Allison Transmission Announces 8% Increase to Quarterly Dividend, $1 Billion Increase to Stock Repurchase Authorization and the Annual Stockholders Meeting and Record Date

Rhea-AI Summary

Allison Transmission (NYSE: ALSN) has announced three significant updates: First, an 8% increase in quarterly dividend from $0.25 to $0.27 per share, payable March 14 to stockholders of record as of March 3. This marks the sixth consecutive year of dividend increases. Second, the Board approved a $1 billion increase to its stock repurchase authorization, bringing the total program to $5 billion. The repurchases can be made through open market or private transactions, subject to market conditions and corporate needs. Third, the company scheduled its 2025 annual stockholders meeting for May 7, with a March 10 record date.

According to COO and CFO Fred Bohley, these decisions reflect Allison's commitment to prudent balance sheet management and capital allocation, supported by strong financial performance and disciplined approach to capital structure.

Positive

• 8% increase in quarterly dividend to $0.27 per share
• $1 billion additional stock repurchase authorization
• Six consecutive years of dividend increases
• Total stock repurchase program reaches $5 billion

Negative

• None.

Insights

Financial Analyst

The announced 8% dividend increase and $1 billion share repurchase authorization expansion represent a robust capital return strategy that significantly enhances shareholder value. The new quarterly dividend of $0.27 per share translates to an annual dividend of $1.08, demonstrating management's confidence in sustainable cash flow generation.

The expanded buyback authorization is particularly notable given Allison's $8.87 billion market capitalization, as it represents approximately 11.3% of the company's market value. This substantial authorization provides management with considerable flexibility to opportunistically repurchase shares while maintaining operational investments in both traditional and electrified propulsion technologies.

Six consecutive years of dividend increases reflects exceptional financial discipline and robust cash flow generation through various market cycles. The company's position as the largest global manufacturer of medium- and heavy-duty fully automatic transmissions provides a strong competitive moat, supporting sustainable free cash flow generation.

The dual approach of dividends and share repurchases offers strategic advantages: while dividends provide predictable returns to income-focused investors, the flexible buyback program can be tactically deployed to enhance shareholder value during market volatility. This balanced capital return strategy, combined with investments in electrified vehicle solutions, positions Allison well for both current operations and future growth opportunities in the evolving vehicle propulsion market.

INDIANAPOLIS, Feb. 20, 2025 /PRNewswire/ -- Allison Transmission Holdings Inc. (NYSE: ALSN), a leading designer and manufacturer of conventional and electrified vehicle propulsion solutions and the largest global manufacturer of medium- and heavy-duty fully automatic transmissions for commercial and defense vehicles, announced today that its Board of Directors has approved an increase in the Company's quarterly dividend from $0.25 to $0.27 per share on the Company's common stock and has declared a cash dividend of $0.27 per share on the Company's common stock for the first quarter of 2025. Payment will be made on March 14 to stockholders of record at the close of business on March 3.

"For the sixth consecutive year, Allison's Board of Directors has approved an increase to the quarterly dividend, demonstrating once again our unwavering commitment to prudent balance sheet management and capital allocation," said Fred Bohley, Chief Operating Officer, Chief Financial Officer and Treasurer at Allison. "The consistent return of capital to shareholders, while simultaneously investing across the organization is supported by Allison's strong financial performance, as well as our disciplined and well-defined approach to the capital structure."

The payment of any future dividends will be at the discretion of the Board of Directors and will be dependent upon Allison Transmission's financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board of Directors.

The Company also announced that its Board of Directors has approved a new authorization under the Company's current stock repurchase program for the repurchase of up to an additional $1 billion. The new authorization brings the total amount authorized under the program to $5 billion.

Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on market conditions and corporate needs. Open market repurchases will be structured to occur within the pricing and volume requirements of Rule 10b-18. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This stock repurchase program does not obligate the Company to acquire any particular amount of its common stock and the program may be extended, modified, suspended or discontinued at any time at the Company's discretion.

Finally, the Company also announced today that its 2025 annual meeting of stockholders will be held on May 7. The record date for the meeting will be March 10.

About Allison Transmission
Allison Transmission (NYSE: ALSN) 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 that Improve the Way the World Works. Allison products are used in a wide variety of applications, including on-highway vehicles (distribution, refuse, construction, fire and emergency), buses (school, transit and coach), motorhomes, off-highway vehicles and equipment (energy, mining, construction and agriculture) and defense vehicles (tactical wheeled and tracked). Founded in 1915, the company is headquartered in Indianapolis, Indiana, USA. With a presence in more than 150 countries, Allison has regional headquarters in the Netherlands, China and Brazil, manufacturing facilities in the USA, Hungary and India, as well as global engineering resources, including electrification engineering centers in Indianapolis, Indiana, Auburn Hills, Michigan and London in the United Kingdom. Allison also has more than 1,600 independent distributor and dealer locations worldwide. For more information, visit https://allisontransmission.com.

Forward-Looking Statements 
This press release contains forward-looking statements. The words "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although forward-looking statements reflect management's good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements speak only as of the date the statements are made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to: our participation in markets that are competitive; our ability to prepare for, respond to and successfully achieve our objectives relating to technological and market developments, competitive threats and changing customer needs, including with respect to electric hybrid and fully electric commercial vehicles; increases in cost, disruption of supply or shortage of labor, freight, raw materials, energy or components used to manufacture or transport our products or those of our customers or suppliers, including as a result of geopolitical risks, wars and pandemics; global economic volatility; general economic and industry conditions, including the risk of recession; labor strikes, work stoppages or similar labor disputes, which could significantly disrupt our operations or those of our principal customers or suppliers; the highly cyclical industries in which certain of our end users operate; uncertainty in the global regulatory and business environments in which we operate; the concentration of our net sales in our top five customers and the loss of any one of these; the failure of markets outside North America to increase adoption of fully automatic transmissions; the success of our research and development efforts, the outcome of which is uncertain; U.S. and foreign defense spending; risks associated with our international operations, including acts of war and increased trade protectionism; the discovery of defects in our products, resulting in delays in new model launches, recall campaigns and/or increased warranty costs and reduction in future sales or damage to our brand and reputation; our ability to identify, consummate and effectively integrate acquisitions and collaborations; and risks related to our indebtedness.

 

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SOURCE Allison Transmission Holdings Inc.

FAQ

What is the new quarterly dividend amount for Allison Transmission (ALSN) in 2025?

Allison Transmission's new quarterly dividend is $0.27 per share, an 8% increase from the previous $0.25 per share.

When will ALSN pay its first quarter 2025 dividend?

The dividend will be paid on March 14, 2025, to stockholders of record as of March 3, 2025.

How much did Allison Transmission increase its stock repurchase authorization in February 2025?

Allison Transmission increased its stock repurchase authorization by $1 billion, bringing the total program to $5 billion.

When is Allison Transmission's 2025 annual stockholders meeting?

Allison Transmission's 2025 annual stockholders meeting will be held on May 7, 2025, with a record date of March 10, 2025.

How many consecutive years has ALSN increased its dividend?

Allison Transmission has increased its dividend for six consecutive years, as of 2025.