0000950170-24-118639 | 10-Q | XBRL Viewer | Allison Transmission Holdings INC

Debt

9 Months Ended

Sep. 30, 2024

NOTE G. DEBT

Long-term debt and maturities are as follows (dollars in millions):


	September 30, 2024		December 31, 2023
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 Notes, fixed 3.75%, due 2031		1,000		1,000
Senior Secured Credit Facility Term Loan, variable, due 2031		515		—
Total long-term debt	$	2,415	$	2,518
Less: current maturities of long-term debt		5		6
deferred financing costs, net		14		15
Total long-term debt, net	$	2,396	$	2,497

As of September 30, 2024, the Company had $2,415 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 $515 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 Secured Credit Facility”).

The fair value of the Company’s long-term debt obligations as of September 30, 2024 was $2,330 million. The fair value is based on quoted Level 2 market prices of the Company’s debt as of September 30, 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 date 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 September 30, 2024 and expensed $1 million of prior deferred financing fees in the Condensed Consolidated Statement of Comprehensive Income for the nine months ended September 30, 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 September 30, 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 September 30, 2024, the Company elected to pay the lowest all-in rate of Term SOFR plus the applicable margin, or 6.85%, 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 September 30, 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 nine months ended September 30, 2024, the Company made no withdrawals on the Revolving Credit Facility. As of September 30, 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 4.00x, 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 4.00x and above 3.50x, 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 3.50x, 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 September 30, 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 September 30, 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 5.50x when revolving loan commitments remain outstanding on the Revolving Credit Facility at the end of a fiscal quarter. As of September 30, 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 (0.23x) ratio. Additionally, within the terms of the Senior Secured Credit Facility, a first lien net leverage ratio at or below 4.00x 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 September 30, 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 September 30, 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 and the 5.875% Senior Notes may be redeemed at any time at redemption prices specified in the indentures 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.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Commitments and Contingencies	9 Months Ended
Sep. 30, 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.

Commitments and Contingencies

9 Months Ended

Sep. 30, 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.

Derivatives - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 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 September 30, 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.
Interest Rate Swaps
Derivative [Line Items]
Derivative, amount of hedged item	$ 500
Weighted average Term SOFR fixed rate	2.81%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]	Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Available-for-sale securities and interest rate swaps
Derivative [Line Items]
Accumulated other comprehensive loss, net of tax	$ 6	$ 12

Leases - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
Leases - Additional Information (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Leases [Abstract]
Operating lease weighted average discount rate percent	4.80%		4.80%		4.75%
Current lease liabilities	$ 5,000,000		$ 5,000,000		$ 4,000,000
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other current liabilities		Other current liabilities		Other current liabilities
Non-current lease liabilities	$ 15,000,000		$ 15,000,000		$ 14,000,000
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other non-current liabilities		Other non-current liabilities		Other non-current liabilities
Remaining lease term	5 years 4 months 24 days	5 years 9 months 18 days	5 years 4 months 24 days	5 years 9 months 18 days
Operating expense	$ 2,000,000	$ 2,000,000	$ 5,000,000	$ 5,000,000
Material short term operating lease expense	$ 0	$ 0	0	0
New ROU assets			$ 6,000,000	$ 2,000,000

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	17		17
Pension and OPEB liability adjustment	(7)				(7)
Foreign currency translation adjustment	(5)				(5)
Interest rate swaps	2				2
Issuance of common stock	20		20
Repurchase of common stock	(157)			(157)
Dividends on common stock	(63)			(63)
Net Income (Loss)	503			503
Ending Balance at Sep. 30, 2023	1,184	1	1,885	(670)	(32)
Beginning Balance at Jun. 30, 2023	1,056	1	1,868	(788)	(25)
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)
Issuance of common stock	11		11
Repurchase of common stock	(20)			(20)
Dividends on common stock	(20)			(20)
Net Income (Loss)	158			158
Ending Balance at Sep. 30, 2023	1,184	1	1,885	(670)	(32)
Beginning Balance at Dec. 31, 2023	1,233	1	1,891	(628)	(31)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	20		20
Pension and OPEB liability adjustment	(2)				(2)
Foreign currency translation adjustment	1				1
Interest rate swaps	(6)				(6)
Issuance of common stock	19		19
Repurchase of common stock	(134)			(134)
Dividends on common stock	(66)			(66)
Net Income (Loss)	556			556
Ending Balance at Sep. 30, 2024	1,621	1	1,930	(272)	(38)
Beginning Balance at Jun. 30, 2024	1,484	1	1,919	(399)	(37)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	6		6
Pension and OPEB liability adjustment	(3)				(3)
Foreign currency translation adjustment	8				8
Interest rate swaps	(6)				(6)
Issuance of common stock	5		5
Repurchase of common stock	(51)			(51)
Dividends on common stock	(22)			(22)
Net Income (Loss)	200			200
Ending Balance at Sep. 30, 2024	$ 1,621	$ 1	$ 1,930	$ (272)	$ (38)

Employee Benefit Plans

9 Months Ended

Sep. 30, 2024

Retirement Benefits [Abstract]

Employee Benefit Plans

NOTE M. EMPLOYEE BENEFIT PLANS

Components of net periodic benefit cost (credit) consisted of the following (dollars in millions):


	Pension Plans						Post-retirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2024			2023			2024			2023
Net periodic benefit cost (credit):
Service cost	$	1		$	1		$	—		$	—
Interest cost		2			2			—			1
Expected return on assets		(2	)		(2	)		—			—
Prior service credit		—			—			(3	)		(2	)
Recognized actuarial gain		—			—			—			(1	)
Net periodic benefit cost (credit)	$	1		$	1		$	(3	)	$	(2	)


	Pension Plans						Post-retirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net periodic benefit cost (credit):
Service cost	$	3		$	3		$	—		$	—
Interest cost		6			6			2			3
Expected return on assets		(6	)		(6	)		—			—
Settlement loss		4			—			—			—
Prior service credit		—			—			(7	)		(7	)
Recognized actuarial gain		—			—			(2	)		(2	)
Net periodic benefit cost (credit)	$	7		$	3		$	(7	)	$	(6	)

The components of net periodic benefit cost (credit) other than the service cost component are included in Other income (expense), net in the Condensed Consolidated Statements of Comprehensive Income.

In June 2024, the Company completed a pension risk transfer to a third-party insurance company of a portion of its salaried defined benefit pension plan's obligations for certain participants and their beneficiaries. The Company agreed to an annuity contract that was purchased using pension plan assets, resulting in the transfer of $30 million of pension plan assets and $30 million of pension plan benefit obligations to the insurance company. As a result of this transaction, in the second quarter of 2024, the Company recognized a non-recurring, non-cash $4 million settlement charge for a pro rata portion of previously unrecognized pension plan actuarial net losses, which was recorded in Other income (expense), net in the Condensed Consolidated Statements of Comprehensive Income.

Derivatives - Derivative Instruments and their Impact on Financial Condition (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Derivative [Line Items]
Total derivative assets	$ 6	$ 12
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Assets	Assets
Derivatives Designated as Hedging Instruments \| Interest Rate Swaps
Derivative [Line Items]
Total derivative assets	$ 6	$ 12
Derivatives Designated as Hedging Instruments \| Interest Rate Swaps \| Other current assets
Derivative [Line Items]
Interest rate swaps, assets	6	7
Derivatives Designated as Hedging Instruments \| Interest Rate Swaps \| Other non-current assets
Derivative [Line Items]
Interest rate swaps, assets	$ 0	$ 5

- Definition

Fair value, after the effects of master netting arrangements, of a financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes assets not subject to a master netting arrangement and not elected to be offset.

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+ Details

Product Warranty Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Guarantees and Product Warranties [Abstract]

Product Warranty Liability Activities

Product warranty liability activities consisted of the following (dollars in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Beginning balance	$	59		$	60		$	59		$	57
Payments		(10	)		(12	)		(32	)		(30	)
Increase in liability (warranty issued during period)		8			5			24			20
Net adjustments to liability		4			6			10			12
Ending balance	$	61		$	59		$	61		$	59

Accumulated Other Comprehensive Loss - Amounts reclassified from AOCL (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Accumulated Other Comprehensive Income Loss [Line Items]
Interest expense, net	$ (21)	$ (27)	$ (68)	$ (83)
Other income (expense), net	10	(2)	(2)	10
Income before income taxes	249	193	687	621
Income tax expense	(49)	(35)	(131)	(118)
Net income	200	158	556	503
Reclassified from AOCL \| Interest rate swaps
Accumulated Other Comprehensive Income Loss [Line Items]
Interest expense, net	3	3	10	8
Reclassified from AOCL \| Prior service credit
Accumulated Other Comprehensive Income Loss [Line Items]
Other income (expense), net	3	2	7	7
Reclassified from AOCL \| Pension settlement loss
Accumulated Other Comprehensive Income Loss [Line Items]
Other income (expense), net			(4)	0
Reclassified from AOCL \| Recognized actuarial gain
Accumulated Other Comprehensive Income Loss [Line Items]
Other income (expense), net	0	1	2	2
Reclassified from AOCL \| Pension and OPEB liability adjustment
Accumulated Other Comprehensive Income Loss [Line Items]
Income before income taxes	6	6	15	17
Income tax expense	(1)	(1)	(3)	(4)
Net income	$ 5	$ 5	$ 12	$ 13

Employee Benefit Plans - Components of Net Periodic Benefit Cost (Credit) (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Defined Benefit Plan Disclosure [Line Items]
Settlement loss	$ 4			$ 4	$ 0
Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost		$ 1	$ 1	3	3
Interest cost		2	2	6	6
Expected return on assets		(2)	(2)	(6)	(6)
Settlement loss				4	0
Prior service credit		0	0	0	0
Recognized actuarial gain		0	0	0	0
Net periodic benefit cost (credit)		1	1	7	3
Post-retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost		0	0	0	0
Interest cost		0	1	2	3
Expected return on assets		0	0	0	0
Settlement loss				0	0
Prior service credit		(3)	(2)	(7)	(7)
Recognized actuarial gain		0	(1)	(2)	(2)
Net periodic benefit cost (credit)		$ (3)	$ (2)	$ (7)	$ (6)

Deferred Revenue

9 Months Ended

Sep. 30, 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 any of the three or nine months ended September 30, 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 September 30, 2024 and December 31, 2023. See "Note J. Deferred Revenue” for more information, including the amount of revenue earned during each of the three and nine months ended September 30, 2024 and 2023 that had been previously deferred. The Company had no material contract assets as of either September 30, 2024 or December 31, 2023.

The Company has one operating segment and reportable segment. The Company is in one line of business, which is the design, 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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
North America On-Highway	$	457	$	376	$	1,333	$	1,149
North America Off-Highway		1		9		6		58
Defense		53		43		144		103
Outside North America On-Highway		126		118		369		349
Outside North America Off-Highway		19		19		83		66
Service Parts, Support Equipment and Other		168		171		494		535
Total Net Sales	$	824	$	736	$	2,429	$	2,260

NOTE J. DEFERRED REVENUE

As of September 30, 2024, current and non-current deferred revenue were $45 million and $93 million, respectively. As of September 30, 2023, current and non-current deferred revenue were $44 million and $94 million, respectively.

Deferred revenue activity consisted of the following (dollars in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Beginning balance	$	136		$	139		$	130		$	131
Increases		11			13			37			42
Revenue earned		(9	)		(14	)		(29	)		(35	)
Ending balance	$	138		$	138		$	138		$	138

Deferred revenue recorded in current and non-current liabilities related to ETC as of September 30, 2024 was $30 million and $92 million, respectively. Deferred revenue recorded in current and non-current liabilities related to ETC as of September 30, 2023 was $29 million and $86 million, respectively.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/606/tableOfContent

+ Details

Overview - Additional Information (Details)	12 Months Ended
Overview - Additional Information (Details)	Dec. 31, 2023 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	75.00%

Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended	9 Months Ended
	Jun. 30, 2024	Sep. 30, 2024	Sep. 30, 2023
Retirement Benefits [Abstract]
Pension plan assets	$ 30
Pension plan benefit obligations	30
Pension plan settlement loss	$ 4	$ 4	$ 0

- Definition

Amount of asset segregated and restricted to provide benefit under defined benefit plan. Asset includes, but is not limited to, stock, bond, other investment, earning from investment, and contribution by employer and employee.

+ References + Details

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 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 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 September 30, 2024 and December 31, 2023, the Company did not have any Level 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 September 30, 2024 and December 31, 2023 (dollars in millions):


	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)				TOTAL
	September 30, 2024			December 31, 2023			September 30, 2024		December 31, 2023		September 30, 2024			December 31, 2023
Cash equivalents	$	588		$	421		$	—	$	—	$	588		$	421
Marketable securities		13			20			—		—		13			20
Rabbi trust assets		21			18			—		—		21			18
Deferred compensation obligation		(21	)		(18	)		—		—		(21	)		(18	)
Derivative assets		—			—			6		12		6			12
Total	$	601		$	441		$	6	$	12	$	607		$	453

The Company holds equity securities in unconsolidated entities without a readily determinable fair value. Each of these investments represents a less than 20% ownership interest in the respective privately-held entity, and the Company does not maintain significant influence over or control of any of the entities. The Company has elected the measurement alternative and measures the investments at cost, less any impairment, plus or minus adjustments related to observable price changes in orderly transactions for identical or similar investments of the same issuer. These equity investments are recorded in Other non-current assets in the Condensed Consolidated Balance Sheets, with changes in the value recorded in Other income (expense), net in the Consolidated Statements of Comprehensive Income. During the three and nine months ended September 30, 2024, no impairment charges or adjustments resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer occurred for any of these investments. As of September 30, 2024 and December 31, 2023, the Company held equity securities without a readily determinable fair value of $7 million and $5 million, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Debt - Senior Secured Credit Facility - Additional Information (Details) - USD ($)	1 Months Ended	9 Months Ended
	Mar. 31, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Debt Instrument [Line Items]
Balance of letters of credit		$ 5,000,000
Debt expensed		4,000,000	$ 0
Deferred financing fees		14,000,000		$ 15,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, commitments amount		750,000,000
Credit facility, withdrawal amount		$ 0
Debt instrument, maturity month and year		2029-03
Increased commitment in credit facility	$ 100,000,000
Available revolving credit facility		$ 745,000,000
Commitment fee percentage		0.25%
Amount outstanding		$ 0
Debt instruments maturity year	2025
Debt instrument extended maturity year	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		4.00
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
Achieved senior secured leverage ratio		(0.23)
Net leverage ratio		4.00
Deffered financing fee expense		$ 1,000,000
Deferred financing fees		4,000,000
Senior Secured Credit Facility \| Letter of Credit
Debt Instrument [Line Items]
Credit facility, commitments amount		$ 75,000,000
Senior Secured Credit Facility \| Minimum \| First Lien Net Leverage Ratio is Equal to or Less Than 4.00x and above 3.50x
Debt Instrument [Line Items]
Net leverage ratio		3.50
Senior Secured Credit Facility \| Maximum \| First Lien Net Leverage Ratio is Equal to or Less Than 4.00x and above 3.50x
Debt Instrument [Line Items]
Net leverage ratio		4.00
Senior Secured Credit Facility \| Maximum \| First Lien Net Leverage Ratio is Equal to or Below 3.50x
Debt Instrument [Line Items]
Net leverage ratio		3.50
Term Loan
Debt Instrument [Line Items]
Debt instrument, maturity month and year		2031-03
Debt instruments maturity year	2026
Debt instrument extended maturity year	2031
Term Loan \| SOFR
Debt Instrument [Line Items]
Applicable margin over base rate		0.75%
Debt instrument effective interest rate		6.85%
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		1.00%
Floor rate		1.00%

Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Other Intangible Assets

The following presents a summary of other intangible assets (dollars in millions):


	September 30, 2024							December 31, 2023
	Intangible assets, gross		Accumulated amortization			Intangible assets, net		Intangible assets, gross		Accumulated amortization			Intangible assets, net
Other intangible assets:
Trade name	$	791	$	—		$	791	$	791	$	—		$	791
In-process research and development		1		—			1		25		—			25
Customer relationships — commercial		839		(837	)		2		839		(833	)		6
Proprietary technology		508		(481	)		27		484		(479	)		5
Customer relationships — defense		62		(58	)		4		62		(56	)		6
Non-compete agreement		1		(1	)		—		1		(1	)		—
Total	$	2,202	$	(1,377	)	$	825	$	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

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 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. Certain immaterial reclassifications have been made in the condensed consolidated financial statements of prior periods to conform to the current period presentation. These reclassifications had no material impact on previously reported net income, total stockholders’ equity or cash flows. 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- and nine-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 September 30, 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 liability is determined by discounting the future cash flows over the lease period. The Company determines its discount rates utilizing current secured financing rates based on the length of the lease period plus the Company's margin over 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.

Overview

9 Months Ended

Sep. 30, 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.

Inventories - Schedule of Components of Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Purchased parts and raw materials	$ 153	$ 152
Work in progress	20	17
Finished goods	94	53
Service parts	59	54
Total inventories	$ 326	$ 276

Leases - Schedule of Lease Maturity, Current Guidance (Details) $ in Millions	Sep. 30, 2024 USD ($)
Leases [Abstract]
For the remainder of 2024	$ 1
2025	6
2026	4
2027	4
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

Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 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 September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Beginning balance	$	136		$	139		$	130		$	131
Increases		11			13			37			42
Revenue earned		(9	)		(14	)		(29	)		(35	)
Ending balance	$	138		$	138		$	138		$	138

Revenue - Additional Information (Details)	3 Months Ended		9 Months Ended
Revenue - Additional Information (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) Segment	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
Material adjustments based on variable consideration \| $	$ 0	$ 0	$ 0	$ 0
Credit term period			30 days
Contract assets \| $	$ 0		$ 0		$ 0
Number of operating segment \| Segment			1
Number of reportable segment \| Segment			1

Revenue (Tables)

9 Months Ended

Sep. 30, 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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
North America On-Highway	$	457	$	376	$	1,333	$	1,149
North America Off-Highway		1		9		6		58
Defense		53		43		144		103
Outside North America On-Highway		126		118		369		349
Outside North America Off-Highway		19		19		83		66
Service Parts, Support Equipment and Other		168		171		494		535
Total Net Sales	$	824	$	736	$	2,429	$	2,260

Inventories

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Inventories

NOTE D. INVENTORIES

Inventories consisted of the following components (dollars in millions):


	September 30, 2024		December 31, 2023
Purchased parts and raw materials	$	153	$	152
Work in progress		20		17
Finished goods		94		53
Service parts		59		54
Total inventories	$	326	$	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.

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2024 and December 31, 2023 (dollars in millions):


	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)				TOTAL
	September 30, 2024			December 31, 2023			September 30, 2024		December 31, 2023		September 30, 2024			December 31, 2023
Cash equivalents	$	588		$	421		$	—	$	—	$	588		$	421
Marketable securities		13			20			—		—		13			20
Rabbi trust assets		21			18			—		—		21			18
Deferred compensation obligation		(21	)		(18	)		—		—		(21	)		(18	)
Derivative assets		—			—			6		12		6			12
Total	$	601		$	441		$	6	$	12	$	607		$	453

Fair Value of Financial Instruments - Additional Information (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2024	Sep. 30, 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 September 30, 2024 and December 31, 2023, the Company did not have any Level 3 financial assets or liabilities.
Impairment on investments	$ 0	$ 0
Equity securities without readily determinable fair value, amount	7,000,000	7,000,000	$ 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	0
Financial liabilities	$ 0	$ 0	$ 0

Deferred Revenue - Summary of Deferred Revenue Activity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue Recognition and Deferred Revenue [Abstract]
Beginning balance	$ 136	$ 139	$ 130	$ 131
Increases	11	13	37	42
Revenue earned	(9)	(14)	(29)	(35)
Ending balance	$ 138	$ 138	$ 138	$ 138

Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE N. INCOME TAXES

For the three and nine months ended September 30, 2024, the Company recorded total income tax expense of $49 million and $131 million, respectively. The effective tax rate for the three and nine months ended September 30, 2024 was 20% and 19%, respectively. For the three and nine months ended September 30, 2023, the Company recorded total income tax expense of $35 million and $118 million, respectively. The effective tax rate for the three and nine months ended September 30, 2023 was 18% and 19%, respectively.

The need to establish a valuation allowance against the deferred tax assets is assessed periodically based on a more-likely-than-not realization threshold, in accordance with authoritative accounting guidance. Appropriate consideration is given to all positive and negative evidence related to that realization. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry-forward periods, experience with tax attributes expiring unused, and tax planning alternatives. The weight given to these considerations depends upon the degree to which they can be objectively verified.

The Company continues to provide for a valuation allowance on certain of its foreign deferred tax assets. 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.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 6.I.5.Q1)
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-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-13

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
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-Paragraph 1
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/740/tableOfContent

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
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-Section 50
-Paragraph 17
-Subparagraph (b)
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Allowance for doubtful accounts receivable	$ 2	$ 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)	86,743,980	87,648,046
Common stock, shares outstanding (in shares)	86,743,980	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

Debt - Summary of Long-Term Debt and Maturities (Parenthetical) (Details)	Sep. 30, 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 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%
Senior Secured Credit Facility Term Loan, variable, due 2031
Debt Instrument [Line Items]
Debt instrument, due date	2031	2031

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 55
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482949/835-30-55-8

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+ Details

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net sales	$ 824	$ 736	$ 2,429	$ 2,260
Cost of sales	428	379	1,273	1,161
Gross profit	396	357	1,156	1,099
Selling, general and administrative	85	86	253	265
Engineering — research and development	51	49	146	140
Operating income	260	222	757	694
Interest expense, net	(21)	(27)	(68)	(83)
Other income (expense), net	10	(2)	(2)	10
Income before income taxes	249	193	687	621
Income tax expense	(49)	(35)	(131)	(118)
Net income	$ 200	$ 158	$ 556	$ 503
Basic earnings per share attributable to common stockholders	$ 2.3	$ 1.76	$ 6.39	$ 5.53
Diluted earnings per share attributable to common stockholders	$ 2.27	$ 1.76	$ 6.32	$ 5.53
Comprehensive income, net of tax	$ 199	$ 151	$ 549	$ 493

Goodwill and Other Intangible Assets - Schedule of Amortization Expense Related to Other Intangible Assets for Next Five Fiscal Years (Details) $ in Millions	Sep. 30, 2024 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2025	$ 7
2026	3
2027	3
2028	2
2029	$ 2

Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Summary of Long-Term Debt and Maturities

Long-term debt and maturities are as follows (dollars in millions):


	September 30, 2024		December 31, 2023
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 Notes, fixed 3.75%, due 2031		1,000		1,000
Senior Secured Credit Facility Term Loan, variable, due 2031		515		—
Total long-term debt	$	2,415	$	2,518
Less: current maturities of long-term debt		5		6
deferred financing costs, net		14		15
Total long-term debt, net	$	2,396	$	2,497

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Other Current Liabilities - Summary of Other Current Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Payroll and related costs	$ 80	$ 89
Sales incentives	40	41
Accrued interest payable	28	24
Vendor buyback obligation	19	18
Taxes payable	18	17
OPEB liability	5	5
Lease liability	5	4
Other accruals	17	14
Total	$ 212	$ 212

Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Other Liabilities Disclosure [Abstract]

Summary of Other Current Liabilities

Other current liabilities consisted of the following (dollars in millions):


	September 30, 2024		December 31, 2023
Payroll and related costs	$	80	$	89
Sales incentives		40		41
Accrued interest payable		28		24
Vendor buyback obligation		19		18
Taxes payable		18		17
OPEB liability		5		5
Lease liability		5		4
Other accruals		17		14
Total	$	212	$	212

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		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share [Abstract]
Net income	$ 200	$ 158	$ 556	$ 503
Weighted average shares of common stock outstanding	87	90	87	91
Dilutive effect of stock-based awards	1	0	1	0
Diluted weighted average shares of common stock outstanding	88	90	88	91
Basic earnings per share attributable to common stockholders	$ 2.3	$ 1.76	$ 6.39	$ 5.53
Diluted earnings per share attributable to common stockholders	$ 2.27	$ 1.76	$ 6.32	$ 5.53

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Debt - Summary of Long-Term Debt and Maturities (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Total long-term debt	$ 2,415	$ 2,518
Current portion of long-term debt	5	6
deferred financing costs, net	14	15
Long-term debt	2,396	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 Notes, Fixed 3.75%, Due 2031
Debt Instrument [Line Items]
Total long-term debt	1,000	1,000
Senior Secured Credit Facility Term Loan, variable, due 2031
Debt Instrument [Line Items]
Total long-term debt	$ 515	$ 0

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Oct. 16, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 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		86,622,825
Entity Central Index Key	0001411207
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3

Other Current Liabilities

9 Months Ended

Sep. 30, 2024

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

NOTE L. OTHER CURRENT LIABILITIES

Other current liabilities consisted of the following (dollars in millions):


	September 30, 2024		December 31, 2023
Payroll and related costs	$	80	$	89
Sales incentives		40		41
Accrued interest payable		28		24
Vendor buyback obligation		19		18
Taxes payable		18		17
OPEB liability		5		5
Lease liability		5		4
Other accruals		17		14
Total	$	212	$	212

Common Stock - Additional Information (Details) - Repurchase Program	3 Months Ended	9 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2024 USD ($)
Common Stock Disclosure [Line Items]
Common stock, repurchased during the period	$ 51,000,000	$ 134,000,000
Stock repurchase program, remaining amount	639,000,000	639,000,000
Maximum
Common Stock Disclosure [Line Items]
Stock repurchase program, authorized amount	$ 4,000,000,000	$ 4,000,000,000

- Definition

Equity impact of the value of stock that has been repurchased during the period and has not been retired and is not held in treasury. Some state laws may mandate the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

+ References + Details

Derivatives

9 Months Ended

Sep. 30, 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 September 30, 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	September 30, 2024		December 31, 2023
Derivative Assets:
Interest rate swaps	Other current assets	$	6	$	7
	Other non-current assets		—		5
Total derivative assets		$	6	$	12

The balance of net derivative gains recorded in AOCL as of September 30, 2024 and December 31, 2023 was $6 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 and nine months ended September 30, 2024 and 2023. As of September 30, 2024, all derivative gains recorded in AOCL are expected to be reclassified to earnings within the next twelve months.

Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 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 and OPEB liability adjustments			Interest rate swaps			Foreign currency items			Total
AOCL as of June 30, 2023	$	—		$	17		$	(42	)	$	(25	)
Other comprehensive income (loss) before reclassifications		—			4			(5	)		(1	)
Amounts reclassified from AOCL		(3	)		(3	)		—			(6	)
Income tax benefit (expense)		1			(1	)		—			—
Net current period other comprehensive loss	$	(2	)	$	—		$	(5	)	$	(7	)
AOCL as of September 30, 2023	$	(2	)	$	17		$	(47	)	$	(32	)
AOCL as of June 30, 2024	$	(1	)	$	11		$	(47	)	$	(37	)
Other comprehensive (loss) income before reclassifications		—			(4	)		8			4
Amounts reclassified from AOCL		(3	)		(3	)		—			(6	)
Income tax benefit		—			1			—			1
Net current period other comprehensive (loss) income	$	(3	)	$	(6	)	$	8		$	(1	)
AOCL as of September 30, 2024	$	(4	)	$	5		$	(39	)	$	(38	)


	Nine months ended
	Pension and OPEB liability adjustments			Interest rate swaps			Foreign currency items			Total
AOCL as of December 31, 2022	$	5		$	15		$	(42	)	$	(22	)
Other comprehensive income (loss) before reclassifications		—			11			(5	)		6
Amounts reclassified from AOCL		(9	)		(8	)		—			(17	)
Income tax benefit (expense)		2			(1	)		—			1
Net current period other comprehensive (loss) income	$	(7	)	$	2		$	(5	)	$	(10	)
AOCL as of September 30, 2023	$	(2	)	$	17		$	(47	)	$	(32	)
AOCL as of December 31, 2023	$	(2	)	$	11		$	(40	)	$	(31	)
Other comprehensive income before reclassifications		3			3			1			7
Amounts reclassified from AOCL		(5	)		(10	)		—			(15	)
Income tax benefit		—			1			—			1
Net current period other comprehensive (loss) income	$	(2	)	$	(6	)	$	1		$	(7	)
AOCL as of September 30, 2024	$	(4	)	$	5		$	(39	)	$	(38	)


	Amounts reclassified from AOCL
AOCL Components	Three months ended September 30, 2024			Three months ended September 30, 2023			Affected line item in the Condensed Consolidated Statements of Comprehensive Income
Interest rate swaps	$	3		$	3		Interest expense, net
Prior service credit		3			2		Other income (expense), net
Recognized actuarial gain		—			1		Other income (expense), net
Total reclassifications, before tax	$	6		$	6		Income before income taxes
Income tax expense		(1	)		(1	)	Income tax expense
Total reclassifications, net of tax	$	5		$	5


	Amounts reclassified from AOCL
AOCL Components	Nine months ended September 30, 2024			Nine months ended September 30, 2023			Affected line item in the Condensed Consolidated Statements of Comprehensive Income
Interest rate swaps	$	10		$	8		Interest expense, net
Prior service credit		7			7		Other income (expense), net
Pension plan settlement loss		(4	)		—		Other income (expense), net
Recognized actuarial gain		2			2		Other income (expense), net
Total reclassifications, before tax	$	15		$	17		Income before income taxes
Income tax expense		(3	)		(4	)	Income tax expense
Total reclassifications, net of tax	$	12		$	13

Prior service credits, actuarial gains and pension settlement losses are included in the computation of the Company’s net periodic benefit cost (credit). See "Note M. Employee Benefit Plans” for additional details.

Product Warranty Liabilities - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023
Guarantees [Abstract]
Product warranty liability, current	$ 29	$ 32	$ 29
Product warranty liability, non-current	$ 32	$ 27	$ 30

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income tax expense	$ 49	$ 35	$ 131	$ 118
Effective tax rate	20.00%	18.00%	19.00%	19.00%
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.

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/exampleRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 200	$ 158	$ 556	$ 503

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Fair Value of Financial Instruments - Summary of Fair Value of Financial Assets and (Liabilities) (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	$ 588	$ 421
Marketable securities	13	20
Rabbi trust assets	$ 21	$ 18
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Assets	Assets
Deferred compensation obligation	$ (21)	$ (18)
Derivative assets	6	12
Total	607	453
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	588	421
Marketable securities	13	20
Rabbi trust assets	21	18
Deferred compensation obligation	(21)	(18)
Derivative assets	0	0
Total	601	441
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
Derivative assets	6	12
Total	$ 6	$ 12

Product Warranty Liabilities - Product Warranty Liability Activities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Guarantees [Abstract]
Beginning balance	$ 59	$ 60	$ 59	$ 57
Payments	(10)	(12)	(32)	(30)
Increase in liability (warranty issued during period)	8	5	24	20
Net adjustments to liability	4	6	10	12
Ending balance	$ 61	$ 59	$ 61	$ 59

Goodwill And Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Sep. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill		$ 2,076	$ 2,076
Reclassified amount of in-process research and development	$ 23

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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+ Details

Leases (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2024 (dollars in millions):


	September 30, 2024
For the remainder of 2024	$	1
2025		6
2026		4
2027		4
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):


	September 30, 2024		December 31, 2023
Buildings	$	17	$	15
Equipment		2		2
Land		1		1
Vehicles		1		1
Total ROU assets	$	21	$	19

Derivatives (Tables)

9 Months Ended

Sep. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and their Impact on Financial Condition


		Fair Value
	Balance Sheet Location	September 30, 2024		December 31, 2023
Derivative Assets:
Interest rate swaps	Other current assets	$	6	$	7
	Other non-current assets		—		5
Total derivative assets		$	6	$	12

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 788	$ 555
Accounts receivable - net of allowance for doubtful accounts of $2 and $4, respectively	393	356
Inventories	326	276
Other current assets	85	63
Total Current Assets	1,592	1,250
Marketable securities	13	20
Property, plant and equipment, net	780	774
Intangible assets, net	825	833
Goodwill	2,076	2,076
Other non-current assets	82	72
TOTAL ASSETS	5,368	5,025
Current Liabilities
Accounts payable	272	210
Product warranty liability	29	32
Current portion of long-term debt	5	6
Deferred revenue	45	41
Other current liabilities	212	212
Total Current Liabilities	563	501
Product warranty liability	32	27
Deferred revenue	93	89
Long-term debt	2,396	2,497
Deferred income taxes	505	519
Other non-current liabilities	158	159
TOTAL LIABILITIES	3,747	3,792
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding	0	0
Paid in capital	1,930	1,891
Accumulated deficit	(272)	(628)
Accumulated other comprehensive loss, net of tax	(38)	(31)
TOTAL STOCKHOLDERS’ EQUITY	1,621	1,233
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	5,368	5,025
Voting Common Stock
STOCKHOLDERS’ EQUITY
Common stock	1	1
Non-voting Common Stock
STOCKHOLDERS’ EQUITY
Common stock	$ 0	$ 0

Revenue - Disaggregated Revenue by Categories (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total Net Sales	$ 824	$ 736	$ 2,429	$ 2,260
North America On-Highway
Disaggregation of Revenue [Line Items]
Total Net Sales	457	376	1,333	1,149
North America Off-Highway
Disaggregation of Revenue [Line Items]
Total Net Sales	1	9	6	58
Defense
Disaggregation of Revenue [Line Items]
Total Net Sales	53	43	144	103
Outside North America On-Highway
Disaggregation of Revenue [Line Items]
Total Net Sales	126	118	369	349
Outside North America Off-Highway
Disaggregation of Revenue [Line Items]
Total Net Sales	19	19	83	66
Service Parts, Support Equipment and Other
Disaggregation of Revenue [Line Items]
Total Net Sales	$ 168	$ 171	$ 494	$ 535

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482964/270-10-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (ee)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 4: http://fasb.org/us-gaap/role/ref/otherTransitionRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 32
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 5: http://fasb.org/us-gaap/role/ref/otherTransitionRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Paragraph 30
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-42

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-Paragraph 22
-Subparagraph (b)
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-40

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-4

+ Details

Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2024

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost (Credit)

Components of net periodic benefit cost (credit) consisted of the following (dollars in millions):


	Pension Plans						Post-retirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2024			2023			2024			2023
Net periodic benefit cost (credit):
Service cost	$	1		$	1		$	—		$	—
Interest cost		2			2			—			1
Expected return on assets		(2	)		(2	)		—			—
Prior service credit		—			—			(3	)		(2	)
Recognized actuarial gain		—			—			—			(1	)
Net periodic benefit cost (credit)	$	1		$	1		$	(3	)	$	(2	)


	Pension Plans						Post-retirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net periodic benefit cost (credit):
Service cost	$	3		$	3		$	—		$	—
Interest cost		6			6			2			3
Expected return on assets		(6	)		(6	)		—			—
Settlement loss		4			—			—			—
Prior service credit		—			—			(7	)		(7	)
Recognized actuarial gain		—			—			(2	)		(2	)
Net periodic benefit cost (credit)	$	7		$	3		$	(7	)	$	(6	)

Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	$ 1,484,000,000	$ 1,056,000,000	$ 1,233,000,000	$ 874,000,000
Ending Balance	1,621,000,000	1,184,000,000	1,621,000,000	1,184,000,000
Pension and OPEB liability adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(1,000,000)	0	(2,000,000)	5,000,000
Other comprehensive (loss) income before reclassifications	0	0	3,000,000	0
Amounts reclassified from AOCL	(3,000,000)	(3,000,000)	(5,000,000)	(9,000,000)
Income tax benefit (expense)	0	1,000,000	0	2,000,000
Net current period other comprehensive (loss) income	(3,000,000)	(2,000,000)	(2,000,000)	(7,000,000)
Ending Balance	(4,000,000)	(2,000,000)	(4,000,000)	(2,000,000)
Interest rate swaps
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	11,000,000	17,000,000	11,000,000	15,000,000
Other comprehensive (loss) income before reclassifications	(4,000,000)	4,000,000	3,000,000	11,000,000
Amounts reclassified from AOCL	(3,000,000)	(3,000,000)	(10,000,000)	(8,000,000)
Income tax benefit (expense)	1,000,000	(1,000,000)	1,000,000	(1,000,000)
Net current period other comprehensive (loss) income	(6,000,000)	0	(6,000,000)	2,000,000
Ending Balance	5,000,000	17,000,000	5,000,000	17,000,000
Foreign currency items
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(47,000,000)	(42,000,000)	(40,000,000)	(42,000,000)
Other comprehensive (loss) income before reclassifications	8,000,000	(5,000,000)	1,000,000	(5,000,000)
Amounts reclassified from AOCL	0	0	0	0
Income tax benefit (expense)	0	0	0	0
Net current period other comprehensive (loss) income	8,000,000	(5,000,000)	1,000,000	(5,000,000)
Ending Balance	(39,000,000)	(47,000,000)	(39,000,000)	(47,000,000)
Accumulated Other Comprehensive (Loss) Income, net of tax
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(37,000,000)	(25,000,000)	(31,000,000)	(22,000,000)
Other comprehensive (loss) income before reclassifications	4,000,000	(1,000,000)	7,000,000	6,000,000
Amounts reclassified from AOCL	(6,000,000)	(6,000,000)	(15,000,000)	(17,000,000)
Income tax benefit (expense)	1,000,000	0	1,000,000	1,000,000
Net current period other comprehensive (loss) income	(1,000,000)	(7,000,000)	(7,000,000)	(10,000,000)
Ending Balance	$ (38,000,000)	$ (32,000,000)	$ (38,000,000)	$ (32,000,000)

Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Line Items]
Intangible assets, gross, Total	$ 2,202	$ 2,202
Accumulated amortization	(1,377)	(1,369)
Intangible assets, net, Total	825	833
Trade name
Goodwill and Intangible Assets Disclosure [Line Items]
Indefinite lived intangible assets	791	791
Accumulated amortization	0	0
In process research and development
Goodwill and Intangible Assets Disclosure [Line Items]
Indefinite lived intangible assets	1	25
Accumulated amortization	0	0
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	508	484
Accumulated amortization	(481)	(479)
Intangible assets, net	27	5
Customer relationships - defense
Goodwill and Intangible Assets Disclosure [Line Items]
Intangible assets, gross	62	62
Accumulated amortization	(58)	(56)
Intangible assets, net	4	6
Non-compete agreement
Goodwill and Intangible Assets Disclosure [Line Items]
Intangible assets, gross	1	1
Accumulated amortization	(1)	(1)
Intangible assets, net	$ 0	$ 0

Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

NOTE E. GOODWILL AND OTHER INTANGIBLE ASSETS

As of both September 30, 2024 and December 31, 2023, the carrying value of the Company’s Goodwill was $2,076 million.

The following presents a summary of other intangible assets (dollars in millions):


	September 30, 2024							December 31, 2023
	Intangible assets, gross		Accumulated amortization			Intangible assets, net		Intangible assets, gross		Accumulated amortization			Intangible assets, net
Other intangible assets:
Trade name	$	791	$	—		$	791	$	791	$	—		$	791
In-process research and development		1		—			1		25		—			25
Customer relationships — commercial		839		(837	)		2		839		(833	)		6
Proprietary technology		508		(481	)		27		484		(479	)		5
Customer relationships — defense		62		(58	)		4		62		(56	)		6
Non-compete agreement		1		(1	)		—		1		(1	)		—
Total	$	2,202	$	(1,377	)	$	825	$	2,202	$	(1,369	)	$	833

In the second quarter of 2024, the Company reclassified $23 million of in-process research and development ("IPR&D") to Proprietary technology. The IPR&D was reclassified upon the completion of the Company's project to develop commercially viable eGen Power products.

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

Debt - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Long-term debt	$ 2,415	$ 2,518
Fair value of long-term debt obligations	2,330
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	$ 515	$ 0
Debt instrument, maturity month and year	2031-03
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	100.00%
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

Deferred Revenue - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Deferred revenue current liabilities	$ 45	$ 41	$ 44
Deferred revenue non-current liabilities	93	$ 89	94
ETC contracts
Disaggregation of Revenue [Line Items]
Deferred revenue current liabilities	30		29
Deferred revenue non-current liabilities	$ 92		$ 86

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Common Stock

9 Months Ended

Sep. 30, 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 and nine

months ended September 30, 2024, the Company repurchased $51 million and $134 million, respectively, of its common stock under the Repurchase Program, leaving $639 million of authorized repurchases remaining under the Repurchase Program as of September 30, 2024. The Repurchase Program has no termination date, and the timing and amount of stock purchases are subject to market conditions and corporate needs. The Repurchase Program may be modified, suspended or discontinued at any time at the Company’s discretion.

Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 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 and OPEB liability adjustments			Interest rate swaps			Foreign currency items			Total
AOCL as of June 30, 2023	$	—		$	17		$	(42	)	$	(25	)
Other comprehensive income (loss) before reclassifications		—			4			(5	)		(1	)
Amounts reclassified from AOCL		(3	)		(3	)		—			(6	)
Income tax benefit (expense)		1			(1	)		—			—
Net current period other comprehensive loss	$	(2	)	$	—		$	(5	)	$	(7	)
AOCL as of September 30, 2023	$	(2	)	$	17		$	(47	)	$	(32	)
AOCL as of June 30, 2024	$	(1	)	$	11		$	(47	)	$	(37	)
Other comprehensive (loss) income before reclassifications		—			(4	)		8			4
Amounts reclassified from AOCL		(3	)		(3	)		—			(6	)
Income tax benefit		—			1			—			1
Net current period other comprehensive (loss) income	$	(3	)	$	(6	)	$	8		$	(1	)
AOCL as of September 30, 2024	$	(4	)	$	5		$	(39	)	$	(38	)


	Nine months ended
	Pension and OPEB liability adjustments			Interest rate swaps			Foreign currency items			Total
AOCL as of December 31, 2022	$	5		$	15		$	(42	)	$	(22	)
Other comprehensive income (loss) before reclassifications		—			11			(5	)		6
Amounts reclassified from AOCL		(9	)		(8	)		—			(17	)
Income tax benefit (expense)		2			(1	)		—			1
Net current period other comprehensive (loss) income	$	(7	)	$	2		$	(5	)	$	(10	)
AOCL as of September 30, 2023	$	(2	)	$	17		$	(47	)	$	(32	)
AOCL as of December 31, 2023	$	(2	)	$	11		$	(40	)	$	(31	)
Other comprehensive income before reclassifications		3			3			1			7
Amounts reclassified from AOCL		(5	)		(10	)		—			(15	)
Income tax benefit		—			1			—			1
Net current period other comprehensive (loss) income	$	(2	)	$	(6	)	$	1		$	(7	)
AOCL as of September 30, 2024	$	(4	)	$	5		$	(39	)	$	(38	)

Reclassification out of Accumulated Other Comprehensive Loss


	Amounts reclassified from AOCL
AOCL Components	Three months ended September 30, 2024			Three months ended September 30, 2023			Affected line item in the Condensed Consolidated Statements of Comprehensive Income
Interest rate swaps	$	3		$	3		Interest expense, net
Prior service credit		3			2		Other income (expense), net
Recognized actuarial gain		—			1		Other income (expense), net
Total reclassifications, before tax	$	6		$	6		Income before income taxes
Income tax expense		(1	)		(1	)	Income tax expense
Total reclassifications, net of tax	$	5		$	5


	Amounts reclassified from AOCL
AOCL Components	Nine months ended September 30, 2024			Nine months ended September 30, 2023			Affected line item in the Condensed Consolidated Statements of Comprehensive Income
Interest rate swaps	$	10		$	8		Interest expense, net
Prior service credit		7			7		Other income (expense), net
Pension plan settlement loss		(4	)		—		Other income (expense), net
Recognized actuarial gain		2			2		Other income (expense), net
Total reclassifications, before tax	$	15		$	17		Income before income taxes
Income tax expense		(3	)		(4	)	Income tax expense
Total reclassifications, net of tax	$	12		$	13

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	200	$	158	$	556	$	503
Weighted average shares of common stock outstanding		87		90		87		91
Dilutive effect of stock-based awards		1		—		1		—
Diluted weighted average shares of common stock outstanding		88		90		88		91
Basic earnings per share attributable to common stockholders	$	2.30	$	1.76	$	6.39	$	5.53
Diluted earnings per share attributable to common stockholders	$	2.27	$	1.76	$	6.32	$	5.53

Insider Trading Arrangements

3 Months Ended

Sep. 30, 2024

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 September 30, 2024:

       
      Trading Arrangement

      Name

      Title

      Action

      Date

      Rule 10b5-1*

      Non-Rule 10b5-1**

      Total Shares to be Sold

      Expiration Date

Rafael Basso

Vice President, Operations

Adopted

8/6/2024

X

14,610

10/31/2025

* Intended to satisfy the affirmative defense of Rule 10b5-1(c)

** Not intended to satisfy the affirmative defense of Rule 10b5-1(c)

Rafael Basso

Trading Arrangements, by Individual

Name

Rafael Basso

Title

Vice President, Operations

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

8/6/2024

Expiration Date

10/31/2025

Aggregate Available

14,610

Leases - Schedule of Right of Use Assets (Details) - USD ($) $ in Millions	Sep. 30, 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

Earnings Per Share - Additional Information (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share [Abstract]
Stock options that were anti-dilutive (in shares)	0	0	0	0

Earnings Per Share

9 Months Ended

Sep. 30, 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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	200	$	158	$	556	$	503
Weighted average shares of common stock outstanding		87		90		87		91
Dilutive effect of stock-based awards		1		—		1		—
Diluted weighted average shares of common stock outstanding		88		90		88		91
Basic earnings per share attributable to common stockholders	$	2.30	$	1.76	$	6.39	$	5.53
Diluted earnings per share attributable to common stockholders	$	2.27	$	1.76	$	6.32	$	5.53

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 each of the three and nine months ended September 30, 2024 and 2023, there were no outstanding stock options that 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.

Leases

9 Months Ended

Sep. 30, 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 September 30, 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 liability is determined by discounting the future cash flows over the lease period. The Company determines its discount rates utilizing current secured financing rates based on the length of the lease period plus the Company's margin over 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 September 30, 2024 and December 31, 2023 was 4.80% and 4.75%, respectively.

As of September 30, 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 September 30, 2024 (dollars in millions):


	September 30, 2024
For the remainder of 2024	$	1
2025		6
2026		4
2027		4
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):


	September 30, 2024		December 31, 2023
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 September 30, 2024 and September 30, 2023 was 5.4 years and 5.8 years, respectively.

Operating lease expense was $2 million for each of the three months ended September 30, 2024 and 2023 and $5 million for each of the nine months ended September 30, 2024 and 2023, and was recorded within Selling, general and administrative 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 or nine months ended September 30, 2024 or 2023.

During the nine months ended September 30, 2024 and 2023, the Company recorded $6 million and $2 million, respectively, of new ROU assets obtained in exchange for lease obligations.

Inventories (Tables)

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Schedule of Components of Inventories

Inventories consisted of the following components (dollars in millions):


	September 30, 2024		December 31, 2023
Purchased parts and raw materials	$	153	$	152
Work in progress		20		17
Finished goods		94		53
Service parts		59		54
Total inventories	$	326	$	276

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 556	$ 503
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	82	81
Stock-based compensation	20	17
Deferred income taxes	(12)	(22)
Amortization of intangible assets	8	33
Unrealized loss (gain) on marketable securities	8	(1)
Pension plan settlement loss	4	0
Technology-related investments loss (gain)	1	(3)
Other	4	4
Changes in assets and liabilities:
Accounts receivable	(36)	(12)
Inventories	(50)	(60)
Accounts payable	36	34
Other assets and liabilities	(31)	(28)
Net cash provided by operating activities	590	546
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of long-lived assets	(68)	(73)
Investment in equity method investee	(4)	0
Proceeds from sale of assets	4	0
Investment in equities without a readily determinable fair value	(2)	0
Proceeds from technology-related investments	0	2
Net cash used for investing activities	(70)	(71)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock	(133)	(157)
Payments on long-term debt	(103)	(5)
Dividend payments	(66)	(63)
Proceeds from exercise of stock options	28	27
Taxes paid related to net share settlement of equity awards	(9)	(7)
Debt financing fees	(4)	0
Net cash used for financing activities	(287)	(205)
Effect of exchange rate changes on cash	0	(1)
Net increase in cash and cash equivalents	233	269
Cash and cash equivalents at beginning of period	555	232
Cash and cash equivalents at end of period	788	501
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income taxes paid	(150)	(164)
Interest paid	(91)	(95)
Interest received from interest rate swaps	10	8
Non-cash investing activities:
Capital expenditures in liabilities	$ 30	$ 19

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 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. Certain immaterial reclassifications have been made in the condensed consolidated financial statements of prior periods to conform to the current period presentation. These reclassifications had no material impact on previously reported net income, total stockholders’ equity or cash flows. 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- and nine-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.

Product Warranty Liabilities

9 Months Ended

Sep. 30, 2024

Guarantees and Product Warranties [Abstract]

Product Warranty Liabilities

NOTE I. PRODUCT WARRANTY LIABILITIES

As of September 30, 2024, current and non-current product warranty liabilities were $29 million and $32 million, respectively. As of September 30, 2023, current and non-current product warranty liabilities were $29 million and $30 million, respectively.

Product warranty liability activities consisted of the following (dollars in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Beginning balance	$	59		$	60		$	59		$	57
Payments		(10	)		(12	)		(32	)		(30	)
Increase in liability (warranty issued during period)		8			5			24			20
Net adjustments to liability		4			6			10			12
Ending balance	$	61		$	59		$	61		$	59

Revenue

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

NOTE C. REVENUE


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
North America On-Highway	$	457	$	376	$	1,333	$	1,149
North America Off-Highway		1		9		6		58
Defense		53		43		144		103
Outside North America On-Highway		126		118		369		349
Outside North America Off-Highway		19		19		83		66
Service Parts, Support Equipment and Other		168		171		494		535
Total Net Sales	$	824	$	736	$	2,429	$	2,260

NOTE J. DEFERRED REVENUE

Deferred revenue activity consisted of the following (dollars in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Beginning balance	$	136		$	139		$	130		$	131
Increases		11			13			37			42
Revenue earned		(9	)		(14	)		(29	)		(35	)
Ending balance	$	138		$	138		$	138		$	138

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