v3.26.1
Segment Information
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Information

NOTE T. SEGMENT INFORMATION

The Company’s chief operating decision maker (“CODM”) is its Chair, President and Chief Executive Officer. The CODM evaluates the Company’s segment operating performance and makes decisions regarding the allocation of resources based on Segment Operating Profit (Loss).

The CODM assesses segment performance utilizing Segment Operating Profit (Loss) primarily through comparisons of budgeted results to actual results and period‑over‑period variances. Certain variances identified through this analysis are evaluated to assist the CODM in assessing segment operating performance and making resource allocation decisions.

The significant expenses that are regularly provided to the CODM and included in Segment Operating Profit (Loss) are cost of sales, selling, general and administrative expenses, and engineering — research and development expenses.

Corporate costs are presented separately from the Company’s reportable segments and consist primarily of centralized corporate functions. These costs also include non-recurring costs associated with the Acquisition, primarily integration‑related activities. Such costs are not allocated to the Company’s reportable segments, as they are not reviewed by the CODM on a segment basis when assessing performance or making resource allocation decisions. The Company does not present total assets by segment because the CODM is not regularly provided total assets by segment nor are they included in a segment measure utilized by the CODM.

During the three months ended March 31, 2026, the Company changed its segment structure from one operating and reportable segment to two operating and reportable segments to align with the Acquisition and the manner in which the CODM now reviews operating results and allocates resources. Prior‑period segment information has been retrospectively adjusted to conform to the current period presentation. The Company’s two operating and reportable segments are:

Allison Transmission

Allison Transmission offers more than 200 different transmission models compatible with more than 500 combinations of engine brands, models and ratings, including diesel, gasoline, natural gas and other alternative fuels. In addition, Allison Transmission has developed thousands of proprietary calibrations available for use with its electronic control modules, enabling tailored performance across a broad range of customer applications.

Allison Off-Highway

Allison Off-Highway provides drivetrain and motion solutions for a wide range of mobile and stationary off-highway equipment globally. 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. The global engineering, manufacturing and service footprint of Allison Off-Highway supports localized responsiveness and technical support for customers in key off-highway end markets.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. The Company’s segment information includes the measures reviewed by the CODM and is presented in a manner consistent with internal management reporting.

 

The following presents a financial summary of the Company’s reportable segments (dollars in millions):

 

 

 

Three Months Ended June 30, 2026

 

 

Allison Transmission

 

 

Allison Off-Highway

 

 

Total Segments

 

Total sales

$

860

 

 

$

709

 

 

$

1,569

 

less: Intersegment sales

 

—

 

 

 

3

 

 

 

3

 

Total Net Sales

 

860

 

 

 

706

 

 

 

1,566

 

less:

 

 

 

 

 

 

 

 

Cost of sales

 

463

 

 

 

588

 

 

 

 

Selling, general and administrative

 

75

 

 

 

56

 

 

 

 

Engineering — research and development

 

41

 

 

 

15

 

 

 

 

Segment Operating Profit

$

281

 

 

$

47

 

 

$

328

 

Depreciation of property, plant and equipment

$

31

 

 

$

33

 

 

 

 

Amortization expense

$

—

 

 

$

21

 

 

 

 

Additions of long-lived assets

$

20

 

 

$

11

 

 

 

 

 

 

Three Months Ended June 30, 2025

 

 

Allison Transmission

 

 

Allison Off-Highway

 

 

Total Segments

 

Total sales

$

814

 

 

$

—

 

 

$

814

 

less: Intersegment sales

 

—

 

 

 

—

 

 

 

—

 

Total Net Sales

 

814

 

 

 

—

 

 

 

814

 

less:

 

 

 

 

 

 

 

 

Cost of sales

 

411

 

 

 

—

 

 

 

 

Selling, general and administrative

 

72

 

 

 

—

 

 

 

 

Engineering — research and development

 

43

 

 

 

—

 

 

 

 

Segment Operating Profit

$

288

 

 

$

—

 

 

$

288

 

Depreciation of property, plant and equipment

$

29

 

 

$

—

 

 

 

 

Amortization expense

$

1

 

 

$

—

 

 

 

 

Additions of long-lived assets

$

31

 

 

$

—

 

 

 

 

 

 

For the Six Months Ended June 30, 2026

 

 

Allison Transmission

 

 

Allison Off-Highway

 

 

Total Segments

 

Total sales

$

1,593

 

 

$

1,385

 

 

$

2,978

 

less: Intersegment sales

 

—

 

 

 

6

 

 

 

6

 

Total Net Sales

 

1,593

 

 

 

1,379

 

 

 

2,972

 

less:

 

 

 

 

 

 

 

 

Cost of sales

 

840

 

 

 

1,211

 

 

 

 

Selling, general and administrative

 

140

 

 

 

112

 

 

 

 

Engineering — research and development

 

80

 

 

 

30

 

 

 

 

Segment Operating Profit

$

533

 

 

$

26

 

 

$

559

 

Depreciation of property, plant and equipment

$

61

 

 

$

60

 

 

 

 

Amortization expense

$

1

 

 

$

43

 

 

 

 

Additions of long-lived assets

$

64

 

 

$

20

 

 

 

 

 

 

For the Six Months Ended June 30, 2025

 

 

Allison Transmission

 

 

Allison Off-Highway

 

 

Total Segments

 

Total sales

$

1,580

 

 

$

—

 

 

$

1,580

 

less: Intersegment sales

 

—

 

 

 

—

 

 

 

—

 

Total Net Sales

 

1,580

 

 

 

—

 

 

 

1,580

 

less:

 

 

 

 

 

 

 

 

Cost of sales

 

799

 

 

 

—

 

 

 

 

Selling, general and administrative

 

137

 

 

 

—

 

 

 

 

Engineering — research and development

 

85

 

 

 

—

 

 

 

 

Segment Operating Profit

$

559

 

 

$

—

 

 

$

559

 

Depreciation of property, plant and equipment

$

57

 

 

$

—

 

 

 

 

Amortization expense

$

3

 

 

$

—

 

 

 

 

Additions of long-lived assets

$

57

 

 

$

—

 

 

 

 

 

A reconciliation of reportable segments’ Total Segment Operating Profit to Income before income taxes included in the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025 is as follows (dollars in millions):

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Total Segment Operating Profit

 

$

328

 

 

$

288

 

 

$

559

 

 

$

559

 

Interest expense, net

 

 

(54

)

 

 

(22

)

 

 

(115

)

 

 

(43

)

Other (expense) income, net

 

 

(9

)

 

 

8

 

 

 

(11

)

 

 

13

 

Central group function costs (a)

 

 

(37

)

 

 

(32

)

 

 

(73

)

 

 

(54

)

Income before income taxes

 

$

228

 

 

$

242

 

 

$

360

 

 

$

475

 

 

(a)
Central group function costs not allocated to the segments include certain executive management, finance, legal, information technology and public company costs, Acquisition-related costs and other general administrative expenses.