A method of operating a powertrain system during coasting operation, wherein the powertrain system includes a driveline component (e.g., a transmission, drive shaft, differential, axle or wheel) having an output torque profile. The method includes: (i) determining a desired output torque transition profile for the driveline component between a first transition point before an end of a first state, and a second transition point after a beginning of a second state; and (ii) in response to a braking torque request, generating a friction braking torque command to operate a friction braking system, and adjusting the friction braking torque command during a transitional state between the first and second transition points by an amount corresponding to a difference between a magnitude of the output torque profile and a magnitude of the desired output torque transition profile.