Mr. Mike Waites reports

FINNING REPORTS Q1 2013 RESULTS AND INCREASES DIVIDEND

Finning International Inc. had quarterly revenues of $1.6-billion, an 8-per-cent increase over first-quarter 2012. Strong revenue growth in South America more than offset lower revenues from Canada, the United Kingdom and Ireland. Product support revenues grew by 13 per cent over first-quarter 2012, reaching a new record. Quarterly earnings before finance costs and income taxes (EBIT) rose by 21 per cent to $117-million. Quarterly EBIT margin was 7.4 per cent compared with 6.6 per cent in first-quarter 2012, resulting from improved EBIT margin in Canada. Basic earnings per share (EPS) increased by 16 per cent from the first quarter of last year to 43 cents. First-quarter results included severance costs of approximately $4-million or two cents per share and reflected the adoption of the amendments to International Accounting Standard 19, which reduced results by approximately two cents per share in both 2013 and 2012.

"Our ability to grow revenues during heightened economic uncertainty clearly demonstrates the benefit of our broad end market and geographic diversification, as well as our product support capabilities. As expected, slower activity in mining translated into lower order intake. However, our backlog remains solid, and high machine utilization levels are expected to continue driving strong product support revenues in 2013," said Mike Waites, president and chief executive officer of Finning International. "Our priorities for the year ahead remain unchanged. We are executing on operational excellence initiatives with rigour and discipline to achieve sustainable improvements in our operating profitability. Based on our capabilities to generate strong free cash flow and our expectation for earnings growth, we are pleased to increase our quarterly dividend by 9 per cent to 15.25 cents per share."

Consolidated 2013 revenues are expected to be flat to up 10 per cent over 2012, driven by product support revenues, which benefit from a full year's contribution from the expanded mining product line. For 2013, earnings are expected to grow at a higher rate than revenue. The company's net debt to total capital ratio is projected to decline to the 35-per-cent to 45-per-cent target range by the end of 2013.

The company aims to improve operating profitability through advancing operational excellence. The company targets to achieve EBIT margin of 9 per cent to 10 per cent and return on equity exceeding 18 per cent on a consistent basis. The timing of the achievement of the EBIT margin target will depend on the company's ability to successfully execute its operational excellence strategy and may also be influenced by market conditions.

             FIRST-QUARTER 2013 FINANCIAL SUMMARY
      (in millions of dollars, except per-share amounts)

                                                 Three months
                                              ended March 31,     
                                            2013     2012 (6)     

Revenue                                   $1,584       $1,472          
Earnings before finance costs and                                         
income taxes (EBIT)                          117           97          
Net income                                    73           64           
Basic EPS                                   0.43         0.37           
Earnings before finance costs,                                            
income taxes, depreciation and                                            
amortization (EBITDA) (1)                    169          145          
Free cash flow (1) (2)                       (93)        (223)         

• Revenues increased by 8 per cent from first-quarter 2012 to $1.6-billion, driven by strong revenue growth in South America, which more than offset lower revenues in Canada, the United Kingdom and Ireland. New equipment sales were up by 2 per cent as significantly higher new equipment sales in South America outweighed the reduction in sales in Canada, the U.K. and Ireland compared with first-quarter 2012. Product support revenues rose by 13 per cent to record levels, with the highest ever revenues in Canada and strong growth in South America. Used equipment sales declined in all operations and were down by 18 per cent compared with first-quarter 2012, while rental revenues increased by 2 per cent.
• Gross profit was 12 per cent higher compared with first-quarter 2012, reflecting a favourable shift in revenue mix to higher margin product support, as well as higher gross profit margins in most lines of business. Consolidated gross profit margin increased to 31.4 per cent from 30.2 per cent in first-quarter 2012.
• Selling, general and administrative expenses were higher compared with the first quarter of last year as significantly reduced enterprise-resource-planning-system related costs in Canada were offset by increased costs related to the expanded mining product line and the new Fort McKay service facility. In addition, the company incurred approximately $4-million of severance costs associated with the operational excellence initiatives to improve efficiencies and adjust the cost structure to activity levels. Selling, general and administrative expenses as a percentage of revenue were 24.1 per cent compared with 23.6 per cent in first-quarter 2012.
• EBIT increased by 21 per cent to $117 with higher EBIT reported in Canada and South America. Consolidated EBIT margin rose to 7.4 per cent from 6.6 per cent in first-quarter 2012, reflecting improved EBIT margin in Canada due to a reduction in ERP-system-related costs, as well as a higher proportion of product support in revenue mix compared with the first quarter of last year.
• Net income rose by 14 per cent to $73-million. Basic EPS of 43 cents was up by 16 per cent from first-quarter 2012 and was the highest first-quarter EPS on record. First-quarter 2013 results included severance costs of approximately two cents per share. In addition, the adoption of the amendments to IAS 19 negatively impacted first-quarter results by approximately two cents per share in both 2013 and 2012.
• EBITDA climbed 17 per cent from first-quarter 2012 to $169-million. Quarterly free cash flow was $93-million use of cash, a significant improvement compared with $223-million cash usage in first-quarter 2012, primarily due to improvements in working capital, particularly inventory.
• The company's net debt to total capital ratio (5) was 51.1 per cent at the end of March compared with 50.0 per cent at the end of December, mostly due to negative free cash flow in the first quarter. The ratio is expected to return to the 35-per-cent to 45-per-cent target range by the end of 2013 as a result of expected strong free cash flow in the year, driven primarily by working capital improvements.
• Order backlog was $1.1-billion at the end of March compared with $1.2-billion at the end of December due to lower order intake during the first quarter. Customers continued to be cautious and postponed purchasing decisions in light of uncertain economic conditions and improved equipment availability. There were no unusual order cancellations in any of the company's operations in the first quarter.

First-quarter 2013 highlights by operation

Canada:

• Revenues declined by 3 per cent compared with first-quarter 2012, impacted most notably by 20 per cent lower new equipment sales, primarily to mining customers. While resource sector customers reduced spending on new equipment in the first quarter, demand for parts and service remained healthy. Product support revenues grew by 12 per cent to record levels, primarily due to the company's expanded mining product line.
• Canada's EBIT rose by 46 per cent to $57-million, and EBIT margin was 7.5 per cent compared with 5.0 per cent in first-quarter 2012. The year-over-year improvement is largely driven by the reduction in ERP-system-related costs as well as a favourable shift in revenue mix to higher margin product support. Reduced ERP costs were offset by additional expenses related to the expanded mining product line and the new Fort McKay service facility, as well as severance costs associated with the reduction of approximately 280 positions.
• The Canadian operations remain focused on selling equipment and providing product support to a broad range of industries. In addition, the business is advancing operational excellence initiatives to increase service efficiency, improve working capital performance and reduce costs. In 2013, Finning Canada is expected to deliver improved EBIT margin performance over 2012.

South America:

• Revenues rose by 33 per cent from first-quarter 2012 (31 per cent in functional currency -- United States dollars) driven by strong new equipment sales and product support. In functional currency, new equipment sales were up 45 per cent from first-quarter 2012, reflecting increased deliveries to mining and construction sectors in Chile. Product support revenues benefited from the company's expanded mining product line and were 19 per cent higher compared with first-quarter 2012.
• EBIT increased by 19 per cent to $57-million. EBIT margin was 9.0 per cent compared with 10.0 per cent in first-quarter 2012, primarily reflecting a shift in revenue mix from product support to new equipment sales, which resulted in a lower gross profit margin compared with first-quarter 2012. High machine utilization levels are expected to drive strong product support revenue in South America in 2013.
• South American operations are focused on capturing equipment opportunities in mining, construction and power systems, as well as growing product support with the benefit of the large installed machine population. The business is also driving operational excellence initiatives related to supply chain and cost management.

United Kingdom and Ireland:

• Revenues declined by 10 per cent from first-quarter 2012, reflecting reduced market activity in most sectors compared with last year. New equipment sales decreased by 11 per cent due to lower volumes in equipment solutions. Product support revenues were 10 per cent lower as a result of softer demand across most industries.
• EBIT of $10-million was 17 per cent below first-quarter 2012, and EBIT margin was 5.4 per cent compared with 5.8 per cent a year ago, reflecting lower revenue levels.
• The U.K. and Ireland operations are focused on sustaining solid financial performance through a period of weak demand by capitalizing on value-added opportunities in equipment solutions and power systems, capturing product support opportunities, and executing on operational excellence initiatives.

Corporate and business developments

Dividend

The board of directors has approved a 9-per-cent increase in the quarterly dividend to 15.25 cents per share from 14 cents per share, payable on June 6, 2013, to shareholders of record on May 23, 2013. This dividend will be considered an eligible dividend for Canadian income tax purposes. In addition, the company has increased its target dividend payout ratio to 25 per cent to 35 per cent from 25 per cent to 30 per cent.

          SELECTED CONSOLIDATED FINANCIAL INFORMATION                              
       (in millions of dollars, except per-share amounts)              
   																				                               
                                             Three months ended                                 
                                                      March 31,       
                                          2013             2012
Revenue
New equipment                           $643.9           $631.4
Used equipment                            60.1             73.4
Equipment rental                          93.0             91.2
Product support                          761.3            675.0
Other                                     26.2              0.8
Total revenue                          1,584.5          1,471.8
Gross profit                             497.9            444.5
Gross profit margin (3)                  31.4%            30.2%
Selling, general and administrative     (382.3)          (347.2)
Selling, general and administrative 
as a percentage of revenue               (24.1)           (23.6)
Equity earnings                            2.8              1.9
Other income (expenses)                   (1.3)            (2.4)
EBIT                                     117.1             96.8
EBIT margin (4)                           7.4%             6.6%
Net income                                73.4             64.3
Basic earnings per share (EPS)            0.43             0.37
EBITDA (1)                               169.3            144.8
Free cash flow (1) (2)                   (93.4)          (222.7)

First-quarter 2013 results investor call

Management will hold an investor conference call on Thursday, May 9, at 11 a.m. Eastern Time. The dial-in numbers are 1-866-226-1793 (anywhere within Canada and the United States) or 416-340-2218 (for participants dialling from Toronto and overseas).

The call will be webcast live and subsequently archived at the company's website. Playback recording will be available at 1-800-408-3053 from 1 p.m. Eastern Time on May 9 until May 15. The passcode to access the playback recording is 4463383 followed by the number sign.

We seek Safe Harbor.