Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

(in thousands, except per share amounts)

THE BUSINESS

Ampco-Pittsburgh Corporation and its subsidiaries (collectively, the "Corporation") manufacture and sell highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. It operates in two business segments: the Forged and Cast Engineered Products("FCEP") segment and the Air and Liquid Processing("ALP") segment. This segment presentation is consistent with how the Corporation's chief operating decision maker evaluates financial performance and makes resource allocation and strategic decisions about the business.

The FCEP segment produces forged hardened steel rolls, cast rolls and forged engineered products ("FEP"). Forged hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals. Cast rolls, which are produced in a variety of iron and steel qualities, are used mainly in hot strip mills, medium/heavy section mills, roughing mills, and plate mills. FEP principally are sold to customers in the steel distribution market, the oil and gas industry, and the aluminum and plastic extrusion industries. The segment has operations in the United States, Sweden, Slovenia, and an equity interest in two joint venture companies in China. Collectively, the segment primarily competes with European, Asian, and North and South American companies in both domestic and foreign markets and operates several sales offices located throughout the world.

The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation ("Air & Liquid"), a wholly owned subsidiary of the Corporation. Aerofin produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including original equipment manufacturers and commercial, nuclear power generation and industrial manufacturing. Buffalo Air Handling produces large custom-designed air handling systems for institutional (e.g., hospital, university), pharmaceutical and general industrial building markets. Buffalo Pumps manufactures centrifugal pumps for the fossil-fueled power generation, marine defense and industrial refrigeration industries. The segment has operations in Virginia and New York with its headquarters in Carnegie, Pennsylvania. The segment utilizes an independent group of sales offices located throughout the United States and Canada.

EXIT AND DECONSOLIDATION CHARGES

In February 2025, Union Electric Steel UK Limited ("UES-UK"), an indirect wholly owned subsidiary of the Corporation, entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability. The U.K. operations had been impacted by unpredictable and high energy costs compared to its foreign competitors, lower demand for its products manufactured in the U.K., and increased imports of rolls and flat rolled steel into Europe from low-cost countries. UES-UK completed its formal consultation process in the second quarter of 2025 and, in light of UES-UK's historical performance and management's outlook for the remainder of 2025 and subsequent years, decided to exit its operations.

The Corporation initially recognized charges approximating $10,790 primarily for employee-related costs payable to the employees of UES-UK under existing benefit plans and accelerated depreciation from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK. These charges include similar closure costs approximating $800 for the non-core steel distribution facility located in Ohio held by Alloys Unlimited and Processing, LLC ("AUP") (collectively, the "Exit Charges").

The Exit Charges included the following components:

The charge for employee-related costs primarily represents statutory severance and other benefits payable to the approximately 168 employees of UES-UK and the 15 employees of AUP under existing benefit plans. Accelerated depreciation is a non-cash charge and represents primarily higher depreciation expense resulting from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK and AUP. Professional fees represent direct costs incurred relating to the formal consultation process for and Structured Insolvency of UES-UK and closure of AUP. Loss on sale of assets is a non-cash charge and represents the loss on the sale of the equipment of AUP.

On October 13, 2025, the Directors of UES-UK voluntarily filed a Notice of Intention to appoint certain insolvency practitioners of FRP Advisory Trading Limited ("FRP") as administrators of UES-UK (collectively, the "Administrators") pursuant to the requirements of the Insolvency Act 1986 of England and Wales in the High Court of Justice, Business and Property Courts at Leeds (the "Insolvency Court"). On October 14, 2025, (the "Filing Date"), the Directors of UES-UK filed a Notice of Appointment with the Insolvency Court formally appointing the Administrators as administrators of UES-UK. This action was confined to UES-UK exclusively and did not affect the Corporation or any of its other subsidiaries.

As of the Filing Date, through the date of this Annual Report on Form 10-K, UES-UK was in administration and its affairs, business and property were being managed by the Administrators (the "Structured Insolvency"). The Administrators have set out their proposals to UES-UK's creditors which include an orderly wind-down of UES-UK's financial affairs and sale of its assets. Any funds remaining after the costs and expenses associated with the Structured Insolvency will be distributed in the order of priority set forth in the Insolvency Act 1986.

Through October 13, 2025, the date immediately prior to the Filing Date, the operating results of UES-UK are included in the consolidated operating results of the Corporation. Effective as of the Filing Date, the Corporation no longer consolidates the operating results of UES-UK, as the Corporation no longer has decision-making control over UES-UK. In addition, as of the Filing Date, the Corporation recognized a non-cash charge of $41,424 to (i) write-down the carrying value of its investment in UES-UK to its estimated fair value; (ii) recognize the amount of other comprehensive losses of UES-UK deferred in accumulated other comprehensive loss and (iii) establish an estimated recovery for the amount of funds expected to be returned to the lenders under the Corporation's Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the "Credit Agreement"), if any, after the costs and expenses of the Structured Insolvency (the "Deconsolidation Charge"). The majority of the severance charges included in the Exit Charges will no longer be required to be paid as a result of the Structured Insolvency. In addition, the Corporation expects its future cash expenditures associated with the Structured Insolvency to be insignificant. See Note 2, Exit and Deconsolidation Charges, to the Consolidated Financial Statements.

EXECUTIVE OVERVIEW

For the FCEP segment, global steel manufacturing capacity continues to exceed global consumption of steel products. Demand for steel is soft but stable. In 2025, as a result of low-priced products from other countries entering the United States, tariffs, as outlined under Section 232 of the Trade Expansion Act of 1962, were increased for products with domestic melt and pour requirements imported into the United States. In addition, in the third quarter of 2025, the U.S. government announced new tariffs on coated steel imported into the United States. According to U.S. Census Bureau and U.S. Commerce Department data, imports for 2025 have decreased when compared to 2024 with import reductions accelerating as the year progressed. This should result in increased utilization of our customers' domestic facilities. Similarly, we believe modified tariff and quota systems have been strengthened in Canada and Mexico to support their steel industries, which also should result in better utilization for our customers located in these countries.

Tariffs are also now incurred on forged and cast rolls shipped from the segment's European facilities into the United States and on U.S. forged and cast rolls shipped into China. Since the cast roll market is currently underserved in the United States, the Corporation believes the segment's remaining European cast operations are approximately on equal footing with its competition with respect to tariffs. Tariffs on steel product also have been a tailwind for the segment's FEP products resulting in increased order volumes. Negotiations with our customers have been successful, resulting in the vast majority of these costs being passed on to our customers.

The local currency of each of the subsidiaries of the FCEP segment is its functional (local) currency. Each of these subsidiaries may enter into contractual arrangements with customers or vendors which may be denominated in a currency other than its functional (local) currency. Currently, the Corporation does not hedge any of its foreign-denominates sales or purchases. Accordingly, changes in foreign currency exchange rates, between the date the underlying contract is executed and the date the revenue or costs are recognized and from year to year, will affect the value of reported sales and operating results. During the year, the FCEP segment was adversely affected by movement in the global foreign currency exchange market resulting in lower functional (local) currency sales and operating results when compared to the prior year, particularly for its operations in Sweden.

The primary focus for the FCEP segment for 2026 is to improve its profitability by maintaining a strong position in the roll market and continuing to improve operational efficiency and equipment reliability following the completion of a significant capital equipment program during the second quarter of 2024.

For the ALP segment, the businesses are benefiting from increased demand in the power generation and U.S. military markets and have successfully increased market share but continue to face increasing production costs due to inflation. The segment has been implementing price increases for its products to help mitigate these inflationary effects. Following previous U.S. government actions, tariffs are incurred on certain of the segment's raw materials, primarily those that contain copper or copper alloys. Costs associated with these tariffs have been, and are expected to continue to be, passed on to customers. Tariff outcomes are fluid and subject to change; however, the United States's onshoring of additional manufacturing capabilities would potentially increase demand for the segment's products. The primary focus for the ALP segment for 2026 is to grow revenues, monitor and minimize inflationary and tariff effects, strengthen engineering and manufacturing capabilities to keep pace with growth opportunities, and continue to improve its sales distribution network.

The Corporation is actively monitoring, and will continue to actively monitor, changes prompted by the U.S. government, repercussions from the Middle East conflicts and similar geopolitical matters, economic conditions, and other developments relevant to its business, including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.

CONSOLIDATED RESULTS OF OPERATIONS OVERVIEW

The Corporation

Net salesequaled $434,166 and $418,305 for 2025 and 2024, respectively, an increase of $15,861. While net sales for both of the segments improved, the majority of the increase is attributable to the ALP segment. A discussion of sales by segment is included below.

(Loss) income from operationsequaled $(54,479) and $12,169 for 2025 and 2024, respectively. Loss from operations for 2025 includes the Deconsolidation Charge of $41,424 to (i) write-down the Corporation investment in UES-UK to its estimated fair value; (ii) recognize the other comprehensive losses of UES-UK deferred in accumulated other comprehensive loss; and (iii) establish an estimated recovery for the amount of funds expected to be returned to the lenders under the Credit Agreement, if any, after the costs and expenses of the Structured Insolvency. The estimated recovery was based on the Corporation's assessment of the expected

recovery from the Structured Insolvency proceedings including consideration of information provided by the Administrators. The Corporation has evaluated, and will continue to evaluate, the continued appropriateness of the estimated recovery. If it is determined the estimated recovery is lower than currently estimated, then a charge to net (loss) income would be recorded. Similarly, if it is determined the estimated recovery is higher than currently estimated, then a credit to net (loss) income would be recorded. Any recovery will be distributed in the order of priority set forth in the Insolvency Act 1986.

In addition, loss from operations for 2025 includes:

By comparison, included in income from operations for 2024 is a:

A discussion of (loss) income from operations for the Corporation's two segments is included below. Corporate costs decreased in 2025, when compared to 2024, by $2,238, primarily due to lower employee incentive-related costs.

Backlogequaled $328,937 at December 31, 2025 versus $378,884 as of December 31, 2024. Backlog represents the accumulation of firm orders on hand which: (i) are supported by evidence of a contractual arrangement, (ii) include a fixed and determinable sales price, (iii) have collectability that is reasonably assured, and (iv) generally are expected to ship within two years from the backlog reporting date. Backlog at a certain date may not be a direct measure of future revenue for a particular order because price increases, negotiated subsequently to the original order, are not included in backlog until the updated contract is received from the customer, certain surcharges are not determinable until the order is completed and ready for shipment to the customer, and certain orders are denominated in currency other than the functional (local) currency of the subsidiary and are not hedged. Approximately 6% of the backlog is expected to be released after 2026. A discussion of backlog by segment is included below.

Gross margin, excluding depreciation and amortization, as a percentage of net sales was 18.4% and 19.5% for 2025 and 2024, respectively. For the FCEP segment, gross margin, excluding depreciation and amortization, decreased when compared to the prior year, primarily as a result of lower absorption and changes in product mix. For the ALP segment, gross margin, excluding depreciation and amortization, improved when compared to the prior year, primarily as a result of higher production volumes and a favorable product mix.

Selling and administrative expensesapproximated $52,125 (12.0% of net sales) and $54,878 (13.1% of net sales) for 2025 and 2024, respectively. The decrease of $2,753 is principally due to lower employee incentive-related costs offset by higher professional fees.

Depreciation and amortization expenseequaled $21,785 and $18,611 for 2025 and 2024, respectively. The increase of $3,174 is primarily attributable to the $3,327 of accelerated depreciation resulting from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK and AUP.

Charge (credit) for asbestos-related costsequaled $12,352 and $(4,184) for 2025 and 2024, respectively.

The charge for 2025 represents:

The credit for 2024 represents the net of:

See Note 20,Litigation, to the Consolidated Financial Statements.

Deconsolidation Chargerepresents the non-cash charge to (i) write-down the carrying value of the Corporation's investment in UES-UK to its estimated fair value; (ii) recognize the amount of other comprehensive losses of UES-UK deferred in accumulated other comprehensive loss and (iii) establish an estimated recovery for the amount of funds expected to be returned to the lenders under the Credit Agreement, if any, after the costs and expenses of the Structured Insolvency.

Severance chargerepresents primarily statutory severance and other benefits payable to the approximately 168 employees of UES-UK and the 15 employees of AUP under existing benefit plans.

Interest expenseequaled $11,369 and $11,620 for 2025 and 2024, respectively. The net decrease of $251 is principally due to:

Other income - netfor 2025 decreased when compared to 2024 principally due to the lower net pension and other postretirement income resulting from a lower expected return on plan assets in 2025 versus 2024.

Income tax provisionequaled $120 and $2,695 for 2025 and 2024, respectively, and includes income taxes associated with the Corporation's profitable operations. An income tax benefit is not able to be recognized on losses of certain of the Corporation's entities since it is "more likely than not" the asset will not be realized. Accordingly, changes in the income tax provision for each period includes the effects of changes in the pre-tax income of the Corporation's profitable operations in each jurisdiction and changes in expectations as to whether an income tax benefit will be able to be realized for the deferred income tax assets recognized.

The income tax provision for 2025 benefited from a lower statutory income tax rate on the earnings of the Corporation's majority-owned Chinese joint venture as a result of the joint venture qualifying as a high-tech enterprise ("HTE"). As an HTE, the earnings of the Chinese joint venture are taxed at a rate of 15% (versus 25%). The effect on the income tax provision was a benefit of $1,000 for the year ended December 31, 2025, when compared to the income tax provision for the year ended December 31, 2024.

The income tax provision for 2025 includes a state income tax benefit of approximately $494 associated with the Asbestos-Related Charge whereas the income tax provision for 2024 includes state income tax expense of approximately $153 associated with the Asbestos-Related Credit.

Valuation allowances are recorded against the majority of the Corporation's deferred income tax assets. The Corporation will maintain the valuation allowances until there is sufficient evidence to support the reversal of all or some portion of the valuation allowances. Given the Corporation's anticipated future earnings from operations in Sweden, due in part to the movement of cast roll production from the U.K. to Sweden, and in the United States, the Corporation believes there is a reasonable possibility within the next 12

months, sufficient positive evidence may become available to allow the Corporation to conclude some portion of the valuation allowance will no longer be needed. Release of any portion of the valuation allowance would result in the recognition of deferred income tax assets on the Corporation's consolidated balance sheet and a decrease to the Corporation's income tax expense in the period the release is recorded. The exact timing and the amount of the valuation allowance released are subject to, among many items, the level of profitability achieved. Once the valuation allowance is completely reversed, a tax provision would be recognized on earnings.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. OBBBA introduces multiple tax law and legislative changes, including modifications to income tax provisions such as business interest expense limitations, domestic research and development expenses and U.S. taxation of international earnings. It also reinstates 100% bonus depreciation for property acquired and placed into service on or after January 19, 2025. The Corporation has recognized the effects of the OBBBA provisions in its financial results to the extent they are applicable for the year ended December 31, 2025. Certain provisions of the OBBBA have effective dates after December 31, 2025. The Corporation will continue to evaluate the impact of these provisions on its future consolidated financial statements.

Net (loss) attributable to Ampco-Pittsburghwas approximately $(66,067) or $(3.28) per common share for 2025. Net loss attributable to Ampco-Pittsburgh and net loss per common share attributable to Ampco-Pittsburgh for 2025 include a net after-tax charge of $63,348 or $3.15 per common share associated with the Deconsolidation Charge, the Exit Charges, the Asbestos-Related Charge, and the Employee-Retention Credits. No income tax benefit was able to be recognized for the Deconsolidation Charge or the Exit Charges since the underlying operations remained in a three-year cumulative loss position as of December 31, 2025. The income tax benefit resulting from the Corporation's majority-owned Chinese joint venture qualifying as an HTE of approximately $1,000 reduced the net loss attributable to Ampco-Pittsburgh and net loss per common share attributable to Ampco-Pittsburgh by approximately $598, or $0.03 per common share, for 2025.

Net income attributable to Ampco-Pittsburgh was approximately $438 or $0.02 per common share for 2024. Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for 2024 include a net after-tax credit of $4,031 or $0.20 per common share associated with the Asbestos-Related Credit and the Asbestos-Related Proceeds.

Forged and Cast Engineered Products

Net sales increased by $6,043 in 2025 from 2024 principally due to:

The operating loss for 2025 includes the Deconsolidation Charge of $41,424 and the Exit Charges of $10,790. In addition, operating results for 2025 when compared to 2024 included:

Backlog equaled $208,604 at December 31, 2025 and $250,530 at December 31, 2024, a decrease of $41,926 principally due to:

At December 31, 2025, approximately 6% of the backlog is expected to ship after 2026.

Air and Liquid Processing

The increase in net sales for 2025, when compared to the prior year, is primarily due to:

Operating results decreased by $13,713 in 2025 when compared to 2024 primarily due to higher asbestos-related costs of $16,536. Operating results for 2025 include the Asbestos-Related Charge of $12,352 whereas operating results for 2024 include the Asbestos-Related Credit of $4,101 and the Asbestos-Related Proceeds of $83. See Note 20, Litigation,to the Consolidated Financial Statements for further discussion.

In addition, the change in operating results from the prior year includes:

Backlog at December 31, 2025 decreased $8,021 from December 31, 2024 primarily due to the U.S. Navy's decision to terminate production of the Constellation Frigate program, which resulted in $7,100 of orders being removed from backlog toward the latter part of 2025. Costs related to the terminated orders are expected to be paid by the U.S. Navy along with normal profit margins. Backlog for air handlers and heat exchange coils decreased slightly at December 31, 2025 when compared to December 31, 2024. At December 31, 2025, approximately 6% of the backlog is expected to ship after 2026.

Non-GAAP Financial Measures

The Corporation presents non-GAAP adjusted EBITDA and non-GAAP adjusted income (loss) from operations. Non-GAAP adjusted EBITDA is calculated as net (loss) income excluding interest expense, other income - net, income tax provision, depreciation and amortization, and stock-based compensation along with significant charges or credits that are one-time charges or credits, unrelated to the Corporation's ongoing results of operations, or beyond its control. Non-GAAP adjusted income (loss) from operations is calculated as (loss) income from operations excluding depreciation and amortization and stock-based compensation along with significant charges or credits that are one-time charges or credits, unrelated to a segment's or the Corporation's ongoing results of operations, or beyond its control. These non-GAAP financial measures were adjusted to exclude the Asbestos-Related Charge (Credit), the Asbestos-Related Proceeds, the Deconsolidation Charge, the Exit Charges, and the Employee-Retention Credits. This non-GAAP financial measure is not based on any standardized methodology prescribed by accounting principles generally accepted in the United States of America ("GAAP") and may not be comparable to similarly titled measures presented by other companies.

Beginning in 2025, the Corporation began presenting non-GAAP adjusted EBITDA along with non-GAAP adjusted income (loss) from operations. These measures are key measures used by the Corporation's management and Board of Directors to understand and evaluate the operating performance of the Corporation and its segments. While these non-GAAP measures may not be directly comparable to similarly titled measures presented by other companies, the Corporation's management and Board of Directors believe these non-GAAP measures enhance comparability to companies in its stated industry peer group. Additionally, a portion of the incentive and compensation arrangements for certain employees is based on the Corporation's business performance. The Corporation believes these non-GAAP financial measures help identify underlying trends in its business that otherwise could be masked by the effect of these items it excludes from adjusted EBITDA and adjusted income (loss) from operations. The Corporation also believes these non-GAAP financial measures provide useful information to management, shareholders and investors, and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects and allowing for greater transparency with respect to key financial metrics used by the Corporation's management in its financial and operational decision-making. In particular, the Corporation believes the exclusion of the Asbestos-Related Charge (Credit), the Asbestos-Related Proceeds, the Deconsolidation Charge, the Exit Charges, and the Employee-Retention Credits can provide a useful measure for period-to-period comparisons of the Corporation's core business performance.

Non-GAAP adjusted EBITDA and non-GAAP adjusted income (loss) from operations are not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are limitations related to the use of non-GAAP adjusted EBITDA, rather than net (loss) income, or non-GAAP adjusted income (loss) from operations, rather than (loss) income from operations, which are the nearest GAAP equivalents. Among other things, there can be no assurance that additional expenses similar to the Asbestos-Related Charge, the Deconsolidation Charge and the Exit Charges or additional benefits similar to the Asbestos-Related Credit, the Asbestos-Related Proceeds and the Employee-Retention Credits will not occur in future periods.

The adjustments reflected in non-GAAP adjusted income (loss) from operations are pre-tax. The net tax (benefit) expense associated with the adjustments is approximately $(483) for 2025 and $153 for 2024. No income tax benefit was able to be recognized for the Deconsolidation Charge or the Exit Charges since the underlying operations remained in a three-year cumulative loss position as of December 31, 2025.

The following is a reconciliation of net (loss) income to non-GAAP adjusted EBITDA for 2025 and 2024, respectively:

The following is a reconciliation of (loss) income from operations to non-GAAP adjusted income (loss) from operations for 2025 and 2024, respectively:

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows provided by operating activities equaled $1,344 and $18,028 for 2025 and 2024, respectively, with the decrease primarily due to a change in customer-related liabilities (principally customer deposits) of approximately $14,160. In addition, net cash flows provided by operating activities for the prior year benefited from the reimbursement of asbestos-related costs of approximately $1,756 from a previously unsettled insurance carrier. See Note 20, Litigation, to the Consolidated Financial Statements.

Trade receivables at December 31, 2025 increased by approximately $8,900 when compared to trade receivables at December 31, 2024 primarily due to:

Inventories at December 31, 2025 decreased by approximately $(12,300) when compared to inventories at December 31, 2024 primarily due to:

Accounts payable at December 31, 2025 increased by approximately $11,400 when compared to accounts payable at December 31, 2024 primarily due to:

Although the Corporation recorded the Asbestos-Related Charge (Credit) in 2025 and 2024, these were non-cash charges (credits) and, accordingly, did not impact net cash flows provided by operating activities. Instead, net asbestos-related payments equaled $8,654 in 2025 and, prior to reimbursement of asbestos-related costs from a previously unsettled insurance carrier, equaled $8,292 in 2024. Net asbestos-related payments are expected to approximate $9,000 in 2026 and are expected to continue in the foreseeable future. The amount of asbestos-related payments and corresponding insurance recoveries are difficult to predict and can vary based on a number of factors, including changes in assumptions, as outlined in Note 20, Litigation, to the Consolidated Financial Statements.

Contributions to the defined benefit pension and other postretirement benefit plans equaled $4,595 and $6,978 in 2025 and 2024, respectively. Contributions to the defined benefit pension and other postretirement benefit plans are expected to approximate $3,800 in 2026, $2,700 in 2027, $2,700 in 2028, $2,000 in 2029, and $1,700 in 2030.

Net cash flows used in investing activities equaled $(9,224) and $(8,245) for 2025 and 2024, respectively, an increase of $979 which is primarily due to:

To date, no repayment obligations exist for any government incentives received. At December 31, 2025, commitments for future capital expenditures approximated $7,500, which is expected to be spent over the next 12-24 months.

Net cash flows provided by (used in) financing activities equaled $2,213 and $(1,353) for 2025 and 2024, respectively, a change of $3,566 primarily due to:

In addition, Åkers TISCO Roll Co., Ltd. ("ATR"), a 59.88% indirectly owned joint venture of Union Electric Steel Corporation, repaid $664 due to its minority shareholder during the year ended December 31, 2024.

The current portion of debt increased approximately $3,500 as of December 31, 2025 from December 31, 2024 due to:

The maturity date for the revolving credit facility is June 25, 2030 and, subject to the other terms and conditions of the revolving credit agreement, will become due on that date. In addition, the Corporation has Industrial Revenue Bonds ("IRBs") which begin to become due late 2027. Although considered remote by the Corporation, the bonds can be put back to the Corporation on short notice if they are not able to be remarketed. Future principal payments, assuming the revolving credit facility and other debt instruments become due on their respective maturity dates and the IRBs are called in 2026, are $15,723 for 2026, $5,707 for 2027, $5,775 for 2028, $6,003 for 2029, and $57,677 for 2030. Along with principal payments, the Corporation will be required to make regular interest payments, the amount of which will vary as the underlying benchmark rates change. See Note 10, Debt, to the Consolidated Financial Statements.

The effect of exchange rate changes on cash and cash equivalents is primarily attributable to the fluctuation of the British pound and Swedish krona against the U.S. dollar.

As a result of the above, cash and cash equivalents decreased by $4,724 during 2025 and ended the period at $10,703 in comparison to $15,427 at December 31, 2024. The majority of the Corporation's cash and cash equivalents is held by its foreign operations. Domestic customer remittances are used to pay down borrowings under the Corporation's revolving credit facility daily, resulting in minimal cash maintained by the Corporation's domestic operations. Cash held by the Corporation's foreign operations is considered to be permanently re-invested; accordingly, a provision for estimated local and withholding tax has not been made. If the Corporation was to remit any foreign earnings to it or any of its U.S. entities, the estimated tax impact is expected to be insignificant.

Funds on hand, funds generated from future operations and availability under the Corporation's revolving credit facility are expected to be sufficient to finance the Corporation's operational requirements, debt service costs, net asbestos payments, and capital expenditures. As of December 31, 2025, remaining availability under the revolving credit facility approximated $25,454, net of standard availability reserves. Since a significant portion of the Corporation's debt includes variable rate interest, increases in the underlying benchmark rates will increase the Corporation's debt service costs.

While the Corporation anticipates it has sufficient liquidity to finance the Corporation's operational requirements, debt service costs, net asbestos payments, and capital expenditures, it may from time to time consider alternatives, potential transactions and other strategies in an attempt to enhance its liquidity. Given such measures are forward looking, the Corporation cannot ensure it would be successful in achieving such enhancements or be able to improve its liquidity.

With respect to litigation, see Note 20, Litigation, to the Consolidated Financial Statements. With respect to environmental matters, see Note 22, Environmental Matters, to the Consolidated Financial Statements.

OFF-BALANCE SHEET ARRANGEMENTS

The Corporation's off-balance sheet arrangements include the previously mentioned expected future capital expenditures and letters of credit unrelated to the IRBs. See Note 13, Commitments and Contingent Liabilities, to the Consolidated Financial Statements. These arrangements are not considered significant to the liquidity, capital resources, market risk, or credit risk of the Corporation.

EFFECTS OF INFLATION

Inflationary and market pressures on costs are likely to continue. Customer orders for the FCEP and ALP segments generally are expected to ship within two years from the backlog date, thereby mitigating the risk of inflation when compared to longer-term contracts. In addition, product pricing is reflective of current costs. For the FCEP segment, approximately 70% of customer orders include a commodity, energy and transportation surcharge. The ability to pass on future increases in the price of commodities for the balance of the customer orders will be negotiated on a contract-by-contract basis. To minimize the effect of future increases, including for customer orders without a surcharge, the FCEP segment has fixed pricing for a portion of its estimated electricity and natural gas usage. The ALP segment also has fixed pricing for a portion of its estimated commodity (aluminum) usage.

LABOR AGREEMENTS

The Corporation has long-term labor agreements at each of the key locations. Certain of these agreements will expire in 2026. As is consistent with past practice, the Corporation will negotiate with the intent to secure mutually beneficial arrangements covering multiple years.

COMMITMENTS AND CONTIGENT LIABILITIES

See Note 13, Commitments and Contingent Liabilities, to the Consolidated Financial Statements.

DERIVATIVE INSTRUMENTS

See Note 16, Derivative Instruments, to the Consolidated Financial Statements.

APPLICATION OF CRITICAL ACCOUNTING ESTIMATES

The Corporation has identified critical accounting estimates important to the presentation of its financial condition, changes in financial condition and results of operations and involve the most complex or subjective assessments. Critical accounting estimates relate to assessing recoverability of property, plant and equipment and accounting for pension and other postretirement benefits, litigation and loss contingencies, and income taxes.

Property, plant and equipmentis reviewed for recoverability whenever events or circumstances indicate the carrying amount of the long-lived assets may not be recoverable. If the undiscounted cash flows generated from the use and eventual disposition of the assets are less than their carrying value, then the asset value may not be fully recoverable, resulting in a write-down of the asset value. Estimates of future cash flows are based on expected market conditions over the remaining useful life of the primary asset(s). Accordingly, assumptions are made about pricing, volume and asset-resale values. Actual results may differ from these assumptions. We believe the amounts recorded in the accompanying consolidated financial statements for property, plant and equipment are recoverable and are not impaired as of December 31, 2025.

Accounting for pension and other postretirement benefitsinvolves estimating the cost of benefits to be provided well into the future and attributing that cost over the time period each employee works. To accomplish this, input from the Corporation's actuaries is evaluated and extensive use is made of assumptions about inflation, long-term rate of return on plan assets, longevity, employee turnover, and discount rates. The curtailment of the majority of the Corporation's defined benefit pension plans and the amendment of various other postretirement benefit plans have helped to mitigate the volatility in net periodic pension and other postretirement benefit costs resulting from changes in these assumptions.

The expected long-term rate of return on plan assets is an estimate of the average rates of earnings expected to be earned on funds invested, or to be invested, to provide for the benefits included in the projected benefit obligation. Since these benefits will be paid over many years, the expected long-term rate of return is reflective of current investment returns and investment returns over a longer period. Consideration is also given to target and actual asset allocations, inflation and real risk-free return. The Corporation believes the expected long-term rate of return of 6.40% for its domestic plan to be reasonable, which compares to its actual return on plan assets of approximately 10.35% for 2025. A percentage point decrease in the expected long-term rate of return would increase annual pension expense by approximately $1,800. Conversely, a percentage point increase in the expected long-term rate of return would decrease annual pension expense by approximately $1,800.

The discount rates used in determining future pension obligations and other postretirement benefits for each of the plans are based on rates of return for high-quality fixed-income investments currently available and expected to be available during the period to maturity of the pension and other postretirement benefits. High-quality fixed-income investments are defined as those investments which have received one of the two highest ratings given by a recognized rating agency with maturities of 10+ years. A 25-basis point increase in the discount rate would decrease projected and accumulated benefit obligations by approximately $3,800. Conversely, a 25-basis point decrease in the discount rate would increase projected and accumulated benefit obligations by approximately $3,800.

The Corporation believes that the amounts recorded in the accompanying consolidated financial statements related to pension and other postretirement benefits are based on assumptions that are appropriate at December 31, 2025, although actual outcomes could differ.

Litigation and loss contingency accruals are made when it is determined it is probable a liability has been incurred and the amount can be reasonably estimated. Specifically, the Corporation and certain of its subsidiaries are involved in various claims and lawsuits incidental to their businesses. In addition, claims have been asserted alleging personal injury from exposure to asbestos-containing components historically used in some products manufactured by predecessors of Air & Liquid (the "Asbestos Liability"). To assist the Corporation in determining whether an estimate could be made of the potential liability for pending and unasserted future claims for the Asbestos Liability along with applicable insurance coverage, and the amounts of any estimates, the Corporation hires a nationally recognized asbestos-liability expert and an insurance consultant. Based on their analyses, reserves for probable and reasonably estimable costs for the Asbestos Liability, including defense costs, and receivables for the insurance recoveries deemed probable, are established. These amounts rely on assumptions which are based on currently known facts and strategy.

The Corporation's policy is to evaluate the Asbestos Liability and related insurance receivables as well as the underlying assumptions on a regular basis. Key variables in these assumptions, including the ability to reasonably estimate the Asbestos Liability through the expected final date by which the Corporation expects to have settled all asbestos-related claims, are summarized in Note 20, Litigation, to the Consolidated Financial Statements. Key assumptions include the number and nature of new claims to be filed each year, the average cost of disposing of each new claim, average annual defense costs, ability to reach acceptable agreements with insurance carriers currently not a party to a settlement agreement or at a coverage amount less than anticipated, and the solvency risk with respect to the relevant insurance carriers. Other factors that may affect the Asbestos Liability and the Corporation's ability to recover under its insurance policies include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts and the passage of state or federal tort reform legislation. Actual expenses or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the calculations vary significantly from actual results.

The Corporation intends to continue to evaluate the Asbestos Liability and related insurance receivables as well as the underlying assumptions on a regular basis to determine whether further adjustments to the estimates are required. Due to the uncertainties surrounding asbestos litigation and insurance, these regular reviews may result in the incurrence of future charges or credits; however, the Corporation is currently unable to estimate such future changes. Adjustments, if any, to the Corporation's estimate of the Asbestos Liability and/or insurance receivables could be material to its operating results for the periods in which the adjustments to the liability or receivable are recorded, and to its liquidity and financial position when such liabilities are paid.

Accounting for income taxesincludes the Corporation's evaluation of the underlying accounts, permanent and temporary differences, its tax filing positions, and interpretations of existing tax law. A valuation allowance is recorded against deferred income tax assets to reduce them to the amount that is "more likely than not" to be realized. In doing so, assumptions are made about the future profitability of the Corporation and the nature of that profitability. Actual results may differ from these assumptions. If the Corporation determined it would not be able to realize all or part of the deferred income tax assets in the future, an adjustment to the valuation allowance would be established resulting in a charge to net (loss) income. Likewise, if the Corporation determined it would be able to realize deferred income tax assets in excess of the net amount recorded, a portion of the existing valuation allowance would be released resulting in a credit to net income (loss). As of December 31, 2025, the valuation allowance approximates $51,110, reducing deferred income tax assets to $3,898, an amount the Corporation believes is "more likely than not" to be realized.

The Corporation does not recognize a tax benefit in the consolidated financial statements related to a tax position taken or expected to be taken in a tax return unless it is "more likely than not" the tax authorities will sustain the tax position solely on the basis of the position's technical merits. Consideration is primarily given to legislation and statutes, legislative intent, regulations, rulings, and case law as well as their applicability to the facts and circumstances of the tax position when assessing the sustainability of the tax position. In the event a tax position no longer meets the "more likely than not" criteria, the Corporation would reverse the tax benefit by recognizing a liability and recording a charge to earnings. Conversely, if the Corporation subsequently determined a tax position met the "more likely than not" criteria, it would recognize the tax benefit by reducing the liability and recording a credit to earnings. As of December 31, 2025, based on information known to date, the Corporation believes the amount of unrecognized tax benefits for tax positions taken or expected to be taken in a tax return, which may be challenged by the tax authorities, not to be significant.

The Corporation's tax filings are subject to audits by tax authorities in the various jurisdictions in which it does business. These audits may result in assessments of additional taxes. At December 31, 2025, based on information known to date, the Corporation believes there are no pending or outstanding assessments whose resolution would require recognition in its consolidated financial statements.

See Note 21, Income Taxes, to the Consolidated Financial Statements.

RECENTLY IMPLEMENTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

See Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements.