Unaudited Condensed Consolidated Interim Financial Statements

BRP Inc.

For the three- and six-month periods ended July 31, 2026 and 2025

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF NET (LOSS) INCOME

[Unaudited]

[in millions of Canadian dollars, except per share data]

 

								Three-month periods ended												Six-month periods ended
		Notes						July 31, 2026				July 31, 2025								July 31, 2026				July 31, 2025
Revenues			9						$2,236.8				$1,888.2								$4,628.6				$3,735.1
Cost of sales									1,974.3				1,490.5								3,804.5				2,942.6
Gross profit									262.5				397.7								824.1				792.5
Operating expenses
Selling and marketing									116.7				112.4								247.1				219.8
Research and development									108.7				96.4								227.5				201.4
General and administrative									89.3				96.5								177.4				174.3
Other operating (income) expenses			10						(2.2)				2.0								(3.4)				12.7
Total operating expenses									312.5				307.3								648.6				608.2
Operating income (loss)									(50.0)				90.4								175.5				184.3
Financing costs			11						50.6				50.5								95.6				97.1
Financing income			11						(5.4)				(3.3)								(8.5)				(4.6)
Foreign exchange loss (gain) on long-term debt									72.6				6.9								81.4				(119.5)
Income (loss) before income taxes									(167.8)				36.3								7.0				211.3
Income tax expense (recovery)			12						(31.0)				(20.8)								16.5				(6.8)
Net (loss) income from continuing operations									(136.8)				57.1								(9.5)				218.1
Net income (loss) from discontinued operations			14						2.7				(33.6)								4.3				(44.5)
Net (loss) income									$(134.1)				$23.5								$(5.2)				$173.6
Attributable to shareholders									$(133.9)				$24.3								$(4.4)				$174.5
Attributable to non-controlling interest									$(0.2)				$(0.8)								$(0.8)				$(0.9)
Basic (loss) earnings per share - continuing operations			8						$(1.88)				$0.79								$(0.12)				$3.00
Diluted (loss) earnings per share - continuing operations			8						$(1.88)				$0.79								$(0.12)				$2.98
Basic earnings (loss) per share - discontinued operations			8						$0.04				$(0.46)								$0.06				$(0.61)
Diluted earnings (loss) per share - discontinued operations			8						$0.04				$(0.46)								$0.06				$(0.60)
Basic (loss) earnings per share			8						$(1.84)				$0.33								$(0.06)				$2.39
Diluted (loss) earnings per share			8						$(1.84)				$0.33								$(0.06)				$2.38

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

2

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

[Unaudited]

[in millions of Canadian dollars]

 

										Three-month periods ended												Six-month periods ended
		Notes								July 31, 2026				July 31, 2025								July 31, 2026				July 31, 2025
Net (loss) income											$(134.1)				$23.5								$(5.2)				$173.6
Other comprehensive income
Items that will be reclassified subsequently to net income
Net changes in fair value of derivatives designated as cash flow hedges											(20.5)				3.5								(27.5)				33.2
Net changes in unrealized (loss) gain on translation of foreign operations											(10.3)				7.3								(13.6)				65.2
Income tax recovery (expense)											5.5				(2.5)								7.3				(8.7)
											(25.3)				8.3								(33.8)				89.7
Items that will not be reclassified subsequently to net income
Actuarial gains on defined benefit pension plans											8.7				6.6								17.0				10.2
Gain on fair value of restricted investments											0.1				0.3								—				—
Income tax expense											(2.2)				(1.8)								(4.3)				(2.5)
											6.6				5.1								12.7				7.7
Total other comprehensive (loss) income											(18.7)				13.4								(21.1)				97.4
Total comprehensive (loss) income											$(152.8)				$36.9								$(26.3)				$271.0
Attributable to shareholders											$(152.8)				$37.7								$(25.7)				$271.9
Attributable to non-controlling interest											—				(0.8)								(0.6)				(0.9)
Total comprehensive (loss) income attributable to shareholders
Continuing operations											$(155.7)				$72.0								$(30.9)				$309.1
Discontinued operations			14								2.9				(34.3)								5.2				(37.2)
											$(152.8)				$37.7								$(25.7)				$271.9

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

3

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

[Unaudited]

[in millions of Canadian dollars]

As at

 

		Notes				July 31, 2026				January 31, 2026
Cash and cash equivalents							$647.8				$427.1
Trade and other receivables							393.7				607.2
Income taxes and investment tax credits receivable							161.7				157.6
Other financial assets							48.0				60.7
Inventories			3				1,923.7				1,824.6
Other current assets							92.3				66.2
Assets classified as held for sale			14				130.9				126.1
Total current assets							3,398.1				3,269.5
Investment tax credits receivable							14.0				26.8
Other financial assets							32.1				62.9
Property, plant and equipment							1,757.2				1,816.8
Intangible assets							497.7				494.9
Right-of-use assets							467.5				212.2
Deferred income taxes							466.8				436.2
Other non-current assets							2.8				3.5
Total non-current assets							3,238.1				3,053.3
Total assets							$6,636.2				$6,322.8
Trade payables and accruals							$1,505.7				$1,515.2
Provisions			4				920.2				737.4
Other financial liabilities							176.0				73.4
Income tax payable							18.4				24.1
Deferred revenues							64.3				62.0
Current portion of long-term debt			5				49.7				49.2
Current portion of lease liabilities			5				57.2				55.1
Other current liabilities							33.9				26.7
Liabilities associated to assets classified as held for sale			14				30.4				26.8
Total current liabilities							2,855.8				2,569.9
Long-term debt			5				2,449.8				2,393.1
Lease liabilities			5				442.8				182.3
Provisions			4				134.9				120.7
Other financial liabilities							77.1				71.9
Deferred revenues							77.7				82.3
Employee future benefit liabilities							191.4				210.9
Deferred income taxes							34.9				34.4
Other non-current liabilities							36.6				46.6
Total non-current liabilities							3,445.2				3,142.2
Total liabilities							$6,301.0				$5,712.1
Equity							$335.2				$610.7
Total liabilities and equity							$6,636.2				$6,322.8

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

4

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

[Unaudited]

[in millions of Canadian dollars]

For the six-month period ended July 31, 2026

 

		Attributed to shareholders
			Capital Stock (Note 6)				Contributed surplus				Retained earnings (losses)				Translation of foreign operations				Cash- flow hedges				Total				Non- controlling interests				Total equity
Balance as at January 31, 2026			$279.5				$86.5				$153.8				$83.5				$0.8				$604.1				$6.6				$610.7
Net loss			—				—				(4.4	)			—				—				(4.4	)			(0.8	)			(5.2	)
Other comprehensive income (loss)			—				—				12.7				(13.8	)			(20.2	)			(21.3	)			0.2				(21.1	)
Total comprehensive income (loss)			—				—				8.3				(13.8	)			(20.2	)			(25.7	)			(0.6	)			(26.3	)
Dividends			—				—				(36.4	)			—				—				(36.4	)			—				(36.4	)
Issuance of subordinate shares (Note 6)			34.3				(8.3	)			—				—				—				26.0				—				26.0
Repurchase of subordinate shares (Note 6)			(17.7	)			(42.3	)			(184.0	)			—				—				(244.0	)			—				(244.0	)
Stock-based compensation			—				4.7				—				—				—				4.7				—				4.7
Other			—				—				—				—				—				—				0.5				0.5
Balance as at July 31, 2026			$296.1				$40.6				$(58.3	)			$69.7				$(19.4	)			$328.7				$6.5				$335.2
For the six-month period ended July 31, 2025
		Attributed to shareholders
			Capital Stock (Note 6)				Contributed surplus				Retained earnings (losses)				Translation of foreign operations				Cash- flow hedges				Total				Non- controlling interests				Total equity
Balance as at January 31, 2025			$251.0				$83.0				$(37.3	)			$(21.5	)			$(33.9	)			$241.3				$5.5				$246.8
Net income (loss)			—				—				174.5				—				—				174.5				(0.9	)			173.6
Other comprehensive income			—				—				7.7				65.2				24.5				97.4				—				97.4
Total comprehensive income (loss)			—				—				182.2				65.2				24.5				271.9				(0.9	)			271.0
Dividends			—				—				(31.3	)			—				—				(31.3	)			—				(31.3	)
Issuance of subordinate shares (Note 6)			0.8				(0.2	)			—				—				—				0.6				—				0.6
Stock-based compensation			—				12.4				—				—				—				12.4				—				12.4
Special long-term incentive program (Note 7)			—				(9.3	)			—				—				—				(9.3	)			—				(9.3	)
Other			—				—				—				—				—				—				3.4				3.4
Balance as at July 31, 2025			$251.8				$85.9				$113.6				$43.7				$(9.4	)			$485.6				$8.0				$493.6

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

5

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

[Unaudited]

[in millions of Canadian dollars]

 

								Six-month periods ended
		Notes						July 31, 2026				July 31, 2025
OPERATING ACTIVITIES
Net income (loss)									$(5.2)				$173.6
Non-cash and non-operating items:
Depreciation expense									221.7				219.5
Income tax expense (recovery)									18.7				(20.6)
Foreign exchange loss (gain) on long-term debt									81.4				(119.5)
Interest expense									83.9				87.9
Unrealized foreign exchange (gain) loss on other working capital items									(41.2)				35.0
Other									16.8				6.2
Cash flows generated from operations before changes in working capital									376.1				382.1
Changes in working capital:
Decrease in trade and other receivables									222.1				110.7
(Increase) decrease in inventories									(72.0)				42.0
(Increase) decrease in other assets									(23.4)				2.2
Decrease in trade payables and accruals									(14.3)				(24.1)
Increase in other financial liabilities									41.8				12.8
Increase (decrease) in provisions									177.7				(97.6)
Decrease in other liabilities									(11.1)				(9.5)
Cash flows generated from operations									696.9				418.6
Income taxes paid, net of refunds									(10.1)				(45.5)
Net cash flows generated from operating activities									686.8				373.1
INVESTING ACTIVITIES
Additions to property, plant and equipment									(105.5)				(115.5)
Additions to intangible assets									(21.9)				(18.4)
Proceeds of disposal from Marine businesses			14						—				18.2
Other									1.2				(3.4)
Net cash flows used in investing activities									(126.2)				(119.1)
FINANCING ACTIVITIES
Repayment of long-term debt			5						(25.4)				(31.4)
Repayment of lease liabilities									(27.8)				(29.1)
Interest paid									(82.6)				(86.0)
Issuance of subordinate voting shares			6						26.0				0.6
Repurchase of subordinate voting shares			6						(195.3)				—
Dividends paid									(36.4)				(31.3)
Other									0.5				3.2
Net cash flows used in financing activities									(341.0)				(174.0)
Effect of exchange rate changes on cash and cash equivalents									1.1				11.6
Net increase in cash and cash equivalents									220.7				91.6
Cash and cash equivalents at the beginning of period									427.8				180.0
Cash and cash equivalents at the end of period									$648.5				$271.6

The Company has elected to present a consolidated statement of cash flows that includes both continuing and discontinued operations. Amounts related to discontinued operations by operating, investing and financing activities are disclosed in Note 14.

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

6

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

1.	NATURE OF OPERATIONS

BRP Inc. (“BRP”) is incorporated under the laws of Canada. BRP’s multiple voting shares are owned by Beaudier Inc. and 4338618 Canada Inc. (collectively, “Beaudier Group”), Bain Capital Integral Investors II, L.P. (“Bain Capital”) and La Caisse de dépôt et placement du Québec (“La Caisse”), (collectively, the “Principal Shareholders”). BRP’s subordinate voting shares are listed in Canada on the Toronto Stock Exchange and in the United States on the Nasdaq Global Select Market under the symbol DOO.

BRP and its subsidiaries (the “Company”) design, develop, manufacture and sell powersports vehicles. The Company’s diversified portfolio of products includes: “Year-Round Products”, which consists of all-terrain vehicles, side-by-side vehicles, three-wheel vehicles and electric motorcycles; “Seasonal Products”, which consists of snowmobiles, personal watercraft and pontoons; and “PA&A, OEM Engines and Others”, which consists of parts, accessories and apparel (“PA&A”), engines for karts, recreational aircrafts and jet boats, as well as other products and services.

The Company’s products are sold mainly through a network of independent dealers, independent distributors and to original equipment manufacturers (the “Customers”). The Company distributes its products worldwide and manufactures them in Mexico, Canada, Austria, the United States, Finland, Australia and Germany.

The Company’s headquarters is located at 726 Saint-Joseph Street, Valcourt, Québec, J0E 2L0.

 

2.	BASIS OF PRESENTATION

These unaudited condensed consolidated interim financial statements for the three- and six-month periods ended July 31, 2026 and 2025 have been prepared using accounting policies consistent with IFRS^® Accounting Standards as issued by the International Accounting Standards Board and in accordance with IAS 34 “Interim Financial Reporting”. These unaudited condensed consolidated interim financial statements for the three- and six-month periods ended July 31, 2026 and 2025 follow the same accounting policies as the audited consolidated financial statements for the year ended January 31, 2026 and, as such, should be read in conjunction with them.

 

7

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

2.	BASIS OF PREPARATION [CONTINUED]

The preparation of these unaudited condensed consolidated interim financial statements in accordance with the Company’s accounting policies requires management to make estimates and judgments that can affect the reported amounts of assets and liabilities, related amounts of revenues and expenses, other comprehensive income and disclosures made. The Company’s best estimates are based on the information, facts and circumstances available at the time estimates are made. Management uses historical experience and information, general economic conditions and trends, as well as assumptions regarding probable future outcomes as the basis for determining estimates. Actual results could differ from the estimates used and such differences could be significant.

These unaudited condensed consolidated interim financial statements include the financial statements of BRP and its subsidiaries. BRP controls all of its subsidiaries that are wholly owned through voting equity interests, except for BRP Commerce & Trade (Shanghai) Company Limited in China, and LVHA Manufacturing Company Limited in Vietnam for which a non-controlling interest of 20% and 35% respectively are recorded upon consolidation, and Pinion GmbH in Germany for which there is a non-controlling interest of 20%. BRP is also part of a joint venture located in Austria. All inter-company transactions and balances have been eliminated upon consolidation.

The Company’s revenues and operating income experience substantial fluctuations from quarter to quarter. In general, wholesale sales of the Company’s products are higher in the period immediately preceding and during their respective season of use. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and geographic demand, the introduction of new products and models, and production scheduling for particular types of products.

On September 2, 2026, the Board of Directors of the Company approved these unaudited condensed consolidated interim financial statements for the three- and six-month periods ended July 31, 2026 and 2025.

 

3.	INVENTORIES

The Company’s inventories were as follows, as at:

 

		July 31, 2026				January 31, 2026
Materials and work in progress			$796.6				$707.0
Finished products			693.4				707.7
Parts, accessories and apparel			433.7				409.9
Total inventories			$1,923.7				$1,824.6

The Company recognized in the condensed consolidated interim statements of net (loss) income during the three- and six-month periods ended July 31, 2026, a net write-down on inventories of $4.0 million and $19.3 million respectively ($0.3 million and $6.6 million respectively during the three- and six-month periods ended July 31, 2025).

 

8

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

4.	PROVISIONS

The Company’s provisions were as follows, as at:

 

		July 31, 2026				January 31, 2026
Product-related			$860.9				$810.2
Other			194.2				47.9
Total provisions			$1,055.1				$858.1
Current			920.2				737.4
Non-current			134.9				120.7
Total provisions			$1,055.1				$858.1

Product-related provisions include provisions for regular warranty coverage on products sold, product liability provisions and provisions related to sales programs offered by the Company to its customers in order to support the retail activity.

The non-current portion of provisions is mainly attributable to product-related provisions.

The changes in provisions were as follows:

 

		Product-related								Other								Total
Balance as at January 31, 2026			$810.2								$47.9								$858.1
Expensed during the period			617.9								175.2								793.1
Paid during the period			(587.3	)							(28.4	)							(615.7	)
Reversed during the period			(1.1	)							(0.1	)							(1.2	)
Effect of foreign currency exchange rate changes			21.3								(0.4	)							20.9
Unwinding of discount and effect of changes in discounting estimates			(0.1	)							—								(0.1	)
Balance as at July 31, 2026			$860.9								$194.2								$1,055.1

 

9

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

5.

DEBT

Revolving Credit Facility

The Company has a Revolving Credit Facility totaling $1,500.0 million, which can also be drawn in U.S dollar or Euro equivalent. As at July 31, 2026, the Company had no outstanding amount drawn on the Revolving Credit Facility (nil as at January 31, 2026). Commitment fees on the undrawn amount of the Revolving Credit Facility, varying from 0.25% to 0.40%, were 0.25%.

The applicable interest rates are subject to a customary credit spread adjustment ranging from 0.45% to 3.00%, which varies depending on a Leverage Ratio. Based on the Leverage Ratio, the cost of borrowing as at July 31, 2026, in Canadian dollars, was either the CORRA plus 1.70% or the Canadian Prime Rate plus 0.70%. In U.S. dollars, it was either the SOFR plus 1.70%, the U.S. Base Rate plus 0.70% or the U.S. Prime Rate plus 0.70%. In Euros, it was the EURIBOR plus 1.70%.

The Company is required to maintain, under certain conditions, a minimum fixed charge coverage ratio. Additionally, the total available borrowing under the Revolving Credit Facility is subject to a borrowing base calculation representing 75% of the carrying amount of trade and other receivables plus 50% of the carrying amount of inventories. The total amount available was $1,265.0 million as at July 31, 2026.

Long-Term Debt

As at July 31, 2026 and January 31, 2026, the maturity dates, interest rates, outstanding nominal amounts and carrying amounts of long-term debt were as follows:

 

July 31, 2026

Maturity date

Contractual interest rate

Effective interest rate

Outstanding nominal amount

Carrying amount

Term Facility

Term Loan B-2

December 2029

5.98%

5.98%

U.S. $568.6

$797.8

Term Loan B-3

January 2031

5.98%

5.98%

U.S. $1,147.9

1,610.6

Term Loans

Mar. 2027 to Dec. 2030

0.93% to 3.50%

2.72% to 6.50%

€58.8

91.1

Total long-term debt

$2,499.5

Current

49.7

Non-current

2,449.8

Total long-term debt

$2,499.5

 

10

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

5.	DEBT [CONTINUED]

 

January 31, 2026

Maturity date

Contractual interest rate

Effective interest rate

Outstanding nominal amount

Carrying  amount

Term Facility

Term Loan B-2

December 2029

5.92%

5.92%

U.S. $571.5

$774.8

Term Loan B-3

January 2031

5.92%

5.92%

U.S. $1,153.7

1,564.2

Term Loans

Mar. 2026 to Dec. 2030

0.93% to 3.23%

2.48% to 6.50%

€67.1

103.3

Total long-term debt

$2,442.3

Current

49.2

Non-current

2,393.1

Total long-term debt

$2,442.3

The following table explains the changes in long-term debt during the six-month period ended July 31, 2026:

 

						Statements of cash flows										Non-cash changes
		Carrying amount as at January 31, 2026				Issuance				Repayment						Effect of foreign currency exchange rate changes				Other				Carrying amount as at  July 31, 2026
Term Facility			$2,339.0				$—				$(12.0)						$81.4				$—				$2,408.4
Term Loans			103.3				—				(13.4)						0.3				0.9				91.1
Total			$2,442.3				$—				$(25.4)						$81.7				$0.9				$2,499.5

 

11

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

5.	DEBT [CONTINUED]

 

a)	Term Facility

As at July 31, 2026, the cost of borrowing under the Term Loan B-2 was as follows:

(i) Term SOFR, plus 2.25% per annum, with a Term SOFR floor of 0.50%

As at July 31, 2026, the cost of borrowing under the Term Loan B-3 was as follows:

(i) Term SOFR, plus 2.25% per annum, with a Term SOFR floor of 0.00%

Under the Term Facility, the cost of borrowing in U.S. Base Rate or U.S. Prime Rate cannot be lower than the cost of borrowing under SOFR.

The Company is required to repay a minimum of 0.25% of the nominal amount each quarter, less any voluntary prepayments done to date. Consequently, the Company repaid an amount of U.S. $8.7 million ($12.0 million) during the six-month period ended July 31, 2026 (U.S. $7.5 million ($10.4 million) during the six-month period ended July 31, 2025). Also, the Company may be required to repay a portion of the Term Facility in the event that it has an excess cash position at the end of the fiscal year and its Leverage Ratio is above a certain threshold level. As at July 31, 2026 and 2025, the Company was not required to repay any portion of the Term Facility under this requirement.

 

b)	Lease Liability

During the six-month period ended July 31, 2026, the Company entered a lease agreement for a distribution center related to PA&A operations in Saint-Philippe, Quebec. As a result, a lease liability of $246.7 million has been recognized in the condensed consolidated statement of financial position.

 

12

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

6.	CAPITAL STOCK

The changes in capital stock issued and outstanding were as follows:

 

		Number of shares				Carrying Amount
Subordinate voting shares
Balance as at January 31, 2026			38,303,785			$276.7
Issued upon exercise of stock options			673,169			34.3
Repurchased under the normal course issuer bid program			(2,258,400)			(17.7)
Balance as at July 31, 2026			36,718,554			$293.3
Multiple voting shares
Balance as at January 31, 2026			34,819,204			$2.8
Balance as at July 31, 2026			34,819,204			$2.8
Total outstanding as at July 31, 2026			71,537,758			$296.1

 

a)	Normal course issuer bid program (“NCIB”)

During the six-month period ended July 31, 2026, the Company continued share repurchases under the NCIB that was announced and started during the fiscal year ended January 31, 2026 and repurchased for cancellation 2,258,400 subordinate voting shares, for a total consideration of $201.7 million, of which $6.4 million will be paid upon settlement.

Of the total consideration of $201.7 million, $17.7 million represents the carrying amount of the shares repurchased and $184.0 million represents the amount charged to retained earnings.

As at July 31, 2026, a $42.3 million financial liability, with a corresponding amount in equity, was recorded in the consolidated statements of financial position in relation to the NCIB. This liability represented the value of subordinate voting shares expected to be repurchased by a designated broker under an automatic share purchase plan. This automatic share purchase plan allows the designated broker to purchase subordinate voting shares under pre-set conditions at times when the Company would ordinarily not be permitted to purchase shares due to regulatory restrictions or self-imposed blackout periods.

 

13

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

7.	SHARE BASED PAYMENT PLANS

The Company has two share-based payment plans: pursuant to its stock option plan, the Company has made equity-settled stock option grants, and pursuant to its share unit plan, it has made cash-settled restricted share units (“RSU”) grants.

 

a)	Stock options

During the six-month periods ended July 31, 2026 and 2025, the Company granted respectively 324,840 and 752,300 stock options to eligible officers and employees to acquire subordinate voting shares at an average exercise price of $99.26 and $49.78 respectively. The fair value of the options at the grant date was $35.40 and $17.28, respectively. Such stock options are time vesting and 25% of the options will vest on each of the first, second, third and fourth anniversary of the grant. The stock options have a ten-year term at the end of which the options expire.

 

b)	Restricted share units

During the six-month periods ended July 31, 2026 and 2025, the Company granted respectively 169,700 and 230,020 RSU. The RSU were granted to eligible employees at a share price of $99.26 and $49.78 respectively. The RSU that were granted during the six-month periods ended July 31, 2026 and 2025 are time vesting and 33% of the units will vest on each of the first, second and third anniversary of the grant. The associated compensation expense and liability are recognized over the three-year vesting period. To mitigate the impact of share price variation on this payment plan, the Company secured hedging contracts.

During the six-month period ended July 31, 2025, the Company granted 266,304 restricted share units at a share price of $62.87 under a special long-term incentive program. The restricted share units are subject to time-based and continued employment criteria as well as the voluntary forfeiture of a number of stock options issued in calendar years 2021, 2022 and 2023. As a result of this grant, the Company recognized in the condensed consolidated interim statements of net income an expense of $4.3 million, representing the incremental fair value of the restricted share units compared to the 2021-2023 stock options both measured at the grant date. The Company also reclassified $13.6 million from contributed surplus to other liability, representing the change from an equity to cash settled plan. To mitigate the impact of share price variation on this payment plan, the Company secured hedging contracts.

 

14

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

8.	EARNINGS PER SHARE

 

a)	Basic earnings per share

Details of basic earnings per share were as follows:

 

		Three-month periods ended								Six-month periods ended
		July 31, 2026				July 31, 2025				July 31, 2026				July 31, 2025
Net (loss) income attributable to shareholders - continuing operations			$(136.6)			$57.9					$(8.7)			$219.0
Net income (loss) attributable to shareholders - discontinued operations			2.7			(33.6)					4.3			(44.5)
Net (loss) income attributable to shareholders			$(133.9)			$24.3					$(4.4)			$174.5
Weighted average number of shares			72,756,365			73,040,187					72,950,539			73,036,072
Basic (loss) earnings per share - continuing operations			$(1.88)			$0.79					$(0.12)			$3.00
Basic earnings (loss) per share - discontinued operations			0.04			(0.46)					0.06			(0.61)
Basic (loss) earnings per share			$(1.84)			$0.33					$(0.06)			$2.39

 

b)	Diluted earnings per share

Details of diluted earnings per share were as follows:

 

		Three-month periods ended								Six-month periods ended
		July 31, 2026				July 31, 2025				July 31, 2026				July 31, 2025
Net (loss) income attributable to shareholders - continuing operations			$(136.6)			$57.9					$(8.7)			$219.0
Net income (loss) attributable to shareholders - discontinued operations			2.7			(33.6)					4.3			(44.5)
Net (loss) income attributable to shareholders			$(133.9)			$24.3					$(4.4)			$174.5
Weighted average number of shares			72,756,365			73,040,187					72,950,539			73,036,072
Dilutive effect of stock options			—			576,570					—			533,162
Weighted average number of diluted shares			72,756,365			73,616,757					72,950,539			73,569,234
Diluted (loss) earnings per share - continuing operations			$(1.88)			$0.79					$(0.12)			$2.98
Diluted (loss) earnings per share - discontinued operations			0.04			(0.46)					0.06			(0.60)
Diluted (loss) earnings per share			$(1.84)			$0.33					$(0.06)			$2.38

Due to the net loss reported for the three- and six-month periods ended July 31, 2026, all 2,833,143 outstanding stock options were considered anti-dilutive. Accordingly, basic and diluted loss per share were identical for both periods. For the corresponding three- and six-month periods ended July 31, 2025, 2,610,744 and 2,796,919 stock options, respectively, were deemed to be anti-dilutive and also excluded from the above calculation.

 

15

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

9.

REVENUES

Details of revenues were as follows:

 

		Three-month periods ended										Six-month periods ended
		July 31, 2026				July 31, 2025						July 31, 2026				July 31, 2025
Year-Round Products			$1,485.1			$1,113.8							$2,933.8			$2,219.6
Seasonal Products			427.7			469.7							996.1			888.9
PA&A, OEM Engines and Others			324.0			304.7							698.7			626.6
Revenues			$2,236.8			$1,888.2							$4,628.6			$3,735.1

The following table provides geographic information on the Company’s revenues. The attribution of revenues was based on customer locations:

 

		Three-month periods ended								Six-month periods ended
		July 31, 2026				July 31, 2025				July 31, 2026				July 31, 2025
United States			$1,268.8			$1,080.7					$2,596.3			$2,090.4
Canada			352.6			264.5					748.3			490.3
Europe			293.9			262.6					639.9			570.0
Asia Pacific			144.7			130.4					278.3			268.9
Latin America			172.1			145.8					357.0			309.0
Other			4.7			4.2					8.8			6.5
Revenues			$2,236.8			$1,888.2					$4,628.6			$3,735.1

 

16

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and six-month periods ended July 31, 2026 and 2025

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

 

10. OTHER OPERATING (INCOME) EXPENSES

Details of other operating (income) expenses were as follows:

 

		Three-month periods ended												Six-month periods ended
		July 31, 2026				July 31, 2025								July 31, 2026				July 31, 2025
Foreign exchange (gain) loss on working capital elements			$(7.1)				$(2.4)								$(15.0)				$17.9
Loss (gain) on forward exchange contracts			5.4				4.2								10.1				(7.6)
Other			(0.5)				0.2								1.5				2.4
Other operating (income) expenses			$(2.2)				$2.0								$(3.4)				$12.7

 

11.	FINANCING COSTS AND INCOME

Details of financing costs and financing income were as follows:

 

		Three-month periods ended												Six-month periods ended
		July 31, 2026				July 31, 2025								July 31, 2026				July 31, 2025
Interest on long-term debt			$37.3				$40.8								$73.0				$79.2
Interest on lease liabilities			5.3				2.6								8.1				4.9
Net interest on employee future benefit liabilities			2.3				1.9								4.5				3.8
Interest and commitment fees on revolving credit facilities			1.4				1.5								2.6				3.5
Other			4.3				3.7								7.4				5.7
Financing costs			50.6				50.5								95.6				97.1
Financing income			(5.4	)			(3.3	)							(8.5	)			(4.6	)
Net financing costs			$45.2				$47.2								$87.1				$92.5

 

17