $ 142 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||||
Lessee lease description | Contracts are assessed by the Company to determine if the contract conveys the right to control an identified asset in exchange for consideration during a period of time. The Company classifies all identified leases as either operating or finance leases. As of June 30, 2022, the Company was not a party to any finance leases. Contracts that contain leases are assessed to determine if the consideration in the contract is related to a lease component, non-lease component or other components not related to the lease. Lease components are recorded as right-of-use (“ROU”) assets and lease liabilities while any non-lease component is expensed as incurred. The consideration in the contract related to other components not related to the lease is allocated among the lease component and the non-lease component, as applicable, based on the stand-alone selling price of the lease and non-lease components. | ||||
Discount rate | 4.26% | 4.26% | 4.25% | ||
Current lease liabilities | $ 4,000,000 | $ 4,000,000 | $ 4,000,000 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities | Other current liabilities | ||
Non-current lease liabilities | $ 11,000,000 | $ 11,000,000 | $ 13,000,000 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other non-current liabilities | Other non-current liabilities | Other non-current liabilities | ||
Remaining lease term | 6 years 9 months 18 days | 7 years 1 month 6 days | 6 years 9 months 18 days | 7 years 1 month 6 days | |
Operating expense | $ 2,000,000 | $ 2,000,000 | $ 3,000,000 | $ 3,000,000 | |
Material short term operating lease expense | $ 0 | $ 0 | 0 | 0 | |
New ROU assets | $ 0 | $ 1,000,000 |
Leases - Schedule of Lease Matu
Leases - Schedule of Lease Maturity, Current Guidance (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Leases [Abstract] | |
2022 | $ 2 |
2023 | 4 |
2024 | 2 |
2025 | 2 |
2026 | 1 |
Thereafter | 6 |
Total lease payments | 17 |
Less: Interest | 2 |
Present value of lease liabilities | $ 15 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilities |
Leases - Schedule of Right of U
Leases - Schedule of Right of Use Assets (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
Total ROU assets | $ 16 | $ 18 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property Plant And Equipment Net | Property Plant And Equipment Net |
Buildings | ||
Lessee, Lease, Description [Line Items] | ||
Total ROU assets | $ 14 | $ 16 |
Land | ||
Lessee, Lease, Description [Line Items] | ||
Total ROU assets | 1 | 1 |
Vehicles | ||
Lessee, Lease, Description [Line Items] | ||
Total ROU assets | $ 1 | $ 1 |
Other Current Liabilities - Sum
Other Current Liabilities - Summary of Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Payables And Accruals [Abstract] | ||
Payroll and related costs | $ 48 | $ 80 |
Sales allowances | 33 | 39 |
Accrued interest payable | 24 | 24 |
Taxes payable | 17 | 14 |
Vendor buyback obligation | 15 | 16 |
OPEB liability | 4 | 4 |
Lease liability | 4 | 4 |
Derivative liabilities | 1 | 10 |
Other accruals | 14 | 13 |
Total | $ 160 | $ 204 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Credit) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 2 | $ 2 | $ 4 | $ 5 |
Interest cost | 2 | 2 | 3 | 3 |
Expected return on assets | (2) | (2) | (4) | (4) |
Prior service credit | 0 | 0 | 0 | 0 |
Net periodic benefit cost (credit) | 2 | 2 | 3 | 4 |
Post-retirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | 1 | 1 |
Interest cost | 0 | 1 | 1 | 1 |
Expected return on assets | 0 | 0 | 0 | 0 |
Prior service credit | (2) | (3) | (5) | (5) |
Net periodic benefit cost (credit) | $ (1) | $ (1) | $ (3) | $ (3) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 32 | $ 30 | $ 66 | $ 64 |
Effective tax rate | 21% | 21% | 21% | 22% |
Valuation allowance, description | The need to establish a valuation allowance against the deferred tax assets is assessed periodically based on a more-likely-than-not realization threshold, in accordance with authoritative accounting guidance. Appropriate consideration is given to all positive and negative evidence related to that realization. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry-forward periods, experience with tax attributes expiring unused, and tax planning alternatives. The weight given to these considerations depends upon the degree to which they can be objectively verified. | |||
Income tax examination, description | In accordance with the FASB’s authoritative guidance on accounting for income taxes, the Company has recorded a liability for unrecognized tax benefits related to a 2010 Research and Development Credit as of June 30, 2022 and December 31, 2021. The accounting guidance prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company's returns will remain subject to examination by various taxing authorities for the duration of the applicable statute of limitations (generally three years from the later of the date of filing or the due date of the return). |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | $ 679 | $ 764 | $ 634 | $ 756 |
Balance | 749 | 732 | 749 | 732 |
Pension and OPEB liability adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (19) | (21) | (17) | (19) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from AOCL | (2) | (3) | (5) | (5) |
Income tax benefit (expense) | 0 | 1 | 1 | 1 |
Net current period other comprehensive (loss) income | (2) | (2) | (4) | (4) |
Balance | (21) | (23) | (21) | (23) |
Interest rate swaps | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (5) | (35) | (24) | (46) |
Other comprehensive income (loss) before reclassifications | 5 | (2) | 27 | 8 |
Amounts reclassified from AOCL | 3 | 3 | 6 | 7 |
Income tax benefit (expense) | (2) | 0 | (8) | (3) |
Net current period other comprehensive (loss) income | 6 | 1 | 25 | 12 |
Balance | 1 | (34) | 1 | (34) |
Foreign currency items | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (32) | (30) | (32) | (24) |
Other comprehensive income (loss) before reclassifications | (8) | 4 | (8) | (2) |
Amounts reclassified from AOCL | 0 | 0 | 0 | 0 |
Income tax benefit (expense) | 0 | 0 | 0 | 0 |
Net current period other comprehensive (loss) income | (8) | 4 | (8) | (2) |
Balance | (40) | (26) | (40) | (26) |
Accumulated Other Comprehensive (Loss) Income, net of tax | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (56) | (86) | (73) | (89) |
Other comprehensive income (loss) before reclassifications | (3) | 2 | 19 | 6 |
Amounts reclassified from AOCL | 1 | 0 | 1 | 2 |
Income tax benefit (expense) | (2) | 1 | (7) | (2) |
Net current period other comprehensive (loss) income | (4) | 3 | 13 | 6 |
Balance | $ (60) | $ (83) | $ (60) | $ (83) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Amounts reclassified from AOCL (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Interest expense, net | $ (30) | $ (30) | $ (59) | $ (59) |
Other (expense) income, net | (3) | 3 | (13) | 6 |
Income before income taxes | 154 | 140 | 317 | 294 |
Income tax expense | 32 | 30 | 66 | 64 |
Net income | 122 | 110 | 251 | 230 |
Reclassified from AOCL | Interest rate swaps | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Interest expense, net | (3) | (3) | (6) | (7) |
Reclassified from AOCL | Prior service cost | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other (expense) income, net | 2 | 3 | 5 | 5 |
Reclassified from AOCL | Pension and OPEB liability adjustment | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Income before income taxes | (1) | 0 | (1) | (2) |
Net income | $ (1) | $ 0 | $ (1) | $ (2) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Environmental liability | $ 3 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Shares excluded from diluted EPS calculation (in shares) | 2 | 1 | 1 | 1 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Reconciliation of Numerators and Denominators Used to Calculate Basic EPS and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 122 | $ 110 | $ 251 | $ 230 |
Weighted average shares of common stock outstanding | 97 | 109 | 97 | 110 |
Dilutive effect of stock-based awards | 0 | 0 | 1 | 1 |
Diluted weighted average shares of common stock outstanding | 97 | 109 | 98 | 111 |
Basic earnings per share attributable to common stockholders | $ 1.26 | $ 1.01 | $ 2.59 | $ 2.09 |
Diluted earnings per share attributable to common stockholders | $ 1.26 | $ 1.01 | $ 2.56 | $ 2.07 |
Common Stock - Additional Infor
Common Stock - Additional Information (Details) - Repurchase Program - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Feb. 24, 2022 | |
Common Stock Disclosure [Line Items] | |||
Stock repurchase program, increase in authorized amount | $ 1,000,000,000 | ||
Stock repurchase program, authorized amount | $ 4,000,000,000 | ||
Common stock, repurchased during the period | $ 34,000,000 | $ 115,000,000 | |
Stock repurchase program, remaining amount | $ 1,199,000,000 | $ 1,199,000,000 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Business acquisition for cash | $ 23 | ||
Goodwill | $ 2,076 | $ 2,064 | |
AVTEC | |||
Business Acquisition [Line Items] | |||
Business acquisition date | Mar. 31, 2022 | ||
Business acquisition for cash | $ 23 | ||
Goodwill | 13 | ||
Intangible assets | 8 | ||
property, plant and equipment | $ 2 |