Allison Transmission (ALSN) 10-Q26 Apr 242024 Q1 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	Apr. 12, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
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		87,478,168
Entity Central Index Key	0001411207
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 551	$ 555
Accounts receivable - net of allowance for doubtful accounts of $4	392	356
Inventories	289	276
Other current assets	68	63
Total Current Assets	1,300	1,250
Property, plant and equipment, net	762	774
Intangible assets, net	828	833
Goodwill	2,075	2,076
Marketable securities	14	20
Other non-current assets	77	72
TOTAL ASSETS	5,056	5,025
Current Liabilities
Accounts payable	244	210
Product warranty liability	30	32
Current portion of long-term debt	5	6
Deferred revenue	42	41
Other current liabilities	197	212
Total Current Liabilities	518	501
Product warranty liability	28	27
Deferred revenue	92	89
Long-term debt	2,398	2,497
Deferred income taxes	513	519
Other non-current liabilities	165	159
TOTAL LIABILITIES	3,714	3,792
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	1,911	1,891
Accumulated deficit	(533)	(628)
Accumulated other comprehensive loss, net of tax	(37)	(31)
TOTAL STOCKHOLDERS’ EQUITY	1,342	1,233
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	5,056	5,025
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	Mar. 31, 2024	Dec. 31, 2023
Allowance for doubtful accounts receivable	$ 4	$ 4
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)	87,532,553	87,648,046
Common stock, shares outstanding (in shares)	87,532,553	87,648,046
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
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net sales	$ 789	$ 741
Cost of sales	423	380
Gross profit	366	361
Selling, general and administrative	86	87
Engineering — research and development	46	44
Operating income	234	230
Interest expense, net	(25)	(28)
Other (expense) income, net	(5)	10
Income before income taxes	204	212
Income tax expense	(35)	(42)
Net income	$ 169	$ 170
Basic earnings per share attributable to common stockholders	$ 1.92	$ 1.85
Diluted earnings per share attributable to common stockholders	$ 1.9	$ 1.85
Comprehensive income, net of tax	$ 163	$ 167

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 169	$ 170
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	27	26
Unrealized loss (gain) on marketable securities	7	(3)
Stock-based compensation	6	5
Amortization of intangible assets	5	11
Deferred income taxes	(5)	(8)
Technology-related investments gain	0	(3)
Other	2	1
Changes in assets and liabilities:
Accounts receivable	(39)	(30)
Inventories	(15)	(32)
Accounts payable	28	30
Other assets and liabilities	(12)	26
Net cash provided by operating activities	173	193
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of long-lived assets	(11)	(24)
Investment in equity method investee	(1)	0
Proceeds from technology-related investments	0	2
Net cash used for investing activities	(12)	(22)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt	(101)	(1)
Repurchases of common stock	(52)	(40)
Dividend payments	(22)	(22)
Proceeds from exercise of stock options	22	9
Taxes paid related to net share settlement of equity awards	(8)	(5)
Debt financing fees	(3)	0
Net cash used for financing activities	(164)	(59)
Effect of exchange rate changes on cash	(1)	0
Net (decrease) increase in cash and cash equivalents	(4)	112
Cash and cash equivalents at beginning of period	555	232
Cash and cash equivalents at end of period	551	344
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	(29)	(29)
Income taxes paid	(4)	(2)
Interest received from interest rate swaps	3	2
Non-cash investing activities:
Capital expenditures in liabilities	$ 10	$ 6

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
Beginning Balance at Dec. 31, 2022	$ 874	$ 1	$ 1,848	$ (953)	$ (22)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	5		5
Pension and OPEB liability adjustment	(2)				(2)
Foreign currency translation adjustment	2				2
Interest rate swaps	(3)				(3)
Issuance of common stock	4		4
Repurchase of common stock	(40)			(40)
Dividends on common stock	(22)			(22)
Net Income (Loss)	170			170
Ending Balance at Mar. 31, 2023	988	1	1,857	(845)	(25)
Beginning Balance at Dec. 31, 2023	1,233	1	1,891	(628)	(31)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	6		6
Pension and OPEB liability adjustment	(2)				(2)
Foreign currency translation adjustment	(5)				(5)
Interest rate swaps	1				1
Issuance of common stock	14		14
Repurchase of common stock	(52)			(52)
Dividends on common stock	(22)			(22)
Net Income (Loss)	169			169
Ending Balance at Mar. 31, 2024	$ 1,342	$ 1	$ 1,911	$ (533)	$ (37)

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 169	$ 170

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024 shares
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	Insider Trading Arrangements The following table sets forth information related to the Company's directors and officers who adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) ("Rule 10b5-1 trading arrangement") or any “non-Rule 10b5-1 trading arrangement,” as such term is defined in Item 408(c) of Regulation S-K, during the three months ended March 31, 2024: Trading Arrangement Name Title Action Date Rule 10b5-1* Non-Rule 10b5-1** Total Shares to be Sold Expiration Date Ryan A. Milburn Vice President, Engineering & Technology Development Adopted 2/29/2024 X 5,231 3/31/2025 Rafael Basso Vice President, Operations Adopted 2/29/2024 X 12,624 5/29/2025 * Intended to satisfy the affirmative defense of Rule 10b5-1(c) ** Not intended to satisfy the affirmative defense of Rule 10b5-1(c)
Ryan A. Milburn
Trading Arrangements, by Individual
Name	Ryan A. Milburn
Title	Vice President, Engineering & Technology Development
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	2/29/2024
Aggregate Available	5,231
Expiration Date	3/31/2025
Rafael Basso
Trading Arrangements, by Individual
Name	Rafael Basso
Title	Vice President, Operations
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	2/29/2024
Aggregate Available	12,624
Expiration Date	5/29/2025

Overview

Overview	3 Months Ended
Overview	Mar. 31, 2024
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”. The Company has a global presence by serving customers in North America, Asia, Europe, South America, and Africa, with approximately 75 % of its revenues being generated in North America in 2023. The Company serves customers through an independent network of approximately 1,600 independent distributor and dealer locations worldwide.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Mar. 31, 2024
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 should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission on February 14, 2024 . The interim period financial results for the three-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 incentives, government price adjustments, fair market values and future cash flows associated with goodwill, indefinite-lived intangibles, definite-lived intangibles, long-lived asset impairment tests, useful lives for depreciation and amortization, warranty liabilities, core deposit liabilities, determination of discount rate and other assumptions for pension and other post-retirement benefit ("OPEB") expense, 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. Actual results could differ materially from these estimates and from the assumptions used in the preparation of the Company's financial statements. 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 November 2023, the Financial Accounting Standards Board ("FASB") issued authoritative accounting guidance expanding public entities’ reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses that are regularly reviewed by the Chief Operating Decision Maker and included within each reported measure of segment profit or loss. The guidance will become effective for the Company starting with its fiscal year ending December 31, 2024 and the subsequent interim periods. The guidance will be applied retrospectively, and the Company does not plan to early adopt. Management is currently evaluating the impact of this guidance on the Company's consolidated financial statements. In December 2023, the FASB issued authoritative accounting guidance to improve income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation and information on income taxes paid. The guidance will become effective for the Company beginning with its fiscal year ending December 31, 2025. The guidance will be applied prospectively with the option to apply it retrospectively. Management is currently evaluating the impact of this guidance on the Company's consolidated financial statements. All other recently issued accounting pronouncements were assessed as either not applicable to the Company or were not expected to have a material impact on the Company's condensed consolidated financial statements.

Revenue

Revenue	3 Months Ended
Revenue	Mar. 31, 2024
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. 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 during either of the three months ended March 31, 2024 or 2023. 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 March 31, 2024 and December 31, 2023. See "Note J. Deferred Revenue” for more information, including the amount of revenue earned during each of the three months ended March 31, 2024 and 2023 that had been previously deferred. The Company had no material contract assets as of either March 31, 2024 or December 31, 2023. The Company has one operati ng 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 2024 2023 North America On-Highway $ 420 $ 376 North America Off-Highway 4 24 Defense 48 27 Outside North America On-Highway 115 108 Outside North America Off-Highway 42 23 Service Parts, Support Equipment and Other 160 183 Total Net Sales $ 789 $ 741 NOTE J. DEFERRED REVENUE As of March 31, 2024, current and non-current deferred revenue were $ 42 million and $ 92 million, respectively. As of March 31, 2023, current and non-current deferred revenue were $ 45 million and $ 94 million, respectively. Deferred revenue activity consisted of the following (dollars in millions): Three Months Ended 2024 2023 Beginning balance $ 130 $ 131 Increases 13 17 Revenue earned ( 9 ) ( 9 ) Ending balance $ 134 $ 139 Deferred revenue recorded in current and non-current liabilities related to ETC as of March 31, 2024 was $ 29 million and $ 89 million, respectively. Deferred revenue recorded in current and non-current liabilities related to ETC as of March 31, 2023 was $ 30 million and $ 84 million, respectively.

Inventories

Inventories	3 Months Ended
Inventories	Mar. 31, 2024
Inventory Disclosure [Abstract]
Inventories	NOTE D. INVENTORIES Inventories consisted of the following components (dollars in millions): March 31, December 31, Purchased parts and raw materials $ 148 $ 152 Work in progress 17 17 Service parts 58 54 Finished goods 66 53 Total inventories $ 289 $ 276 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	3 Months Ended
Goodwill and Other Intangible Assets	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	NOTE E. GOODWILL AND OTHER INTANGIBLE ASSETS As of March 31, 2024 and December 31, 2023, the carrying value of the Company’s Goodwill was $ 2,075 million and $ 2,076 million, respectively. The following presents a summary of other intangible assets (dollars in millions): March 31, 2024 December 31, 2023 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 ( 837 ) 2 839 ( 833 ) 6 Proprietary technology 484 ( 479 ) 5 484 ( 479 ) 5 Customer relationships — defense 62 ( 57 ) 5 62 ( 56 ) 6 Non-compete agreement 1 ( 1 ) — 1 ( 1 ) — Total $ 2,202 $ ( 1,374 ) $ 828 $ 2,202 $ ( 1,369 ) $ 833 Amortization expense related to other intangible assets for the next five fiscal years is expected to be (dollars in millions): 2025 2026 2027 2028 2029 Amortization expense $ 7 $ 3 $ 3 $ 2 $ 2

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
Fair Value of Financial Instruments	Mar. 31, 2024
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	NOTE F. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the price (exit price) that would be received to sell an asset or paid to transfer a liability in an orderly tran saction 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 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. Level 2 — Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting 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 in which all significant value-drivers are observable in active markets or are supported by observable levels at which transactions are executed in the marketplace. Level 3 — Certain inputs are unobservable or have little or no market data available. 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 March 31, 2024 and December 31, 2023, the Company did no t have any L evel 3 financial assets or liabilities. The Company’s assets and liabilities that are measured at fair value include cash equivalents, marketable securities, derivative instruments, assets held in a rabbi trust and a deferred compensation obligation. The Company’s cash equivalents consist of short-term U.S. government backed securities and time deposits. 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 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, marketable securities, 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 Secured Overnight Financing Rate ("SOFR"), which is observable at commonly quoted intervals. The fair values are included in other current and non-current assets 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 March 31, 2024 and December 31, 2023 (dollars in millions): Fair Value Measurements Using Quoted Prices in Active Significant Other TOTAL March 31, December 31, March 31, December 31, March 31, December 31, Cash equivalents $ 370 $ 421 $ — $ — $ 370 $ 421 Marketable securities 14 20 — — 14 20 Rabbi trust assets 20 18 — — 20 18 Deferred compensation obligation ( 20 ) ( 18 ) — — ( 20 ) ( 18 ) Derivative assets — — 14 12 14 12 Total $ 384 $ 441 $ 14 $ 12 $ 398 $ 453 The Company holds equity securities in an unconsolidated entity without a readily determinable fair value. This investment represents a less than a 20% ownership interest in the privately-held affiliate, and the Company does not maintain significant influence over or control of the entity. The Company has elected the measurement alternative and measures the investment at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities. This equity investment is recorded in Other non-current assets in the Condensed Consolidated Balance Sheets, with changes in the value recorded in Other (expense) income, net in the Consolidated Statements of Comprehensive Income. As of both March 31, 2024 and December 31, 2023, the Company held equity securities without a readily determinable fair value o f $ 5 million.

Debt

Debt	3 Months Ended
Debt	Mar. 31, 2024
Debt Disclosure [Abstract]
Debt	NOTE G. DEBT Long-term debt and maturities are as follows (dollars in millions): March 31, December 31, Long-term debt: Senior Secured Credit Facility Term Loan, variable, due 2026 $ — $ 618 Senior Notes, fixed 4.75 %, due 2027 400 400 Senior Notes, fixed 5.875 %, due 2029 500 500 Senior Secured Credit Facility Term Loan, variable, due 2031 518 — Senior Notes, fixed 3.75 %, due 2031 1,000 1,000 Total long-term debt $ 2,418 $ 2,518 Less: current maturities of long-term debt 5 6 deferred financing costs, net 15 15 Total long-term debt, net $ 2,398 $ 2,497 As of March 31, 2024, the Company had $ 2,418 million of indebtedness 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 $ 518 million due March 2031 (“Term Loan”) and ATI’s revolving credit facility with commitments in the amount of $ 750 million due March 2029 (“Revolving Credit Facility” and, together with the Term Loan, the “Senior Secure d Credit Facility”). The fair value of the Company’s long-term debt obligations as of March 31, 2024 was $ 2,271 million. The fair value is based on quoted Level 2 market prices of the Company’s debt as of March 31, 2024. 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 In March 2024, the Company and ATI entered into Amendment No. 4 ("Amendment") to the Credit Agreement, after giving effect to a $ 101 million principal prepayment, to remove the 0.10 % credit spread adjustment to the SOFR benchmark for all available interest periods and increase the commitments under the existing Revolving Credit Facility by $ 100 million. The Amendment also extended the maturity of the existing Term Loan from 2026 to 2031 and extended the existing Revolving Credit Facility termination date from 2025 to 2029 . With the exception of the items noted above, the terms of the extended Term Loan and Revolving Credit Facility are materially the same as they were prior to the Amendment. The Amendment was treated as a modification to the Senior Secured Credit Facility under GAAP. The Company recorded $ 4 million as new deferred financing fees in the Condensed Consolidated Balance Sheet as of March 31, 2024 and expensed $ 1 million of prior deferred financing fees in the Condensed Consolidated Statement of Comprehensive Income during the first quarter of 2024. The borrowings under the Senior Secured Credit Facility are collateralized by a lien on substantially all assets of the Company, ATI and certain existing and future U.S. subsidiary guarantors, as provided in the Credit Agreement. Interest on the Term Loan, as of March 31, 2024 , is either (a) 1.75 % over a SOFR rate on deposits in U.S. dollars for one-, three- or six-month periods (or a twelve-month period if, at the time of the borrowing, consented to by all relevant lenders and the administrative agent) ("Term SOFR"), or (b) 0.75 % over the greater of the prime lending rate as quoted by the administrative agent, the Term SOFR 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 March 31, 2024, the Company elected to pay the lowest all-in rate of Term SOFR plus the applicable margin, or 7.07 %, 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 2031 is $ 1 million. As of March 31, 2024, 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. During the three months ended March 31, 2024 , the Company made no withdrawals on the Revolving Credit Facility. As of March 31, 2024, the Company had $ 745 million available under the Revolving Credit Facility, net of $ 5 million in letters of credit. Borrowings under 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 Term SOFR 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 Term SOFR 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 Term SOFR Rate. As of March 31, 2024, 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 March 31, 2024, the commitment fee was 0.25 %. Borrowings under the Revolving Credit Facility are payable at the option of the Company throughout the term of the Revolving Credit Facility with the balance due in March 2029. 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 March 31, 2024, 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 ( 0.03 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 March 31, 2024, the Company was in compliance with all covenants under the Credit Agreement. Senior Notes Each series of the Senior Notes is unsecured and is guaranteed by each of ATI’s domestic subsidiaries that is a borrower under or guarantees the Senior Secured Credit Facility and is 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 March 31, 2024, the Company was in compliance with all covenants under the indentures governing the Senior Notes. ATI may from time to time seek to retire its Senior Notes through cash purchases, exchanges for equity securities, open market purchases, privately negotiated transactions, contractual redemptions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors and will be in accordance with the respective indenture governing such notes. The amounts involved may be material. Some or all of the 4.75 % Senior Notes may be redeemed at any time at redemption prices specified in the indenture governing such notes. Some or all of the 5.875 % Senior Notes may be redeemed prior to June 1, 2024 by paying a price equal to 100.00 % of the principal amount being redeemed, plus an “applicable premium”. At any time on or after June 1, 2024 , ATI may redeem some or all of the 5.875 % Senior Notes at redemption prices specified in the indenture governing such notes. Prior to January 30, 2026 , ATI may redeem some or all of the 3.75 % Senior Notes by paying a price equal to 100.00 % of the principal amount being redeemed, plus an “applicable premium”. At any time on or after January 30, 2026 , ATI may redeem some or all of the 3.75 % Senior Notes at redemption prices specified in the indenture governing such notes.

Derivatives

Derivatives	3 Months Ended
Derivatives	Mar. 31, 2024
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 entered into interest rate swaps 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. During the first quarter of 2024, the Company and ATI entered into the Amendment to the Credit Agreement that changed critical terms of the hedged item. Therefore, the Company performed a quantitative assessment that demonstrated a highly effective hedging relationship that qualifies for hedge accounting under the hypothetical derivative method. As of March 31, 2024 , the Company held interest rate swap contracts that, in the aggregate, effectively hedge $ 500 million of the variable rate debt associated with the Term Loan at the Term SOFR weighted average fixed rate of 2.81 % through September 2025. 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. 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 March 31, December 31, Derivative Assets: Interest rate swaps Other current assets $ 10 $ 7 Other non-current assets 4 5 Total derivative assets $ 14 $ 12 The balance of net derivative gains recorded in AOCL as of March 31, 2024 and December 31, 2023 was $ 14 million and $ 12 million, respectively. See "Note O. Accumulated Other Comprehensive Loss” for information regarding activity recorded as a component of AOCL during the three months ended March 31, 2024 and 2023. As of March 31, 2024, the Company had $ 9 million of derivative gains recorded in AOCL expected to be reclassified to earnings within the next twelve months.

Product Warranty Liabilities

Product Warranty Liabilities	3 Months Ended
Product Warranty Liabilities	Mar. 31, 2024
Guarantees and Product Warranties [Abstract]
Product Warranty Liabilities	NOTE I. PRODUCT WARRANTY LIABILITIES As of March 31, 2024, current and non-current product warranty liabilities were $ 30 million and $ 28 million, respectively. As of March 31, 2023, current and non-current product warranty liabilities were $ 27 million and $ 32 million, respectively. Product warranty liability activities consisted of the following (dollars in millions): Three Months Ended 2024 2023 Beginning balance $ 59 $ 57 Payments ( 12 ) ( 8 ) Increase in liability (warranty issued during period) 7 6 Net adjustments to liability 4 4 Ending balance $ 58 $ 59

Deferred Revenue

Deferred Revenue	3 Months Ended
Deferred Revenue	Mar. 31, 2024
Revenue Recognition and Deferred Revenue [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. 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 during either of the three months ended March 31, 2024 or 2023. 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 March 31, 2024 and December 31, 2023. See "Note J. Deferred Revenue” for more information, including the amount of revenue earned during each of the three months ended March 31, 2024 and 2023 that had been previously deferred. The Company had no material contract assets as of either March 31, 2024 or December 31, 2023. The Company has one operati ng 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 2024 2023 North America On-Highway $ 420 $ 376 North America Off-Highway 4 24 Defense 48 27 Outside North America On-Highway 115 108 Outside North America Off-Highway 42 23 Service Parts, Support Equipment and Other 160 183 Total Net Sales $ 789 $ 741 NOTE J. DEFERRED REVENUE As of March 31, 2024, current and non-current deferred revenue were $ 42 million and $ 92 million, respectively. As of March 31, 2023, current and non-current deferred revenue were $ 45 million and $ 94 million, respectively. Deferred revenue activity consisted of the following (dollars in millions): Three Months Ended 2024 2023 Beginning balance $ 130 $ 131 Increases 13 17 Revenue earned ( 9 ) ( 9 ) Ending balance $ 134 $ 139 Deferred revenue recorded in current and non-current liabilities related to ETC as of March 31, 2024 was $ 29 million and $ 89 million, respectively. Deferred revenue recorded in current and non-current liabilities related to ETC as of March 31, 2023 was $ 30 million and $ 84 million, respectively.

Leases

Leases	3 Months Ended
Leases	Mar. 31, 2024
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 both March 31, 2024 and December 31, 2023, 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. 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 lia bility 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 Term SOFR 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 March 31, 2024 and December 31, 2023 was 4.76 % and 4.75 %, respectively. As of March 31, 2024 , the Company recorded current and non-current operating lease liabilities of $ 5 million and $ 15 million, respectively. As of December 31, 2023 , the Company recorded current and non-current operating lease liabilities of $ 4 million and $ 14 million, respectively. The following table reconciles future undiscounted cash flows for operating leases to total operating lease liabilities as of March 31, 2024 (dollars in millions): March 31, For the remainder of 2024 $ 4 2025 5 2026 3 2027 3 2028 3 Thereafter 5 Total lease payments $ 23 Less: Interest 3 Present value of operating lease liabilities $ 20 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 (dollars in millions): March 31, December 31, Buildings $ 17 $ 15 Equipment 2 2 Land 1 1 Vehicles 1 1 Total ROU assets $ 21 $ 19 The weighted average remaining lease term as of March 31, 2024 and March 31, 2023 was 5.8 years and 6.1 years , respectively. Operating lease expense was $ 2 million and $ 1 million for the three months ended March 31, 2024 and 2023 , respectively. Operating lease expense 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 either of the three months ended March 31, 2024 or 2023. During the three months ended March 31, 2024 and 2023, the Company recorded $ 3 million and $ 1 million, respectively, of new ROU assets obtained in exchange for lease obligations.

Other Current Liabilities

Other Current Liabilities	3 Months Ended
Other Current Liabilities	Mar. 31, 2024
Other Liabilities Disclosure [Abstract]
Other Current Liabilities	NOTE L. OTHER CURRENT LIABILITIES Other current liabilities consist of the following (dollars in millions): March 31, December 31, Taxes payable $ 52 $ 17 Payroll and related costs 38 89 Sales incentives 36 41 Accrued interest payable 28 24 Vendor buyback obligation 19 18 Lease liability 5 4 Other accruals 19 19 Total $ 197 $ 212

Employee Benefit Plans

Employee Benefit Plans	3 Months Ended
Employee Benefit Plans	Mar. 31, 2024
Retirement Benefits [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 2024 2023 2024 2023 Net periodic benefit cost (credit): Service cost $ 1 $ 1 $ — $ — Interest cost 2 2 1 1 Expected return on assets ( 2 ) ( 2 ) — — Prior service credit — — ( 2 ) ( 2 ) Recognized actuarial gain — — ( 1 ) ( 1 ) Net periodic benefit cost (credit) $ 1 $ 1 $ ( 2 ) $ ( 2 ) 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	3 Months Ended
Income Taxes	Mar. 31, 2024
Income Tax Disclosure [Abstract]
Income Taxes	NOTE N. INCOME TAXES For the three months ended March 31, 2024 and 2023, the Company recorded total income tax expense of $ 35 million and $ 42 million, respectively. The effective tax rate for the three months ended March 31, 2024 and 2023 was 17 % and 20 %, respectively. The decrease in the effective tax rate was principally driven by increased estimated U.S. federal income tax deductions. 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. 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.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	3 Months Ended
Accumulated Other Comprehensive Loss	Mar. 31, 2024
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 December 31, 2022 $ 5 $ 15 $ ( 42 ) $ ( 22 ) Other comprehensive (loss) income before reclassifications — ( 2 ) 2 — Amounts reclassified from AOCL ( 3 ) ( 2 ) — ( 5 ) Income tax benefit 1 1 — 2 Net current period other comprehensive (loss) income $ ( 2 ) $ ( 3 ) $ 2 $ ( 3 ) AOCL as of March 31, 2023 $ 3 $ 12 $ ( 40 ) $ ( 25 ) AOCL as of December 31, 2023 $ ( 2 ) $ 11 $ ( 40 ) $ ( 31 ) Other comprehensive income (loss) before reclassifications — 5 ( 5 ) — Amounts reclassified from AOCL ( 3 ) ( 3 ) — ( 6 ) Income tax benefit (expense) 1 ( 1 ) — — Net current period other comprehensive (loss) income $ ( 2 ) $ 1 $ ( 5 ) $ ( 6 ) AOCL as of March 31, 2024 $ ( 4 ) $ 12 $ ( 45 ) $ ( 37 ) Amounts reclassified from AOCL AOCL Components Three months ended Three months ended Affected line item in the Condensed Interest rate swaps $ 3 $ 2 Interest expense, net Prior service credit 2 2 Other (expense) income, net Recognized actuarial gain 1 1 Other (expense) income, net Total reclassifications, before tax $ 6 $ 5 Income before income taxes Income tax expense ( 1 ) ( 1 ) Income tax expense Total reclassifications, net of tax $ 5 $ 4 Prior service credits and actuarial gains 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	3 Months Ended
Commitments and Contingencies	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE P. COMMITMENTS AND CONTINGENCIES 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	3 Months Ended
Earnings Per Share	Mar. 31, 2024
Earnings Per Share [Abstract]
Earnings Per Share	NOTE Q. EARNINGS PER SHARE 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 2024 2023 Net income $ 169 $ 170 Weighted average shares of common stock outstanding 88 92 Dilutive effect of stock-based awards 1 — Diluted weighted average shares of common stock outstanding 89 92 Basic earnings per share attributable to common stockholders $ 1.92 $ 1.85 Diluted earnings per share attributable to common stockholders $ 1.90 $ 1.85 The dilutive impact of stock-based compensation is calculated using the treasury stock method. 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. For the three months ended March 31, 2024 , there were no outstanding stock options excluded from the diluted EPS calculation because they were anti-dilutive. For the three months ended March 31, 2023, there were 1 million outstanding stock options excluded from the diluted EPS calculation because they were anti-dilutive. Basic and diluted EPS for the full-year are calculated using the weighted average shares of common stock outstanding during the year while quarterly basic and diluted EPS are calculated using the weighted average shares of common stock outstanding during the quarter; therefore, the sum of each quarter's EPS may not equal full-year EPS.

Common Stock

Common Stock	3 Months Ended
Common Stock	Mar. 31, 2024
Equity [Abstract]
Common Stock	NOTE R. COMMON STOCK The Company's Board of Directors has authorized the Company to repurchase up to $ 4,000 million of its common stock pursuant to a stock repurchase program (the "Repurchase Program"). During the three months ended March 31, 2024, the Company repurchased $ 52 million of its common stock under the Repurchase Program, leaving $ 721 million of authorized repurchases remaining under the Repurchase Program as of March 31, 2024. The Repurchase Program has no ter mination 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.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2024
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 should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission on February 14, 2024 . The interim period financial results for the three-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 incentives, government price adjustments, fair market values and future cash flows associated with goodwill, indefinite-lived intangibles, definite-lived intangibles, long-lived asset impairment tests, useful lives for depreciation and amortization, warranty liabilities, core deposit liabilities, determination of discount rate and other assumptions for pension and other post-retirement benefit ("OPEB") expense, 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. Actual results could differ materially from these estimates and from the assumptions used in the preparation of the Company's financial statements. 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 November 2023, the Financial Accounting Standards Board ("FASB") issued authoritative accounting guidance expanding public entities’ reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses that are regularly reviewed by the Chief Operating Decision Maker and included within each reported measure of segment profit or loss. The guidance will become effective for the Company starting with its fiscal year ending December 31, 2024 and the subsequent interim periods. The guidance will be applied retrospectively, and the Company does not plan to early adopt. Management is currently evaluating the impact of this guidance on the Company's consolidated financial statements. In December 2023, the FASB issued authoritative accounting guidance to improve income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation and information on income taxes paid. The guidance will become effective for the Company beginning with its fiscal year ending December 31, 2025. The guidance will be applied prospectively with the option to apply it retrospectively. Management is currently evaluating the impact of this guidance on the Company's consolidated financial statements. All other recently issued accounting pronouncements were assessed as either not applicable to the Company or were not expected to have a material impact on the Company's condensed consolidated financial statements.
Lessee Accounting	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 both March 31, 2024 and December 31, 2023, 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. 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 lia bility 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 Term SOFR 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.

Revenue (Tables)

Revenue (Tables)	3 Months Ended
Revenue (Tables)	Mar. 31, 2024
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 2024 2023 North America On-Highway $ 420 $ 376 North America Off-Highway 4 24 Defense 48 27 Outside North America On-Highway 115 108 Outside North America Off-Highway 42 23 Service Parts, Support Equipment and Other 160 183 Total Net Sales $ 789 $ 741

Inventories (Tables)

Inventories (Tables)	3 Months Ended
Inventories (Tables)	Mar. 31, 2024
Inventory Disclosure [Abstract]
Schedule of Components of Inventories	Inventories consisted of the following components (dollars in millions): March 31, December 31, Purchased parts and raw materials $ 148 $ 152 Work in progress 17 17 Service parts 58 54 Finished goods 66 53 Total inventories $ 289 $ 276

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	3 Months Ended
Goodwill and Other Intangible Assets (Tables)	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Other Intangible Assets	The following presents a summary of other intangible assets (dollars in millions): March 31, 2024 December 31, 2023 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 ( 837 ) 2 839 ( 833 ) 6 Proprietary technology 484 ( 479 ) 5 484 ( 479 ) 5 Customer relationships — defense 62 ( 57 ) 5 62 ( 56 ) 6 Non-compete agreement 1 ( 1 ) — 1 ( 1 ) — Total $ 2,202 $ ( 1,374 ) $ 828 $ 2,202 $ ( 1,369 ) $ 833
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): 2025 2026 2027 2028 2029 Amortization expense $ 7 $ 3 $ 3 $ 2 $ 2

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	3 Months Ended
Fair Value of Financial Instruments (Tables)	Mar. 31, 2024
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 March 31, 2024 and December 31, 2023 (dollars in millions): Fair Value Measurements Using Quoted Prices in Active Significant Other TOTAL March 31, December 31, March 31, December 31, March 31, December 31, Cash equivalents $ 370 $ 421 $ — $ — $ 370 $ 421 Marketable securities 14 20 — — 14 20 Rabbi trust assets 20 18 — — 20 18 Deferred compensation obligation ( 20 ) ( 18 ) — — ( 20 ) ( 18 ) Derivative assets — — 14 12 14 12 Total $ 384 $ 441 $ 14 $ 12 $ 398 $ 453

Debt (Tables)

Debt (Tables)	3 Months Ended
Debt (Tables)	Mar. 31, 2024
Debt Disclosure [Abstract]
Summary of Long-Term Debt and Maturities	Long-term debt and maturities are as follows (dollars in millions): March 31, December 31, Long-term debt: Senior Secured Credit Facility Term Loan, variable, due 2026 $ — $ 618 Senior Notes, fixed 4.75 %, due 2027 400 400 Senior Notes, fixed 5.875 %, due 2029 500 500 Senior Secured Credit Facility Term Loan, variable, due 2031 518 — Senior Notes, fixed 3.75 %, due 2031 1,000 1,000 Total long-term debt $ 2,418 $ 2,518 Less: current maturities of long-term debt 5 6 deferred financing costs, net 15 15 Total long-term debt, net $ 2,398 $ 2,497

Derivatives (Tables)

Derivatives (Tables)	3 Months Ended
Derivatives (Tables)	Mar. 31, 2024
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 March 31, December 31, Derivative Assets: Interest rate swaps Other current assets $ 10 $ 7 Other non-current assets 4 5 Total derivative assets $ 14 $ 12

Product Warranty Liabilities (T

Product Warranty Liabilities (Tables)	3 Months Ended
Product Warranty Liabilities (Tables)	Mar. 31, 2024
Guarantees and Product Warranties [Abstract]
Product Warranty Liability Activities	Product warranty liability activities consisted of the following (dollars in millions): Three Months Ended 2024 2023 Beginning balance $ 59 $ 57 Payments ( 12 ) ( 8 ) Increase in liability (warranty issued during period) 7 6 Net adjustments to liability 4 4 Ending balance $ 58 $ 59

Deferred Revenue (Tables)

Deferred Revenue (Tables)	3 Months Ended
Deferred Revenue (Tables)	Mar. 31, 2024
Revenue Recognition and Deferred Revenue [Abstract]
Summary of Deferred Revenue Activity	Deferred revenue activity consisted of the following (dollars in millions): Three Months Ended 2024 2023 Beginning balance $ 130 $ 131 Increases 13 17 Revenue earned ( 9 ) ( 9 ) Ending balance $ 134 $ 139

Leases (Tables)

Leases (Tables)	3 Months Ended
Leases (Tables)	Mar. 31, 2024
Leases [Abstract]
Schedule of Lease Maturity, Current Guidance	The following table reconciles future undiscounted cash flows for operating leases to total operating lease liabilities as of March 31, 2024 (dollars in millions): March 31, For the remainder of 2024 $ 4 2025 5 2026 3 2027 3 2028 3 Thereafter 5 Total lease payments $ 23 Less: Interest 3 Present value of operating lease liabilities $ 20
Schedule of Right of Use Assets	The below table depicts the ROU assets held by the Company based on the underlying asset (dollars in millions): March 31, December 31, Buildings $ 17 $ 15 Equipment 2 2 Land 1 1 Vehicles 1 1 Total ROU assets $ 21 $ 19

Other Current Liabilities (Tabl

Other Current Liabilities (Tables)	3 Months Ended
Other Current Liabilities (Tables)	Mar. 31, 2024
Other Liabilities Disclosure [Abstract]
Summary of Other Current Liabilities	Other current liabilities consist of the following (dollars in millions): March 31, December 31, Taxes payable $ 52 $ 17 Payroll and related costs 38 89 Sales incentives 36 41 Accrued interest payable 28 24 Vendor buyback obligation 19 18 Lease liability 5 4 Other accruals 19 19 Total $ 197 $ 212

Employee Benefit Plans (Tables)

Employee Benefit Plans (Tables)	3 Months Ended
Employee Benefit Plans (Tables)	Mar. 31, 2024
Retirement Benefits [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 2024 2023 2024 2023 Net periodic benefit cost (credit): Service cost $ 1 $ 1 $ — $ — Interest cost 2 2 1 1 Expected return on assets ( 2 ) ( 2 ) — — Prior service credit — — ( 2 ) ( 2 ) Recognized actuarial gain — — ( 1 ) ( 1 ) Net periodic benefit cost (credit) $ 1 $ 1 $ ( 2 ) $ ( 2 )

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Loss (Tables)	3 Months Ended
Accumulated Other Comprehensive Loss (Tables)	Mar. 31, 2024
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 December 31, 2022 $ 5 $ 15 $ ( 42 ) $ ( 22 ) Other comprehensive (loss) income before reclassifications — ( 2 ) 2 — Amounts reclassified from AOCL ( 3 ) ( 2 ) — ( 5 ) Income tax benefit 1 1 — 2 Net current period other comprehensive (loss) income $ ( 2 ) $ ( 3 ) $ 2 $ ( 3 ) AOCL as of March 31, 2023 $ 3 $ 12 $ ( 40 ) $ ( 25 ) AOCL as of December 31, 2023 $ ( 2 ) $ 11 $ ( 40 ) $ ( 31 ) Other comprehensive income (loss) before reclassifications — 5 ( 5 ) — Amounts reclassified from AOCL ( 3 ) ( 3 ) — ( 6 ) Income tax benefit (expense) 1 ( 1 ) — — Net current period other comprehensive (loss) income $ ( 2 ) $ 1 $ ( 5 ) $ ( 6 ) AOCL as of March 31, 2024 $ ( 4 ) $ 12 $ ( 45 ) $ ( 37 )
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 $ 2 Interest expense, net Prior service credit 2 2 Other (expense) income, net Recognized actuarial gain 1 1 Other (expense) income, net Total reclassifications, before tax $ 6 $ 5 Income before income taxes Income tax expense ( 1 ) ( 1 ) Income tax expense Total reclassifications, net of tax $ 5 $ 4

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
Earnings Per Share (Tables)	Mar. 31, 2024
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 2024 2023 Net income $ 169 $ 170 Weighted average shares of common stock outstanding 88 92 Dilutive effect of stock-based awards 1 — Diluted weighted average shares of common stock outstanding 89 92 Basic earnings per share attributable to common stockholders $ 1.92 $ 1.85 Diluted earnings per share attributable to common stockholders $ 1.90 $ 1.85

Overview - Additional Informati

Overview - Additional Information (Details)	3 Months Ended
Overview - Additional Information (Details)	Mar. 31, 2024 Customer
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Worldwide independent distributor and dealer locations	1,600
Sales Revenue, Net \| North America \| Geographic Concentration Risk
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Concentration of risk, percentage	75%

Revenue - Additional Informatio

Revenue - Additional Information (Details)	3 Months Ended
Revenue - Additional Information (Details)	Mar. 31, 2024 USD ($) Segment	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
Material adjustments based on variable consideration \| $	$ 0	$ 0
Credit term period	30 days
Contract assets \| $	$ 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
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Total Net Sales	$ 789	$ 741
North America On-Highway
Disaggregation of Revenue [Line Items]
Total Net Sales	420	376
North America Off-Highway
Disaggregation of Revenue [Line Items]
Total Net Sales	4	24
Defense
Disaggregation of Revenue [Line Items]
Total Net Sales	48	27
Outside North America On-Highway
Disaggregation of Revenue [Line Items]
Total Net Sales	115	108
Outside North America Off-Highway
Disaggregation of Revenue [Line Items]
Total Net Sales	42	23
Service Parts, Support Equipment and Other
Disaggregation of Revenue [Line Items]
Total Net Sales	$ 160	$ 183

Inventories - Schedule of Compo

Inventories - Schedule of Components of Inventories (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Purchased parts and raw materials	$ 148	$ 152
Work in progress	17	17
Service parts	58	54
Finished goods	66	53
Total inventories	$ 289	$ 276

Goodwill And Other Intangible_3

Goodwill And Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 2,075	$ 2,076

Goodwill and Other Intangible_4

Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Line Items]
Intangible assets, gross, Total	$ 2,202	$ 2,202
Accumulated amortization	(1,374)	(1,369)
Intangible assets, net, Total	828	833
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	(837)	(833)
Intangible assets, net	2	6
Proprietary technology
Goodwill and Intangible Assets Disclosure [Line Items]
Intangible assets, gross	484	484
Accumulated amortization	(479)	(479)
Intangible assets, net	5	5
Customer relationships - defense
Goodwill and Intangible Assets Disclosure [Line Items]
Intangible assets, gross	62	62
Accumulated amortization	(57)	(56)
Intangible assets, net	5	6
Non-compete agreement
Goodwill and Intangible Assets Disclosure [Line Items]
Intangible assets, gross	1	1
Accumulated amortization	$ (1)	$ (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	Mar. 31, 2024 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2025	$ 7
2026	3
2027	3
2028	2
2029	$ 2

Fair Value of Financial Instr_3

Fair Value of Financial Instruments - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value measurement guidance and hierarchy levels, description	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 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. Level 2 — Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting 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 in which all significant value-drivers are observable in active markets or are supported by observable levels at which transactions are executed in the marketplace.Level 3 — Certain inputs are unobservable or have little or no market data available. 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 March 31, 2024 and December 31, 2023, the Company did not have any Level 3 financial assets or liabilities.
Equity securities without readily determinable fair value, amount	$ 5,000,000	$ 5,000,000
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	Mar. 31, 2024	Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	$ 370	$ 421
Marketable securities	14	20
Rabbi trust assets	$ 20	$ 18
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Assets	Assets
Deferred compensation obligation	$ (20)	$ (18)
Total	398	453
Derivatives Designated as Hedging Instruments
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	14	12
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	370	421
Marketable securities	14	20
Rabbi trust assets	20	18
Deferred compensation obligation	(20)	(18)
Total	384	441
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	0	0
Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Marketable securities	0	0
Rabbi trust assets	0	0
Deferred compensation obligation	0	0
Total	14	12
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	$ 14	$ 12

Debt - Summary of Long-Term Deb

Debt - Summary of Long-Term Debt and Maturities (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Total long-term debt	$ 2,418	$ 2,518
Current portion of long-term debt	5	6
deferred financing costs, net	15	15
Long-term debt	2,398	2,497
Senior Secured Credit Facility Term Loan, Variable, Due 2026
Debt Instrument [Line Items]
Total long-term debt	0	618
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 Secured Credit Facility Term Loan, variable, due 2031
Debt Instrument [Line Items]
Total long-term debt	518	0
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)	Mar. 31, 2024	Dec. 31, 2023
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 Secured Credit Facility Term Loan, variable, due 2031
Debt Instrument [Line Items]
Debt instrument, due date	2031	2031
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	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Debt Instrument [Line Items]
Long-term debt	$ 2,418		$ 2,518
Fair value of long-term debt obligations	2,271
Deferred financing fees	3	$ 0
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 2031
Debt Instrument [Line Items]
Long-term debt	$ 518		$ 0
Debt instrument, maturity month and year	2031-03
Debt Instrument, Redemption, Period One \| Senior Notes, Fixed 5.875%, Due 2029
Debt Instrument [Line Items]
Debt instrument, redemption end date	Jun. 01, 2024
Percentage of principal amount redeemed	100%
Debt Instrument, Redemption, Period One \| Senior Notes, Fixed 3.75%, Due 2031
Debt Instrument [Line Items]
Debt instrument, redemption end date	Jan. 30, 2026
Percentage of principal amount redeemed	100%
Debt Instrument, Redemption, Period Two \| Senior Notes, Fixed 5.875%, Due 2029
Debt Instrument [Line Items]
Debt instrument redemption start date	Jun. 01, 2024
Debt Instrument, Redemption, Period Two \| Senior Notes, Fixed 3.75%, Due 2031
Debt Instrument [Line Items]
Debt instrument, redemption end date	Jan. 30, 2026
Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, maturity month and year	2029-03
Credit facility, commitments amount	$ 750

Debt - Senior Secured Credit Fa

Debt - Senior Secured Credit Facility - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Debt Instrument [Line Items]
Balance of letters of credit	$ 5,000,000	$ 5,000,000
Debt expensed		3,000,000	$ 0
Deferred financing fees	15,000,000	15,000,000		$ 15,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, commitments amount	$ 750,000,000	750,000,000
Credit facility, withdrawal amount		$ 0
Debt instrument, maturity month and year	2029-03	2029-03
Increased commitment in credit facility	$ 100,000,000
Available revolving credit facility	745,000,000	$ 745,000,000
Commitment fee percentage		0.25%
Amount outstanding	$ 0	$ 0
Debt instruments maturity year	2025	2025
Debt instrument extended maturity year	2029	2029
SOFR \| Revolving Credit Facility
Debt Instrument [Line Items]
Applicable margin over base rate		1.25%
SOFR \| First Lien Net Leverage Ratio is Above 4.00x \| Revolving Credit Facility
Debt Instrument [Line Items]
Applicable margin over base rate		1.75%
SOFR \| 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%
SOFR \| 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	4
Senior Secured Credit Facility
Debt Instrument [Line Items]
Applicable margin over base rate	0.10%
Principal prepayment	$ 101,000,000
Required senior secured leverage ratio	5.50	5.50
Achieved senior secured leverage ratio	(0.03)	(0.03)
Net leverage ratio	4	4
Deffered financing fee expense		$ 1,000,000
Deferred financing fees	$ 4,000,000	4,000,000
Senior Secured Credit Facility \| Letter of Credit
Debt Instrument [Line Items]
Credit facility, commitments amount	$ 75,000,000	$ 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	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	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	3.50
Term Loan
Debt Instrument [Line Items]
Debt instrument effective interest rate	7.07%	7.07%
Debt instrument, maturity month and year	2031-03	2031-03
Debt instruments maturity year	2026	2026
Debt instrument extended maturity year	2031	2031
Term Loan \| SOFR
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
Debt Instrument [Line Items]
Principal payments on term loans		$ 1,000,000
Term Loan \| Minimum \| SOFR
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 ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Derivative [Line Items]
Derivative, description of terms	The Company is subject to interest rate risk related to the Senior Secured Credit Facility and entered into interest rate swaps 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. During the first quarter of 2024, the Company and ATI entered into the Amendment to the Credit Agreement that changed critical terms of the hedged item. Therefore, the Company performed a quantitative assessment that demonstrated a highly effective hedging relationship that qualifies for hedge accounting under the hypothetical derivative method. As of March 31, 2024, the Company held interest rate swap contracts that, in the aggregate, effectively hedge $500 million of the variable rate debt associated with the Term Loan at the Term SOFR weighted average fixed rate of 2.81% through September 2025. 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.
Derivative gains in AOCL expected to be reclassified within next twelve months	$ 9
Interest Rate Swaps
Derivative [Line Items]
Derivative, amount of hedged item	500
Available-for-sale securities and interest rate swaps
Derivative [Line Items]
Accumulated other comprehensive loss, net of tax	$ 14	$ 12
SOFR \| Interest Rate Swaps
Derivative [Line Items]
Weighted average LIBOR fixed rate	2.81%

Derivatives - Derivative Instru

Derivatives - Derivative Instruments and their Impact on Financial Condition (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Derivative [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Assets	Assets
Derivatives Designated as Hedging Instruments
Derivative [Line Items]
Total derivative assets	$ 14	$ 12
Derivatives Designated as Hedging Instruments \| Interest Rate Swaps
Derivative [Line Items]
Total derivative assets	14	12
Derivatives Designated as Hedging Instruments \| Interest Rate Swaps \| Other current assets
Derivative [Line Items]
Interest rate swaps, assets	10	7
Derivatives Designated as Hedging Instruments \| Interest Rate Swaps \| Other non-current assets
Derivative [Line Items]
Interest rate swaps, assets	$ 4	$ 5

Product Warranty Liabilities -

Product Warranty Liabilities - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Guarantees [Abstract]
Product warranty liability, current	$ 30	$ 32	$ 27
Product warranty liability, non-current	$ 28	$ 27	$ 32

Product Warranty Liabilities _2

Product Warranty Liabilities - Product Warranty Liability Activities (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Guarantees [Abstract]
Beginning balance	$ 59	$ 57
Payments	(12)	(8)
Increase in liability (warranty issued during period)	7	6
Net adjustments to liability	4	4
Ending balance	$ 58	$ 59

Deferred Revenue - Additional I

Deferred Revenue - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Deferred revenue current liabilities	$ 42	$ 41	$ 45
Deferred revenue non-current liabilities	92	$ 89	94
ETC contracts
Disaggregation of Revenue [Line Items]
Deferred revenue current liabilities	29		30
Deferred revenue non-current liabilities	$ 89		$ 84

Deferred Revenue - Summary of D

Deferred Revenue - Summary of Deferred Revenue Activity (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue Recognition and Deferred Revenue [Abstract]
Beginning balance	$ 130	$ 131
Increases	13	17
Revenue earned	(9)	(9)
Ending balance	$ 134	$ 139

Leases - Additional Information

Leases - Additional Information (Details) - USD ($)	3 Months Ended
Leases - Additional Information (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Leases [Abstract]
Operating lease weighted average discount rate percent	4.76%		4.75%
Current lease liabilities	$ 5,000,000		$ 4,000,000
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other current liabilities		Other current liabilities
Non-current lease liabilities	$ 15,000,000		$ 14,000,000
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other non-current liabilities		Other non-current liabilities
Remaining lease term	5 years 9 months 18 days	6 years 1 month 6 days
Operating expense	$ 2,000,000	$ 1,000,000
Material short term operating lease expense	0	0
New ROU assets	$ 3,000,000	$ 1,000,000

Leases - Schedule of Lease Matu

Leases - Schedule of Lease Maturity, Current Guidance (Details) $ in Millions	Mar. 31, 2024 USD ($)
Leases [Abstract]
For the remainder of 2024	$ 4
2025	5
2026	3
2027	3
2028	3
Thereafter	5
Total lease payments	23
Less: Interest	3
Present value of operating lease liabilities	$ 20
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	Mar. 31, 2024	Dec. 31, 2023
Lessee, Lease, Description [Line Items]
Total ROU assets	$ 21	$ 19
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	$ 17	$ 15
Equipment
Lessee, Lease, Description [Line Items]
Total ROU assets	2	2
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	Mar. 31, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Taxes payable	$ 52	$ 17
Payroll and related costs	38	89
Sales incentives	36	41
Accrued interest payable	28	24
Vendor buyback obligation	19	18
Lease liability	5	4
Other accruals	19	19
Total	$ 197	$ 212

Employee Benefit Plans - Compon

Employee Benefit Plans - Components of Net Periodic Benefit Cost (Credit) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax
Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1	$ 1
Interest cost	2	2
Expected return on assets	(2)	(2)
Prior service credit	0	0
Recognized actuarial loss (gain)	0	0
Net periodic benefit cost (credit)	1	1
Post-retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0
Interest cost	1	1
Expected return on assets	0	0
Prior service credit	(2)	(2)
Recognized actuarial loss (gain)	(1)	(1)
Net periodic benefit cost (credit)	$ (2)	$ (2)

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income tax expense	$ 35	$ 42
Effective tax rate	17%	20%
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.

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	$ 1,233	$ 874
Ending Balance	1,342	988
Pension and OPEB liability adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(2)	5
Other comprehensive (loss) income before reclassifications	0	0
Amounts reclassified from AOCL	(3)	(3)
Income tax benefit (expense)	1	1
Net current period other comprehensive (loss) income	(2)	(2)
Ending Balance	(4)	3
Interest rate swaps
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	11	15
Other comprehensive (loss) income before reclassifications	5	(2)
Amounts reclassified from AOCL	(3)	(2)
Income tax benefit (expense)	(1)	1
Net current period other comprehensive (loss) income	1	(3)
Ending Balance	12	12
Foreign currency items
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(40)	(42)
Other comprehensive (loss) income before reclassifications	(5)	2
Amounts reclassified from AOCL	0	0
Income tax benefit (expense)	0	0
Net current period other comprehensive (loss) income	(5)	2
Ending Balance	(45)	(40)
Accumulated Other Comprehensive (Loss) Income, net of tax
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(31)	(22)
Other comprehensive (loss) income before reclassifications	0	0
Amounts reclassified from AOCL	(6)	(5)
Income tax benefit (expense)	0	2
Net current period other comprehensive (loss) income	(6)	(3)
Ending Balance	$ (37)	$ (25)

Accumulated Other Comprehensi_4

Accumulated Other Comprehensive Loss - Amounts reclassified from AOCL (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accumulated Other Comprehensive Income Loss [Line Items]
Interest expense, net	$ (25)	$ (28)
Other (expense) income, net	(5)	10
Income before income taxes	204	212
Income tax expense	(35)	(42)
Net income	169	170
Reclassified from AOCL \| Interest rate swaps
Accumulated Other Comprehensive Income Loss [Line Items]
Interest expense, net	3	2
Reclassified from AOCL \| Prior service credit
Accumulated Other Comprehensive Income Loss [Line Items]
Other (expense) income, net	2	2
Reclassified from AOCL \| Recognized actuarial gain
Accumulated Other Comprehensive Income Loss [Line Items]
Other (expense) income, net	1	1
Reclassified from AOCL \| Pension and OPEB liability adjustment
Accumulated Other Comprehensive Income Loss [Line Items]
Income before income taxes	6	5
Income tax expense	(1)	(1)
Net income	$ 5	$ 4

Earnings Per Share - Additional

Earnings Per Share - Additional Information (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share [Abstract]
Shares excluded from diluted EPS calculation (in shares)	0	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
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share [Abstract]
Net income	$ 169	$ 170
Weighted average shares of common stock outstanding	88	92
Dilutive effect of stock-based awards	1	0
Diluted weighted average shares of common stock outstanding	89	92
Basic earnings per share attributable to common stockholders	$ 1.92	$ 1.85
Diluted earnings per share attributable to common stockholders	$ 1.9	$ 1.85

Common Stock - Additional Infor

Common Stock - Additional Information (Details) - Repurchase Program	3 Months Ended
	Mar. 31, 2024 USD ($)
Common Stock Disclosure [Line Items]
Common stock, repurchased during the period	$ 52,000,000
Stock repurchase program, remaining amount	721,000,000
Maximum
Common Stock Disclosure [Line Items]
Stock repurchase program, authorized amount	$ 4,000,000,000