Rob Wertheimer • Melius Research LLC

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CFO Brian Delghiaccio confirmed there would be no residual margin impact, as all incremental labor disruption costs will be excluded from adjusted results. He stated that the second-half margin moderation is due to tougher year-over-year comparisons, not inefficiencies. He also explained that bonus depreciation does not change their steady and consistent approach to capital expenditures, as they follow a ratable asset replacement cycle.

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CFO Brian Delghiaccio confirmed that the planned adjustments will back out the incremental costs, so no residual inefficiencies are expected to impact adjusted results. He explained that second-half margin performance is more about tougher year-over-year comps than current events. Regarding CapEx, Delghiaccio stated that bonus depreciation does not fundamentally change their steady, consistent, and ratable asset replacement strategy, as they would not retire an asset that still has remaining useful life.

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CFO Mark Smith attributed the Engine margin performance to price increases on new light-duty products, stable product quality, and higher joint venture income from China. CEO Jennifer Rumsey added that benefits from ongoing operational efficiency programs and prior restructuring also contributed. Regarding EPA 2027, management's earlier comments indicated the timing for regulatory clarity is highly uncertain.

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CFO Mark Smith attributed the resilient Engine margins to positive pricing on new light-duty products, stable product quality, and slightly higher joint venture income from China. Chair and CEO Jennifer Rumsey added that benefits from ongoing operational efficiency initiatives and prior restructuring also contributed to the performance.

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CFO Mark Smith and Executive Christopher Clulow clarified that the retroactive pricing was a localized, protracted negotiation in the light-duty business and not indicative of a broader shift in pricing power. CEO Jennifer Rumsey affirmed that for the next decade, reciprocating engines are expected to remain the primary solution for data center backup power due to their superior combination of lead time, cost, and reliability.

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CEO Joe Creed confirmed they are taking orders for data center applications that extend into the timeframe when new capacity will be online, based on long-term planning with customers. He also stated that Solar Turbines is seeing "unprecedented interest" for power generation and is currently able to keep up with demand while working to increase output.

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G. Frederick Bohley, COO of Allison Transmission, explained that while the immediate focus is on integrating the Dana business and realizing synergies, the deal's expanded global footprint and market presence will create more opportunities for future bolt-on acquisitions. He emphasized that the transaction provides a larger platform for both organic and inorganic growth.

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CEO Vicente Reynal attributed the delays primarily to uncertainty around tariffs and specific government funding acts affecting renewable energy. He clarified that the hesitancy is concentrated in larger, long-cycle projects, which are experiencing slower movement due to factors like spec changes or EPC resource constraints, rather than outright cancellations.

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EVP and CFO Philip Fracassa clarified the distribution outlook change was a cautious adjustment, noting channel inventories appear to be at good levels. He described the services business as mainly industrial repair, which can see discretionary spending pushed out amid uncertainty. He attributed the wind energy strength to a step-up in China, partly due to a regulatory pull-forward, but sees the market on a recovery path. President & CEO Rich Kyle added that price realization is typically faster in distribution.

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SVP & CFO Mark Humphrey explained that it is still 'early innings' and the immediate focus is on rightsizing the H&E fleet, with back-half 2025 CapEx increases dedicated to synergy-related fleet. SVP & COO Aaron Birnbaum added that employee turnover and anxiety at H&E have stabilized since the deal closed, mitigating further dissynergies, though Mr. Humphrey noted H&E still faces tough year-over-year comparisons.

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COO, EVP and President of Tools & Outdoor Christopher J. Nelson attributed the slow outdoor season to a late start caused by weather, but noted that POS activity has since become more robust. He stated the issue was market-related, not share-related, and expressed confidence in the company's share position with brands like DEWALT and Cub Cadet. He did not indicate a spillover effect into other tool categories.

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CEO Rafael Santana responded that Wabtec views potential consolidation as a significant opportunity. He explained that it would likely lead to increased carloads and rail volumes, making rail a more attractive mode of transport and ultimately creating a positive outcome for both the industry and Wabtec.

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Chair, President & CEO Judith Marks clarified the distinction: the project delays are related to the *execution* of the current backlog at job sites, partly due to macro uncertainty around tariffs. This is separate from the *orders* trend, which has been very strong for four consecutive quarters, building a healthy backlog that will primarily benefit revenue in 2026.

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CEO Judith Marks clarified that the project delays relate to the execution of the current backlog at job sites, where macro uncertainty around tariffs has caused some minor slowdowns affecting revenue timing. In contrast, the strength is in new orders, with four consecutive quarters of teens growth in North America. This strong order intake is building the backlog that will drive revenue growth in 2026 and beyond.

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Executive David Zapico attributed the strong margin performance, with core margins up 140 basis points, to AMETEK's operational excellence programs, good productivity, and positive price-cost mix. He noted that laboratory demand is currently very strong internationally, particularly in Asia, and sees potential pro-growth U.S. policies around energy, military spending, and equipment investment as positives for the company.

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