What changed in this filing

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Item 1. Business

2026-02-24 compared with 2025-02-13 · 80 added, 65 removed, 265 unchanged (35% of the section changed)

Allison Transmission Holdings, Inc.

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.

and its subsidiaries (“Allison,” “we,” “us” or “our”) is a global leader in high-performance mobility and work solutions built for the needs of the modern industrial world.

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

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We have a global presence by serving customers in North America, Asia, Europe, South America, and Africa, with approximately 76% of our revenues being generated in North America in 2025.

We serve customers through an independent network of approximately 1,600 independent distributor and dealer locations worldwide.

We serve customers through an independent network of approximately 1,500 independent distributor and dealer locations worldwide as of December 31, 2025.

On January 1, 2026, we completed the acquisition of the Acquired Off-Highway Business, expanding our portfolio of drivetrain and propulsion solutions and broadening our participation in off-highway end markets.

As a result of this acquisition, we now operate a broader range of technologies and products and serve a more diverse global customer base across on-highway, off-highway, and defense applications.

Unless otherwise expressly provided herein, the information disclosed in this Part I, Item 1 is provided as of and/or for the year ended December 31, 2025 and, accordingly, does not give effect to the acquisition of the Acquired Off-Highway Business.

We are the world’s largest manufacturer of fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S.

defense vehicles and a leader in electrified propulsion systems.

defense vehicles, and subsequent to the acquisition of the Acquired Off-Highway Business, a leading provider of drivetrain and propulsion solutions for off-highway applications.

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).

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Our products are highly engineered, requiring advanced manufacturing processes, and employ complex software algorithms for our propulsion system controls to maximize end user performance.

We have more than 200 different models that are compatible with more than 500 combinations of engine brands, models and ratings (including diesel, gasoline, natural gas and other alternative fuels).

Additionally, we have created thousands of unique Allison-developed calibrations available to be used with our control modules.

As a result of our acquisition of the Acquired Off-Highway Business, we now offer an expanded portfolio of drivetrain, motion and propulsion solutions, providing complementary product breadth and an enhanced ability to support customers across multiple end markets.

The Acquired Off-Highway Business has historically served end markets with demand characteristics that differ from our traditional on-highway markets, contributing to a more diversified portfolio.

Following our acquisition of the Acquired Off-Highway Business, we continue to operate under the Allison name, but our operations are now comprised of two business units:

Allison Transmission and Allison Off-Highway

Drive & Motion Systems.

Business unit leadership is located globally, reflecting the international nature of our operations and the importance of local market insights, sourcing, production and customer support.

Commercial vehicles typically employ one of three transmission types:

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Moreover, the clutches must be replaced regularly, resulting in increased maintenance expense and vehicle downtime.

Manual transmissions also

require a skilled driver to operate the disconnect clutch when launching the vehicle and shifting gears.

Manual transmissions also require a skilled driver to operate the disconnect clutch when launching the vehicle and shifting gears.

AMTs are manual transmissions that feature automated operation of the disconnect clutch.

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NORTH AMERICA

OUTSIDE NORTH AMERICA

NORTH AMERICA

2025 NET SALES

(IN MILLIONS)

(DOLLARS IN MILLIONS)

Construction

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School, transit, shuttle and coach buses

Construction

Specialty vehicle

Agriculture

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Refer to "Note 19.

Concentration of Risk” in Part II, Item 8., of this Annual Report on Form 10-K for additional information on our significant original equipment manufacturer (“OEM”) customers.

North America

Concentration of Risk” of Notes to Consolidated Financial Statements included in Part II, Item 8., of this Annual Report on Form 10-K for additional information on our significant original equipment manufacturer (“OEM”) customers.

North America On-Highway

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 and type in North America.

The following is a summary of our on-highway net sales by vehicle class and type in North America for 2025.

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.

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We have limited exposure to the Class 8 line-haul tractor market because lower priced manual transmissions and AMTs generally meet the needs of these vehicles, which are primarily used in long distance hauling.

We also provide electric hybrid and fully electric propulsion solutions within the North American on-highway market.

The interest in conserving fuel and reducing greenhouse gas emissions is driving demand for more fuel-efficient commercial vehicles.

Our electric hybrid and fully electric propulsion customers include bus and truck applications.

We compete primarily with BAE Systems plc and manufacturers of fully electric propulsion solutions such as Dana Incorporated ("Dana") and Cummins Inc.

as well as certain vertically integrated OEMs.

We also provide electric hybrid propulsion solutions within the North American on-highway transit market, where interest in conserving fuel and reducing greenhouse gas emissions remains a customer desire.

We compete primarily with BAE Systems plc in the transit market segment.

We sell substantially all of our propulsion solutions in the North American on-highway market to OEMs.

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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.

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

Off-highway energy applications include hydraulic fracturing equipment, well-stimulation equipment, pumping equipment, and well-servicing rigs, which often use a fully automatic transmission in stationary pumping applications.

We supply our heavy-duty off-highway transmissions to producers of well-stimulation and well-servicing equipment.

Competition in this end market includes Caterpillar Inc.

(“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.

Off-highway mining and construction applications include trucks used to haul various commodities and other products around construction sites and mines, including underground mines.

These trucks include rigid dump trucks, wide-body dump trucks and underground trucks with load capacities between 40 to 130 tons.

Our major competitors in this end market include vertically integrated companies that manufacture fully automatic transmissions for their vehicles.

These vertically integrated competitors include Caterpillar, Komatsu Ltd.

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

We also compete with independent manufacturers such as ZF.

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

Our major competitor in this end market is Twin Disc.

Outside North America

We often compete in this market against (i) independent manufacturers of manual transmissions, AMTs and electric hybrid and fully electric propulsion solutions, (ii) fully automatic transmissions manufactured by Ford Motor Company (“Ford”), ZF Friedrichshafen AG (“ZF”) and Driventic GmbH (“Driventic”) and (iii) vertically integrated OEMs in certain weight classes that use their own internally manufactured transmissions in certain vehicles.

Outside North America On-Highway

Outside North America we serve several different markets, including:

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

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

We are a leading 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.

Where adopted, fully automatic transmission-equipped medium- and heavy-duty commercial vehicles are concentrated in certain vocational end markets.

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 ZF, Voith, and Shaanxi Fast Gear Co., Ltd.

and (iii) vertically integrated OEMs.

The following is a summary of our on-highway net sales by region outside of North America.

The following is a summary of our on-highway net sales by region outside of North America for 2025.

Asia-Pacific.

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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.

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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The South American region is characterized by a high level of OEM vertical integration, with captive manual transmission and AMT manufacturing.

Currently, manual transmissions are the predominant transmissions used in commercial vehicles in South America.

Currently, manual transmissions are the predominant

transmissions used in commercial vehicles in South America.

We serve the South American region primarily in the bus, refuse, vocational truck and agricultural markets.

The following is a summary of our off-highway net sales by region outside of North America.

Global Off-Highway

North America.

We have provided products used in vehicles and equipment that primarily serve energy, mining and construction applications in North America for over 75 years.

We supply our heavy-duty off-highway transmissions to producers of well-stimulation and well-servicing equipment.

Competition in this end market for 2025 included Caterpillar Inc.

(“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.

Off-highway mining and construction applications include trucks used to haul various commodities and other products around construction sites and mines, including underground mines.

These trucks include rigid dump trucks, wide-body dump trucks and underground trucks with load capacities between 40 to 130 tons.

Our major competitors in this end market for 2025 included vertically integrated companies that manufacture fully automatic transmissions for their vehicles.

These vertically integrated competitors included Caterpillar, Komatsu Ltd.

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

We also compete with independent manufacturers such as ZF.

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

Our major competitor in this end market for 2025 was Twin Disc.

Outside North America.

The following is a summary of our off-highway net sales by region outside of North America for 2025.

Asia-Pacific.

Off-highway markets in Asia are shared by energy, mining and construction applications.

Our primary competitors are Caterpillar, Danyang Winstar Auto Parts Co., Ltd., Twin Disc and manufacturers of electrified solutions in energy applications;

Our primary competitors were Caterpillar, Danyang Winstar Auto Parts Co., Ltd., Twin Disc and manufacturers of electrified solutions in energy applications;

Caterpillar, Xi’an FC Intelligence Transmission Co.

and Komatsu in mining applications;

and Caterpillar, Volvo and ZF in construction applications.

and Caterpillar, Volvo and ZF in construction applications in 2025.

Europe, Middle East, Africa.

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

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.

Our primary off-highway competitors for 2025 were 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

A typical mining application is a rigid, underground or articulated dump truck, with competition from Caterpillar, Volvo and ZF in 2025.

As a result of the acquisition of the Acquired Off-Highway Business, we now provide drivetrain and motion solutions for a wide range of mobile and stationary off-highway equipment both in North America and outside North America.

These solutions include optimized drivetrain systems, propulsion components and motion technologies designed for industries such as construction, agriculture, mining, material handling and other industrial applications.

The portfolio encompasses systems that manage power conveyance to machines and power work functions, including axles, gearboxes, transmissions and related components, as well as motion systems tailored to customer performance and efficiency requirements across both conventional and electrified powertrains.

Consequently, we now face competition in these expanded end markets.

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

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Today, we sell substantially all of the propulsion solutions for medium- and heavy-tactical wheeled vehicles used by the U.S.

military, including the Joint Light Tactical Vehicle, Light Armored Vehicle, Stryker Armored Vehicle, the Family of Medium Tactical Vehicles, Heavy Expanded Mobility Tactical Trucks, Palletized Loading Systems, Heavy Dump Trucks and Heavy Equipment Transporters.

military, including the Joint Light Tactical Vehicle, Stryker Armored Vehicle, the Family of Medium Tactical Vehicles, Heavy Expanded Mobility Tactical Trucks, Palletized Loading Systems, Heavy Dump Trucks and Heavy Equipment Transporters.

Propulsion solutions for tactical wheeled vehicles are typically sold to OEMs.

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See Part I, Item 1A., “Risk Factors” of this Annual Report on Form 10-K for a discussion of risks associated with our contracts with the DOD.

We have defense products in approximately 120 countries around the world.

We have defense products in approximately 120 countries around the world as of December 31, 2025.

Increasingly, we are supplying vehicle propulsion solutions for international tracked vehicles, such as light tracked personnel carriers, armored fighting vehicles, heavy tracked artillery systems, and Main Battle Tanks.

Our defense products are manufactured at our headquarters in Indianapolis and by our licensees internationally for export world-wide.

Globally, we face competition primarily from Renk AG/Renk America, SAPA S.p.A, ST Kinetics and QinetiQ Group plc for the supply of tracked vehicle propulsion solutions.

Globally, we face competition primarily from QinetiQ Group plc, Renk AG/Renk America, SAPA S.p.A and ST Kinetics for the supply of tracked vehicle propulsion solutions.

Additionally, we face competition from ZF in certain defense wheeled vehicles using automatic transmissions and from several AMT suppliers.

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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.

We have assembled a worldwide network of approximately 1,500 independent distributor and dealer locations as of December 31, 2025 to sell, service and support our solutions.

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

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Allison transmissions and electric propulsion solutions are sold under the Allison Transmission brand name and remanufactured transmissions are sold under the ReTran brand name.

The following is a summary of our product lines.

The following is a summary of our product lines as of December 31, 2025.

On-Highway Products

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eGen Flex Electric Hybrid Propulsion Solutions

Transit and Shuttle Bus

Transit Bus

eGen Power Fully Electric Propulsion Solutions

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Tracked Vehicles

Subsequent to the acquisition of the Acquired Off-Highway Business, our product portfolio has expanded to include drivetrain and motion solutions for a wide range of mobile and stationary off-highway equipment.

This expanded portfolio encompasses systems that manage power conveyance to machines and power work functions, including axles, gearboxes, transmissions and related components, as well as motion systems tailored to customer performance and efficiency requirements across both conventional and electrified powertrains.

Product Development and Engineering

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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 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.

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 without compromising performance, and by developing our product portfolio to pair with new engine ratings enabling lower nitrous oxide emissions.

Sales and Marketing Organization

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The process is interactive, as Allison representatives, Allison distributors, OEMs and dealers educate customers and respond to the specific applications, requirements and needs of numerous specialty markets.

Similarly, we work with customers, dealers and OEMs to educate, improve and simplify how they specify vehicles and vehicle systems in order to optimize vehicle performance and fuel consumption.

Similarly, we work with customers, dealers and OEMs to educate, improve and simplify how they specify vehicles and certain systems in order to optimize vehicle performance and fuel consumption.

Our field organization also works closely with distributors who, in turn, work with dealers to provide end users with education, parts, service and warranty support.

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Our manufacturing strategy provides for distributed capability in manufacturing and assembly of our products for the global commercial vehicle market.

Our primary manufacturing facilities, located in Indianapolis, Indiana, consist of approximately 2.3 million square feet of usable manufacturing space in five plants.

Our high volume on-highway products are produced in multiple global locations (United States, Chennai, India and Szentgotthard, Hungary), while off-highway, electric hybrid propulsion and defense tracked products are produced in Indianapolis and fully electric propulsion solutions are produced in Auburn Hills, Michigan.

As of December 31, 2025, our primary manufacturing facilities, located in Indianapolis, Indiana, consist of approximately 2.3 million square feet of usable manufacturing space in five plants.

Our high volume on-highway products are produced in multiple global locations (United States, Chennai, India and Szentgotthard, Hungary), while off-highway products are produced in Indianapolis and Chennai, India.

Our electric hybrid propulsion and defense tracked products are also produced in Indianapolis, and fully electric propulsion solutions are produced in Auburn Hills, Michigan.

In addition, our aluminum die cast components are produced in Lewisburg, Tennessee.

We also have established customization and parts distribution in the United States, the Netherlands, Brazil, China, Hungary, India and Japan.

We also have established customization and parts distribution centers in the United States, the Netherlands, Brazil, China, Hungary, India and Japan.

As part of the acquisition of the Acquired Off-Highway Business, we acquired approximately 46 manufacturing and assembly plants, in addition to certain other facilities, which facilities will produce our Allison Off-Highway Drive & Motion Systems products.

Suppliers and Raw Materials

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As of December 31, 2025, we had a highly skilled workforce of approximately 4,000 employees, with approximately 87% of those employees in the U.S.

Approximately 50% of our

Approximately 49% of our U.S.

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.

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

As part of the acquisition of the Acquired Off-Highway Business, effective as of January 1, 2026, we acquired approximately 8,000 additional employees, excluding contractors, with approximately 8% of those employees in the U.S.

Approximately 68% of the U.S.

employees that were acquired with the Acquired Off-Highway Business are represented by the UAW or the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (the "USW") and are subject to collective bargaining agreements.

Equality of Opportunity .

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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 the SEC's final climate disclosure rules, which are currently stayed.

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") and California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act.

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 Corporate Social Responsibility Report.

We also continue to regularly report our sustainability efforts 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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We do not anticipate our liabilities relating to contaminated sites will be material to our financial results.

We compete on the basis of product performance, quality, price, distribution capability, service and fuel efficiency, in addition to other factors.

We compete on the basis of product performance, quality, value, distribution capability, service and fuel efficiency, in addition to other factors.

We face competition from numerous manufacturers of various types of propulsion solutions for commercial vehicles.

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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