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November 2, 2026 Q3 2026 EARNINGS RELEASE Fred Bohley – COO & Allison Transmission President Scott Mell – CFO & Treasurer Dave Graziosi – Chair, President & CEO Craig Price – Allison Off -Highway President 1
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THE FOLLOWING INFORMATION CONTAINS FORWARD - LOOKING STATEMENTS. T HE 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 HIST ORICAL MATTERS IDENTIFY FORWARD - LOOKING STATEMENTS. YOU SHOULD N OT PLACE UNDUE RELIANCE ON THESE FORWARD - LOOKING STATEMENTS. ALTHOUGH FORWARD - LOOKING STATEMENTS REFLECT MANAGEMENT’S GOOD FAITH BELIEFS, RELIANCE SHOULD NOT BE PLACED O N 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 SUC H FORWARD - LOOKING STATEMENTS. FORWARD - LOOKING STATEMENTS SPEAK O NLY AS OF THE DATE THE STATEMENTS ARE MADE. WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORW ARD - LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, F UTURE EVENTS, CHANGED CIRCUMSTANCES OR OTHERWISE. THESE FORWARD - LOOKING STATEMENTS ARE SUBJECT TO NUMER OUS RISKS AND UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO: THE SIGNIFICANT COSTS WE ARE EXPECTED TO INCUR IN CONNECTION WITH THE INTEGRATION OF THE OFF - HIGHWAY DRIVE & MOTIO N SYSTEMS BUSINESS OF DANA INCORPORATED (NOW REFERRED TO AS THE “ALLISON OFF - HIGHWAY BUSINESS”); OUR ABILITY TO SUCCESSFULLY INTEGRATE THE ALLISON OFF - HIGHWAY BUSINESS AND ITS OPERATIONS IN THE EXPECTED TIME FRAME; OUR ABILITY TO REALIZE AL L OF THE ANTICIPATED BENEFITS FROM THE INTEGRATION OF THE ALLISON OFF - HIGHWAY BUSINESS AND ITS OPERATIONS AND TO EF FECTIVELY MANAGE OUR EXPANDED OPERATIONS; OUR PARTICIPATION IN M ARKETS THAT ARE COMPETITIVE; OUR ABILITY TO PREPARE FOR, RESPOND TO AND SUCCESSFULLY ACHIEVE OUR OBJECTIVES RELATING TO TECHNOLOGICAL AND MARKET DEVELOPMENTS, COMPETITIVE T HREATS AND CHANGING CUSTOMER NEEDS, INCLUDING WITH RESPECT TO ELECTRIC HYBRID AND FULLY ELECTRIC COMMERCIAL VE HICLES; INCREASES IN COST, DISRUPTION OF SUPPLY OR SHORTAGE OF L ABOR, FREIGHT, RAW MATERIALS, ENERGY OR COMPONENTS USED TO MANUFACTURE OR TRANSPORT OUR PRODUCTS OR THOSE OF OUR CU STOMERS OR SUPPLIERS, INCLUDING AS A RESULT OF GEOPOLITICAL RISK S, NATURAL DISASTERS, EXTREME WEATHER EVENTS, WARS AND PUBLIC HEALTH CRISES SUCH AS PANDEMICS; GLOBAL ECONOMIC VOLATILITY; GENERAL ECONOMIC AND INDUSTRY CONDITIONS, INCLUDING THE RISK OF PROLONGED INFLATION AND RECESSION; LABOR STRIKES, WORK STOPPAGES OR SIMILAR LABOR DISPUTES, WHICH C OULD SIGNIFICANTLY DISRUPT OUR OPERATIONS OR THOSE OF OUR PRINCI PAL CUSTOMERS OR SUPPLIERS; THE HIGHLY CYCLICAL INDUSTRIES IN WHICH CERTAIN OF OUR END USERS OPERATE; UNCERTAINT Y 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 CUSTOMER S; CYBERSECURITY RISKS TO OUR OPERATIONAL SYSTEMS, SECURITY SYST EMS OR INFRASTRUCTURE OWNED BY US OR OUR THIRD - PARTY VENDORS AND SUPPLIERS; THE FAILURE OF MARKETS OUTSIDE NORT H 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 DEF ENSE SPENDING; RISKS ASSOCIATED WITH OUR INTERNATIONAL OPERATION S, INCLUDING ACTS OF WAR AND INCREASED TRADE PROTECTIONISM AND TARIFFS; THE DISCOVERY OF DEFECTS IN OUR PRODU CTS, 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 ABILI TY TO IDENTIFY, CONSUMMATE AND EFFECTIVELY INTEGRATE ACQUISITION S AND COLLABORATIONS; AND RISKS RELATED TO OUR INDEBTEDNESS. ALLISON CANNOT ASSURE YOU THAT THE ASSUMPTIONS MADE IN PREPARING ANY OF THE FORWARD - LOOKING STATEMENTS WILL PROVE ACCURATE OR TH AT ANY LONG - TERM FINANCIAL GOALS WILL BE REALIZED. ALL FORWARD - LOOKING STATEMENTS INCLUDED IN THIS PRESEN TATION SPEAK ONLY AS OF THE DATE MADE, AND ALLISON UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE PUBLICLY ANY SUCH FORWARD - LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFO RMATION, FUTURE EVENTS, OR OTHERWISE. IN PARTICULAR, ALLISON CAU TIONS YOU NOT TO PLACE UNDUE WEIGHT ON CERTAIN FORWARD - LOOKING STATEMENTS PERTAINING TO POTENTIAL GROWTH OPPORT UNITIES OR LONG - TERM FINANCIAL GOALS SET FORTH HEREIN. ACTUAL RE SULTS MAY VARY SIGNIFICANTLY FROM THESE STATEMENTS. ALLISON BUSINESS IS SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES, WHICH MAY CAUSE FUTURE RESULTS OF OPERATIONS TO VARY SIGNIFICAN TLY FROM THOSE PRESENTED HEREIN. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY ARE DISCUSSED IN ALLISON ANNUAL REPORT ON FORM 10 - K FOR THE YEAR EN DED DECEMBER 31, 2025. SAFE HARBOR STATEMENT 2Q3 2026 EARNINGS RELEASE
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WE USE ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, A ND AMORTIZATION (“EBITDA”) AND ADJUSTED EBITDA AS A PERCENT OF N ET SALES (“ADJUSTED EBITDA MARGIN”) TO MEASURE OUR OPERATING PROFITABILITY. WE BELIEVE THAT ADJUSTED EBITDA AND ADJ USTED EBITDA MARGIN PROVIDE MANAGEMENT, INVESTORS AND CREDITORS WITH USEFUL MEASURES OF THE OPERATIONAL RESULTS OF OUR BUSINESS AND INCREASE THE PERIOD - TO - PERIOD COMPARABILITY OF OUR OPERATING PROFITABILITY. ADJUSTED EBITDA MARGIN IS ALSO U SED IN THE CALCULATION OF MANAGEMENT’S INCENTIVE COMPENSATION PROGRAM. THE MOST DIRECTLY COMPARABLE GAAP MEASURE TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN IS NET INCOME OR S EGMENT OPERATING PROFIT (LOSS) IN THE CASE OF OUR SEGMENTS AND NET INCOME AS A PERCENT OF NET SALES (“NET INCO ME MARGIN”) OR SEGMENT OPERATING PROFIT (LOSS) AS A PERCENT OF N ET SALES IN THE CASE OF OUR SEGMENTS, RESPECTIVELY. ADJUSTED EBITDA IS CALCULATED AS EARNINGS BEFORE INTEREST EXPENS E, NET, INCOME TAX EXPENSE, AMORTIZATION OF INTANGIBLE ASSETS, D EPRECIATION OF PROPERTY, PLANT AND EQUIPMENT AND OTHER ADJUSTMENTS AS DEFINED BY THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF MARCH 29, 2019, AS AMENDED, GOVERNI NG ALLISON TRANSMISSION, INC.’S TERM LOANS AND REVOLVING CREDIT FACILITY. ADJUSTED EBITDA MARGIN IS CALCULATED AS ADJUSTED EBITDA DIVIDED BY NET SALES. IN ADDITION, WE BELIEVE ADJUSTED NET INCOME, ADJUSTED BASIC EARN INGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (“ADJUSTED BA SIC EPS”) AND ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (“ADJUSTED DILUTED EPS ") PROVIDE MANAGEMENT, INVESTORS AND CREDITORS WITH USEFUL MEASU RES OF OUR CORE BUSINESS PERFORMANCE AND TRENDS AND INCREASE THE PERIOD - TO - PERIOD COMPARABILITY OF OUR RE SULTS OF OPERATIONS. THE MOST DIRECTLY COMPARABLE GAAP MEASURE T O ADJUSTED NET INCOME, ADJUSTED BASIC EPS AND ADJUSTED DILUTED EPS IS NET INCOME, BASIC EARNINGS PER SHARE ATT RIBUTABLE TO COMMON STOCKHOLDERS (“BASIC EPS”) AND DILUTED EARNI NGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (“DILUTED EPS"), RESPECTIVELY. ADJUSTED NET INCOME IS CALCULATED AS NET INCOME EXCLUDING THE EFFECT OF CERTAIN NON - CASH, NON - RECURRING, INFREQUENT OR UNUSUAL ITEMS SUCH AS: AMORTIZATION RELATED TO ACQUIRED INTANGIBLE ASSETS, DEP RECIATION OF THE STEPPED - UP BASIS IN PROPERTY, PLANT AND EQUIPME NT RELATED TO ACQUIRED ASSETS, STEPPED - UP BASIS IN ACQUIRED INVENTORY, STOCK - BASED COMPENSATION EXPENSE, ACQUISITIO N - RELATED EXPENSES, IMPAIRMENT CHARGES, OTHER ONE - OFF ADJUSTMENT S AND THE TAX EFFECT OF THE ADJUSTMENTS. ADJUSTED BASIC EPS IS CALCULATED BY DIVIDING ADJUSTED NET INCOME BY THE WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING AND ADJUSTED DILUTED EPS IS CALCULATED BY DIVIDING ADJUSTED NET INCOME BY THE DILUTED WEIGHTED AVERAGE SHARES OF CO MMON STOCK OUTSTANDING. WE USE ADJUSTED FREE CASH FLOW TO EVALUATE THE AMOUNT OF CASH GE NERATED BY OUR BUSINESS THAT, AFTER THE CAPITAL INVESTMENT NEEDE D TO MAINTAIN AND GROW OUR BUSINESS AND CERTAIN MANDATORY DEBT SERVICE REQUIREMENTS, CAN BE USED FOR REP AYMENT OF DEBT, STOCKHOLDER DISTRIBUTIONS AND STRATEGIC OPPORTUN ITIES, INCLUDING INVESTING IN OUR BUSINESS. WE BELIEVE THAT ADJUSTED FREE CASH FLOW ENHANCES THE UNDERSTANDING OF THE CASH FLOWS OF OUR BUSINESS FOR MANAGEMENT, INVESTORS AND CREDITORS. ADJUSTED FREE CASH FLOW IS ALSO USED IN THE CALCULATION OF MANAGEMENT’S INCENTIVE COMPENSATION P ROGRAM. THE MOST DIRECTLY COMPARABLE GAAP MEASURE TO ADJUSTED FR EE CASH FLOW IS NET CASH PROVIDED BY OPERATING ACTIVITIES. ADJUSTED FREE CASH FLOW IS CALCULATED AS NET CASH PR OVIDED BY OPERATING ACTIVITIES AFTER CASH USED FOR ADDITIONS OF LONG - LIVED ASSETS. NON - GAAP FINANCIAL INFORMATION 3Q3 2026 EARNINGS RELEASE
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PRESENTATION TITLE Q3 Business Update CALL AGENDA Combined Product Portfolio Opportunities Q3 Business Unit Net Sales Performance Q3 Financial Performance 2026 Guidance Update 4
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5 Moving the world forward with confidence. Q3 2026 BUSINESS UPDATE – ALLISON IN ACTION HIGHLIGHTS Q3 2026 EARNINGS RELEASE 20,000 deliveries and counting: How Japanese city bus operators are overcoming driver shortages and congestion Building the Jackal: Allison has delivered defense vehicle reliability from the start Defining choice for Mongolia’s mines: How a transmission is transforming efficiency
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NEW ALLISON: TURNING POWER INTO PROGRESS ALLISON IS TRANSITIONING TO A FULL - SCALE, INTEGRATED PROPULSION SYSTEMS PROVIDER 6Q3 2026 EARNINGS RELEASE REPRESENTATIVE APPLICATIONS UTILIZING IN - PIPELINE COMBINED PORTFOLIO MOVING UP THE VALUE CHAIN • Shifting from individual component supplier to driveline integrator • Single-source for OEMs across multiple end markets and vehicle applications INCREASING CONTENT PER VEHICLE • Expanded product portfolio creates opportunities for increased content per vehicle and value-selling • Acceleration of sustainable, profitable sales growth and margin expansion • Shared engineering capabilities to develop next-generation propulsion systems faster ENERGY - AGNOSTIC PORTFOLIO • Solutions cover ICE, hybrid and electrified propulsion – Reducing concentration risk and meeting customers across the technology curve • Combined portfolio enabling cross-selling opportunities with existing customers LEVERAGING GLOBAL PRESENCE • Global footprint with engineering, manufacturing, sales and service presence enhancing proximity to customers • Leveraging expanded global reach to unlock synergies and scale profitability Mobile Crane Articulated Dump Truck Terminal Tractor
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7 +121% Q3 2026 BUSINESS UNIT NET SALES PERFORMANCE $1,534 Q3 2026 ALLISON NET SALES YEAR - OVER - YEAR Allison Transmission • Record quarterly net sales of $881million, up 27% year- over-year • Year-over-year increase of 41% in the North America On-Highway end market, leading to record quarterly net sales of $462 million Allison Off-Highway • Quarterly net sales of $653 million • Strong performance in the Construction & Material Handling end market with all regions up year-over-year • Continued strength in Mining end market driven by elevated commodity prices Q3 2026 EARNINGS RELEASE ($ in millions, variance % from Q3 2025)
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Q3 2026 NET SALES PERFORMANCE – ALLISON TRANSMISSION 8Q3 2026 EARNINGS RELEASE END MARKETS COMMENTARY Q3 2026 VARIANCE North America On - Hwy Outside North America On - Hwy Global Off - Hwy Defense Service Parts, Support Equipment & Other TOTAL $881 +27% $462 +41% $129 +6% $15 +114% $94 +21% $181 +14% Demand for medium-duty and Class 8 vocational trucks accelerated in the third quarter although uncertainty persists around geopolitical impacts, including tariffs and emissions regulations. Class 8 vocational truck demand driven by infrastructure spending and megaprojects. Aging fleets causing pent-up demand in medium-duty truck market with long-term demand impacted by consumer spending and overall macroeconomic health. European Union economic stabilization remains uncertain due to ongoing conflict in the Middle East. Penetration initiatives in Asia Pacific with near -term impacted by regional economic differences. Trend of increased automaticity drives long-term growth opportunities. Implications for hydraulic fracturing due to conflict in Middle East uncertain, although cautiously optimistic on North America fracturing showing potential for inflection. Mining strong due to elevated commodity prices and global growth initiatives. Continued strength from International customers, primarily in tracked programs, with both new and legacy products. Growth outlook bullish with global defense budgets increasing and national security more relevant to nations. Global parts outlook impacted by increased fleet ages across multiple sectors and fielded population outside of warranty. Support equipment driven by transmission volume. ($ in millions, variance % from Q3 2025)
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Q3 2026 NET SALES PERFORMANCE – ALLISON OFF - HIGHWAY 9Q3 2026 EARNINGS RELEASE END MARKETS COMMENTARY Q3 2026 Construction & Material Handling Agriculture Industrial Mining Service Parts, Specialty & Other TOTAL $653 $232 $130 $92 $53 $146 Global construction markets seeing steadier investments, while rate -sensitive residential segments lag. European construction activity is showing signs of strength, although the potential impacts of the ongoing conflict in the Middle East remain uncertain. Americas construction weak due to lower telehandler production. Warehousing and e - commerce activities driving demand for fork trucks. Commodity prices remain low, and the potential effects of the ongoing conflict in the Middle East are still uncertain. High-horsepower equipment demand is soft, with farm margins playing a critical role in purchase decisions. Meanwhile, low-horsepower segments continue to grow in India. Large machine projects, industrial output and manufacturing health driven by interest rate environment. Mineral prices, including key commodities such as gold, copper and rare -earth minerals remain elevated globally, driving demand for equipment. Increased fleet ages across multiple sectors impacting global parts outlook. ($ in millions)
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Q3 2026 ALLISON CONSOLIDATED FINANCIAL PERFORMANCE 10Q3 2026 EARNINGS RELEASE Net Sales increased 121% year-over-year, including the addition of the Allison Off- Highway business unit acquired on January 1, 2026 Net Sales in the Allison Transmission business unit increased 27% year -over-year to a quarterly record of $881 million Adjusted EBITDA of $400 million increased 56% year-over-year Adjusted EBITDA margin of 26.1% increased 30 basis points sequentially Net Sales *See Appendix for the reconciliation to most comparable GAAP measure **YTD as of September 30, 2026 Adj. EBITDA* Adjusted Diluted EPS increased 59% year - over-year to $2.90 Q3 2025 diluted shares outstanding of 84 million and Q3 2026 diluted shares outstanding of 83 million Adj. Diluted EPS* Adj. Free Cash Flow* Net Income: $191, 12.5% of Net Sales in Q3 2026 and $137, 19.8% of Net Sales in Q3 2025 Adjusted Free Cash Flow increased 51% year - over-year to $278 million Q3 2026 Capital Allocation $100 million partial redemption of 2027 Notes; Over $400 million of debt repayment YTD26** $57 million of share repurchases $23 million of dividend payments Diluted EPS: $2.30 in Q3 2026 and $1.63 in Q3 2025 Net Cash Provided by Operating Activities: $343 in Q3 2026 and $228 in Q3 2025 ($ in millions, except per share data)
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Q3 2026 ALLISON SEGMENT FINANCIAL PERFORMANCE 11Q3 2026 EARNINGS RELEASE ($ in millions) ALLISON TRANSMISSION Net Sales ALLISON OFF - HIGHWAY ALLISON CENTRAL GROUP CONSOLIDATED Adjusted EBITDA Margin* Gross Profit Gross Margin Operating Income / (Loss) Operating Income / (Loss) as a % of Net Sales Adjusted EBITDA* $881 $653 - $1,534 $407 46.2% $300 34.1% 37.8% $333 $98 15.0% $32 4.9% 12.7% $83 - - ($28) - - ($16) $505 32.9% $304 19.8% 26.1% $400 *See Appendix for the reconciliation from Segment Operating Income / (Loss) and Segment Operating Income / (Loss) as a percen tage of Net Sales
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FULL YEAR 2026 GUIDANCE UPDATE 12Q3 2026 EARNINGS RELEASE ($ in millions) PRIOR GUIDE (August 3, 2026) $5,800 to $6,000 $5,900 Midpoint Net Sales Net Income* Adjusted EBITDA** Net Cash Provided by Operating Activities Capital Expenditures Adjusted Free Cash Flow** $600 to $700 $650 Midpoint $1,465 to $1,575 $1,520 Midpoint $1,025 to $1,125 $1,075 Midpoint $260 to $280 $270 Midpoint $745 to $865 $805 Midpoint UPDATED GUIDE (November 2, 2026) $5,975 to $6,075 $6,025 Midpoint $645 to $685 $665 Midpoint $1,530 to $1,580 $1,555 Midpoint $1,110 to $1,140 $1,125 Midpoint $240 to $260 $250 Midpoint $850 to $900 $875 Midpoint *Subject to the completion of purchase price accounting associated with the acquisition of the Allison Off -Highway business unit. Net Income guidance includes additional non -cash cost associated with the Allison Off-Highway acquisition. **See Appendix for the Guidance Reconciliation
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PRESENTATION TITLE Non-GAAP Financial Information APPENDIX 13
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$ in millions, Unaudited 2021 2022 2023 2024 2025 2025 2026 Net income (GAAP) $442 $531 $673 $731 $623 $137 $191 plus: Interest expense, net 116 118 107 89 92 24 51 Income tax expense 130 114 154 166 181 45 47 Depreciation of property, plant and equipment 104 109 109 111 117 30 46 Amortization of intangible assets 46 46 45 10 7 2 22 Restructuring charges — — — — — — 17 Depreciation related to stepped-up basis in assets — — — — — — 10 Stock-based compensation expense 14 18 22 26 27 6 8 Acquisition-related expenses — — — — 64 14 4 Unrealized (gain) loss on marketable securities (4) 22 1 9 (12) (3) 2 Recognition of the stepped-up basis in inventory — — — — — — 1 Loss associated with impairment of long-lived assets — — — 1 29 — — UAW Local 933 contract signing incentives — — — 14 — — — Pension plan settlement loss — — — 4 — — — Other (4) 3 (3) 4 2 1 1 Adjusted EBITDA (Non-GAAP) $844 $961 $1,108 $1,165 $1,130 $256 $400 Net sales (GAAP) $2,402 $2,769 $3,035 $3,225 $3,010 $693 $1,534 Net income as a percent of Net sales (GAAP) 18.4% 19.2% 22.2% 22.7% 20.7% 19.8% 12.5% Adjusted EBITDA as a percent of Net sales (Non-GAAP) 35.1% 34.7% 36.5% 36.1% 37.5% 36.9% 26.1% Three months ended September 30, 2026 includes the addition of the Allison Off-Highway business unit. All other time periods shown reflect only the legacy Allison Transmission business unit. Three months ended September 30,For the year ended December 31, NON - GAAP RECONCILIATIONS (1 OF 5) 14Q3 2026 EARNINGS RELEASE ADJUSTED EBITDA RECONCILIATION
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NON - GAAP RECONCILIATIONS (2 OF 5) 15Q3 2026 EARNINGS RELEASE SEGMENT ADJUSTED EBITDA RECONCILIATION Three months ended Three months ended Three months ended $ in millions, Unaudited September 30, September 30, September 30, 2026 2026 2026 2026 2025 Segment Operating Profit/(Loss) (GAAP) 300$ 32$ (28)$ 304$ 204$ plus: Depreciation of property, plant and equipment 31 15 - 46 30 Amortization expense 1 21 - 22 2 Depreciation of the stepped up basis in property, plant and equipment - 10 - 10 - Stock-based compensation expense - - 8 8 6 Acquisition-related expenses - - 4 4 14 Recognition of the stepped-up basis in inventory - 1 - 1 - Other 1 4 - 5 - Adjusted EBITDA (Non-GAAP) 333$ 83$ (16.0)$ 400$ 256$ Net sales (GAAP) 881$ 653$ -$ 1,534$ 693$ Segment Operating Profit/(Loss) as a percent of Net sales (GAAP) 34.1% 4.9% - 19.8% 29.4% Adjusted EBITDA as a percent of Net sales (Non-GAAP) 37.8% 12.7% - 26.1% 36.9% Allison Transmission Allison Off-Highway Consolidated Three months ended September 30, Central Group Function
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NON - GAAP RECONCILIATIONS (3 OF 5) 16Q3 2026 EARNINGS RELEASE ADJUSTED NET INCOME AND EARNINGS PER SHARE RECONCILIATION $ in millions, Unaudited 2026 2025 Net income (GAAP) 191$ 137$ plus: Amortization expense 22 2 Restructuring charges 17 - Depreciation of the stepped up basis in property, plant and equipment 10 - Stock-based compensation expense 8 6 Acquisition-related expenses 4 14 Recognition of the stepped-up basis in inventory 1 - Income tax effect on adjustments (12) (6) Adjusted net income (Non-GAAP) 241$ 153$ Basic EPS (GAAP) 2.30$ 1.63$ Diluted EPS (GAAP) 2.30$ 1.63$ Adjusted basic EPS (Non-GAAP) 2.90$ 1.82$ Adjusted diluted EPS (Non-GAAP) 2.90$ 1.82$ Three months ended September 30, 2026 includes the addition of the Allison Off-Highway business unit. September 30, Three months ended
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$ in millions, Unaudited 2021 2022 2023 2024 2025 2025 2026 Net cash provided by operating activities (GAAP) $635 $657 $784 $801 $836 $228 $343 (Deductions) Long-lived assets (175) (167) (125) (143) (175) (44) (65) Adjusted free cash flow (Non-GAAP) $460 $490 $659 $658 $661 $184 $278 Three months ended September 30, 2026 includes the addition of the Allison Off-Highway business unit. All other time periods shown reflect only the legacy Allison Transmission business unit. Three months ended September 30,For the year ended December 31, NON - GAAP RECONCILIATIONS (4 OF 5) 17Q3 2026 EARNINGS RELEASE ADJUSTED FREE CASH FLOW RECONCILIATION
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NON - GAAP RECONCILIATIONS (5 OF 5) 18Q3 2026 EARNINGS RELEASE GUIDANCE RECONCILIATION $ in millions, Unaudited Low High Net income (GAAP) 645$ 685$ plus: Income tax expense 135 185 Depreciation of property, plant and equipment (a) 250 240 Interest expense, net 225 215 Amortization of intangible assets 85 85 Recognition of the stepped-up basis in inventory (b) 65 65 Acquisition-related expenses (c) 45 35 Stock-based compensation expense (d) 35 35 Restructuring & one-time expenses (e) 25 20 Unrealized loss on marketable securities (f) 10 10 Other (g) 10 5 Adjusted EBITDA (Non-GAAP) 1,530$ 1,580$ Net cash provided by Operating activities (GAAP) 1,110$ 1,140$ Deductions to reconcile to Adjusted free cash flow: Additions of long-lived assets (h) (260)$ (240)$ Adjusted free cash flow (Non-GAAP) 850$ 900$ (a) Includes depreciation of the stepped-up basis in property, plant and equipment related to the Acquisition (recorded in Cost of sales). (b) Represents the recognition of the stepped-up basis in inventory related to the Acquisition (recorded in Cost of sales). (c) Represents expenses (recorded in Selling, general and administrative), primarily consulting and legal fees, related to the Acquisition. (d) Represents stock-based compensation expense (recorded in Cost of sales, Selling, general and administrative, and Engineering — research and development). (e) Includes one-time restructuring costs and minority interest. (f) Represents gains (recorded in Other (expense) income, net) related to an investment in common stock of Jing-Jin Electric Technologies Co. Ltd. (g) Represents other adjustments as defined by the Second Amended and Restated Credit Agreement dated as of March 29, 2019 as amended. (h) Includes one-time Acquisition-related investments. Guidance Year Ending December 31, 2026