Earnings release
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FINNING Q2 2026 EARNINGS RELEASE Finning reports Q2 2026 results August 5 , 2026 Vancouver , B.C. – Finning International Inc. ( TSX : FTT ) ( “ Finning ” , the “ Company ” , “ we ” , “ our ” or “ us ” ) reported second quarter 2026 results today . All monetary amounts are in Canadian dollars unless otherwise stated and all financial information in this earnings release represents the results from continuing operations , unless otherwise noted . ( 1 ) HIGHLIGHTS All comparisons are to Q2 2025 results unless indicated otherwise . • • • • • • • • Q2 Revenue was up 20 % on Q2 2025 and exceeded $ 3 billion for the first time , led by new equipment sales in all regions and product support growth in Canada . Product support revenue increased 11 % with growth across all market sectors . Q2 2026 was the 9th quarter in a row of year - over - year product support growth . SG & A ( 2 ) margin ( 3 ) was 13.3 % and included $ 21 million of LTIP ( 2 ) expense due to continued share price appreciation . EBIT ( 2 ) at $ 249 million , was up on Q2 2025 Adjusted EBIT ( 4 ) ( 5 ) by 16 % . EBIT margin ( 3 ) was 8.0 % , down 30 basis points from Q2 2025 Adjusted EBIT margin ( 3 ) ( 5 ) . Adjusted EBIT margin was 9.7 % in South America , 8.3 % in Canada , and 6.2 % in the UK & Ireland . Record EPS of $ 1.22 was up 21 % from Q2 2025 Adjusted EPS ( 2 ) ( 3 ) ( 5 ) of $ 1.01 . Adjusted ROIC ( 2 ) from continuing operations ( 3 ) ( 5 ) was 19.0 % , up 30 basis points compared to June 30 , 2025 . Free cash flow ( 4 ) was a cash inflow of $ 15 million , with increased collections from higher revenues offsetting investments in working capital to support growth . Net debt to Adjusted EBITDA ( 2 ) ( 3 ) ( 5 ) at June 30 , 2026 was 1.6 times . Equipment backlog ( 3 ) maintained a record level of $ 3.8 billion at June 30 , 2026 , up 22 % from December 31 , 2025 , driven by order intake outpacing deliveries across all regions , particularly in the mining and power & energy sectors . " Our business continued to build momentum through the second quarter of 2026 , and I would like to express my gratitude to our employees for their dedication , agility , and execution . Their commitment to serving our customers and delivering on our strategy enabled us to achieve another quarter of strong growth and operational performance . We are pleased with our results , highlighted by 20 % revenue growth taking us to $ 3.1 billion , driven by strong new equipment sales across all regions and continued product support growth . Through a combination of healthy customer demand , disciplined execution , and targeted investments in growth opportunities , we delivered earnings per share of $ 1.22 , up 21 % from the prior year while our equipment backlog remained at a record $ 3.8 billion at the end of June , up 22 % since the beginning of the year , " said Kevin Parkes , President and CEO . " Canada continued to lead our growth , with strong demand across all market sectors including product support revenue , up 19 % in the quarter , while both our South American and UK & Ireland businesses continued to demonstrate resilience in dynamic market environments . Across all regions , our teams remained focused on balancing growth with disciplined cost and capital management . We generated EBIT of $ 249 million and maintained a strong adjusted return on invested capital of 19.0 % . Our free cash flow was positive despite investments in working capital to support higher levels of business activity , and our balance sheet remains strong with net debt to adjusted EBITDA of 1.6 times . Looking ahead , we remain confident in our strategy and our ability to execute . Strong customer activity , a record backlog and growing product support revenues position us well for the future . We continue to focus on maximizing product support , enhancing full - cycle resilience and expanding our used equipment , rental , and power & energy businesses , " concluded Mr. Parkes . 1
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2 Q2 2026 FINANCIAL SUMMARY 3 months ended June 30 % change fav (2) ($ millions, except per share amounts) 2026 2025 (unfav) (2) New equipment 1,315 982 34% Used equipment 98 83 18% Equipment rental 87 73 19% Product support 1,629 1,469 11% Other 1 2 (50)% Revenue 3,130 2,609 20% Gross profit 666 619 7% Gross profit margin (3) 21.3% 23.7% SG&A (418) (404) (3)% SG&A margin (13.3)% (15.5)% Equity earnings (loss) of joint ventures 1 — Other expense — (12) EBIT 249 203 23% EBIT margin 8.0% 7.8% Adjusted EBIT 249 215 16% Adjusted EBIT margin 8.0% 8.3% Net income from continuing operations 160 126 26% EPS 1.22 0.94 30% Adjusted EPS 1.22 1.01 21% Free cash flow from continuing operations 15 (164) Q2 2026 EBIT by Operation South UK & Finning ($ millions, except per share amounts) Canada America Ireland Other Total EPS EBIT / EPS 138 104 24 (17) 249 1.22 EBIT margin 8.3% 9.7% 6.2% n/m 8.0% Q2 2025 EBIT by Operation South UK & Finning ($ millions, except per share amounts) Canada America Ireland Other Total EPS EBIT / EPS 114 96 17 (24) 203 0.94 Severance costs 11 — — 1 12 0.07 Adjusted EBIT / Adjusted EPS 125 96 17 (23) 215 1.01 Adjusted EBIT margin 9.4% 10.1% 5.2% n/m 8.3%
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3 QUARTERLY KEY PERFORMANCE MEASURES FROM CONTINUING OPERATIONS 2026 2025 (Restated) (1) 2024 (Restated) (1) Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 EBIT ($ millions) 249 188 187 240 203 205 212 160 220 Adjusted EBIT ($ millions) 249 204 209 240 215 205 212 193 220 EBIT margin Consolidated 8.0% 7.5% 6.9% 8.5% 7.8% 8.4% 8.4% 6.4% 8.5% Canada 8.3% 8.1% 7.7% 8.7% 8.5% 8.4% 7.5% 5.0% 8.9% South America 9.7% 9.2% 9.9% 9.7% 10.1% 10.6% 10.9% 10.6% 10.4% UK & Ireland 6.2% 5.1% 4.0% 6.5% 5.2% 4.7% 5.8% 4.9% 4.6% Adjusted EBIT margin Consolidated 8.0% 8.2% 7.8% 8.5% 8.3% 8.4% 8.4% 7.8% 8.5% Canada 8.3% 8.1% 8.1% 8.7% 9.4% 8.4% 7.5% 6.9% 8.9% South America 9.7% 11.1% 10.4% 9.7% 10.1% 10.6% 10.9% 10.9% 10.4% UK & Ireland 6.2% 5.1% 4.6% 6.5% 5.2% 4.7% 5.8% 6.3% 4.6% EPS 1.22 0.93 0.88 1.17 0.94 0.95 0.97 0.69 0.97 Adjusted EPS 1.22 1.02 1.00 1.17 1.01 0.95 0.97 0.88 0.97 Invested capital from continuing operations (4) ($ millions) 5,025 4,822 4,313 4,876 4,580 4,333 4,275 4,495 4,683 Adjusted ROIC from continuing operations Consolidated 19.0% 18.7% 19.2% 19.3% 18.7% 18.7% 17.9% 18.0% 19.0% Canada 18.0% 18.2% 18.2% 17.6% 16.3% 15.9% 15.4% 15.9% 17.7% South America 23.5% 23.4% 24.5% 24.6% 25.9% 26.3% 25.9% 26.5% 26.5% UK & Ireland 21.6% 19.3% 20.1% 20.2% 18.4% 16.9% 15.0% 11.5% 11.0% Invested capital turnover from continuing operations (3) (times) 2.35 2.29 2.34 2.31 2.28 2.26 2.16 2.10 2.07 Free cash flow from continuing operations ($ millions) 15 (310) 642 (56) (164) 124 399 330 323 Net debt to Adjusted EBITDA ratio from continuing operations (times) 1.6 1.6 1.2 1.7 1.6 1.6 1.7 1.9 1.9
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4 Q2 2026 HIGHLIGHTS BY OPERATION All comparisons are to Q2 2025 results unless indicated otherwise. All numbers, except Adjusted ROIC from continuing operations, are in functional currency: Canada – Canadian dollar; South America – US dollar (USD); UK & Ireland – UK pound sterling (GBP). These variances and ratios for South America and UK & Ireland exclude the foreign currency translation impact from the CAD relative to the USD and GBP, respectively, and are therefore considered to be specified financial measures. We believe the variances and ratios in functional currency provide meaningful information about operational performance of the reporting segment. South America Operations New equipment sales were up by 35%, due to higher construction and mining deliveries in Chile. Product support revenue was up 3%, driven by higher mining activity in Chile and increased revenue in all sectors in Argentina. EBIT margin of 9.7% was down 40 basis points from Q2 2025 Adjusted EBIT margin, primarily driven by higher mix of new equipment revenue and product support margin compression, partially offset by improvement in SG&A margin. Adjusted ROIC of 23.5% was down 240 bps, impacted by higher average invested capital driven by working capital investments. Canada Operations New equipment, used equipment, and rental sales were all higher in the quarter, led by strong demand for new equipment in mining and continued market share gains in construction. Product support revenue was up 19%, reflecting strong demand across all sectors, particularly mining. EBIT margin of 8.3% was down 110 basis points from Adjusted EBIT margin, driven by lower product support margins and higher proportion of new equipment in the revenue mix, partially offset by improved SG&A margin. Adjusted ROIC was 18.0%, up 170 basis points on higher EBIT in the last twelve-month period, partially offset by higher average invested capital. UK & Ireland Operations New equipment sales were up 34% driven by delivery of delayed sales from Q1 2026. Product support revenue was down 2%, primarily due to lower activity in construction and power & energy sectors. EBIT margin of 6.2% was up 100 basis points, driven by robust SG&A control on higher revenue. Adjusted ROIC was 21.6%, up 320 basis points, reflecting the higher EBIT in the last twelve-month period and lower average invested capital levels from the optimization of pension assets. Corporate and Other Items EBIT loss for Corporate was $17 million compared to an Adjusted EBIT loss of $23 million in Q2 2025, primarily driven by lower operating costs. In Q2 2026, we repurchased 0.4 million shares at an average cost of $100.06 per share.
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5 Finning Announces Executive Leadership Transition in South America Finning announces that Juan Pablo Amar is retiring as President of Finning South America, following a distinguished career spanning more than 30 years with the Company. To support a smooth transition, Mr. Amar will continue in an advisory capacity until his retirement on November 30, 2026. Since joining Finning in 1993, Mr. Amar has held numerous leadership positions of increasing responsibility with Finning South America, including Vice President, Human Resources, Vice President, Finance and Vice President, Operations, before being appointed President, Finning South America in January 2020. “Juan Pablo has made an extraordinary contribution to Finning during his tenure, leading South America through a period of transformational growth while fostering a strong customer and safety focused culture”, said Kevin Parkes, President and Chief Executive Officer. “Juan Pablo's leadership, integrity and dedication to developing his leadership team have helped shape the organization we are today and positions our South America business for continued success.” Stepping into the role of President of Finning South America is Sebastian Reisch, effective today. Mr. Reisch brings 19 years of leadership experience with Finning across Canada and South America, holding a variety of senior roles spanning finance, supply chain, customer experience, product support, marketing and sales. Most recently, he served as Vice President, Finance & Supply Chain for Finning South America. “Sebastian is a proven and respected leader with deep knowledge of our business, strong customer relationships and extensive experience across multiple functions and geographies. We have tremendous confidence in Sebastian to build on our strong foundation and lead our South America business forward.” MARKET UPDATE AND BUSINESS OUTLOOK The discussion of our expectations relating to the market and business outlook in this section is forward-looking information that is based upon the assumptions and subject to the material risks discussed under the heading “Forward-Looking Information Caution” at the end of this news release. Actual outcomes and results may vary significantly. South America Operations In Chile, our outlook is underpinned by growing global demand for copper, strong copper prices, capital deployment into large-scale brownfield expansions under supportive government priorities, and customer confidence to invest in greenfield projects. We are seeing a broad-based level of quoting, tender, and award activity for mining equipment, product support, and technology solutions. In the near term, we expect some moderation in product support activity levels as customers adjust their mine plans and existing equipment fleets. While demand for skilled labour remains high, we expect a more stabilized labour environment through 2028 as we have successfully concluded negotiations with all major unions as of Q1 2026. In the Chilean construction sector, we continue to see demand from large contractors supporting mining operations, and we expect infrastructure construction activity to remain steady. In the power & energy sector, activity remains strong in the industrial and data centre markets, driving growing demand for electric power solutions. In Argentina, we are carefully positioning our business to capture opportunities, particularly in the oil and gas and mining sectors. We are seeing increased quoting activity for equipment and are encouraged by our equipment order with Glencore’s Alumbrera copper mine in Q1 2026. At the same time, the operating environment remains dynamic, and we continue to closely monitor the government’s rules and policies, some of which help drive large-scale investment. We expect activity levels to continue to improve in the coming years, subject to a constructive investment environment. Canada Operations Our outlook for Western Canada is positive. We expect strong activity levels in our mining business as customers grow fleets and maintain and rebuild aging equipment. In the power & energy sector, activity remains strong in the oil and gas market, with longer-term potential in the data centre market where we continue active discussions with numerous customers on primary and back-up power generation opportunities. We are leveraging the expertise of our UK & Ireland operations with over a decade of experience in the data centre space, to become a trusted and value-add partner to our customers.
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6 The construction sector continues to show signs of improvement. We are encouraged by announcements regarding the potential to accelerate resource development and infrastructure project activity, but we remain cautious with respect to the timing and magnitude of such potential activity. We remain focused on building resilience by managing our cost and invested capital levels. UK & Ireland Operations With low GDP (2) growth projected in the UK to continue, we expect demand in the construction sector to remain soft. We expect a growing contribution from power & energy as we continue to execute our strategy. In power & energy, quoting activity remains strong, driven by healthy demand for primary and backup power generation, particularly backup power in the data centre market. We expect our product support business in the UK & Ireland to remain stable. Global Trade and Geopolitical Risk Update We continue to closely monitor the evolving global trade dynamics, along with the escalating geopolitical tension in the Middle East which has introduced heightened volatility across global energy and commodity markets. To date, we have not seen direct impacts on customer purchasing decisions, major supply chain shifts, or changes in the competitive environment in our operating regions. However, we remain cautious and are actively evaluating mitigation strategies and contingency measures to address these potential risks. Execution Focus We plan to continue to execute our strategy in 2026: maximize product support, improve our cost and capital position to drive full-cycle resilience, and grow prudently in used, rental, and power & energy. Consistent execution will enable us to continue to meet our objective of achieving a sustainably higher Adjusted ROIC in the range of 18- 25% in all market conditions. To access Finning's complete Q2 2026 results, please visit our website at https://www.finning.com/en_CA/company/investors.html Q2 2026 INVESTOR CALL We will hold an investor call on August 6, 2026, at 10:00 am Eastern Time. Dial-in numbers: 1-833-752-3398 (Canada and US toll free), 1-647-846-2852 (international toll). The investor call will be webcast live and archived for three months. The webcast and accompanying presentation can be accessed at https://www.finning.com/en_CA/company/investors.html ABOUT FINNING Finning is the world’s largest Caterpillar dealer. Headquartered in Surrey, British Columbia, we sell and rent Caterpillar equipment, and provide parts, service and performance solutions in Western Canada, Chile, Argentina, Bolivia, the United Kingdom, and Ireland. Since 1933, we have delivered unrivalled customer service and are committed to solving our customers’ toughest challenges. CONTACT INFORMATION Email: FinningIR@finning.com https://www.finning.com
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7 Description of Specified Financial Measures and Reconciliations Specified Financial Measures We believe that certain specified financial measures, including non-GAAP (1) financial measures, provide users of our Earnings Release with important information regarding the operational performance and related trends of our business. The specified financial measures we use do not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other issuers. Accordingly, specified financial measures should not be considered as a substitute or alternative for financial measures determined in accordance with GAAP (GAAP financial measures). By considering these specified financial measures in combination with the comparable GAAP financial measures (where available) we believe that users are provided a better overall understanding of our business and financial performance during the relevant period than if they simply considered the GAAP financial measures alone. We use KPIs to consistently measure performance against our priorities across the organization. Some of our KPIs are specified financial measures. There may be significant items that we do not consider indicative of our operational and financial trends, either by nature or amount. We exclude these items when evaluating our operating financial performance. These items may not be non-recurring, but we believe that excluding these significant items from GAAP financial measures provides a better understanding of our financial performance when considered in conjunction with the GAAP financial measures. Financial measures that have been adjusted to take these significant items into account are referred to as “Adjusted” measures. Adjusted measures are specified financial measures and are intended to provide additional information to readers of the Earnings Release. Descriptions and components of the specified financial measures we use in this Earnings Release are set out below. Where applicable, quantitative reconciliations from certain specified financial measures to their most directly comparable GAAP financial measures (specified, defined, or determined under GAAP and used in our consolidated financial statements) are also set out below. Adjusted EPS Adjusted EPS excludes the after-tax per share impact of significant items that we do not consider to be indicative of operational and financial trends either by nature or amount to provide a better overall understanding of our underlying business performance. The tax impact of each significant item is calculated by applying the relevant applicable tax rate for the jurisdiction in which the significant item occurred. The after-tax per share impact of significant items is calculated by dividing the after-tax amount of significant items by the weighted average number of common shares outstanding during the period. A reconciliation between EPS (the most directly comparable GAAP financial measure) and Adjusted EPS can be found on page 10 of this Earnings Release. Adjusted EBIT and Adjusted EBITDA Adjusted EBIT and Adjusted EBITDA exclude items that we do not consider to be indicative of operational and financial trends, either by nature or amount, to provide a better overall understanding of our underlying business performance. Adjusted EBITDA is calculated by adding depreciation and amortization to Adjusted EBIT. The most directly comparable GAAP financial measure to Adjusted EBITDA and Adjusted EBIT is EBIT.
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8 Significant items identified by management that affected our results from continuing operations were as follows: In Q1 2026, we recorded severance costs for headcount reductions related to consolidation efforts and changes to our organizational structure aimed at simplifying structures and strengthening our service resiliency. In Q4 2025, following an evaluation of the business needs of our operations, including an alignment with Caterpillar’s digital and technology strategy, several technology assets have been decommissioned; as a result, we derecognized previously capitalized costs. In Q2 2025, we recorded severance costs for headcount reductions related to consolidation efforts and changes to our organizational structure focused on non-revenue generating positions, primarily in selected back office and technology roles. In Q3 2024, we recorded severance costs related to the headcount reductions and consolidation efforts focused on non-revenue generating positions, including selected technology and supply chain roles as well as some financial support functions as we worked to simplify our business activities in each of our operations. In Q3 2024, our Canadian operations recorded an estimated loss for receivables from Victoria Gold, a mining customer that was placed into receivership following a landslide at its mine. On December 13, 2023, the then newly-elected Argentine government devalued the ARS (1) official exchange rate by 118% from 366.5 ARS to 800 ARS for USD 1. As a result of prolonged government currency restrictions, including no material access to USD starting in late August 2023, our ARS exposure increased and during this period economic hedges were not available. As a result of the growth in our ARS exposure and the significant devaluation of the ARS in the fourth quarter, our South American operations incurred a foreign exchange loss of $56 million which exceeds the typical foreign exchange impact in the region. We began to implement our invested capital improvement plan as outlined at our 2023 Investor Day, which targets selling and optimizing real estate and exiting low-ROIC activities. In Q4 2023: our South American operations sold a property in Chile and recorded a gain of $13 million on the sale; and following an evaluation of the business needs of our operations and related intangible assets, several software and technology assets had been or were planned to be decommissioned, and as a result, we derecognized previously capitalized costs of $12 million.
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9 A reconciliation from EBIT to Adjusted EBIT and Adjusted EBITDA for our consolidated operations is as follows: 3 months ended 2026 2025 2024 2023 (Restated) ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 EBIT (1) 249 188 187 240 203 205 212 160 220 195 168 246 Significant items: Severance costs — 16 — — 12 — — 19 — — — — Write-off of intangible assets — — 22 — — — — — — — 12 — Estimated loss for a customer receivable — — — — — — — 14 — — — — Foreign exchange and tax impact of devaluation of ARS — — — — — — — — — — 56 — Gain on sale of property, plant, and equipment — — — — — — — — — — (13) — Adjusted EBIT (1) 249 204 209 240 215 205 212 193 220 195 223 246 Depreciation and amortization (1) 93 95 94 95 95 90 86 91 89 90 90 86 Adjusted EBITDA (1)(4)(5) 342 299 303 335 310 295 298 284 309 285 313 332 The income tax impact of the significant items was as follows: 3 months ended 2026 2025 2024 ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Significant items: Severance costs — (4) — — (3) — — (4) — Write-off of intangible assets — — (6) — — — — — — Estimated loss for a customer receivable — — — — — — — (4) — Recovery of taxes on the significant items — (4) (6) — (3) — — (8) —
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10 A reconciliation from EPS to Adjusted EPS for our consolidated operations is as follows: 3 months ended 2026 2025 2024 (Restated) ($) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 EPS (1)(a) 1.22 0.93 0.88 1.17 0.94 0.95 0.97 0.69 0.97 Significant items: Severance costs — 0.09 — — 0.07 — — 0.11 — Write-off of intangible assets — — 0.12 — — — — — — Estimated loss for a customer receivable — — — — — — — 0.08 — Adjusted EPS (1)(a) 1.22 1.02 1.00 1.17 1.01 0.95 0.97 0.88 0.97 A reconciliation from EBIT to Adjusted EBIT for our Canadian operations is as follows: 3 months ended 2026 2025 2024 2023 (Restated) ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 EBIT (1) 138 112 98 117 114 101 90 61 123 105 108 131 Significant items: Write-off of intangible assets — — 5 — — — — — — — 5 — Severance costs — — — — 11 — — 9 — — — — Estimated loss for a customer receivable — — — — — — — 14 — — — — Adjusted EBIT (1) 138 112 103 117 125 101 90 84 123 105 113 131 (a) The per share impact for each quarter has been calculated using the weighted average number of common shares outstanding during the respective quarters; therefore, quarterly amounts may not add to the annual or year-to-date total.
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11 A reconciliation from EBIT to Adjusted EBIT for our South American operations is as follows: 3 months ended 2026 2025 2024 2023 ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 EBIT 104 77 98 109 96 101 103 101 93 84 55 104 Significant items: Severance costs — 16 — — — — — 3 — — — — Write-off of intangible assets — — 5 — — — — — — — 4 — Foreign exchange and tax impact of devaluation of ARS — — — — — — — — — — 56 — Gain on sale of property, plant, and equipment — — — — — — — — — — (13) — Adjusted EBIT 104 93 103 109 96 101 103 104 93 84 102 104 A reconciliation from EBIT to Adjusted EBIT for our UK & Ireland operations is as follows: 3 months ended 2026 2025 2024 2023 ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 EBIT 24 15 17 24 17 14 22 16 15 14 6 19 Significant items: Write-off of intangible assets — — 3 — — — — — — — 3 — Severance costs — — — — — — — 4 — — — — Adjusted EBIT 24 15 20 24 17 14 22 20 15 14 9 19 A reconciliation from EBIT to Adjusted EBIT for our Other operations is as follows: 3 months ended 2026 2025 2024 2023 ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 EBIT (17) (16) (26) (10) (24) (11) (3) (18) (11) (8) (1) (8) Significant items: Write-off of intangible assets — — 9 — — — — — — — — — Severance costs — — — — 1 — — 3 — — — — Adjusted EBIT (17) (16) (17) (10) (23) (11) (3) (15) (11) (8) (1) (8) Equipment Backlog Equipment backlog is defined as the retail value of new equipment units ordered by customers for future deliveries. We use equipment backlog as a measure of projecting future new equipment deliveries. There is no directly comparable GAAP financial measure for equipment backlog.
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12 Free Cash Flow from Continuing Operations Free cash flow is defined as cash flow provided by or used in operating activities less net additions to property, plant, and equipment and intangible assets, as disclosed in our financial statements. Free cash flow from continuing operations excludes free cash flow from discontinued operations. We use free cash flow from continuing operations to assess cash operating performance, including working capital efficiency. Positive free cash flow generation enables us to re- invest capital to grow our business, repay debt, and return capital to shareholders. A reconciliation from cash flow used in or provided by operating activities to free cash flow from continuing operations is as follows: 3 months ended 2026 2025 2024 ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Cash flow (used in) provided by operating activities 63 (284) 724 (58) (127) 149 441 383 364 Additions to property, plant, and equipment and intangible assets (48) (32) (93) (59) (30) (26) (44) (38) (34) Proceeds on disposal of property, plant, and equipment — 6 11 61 14 12 2 1 — Less free cash flow from discontinued operations (4) — — — — (21) (11) — (16) (7) Free cash flow from continuing operations 15 (310) 642 (56) (164) 124 399 330 323 Invested Capital from Continuing Operations Invested capital is defined as net debt plus total equity. Invested capital is also calculated as total assets less total liabilities, excluding net debt. Net debt is calculated as short-term and long-term debt, net of cash and cash equivalents. We use invested capital from continuing operations as a measure of the total cash investment made in Finning and each reportable segment. Invested capital from continuing operations is used in a number of different measurements (ROIC from continuing operations, Adjusted ROIC from continuing operations, invested capital turnover from continuing operations) to assess financial performance against other companies and between reportable segments. Invested capital from continuing operations is calculated as follows: 2026 2025 2024 2023 ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Cash and cash equivalents (280) (253) (369) (312) (431) (433) (316) (298) (233) (215) (152) (168) Short-term debt 919 816 518 1,022 944 939 844 1,103 1,234 1,322 1,239 1,372 Long-term debt Current 464 181 180 181 — 6 6 — — 68 199 203 Non-current 923 1,201 1,196 1,200 1,375 1,390 1,390 1,378 1,378 1,379 949 955 Net debt (4) 2,026 1,945 1,525 2,091 1,888 1,902 1,924 2,183 2,379 2,554 2,235 2,362 Total equity 2,999 2,877 2,788 2,785 2,692 2,676 2,642 2,591 2,590 2,574 2,530 2,535 Invested capital (3) 5,025 4,822 4,313 4,876 4,580 4,578 4,566 4,774 4,969 5,128 4,765 4,897 Less invested capital from discontinued operations (4) — — — — — (245) (291) (279) (286) (285) (292) (305) Invested capital from continuing operations 5,025 4,822 4,313 4,876 4,580 4,333 4,275 4,495 4,683 4,843 4,473 4,592 Invested Capital Turnover from Continuing Operations We use invested capital turnover from continuing operations to measure capital efficiency. Invested capital turnover from continuing operations is calculated as revenue from continuing operations for the last twelve months divided by average invested capital from continuing operations of the last four quarters.
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13 Net Debt to Adjusted EBITDA Ratio from Continuing Operations We use this ratio to assess operating leverage and ability to repay debt. This ratio approximates the length of time, in years, that it would take us to repay debt, with net debt and Adjusted EBITDA held constant. This ratio is calculated as net debt from continuing operations at the reporting date divided by Adjusted EBITDA for the last twelve months. Net debt from continuing operations is calculated as follows: 2026 2025 2024 2023 ($ millions) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Net debt 2,026 1,945 1,525 2,091 1,888 1,902 1,924 2,183 2,379 2,554 2,235 2,362 Less net debt from discontinued operations (4) — — — — — 39 31 35 5 (1) (11) (30) Net debt from continuing operations (4) 2,026 1,945 1,525 2,091 1,888 1,941 1,955 2,218 2,384 2,553 2,224 2,332 Gross Profit Margin, SG&A Margin, and EBIT Margin We use these specified financial measures to assess and evaluate the financial performance or profitability of our reportable segments. We may also calculate EBIT margin using Adjusted EBIT to exclude significant items we do not consider to be indicative of operational and financial trends either by nature or amount to provide a better overall understanding of our underlying business performance. The ratios are calculated, respectively, as gross profit divided by revenue, SG&A divided by revenue, and EBIT divided by revenue. Adjusted ROIC from Continuing Operations ROIC is defined as EBIT for the last twelve months divided by average invested capital of the last four quarters, expressed as a percentage. We also calculate Adjusted ROIC from continuing operations using Adjusted EBIT to exclude significant items that we do not consider to be indicative of operational and financial trends either by nature or amount to provide a better overall understanding of our underlying business performance and invested capital from continuing operations. We use Adjusted ROIC from continuing operations as a useful measure for capital allocation decisions that drive profitable growth and attractive returns to shareholders.
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14 FOOTNOTES (1) As a result of the sales of our interests in ComTech (2) and 4Refuel (2) on May 15, 2025 and June 30, 2025, respectively, these businesses qualified as discontinued operations. Effective Q2 2025, the comparative figures have been restated to exclude the results of discontinued operations. For the purposes of this MD&A (2), balance sheet key performance measures and free cash flow have also been restated to exclude the results of discontinued operations from the relevant comparative periods. Unless otherwise indicated, all financial information in this MD&A represents the results from continuing operations. For more information, please refer to our 2025 Annual MD&A. (2) 4Refuel Holdings Limited, Midnight Holding Inc., and their respective affiliates (collectively “4Refuel”); Argentine peso (ARS); Compression Technology Corporation (ComTech); Earnings from continuing operations Before Finance Costs and Income Taxes (EBIT); Earnings from continuing operations Before Finance Costs, Income Taxes, Depreciation and Amortization (EBITDA); Basic Earnings per Share from continuing operations (EPS); favourable (fav); generally accepted accounting principles (GAAP); gross domestic product (GDP); Management’s Discussion and Analysis (MD&A); not meaningful (n/m); Return on Invested Capital (ROIC); Selling, General & Administrative Expenses (SG&A); unfavourable (unfav). (3) See “Description of Specified Financial Measures and Reconciliations” on page 7 of this Earnings Release. (4) These are non-GAAP financial measures. See “Description of Specified Financial Measures and Reconciliations” on page 7 of this Earnings Release. (5) Certain financial measures were impacted by significant items management does not consider indicative of operational and financial trends either by nature or amount; these significant items are described on page 8 of this Earnings Release. The financial measures that have been adjusted to take these items into account are referred to as “Adjusted” measures.
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15 Forward-Looking Information Disclaimer Forward-looking information in this news release includes, but is not limited to, the following: our belief in our strategy and ability to execute; our expectation that strong customer activity, a record backlog and growing product support revenues position us well for the balance of the year; our expectation to continue to focus on maximizing product support, enhancing full-cycle resilience and expanding our used equipment, rental and power & energy businesses; all information in the section entitled “Market Update and Business Outlook”, including for our South America operations: our outlook for Chile based on growing global demand for copper, strong copper prices, capital deployment into large-scale brownfield expansions under supportive government priorities and customer confidence to invest in greenfield projects; our expectation in the near term of some moderation in product support activity levels as customers adjust their mine plans and existing equipment fleets; although the demand for skilled labour remains high, our expectation of a more stabilized labour environment through 2028 as we successfully concluded negotiations with all major unions in Chile as of Q1 2026; our expectation that infrastructure construction in Chile will remain steady (based on assumptions of continued demand from large contractors supporting mining operations); in the power & energy sector, our expectation regarding growing demand for electric power solutions from strong activity in the industrial and data centre markets; in Argentina, our belief that the operating environment remains dynamic and our careful business positioning to capture opportunities, particularly in the oil & gas and mining sectors; our continued monitoring of rules and policies, some of which help drive large-scale investment; and our expectation that activity levels will continue to improve in the coming years, subject to a constructive investment environment; for our Canada operations: our outlook for Western Canada being positive; our expectation of strong activity levels in our mining business as customers grow fleets and maintain and rebuild aging equipment; our belief that in the power & energy sector, activity remains strong in the oil and gas market, with longer-term potential in the data centre market where we continue active discussions with numerous customers on primary and back-up power generation opportunities; our expectation to be able to leverage the expertise of our UK & Ireland operations in the data centre space to become a trusted and value-add partner to our customers; our belief that construction sector activity continues to show signs of improvement; our expectations regarding the potential to accelerate resource development and infrastructure project activity and our cautious approach with respect to timing and magnitude of such potential activity; our continued focus on building our resilience by managing our cost and invested capital levels; and our continued implementation of structural changes and overhead reductions to drive productivity improvements; for our UK & Ireland operations: our expectation for demand in the construction sector to remain soft (based on assumptions that the low GDP growth projected in the UK will continue); our expectation of a growing contribution from power & energy as we continue to execute our strategy; in power & energy, our expectation of continued strong quoting activity (based on assumptions of healthy demand for primary power as well as backup power generation, particularly backup power in the data centre market); our expectation of our product support business to remain stable; for global trade and geopolitical risk: our continued monitoring of the evolving global trade dynamics, along with the escalating geopolitical tension in the Middle East which has introduced heightened volatility across global energy and commodity markets; and our expectation of remaining cautious and actively evaluating mitigation strategies and contingency measures to address these potential risks; and overall: our expectation to continue executing our strategy to maximize product support, improve our cost and capital position to drive full-cycle resilience, and grow prudently in used, rental, and power & energy; our expectation that consistent execution will enable us to continue to meet our objective of achieving a sustainably higher Adjusted ROIC in the range of 18-25% in all market conditions; and the Canadian income tax treatment of the quarterly dividend. All such forward-looking information is provided pursuant to the ‘safe harbour’ provisions of applicable Canadian securities laws. Unless we indicate otherwise, forward-looking information in this news release reflects our expectations at the date of this news release. Except as may be required by Canadian securities laws, we do not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events, or otherwise. Forward-looking information, by its very nature, is subject to numerous risks and uncertainties and is based on a number of assumptions. This gives rise to the possibility that actual results could differ materially from the expectations expressed in or implied by such forward-looking information and that our business outlook, objectives, plans, strategic priorities and other information that is not historical fact may not be achieved. As a result, we cannot guarantee that any forward-looking information will materialize. Factors that could cause actual results or events to differ materially from those expressed in or implied by this forward-looking information include: the specific factors stated elsewhere in this news release; the impact and duration of, and our ability to respond to and manage, high inflation, geopolitical and trade uncertainty, energy market fluctuations, changing tariffs and interest rates, and supply chain challenges; general economic and market conditions, including increasing inflationary cost pressure, and economic and market conditions in the regions where we operate; prospects for investments in oil and gas and mining projects in Argentina; capital deployment into large- scale brownfield expansions; support and commitment by Canadian federal and provincial governments in infrastructure development; foreign exchange rates; commodity prices; interest rates; the level of customer confidence and spending, and the demand for, and prices of, our products and services; our ability to maintain our
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16 relationship with Caterpillar; our dependence on the continued market acceptance of our products, and the timely supply of parts and equipment; our ability to continue to improve productivity and operational efficiencies while continuing to maintain customer service; our ability to manage cost pressures as revenue grows; our ability to effectively integrate and realize expected synergies from businesses that we acquire; our ability to deliver our equipment backlog; our ability to access capital markets for additional debt or equity, to finance future growth and to refinance outstanding debt obligations, on terms acceptable to us, which will depend upon prevailing market conditions and our financial condition; our ability to negotiate satisfactory purchase or investment terms and prices, obtain necessary regulatory or other approvals, and secure financing on attractive terms or at all; our ability to manage our growth strategy effectively; our ability to effectively price and manage long-term product support contracts with our customers; our ability to drive continuous cost efficiency; our ability to attract sufficient skilled labour resources as market conditions, business strategy or technologies change; the intensity of competitive activity; our ability to maintain a safe and healthy work environment across all regions; our ability to raise the capital needed to implement our business plan; business disruption resulting from business process change, systems change and organizational change; regulatory initiatives or proceedings, litigation and changes in laws, regulations or policies, including changes in applicable accounting standards and those relating to environmental protection, environmental disclosure and/or energy transition; stock market volatility; changes in political and economic environments in the regions where we carry on business; our ability to respond to climate change-related risks; the availability of carbon-neutral technology or renewable power; the cost of climate change initiatives; the occurrence of one or more natural disasters, pandemic outbreaks, geopolitical events, acts of terrorism, social unrest or similar disruptions; the availability of insurance at commercially reasonable rates and whether the amount of insurance coverage will be adequate to cover all liability or loss that we incur; the potential for warranty claims to be greater than we anticipate; the integrity, reliability and availability of, and benefits from, information technology and the data processed by that technology; and our ability to protect our business from cybersecurity threats or incidents. Forward-looking information is provided in this news release to give information about our current expectations and plans and allow investors and others to get a better understanding of our operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking information for any other purpose. Forward-looking information provided in this news release is based on a number of assumptions that we believed were reasonable on the day the information was given, including but not limited to: the specific assumptions and expectations stated above; that we will be able to successfully manage our business through volatile commodity prices, high inflation, changing tariffs and interest rates, and supply chain challenges, and successfully execute our strategies to win customers, achieve full-cycle resilience and continue business momentum; that we will be able to continue to source and hire technicians, build capabilities and capacity and successfully and sustainably improve workshop efficiencies; that commodity prices will remain at constructive levels; that our customers will not curtail their activities; that general economic and market conditions will continue to be supportive; that the level of customer confidence and spending, and the demand for, and prices of, our products and services will be maintained; that support and demand for renewable energy and power generation solutions will continue to grow; that supply chain and inflationary challenges will not materially impact large project deliveries in our equipment backlog; that we will successfully execute initiatives to reduce our GHG emissions and support our customers on their individual GHG reduction pathways; that we will be able to successfully execute our plans and intentions, including our strategic priorities; that we will be able to attract and retain skilled staff; that market competition will remain at similar levels; that the products and technology offered by our competitors will be as expected; that identified opportunities for growth will result in revenue; that we will have sufficient liquidity to meet operational needs, commitments and obligations; that legislation in the various countries in which we operate will remain consistent and stable; that there will be no disruptive changes in the technology environment; that our current good relationship with Caterpillar, our customers and our suppliers, service providers and other third parties will be maintained and that Caterpillar and such other suppliers will deliver quality, competitive products with supply chain continuity; that oil prices will remain supportive of customer activity; that maximizing product support growth will positively affect our strategic priorities going forward; that quoting activity for requests for proposals for equipment and product support is reflective of opportunities; and that market recoveries in the regions in which we operate will continue. Some of the assumptions, risks, and other factors that could cause results to differ materially from those expressed in the forward-looking information contained in this news release, are discussed in our current AIF and in our annual and most recent quarterly MD&A for the financial risks. We caution readers that the risks described in the annual and most recent quarterly MD&A and in the AIF are not the only ones that could impact us. Additional risks and uncertainties not currently known to us or that are currently deemed to be immaterial may also have a material adverse effect on our business, financial condition, or results of operations. Except as otherwise indicated, forward-looking information does not reflect the potential impact of any non-recurring or other unusual items or of any dispositions, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after the date of this news release. The financial impact of these transactions and non-recurring and other unusual items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same manner we present known risks affecting our business.