Allison(ALSN) - 2024 Q4 - Annual Report

Financial Performance - Net sales for the year ended December 31, 2024, were $3,225 million, an increase of 6% compared to$ 3,035 million in 2023[197]. - Net income for 2024 was $731 million, representing 23% of net sales, compared to$ 673 million, or 22% of net sales in 2023[196]. - Adjusted EBITDA for 2024 was $1,165 million, with an Adjusted EBITDA margin of 36.1%[190]. - Gross profit for the year ended December 31, 2024 was$ 1,529 million, an increase of 4% from $1,470 million in 2023, driven by$ 80 million in price increases and $62 million in increased net sales[200]. - Basic earnings per share attributable to common stockholders increased to$ 8.40 in 2024 from $7.48 in 2023[275]. - The company reported a comprehensive income of$ 711 million for 2024, compared to $664 million in 2023[275]. Sales and Revenue Breakdown - North America On-Highway net sales increased by$ 223 million, or 15%, driven by demand for Class 8 vocational and medium-duty trucks[197]. - Defense end market net sales rose by $46 million, or 28%, due to increased demand for Tracked vehicle applications[197]. - Global Off-Highway net sales decreased by$ 62 million, or 37%, primarily due to lower demand from the energy sector in North America[197]. - Revenue from North America On-Highway increased to $1,752 million in 2024, up 14.6% from$ 1,529 million in 2023[344]. - Defense revenue rose to $212 million in 2024, a 27.7% increase compared to$ 166 million in 2023[344]. Costs and Expenses - Cost of sales for 2024 was $1,696 million, an increase of 8% from$ 1,565 million in 2023, driven by higher direct material and manufacturing expenses[198]. - Selling, general and administrative expenses decreased by 6% to $337 million in 2024 from$ 357 million in 2023, primarily due to lower intangible amortization expenses[201]. - Engineering expenses increased by 3% to $200 million in 2024, up from$ 194 million in 2023, mainly due to increased spending on product initiatives[202]. - Net interest expense decreased by 17% to $89 million in 2024 from$ 107 million in 2023, attributed to higher interest income and lower interest expense due to a $101 million principal repayment[203]. Cash Flow and Investments - Cash flows from operating activities generated$ 801 million in 2024, an increase from $784 million in 2023, driven by higher gross profit and lower cash interest payments[218]. - Cash used for investing activities rose to$ 147 million in 2024 from $129 million in 2023, primarily due to increased capital expenditures[219]. - Cash used for financing activities increased to$ 427 million in 2024 from $332 million in 2023, mainly due to higher long-term debt payments[220]. - The company repurchased approximately$ 254 million of its common stock in 2024, with $519 million remaining available under the Repurchase Program[215]. Assets and Liabilities - Total assets as of December 31, 2024, were$ 5,336 million, compared to $5,025 million in 2023, marking a 6.2% increase[273]. - Total liabilities decreased to$ 3,685 million in 2024 from $3,792 million in 2023, a reduction of 2.8%[273]. - The balance of stockholders' equity at December 31, 2024, was$ 1.651 billion, up from $1.233 billion in 2023[281]. - As of December 31, 2024, the total long-term debt of the Company is$ 2,414 million, a decrease from $2,518 million in 2023[372]. Market and Economic Factors - A 10% increase or decrease in the Chinese Yuan Renminbi, Euro, Indian Rupee, and Japanese Yen would change the company's earnings by an estimated$ 5 million per year[252]. - Approximately 65% of the company's cost of sales consists of purchased components, with significant exposure to fluctuations in aluminum and steel prices[253]. - A 10% variation in aluminum prices would change earnings by approximately $8 million per year, while a similar variation in steel prices would change earnings by approximately$ 13 million per year[254]. Employee and Labor Relations - The UAW Local 933 ratified a new four-year collective bargaining agreement, leading to increased labor costs[177]. - Stock-based compensation increased to $26 million in 2024 from$ 22 million in 2023[281]. - Dividends on common stock were $1.00 per share in 2024, compared to$ 0.92 per share in 2023[281]. Company Overview - Allison Transmission Holdings, Inc. is the largest global manufacturer of medium- and heavy-duty fully automatic transmissions[283]. - The company operates a global distribution network with approximately 1,600 independent distributor and dealer locations[176]. - The company has been headquartered in Indianapolis, Indiana since its founding in 1915[283].