Ferguson Enterprises Inc. /de,
Fiscal Year 2025 Q1.

For further discussion on the Company's net sales, see the "Segment results" section below. Gross profit Gross profit in the second quarter of fiscal 2025 increased $13 million, or 0.6%, compared with the same period in fiscal 2024, primarily reflecting increased net sales. Gross profit as a percentage of sales was 29.7% and 30.4% in the second quarters of fiscal 2025 and fiscal 2024, respectively. The decrease of 0.7% reflected the impact on margins from subdued end market demand, as well as the impact of price deflation and sales mix. Gross profit in the year-to-date period of fiscal 2025 increased $22 million, or 0.5%, compared with the same period in fiscal 2024. Gross profit as a percentage of sales was 29.9% and 30.3% in the year-to-date periods of fiscal 2025 and fiscal 2024, respectively. The factors impacting the year-to-date comparisons were largely the same as those noted above for the quarter.

Selling, general and administrative ("SG&A") expenses SG&A expenses in the second quarter of fiscal 2025 increased $71 million, or 4.8%, compared with the same period in fiscal 2024. SG&A as a percentage of sales was 22.4% and 22.0% in the second quarters of fiscal 2025 and fiscal 2024, respectively. The increase in SG&A as a percent of sales primarily reflects the impact of cost inflation, mainly on infrastructure and fleet. SG&A expenses in the year-to-date period of fiscal 2025 increased $144 million, or 4.8%, compared with the same period in fiscal 2024. SG&A as a percentage of sales was 21.3% and 20.7% in the year-to-date period of fiscal 2025 and fiscal 2024, respectively. The factors impacting the year-to-date comparisons were largely the same as those noted above for the quarter, as well as the impact of increased labor costs, primarily related to wage inflation, on the year-to-date comparison. 20

Income tax Income tax expense was $94 million for the second quarter of fiscal 2025, a decrease of $17 million, or 15.3%, compared to the same period in fiscal 2024. In the year-to-date period of fiscal 2025, income tax expense was $248 million, a decrease of $35 million, or 12.4%, compared to the same period in fiscal 2024. In each case the decrease was due to lower income before income taxes. The Company's effective tax rates were 25.4% and 25.6% for the second quarters of fiscal 2025 and 2024, respectively. The Company's effective tax rates were 24.9% and 25.2% for the year-to-date periods of fiscal 2025 and 2024, respectively. For each of the year-over-year comparisons, the decrease in the effective tax rate was primarily due to discrete tax benefits recorded in fiscal 2025.

Net income Net income for the second quarter and year-to-date periods of fiscal 2025 was $276 million and $746 million, respectively. These represented decreases in net income of $46 million, or 14.3%, and $95 million, or 11.3%, compared with the respective periods in fiscal 2024 due to the various elements described in the sections above.

11 9 34 32 Net sales for the Canada segment were $319 million in the second quarter of fiscal 2025, an increase of $10 million, or 3.2%, compared to the same period in fiscal 2024. This increase in net sales was primarily driven by incremental sales from an acquisition of 5.4%, price inflation of approximately 2% and higher sales volume, partially offset by the impact of foreign currency exchange rates of 5.3%. Net sales were $722 million in the year-to-date period of fiscal 2025, an increase of $34 million, or 4.9%, compared with the same period in fiscal 2024. The factors impacting the year-to-date comparison were largely the same as those noted above for the quarter. Adjusted operating profit for the Canada segment in the second quarter and year-to-date periods of fiscal 2025 increased by $2 million compared with the respective periods in fiscal 2024 in connection with higher sales. 22

Diluted weighted average shares outstanding200.5 204.2 (1)Per share on a dilutive basis. (2)For the six months ended January 31, 2025, corporate restructurings primarily related to incremental costs in connection with transition activities following the establishment of our parent company's domicile in the United States. For the three and six months ended January 31, 2024, corporate restructuring costs related to incremental costs in connection with establishing a new corporate structure to domicile our ultimate parent company in the United States. (3)For the three and six months ended January 31, 2025 and 2024, discrete tax adjustments mainly related to the tax treatment of certain compensation items that are not material. (4)For the three and six months ended January 31, 2025 and 2024, the tax impact on non-GAAP adjustments primarily related to the amortization of acquired intangibles. 24

Cash flows from financing activities Six months ended January 31, (In millions)20252024 Net cash used in financing activities($289)($597) Net cash used in financing activities was $289 million and $597 million for the year-to-date periods of fiscal 2025 and 2024, respectively. Dividends paid to shareholders were $158 million and $305 million for the year-to-date periods of fiscal 2025 and 2024, respectively. The Company generally pays dividends in the fiscal quarter following the fiscal quarter in which the dividend was declared. However, the dividends declared in the fourth quarter of fiscal 2024 were also paid in the fourth quarter of fiscal 2024 due to the Merger. As such, no dividends were paid in the first quarter of fiscal 2025. Share repurchases under the Company's announced share repurchase program were $508 million and $250 million for the year-to-date periods of fiscal 2025 and fiscal 2024, respectively. Net proceeds from debt transactions were $421 million compared with net payments of $30 million for the year-to-date periods of fiscal 2025 and 2024, respectively. In the year-to-date period of fiscal 2025, the Company received net proceeds of $746 million and $325 million from the issuance of the 2034 Senior Notes and net borrowings under the Receivables Facility, respectively. These proceeds were partially offset by debt repayments of $500 million and $150 million in connection with the Company's Term Loans and the maturity of certain Private Placement Notes, respectively. In the year-to-date period of fiscal 2024, the Company repaid $55 million in connection with the maturity of certain Private Placement Notes, which was partially offset by net proceeds of $25 million borrowed under the Receivables Facility.

Income before income taxes370 433 994 1,124 Provision for income taxes(94)(111)(248)(283) Net income$276 $322 $746 $841 Net sales Net sales were $6.9 billion in the second quarter of fiscal 2025, an increase of $0.2 billion, or 3.0%, compared with the same period in fiscal 2024. The increase in net sales was driven by higher sales volume and incremental sales from acquisitions of 1.2%. These increases were partially offset by price deflation of approximately 2%, mainly within certain commodity categories in the United States. The Company's increase in net sales was driven by growth in both of the residential and non-residential markets in its United States segment. Net sales were $14.6 billion in the year-to-date period of fiscal 2025, an increase of $0.3 billion, or 1.8%, compared with the same period in fiscal 2024. The factors impacting the year-to-date comparison were largely the same as those noted above for the quarter.

Non-GAAP Reconciliations and Supplementary Information The Company reports its financial results in accordance with U.S. GAAP. However, the Company believes certain non-GAAP financial measures provide users of the Company's financial information with additional meaningful information to assist in understanding financial results and assessing the Company's performance from period to period. These non-GAAP financial measures include adjusted operating profit, adjusted net income and adjusted earnings per share ("adjusted EPS") - diluted. Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying businesses, and they are consistent with how business performance is planned, reported and assessed internally by management and the Company's Board of Directors. Such non-GAAP adjustments include amortization of acquired intangible assets, discrete tax items, and any other items that are non-recurring. Non-recurring items may include various restructuring charges, gains or losses on the disposals of businesses which by their nature do not reflect primary operations, as well as certain other items deemed non-recurring in nature and/or that are not a result of the Company's primary operations. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These non-GAAP financial measures should not be considered in isolation or as a substitute for results reported under U.S. GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of operations that, when viewed with U.S. GAAP results, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review the Company's financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

The following table presents highlights of the Company's performance for the periods below: Three months endedSix months ended January 31,January 31,

Three months ended January 31, (In millions, except per share amounts)20252024 per share(1) per share(1) Net income$276 $1.38 $322 $1.58 Corporate restructurings(2)

Cash flows As of January 31, 2025 and July 31, 2024, the Company had cash and cash equivalents of $764 million and $571 million, respectively. In addition to cash, the Company had $1.9 billion of available liquidity from undrawn debt facilities as of January 31, 2025. As of January 31, 2025, the Company's total debt was $4.3 billion. The Company anticipates that it will be able to meet its debt obligations as they become due.

Cash flows from investing activities Six months ended January 31, (In millions)20252024 Net cash used in investing activities($192)($231) Net cash used in investing activities was $192 million and $231 million for the year-to-date periods of fiscal 2025 and 2024, respectively. Capital expenditures totaled $158 million and $192 million for the year-to-date periods of fiscal 2025 and 2024, respectively. These investments were primarily for strategic projects to support future growth, such as new market distribution centers, our branch network and new technology. In addition, the Company invested $46 million and $67 million in new acquisitions in the year-to-date period of fiscal 2025 and fiscal 2024, respectively. 25

As of (In millions)January 31, 2025July 31, 2024 Short-term debt$400 $150 Long-term debt3,949 3,774 Total debt$4,349 $3,924 Private Placement Notes In June 2015 and November 2017, Wolseley Capital, Inc., a wholly-owned subsidiary of the Company, privately placed fixed rate notes (the "Private Placement Notes"). As of January 31, 2025, $700 million in Private Placement Notes remain outstanding. In the second quarter of fiscal year 2025, the Company repaid $150 million of Private Placement Notes that matured. In September 2025, an additional $400 million of such notes will mature.

Revolving Credit Facility The Company maintains a Revolving Facility with aggregate total available credit commitments of $1.35 billion. As of January 31, 2025, no borrowings were outstanding under the Revolving Facility.

As of January 31, 2025, $575 million in borrowings were outstanding under the Receivables Facility. Other The Company was in compliance with all debt covenants that were in effect as of January 31, 2025. See Note 5, Debt to the Condensed Consolidated Financial Statements and the notes to the consolidated financial statements in "Item 8. Financial Statements and Supplementary Data" of the Annual Report for further details regarding the Company's debt. There have been no significant changes to the Company's policies on accounting for, valuing or managing the risk of financial instruments during the second quarter of fiscal 2025.

Due from non-guarantor subsidiaries9,884 5,474 Three months ended January 31, (In millions)2025 Net sales$- Gross profit- Operating loss(5) Net loss(67)

Other interest income, net to non-guarantor subsidiaries344 Other income, net from non-guarantor subsidiaries(1) $4,383 (1)Includes income from intercompany transactions with non-guarantor subsidiaries, primarily from non-cash dividend transactions.

Adjusted earnings per share - diluted1.521.743.984.40 (1) The Company uses certain non-GAAP measures, which are not defined or specified under U.S. GAAP. See the section titled "Non-GAAP Reconciliations and Supplementary Information." For the second quarter of fiscal 2025, net sales increased by 3.0% compared to the second quarter of fiscal 2024, primarily due to higher sales volume and incremental revenue from acquisitions, partially offset by price deflation (approximately 2%), mainly within certain commodity categories in the United States. For the second quarter of fiscal 2025, operating profit decreased by 14.0% (adjusted operating profit decreased 13.7%), compared with the second quarter of fiscal 2024. This decrease was primarily due to higher operating costs driven by sales volume growth and cost inflation. For the second quarter of fiscal 2025, diluted earnings per share was $1.38 (adjusted diluted earnings per share: $1.52), decreasing 12.7% compared with the second quarter of fiscal 2024 (12.6% on an adjusted basis) due to lower net income, partially offset by the impact of share repurchases. Net cash provided by operating activities decreased to $0.7 billion in the year-to-date period of fiscal 2025 compared with $0.9 billion in the same period of fiscal 2024, reflecting an increase in working capital to support volume growth period-over-period, along with lower net income after adjusting for non-cash items. 19