Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 05, 2016 | Jun. 30, 2015 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ALSN | ||
Entity Registrant Name | ALLISON TRANSMISSION HOLDINGS INC | ||
Entity Central Index Key | 1,411,207 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 171,138,742 | ||
Entity Public Float | $ 4,599.4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 251.6 | $ 263 |
Accounts receivable - net of allowance for doubtful accounts of $0.4 and $0.3, respectively | 195 | 207.4 |
Inventories | 141.4 | 143.5 |
Other current assets | 28.8 | 24.4 |
Total Current Assets | 616.8 | 638.3 |
Property, plant and equipment, net | 479.7 | 514.6 |
Intangible assets, net | 1,334.8 | 1,512 |
Goodwill | 1,941 | 1,941 |
Deferred income taxes, net | 1.9 | 2.3 |
Other non-current assets | 34.2 | 48 |
TOTAL ASSETS | 4,408.4 | 4,656.2 |
Current Liabilities | ||
Accounts payable | 126.2 | 151.7 |
Product warranty liability | 24.9 | 24 |
Current portion of long-term debt | 24.5 | 17.9 |
Deferred revenue | 22.9 | 20.6 |
Other current liabilities | 106.1 | 131.7 |
Total Current Liabilities | 304.6 | 345.9 |
Product warranty liability | 53.4 | 59.6 |
Deferred revenue | 56.4 | 48.7 |
Long-term debt | 2,352.7 | 2,473.3 |
Deferred income taxes | 204.6 | 119.5 |
Other non-current liabilities | 248.1 | 211.4 |
TOTAL LIABILITIES | $ 3,219.8 | $ 3,258.4 |
Commitments and contingencies (see NOTE 17) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding | ||
Paid in capital | $ 1,690.2 | $ 1,651 |
Accumulated deficit | (444.5) | (215.5) |
Accumulated other comprehensive loss, net of tax | (58.8) | (39.5) |
TOTAL STOCKHOLDERS' EQUITY | 1,188.6 | 1,397.8 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | 4,408.4 | 4,656.2 |
Voting Common Stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock | $ 1.7 | $ 1.8 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Allowance for doubtful accounts receivables | $ 0.4 | $ 0.3 |
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 |
Voting 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 | 171,157,004 | 179,488,247 |
Common stock, shares outstanding | 171,157,004 | 179,488,247 |
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 | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net sales | $ 1,985.8 | $ 2,127.4 | $ 1,926.8 |
Cost of sales | 1,052 | 1,151.5 | 1,084.9 |
Gross profit | 933.8 | 975.9 | 841.9 |
Selling, general and administrative expenses | 317.1 | 344.6 | 334.9 |
Engineering - research and development | 92.5 | 103.8 | 97.1 |
Trade name impairment (see NOTE 5) | 80 | ||
Environmental remediation | 14 | ||
Loss associated with impairment of long-lived assets | 1.3 | 15.4 | |
Operating income | 428.9 | 512.1 | 409.9 |
Interest income | 0.7 | 0.9 | 0.8 |
Interest expense | (115.2) | (139.3) | (133.7) |
Premiums and expenses on tender offer and redemption of long-term debt | (25.3) | ||
Other expense, net | (0.3) | (5.6) | (10.9) |
Income before income taxes | 288.8 | 368.1 | 266.1 |
Income tax expense | (106.5) | (139.5) | (100.7) |
Net income | $ 182.3 | $ 228.6 | $ 165.4 |
Basic earnings per share attributable to common stockholders | $ 1.03 | $ 1.27 | $ 0.90 |
Diluted earnings per share attributable to common stockholders | 1.03 | 1.25 | 0.88 |
Dividends declared per common share | $ 0.60 | $ 0.51 | $ 0.42 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation | $ (11.5) | $ (7.4) | $ (5) |
Pension and OPEB liability adjustment | (3) | (9.1) | 29 |
Available-for-sale securities | (4.8) | (2) | (1.1) |
Total other comprehensive (loss) income, net of tax | (19.3) | (18.5) | 22.9 |
Comprehensive income | $ 163 | $ 210.1 | $ 188.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 182.3 | $ 228.6 | $ 165.4 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of intangible assets | 97.1 | 98.8 | 105.3 |
Depreciation of property, plant and equipment | 88.3 | 93.8 | 98.7 |
Deferred income taxes | 96 | 131.8 | 98 |
Trade name impairment | 80 | ||
Premiums and expenses on tender offer and redemption of long-term debt | 25.3 | ||
Unrealized loss (gain) on derivatives | 14.7 | (4.7) | (32.8) |
Stock-based compensation | 9.8 | 14.7 | 13.7 |
Excess tax benefit from stock-based compensation | (8.4) | (24.6) | (13.7) |
Amortization of deferred financing costs | 8 | 8.1 | 10.9 |
Loss associated with impairment of long-lived assets | 1.3 | 15.4 | |
Loss on repayments of long-term debt | 0.3 | 0.5 | 0.8 |
Impairment loss on investments in technology-related initiatives | 2 | 5 | |
Other | 2 | 5.2 | 2.1 |
Changes in assets and liabilities: | |||
Accounts receivable | 9 | (35.8) | (9.9) |
Inventories | (2.2) | 12.7 | (4.4) |
Accounts payable | (25.1) | 2.1 | 17.6 |
Other assets and liabilities | 1.5 | 24.7 | 6.8 |
Net cash provided by operating activities | 579.9 | 573.3 | 463.5 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Additions of long-lived assets | (58.1) | (64.1) | (74.4) |
Investments in technology-related initiatives | (1.9) | (5.8) | (8.8) |
Proceeds from disposal of assets | 0.3 | 0.3 | 0.5 |
Collateral for interest rate derivatives | 1.7 | 1.2 | |
Net cash used for investing activities | (59.7) | (67.9) | (81.5) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Repurchases and redemption of long-term debt | (491.2) | ||
Issuance of long-term debt | 470 | ||
Repurchase of common stock | (305.8) | (249.8) | (99.5) |
Payments on long-term debt | (116.5) | (157.6) | (142.4) |
Dividend payments | (105.6) | (91.6) | (77.1) |
Proceeds from exercise of stock options | 22.9 | 59.6 | 46.3 |
Debt financing costs | (9) | (0.9) | (14.9) |
Excess tax benefit from stock-based compensation | 8.4 | 24.6 | 13.7 |
Taxes paid related to net share settlement of equity awards | (1.9) | (8.4) | (3.6) |
Net cash used for financing activities | (528.7) | (424.1) | (277.5) |
Effect of exchange rate changes on cash | (2.9) | (3) | 0 |
Net (decrease) increase in cash and cash equivalents | (11.4) | 78.3 | 104.5 |
Cash and cash equivalents at beginning of period | 263 | 184.7 | 80.2 |
Cash and cash equivalents at end of period | 251.6 | 263 | 184.7 |
Supplemental disclosures: | |||
Interest paid | 97.1 | 140 | 159.2 |
Income taxes paid | $ 5.2 | $ 5 | $ 3.8 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Non-voting Common Stock | Treasury Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss), net of tax |
Balance at Dec. 31, 2012 | $ 1,356.9 | $ 1.8 | $ 0 | $ (0.2) | $ 1,601.5 | $ (202.3) | $ (43.9) |
Stock-based compensation | 13.7 | 13.7 | |||||
Pension and OPEB liability adjustment | 29 | 29 | |||||
Foreign currency translation adjustment | (5) | (5) | |||||
Available-for-sale securities | (1.1) | (1.1) | |||||
Issuance of common stock | 42.6 | 0 | 42.6 | ||||
Repurchase of common stock | (99.5) | 0 | (39.7) | (59.8) | |||
Retirement of treasury stock | 0.2 | $ 0.2 | |||||
Dividends on common stock | (77.1) | (77.1) | |||||
Excess tax benefit from stock-based compensation | 13.7 | 13.7 | |||||
Net income | 165.4 | 165.4 | |||||
Balance at Dec. 31, 2013 | 1,438.8 | 1.8 | 0 | 1,631.8 | (173.8) | (21) | |
Stock-based compensation | 14.7 | 14.7 | |||||
Pension and OPEB liability adjustment | (9.1) | (9.1) | |||||
Foreign currency translation adjustment | (7.4) | (7.4) | |||||
Available-for-sale securities | (2) | (2) | |||||
Issuance of common stock | 51 | 0 | 51 | ||||
Repurchase of common stock | (249.8) | 0 | $ 0 | (71.1) | (178.7) | ||
Dividends on common stock | (91.6) | (91.6) | |||||
Excess tax benefit from stock-based compensation | 24.6 | 24.6 | |||||
Net income | 228.6 | 228.6 | |||||
Balance at Dec. 31, 2014 | 1,397.8 | 1.8 | 1,651 | (215.5) | (39.5) | ||
Stock-based compensation | 9.8 | 9.8 | |||||
Pension and OPEB liability adjustment | (3) | (3) | |||||
Foreign currency translation adjustment | (11.5) | (11.5) | |||||
Available-for-sale securities | (4.8) | (4.8) | |||||
Issuance of common stock | 21 | 0 | 21 | ||||
Repurchase of common stock | (305.8) | (0.1) | (305.7) | ||||
Dividends on common stock | (105.6) | (105.6) | |||||
Excess tax benefit from stock-based compensation | 8.4 | 8.4 | |||||
Net income | 182.3 | 182.3 | |||||
Balance at Dec. 31, 2015 | $ 1,188.6 | $ 1.7 | $ 1,690.2 | $ (444.5) | $ (58.8) |
OVERVIEW
OVERVIEW | 12 Months Ended |
Dec. 31, 2015 | |
OVERVIEW | NOTE 1. OVERVIEW Overview Allison Transmission Holdings, Inc. and its subsidiaries (“Allison,” the “Company” or “we”) design and manufacture commercial and defense fully-automatic transmissions. The business was founded in 1915 and has been headquartered in Indianapolis, Indiana since inception. Allison was an operating unit of General Motors Corporation (“Old GM”) from 1929 until 2007, when Allison once again became a stand-alone company. In March 2012, Allison began trading on the New York Stock Exchange under the symbol, “ALSN”. The Company has approximately 2,700 employees and 13 different transmission product lines. Although approximately 81% of revenues were generated in North America in 2015, 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The information herein reflects all normal recurring material adjustments, which are, in the opinion of management, necessary for the fair statements of the results for the periods presented. The consolidated financial statements herein consist of all wholly-owned domestic and foreign subsidiaries with all significant intercompany transactions eliminated. These consolidated financial statements present the financial position, results of comprehensive income, cash flows and statements of equity. Certain reclassifications have been made in the consolidated financial statements of prior periods to conform to the current period presentation. The Company revised its consolidated statements of cash flows for prior periods due to changes in how foreign currency exchange rate movements on cash were calculated. The revisions resulted in a decrease to the “Effect of exchange rate changes on cash” with a corresponding increase to “Net cash provided by operating activities.” Management believes the revisions are immaterial to the consolidated financial statements. The Company made reclassifications to the balance sheets for deferred financing costs and deferred taxes as a result of newly adopted accounting guidance. All reclassifications and revisions had no impact on previously reported net income, total stockholders’ equity or cash. See “Recently Issued Accounting Pronouncements” below for more details. 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 liabilities, environmental liabilities, 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. Segment Reporting In accordance with the Financial Accounting Standards Board’s (“FASB”) authoritative accounting guidance on segment reporting, the Company has one operating segment and reportable segment. The Company is in one line of business, which is the manufacture and distribution of fully-automatic transmissions. Cash and Cash Equivalents Cash equivalents are defined as short-term, highly-liquid investments with original maturities of 90 days or less. Under the Company’s cash management system, checks issued but not presented to banks may result in book overdraft balances for accounting purposes and are classified within Accounts payable in the Consolidated Balance Sheets. The change in book overdrafts is reported as a component of operating cash flows for Accounts payable. Marketable Securities The Company determines the appropriate classification of all marketable securities as “held-to-maturity,” “available-for-sale” or “trading” at the time of purchase, and re-evaluates such classifications as of each balance sheet date. As of December 31, 2015, the Company’s marketable securities are classified as either available-for-sale or trading. Available-for-sale securities are carried at fair value with the unrealized gain or loss reported in Accumulated other comprehensive loss (“AOCL”). Unrealized gains or losses considered to be “other-than-temporary” are recognized in income. Trading securities are carried at fair value with the unrealized gain or loss recognized in Other expense, net. The fair value of the Company’s investment securities is determined by currently available market prices. See NOTE 6 for more details. Allowance for Doubtful Accounts The allowance for doubtful trade accounts receivable reflects estimated losses to be incurred in the collection of the receivables. Estimated losses are based on historical collection experience as well as a review by management of the current status of all receivables. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Inventories Inventories are stated at the lower of cost or market. The Company determines cost using the first-in, first-out method. The Company analyzes inventory on a quarterly basis to determine whether it is excess or obsolete inventory. Any decline in carrying value of estimated excess or obsolete inventory is recorded as a reduction of inventory and as an expense included in Cost of sales in the period it is identified. Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation expense is recorded using the straight-line method over the following estimated lives: Range in Years Land improvements 5 – 30 Buildings and building improvements 10 – 40 Machinery and equipment 2 – 20 Software 2 – 5 Special tools 2 – 10 Software represents the costs of software developed or obtained for internal use. Software costs are amortized on a straight-line basis over their estimated useful lives. Software assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. Upgrades and enhancements are capitalized if they result in added functionality, which enables the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion and business process reengineering costs are expensed in the period in which they are incurred. Special tooling represents the costs to design and develop tools, dies, jigs and other items owned by the Company and used in the manufacture of components by suppliers under long-term supply agreements. Special tooling is depreciated over the tool’s expected life. Special tooling used in the development of new technology is expensed as incurred. Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred. Impairment of Long-Lived Assets The carrying value of long-lived assets is evaluated whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. Events or circumstances that would result in an impairment review primarily include a significant change in the use of an asset, or the planned sale or disposal of an asset. The asset would be considered impaired when there is no future use planned for the asset or the future net undiscounted cash flows generated by the asset or asset group are less than its carrying value. An impairment loss would be recognized based on the amount by which the carrying value exceeds fair value. Assumptions and estimates used to determine cash flows in the evaluation of impairment and the fair values used to determine the impairment are subject to a degree of judgment and complexity. Any changes to the assumptions and estimates resulting from changes in actual results or market conditions from those anticipated may affect the carrying value of long-lived assets and could result in an impairment charge. As a result of events and circumstances in the fourth quarter of 2014, the Company reviewed certain of its long-lived assets related to the production of the H3000 and H4000 hybrid-propulsion systems, resulting in a $15.4 million loss recorded for the year ended December 31, 2014. The loss, determined by using future net discounted cash flows, included approximately $1.7 million of accrued expenses related to the impairment of the long-lived assets. The Company also recorded $1.3 million impairment loss during the first quarter of 2015. Deteriorating market conditions for hybrid-propulsion vehicles, principally as a result of decreased fuel costs, alternative fuels and other technologies, significantly contributed to the future cash flows of the related assets being less than the carrying value of those assets. Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price paid over the fair value of net assets acquired. In accordance with the FASB’s authoritative accounting guidance on goodwill, the Company does not amortize goodwill but rather evaluates it for impairment on an annual basis, or more often if events or circumstances change that could cause goodwill to become impaired. Goodwill is tested for impairment at the reporting unit level, which is the same as the Company’s one operating and reportable segment. The Company has elected to perform its annual impairment test on October 31 of every year. A multi-step impairment test is performed on goodwill. In Step 0, the Company has the option to evaluate various qualitative factors to determine the likelihood of impairment. If determined that the fair value is more likely than not less than the carrying value, then the Company is required to perform Step 1. If the Company does not elect to perform Step 0, it can voluntarily proceed directly to Step 1. In Step 1, the Company performs a quantitative analysis to compare the fair value of its reporting unit to its carrying value including goodwill. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired, and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform Step 2 of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference. Goodwill impairment testing for 2015 was performed by assessing certain qualitative trends and factors. The Company’s qualitative assessment included an assessment of business changes, economic outlook, financial trends and forecasts, growth rates, credit ratings, equity ratings, discount rates, industry data and other relevant qualitative factors. Events or circumstances that could unfavorably impact the key assumptions include lower net sales driven by market conditions, our inability to execute on marketing programs and/or delay in the introduction of new products, lower gross margins as a result of market conditions or failure to obtain forecasted cost reductions, or a higher discount rate as a result of market conditions. While unpredictable and inherently uncertain, the Company believes its forecast estimates are reasonable and incorporate assumptions that similar market participants would use in their estimates of fair value. These trends and factors were compared to, and based on, the assumptions used in prior years. After reviewing various qualitative factors, the Company’s 2015 annual goodwill impairment test indicated that the fair value of the reporting unit more likely than not exceeded its carrying value, indicating no impairment. Other intangible assets have both indefinite and finite useful lives. Intangible assets with indefinite useful lives, such as the Company’s trade name, are not amortized but are tested annually for impairment. The Company has elected to perform our annual trade name impairment test on October 31 of every year and follow a similar multi-step impairment test that is performed on goodwill. Events or circumstances that could unfavorably impact the key assumptions include lower net sales driven by market conditions, our inability to execute on marketing programs and/or delay in introduction of new products, and higher discount rate as a result of market conditions. While unpredictable and inherently uncertain, the Company believes the forecast estimates are reasonable and incorporate those assumptions that similar market participants would use in their estimates of fair value. After reviewing various qualitative factors, the Company’s annual 2015 trade name impairment test, as of October 31, 2015, indicated that the fair value of the trade name more likely than not exceeded its carrying value, indicating no impairment. However, late in the fourth quarter of 2015, the Company obtained updated market data showing a further decline in forecasted net sales for certain of the Company’s end markets. As a result of the new market data and revised near term and long term forecasts, the Company completed a Step 1 analysis for the trade name to assess the impact of these changes on its fair value. The Company performed a quantitative analysis to compare the fair value of trade name to the carrying value of the trade name primarily using the relief-from-royalty method under the income valuation approach consistent with prior years. Significant assumptions used to determine fair value under the relief-from-royalty method include forecasted net sales, royalty rates and a discount rate to be applied to the forecasted net sales. The estimated fair value of the trade name, as of December 31, 2015, was approximately $790.0 million versus a carrying amount of $870.0 million, resulting in a trade name impairment of $80.0 million as of December 31, 2015. The trade name impairment did not result in any other charges to goodwill, other intangible assets or long-lived assets. Refer to NOTE 5 for further information. Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment when circumstances change that would create a triggering event. Customer relationships are amortized over the life in which expected benefits are to be consumed. The other remaining finite useful life intangibles are amortized on a straight-line basis over their useful lives. The Company evaluates the remaining useful life of the other intangible assets on a periodic basis to determine whether events or circumstances warrant a revision to the remaining useful life. Assumptions and estimates about future values and remaining useful lives of the Company’s intangible and other long-lived assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors, such as changes in the Company’s business strategy and internal forecasts. Although management believes the historical assumptions and estimates are reasonable and appropriate, different assumptions and estimates could materially impact the Company’s reported financial results. NOTE 5 provides further information on Goodwill and Other intangible assets. Deferred Financing Costs The Company early adopted the FASB’s authoritative accounting guidance, as of December 31, 2015, to present the deferred financing costs on the balance sheet as a direct deduction from the carrying amount of the debt rather than at cost as a component of other non-current assets. The debt issuance costs related to line-of-credit arrangements is presented as a component of other non-current assets as permitted by the new guidance. Deferred financing costs continue to be amortized over the life of the related debt using the effective interest method. Amortization of deferred financing costs is recorded as part of interest expense and totaled $8.0 million, $8.1 million and $10.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. Financial Instruments The Company’s cash equivalents are invested in U.S. Government backed securities and recorded at fair value in the Consolidated Balance Sheets. The carrying values of accounts receivable and accounts payable approximate fair value due to their short-term nature. The Company’s financial derivative instruments, including interest rate swaps and foreign currency and commodity forward contracts are carried at fair value on the Consolidated Balance Sheets. Refer to NOTE 6 for more detail. The Company’s long-term debt obligations are carried at historical amounts with the Company providing fair value disclosure in NOTE 7. Insurable Liabilities The Company records liabilities for its medical, workers’ compensation, long-term disability, product, general and auto liabilities. The determination of these liabilities and related expenses is dependent on claims experience. For most of these liabilities, claims incurred but not yet reported are estimated based upon historical claims experience. Revenue Recognition The Company records sales when title has transferred to the customer, there is evidence of an agreement, the sales price is fixed or determinable, delivery has occurred or services have been rendered, and collectability is reasonably assured. The Company sells Extended Transmission Coverage (“ETC”) for which sales are deferred. ETC sales are recognized ratably over the period of the ETC, which typically ranges from two to five years after initial sale. Costs associated with ETC programs are recorded as incurred during the extended period. Distributor and customer sales incentives, consisting of allowances and other rebates, are estimated at the time of sale based upon the Company’s history and experience and are recorded as a reduction to Net sales. Incentive programs are generally product specific or region specific. Some factors used in estimating the cost of incentives include the number of transmissions that will be affected by the incentive program and rate of acceptance of any incentive program. If the actual number of affected transmissions differs from this estimate, or if a different mix of incentives is actually paid, the impact on Net sales would be recorded in the period that the change was identified. Consideration given to commercial customers recorded as a reduction of Net sales in the Consolidated Statements of Comprehensive Income included $46.7 million, $66.9 million, and $65.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. Sales under U.S. government production contracts are recorded when the product is accepted, title has transferred to the U.S. government, the sales price is fixed or determinable, and delivery has occurred. Deferred revenue arises from cash received in advance of the culmination of the earnings process and is recognized as revenue in future periods when the applicable revenue recognition criteria have been met. Under the terms of some U.S. government contracts, there are certain price reduction clauses and provisions for potential price reductions which are estimated at the time of sale based upon the Company’s history and experience and are recorded as a reduction to Net sales. Potential reductions may be attributed to a change in projected sales volumes or plant efficiencies which impact overall costs. As of December 31, 2015 and 2014, the Company had $55.1 million and $63.1 million recorded in the price reduction reserve account, respectively. Due to requests from the U.S. government, the Company billed, but did not ship certain tracked transmissions during 2013. Based on the lack of a fixed delivery date from the U.S. government, the Company deferred approximately $8.8 million of Net sales for these transmissions until they were shipped in 2014. See NOTE 10 for additional details. The Company classifies shipping and handling billed to customers in Net sales and shipping and handling costs in Cost of sales, in accordance with authoritative accounting guidance. The Company contracts with various third parties to provide engineering services. These services are recorded as Net sales in accordance with the terms of the contract. The saleable engineering recorded was $4.2 million, $7.4 million and $12.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. The associated costs are recorded in Cost of sales. Warranty Provisions for estimated expenses related to product warranties are made at the time products are sold. Warranty claims arise when a transmission fails while in service during the relevant warranty period. The warranty reserve is adjusted in Selling, general and administrative expenses based on the Company’s current and historical warranty claims paid and associated repair costs. These estimates are established using historical information including the nature, frequency, and average cost of warranty claims and are adjusted as actual information becomes available. From time to time, the Company may initiate a specific field action program. As a result of the uncertainty surrounding the nature and frequency of specific field action programs, the liability for such programs is recorded when the Company commits to an action. The Company reviews and assesses the liability for these programs on a quarterly basis. The Company also assesses its ability to recover certain costs from its suppliers and records a receivable from the supplier when it believes a recovery is probable. Warranty costs may differ from those estimated if actual claim rates are higher or lower than our historical rates. Research and Development The Company incurs costs in connection with research and development programs that are expected to contribute to future earnings. Such costs are charged to Engineering — research and development as incurred. Environmental The Company accrues costs related to environmental matters when it is probable that the Company has incurred a liability related to a contaminated site and the costs can be reasonably estimated. For additional information, see NOTE 17 Commitments and Contingencies. Foreign Currency Translation Most of the subsidiaries outside the United States prepare financial statements in currencies other than the U.S. dollar. The functional currency for all these subsidiaries is the local currency, except for the Company’s Hong Kong and Middle East subsidiaries which currently use the U.S. dollar as their functional currency. Balances are translated at period-end exchange rates for assets and liabilities and monthly weighted-average exchange rates for revenues and expenses. The translation gains (losses) are stated as a component of AOCL as disclosed in NOTE 16. Derivative Instruments In the normal course of business, the Company is exposed to fluctuations in interest rates, foreign currency exchange rates, and commodity prices. The risk is managed through the use of financial derivative instruments including interest rate swaps and commodity and foreign currency forward contracts. Despite the fact that the Company either has not elected or does not qualify for hedge accounting treatment on all of its derivative instruments, the contracts 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. NOTE 8 provides further information on the accounting treatment of the Company’s derivative instruments. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The future tax benefits associated with operating loss and tax credit carryforwards are recognized as deferred tax assets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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 the FASB’s authoritative accounting guidance on income taxes. 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, and 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 early adopted the FASB’s authoritative accounting guidance on a retrospective basis, as of December 31, 2015, to classify all deferred tax assets and liabilities, along with any related valuation allowance, as noncurrent on the balance sheet. Stock-Based Compensation The Company maintains a stock-based compensation plan which allows employees (including executive officers), consultants and directors to receive equity awards. The Company follows the FASB’s authoritative accounting guidance on share-based payments and recognizes the fair value of the awards as compensation expense over the vesting period. The accounting guidance also requires that forfeitures be estimated over the vesting period of an award instead of being recognized as a reduction of compensation expense when the forfeiture actually occurs. Pension and Post-retirement Benefit Plans For pension and other post-retirement benefits (“OPEB”) plans in which employees participate, costs are determined within the FASB’s authoritative accounting guidance set forth in employers’ defined benefit pensions including accounting for settlements and curtailments of defined benefit pension plans, termination of benefits and accounting for post-retirement benefits other than pensions. In accordance with the authoritative accounting guidance, the Company recognizes the funded status of its defined benefit pension plans and OPEB plan in its Consolidated Balance Sheets with a corresponding adjustment to AOCL, net of tax. Post-retirement benefit costs consist of service cost, interest cost on accrued obligations and the expected return on assets (calculated using a smoothed market value of assets). Any difference between actual and expected returns on assets during a year and actuarial gains and losses on liabilities together with any prior service costs are charged (or credited) to income over the average remaining service lives of employees. The benefit cost components shown in the Consolidated Statements of Comprehensive Income are based upon various actuarial assumptions and methodologies as prescribed by authoritative accounting guidance. These assumptions include discount rates, expected return on plan assets, health care cost trend rates, inflation, rate of compensation increases, population demographics, mortality rates and other factors. The Company reviews all actuarial assumptions on an annual basis. Changes in key economic indicators can change these assumptions. These assumptions, along with the actual value of assets at the measurement date, will impact the calculation of pension expenses for the year. For instance, the effect of a one percentage point decrease in the assumed discount rate would result in an increase in the December 31, 2015 defined benefit pension plans obligation of approximately $21.1 million. Similarly, a one percentage point decrease in the assumed discount rate would result in an increase in the December 31, 2015 OPEB obligation of approximately $28.0 million. Recently Issued Accounting Pronouncements In November 2015, the FASB issued authoritative accounting guidance to simplify the balance sheet classification of deferred taxes. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. As a result, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. The guidance will be effective prospectively or retrospectively for public entities for interim and annual reporting periods beginning after December 15, 2016, but can be early-adopted. Management has elected to early adopt the guidance on a retrospective basis as of December 31, 2015. As of December 31, 2014, the Company reclassified $1.0 million and ($118.7) million to non-current deferred income tax assets, net and non-current deferred income tax liabilities, net, respectively, to conform to the current period presentation. In July 2015, the FASB issued authoritative accounting guidance to simplify the measurement of inventory. The guidance requires that inventory be measured at the lower of cost and net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. Inventory measured using last-in, first-out and the retail inventory method are not impacted by the new guidance. The guidance is effective for public entities for interim and annual reporting periods beginning after December 15, 2016, but can be early-adopted. Management is assessing the potential impact of the adoption of this guidance on the Company’s consolidated financial statements. In April 2015, the FASB issued authoritative accounting guidance to simplify the presentation of the debt issuance costs. The guidance requires that the debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The debt issuance costs related to line-of-credit arrangements can still be deferred and presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement. The recognition and measurement guidance for debt issuance costs are not affected. The guidance is effective for public entities for interim and annual reporting periods beginning after December 15, 2015, but can be early-adopted. The guidance should also be applied on a retrospective basis. As of December 31, 2015, management has decided to early adopt this guidance. As of December 31, 2015 and 2014, approximately $25.6 million and $29.3 million of debt issuance costs, net of accumulated amortization, were presented in the consolidated balance sheet as direct deductions from the carrying amounts of the debt. In August 2014, the FASB issued authoritative accounting guidance on the disclosure of uncertainties about an entity’s ability to continue as a going concern. The guidance requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that financial statements are available to be issued when applicable) and to provide related footnote disclosures. The guidance is effective prospectively for fiscal years beginning after December 15, 2016, but can be early-adopted. While the adoption of this guidance is not expected to have an effect on the Company’s consolidated financial statements, it could affect the disclosure applied under these circumstances in the future. In May 2014, the FASB issued authoritative accounting guidance on a company’s accounting for revenue from contracts with customers. The guidance applies to all companies that enter into contracts with customers to transfer goods, services or nonfinancial assets. The guidance requires these companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, timing, amount and uncertainty of revenue that is recognized. The guidance allows either full or modified retrospective adoption. The new guidance would have become effective for annual and interim periods beginning January 1, 2017. In July 2015, the FASB approved a one year delay of the effective date of the standard to January 1, 2018, to provide adequate time for implementa |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2015 | |
INVENTORIES | NOTE 3. INVENTORIES Inventories consisted of the following components (dollars in millions): December 31, 2015 December 31, 2014 Purchased parts and raw materials $ 69.5 $ 72.3 Work in progress 5.1 6.1 Service parts 45.8 46.5 Finished goods 21.0 18.6 Total inventories $ 141.4 $ 143.5 Inventory components shipped to third parties, primarily cores, parts to re-manufacturers, and parts to contract manufacturers, which the Company has an obligation to buy back, are included in purchased parts and raw materials, with an offsetting liability in Other current liabilities. See NOTE 12, “Other Current Liabilities” for more information. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 4. PROPERTY, PLANT AND EQUIPMENT The cost and accumulated depreciation of property, plant and equipment are as follows (dollars in millions): December 31, 2015 December 31, 2014 Land and land improvements $ 25.0 $ 23.6 Buildings and building improvements 293.8 281.6 Machinery and equipment 585.7 576.2 Software 121.3 117.0 Special tools 160.0 143.6 Construction in progress 28.8 39.9 Total property, plant and equipment 1,214.6 1,181.9 Accumulated depreciation (734.9 ) (667.3 ) Property, plant and equipment, net $ 479.7 $ 514.6 Depreciation of property, plant and equipment was $88.3 million, $93.8 million and $98.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. During 2015 and 2014, the Company recorded an impairment of certain machinery and equipment, and special tools associated with the production of the H3000 and H4000 hybrid-propulsion systems. See NOTE 2, “Impairment of long-lived assets” for more information. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS As of December 31, 2015 and 2014, 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): December 31, 2015 December 31, 2014 Intangible assets, gross Accumulated amortization Intangible assets, net Intangible assets, gross Accumulated amortization Intangible assets, net Other intangible assets: Trade name $ 790.0 $ — $ 790.0 $ 870.0 $ — $ 870.0 Customer relationships - defense 62.3 (31.3 ) 31.0 62.3 (27.9 ) 34.4 Customer relationships – commercial 831.8 (477.3 ) 354.5 831.8 (426.9 ) 404.9 Proprietary technology 476.3 (320.1 ) 156.2 476.3 (282.0 ) 194.3 Non-compete agreement 17.3 (14.6 ) 2.7 17.3 (12.8 ) 4.5 Patented technology - defense 28.2 (27.9 ) 0.3 28.2 (24.5 ) 3.7 Tooling rights 4.5 (4.4 ) 0.1 4.5 (4.3 ) 0.2 Patented technology - commercial 260.6 (260.6 ) — 260.6 (260.6 ) — Total $ 2,471.0 $ (1,136.2 ) $ 1,334.8 $ 2,551.0 $ (1,039.0 ) $ 1,512.0 Amortization of intangible assets was $97.1 million, $98.8 million and $105.3 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, the Company recorded a trade name impairment charge of $80.0 million. The impairment charge was a result of a decline in forecasted net sales for certain of the Company’s end markets. The impairment charge was derived from an income approach by which the relief-from-royalty method was applied valuing the savings to cash flow. The relief-from-royalty method requires assumptions be made concerning forecasted revenue, a discount rate, and a royalty rate. The underlying concept of the relief-from-royalty method is that the value of the trade name can be estimated by determining the cost savings the Company achieves by not having to license the trade name. The trade name impairment did not result in any other charges to goodwill, other intangible assets or long-lived assets. As of December 31, 2015, the net carrying value of the Company’s Goodwill and Other intangible assets, net was $3,275.8 million. Amortization expense related to other intangible assets for the next five years and thereafter is expected to be (dollars in millions): 2016 2017 2018 2019 2020 Thereafter Amortization expense $ 92.4 $ 89.7 $ 87.2 $ 85.7 $ 49.9 $ 140.6 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 6. FAIR VALUE OF FINANCIAL INSTRUMENTS In accordance with the FASB’s authoritative accounting guidance on fair value measurements, fair value is the price (exit price) that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company primarily applies the market approach for recurring fair value measurements and utilizes the best available information that maximizes the use of observable inputs and minimizes the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs. The accounting guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the relevant guidance are as follows: Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and publicly traded bonds. Level 2 — Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes financial instruments that are valued using quoted prices in markets that are not active and those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3 — Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. At each balance sheet date, the Company performs an analysis of all instruments subject to authoritative accounting guidance and includes, in Level 3, all of those whose fair value is based on significant unobservable inputs. As of December 31, 2015 and 2014, 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 swaps 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 calculate the fair value of 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 qualify as Level 1 in the fair value hierarchy. The Company’s valuation techniques used to calculate the fair value of derivative instruments represent a market approach with observable inputs that qualify as Level 2 in the fair value hierarchy. The foreign currency swaps 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 swaps 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 swaps 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 Consolidated Balance Sheets. The Company generally does not elect to apply hedge accounting for these foreign currency swaps, and as a result, unrealized fair value adjustments and realized gains and losses are recorded in Other expense, net in the 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 Consolidated Balance Sheets. The Company has either not qualified for or not elected hedge accounting treatment for these commodity swaps, and as a result, unrealized fair value adjustments and realized gains and losses are recorded in Other expense, net in the 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 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 Consolidated Statements of Comprehensive Income. The following table summarizes the fair value of the Company’s financial assets and (liabilities) as of December 31 (dollars in millions): Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) TOTAL 2015 2014 2015 2014 2015 2014 Cash equivalents $ 100.0 $ 55.0 $ — $ — $ 100.0 $ 55.0 Available-for-sale securities 2.9 8.6 — — 2.9 8.6 Rabbi trust assets 4.8 2.9 — — 4.8 2.9 Deferred compensation obligation (4.8 ) (2.9 ) — — (4.8 ) (2.9 ) Derivative assets — — 0.0 0.0 0.0 0.0 Derivative liabilities — — (30.1 ) (15.4 ) (30.1 ) (15.4 ) Total $ 102.9 $ 63.6 $ (30.1 ) $ (15.4 ) $ 72.8 $ 48.2 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2015 | |
DEBT | NOTE 7. DEBT Long-term debt and maturities are as follows (dollars in millions): December 31, 2015 December 31, 2014 Long-term debt: Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 $ — $ 283.6 Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 2,402.8 1,765.6 Senior Notes, fixed 7.125%, due 2019 — 471.3 Total long-term debt $ 2,402.8 $ 2,520.5 Less: current maturities of long-term debt 24.5 17.9 deferred financing costs, net (see NOTE 2) 25.6 29.3 Total long-term debt, net $ 2,352.7 $ 2,473.3 Principal payments required on long-term debt during the next five years are as follows: Required Principal Payments (dollars in millions) 2016 2017 2018 2019 2020 Payment $ 24.5 $ 24.5 $ 24.5 $ 2,329.3 $ — As of December 31, 2015, the Company had $2,402.8 million of indebtedness associated with Allison Transmission, Inc.’s (“ATI”), the Company’s wholly-owned subsidiary, Senior Secured Credit Facility Term B-3 Loan due 2019 (“Term B-3 Loan”, and together the revolving credit facility, defined as the “Senior Secured Credit Facility”). The fair value of the Company’s long-term debt obligations as of December 31, 2015 was $2,384.8 million. The fair value is based on quoted Level 2 market prices of the Company’s debt as of December 31, 2015. 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. In March 2015, ATI commenced a cash tender offer to purchase its outstanding 7.125% senior cash pay notes due May 2019 (“7.125% Senior Notes”). In connection with the cash tender offer, ATI solicited consents to enter into a supplemental indenture to eliminate substantially all of the restrictive covenants, certain events of default and related provisions contained in the indenture dated as of May 6, 2011 (the “Indenture”) governing the 7.125% Senior Notes. On March 31, 2015, ATI received valid consents from holders with an aggregate principal amount of $420.9 million of the 7.125% Senior Notes. Accordingly, ATI entered into a first supplemental indenture to the Indenture contingent on the execution of an amendment with the term loan lenders under its Senior Secured Credit Facility. In April 2015, ATI entered into an amendment with the term loan lenders under its Senior Secured Credit Facility to add up to an additional $470.0 million of Term B-3 Loan commitments and incur term loans in an aggregate principal amount of $470.0 million. The amendment also, among other things, (i) permits prepayment, repurchase or redemption of ATI’s 7.125% Senior Notes with the proceeds of the financing and (ii) resets the period for which a prepayment premium of 1.00% will apply in the event of a repricing transaction to the six-month anniversary of the closing date of the financing. With the exception of the items noted above, the terms (including maturity and pricing) of the financing are materially the same as the terms of the existing Term B-3 Loan outstanding. As a result of the newly structured Senior Secured Credit Facility, ATI recorded approximately $7.7 million as deferred financing fees in the Consolidated Balance Sheets. Immediately following the financing, ATI purchased $420.9 million of the tendered 7.125% Senior Notes using the proceeds from the financing in a cash payment equal to $1,042 per $1,000 aggregate principal amount of the 7.125% Senior Notes plus accrued and unpaid interest. Upon the payment, the supplemental indenture to the Indenture became operative. The purchase resulted in a loss (the premium between the purchase price of the notes and the face value of such notes) of $22.7 million including deferred financing fees written off. In May 2015, ATI redeemed the remaining $50.4 million of its outstanding 7.125% Senior Notes, at the redemption price equal to 103.563% of the principal amount plus any accrued and unpaid interest, using the remaining proceeds from the financing and cash on hand, resulting in a loss (the premium between the purchase price of the notes and the face value of such notes) of $2.4 million including deferred financing fees written off. In November 2015, ATI entered into an amendment with the term loan lenders under its Senior Secured Credit Facility to refinance $189.0 million of Senior Secured Credit Facility Term B-2 Loan due 2017 (“Term B-2 Loan”) replacing it with an additional $189.0 million of term loans under the Term B-3 Loan. The addition to the Term B-3 Loan increased the Company’s debt maturity from August 2017 to August 2019 and the applicable interest rate margin at the Company’s option, is either (a) 2.50% over the LIBOR (which may not be less than 1.00%) or (b) 1.50% 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. As of December 31, 2015, the rate was approximately 3.50% on the Term B-3 Loan. The November 2015 amendment was treated as a modification of debt under GAAP, and thus the Company expensed $0.3 million of deferred financing fees and recorded $1.3 million of new deferred financing fees in the consolidated financial statements. The Senior Secured Credit Facility requires minimum quarterly principal payments on the 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. During 2015, the Company made principal payments of $94.5 million on the Term B-2 Loan, resulting in a loss of $0.3 million associated with the write off of related deferred debt issuance costs. The minimum required quarterly principal payment on the Term B-3 Loan is $6.1 million and remains through its maturity date of 2019. As of December 31, 2015, there had been no payments required from certain net cash proceeds of non-ordinary course asset sales and casualty and condemnation events. The remaining principal balance is due upon maturity. The Senior Secured Credit Facility 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). In accordance with the Senior Secured Credit Facility, net cash proceeds of non-ordinary course asset sales, casualty and condemnation events will only be required to prepay the term loan if the Company does not reinvest or commit to reinvest such net cash proceeds in assets to be used in its business or to make certain other permitted investments within 15 months of the related transaction or event, subject to certain limitations. The Company must apply 50% of its annual excess cash flow (as defined in the Senior Secured Credit Facility) to the prepayment of the Senior Secured Credit Facility, however this percentage reduces to certain levels and eventually to zero upon achievement of certain total senior secured leverage ratios. For the years ended December 31, 2015 and 2014, the Company was not required to make an excess cash flow payment. The Senior Secured Credit Facility also provides for a revolving credit borrowing. In 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 consolidated financial statements. As of December 31, 2015, the Company had $461.0 million available under the revolving credit facility, net of $4.0 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 December 31, 2015, this rate would have been approximately 1.63%. In addition, there is an annual commitment fee, based on the Company’s total leverage ratio, which as of December 31, 2015, was equal to 0.25% 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. In March 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 December 31, 2015, 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 2.99x 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 December 31, 2015, the total leverage ratio was 2.99x. 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, declare or pay certain dividends, or repurchase shares of the Company’s common stock. As of December 31, 2015, the Company is in compliance with all covenants under the Senior Secured Credit Facility. |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2015 | |
DERIVATIVES | NOTE 8. 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 swaps 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 Consolidated Statements of Comprehensive Income. A summary of the Company’s interest rate derivatives as of December 31, 2015 and December 31, 2014 follows (dollars in millions): December 31, 2015 December 31, 2014 Notional Amount Fair Value Notional Amount Fair Value 3.44% Interest Rate Swap L, Aug 2016 – Aug 2019* $ 75.0 (3.6 ) 75.0 (2.3 ) 3.43% Interest Rate Swap M, Aug 2016 – Aug 2019* 100.0 (4.8 ) 100.0 (3.0 ) 3.37% Interest Rate Swap N, Aug 2016 – Aug 2019* 75.0 (3.5 ) 75.0 (2.1 ) 3.19% Interest Rate Swap O, Aug 2016 – Aug 2019* 75.0 (3.1 ) 75.0 (1.7 ) 3.08% Interest Rate Swap P, Aug 2016 – Aug 2019* 75.0 (2.8 ) 75.0 (1.5 ) 2.99% Interest Rate Swap Q, Aug 2016 – Aug 2019* 50.0 (1.7 ) 50.0 (0.9 ) 2.98% Interest Rate Swap R, Aug 2016 – Aug 2019* 50.0 (1.7 ) 50.0 (0.9 ) 2.73% Interest Rate Swap S, Aug 2016 – Aug 2019* 50.0 (1.4 ) 50.0 (0.5 ) 2.74% Interest Rate Swap T, Aug 2016 – Aug 2019* 75.0 (2.1 ) 75.0 (0.8 ) 2.66% Interest Rate Swap U, Aug 2016 – Aug 2019* 50.0 (1.2 ) 50.0 (0.4 ) 2.60% Interest Rate Swap V, Aug 2016 – Aug 2019* 50.0 (1.2 ) 50.0 (0.3 ) 2.40% Interest Rate Swap W, Aug 2016 – Aug 2019* 25.0 (0.5 ) 25.0 0.0 2.25% Interest Rate Swap X, Aug 2016 – Aug 2019* 50.0 (0.8 ) — — * includes LIBOR floor of 1.00% $ 800.0 $ (28.4 ) $ 750.0 $ (14.4 ) 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 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 Consolidated Statements of Comprehensive Income during the period of change. The following table summarizes the outstanding foreign currency swaps as of December 31, 2015 and 2014 (amounts in millions): December 31, 2015 December 31, 2014 Notional Amount Fair Value Notional Amount Fair Value Japanese Yen (JPY) ¥ — $ — ¥ 300.0 $ (0.3 ) $ — $ (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 swaps, 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 Consolidated Statements of Comprehensive Income during the period of change. The following table summarizes the outstanding commodity swaps as of December 31, 2015 and December 31, 2014 (dollars in millions): December 31, 2015 December 31, 2014 Notional Amount Quantity Fair Value Notional Amount Quantity Fair Value Aluminum $ 13.7 8,150 metric tons $ (1.7 ) $ 11.3 6,200 metric tons $ (0.7 ) Natural Gas $ 0.2 70,000 MMBtu 0.0 $ 0.2 60,000 MMBtu 0.0 $ (1.7 ) $ (0.7 ) The following tabular disclosures further describe the Company’s derivative instruments and their impact on the financial condition of the Company (dollars in millions): December 31, 2015 December 31, 2014 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments Foreign currency swaps Other current assets $ — Other current $ (0.3 ) Commodity swaps Other current and non-current liabilities (1.7 ) Other current and non-current liabilities (0.7 ) Interest rate swaps Other current and non-current liabilities (28.4 ) Other non- (14.4 ) Total derivatives not designated as hedging instruments $ (30.1 ) $ (15.4 ) 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 Consolidated Balance Sheets. As of December 31, 2015, the amounts recorded to Other current and non-current liabilities for commodity swaps were ($1.1) million and ($0.6) million, respectively. The amounts recorded to Other current and non-current liabilities for interest rate swaps were ($3.9) million and ($24.5) million, respectively. As of December 31, 2014, the amount recorded to Other current liabilities for foreign currency swaps was ($0.3) million. The amounts recorded to Other current and non-current liabilities for commodity swaps were ($0.6) million and ($0.1) million, respectively. The amount recorded to Other non-current liabilities for interest rate swaps was ($14.4) million, respectively. The impact on the Company’s Consolidated Statements of Comprehensive Income related to foreign currency and commodity swaps can be found in NOTE 11, and the following tabular disclosure describes the location and impact on the Company’s results of operations related to unrealized (loss) gain on interest rate derivatives (dollars in millions): December 31, December 31, December 31, Location of impact on results of operations Interest expense $ (14.0 ) $ 3.5 $ 34.3 |
PRODUCT WARRANTY LIABILITIES
PRODUCT WARRANTY LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
PRODUCT WARRANTY LIABILITIES | NOTE 9. PRODUCT WARRANTY LIABILITIES As of December 31, 2015, the current and non-current product warranty liabilities were $24.9 million and $53.4 million, respectively. As of December 31, 2014, the current and non-current product warranty liabilities were $24.0 million and $59.6 million, respectively. Product warranty liability activities consist of the following (dollars in millions): Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Beginning balance $ 83.6 $ 90.5 $ 109.7 Payments (32.5 ) (35.0 ) (38.7 ) Increase in liability (warranty issued during period) 21.2 26.8 28.4 Net adjustments to liability 5.5 0.7 (9.6 ) Accretion (for predecessor liabilities) 0.5 0.6 0.7 Ending balance $ 78.3 $ 83.6 $ 90.5 During 2015, the Company recorded approximately $9.2 million of adjustments to the product warranty liabilities as a result of specific field action programs. As a result of the uncertainty surrounding the nature and frequency of specific field action programs, these liabilities will change as additional field information becomes available. The remaining adjustments to the total liability in 2015, 2014 and 2013, excluding the Dual Power Inverter Module (“DPIM”) as discussed below, were the result of general changes in estimates for various products as additional claims data and field information became available. Dual Power Inverter Module During June 2007, Old GM recognized the estimated cost of replacing the DPIM used on H 40/50 EP hybrid systems. Certain units were falling short of their expected service life and the Company’s predecessor, Allison Transmission, an operating unit of General Motors Corporation, decided to cover repair or replacement for an extended period. The Company is responsible for the first $12.0 million of qualified cost while General Motors Company (“GM”) is responsible for the next $34.0 million of costs, with any amount over $46.0 million being shared one-third by the Company and two-thirds by GM for shipments through June 30, 2009. During 2015, the Company completed an analysis of its DPIM extended coverage program and determined, based on current claims, that the product warranty liability should be increased by $1.8 million. This resulted in a $2.1 million increase in the GM DPIM receivable and a $0.3 million favorable adjustment to the Consolidated Statements of Comprehensive Income. During 2015, the Company also received a $1.8 million favorable settlement related to the specific DPIM field action programs. As of December 31, 2015, the DPIM liability was $50.3 million with an associated receivable from GM of $30.7 million. Through December 31, 2015, the Company had paid approximately $39.6 million in DPIM claims and received approximately $23.6 million in reimbursement from GM. The Company will continue to review the total DPIM liability and GM receivable for any changes in estimates as additional data becomes available. During 2014, the Company completed an analysis of its DPIM extended coverage program and determined, based on current claims, that the product warranty liability should be increased by $3.9 million. This resulted in a $2.9 million increase in the GM DPIM receivable and a $1.0 million unfavorable adjustment to the Consolidated Statements of Comprehensive Income. As of December 31, 2014, the DPIM liability was $48.5 million with an associated receivable from GM of $28.7 million. Through December 31, 2014, the Company had paid approximately $32.8 million in DPIM claims and received approximately $14.9 million in reimbursement from GM. The Company will continue to review the total DPIM liability and GM receivable for any changes in estimates as additional data becomes available. During 2013, the Company completed an analysis of its DPIM extended coverage program and determined, based on current claims, that the product warranty liability should be reduced by $8.2 million. This resulted in a $5.8 million reduction in the GM DPIM receivable and a $2.4 million favorable adjustment to the Consolidated Statements of Comprehensive Income. As of December 31, 2013, the DPIM liability was $44.6 million with an associated receivable from GM of $25.8 million. Through December 31, 2013, the Company had paid approximately $25.5 million in DPIM claims and received approximately $9.1 million in reimbursement from GM. |
DEFERRED REVENUE
DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2015 | |
DEFERRED REVENUE | NOTE 10. DEFERRED REVENUE As of December 31, 2015, the current and non-current deferred revenue for ETC were $22.9 million and $56.4 million, respectively. As of December 31, 2014, the current and non-current deferred revenue for ETC were $20.3 million and $48.7 million, respectively. Deferred revenue for ETC activity (dollars in millions): Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Beginning balance $ 69.0 $ 63.6 $ 63.5 Increases 31.9 26.2 21.1 Revenue earned (21.6 ) (20.8 ) (21.0 ) Ending balance $ 79.3 $ 69.0 $ 63.6 Deferred revenue recorded in current liabilities related to unearned net sales for defense contracts for the years ended December 31, 2015, 2014 and 2013 was approximately $0.0 million, $0.3 million and $8.8 million, respectively. Due to requests from the U.S. government, the Company billed, but did not ship certain tracked transmissions during 2013. Based on the lack of a fixed delivery date from the U.S. government, the Company deferred approximately $8.8 million of net sales for these transmissions until they were shipped in 2014. |
OTHER EXPENSE, NET
OTHER EXPENSE, NET | 12 Months Ended |
Dec. 31, 2015 | |
OTHER EXPENSE, NET | NOTE 11. OTHER EXPENSE, NET Other expense, net consists of the following (dollars in millions): Years ended December 31, 2015 2014 2013 Vendor settlement $ 2.9 $ — $ — Loss on intercompany foreign exchange (1.7 ) (5.4 ) (2.3 ) Gain (loss) on foreign exchange 1.4 (1.0 ) (2.4 ) Realized loss on derivative contracts (see NOTE 8) (1.3 ) (1.0 ) (2.8 ) Unrealized (loss) gain on derivative contracts (see NOTE 8) (0.8 ) 1.2 (1.5 ) Loss on repayments and repurchases of long-term debt (see NOTE 7) (0.3 ) (0.5 ) (0.8 ) Grant program income — 2.6 5.2 Impairment loss on investments in technology-related initiatives — (2.0 ) (5.0 ) Gain on negotiation of commercial agreement — 2.0 — Public offering fees and expenses — (1.4 ) (1.6 ) Other (0.5 ) (0.1 ) 0.3 Total $ (0.3 ) $ (5.6 ) $ (10.9 ) |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
OTHER CURRENT LIABILITIES | NOTE 12. OTHER CURRENT LIABILITIES Other current liabilities consist of the following (dollars in millions): As of December 31, 2015 As of December 31, 2014 Payroll and related costs $ 31.5 $ 50.9 Sales allowances 24.3 25.5 Vendor buyback obligation 12.1 13.2 Taxes payable 12.6 8.5 Defense price reduction reserve 8.7 16.2 Derivative liabilities 5.0 0.8 Accrued interest payable 0.6 5.2 Environmental liabilities 0.5 — Other accruals 10.8 11.4 Total $ 106.1 $ 131.7 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
EMPLOYEE BENEFIT PLANS | NOTE 13. EMPLOYEE BENEFIT PLANS The Company’s hourly defined benefit pension plan generally provides benefits of negotiated, stated amounts for each year of service as well as significant supplemental benefits for employees who retire with 30 years of service before normal retirement age. For all hourly employees hired after May 18, 2008, the defined benefit pension plan was replaced with a defined contribution pension plan, and the company-sponsored retiree healthcare was also eliminated for those hired after May 18, 2008. The charge to expense for the hourly defined contribution pension plan was $1.5 million, $1.3 million and $1.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. The Company’s salaried defined benefit plan covering salaried employees with a service date prior to January 1, 2001 is generally based on years of service and compensation history. The salaried defined contribution retirement savings plan requires the Company to match employee contributions up to certain predefined limits based upon eligible base salary. In addition to the matching contribution, the Company is required to make a contribution equal to 1% of eligible base salary for salaried employees with a service date on or after January 1, 1993 to cover certain benefits in retirement that are different from salaried employees with a service date prior to January 1, 1993. In addition, for salaried employees with a service date on or after January 1, 2001, the Company is required to contribute to its defined contribution retirement savings plan an amount equal to 4% of eligible base salary under the program. The charge to expense for the salaried defined contribution retirement savings plan was $5.7 million, $5.4 million and $5.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. The Company is also responsible for OPEB costs (medical, dental, vision, and life insurance) for hourly employees hired prior to May 19, 2008. Post-retirement benefit costs consist of service cost, interest cost on accrued obligations and the expected return on assets (calculated using a smoothed market value of assets). Any difference between actual and expected returns on assets during a year and actuarial gains and losses on liabilities together with any prior service costs are charged (or credited) to income over the average remaining service lives of employees. The benefit cost components shown in the Consolidated Statements of Comprehensive Income are based upon certain data specific to the Company, actuarial assumptions that were used for OPEB accounting disclosures, and certain allocation methodologies such as population demographics. The plan is unfunded and any future payments will be funded by the Company’s operating cash flows. As of December 31, 2015 and 2014, the Company had an estimated OPEB liability for hourly employees hired prior to May 19, 2008, excluding those employees eligible to retire at the time of the sale of the Company (“the Acquisition Transaction”), of $147.3 million and $136.0 million, respectively. As part of the Health Care Reform Act enacted in 2010, the Company has evaluated the impact on “High-cost Health Plans” in which employers offering health plan coverage exceeding certain thresholds must pay an excise tax equal to 40% of the value of the plan that exceeds the threshold amount. As a result of the excise tax, the Company has recorded $12.2 million in its OPEB liability as of December 31, 2015 with a corresponding adjustment to AOCL, net of tax. This includes an adjustment for the delay in the start date from 2018 to 2020 as a result of the Bipartisan Budget Act of 2015. The Company provides contributions to certain international benefit plans; however, these contributions are not material for periods presented. For all pension and OPEB plans in which employees participate, costs are determined within the FASB’s authoritative accounting guidance set forth on employers’ defined benefit pensions including accounting for settlements and curtailments of defined benefit pension plans, termination of benefits and accounting for post-retirement benefits other than pensions. In accordance with the authoritative accounting guidance, the Company recognizes the funded status of its defined benefit pension plans and OPEB plan in its Consolidated Balance Sheets with a corresponding adjustment to AOCL, net of tax. Information about the net periodic benefit cost and other changes recognized in AOCL for the pension and post-retirement benefit plans is as follows (dollars in millions): Pension Plans Post-retirement Benefits Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Net Periodic Benefit Cost: Service cost $ 14.4 $ 13.2 $ 16.3 $ 2.2 $ 2.2 $ 3.3 Interest cost 5.2 5.0 4.0 5.4 5.9 5.8 Expected return on assets (8.5 ) (7.7 ) (6.7 ) — — — Prior service cost 0.1 0.1 0.1 (3.6 ) (3.6 ) (3.6 ) (Gain) loss (0.1 ) — 0.7 — (0.7 ) — Net Periodic Benefit Cost $ 11.1 $ 10.6 $ 14.4 $ 4.0 $ 3.8 $ 5.5 Other changes recognized in other comprehensive income: Prior service credit $ 0.2 $ — $ — $ — $ — $ — Net (gain) loss (4.4 ) 2.1 (18.4 ) 4.4 7.8 (30.7 ) Amortizations (0.0 ) (0.1 ) (0.8 ) 3.6 4.3 3.6 Total recognized – other comprehensive income $ (4.2 ) $ 2.0 $ (19.2 ) $ 8.0 $ 12.1 $ (27.1 ) The table below provides the weighted-average actuarial assumptions used to determine the net periodic benefit cost. Pension Plans Post-retirement Benefits Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Discount rate 3.90 % 4.80 % 3.90 % 4.00 % 4.90 % 4.10 % Rate of compensation increase (salaried) 3.00 % 3.00 % 3.00 % N/A N/A N/A Expected return on assets 6.25 % 6.80 % 7.00 % N/A N/A N/A The table below provides the weighted-average actuarial assumptions used to determine the benefit obligations of the Company’s plans. Pension Plans Post-retirement Benefits As of December 31, 2015 2014 2015 2014 Discount rate 4.40 % 3.90 % 4.60 % 4.00 % Rate of compensation increase (salaried) 3.00 % 3.00 % N/A N/A The Company’s pension and OPEB costs are calculated using various actuarial assumptions and methodologies as prescribed by authoritative accounting guidance. These assumptions include discount rates, expected return on plan assets, health care cost trend rates, inflation, rate of compensation increases, mortality rates and other factors. The Company reviews all actuarial assumptions on an annual basis. The discount rate is used to determine the present value of the Company’s benefit obligations. The Company’s discount rate is determined by matching the plans projected cash flows to a yield curve based on long-term, fixed income debt instruments available as of the measurement date of December 31, 2015. The overall expected rate of return on plan assets is based upon historical and expected future returns consistent with the expected benefit duration of the plan for each asset group adjusted for investment and administrative fees. Health care cost trends are used to project future post-retirement benefits payable from the Company’s plans. For the Company’s December 31, 2015 obligations, future post-retirement medical care costs were forecasted assuming an initial annual increase of 6.67%, decreasing to 4.50% by the year 2027. Future post-retirement prescription drug costs were forecasted assuming an initial annual increase of 5.75%, decreasing to 4.50% by the year 2027. As health care costs trends have a significant effect on the amounts reported, an increase and decrease of one-percentage-point would have the following effects in the year ended December 31, 2015 (dollars in millions): 1% Increase 1% Decrease Effect on total of service and interest cost $ 1.8 $ (1.3 ) Effect on post-retirement benefit obligation $ 31.2 $ (24.3 ) The following table provides a reconciliation of the changes in the net benefit obligations and fair value of plan assets for the years ended December 31, 2015, 2014 and 2013 (dollars in millions): Pension Plans Post-retirement Benefits Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Benefit Obligations: Net benefit obligation at beginning of year $ 133.5 $ 105.9 $ 103.3 $ 136.0 $ 120.7 $ 142.6 Service cost 14.4 13.2 16.3 2.2 2.2 3.3 Interest cost 5.2 5.0 4.0 5.4 5.9 5.8 Plan Amendments 0.2 — — — — — Benefits paid (2.0 ) (1.5 ) (0.8 ) (0.7 ) (0.6 ) (0.3 ) Actuarial (gain) loss (10.9 ) 10.9 (16.9 ) 4.4 7.8 (30.7 ) Net benefit obligation at end of year $ 140.4 $ 133.5 $ 105.9 $ 147.3 $ 136.0 $ 120.7 Fair Value of Plan Assets: Fair value of plan assets at beginning of year $ 135.3 $ 108.6 $ 89.4 $ — $ — $ — Actual return on plan assets 2.0 16.4 8.2 — — — Employer contributions 4.8 11.8 11.8 0.7 0.6 0.3 Benefits paid (2.0 ) (1.5 ) (0.8 ) (0.7 ) (0.6 ) (0.3 ) Fair value of plan assets at end of year $ 140.1 $ 135.3 $ 108.6 $ — $ — $ — Net Funded Status $ (0.3 ) $ 1.8 $ 2.7 $ (147.3 ) $ (136.0 ) $ (120.7 ) The Company’s pension plan assets mostly consist of diversified equity securities and diversified debt securities. The fair values of plan assets for the Company’s pension plans as of December 31, 2015 and 2014 are as follows (dollars in millions): Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) TOTAL 2015 2014 2015 2014 2015 2014 Cash equivalents $ 3.0 $ 8.6 $ — $ — $ 3.0 $ 8.6 Diversified equity securities 21.1 57.8 — — 21.1 57.8 Diversified debt securities 21.9 68.9 94.1 — 116.0 68.9 Total $ 46.0 $ 135.3 $ 94.1 $ — $ 140.1 $ 135.3 The Company’s investment strategy with respect to pension plan assets is to invest the assets in accordance with laws and regulations. The long-term primary objectives for the Company’s pension assets are to provide results that meet or exceed the plans’ actuarially assumed long-term rate of return without subjecting the funds to undue risk. To achieve these objectives the Company has established the following targets: Target Asset Category Hourly Salary Cash equivalents 2 % 2 % Diversified equity securities 15 15 Diversified debt securities 83 83 Total 100 % 100 % Through 2015, the Company’s investment committee has continued to evaluate the investments and take steps toward the established targets. The following table discloses the amounts recognized in the balance sheet and in AOCL at December 31, 2015 and 2014, on a pre-tax basis (dollars in millions): Pension Plans Post-retirement Benefits As of December 31, 2015 2014 2015 2014 Amounts Recognized in Balance Sheet: Noncurrent assets $ 6.6 $ 7.9 $ — $ — Current liabilities — — (1.6 ) (1.2 ) Noncurrent liabilities (6.9 ) (6.1 ) (145.7 ) (134.8 ) Total (liability) asset $ (0.3 ) $ 1.8 $ (147.3 ) $ (136.0 ) Accumulated Other Comprehensive Loss: Prior service (cost) credit $ (0.3 ) $ (0.1 ) $ 18.1 $ 21.7 Actuarial gain 5.0 0.6 4.2 8.6 Total $ 4.7 $ 0.5 $ 22.3 $ 30.3 The amounts in AOCL expected to be amortized and recognized as a component of net periodic benefit cost in 2016 are as follows (dollars in millions): 2016 Pension Plans Post-retirement Benefits Prior service (cost) credit $ (0.2 ) $ 3.6 Actuarial gain 0.3 — Total $ 0.1 $ 3.6 The accumulated benefit obligation for the Company’s pension plans as of December 31, 2015 and 2014 was $136.6 million and $129.7 million, respectively. As of December 31, 2015 and 2014, the projected benefit obligation, the accumulated benefit obligation, and the fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets and for pension plans with an accumulated benefit obligation in excess of plan assets were as follows (dollars in millions): Hourly Plan Salary Plan As of December 31, 2015 2014 2015 2014 Plans with projected benefit obligation in excess of plan assets: Projected benefit obligation N/A 1 N/A 1 $ 74.6 $ 71.4 Fair value of plan assets N/A 1 N/A 1 $ 67.7 $ 65.3 Plans with accumulated benefit obligation in excess of plan assets: Accumulated benefit obligation N/A 1 N/A 1 $ 70.8 $ 67.6 Fair value of plan assets N/A 1 N/A 1 $ 67.7 $ 65.3 1 As of December 31, 2015 and 2014, the hourly defined benefit pension plan had plan assets greater than both the projected benefit obligation and accumulated benefit obligation. Information about expected cash flows for the Company’s pension and post-retirement benefit plans is as follows (dollars in millions): Pension Plans Post-retirement Benefits Employer Contributions: 2016 expected contributions $ 8.0 $ 1.7 Expected Benefit Payments: 2016 3.3 1.7 2017 4.1 2.3 2018 4.8 3.0 2019 5.6 3.7 2020 6.4 4.5 2021-2025 45.6 30.8 Expected benefit payments for pension and post-retirement benefits will be paid from plan trusts or corporate assets. The Company’s funding policy is to contribute amounts annually that are at least equal to the amounts required by applicable laws and regulations or to directly fund payments to plan participants. Additional discretionary contributions will be made when deemed appropriate to meet the Company’s long-term obligation to the plans. In June 2012, the Company established a non-qualified deferred compensation plan (“Deferred Compensation Plan”) for a select group of management. Under the terms of the plan, the Company has utilized a rabbi trust to accumulate assets to fund its promise to pay benefits under the Deferred Compensation Plan. The rabbi trust is an irrevocable trust, which restricts any use of funds (operational or otherwise) by the Company other than to pay benefits under the Deferred Compensation Plan, and prevents immediate taxation of contributed amounts. Funds are accumulated through both employee deferrals and a company match. Funds can be invested by the employee into a diversified group of investment options, which have been selected by the Company’s investment committee, that are all categorized as Level 1 in the fair value hierarchy. The company match resulted in a charge of $0.2 million, $0.2 million, and $0.3 million to the Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, respectively, and the fair value of the rabbi trust plan assets and deferred compensation obligation was $4.8 million and $2.9 million as of December 31, 2015 and 2014, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
STOCK-BASED COMPENSATION | NOTE 14. STOCK-BASED COMPENSATION In March 2015, the Company’s Board of Directors adopted and in May 2015, the Company’s stockholders approved the Allison Transmission Holdings, Inc. 2015 Equity Incentive Award Plan (“2015 Plan”), which became effective on May 14, 2015. Under the 2015 Plan, certain employees (including executive officers), consultants and directors are eligible to receive equity-based compensation, including non-qualified stock options, incentive stock options, restricted stock, dividend equivalents, stock payments, restricted stock units (“RSU”), performance awards, stock appreciation rights and other equity-based awards, or any combination thereof. The 2015 Plan limits the aggregate number of shares of common stock available for issue to 15.3 million and will expire on, and no option or other equity award may be granted pursuant to the 2015 Plan after, the tenth anniversary of the date the 2015 Plan was approved by the Board of Directors. Prior to the adoption of the 2015 Plan, the Company’s equity-based awards were granted under Allison Transmission Holdings, Inc. 2011 Equity Incentive Award Plan (“2011 Plan”) and the Equity Incentive Plan of Allison Transmission Holdings, Inc. (“Equity Plan” and, together with the 2011 Plan, the “Prior Plans”). As of the effective date of the 2015 Plan, no new awards will be granted under the Prior Plans, but the Prior Plans will continue to govern the equity awards issued under the Prior Plans. Restricted Stock Units RSUs were issued to certain employees in 2015, 2014 and 2013 under the 2011 Plan, and certain directors in 2015 and 2014 under the 2015 Plan and 2011 Plan, at fair market value at the date of grant. These awards entitle the holder to receive one common share for each RSU upon vesting, which generally occurs over one to three years upon continued performance of services by the RSU holders. A summary of RSU activity as of December 31, 2015, 2014 and 2013, and changes during the period then ended is presented below: Non-vested RSUs: RSUs (in millions) Weighted-Average Grant-Date Fair Value Non-vested as of December 31, 2012 1.0 $ 20.20 Granted 0.2 23.31 Vested (0.4 ) 20.23 Non-vested as of December 31, 2013 0.8 $ 20.90 Granted 0.0 29.85 Vested (0.6 ) 20.32 Non-vested as of December 31, 2014 0.2 $ 26.57 Granted 0.1 31.96 Vested (0.1 ) 23.95 Non-vested as of December 31, 2015 0.2 $ 30.61 As of December 31, 2015 and 2014, there were $2.8 million and $3.0 million, respectively, of unrecognized compensation cost related to non-vested RSU compensation arrangements granted under the 2015 Plan and 2011 Plan. This cost is expected to be recognized, on a straight line basis, over a period of approximately two years. RSU incentive compensation expense recorded was $3.0 million, $9.8 million and $12.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. The total intrinsic value of RSUs vested during the years ended December 31, 2015, 2014 and 2013 was $0.2 million, $7.4 million and $1.1 million, respectively. The total fair value of RSUs vested during the years ended December 31, 2015, 2014 and 2013 was approximately $3.8 million, $20.2 million and $9.0 million, respectively. Pursuant to the share withholding provisions of the 2011 Plan and the related RSU award agreement, certain employees, in lieu of paying withholding taxes on the vesting of RSUs, authorized the withholding of an aggregate of approximately 0.1 million, 0.3 million and 0.1 million shares, respectively of the Company’s common stock to satisfy their minimum statutory tax withholding requirements related to such vesting events during 2015, 2014 and 2013. The withheld shares were recorded as a reduction to equity on the applicable vesting dates of approximately $1.4 million, $8.4 million and $3.6 million during 2015, 2014 and 2013, respectively. Restricted Stock Awards Restricted stock was granted to certain employees in 2015 and 2014 under the 2011 Plan at fair market value on the date of grant. The restrictions lapse upon continued performance by the restricted stock holders on the vest date which generally occurs over one, two or three years. A summary of restricted stock activity as of December 31, 2015 and 2014, and changes during the period ended December 31, 2015 and 2014 is presented below: Non-vested Shares: Restricted (in millions) Weighted-Average Grant-Date Fair Value Non-vested as of December 31, 2013 — $ — Granted 0.2 29.47 Vested — — Non-vested as of December 31, 2014 0.2 $ 29.47 Granted 0.0 32.05 Vested 0.0 29.08 Non-vested as of December 31, 2015 0.2 $ 30.27 As of December 31, 2015 and 2014, there was $2.8 million and $3.4 million, respectively, of unrecognized compensation cost related to non-vested restricted stock compensation arrangements granted under the 2011 Plan. This cost is expected to be recognized, on a straight line basis, over a period of approximately two years. Restricted stock incentive compensation expense recorded was $2.2 million and $1.6 million for the years ended December 31, 2015 and 2014, respectively. The total intrinsic value of restricted stock vested during the year ended December 31, 2015 was $0.1 million. Pursuant to the share withholding provisions of the 2011 Plan and the related restricted stock award agreement, certain employees, in lieu of paying withholding taxes on the vesting of restricted stock, authorized the withholding of the Company’s common stock to satisfy their minimum statutory tax withholding requirements related to such vesting events during 2015. The withheld shares were recorded as a reduction to equity on the applicable vesting dates of approximately $0.5 million during 2015. Performance Awards Performance awards were granted to certain employees in 2015 under the 2011 Plan. In accordance with the FASB’s authoritative accounting guidance on stock compensation, each performance award granted is to be recorded at fair value. The Company records the fair value of each performance award based on a Monte-Carlo pricing model using the assumptions noted in the following table: 2015 Expected volatility 18%-34% Expected term (in years) 2.9 Risk-free rate 1.0% The restrictions lapse on the date the Compensation Committee of the Board of Directors determines the number of shares that shall vest based on the total stockholders return of the Company and the specified peer group, which date should be no later than February 28, 2018. A summary of performance award activity as of December 31, 2015, and changes during the period ended December 31, 2015 is presented below: Non-vested Shares: Performance (in millions) Weighted-Average Grant-Date Fair Value Non-vested as of December 31, 2014 — $ — Granted 0.1 $ 36.53 Vested — — Non-vested as of December 31, 2015 0.1 $ 36.53 As of December 31, 2015, there was $1.7 million of unrecognized compensation cost related to non-vested performance awards granted under the 2011 Plan. This cost is expected to be recognized, on a straight line basis, over a period of approximately three years. Performance award incentive compensation expense recorded was $0.7 million for the year ended December 31, 2015. Stock Options Stock options granted under the Equity Plan after the completion of the Acquisition Transaction and through March 2012, have a per share exercise price based on the fair market value of the Company at the date of grant. Stock options granted under the 2015 Plan and 2011 Plan have a per share exercise price based on the closing price of a share of the Company’s common stock as reported by the NYSE on the date of grant. All stock options expire 10 years after the grant date. The options vest upon the continued performance of services by the option holder over time, with either 20% or 33% of the award vesting on each anniversary of the grant date over three to five years for awards under the Equity Plan and 100% of the award vesting in December of the year that is two years after the year of grant or the third anniversary of the grant date under the 2011 Plan. Upon termination of employment for reasons other than cause, retirement before the age of 65 with less than 90 points (calculated as age plus years of service), death or disability, the options shall cease to be exercisable ninety days following the date of the optionees’ termination of service. Upon termination of employment for cause, the options shall not be exercisable on the date of such termination. Upon termination of employment for retirement at or after the age of 65, the options shall cease to be exercisable three years following such date. Upon termination of employment for retirement before the age of 65 with 90 or more points, the options shall cease to be exercisable two years following such date. Upon termination of employment for death or disability, the options shall cease to be exercisable twelve months following such date. In accordance with the FASB’s authoritative accounting guidance on stock compensation, each option grant is to be recorded at fair value. When options are granted, the Company uses a Black-Scholes option pricing model to calculate the fair value of each option award using the assumptions noted in the following table: 2015 2014 2013 Expected volatility 31 % 38 % 51 % Expected dividend yield 1.9 % 1.6 % 1.2 % Expected term (in years) 6.0 5.5 5.4 Risk-free rate 1.5 % 1.7 % 1.6 % Expected volatility is based on “the average volatilities of otherwise similar public entities” as defined by authoritative accounting guidance. The Company currently pays a $0.15 dividend per quarter. The expected term is derived from the average of the weighted vesting life and the contractual term. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. A summary of option activity as of December 31, 2015, 2014 and 2013, and changes during the period then ended is presented below: Options (in millions) Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term Outstanding as of December 31, 2012 11.9 $ 14.01 4.93 years Exercisable as of December 31, 2012 11.8 $ 14.02 4.91 years Granted 0.6 $ 23.39 Exercised (3.8 ) — Outstanding as of December 31, 2013 8.7 $ 15.33 4.30 years Exercisable as of December 31, 2013 8.1 $ 14.79 3.94 years Granted 0.4 $ 30.23 Exercised (4.2 ) — Outstanding as of December 31, 2014 4.9 $ 17.49 4.19 years Exercisable as of December 31, 2014 3.9 $ 15.32 3.08 years Granted 0.2 $ 32.13 Exercised (1.5 ) — Outstanding as of December 31, 2015 3.6 $ 19.47 4.12 years Exercisable as of December 31, 2015 3.0 $ 16.87 3.12 years The weighted-average grant-date fair value of options granted during the years ended December 31, 2015, 2014 and 2013 was $8.39, $9.51 and $9.76, respectively. The total fair value of stock options vested during the years ended December 31, 2015, 2014 and 2013 was $5.9 million, $0.0 million and $0.7 million, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2015, 2014 and 2013 was $25.8 million, $82.3 million and $58.0 million, respectively. The aggregate intrinsic value of stock options outstanding and exercisable was $23.1 million and $27.1 million as of December 31, 2015, and $80.4 million and $72.5 million as of December 31, 2014, respectively. A summary of the status of the Company’s non-vested stock options as of December 31, 2015, 2014 and 2013, and changes during the period ended December 31, 2015, 2014 and 2013 is presented below: Non-vested Stock Options: Options (in millions) Weighted-Average Grant-Date Fair Value Non-vested at December 31, 2012 0.2 $ 4.34 Granted 0.6 9.76 Vested (0.2 ) 3.59 Non-vested at December 31, 2013 0.6 $ 9.06 Granted 0.4 9.51 Vested — — Non-vested at December 31, 2014 1.0 $ 9.44 Granted 0.2 8.39 Vested (0.6 ) 9.76 Non-vested at December 31, 2015 0.6 $ 9.12 As of December 31, 2015, 2014 and 2013, there was $2.9 million, $4.8 million and $4.2 million, respectively, of unrecognized compensation cost related to non-vested stock option compensation arrangements granted under the Prior Plans. This cost is expected to be recognized, on a straight line basis, over a period of approximately two to three years. Stock option incentive compensation expense recorded was $3.9 million, $3.3 million and $1.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | NOTE 15. INCOME TAXES Income before income taxes included the following (dollars in millions): Years ended December 31, 2015 2014 2013 U.S. income $ 260.5 $ 355.1 $ 259.0 Foreign income 28.3 13.0 7.1 Total $ 288.8 $ 368.1 $ 266.1 The provision for income tax expense was estimated as follows (dollars in millions): Years ended December 31, 2015 2014 2013 Estimated current income taxes: U.S. federal $ 3.0 $ 1.6 $ 0.2 Foreign 5.4 6.3 1.9 U.S. state and local 2.1 (0.2 ) 0.6 Total Current 10.5 7.7 2.7 Deferred income tax expense (credit), net: U.S. federal 89.7 125.6 87.6 Foreign (0.1 ) (0.3 ) 0.1 U.S. state and local 6.4 6.5 10.3 Total Deferred 96.0 131.8 98.0 Total income tax expense $ 106.5 $ 139.5 $ 100.7 Cash paid for income taxes for the years ended December 31, 2015, 2014 and 2013 was $5.2 million, $5.0 million and $3.8 million, respectively. A reconciliation of the provision for income tax expense compared with the amounts at the U.S. federal statutory rate is as follows (dollars in millions): Years ended December 31, 2015 2014 2013 Tax at U.S. statutory income tax rate $ 101.1 $ 128.9 $ 93.1 Foreign rate differential (3.0 ) (2.3 ) (0.7 ) Non-deductible expenses 3.9 3.9 0.8 Valuation allowance (0.8 ) 2.6 1.0 State tax expense 5.4 4.0 7.3 Adjustment to deferred tax expense 1.2 2.4 (0.3 ) Other adjustments (1.3 ) (0.0 ) (0.5 ) Total income tax expense $ 106.5 $ 139.5 $ 100.7 Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities included the following (dollars in millions): As of December 31, 2015 As of December 31, 2014 Deferred tax assets: Inventories $ 5.4 $ 5.1 Warranty accrual 26.3 26.2 Sales allowances and rebates 6.8 6.7 Deferred revenue 29.4 25.7 Post-retirement 11.2 5.0 Intangibles 71.8 77.3 Other accrued liabilities 24.1 32.8 Unrealized loss on interest rate derivatives 13.4 6.6 Operating loss carryforwards 48.6 107.8 Tax credits 6.2 3.1 Environmental remediation 5.2 — Stock based compensation 7.4 6.9 Technology-related investments 10.2 7.5 Other 13.8 10.8 Total Deferred tax assets 279.8 321.5 Valuation allowances (4.2 ) (5.2 ) Deferred tax liabilities: Property, plant and equipment (19.0 ) (19.6 ) Goodwill (365.0 ) (320.8 ) Trade name (91.3 ) (90.3 ) Other (3.0 ) (2.8 ) Total Deferred tax liabilities (478.3 ) (433.5 ) Net Deferred tax liability $ (202.7 ) $ (117.2 ) As of December 31, 2015, the Company early adopted the FASB’s authoritative accounting guidance on a retrospective basis to classify all deferred tax assets and liabilities, along with any related valuation allowance, as noncurrent on the balance sheet. Refer to NOTE 2 for more details. Of the estimated net operating loss carryforwards as of December 31, 2015, approximately 85% relates to U.S. federal net operating loss carryforwards and approximately 16% relates to the U.S. state net operating loss carryforwards. Substantially all U.S. Federal and State operating loss carryforwards will not expire until 2027-2032. As of December 31, 2015 and 2014, the Company had $97.4 million and $253.3 million, respectively, of net operating loss carryforwards for U.S. federal income tax purposes. If the Company continues to generate taxable income, it expects to utilize the remaining U.S. federal net operating loss carryforwards by the end of 2016. Management has determined, based on an evaluation of available objective and subjective evidence, that it is more likely than not that certain foreign deferred tax assets will not be realized and therefore continue to offset these deferred tax assets with a valuation allowance of $4.2 million and $5.2 million as of December 31, 2015 and 2014, respectively. The Company has not recognized any deferred tax liabilities associated with investments and earnings in foreign subsidiaries as they are intended to be permanent in duration. Such amounts may become taxable upon an actual or deemed repatriation in the future; however, at this time, management believes any related unrecognized deferred tax liability is immaterial. In accordance with the FASB’s authoritative guidance on accounting for uncertainty in income taxes, the Company has recorded a liability for unrecognized tax benefits related to a 2010 Research & Development Credit. 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, 2015, all of the company’s returns (when filed) 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). The change in the liability for unrecognized tax benefits are as follows (dollars in millions): December 31, 2013 $ 2.3 December 31, 2014 $ 2.5 Increases in unrecognized tax benefits as a result of current year activity — December 31, 2015 $ 2.5 For the years ended December 31, 2015, 2014 and 2013, the Company recognized no interest and penalties in the Consolidated Statements of Comprehensive Income. The Company follows a policy of recording any tax related interest or penalties in Income tax expense. |
OTHER COMPREHENSIVE LOSS
OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2015 | |
OTHER COMPREHENSIVE LOSS | NOTE 16. OTHER COMPREHENSIVE LOSS The changes in components of accumulated other comprehensive loss consisted of the following (dollars in millions): Before Tax Tax (Expense) After Tax Balance at December 31, 2012 $ (9.2 ) $ (34.7 ) $ (43.9 ) Foreign currency translation (5.0 ) — (5.0 ) Pension and OPEB liability adjustment 46.4 (17.4 ) 29.0 Available-for-sale securities (1.9 ) 0.8 (1.1 ) Net current period other comprehensive income $ 39.5 $ (16.6 ) $ 22.9 Balance at December 31, 2013 $ 30.3 $ (51.3 ) $ (21.0 ) Foreign currency translation (7.4 ) — (7.4 ) Pension and OPEB liability adjustment (14.6 ) 5.5 (9.1 ) Available-for-sale securities (3.2 ) 1.2 (2.0 ) Net current period other comprehensive loss $ (25.2 ) $ 6.7 $ (18.5 ) Balance at December 31, 2014 $ 5.1 $ (44.6 ) $ (39.5 ) Foreign currency translation (11.5 ) — (11.5 ) Pension and OPEB liability adjustment (3.4 ) 0.4 (3.0 ) Available-for-sale securities (7.6 ) 2.8 (4.8 ) Net current period other comprehensive loss $ (22.5 ) $ 3.2 $ (19.3 ) Balance at December 31, 2015 $ (17.4 ) $ (41.4 ) $ (58.8 ) The following table shows the location in the Consolidated Statements of Comprehensive Income affected by reclassifications from AOCL (dollars in millions): For the year ended December 31, 2015 AOCL Components Amount Affected line item in the consolidated Amortization of defined benefit pension items: Prior service cost $ 3.2 Cost of sales 0.2 Selling, general and 0.1 Engineering – research and Actuarial loss 0.1 Cost of sales 0.0 Selling, general and 0.0 Engineering – research and Total reclassifications, before tax 3.6 Income before income Income tax expense (1.3 ) Tax expense Total reclassifications $ 2.3 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 13 for additional details. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | NOTE 17. COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases certain facilities under various operating leases. Rent expense under the non-cancelable operating leases was $5.1 million, $5.4 million, and $5.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. Certain leases contain renewal options. As of December 31, 2015, future payments under non-cancelable operating leases are as follows over each of the next five years and thereafter (dollars in millions): 2016 $ 4.7 2017 3.3 2018 2.1 2019 1.4 2020 1.3 Thereafter 2.0 Total $ 14.8 Environmental Matters Under the asset purchase agreement with Old GM, Old GM agreed to indemnify the Company against certain environmental liabilities, including pre-acquisition offsite waste disposal from the Company’s facilities, former facilities associated with the business and any properties or facilities relating to the business that Old GM retained. While the Company is responsible for environmental liabilities that arise due to post-acquisition activities, GM, as successor to Old GM’s obligations, has continued to perform remedial activities at the Company’s Indianapolis, Indiana manufacturing facilities relating to historical soil and groundwater contamination at the facilities. GM’s activities are referred to as the “Corrective Action” plan, pursuant to the asset purchase agreement, whereby it retained responsibility for completing all obligations covered by a voluntary Corrective Action Agreement that Old GM entered with the U.S. Environmental Protection Agency (“EPA”). By operation of the asset purchase agreement, once the EPA issues a final decision on GM’s activities under the Corrective Action Plan, the Company assumes all responsibility for operating, monitoring and maintaining the ongoing corrective action and GM’s indemnification obligations cease. During the third quarter of 2015, the EPA determined that GM’s remedial activities were complete and that the migration of any contamination is under control, and published a public notice seeking comment on a draft final decision, the issuance of which would result in the Company assuming responsibility for operating, monitoring and maintaining the ongoing Corrective Action activities through an agreed order of consent (“AOC”) with the EPA. As a result of the publishing of the draft final decision, the Company has determined that appropriate liabilities for the operating, monitoring and maintaining the ongoing remedial activities can be reasonably estimated. As of September 30, 2015, the Company recorded approximately $14.0 million for the estimated undiscounted liabilities to be paid out over the next 30 years, including approximately $0.5 million recorded to Other current liabilities and approximately $13.5 million to Other non-current liabilities. The recorded liabilities will be adjusted periodically as remediation efforts progress or as additional technical, regulatory or legal information becomes available. The Company expects to fund the expenditures for these activities from operating cash flow. On January 27, 2016, the EPA issued a final decision. With the AOC, financial assurance is required by the EPA to complete the operation, monitoring and maintenance activities in the event the Company fails to do so. This financial assurance can take a variety of forms including, but not limited to meeting certain financial metrics, providing a letter of credit, or securing a bond or an insurance policy. The amount and method by which the Company will be required to provide financial assurance is expected to be determined in 2016. 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 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. |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 12 Months Ended |
Dec. 31, 2015 | |
CONCENTRATION OF RISK | NOTE 18. CONCENTRATION OF RISK As of December 31, 2015 and 2014, the Company employed approximately 2,700 employees with 90% of those employees in the U.S. Approximately 60% of the Company’s U.S. employees were represented by unions and subject to a collective bargaining agreement as of December 31, 2015 and 2014. In addition, many of the hourly employees outside the U.S. are represented by various unions. The Company is currently operating under a collective bargaining agreement with the UAW Local 933 that expires in November 2017. Three customers accounted for greater than 10% of net sales within the last three years presented. Years ended December 31, % of net sales 2015 2014 2013 Daimler AG 21 % 17 % 17 % Navistar, Inc. 10 % 10 % 10 % Volvo Group 10 % 8 % 6 % No other customers accounted for more than 10% of net sales of the Company during the years ended December 31, 2015, 2014 or 2013. Two customers accounted for greater than 10% of outstanding accounts receivable within the last two years presented. % of accounts receivable As of December 31, 2015 As of December 31, 2014 Daimler AG 24 % 15 % Navistar, Inc. 8 % 12 % No other customers accounted for more than 10% of the outstanding accounts receivable as of December 31, 2015 or December 31, 2014. One supplier accounted for greater than 10% of materials purchased for the periods presented: Years ended December 31, % of material purchased 2015 2014 2013 Linamar Corporation Inc. 8 % 10 % 13 % No other supplier accounted for more than 10% of materials purchased during the years ended December 31, 2015, 2014 or 2013. |
CERTAIN RELATIONSHIPS AND RELAT
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | NOTE 19. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Senior Notes Held by Executive Officers In May 2015, the Company redeemed $100,000 and $450,000 of ATI’s 7.125% Senior Notes held by Lawrence E. Dewey, Chairman and Chief Executive Officer, and David S. Graziosi, President, Chief Financial Officer and Treasurer, respectively, at the specified redemption price in the governing indenture equal to 103.563% of the principal amount plus any accrued and unpaid interest. Refer to NOTE 7 for additional details. Repurchase of Common Stock held by Sponsors During 2014, the Company completed four secondary public offerings in September, June, April and February of 5,392,499, 40,250,000, 25,000,000, and 28,750,000 shares of its common stock held by investment funds affiliated with the Carlyle Group and Onex Corporation (collectively, the Sponsors”) at public offering prices, less underwriting discounts and commissions, of $30.46, $29.95, $29.78 and $29.17 per share, respectively. In connection with certain of the offerings, the Company repurchased from the underwriters 5,000,000 shares in June 2014 and 3,428,179 shares in February 2014 at the prices paid by the underwriters and subsequently retired those shares. |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2015 | |
COMMON STOCK | NOTE 20. COMMON STOCK The Company’s current stock repurchase program was announced on October 30, 2014. The Board authorized management to repurchase up to $500.0 million of its common stock on the open market or through privately negotiated transactions through December 31, 2016. The timing and amount of stock purchases are subject to market conditions and corporate needs. This stock repurchase program may be extended, modified, suspended or discontinued at any time at the Board’s discretion. During 2015, the Company repurchased approximately $305.8 million of its common stock under the repurchase program. All of the repurchase transactions during the fourth quarter of 2015 were settled in cash during the same period. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE | NOTE 21. 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 diluted weighted-average common shares outstanding exclude the anti-dilutive effect of certain stock options since such options had an exercise price in excess of the monthly average market value of our common stock. As of December 31, 2015, the Company had 0.7 million shares of outstanding anti-dilutive stock options. The following table reconciles the numerators and denominators used to calculate basic EPS and diluted EPS (in millions, except per share data): Years ended December 31, 2015 2014 2013 Net income $ 182.3 $ 228.6 $ 165.4 Weighted average shares of common stock outstanding 175.9 179.8 184.5 Dilutive effect stock-based awards 1.3 2.5 3.4 Diluted weighted average shares of common stock outstanding 177.2 182.3 187.9 Basic earnings per share attributable to common stockholders $ 1.03 $ 1.27 $ 0.90 Diluted earnings per share attributable to common stockholders $ 1.03 $ 1.25 $ 0.88 |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
GEOGRAPHIC INFORMATION | NOTE 22. GEOGRAPHIC INFORMATION The Company had the following net sales by country as follows (dollars in millions): Years ended December 31, 2015 2014 2013 United States $ 1,459.8 $ 1,578.0 $ 1,354.3 Canada 95.5 85.1 88.6 China 63.9 128.7 141.0 Japan 48.7 45.8 37.0 United Kingdom 44.0 36.8 42.5 Germany 39.6 38.1 53.9 Other 234.3 214.9 209.5 Total $ 1,985.8 $ 2,127.4 $ 1,926.8 The Company had net long-lived assets by country as follows (dollars in millions): Years ended December 31, 2015 2014 2013 United States $ 419.2 $ 442.6 $ 478.7 India 43.2 51.5 59.9 Hungary 12.5 15.1 18.1 Others 4.8 5.4 6.7 Total $ 479.7 $ 514.6 $ 563.4 |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY FINANCIAL INFORMATION | NOTE 23. QUARTERLY FINANCIAL INFORMATION The following is a summary of the unaudited quarterly results of operations. The Company believes that all adjustments considered necessary for a fair presentation in accordance with GAAP have been included (unaudited, in millions, except per share data). Quarters ended, March 31 June 30 September 30 December 31 2015 Net sales $ 503.6 $ 511.0 $ 493.0 $ 478.2 Gross profit 239.2 236.3 236.1 222.2 Operating income 142.3 137.5 111.9 37.2 Income before income taxes 108.2 87.1 73.8 19.7 Net income 68.4 54.4 46.5 13.0 Basic earnings per share $ 0.38 $ 0.30 $ 0.27 $ 0.08 Diluted earnings per share $ 0.38 $ 0.30 $ 0.27 $ 0.08 2014 Net sales $ 493.6 $ 536.1 $ 553.3 $ 544.4 Gross profit 222.5 238.5 259.3 255.6 Operating income 114.8 132.2 147.3 117.8 Income before income taxes 79.3 94.7 116.3 77.8 Net income 52.1 57.2 68.8 50.5 Basic earnings per share $ 0.29 $ 0.32 $ 0.38 $ 0.28 Diluted earnings per share $ 0.28 $ 0.31 $ 0.38 $ 0.28 The Company’s 2015 quarterly results were affected by certain items. For the quarter ended December 31, 2015, the Company recorded $80.0 million of trade name impairment charge as a result of lower forecasted net sales for certain of the Company’s end markets. |
Schedule I-Parent Company only
Schedule I-Parent Company only Balance Sheets | 12 Months Ended |
Dec. 31, 2015 | |
Schedule I-Parent Company only Balance Sheets | Allison Transmission Holdings, Inc. Schedule I—Parent Company only Balance Sheets (dollars in millions) December 31, 2015 December 31, 2014 ASSETS Current Assets: Cash $ — $ — Total Current Assets — — Investments in and advances to subsidiaries 1,188.6 1,397.8 TOTAL ASSETS $ 1,188.6 $ 1,397.8 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ — Total Current Liabilities — — Capital stock 1.7 1.8 Additional paid-in-capital 1,690.2 1,651.0 Treasury stock — — Accumulated deficit (444.5 ) (215.5 ) Accumulated other comprehensive loss, net of tax (58.8 ) (39.5 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,188.6 $ 1,397.8 The accompanying note is an integral part of the Parent Company only financial statements. Allison Transmission Holdings, Inc. Schedule I—Parent Company only Statements of Comprehensive Income (dollars in millions) Years ended December 31, 2015 2014 2013 Net sales $ — $ — $ — General and administrative fees — — — Total operating income — — — Other income: Equity earnings of consolidated subsidiary 182.3 228.6 165.4 Income before income taxes 182.3 228.6 165.4 Income tax expense — — — Net income $ 182.3 $ 228.6 $ 165.4 Comprehensive income $ 182.3 $ 228.6 $ 165.4 The accompanying note is an integral part of the Parent Company only financial statements. Allison Transmission Holdings, Inc. Schedule I—Parent Company only Statements of Cash Flows (dollars in millions) Years ended December 31, 2015 2014 2013 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 182.3 $ 228.6 $ 165.4 Deduct items included in net income not providing cash: Equity in earnings in consolidated subsidiary (182.3 ) (228.6 ) (165.4 ) Net cash provided by operating activities — — — CASH FLOWS FROM INVESTING ACTIVITIES: Investments in subsidiaries (22.9 ) (59.6 ) (46.3 ) Dividends 105.6 91.6 77.1 Net cash provided by investing activities 82.7 32.0 30.8 CASH FLOWS FROM FINANCING ACTIVITIES: Capital contributions 22.9 59.6 46.3 Dividends (105.6 ) (91.6 ) (77.1 ) Net cash used in financing activities (82.7 ) (32.0 ) (30.8 ) Net increase (decrease) during period — — — Cash and cash equivalents at beginning of period — — — Cash and cash equivalents at end of period $ — $ — $ — The accompanying note is an integral part of the Parent Company only financial statements. Allison Transmission Holdings, Inc. Schedule I—Parent Company only Footnote NOTE 1—BASIS OF PRESENTATION Allison Transmission Holdings, Inc. (the “Parent Company”) is a holding company that conducts all of its business operations through its subsidiaries. There are restrictions on the Parent Company’s ability to obtain funds from its subsidiaries through dividends (refer to NOTE 7 of the Consolidated Financial Statements). The entire amount of our consolidated net assets was subject to restrictions on payment of dividends at the end of December 31, 2015, 2014 and 2013. Accordingly, these financial statements have been presented on a “parent-only” basis. Under a parent-only presentation, the Parent Company’s investments in its consolidated subsidiaries are presented under the equity method of accounting. These parent-only financial statements should be read in conjunction with Allison Transmission Holdings, Inc.’s audited Consolidated Financial Statements included elsewhere herein. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The information herein reflects all normal recurring material adjustments, which are, in the opinion of management, necessary for the fair statements of the results for the periods presented. The consolidated financial statements herein consist of all wholly-owned domestic and foreign subsidiaries with all significant intercompany transactions eliminated. These consolidated financial statements present the financial position, results of comprehensive income, cash flows and statements of equity. Certain reclassifications have been made in the consolidated financial statements of prior periods to conform to the current period presentation. The Company revised its consolidated statements of cash flows for prior periods due to changes in how foreign currency exchange rate movements on cash were calculated. The revisions resulted in a decrease to the “Effect of exchange rate changes on cash” with a corresponding increase to “Net cash provided by operating activities.” Management believes the revisions are immaterial to the consolidated financial statements. The Company made reclassifications to the balance sheets for deferred financing costs and deferred taxes as a result of newly adopted accounting guidance. All reclassifications and revisions had no impact on previously reported net income, total stockholders’ equity or cash. See “Recently Issued Accounting Pronouncements” below for more details. |
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 liabilities, environmental liabilities, 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. |
Segment Reporting | Segment Reporting In accordance with the Financial Accounting Standards Board’s (“FASB”) authoritative accounting guidance on segment reporting, the Company has one operating segment and reportable segment. The Company is in one line of business, which is the manufacture and distribution of fully-automatic transmissions. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents are defined as short-term, highly-liquid investments with original maturities of 90 days or less. Under the Company’s cash management system, checks issued but not presented to banks may result in book overdraft balances for accounting purposes and are classified within Accounts payable in the Consolidated Balance Sheets. The change in book overdrafts is reported as a component of operating cash flows for Accounts payable. |
Marketable Securities | Marketable Securities The Company determines the appropriate classification of all marketable securities as “held-to-maturity,” “available-for-sale” or “trading” at the time of purchase, and re-evaluates such classifications as of each balance sheet date. As of December 31, 2015, the Company’s marketable securities are classified as either available-for-sale or trading. Available-for-sale securities are carried at fair value with the unrealized gain or loss reported in Accumulated other comprehensive loss (“AOCL”). Unrealized gains or losses considered to be “other-than-temporary” are recognized in income. Trading securities are carried at fair value with the unrealized gain or loss recognized in Other expense, net. The fair value of the Company’s investment securities is determined by currently available market prices. See NOTE 6 for more details. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful trade accounts receivable reflects estimated losses to be incurred in the collection of the receivables. Estimated losses are based on historical collection experience as well as a review by management of the current status of all receivables. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Inventories | Inventories Inventories are stated at the lower of cost or market. The Company determines cost using the first-in, first-out method. The Company analyzes inventory on a quarterly basis to determine whether it is excess or obsolete inventory. Any decline in carrying value of estimated excess or obsolete inventory is recorded as a reduction of inventory and as an expense included in Cost of sales in the period it is identified. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation expense is recorded using the straight-line method over the following estimated lives: Range in Years Land improvements 5 – 30 Buildings and building improvements 10 – 40 Machinery and equipment 2 – 20 Software 2 – 5 Special tools 2 – 10 Software represents the costs of software developed or obtained for internal use. Software costs are amortized on a straight-line basis over their estimated useful lives. Software assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. Upgrades and enhancements are capitalized if they result in added functionality, which enables the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion and business process reengineering costs are expensed in the period in which they are incurred. Special tooling represents the costs to design and develop tools, dies, jigs and other items owned by the Company and used in the manufacture of components by suppliers under long-term supply agreements. Special tooling is depreciated over the tool’s expected life. Special tooling used in the development of new technology is expensed as incurred. Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The carrying value of long-lived assets is evaluated whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. Events or circumstances that would result in an impairment review primarily include a significant change in the use of an asset, or the planned sale or disposal of an asset. The asset would be considered impaired when there is no future use planned for the asset or the future net undiscounted cash flows generated by the asset or asset group are less than its carrying value. An impairment loss would be recognized based on the amount by which the carrying value exceeds fair value. Assumptions and estimates used to determine cash flows in the evaluation of impairment and the fair values used to determine the impairment are subject to a degree of judgment and complexity. Any changes to the assumptions and estimates resulting from changes in actual results or market conditions from those anticipated may affect the carrying value of long-lived assets and could result in an impairment charge. As a result of events and circumstances in the fourth quarter of 2014, the Company reviewed certain of its long-lived assets related to the production of the H3000 and H4000 hybrid-propulsion systems, resulting in a $15.4 million loss recorded for the year ended December 31, 2014. The loss, determined by using future net discounted cash flows, included approximately $1.7 million of accrued expenses related to the impairment of the long-lived assets. The Company also recorded $1.3 million impairment loss during the first quarter of 2015. Deteriorating market conditions for hybrid-propulsion vehicles, principally as a result of decreased fuel costs, alternative fuels and other technologies, significantly contributed to the future cash flows of the related assets being less than the carrying value of those assets. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price paid over the fair value of net assets acquired. In accordance with the FASB’s authoritative accounting guidance on goodwill, the Company does not amortize goodwill but rather evaluates it for impairment on an annual basis, or more often if events or circumstances change that could cause goodwill to become impaired. Goodwill is tested for impairment at the reporting unit level, which is the same as the Company’s one operating and reportable segment. The Company has elected to perform its annual impairment test on October 31 of every year. A multi-step impairment test is performed on goodwill. In Step 0, the Company has the option to evaluate various qualitative factors to determine the likelihood of impairment. If determined that the fair value is more likely than not less than the carrying value, then the Company is required to perform Step 1. If the Company does not elect to perform Step 0, it can voluntarily proceed directly to Step 1. In Step 1, the Company performs a quantitative analysis to compare the fair value of its reporting unit to its carrying value including goodwill. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired, and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform Step 2 of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference. Goodwill impairment testing for 2015 was performed by assessing certain qualitative trends and factors. The Company’s qualitative assessment included an assessment of business changes, economic outlook, financial trends and forecasts, growth rates, credit ratings, equity ratings, discount rates, industry data and other relevant qualitative factors. Events or circumstances that could unfavorably impact the key assumptions include lower net sales driven by market conditions, our inability to execute on marketing programs and/or delay in the introduction of new products, lower gross margins as a result of market conditions or failure to obtain forecasted cost reductions, or a higher discount rate as a result of market conditions. While unpredictable and inherently uncertain, the Company believes its forecast estimates are reasonable and incorporate assumptions that similar market participants would use in their estimates of fair value. These trends and factors were compared to, and based on, the assumptions used in prior years. After reviewing various qualitative factors, the Company’s 2015 annual goodwill impairment test indicated that the fair value of the reporting unit more likely than not exceeded its carrying value, indicating no impairment. Other intangible assets have both indefinite and finite useful lives. Intangible assets with indefinite useful lives, such as the Company’s trade name, are not amortized but are tested annually for impairment. The Company has elected to perform our annual trade name impairment test on October 31 of every year and follow a similar multi-step impairment test that is performed on goodwill. Events or circumstances that could unfavorably impact the key assumptions include lower net sales driven by market conditions, our inability to execute on marketing programs and/or delay in introduction of new products, and higher discount rate as a result of market conditions. While unpredictable and inherently uncertain, the Company believes the forecast estimates are reasonable and incorporate those assumptions that similar market participants would use in their estimates of fair value. After reviewing various qualitative factors, the Company’s annual 2015 trade name impairment test, as of October 31, 2015, indicated that the fair value of the trade name more likely than not exceeded its carrying value, indicating no impairment. However, late in the fourth quarter of 2015, the Company obtained updated market data showing a further decline in forecasted net sales for certain of the Company’s end markets. As a result of the new market data and revised near term and long term forecasts, the Company completed a Step 1 analysis for the trade name to assess the impact of these changes on its fair value. The Company performed a quantitative analysis to compare the fair value of trade name to the carrying value of the trade name primarily using the relief-from-royalty method under the income valuation approach consistent with prior years. Significant assumptions used to determine fair value under the relief-from-royalty method include forecasted net sales, royalty rates and a discount rate to be applied to the forecasted net sales. The estimated fair value of the trade name, as of December 31, 2015, was approximately $790.0 million versus a carrying amount of $870.0 million, resulting in a trade name impairment of $80.0 million as of December 31, 2015. The trade name impairment did not result in any other charges to goodwill, other intangible assets or long-lived assets. Refer to NOTE 5 for further information. Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment when circumstances change that would create a triggering event. Customer relationships are amortized over the life in which expected benefits are to be consumed. The other remaining finite useful life intangibles are amortized on a straight-line basis over their useful lives. The Company evaluates the remaining useful life of the other intangible assets on a periodic basis to determine whether events or circumstances warrant a revision to the remaining useful life. Assumptions and estimates about future values and remaining useful lives of the Company’s intangible and other long-lived assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors, such as changes in the Company’s business strategy and internal forecasts. Although management believes the historical assumptions and estimates are reasonable and appropriate, different assumptions and estimates could materially impact the Company’s reported financial results. NOTE 5 provides further information on Goodwill and Other intangible assets. |
Deferred Financing Costs | Deferred Financing Costs The Company early adopted the FASB’s authoritative accounting guidance, as of December 31, 2015, to present the deferred financing costs on the balance sheet as a direct deduction from the carrying amount of the debt rather than at cost as a component of other non-current assets. The debt issuance costs related to line-of-credit arrangements is presented as a component of other non-current assets as permitted by the new guidance. Deferred financing costs continue to be amortized over the life of the related debt using the effective interest method. Amortization of deferred financing costs is recorded as part of interest expense and totaled $8.0 million, $8.1 million and $10.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Financial Instruments | Financial Instruments The Company’s cash equivalents are invested in U.S. Government backed securities and recorded at fair value in the Consolidated Balance Sheets. The carrying values of accounts receivable and accounts payable approximate fair value due to their short-term nature. The Company’s financial derivative instruments, including interest rate swaps and foreign currency and commodity forward contracts are carried at fair value on the Consolidated Balance Sheets. Refer to NOTE 6 for more detail. The Company’s long-term debt obligations are carried at historical amounts with the Company providing fair value disclosure in NOTE 7. |
Insurable Liabilities | Insurable Liabilities The Company records liabilities for its medical, workers’ compensation, long-term disability, product, general and auto liabilities. The determination of these liabilities and related expenses is dependent on claims experience. For most of these liabilities, claims incurred but not yet reported are estimated based upon historical claims experience. |
Revenue Recognition | Revenue Recognition The Company records sales when title has transferred to the customer, there is evidence of an agreement, the sales price is fixed or determinable, delivery has occurred or services have been rendered, and collectability is reasonably assured. The Company sells Extended Transmission Coverage (“ETC”) for which sales are deferred. ETC sales are recognized ratably over the period of the ETC, which typically ranges from two to five years after initial sale. Costs associated with ETC programs are recorded as incurred during the extended period. Distributor and customer sales incentives, consisting of allowances and other rebates, are estimated at the time of sale based upon the Company’s history and experience and are recorded as a reduction to Net sales. Incentive programs are generally product specific or region specific. Some factors used in estimating the cost of incentives include the number of transmissions that will be affected by the incentive program and rate of acceptance of any incentive program. If the actual number of affected transmissions differs from this estimate, or if a different mix of incentives is actually paid, the impact on Net sales would be recorded in the period that the change was identified. Consideration given to commercial customers recorded as a reduction of Net sales in the Consolidated Statements of Comprehensive Income included $46.7 million, $66.9 million, and $65.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. Sales under U.S. government production contracts are recorded when the product is accepted, title has transferred to the U.S. government, the sales price is fixed or determinable, and delivery has occurred. Deferred revenue arises from cash received in advance of the culmination of the earnings process and is recognized as revenue in future periods when the applicable revenue recognition criteria have been met. Under the terms of some U.S. government contracts, there are certain price reduction clauses and provisions for potential price reductions which are estimated at the time of sale based upon the Company’s history and experience and are recorded as a reduction to Net sales. Potential reductions may be attributed to a change in projected sales volumes or plant efficiencies which impact overall costs. As of December 31, 2015 and 2014, the Company had $55.1 million and $63.1 million recorded in the price reduction reserve account, respectively. Due to requests from the U.S. government, the Company billed, but did not ship certain tracked transmissions during 2013. Based on the lack of a fixed delivery date from the U.S. government, the Company deferred approximately $8.8 million of Net sales for these transmissions until they were shipped in 2014. See NOTE 10 for additional details. The Company classifies shipping and handling billed to customers in Net sales and shipping and handling costs in Cost of sales, in accordance with authoritative accounting guidance. The Company contracts with various third parties to provide engineering services. These services are recorded as Net sales in accordance with the terms of the contract. The saleable engineering recorded was $4.2 million, $7.4 million and $12.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. The associated costs are recorded in Cost of sales. |
Warranty | Warranty Provisions for estimated expenses related to product warranties are made at the time products are sold. Warranty claims arise when a transmission fails while in service during the relevant warranty period. The warranty reserve is adjusted in Selling, general and administrative expenses based on the Company’s current and historical warranty claims paid and associated repair costs. These estimates are established using historical information including the nature, frequency, and average cost of warranty claims and are adjusted as actual information becomes available. From time to time, the Company may initiate a specific field action program. As a result of the uncertainty surrounding the nature and frequency of specific field action programs, the liability for such programs is recorded when the Company commits to an action. The Company reviews and assesses the liability for these programs on a quarterly basis. The Company also assesses its ability to recover certain costs from its suppliers and records a receivable from the supplier when it believes a recovery is probable. Warranty costs may differ from those estimated if actual claim rates are higher or lower than our historical rates. |
Research and Development | Research and Development The Company incurs costs in connection with research and development programs that are expected to contribute to future earnings. Such costs are charged to Engineering — research and development as incurred. |
Environmental | Environmental The Company accrues costs related to environmental matters when it is probable that the Company has incurred a liability related to a contaminated site and the costs can be reasonably estimated. For additional information, see NOTE 17 Commitments and Contingencies. |
Foreign Currency Translation | Foreign Currency Translation Most of the subsidiaries outside the United States prepare financial statements in currencies other than the U.S. dollar. The functional currency for all these subsidiaries is the local currency, except for the Company’s Hong Kong and Middle East subsidiaries which currently use the U.S. dollar as their functional currency. Balances are translated at period-end exchange rates for assets and liabilities and monthly weighted-average exchange rates for revenues and expenses. The translation gains (losses) are stated as a component of AOCL as disclosed in NOTE 16. |
Derivative Instruments | Derivative Instruments In the normal course of business, the Company is exposed to fluctuations in interest rates, foreign currency exchange rates, and commodity prices. The risk is managed through the use of financial derivative instruments including interest rate swaps and commodity and foreign currency forward contracts. Despite the fact that the Company either has not elected or does not qualify for hedge accounting treatment on all of its derivative instruments, the contracts 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. NOTE 8 provides further information on the accounting treatment of the Company’s derivative instruments. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The future tax benefits associated with operating loss and tax credit carryforwards are recognized as deferred tax assets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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 the FASB’s authoritative accounting guidance on income taxes. 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, and 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 early adopted the FASB’s authoritative accounting guidance on a retrospective basis, as of December 31, 2015, to classify all deferred tax assets and liabilities, along with any related valuation allowance, as noncurrent on the balance sheet. |
Stock-Based Compensation | Stock-Based Compensation The Company maintains a stock-based compensation plan which allows employees (including executive officers), consultants and directors to receive equity awards. The Company follows the FASB’s authoritative accounting guidance on share-based payments and recognizes the fair value of the awards as compensation expense over the vesting period. The accounting guidance also requires that forfeitures be estimated over the vesting period of an award instead of being recognized as a reduction of compensation expense when the forfeiture actually occurs. |
Pension and Post-retirement Benefit Plans | Pension and Post-retirement Benefit Plans For pension and other post-retirement benefits (“OPEB”) plans in which employees participate, costs are determined within the FASB’s authoritative accounting guidance set forth in employers’ defined benefit pensions including accounting for settlements and curtailments of defined benefit pension plans, termination of benefits and accounting for post-retirement benefits other than pensions. In accordance with the authoritative accounting guidance, the Company recognizes the funded status of its defined benefit pension plans and OPEB plan in its Consolidated Balance Sheets with a corresponding adjustment to AOCL, net of tax. Post-retirement benefit costs consist of service cost, interest cost on accrued obligations and the expected return on assets (calculated using a smoothed market value of assets). Any difference between actual and expected returns on assets during a year and actuarial gains and losses on liabilities together with any prior service costs are charged (or credited) to income over the average remaining service lives of employees. The benefit cost components shown in the Consolidated Statements of Comprehensive Income are based upon various actuarial assumptions and methodologies as prescribed by authoritative accounting guidance. These assumptions include discount rates, expected return on plan assets, health care cost trend rates, inflation, rate of compensation increases, population demographics, mortality rates and other factors. The Company reviews all actuarial assumptions on an annual basis. Changes in key economic indicators can change these assumptions. These assumptions, along with the actual value of assets at the measurement date, will impact the calculation of pension expenses for the year. For instance, the effect of a one percentage point decrease in the assumed discount rate would result in an increase in the December 31, 2015 defined benefit pension plans obligation of approximately $21.1 million. Similarly, a one percentage point decrease in the assumed discount rate would result in an increase in the December 31, 2015 OPEB obligation of approximately $28.0 million. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2015, the FASB issued authoritative accounting guidance to simplify the balance sheet classification of deferred taxes. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. As a result, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. The guidance will be effective prospectively or retrospectively for public entities for interim and annual reporting periods beginning after December 15, 2016, but can be early-adopted. Management has elected to early adopt the guidance on a retrospective basis as of December 31, 2015. As of December 31, 2014, the Company reclassified $1.0 million and ($118.7) million to non-current deferred income tax assets, net and non-current deferred income tax liabilities, net, respectively, to conform to the current period presentation. In July 2015, the FASB issued authoritative accounting guidance to simplify the measurement of inventory. The guidance requires that inventory be measured at the lower of cost and net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. Inventory measured using last-in, first-out and the retail inventory method are not impacted by the new guidance. The guidance is effective for public entities for interim and annual reporting periods beginning after December 15, 2016, but can be early-adopted. Management is assessing the potential impact of the adoption of this guidance on the Company’s consolidated financial statements. In April 2015, the FASB issued authoritative accounting guidance to simplify the presentation of the debt issuance costs. The guidance requires that the debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The debt issuance costs related to line-of-credit arrangements can still be deferred and presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement. The recognition and measurement guidance for debt issuance costs are not affected. The guidance is effective for public entities for interim and annual reporting periods beginning after December 15, 2015, but can be early-adopted. The guidance should also be applied on a retrospective basis. As of December 31, 2015, management has decided to early adopt this guidance. As of December 31, 2015 and 2014, approximately $25.6 million and $29.3 million of debt issuance costs, net of accumulated amortization, were presented in the consolidated balance sheet as direct deductions from the carrying amounts of the debt. In August 2014, the FASB issued authoritative accounting guidance on the disclosure of uncertainties about an entity’s ability to continue as a going concern. The guidance requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that financial statements are available to be issued when applicable) and to provide related footnote disclosures. The guidance is effective prospectively for fiscal years beginning after December 15, 2016, but can be early-adopted. While the adoption of this guidance is not expected to have an effect on the Company’s consolidated financial statements, it could affect the disclosure applied under these circumstances in the future. In May 2014, the FASB issued authoritative accounting guidance on a company’s accounting for revenue from contracts with customers. The guidance applies to all companies that enter into contracts with customers to transfer goods, services or nonfinancial assets. The guidance requires these companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, timing, amount and uncertainty of revenue that is recognized. The guidance allows either full or modified retrospective adoption. The new guidance would have become effective for annual and interim periods beginning January 1, 2017. In July 2015, the FASB approved a one year delay of the effective date of the standard to January 1, 2018, to provide adequate time for implementation. Management is in the early stage of assessing the impact of both methods of adoption on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property And Equipment Estimated Useful Lives | Depreciation expense is recorded using the straight-line method over the following estimated lives: Range in Years Land improvements 5 – 30 Buildings and building improvements 10 – 40 Machinery and equipment 2 – 20 Software 2 – 5 Special tools 2 – 10 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Components of Inventories | Inventories consisted of the following components (dollars in millions): December 31, 2015 December 31, 2014 Purchased parts and raw materials $ 69.5 $ 72.3 Work in progress 5.1 6.1 Service parts 45.8 46.5 Finished goods 21.0 18.6 Total inventories $ 141.4 $ 143.5 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property Plant and Equipment Cost and Accumulated Depreciation | The cost and accumulated depreciation of property, plant and equipment are as follows (dollars in millions): December 31, 2015 December 31, 2014 Land and land improvements $ 25.0 $ 23.6 Buildings and building improvements 293.8 281.6 Machinery and equipment 585.7 576.2 Software 121.3 117.0 Special tools 160.0 143.6 Construction in progress 28.8 39.9 Total property, plant and equipment 1,214.6 1,181.9 Accumulated depreciation (734.9 ) (667.3 ) Property, plant and equipment, net $ 479.7 $ 514.6 |
GOODWILL AND OTHER INTANGIBLE35
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Other Intangible Assets | The following presents a summary of other intangible assets (dollars in millions): December 31, 2015 December 31, 2014 Intangible assets, gross Accumulated amortization Intangible assets, net Intangible assets, gross Accumulated amortization Intangible assets, net Other intangible assets: Trade name $ 790.0 $ — $ 790.0 $ 870.0 $ — $ 870.0 Customer relationships - defense 62.3 (31.3 ) 31.0 62.3 (27.9 ) 34.4 Customer relationships – commercial 831.8 (477.3 ) 354.5 831.8 (426.9 ) 404.9 Proprietary technology 476.3 (320.1 ) 156.2 476.3 (282.0 ) 194.3 Non-compete agreement 17.3 (14.6 ) 2.7 17.3 (12.8 ) 4.5 Patented technology - defense 28.2 (27.9 ) 0.3 28.2 (24.5 ) 3.7 Tooling rights 4.5 (4.4 ) 0.1 4.5 (4.3 ) 0.2 Patented technology - commercial 260.6 (260.6 ) — 260.6 (260.6 ) — Total $ 2,471.0 $ (1,136.2 ) $ 1,334.8 $ 2,551.0 $ (1,039.0 ) $ 1,512.0 |
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): 2016 2017 2018 2019 2020 Thereafter Amortization expense $ 92.4 $ 89.7 $ 87.2 $ 85.7 $ 49.9 $ 140.6 |
FAIR VALUE OF FINANCIAL INSTR36
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 December 31 (dollars in millions): Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) TOTAL 2015 2014 2015 2014 2015 2014 Cash equivalents $ 100.0 $ 55.0 $ — $ — $ 100.0 $ 55.0 Available-for-sale securities 2.9 8.6 — — 2.9 8.6 Rabbi trust assets 4.8 2.9 — — 4.8 2.9 Deferred compensation obligation (4.8 ) (2.9 ) — — (4.8 ) (2.9 ) Derivative assets — — 0.0 0.0 0.0 0.0 Derivative liabilities — — (30.1 ) (15.4 ) (30.1 ) (15.4 ) Total $ 102.9 $ 63.6 $ (30.1 ) $ (15.4 ) $ 72.8 $ 48.2 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Long-Term and Maturities | Long-term debt and maturities are as follows (dollars in millions): December 31, 2015 December 31, 2014 Long-term debt: Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 $ — $ 283.6 Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 2,402.8 1,765.6 Senior Notes, fixed 7.125%, due 2019 — 471.3 Total long-term debt $ 2,402.8 $ 2,520.5 Less: current maturities of long-term debt 24.5 17.9 deferred financing costs, net (see NOTE 2) 25.6 29.3 Total long-term debt, net $ 2,352.7 $ 2,473.3 |
Principal Payments Required on Long Term Debt | Principal payments required on long-term debt during the next five years are as follows: Required Principal Payments (dollars in millions) 2016 2017 2018 2019 2020 Payment $ 24.5 $ 24.5 $ 24.5 $ 2,329.3 $ — |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Company's Interest Rate Derivatives | A summary of the Company’s interest rate derivatives as of December 31, 2015 and December 31, 2014 follows (dollars in millions): December 31, 2015 December 31, 2014 Notional Amount Fair Value Notional Amount Fair Value 3.44% Interest Rate Swap L, Aug 2016 – Aug 2019* $ 75.0 (3.6 ) 75.0 (2.3 ) 3.43% Interest Rate Swap M, Aug 2016 – Aug 2019* 100.0 (4.8 ) 100.0 (3.0 ) 3.37% Interest Rate Swap N, Aug 2016 – Aug 2019* 75.0 (3.5 ) 75.0 (2.1 ) 3.19% Interest Rate Swap O, Aug 2016 – Aug 2019* 75.0 (3.1 ) 75.0 (1.7 ) 3.08% Interest Rate Swap P, Aug 2016 – Aug 2019* 75.0 (2.8 ) 75.0 (1.5 ) 2.99% Interest Rate Swap Q, Aug 2016 – Aug 2019* 50.0 (1.7 ) 50.0 (0.9 ) 2.98% Interest Rate Swap R, Aug 2016 – Aug 2019* 50.0 (1.7 ) 50.0 (0.9 ) 2.73% Interest Rate Swap S, Aug 2016 – Aug 2019* 50.0 (1.4 ) 50.0 (0.5 ) 2.74% Interest Rate Swap T, Aug 2016 – Aug 2019* 75.0 (2.1 ) 75.0 (0.8 ) 2.66% Interest Rate Swap U, Aug 2016 – Aug 2019* 50.0 (1.2 ) 50.0 (0.4 ) 2.60% Interest Rate Swap V, Aug 2016 – Aug 2019* 50.0 (1.2 ) 50.0 (0.3 ) 2.40% Interest Rate Swap W, Aug 2016 – Aug 2019* 25.0 (0.5 ) 25.0 0.0 2.25% Interest Rate Swap X, Aug 2016 – Aug 2019* 50.0 (0.8 ) — — * includes LIBOR floor of 1.00% $ 800.0 $ (28.4 ) $ 750.0 $ (14.4 ) |
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): December 31, 2015 December 31, 2014 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments Foreign currency swaps Other current assets $ — Other current $ (0.3 ) Commodity swaps Other current and non-current liabilities (1.7 ) Other current and non-current liabilities (0.7 ) Interest rate swaps Other current and non-current liabilities (28.4 ) Other non- (14.4 ) Total derivatives not designated as hedging instruments $ (30.1 ) $ (15.4 ) |
Interest Rate Derivative Instruments and their Impact on the Results of Operations | The impact on the Company’s Consolidated Statements of Comprehensive Income related to foreign currency and commodity swaps can be found in NOTE 11, and the following tabular disclosure describes the location and impact on the Company’s results of operations related to unrealized (loss) gain on interest rate derivatives (dollars in millions): December 31, December 31, December 31, Location of impact on results of operations Interest expense $ (14.0 ) $ 3.5 $ 34.3 |
Foreign Currency Forward Contract | |
Notional Amount and Fair Value of Derivatives | The following table summarizes the outstanding foreign currency swaps as of December 31, 2015 and 2014 (amounts in millions): December 31, 2015 December 31, 2014 Notional Amount Fair Value Notional Amount Fair Value Japanese Yen (JPY) ¥ — $ — ¥ 300.0 $ (0.3 ) $ — $ (0.3 ) |
Commodity contracts | |
Notional Amount and Fair Value of Derivatives | The following table summarizes the outstanding commodity swaps as of December 31, 2015 and December 31, 2014 (dollars in millions): December 31, 2015 December 31, 2014 Notional Amount Quantity Fair Value Notional Amount Quantity Fair Value Aluminum $ 13.7 8,150 metric tons $ (1.7 ) $ 11.3 6,200 metric tons $ (0.7 ) Natural Gas $ 0.2 70,000 MMBtu 0.0 $ 0.2 60,000 MMBtu 0.0 $ (1.7 ) $ (0.7 ) |
PRODUCT WARRANTY LIABILITIES (T
PRODUCT WARRANTY LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Product Warranty Liability Activities | Product warranty liability activities consist of the following (dollars in millions): Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Beginning balance $ 83.6 $ 90.5 $ 109.7 Payments (32.5 ) (35.0 ) (38.7 ) Increase in liability (warranty issued during period) 21.2 26.8 28.4 Net adjustments to liability 5.5 0.7 (9.6 ) Accretion (for predecessor liabilities) 0.5 0.6 0.7 Ending balance $ 78.3 $ 83.6 $ 90.5 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Revenue for Extended Transmission Coverage Activity | Deferred revenue for ETC activity (dollars in millions): Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Beginning balance $ 69.0 $ 63.6 $ 63.5 Increases 31.9 26.2 21.1 Revenue earned (21.6 ) (20.8 ) (21.0 ) Ending balance $ 79.3 $ 69.0 $ 63.6 |
OTHER EXPENSE, NET (Tables)
OTHER EXPENSE, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Computation of Other Expense, Net | Other expense, net consists of the following (dollars in millions): Years ended December 31, 2015 2014 2013 Vendor settlement $ 2.9 $ — $ — Loss on intercompany foreign exchange (1.7 ) (5.4 ) (2.3 ) Gain (loss) on foreign exchange 1.4 (1.0 ) (2.4 ) Realized loss on derivative contracts (see NOTE 8) (1.3 ) (1.0 ) (2.8 ) Unrealized (loss) gain on derivative contracts (see NOTE 8) (0.8 ) 1.2 (1.5 ) Loss on repayments and repurchases of long-term debt (see NOTE 7) (0.3 ) (0.5 ) (0.8 ) Grant program income — 2.6 5.2 Impairment loss on investments in technology-related initiatives — (2.0 ) (5.0 ) Gain on negotiation of commercial agreement — 2.0 — Public offering fees and expenses — (1.4 ) (1.6 ) Other (0.5 ) (0.1 ) 0.3 Total $ (0.3 ) $ (5.6 ) $ (10.9 ) |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Other Current Liabilities | Other current liabilities consist of the following (dollars in millions): As of December 31, 2015 As of December 31, 2014 Payroll and related costs $ 31.5 $ 50.9 Sales allowances 24.3 25.5 Vendor buyback obligation 12.1 13.2 Taxes payable 12.6 8.5 Defense price reduction reserve 8.7 16.2 Derivative liabilities 5.0 0.8 Accrued interest payable 0.6 5.2 Environmental liabilities 0.5 — Other accruals 10.8 11.4 Total $ 106.1 $ 131.7 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Periodic Benefit Costs | Information about the net periodic benefit cost and other changes recognized in AOCL for the pension and post-retirement benefit plans is as follows (dollars in millions): Pension Plans Post-retirement Benefits Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Net Periodic Benefit Cost: Service cost $ 14.4 $ 13.2 $ 16.3 $ 2.2 $ 2.2 $ 3.3 Interest cost 5.2 5.0 4.0 5.4 5.9 5.8 Expected return on assets (8.5 ) (7.7 ) (6.7 ) — — — Prior service cost 0.1 0.1 0.1 (3.6 ) (3.6 ) (3.6 ) (Gain) loss (0.1 ) — 0.7 — (0.7 ) — Net Periodic Benefit Cost $ 11.1 $ 10.6 $ 14.4 $ 4.0 $ 3.8 $ 5.5 Other changes recognized in other comprehensive income: Prior service credit $ 0.2 $ — $ — $ — $ — $ — Net (gain) loss (4.4 ) 2.1 (18.4 ) 4.4 7.8 (30.7 ) Amortizations (0.0 ) (0.1 ) (0.8 ) 3.6 4.3 3.6 Total recognized – other comprehensive income $ (4.2 ) $ 2.0 $ (19.2 ) $ 8.0 $ 12.1 $ (27.1 ) |
Health Care Costs Trends | As health care costs trends have a significant effect on the amounts reported, an increase and decrease of one-percentage-point would have the following effects in the year ended December 31, 2015 (dollars in millions): 1% Increase 1% Decrease Effect on total of service and interest cost $ 1.8 $ (1.3 ) Effect on post-retirement benefit obligation $ 31.2 $ (24.3 ) |
Reconciliation of Changes in Net Benefit Obligations and Fair Value of Plan Assets | The following table provides a reconciliation of the changes in the net benefit obligations and fair value of plan assets for the years ended December 31, 2015, 2014 and 2013 (dollars in millions): Pension Plans Post-retirement Benefits Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Benefit Obligations: Net benefit obligation at beginning of year $ 133.5 $ 105.9 $ 103.3 $ 136.0 $ 120.7 $ 142.6 Service cost 14.4 13.2 16.3 2.2 2.2 3.3 Interest cost 5.2 5.0 4.0 5.4 5.9 5.8 Plan Amendments 0.2 — — — — — Benefits paid (2.0 ) (1.5 ) (0.8 ) (0.7 ) (0.6 ) (0.3 ) Actuarial (gain) loss (10.9 ) 10.9 (16.9 ) 4.4 7.8 (30.7 ) Net benefit obligation at end of year $ 140.4 $ 133.5 $ 105.9 $ 147.3 $ 136.0 $ 120.7 Fair Value of Plan Assets: Fair value of plan assets at beginning of year $ 135.3 $ 108.6 $ 89.4 $ — $ — $ — Actual return on plan assets 2.0 16.4 8.2 — — — Employer contributions 4.8 11.8 11.8 0.7 0.6 0.3 Benefits paid (2.0 ) (1.5 ) (0.8 ) (0.7 ) (0.6 ) (0.3 ) Fair value of plan assets at end of year $ 140.1 $ 135.3 $ 108.6 $ — $ — $ — Net Funded Status $ (0.3 ) $ 1.8 $ 2.7 $ (147.3 ) $ (136.0 ) $ (120.7 ) |
Fair Value of Plan Assets | The fair values of plan assets for the Company’s pension plans as of December 31, 2015 and 2014 are as follows (dollars in millions): Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) TOTAL 2015 2014 2015 2014 2015 2014 Cash equivalents $ 3.0 $ 8.6 $ — $ — $ 3.0 $ 8.6 Diversified equity securities 21.1 57.8 — — 21.1 57.8 Diversified debt securities 21.9 68.9 94.1 — 116.0 68.9 Total $ 46.0 $ 135.3 $ 94.1 $ — $ 140.1 $ 135.3 |
Schedule of Allocation of Plan Assets | To achieve these objectives the Company has established the following targets: Target Asset Category Hourly Salary Cash equivalents 2 % 2 % Diversified equity securities 15 15 Diversified debt securities 83 83 Total 100 % 100 % |
Amounts Recognized in Balance Sheet and in Accumulated Other Comprehensive Income AOCI | The following table discloses the amounts recognized in the balance sheet and in AOCL at December 31, 2015 and 2014, on a pre-tax basis (dollars in millions): Pension Plans Post-retirement Benefits As of December 31, 2015 2014 2015 2014 Amounts Recognized in Balance Sheet: Noncurrent assets $ 6.6 $ 7.9 $ — $ — Current liabilities — — (1.6 ) (1.2 ) Noncurrent liabilities (6.9 ) (6.1 ) (145.7 ) (134.8 ) Total (liability) asset $ (0.3 ) $ 1.8 $ (147.3 ) $ (136.0 ) Accumulated Other Comprehensive Loss: Prior service (cost) credit $ (0.3 ) $ (0.1 ) $ 18.1 $ 21.7 Actuarial gain 5.0 0.6 4.2 8.6 Total $ 4.7 $ 0.5 $ 22.3 $ 30.3 |
Amounts in Accumulated Other Comprehensive Income AOCI Expected to be Amortized and Recognized as Component of Net Periodic Benefit Cost in Two Thousand Thirteen | The amounts in AOCL expected to be amortized and recognized as a component of net periodic benefit cost in 2016 are as follows (dollars in millions): 2016 Pension Plans Post-retirement Benefits Prior service (cost) credit $ (0.2 ) $ 3.6 Actuarial gain 0.3 — Total $ 0.1 $ 3.6 |
Projected and Accumulated Benefit Obligation and Fair Value of Plan Assets for Pension Plans with Projected Benefit Obligation in Excess of Plan Assets | As of December 31, 2015 and 2014, the projected benefit obligation, the accumulated benefit obligation, and the fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets and for pension plans with an accumulated benefit obligation in excess of plan assets were as follows (dollars in millions): Hourly Plan Salary Plan As of December 31, 2015 2014 2015 2014 Plans with projected benefit obligation in excess of plan assets: Projected benefit obligation N/A 1 N/A 1 $ 74.6 $ 71.4 Fair value of plan assets N/A 1 N/A 1 $ 67.7 $ 65.3 Plans with accumulated benefit obligation in excess of plan assets: Accumulated benefit obligation N/A 1 N/A 1 $ 70.8 $ 67.6 Fair value of plan assets N/A 1 N/A 1 $ 67.7 $ 65.3 1 As of December 31, 2015 and 2014, the hourly defined benefit pension plan had plan assets greater than both the projected benefit obligation and accumulated benefit obligation. |
Expected Cash Flows for Pension and Post-Retirement Benefit Plans | Information about expected cash flows for the Company’s pension and post-retirement benefit plans is as follows (dollars in millions): Pension Plans Post-retirement Benefits Employer Contributions: 2016 expected contributions $ 8.0 $ 1.7 Expected Benefit Payments: 2016 3.3 1.7 2017 4.1 2.3 2018 4.8 3.0 2019 5.6 3.7 2020 6.4 4.5 2021-2025 45.6 30.8 |
Benefit Obligation | |
Weighted-Average Actuarial Assumptions | The table below provides the weighted-average actuarial assumptions used to determine the benefit obligations of the Company’s plans. Pension Plans Post-retirement Benefits As of December 31, 2015 2014 2015 2014 Discount rate 4.40 % 3.90 % 4.60 % 4.00 % Rate of compensation increase (salaried) 3.00 % 3.00 % N/A N/A |
Benefit Costs | |
Weighted-Average Actuarial Assumptions | The table below provides the weighted-average actuarial assumptions used to determine the net periodic benefit cost. Pension Plans Post-retirement Benefits Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Discount rate 3.90 % 4.80 % 3.90 % 4.00 % 4.90 % 4.10 % Rate of compensation increase (salaried) 3.00 % 3.00 % 3.00 % N/A N/A N/A Expected return on assets 6.25 % 6.80 % 7.00 % N/A N/A N/A |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Assumptions Used to Calculate Fair Value of Performance Award Based | The Company records the fair value of each performance award based on a Monte-Carlo pricing model using the assumptions noted in the following table: 2015 Expected volatility 18%-34% Expected term (in years) 2.9 Risk-free rate 1.0% |
Assumptions Used to Calculate Fair Value of Option Award | When options are granted, the Company uses a Black-Scholes option pricing model to calculate the fair value of each option award using the assumptions noted in the following table: 2015 2014 2013 Expected volatility 31 % 38 % 51 % Expected dividend yield 1.9 % 1.6 % 1.2 % Expected term (in years) 6.0 5.5 5.4 Risk-free rate 1.5 % 1.7 % 1.6 % |
Option Activity | A summary of option activity as of December 31, 2015, 2014 and 2013, and changes during the period then ended is presented below: Options (in millions) Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term Outstanding as of December 31, 2012 11.9 $ 14.01 4.93 years Exercisable as of December 31, 2012 11.8 $ 14.02 4.91 years Granted 0.6 $ 23.39 Exercised (3.8 ) — Outstanding as of December 31, 2013 8.7 $ 15.33 4.30 years Exercisable as of December 31, 2013 8.1 $ 14.79 3.94 years Granted 0.4 $ 30.23 Exercised (4.2 ) — Outstanding as of December 31, 2014 4.9 $ 17.49 4.19 years Exercisable as of December 31, 2014 3.9 $ 15.32 3.08 years Granted 0.2 $ 32.13 Exercised (1.5 ) — Outstanding as of December 31, 2015 3.6 $ 19.47 4.12 years Exercisable as of December 31, 2015 3.0 $ 16.87 3.12 years |
Restricted Stock Units (RSUs) | |
Non-Vested Shares Activity | A summary of RSU activity as of December 31, 2015, 2014 and 2013, and changes during the period then ended is presented below: Non-vested RSUs: RSUs (in millions) Weighted-Average Grant-Date Fair Value Non-vested as of December 31, 2012 1.0 $ 20.20 Granted 0.2 23.31 Vested (0.4 ) 20.23 Non-vested as of December 31, 2013 0.8 $ 20.90 Granted 0.0 29.85 Vested (0.6 ) 20.32 Non-vested as of December 31, 2014 0.2 $ 26.57 Granted 0.1 31.96 Vested (0.1 ) 23.95 Non-vested as of December 31, 2015 0.2 $ 30.61 |
Restricted Stock | |
Non-Vested Shares Activity | A summary of restricted stock activity as of December 31, 2015 and 2014, and changes during the period ended December 31, 2015 and 2014 is presented below: Non-vested Shares: Restricted (in millions) Weighted-Average Grant-Date Fair Value Non-vested as of December 31, 2013 — $ — Granted 0.2 29.47 Vested — — Non-vested as of December 31, 2014 0.2 $ 29.47 Granted 0.0 32.05 Vested 0.0 29.08 Non-vested as of December 31, 2015 0.2 $ 30.27 |
Employee Stock Option | |
Non-Vested Shares Activity | A summary of the status of the Company’s non-vested stock options as of December 31, 2015, 2014 and 2013, and changes during the period ended December 31, 2015, 2014 and 2013 is presented below: Non-vested Stock Options: Options (in millions) Weighted-Average Grant-Date Fair Value Non-vested at December 31, 2012 0.2 $ 4.34 Granted 0.6 9.76 Vested (0.2 ) 3.59 Non-vested at December 31, 2013 0.6 $ 9.06 Granted 0.4 9.51 Vested — — Non-vested at December 31, 2014 1.0 $ 9.44 Granted 0.2 8.39 Vested (0.6 ) 9.76 Non-vested at December 31, 2015 0.6 $ 9.12 |
Performance Awards | |
Non-Vested Shares Activity | A summary of performance award activity as of December 31, 2015, and changes during the period ended December 31, 2015 is presented below: Non-vested Shares: Performance (in millions) Weighted-Average Grant-Date Fair Value Non-vested as of December 31, 2014 — $ — Granted 0.1 $ 36.53 Vested — — Non-vested as of December 31, 2015 0.1 $ 36.53 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Loss Before Income Taxes | Income before income taxes included the following (dollars in millions): Years ended December 31, 2015 2014 2013 U.S. income $ 260.5 $ 355.1 $ 259.0 Foreign income 28.3 13.0 7.1 Total $ 288.8 $ 368.1 $ 266.1 |
Provision for Income Tax Expense | The provision for income tax expense was estimated as follows (dollars in millions): Years ended December 31, 2015 2014 2013 Estimated current income taxes: U.S. federal $ 3.0 $ 1.6 $ 0.2 Foreign 5.4 6.3 1.9 U.S. state and local 2.1 (0.2 ) 0.6 Total Current 10.5 7.7 2.7 Deferred income tax expense (credit), net: U.S. federal 89.7 125.6 87.6 Foreign (0.1 ) (0.3 ) 0.1 U.S. state and local 6.4 6.5 10.3 Total Deferred 96.0 131.8 98.0 Total income tax expense $ 106.5 $ 139.5 $ 100.7 |
Reconciliation of Provision for Income Tax Expense | A reconciliation of the provision for income tax expense compared with the amounts at the U.S. federal statutory rate is as follows (dollars in millions): Years ended December 31, 2015 2014 2013 Tax at U.S. statutory income tax rate $ 101.1 $ 128.9 $ 93.1 Foreign rate differential (3.0 ) (2.3 ) (0.7 ) Non-deductible expenses 3.9 3.9 0.8 Valuation allowance (0.8 ) 2.6 1.0 State tax expense 5.4 4.0 7.3 Adjustment to deferred tax expense 1.2 2.4 (0.3 ) Other adjustments (1.3 ) (0.0 ) (0.5 ) Total income tax expense $ 106.5 $ 139.5 $ 100.7 |
Deferred Tax Assets and Liabilities | Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities included the following (dollars in millions): As of December 31, 2015 As of December 31, 2014 Deferred tax assets: Inventories $ 5.4 $ 5.1 Warranty accrual 26.3 26.2 Sales allowances and rebates 6.8 6.7 Deferred revenue 29.4 25.7 Post-retirement 11.2 5.0 Intangibles 71.8 77.3 Other accrued liabilities 24.1 32.8 Unrealized loss on interest rate derivatives 13.4 6.6 Operating loss carryforwards 48.6 107.8 Tax credits 6.2 3.1 Environmental remediation 5.2 — Stock based compensation 7.4 6.9 Technology-related investments 10.2 7.5 Other 13.8 10.8 Total Deferred tax assets 279.8 321.5 Valuation allowances (4.2 ) (5.2 ) Deferred tax liabilities: Property, plant and equipment (19.0 ) (19.6 ) Goodwill (365.0 ) (320.8 ) Trade name (91.3 ) (90.3 ) Other (3.0 ) (2.8 ) Total Deferred tax liabilities (478.3 ) (433.5 ) Net Deferred tax liability $ (202.7 ) $ (117.2 ) |
Liability for Unrecognized Tax Benefit | The change in the liability for unrecognized tax benefits are as follows (dollars in millions): December 31, 2013 $ 2.3 December 31, 2014 $ 2.5 Increases in unrecognized tax benefits as a result of current year activity — December 31, 2015 $ 2.5 |
OTHER COMPREHENSIVE LOSS (Table
OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Changes in Components of Accumulated Other Comprehensive Loss | The changes in components of accumulated other comprehensive loss consisted of the following (dollars in millions): Before Tax Tax (Expense) After Tax Balance at December 31, 2012 $ (9.2 ) $ (34.7 ) $ (43.9 ) Foreign currency translation (5.0 ) — (5.0 ) Pension and OPEB liability adjustment 46.4 (17.4 ) 29.0 Available-for-sale securities (1.9 ) 0.8 (1.1 ) Net current period other comprehensive income $ 39.5 $ (16.6 ) $ 22.9 Balance at December 31, 2013 $ 30.3 $ (51.3 ) $ (21.0 ) Foreign currency translation (7.4 ) — (7.4 ) Pension and OPEB liability adjustment (14.6 ) 5.5 (9.1 ) Available-for-sale securities (3.2 ) 1.2 (2.0 ) Net current period other comprehensive loss $ (25.2 ) $ 6.7 $ (18.5 ) Balance at December 31, 2014 $ 5.1 $ (44.6 ) $ (39.5 ) Foreign currency translation (11.5 ) — (11.5 ) Pension and OPEB liability adjustment (3.4 ) 0.4 (3.0 ) Available-for-sale securities (7.6 ) 2.8 (4.8 ) Net current period other comprehensive loss $ (22.5 ) $ 3.2 $ (19.3 ) Balance at December 31, 2015 $ (17.4 ) $ (41.4 ) $ (58.8 ) |
Consolidated Statements of Comprehensive Income Affected by Reclassifications from by AOCL | The following table shows the location in the Consolidated Statements of Comprehensive Income affected by reclassifications from AOCL (dollars in millions): For the year ended December 31, 2015 AOCL Components Amount Affected line item in the consolidated Amortization of defined benefit pension items: Prior service cost $ 3.2 Cost of sales 0.2 Selling, general and 0.1 Engineering – research and Actuarial loss 0.1 Cost of sales 0.0 Selling, general and 0.0 Engineering – research and Total reclassifications, before tax 3.6 Income before income Income tax expense (1.3 ) Tax expense Total reclassifications $ 2.3 Net of tax |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Future Payments under Non-Cancelable Operating Leases | As of December 31, 2015, future payments under non-cancelable operating leases are as follows over each of the next five years and thereafter (dollars in millions): 2016 $ 4.7 2017 3.3 2018 2.1 2019 1.4 2020 1.3 Thereafter 2.0 Total $ 14.8 |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedules of Concentration of Risk by Risk Factor | Three customers accounted for greater than 10% of net sales within the last three years presented. Years ended December 31, % of net sales 2015 2014 2013 Daimler AG 21 % 17 % 17 % Navistar, Inc. 10 % 10 % 10 % Volvo Group 10 % 8 % 6 % No other customers accounted for more than 10% of net sales of the Company during the years ended December 31, 2015, 2014 or 2013. Two customers accounted for greater than 10% of outstanding accounts receivable within the last two years presented. % of accounts receivable As of December 31, 2015 As of December 31, 2014 Daimler AG 24 % 15 % Navistar, Inc. 8 % 12 % No other customers accounted for more than 10% of the outstanding accounts receivable as of December 31, 2015 or December 31, 2014. One supplier accounted for greater than 10% of materials purchased for the periods presented: Years ended December 31, % of material purchased 2015 2014 2013 Linamar Corporation Inc. 8 % 10 % 13 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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): Years ended December 31, 2015 2014 2013 Net income $ 182.3 $ 228.6 $ 165.4 Weighted average shares of common stock outstanding 175.9 179.8 184.5 Dilutive effect stock-based awards 1.3 2.5 3.4 Diluted weighted average shares of common stock outstanding 177.2 182.3 187.9 Basic earnings per share attributable to common stockholders $ 1.03 $ 1.27 $ 0.90 Diluted earnings per share attributable to common stockholders $ 1.03 $ 1.25 $ 0.88 |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Sales by Country | The Company had the following net sales by country as follows (dollars in millions): Years ended December 31, 2015 2014 2013 United States $ 1,459.8 $ 1,578.0 $ 1,354.3 Canada 95.5 85.1 88.6 China 63.9 128.7 141.0 Japan 48.7 45.8 37.0 United Kingdom 44.0 36.8 42.5 Germany 39.6 38.1 53.9 Other 234.3 214.9 209.5 Total $ 1,985.8 $ 2,127.4 $ 1,926.8 |
Schedule of Disclosure of Long-Lived Assets by Geographic Location | The Company had net long-lived assets by country as follows (dollars in millions): Years ended December 31, 2015 2014 2013 United States $ 419.2 $ 442.6 $ 478.7 India 43.2 51.5 59.9 Hungary 12.5 15.1 18.1 Others 4.8 5.4 6.7 Total $ 479.7 $ 514.6 $ 563.4 |
QUARTERLY FINANCIAL INFORMATI51
QUARTERLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Data | The following is a summary of the unaudited quarterly results of operations. The Company believes that all adjustments considered necessary for a fair presentation in accordance with GAAP have been included (unaudited, in millions, except per share data). Quarters ended, March 31 June 30 September 30 December 31 2015 Net sales $ 503.6 $ 511.0 $ 493.0 $ 478.2 Gross profit 239.2 236.3 236.1 222.2 Operating income 142.3 137.5 111.9 37.2 Income before income taxes 108.2 87.1 73.8 19.7 Net income 68.4 54.4 46.5 13.0 Basic earnings per share $ 0.38 $ 0.30 $ 0.27 $ 0.08 Diluted earnings per share $ 0.38 $ 0.30 $ 0.27 $ 0.08 2014 Net sales $ 493.6 $ 536.1 $ 553.3 $ 544.4 Gross profit 222.5 238.5 259.3 255.6 Operating income 114.8 132.2 147.3 117.8 Income before income taxes 79.3 94.7 116.3 77.8 Net income 52.1 57.2 68.8 50.5 Basic earnings per share $ 0.29 $ 0.32 $ 0.38 $ 0.28 Diluted earnings per share $ 0.28 $ 0.31 $ 0.38 $ 0.28 |
Overview - Additional Informati
Overview - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2015EmployeeCustomerProduct | Dec. 31, 2014Employee | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Transmission product lines | Product | 13 | |
Worldwide independent distributor and dealer locations | Customer | 1,400 | |
Number of employees | Employee | 2,700 | 2,700 |
Sales Revenue, Net | North America | Geographic Concentration Risk | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Concentration of risk, percentage | 81.00% |
Summary of Significant Accoun53
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)Segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segment | Segment | 1 | |||
Number of reportable segment | Segment | 1 | |||
Highly-liquid investments with original maturities | 90 days | |||
Loss associated with impairment of long-lived assets | $ 1.3 | $ 1.3 | $ 15.4 | |
Accrued expenses related to impaired long-lived assets | 1.7 | |||
Carrying amount, trade name | 790 | 870 | ||
Trade name impairment | 80 | |||
Amortization of deferred financing costs | 8 | 8.1 | $ 10.9 | |
Sales incentives | 46.7 | 66.9 | 65.2 | |
Military price reduction reserve | 55.1 | 63.1 | ||
Deferred revenue recognized | 8.8 | |||
Engineering services revenue | 4.2 | 7.4 | $ 12.4 | |
Increase in defined benefit obligation due to one percentage point decrease in assumed discount rate | 24.3 | |||
Non-current deferred income tax assets, net | 1.9 | 2.3 | ||
Non-current deferred income tax liabilities, net | 204.6 | 119.5 | ||
Deferred financing costs, net | 25.6 | 29.3 | ||
Trade Name | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Indefinite lived intangible assets, fair value | 790 | |||
Carrying amount, trade name | 870 | |||
Restatement Adjustment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Non-current deferred income tax assets, net | 1 | |||
Non-current deferred income tax liabilities, net | $ 118.7 | |||
Pension Plans | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Increase in defined benefit obligation due to one percentage point decrease in assumed discount rate | 21.1 | |||
Post-retirement Benefits | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Increase in defined benefit obligation due to one percentage point decrease in assumed discount rate | $ 28 | |||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Extended Transmission Coverage sales, recognition period | 2 years | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Extended Transmission Coverage sales, recognition period | 5 years |
Property Plant and Equipment Es
Property Plant and Equipment Estimated Lives (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | Land Improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 5 years |
Minimum | Building and Building Improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 10 years |
Minimum | Machinery and Equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 2 years |
Minimum | Software | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 2 years |
Minimum | Special tools | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 2 years |
Maximum | Land Improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 30 years |
Maximum | Building and Building Improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 40 years |
Maximum | Machinery and Equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 20 years |
Maximum | Software | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 5 years |
Maximum | Special tools | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated Lives | 10 years |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory [Line Items] | ||
Purchased parts and raw materials | $ 69.5 | $ 72.3 |
Work in progress | 5.1 | 6.1 |
Service parts | 45.8 | 46.5 |
Finished goods | 21 | 18.6 |
Total inventories | $ 141.4 | $ 143.5 |
Cost and Accumulated Depreciati
Cost and Accumulated Depreciation of Property Plant and Equipment (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | |||
Land and land improvements | $ 25 | $ 23.6 | |
Buildings and building improvements | 293.8 | 281.6 | |
Machinery and equipment | 585.7 | 576.2 | |
Software | 121.3 | 117 | |
Special tools | 160 | 143.6 | |
Construction in progress | 28.8 | 39.9 | |
Total property, plant and equipment | 1,214.6 | 1,181.9 | |
Accumulated depreciation | (734.9) | (667.3) | |
Property, plant and equipment, net | $ 479.7 | $ 514.6 | $ 563.4 |
Property Plant and Equipment -
Property Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation of property, plant and equipment | $ 88.3 | $ 93.8 | $ 98.7 |
Goodwill and Other Intangible58
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Line Items] | |||
Goodwill | $ 1,941 | $ 1,941 | |
Amortization of intangible assets | 97.1 | $ 98.8 | $ 105.3 |
Trade name impairment | 80 | ||
Net carrying value of Goodwill and other intangible assets | $ 3,275.8 |
Summary of Goodwill and Other I
Summary of Goodwill and Other Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Trade name | $ 790 | $ 870 |
Intangible assets, gross | 2,471 | 2,551 |
Accumulated amortization | (1,136.2) | (1,039) |
Intangible assets, net | 1,334.8 | 1,512 |
Customer relationships - defense | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 62.3 | 62.3 |
Accumulated amortization | (31.3) | (27.9) |
Intangible assets, net | 31 | 34.4 |
Customer relationships - commercial | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 831.8 | 831.8 |
Accumulated amortization | (477.3) | (426.9) |
Intangible assets, net | 354.5 | 404.9 |
Proprietary technology | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 476.3 | 476.3 |
Accumulated amortization | (320.1) | (282) |
Intangible assets, net | 156.2 | 194.3 |
Non-compete agreement | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 17.3 | 17.3 |
Accumulated amortization | (14.6) | (12.8) |
Intangible assets, net | 2.7 | 4.5 |
Patented technology - defense | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 28.2 | 28.2 |
Accumulated amortization | (27.9) | (24.5) |
Intangible assets, net | 0.3 | 3.7 |
Tooling rights | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 4.5 | 4.5 |
Accumulated amortization | (4.4) | (4.3) |
Intangible assets, net | 0.1 | 0.2 |
Patented technology - commercial | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, gross | 260.6 | 260.6 |
Accumulated amortization | $ (260.6) | $ (260.6) |
Expected Amortization Expense R
Expected Amortization Expense Related to Other Intangible Assets (Detail) $ in Millions | Dec. 31, 2015USD ($) |
Finite-Lived Intangible Assets | |
2,016 | $ 92.4 |
2,017 | 89.7 |
2,018 | 87.2 |
2,019 | 85.7 |
2,020 | 49.9 |
Thereafter | $ 140.6 |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 100 | $ 55 |
Available-for-sale securities | 2.9 | 8.6 |
Rabbi trust assets | 4.8 | 2.9 |
Deferred compensation obligation | (4.8) | (2.9) |
Derivative assets | 0 | 0 |
Derivative liabilities | (30.1) | (15.4) |
Total | 72.8 | 48.2 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 100 | 55 |
Available-for-sale securities | 2.9 | 8.6 |
Rabbi trust assets | 4.8 | 2.9 |
Deferred compensation obligation | (4.8) | (2.9) |
Total | 102.9 | 63.6 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | (30.1) | (15.4) |
Total | $ (30.1) | $ (15.4) |
Long Term Debt and Maturities (
Long Term Debt and Maturities (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 2,402.8 | $ 2,520.5 |
Less: current maturities of long-term debt | 24.5 | 17.9 |
Less: deferred financing costs, net (see NOTE 2) | 25.6 | 29.3 |
Total long-term debt,net | 2,352.7 | 2,473.3 |
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 283.6 | |
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 2,402.8 | 1,765.6 |
Senior Notes, fixed 7.125%, due 2019 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 471.3 |
Long Term Debt and Maturities63
Long Term Debt and Maturities (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | |
Debt Instrument [Line Items] | |
Debt instrument, due date | 2,017 |
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | |
Debt Instrument [Line Items] | |
Debt instrument, due date | 2,019 |
Senior Notes, fixed 7.125%, due 2019 | |
Debt Instrument [Line Items] | |
Interest rate of Senior Notes | 7.125% |
Debt instrument, due date | 2,019 |
Principal Payments Required on
Principal Payments Required on Long Term Debt (Detail) $ in Millions | Dec. 31, 2015USD ($) |
Long Term Debt [Line Items] | |
2,016 | $ 24.5 |
2,017 | 24.5 |
2,018 | 24.5 |
2,019 | 2,329.3 |
2,020 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Nov. 30, 2015USD ($) | May. 31, 2015USD ($) | Apr. 30, 2015USD ($)$ / Note | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Debt Instrument [Line Items] | |||||||
Total long-term debt | $ 2,402,800,000 | $ 2,520,500,000 | |||||
Fair value of long-term debt obligations | $ 2,384,800,000 | ||||||
Line of credit facility amendment terms | The amendment also, among other things, (i) permits prepayment, repurchase or redemption of ATI's 7.125% Senior Notes with the proceeds of the financing and (ii) resets the period for which a prepayment premium of 1.00% will apply in the event of a repricing transaction to the six-month anniversary of the closing date of the financing. | ||||||
Tendered notes consideration per $1000 | $ / Note | 1,042 | ||||||
Loss on offering of debt instrument | $ 22,700,000 | $ 300,000 | 500,000 | $ 800,000 | |||
Debt issuance costs | 7,700,000 | ||||||
Deferred financing fees | 8,000,000 | 8,100,000 | 10,900,000 | ||||
Long-term debt repayment | $ 116,500,000 | 157,600,000 | $ 142,400,000 | ||||
Total leverage ratio | 299.00% | ||||||
Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Annual excess cash flow to prepay term loan | 50.00% | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Deferred financing fees | 600,000 | ||||||
Revolving credit borrowings | 465,000,000 | ||||||
Maximum amount of letters of credit commitments available under the revolving credit facility | 75,000,000 | ||||||
Available revolving credit facility | $ 461,000,000 | ||||||
Letters of Credit | $ 4,000,000 | ||||||
Revolving credit borrowings, interest rate | 1.63% | ||||||
Line of Credit Facility, commitment fee percentage | 0.25% | ||||||
Maturity date of revolving credit borrowings | 2019-01 | ||||||
Required senior secured leverage ratio | 550.00% | ||||||
Achieved senior secured leverage ratio | 299.00% | ||||||
Minimum senior secured leverage ratio | 350.00% | ||||||
Total leverage ratio for applicable margin reduction | 400.00% | ||||||
Basis point reduction to applicable margin, resulting from total leverage ratio below minimum | 0.25% | ||||||
Total leverage ratio for commitment fee reduction | 350.00% | ||||||
Basis point reduction to commitment fee, resulting from total leverage ratio below minimum | 0.125% | ||||||
Fixed 7.125% Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Cash tender offer date to acquire outstanding senior notes | Mar. 18, 2015 | ||||||
Aggregate principal amount of senior notes | 470,000,000 | $ 420,900,000 | |||||
Loss on offering of debt instrument | $ 2,400,000 | ||||||
Debt Instrument redeemed amount | $ 50,400,000 | ||||||
Percentage of principal amount redeemed | 103.563% | ||||||
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Total long-term debt | $ 2,402,800,000 | 1,765,600,000 | |||||
Senior Secured Credit Facility | $ 189,000,000 | $ 470,000,000 | |||||
Debt instrument effective interest rate | 3.50% | ||||||
Deferred financing fees | 300,000 | $ 1,300,000 | |||||
Principal payments on term loans | $ 6,100,000 | ||||||
Debt instrument, due date | 2,019 | ||||||
Total leverage ratio for applicable margin reduction | 325.00% | ||||||
Basis point reduction to applicable margin, resulting from total leverage ratio below minimum | 0.25% | ||||||
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin over base rate | 2.50% | ||||||
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin over base rate | 1.00% | ||||||
Senior Secured Credit Facility Term B-3 Loan, variable, due 2019 | greater of the prime lending rate or federal funds | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin over base rate | 1.50% | ||||||
Senior Secured Credit Facility Term B-2 Loan, variable, due 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Total long-term debt | $ 283,600,000 | ||||||
Loss on offering of debt instrument | $ 300,000 | ||||||
Credit facility refinanced amount | $ 189,000,000 | ||||||
Long-term debt repayment | $ 94,500,000 | ||||||
Debt instrument, due date | 2,017 |
Summary of Company's Interest R
Summary of Company's Interest Rate Derivatives (Detail) - Derivatives not designated as hedging instruments - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 800,000,000 | $ 750,000,000 | |
Fair Value | (28,400,000) | (14,400,000) | |
Interest Rate Swap L | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 75,000,000 | 75,000,000 |
Fair Value | [1] | (3,600,000) | (2,300,000) |
Interest Rate Swap M | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 100,000,000 | 100,000,000 |
Fair Value | [1] | (4,800,000) | (3,000,000) |
Interest Rate Swap N | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 75,000,000 | 75,000,000 |
Fair Value | [1] | (3,500,000) | (2,100,000) |
Interest Rate Swap O | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 75,000,000 | 75,000,000 |
Fair Value | [1] | (3,100,000) | (1,700,000) |
Interest Rate Swap P | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 75,000,000 | 75,000,000 |
Fair Value | [1] | (2,800,000) | (1,500,000) |
Interest Rate Swap Q | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 50,000,000 | 50,000,000 |
Fair Value | [1] | (1,700,000) | (900,000) |
Interest Rate Swap R | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 50,000,000 | 50,000,000 |
Fair Value | [1] | (1,700,000) | (900,000) |
Interest Rate Swap S | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 50,000,000 | 50,000,000 |
Fair Value | [1] | (1,400,000) | (500,000) |
Interest Rate Swap T | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 75,000,000 | 75,000,000 |
Fair Value | [1] | (2,100,000) | (800,000) |
Interest Rate Swap U | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 50,000,000 | 50,000,000 |
Fair Value | [1] | (1,200,000) | (400,000) |
Interest Rate Swap V | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 50,000,000 | 50,000,000 |
Fair Value | [1] | (1,200,000) | (300,000) |
Interest Rate Swap W | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 25,000,000 | 25,000,000 |
Fair Value | [1] | (500,000) | $ 0 |
Interest Rate Swap X | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | 50,000,000 | |
Fair Value | [1] | $ (800,000) | |
[1] | includes LIBOR floor of 1.00% |
Summary of Company's Interest67
Summary of Company's Interest Rate Derivatives (Parenthetical) (Detail) - Derivatives not designated as hedging instruments | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
LIBOR | ||
Derivatives, Fair Value [Line Items] | ||
LIBOR floor | 1.00% | 1.00% |
Interest Rate Swap L | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 3.44% | 3.44% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap M | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 3.43% | 3.43% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap N | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 3.37% | 3.37% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap O | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 3.19% | 3.19% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap P | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 3.08% | 3.08% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap Q | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 2.99% | 2.99% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap R | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 2.98% | 2.98% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap S | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 2.73% | 2.73% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap T | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 2.74% | 2.74% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap U | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 2.66% | 2.66% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap V | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 2.60% | 2.60% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap W | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 2.40% | 2.40% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 | |
Interest Rate Swap X | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fixed Interest Rate | 2.25% | 2.25% |
Derivative, Maturity Date, Range Start | 2016-08 | |
Derivative, Maturity Date, Range End | 2019-08 |
Summary of Outstanding Foreign
Summary of Outstanding Foreign Currency Forward Contracts (Detail) - Derivatives not designated as hedging instruments | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2014JPY (¥) |
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 800,000,000 | $ 750,000,000 | |
Foreign currency contracts | |||
Derivatives, Fair Value [Line Items] | |||
Assets Fair Value | 0 | ||
Liabilities Fair Value | (300,000) | ||
Foreign currency contracts | Japanese Yen | |||
Derivatives, Fair Value [Line Items] | |||
Assets Fair Value | $ 0 | ||
Liabilities Fair Value | $ (300,000) | ||
Notional Amount | ¥ | ¥ 300,000,000 |
Summary of Outstanding Commodit
Summary of Outstanding Commodity Swaps (Detail) - Derivatives not designated as hedging instruments | 12 Months Ended | |
Dec. 31, 2015USD ($)MMBTUt | Dec. 31, 2014USD ($)MMBTUt | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional Amount | $ 800,000,000 | $ 750,000,000 |
Fair value | 30,100,000 | 15,400,000 |
Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value | (1,700,000) | (700,000) |
Commodity contracts | Aluminum | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional Amount | $ 13,700,000 | $ 11,300,000 |
Quantity | t | 8,150 | 6,200 |
Fair value | $ (1,700,000) | $ (700,000) |
Commodity contracts | Natural Gas | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional Amount | $ 200,000 | $ 200,000 |
Quantity | MMBTU | 70,000 | 60,000 |
Fair value | $ 0 | $ 0 |
Company's Derivative Instrument
Company's Derivative Instruments and their Impact on Financial Condition of Company (Detail) - Derivatives not designated as hedging instruments - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Total derivatives not designated as hedging instruments | $ (30.1) | $ (15.4) |
Foreign currency contracts | Other current assets | ||
Derivative [Line Items] | ||
Derivative Assets, Fair Value | 0 | 0 |
Foreign currency contracts | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | (0.3) | |
Commodity contracts | ||
Derivative [Line Items] | ||
Total derivatives not designated as hedging instruments | 1.7 | 0.7 |
Commodity contracts | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | (1.1) | (0.6) |
Commodity contracts | Other current and non-current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | (1.7) | (0.7) |
Commodity contracts | Other non-current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | (0.6) | (0.1) |
Interest rate contracts | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | (3.9) | |
Interest rate contracts | Other current and non-current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | (28.4) | |
Interest rate contracts | Other non-current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | $ (24.5) | $ (14.4) |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - Derivatives not designated as hedging instruments - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Foreign currency contracts | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | $ (0.3) | |
Commodity contracts | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | $ (1.1) | (0.6) |
Commodity contracts | Other non-current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | (0.6) | (0.1) |
Interest rate contracts | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | (3.9) | |
Interest rate contracts | Other non-current liabilities | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value | $ (24.5) | $ (14.4) |
Impact on the Company's Results
Impact on the Company's Results of Operations Related to Unrealized (Loss) Gain on Interest Rate Derivatives (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative [Line Items] | |||
Unrealized gain (loss)on derivatives | $ (14.7) | $ 4.7 | $ 32.8 |
Derivatives not designated as hedging instruments | Interest rate contracts | Interest expense | |||
Derivative [Line Items] | |||
Unrealized gain (loss)on derivatives | $ (14) | $ 3.5 | $ 34.3 |
Product Warranty Liabilities -
Product Warranty Liabilities - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2007 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Guarantor Obligations [Line Items] | |||||
Product warranty liability, current | $ 24.9 | $ 24 | |||
Product warranty liability, non-current | 53.4 | 59.6 | |||
Adjustments to product warranty liabilities | 9.2 | ||||
Increase (decrease) in extended Product liability | 1.8 | 3.9 | $ 8.2 | ||
Product warranty accrual reduction charged to comprehensive income | 0.3 | (1) | 2.4 | ||
Warranty liability | 78.3 | 83.6 | 90.5 | $ 109.7 | |
Warranty claims paid | 32.5 | 35 | 38.7 | ||
General Motors | |||||
Guarantor Obligations [Line Items] | |||||
Product warranty accrual reduction charged to DPIM receivable | 2.1 | 2.9 | 5.8 | ||
Reimbursement received | 23.6 | 14.9 | 9.1 | ||
Dual Power Inverter Module | |||||
Guarantor Obligations [Line Items] | |||||
Adjustments to product warranty liabilities | (1.8) | ||||
Product warranty, qualified cost | $ 12 | ||||
Product warranty, qualified cost sharing ratio for any amount over $46.0 million | 33.33% | ||||
Warranty liability | 50.3 | 48.5 | 44.6 | ||
Warranty claims paid | 39.6 | 32.8 | 25.5 | ||
Dual Power Inverter Module | General Motors | |||||
Guarantor Obligations [Line Items] | |||||
Product warranty, qualified cost | $ 34 | ||||
Product warranty, qualified cost sharing ratio for any amount over $46.0 million | 66.67% | ||||
Other receivable | $ 30.7 | $ 28.7 | $ 25.8 | ||
Dual Power Inverter Module | Product Warranty | |||||
Guarantor Obligations [Line Items] | |||||
Product warranty, qualified cost | $ 46 |
Product Warranty Liability Acti
Product Warranty Liability Activities (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Guarantor Obligations [Line Items] | |||
Beginning balance | $ 83.6 | $ 90.5 | $ 109.7 |
Payments | (32.5) | (35) | (38.7) |
Increase in liability (warranty issued during period) | 21.2 | 26.8 | 28.4 |
Net adjustments to liability | 5.5 | 0.7 | (9.6) |
Accretion (for Predecessor liabilities) | 0.5 | 0.6 | 0.7 |
Ending balance | $ 78.3 | $ 83.6 | $ 90.5 |
Deferred Revenue - Additional I
Deferred Revenue - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue current liabilities | $ 22.9 | $ 20.6 | |
Deferred revenue non-current liabilities | 56.4 | 48.7 | |
Deferred revenue recognized | 8.8 | ||
Extended Transmission Coverage | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue current liabilities | 22.9 | 20.3 | |
Deferred revenue non-current liabilities | 56.4 | 48.7 | |
Deferred revenue recognized | 21.6 | 20.8 | $ 21 |
U S Government Contracts | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue current liabilities | 0 | $ 0.3 | $ 8.8 |
Deferred revenue recognized | $ 8.8 |
Deferred Revenue for ETC Activi
Deferred Revenue for ETC Activity (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Revenue Arrangement [Line Items] | |||
Revenue earned | $ (8.8) | ||
Extended Transmission Coverage | |||
Deferred Revenue Arrangement [Line Items] | |||
Beginning balance | 69 | $ 63.6 | $ 63.5 |
Increases | 31.9 | 26.2 | 21.1 |
Revenue earned | (21.6) | (20.8) | (21) |
Ending balance | $ 79.3 | $ 69 | $ 63.6 |
Other (Expense) Income, Net (De
Other (Expense) Income, Net (Detail) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components of Other Income (Expense) [Line Items] | ||||
Vendor settlement | $ 2.9 | |||
Loss on intercompany foreign exchange | (1.7) | $ (5.4) | $ (2.3) | |
Gain (loss) on foreign exchange | 1.4 | (1) | (2.4) | |
Realized loss on derivative contracts (see NOTE 8) | (1.3) | (1) | (2.8) | |
Unrealized (loss) gain on derivative contracts (see NOTE 8) | (0.8) | 1.2 | (1.5) | |
Loss on repayments and repurchases of long-term debt (see NOTE 7) | $ (22.7) | (0.3) | (0.5) | (0.8) |
Grant program income | 2.6 | 5.2 | ||
Impairment loss on investments in technology-related initiatives | (2) | (5) | ||
Gain on negotiation of commercial agreement | 2 | |||
Public offering fees and expenses | (1.4) | (1.6) | ||
Other | (0.5) | (0.1) | 0.3 | |
Total | $ (0.3) | $ (5.6) | $ (10.9) |
Other Current Liabilities (Deta
Other Current Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Other Current Liabilities [Line Items] | |||
Payroll and related costs | $ 31.5 | $ 50.9 | |
Sales allowances | 24.3 | 25.5 | |
Vendor buyback obligation | 12.1 | 13.2 | |
Taxes payable | 12.6 | 8.5 | |
Defense price reduction reserve | 8.7 | 16.2 | |
Derivative liabilities | 5 | 0.8 | |
Accrued interest payable | 0.6 | 5.2 | |
Environmental liabilities | 0.5 | $ 0.5 | |
Other accruals | 10.8 | 11.4 | |
Total | $ 106.1 | $ 131.7 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Excise tax as a percentage of value of plan that exceeds the threshold amount | 40.00% | |||
Effect of excise tax on post-retirement benefit obligation | $ 12.2 | |||
Accumulated benefit obligation | 136.6 | $ 129.7 | ||
Nonqualified Deferred Compensation Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Deferred compensation expense | 0.2 | 0.2 | $ 0.3 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Nonqualified Deferred Compensation Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets, fair value | 4.8 | 4.8 | ||
Plan obligation, fair value | 2.9 | 2.9 | ||
Salary Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution plan expense | $ 5.7 | 5.4 | 5.4 | |
Defined contribution plan, employer contribution for employee with severance date on or after January 1, 1993 | 1.00% | |||
Defined contribution plan, employer matching contribution | 4.00% | |||
Future Post Retirement Medical Care Costs | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Health care cost trend rate | 6.67% | |||
Health care cost ultimate trend rate | 4.50% | |||
Health care cost ultimate trend year | 2,027 | |||
Future Post Retirement Prescription Drug Costs | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Health care cost trend rate | 5.75% | |||
Health care cost ultimate trend rate | 4.50% | |||
Health care cost ultimate trend year | 2,027 | |||
Hourly Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan, service period before normal retirement age | 30 years | |||
Defined contribution plan expense | $ 1.5 | 1.3 | 1 | |
Post-retirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net benefit obligation | 147.3 | 136 | $ 120.7 | $ 142.6 |
Hourly Employee | Post-retirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net benefit obligation | $ 147.3 | $ 136 |
Employee Benefit Plans (Detail)
Employee Benefit Plans (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Employee Benefit Plans [Line Items] | |||
Total recognized - other comprehensive income | $ 3 | $ 9.1 | $ (29) |
Pension Plans | |||
Schedule of Employee Benefit Plans [Line Items] | |||
Service cost | 14.4 | 13.2 | 16.3 |
Interest cost | 5.2 | 5 | 4 |
Expected return on assets | (8.5) | (7.7) | (6.7) |
Prior service cost | 0.1 | 0.1 | 0.1 |
(Gain) loss | (0.1) | 0.7 | |
Net Periodic Benefit Cost | 11.1 | 10.6 | 14.4 |
Prior service credit | 0.2 | ||
Net (gain) loss | (4.4) | 2.1 | (18.4) |
Amortizations | 0 | (0.1) | (0.8) |
Total recognized - other comprehensive income | (4.2) | 2 | (19.2) |
Post-retirement Benefits | |||
Schedule of Employee Benefit Plans [Line Items] | |||
Service cost | 2.2 | 2.2 | 3.3 |
Interest cost | 5.4 | 5.9 | 5.8 |
Prior service cost | (3.6) | (3.6) | (3.6) |
(Gain) loss | (0.7) | ||
Net Periodic Benefit Cost | 4 | 3.8 | 5.5 |
Prior service credit | 0 | ||
Net (gain) loss | 4.4 | 7.8 | (30.7) |
Amortizations | 3.6 | 4.3 | 3.6 |
Total recognized - other comprehensive income | $ 8 | $ 12.1 | $ (27.1) |
Weighted-Average Actuarial Assu
Weighted-Average Actuarial Assumptions Used to Determine Net Periodic Benefit Cost (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Pension Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 3.90% | 4.80% | 3.90% |
Rate of compensation increase (salaried) | 3.00% | 3.00% | 3.00% |
Expected return on assets | 6.25% | 6.80% | 7.00% |
Post-retirement Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 4.00% | 4.90% | 4.10% |
Weighted-Average Actuarial As82
Weighted-Average Actuarial Assumptions Used to Determine Benefit Obligations (Detail) | Dec. 31, 2015 | Dec. 31, 2014 |
Pension Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate | 4.40% | 3.90% |
Rate of compensation increase (salaried) | 3.00% | 3.00% |
Post-retirement Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate | 4.60% | 4.00% |
Health Care Costs Trends (Detai
Health Care Costs Trends (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Effect of 1% increase on total of service and interest cost | $ 1.8 |
Effect of 1% increase on post-retirement benefit obligation | 31.2 |
Effect of 1% decrease on total of service and interest cost | (1.3) |
Effect of 1% decrease on post-retirement benefit obligation | $ (24.3) |
Reconciliation of Changes in Ne
Reconciliation of Changes in Net Benefit Obligations and Fair Value of Plan Assets (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value of Plan Assets: | |||
Fair value of plan assets at beginning of year | $ 135.3 | ||
Fair value of plan assets at end of year | 140.1 | $ 135.3 | |
Pension Plans | |||
Benefit Obligations: | |||
Net benefit obligation at beginning of year | 133.5 | 105.9 | $ 103.3 |
Service cost | 14.4 | 13.2 | 16.3 |
Interest cost | 5.2 | 5 | 4 |
Plan Amendments | 0.2 | ||
Benefits paid | (2) | (1.5) | (0.8) |
Actuarial (gain) loss | (10.9) | 10.9 | (16.9) |
Net benefit obligation at end of year | 140.4 | 133.5 | 105.9 |
Fair Value of Plan Assets: | |||
Fair value of plan assets at beginning of year | 135.3 | 108.6 | 89.4 |
Actual return on plan assets | 2 | 16.4 | 8.2 |
Employer contributions | 4.8 | 11.8 | 11.8 |
Benefits paid | (2) | (1.5) | (0.8) |
Fair value of plan assets at end of year | 140.1 | 135.3 | 108.6 |
Net Funded Status | (0.3) | 1.8 | 2.7 |
Post-retirement Benefits | |||
Benefit Obligations: | |||
Net benefit obligation at beginning of year | 136 | 120.7 | 142.6 |
Service cost | 2.2 | 2.2 | 3.3 |
Interest cost | 5.4 | 5.9 | 5.8 |
Benefits paid | (0.7) | (0.6) | (0.3) |
Actuarial (gain) loss | 4.4 | 7.8 | (30.7) |
Net benefit obligation at end of year | 147.3 | 136 | 120.7 |
Fair Value of Plan Assets: | |||
Fair value of plan assets at beginning of year | 0 | ||
Employer contributions | 0.7 | 0.6 | 0.3 |
Benefits paid | (0.7) | (0.6) | (0.3) |
Fair value of plan assets at end of year | 0 | 0 | |
Net Funded Status | $ (147.3) | $ (136) | $ (120.7) |
Fair Value of Plan Assets by As
Fair Value of Plan Assets by Asset Category (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | $ 140.1 | $ 135.3 |
Cash and Cash Equivalents | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | 3 | 8.6 |
Diversified equity Securities | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | 21.1 | 57.8 |
Diversified debt Securities | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | 116 | 68.9 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | 46 | 135.3 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash and Cash Equivalents | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | 3 | 8.6 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Diversified equity Securities | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | 21.1 | 57.8 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Diversified debt Securities | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | 21.9 | $ 68.9 |
Significant Other Observable Inputs (Level 2) | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | 94.1 | |
Significant Other Observable Inputs (Level 2) | Diversified debt Securities | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Fair Value of Plan Assets | $ 94.1 |
Plan Asset Allocation (Detail)
Plan Asset Allocation (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Hourly Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Target allocation | 100.00% |
Hourly Plan | Cash and Cash Equivalents | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Target allocation | 2.00% |
Hourly Plan | Diversified equity Securities | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Target allocation | 15.00% |
Hourly Plan | Diversified debt Securities | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Target allocation | 83.00% |
Salary Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Target allocation | 100.00% |
Salary Plan | Cash and Cash Equivalents | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Target allocation | 2.00% |
Salary Plan | Diversified equity Securities | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Target allocation | 15.00% |
Salary Plan | Diversified debt Securities | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Target allocation | 83.00% |
Amounts Recognized in Balance S
Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income AOCI (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Pension Plans | |||
Amounts Recognized in Balance Sheet: | |||
Noncurrent assets | $ 6.6 | $ 7.9 | |
Noncurrent liabilities | (6.9) | (6.1) | |
Total (liability) asset | (0.3) | 1.8 | $ 2.7 |
Accumulated Other Comprehensive Loss: | |||
Prior service (cost) credit | (0.3) | (0.1) | |
Actuarial gain | 5 | 0.6 | |
Total | 4.7 | 0.5 | |
Post-retirement Benefits | |||
Amounts Recognized in Balance Sheet: | |||
Current liabilities | (1.6) | (1.2) | |
Noncurrent liabilities | (145.7) | (134.8) | |
Total (liability) asset | (147.3) | (136) | $ (120.7) |
Accumulated Other Comprehensive Loss: | |||
Prior service (cost) credit | 18.1 | 21.7 | |
Actuarial gain | 4.2 | 8.6 | |
Total | $ 22.3 | $ 30.3 |
Amounts in Accumulated Other Co
Amounts in Accumulated Other Comprehensive Income AOCI Expected to be Amortized and Recognized as Component of Net Periodic Benefit Cost in Two Thousand Thirteen (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Pension Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Prior service (cost) credit | $ (0.2) |
Actuarial gain | 0.3 |
Total | 0.1 |
Post-retirement Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Prior service (cost) credit | 3.6 |
Total | $ 3.6 |
Projected and Accumulated Benef
Projected and Accumulated Benefit Obligation and Fair Value of Plan Assets for Pension Plans with Projected Benefit Obligation in Excess of Plan Assets (Detail) - Salary Plan - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Projected benefit obligation | $ 74.6 | $ 71.4 |
Fair value of plan assets | 67.7 | 65.3 |
Accumulated benefit obligation | 70.8 | 67.6 |
Fair value of plan assets | $ 67.7 | $ 65.3 |
Expected Cash Flows for Pension
Expected Cash Flows for Pension and Post-Retirement Benefit Plans (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Pension Plans | |
Employer Contributions: | |
2016 expected contributions | $ 8 |
Expected Benefit Payments: | |
2,016 | 3.3 |
2,017 | 4.1 |
2,018 | 4.8 |
2,019 | 5.6 |
2,020 | 6.4 |
2021-2025 | 45.6 |
Post-retirement Benefits | |
Employer Contributions: | |
2016 expected contributions | 1.7 |
Expected Benefit Payments: | |
2,016 | 1.7 |
2,017 | 2.3 |
2,018 | 3 |
2,019 | 3.7 |
2,020 | 4.5 |
2021-2025 | $ 30.8 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2015USD ($)shares$ / shares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | Mar. 31, 2012shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate number of shares of common stock available for issuance under the 2011 Plan | shares | 15,300,000 | ||||
Common stock conversion ratio for each RSU upon vesting | shares | 1 | ||||
Incentive compensation expense | $ 3.9 | $ 3.3 | $ 1.7 | ||
Taxes paid related to net share settlement of equity awards | $ 1.9 | $ 8.4 | $ 3.6 | ||
Option expiration period | 10 years | ||||
Dividend per-share | $ / shares | $ 0.15 | $ 0.60 | $ 0.51 | $ 0.42 | |
Weighted-average grant-date fair value of options granted | $ / shares | $ 8.39 | $ 9.51 | $ 9.76 | ||
Total fair value of stock options vested | $ 5.9 | $ 0 | $ 0.7 | ||
Total intrinsic value of stock options exercised | 25.8 | 82.3 | 58 | ||
Aggregate intrinsic value of stock options outstanding | $ 23.1 | 23.1 | 80.4 | ||
Aggregate intrinsic value of stock options exercisable | 27.1 | 27.1 | 72.5 | ||
Unrecognized compensation cost related to non-vested share-based compensation arrangements | $ 2.9 | $ 2.9 | 4.8 | 4.2 | |
For reason other than death or disability | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Period following optionees' termination options cease to be exercisable | 90 days | ||||
Termination for retirement after the age of 65 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Period following optionees' termination options cease to be exercisable | 3 years | ||||
Termination Due To Death | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Period following optionees' termination options cease to be exercisable | 12 months | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost, expected period for recognition | 2 years | ||||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost, expected period for recognition | 3 years | ||||
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Option vesting percentage on each anniversary of grant date | 100.00% | 100.00% | |||
Option Vesting period | 2 years | ||||
Employee Stock Option | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Option vesting percentage on each anniversary of grant date | 20.00% | 20.00% | |||
Option Vesting period | 3 years | ||||
Employee Stock Option | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Option vesting percentage on each anniversary of grant date | 33.00% | 33.00% | |||
Option Vesting period | 5 years | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost | $ 2.8 | $ 2.8 | 3 | ||
Unrecognized compensation cost, expected period for recognition | 2 years | ||||
Incentive compensation expense | $ 3 | 9.8 | 12 | ||
Total intrinsic value of shares vested | 0.2 | 7.4 | 1.1 | ||
Total fair value of RSUs vested | $ 3.8 | $ 20.2 | $ 9 | ||
Number of shares paying for withholding taxes | shares | 100,000 | 300,000 | 100,000 | ||
Taxes paid related to net share settlement of equity awards | $ 1.4 | $ 8.4 | $ 3.6 | ||
Restricted Stock Units (RSUs) | Vesting Schedule One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, vesting term | 1 year | ||||
Restricted Stock Units (RSUs) | Vesting Schedule Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, vesting term | 2 years | ||||
Restricted Stock Units (RSUs) | Vesting Schedule Three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, vesting term | 3 years | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost | 2.8 | $ 2.8 | $ 3.4 | ||
Unrecognized compensation cost, expected period for recognition | 2 years | 2 years | |||
Incentive compensation expense | $ 2.2 | $ 1.6 | |||
Total intrinsic value of shares vested | 0.1 | ||||
Taxes paid related to net share settlement of equity awards | $ 0.5 | ||||
Restricted Stock | Vesting Schedule One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, vesting term | 1 year | ||||
Restricted Stock | Vesting Schedule Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, vesting term | 2 years | ||||
Restricted Stock | Vesting Schedule Three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, vesting term | 3 years | ||||
Performance Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost | $ 1.7 | $ 1.7 | |||
Unrecognized compensation cost, expected period for recognition | 3 years | ||||
Incentive compensation expense | $ 0.7 |
Summary of RSU Activity (Detail
Summary of RSU Activity (Detail) - Restricted Stock Units (RSUs) - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Non-vested RSUs: | |||
Beginning balance | 0.2 | 0.8 | 1 |
Granted | 0.1 | 0 | 0.2 |
Vested | (0.1) | (0.6) | (0.4) |
Ending balance | 0.2 | 0.2 | 0.8 |
Weighted-Average Grant-Date Fair Value | |||
Beginning balance | $ 26.57 | $ 20.90 | $ 20.20 |
Granted | 31.96 | 29.85 | 23.31 |
Vested | 23.95 | 20.32 | 20.23 |
Ending balance | $ 30.61 | $ 26.57 | $ 20.90 |
Summary of Restricted Stock Act
Summary of Restricted Stock Activity (Detail) - Restricted Stock - $ / shares shares in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Non-vested Shares: | ||
Beginning balance | 0.2 | |
Granted | 0 | 0.2 |
Vested | 0 | |
Ending balance | 0.2 | 0.2 |
Weighted-Average Grant-Date Fair Value | ||
Beginning balance | $ 29.47 | |
Granted | 32.05 | $ 29.47 |
Vested | 29.08 | |
Ending balance | $ 30.27 | $ 29.47 |
Assumptions Used to Calculate F
Assumptions Used to Calculate Fair Value of Performance Award Based (Detail) - Performance Awards | 12 Months Ended |
Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility, minimum | 18.00% |
Expected volatility, maximum | 34.00% |
Expected term (in years) | 2 years 10 months 24 days |
Risk-free rate | 1.00% |
Summary of Performance Award Ac
Summary of Performance Award Activity (Detail) - Performance Awards shares in Millions | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Non-vested Shares: | |
Granted | shares | 0.1 |
Vested | shares | 0 |
Ending balance | shares | 0.1 |
Weighted-Average Grant-Date Fair Value | |
Granted | $ / shares | $ 36.53 |
Vested | $ / shares | 0 |
Ending balance | $ / shares | $ 36.53 |
Assumptions Used to Calculate96
Assumptions Used to Calculate Fair Value of Options (Detail) - Employee Stock Option | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 31.00% | 38.00% | 51.00% |
Expected dividend yield | 1.90% | 1.60% | 1.20% |
Expected term (in years) | 6 years | 5 years 6 months | 5 years 4 months 24 days |
Risk-free rate | 1.50% | 1.70% | 1.60% |
Option Activity (Detail)
Option Activity (Detail) - $ / shares shares in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options | ||||
Outstanding stock options, beginning balance | 4.9 | 8.7 | 11.9 | |
Granted | 0.2 | 0.4 | 0.6 | |
Exercised | (1.5) | (4.2) | (3.8) | |
Outstanding stock options, ending balance | 3.6 | 4.9 | 8.7 | 11.9 |
Exercisable stock options | 3 | 3.9 | 8.1 | 11.8 |
Weighted-Average Exercise | ||||
Outstanding stock options | $ 17.49 | $ 15.33 | $ 14.01 | |
Granted | 32.13 | 30.23 | 23.39 | |
Exercised | 0 | 0 | 0 | |
Outstanding stock options | 19.47 | 17.49 | 15.33 | $ 14.01 |
Exercisable stock options | $ 16.87 | $ 15.32 | $ 14.79 | $ 14.02 |
Weighted-Average Remaining | ||||
Outstanding stock options | 4 years 1 month 13 days | 4 years 2 months 9 days | 4 years 3 months 18 days | 4 years 11 months 5 days |
Exercisable stock options | 3 years 1 month 13 days | 3 years 29 days | 3 years 11 months 9 days | 4 years 10 months 28 days |
Non-Vested Shares Activity (Det
Non-Vested Shares Activity (Detail) - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Non-vested Stock Options: | |||
Beginning Balance | 1 | 0.6 | 0.2 |
Granted | 0.2 | 0.4 | 0.6 |
Vested | (0.6) | (0.2) | |
Ending Balance | 0.6 | 1 | 0.6 |
Weighted-Average Grant-Date | |||
Beginning Balance | $ 9.44 | $ 9.06 | $ 4.34 |
Granted | 8.39 | 9.51 | 9.76 |
Vested | 9.76 | 3.59 | |
Ending Balance | $ 9.12 | $ 9.44 | $ 9.06 |
Income Before Income Taxes (Det
Income Before Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items] | |||
U.S. income | $ 260.5 | $ 355.1 | $ 259 |
Foreign income | 28.3 | 13 | 7.1 |
Total | $ 288.8 | $ 368.1 | $ 266.1 |
Provision for Income Tax Expens
Provision for Income Tax Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Estimated current income taxes: | |||
U.S. federal | $ 3 | $ 1.6 | $ 0.2 |
Foreign | 5.4 | 6.3 | 1.9 |
U.S. state and local | 2.1 | (0.2) | 0.6 |
Total Current | 10.5 | 7.7 | 2.7 |
Deferred income tax expense (credit), net: | |||
U.S. federal | 89.7 | 125.6 | 87.6 |
Foreign | (0.1) | (0.3) | 0.1 |
U.S. state and local | 6.4 | 6.5 | 10.3 |
Total Deferred | 96 | 131.8 | 98 |
Total income tax expense | $ 106.5 | $ 139.5 | $ 100.7 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | |||
Income taxes paid | $ 5.2 | $ 5 | $ 3.8 |
Net operating loss carryforwards, federal | 85.00% | ||
Net operating loss carryforwards, state | 16.00% | ||
Operating loss carryforwards | $ 97.4 | 253.3 | |
Valuation allowances | $ 4.2 | $ 5.2 | |
Minimum | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards, expiration year | 2,027 | ||
Maximum | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards, expiration year | 2,032 |
Reconciliation of Provision for
Reconciliation of Provision for Income Tax Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Provision of Income Taxes [Line Items] | |||
Tax at U.S. statutory income tax rate | $ 101.1 | $ 128.9 | $ 93.1 |
Foreign rate differential | (3) | (2.3) | (0.7) |
Non-deductible expenses | 3.9 | 3.9 | 0.8 |
Valuation allowance | (0.8) | 2.6 | 1 |
State tax expense | 5.4 | 4 | 7.3 |
Adjustment to deferred tax expense | 1.2 | 2.4 | (0.3) |
Other adjustments | (1.3) | 0 | (0.5) |
Total income tax expense | $ 106.5 | $ 139.5 | $ 100.7 |
Deferred Tax Assets and Liabili
Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Inventories | $ 5.4 | $ 5.1 |
Warranty accrual | 26.3 | 26.2 |
Sales allowances and rebates | 6.8 | 6.7 |
Deferred revenue | 29.4 | 25.7 |
Post-retirement | 11.2 | 5 |
Intangibles | 71.8 | 77.3 |
Other accrued liabilities | 24.1 | 32.8 |
Unrealized loss on interest rate derivatives | 13.4 | 6.6 |
Operating loss carryforwards | 48.6 | 107.8 |
Tax credits | 6.2 | 3.1 |
Environmental remediation | 5.2 | |
Stock based compensation | 7.4 | 6.9 |
Technology-related investments | 10.2 | 7.5 |
Other | 13.8 | 10.8 |
Total Deferred tax assets | 279.8 | 321.5 |
Valuation allowances | (4.2) | (5.2) |
Deferred tax liabilities: | ||
Property, plant and equipment | (19) | (19.6) |
Goodwill | (365) | (320.8) |
Trade name | (91.3) | (90.3) |
Other | (3) | (2.8) |
Total Deferred tax liabilities | (478.3) | (433.5) |
Net Deferred tax liability | $ (202.7) | $ (117.2) |
Liability for Unrecognized Tax
Liability for Unrecognized Tax Benefit (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | ||
Unrecognized Tax Benefits, Beginning Balance | $ 2.5 | $ 2.3 |
Increases in unrecognized tax benefits as a result of current year activity | 0 | 0 |
Unrecognized Tax Benefits, Ending Balance | $ 2.5 | $ 2.5 |
Changes in Components of Accumu
Changes in Components of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ 5.1 | $ 30.3 | $ (9.2) |
Foreign currency translation, before tax | (11.5) | (7.4) | (5) |
Pension and OPEB liability adjustment, before tax | (3.4) | (14.6) | 46.4 |
Available-for-sale securities, before tax | (7.6) | (3.2) | (1.9) |
Net current period other comprehensive income (loss) | (22.5) | (25.2) | 39.5 |
Ending balance | (17.4) | 5.1 | 30.3 |
Beginning balance | (44.6) | (51.3) | (34.7) |
Foreign currency translation, tax expense | 0 | 0 | 0 |
Pension and OPEB liability adjustment, tax expense | 0.4 | 5.5 | (17.4) |
Available-for-sale securities, tax expense | 2.8 | 1.2 | 0.8 |
Net current period other comprehensive income (loss) | 3.2 | 6.7 | (16.6) |
Ending balance | (41.4) | (44.6) | (51.3) |
Beginning Balance | (39.5) | (21) | (43.9) |
Foreign currency translation, after tax | (11.5) | (7.4) | (5) |
Pension and OPEB liability adjustment, after tax | (3) | (9.1) | 29 |
Available-for-sale securities, after tax | (4.8) | (2) | (1.1) |
Total other comprehensive (loss) income, net of tax | (19.3) | (18.5) | 22.9 |
Ending balance | $ (58.8) | $ (39.5) | $ (21) |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income Affected by Reclassification from AOCL (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Cost of sales | $ 1,052 | $ 1,151.5 | $ 1,084.9 | ||||||||
Selling, general and administrative expenses | 317.1 | 344.6 | 334.9 | ||||||||
Engineering - research and development | 92.5 | 103.8 | 97.1 | ||||||||
Income before income taxes | $ 19.7 | $ 73.8 | $ 87.1 | $ 108.2 | $ 77.8 | $ 116.3 | $ 94.7 | $ 79.3 | 288.8 | 368.1 | 266.1 |
Income tax (expense) benefit | (106.5) | (139.5) | (100.7) | ||||||||
Total reclassifications | $ 13 | $ 46.5 | $ 54.4 | $ 68.4 | $ 50.5 | $ 68.8 | $ 57.2 | $ 52.1 | 182.3 | $ 228.6 | $ 165.4 |
Reclassified from AOCL | Prior service cost | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Cost of sales | 3.2 | ||||||||||
Selling, general and administrative expenses | 0.2 | ||||||||||
Engineering - research and development | 0.1 | ||||||||||
Reclassified from AOCL | Actuarial loss | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Cost of sales | 0.1 | ||||||||||
Selling, general and administrative expenses | 0 | ||||||||||
Engineering - research and development | 0 | ||||||||||
Reclassified from AOCL | Accumulated Defined Benefit Plans Adjustment | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Income before income taxes | 3.6 | ||||||||||
Income tax (expense) benefit | (1.3) | ||||||||||
Total reclassifications | $ 2.3 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Line Items] | ||||
Rent expense | $ 5.1 | $ 5.4 | $ 5.7 | |
Estimated undiscounted liability | $ 14 | |||
Environmental liabilities, non-current | $ 13.5 | |||
Estimated undiscounted liabilities payment period | 30 years | |||
Environmental liabilities, current | $ 0.5 | $ 0.5 |
Future Payments under Non-Cance
Future Payments under Non-Cancelable Operating Leases (Detail) $ in Millions | Dec. 31, 2015USD ($) |
Operating Leased Assets [Line Items] | |
2,016 | $ 4.7 |
2,017 | 3.3 |
2,018 | 2.1 |
2,019 | 1.4 |
2,020 | 1.3 |
Thereafter | 2 |
Total | $ 14.8 |
Concentration of Risk - Additio
Concentration of Risk - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2015EmployeeCustomer | Dec. 31, 2014EmployeeCustomer | Dec. 31, 2013Customer | |
Concentration Risk [Line Items] | |||
Number of employees | Employee | 2,700 | 2,700 | |
Collective bargaining agreement, expiration date | 2017-11 | ||
Employees in the U.S | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 90.00% | 90.00% | |
Unionized employees subject to collective bargaining agreement | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 60.00% | 60.00% | |
Sales Revenue, Goods, Net | |||
Concentration Risk [Line Items] | |||
Number of significant customers | 3 | 3 | 3 |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Number of significant customers | 2 | 2 | |
Supplier Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of significant suppliers | 1 | 1 | 1 |
Customers Accounted for Greater
Customers Accounted for Greater Than Ten Percent of Net Sales (Detail) - Sales Revenue, Net - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Daimler AG | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 21.00% | 17.00% | 17.00% |
Navistar Inc | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% |
Volvo Group | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 8.00% | 6.00% |
Customers Accounted for Grea111
Customers Accounted for Greater Than Ten Percent of Accounts Receivable (Detail) - Accounts Receivable - Credit Concentration Risk | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Daimler AG | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 24.00% | 15.00% |
Navistar Inc | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 8.00% | 12.00% |
Supplier Accounted for Greater
Supplier Accounted for Greater Than Ten Percent of Materials Purchased (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cost of Goods, Total | Supplier Concentration Risk | Linamar Corporation Inc. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 8.00% | 10.00% | 13.00% |
Certain Relationships and Re113
Certain Relationships and Related Party Transactions - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May. 31, 2015 | Jun. 30, 2014 | Feb. 28, 2014 | Dec. 31, 2014 | |
Secondary Public Offering in September | ||||
Related Party Transaction [Line Items] | ||||
Secondary offering of common stock | 5,392,499 | |||
Common stock, price per share | $ 30.46 | |||
Secondary Public Offering in June | ||||
Related Party Transaction [Line Items] | ||||
Secondary offering of common stock | 40,250,000 | |||
Common stock, price per share | $ 29.95 | |||
Secondary Public Offering in April | ||||
Related Party Transaction [Line Items] | ||||
Secondary offering of common stock | 25,000,000 | |||
Common stock, price per share | $ 29.78 | |||
Secondary Public Offering in February | ||||
Related Party Transaction [Line Items] | ||||
Secondary offering of common stock | 28,750,000 | |||
Common stock, price per share | $ 29.17 | |||
Secondary Public Offering | ||||
Related Party Transaction [Line Items] | ||||
Stock repurchased from underwriter | 5,000,000 | 3,428,179 | ||
Fixed 7.125% Senior Notes | ||||
Related Party Transaction [Line Items] | ||||
Senior Notes, stated interest rate | 7.125% | |||
Percentage of principal amount redeemed | 103.563% | |||
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 |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Oct. 30, 2014 | |
Common Stock Disclosure [Line Items] | ||
Common stock, repurchases authorized | $ 500,000,000 | |
Common stock, repurchased during the period | $ 305,800,000 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) shares in Millions | 12 Months Ended |
Dec. 31, 2015shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive stock options not included in the diluted EPS computation | 0.7 |
Reconciliation of Numerators an
Reconciliation of Numerators and Denominators Used to Calculate Basic EPS and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Computation of Earnings Per Share [Line Items] | |||||||||||
Net income | $ 13 | $ 46.5 | $ 54.4 | $ 68.4 | $ 50.5 | $ 68.8 | $ 57.2 | $ 52.1 | $ 182.3 | $ 228.6 | $ 165.4 |
Weighted average shares of common stock outstanding | 175.9 | 179.8 | 184.5 | ||||||||
Dilutive effect stock-based awards | 1.3 | 2.5 | 3.4 | ||||||||
Diluted weighted average shares of common stock outstanding | 177.2 | 182.3 | 187.9 | ||||||||
Basic earnings per share attributable to common stockholders | $ 0.08 | $ 0.27 | $ 0.30 | $ 0.38 | $ 0.28 | $ 0.38 | $ 0.32 | $ 0.29 | $ 1.03 | $ 1.27 | $ 0.90 |
Diluted earnings per share attributable to common stockholders | $ 0.08 | $ 0.27 | $ 0.30 | $ 0.38 | $ 0.28 | $ 0.38 | $ 0.31 | $ 0.28 | $ 1.03 | $ 1.25 | $ 0.88 |
Net Sales by Country (Detail)
Net Sales by Country (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total net sales | $ 478.2 | $ 493 | $ 511 | $ 503.6 | $ 544.4 | $ 553.3 | $ 536.1 | $ 493.6 | $ 1,985.8 | $ 2,127.4 | $ 1,926.8 |
UNITED STATES | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total net sales | 1,459.8 | 1,578 | 1,354.3 | ||||||||
CHINA | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total net sales | 63.9 | 128.7 | 141 | ||||||||
CANADA | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total net sales | 95.5 | 85.1 | 88.6 | ||||||||
JAPAN | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total net sales | 48.7 | 45.8 | 37 | ||||||||
GERMANY | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total net sales | 39.6 | 38.1 | 53.9 | ||||||||
UNITED KINGDOM | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total net sales | 44 | 36.8 | 42.5 | ||||||||
Other Countries | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total net sales | $ 234.3 | $ 214.9 | $ 209.5 |
Net Long-Lived Assets by Countr
Net Long-Lived Assets by Country (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property, plant and equipment, net | $ 479.7 | $ 514.6 | $ 563.4 |
UNITED STATES | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property, plant and equipment, net | 419.2 | 442.6 | 478.7 |
INDIA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property, plant and equipment, net | 43.2 | 51.5 | 59.9 |
HUNGARY | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property, plant and equipment, net | 12.5 | 15.1 | 18.1 |
Other Countries | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property, plant and equipment, net | $ 4.8 | $ 5.4 | $ 6.7 |
Quarterly Financial Informat119
Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information [Line Items] | |||||||||||
Net sales | $ 478.2 | $ 493 | $ 511 | $ 503.6 | $ 544.4 | $ 553.3 | $ 536.1 | $ 493.6 | $ 1,985.8 | $ 2,127.4 | $ 1,926.8 |
Gross profit | 222.2 | 236.1 | 236.3 | 239.2 | 255.6 | 259.3 | 238.5 | 222.5 | 933.8 | 975.9 | 841.9 |
Operating income | 37.2 | 111.9 | 137.5 | 142.3 | 117.8 | 147.3 | 132.2 | 114.8 | 428.9 | 512.1 | 409.9 |
Income before income taxes | 19.7 | 73.8 | 87.1 | 108.2 | 77.8 | 116.3 | 94.7 | 79.3 | 288.8 | 368.1 | 266.1 |
Net income | $ 13 | $ 46.5 | $ 54.4 | $ 68.4 | $ 50.5 | $ 68.8 | $ 57.2 | $ 52.1 | $ 182.3 | $ 228.6 | $ 165.4 |
Basic earnings per share | $ 0.08 | $ 0.27 | $ 0.30 | $ 0.38 | $ 0.28 | $ 0.38 | $ 0.32 | $ 0.29 | $ 1.03 | $ 1.27 | $ 0.90 |
Diluted earnings per share | $ 0.08 | $ 0.27 | $ 0.30 | $ 0.38 | $ 0.28 | $ 0.38 | $ 0.31 | $ 0.28 | $ 1.03 | $ 1.25 | $ 0.88 |
Quarterly Financial Informat120
Quarterly Financial Information - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Quarterly Financial Information [Line Items] | |
Trade name impairment | $ 80 |
Schedule I Parent Company Only
Schedule I Parent Company Only Balance Sheets (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets: | ||||
Cash | $ 251.6 | $ 263 | $ 184.7 | $ 80.2 |
Total Current Assets | 616.8 | 638.3 | ||
TOTAL ASSETS | 4,408.4 | 4,656.2 | ||
Current Liabilities: | ||||
Accounts payable | 126.2 | 151.7 | ||
Total Current Liabilities | 304.6 | 345.9 | ||
Capital stock | 1,188.6 | 1,397.8 | 1,438.8 | 1,356.9 |
Additional paid-in-capital | 1,690.2 | 1,651 | ||
Accumulated deficit | (444.5) | (215.5) | ||
Accumulated other comprehensive loss, net of tax | (58.8) | (39.5) | (21) | (43.9) |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | 4,408.4 | 4,656.2 | ||
Parent Company | ||||
Current Assets: | ||||
Cash | 0 | 0 | $ 0 | $ 0 |
Total Current Assets | 0 | 0 | ||
Investments in and advances to subsidiaries | 1,188.6 | 1,397.8 | ||
TOTAL ASSETS | 1,188.6 | 1,397.8 | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Total Current Liabilities | 0 | 0 | ||
Capital stock | 1.7 | 1.8 | ||
Additional paid-in-capital | 1,690.2 | 1,651 | ||
Treasury stock | 0 | 0 | ||
Accumulated deficit | (444.5) | (215.5) | ||
Accumulated other comprehensive loss, net of tax | (58.8) | (39.5) | ||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 1,188.6 | $ 1,397.8 |
Schedule I Parent Company On122
Schedule I Parent Company Only Statements of Comprehensive Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net sales | $ 478.2 | $ 493 | $ 511 | $ 503.6 | $ 544.4 | $ 553.3 | $ 536.1 | $ 493.6 | $ 1,985.8 | $ 2,127.4 | $ 1,926.8 |
Operating income | 37.2 | 111.9 | 137.5 | 142.3 | 117.8 | 147.3 | 132.2 | 114.8 | 428.9 | 512.1 | 409.9 |
Other income: | |||||||||||
Income before income taxes | 19.7 | 73.8 | 87.1 | 108.2 | 77.8 | 116.3 | 94.7 | 79.3 | 288.8 | 368.1 | 266.1 |
Income tax expense | (106.5) | (139.5) | (100.7) | ||||||||
Net income | $ 13 | $ 46.5 | $ 54.4 | $ 68.4 | $ 50.5 | $ 68.8 | $ 57.2 | $ 52.1 | 182.3 | 228.6 | 165.4 |
Comprehensive income | 163 | 210.1 | 188.3 | ||||||||
Parent Company | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
General and administrative fees | 0 | 0 | 0 | ||||||||
Operating income | 0 | 0 | 0 | ||||||||
Other income: | |||||||||||
Equity earnings of consolidated subsidiary | 182.3 | 228.6 | 165.4 | ||||||||
Income before income taxes | 182.3 | 228.6 | 165.4 | ||||||||
Income tax expense | 0 | 0 | 0 | ||||||||
Net income | 182.3 | 228.6 | 165.4 | ||||||||
Comprehensive income | $ 182.3 | $ 228.6 | $ 165.4 |
Schedule I Parent Company on123
Schedule I Parent Company only Statements of Cash Flows (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ 13 | $ 46.5 | $ 54.4 | $ 68.4 | $ 50.5 | $ 68.8 | $ 57.2 | $ 52.1 | $ 182.3 | $ 228.6 | $ 165.4 |
Deduct items included in net income not providing cash: | |||||||||||
Net cash provided by operating activities | 579.9 | 573.3 | 463.5 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Net cash used for investing activities | (59.7) | (67.9) | (81.5) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Dividends | (105.6) | (91.6) | (77.1) | ||||||||
Net cash used for financing activities | (528.7) | (424.1) | (277.5) | ||||||||
Net (decrease) increase in cash and cash equivalents | (11.4) | 78.3 | 104.5 | ||||||||
Cash and cash equivalents at beginning of period | 263 | 184.7 | 263 | 184.7 | 80.2 | ||||||
Cash and cash equivalents at end of period | 251.6 | 263 | 251.6 | 263 | 184.7 | ||||||
Parent Company | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | 182.3 | 228.6 | 165.4 | ||||||||
Deduct items included in net income not providing cash: | |||||||||||
Equity in earnings in consolidated subsidiary | (182.3) | (228.6) | (165.4) | ||||||||
Net cash provided by operating activities | 0 | 0 | 0 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Investments in subsidiaries | (22.9) | (59.6) | (46.3) | ||||||||
Dividends | 105.6 | 91.6 | 77.1 | ||||||||
Net cash used for investing activities | 82.7 | 32 | 30.8 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Capital contributions | 22.9 | 59.6 | 46.3 | ||||||||
Dividends | (105.6) | (91.6) | (77.1) | ||||||||
Net cash used for financing activities | (82.7) | (32) | (30.8) | ||||||||
Net (decrease) increase in cash and cash equivalents | 0 | 0 | 0 | ||||||||
Cash and cash equivalents at beginning of period | $ 0 | $ 0 | 0 | 0 | 0 | ||||||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |