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Q2 2026 EARNINGS
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2 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of U.S. federal securities laws. Forward-looking statements are statements other than historical fact that provide current expectations or forecasts of future events based on certain assumptions and are not guarantees of future performance. Forward-looking statements use words such as “anticipate,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “likely,” “may,” “outlook ,” “plan,” “potential,” “predict,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” and other words of similar meaning. Forward-looking statements are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and which could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. Risks, uncertainties, and factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: adverse changes in general business and economic conditions, including recessions, adverse market conditions or downturns and other factors, including geopolitical tensions and related trade restrictions, impacting the global transportation and industrial equipment industries; our inability to deliver new products, services and technologies in response to changing consumer preferences and evolving exhaust emissions regulations, or acceleration of the market for elect ric vehicles or deceleration of the market for alternative fuel technologies, including for use in internal combustion engines; competitive industry conditions; failure to identify, consummate, effectively integrate or realize the expected benefits from acquisitions, partnerships or other strategic investments; failure of or disruption in our technology infrastructure, including a disruption related to cybersecurity; pricing pressures from customers; elevated inflation rates and volatility in the costs of commodities used in the production of our products; difficulties launching new machine, engine or vehicle programs; changes in U.S. and foreign administrative policy, including increases in tariffs, changes to existing trade agreements and import or export licensing requirements and exchange controls, and any resulting changes in international trade relations; our inability to identify, attract, retain and develop a qualified global workforce; our inability to protect our intellectual property; failure to achieve the anticipated savings and benefits from restructuring and other actions, including those intended to improve future profitability and competitiveness, optimize our product portfolio and operations and execute our strategy; extraordina ry events, including natural disasters or extreme weather events, political disruptions, terrorist attacks, pandemics or other public health crises, and acts of war; risks related to our international operations; economic, geopolitical, social and market conditions impacting our business in China; supply chain disruptions, including due to U.S. and foreign government action; our reliance on a limited number of OEM customers; work stoppages, production shutdowns and similar events or conditions; liabilities related to product warranties, litigation and other claims; current and future environmental, health and safety, human rights and other laws and regulations related to corporate sustainability; tax audits or similar processes, and changes in tax laws or tax rates taken by taxing authorities; governmental investigations and related proceedings; the impacts of climate change, regulations related to climate change, various stakeholders’ emphasis on reducing the impacts of climate change and other related matters ; compliance with and changes in other laws and regulations impacting our operations; impairment charges on goodwill, indefinite-lived intangible assets and long-lived assets; changes in interest rates and asset returns that increase our pension funding obligations; restrictive covenants and other requirements impacting our financial and operating flexibility pursuant to the agreements governing our indebtedness;; risks relating to the Spin-Off, including a determination that the Spin-Off does not qualify as tax-free for U.S. federal income tax purposes, our or our Former Parent’s failure to perform under, or additional disputes that may arise between the parties relating to, various transaction agreements executed in connection with the Spin-Off and any amendments and restatements thereto, and the availability of, and our ability to use, various credits and offsets detailed in such agreements or the settlement agreement between the Company and our Former Parent; and other risks and uncertainties described in Item 1A, “Risk Factors” and in our other reports filed from time to time with the Securities and Exchange Commission (the SEC). We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measures This presentation contains information about PHINIA’s financial results that is not presented in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial measures are reconciled to their most directly comparable GAAP financial measures in the Appendix. The reconciliations include all information reasonably available to the Company at the date of this presentation and the adjustments that management can reasonably predict. Management believes that these non-GAAP financial measures are useful to management, investors, and banking institutions in their analysis of the Company's business and operating performance. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, because not al l companies use identical calculations, the non-GAAP financial measures as presented by PHINIA may not be comparable to similarly titled measures reported by other companies. A reconciliation of each of projected Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow, which are forward-looking non-GAAP financial measures, to the most directly comparable GAAP financial measure, is not provided because the Company is unable to provide such reconciliation without unreasonable effort. The inability to provide each reconciliation is due to the unpredictability of the amounts and timing of events affecting the items we exclude from the non-GAAP measure.
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GLOSSARY ADJ Adjusted AOI Adjusted Operating Income BEV Battery Electric Vehicle BPS Basis Points CAGR Compound Annual Growth Rate CV Commercial Vehicle EBITDA Earnings Before Interest, Tax, Depreciation & Amortization ECU Electronic Control Unit EPS Earnings Per Share EMEA Europe, Middle East and Africa FCF Free Cash Flow FX Foreign Exchange GDI Gasoline Direct Injection HD Heavy Duty HWY Highway IND Industrial LCV Light Commercial Vehicle LPV Light Passenger Vehicle M&A Mergers & Acquisitions MD Medium Duty OEM Original Equipment Manufacturer OES Original Equipment Service SG&A Selling, General, and Administrative Expenses SEM Swedish Electromagnet Invest AB YoY Year Over Year Acronym Definition 3
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LONG-TERM VALUE CREATION EXECUTING STRATEGIES TO DELIVER CONSISTENT SHAREHOLDER RETURNS Product Leadership • Leading Competitive Position 4 Stable Growth • Diverse Industrial Markets Financial Discipline • Consistent and Reliable Performer Maximizing Total Shareholder Returns
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Diversified Business With Expansion Opportunity Net Sales Splits – 2025 Resilience, Growth, & Flexibility Resilient End-Market with Unique Cycles & Dynamics. Strong Demand with Minimal Anticipated Impact from BEV Penetration Emerging Growth Industries: Off-Highway, Industrial, & Other Emerging Growth Technologies: Alternative Fuels, Higher Pressures, System Optimization Flexibility to Modify and Move Manufacturing Capital and Human Capital to Growing Regions and Markets Sales by Region Americas – 43% Europe – 40% Asia-Pacific – 17% Sales by Customer Top 5 – 37% Other – 63% Sales by End Market Service – 35% LPV – 25% MD/HD CV – 15% LCV – 19% Off-Hwy/Ind./Other – 6% STABLE GROWTH THROUGH DIVERSITY OF END MARKETS DIVERSIFIED INDUSTRIAL 5
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PHINIA ACQUISITION OF STOBA GROUP FOCUSED ON LONG-TERM VALUE CREATION (1) 130 million EUR purchase price (reflects a cash-free, debt-free transaction structure; includes repayment of debt assumed to be outstanding at closing) (2) Run-rate of projected figures. (3) Forward-looking non-GAAP metric. See Appendix for Adj. EBITDA definition. 100% Equity Acquisition, Expected to be Funded Through Existing Liquidity. Q4 2026 Anticipated Close, Subject to Customary Regulatory Approvals and Closing Conditions 6 Industry leader in high precision machining and multi- process requirements, providing world-class technical manufacturing capabilities Trusted technology and service partner EXPERTISE RESILIENCE Expected to strengthen supply continuity of critical precision machine components for existing PHINIA products Offers improved control, flexibility, and stabilization of PHINIA’s supply base Broadens customer and end-market exposure in Off-Highway, Industrial, and Other Adds an Aerospace & Defense qualified location Supports global semiconductor industry with high-performance equipment components SYNERGY Anticipated to drive profit expansion through supply chain ownership, integrating key capabilities, improving cost control, efficiency, utilization, and margin Complements PHINIA’s current portfolio ~$150M Purchase Price ~$25M Adj. EBITDA (6x Multiple) ~40 bps Adj. EBITDA Margin Accretive (1) (2) (3) ~$200M Total Sales (2) Sales by Customer PHINIA ~60% ~$120M 3rd Party ~40% ~$80M EXPANSION
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GLOBAL REACH. PROVEN EXCELLENCE. Presence European-based advanced manufacturing footprint centered in Germany. 7 Manufacturing sites in 4 countries (Germany, UK, China, and the Czech Republic) and over 1,000 employees PHINIA ACQUISITION OF STOBA GROUP BROAD END MARKET EXPOSURE 7 Excellence Leading precision machining company expected to enhance PHINIA’s ability to deliver high-precision components, systems, and integrated solutions globally Serves a broad range of strategic sectors, including Passenger Cars, Commercial Vehicles, Off-Highway / Industrial, Capital Equipment, Semiconductors, Aerospace & Defense Reach
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$940M Net Sales $130M 13.8% Adjusted EBITDA(1) & Margin(1) $1.53 Adjusted Diluted EPS(1) $42M Share Repurchases $11M Dividends Paid to Shareholders 1.3x Net Leverage(1) Strong Balance Sheet • $370M Cash & Cash Equivalents • $820M of Liquidity Key Financial Metrics • 13.3% Total SegmentAdj. Operating Income Margin • 11.0% Fuel Systems • 17.1% Aftermarket Second-Quarter Strong Financial Performance Delivered $53M to Shareholders, $74M in Adjusted Free Cash Flow, and$50M YoY Net Sales Growth (1) Non-GAAP metric. See Appendix for Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Diluted EPS, and Net Leverage definitions and reconciliations to the most directly comparable GAAP measures, as applicable. SECOND QUARTER 2026 HIGHLIGHTS COMMITTED TO FINANCIAL SUCCESS 8 (1)
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SEGMENT WINS FUEL SYSTEMS 9 Images for illustrative purposes only. PHINIA is Winning and Retaining Business Across Multiple Markets and Regions. Notable Wins in Q2 Include: Extension BusinessNew Business A heated-tip multi-point fuel injection (MPFI) system program supporting a light passenger vehicle engine application, further expanding PHINIA’s alternative fuel portfolio A complete common rail system program, including the rail, pump, injectors, and ECU, for agricultural applications, strengthening PHINIA’s presence in the off-highway market Incumbent Business A 24V starter program supporting a Class 8 commercial vehicle platform, reinforcing PHINIA’s long-standing position in the heavy-duty on-highway market
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SEGMENT WINS AFTERMARKET 10 Images for illustrative purposes only. New Business Distribution & Market Product Expansion Expanded the global aftermarket footprint through new customer acquisitions, branch expansion and increased distribution penetration across North Africa, Eastern Europe, North and South America, China, Southeast Asia and Oceania, increasing customer reach and product availability in strategic growth markets Introduced more than 2,650 new SKUs globally during the first half of 2026, while adding more than 150,000 cross references to regional catalogues, expanding vehicle coverage and enhancing customer access to PHINIA products Opened vehicle electronics distribution with a leading pan-European distributor, significantly expanding market access across the EMEA region
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PRODUCT LAUNCHES DRIVING GROWTH THROUGH INNOVATION 11 Images for illustrative purposes only. PHINIA is Delivering the Next Generation of Solutions and Expanding Our Market Leadership. Notable Product Launches in Q2 Include: Platform ExpansionAdvanced Technology CV Expansion A fuel delivery module launch in India, broadening PHINIA's commercial vehicle portfolio and supporting growth in a key strategic market A 500-bar GDI system launch for premium passenger vehicle applications in Europe and Asia, showcasing PHINIA's full-system fuel injection capabilities and continued leadership in advanced gasoline technologies A next-generation GDI pump launch for high- volume vehicle platforms in North America, reinforcing PHINIA's position in passenger and light commercial vehicle applications
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DISCIPLINED CAPITAL ALLOCATION PHINIA MODEL (1) Dividends and Share Repurchases are subject to approval by PHINIA Board of Directors (2) Life-to-date through Q2 2026 (3) As a percentage of Net Sales, life-to-date through Q2 2026. Target is 4% or less for Capital & Tooling, 3% or less for Research & Development. (4) Expected Organic Sales Growth from 2021 to 2030 is a forward-looking non-GAAP financial metric. Excludes Contract Manufacturing Revenue to BorgWarner, which ended in Q3 2024, and future M&A. Includes SEM. (5) Non-GAAP metric. See Appendix for Net Leverage definition and reconciliation to the most directly comparable GAAP measures, as applicable. Financial Pillars • Strong Balance Sheet • Solid Cash Generation • Lean Organization • Robust Liquidity Investm entforGrowth StrongFoundation CompetitiveCapital Return 1.3X Net Leverage (5) 80% Revenue Produced in Best Cost Countries in 2025 40+ Locations in 20 Countries $131M Total Shareholder Dividends Paid (1) 12 Life-to-Date Through Q2 2026 20% Dividend Growth (2) 24% Outstanding Shares Repurchased (2) $665M Returned to Shareholders (2) 2-4% Average Organic Revenue CAGR (4) SEM PHINIA’s Strategic Acquisition (August 2025) ~4% Capital & Tooling (3) ~3% Research & Development (3) Growth Areas • Aerospace & Industrial • Commercial Vehicle • Alternative Fuels • Aftermarket Life-to-Date Through Q2 2026 (1) $534M / 11.2M Shares Repurchased Strategic and Accretive Mergers & Acquisitions Return on Invested Capital (ROIC) Focused Maximizing Total Shareholder Return Sustainable Free Cash Flow Generation
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Q2 2025 Core Business Drivers Tariff Pass-Through FX Q2 2026 Before M&A M&A Q2 2026 13 Q2 2026 NET SALES STRONG PERFORMANCE SUSTAINS FISCAL YEAR MOMENTUM $(7) $890 $18 $18 $21 $922 $940 Core Drivers Primarily Driven by Higher Sales in the Americas Tariffs Tariff Pass- Through FX Mainly Driven by Strengthening of: CNY $8 EUR $6 BRL $6 in millions ($) M&A Newly Acquired SEM Business
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Q2 2025 Adj. EBITDA & Margin Core Business Drivers Net Tariff Pass-Through Corporate Costs & All Other Q2 2026 Before M&A M&A Q2 2026 Adj. EBITDA & Margin (1) 14 Q2 2026 ADJUSTED EBITDA FUELING THE MOMENTUM Core Drivers Primarily Driven by Product Mix, Partially Offset by Cost Control Measures Net Tariffs Net Tariff Refund Others Primarily Driven by Employee Compensation (1) (1) Non-GAAP metric. See Appendix for definition and reconciliation to the most directly comparable GAAP measure. $(9)$(1)$126 $11 14.2% $3 13.8%$127 $130 M&A Newly Acquired SEM Business in millions ($) (1)
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FY 2026 Outlook 30% - 33% FY 2026 Outlook $3,565 - $3,665M 2% to 5% YoY Growth (1) Forward-looking Non-GAAP metric. See Appendix for Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, and Adjusted Effective Tax Rate definitions. 15 UPDATED 2026 FULL YEAR OUTLOOK ACCELERATING PERFORMANCE Net Sales FY 2026 Outlook $485 - $515M 13.5% - 14.1% Adj. EBITDA & Margin FY 2026 Outlook $210 - $250M Adj. Free Cash Flow Adj. Effective Tax Rate (1)(1) (1) (1)
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EXPECTED CONSISTENT PERFORMANCE THROUGH THE DECADE READY TO DELIVER (1) Expected Organic Sales Growth from 2021 to 2030 is a forward-looking non-GAAP financial metric. Excludes Contract Manufacturing Revenue to BorgWarner, which ended in Q3 2024, and future M&A. Includes SEM. (2) Forward-looking non-GAAP metric. See Appendix for Adj. FCF Conversion, Adj. EBITDA, Adj. EBITDA Margin, and Net Leverage definitions. 16 2–4% Average Organic Revenue CAGR 14–15% Adjusted EBITDA Margin >40% Adj. FCF Conversion ~1.5X Net Leverage HighlyCashGenerative Global Scale with Growth ModestLeverageTarget Strong Margins (2) (2)(2) (1)
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APPENDIX
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STABLE GROWTH THROUGH DIVERSITY OF END MARKETS ADVANCING SUSTAINABILITY TODAY, POWERING A CLEANER TOMORROW MEDIUM AND HEAVY-DUTY COMMERCIAL VEHICLE (MD/HD CV) Includes On-Road Vehicles Used for Commercial Transport Classified Class 4-8 (14,001 Pounds or Heavier) OFF-HIGHWAY, INDUSTRIAL, AND OTHER (OFF-HWY/IND./ OTHER) Includes Construction and Agricultural Machinery; Vocational Vehicles; Marine; Industrial Applications; Power Generation; Aerospace and Defense; and Other LIGHT COMMERCIAL VEHICLE (LCV) Includes On-Road Vehicles Used for Commercial Transport Classified Class 1-3 (14,000 Pounds or Lighter) LIGHT PASSENGER VEHICLE (LPV) Includes On-Road Vehicles Used Primarily for Carrying Passengers SERVICE Includes Vehicle Repair and Replacement Parts, including both new and remanufactured products sold via the Original Equipment Manufacturer Dealer Network (OES) and the Independent Aftermarket channel 18
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Q2 2025 AOI Core Business Drivers Net Tariff Pass-Through FX, SG&A & All Other Q2 2026 Before M&A M&A Q2 2026 AOI 19 Segment Adj. Operating Income & Margin Q2 2026 – FUEL SYSTEMS Net Sales & Segment Adj. Operating Income $556 $(5) $18 $584$12$3 Net Sales Core Drivers Sales Customer Pricing AOI Cost Control Measures & Supplier Savings, Offset by Unfavorable Mix in Asia Tariffs Sales & AOI Net Tariff Pass- Through FX & Other Sales Driven by FX Tailwinds AOI FX Tailwinds, Offset by Employee Compensation M&A Newly Acquired SEM Business $2 $62 $(1) 11.2% $3 11.0%$61 $64 in millions ($) $(2)
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Q2 2025 AOI Core Business Drivers Net Tariff Pass-Through FX, SG&A & All Other Q2 2026 AOI 20 Segment Adj. Operating Income & Margin Q2 2026 – AFTERMARKET Net Sales & Segment Adj. Operating Income $334 $9$(2) $356$15 Net Sales Core Drivers Sales Driven by Increased Sales in the Americas AOI Primarily Driven by Product Mix & Cost Control Measures Tariffs Sales & AOI Net Tariff Pass- Through FX & Other Sales Driven by FX Tailwinds AOI Primarily Driven by Employee Compensation $1 $57 $9 17.1% 17.1% $61 in millions ($) $(6)
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21 HISTORICAL QUARTERLY FINANCIAL METRICS Q1 Q2 FY Q1 Q2 Q3 Q4 FY Fuel Systems $ 549 $ 584 $ 1,133 $ 490 $ 556 $ 571 $ 560 $ 2,177 Aftermarket 329 356 685 306 334 337 329 1,306 Net Sales $ 878 $ 940 $ 1,818 $ 796 $ 890 $ 908 $ 889 $ 3,483 Fuel Systems 51 64 115 46 62 76 60 244 Margin % 9.3% 11.0% 10.2% 9.4% 11.2% 13.3% 10.7% 11.2% Aftermarket 56 61 117 51 57 51 52 211 Margin % 17.0% 17.1% 17.1% 16.7% 17.1% 15.1% 15.8% 16.2% Segment Adj. Operating Income $ 107 $ 125 $ 232 $ 97 $ 119 $ 127 $ 112 $ 455 Margin % 12.2% 13.3% 12.8% 12.2% 13.4% 14.0% 12.6% 13.1% Corporate Costs (24) (28) (52) (24) (25) (26) (29) (104) Adj. Operating Income (1) $ 83 $ 97 $ 180 $ 73 $ 94 $ 101 $ 83 $ 351 Margin % (1) 9.5% 10.3% 9.9% 9.2% 10.6% 11.1% 9.3% 10.1% Depreciation Expense 32 33 65 30 32 32 33 127 Adj. EBITDA (1) $ 115 $ 130 $ 245 $ 103 $ 126 $ 133 $ 116 $ 478 Margin % (1) 13.1% 13.8% 13.5% 12.9% 14.2% 14.6% 13.0% 13.7% 20252026 (1) Non-GAAP metrics. See Appendix for definitions and reconciliations to the most directly comparable GAAP measures.
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22 ADJUSTED EBITDA AND MARGIN RECONCILIATION TO US GAAP The Company defines adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) as net earnings less interest, taxes, depreciation and amortization, adjusted to exclude the impact of restructuring expense, separation-related costs, merger and acquisition expense, other postretirement income and expense, equity in affiliates' earnings, net of tax, impairment charges, other net expenses, and other gains and losses not reflective of our ongoing operations. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales. Management utilizes adjusted EBITDA and adjusted EBITDA margin in its financial decision-making process and to evaluate performance of the Company's consolidated results. Management also believes adjusted EBITDA and adjusted EBITDA margin are useful to investors in assessing the Company’s ongoing consolidated financial performance, as they provide improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance. $ in millions Q1 Q2 FY Q1 Q2 Q3 Q4 FY Net earnings $ 37 $ 40 $ 77 $ 26 $ 46 $ 13 $ 45 $ 130 Depreciation and tooling amortization 32 33 65 30 32 32 33 127 Provision for income taxes 20 27 47 24 29 6 9 68 Intangible asset amortization expense 8 8 16 7 7 8 8 30 Interest expense, net 18 19 37 15 17 17 18 67 EBITDA $ 115 $ 127 $ 242 $ 102 $ 131 $ 76 $ 113 $ 422 Restructuring expense 3 8 11 5 2 4 6 17 Separation-related costs 2 (1) 1 (4) (6) 53 — 43 Merger and acquisition expense 1 2 3 3 2 4 — 9 Other postretirement (income) expense (1) (2) (3) 1 1 1 1 4 Equity in affiliates' earnings, net of tax (5) (4) (9) (4) (4) (3) (4) (15) Losses for other one-time events — — — — — (2) — (2) Adjusted EBITDA $ 115 $ 130 $ 245 $ 103 $ 126 $ 133 $ 116 $ 478 Net sales $ 878 $ 940 $ 1,818 $ 796 $ 890 $ 908 $ 889 $ 3,483 Adjusted EBITDA margin % 13.1% 13.8% 13.5% 12.9% 14.2% 14.6% 13.0% 13.7% 20252026
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The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, separation-related costs, merger and acquisition expense, impairment charges, other net expenses, and other gains and losses not reflective of the Company’s ongoing operations, and intangibles amortization expense associated with acquisitions that occurred prior to the Spin-off. Adjusted operating margin is defined as adjusted operating income divided by net sales. Management utilizes adjusted operating income and adjusted operating margin as key performance measures of segment income and for planning and forecasting purposes to allocate resources to our segments. Management believes these measures provide useful information to investors, when reconciled to the corresponding U.S. GAAP measure, as they are reflective of the operational profitability or loss of our segments. 23 ADJUSTED OPERATING INCOME AND MARGIN RECONCILIATION TO US GAAP $ in millions Q1 Q2 FY Q1 Q2 Q3 Q4 FY Operating income $ 69 $ 80 $ 149 $ 62 $ 89 $ 34 $ 69 $ 254 Intangible asset amortization expense 8 8 16 7 7 8 8 30 Restructuring expense 3 8 11 5 2 4 6 17 Separation-related costs (benefits) 2 (1) 1 (4) (6) 53 — 43 Merger and acquisitions expense 1 2 3 3 2 4 — 9 Losses for other one-time events — — — — — (2) — (2) Adjusted operating income $ 83 $ 97 $ 180 $ 73 $ 94 $ 101 $ 83 $ 351 Net sales $ 878 $ 940 $ 1,818 $ 796 $ 890 $ 908 $ 889 $ 3,483 Operating margin % 7.9% 8.5% 8.2% 7.8% 10.0% 3.7% 7.8% 7.3% Adjusted operating margin % 9.5% 10.3% 9.9% 9.2% 10.6% 11.1% 9.3% 10.1% 20252026
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24 ADJUSTED NET EARNINGS AND ADJUSTED NET EARNINGS PER DILUTED SHARE RECONCILIATION TO US GAAP The Company defines adjusted net earnings and adjusted net earnings per diluted share as net earnings and net earnings per share adjusted to exclude: (i) the tax-effected impact of restructuring expense, separation-related costs, merger and acquisition expense, impairment charges and other gains, losses and tax effects and adjustments not reflective of the Company’s ongoing operations; and (ii) acquisition-related intangibles amortization expense because it pertains to non-cash expenses that the Company does not use to evaluate core operating performance. Management believes that adjusted net earnings and adjusted net earnings per diluted share are useful to investors in assessing the Company’s ongoing financial performance, as they provide improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance. 2026 2025 2026 2025 Net earnings per diluted share $ 1.05 $ 1.14 $ 2.01 $ 1.76 Intangible asset amortization expense 0.21 0.18 0.42 0.35 Restructuring expense 0.21 0.05 0.28 0.17 Merger and acquisition expense 0.05 0.05 0.08 0.12 Separation-related costs (0.02) (0.15) 0.02 (0.24) Tax effects and adjustments 0.03 — - 0.05 Adjusted net earnings per diluted share $ 1.53 $ 1.27 $ 2.81 $ 2.21 Six Months Ended June 30,Three Months Ended June 30, 2026 2025 2026 2025 Net earnings $ 40 $ 46 $ 77 $ 72 Intangible asset amortization expense 8 7 16 14 Restructuring expense 8 2 11 7 Merger and acquisition expense 2 2 3 5 Separation-related costs (1) (6) 1 (10) Tax effects and adjustments 1 — — 2 Adjusted net earnings $ 58 $ 51 $ 108 $ 90 Six Months Ended June 30,Three Months Ended June 30,
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$ in millions 2026 2025 2026 2025 Net cash provided by operating activities $ 91 $ 57 $ 144 $ 97 Capital expenditures, including tooling outlays (22) (34) (54) (69) Effects of separation-related transactions 5 (3) 26 (11) Adjusted free cash flow $ 74 $ 20 $ 116 $ 17 Six Months Ended June 30,Three Months Ended June 30, 25 The Company defines adjusted free cash flow as net cash provided by operating activities after adding back adjustments related to the ongoing effects of separation-related transactions, less capital expenditures, including tooling outlays. Management believes that adjusted free cash flow is useful to investors in assessing the Company's ability to service and repay its debt and return capital to shareholders. Further, management uses this non-GAAP measure for planning and forecasting purposes. ADJUSTED FREE CASH FLOW RECONCILIATION TO GAAP The Company utilized the following calculations and definitions on the foregoing slides, some of which include Non-GAAP measures as defined below: • Adjusted Effective Tax Rate - Excludes the tax effect of adjusted items and tax amounts not reflective of the Company's ongoing operations • Adjusted Free Cash Flow Conversion – Calculated as Adjusted FCF divided by Adjusted EBITDA • Net Leverage – Calculated as Net Debt divided by the trailing twelve month Adjusted EBITDA DEFINITIONS & CALCULATIONS