PHINIA INC.

Previous wording

PHINIA is a diversified industrial supplier and global leader in the development of fuel systems, electrical systems, and aftermarket solutions, with a strong portfolio of trusted brands that includes DELPHI®, DELCO REMY®, and HARTRIDGE™. With over 100 years of manufacturing expertise and industry relationships, PHINIA has approximately 12,500 talented employees and over 40 locations in 20 countries and is headquartered in Auburn Hills, Michigan, USA. PHINIA systems and solutions are designed to keep combustion engines operating at peak performance across a variety of applications: medium- and heavy-duty commercial vehicle (on-road vehicles used for commercial transport classified class 4–8, 14,001 pounds or heavier); light commercial vehicle (on-road vehicles used for commercial transport classified class 1–3, 14,000 pounds or lighter); light passenger vehicles (on-road vehicles used primarily for carrying passengers); and off-highway, industrial, and other (including construction and agricultural machinery, vocational vehicles, marine, industrial applications, power generation, and aerospace and defense). PHINIA’s service solutions include vehicle repair and replacement parts, offering both new and remanufactured products through the original equipment manufacturer dealer network and the independent aftermarket channel.

Current wording

PHINIA is a diversified industrial supplier and global leader in the development of fuel systems, electrical systems, and aftermarket solutions, with a strong portfolio of trusted brands that includes DELPHI®, DELCO REMY®, HARTRIDGE™ and stoba®. With over 100 years of manufacturing expertise and industry relationships, PHINIA has approximately 13,500 talented employees and over 40 locations in 21 countries and is headquartered in Auburn Hills, Michigan, USA. Our systems and solutions are designed to keep combustion engines operating at peak performance across a variety of applications: medium- and heavy-duty commercial vehicle (on-road vehicles used for commercial transport classified as class 4-8, 14,001 pounds or heavier), light commercial vehicle (on-road vehicles used for commercial transport classified as class 1-3, 14,000 pounds or lighter), light passenger vehicle (on-road vehicles used primarily for carrying passengers), and off-highway, industrial, and other (including construction and agricultural machinery, vocational vehicles, marine, industrial applications, power generation, and aerospace and defense). PHINIA’s service solutions include vehicle repair and replacement parts, offering both new and remanufactured products through the original equipment manufacturer dealer network and the independent aftermarket channel.

Previous wording

We expect improved earnings and cash generation in 2026 as compared to 2025, as we expect foreign currency, operational efficiencies, and share gains to more than offset a softening original equipment (OE) market. Continued economic and geopolitical uncertainty is expected to continue to impact light vehicle (LV) volumes, which are expected to decline by mid-single digit percentages in our key markets. Commercial vehicle (CV) volumes are now expected to decline by low-single digit percentages in our key markets. Assuming constant foreign exchange rates and excluding sales from acquisitions, we expect a modest increase in sales. Additionally, we expect to continue to be impacted by other macroeconomic challenges in the second half of 2026, which may include but are not limited to elevated inflation, supply chain constraints, market volatility, higher tariffs (particularly in Mexico and China), evolving trade restrictions, government shutdowns, geopolitical tensions, and changes in international trade relations.

Current wording

We expect improved earnings and cash generation in 2026 as compared to 2025, as we expect foreign currency, operational efficiencies, and share gains to more than offset a softening original equipment (OE) market. Continued economic and geopolitical uncertainty is expected to continue to impact light vehicle (LV) volumes, which are expected to decline by mid-single digit percentages in our key markets. Commercial vehicle (CV) volumes are now expected to increase by low-single digit percentages in our key markets. Assuming constant foreign exchange rates and excluding sales from acquisitions, we expect a modest increase in sales. Additionally, we expect to continue to be impacted by other macroeconomic challenges in the fourth quarter of 2026, which may include but are not limited to elevated inflation, supply chain constraints, market volatility, higher tariffs (particularly in Mexico and China), evolving trade restrictions, government shutdowns, geopolitical tensions, and changes in international trade relations.

Previous wording

Despite the near-term uncertainties, the Company maintains a positive long-term outlook for its global business and is committed to new product development and strategic investments to support its product leadership and growth strategies. There are several trends that are driving the Company’s long-term growth that management expects to continue, including expansion in the CV market, growth in overall vehicle parc that supports aftermarket demand, increased consumer interest in hybrid and plug-in hybrid electric vehicles, adoption of additional product offerings enabling lower-carbon fuel solutions for combustion vehicles, and continued expansion in the aerospace and defense industry. In addition, we believe we are well positioned to continue to expand our differentiated offerings and capabilities across electronics, software and complete systems.

Current wording

Despite the near-term uncertainties, the Company maintains a positive long-term outlook for its global business and is committed to new product development and strategic investments to support its product leadership and growth strategies. There are several trends that are driving the Company’s long-term growth that management expects to continue, including expansion in the CV market, growth in overall vehicle parc that supports aftermarket solutions demand, increased consumer interest in hybrid and plug-in hybrid electric vehicles, adoption of additional product offerings enabling lower-carbon fuel solutions for combustion vehicles, and continued expansion in the aerospace and defense industry. In addition, we believe we are well positioned to continue to expand our differentiated offerings and capabilities across electronics, software and complete systems.

Previous wording

Net sales for the three months ended June 30, 2026 totaled $940 million, an increase of $50 million, or 6%, compared to the three months ended June 30, 2025. Cost of sales and cost of sales as a percentage of net sales were $724 million and 77%, respectively, during the three months ended June 30, 2026, compared to $693 million and 78%, respectively, during the three months ended June 30, 2025. The change in net sales, cost of sales, and gross profit for the three months ended June 30, 2026 was primarily driven by the impacts below.

Current wording

Net sales for the three months ended September 30, 2026 totaled $912 million, an increase of $4 million, or 0.4%, compared to the three months ended September 30, 2025. Cost of sales and cost of sales as a percentage of net sales were $708 million and 78% during both the three months ended September 30, 2026 and 2025 . The change in net sales, cost of sales, and gross profit for the three months ended September 30, 2026 was primarily driven by the impacts below.

Previous wording

1 Cost of sales in the three months ended June 30, 2026 included a benefit related to one-time IEEPA tariff refunds, while net sales included a reduction related to estimated amounts to be returned to customers for these amounts.

Current wording

1 Cost of sales in the three months ended September 30, 2026 included a benefit related to one-time tariff refunds, while net sales included a reduction related to estimated amounts to be returned to customers and the reversal of amounts previously expected to be recovered from customers related to these amounts.

Previous wording

SG&A for the three months ended June 30, 2026 was $128 million as compared to $112 million for the three months ended June 30, 2025. SG&A as a percentage of net sales was 14% for the three months ended June 30, 2026, compared to 13% for the three months ended June 30, 2025. SG&A expenses increased period-over-period, primarily attributable to increased employee costs, including stock-based compensation, as well as foreign currency exchange impacts and professional fees.

Current wording

SG&A for the three months ended September 30, 2026 was $111 million as compared to $105 million for the three months ended September 30, 2025. SG&A as a percentage of net sales was 12% for the three months ended September 30, 2026 and 2025. SG&A expenses increased period-over-period, primarily attributable to timing of R&D costs.

Previous wording

Restructuring expense was $8 million and$2 million for the three months ended June 30, 2026 and 2025, respectively. See Note 4, “Restructuring”, for further discussion.

Current wording

Restructuring expense was $5 million and $4 million for the three months ended September 30, 2026 and 2025, respectively. See Note 4, “Restructuring”, for further discussion.

Previous wording

Other operating (income) expense, net was expense of $1 million compared to income of $8 million for the six months ended June 30, 2026 and 2025, respectively. The change in other operating expense, net was primarily driven by a decrease in separation-related benefits. Other operating (income) expense, net was comprised of the following:

Current wording

Other operating expense, net was $4 million and $57 million for the three months ended September 30, 2026 and 2025, respectively. The change in other operating expense, net was primarily driven by a decrease in separation-related costs due to the Company recognizing a $39 million loss in connection with the settlement of separation-related claims with the Former Parent in the prior period. Other operating expense, net was comprised of the following:

Previous wording

Equity in affiliates’ earnings, net of tax was $4 million in the three months ended June 30, 2026 and 2025. This line item is driven by the results of the Company’s unconsolidated joint venture.

Current wording

Equity in affiliates’ earnings, net of tax was $4 million and $3 million in the three months ended September 30, 2026 and 2025, respectively. This line item is driven by the results of the Company’s unconsolidated joint venture.

Previous wording

Interest income was $2 million and $4 million in the three months ended June 30, 2026 and 2025, respectively. The interest income is primarily related to interest earned on funds held in money market, local overnight deposits, and short term investments.

Current wording

Interest income was $2 million and $3 million in the three months ended September 30, 2026 and 2025, respectively. The interest income is primarily related to interest earned on funds held in money market, local overnight deposits, and short term investments.

Previous wording

Interest expense was $21 million in the three months ended June 30, 2026 and 2025.

Current wording

Interest expense was $21 million and $20 million in the three months ended September 30, 2026 and 2025, respectively.

Previous wording

The Company’s net earnings per diluted share was $1.05 and $1.14 for the three months ended June 30, 2026 and 2025, respectively. The Company’s adjusted net earnings per diluted share was $1.53 and $1.27 for the three months ended June 30, 2026 and 2025, respectively. The Company defines adjusted net earnings per diluted share, a non-GAAP measure, as net earnings per diluted share adjusted to exclude: (i) the impact of restructuring expense, separation-related costs, merger and acquisition costs, 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 per diluted share is useful to investors in assessing the Company’s ongoing financial performance, as it provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance.

Current wording

The Company’s net earnings per diluted share was $1.80 and $0.33 for the three months ended September 30, 2026 and 2025, respectively. The Company’s adjusted net earnings per diluted share was $1.83 and $1.59 for the three months ended September 30, 2026 and 2025, respectively. The Company defines adjusted net earnings per diluted share, a non-GAAP measure, as net earnings per diluted share adjusted to exclude: (i) the impact of restructuring expense, separation-related costs, merger and acquisition costs, 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 per diluted share is useful to investors in assessing the Company’s ongoing financial performance, as it provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance.

Previous wording

The Company’s business is comprised of two reportable segments: Fuel Systems and Aftermarket.

Current wording

The Company’s business is comprised of two reportable segments: Power Systems and Aftermarket Solutions.

Previous wording

In the fourth quarter of 2025, the Company made a strategic decision to shift a significant portion of the OES business, previously reported in its Aftermarket segment, to the Fuel Systems segment, as distribution will now be handled by the Fuel Systems locations that manufacture the products. This is expected to streamline the sales structure to external customers while also reducing administrative efforts. The reporting segment disclosures have been updated accordingly which included recasting prior period information for the new reporting structure.

Current wording

In the fourth quarter of 2025, the Company made a strategic decision to shift a significant portion of the OES business, previously reported in its Aftermarket Solutions segment, to the Power Systems segment, as distribution will now be handled by the Power Systems locations that manufacture the products. This is expected to streamline the sales structure to external customers while also reducing administrative efforts. The reporting segment disclosures have been updated accordingly which included recasting prior period information for the new reporting structure.

Previous wording

Segment Adjusted Operating Income (AOI) is the measure of segment income or loss used by the Company. Segment AOI is comprised of segment operating income adjusted for restructuring, separation-related costs, merger and acquisition costs, intangible asset amortization expense, impairment charges and other items not reflective of ongoing operating income or loss. The Company believes Segment AOI is most reflective of the operational profitability or loss of its reportable segments.

Current wording

Segment AOI is the measure of segment income or loss used by the Company. Segment AOI is comprised of segment operating income adjusted for restructuring, separation-related costs, merger and acquisition costs, acquisition-related intangible asset amortization expense, impairment charges and other items not reflective of ongoing operating income or loss. The Company believes Segment AOI is most reflective of the operational profitability or loss of its reportable segments.

Previous wording

Segment AOI excludes certain corporate costs, which primarily represent corporate expenses not directly attributable to the individual segments. Corporate expenses not allocated to Segment AOI were $52 million and $49 million for the six months ended June 30, 2026 and 2025, respectively. The increase in corporate expenses was primarily related to employee compensation, mainly driven by the addition of a third tranche of performance stock units under the Company's stock incentive plan and increased performance-based incentive compensation.

Current wording

Segment AOI excludes certain corporate costs, which primarily represent corporate expenses not directly attributable to the individual segments. Corporate expenses not allocated to Segment AOI were $26 million for each of the three months ended September 30, 2026 and 2025.

Previous wording

Net sales for the six months ended June 30, 2026 totaled $1,818 million, an increase of $132 million, or 8%, compared to the six months ended June 30, 2025. Cost of sales and cost of sales as a percentage of net sales were $1,414 million and 78%, respectively, during the six months ended June 30, 2026, compared to $1,317 million and 78%, respectively, during the six months ended June 30, 2025. The change in net sales and cost of sales for the six months ended June 30, 2026 was primarily driven by the impacts below.

Current wording

Net sales for the nine months ended September 30, 2026 totaled $2,730 million, an increase of $136 million, or 5%, compared to the nine months ended September 30, 2025. Cost of sales and cost of sales as a percentage of net sales were $2,122 million and 78%, respectively, during the nine months ended September 30, 2026, compared to $2,025 million and 78%, respectively, during the nine months ended September 30, 2025. The change in net sales and cost of sales for the nine months ended September 30, 2026 was primarily driven by the impacts below.

Previous wording

1 Cost of sales in the six months ended June 30, 2026 included a benefit related to one-time IEEPA tariff refunds, while net sales included a reduction related to estimated amounts to be returned to customers for these amounts.

Current wording

1 Cost of sales in the nine months ended September 30, 2026 included a benefit related to one-time tariff refunds, while net sales included a reduction related to estimated amounts to be returned to customers and the reversal of amounts previously expected to be recovered from customers related to these amounts.

Previous wording

SG&A for the six months ended June 30, 2026 and 2025 was $243 million as compared to $219 million for the six months ended June 30, 2025. SG&A as a percentage of net sales was 13% for the six months ended June 30, 2026 and 2025. SG&A expenses increased period-over-period, primarily attributable to increased employee costs, including stock-based compensation, as well as foreign currency exchange impacts and professional fees.

Current wording

SG&A for the nine months ended September 30, 2026 was $354 million as compared to $324 million for the nine months ended September 30, 2025. SG&A as a percentage of net sales was 13% for the nine months ended September 30, 2026 and 2025. SG&A expenses increased period-over-period, primarily attributable to increased employee costs which includes stock-based compensation, timing of R&D costs, and foreign currency exchange impacts.

Previous wording

Restructuring expense was $11 million and $7 million for thesix months ended June 30, 2026 and 2025, respectively. See Note 4, “Restructuring,” for further discussion.

Current wording

Restructuring expense was $16 million and $11 million for the nine months ended September 30, 2026 and 2025, respectively. See Note 4, “Restructuring,” for further discussion.

Previous wording

Other operating income, net was de minimis compared to income of $6 million for the three months ended June 30, 2026 and 2025. The change in other operating income, net was primarily driven by a decrease in separation-related benefits. Other operating income, net was comprised of the following:

Current wording

Other operating expense, net was $5 million and $49 million for the nine months ended September 30, 2026 and 2025, respectively. The change in other operating expense, net was primarily driven by a decrease in separation-related costs due to the Company recognizing a $39 million loss in connection with the settlement of separation-related claims with the Former Parent in the prior period. Other operating expense, net was comprised of the following:

Previous wording

Equity in affiliates’ earnings, net of tax was $9 million and $8 million in the six months ended June 30, 2026 and 2025, respectively. This line item is driven by the results of the Company’s unconsolidated joint venture.

Current wording

Equity in affiliates’ earnings, net of tax was $13 million and $11 million in the nine months ended September 30, 2026 and 2025, respectively. This line item is driven by the results of the Company’s unconsolidated joint venture.

Previous wording

Interest income was $4 million and $8 million in the six months ended June 30, 2026 and 2025, respectively. The interest income is primarily related to interest earned on funds held in money market, local overnight deposits, and short term investments.

Current wording

Interest income was $6 million and $11 million in the nine months ended September 30, 2026 and 2025, respectively. The interest income is primarily related to interest earned on funds held in money market, local overnight deposits, and short term investments. The decrease in interest income was primarily due to lower average cash balances and decreasing interest rates.

Previous wording

Provision for income taxes was $47 million for the six months ended June 30, 2026, resulting in an effective tax rate of 38%, compared to $53 million, or 42%, for the six months ended June 30, 2025. The effective tax rate for the six months ended June 30, 2026 decreased as compared to the prior year as a result of an uncertain tax position recorded discretely in the six month period ended June 30, 2025 that did not recur in the six month period ended June 30, 2026.

Current wording

Provision for income taxes was $50 million for the nine months ended September 30, 2026, resulting in an effective tax rate of 26%, compared to $59 million, or 41%, for the nine months ended September 30, 2025. The effective tax rate for the nine months ended September 30, 2026 decreased as compared to the prior year due to favorable provision to return adjustments for tax returns filed in the period, a reduction in U.S. tax on foreign earnings and the recognition of an uncertain tax position recorded discretely in the nine month period ended September 30, 2025 that did not recur in the nine month period ended September 30, 2026.

Previous wording

Excluding the impact of items not related to the Company’s ongoing operations, the Company’s effective tax rate associated with ongoing operations was 30% for the six months ended June 30, 2026 compared to 36% for the six months ended June 30, 2025.

Current wording

Excluding the impact of items not related to the Company’s ongoing operations, the Company’s effective tax rate associated with ongoing operations was 28% for the nine months ended September 30, 2026 compared to 33% for the nine months ended September 30, 2025.

Previous wording

For further details, see Note 7, “Income Taxes,” to the Condensed Consolidated Financial Statements for the six months ended June 30, 2026 and 2025.

Current wording

For further details, see Note 7, “Income Taxes,” to the Condensed Consolidated Financial Statements for the nine months ended September 30, 2026 and 2025.

Previous wording

The Company’s net earnings per diluted share was $2.01 and $1.76 for the six months ended June 30, 2026 and 2025, respectively. The Company’s adjusted net earnings per diluted share was $2.81 and $2.21 for the six months ended June 30, 2026 and 2025, respectively. The Company defines adjusted net earnings per diluted share, a non-GAAP measure, as net earnings per diluted share adjusted to exclude: (i) the 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 per diluted share is useful to investors in assessing the Company’s ongoing financial performance, as it provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance.

Current wording

The Company’s net earnings per diluted share was $3.79 and $2.10 for the nine months ended September 30, 2026 and 2025, respectively. The Company’s adjusted net earnings per diluted share was $4.64 and $3.79 for the nine months ended September 30, 2026 and 2025, respectively. The Company defines adjusted net earnings per diluted share, a non-GAAP measure, as net earnings per diluted share adjusted to exclude: (i) the 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 per diluted share is useful to investors in assessing the Company’s ongoing financial performance, as it provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance.

Previous wording

Results by Reportable Segment for the six months ended June 30, 2026 and 2025

Current wording

Results by Reportable Segment for the nine months ended September 30, 2026 and 2025

Previous wording

The Company’s business is aggregated into two reportable segments: Fuel Systems and Aftermarket.

Current wording

The Company’s business is aggregated into two reportable segments: Power Systems and Aftermarket Solutions.

Previous wording

Segment Adjusted Operating Income (AOI) is the measure of segment income or loss used by the Company. Segment AOI is comprised of segment operating income adjusted for restructuring, transaction-related costs, acquisition-related intangible asset amortization expense, impairment charges and other items not reflective of ongoing operating income or loss. The Company believes Segment AOI is most reflective of the operational profitability or loss of its reportable segments.

Current wording

Segment AOI is the measure of segment income or loss used by the Company. Segment AOI is comprised of segment operating income adjusted for restructuring, separation-related costs, merger and acquisition costs, acquisition-related intangible asset amortization expense, impairment charges and other items not reflective of ongoing operating income or loss. The Company believes Segment AOI is most reflective of the operational profitability or loss of its reportable segments.

Previous wording

Segment AOI excludes certain corporate costs, which primarily represent corporate expenses not directly attributable to the individual segments. Corporate expenses not allocated to Segment AOI were $28 million and $25 million for the three months ended June 30, 2026 and 2025, respectively. The increase in corporate expenses was primarily related to employee compensation, mainly driven by the addition of a third tranche of performance stock units under the Company's stock incentive plan and increased performance-based incentive compensation.

Current wording

Segment AOI excludes certain corporate costs, which primarily represent corporate expenses not directly attributable to the individual segments. Corporate expenses not allocated to Segment AOI were $78 million and $75 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in corporate expenses was primarily related to employee compensation mainly driven by the addition of a third tranche of performance stock units under the Company’s stock incentive plan.

Previous wording

The following table presents the year-over-year change in net sales and Segment AOI for the Company’s reportable segments for the six months ended:

Current wording

The following table presents the year-over-year change in net sales and Segment AOI for the Company’s reportable segments for the nine months ended:

Previous wording

The Company maintains various liquidity sources, including cash and cash equivalents and the unused portion of its $500 million revolving credit facility maturing in July 2028 (the Revolving Facility). As of June 30, 2026, the Company had liquidity of $820 million, comprised of cash and cash equivalent balances of $370 million and availability on the Revolving Facility of $450 million. Given the Company’s strong liquidity position, management believes that it will have sufficient liquidity and will maintain compliance with all covenants through at least the next 12 months.

Current wording

The Company maintains various liquidity sources, including cash and cash equivalents and the unused portion of its $500 million revolving credit facility maturing in July 2028 (the Revolving Facility). As of September 30, 2026, the Company had liquidity of $813 million, comprised of cash and cash equivalent balances of $436 million and availability on the Revolving Facility of $377 million. Given the Company’s strong liquidity position, management believes that it will have sufficient liquidity and will maintain compliance with all covenants through at least the next 12 months.

Previous wording

At June 30, 2026 and December 31, 2025, the Company had $370 million and $359 million of cash and cash equivalents, respectively, of which $352 million and $330 million, respectively, was held by our subsidiaries outside of the United States. We believe our existing cash and cash flows generated from operations and the Revolving Facility will be responsive to the needs of our current and planned operations for at least the next 12 months and the foreseeable future thereafter. At June 30, 2026, the Company had total debt of $1,019 million.

Current wording

At September 30, 2026 and December 31, 2025, the Company had $436 million and $359 million of cash and cash equivalents, respectively, of which $361 million and $330 million, respectively, was held by our subsidiaries outside of the United States. We believe our existing cash and cash flows generated from operations and the Revolving Facility will be responsive to the needs of our current and planned operations for at least the next 12 months and the foreseeable future thereafter. At September 30, 2026, the Company had total debt of $1,093 million. During the quarter ended September 30, 2026, the Company borrowed under the Revolving Facility to prepare for the purchase of the stoba Group, which closed on October 1, 2026. Those amounts borrowed under the Revolving Facility are reflected in Cash and Cash Equivalents, as well as a reduction from the borrowing availability under the Revolving Facility, for the quarter ended September 30, 2026.

Previous wording

Net cash provided by operating activities was $144 million and $97 million in the six months ended June 30, 2026 and 2025, respectively. The increase in cash from operating activities for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 was primarily due to strong execution of inventory optimization initiatives and working capital discipline.

Current wording

Net cash provided by operating activities was $231 million and $216 million in the nine months ended September 30, 2026 and 2025, respectively. The increase in cash from operating activities for the nine months ended September 30, 2026 compared with the nine months ended September 30, 2025 was primarily due to higher net earnings performance, which contributed to stronger cash generation during the period.

Previous wording

Net cash used in investing activities was $53 million and $68 million in the six months ended June 30, 2026 and 2025, respectively, related to timing of capital expenditures. As a percentage of sales, capital expenditures were 3.0% and 4.1% for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Net cash used in investing activities was $70 million and $103 million in the nine months ended September 30, 2026 and 2025, respectively. The decrease is primarily related to timing of capital expenditures, as well as the SEM acquisition in the prior period. As a percentage of sales, capital expenditures were 2.6% and 3.7% for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Net cash used in financing activities was $81 million and $169 million in the six months ended June 30, 2026 and 2025, respectively. The decrease is primarily due to borrowings on the Revolving Facility in order to support regional liquidity needs, as well as lower stock repurchases.

Current wording

Net cash used in financing activities was $87 million and $245 million in the nine months ended September 30, 2026 and 2025, respectively. The decrease is primarily due to borrowings on the Revolving Facility in order to support acquisition initiatives and regional liquidity needs, lower stock repurchases, and the extinguishment of debt assumed through the SEM acquisition in the prior period.