What changed in this filing

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Item 1. Business

2025-02-13 compared with 2024-02-14 · 55 added, 53 removed, 275 unchanged (28% of the section changed)

Allison Transmission Holdings, Inc.

and its subsidiaries (“Allison,” “we,” “us” or “our”) design and manufacture vehicle propulsion solutions, including commercial-duty on-highway, off-highway and defense fully automatic transmissions and electric hybrid and fully electric systems.

and its subsidiaries (“Allison,” “we,” “us” or “our”) is a leading designer and manufacturer of propulsion solutions for commercial and defense vehicles and the largest global manufacturer of medium- and heavy-duty fully automatic transmissions.

The business was founded in 1915 and has been headquartered in Indianapolis, Indiana since inception.

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defense vehicles and a leader in electrified propulsion systems.

Allison products are used in a wide variety of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (primarily school and transit), motorhomes, off-highway vehicles and equipment (primarily energy, mining and construction applications) and defense vehicles (tactical wheeled and tracked).

Allison products are used in a wide variety of applications, including on-highway vehicles (distribution, refuse, construction, fire and emergency), buses (primarily school, transit and coach), motorhomes, off-highway vehicles and equipment (energy, mining, construction and agriculture) and defense vehicles (tactical wheeled and tracked).

We believe the Allison brand is one of the most recognized in our industry as a result of the performance, reliability and fuel efficiency of our propulsion solutions and is associated with high quality, durability, vocational value, technological leadership and superior customer service.

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Emerging technologies in commercial-duty propulsion solutions include electric hybrid and fully electric propulsion solutions in certain end markets and are in part driven by efforts to reduce fuel consumption, noise and greenhouse gas emissions.

Fully electric powertrains differ from electric hybrid powertrains because they only propel the vehicle with an electric motor;

while electric hybrids generally utilize both a conventional internal combustion power source and powertrain as well as the means to propel the vehicle electrically.

Fully electric powertrains differ from electric hybrid powertrains because they only have a battery for energy storage and exclusively power the wheels using electric motors.

In contrast, electric hybrids may use multiple energy storage sources including diesel and hydrogen and may drive the wheels exclusively with electric motors or in parallel with an internal combustion engine.

While both emerging technologies are gaining use in automotive markets and electric hybrids and fully electric propulsion solutions have gained use in the bus market, fully electric propulsion solutions remain in a developmental phase in the medium- and heavy-duty commercial vehicle market.

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Specialty vehicle

Agriculture

Construction

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and coach buses

Wheeled defense platforms

Construction

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Global tracked combat platforms

North America medium- and heavy-tactical wheeled platforms

North America wheeled platforms

Aluminum die cast components

Extended transmission coverage

Remanufactured transmissions

Remanufactured propulsion solutions

Saleable engineering

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We are the largest manufacturer of fully automatic transmissions for the on-highway medium- and heavy-duty commercial vehicle market in North America.

The following is a summary of our on-highway net sales by vehicle class in North America.

Our core North American on-highway market includes Class 4-5, Class 6-7 and Class 8 straight trucks and regional haul tractors, conventional transit, shuttle and coach buses, school buses and motorhomes.

The following is a summary of our on-highway net sales by vehicle class and type in North America.

Our North American on-highway market includes Class 4-5, Class 6-7 and Class 8 straight trucks and regional haul tractors, conventional transit, shuttle and coach buses, school buses and motorhomes.

Class 8 trucks are subdivided into two markets:

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Class 8 straight trucks are those with a unified body (e.g., refuse, construction, and dump trucks), while tractors have a vehicle chassis that is separable from the trailer they pull.

Class 8 tractor is further divided into two subcategories:

Class 8 tractors are further divided into two subcategories:

regional haul and line-haul.

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The length of our LTAs is typically between three and five years.

We often compete in this market against (i) independent manufacturers of

manual transmissions, AMTs, electric hybrid and fully electric propulsion solutions, (ii) fully automatic transmissions manufactured by Ford Motor Company (“Ford”), ZF Friedrichshafen AG (“ZF”) and Voith GmbH (“Voith”) and (iii) vertically integrated OEMs in certain weight classes that use their own internally manufactured transmissions in certain vehicles.

The following table presents a summary of our market share by vehicle class in the North America On-Highway end market.

CLASS 8 STRAIGHT

We often compete in this market against (i) independent manufacturers of manual transmissions, AMTs, electric hybrid and fully electric propulsion solutions, (ii) fully automatic transmissions

manufactured by Ford Motor Company (“Ford”), ZF Friedrichshafen AG (“ZF”) and Voith GmbH (“Voith”) and (iii) vertically integrated OEMs in certain weight classes that use their own internally manufactured transmissions in certain vehicles.

We have provided products used in vehicles and equipment that primarily serve energy, mining and construction applications in North America for over 70 years.

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Competition in this end market includes Caterpillar Inc.

(“Caterpillar”) and Twin Disc, Inc.

(“Twin Disc”).

(“Caterpillar”), Twin Disc, Inc.

(“Twin Disc”) and certain alternative hydraulic fracturing technologies.

We also provide heavy-duty transmissions used in mining trucks, specialty vehicles and construction vehicles.

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(“Komatsu”), and Volvo Group (“Volvo”).

We also compete with independent manufacturers ZF and Dana.

We also compete with independent manufacturers such as ZF.

Specialty vehicles using our heavy-duty off-highway transmissions include airport rescue and firefighting vehicles.

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Asia-Pacific, Europe, Middle East, Africa (collectively, “EMEA”), and South America.

We are the largest manufacturer of fully automatic transmissions for the commercial vehicle market outside of North America.

We also provide electric hybrid and fully electric propulsion solutions for the outside North America on-highway market.

We are the largest manufacturer of fully automatic transmissions for the medium-duty and heavy-duty commercial vehicle market outside of North America.

We also provide fully electric propulsion solutions for the outside North America on-highway market.

While the use of fully automatic transmissions in the medium- and heavy-duty commercial vehicle market has been widely accepted in North America, markets outside North America continue to be dominated by manual transmissions.

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In addition, OEMs in the Asia-Pacific market are increasingly exporting their products to other regions.

Within Asia-Pacific, our sales efforts are principally focused on the transit bus, vocational truck, severe service and distribution markets.

Currently, manual transmissions are the predominant transmissions used in commercial vehicles in the Asia-Pacific region.

Within Asia-Pacific, our sales efforts are principally focused on the transit bus, vocational truck, severe service, distribution and wide-body dump truck markets.

Currently, manual transmissions are the predominant transmission type used in commercial vehicles in the Asia-Pacific region.

Europe, Middle East, Africa.

EMEA is composed of several different markets, each of which differs from our core North American market by the degree of market maturity, sophistication and acceptance of fully automatic transmission and electric propulsion solution technology.

Within Europe, we serve Western European developed markets, as well as Eastern European emerging markets, principally in the refuse, emergency, transit bus, coach bus, distribution and utility markets.

Competition in Western Europe is most notably characterized by a high level of vertical powertrain integration, with OEMs often utilizing their own manual transmissions and AMTs in their vehicles, and electric hybrid and fully electric propulsion solutions.

The Middle East and Africa regions are generally characterized by very limited local vehicle production, with imports from China, Europe, India, South America, Turkey and the U.S.

Competition in Western Europe is most notably characterized by a high level of vertical powertrain integration, with OEMs often utilizing vertically integrated manual transmissions and AMTs in their vehicles, and electric hybrid and fully electric propulsion solutions.

The Middle East

and Africa regions are generally characterized by very limited local vehicle production, with imports from China, Europe, India, South America, Turkey and the U.S.

accounting for the majority of vehicles.

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Our off-highway markets in EMEA are mining and construction.

Our major off-highway competitors are Caterpillar and Komatsu, both of which are vertically integrated manufacturers of off-highway mining vehicles, including the specific fully automatic transmission used in their mining trucks.

A typical construction application is a rigid or articulated dump truck, with competition from Caterpillar, Dana, Volvo and ZF.

Our primary off-highway competitors are Caterpillar, Volvo and Komatsu, all of which are vertically integrated manufacturers of off-highway mining vehicles, including the specific fully automatic transmission used in their mining trucks.

A typical mining application is a rigid, underground or articulated dump truck, with competition from Caterpillar, Dana, Volvo and ZF.

We have had a long-standing relationship with the U.S.

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Our service parts, support equipment and other end market is comprised of:

Allison-branded service parts and transmission fluids, aluminum die cast components, extended transmission coverage, remanufactured transmissions, royalties, saleable engineering and support equipment.

Allison-branded service parts and transmission fluids, aluminum die cast components, extended transmission coverage, remanufactured propulsion solutions, royalties, saleable engineering and support equipment.

The aftermarket provides us with a relatively stable source of revenues as the installed base of vehicles and equipment utilizing our solutions continues to grow.

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Uninterrupted operation is generally critical for end users’ profitability.

The sale of Allison-branded parts and fluids, remanufactured transmissions and support equipment is fundamental to our brand promise.

The sale of Allison-branded service parts and transmission fluids, remanufactured propulsion solutions and support equipment is fundamental to our brand promise.

We have assembled a worldwide network of approximately 1,600 independent distributor and dealer locations to sell, service and support our solutions.

As part of our brand strategy, our distributors and dealers are required to sell genuine Allison-branded parts.

As part of our brand strategy, our distributors and dealers are required to sell genuine Allison-branded service parts.

Within the aftermarket, we offer remanufactured propulsion solutions as a cost-effective alternative for repairs and replacements.

We also provide support equipment to our OEMs to assist in installing new Allison solutions into vehicles, and, therefore, sales of support equipment are dependent upon sales of new solutions.

The competition for service parts and ReTran remanufactured transmissions comes from a variety of smaller-scale companies sourcing non-genuine “will-fit” parts from unauthorized manufacturers.

The competition for service parts and remanufactured propulsion solutions comes from a variety of smaller-scale companies sourcing non-genuine “will-fit” parts from unauthorized manufacturers.

These “will-fit” parts often do not meet our product specifications, and therefore may be of lesser quality than genuine Allison parts.

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On-Highway Products

Agriculture

Distribution

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Wheeled Defense

Agriculture

Distribution

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Wheeled Defense

Agriculture

Coach and Transit Bus

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Off-Highway Products

Rigid and Articulated Dump Truck

Underground Mine Truck

Well Service Rigs

Rigid and Articulated Dump Truck

Rigid, Articulated, and Wide-Body Mining Dump Trucks

Underground Mine Truck

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Tracked Vehicles

Product Development and Engineering

We maintain product development and engineering capability dedicated to the design, development, refinement and support of our fully automatic transmissions and electric hybrid and fully electric propulsion systems.

We maintain product development and engineering capabilities dedicated to the design, development, refinement and support of our fully automatic transmissions and electric hybrid and fully electric propulsion systems.

We believe our customers expect our products to provide unparalleled performance and value defined in various ways, including delivering maximum cargo in minimum time, using the least amount of fuel possible while employing the fewest vehicles possible and experiencing maximum vehicle uptime.

In response to those needs and the evolving customer focus on fuel efficiency and reduced emissions, we provide vehicle specification guidelines, propulsion control software and mechanical components to optimize fuel economy while delivering desired vehicle performance.

Further, we are developing new products and technology to improve the fuel efficiency and fuel economy of our conventional products, including by allowing engines to operate more efficiently and at lower speeds to avoid consuming fuel without compromising performance, and to expand our portfolio of electric hybrid and fully electric propulsion solutions.

Further, we are developing new products and technology to improve the fuel efficiency and fuel economy of our fuel agnostic conventional products, including by allowing engines to operate more efficiently and at lower speeds to avoid consuming fuel without compromising performance, and to expand our portfolio of electric hybrid and fully electric propulsion solutions.

Sales and Marketing Organization

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While our marketing management uses the term “customer” interchangeably for OEMs and end users, the primary objective of our marketing strategy is to create demand for propulsion solutions through:

• OEM promotion of our products and incorporation of our propulsion solutions in their commercial vehicle product offerings;

• OEM and body builder promotion of our products and incorporation of our propulsion solutions in their commercial vehicle product offerings;

• Allison representative and/or Allison distributor contact with identified, major end users;

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and foreign patents related to our products and business.

We do not consider our business to be dependent

on any single patent, nor will the expiration of any single patent materially affect our business.

We do not consider our business to be dependent on any single patent, nor will the expiration of any single patent materially affect our business.

Our current patents will expire over various periods, and we continue to file new patent applications on newly-developed technology.

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workforce demographics;

inclusion and diversity;

equality of opportunity;

and employee health and safety.

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As of December 31, 2024, we had a highly skilled workforce of approximately 4,000 employees, with approximately 89% of those employees in the U.S.

Approximately 48% of our U.S.

Approximately 50% of our

employees are represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (“UAW”) and are subject to a collective bargaining agreement.

In January 2024, we entered into a new four-year collective bargaining agreement with UAW Local 933 that expires in November 2027.

Inclusion and Diversity .

Allison recognizes the power of different thought, accepts and respects each individual and strives to create an inclusive workplace where everyone can reach their full potential, driving innovation and business results.

Allison’s Inclusion and Diversity (I&D) Executive Council is chaired by our Chief Executive Officer and includes eight executive members.

The council exists to provide leadership advice, analyze progress of our I&D strategy and ensure alignment with our business strategy.

We are committed to advancing and representing all of our workforce by creating a diverse, equitable, and inclusive organization.

Our efforts to promote an equitable and inclusive workplace include:

providing unconscious bias training;

continuing to increase our focus on non-traditional recruiting sources such as veterans, people with disabilities, diverse professional organizations, high schools, Historically Black Colleges and Universities and predominantly Hispanic organizations;

Equality of Opportunity .

Allison recognizes the power of different thought, accepts and respects each individual and strives to create a workplace where everyone can reach their full potential, driving innovation and business results.

Allison hires, promotes, trains, and compensates its employees based on merit, experience, or other work-related criteria.

Allison values the wide range of backgrounds of our employees.

Allison views our diversity as a strength and strives to create work environments that accept differences while promoting productivity and teamwork.

Everyone at Allison is responsible for creating and maintaining a productive work environment where the dignity of all employees is respected.

Our efforts to promote a respectful workplace include:

providing training;

utilizing non-traditional recruiting sources, such as organizations focused on veterans and people with disabilities, diverse professional organizations, and schools with diverse student bodies;

organizing virtual mentoring programs to connect employees from different locations, departments and backgrounds;

and creating LGBTQ+, multicultural, emerging professionals and military veterans employee resource groups.

and creating multicultural, emerging professionals, and military veterans employee resource groups that are open to all.

Employee Health & Safety .

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Some of our operations require environmental permits and controls to prevent and reduce air and water pollution.

These permits are subject to modification, renewal and revocation by

issuing authorities.

These permits are subject to modification, renewal and revocation by issuing authorities.

In addition, certain of our products and our customer’s products are subject to certification requirements by a variety of regulatory bodies.

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and in other countries, states or provinces could affect our operations both positively and negatively (e.g., by affecting the demand for or suitability of some of our products).

In addition to the foregoing, various legislation, regulations and international accords pertaining to climate change have been implemented or are being considered for implementation, particularly as they relate to the reporting of greenhouse gas emissions and sustainability efforts being undertaken, such as the European Union’s Corporate Sustainability Reporting Directive ("CSRD"), California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act, and proposed climate disclosure rules that remain under consideration by the SEC.

In addition to the foregoing, various legislation, regulations and international accords pertaining to climate change have been implemented or are being considered for implementation, particularly as they relate to the reporting of greenhouse gas emissions and sustainability efforts being undertaken, such as the European Union’s Corporate Sustainability Reporting Directive ("CSRD"), California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act, and the SEC's final climate disclosure rules, which are currently stayed.

We continue to monitor the development and implementation of such legislation and regulations and are evaluating the impact these laws and regulations may have on the Company, including the extent of our potential disclosures or other reporting requirements.

We also continue to regularly report our sustainability efforts and metrics under the Global Reporting Initiative framework and report our progress in our annual Environmental, Social and Governance Report.

We also continue to regularly report our sustainability efforts and metrics under the Global Reporting Initiative framework and report our progress in our annual Corporate Social Responsibility Report.

We also may be subject to liability as a potentially responsible party under the Comprehensive Environmental Response, Compensation, and Liability Act and similar state or foreign laws for contaminated properties that we currently own, lease or operate or that we or our predecessors have previously owned, leased or operated and sites to which we or our predecessors sent hazardous substances.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business