Allison Transmission : Q4 2025 Investor Relations Presentation

About this update from Allison Transmission Holdings, Inc.

Investor Relations Presentation Q4 2025 Published March 2, 2026 Table of Contents 1 2 3 4 Allison Off-Highway Acquisition Overview Allison Transmission Business Overview Allison Off-Highway Business Overview Allison Transmission Financial Overview Allison Off-Highway Acquisition Overview © 2026 Allison Transmission, Inc. All Rights Reserved. 4 Allison Off-Highway Acquisition - Transaction Highlights Purchase Price Acquisition completed on January 1, 2026 with purchase price of approximately $2.7B Represents 6.8x Adjusted EBITDA (LTM 12/31/24) of ~$400M (1) and 5.2x including estimated run-rate synergies of ~$120M Purchased using a combination of cash on hand, proceeds from the 5.875% Senior Notes 2033, proceeds from the borrowings under the incremental term loan facility and borrowings under the revolving credit facility Financial Highlights 12/31/25 net leverage of 1.25x Pro-forma leverage of less than 3.0x following acquisition completion with near-term target of less than 2.0x Combined company cash flow expected to preserve capital allocation flexibility Accretion and Synergies Anticipated to be immediately accretive to net income and diluted earnings per share in 2026 Expected annual run-rate synergies of ~$120M Cost savings primarily driven by operations, procurement, IR&D and SG&A (1) Represents Adjusted EBITDA associated with the acquired portions of the Dana Off-Highway business Allison Off-Highway - Global Growth Platform Off-Highway acquisition accelerates combined businesses' current growth objectives while multiplying future global growth opportunities Seasoned and innovative leadership team with sophisticated global employee base increasing in-regions capabilities Combined company has strong global reach and footprint with more "Local for Local" production to meet commercial and government customers' requirements and adapt to global market dynamics Broader platform enabling further inorganic growth with established M&A playbook to grow in established end markets Key capabilities in software & controls and fully integrated commercial-duty propulsion solutions Complementary customer mix provides for potential cross-selling with enhanced ability and reach to support multiple end markets growth opportunities Strong procurement, supply chain and logistics synergies with opportunities for cost reductions in current product portfolios with increased scale Summary Growth Opportunities Key Growth Drivers for Allison as a Premier Industrial Company Facilities & People Products & Customers Engineering & Vertical Integration M&A Platform Combined company has a strong global reach with more "Local for Local" production and markets presence Seasoned and innovative leadership team with sophisticated globa l employee base Manufacturing in best-cost countries and adapting to global market dynamics ~14,000 globa l employees* including ~5,000 in Europe, Middle East and Africa and ~4,500 in Asia Pacific End markets revenue growth leveraging strategic localization near customers Harmonious propulsion categories extending applications of existing and combined portfolios Sales growth resulting from increased set of diverse drivetrain components & services and work solutions to current customers Opportunity to support customers globally across Allison's aftermarket network Agile and market-driven technology, service and product development across diverse drivetrain components and work solutions Accelerated product innovation with increased local IR&D and engineering capabilities Best-in-class SG&A driven by effective deployment of centers of excellence and shared services Opportunities for cost reductions in current product portfolios with increased scale Broader platform enabling further inorganic growth Combined company has established M&A playbook to grow share of wallet in established end markets Footprint and capabilities provide for synergy development across future opportunities Ability and reach to support multiple end markets growth opportunities *Including contractors Step-Up in Scale; Preserves Industry-Leading EBITDA Margin Expected to achieve $5.7B in net sales and increase Adjusted EBITDA by ~40% while maintaining an industry-leading Adjusted EBITDA margin profile Financial Profile (LTM 6/30/25) EBITDA Margin (2025) (3) Combined (1) (w/ Synergies) 37.5% 27% - 29% 40% Net Sales Allison $3.2B Adjusted EBITDA $1.2B (2) Adjusted EBITDA Margin 37.0% (2) Combined (1) $5.7B $1.6-1.7B 27-29% 35% 30% 25% 20% 15% 10% 5% LTM 6/30/25 pro forma. Combined results include expected annual run-rate synergies of $120M See Appendix for the reconciliation from Allison's Net income and Net income as a percent of Net sales. Rounding may impact Adjusted EBITDA margin percentage. Fiscal year 2025 peer EBITDA provided by S&P Capital IQ Pro. EBITDA included above may not be consistent with such entity's reported EBITDA or Adjusted EBITDA, if available. EBITDA Margin: EBITDA or Adjusted EBITDA divided by Net sales. Combined Company Priorities and Strategy Near-Term Strategic Priorities Protect margins while growing Sustain Allison Transmission Profitability Capitalize on adjacent markets Accelerate Allison Off-Highway Growth Integration synergies, cost efficiency and operating model progress Operational Excellence ROIC-driven investment decisions Capital Discipline Advanced commercial duty mobility and work solutions Innovation Key Post-Acquisition Strategy Process Priorities Acquisition creates a broader two Business Units product portfolio Core Allison On-Highway business remains cash engine Allison Off-Highway business accelerates growth and expands addressable market Capital allocation / prioritization aligned with long-term ROIC and shareholder value Allison Transmission Business Overview © 2026 Allison Transmission, Inc. All Rights Reserved. 9 Allison Transmission at a Glance Leading designer and manufacturer of propulsion solutions for commercial and defense vehicles - World's largest manufacturer of medium- and heavy-duty fully automatic transmissions and hybrid propulsion solutions Premier brand, offering superior performance, frequently specified by end users Premium price component Differentiated technology Lower total cost of ownership Well-positioned for revenue and earnings growth Further adoption outside North America Expanding addressable market Funded growth opportunities in asset-light business model $300 million of incremental annual revenue opportunities* Strong cash flow generation and well-defined capital allocation policy History of strong free cash flow generation Capital allocation priorities include: investing to grow the business, strategic acquisition priorities, and returning cash to shareholders and debt reduction to meet leverage targets *$100 million incremental annual revenue opportunity in Defense end market achieved in 2025 Allison Transmission at a Glance 2025 Net Sales by End Market 51% Parts, Support Equipment and Other 21% Global Off-Highway Outside North America On-Highway 2% 17% North America On-Highway Defense 9% 2025 Net Sales: $3.0 billion North America On-Highway End Market Class 1-3 Underserved Core Addressable Market Underserved Class 8 Tractor Sleeper (Linehaul) Class 4-5 Motor Home School Bus Class 6-7 Class 8 Straight Class 8 Tractor Day Cab Vehicles Weight (000s of lbs) <14 lbs 14-19 lbs 16-33 lbs 16-33 lbs 19-33 lbs 33 lbs+ 33 lbs+ 33 lbs+ Industry Units Produced (2025) 13,490,549 75,937 11,976 32,985 77,221 95,771 66,573 92,403 Allison Share (2025) 0% 9% 28% 82% 75% 80% 5% 0% ~30-40% of Allison's North America On-Highway market volume is driven by municipal spending, reducing end-market volatility Opportunity to further grow share in Class 6/7 with All-New Mack MD Series and Isuzu F-Series medium-duty truck models, exclusively featuring Allison fully automatic transmissions $100 million incremental annual revenue growth opportunity in the Class 8 Tractor Day Cab market with the Allison 3000 and 4000 Series fully automatic transmissions Note: Analysis excludes Allison's Transit/Coach Bus, and Electric Hybrid Transit Bus volume. Class 8 Straight industry units include Dockspotters. Sources: Class 1-3 from US Truck Sales and Inventory by Weight Class (December 2025); Core Addressable Market from Allison Backcast, and Class 8 Tractor from Allison and ACT Research State of the Industry (January 2026) eGen Flex ® Capitalize on improving developed markets demand New vocational offerings to expand addressable market Over 20-year history in hybrid propulsion Fully-integrated electrified propulsion solutions Expand global market leadership Automaticity, fuel efficiency and safety trends Lower total cost of ownership Increasing number of vehicle releases Emerging markets penetration Alternative fuels and hybrid propulsion Advanced fuel efficient and emissions reduction technologies Enhancements to core technologies for new products and variants Continued focus on new technologies and product development Exploit capacity availability and asset-light business model Earnings growth and cash flow generation Focus on margin sustainment Well-defined capital allocation policy Deliver strong financial results Strategic Priorities 3000 Series 4000 Series FracTran ® eGen Force 1000/2000 Series Allison Transmission Elite EBITDA Margin 40% 37.5% 2025 EBITDA Margin (1) 35% 30% 25% 20% 15% 10% 5% Graco Parker Hannifin Gentex Eaton Rockwell Sensata Donaldson Cummins (1) Fiscal year 2025 peer EBITDA provided by S&P Capital IQ Pro. EBITDA included above may not be consistent with such entity's reported EBITDA or Adjusted EBITDA, if available. EBITDA Margin: EBITDA or Adjusted EBITDA divided by net sales. *See appendix for comments regarding the presentation of non-GAAP financial information. Leading Technology and Innovation 1 2 3 Next Generation of Commercial Propulsion Allison eGen Flex ® Electric Hybrid Propulsion Allison eGen Force Electrified Transmission Next Generation of Commercial Propulsion Incremental growth opportunities for an established and experienced propulsion supplier such as Allison Expertise in commercial propulsion, vehicle controls and vocational duty-cycles Deep experience in systems integration, battery management and power distribution State-of-the-art product development and testing capabilities Established service network Allison brand promise of quality, reliability and durability Positioning Allison to advance the next generation of commercial vehicle propulsion Expertise in commercial propulsion, vehicle controls and vocational duty-cycles Deep experience in systems integration, battery management and power distribution Fully-Integrated Electric Axles Extended Range Electric Hybrid Propulsion Systems & Battery Management Transmission Integrated Generators Electrification of Accessories Portfolio of Electric Products Next generation zero-emission capable electric hybrid propulsion system Enables transit bus fleets to utilize full electric capability without range limitations or infrastructure investment Selected by multiple transit authorities across the United States Released with major transit OEMs, GILLIG and New Flyer Content per vehicle of 10x-15x compared to a fully automatic transmission for transit buses ® Fully-integrated zero-emission electric axles for medium- and heavy-duty commercial trucks Content per vehicle opportunity of more than 3x compared to a fully automatic transmission ® New electric hybrid propulsion system for tracked combat vehicles Designed for 50-ton tracked vehicles, also scalable to 70-ton tracked vehicles meeting future Main Battle Tank requirements Power distribution system featuring an electric motor and inverter for on-board vehicle power and parallel hybrid operation Engine-off mobility for reduced enemy detection, both acoustic and thermal, increasing soldier survivability Leverages use of content from X1100 transmission, used in Abrams Main Battle Tank Electric Hybrid Propulsion ® Over $1.6 billion in sales since 2003 launch Allison's electric hybrid propulsion system for transit buses is among the most dependable and efficient electric hybrid systems in the world Demonstrated ability to operate in full engine-off mode for more than 50% of its time in operation across multiple routes Drive unit integrates multiple electric motors and multi-speeds to optimize vehicle performance and fuel economy Allison is the electrification and system integrator, controlling the entire powertrain including the engine Over 10,000 Allison electric hybrid propulsion systems delivered globally Rechargeable Energy Storage System Improved efficiency Improved packaging -one-third the size and 116 lbs. lighter WEG cooling - no oil-coolant lines from drive unit, reducing installation complexity and maintenance costs Inverter Proven industry-leading reliability Disconnect clutch to enable disengaging input shaft from the engine Provides propulsion while the engine is at zero speed Drive Unit ● ● ● ● ● ● Lithium Titanate (LTO) chemistry, ideal for electric hybrid operation Increased energy capacity Industry-leading battery design life Faster charging than other chemistries 476 million gallons of fuel saved Serving 230+ cities 4.1 billion miles of reliable operation Next-Generation Electrified Transmission Newest product in Allison's extensive tracked vehicle portfolio Will enable electric hybrid propulsion, electric-only silent maneuverability and exportable power provisions for on- and off-board systems High efficiency range pack utilizes eight forward and three reverse gears providing an efficient 12:1 ratio coverage, generating 220 kilowatts of electrical power Designed to meet requirements across a broad spectrum of applications, including the heavy Infantry Fighting Vehicle and future Main Battle Tank markets Allison will provide the Next-Generation Electrified Transmission propulsion system for American Rheinmetall's Lynx vehicle, competing for the U.S. Army's XM30 Combat Vehicle (formerly, the Optionally Manned Fighting Vehicle) program - Strategic partnership with American Rheinmetall Vehicles, and its Team Lynx consortium including Raytheon Technologies, Textron Systems and L3 Harris XM30 program is a U.S. Army priority ground modernization initiative that could replace nearly 4,000 Bradley Infantry Fighting Vehicles In June 2023, the U.S. Army down-selected from 5 to 2 OEMs, including American Rheinmetall Vehicles, to continue into the Detailed Design and Prototype Build and Testing phases Development of prototype vehicles began late-2024, with government testing beginning in early 2026 and estimated start of production in 2029 Premier Industrial Company 1 2 3 4 5 6 Global Market Leader and Premier Brand End User Value Proposition Leader in Commercial Propulsion Diverse End Markets Growth Opportunities Capital Allocation and Free Cash Flow Utilization © 2026 Allison Transmission, Inc. 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