Share-based Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-Based Compensation Plan Expense

Share-based compensation during the years ended December 31, 2023 and 2022, was recorded in the Consolidated Statements of Earnings within general and administrative expenses as shown in the following table:

	Year Ended December 31,
(Dollars in millions)	2023		2022
Total share-based compensation expense	$	17	$	5
Tax benefit recognized from share-based compensation	2		1

Schedule of Stock Options Valuation Assumptions

The assumptions used in valuing stock options during the periods presented are set forth in the following table:

	Year Ended December 31,
	2022
Expected term(1)	0.04 – 5.18 years
Expected volatility(2)	45.0	%
Risk-free interest rate(3)	3.8 – 4.7%
Expected dividend yield(4)	—	%

(1) The expected term is based upon historical experience and represents the period of time between when the options are granted and when they are expected to be exercised.

(2) The computation of expected volatility is based on a blend of historical RADA volatility and leverage-adjusted historical volatility of the Company’s publicly traded peers.

(3) The risk-free interest rate is based on the bootstrap adjusted U.S. Treasury Rate Yield Curve Rate as of the valuation date, term matched with expected life of the awards.

(4) The expected dividend yield is based on the Company’s historical experience and expectation of future dividend payouts and may be subject to changes in the future.

Schedule of Stock Option Activity

The following table shows a summary of all option activity under the 2022 Equity Plan for the year ended December 31, 2023:

	Number of Shares (in millions)	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (Dollars in millions)
Outstanding as of January 1, 2023	5.34	$	8.45	4	$	23
Assumed	—	—
Exercised	(2.04)	5.66
Forfeited	(0.10)	9.98
Outstanding as of December 31, 2023	3.20	$	10.18	4	$	32
Exercisable as of December 31, 2023	2.57	$	10.17	3	$	25
Vested and expected to vest as of December 31, 2023	3.20	$	10.18	4	$	32

Schedule of RSUs and PRSUs Activity

The following table shows a summary of all RSU activity under the 2022 Equity Plan for the year ended December 31, 2023:

	Number of Shares (in millions)	Weighted Average Grant Date Fair Value
Unvested as of January 1, 2023	1.43	$	9.87
Granted	0.86	14.87
Vested	(0.36)	9.87
Forfeited	(0.03)	11.67
Unvested as of December 31, 2023	1.90	$	12.10

The following table shows a summary of all PRSU activity under the 2022 Equity Plan for the year ended December 31, 2023:

	Number of Shares (in millions)	Weighted Average Grant Date Fair Value
Unvested as of January 1, 2023	1.20	$	7.20
Granted	0.55	17.01
Vested	—	—
Forfeited	—	—
Unvested as of December 31, 2023	1.75	$	10.30

Schedule of PRSUs Valuation Assumptions

The Monte Carlo Model assumptions used in valuing market condition PRSUs during the periods presented are set forth in the following table:

	Year Ended December 31,
	2023			2022
Grant date stock price	$	14.74		$	9.87
Expected volatility	51.2		%	40.0		%
Risk-free interest rate	4.0		%	4.4		%
Expected dividend yield	—		%	—		%