Investor Relations Presentation Q4 2025
Published March 2, 2026
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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 PlatformOff-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 |
employees* including ~5,000 in Europe, Middle East and Africa and ~4,500 in Asia Pacific |
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*Including contractors
Step-Up in Scale; Preserves Industry-Leading EBITDA MarginExpected 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.
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 Glance2025 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 MarketClass 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
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 Innovation1 2 3
Next Generation of Commercial Propulsion
Allison eGen Flex® Electric Hybrid Propulsion
Allison eGen Force Electrified Transmission
Next Generation of Commercial PropulsionIncremental 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 ProductsNext 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
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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
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
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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. All Rights Reserved.
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