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Date
Oct. 29, 2025, at 5 p.m. ET
Call participants
- Chief Executive Officer — David S. Graziosi
- Chief Financial Officer — G. Frederick Bohley
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Takeaways
- Revenue Guidance -- Management guided revenue to $3 billion, without specifying whether this refers to the fiscal or calendar year, a decrease of $250 million, or 7% year over year, due to weaker North America On-Highway demand, specifically in class 6, 7, and 8 straight segments, without specifying the exact time period for the comparison.
- Pricing Impact -- CFO Bohley stated the company achieved "over $130 million in price" for the year, without specifying whether this refers to the fiscal or calendar year, representing "north of 450 basis points of price" for the year, without specifying the exact time period.
- Tariff Exposure -- 85% of components are sourced from the U.S., Mexico, and Canada, with minimal material cost increases from Section 232 tariffs due to a largely domestic supply chain.
- Cost Control and Flexibility -- CEO David S. Graziosi emphasized ongoing alignment of headcount, output capabilities, and cost structure with fluctuating end-market demand and inventory adjustments.
- Future Price Increases -- CFO Bohley said price increases for next year will exceed the historical pre-pandemic range of "50 to 100 basis points," with guidance for the next year to be provided in February, due to long-term agreements and carryover from current year price actions.
- Dana Acquisition Integration -- CEO Graziosi confirmed continued progress toward closing the Dana acquisition, citing attractive international footprint, supply chain localization, and potential access to new customers and markets.
Summary
Allison Transmission (ALSN +2.44%) management acknowledged a 7% decline in revenue guidance for the year, driven by lower North America On-Highway build rates, without specifying the exact time period. However, management anticipates improved EBITDA margins through strategic pricing and cost management. New long-term pricing agreements, minimal tariff-driven material cost exposure, and ongoing investments in regional production position the company for resilience amid near-term volume uncertainty. International market penetration and integration of the pending Dana acquisition are expected to expand global reach and support future growth.
- CEO Graziosi described a return to balance from disrupted Q3 production, stating, "some level of adjustment. We would certainly look at it from a bit of a normalization from Q3 into Q4."
- CFO Bohley emphasized that "our material cost has been a very minimal because of the just the footprint we have from a supply chain standpoint," highlighting the company's relative insulation from recent tariff cost pressures.
- Management conveyed that EBITDA margin improvement is being maintained despite the top-line decline, supported by clear visibility on further pricing actions into next year; the company is guiding to EBITDA margin being 80 basis points higher year over year.
- CEO Graziosi noted the company's market approach remains focused on aligning production and investments with evolving demand signals, while stressing that "margins are right at the top of our list in terms of focus."
- Progress toward closing the Dana acquisition was confirmed, with management stating it "really does allow us as a legacy Allison business to have a global footprint that starts to address some of the macro issues" according to David S. Graziosi.
Industry glossary
- Section 232 Tariffs: U.S. import tariffs imposed on steel and aluminum justified on national security grounds, affecting material costs in the automotive supply chain.
- EBITDA Margin: Earnings before interest, tax, depreciation, and amortization as a percentage of revenue, commonly used to assess core profitability.
- Build Rates: The rate at which vehicles are manufactured, a key demand indicator in automotive supply chains.
- On-Highway: Refers to trucks and vehicles designed for road use, in contrast to off-highway applications such as mining or agriculture.
Full Conference Call Transcript
David Graziosi: Thank you, Jackie. Good afternoon and thank you for joining us. Throughout 2025, our largest end market, North America On-Highway has been negatively affected by extraordinary and volatile global macroeconomic factors leading to substantial reductions in demand for commercial vehicles. External pressures related to tariffs, evolving trade policies, and upcoming emissions regulations, in addition to broader economic uncertainties have led to more cautious purchasing decisions from end users, which has impacted visibility and predictability in terms of demand. We expect this operating environment to persist in the near term with market activity likely to remain subdued until there is greater clarity around these regulatory and economic factors. A meaningful shift will depend on a clear catalyst or resolution to the aforementioned issues impacting demand.
Despite these challenges, we remain focused on what we can control, including meeting our commitments to operational excellence, quality, customer service, and maintaining strong execution across all aspects of our business. Our performance during the third quarter reflects Allison's resilience with the ability to flex our operating cost structure and generate meaningful cash flow during low-demand environments.
For the quarter, although revenue decreased 16% year over year, we achieved an adjusted EBITDA margin of 37% and generated adjusted free cash flow of $184 million. Importantly, we remain agile and responsive to evolving market dynamics, ensuring we can quickly adapt as conditions change. As mentioned on our last earnings conference call, we see the reductions in demand in North America On-Highway as a deferral of purchases by end users as opposed to a permanent change in market size.
In summary, while the operating environment remains challenging, we are managing through the uncertainty with discipline, maintaining a solid balance sheet with over $900 million of cash on hand, a sequential quarterly increase of $124 million and making prudent decisions to preserve financial strength with a commitment to delivering long-term value to our stakeholders.
At the same time, we are working diligently to successfully close our acquisition of Dana's off-highway business. I would like to thank the Allison team for their hard work and dedication during this period. Now I'll pass the call over to Fred to review recent announcements across our business. Fred?
Frederick Bohley: Thank you, Dave. Good afternoon, everyone. Starting with our Outside North America On-Highway end market in early August, we were excited to announce that Volare microbuses equipped with Allison T2100 fully automatic transmissions were delivered in Brazil in support of the country's student transportation modernization initiatives. In collaboration with the National Fund for Educational Development, these vehicles represent the first school buses utilizing fully automatic transmissions in South America.
Allison's fully automatic transmissions eliminate the need for manual gear shifts, simplifying operations on roads with mud, gravel, and steep inclines. Drivers report less physical strain and greater control, particularly in challenging driving conditions and rough terrain. We're pleased to support better access to education while demonstrating the performance, reliability, and efficiency of Allison's fully automatic transmissions. In addition to the social impact, this milestone reflects our strategic priorities for growth in markets outside of North America.
In our North American On-Highway end market during the quarter, we announced that Allison's neutral stop technology has been standardized by PACCAR on the Kenworth and Peterborough trucks equipped with Allison's 4700 rugged duty series transmission. Allison's neutral stop technology is designed to improve fuel efficiency and lower operating costs by reducing engine load at stops and reducing unnecessary fuel consumption when vehicles are at idle. Our technology ensures that fuel is used for movement, not for idling, enhancing overall fuel efficiency. We are proud to partner with PACCAR to make this innovative solution a standard offering for customers supporting fleets and their goals to reduce fuel consumption and vehicle emissions.
Also in our North America On-Highway end market earlier this month, we announced that Ozinga Renewable Energy Logistics has successfully deployed Kenworth's T88 tractors, utilizing the commons X15 in natural gas engine integrated with our Allison 4500 rugged duty series transmission. The pairing sets a new standard for sustainable heavy-duty transportation, delivering exceptional power and innovative technology. The integration also demonstrates how sustainability and operational excellence can go hand in hand, allowing industries to adopt cleaner fuel solutions like natural gas without compromising on performance.
With these announcements, reiterate the field-agnostic nature of Allison's fully automatic transmissions. Our products pair well with all propulsion solutions, providing customers with power of choice in selecting the energy source that best suits their needs.
Moving on to our defense end market. This morning we announced that WZM, a state-owned defense vehicle service provider in Poland, is now an official channel partner for track vehicles. Allison's propulsion solutions power a wide range of wheeled and track defense vehicles that are actively deployed in more than 80 US allied and partner nations worldwide.
As a result of our growing international defense presence, Allison now enables local commercial or government service providers to become Allison authorized channel partners. We're excited to add WZM to our global network of authorized service providers to support Allison's cross-drive transmissions for defense applications. Allison continues to enhance our global support capabilities through strategic partnerships with local service providers, further solidifying our commitment to improving the operational readiness of defense vehicles worldwide.
Also in our defense end market, we're pleased to announce that Allison was selected by FNSS Defense Systems, a subsidiary of Nurol Holding, to supply our 3040 MX medium weight cross-drive transmissions for the Turkish Land Forces Korkut program. The Korkut system is a mobile air defense solution developed in Turkey to protect ground forces from drones, helicopters, and low-flying aircraft. The system consists of two track vehicles, is designed to move with armored units and operate across difficult terrain, adding fast and flexible protection for defense forces. This partnership with FNSS and our participation in the Korkut program is a testament to the trust and confidence in Allison's capabilities to deliver high-quality, reliable transmissions that meet the demanding requirements of modern defense vehicles.
In addition, this partnership further solidifies Allison's presence in the Turkish defense sector, where we are supporting numerous wheel platforms and actively engaged supplying our X1100 transmission for the Turkish Firtina self-propelled howitzer program. Thank you, and I'll now turn the call over to Scott.
Scott Mell: Thank you, Fred. I will now review our third-quarter financial performance and provide an update to our full-year 2025 guidance. Please turn to slide 5 of the presentation, the Q3 2025 performance summary.
Year-over-year net sales of $693 million, were down 16% from the same period in 2024, primarily due to lower demand for Class A vocational and medium-duty trucks in the North American On-Highway end market.
In the defense end market, we continue to execute on our growth initiatives with third-quarter net sales increasing 47% year over year. The net income for the quarter was $137 million, a decrease of $63 million from $200 million in the same period of 2024. The decrease was primarily driven by lower gross profit and $14 million of expenses related to the acquisition of Dana's Off-Highway segment.
Despite a challenging operating environment, adjusted EBITDA margin was essentially flat year over year at 37%.
Net cash provided by operating activities for the quarter was $228 million, a decrease of $18 million from the same period in 2024. The decrease was primarily driven by lower gross profit and $13 million of payments for acquisition-related expenses. Partially offset by lower cash income taxes and lower operating working capital funding requirements.
Our strong cash generation remains a key strength of our business with adjusted free cash flow of $184 million in the third quarter. We continue to maintain solid operating cash flow, reflecting the resilience of our operations and disciplined cost management. We ended the third quarter with a net leverage ratio of 1.33 times and $1.65 billion of liquidity, comprised of $902 million of cash, and $745 million of available revolving credit facility commitments.
We continue to maintain a flexible, long-dated, and covenant-like debt structure with our earliest maturity due in October 2027. A detailed overview of our net sales by end market in Q3 2025 financial performance can be found on slide 6, 7, and 8 of the presentation.
Please turn the slide 9 of the presentation for our 2025 guidance update. Given third-quarter results and -- and current market conditions, we are revising a full-year 2025 guidance provided to the market on August 4. Allison now expects net sales to be in the range of $2,975 million to $3,025 million. In addition to Allison's 2025 net sales guidance, we anticipate net income in the range of $620 million to $650 million including over $60 million of expenses related to our acquisition of Dana's Off-Highway business.
Adjusted EBITDA in the range of $1,090 million to $1,125 million. Net cash provided by operating activities in the range of $765 million to $795 million which includes approximately $70 million of cash outlays related to our acquisition of Dana's Off-Highway business. Capital expenditures in the range of $165 million to $175 million and adjusted free cash flow in the range of $600 million to $620 million. We are maintaining the midpoint of the implied full-year adjusted EBITDA margin guidance.
This concludes our prepared remarks. Shamali, please open the call for questions.
Rob Wertheimer: So it's really no surprise, I guess, given truck orders that On-Highway sales are down. This is a little bit of a steeper decline than we modeled and maybe we should apologize for that, but even so, it felt a little steeper than I would have thought. And I wonder if you could give maybe this is a little bit of a soft question, but your opinion because there's some different factors of this cycle with bodybuilders haven't been a bit backed up, so maybe there's more channel inventory. The cycle was a little bit higher than it was in recent downturns at least. And so I wonder if you could help us disaggregate the suddenness of this fall versus channel inventory and end market, demand, which may or may not be as dramatic as this. Thank you.
David Graziosi: Rob, thank you for the question, it's Dave. So just a quick reference back to our August call when we talked about I mentioned what we were starting to see in terms of revisions to build rates, getting to your question with the OEM announcements that we referenced at the time layoffs, et cetera. That just you know was early Q3. There was certainly an expectation that those build rates would at some level start to normalize to your point about steeper than we thought, so to speak, we all of us, those reductions continued, frankly.
So as we looked at getting by the end of third quarter or certainly earlier this quarter, you started to see some level of normalization at those lower levels. So to your question in terms of how everybody is reading the market right now, no question that bodybuilders continue to, in many cases, sit with quite a few chassis. It really does depend on the end users in terms of overall inventory levels that are out there, I think that's starting to improve in most cases, but the reality is that inventory is needed to be further rationalized. I think you know the OEM comments about even third-quarter results that are pretty fresh here all support that point.
So again we talked about in August medium duty being a very tough year, vocational certainly starting to soften, and I think the comments that we referenced in our prepared script certainly there is no doubt that the level of uncertainty is extremely high, so it makes anybody's job at this point relatively difficult to forecast, and I think frankly, even the ranges that the OEMs have provided for the balance of this year and even thinking about '26 are pretty wide as so you know.
We've had a very strong cycle coming out of COVID, as you mentioned. I think that certainly filled some of the gap that was there. Having said all that, equipment is being utilized, so to our prepared comments, we don't really view this as a change in market size, it's more a deferral and you can't blame frankly the end users with the amount of uncertainty that they're all facing. Capital costs more. There's a higher risk premium.
So from our perspective, anybody that's making investment decisions right now is likely looking for a more attractive risk reward balance and that's very difficult to come by until we all have more certainty around whether it be emissions, interest rates, trade, et cetera. So there's a lot out there at this point for all of us to digest. We feel very good about our market position as we continue to have very strong share.
Strong poll in terms of end users and our positioning to respond to whatever demand the market presents to us. So with our structures we talked about whether it be cost, labor, et cetera. The investments that we've made in capacity, we feel very well placed to respond to whatever the market conditions are, but we're going to, as I said, focus on the things we can control at this point and the revenue - when you look at the revenue reduction on a year-over-year basis, I think again supports the idea that we are a flexible organization. We respond accordingly and the margin performance really speaks to that.
Rob Wertheimer: I mean, you're seeing some, mixed trends, let's say in construction equipment, which maybe overlaps a little bit on the heavy side on vocational. Was vocational as bad as medium duty and then if you have any way to quantify how much inventory was in the channel versus prior cycles, that'll just help a little bit understand where we are, but the answer was comprehensive and I appreciate it. Thank you.
David Graziosi: I just offer on the medium duty by far much tougher sledding right now in terms of overall market. We don't necessarily view vocational as nearly as that has been challenged, and I would just point you to, I think the OEM comments that do have a meaningful share in the vocational space. They continue to support that very overtly, and we believe, given all the infrastructure investment that's underway with AI data centers, et cetera that that certainly bodes well for the utilization of those relevant fleets and as I said, that equipment is certainly being used right now.
Operator: Tim Thein, Raymond James.
Timothy Thein: It's just a quick one, it's just on the implied. Revenues for the fourth quarter, the full-year guide implies something like a 5% sequential improvement and we just spent plenty of time talking about the challenges in North America On-Highway, and fewer build days, and OEM build plans certainly not being revised higher. So what's the offset there, again -- it just what, yeah, I don't know, defense or other segments that you'd point to in terms of why we see an improvement sequentially on the top line. Thank you.
Frederick Bohley: Thanks, Tim. This is Fred. As Dave mentioned, a tremendous amount of downtime by the OEMs in Q3, aggressively adjusting inventory levels [rolled] into Q4s, clearly we're going to have fewer work days which would generally drive that down versus Q3, but you need to take into consideration the significant amount of down days, and you also saw a defense ramp pretty aggressively off the Q2 and Q3, and we expect that to continue into Q4.
Operator: Ian Zaffino, Oppenheimer & Company.
Ian Zaffino: Just try to understand maybe when you guys started to notice the weakness and how did it look, maybe by month throughout the quarter. And I guess what I'm trying to get at here is you guys did a great job of kind of curtailing SG&A, some of the R&D. So was that kind of a reaction to what you had seen or was this kind of pre-planned and then how do we think about kind of going forward in this environment? Thanks.
David S. Graziosi: Ian, it's Dave. Appreciate the questions there. So as we mentioned on the Q4 or the August 4 call, we really started to this weakness in build and reductions in build rates really started to manifest itself early Q3. What to Fred's comments, there was certainly an expectation at least what we were being provided with from a build rate or forecast perspective at that stage. Was really focused on Q3 at that point in terms of adjustments. So what has since transpired is some level of adjustment. We would certainly look at it from a bit of a normalization from Q3 into Q4.
So I think it appears to be starting to settle out simply because adjustments have been made to Fred's comments around inventory. Also, importantly, just build rate capabilities. Once you start taking out your headcount, it very much does restrict output obviously. So we see that some level of balance from Q3 into Q4. Our cost approach is, as you know, you've covered us for a number of years, is pretty consistent.
As we entered the year and certainly focused on the macro environment and frankly the volatility, the uncertainty, we would view as almost unprecedented other than COVID to a level because you had so many things coming into the market it became clear to us that was going to have the impact we believe at the time of really inserting a tremendous amount of uncertainty into the end market for end users. So that implies that they have the ability to defer, which they in fact have done, then we needed to better align ourselves accordingly. So what we've done has really been throughout the year wasn’t we arrived in Q3 and decided to do certain things.
It's been more of a full-year approach. And I again thank the Allison team for managing that situation in a way that is certainly consistent with our view, which is what we can control. And really looking at the broader markets in terms of feedback to take whatever advantage we can also I think understanding the voice of the market in terms of what's needed absolutely needed at this stage. And that's what's been reflected in our activity level.
Tami Zakaria: Hi. Good afternoon. Thank you so much. I wanted to ask about tariffs. Given the latest section 232 announcement, how should we think about your tariff impact if there was any at all before this? And also the ability to offset some of these past tariffs given your U. S.-based manufacturing. So any color on the latest about tariffs would be helpful.
G. Frederick Bohley: Sure, Tami. This is Fred. I think first maybe just stepping back big picture, our guide is $3 billion in revenue. That's down $250 million year over year, so down 7%. Dave talked through, you know, certainly the driver is our largest end market North America On Highway. Primarily class six, seven, class eight straight, which are 80% of that total in the market and the build's just being down. But, operationally, we're performing at a very high level. 7% revenue down and EBITDA margin, we're guiding to being 80 basis points up. So certainly, we're able to perform well in this challenging environment.
Specific to tariffs, it's really important to continue to highlight that 85% of our components are purchased in The U. S., Mexico, and Canada with the majority of those being in The U. S. The bigger impact on tariffs and then Section 232 tariffs becomes, I think, vehicle pricing, total uncertainty, and how that impacts demand. But when you think about Section 232, you know, our OEMs are certainly going to increase their prioritization on US-made content and components. And that really well positions us as everything that we're providing to the OEMs in The US is manufactured here in Indianapolis. I think we're well-positioned there.
As far as, you know, additional cost to us, think you can see in our disclosures, our material cost has been a very minimal because of the just the footprint we have from a supply chain standpoint. And as we've talked about we've always intended to offset that. And even in, you know, a challenging top-line revenue, you see that we are doing that.
Angel Castillo: Hi. Good evening. Thanks for taking my question. Just Dave, Fred, I guess as you roll everything up, you know, that we kinda have in place, all the puts and takes, exiting 2025. I know it's still early, but you know, if we do assume everything stays as is today, Dana acquisition aside, and assuming you continue to focus on what costs or what you can control on your end as you noted, do you believe that I guess ultimately you can grow earnings next year or do we need to see volume recovery in order for earnings to grow next year? How should we kind of think about that?
G. Frederick Bohley: That’s a tough one. We'll provide our guide in February. What we have talked about publicly is, you know, we've gotten meaningful price this year. You know, we'll end up for the year with over a $130 million in price north of four fifty basis points of price. And you know, we also talked about the long-term agreements that we've signed. We didn't take all that price in year one. So we have some visibility on pricing going into 2026. Clearly good visibility on, you know, cost structure. I think what everybody is still really trying to get their arms around is gonna be end user demand. And Dave talked to it.
The uncertainty, with tariffs, Do people feel a little bit better with February with some, I guess, some level of more clarity now? The emissions change. Is there gonna be any sort of meaningful pre-buy in 2026? Fortunately, we have a couple months to continue to gather data points and really try to model the top line. And we'll provide our viewpoint in February 2026.
Angel Castillo: Understood. Maybe just, I guess, given the part that you have visibility into is that price. With the $450 million that you did this year, the long-term agreements you have in place, and the pass-through of kind of the tariffs that have already kind of rolled through, what's kind of the price increase we should expect next year?
G. Frederick Bohley: If you go back to, you know, pre-pandemic, we would pick up 50 to a 100 basis points of price. And as we've got things modeled out, it's gonna certainly be quite a bit higher than that.
Angel Castillo: Got it. Thank you.
Kyle David Menges: Thank you. Our next question comes from the line of Luke Junk with Baird. Please proceed with your question.
Luke Junk: Good afternoon. Thanks for taking the question. Maybe a tricky question to answer, but I'm just wondering maybe what your gut says in terms of how much more leeway there is in the model to maintain similar margins or at least to prevent decrementals from getting closer. I think 60% maybe is the historical threshold. I know there's inefficiency that was in the P and L last year because of the huge surge in production? Clearly, you're on the front foot in terms of taking tactical actions plus the incremental price into next year. Just how do you think through those permutations? And sort of the level of buffer that's left in the business right now? Thank you.
David S. Graziosi: Luke, it's Dave. Appreciate the question there. So certainly our approach, our history is that we focus a fair bit as we should on margins. I think tier question on incrementals and thinking about that, the biggest unknown for us right now as we think about the future is just what this overall demand picture is going to look like. We've made I think good progress on our growth initiatives. The investments have been made in terms of capacity. We'll be winding up the balance of those by the end of next year, certainly early 2027. So the efforts that we've also put into resourcing as well and optimizing footprint, again, the Dana acquisition.
But we feel very good about our ability to certainly come in within a reasonable range of maintaining margins. So we will size our continue to size our investments and initiatives with market opportunities. But to Fred's point, certainly have some initiatives around price and cost line going into 2026 and we'll take whatever appropriate actions there are consistent with end market conditions, which you would certainly view today in terms of North On Highway being a bit of a question mark. But when you look at our business in terms of whether it's parts, port, equipment, etc, defense, off highway relative, I think stabilized at a lower level right now.
We feel very good about positioning overall in terms of approaching market needs. But margins are right at the top of our list in terms of focus and we continue to work through our plans and feel relatively good about what we're seeing at least from an initial pass. And we'll provide our guidance come February.
Luke Junk: Got it. Thank you very much.
Kyle David Menges: Thank you. Our next question comes from the line of Kyle Minges with Citigroup. Please proceed with your question.
Kyle David Menges: Thank you. Good evening, guys. I understand you're not on highway to hit your double-digit growth target next year. And then perhaps it would be good to hear an update on how you think the Dana acquisition positions you to win in international markets?
David S. Graziosi: Yes. It's Dave, Kyle. So on the overall, I would say international on highway continues to be a very significant opportunity for our team. We're actually, in this time of year involved in a number of regional meetings to look at the status of our growth initiatives. I believe the team there is doing a great job identifying a number of different opportunities for us. I think our relationship relationships are where they need to be from an OEM and release plan perspective. There's always been a tremendous amount of opportunity out there.
I think the team has become very focused on that adjusting for some regional differences, the Japanese market last year moved around a fair bit because of emissions and safety regulations, and a number of things coming into the market that's a softer market this year. We expect that certainly to improve next year. And again, their ability to sell into the balance of Asia and relevant markets, we're excited about, the team has done a very good job looking at applications for our product that certainly make the most sense. But we're, we sell based on value, as you know, versus cost.
I think on highway outside North America continues to be a relatively large opportunity for us with very low penetration. So as you think about what that means over the longer term, all the investments that we've made in regional production, etc., and the investments specifically in China now to really be able to support Asia from the Asian region is important to us. It also reduces cost in a number of other areas. So I think all of that fits together. In terms of the Dana acquisition, we continue to work diligently towards closing that. We're pleased with the progress to date.
As we mentioned on the calls around the announcement as well as the August earnings call, the attributes are very attractive to us. It's an accomplished team. It's a high quality business. It really does allow us as a legacy Allison business to have a global footprint that starts to address some of the macro issues that I mentioned earlier. It's clear with tariffs and trade developments that there is much more of a focus from a number in a number of different regions for local for local content. The Dana footprint certainly fits well with that outcome and you could look at that across all of our end markets.
For us, it's very attractive to have access to that type of footprint. It also allows us to further analyze make versus buy in a number of areas for our products as well. And ultimately really start to leverage, although we've not quantified revenue synergies, we do have common customers in a number of different end markets, but also allowing our respective teams access to new customers, new markets. So overall, I think it's an exciting time for both respective teams and we look forward to getting the acquisition closed and getting on with the business.
Operator: Thank you. And we have reached the end of the question and answer session. I would like to turn the floor back to CEO David Graziosi for closing remarks.
David S. Graziosi: Thank you, Shamali. Thank you for your continued interest in Allison and for participating on today's call. Enjoy your evening.
Operator: Thank you. And this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.