Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | ||
Mar. 31, 2014 | Apr. 14, 2014 | Apr. 14, 2014 | |
Common Stock | Non-voting Common Stock | ||
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q1 | ' | ' |
Trading Symbol | 'ALSN | ' | ' |
Entity Registrant Name | 'ALLISON TRANSMISSION HOLDINGS INC | ' | ' |
Entity Central Index Key | '0001411207 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 181,128,245 | 1,185 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current Assets | ' | ' |
Cash and cash equivalents | $159.90 | $184.70 |
Accounts receivables - net of allowance for doubtful accounts of $0.5 and $0.4 | 227.2 | 175.1 |
Inventories | 175.6 | 160.4 |
Deferred income taxes, net | 58.1 | 58.1 |
Other current assets | 31.8 | 28.6 |
Total Current Assets | 652.6 | 606.9 |
Property, plant and equipment, net | 551.1 | 563.4 |
Intangible assets, net | 1,586.10 | 1,610.80 |
Goodwill | 1,941 | 1,941 |
Deferred income taxes, net | 1.1 | 1.1 |
Other non-current assets | 88 | 89.4 |
TOTAL ASSETS | 4,819.90 | 4,812.60 |
Current Liabilities | ' | ' |
Accounts payable | 173.3 | 150.4 |
Product warranty liability | 32.3 | 37.4 |
Current portion of long-term debt | 19.5 | 17.9 |
Deferred revenue | 38.7 | 29.2 |
Other current liabilities | 147.3 | 152.3 |
Total Current Liabilities | 411.1 | 387.2 |
Product warranty liability | 58.1 | 53.1 |
Deferred revenue | 43.7 | 43.2 |
Long-term debt | 2,656 | 2,660.40 |
Deferred income taxes | 98.4 | 76.2 |
Other non-current liabilities | 158.8 | 153.7 |
TOTAL LIABILITIES | 3,426.10 | 3,373.80 |
Commitments and contingencies (see NOTE O) | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding | ' | ' |
Treasury stock | ' | ' |
Paid in capital | 1,625.50 | 1,631.80 |
Accumulated deficit | -214.6 | -173.8 |
Accumulated other comprehensive loss, net of tax | -18.9 | -21 |
TOTAL STOCKHOLDERS' EQUITY | 1,393.80 | 1,438.80 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | 4,819.90 | 4,812.60 |
Common Stock | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Common stock | 1.8 | 1.8 |
Non-voting Common Stock | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Common stock | $0 | $0 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts receivables | $0.50 | $0.40 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 1,880,000,000 | 1,880,000,000 |
Common stock, shares issued | 180,990,466 | 183,375,436 |
Common stock, shares outstanding | 180,990,466 | 183,375,436 |
Non-voting Common Stock | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 1,185 | 1,185 |
Common stock, shares outstanding | 1,185 | 1,185 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net sales | $493.60 | $457.40 |
Cost of sales | 271.1 | 259.1 |
Gross profit | 222.5 | 198.3 |
Selling, general and administrative expenses | 83.2 | 87.9 |
Engineering - research and development | 24.5 | 29 |
Operating income | 114.8 | 81.4 |
Interest income | 0.2 | 0.2 |
Interest expense | -35.3 | -34.1 |
Other expense, net | -0.4 | -3.1 |
Income before income taxes | 79.3 | 44.4 |
Income tax expense | -27.2 | -16.9 |
Net income | 52.1 | 27.5 |
Basic earnings per share attributable to common stockholders | $0.29 | $0.15 |
Diluted earnings per share attributable to common stockholders | $0.28 | $0.15 |
Dividends per common share | $0.12 | $0.06 |
Comprehensive income | $54.20 | $24.90 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $52.10 | $27.50 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Amortization of intangible assets | 24.7 | 29.9 |
Depreciation of property, plant and equipment | 23.3 | 24.7 |
Deferred income taxes | 27.5 | 16.1 |
Unrealized gain on derivatives | -4.2 | -7.3 |
Amortization of deferred financing costs | 2 | 2.9 |
Impairment loss on investment in technology-related initiatives | ' | 2.5 |
Stock-based compensation | 3.3 | 3.4 |
Excess tax benefit from stock-based compensation | -5 | -4.9 |
Other | 0 | -0.1 |
Changes in assets and liabilities: | ' | ' |
Accounts receivable | -52 | -40.3 |
Inventories | -14.9 | -12.2 |
Accounts payable | 22.9 | 28.6 |
Other assets and liabilities | 18.9 | -16.1 |
Net cash provided by operating activities | 98.6 | 54.7 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Additions of long-lived assets | -11.1 | -12.6 |
Investments in technology-related initiatives | -3.8 | -6.3 |
Collateral for interest rate derivatives | -0.3 | -0.4 |
Proceeds from disposal of assets | 0.1 | 0.2 |
Net cash used for investing activities | -15.1 | -19.1 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Repurchase of common stock | -100 | ' |
Debt financing fees | -0.7 | -1.6 |
Payments on long-term debt | -2.8 | -5.9 |
Dividend payments | -21.7 | -11.1 |
Proceeds from exercise of stock options | 14.5 | 15.8 |
Excess tax benefit on stock-based compensation | 5 | 4.9 |
Net cash (used for) provided by financing activities | -105.7 | 2.1 |
Effect of exchange rate changes on cash | -2.6 | 3 |
Net (decrease) increase in cash and cash equivalents | -24.8 | 40.7 |
Cash and cash equivalents at beginning of period | 184.7 | 80.2 |
Cash and cash equivalents at end of period | 159.9 | 120.9 |
Supplemental disclosures: | ' | ' |
Interest paid | 29.4 | 30 |
Income taxes paid | $2.10 | $1.20 |
Overview
Overview | 3 Months Ended |
Mar. 31, 2014 | |
Overview | ' |
NOTE A. OVERVIEW | |
Overview | |
Allison Transmission Holdings, Inc. and its subsidiaries (the “Company” or “Allison”), design and manufacture commercial and defense fully-automatic transmissions. | |
The business was founded in 1915 and has been headquartered in Indianapolis, Indiana since inception. The Company has 13 different transmission product lines. Although approximately 77% of revenues were generated in North America in 2013, the Company has a global presence by serving customers in Europe, Asia, South America and Africa. The Company serves customers through an independent network of approximately 1,400 independent distributor and dealer locations worldwide. | |
Since the introduction of the Company’s first fully-automatic transmission over 60 years ago, the Company’s products have gained acceptance in a wide variety of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (primarily school, transit and hybrid-transit), motorhomes, off-highway vehicles and equipment (primarily energy, mining and construction) and defense vehicles (wheeled and tracked). The Company has developed over 100 different product models that are used in more than 2,500 different vehicle configurations, which are compatible with more than 500 combinations of engine brands, models and ratings. The Company also sells support equipment and Allison-branded replacement parts for the Company’s transmissions and remanufactured transmissions for use in the vehicle aftermarket. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Principles of Consolidation | |
The condensed consolidated financial statements as of and for the three months ended March 31, 2014 and 2013 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 operations and cash flows of the Company. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission (“SEC”) on February 24, 2014. The interim period financial results for the three month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Significant estimates include, but are not limited to, allowance for doubtful accounts, sales allowances, government price adjustments, fair market values and future cash flows associated with goodwill, indefinite life intangibles, long-lived asset impairment tests, useful lives for depreciation and amortization, warranty liability, determination of discount and other assumptions for pension and other postretirement benefit expense, income taxes and deferred tax valuation allowances, derivative valuation, 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. 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 July 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative accounting guidance on the presentation of an unrecognized tax benefit when net operating loss (“NOL”) carryforwards exist. The guidance requires presentation of an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss or a tax credit carryforward. The guidance became effective for fiscal years beginning after December 15, 2013. The adoption of this guidance did not have a material effect on the Company’s condensed consolidated financial statements. | |
In March 2013, the FASB issued authoritative accounting guidance on a parent company’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. The guidance clarifies that when a parent company ceases to have a controlling financial interest in a subsidiary or group of assets, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The guidance became effective for fiscal years beginning after December 15, 2013. The adoption of this guidance did not have an effect on the Company’s condensed consolidated financial statements. |
INVENTORIES
INVENTORIES | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
INVENTORIES | ' | ||||||||
NOTE C. INVENTORIES | |||||||||
Inventories consisted of the following components (dollars in millions): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Purchased parts and raw materials | $ | 82.7 | $ | 79.7 | |||||
Work in progress | 6.8 | 5.7 | |||||||
Service parts | 42.5 | 45.8 | |||||||
Finished goods | 43.6 | 29.2 | |||||||
Total inventories | $ | 175.6 | $ | 160.4 | |||||
Inventory components shipped to third parties, primarily cores, parts to re-manufacturers, and parts to contract manufacturers, in 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. |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||||||||||
NOTE D. GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||||||||||
As of March 31, 2014 and December 31, 2013, the carrying amount of the Company’s Goodwill was $1,941.0 million. The following presents a summary of other intangible assets (dollars in millions): | |||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Intangible | Accumulated | Intangible | Intangible | Accumulated | Intangible | ||||||||||||||||||||
assets, gross | amortization | assets, net | assets, gross | amortization | assets, net | ||||||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||||
Trade name | $ | 870 | $ | — | $ | 870 | $ | 870 | $ | — | $ | 870 | |||||||||||||
Customer relationships — defense | 62.3 | (25.2 | ) | 37.1 | 62.3 | (24.4 | ) | 37.9 | |||||||||||||||||
Customer relationships — commercial | 831.8 | (387.9 | ) | 443.9 | 831.8 | (374.9 | ) | 456.9 | |||||||||||||||||
Proprietary technology | 476.3 | (253.4 | ) | 222.9 | 476.3 | (243.9 | ) | 232.4 | |||||||||||||||||
Non-compete agreement | 17.3 | (11.5 | ) | 5.8 | 17.3 | (11.1 | ) | 6.2 | |||||||||||||||||
Patented technology — defense | 28.2 | (22.1 | ) | 6.1 | 28.2 | (21.2 | ) | 7 | |||||||||||||||||
Tooling rights | 4.5 | (4.2 | ) | 0.3 | 4.5 | (4.1 | ) | 0.4 | |||||||||||||||||
Patented technology — commercial | 260.6 | (260.6 | ) | — | 260.6 | (260.6 | ) | — | |||||||||||||||||
Total | $ | 2,551.00 | $ | (964.9 | ) | $ | 1,586.10 | $ | 2,551.00 | $ | (940.2 | ) | $ | 1,610.80 | |||||||||||
As of March 31, 2014 and December 31, 2013, the net carrying value of our Goodwill and other intangibles was $3,527.1 million and $3,551.8 million, respectively. | |||||||||||||||||||||||||
Amortization expense related to other intangible assets for the next five years and thereafter is expected to be (dollars in millions): | |||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||||
Amortization expense | $ | 97.1 | $ | 92.4 | $ | 89.7 | $ | 87.2 | $ | 85.7 | $ | 189.9 | |||||||||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | ||||||||||||||||||||||||
NOTE E. FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||||||||||
In accordance with the FASB’s authoritative accounting guidance on fair value measurements, fair value is the price (exit price) that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company primarily applies the market approach for recurring fair value measurements and utilizes the best available information that maximizes the use of observable inputs and minimizes the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The accounting guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the relevant guidance are as follows: | |||||||||||||||||||||||||
Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and publicly traded bonds. | |||||||||||||||||||||||||
Level 2 — Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. | |||||||||||||||||||||||||
Level 3 — Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. At each balance sheet date, the Company performs an analysis of all instruments subject to authoritative accounting guidance and includes, in Level 3, all of those whose fair value is based on significant unobservable inputs. As of March 31, 2014 and December 31, 2013, 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 and cash equivalents, available-for-sale 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. The Company’s available-for-sale securities consist of ordinary shares of Torotrak plc (“Torotrak”) associated with a license and exclusivity agreement with Torotrak. Torotrak’s listed shares are traded on the London Stock Exchange under the ticker symbol “TRK.” The Company’s derivative instruments consist of interest rate swaps, foreign currency forward contracts and commodity 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 fair value cash and cash equivalents, available-for-sale securities, assets held in the rabbi trust and the deferred compensation obligation represent a market approach in active markets for identical assets that qualifies 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 foreign currency contracts consist of forward rate contracts which are intended to hedge exposure of transactions denominated in certain currencies and reduce the impact of currency price volatility on the Company’s financial results. The commodity contracts consist of forward rate contracts which are intended to hedge exposure of transactions involving purchases of component parts and energy to power our facilities, reducing the impact of commodity price volatility on the Company’s financial results. | |||||||||||||||||||||||||
For the fair value measurement of foreign currency derivatives, the Company uses forward foreign exchange rates received from the issuing financial institution. These rates are periodically corroborated by comparing to third-party broker quotes. The foreign currency hedges are accounted for within the authoritative accounting guidance set forth on accounting for derivative instruments and hedging activities and have been recorded at fair value based upon quoted market rates. The fair values are included in Other current and non-current assets and liabilities in the Condensed Consolidated Balance Sheets. The Company generally does not elect to apply hedge accounting for these foreign currency contracts, and as a result, unrealized fair value adjustments and realized gains and losses are recorded in Other expense, net in the Condensed Consolidated Statements of Comprehensive Income during the period of change. | |||||||||||||||||||||||||
For the fair value measurement of commodity derivatives, the Company uses forward prices received from the issuing financial institution. These rates are periodically corroborated by comparing to third-party broker quotes. The commodity derivatives are accounted for within the authoritative accounting guidance set forth on accounting for derivative instruments and hedging activities and have been recorded at fair value based upon quoted market rates. The fair values are included in Other current and non-current assets and liabilities in the Condensed Consolidated Balance Sheets. The Company has either not qualified for or not elected hedge accounting treatment for these commodity contracts, and as a result, unrealized fair value adjustments and realized gains and losses are recorded in Other expense, net in the Condensed Consolidated Statements of Comprehensive Income. | |||||||||||||||||||||||||
For the fair value measurement of interest rate derivatives, the Company uses valuations from the issuing financial institution. The Company corroborates the valuation through the use of third-party valuation services using a standard replacement valuation model. The floating-to-fixed interest rate swaps are based on the London Interbank Offered Rate (“LIBOR”) which is observable at commonly quoted intervals. The fair values are included in other current and non-current assets and liabilities in the Condensed Consolidated Balance Sheets. The Company has not qualified for hedge accounting treatment for the interest rate swaps and, as a result, fair value adjustments are charged directly to Interest expense in the Condensed Consolidated Statements of Comprehensive Income. | |||||||||||||||||||||||||
The following table summarizes the fair value of the Company’s financial assets and (liabilities) as of March 31, 2014 and December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||||
Quoted Prices in Active | Significant Other | TOTAL | |||||||||||||||||||||||
Markets for Identical | Observable Inputs (Level 2) | ||||||||||||||||||||||||
Assets (Level 1) | |||||||||||||||||||||||||
March 31, | December 31, | March 31, | December 31, | March 31, | December 31, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Cash and cash equivalents | $ | 159.9 | $ | 184.7 | $ | — | $ | — | $ | 159.9 | $ | 184.7 | |||||||||||||
Available-for-sale securities | 12.1 | 8.2 | — | — | 12.1 | 8.2 | |||||||||||||||||||
Rabbi trust assets | 2.4 | 1.3 | — | — | 2.4 | 1.3 | |||||||||||||||||||
Deferred compensation obligation | (2.4 | ) | (1.3 | ) | — | — | (2.4 | ) | (1.3 | ) | |||||||||||||||
Derivative assets | — | — | 0.2 | 1.6 | 0.2 | 1.6 | |||||||||||||||||||
Derivative liabilities | — | — | (15.9 | ) | (21.4 | ) | (15.9 | ) | (21.4 | ) | |||||||||||||||
Total | $ | 172 | $ | 192.9 | $ | (15.7 | ) | $ | (19.8 | ) | $ | 156.3 | $ | 173.1 | |||||||||||
Of the available Cash and cash equivalents, approximately $144.9 million and $179.7 million was deposited in operating accounts while approximately $15.0 million and $5.0 million was invested in U.S. government backed securities as of March 31, 2014 and December 31, 2013, respectively. |
DEBT
DEBT | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
DEBT | ' | ||||||||
NOTE F. DEBT | |||||||||
Long-term debt and maturities are as follows (dollars in millions): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Long-term debt: | |||||||||
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | $ | 423.5 | $ | 423.5 | |||||
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | 1,780.70 | 1,783.50 | |||||||
Senior Notes, fixed 7.125%, due 2019 | 471.3 | 471.3 | |||||||
Total long-term debt | 2,675.50 | 2,678.30 | |||||||
Less: current maturities of long-term debt | 19.5 | 17.9 | |||||||
Total long-term debt less current portion | $ | 2,656.00 | $ | 2,660.40 | |||||
As of March 31, 2014, the Company had $423.5 million of indebtedness associated with Allison Transmission, Inc.’s (“ATI”), the Company’s wholly-owned subsidiary, Senior Secured Credit Facility Term B-2 Loan due 2017 (“Term B-2 Loan”) and $1,780.7 million of indebtedness associated with ATI’s Senior Secured Credit Facility Term B-3 Loan due 2019 (“Term B-3 Loan”) (together the Term B-2 Loan, Term B-3 Loan and revolving credit facility defined as the “Senior Secured Credit Facility”). The Company also had indebtedness of $471.3 million of ATI’s 7.125% senior cash pay notes due May 2019 (“7.125% Senior Notes”). | |||||||||
The fair value of the Company’s long-term debt obligations as of March 31, 2014 was $2,720.3 million. The fair value is based on quoted Level 1 market prices of the Company’s debt as of March 31, 2014. It is not expected that the Company would be able to repurchase a significant amount of its debt at these levels. The difference between the fair value and carrying value of the long-term debt is driven primarily by trends in the financial markets. | |||||||||
Senior Secured Credit Facility | |||||||||
The Senior Secured Credit Facility is collateralized by a lien on substantially all assets of the Company including all of ATI’s capital stock and all of the capital stock or other equity interest held by the Company, ATI and each of the Company’s existing and future U.S. subsidiary guarantors (subject to certain limitations for equity interests of foreign subsidiaries and other exceptions set forth in the terms of the Senior Secured Credit Facility). Interest on the Term B-2 Loan, as of March 31, 2014, is equal to the LIBOR plus 3.00% and interest on the Term B-3 Loan, as of March 31, 2014, is equal to the LIBOR (which may not be less than 1.00%) plus 2.75% based on the Company’s total leverage ratio. As of March 31, 2014, these rates were approximately 3.16% and 3.75% on the Term B-2 Loan and Term B-3 Loan, respectively, and the weighted average rate on the Senior Secured Credit Facility was approximately 3.64%. The Senior Secured Credit Facility requires minimum quarterly principal payments on the Term B-2 Loan and Term B-3 Loan as well as prepayments from certain net cash proceeds of non-ordinary course asset sales and casualty and condemnation events and from a percentage of excess cash flow, if applicable. Due to voluntary prepayments, the Company has fulfilled all Term B-2 Loan required quarterly payments through its maturity date of 2017. The minimum required quarterly principal payment on the Term B-3 Loan is $4.5 million and remains through its maturity date of 2019. As of March 31, 2014, 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 on each loan is due upon maturity. | |||||||||
The Senior Secured Credit Facility also provides for revolving credit borrowings. In the first quarter of 2014, ATI increased the revolving commitments available under the revolving portion of the Senior Secured Credit Facility to $465.0 million, net of an allowance for up to $75.0 million in outstanding letters of credit commitments. The increase was treated as a modification of debt under GAAP, and thus the Company recorded $0.6 million of new deferred financing fees in the condensed consolidated financial statements. Throughout the three months ended March 31, 2014, the Company did not make any withdrawals on the revolving credit facility. As of March 31, 2014, the Company had $453.0 million available under the revolving credit facility, net of $12.0 million in letters of credit. Revolving credit borrowings bear interest at a variable base rate plus an applicable margin based on the Company’s total leverage ratio. As of March 31, 2014, this rate would have been between approximately 2.41% and 4.50%. In addition, there is an annual commitment fee, based on the Company’s total leverage ratio, which as of March 31, 2014, was equal to 0.375% of the average unused revolving credit borrowings available under the Senior Secured Credit Facility. Revolving credit borrowings are payable at the option of the Company throughout the term of the Senior Secured Credit Facility with the balance due in January 2019. | |||||||||
The revolving portion of the Senior Secured Credit Facility requires the Company to maintain a specified maximum total senior secured leverage ratio of 5.50x when revolving loan commitments remain outstanding at the end of a fiscal quarter. On March 12, 2014, however, the revolving lenders holding a majority of the revolving loan commitments permanently waived and agreed that no event of default would result from any non-compliance so long as there were no revolving loans outstanding as of the last day of any fiscal quarter. As of March 31, 2014, the Company had no revolving loans outstanding, however the Company would have been in compliance with the maximum total senior secured leverage ratio, achieving a 3.14x ratio. Additionally within the terms of the Senior Secured Credit Facility, a senior secured leverage ratio at or below 3.50x results in the elimination of excess cash flow payments on the Senior Secured Credit Facility for the applicable year. The Senior Secured Credit Facility also provides certain financial incentives based on our total leverage ratio. A total leverage ratio at or below 4.00x results in a 25 basis point reduction to the applicable margin on the revolving credit facility, and a total leverage ratio at or below 3.50x results in a 12.5 basis point reduction to the revolving credit facility commitment fee and an additional 25 basis point reduction to the applicable margin on the revolving credit facility. A total leverage ratio at or below 3.25x results in a 25 basis point reduction to the applicable margin on our Term B-3 Loan. These reductions would remain in effect as long as the Company achieves a total leverage ratio at or below the related threshold. As of March 31, 2014, the total leverage ratio was 3.86x. | |||||||||
In addition, the Senior Secured Credit Facility, 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 or declare or pay certain dividends. As of March 31, 2014, the Company is in compliance with all covenants under the Senior Secured Credit Facility. |
DERIVATIVES
DERIVATIVES | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
DERIVATIVES | ' | ||||||||||||||||||||
NOTE G. DERIVATIVES | |||||||||||||||||||||
The Company is exposed to certain financial risk from volatility in interest rates, foreign exchange rates and commodity prices. The risk is managed through the use of financial derivative instruments including interest rate swaps, foreign currency forward contracts and commodity swaps. The Company’s current derivative instruments are used strictly as an economic hedge and not for speculative purposes. As necessary, the Company adjusts the values of the derivative instruments for counter-party or credit risk. | |||||||||||||||||||||
Interest Rate | |||||||||||||||||||||
The Company is subject to interest rate risk related to the Senior Secured Credit Facility and enters into interest rate swap contracts that are based on the LIBOR to manage a portion of this exposure. The Company has not elected hedge accounting treatment for these derivatives, and as a result, fair value adjustments are charged directly to Interest expense in the Condensed Consolidated Statements of Comprehensive Income. A summary of the Company’s interest rate derivatives as of March 31, 2014 and December 31, 2013 follows (dollars in millions): | |||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Notional | Fair Value | Notional | Fair Value | ||||||||||||||||||
Amount | Amount | ||||||||||||||||||||
3.75% Interest Rate Swap H, due August 2014 | $ | 350 | $ | (4.2 | ) | $ | 350 | $ | (7.2 | ) | |||||||||||
3.77% Interest Rate Swap I, due August 2014 | 350 | (4.1 | ) | 350 | (7.2 | ) | |||||||||||||||
2.96% Interest Rate Swap J, due August 2014 | 125 | (1.2 | ) | 125 | (2.0 | ) | |||||||||||||||
3.05% Interest Rate Swap K, due August 2014 | 125 | (1.2 | ) | 125 | (2.0 | ) | |||||||||||||||
3.44% Interest Rate Swap L, due August 2019* | 75 | (0.9 | ) | 75 | (0.4 | ) | |||||||||||||||
3.43% Interest Rate Swap M, due August 2019* | 100 | (1.2 | ) | 100 | (0.4 | ) | |||||||||||||||
3.37% Interest Rate Swap N, due August 2019* | 75 | (0.8 | ) | 75 | (0.2 | ) | |||||||||||||||
3.19% Interest Rate Swap O, due August 2019* | 75 | (0.4 | ) | 75 | 0.2 | ||||||||||||||||
3.08% Interest Rate Swap P, due August 2019* | 75 | (0.1 | ) | 75 | 0.4 | ||||||||||||||||
2.99% Interest Rate Swap Q, due August 2019* | 50 | 0 | 50 | 0.4 | |||||||||||||||||
2.98% Interest Rate Swap R, due August 2019* | 50 | 0 | 50 | 0.4 | |||||||||||||||||
* include LIBOR floor of 1.00% | $ | 1,450.00 | $ | (14.1 | ) | $ | 1,450.00 | $ | (18.0 | ) | |||||||||||
Certain of the Company’s interest rate derivatives contain credit-risk and collateral contingent features under which downgrades in the Company’s credit rating could require the Company to increase its collateral. Certain interest rate derivatives also contain provisions under which the Company may be required to post additional collateral if the LIBOR interest rate curve reaches certain levels. | |||||||||||||||||||||
As of March 31, 2014 and December 31, 2013, the Company had recorded cash collateral of $2.0 million and $1.7 million, respectively, in Other current assets in the Condensed Consolidated Balance Sheets, as the balances are subject to frequent change. The Company has also posted $2.0 million of collateral in the form of letters of credit. | |||||||||||||||||||||
Currency Exchange | |||||||||||||||||||||
The Company’s business is subject to foreign exchange rate risk. As a result, the Company enters into various forward rate contracts that qualify as derivatives under the authoritative accounting guidance to manage certain of these exposures. Forward contracts are used to hedge forecasted transactions and known exposure of payables denominated in a foreign currency. The Company generally has not elected to apply hedge accounting under the authoritative accounting guidance and recorded the unrealized fair value adjustments and realized gains and losses associated with these contracts in Other expense, net in the Condensed Consolidated Statements of Comprehensive Income during the period of change. | |||||||||||||||||||||
The following table summarizes the outstanding foreign currency forward contracts as of March 31, 2014 and December 31, 2013 (amounts in millions): | |||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Notional | Fair Value | Notional | Fair Value | ||||||||||||||||||
Amount | Amount | ||||||||||||||||||||
Japanese Yen (JPY) | ¥ | 1,050.00 | $ | 0 | ¥ | 600 | $ | (0.3 | ) | ||||||||||||
$ | 0 | $ | (0.3 | ) | |||||||||||||||||
Commodity | |||||||||||||||||||||
The Company’s business is subject to commodity price risk, primarily with component suppliers. As a result, the Company enters into various commodity swap contracts that qualify as derivatives under the authoritative accounting guidance to manage certain of these exposures. Swap contracts are used to hedge forecasted transactions either of the commodity or of components containing the commodity. The Company has not qualified for hedge accounting treatment for these commodity contracts, and as a result, unrealized fair value adjustments and realized gains and losses associated with these contracts were charged directly to Other expense, net in the Condensed Consolidated Statements of Comprehensive Income during the period of change. | |||||||||||||||||||||
The following table summarizes the outstanding commodity swaps as of March 31, 2014 and December 31, 2013 (dollars in millions): | |||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Notional | Quantity | Fair Value | Notional | Quantity | Fair Value | ||||||||||||||||
Amount | Amount | ||||||||||||||||||||
Aluminum | $ | 21.9 | 11,000 metric tons | $ | (1.6 | ) | $ | 23.8 | 11,875 metric tons | $ | (1.6 | ) | |||||||||
Natural Gas | N/A | N/A | — | 0.3 | 90,000 MMBtu | 0 | |||||||||||||||
$ | (1.6 | ) | $ | (1.6 | ) | ||||||||||||||||
The following tabular disclosures further describe the Company’s derivative instruments and their impact on the financial condition of the Company (dollars in millions): | |||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 0.1 | Other current | $ | (0.3 | ) | ||||||||||||||
liabilities | |||||||||||||||||||||
Other current | (0.1 | ) | |||||||||||||||||||
liabilities | |||||||||||||||||||||
Commodity contracts | Other non-current | 0.1 | Other current and | 0.1 | |||||||||||||||||
assets | non-current assets | ||||||||||||||||||||
Other current and | (1.7 | ) | Other current and | (1.7 | ) | ||||||||||||||||
non-current liabilities | non-current liabilities | ||||||||||||||||||||
Interest rate contracts | Other non-current | 0.1 | Other non-current | 1.5 | |||||||||||||||||
assets | assets | ||||||||||||||||||||
Other current and | (14.2 | ) | Other current and | (19.5 | ) | ||||||||||||||||
non-current liabilities | non-current liabilities | ||||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | (15.7 | ) | $ | (19.9 | ) | |||||||||||||||
The fair values of the derivatives are recorded between Other current and non-current assets and Other current and non-current liabilities as appropriate in the Condensed Consolidated Balance Sheets. As of March 31, 2014, the amounts recorded to Other current assets and Other current liabilities for foreign currency contracts were $0.1 million and ($0.1) million, respectively. The amount recorded to Other non-current assets for commodity contracts was $0.1 million, and the amounts recorded to Other current and non-current liabilities for commodity contracts were ($1.5) million and ($0.2) million, respectively. The amount recorded to Other non-current assets for interest rate contracts was $0.1 million. The amounts recorded to Other current and non-current liabilities for interest rate contracts were ($10.7) million and ($3.5) million, respectively. | |||||||||||||||||||||
As of December 31, 2013, the amount recorded to Other current liabilities for foreign currency contracts was ($0.3) million. The amounts recorded to Other current and non-current assets for commodity contracts were $0.1 million and $0.0 million, respectively. The amounts recorded to Other current and non-current liabilities for commodity contracts were ($1.5) million and ($0.2) million, respectively. The amount recorded to Other non-current assets for interest rate contracts was $1.5 million. The amounts recorded to Other current and non-current liabilities for interest rate contracts were ($18.5) million and ($1.0) million, respectively. | |||||||||||||||||||||
The impact on the Company’s Condensed Consolidated Statements of Comprehensive Income related to foreign currency and commodity contracts can be found in NOTE J, and the following tabular disclosure describes the location and impact on the Company’s results of operations related to unrealized gain on interest rate derivatives (dollars in millions): | |||||||||||||||||||||
Three months ended March 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Interest expense | $ | 3.9 | $ | 9.2 |
PRODUCT_WARRANTY_LIABILITIES
PRODUCT WARRANTY LIABILITIES | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
PRODUCT WARRANTY LIABILITIES | ' | ||||||||
NOTE H. PRODUCT WARRANTY LIABILITIES | |||||||||
Product warranty liability activities consist of the following (dollars in millions): | |||||||||
Three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | 90.5 | $ | 109.7 | |||||
Payments | (8.4 | ) | (9.9 | ) | |||||
Increase in liability (warranty issued during period) | 6.3 | 5.5 | |||||||
Net adjustments to liability | 1.9 | 2 | |||||||
Accretion (for Predecessor liabilities) | 0.1 | 0.2 | |||||||
Ending balance | $ | 90.4 | $ | 107.5 | |||||
As of March 31, 2014, the current and non-current liabilities were $32.3 million and $58.1 million, respectively. As of March 31, 2013, the current and non-current liabilities were $35.9 million and $71.6 million, respectively. |
DEFERRED_REVENUE
DEFERRED REVENUE | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
DEFERRED REVENUE | ' | ||||||||
NOTE I. DEFERRED REVENUE | |||||||||
As of March 31, 2014, the current and non-current liabilities related to deferred revenue for ETC were $20.1 million and $43.7 million, respectively. As of March 31, 2013, the current and non-current liabilities related to deferred revenue for ETC were $21.0 million and $40.6 million, respectively. | |||||||||
Deferred revenue for ETC activity (dollars in millions): | |||||||||
Three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | 63.6 | $ | 63.5 | |||||
Increases | 5.5 | 3.3 | |||||||
Revenue earned | (5.3 | ) | (5.2 | ) | |||||
Ending balance | $ | 63.8 | $ | 61.6 | |||||
Deferred revenue recorded in current liabilities related to unearned net sales for defense contracts as of March 31, 2014 and 2013 was approximately $18.6 million and $0.5 million, respectively. During 2013 and 2014, the Company recorded deferred revenue for payments received from the U.S. government for certain tracked transmissions that were not shipped at the request of the U.S. government. |
OTHER_EXPENSE_NET
OTHER EXPENSE, NET | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
OTHER EXPENSE, NET | ' | ||||||||
NOTE J. OTHER EXPENSE, NET | |||||||||
Other expense, net consists of the following (dollars in millions): | |||||||||
Three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Realized loss on derivative contracts (see NOTE G) | $ | (0.6 | ) | $ | (0.6 | ) | |||
Grant Program income | 0.6 | 1.2 | |||||||
(Loss) gain on foreign exchange | (0.5 | ) | 0.6 | ||||||
Public offering fees and expenses | (0.3 | ) | — | ||||||
Unrealized gain (loss) on derivative contracts (see NOTE G) | 0.2 | (1.9 | ) | ||||||
Impairment loss on investments in technology-related initiatives | — | (2.5 | ) | ||||||
Other | 0.2 | 0.1 | |||||||
Total | $ | (0.4 | ) | $ | (3.1 | ) | |||
During the first quarter of 2014, the Company completed an underwritten secondary public offering of 28,750,000 shares of its common stock held by investment funds affiliated with The Carlyle Group and Onex Corporation (collectively, the “Sponsors”) at a public offering price, less underwriting discounts and commissions, of $29.17 per share. In connection with the offering, the Company repurchased from the underwriters 3,428,179 shares of the 28,750,000 shares at the price paid by the underwriters and subsequently retired those shares. | |||||||||
In 2009, the Company was notified by the U.S. Department of Energy that it was selected to receive matching funds from a grant program funded by the American Recovery and Reinvestment Act for the development of Hybrid manufacturing capacity in the U.S. (the “Grant Program”). All applicable costs associated with the Grant Program have been charged to Engineering — research and development while the Government’s matching reimbursement is recorded to Other expense, net in the Condensed Consolidated Statements of Comprehensive Income. Since inception of the Grant Program, the Company has recorded $46.7 million of Grant Program income to Other expense, net in the Condensed Consolidated Statements of Comprehensive Income. | |||||||||
For the three months ended March 31, 2014 and 2013, the Company recorded $0.0 million and $1.4 million, respectively, as a reduction of the basis of capital assets purchased under the Grant Program. Under the Grant Program, the Company has acquired approximately $7.1 million of assets that have been placed in service, resulting in related depreciation of $0.1 million and $0.1 million for the three months ended March 31, 2014 and 2013, respectively. |
OTHER_CURRENT_LIABILITIES
OTHER CURRENT LIABILITIES | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
OTHER CURRENT LIABILITIES | ' | ||||||||
NOTE K. OTHER CURRENT LIABILITIES | |||||||||
Other current liabilities consist of the following (dollars in millions): | |||||||||
As of | As of | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Sales allowances | $ | 30.4 | $ | 26.9 | |||||
Payroll and related costs | 27.3 | 37.6 | |||||||
Defense price reduction reserve | 26.2 | 26.8 | |||||||
Accrued interest payable | 18.9 | 11.2 | |||||||
Derivative liabilities | 12.2 | 20.2 | |||||||
Vendor buyback obligation | 12.1 | 11.8 | |||||||
Taxes payable | 7 | 8.6 | |||||||
Research and development payable | 4.3 | — | |||||||
Other accruals | 8.9 | 9.2 | |||||||
Total | $ | 147.3 | $ | 152.3 | |||||
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | ||||||||||||||||
NOTE L. EMPLOYEE BENEFIT PLANS | |||||||||||||||||
Components of net periodic benefit cost consist of the following (dollars in millions): | |||||||||||||||||
Pension Plans | Post-retirement Benefits | ||||||||||||||||
Three months ended March 31, | Three months ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net periodic benefit cost: | |||||||||||||||||
Service cost | $ | 3.3 | $ | 4.1 | $ | 0.5 | $ | 0.8 | |||||||||
Interest cost | 1.3 | 1 | 1.5 | 1.5 | |||||||||||||
Expected return on assets | (1.9 | ) | (1.6 | ) | — | — | |||||||||||
Prior service cost | 0 | 0 | (0.9 | ) | (0.9 | ) | |||||||||||
Loss | — | 0.2 | (0.2 | ) | — | ||||||||||||
Net periodic benefit cost | $ | 2.7 | $ | 3.7 | $ | 0.9 | $ | 1.4 | |||||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2014 | |
INCOME TAXES | ' |
NOTE M. INCOME TAXES | |
For the three months ended March 31, 2014 and 2013, the Company recorded total tax expense of $27.2 million and $16.9 million, respectively. The effective tax rate for the three months ended March 31, 2014 and 2013 was (34.4%) and (38.1%), respectively. The change in the effective rate was principally driven by a 2013 discrete expense item and a prior period statutory change in a state apportionment rate, resulting in a favorable tax benefit being recorded in the first quarter of 2014. | |
During the first quarter 2014, the Company incurred an ownership change resulting in a limitation on the utilization of the Company’s net operating losses. The Company has reviewed the limitation and determined there is no concern about the Company’s ability to utilize the tax attributes in the future. | |
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 carryforward 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 has determined, based on the evaluation of both objective and subjective evidence available, that the domestic valuation allowance is not necessary and that it is more likely than not that the deferred tax assets are fully realizable. The Company has reached a sustained period of profitability and objectively measured positive evidence outweighed the negative evidence. The Company continues to provide for a valuation allowance on certain of its foreign deferred tax assets. | |
In accordance with the FASB’s authoritative guidance on accounting for uncertainty in income taxes, the Company recorded a liability of $2.3 million for unrecognized tax benefits related to the 2010 Research & Development Credit as of March 31, 2014 and December 31, 2013. The accounting guidance prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For the year ended December 31, 2013, the return will remain subject to examination by the various taxing authorities for the duration of the applicable statute of limitations (generally three years from the later of the date of filing or the due date of the return). |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | ||||||||||||||||
NOTE N. ACCUMULATED OTHER COMPREHENSIVE LOSS | |||||||||||||||||
The following table reconciles changes in Accumulated other comprehensive loss (“AOCL”) by component (net of tax, dollars in millions): | |||||||||||||||||
Three months ended | |||||||||||||||||
Available-for- | Defined | Foreign | Total | ||||||||||||||
sale securities | benefit | currency items | |||||||||||||||
pension items | |||||||||||||||||
AOCL as of December 31, 2012 | $ | 2.2 | $ | (36.9 | ) | $ | (9.2 | ) | $ | (43.9 | ) | ||||||
Other comprehensive income before reclassifications | 0.1 | — | (2.3 | ) | (2.2 | ) | |||||||||||
Amounts reclassified from AOCL | — | (0.4 | ) | — | (0.4 | ) | |||||||||||
Net current period other comprehensive income | $ | 0.1 | $ | (0.4 | ) | $ | (2.3 | ) | $ | (2.6 | ) | ||||||
AOCL as of March 31, 2013 | $ | 2.3 | $ | (37.3 | ) | $ | (11.5 | ) | $ | (46.5 | ) | ||||||
AOCL as of December 31, 2013 | $ | 1.1 | $ | (7.9 | ) | $ | (14.2 | ) | $ | (21.0 | ) | ||||||
Other comprehensive income before reclassifications | 0.1 | — | 2.7 | 2.8 | |||||||||||||
Amounts reclassified from AOCL | — | (0.7 | ) | — | (0.7 | ) | |||||||||||
Net current period other comprehensive income | $ | 0.1 | $ | (0.7 | ) | $ | 2.7 | $ | 2.1 | ||||||||
AOCL as of March 31, 2014 | $ | 1.2 | $ | (8.6 | ) | $ | (11.5 | ) | $ | (18.9 | ) | ||||||
The following table shows the location in the Condensed Consolidated Statements of Comprehensive Income affected by reclassifications from AOCL (dollars in millions): | |||||||||||||||||
Amounts | Affected line item in the Condensed | ||||||||||||||||
reclassified from AOCL | Consolidated Statements of | ||||||||||||||||
Three months ended | Comprehensive Income | ||||||||||||||||
AOCL Components | March 31, 2014 | March 31, 2013 | |||||||||||||||
Amortization of defined benefit pension items: | |||||||||||||||||
Prior service cost | $ | 0.8 | $ | 0.7 | Cost of sales | ||||||||||||
0.1 | 0.2 | Selling, general and | |||||||||||||||
administrative | |||||||||||||||||
0 | — | Engineering – research and | |||||||||||||||
development | |||||||||||||||||
Actuarial loss | 0.2 | — | Cost of sales | ||||||||||||||
0 | (0.1 | ) | Selling, general and | ||||||||||||||
administrative | |||||||||||||||||
0 | (0.1 | ) | Engineering – research and | ||||||||||||||
development | |||||||||||||||||
Total reclassifications, before tax | 1.1 | 0.7 | Income before income taxes | ||||||||||||||
Income tax expense | (0.4 | ) | (0.3 | ) | Tax expense | ||||||||||||
Total reclassifications | $ | 0.7 | $ | 0.4 | Net of tax | ||||||||||||
Prior service cost and actuarial loss are included in the computation of the Company’s net periodic benefit cost. Please see NOTE L for additional details. | |||||||||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | ' |
NOTE O. COMMITMENTS AND CONTINGENCIES | |
Claims, Disputes, and Litigation | |
The Company is party to various legal actions and administrative proceedings and subject to various claims arising in the ordinary course of business. These proceedings primarily involve commercial claims, product liability claims, personal injury claims and workers’ compensation claims. The Company believes that the ultimate liability, if any, in excess of amounts already provided for in the condensed consolidated financial statements or covered by insurance on the disposition of these matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company. |
CERTAIN_RELATIONSHIPS_AND_RELA
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2014 | |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | ' |
NOTE P. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | |
As of March 31, 2014, the Sponsors owned approximately 39.0% of the Company’s outstanding common stock. Pursuant to an amended and restated stockholders agreement, a majority of the Board of Directors has been designated by the Sponsors and is affiliated with the Sponsors. As a result, the Sponsors or their nominees to the Board of Directors have the ability to control the appointment of management, the entering into of mergers, sales of substantially all of the Company’s assets and other extraordinary transactions and influence amendments to the Company’s certificate of incorporation. The interests of the Sponsors could conflict with those of the Company’s other stockholders. In addition, the Sponsors may in the future own businesses that directly compete with the Company. | |
Senior Notes Held by Executive Officers | |
As of March 31, 2014, Lawrence E. Dewey, our Chairman, President and Chief Executive Officer, and David S. Graziosi, our Executive Vice President, Chief Financial Officer and Treasurer held approximately $100,000 and $450,000, respectively, in aggregate principal amount of the 7.125% Senior Notes. | |
Repurchase of Common Stock held by Sponsors | |
During the first quarter of 2014, the Company completed an underwritten secondary public offering of 28,750,000 shares of its common stock held by investment funds affiliated with the Sponsors at a public offering price, less underwriting discounts and commissions, of $29.17 per share. In connection with the offering, the Company repurchased from the underwriters 3,428,179 shares of the 28,750,000 shares at the price paid by the underwriters and subsequently retired those shares. The sale by the Sponsors resulted in their ownership falling below fifty percent of our outstanding common stock and the loss of controlled company status under the listing rules of the New York Stock Exchange. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
EARNINGS PER SHARE | ' | ||||||||
NOTE Q. EARNINGS PER SHARE | |||||||||
The Company presents both basic and diluted earnings per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted EPS is calculated by dividing net income by the weighted average number of common shares and common equivalent shares outstanding during the reporting period that are calculated using the treasury stock method for stock-based awards. The treasury stock method assumes that the Company uses the proceeds from the exercise of awards to repurchase common stock at the average market price during the period. The assumed proceeds under the treasury stock method include the purchase price that the grantee will pay in the future, compensation cost for future service that the Company has not yet recognized and any tax benefits that would be credited to additional paid-in-capital when the award generates a tax deduction. If there would be a shortfall resulting in a charge to additional paid-in-capital, such an amount would be a reduction of the proceeds to the extent of the gains. | |||||||||
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 March 31, | |||||||||
2014 | 2013 | ||||||||
Net income | $ | 52.1 | $ | 27.5 | |||||
Weighted average shares of common stock outstanding | 182.2 | 184.7 | |||||||
Dilutive effect stock-based awards | 3.7 | 3.1 | |||||||
Diluted weighted average shares of common stock outstanding | 185.9 | 187.8 | |||||||
Basic earnings per share attributable to common stockholders | $ | 0.29 | $ | 0.15 | |||||
Diluted earnings per share attributable to common stockholders | $ | 0.28 | $ | 0.15 | |||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2014 | |
SUBSEQUENT EVENTS | ' |
NOTE R. SUBSEQUENT EVENTS | |
On April 14, 2014, ATI entered into an amendment with the term loan lenders under its Senior Secured Credit Facility to refinance approximately $423.5 million of term loan debt due August 7, 2017. The interest rate margin applicable to such refinanced loans is at the Company’s option, either (a) 2.75% over the LIBOR or (b) 1.75% over the greater of the prime lending rate provided by the British Banking Association or the federal funds effective rate published by the Federal Reserve Bank of New York plus 0.50%. | |
On April 25, 2014, the Company completed an underwritten secondary public offering of 25,000,000 shares of its common stock held by investment funds affiliated with the Sponsors at a public offering price, less underwriting discounts and commissions, of $29.78 per share. After completion of the sale, the Sponsors continued to own a total of approximately 25.2% of the Company’s outstanding common stock. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Basis of Presentation and Principles of Consolidation | ' |
Basis of Presentation and Principles of Consolidation | |
The condensed consolidated financial statements as of and for the three months ended March 31, 2014 and 2013 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 operations and cash flows of the Company. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission (“SEC”) on February 24, 2014. The interim period financial results for the three month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Significant estimates include, but are not limited to, allowance for doubtful accounts, sales allowances, government price adjustments, fair market values and future cash flows associated with goodwill, indefinite life intangibles, long-lived asset impairment tests, useful lives for depreciation and amortization, warranty liability, determination of discount and other assumptions for pension and other postretirement benefit expense, income taxes and deferred tax valuation allowances, derivative valuation, 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. 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 July 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative accounting guidance on the presentation of an unrecognized tax benefit when net operating loss (“NOL”) carryforwards exist. The guidance requires presentation of an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss or a tax credit carryforward. The guidance became effective for fiscal years beginning after December 15, 2013. The adoption of this guidance did not have a material effect on the Company’s condensed consolidated financial statements. | |
In March 2013, the FASB issued authoritative accounting guidance on a parent company’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. The guidance clarifies that when a parent company ceases to have a controlling financial interest in a subsidiary or group of assets, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The guidance became effective for fiscal years beginning after December 15, 2013. The adoption of this guidance did not have an effect on the Company’s condensed consolidated financial statements. |
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Components of Inventories | ' | ||||||||
Inventories consisted of the following components (dollars in millions): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Purchased parts and raw materials | $ | 82.7 | $ | 79.7 | |||||
Work in progress | 6.8 | 5.7 | |||||||
Service parts | 42.5 | 45.8 | |||||||
Finished goods | 43.6 | 29.2 | |||||||
Total inventories | $ | 175.6 | $ | 160.4 | |||||
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Summary of Other Intangible Assets | ' | ||||||||||||||||||||||||
The following presents a summary of other intangible assets (dollars in millions): | |||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Intangible | Accumulated | Intangible | Intangible | Accumulated | Intangible | ||||||||||||||||||||
assets, gross | amortization | assets, net | assets, gross | amortization | assets, net | ||||||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||||
Trade name | $ | 870 | $ | — | $ | 870 | $ | 870 | $ | — | $ | 870 | |||||||||||||
Customer relationships — defense | 62.3 | (25.2 | ) | 37.1 | 62.3 | (24.4 | ) | 37.9 | |||||||||||||||||
Customer relationships — commercial | 831.8 | (387.9 | ) | 443.9 | 831.8 | (374.9 | ) | 456.9 | |||||||||||||||||
Proprietary technology | 476.3 | (253.4 | ) | 222.9 | 476.3 | (243.9 | ) | 232.4 | |||||||||||||||||
Non-compete agreement | 17.3 | (11.5 | ) | 5.8 | 17.3 | (11.1 | ) | 6.2 | |||||||||||||||||
Patented technology — defense | 28.2 | (22.1 | ) | 6.1 | 28.2 | (21.2 | ) | 7 | |||||||||||||||||
Tooling rights | 4.5 | (4.2 | ) | 0.3 | 4.5 | (4.1 | ) | 0.4 | |||||||||||||||||
Patented technology — commercial | 260.6 | (260.6 | ) | — | 260.6 | (260.6 | ) | — | |||||||||||||||||
Total | $ | 2,551.00 | $ | (964.9 | ) | $ | 1,586.10 | $ | 2,551.00 | $ | (940.2 | ) | $ | 1,610.80 | |||||||||||
Amortization Expense Related to Other Intangible Assets for Next Five Years and Thereafter | ' | ||||||||||||||||||||||||
Amortization expense related to other intangible assets for the next five years and thereafter is expected to be (dollars in millions): | |||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||||
Amortization expense | $ | 97.1 | $ | 92.4 | $ | 89.7 | $ | 87.2 | $ | 85.7 | $ | 189.9 | |||||||||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Summary of Fair Value of Financial Assets and (Liabilities) | ' | ||||||||||||||||||||||||
The following table summarizes the fair value of the Company’s financial assets and (liabilities) as of March 31, 2014 and December 31, 2013 (dollars in millions): | |||||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||||
Quoted Prices in Active | Significant Other | TOTAL | |||||||||||||||||||||||
Markets for Identical | Observable Inputs (Level 2) | ||||||||||||||||||||||||
Assets (Level 1) | |||||||||||||||||||||||||
March 31, | December 31, | March 31, | December 31, | March 31, | December 31, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Cash and cash equivalents | $ | 159.9 | $ | 184.7 | $ | — | $ | — | $ | 159.9 | $ | 184.7 | |||||||||||||
Available-for-sale securities | 12.1 | 8.2 | — | — | 12.1 | 8.2 | |||||||||||||||||||
Rabbi trust assets | 2.4 | 1.3 | — | — | 2.4 | 1.3 | |||||||||||||||||||
Deferred compensation obligation | (2.4 | ) | (1.3 | ) | — | — | (2.4 | ) | (1.3 | ) | |||||||||||||||
Derivative assets | — | — | 0.2 | 1.6 | 0.2 | 1.6 | |||||||||||||||||||
Derivative liabilities | — | — | (15.9 | ) | (21.4 | ) | (15.9 | ) | (21.4 | ) | |||||||||||||||
Total | $ | 172 | $ | 192.9 | $ | (15.7 | ) | $ | (19.8 | ) | $ | 156.3 | $ | 173.1 | |||||||||||
DEBT_Tables
DEBT (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Summary of Long-Term Debt and Maturities | ' | ||||||||
Long-term debt and maturities are as follows (dollars in millions): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Long-term debt: | |||||||||
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | $ | 423.5 | $ | 423.5 | |||||
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | 1,780.70 | 1,783.50 | |||||||
Senior Notes, fixed 7.125%, due 2019 | 471.3 | 471.3 | |||||||
Total long-term debt | 2,675.50 | 2,678.30 | |||||||
Less: current maturities of long-term debt | 19.5 | 17.9 | |||||||
Total long-term debt less current portion | $ | 2,656.00 | $ | 2,660.40 | |||||
DERIVATIVES_Tables
DERIVATIVES (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Summary of Company's Interest Rate Derivatives | ' | ||||||||||||||||||||
A summary of the Company’s interest rate derivatives as of March 31, 2014 and December 31, 2013 follows (dollars in millions): | |||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Notional | Fair Value | Notional | Fair Value | ||||||||||||||||||
Amount | Amount | ||||||||||||||||||||
3.75% Interest Rate Swap H, due August 2014 | $ | 350 | $ | (4.2 | ) | $ | 350 | $ | (7.2 | ) | |||||||||||
3.77% Interest Rate Swap I, due August 2014 | 350 | (4.1 | ) | 350 | (7.2 | ) | |||||||||||||||
2.96% Interest Rate Swap J, due August 2014 | 125 | (1.2 | ) | 125 | (2.0 | ) | |||||||||||||||
3.05% Interest Rate Swap K, due August 2014 | 125 | (1.2 | ) | 125 | (2.0 | ) | |||||||||||||||
3.44% Interest Rate Swap L, due August 2019* | 75 | (0.9 | ) | 75 | (0.4 | ) | |||||||||||||||
3.43% Interest Rate Swap M, due August 2019* | 100 | (1.2 | ) | 100 | (0.4 | ) | |||||||||||||||
3.37% Interest Rate Swap N, due August 2019* | 75 | (0.8 | ) | 75 | (0.2 | ) | |||||||||||||||
3.19% Interest Rate Swap O, due August 2019* | 75 | (0.4 | ) | 75 | 0.2 | ||||||||||||||||
3.08% Interest Rate Swap P, due August 2019* | 75 | (0.1 | ) | 75 | 0.4 | ||||||||||||||||
2.99% Interest Rate Swap Q, due August 2019* | 50 | 0 | 50 | 0.4 | |||||||||||||||||
2.98% Interest Rate Swap R, due August 2019* | 50 | 0 | 50 | 0.4 | |||||||||||||||||
* include LIBOR floor of 1.00% | $ | 1,450.00 | $ | (14.1 | ) | $ | 1,450.00 | $ | (18.0 | ) | |||||||||||
Derivative Instruments and their Impact on the Financial Condition | ' | ||||||||||||||||||||
The following tabular disclosures further describe the Company’s derivative instruments and their impact on the financial condition of the Company (dollars in millions): | |||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 0.1 | Other current | $ | (0.3 | ) | ||||||||||||||
liabilities | |||||||||||||||||||||
Other current | (0.1 | ) | |||||||||||||||||||
liabilities | |||||||||||||||||||||
Commodity contracts | Other non-current | 0.1 | Other current and | 0.1 | |||||||||||||||||
assets | non-current assets | ||||||||||||||||||||
Other current and | (1.7 | ) | Other current and | (1.7 | ) | ||||||||||||||||
non-current liabilities | non-current liabilities | ||||||||||||||||||||
Interest rate contracts | Other non-current | 0.1 | Other non-current | 1.5 | |||||||||||||||||
assets | assets | ||||||||||||||||||||
Other current and | (14.2 | ) | Other current and | (19.5 | ) | ||||||||||||||||
non-current liabilities | non-current liabilities | ||||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | (15.7 | ) | $ | (19.9 | ) | |||||||||||||||
Interest Rate Derivative Instruments and their Impact on the Results of Operations | ' | ||||||||||||||||||||
The impact on the Company’s Condensed Consolidated Statements of Comprehensive Income related to foreign currency and commodity contracts can be found in NOTE J, and the following tabular disclosure describes the location and impact on the Company’s results of operations related to unrealized gain on interest rate derivatives (dollars in millions): | |||||||||||||||||||||
Three months ended March 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Interest expense | $ | 3.9 | $ | 9.2 | |||||||||||||||||
Foreign Currency Forward Contract | ' | ||||||||||||||||||||
Notional Amount and Fair Value of Derivatives | ' | ||||||||||||||||||||
The following table summarizes the outstanding foreign currency forward contracts as of March 31, 2014 and December 31, 2013 (amounts in millions): | |||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Notional | Fair Value | Notional | Fair Value | ||||||||||||||||||
Amount | Amount | ||||||||||||||||||||
Japanese Yen (JPY) | ¥ | 1,050.00 | $ | 0 | ¥ | 600 | $ | (0.3 | ) | ||||||||||||
$ | 0 | $ | (0.3 | ) | |||||||||||||||||
Commodity contracts | ' | ||||||||||||||||||||
Notional Amount and Fair Value of Derivatives | ' | ||||||||||||||||||||
The following table summarizes the outstanding commodity swaps as of March 31, 2014 and December 31, 2013 (dollars in millions): | |||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Notional | Quantity | Fair Value | Notional | Quantity | Fair Value | ||||||||||||||||
Amount | Amount | ||||||||||||||||||||
Aluminum | $ | 21.9 | 11,000 metric tons | $ | (1.6 | ) | $ | 23.8 | 11,875 metric tons | $ | (1.6 | ) | |||||||||
Natural Gas | N/A | N/A | — | 0.3 | 90,000 MMBtu | 0 | |||||||||||||||
$ | (1.6 | ) | $ | (1.6 | ) | ||||||||||||||||
PRODUCT_WARRANTY_LIABILITIES_T
PRODUCT WARRANTY LIABILITIES (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Product Warranty Liability Activities | ' | ||||||||
Product warranty liability activities consist of the following (dollars in millions): | |||||||||
Three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | 90.5 | $ | 109.7 | |||||
Payments | (8.4 | ) | (9.9 | ) | |||||
Increase in liability (warranty issued during period) | 6.3 | 5.5 | |||||||
Net adjustments to liability | 1.9 | 2 | |||||||
Accretion (for Predecessor liabilities) | 0.1 | 0.2 | |||||||
Ending balance | $ | 90.4 | $ | 107.5 | |||||
DEFERRED_REVENUE_Tables
DEFERRED REVENUE (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Deferred Revenue for Extended Transmission Coverage Activity | ' | ||||||||
Deferred revenue for ETC activity (dollars in millions): | |||||||||
Three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | 63.6 | $ | 63.5 | |||||
Increases | 5.5 | 3.3 | |||||||
Revenue earned | (5.3 | ) | (5.2 | ) | |||||
Ending balance | $ | 63.8 | $ | 61.6 | |||||
OTHER_EXPENSE_NET_Tables
OTHER EXPENSE, NET (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Computation of Other Expense, Net | ' | ||||||||
Other expense, net consists of the following (dollars in millions): | |||||||||
Three months ended March 31, | |||||||||
2014 | 2013 | ||||||||
Realized loss on derivative contracts (see NOTE G) | $ | (0.6 | ) | $ | (0.6 | ) | |||
Grant Program income | 0.6 | 1.2 | |||||||
(Loss) gain on foreign exchange | (0.5 | ) | 0.6 | ||||||
Public offering fees and expenses | (0.3 | ) | — | ||||||
Unrealized gain (loss) on derivative contracts (see NOTE G) | 0.2 | (1.9 | ) | ||||||
Impairment loss on investments in technology-related initiatives | — | (2.5 | ) | ||||||
Other | 0.2 | 0.1 | |||||||
Total | $ | (0.4 | ) | $ | (3.1 | ) | |||
OTHER_CURRENT_LIABILITIES_Tabl
OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Summary of Other Current Liabilities | ' | ||||||||
Other current liabilities consist of the following (dollars in millions): | |||||||||
As of | As of | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Sales allowances | $ | 30.4 | $ | 26.9 | |||||
Payroll and related costs | 27.3 | 37.6 | |||||||
Defense price reduction reserve | 26.2 | 26.8 | |||||||
Accrued interest payable | 18.9 | 11.2 | |||||||
Derivative liabilities | 12.2 | 20.2 | |||||||
Vendor buyback obligation | 12.1 | 11.8 | |||||||
Taxes payable | 7 | 8.6 | |||||||
Research and development payable | 4.3 | — | |||||||
Other accruals | 8.9 | 9.2 | |||||||
Total | $ | 147.3 | $ | 152.3 | |||||
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Components of Net Periodic Benefit Cost | ' | ||||||||||||||||
Components of net periodic benefit cost consist of the following (dollars in millions): | |||||||||||||||||
Pension Plans | Post-retirement Benefits | ||||||||||||||||
Three months ended March 31, | Three months ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net periodic benefit cost: | |||||||||||||||||
Service cost | $ | 3.3 | $ | 4.1 | $ | 0.5 | $ | 0.8 | |||||||||
Interest cost | 1.3 | 1 | 1.5 | 1.5 | |||||||||||||
Expected return on assets | (1.9 | ) | (1.6 | ) | — | — | |||||||||||
Prior service cost | 0 | 0 | (0.9 | ) | (0.9 | ) | |||||||||||
Loss | — | 0.2 | (0.2 | ) | — | ||||||||||||
Net periodic benefit cost | $ | 2.7 | $ | 3.7 | $ | 0.9 | $ | 1.4 | |||||||||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Changes in Accumulated Other Comprehensive Loss by Component | ' | ||||||||||||||||
The following table reconciles changes in Accumulated other comprehensive loss (“AOCL”) by component (net of tax, dollars in millions): | |||||||||||||||||
Three months ended | |||||||||||||||||
Available-for- | Defined | Foreign | Total | ||||||||||||||
sale securities | benefit | currency items | |||||||||||||||
pension items | |||||||||||||||||
AOCL as of December 31, 2012 | $ | 2.2 | $ | (36.9 | ) | $ | (9.2 | ) | $ | (43.9 | ) | ||||||
Other comprehensive income before reclassifications | 0.1 | — | (2.3 | ) | (2.2 | ) | |||||||||||
Amounts reclassified from AOCL | — | (0.4 | ) | — | (0.4 | ) | |||||||||||
Net current period other comprehensive income | $ | 0.1 | $ | (0.4 | ) | $ | (2.3 | ) | $ | (2.6 | ) | ||||||
AOCL as of March 31, 2013 | $ | 2.3 | $ | (37.3 | ) | $ | (11.5 | ) | $ | (46.5 | ) | ||||||
AOCL as of December 31, 2013 | $ | 1.1 | $ | (7.9 | ) | $ | (14.2 | ) | $ | (21.0 | ) | ||||||
Other comprehensive income before reclassifications | 0.1 | — | 2.7 | 2.8 | |||||||||||||
Amounts reclassified from AOCL | — | (0.7 | ) | — | (0.7 | ) | |||||||||||
Net current period other comprehensive income | $ | 0.1 | $ | (0.7 | ) | $ | 2.7 | $ | 2.1 | ||||||||
AOCL as of March 31, 2014 | $ | 1.2 | $ | (8.6 | ) | $ | (11.5 | ) | $ | (18.9 | ) | ||||||
Condensed Consolidated Statements of Comprehensive Income affected by reclassifications from AOCL | ' | ||||||||||||||||
The following table shows the location in the Condensed Consolidated Statements of Comprehensive Income affected by reclassifications from AOCL (dollars in millions): | |||||||||||||||||
Amounts | Affected line item in the Condensed | ||||||||||||||||
reclassified from AOCL | Consolidated Statements of | ||||||||||||||||
Three months ended | Comprehensive Income | ||||||||||||||||
AOCL Components | March 31, 2014 | March 31, 2013 | |||||||||||||||
Amortization of defined benefit pension items: | |||||||||||||||||
Prior service cost | $ | 0.8 | $ | 0.7 | Cost of sales | ||||||||||||
0.1 | 0.2 | Selling, general and | |||||||||||||||
administrative | |||||||||||||||||
0 | — | Engineering – research and | |||||||||||||||
development | |||||||||||||||||
Actuarial loss | 0.2 | — | Cost of sales | ||||||||||||||
0 | (0.1 | ) | Selling, general and | ||||||||||||||
administrative | |||||||||||||||||
0 | (0.1 | ) | Engineering – research and | ||||||||||||||
development | |||||||||||||||||
Total reclassifications, before tax | 1.1 | 0.7 | Income before income taxes | ||||||||||||||
Income tax expense | (0.4 | ) | (0.3 | ) | Tax expense | ||||||||||||
Total reclassifications | $ | 0.7 | $ | 0.4 | Net of tax | ||||||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
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 March 31, | |||||||||
2014 | 2013 | ||||||||
Net income | $ | 52.1 | $ | 27.5 | |||||
Weighted average shares of common stock outstanding | 182.2 | 184.7 | |||||||
Dilutive effect stock-based awards | 3.7 | 3.1 | |||||||
Diluted weighted average shares of common stock outstanding | 185.9 | 187.8 | |||||||
Basic earnings per share attributable to common stockholders | $ | 0.29 | $ | 0.15 | |||||
Diluted earnings per share attributable to common stockholders | $ | 0.28 | $ | 0.15 | |||||
Overview_Additional_Informatio
Overview - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2014 | |
Brand | |
Product | |
Vehicle | |
Customer | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ' |
Transmission product lines | 13 |
Worldwide independent distributor and dealer locations | 1,400 |
Product models | 100 |
Vehicle configurations | 2,500 |
Combinations of engine brands, models and ratings | 500 |
Year of introduction of Company's automatic products | '60 years |
Revenues | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ' |
Total revenues generated in North America | 77.00% |
Components_of_Inventories_Deta
Components of Inventories (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Purchased parts and raw materials | $82.70 | $79.70 |
Work in progress | 6.8 | 5.7 |
Service parts | 42.5 | 45.8 |
Finished goods | 43.6 | 29.2 |
Total inventories | $175.60 | $160.40 |
Recovered_Sheet1
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Goodwill [Line Items] | ' | ' |
Goodwill | $1,941 | $1,941 |
Net carrying value of Goodwill and other intangible assets | $3,527.10 | $3,551.80 |
Summary_of_Goodwill_and_Other_
Summary of Goodwill and Other Intangible Assets (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ' | ' |
Trade name | $870 | $870 |
Intangible assets, gross | 2,551 | 2,551 |
Accumulated amortization | -964.9 | -940.2 |
Intangible assets, net | 1,586.10 | 1,610.80 |
Customer relationships - defense | ' | ' |
Goodwill and Intangible Assets Disclosure [Line Items] | ' | ' |
Intangible assets, gross | 62.3 | 62.3 |
Accumulated amortization | -25.2 | -24.4 |
Intangible assets, net | 37.1 | 37.9 |
Customer relationships - commercial | ' | ' |
Goodwill and Intangible Assets Disclosure [Line Items] | ' | ' |
Intangible assets, gross | 831.8 | 831.8 |
Accumulated amortization | -387.9 | -374.9 |
Intangible assets, net | 443.9 | 456.9 |
Proprietary technology | ' | ' |
Goodwill and Intangible Assets Disclosure [Line Items] | ' | ' |
Intangible assets, gross | 476.3 | 476.3 |
Accumulated amortization | -253.4 | -243.9 |
Intangible assets, net | 222.9 | 232.4 |
Non-compete agreement | ' | ' |
Goodwill and Intangible Assets Disclosure [Line Items] | ' | ' |
Intangible assets, gross | 17.3 | 17.3 |
Accumulated amortization | -11.5 | -11.1 |
Intangible assets, net | 5.8 | 6.2 |
Patented technology - defense | ' | ' |
Goodwill and Intangible Assets Disclosure [Line Items] | ' | ' |
Intangible assets, gross | 28.2 | 28.2 |
Accumulated amortization | -22.1 | -21.2 |
Intangible assets, net | 6.1 | 7 |
Tooling rights | ' | ' |
Goodwill and Intangible Assets Disclosure [Line Items] | ' | ' |
Intangible assets, gross | 4.5 | 4.5 |
Accumulated amortization | -4.2 | -4.1 |
Intangible assets, net | 0.3 | 0.4 |
Patented technology - commercial | ' | ' |
Goodwill and Intangible Assets Disclosure [Line Items] | ' | ' |
Intangible assets, gross | 260.6 | 260.6 |
Accumulated amortization | ($260.60) | ($260.60) |
Expected_Amortization_Expense_
Expected Amortization Expense Related to Other Intangible Assets (Detail) (USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
Finite-Lived Intangible Assets | ' |
2015 | $97.10 |
2016 | 92.4 |
2017 | 89.7 |
2018 | 87.2 |
2019 | 85.7 |
Thereafter | $189.90 |
Fair_Value_of_Financial_Assets
Fair Value of Financial Assets and Liabilities (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | $159.90 | $184.70 |
Available-for-sale securities | 12.1 | 8.2 |
Rabbi trust assets | 2.4 | 1.3 |
Deferred compensation obligation | -2.4 | -1.3 |
Derivative assets | 0.2 | 1.6 |
Derivative liabilities | -15.9 | -21.4 |
Total | 156.3 | 173.1 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | 159.9 | 184.7 |
Available-for-sale securities | 12.1 | 8.2 |
Rabbi trust assets | 2.4 | 1.3 |
Deferred compensation obligation | -2.4 | -1.3 |
Total | 172 | 192.9 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative assets | 0.2 | 1.6 |
Derivative liabilities | -15.9 | -21.4 |
Total | ($15.70) | ($19.80) |
Recovered_Sheet2
Fair Value of Financial Instruments - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Deposited in operating accounts | $144.90 | $179.70 |
Investment in U.S. government backed securities | $15 | $5 |
Long_Term_Debt_and_Maturities_
Long Term Debt and Maturities (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | $2,675.50 | $2,678.30 |
Less: current maturities of long-term debt | 19.5 | 17.9 |
Total long-term debt less current portion | 2,656 | 2,660.40 |
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 423.5 | 423.5 |
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 1,780.70 | 1,783.50 |
Senior Notes, fixed 7.125%, due 2019 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | $471.30 | $471.30 |
Long_Term_Debt_and_Maturities_1
Long Term Debt and Maturities (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2014 | |
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | ' |
Debt Instrument [Line Items] | ' |
Senior secured credit facility term B-2, due date | '2017 |
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | ' |
Debt Instrument [Line Items] | ' |
Senior Secured Credit Facility Term B-3, due date | '2019 |
Senior Notes, fixed 7.125%, due 2019 | ' |
Debt Instrument [Line Items] | ' |
Interest rate of Senior Notes | 7.13% |
Senior Notes, fixed due date | '2019 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Debt Instrument [Line Items] | ' | ' |
Fair value of long-term debt obligations | $2,720.30 | ' |
Deferred financing fees | 2 | 2.9 |
Total leverage ratio | 3.86 | ' |
Line of Credit | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Weighted average rate on the Senior Secured Credit Facility | 3.64% | ' |
Revolving Credit Facility | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Revolving credit borrowings | 465 | ' |
Maximum amount of letters of credit commitments available under the revolving credit facility | 75 | ' |
Deferred financing fees | 0.6 | ' |
Available revolving credit facility | 453 | ' |
Letters of Credit | 12 | ' |
Line of Credit Facility, commitment fee percentage | 0.38% | ' |
Maturity date of revolving credit borrowings | '2019-01 | ' |
Required senior secured leverage ratio | 5.5 | ' |
Achieved senior secured leverage ratio | 3.14 | ' |
Minimum senior secured leverage ratio | 3.5 | ' |
Basis point reduction to applicable margin, resulting from total leverage ratio below minimum | 0.25% | ' |
Basis point reduction to commitment fee, resulting from total leverage ratio below minimum | 0.13% | ' |
Revolving Credit Facility | Minimum | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Revolving credit borrowings, interest rate | 2.41% | ' |
Revolving Credit Facility | Maximum | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Revolving credit borrowings, interest rate | 4.50% | ' |
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Indebtedness associated with Allison Transmission Inc. | 423.5 | ' |
Variable interest rate, description | 'Interest on the Term B-2 Loan, as of March 31, 2014, is equal to the LIBOR plus 3.00% | ' |
LIBOR margin rate | 'LIBOR plus 3.00% | ' |
Total interest rate for term loan | 3.16% | ' |
Senior secured credit facility term B-2, due date | '2017 | ' |
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Indebtedness associated with Allison Transmission Inc. | 1,780.70 | ' |
Variable interest rate, description | 'Interest on the Term B-3 Loan, as of March 31, 2014, is equal to the LIBOR (which may not be less than 1.00%) plus 2.75% | ' |
LIBOR margin rate | 'LIBOR plus 2.75% | ' |
Total interest rate for term loan | 3.75% | ' |
Principal payments on term loans | 4.5 | ' |
Senior Secured Credit Facility Term B-3, due date | '2019 | ' |
Basis point reduction to applicable margin, resulting from total leverage ratio below minimum | 0.25% | ' |
Total leverage ratio | 3.25 | ' |
Senior Notes, fixed 7.125%, due 2019 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Indebtedness associated with Allison Transmission Inc. | $471.30 | ' |
Interest rate of Senior Notes | 7.13% | ' |
Summary_of_Companys_Interest_R
Summary of Company's Interest Rate Derivatives (Detail) (Derivatives not designated as hedging instruments, USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Interest Rate Swap H, due August 2014 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | $350 | $350 | ||
Fair Value | -4.2 | -7.2 | ||
Interest Rate Swap I, due August 2014 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 350 | 350 | ||
Fair Value | -4.1 | -7.2 | ||
Interest Rate Swap J, due August 2014 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 125 | 125 | ||
Fair Value | -1.2 | -2 | ||
Interest Rate Swap K, due August 2014 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 125 | 125 | ||
Fair Value | -1.2 | -2 | ||
Interest Rate Swap L, due August 2019 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 75 | [1] | 75 | [1] |
Fair Value | -0.9 | [1] | -0.4 | [1] |
Interest Rate Swap M, due August 2019 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 100 | [1] | 100 | [1] |
Fair Value | -1.2 | [1] | -0.4 | [1] |
Interest Rate Swap N, due August 2019 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 75 | [1] | 75 | [1] |
Fair Value | -0.8 | [1] | -0.2 | [1] |
Interest Rate Swap O, due August 2019 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 75 | [1] | 75 | [1] |
Fair Value | -0.4 | [1] | 0.2 | [1] |
Interest Rate Swap P, due August 2019 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 75 | [1] | 75 | [1] |
Fair Value | -0.1 | [1] | 0.4 | [1] |
Interest Rate Swap Q, due August 2019 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 50 | [1] | 50 | [1] |
Fair Value | 0 | [1] | 0.4 | [1] |
Interest Rate Swap R, due August 2019 | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 50 | [1] | 50 | [1] |
Fair Value | 0 | [1] | 0.4 | [1] |
Interest Rate Swap | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amount | 1,450 | 1,450 | ||
Fair Value | ($14.10) | ($18) | ||
[1] | include LIBOR floor of 1.00% |
Summary_of_Companys_Interest_R1
Summary of Company's Interest Rate Derivatives (Parenthetical) (Detail) (Derivatives not designated as hedging instruments) | Mar. 31, 2014 | Dec. 31, 2013 |
Interest Rate Swap H, due August 2014 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 3.75% | 3.75% |
Interest Rate Swap I, due August 2014 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 3.77% | 3.77% |
Interest Rate Swap J, due August 2014 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 2.96% | 2.96% |
Interest Rate Swap K, due August 2014 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 3.05% | 3.05% |
Interest Rate Swap L, due August 2019 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 3.44% | 3.44% |
Interest Rate Swap M, due August 2019 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 3.43% | 3.43% |
Interest Rate Swap N, due August 2019 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 3.37% | 3.37% |
Interest Rate Swap O, due August 2019 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 3.19% | 3.19% |
Interest Rate Swap P, due August 2019 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 3.08% | 3.08% |
Interest Rate Swap Q, due August 2019 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 2.99% | 2.99% |
Interest Rate Swap R, due August 2019 | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Fixed Interest Rate | 2.98% | 2.98% |
LIBOR | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
LIBOR floor | 1.00% | 1.00% |
Derivatives_Additional_Informa
Derivatives - Additional Information (Detail) (Derivatives not designated as hedging instruments, USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivative [Line Items] | ' | ' |
Amount of collateral recorded in Other current assets | $2 | $1.70 |
Foreign currency contracts | Other current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -0.1 | -0.3 |
Foreign currency contracts | Other current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | 0.1 | ' |
Commodity contracts | Other current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -1.5 | -1.5 |
Commodity contracts | Other current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | ' | 0.1 |
Commodity contracts | Other non-current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | 0.1 | 0 |
Commodity contracts | Other non-current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -0.2 | -0.2 |
Interest rate contracts | Other current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -10.7 | -18.5 |
Interest rate contracts | Other non-current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | 0.1 | 1.5 |
Interest rate contracts | Other non-current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -3.5 | -1 |
Interest Rate Swap | ' | ' |
Derivative [Line Items] | ' | ' |
Letters of Credit | $2 | ' |
Summary_of_Outstanding_Foreign
Summary of Outstanding Foreign Currency Forward Contracts (Detail) (Foreign currency contracts, Derivatives not designated as hedging instruments, Japanese Yen) | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | USD ($) | JPY (¥) | USD ($) | JPY (¥) |
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' |
Notional Amount | ' | ¥ 1,050 | ' | ¥ 600 |
Fair Value | $0 | ¥ 0 | ($0.30) | ¥ (0.3) |
Summary_of_Outstanding_Commodi
Summary of Outstanding Commodity Swaps (Detail) (Derivatives not designated as hedging instruments, USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
t | t | |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Fair value | ($15.70) | ($19.90) |
Commodity contracts | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Fair value | -1.6 | -1.6 |
Commodity contracts | Aluminum | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Notional Amount | 21.9 | 23.8 |
Quantity | 11,000 | 11,875 |
Fair value | -1.6 | -1.6 |
Commodity contracts | Natural Gas | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Notional Amount | ' | 0.3 |
Quantity | ' | 90,000 |
Fair value | ' | $0 |
Companys_Derivative_Instrument
Company's Derivative Instruments and their Impact on Financial Condition of Company (Detail) (Derivatives not designated as hedging instruments, USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivative [Line Items] | ' | ' |
Total derivatives not designated as hedging instruments | ($15.70) | ($19.90) |
Foreign currency contracts | Other current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | 0.1 | ' |
Foreign currency contracts | Other current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -0.1 | -0.3 |
Commodity contracts | ' | ' |
Derivative [Line Items] | ' | ' |
Total derivatives not designated as hedging instruments | -1.6 | -1.6 |
Commodity contracts | Other current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | ' | 0.1 |
Commodity contracts | Other current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -1.5 | -1.5 |
Commodity contracts | Other non-current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | 0.1 | 0 |
Commodity contracts | Other current assets and non-current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | ' | 0.1 |
Commodity contracts | Other current and non-current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -1.7 | -1.7 |
Interest rate contracts | Other current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | -10.7 | -18.5 |
Interest rate contracts | Other non-current assets | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Assets, Fair Value | 0.1 | 1.5 |
Interest rate contracts | Other current and non-current liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value | ($14.20) | ($19.50) |
Impact_on_the_Companys_Results
Impact on the Company's Results of Operations Related to Unrealized Gain (Loss) on Interest Rate Derivatives (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Derivative [Line Items] | ' | ' |
Unrealized gain on derivatives | $4.20 | $7.30 |
Interest rate contracts | Derivatives not designated as hedging instruments | Interest expense | ' | ' |
Derivative [Line Items] | ' | ' |
Unrealized gain on derivatives | $3.90 | $9.20 |
Product_Warranty_Liability_Act
Product Warranty Liability Activities (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Guarantor Obligations [Line Items] | ' | ' |
Beginning balance | $90.50 | $109.70 |
Payments | -8.4 | -9.9 |
Increase in liability (warranty issued during period) | 6.3 | 5.5 |
Net adjustments to liability | 1.9 | 2 |
Accretion (for Predecessor liabilities) | 0.1 | 0.2 |
Ending balance | $90.40 | $107.50 |
Product_Warranty_Liabilities_A
Product Warranty Liabilities - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
In Millions, unless otherwise specified | |||
Guarantor Obligations [Line Items] | ' | ' | ' |
Product warranty liability, current | $32.30 | $37.40 | $35.90 |
Product warranty liability, non-current | $58.10 | $53.10 | $71.60 |
Deferred_Revenue_Additional_In
Deferred Revenue - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
In Millions, unless otherwise specified | |||
Deferred Revenue [Line Items] | ' | ' | ' |
Deferred revenue current liabilities | $20.10 | ' | $21 |
Deferred revenue non-current liabilities | 43.7 | 43.2 | 40.6 |
Deferred revenue current liabilities | 38.7 | 29.2 | ' |
U S Government Contracts | ' | ' | ' |
Deferred Revenue [Line Items] | ' | ' | ' |
Deferred revenue current liabilities | $18.60 | ' | $0.50 |
Deferred_Revenue_for_ETC_Activ
Deferred Revenue for ETC Activity (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Deferred Revenue [Line Items] | ' | ' |
Beginning balance | $63.60 | $63.50 |
Increases | 5.5 | 3.3 |
Revenue earned | -5.3 | -5.2 |
Ending balance | $63.80 | $61.60 |
Other_Expense_Net_Detail
Other Expense Net (Detail) (USD $) | 3 Months Ended | 63 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 |
Components of Other Income (Expense) [Line Items] | ' | ' | ' |
Realized loss on derivative contracts (see NOTE G) | ($0.60) | ($0.60) | ' |
Grant Program income | 0.6 | 1.2 | 46.7 |
(Loss) gain on foreign exchange | -0.5 | 0.6 | ' |
Public offering fees and expenses | -0.3 | ' | ' |
Unrealized gain (loss) on derivative contracts (see NOTE G) | 0.2 | -1.9 | ' |
Impairment loss on investments in technology-related initiatives | ' | -2.5 | ' |
Other | 0.2 | 0.1 | ' |
Total | ($0.40) | ($3.10) | ' |
Other_Expense_Net_Additional_I
Other Expense, Net - Additional Information (Detail) (USD $) | 3 Months Ended | 63 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 |
Other Income Expense [Line Items] | ' | ' | ' |
Grant Program income | $0.60 | $1.20 | $46.70 |
Reduction of basis of capital assets purchased under Grant program | 0 | 1.4 | ' |
Assets acquired under Grant Program | 7.1 | ' | 7.1 |
Grant Program, related depreciation | $0.10 | $0.10 | ' |
Secondary Public Offering | ' | ' | ' |
Other Income Expense [Line Items] | ' | ' | ' |
Secondary offering of common stock | 28,750,000 | ' | ' |
Common stock, price per share | $29.17 | ' | $29.17 |
Stock repurchased from underwriter | 3,428,179 | ' | ' |
Other_Current_Liabilities_Deta
Other Current Liabilities (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other Current Liabilities [Line Items] | ' | ' |
Sales allowances | $30.40 | $26.90 |
Payroll and related costs | 27.3 | 37.6 |
Defense price reduction reserve | 26.2 | 26.8 |
Accrued interest payable | 18.9 | 11.2 |
Derivative liabilities | 12.2 | 20.2 |
Vendor buyback obligation | 12.1 | 11.8 |
Taxes payable | 7 | 8.6 |
Research and development payable | 4.3 | ' |
Other accruals | 8.9 | 9.2 |
Total | $147.30 | $152.30 |
Employee_Benefit_Plans_Detail
Employee Benefit Plans (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Pension Plans | ' | ' |
Schedule of Employee Benefit Plans [Line Items] | ' | ' |
Service cost | $3.30 | $4.10 |
Interest cost | 1.3 | 1 |
Expected return on assets | -1.9 | -1.6 |
Prior service cost | 0 | 0 |
Loss | ' | 0.2 |
Net periodic benefit cost | 2.7 | 3.7 |
Post-retirement Benefits | ' | ' |
Schedule of Employee Benefit Plans [Line Items] | ' | ' |
Service cost | 0.5 | 0.8 |
Interest cost | 1.5 | 1.5 |
Prior service cost | -0.9 | -0.9 |
Loss | -0.2 | ' |
Net periodic benefit cost | $0.90 | $1.40 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
Income Taxes [Line Items] | ' | ' | ' |
Effective tax rate | -34.40% | ' | -38.10% |
Income tax expense (benefit) | $27.20 | ' | $16.90 |
Liability for unrecognized tax benefit related to 2010 research and development credit | $2.30 | $2.30 | ' |
Income tax examination statute of limitations period | ' | '3 years | ' |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Loss (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance of AOCL | ($21) | ($43.90) |
Other comprehensive income before reclassifications | 2.8 | -2.2 |
Amounts reclassified from AOCL | -0.7 | -0.4 |
Net current period other comprehensive income | 2.1 | -2.6 |
Total AOCL | -18.9 | -46.5 |
Accumulated Net Unrealized Investment Gain (Loss) | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance of AOCL | 1.1 | 2.2 |
Other comprehensive income before reclassifications | 0.1 | 0.1 |
Net current period other comprehensive income | 0.1 | 0.1 |
Total AOCL | 1.2 | 2.3 |
Accumulated Defined Benefit Plans Adjustment | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance of AOCL | -7.9 | -36.9 |
Amounts reclassified from AOCL | -0.7 | -0.4 |
Net current period other comprehensive income | -0.7 | -0.4 |
Total AOCL | -8.6 | -37.3 |
Accumulated Translation Adjustment | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning balance of AOCL | -14.2 | -9.2 |
Other comprehensive income before reclassifications | 2.7 | -2.3 |
Net current period other comprehensive income | 2.7 | -2.3 |
Total AOCL | ($11.50) | ($11.50) |
Consolidated_Statement_of_Comp
Consolidated Statement of Comprehensive Income Affected by Reclassification from AOCL (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Cost of sales | ($271.10) | ($259.10) |
Selling, general and administrative expenses | -83.2 | -87.9 |
Engineering - research and development | -24.5 | -29 |
Income before income taxes | 79.3 | 44.4 |
Income tax (expense) benefit | -27.2 | -16.9 |
Total reclassifications | 52.1 | 27.5 |
Reclassified from AOCL | Prior service cost | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Cost of sales | 0.8 | 0.7 |
Selling, general and administrative expenses | 0.1 | 0.2 |
Engineering - research and development | 0 | ' |
Reclassified from AOCL | Actuarial loss | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Cost of sales | 0.2 | ' |
Selling, general and administrative expenses | 0 | -0.1 |
Engineering - research and development | 0 | -0.1 |
Reclassified from AOCL | Accumulated Defined Benefit Plans Adjustment | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Income before income taxes | 1.1 | 0.7 |
Income tax (expense) benefit | -0.4 | -0.3 |
Total reclassifications | $0.70 | $0.40 |
Recovered_Sheet3
Certain Relationships and Related Party Transactions - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transaction [Line Items] | ' |
Percentage the of Company's equity owned by affiliates | 39.00% |
Secondary Public Offering | ' |
Related Party Transaction [Line Items] | ' |
Secondary offering of common stock | 28,750,000 |
Common stock, price per share | $29.17 |
Stock repurchased from underwriter | 3,428,179 |
Fixed 7.125% Senior Notes | ' |
Related Party Transaction [Line Items] | ' |
Senior Notes, stated interest rate | 7.13% |
Lawrence E. Dewey | Fixed 7.125% Senior Notes | ' |
Related Party Transaction [Line Items] | ' |
Senior notes held by executive officers | $100,000 |
David S. Graziosi | Fixed 7.125% Senior Notes | ' |
Related Party Transaction [Line Items] | ' |
Senior notes held by executive officers | $450,000 |
Reconciliation_of_Numerators_a
Reconciliation of Numerators and Denominators Used to Calculate Basic EPS and Diluted EPS (Detail) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Computation Of Earnings Per Share Line Items | ' | ' |
Net income | $52.10 | $27.50 |
Weighted average shares of common stock outstanding | 182.2 | 184.7 |
Dilutive effect stock-based awards | 3.7 | 3.1 |
Diluted weighted average shares of common stock outstanding | 185.9 | 187.8 |
Basic earnings per share attributable to common stockholders | $0.29 | $0.15 |
Diluted earnings per share attributable to common stockholders | $0.28 | $0.15 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | ||||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Apr. 25, 2014 | Apr. 14, 2014 | Apr. 14, 2014 | Apr. 14, 2014 | Apr. 14, 2014 |
Secondary Public Offering | Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | |
Secondary Public Offering | Refinancing of Line of Credit | Refinancing of Line of Credit | Refinancing of Line of Credit | Refinancing of Line of Credit | |||
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | ||||
LIBOR | Prime Rate or Federal Funds Rate Plus 0.50% | Federal Reserve Bank of New York | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Credit facility refinanced amount | ' | $423.50 | ' | $423.50 | ' | ' | ' |
Debt due date | ' | ' | ' | 7-Aug-17 | ' | ' | ' |
Applicable margin over base rate | ' | ' | ' | ' | 2.75% | 1.75% | ' |
Variable interest rate | ' | ' | ' | ' | ' | ' | 0.50% |
Secondary offering of common stock | 28,750,000 | ' | 25,000,000 | ' | ' | ' | ' |
Common stock, price per share | $29.17 | ' | $29.78 | ' | ' | ' | ' |
Ownership of outstanding common stock, percentage | ' | ' | 25.20% | ' | ' | ' | ' |