Slides
Page 1
Q3 2026 EARNINGS
Page 2
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” of our annual report on Form 10-K 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.
Page 3
GLOSSARY ADJ Adjusted AOI Adjusted Operating Income BEV Battery Electric Vehicle CAGR Compound Annual Growth Rate CNG Compressed Natural Gas CV Commercial Vehicle EBITDA Earnings Before Interest, Tax, Depreciation & Amortization EPS Earnings Per Share EMS Engine Management Systems 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 ROIC Return on Invested Capital SCR Selective Catalytic Reduction SG&A Selling, General, and Administrative Expenses SEM Swedish Electromagnet Invest AB YoY Year Over Year Acronym Definition 3
Page 4
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
Page 5
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
Page 6
$912M Net Sales $135M 14.8% Adjusted EBITDA(1) & Margin(1) $1.83 Adjusted Diluted EPS(1) $65M Share Repurchases $11M Dividends Paid to Shareholders 1.3x Net Leverage(1) Strong Balance Sheet • $436M Cash & Cash Equivalents • $813M of Liquidity Key Financial Metrics • 14.0% Total SegmentAdj. Operating Income Margin • 12.1% Power Systems • 17.1% Aftermarket Solutions Third-Quarter Strong Financial Performance Delivered $76M to Shareholders, $73M in Adjusted Free Cash Flow, and15.1% YoY Adjusted Diluted EPS 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. THIRD QUARTER 2026 HIGHLIGHTS COMMITTED TO FINANCIAL SUCCESS 6 (1)
Page 7
SEGMENT WINS POWER SYSTEMS 7 Images for illustrative purposes only. PHINIA is Winning and Retaining Business Across Multiple Markets and Regions. Notable Wins in Q3 Include: Extension BusinessNew Business Incumbent Business Industrial & Alternative Fuels First methanol engine program, extending PHINIA’s technology into alternative fuels and industrial off-highway applications in China CNG Light Passenger Vehicle New CNG injector program for the Indian light passenger vehicle market, strengthening PHINIA’s position across diverse fuels, applications, and regions Range-Extender Application GDI pump award for a new range-extender application in North America, demonstrating the continued relevance of PHINIA technology across evolving powertrain architectures
Page 8
SEGMENT WINS AFTERMARKET SOLUTIONS 8 Images for illustrative purposes only. New Business Distribution & Market Product Expansion Won competitive-conquest Aftermarket braking business in Spain and expanded Southeast Asian distribution, including increased penetration of steering & suspension products Secured new business across diesel, vehicle electronics and engine management systems (EMS) in Saudi Arabia, Portugal and Spain, expanding customer and product penetration New customer win for the North American fuel injector remanufacturing business, expanding the diesel customer base
Page 9
PRODUCT LAUNCHES DRIVING GROWTH THROUGH INNOVATION 9 Images for illustrative purposes only. PHINIA is Delivering the Next Generation of Solutions and Expanding Our Market Leadership. Notable Product Launches in Q3 Include: Flex-Fuel Expansion CV Expansion Launched Heated Tip Injector for a flex- fuel SUV application in Brazil, expanding PHINIA’s presence in a key flex-fuel market and demonstrating differentiated, patented fuel injection technology Launched a fuel delivery module for medium-duty truck and bus applications in North America, expanding PHINIA’s presence across commercial vehicle platforms Launched PHINIA’s second 500-bar program, supplying a GDI pump and fuel rail assembly for hybrid vehicle applications in China and extending deployment of its advanced gasoline fuel system technology Advanced GDI Tech Multi-product launch for a major North American diesel pickup platform, with fuel pump, rails, starter motor, and SCR Doser entering production for a high- volume LCV application LCV Expansion
Page 10
DISCIPLINED CAPITAL ALLOCATION PHINIA MODEL (1) Dividends and Share Repurchases are subject to approval by PHINIA Board of Directors (2) Life-to-date through Q3 2026 (3) As a percentage of Net Sales, life-to-date through Q3 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 21 Countries $142M Total Shareholder Dividends Paid (1) 10 Life-to-Date Through Q3 2026 20% Dividend Growth (2) 26% Outstanding Shares Repurchased (2) $741M Returned to Shareholders (2) 2-4% Average Organic Revenue CAGR (4) stoba PHINIA’s Most Recent Strategic Acquisition (October 2026) ~4% Capital & Tooling (3) ~3% Research & Development (3) Growth Areas • Aerospace & Industrial • Commercial Vehicle • Alternative Fuels • Aftermarket Life-to-Date Through Q3 2026 (1) $599M / 12.1M Shares Repurchased Strategic and Accretive Mergers & Acquisitions Return on Invested Capital (ROIC) Focused Maximizing Total Shareholder Return Sustainable Free Cash Flow Generation
Page 11
Q3 2025 Core Business Drivers Tariff Pass-Through FX Q3 2026 11 Q3 2026 NET SALES STRONG PERFORMANCE SUSTAINS FISCAL YEAR MOMENTUM $(21)$908 $21 $4 $912 Core Drivers Primarily Driven by Higher Sales in the Americas, Partially Offset by the Non- Repeat of Favorable Customer Pricing Actions Recognized in 2025 Tariffs Timing of Tariff Recovery Mechanisms with Customers FX Mainly Driven by CNY and BRL, Partially Offset by EUR and INR in millions ($)
Page 12
Q3 2025 Adj. EBITDA & Margin Core Business Drivers Net Tariff Pass-Through Corporate Costs & All Other Q3 2026 Adj. EBITDA & Margin 12 $3 $133 $3 $(4) $135 Core Drivers Favorable Product Mix, Partially Offset by the Non-Repeat of Favorable Customer Pricing Actions Recognized in 2025 Net Tariffs Timing of Tariff Recovery Mechanisms Others Primarily Driven by Timing of R&D Costs in millions ($) Q3 2026 ADJUSTED EBITDA FUELING THE MOMENTUM (1) 14.6% 14.8% (1) Non-GAAP metric. See Appendix for definition and reconciliation to the most directly comparable GAAP measure. (1) (1)
Page 13
FY 2026 Outlook 28% - 30% FY 2026 Outlook $3,625 - $3,675M 4% to 6% YoY Growth (1) Updated guidance includes the expected fourth-quarter contribution from the recent acquisition of the stoba Group, which closed on October 1, 2026. (2) Forward-looking Non-GAAP metric. See Appendix for Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, and Adjusted Effective Tax Rate definitions. 13 UPDATED 2026 FULL YEAR OUTLOOK ACCELERATING PERFORMANCE Net Sales FY 2026 Outlook $500 - $520M 13.7% - 14.1% Adj. EBITDA & Margin FY 2026 Outlook $220 - $250M Adj. Free Cash Flow Adj. Effective Tax Rate (2)(2) (2) (2) (1)
Page 14
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. 14 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)
Page 15
APPENDIX
Page 16
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 16
Page 17
Q3 2025 AOI Core Business Drivers Net Tariff Pass-Through FX, SG&A & All Other Q3 2026 AOI 17 Segment Adj. Operating Income & Margin Q3 2026 – POWER SYSTEMS Net Sales & Segment Adj. Operating Income $571 $5$(10) $561$(5) Net Sales Core Drivers Sales & AOI Largely Attributable to the Non-Repeat of Favorable Customer Pricing Actions Recognized in 2025 Tariffs Sales & AOI Timing of Tariff Recovery Mechanisms with Customers FX & Other Sales Driven by FX Tailwinds (CNY) AOI Primarily Driven by Timing of R&D Costs $(6)$76 $2 13.3% 12.1% $68 in millions ($) $(4)
Page 18
Q3 2025 AOI Core Business Drivers Net Tariff Pass-Through FX, SG&A & All Other Q3 2026 AOI 18 Segment Adj. Operating Income & Margin Q3 2026 – AFTERMARKET SOLUTIONS Net Sales & Segment Adj. Operating Income $337 $(1)$(11) $351$26 Net Sales Core Drivers Sales Driven by Increased Sales in the Americas AOI Driven by Product Mix, Partially Offset by Pricing Tariffs Sales & AOI Timing of Tariff Recovery Mechanisms FX & Other AOI Primarily Driven by FX Headwinds $9 $51 $1 15.1% 17.1% $60 in millions ($) $(1)
Page 19
19 HISTORICAL QUARTERLY FINANCIAL METRICS Q1 Q2 Q3 YTD Q1 Q2 Q3 Q4 FY Power Systems $ 549 $ 584 $ 561 $ 1,694 $ 490 $ 556 $ 571 $ 560 $ 2,177 Aftermarket Solutions 329 356 351 1,036 306 334 337 329 1,306 Net Sales $ 878 $ 940 $ 912 $ 2,730 $ 796 $ 890 $ 908 $ 889 $ 3,483 Power Systems 51 64 68 183 46 62 76 60 244 Margin % 9.3% 11.0% 12.1% 10.8% 9.4% 11.2% 13.3% 10.7% 11.2% Aftermarket Solutions 56 61 60 177 51 57 51 52 211 Margin % 17.0% 17.1% 17.1% 17.1% 16.7% 17.1% 15.1% 15.8% 16.2% Segment Adj. Operating Income $ 107 $ 125 $ 128 $ 360 $ 97 $ 119 $ 127 $ 112 $ 455 Margin % 12.2% 13.3% 14.0% 13.2% 12.2% 13.4% 14.0% 12.6% 13.1% Corporate Costs (24) (28) (26) (78) (24) (25) (26) (29) (104) Adj. Operating Income (1) $ 83 $ 97 $ 102 $ 282 $ 73 $ 94 $ 101 $ 83 $ 351 Margin % (1) 9.5% 10.3% 11.2% 10.3% 9.2% 10.6% 11.1% 9.3% 10.1% Depreciation Expense 32 33 33 98 30 32 32 33 127 Adj. EBITDA (1) $ 115 $ 130 $ 135 $ 380 $ 103 $ 126 $ 133 $ 116 $ 478 Margin % (1) 13.1% 13.8% 14.8% 13.9% 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.
Page 20
20 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 Q3 YTD Q1 Q2 Q3 Q4 FY Net earnings $ 37 $ 40 $ 67 $ 144 $ 26 $ 46 $ 13 $ 45 $ 130 Depreciation and tooling amortization 32 33 33 98 30 32 32 33 127 Provision for income taxes 20 27 3 50 24 29 6 9 68 Intangible asset amortization expense 8 8 8 24 7 7 8 8 30 Interest expense, net 18 19 19 56 15 17 17 18 67 EBITDA $ 115 $ 127 $ 130 $ 372 $ 102 $ 131 $ 76 $ 113 $ 422 Restructuring expense 3 8 5 16 5 2 4 6 17 Separation-related costs (benefits) 2 (1) 2 3 (4) (6) 53 — 43 Merger and acquisition expense 1 2 2 5 3 2 4 — 9 Other postretirement (income) expense (1) (2) (1) (4) 1 1 1 1 4 Equity in affiliates' earnings, net of tax (5) (4) (4) (13) (4) (4) (3) (4) (15) Losses for other one-time events — — 1 1 — — (2) — (2) Adjusted EBITDA $ 115 $ 130 $ 135 $ 380 $ 103 $ 126 $ 133 $ 116 $ 478 Net sales $ 878 $ 940 $ 912 $ 2,730 $ 796 $ 890 $ 908 $ 889 $ 3,483 Adjusted EBITDA margin % 13.1% 13.8% 14.8% 13.9% 12.9% 14.2% 14.6% 13.0% 13.7% 20252026
Page 21
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. 21 ADJUSTED OPERATING INCOME AND MARGIN RECONCILIATION TO US GAAP $ in millions Q1 Q2 Q3 YTD Q1 Q2 Q3 Q4 FY Operating income $ 69 $ 80 $ 84 $ 233 $ 62 $ 89 $ 34 $ 69 $ 254 Intangible asset amortization expense 8 8 8 24 7 7 8 8 30 Restructuring expense 3 8 5 16 5 2 4 6 17 Separation-related costs (benefits) 2 (1) 2 3 (4) (6) 53 — 43 Merger and acquisitions expense 1 2 2 5 3 2 4 — 9 Losses (gains) for other one-time events — — 1 1 — — (2) — (2) Adjusted operating income $ 83 $ 97 $ 102 $ 282 $ 73 $ 94 $ 101 $ 83 $ 351 Net sales $ 878 $ 940 $ 912 $ 2,730 $ 796 $ 890 $ 908 $ 889 $ 3,483 Operating margin % 7.9% 8.5% 9.2% 8.5% 7.8% 10.0% 3.7% 7.8% 7.3% Adjusted operating margin % 9.5% 10.3% 11.2% 10.3% 9.2% 10.6% 11.1% 9.3% 10.1% 20252026
Page 22
22 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 $ 67 $ 13 $ 144 $ 85 Amortization of acquisition-related intangibles 8 8 24 22 Restructuring expense 5 4 16 11 Merger and acquisition expense 2 4 5 9 Losses (gains) for other one-time events 1 (2) 1 (2) Separation-related costs 2 53 3 43 Tax effects and adjustments (17) (17) (17) (15) Adjusted net earnings $ 68 $ 63 $ 176 $ 153 Nine Months Ended September 30,Three Months Ended September 30, 2026 2025 2026 2025 Net earnings per diluted share $ 1.80 $ 0.33 $ 3.79 $ 2.10 Amortization of acquisition-related intangibles 0.22 0.20 0.63 0.55 Restructuring expense 0.13 0.10 0.42 0.27 Merger and acquisition expense 0.05 0.10 0.13 0.22 Losses (gains) for other one-time events 0.03 (0.05) 0.03 (0.05) Separation-related costs 0.05 1.34 0.08 1.07 Tax effects and adjustments (0.45) (0.43) (0.44) (0.37) Adjusted net earnings per diluted share $ 1.83 $ 1.59 $ 4.64 $ 3.79 Nine Months Ended September 30,Three Months Ended September 30,
Page 23
$ in millions 2026 2025 2026 2025 Net cash provided by operating activities $ 87 $ 119 $ 231 $ 216 Capital expenditures, including tooling outlays (17) (26) (71) (95) Effects of separation-related transactions 3 11 29 - Adjusted free cash flow $ 73 $ 104 $ 189 $ 121 Nine Months Ended September 30,Three Months Ended September 30, 23 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