# ARMSTRONG WORLD INDUSTRIES INC (AWI) Informational only - not investment advice. CIK: 0000007431 SIC: 3089 Plastics Products, NEC SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 30](/major-group/30/) > [SIC 3089 Plastics Products, NEC](/industry/3089/) Latest 10-K filed: 2026-02-24 SEC page: https://www.sec.gov/edgar/browse/?CIK=7431 Filing source: https://www.sec.gov/Archives/edgar/data/7431/000119312526065183/awi-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1620800000 | USD | 2025 | 2026-02-24 | | Net income | 308700000 | USD | 2025 | 2026-02-24 | | Assets | 1924700000 | USD | 2025 | 2026-02-24 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000007431.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 837,300,000 | 893,600,000 | 975,300,000 | 1,038,100,000 | 936,900,000 | 1,106,600,000 | 1,233,100,000 | 1,295,200,000 | 1,445,700,000 | 1,620,800,000 | | Net income | 104,700,000 | 119,600,000 | 185,900,000 | 214,500,000 | -99,100,000 | 183,200,000 | 202,900,000 | 223,800,000 | 264,900,000 | 308,700,000 | | Operating income | 195,900,000 | 243,800,000 | 249,400,000 | 317,400,000 | 254,800,000 | 260,000,000 | 278,700,000 | 323,700,000 | 374,300,000 | 430,900,000 | | Gross profit | 307,000,000 | 315,400,000 | 333,500,000 | 395,100,000 | 333,100,000 | 405,600,000 | 449,100,000 | 497,000,000 | 581,600,000 | 658,700,000 | | Diluted EPS | 1.87 | 2.21 | 3.56 | 4.32 | -2.07 | 3.82 | 4.37 | 4.99 | 6.02 | 7.08 | | Assets | 1,758,000,000 | 1,873,500,000 | 1,838,300,000 | 1,493,300,000 | 1,718,500,000 | 1,710,000,000 | 1,687,200,000 | 1,672,400,000 | 1,842,700,000 | 1,924,700,000 | | Stockholders' equity | 266,400,000 | 384,100,000 | 226,000,000 | 364,900,000 | 450,900,000 | 519,700,000 | 535,000,000 | 591,800,000 | 757,100,000 | 900,700,000 | | Cash and cash equivalents | 141,900,000 | 159,600,000 | 325,700,000 | 45,300,000 | 136,900,000 | 98,100,000 | 106,000,000 | 70,800,000 | 79,300,000 | 112,700,000 | | Net margin | 12.50% | 13.38% | 19.06% | 20.66% | -10.58% | 16.56% | 16.45% | 17.28% | 18.32% | 19.05% | | Operating margin | 23.40% | 27.28% | 25.57% | 30.58% | 27.20% | 23.50% | 22.60% | 24.99% | 25.89% | 26.59% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000007431.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 1.11 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 1.25 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 1.04 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 325,400,000 | 60,200,000 | 1.34 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 347,300,000 | 69,500,000 | 1.56 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 312,300,000 | 46,800,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 326,300,000 | 59,900,000 | 1.36 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 365,100,000 | 65,900,000 | 1.50 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 386,600,000 | 76,900,000 | 1.75 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 367,700,000 | 62,200,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 382,700,000 | 69,100,000 | 1.58 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 424,600,000 | 87,800,000 | 2.01 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 425,200,000 | 86,300,000 | 1.98 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 388,300,000 | 65,500,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 409,900,000 | 66,800,000 | 1.55 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/7431/000119312526183484/awi-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-28 Report date: 2026-03-31 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This discussion should be read in conjunction with the financial statements, the accompanying notes, the cautionary note regarding forward-looking statements and risk factors included in this report and our Annual Report on Form 10-K for the year ended December 31, 2025. OVERVIEW AWI is an Americas leader in the design and manufacture of innovative interior and exterior architectural applications including ceilings, specialty walls and exterior metal solutions. We manufacture and source products made of numerous materials, including mineral fiber, fiberglass, metal, felt, architectural resin and glass, wood, wood fiber and glass-reinforced-gypsum. We also manufacture ceiling suspension system (grid) products through a joint venture with Worthington Enterprises, Inc. called Worthington Armstrong Venture (“WAVE”). Acquisitions In February 2026, we acquired all of the issued and outstanding shares of Event Scape Inc. and Eventscape U.S. Holdings Inc. (collectively, “Eventscape”), headquartered in Toronto, Ontario, Canada. Eventscape is a designer, manufacturer and installer of ceilings, walls and facades made of a broad range of materials. The operations, assets and liabilities of Eventscape are included in our Architectural Specialties segment. In December 2025, we acquired all of the issued and outstanding stock of FGM-Parallel LLC (“Parallel”), based in Englewood, Colorado. Parallel is a designer and manufacturer of extruded aluminum products primarily used in exterior architectural applications. The operations, assets and liabilities of Parallel are included in our Architectural Specialties segment. In September 2025, we acquired all of the issued and outstanding shares of Geometrik Manufacturing, Inc. (“Geometrik”), based in Kelowna, British Columbia, Canada. Geometrik is a designer and manufacturer of wood acoustical ceiling and wall systems. The operations, assets and liabilities of Geometrik are included in our Architectural Specialties segment. Manufacturing Plants As of March 31, 2026, we operated 24 manufacturing plants, including 20 plants located within the U.S. and four plants in Canada. WAVE operates seven additional plants in the U.S. to produce suspension system (grid) products, which we use and sell in our ceiling systems. Reportable Segments Our operating segments are as follows: Mineral Fiber, Architectural Specialties and Unallocated Corporate. Mineral Fiber – produces suspended mineral fiber and fiberglass ceiling systems. Our mineral fiber products offer various performance attributes such as acoustical control, rated fire protection, and energy efficiency, along with other health and sustainability features and aesthetic appeal. Ceiling products are primarily sold to resale distributors, ceiling systems contractors and wholesalers, and retailers (including large home centers). The Mineral Fiber segment also includes the results of WAVE, which manufactures and sells suspension system (grid) products and ceiling component products that are invoiced by both AWI and WAVE. Segment results relating to WAVE consist primarily of equity earnings and reflect our 50% equity interest in the joint venture. Ceiling component products consist of ceiling perimeters and trim, in addition to grid products that support drywall ceiling systems, structural and walkable grid systems. For some customers, WAVE sells its suspension system products to AWI for resale to customers. Mineral Fiber segment results reflect those sales transactions. The Mineral Fiber segment also includes all assets and liabilities not specifically allocated to our Architectural Specialties or Unallocated Corporate segment, including all property and related depreciation associated with our Lancaster, Pennsylvania headquarters. Operating results for the Mineral Fiber segment include a significant majority of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations. Architectural Specialties – designs, produces and sources specialty ceilings, walls, and other interior and exterior architectural applications primarily for use in commercial settings. Products are available in numerous materials, such as metal, felt, architectural resin and glass, wood, wood fiber and glass-reinforced-gypsum in various colors, shapes and designs. These products offer a range of design options and performance attributes such as acoustical control, rated fire protection, light, aesthetic appeal, energy conservation and building performance. We sell standard, premium and customized products, a portion of which are sourced from third-party producers. Architectural Specialties products are sold primarily to direct customers, primarily ceiling systems contractors, and resale 25 Management’s Discussion and Analysis of Financial Condition and Results of Operations distributors. This segment’s revenues are primarily project driven, which can lead to more variability in sales patterns. Operating results for the Architectural Specialties segment include a portion of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations. Unallocated Corporate – includes certain assets, liabilities, income and expenses that have not been allocated to our other business segments and consists of: cash and cash equivalents, our Overcast Innovations LLC (“Overcast”) investment and related equity earnings and losses, the net funded status of our U.S. Retirement Income Plan (“RIP”), the estimated fair value of interest rate swap contracts, outstanding borrowings under our senior secured credit facility and income tax balances. Factors Affecting Revenues For information on our 2026 and 2025 net sales and disaggregated expenses by segment, see Note 2 to the Condensed Consolidated Financial Statements. For information on our 2026 and 2025 net sales disaggregated by major customer groups, see Note 3 to the Condensed Consolidated Financial Statements. Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we define organic as consolidated and/or Architectural Specialties results excluding the impacts of the Eventscape, Parallel and Geometrik acquisitions. We define the impacts of Eventscape, Parallel and Geometrik as inorganic consolidated and/or Architectural Specialties results. Markets. We compete in the building product markets of the Americas. We closely monitor publicly available macroeconomic data and trends that provide insight into commercial construction market activity, including, but not limited to, Gross Domestic Product (“GDP”), office vacancy rates, the Architecture Billings Index, new commercial construction starts, state and local government spending, corporate profits and retail sales. The Company continues to monitor the impacts of governmental trade policies and geopolitical events, including the conflict in Iran, none of which had a material direct impact on our financial condition, liquidity or results of operations in the first three months of 2026 or 2025. Several factors and trends within our markets affected our business performance during the first quarter of 2026 compared to the first quarter of 2025. For the three months ended March 31, 2026, sales volumes increased $17 million compared to the prior-year period, due primarily to a $10 million increase in organic Architectural Specialties net sales and a $5 million inorganic increase due to our February 2026 acquisition of Eventscape, our December 2025 acquisition of Parallel and our September 2025 acquisition of Geometrik. Also contributing to the increase in net sales was a $2 million increase from higher sales volumes in our Mineral Fiber segment. Average Unit Value. We periodically modify sales prices of our products due to changes in costs for raw materials and energy, market conditions and the competitive environment. Typically, realized price increases are less than announced price increases because of project pricing, competitive adjustments and changing market conditions. We also offer a wide assortment of products that are differentiated by style, design and performance attributes. Pricing and margins for products within the assortment vary. In addition, changes in the relative quantity of products purchased at different price points can impact year-to-year comparisons of net sales and operating income. Within our Mineral Fiber segment, we focus on improving sales dollars per unit sold, or average unit value (“AUV”), as a measure that accounts for the varying assortment of products and like-for-like pricing impacting our revenues. Favorable AUV increased our total consolidated net sales by $10 million for the three months ended March 31, 2026 compared to the same period in 2025. Our Architectural Specialties segment revenues are primarily generated from individual contracts that include project-specific mixes of manufactured and sourced products. As such, we do not manage or evaluate performance using AUV for this segment but rather attribute all changes in net sales to volume, including gross to net sales adjustments. During the first quarter of 2026, we implemented price increases on Mineral Fiber ceiling products and WAVE implemented price increases on grid products. Future pricing actions for Mineral Fiber, Architectural Specialties and WAVE products may be implemented based on numerous factors, including the impact of tariffs, the rate and pace of inflation and its impact on our business and the competitive environment. Seasonality. Historically, our sales tend to be stronger in the second and third quarters of our fiscal year due to more favorable weather conditions, customer business cycles and the timing of renovation and new construction projects. Factors Affecting Operating Costs Operating Expenses. Our operating expenses are comprised of direct production costs (principally raw materials, labor, and energy), manufacturing overhead costs, freight, costs to purchase sourced products, tariffs and selling, general and administrative (“SG&A”) expenses. 26 Management’s Discussion and Analysis of Financial Condition and Results of Operations Our largest raw material expenditures are primarily for fiberglass, perlite, recycled paper, and starch. Other raw materials include clays, felt, pigment, architectural resin and glass, wood and wood fiber. We manufacture substantially all of our mineral wool at one of our manufacturing facilities. We use aluminum and steel in the production of metal building products by us and by WAVE. Finally, we also purchase significant amounts of packaging materials and consume substantial amounts of energy, such as electricity and natural gas, and water. Fluctuations in the prices of these inputs impact our financial results. In the first quarter of 2026, higher raw material and energy costs negatively impacted operating income by $2 million compared to the same period in 2025. Acquisition-Related Expenses and Losses In connection with our acquisitions of Eventscape in February 2026 and BOK Modern, LLC (“BOK”) in July 2023, we recorded certain acquisition-related expenses and losses to operating income in the three months ended March 31, 2026 and 2025, summarized as follows (dollar amounts in millions): Three Months Ended Affected Line Item in the Condensed March 31, Consolidated Statements of Earnings and 2026 2025 Comprehensive Income Acquisition costs $ 2.6 $ -  SG&A expenses Loss related to change in fair value of contingent consideration - 0.3  SG&A expenses Negative impact to operating income $ 2.6 $ 0.3 Acquisition costs above reflect certain third-party professional fees incurred due to the Eventscape acquisition. The change in fair value of contingent consideration was related to our BOK acquis [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Armstrong World Industries, Inc. (“AWI”) is a Pennsylvania corporation incorporated in 1891. This discussion should be read in conjunction with the financial statements, the accompanying notes, the cautionary note regarding forward-looking statements and risk factors included in this Form 10-K. Overview AWI is an Americas leader in the design and manufacture of innovative interior and exterior architectural applications including ceilings, specialty walls and exterior metal solutions. We manufacture and source products made of numerous materials, including mineral fiber, fiberglass, metal, felt, architectural resin and glass, wood, wood fiber and glass-reinforced-gypsum. We also manufacture ceiling suspension system (grid) products through a joint venture with Worthington Enterprises, Inc. called Worthington Armstrong Venture (“WAVE”). Acquisitions In December 2025, we acquired all of the issued and outstanding stock of FGM-Parallel LLC (“Parallel”), based in Englewood, Colorado. Parallel is a designer and manufacturer of extruded aluminum products primarily used in exterior architectural applications. The operations, assets and liabilities of Parallel are included in our Architectural Specialties segment. In September 2025, we acquired all of the issued and outstanding stock of Geometrik Manufacturing, Inc. (“Geometrik”), based in Kelowna, British Columbia, Canada. Geometrik is a designer and manufacturer of wood acoustical ceiling and wall systems. The operations, assets and liabilities of Geometrik are included in our Architectural Specialties segment. In December 2024, we acquired all of the issued and outstanding stock of A. Zahner Company (“Zahner”), based in Kansas City, Missouri. Zahner is a designer and manufacturer of exterior metal architectural solutions. The operations, assets and liabilities of Zahner are included in our Architectural Specialties segment. In April 2024, we acquired all of the issued and outstanding membership interests in 3form, LLC (“3form”), based in Salt Lake City, Utah from Hunter Douglas, Inc. 3form is a designer and manufacturer of architectural resin and glass products used for specialty walls, partitions and ceilings. The operations, assets and liabilities of 3form are included in our Architectural Specialties segment. In January 2024, we entered into a strategic partnership and equity investment in Overcast Innovations LLC (“Overcast”) with McKinstry Essention, LLC whereby we contributed $5.5 million in exchange for an initial 19.5% ownership interest in Overcast (currently 19.2%). Overcast is a solutions company offering prefabricated ceiling cloud systems, modular grid platforms and engineering design services to reduce waste and inefficiencies in the built environment. Our investment and equity earnings and losses in Overcast are included in our Unallocated Corporate segment. In October 2023, we acquired a portion of the business and certain assets of Insolcorp, LLC (“Insolcorp”), based in Albemarle, North Carolina. Insolcorp develops, tests and manufactures energy saving products deployed in building and roofing installations. The acquired operations, assets and liabilities of Insolcorp are included in our Mineral Fiber segment. In July 2023, we acquired all of the issued and outstanding stock of BOK Modern, LLC (“BOK”), based in San Rafael, California. BOK is a designer of exterior metal architectural solutions. The operations, assets and liabilities of BOK are included in our Architectural Specialties segment. Manufacturing Plants As of December 31, 2025, we operated 22 manufacturing plants, including 19 plants located within the U.S. and three plants in Canada. WAVE operates seven additional plants in the U.S. to produce suspension system (grid) products, which we use and sell in our ceiling systems. 23 Reportable Segments Our operating segments are as follows: Mineral Fiber, Architectural Specialties and Unallocated Corporate. Mineral Fiber – produces suspended mineral fiber and fiberglass ceiling systems. Our mineral fiber products offer various performance attributes such as acoustical control, rated fire protection, and energy efficiency, along with other health and sustainability features and aesthetic appeal. Ceiling products are primarily sold to resale distributors, ceiling systems contractors and wholesalers, and retailers (including large home centers). The Mineral Fiber segment also includes the results of WAVE, which manufactures and sells suspension system (grid) products and ceiling component products that are invoiced by both AWI and WAVE. Segment results relating to WAVE consist primarily of equity earnings and reflect our 50% equity interest in the joint venture. Ceiling component products consist of ceiling perimeters and trim, in addition to grid products that support drywall ceiling systems, structural and walkable grid systems. For some customers, WAVE sells its suspension system products to AWI for resale to customers. Mineral Fiber segment results reflect those sales transactions. The Mineral Fiber segment also includes all assets and liabilities not specifically allocated to our Architectural Specialties or Unallocated Corporate segment, including all property and related depreciation associated with our Lancaster, Pennsylvania headquarters. Operating results for the Mineral Fiber segment include a significant majority of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations. Architectural Specialties – designs, produces and sources specialty ceilings, walls, and other interior and exterior architectural applications primarily for use in commercial settings. Products are available in numerous materials, such as metal, felt, architectural resin and glass, wood, wood fiber and glass-reinforced-gypsum in various colors, shapes and designs. These products offer a range of design options and performance attributes such as acoustical control, rated fire protection, light, aesthetic appeal, energy conservation and building performance. We sell standard, premium and customized products, a portion of which are sourced from third-party producers. Architectural Specialties products are sold primarily to direct customers, primarily ceiling systems contractors, and resale distributors. This segment’s revenues are primarily project driven, which can lead to more variability in sales patterns. Operating results for the Architectural Specialties segment include a portion of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations. Unallocated Corporate – includes certain assets, liabilities, income and expenses that have not been allocated to our other business segments and consists of: cash and cash equivalents, our Overcast investment and related equity earnings and losses, the net funded status of our U.S. Retirement Income Plan (“RIP”), the estimated fair value of interest rate swap contracts, outstanding borrowings under our senior secured credit facility and income tax balances. Factors Affecting Revenues For information on our segments’ 2025 net sales by geography and disaggregated expenses, see Note 3 to the Consolidated Financial Statements included in this Form 10-K. For information on our segments’ 2025 net sales disaggregated by major customer groups, see Note 4 to the Consolidated Financial Statements included in this Form 10-K. Markets. We compete in the building product markets of the Americas. We closely monitor publicly available macroeconomic data and trends that provide insight into commercial construction market activity, including, but not limited to, GDP, office vacancy rates, the Architecture Billings Index, new commercial construction starts, state and local government spending, corporate profits and retail sales. The Company continues to monitor the impacts of tariffs and other governmental trade policies and geopolitical events, neither of which had a material direct impact on our financial condition, liquidity or results of operations during 2025 or 2024. In September 2025, GMS, Inc., one of our largest distributor customers, was acquired by The Home Depot, Inc. In addition, in October 2025, Foundation Building Materials, Inc., another one of our largest distributor customers, was acquired by Lowe's Companies, Inc. These acquisitions had no material impact on our financial condition, liquidity or results of operations during 2025. Additionally, in the fourth quarter of 2025, the U.S. federal government experienced a six‑week shutdown of non‑essential operations. While the shutdown contributed to certain short‑term indirect headwinds that impacted our results for the fourth quarter of 2025, these disruptions were temporary in nature and did not have a material impact on our financial condition, liquidity or results of operations for the full year ended December 31, 2025. Several factors and trends within our markets affected our business performance during 2025 compared to 2024, most notably a $94 million increase in net sales within Architectural Specialties due to our December 2024 acquisition of Zahner and April 2024 acquisition of 3form (collectively, the “2024 Acquisitions”). The increase in net sales attributable to the December 2025 acquisition of Parallel and the September 2025 acquisition of Geometrik (collectively, the “2025 Acquisitions”) was not material to consolidated net 24 sales. The following table presents the impact of the 2024 Acquisitions and the 2025 Acquisitions on our net sales (dollar amounts in millions): 2025 2024 2024 Acquisitions $ 163.1 $ 69.6 2025 Acquisitions 1.1 - Total $ 164.2 $ 69.6 Also contributing to the increase in net sales was a $36 million increase in organic Architectural Specialties net sales, partially offset by a $14 million impact from lower sales volumes in our Mineral Fiber segment. Average Unit Value. We periodically modify sales prices of our products due to changes in costs for raw materials and energy, market conditions and the competitive environment. Typically, realized price increases are less than announced price increases because of project pricing, competitive adjustments and changing market conditions. We also offer a wide assortment of products that are differentiated by style, design and performance attributes. Pricing and margins for products within the assortment vary. In addition, changes in the relative quantity of products purchased at different price points can impact year-to-year comparisons of net sales and operating income. Within our Mineral Fiber segment, we focus on improving sales dollars per unit sold, or average unit value (“AUV”), as a measure that accounts for the varying assortment of products and like-for-like pricing impacting our revenues. Favorable AUV increased our total consolidated net sales for the year ended December 31, 2025 by approximately $58 million compared to the same period in 2024. Our Architectural Specialties segment revenues are primarily generated from individual contracts that include project-specific mixes of manufactured and sourced products. As such, we do not track AUV performance for this segment but rather attribute all changes in net sales to volume, including gross to net sales adjustments. During the first quarter and third quarters of 2025, we implemented price increases on Mineral Fiber ceiling products. During the first and second quarters of 2025, WAVE implemented price increases on grid products. In the fourth quarter of 2025, we announced price increases on Mineral Fiber ceiling products and WAVE announced price increases on grid products that became effective in the first quarter of 2026. Future pricing actions for Mineral Fiber, Architectural Specialties and WAVE products may be implemented based on numerous factors, including the impact of tariffs, the rate and pace of inflation and its impact on our business. Seasonality. Historically, our sales tend to be stronger in the second and third quarters of our fiscal year due to more favorable weather conditions, customer business cycles and the timing of renovation and new construction projects. Factors Affecting Operating Costs Operating Expenses. Our operating expenses are comprised of direct production costs (principally raw materials, labor, and energy), manufacturing overhead costs, freight, costs to purchase sourced products, tariffs and selling, general and administrative (“SG&A”) expenses. Our largest raw material expenditures are primarily for fiberglass, perlite, recycled paper, and starch. Other raw materials include clays, felt, pigment, architectural resin and glass, wood and wood fiber. We manufacture substantially all of our mineral wool at one of our manufacturing facilities. We use aluminum and steel in the production of metal building products by us and by WAVE. Finally, natural gas and packaging materials also represent significant input costs. Fluctuations in the prices of these inputs impact our financial results. In 2025, higher energy and raw material costs were partially offset by lower freight costs, resulting in a $5 million negative impact to operating income compared to 2024. Acquisition-Related Expenses and Losses In connection with our acquisitions of Parallel in December 2025, Geometrik in September 2025, Zahner in December 2024, 3form in April 2024, Insolcorp in October 2023, BOK in July 2023 and Arktura LLC (“Arktura”) in December 2020, we recorded certain 25 acquisition-related expenses and losses to operating income for the years ended December 31, 2025, 2024, and 2023, summarized as follows (dollar amounts in millions): 2025 2024 2023 Affected Line Item on the Consolidated Statements of Earnings and Comprehensive Income Inventory $ 0.1 $ 0.3 $ - Cost of goods sold Acquisition costs 1.0 1.8 - SG&A expenses Deferred cash and restricted stock expenses - - 10.7 SG&A expenses Loss related to change in fair value of contingent consideration 1.4 1.6 0.1 Loss related to change in fair value of contingent consideration Negative impact to operating income $ 2.5 $ 3.7 $ 10.8 The inventory amounts above reflect the post-acquisition expenses associated with recording inventory at fair value as part of purchase accounting for the Geometrik and 3form acquisitions. Acquisition costs above reflect certain contingent third-party professional fees incurred due to the Parallel, Geometrik, Zahner and 3form acquisitions. Expenses related to deferred cash and restricted stock awards were for Arktura’s former owners and employees that were recorded over their respective service periods, as such payments were subject to the awardees’ continued employment with AWI. The change in fair value of contingent consideration was related to our Geometrik, Insolcorp and BOK acquisitions and is remeasured quarterly during each acquisition's earn-out periods. See Note 18 to the Consolidated Financial Statements for further information. Depreciation and amortization of fixed and intangible assets acquired have been excluded from the table above. See Note 5 to the Consolidated Financial Statements for further information. RESULTS OF OPERATIONS The following discussion includes year-to-year comparisons between 2025 and 2024. Discussions of year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Please refer to Note 3 to the Consolidated Financial Statements for a reconciliation of segment operating income to consolidated earnings before income taxes. CONSOLIDATED RESULTS FROM OPERATIONS (dollar amounts in millions) 2025 2024 Change is Favorable Total consolidated net sales $ 1,620.8 $ 1,445.7 12.1 % Operating income $ 430.9 $ 374.3 15.1 % Consolidated net sales for 2025 increased 12.1% versus the prior year due to higher volumes of $117 million and favorable AUV of $58 million. Architectural Specialties net sales increased $130 million and Mineral Fiber net sales increased $45 million. Architectural Specialties segment net sales improved due to a $94 million year-over-year increase attributable to the 2024 Acquisitions and a $36 million increase in organic net sales. The increase in Mineral Fiber net sales was driven by favorable AUV, partially offset by lower sales volumes. Cost of goods sold during 2025 was 59.4% of net sales, compared to 59.8% for 2024. The year-over-year decrease in cost of goods sold as a percent of net sales was primarily driven by favorable AUV benefits, improved manufacturing productivity and favorable inventory valuation impacts. These benefits were partially offset by an increase in manufacturing costs. SG&A expenses in 2025 were $339.5 million, or 20.9% of net sales, compared to $308.5 million, or 21.3% of net sales, in 2024. The reduction in SG&A expenses as a percent of net sales was due to disciplined cost control, partially offset by inflation. The year-over-year increase in SG&A expenses compared to the prior year was primarily driven by a $27 million increase related to the 2024 Acquisitions, a $4 million increase in incentive compensation and a $3 million increase in Architectural Specialties selling and advertising expenses, driven primarily by higher net sales as well as additional investments in selling capabilities. These increases were partially offset by a $2 million increase in company-owned officer life insurance gains related to deferred compensation plans and a prior-period increase in reserves for environmental remediation matters of $2 million that did not recur in the current period. In 2025, we recorded $1.4 million of remeasurement losses for changes in the fair value of contingent consideration related to the acquisitions of Geometrik, BOK and Insolcorp. In the same period in 2024, we recorded $1.6 million of remeasurement losses for 26 changes in the fair value of contingent consideration related to the acquisitions of BOK and Insolcorp. See Note 18 to the Consolidated Financial Statements for further information. In 2025, we recorded $0.8 million of net gains on sales of fixed assets, which were primarily comprised of a $0.9 million gain on the sale of a parcel of land at a Mineral Fiber plant. In 2024, we recorded $0.6 million of net losses on sales of fixed assets, which were comprised of a $5.2 million loss on the sale of undeveloped land adjacent to our Corporate headquarters, partially offset by a $4.6 million gain on the sale of our idled Mineral Fiber plant in St. Helens, Oregon. Equity earnings from unconsolidated affiliates were $112.3 million in 2025, compared to $103.4 million in 2024. WAVE equity earnings were $113.2 million in 2025 compared to $104.3 million in 2024. The increase in WAVE equity earnings was primarily driven by the benefit from favorable AUV, partially offset by the negative impact of lower sales volumes. See Note 10 to the Consolidated Financial Statements for further information. Interest expense was $33.0 million in 2025 compared to $39.8 million in 2024. The decrease in interest expense was primarily due to lower average debt balances, partially offset by higher average effective interest rates. Other non-operating income, net was $2.4 million during 2025 compared to $12.6 million during 2024. The decrease in other non-operating income, net, was primarily driven by the non-service cost components of pension and postretirement net periodic benefit costs and a decrease in interest income. Income tax expense was $91.6 million in 2025 compared to $82.2 million in 2024. The effective tax rate was 22.9% in 2025 compared to 23.7% in 2024. The effective tax rate for 2025 was lower compared to 2024 primarily due to a greater benefit recognized in the current year from statute closures as well as the benefit from an investment tax credit generated in the current year, offset partially by unfavorable adjustments related to our valuation allowance for capital loss carryforwards compared to 2024. Total Other Comprehensive Income (“OCI”) was $7.1 million in 2025 compared to Total Other Comprehensive Loss (“OCL”) of $5.5 million in 2024. The change from OCL to OCI was primarily driven by favorable pension and postretirement actuarial adjustments and higher foreign currency translation gains, driven primarily by the Canadian dollar. To a lesser extent, the change was also driven by lower interest rate swap derivative losses in 2025 compared to 2024. Pension and postretirement adjustments represent the actuarial gains and losses related to our defined benefit pension and postretirement plans. Foreign currency translation adjustments represent the change in the U.S. dollar value of assets and liabilities denominated in foreign currencies. Derivative losses represent the mark-to-market value adjustments of our derivative assets and liabilities, and the recognition of gains and losses previously deferred in accumulated OCL. REPORTABLE SEGMENT RESULTS Mineral Fiber (dollar amounts in millions) 2025 2024 Change is Favorable Total segment net sales $ 1,030.7 $ 986.0 4.5 % Operating income $ 362.0 $ 322.5 12.2 % Mineral Fiber net sales increased $45 million due to $58 million of favorable AUV, partially offset by $14 million of lower sales volumes. The improvement in AUV was due to favorable like-for-like price and, to a lesser extent, favorable mix. The increase in net sales was primarily driven by our strong execution and benefits from growth initiatives, which contributed both volume and mix benefits. These benefits were partially offset by a decrease in volumes driven by softer demand, primarily from home centers. Cost of goods sold during 2025 was $603 million, or 58.5% of net sales, compared to $586 million, or 59.5% of net sales, for 2024. Gross profit increased $28 million, or 6.9%, compared to 2024 due to a $38 million benefit from favorable AUV, partially offset by a $9 million negative impact from lower sales volumes and a $2 million increase in manufacturing costs. The increase in manufacturing costs was primarily due to higher input costs, net of a $7 million benefit from favorable inventory valuations. SG&A expenses were $179 million, or 17.4% of net sales in 2025, compared to $181 million, or 18.3% of net sales, for 2024. The year-over-year decrease in SG&A expenses was primarily driven by a $2 million increase in company-owned officer life insurance gains related to deferred compensation plans and a prior period increase in reserves for environmental matters of $2 million that did not recur in the current period. These decreases were partially offset by a $3 million increase in incentive compensation. 27 Equity earnings from our WAVE joint venture were $113 million in 2025, compared to $104 million in 2024. The increase in WAVE equity earnings was primarily driven by the benefit from favorable AUV, partially offset by the negative impact of lower sales volumes. Architectural Specialties (dollar amounts in millions) 2025 2024 Change is Favorable Total segment net sales $ 590.1 $ 459.7 28.4 % Operating income $ 72.2 $ 55.3 30.6 % Architectural Specialties net sales increased $130 million, primarily due to a $94 million increase from the 2024 Acquisitions, in addition to a $36 million increase in organic net sales driven by strong growth across most of our specialty product categories. Cost of goods sold during 2025 was $357 million, or 60.6% of net sales, compared to $276 million, or 60.1% of net sales, for 2024. Gross profit increased $49 million, or 26.9%, compared to 2024. The increase in cost of goods sold as a percentage of sales was driven primarily by an increase in manufacturing costs within our organic business due to less favorable operating leverage driven by project timing, partially offset by improved custom project margins. The 2024 Acquisitions contributed a $36 million benefit to gross profit, with the remaining increase primarily driven by the benefit from higher organic sales volumes. SG&A expenses were $160 million, or 27.0% of net sales, in 2025 compared to $127 million, or 27.6% of net sales, for 2024. The year-over-year increase in SG&A expenses was primarily driven by a $27 million increase related to the 2024 Acquisitions and a $3 million increase in selling and advertising expenses, driven primarily by higher net sales as well as additional investments in selling capabilities. Unallocated Corporate Unallocated Corporate operating loss was $3 million in 2025 compared to $4 million in 2024. FINANCIAL CONDITION AND LIQUIDITY Cash Flow Operating activities for 2025 provided $355.5 million of cash, compared to $266.8 million in 2024. The favorable change in cash from operating activities was driven by higher cash earnings compared to the prior year, including a benefit from a decrease in income taxes paid due to the impact of 2025 federal tax reform. Also contributing to the increase in cash flows from operating activities was a favorable timing related working capital change in accounts receivable, partially offset by an unfavorable change in inventory. Net cash used for investing activities was $3.6 million for 2025, compared to $79.3 million in 2024. The favorable change in cash was primarily due to a $110 million reduction in cash paid for acquisitions and an increase in dividends from WAVE, partially offset by an increase in purchases of property, plant and equipment and a decrease in proceeds from the sale of fixed assets, due primarily to 2024 cash proceeds received from the sales of our idled St. Helens manufacturing plant and undeveloped land adjacent to our corporate headquarters. Net cash used for financing activities was $319.3 million in 2025, compared to $177.6 million in 2024. The unfavorable change in cash used for financing activities was primarily due to increased debt repayments, net of borrowings, under our senior secured credit facility. Borrowings were significantly higher in the prior year primarily due to the 2024 acquisition of 3form. Also contributing to the increase in cash used for financing activities was an increase in repurchases of our outstanding common stock. Liquidity Our liquidity needs for operations vary throughout the year. We retain lines of credit to facilitate our seasonal cash flow needs, since cash flow is historically lower during the first and fourth quarters of our fiscal year. On December 10, 2025, we amended our second amended and restated $950.0 million variable rate senior secured credit facility. The amendment to our senior secured credit facility decreased our principal balance to $910.6 million and is comprised of a $500.0 million revolving credit facility (with a $150.0 million sublimit for letters of credit) and a $410.6 million Term Loan A. The terms of the amended senior secured credit facility resulted in a lower interest rate spread for both the revolving credit facility and Term Loan A (upon refinance, from 1.375% over the Secured Overnight Financing Rate (“SOFR”), plus a 10-basis point SOFR adjustment to 1.25% over SOFR, with no incremental SOFR basis point adjustment). The interest rate can fluctuate based upon our election of the floating rate, with the applicable margin subject to adjustment based on our consolidated net leverage ratio. We also extended the maturity of 28 both the revolving credit facility and Term Loan A from December 2027 to December 2030. In connection with the refinancing, we incurred $2.7 million of bank, legal and other fees, of which $2.6 million were capitalized. These fees are reflected as a component of long-term debt and amortized into interest expense over the lives of the underlying debt. Additionally, during the fourth quarter of 2025, we wrote off $0.2 million of unamortized debt financing costs, included as a component of interest expense, related to our previous credit facility. We also have a $25.0 million bi-lateral letter of credit facility separate from the senior secured credit facility. As of December 31, 2025, total borrowings outstanding under our senior credit facility were $410.6 million under Term Loan A, and the revolving credit facility was undrawn. The senior credit facility includes two financial covenants that require the ratio of consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) to consolidated cash interest expense minus consolidated cash interest income to be greater than or equal to 3.0 to 1.0, and requires the ratio of consolidated funded indebtedness, minus AWI and domestic subsidiary unrestricted cash and cash equivalents up to $100 million, to EBITDA, to be less than or equal to 3.75 to 1.0 (subject to certain exceptions for certain acquisitions). As of December 31, 2025, we were in compliance with all covenants of the senior credit facility. The Term Loan A is currently priced on a variable interest rate basis. We use interest rate swaps to minimize the fluctuations in earnings caused by interest rate volatility associated with our senior credit facility. The following table summarizes our interest rate swaps, including forward interest rate swaps (dollar amounts in millions): Coverage Period Notional Amount Risk Coverage Trade Date March 2025 to March 2026 $ 50.0 USD-SOFR March 27, 2025 March 2024 to June 2026 $ 50.0 USD-SOFR March 25, 2024 March 2025 to September 2026 $ 25.0 USD-SOFR March 27, 2025 November 2023 to December 2026 $ 50.0 USD-SOFR October 10, 2023 March 2024 to June 2027 $ 50.0 USD-SOFR March 27, 2024 November 2023 to November 2027 $ 50.0 USD-SOFR September 29, 2023 June 2024 to June 2028 $ 50.0 USD-SOFR June 26, 2024 Under the terms of the interest rate swaps above, we pay a fixed rate monthly and receive a floating rate based on SOFR. These swaps are designated as cash flow hedges against changes in SOFR for a portion of our variable rate debt. We use lines of credit and other commercial commitments to ensure that adequate funds are available to meet operating requirements. Letters of credit are currently arranged through our revolving credit facility and our bi-lateral facility. Letters of credit may be issued to third party suppliers, insurance companies and financial institutions and typically can only be drawn upon in the event of AWI’s failure to pay its obligations to the beneficiary. The following table presents details related to our letters of credit facilities (dollar amounts in millions): December 31, 2025 Financing Arrangements Limit Used Available Bi-lateral facility $ 25.0 $ 7.7 $ 17.3 Revolving credit facility 150.0 - 150.0 Total $ 175.0 $ 7.7 $ 167.3 The following table reflects scheduled future payments of long-term debt, excluding $3.9 million of unamortized debt financing costs, and the related interest payments, which are projected based on market-based interest rate swap curves (dollar amounts in millions): 2026 2027 2028 2029 2030 Thereafter Total Long-term debt $ 10.3 $ 10.3 $ 20.5 $ 20.5 $ 349.0 $ - $ 410.6 Scheduled interest payments 22.3 20.0 19.1 18.5 16.9 - 96.8 As of December 31, 2025, we had $112.7 million of cash and cash equivalents, $92.0 million in the U.S. and $20.7 million in various foreign jurisdictions, primarily Canada. As of December 31, 2025, we also had $500 million of borrowing capacity available under our revolving credit facility. We believe cash on hand and cash generated from operations, together with borrowing capacity under our credit facility, will be adequate to address our near-term liquidity needs based on current expectations of our business operations, capital expenditures and scheduled payment of debt obligations. In 2026, we expect to spend approximately $100 million to $110 million on capital expenditures and approximately $60 million on dividends. In addition, in February 2026 we paid $64.1 million associated with the acquisition of Eventscape, Inc. and Eventscape U.S. Holdings Inc. (collectively, “Eventscape”). See Note 28 to the Consolidated Financial Statements for more information. 29 In July 2016, our Board of Directors approved a share repurchase program authorizing us to repurchase up to $150.0 million of our outstanding shares of common stock (the “Program”). Since inception of the Program, this authorization has been increased to permit repurchases of up to an aggregate of $1,700.0 million of our outstanding shares of common stock through December 31, 2026. We had $532.8 million remaining under the Board’s repurchase authorization as of December 31, 2025. Repurchases of our common stock under the Program may be made through open market, block and privately negotiated transactions, including Rule 10b5-1 plans, at such times and in such amounts as management deems appropriate, subject to market and business conditions, regulatory requirements and other factors. The Program does not obligate AWI to repurchase any particular amount of common stock and may be suspended or discontinued at any time without notice. CRITICAL ACCOUNTING ESTIMATES In preparing our Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“GAAP”), we are required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates and assumptions on an ongoing basis, using relevant internal and external information. We believe that our estimates and assumptions are reasonable; however, actual results may differ from what was estimated and could have a significant impact on our financial statements. We have identified the following as our critical accounting estimates and have discussed these with our Audit Committee. U.S. Pension Credit and Postretirement Benefit Costs – We maintain significant pension and postretirement plans in the U.S. Our defined benefit pension and postretirement benefit costs are developed from actuarial valuations. These valuations are calculated using a number of assumptions, which represent management’s best estimate of the future. The assumptions that have the most significant impact on reported results are the discount rate, the estimated long-term return on plan assets and the estimated inflation in health care costs. These assumptions are generally updated annually. Management utilizes the Aon AA Above Median yield curve, which is a hypothetical AA yield curve comprised of a series of annualized individual discount rates, as the primary basis for determining discount rates. As of December 31, 2025 and 2024, we assumed discount rates of 5.47% and 5.68%, respectively, for our U.S. defined benefit pension plans. As of December 31, 2025 and 2024, we assumed discount rates of 5.36% and 5.61%, respectively, for our U.S. postretirement plan. The effects of the change in discount rate will be amortized into earnings as described below. Absent any other changes, a one-quarter percentage point increase or decrease in the discount rates for the U.S. pension and postretirement plans would not have a material impact on 2026 non-operating income. We manage two U.S. defined benefit pension plans, our RIP, which is a qualified funded plan, and a nonqualified unfunded plan. For the RIP, the expected return on plan assets represents a long-term view of the future estimated investment return on plan assets. This estimate is determined based on the target allocation of plan assets among asset classes and input from investment professionals on the expected performance of the asset classes over 10 to 20 years. Historical asset returns are monitored and considered when we develop our expected return on plan assets. An incremental component is added for the expected return from active management based on historical information obtained from the plan’s investment consultants. These forecasted gross returns are reduced by estimated management fees and expenses. Over the 10-year period ended December 31, 2025, the historical annualized return was approximately 3.43% compared to an average expected return of 5.63%. The actual gain on plan assets incurred for 2025 was 8.36%, net of fees. The difference between the actual and expected rate of return on plan assets will be amortized into earnings as described below. The expected return on plan assets used in determining our 2025 U.S. pension cost was 6.00%. We have assumed a return on plan assets for 2026 of 6.00%. The 2026 expected return on assets was calculated in a manner consistent with 2025. Absent any other changes, a one-quarter percentage point increase or decrease in this assumption would impact 2026 non-operating income by $1.0 million. Contributions to the unfunded pension plan were $3.0 million in 2025 and were made on a monthly basis to fund benefit payments. We estimate the 2026 contributions will be approximately $2.7 million. See Note 17 to the Consolidated Financial Statements for more information. 30 The estimated inflation in health care costs represents a 5 to 10-year view of the expected inflation in our postretirement health care costs. We separately estimate expected health care cost increases for pre-65 retirees and post-65 retirees due to the influence of Medicare coverage at age 65, as illustrated below: Assumptions Actual Post-65 Pre-65 Post-65 Pre-65 2024 10.5 % 7.8 % 11.8 % 12.0 % 2025 12.0 % 8.6 % 25.8 % 49.4 % 2026 18.6 % 8.7 % The difference between the actual and expected health care costs is amortized into earnings as described below. As of December 31, 2025, health care cost increases are estimated to decrease ratably until 2036, after which they are estimated to be constant at 4.50%. See Note 17 to the Consolidated Financial Statements for more information. Actual results that differ from our various pension and postretirement plan estimates are captured as actuarial gains/losses. When certain thresholds are met, the gains and losses are amortized into future earnings over the remaining life expectancy of participants. Changes in assumptions could have significant effects on earnings in future years. Total net actuarial losses related to our U.S. pension benefit plans decreased by $10.7 million in 2025 primarily due to a favorable actual return on RIP assets and the amortization of actuarial losses, partially offset by the impact of a 21-basis point decrease in the discount rate. The $10.7 million change in actuarial loss impacting our U.S. pension plans is reflected as a component of other comprehensive income on our Consolidated Statements of Earnings and Comprehensive Income along with actuarial gains and losses from our foreign pension plan and our postretirement benefit plans. Income Taxes – Our effective tax rate is primarily determined based on our pre-tax income, statutory income tax rates in the jurisdictions in which we operate, and the tax impacts of items treated differently for tax purposes than for financial reporting purposes. Some of these differences are permanent, such as expenses that are not deductible in our tax returns, and some of these differences are temporary, reversing over time, such as depreciation expense. These temporary differences create deferred income tax assets and liabilities. Deferred income tax assets are also recorded for state net operating losses (“NOL”) and capital loss carryforwards. As of December 31, 2025, we have recorded valuation allowances totaling $16.6 million for various federal and state deferred tax assets. While we have considered future taxable income in assessing the need for the valuation allowances based on our best available projections, if these estimates and assumptions change in the future or if actual results differ from our projections, we may be required to adjust our valuation allowances accordingly. Such adjustments could be material to our Consolidated Financial Statements. As further described in Note 15 to the Consolidated Financial Statements, our Consolidated Balance Sheet as of December 31, 2025, includes deferred income tax liabilities of $192.8 million, which is net of $69.5 million of deferred tax assets. We have established $16.6 million of valuation allowances consisting of $16.3 million for state deferred tax assets, primarily net operating loss carryforwards, and $0.3 million for federal and state capital loss carryforwards. Inherent in determining our effective tax rate are judgments regarding business plans and expectations about future operations. These judgments include the amount and geographic mix of future taxable income, limitations on usage of NOL carryforwards, the impact of ongoing or potential tax audits, and other future tax consequences. As of December 31, 2025 and 2024, we had $337.2 million and $622.9 million, respectively, of gross state NOL carryforwards expiring between 2026 and 2044. We estimate we will need to generate future U.S. taxable income of approximately $106.5 million for state income tax purposes during the respective realization periods (ranging from 2026 to 2044) to be able to fully realize the gross state NOL carryforwards offset by related valuation allowances. Our ability to utilize deferred tax assets may be impacted by certain future events, such as changes in tax legislation and insufficient future taxable income prior to expiration of certain deferred tax assets. Impairments of Tangible Assets, Intangible Assets and Goodwill – Our indefinite-lived assets include goodwill and other intangibles, primarily trademarks and brand names. Those trademarks and brand names are integral to our corporate identity and are expected to contribute indefinitely to our corporate cash flows. Accordingly, they have been assigned an indefinite life. We conduct our annual impairment tests for these indefinite-lived intangible assets and goodwill during the fourth quarter. These assets undergo more frequent tests if an indication of possible impairment exists. We conduct impairment tests for tangible assets and definite-lived intangible assets when indicators of impairment exist for the asset group, such as operating losses and/or negative cash flows. 31 The principal assumptions used in our impairment tests for definite-lived intangible assets is operating profit adjusted for depreciation and amortization and, if required to estimate the fair value, the discount rate. The principal assumptions used in our impairment tests for indefinite-lived intangible assets include revenue growth rates, discount rate and royalty rate. The principal assumptions used in our impairment tests for goodwill include after-tax cash flows growth rates and discount rate. Revenue growth rates, after-tax cash flows growth rates and operating profit assumptions are derived from those used in our operating plan and strategic planning processes. The discount rate assumption is calculated based upon an estimated weighted average cost of capital which reflects the overall level of inherent risk and the rate of return a market participant would expect to achieve. The royalty rate assumption represents the estimated contribution of the intangible assets to the overall profits of the related businesses. Methodologies used for valuing our intangible assets did not change from prior periods. In 2025, indefinite-lived intangibles and goodwill were tested for impairment based on the identified asset (for indefinite-lived intangibles) or on our identified reporting units (for goodwill). There were no impairment charges recorded in 2025, 2024 or 2023 related to intangible assets. We did not test tangible assets or amortizing intangible assets for impairment in 2025, 2024 or 2023 as no indicators of impairment existed. The revenue and cash flow estimates used in applying our impairment tests are based on management’s analysis of information available at the time of the impairment test and represent a market participant view. Actual cash flows lower than the estimate could lead to significant future impairments. If subsequent testing indicates that fair values have declined, the carrying values would be reduced and our future statements of earnings would be affected. We cannot predict the occurrence of certain events that might lead to material impairment charges in the future. Such events may include, but are not limited to, the impact of economic environments, particularly related to the commercial construction industry, material adverse changes in relationships with significant customers, or strategic decisions made in response to economic and competitive conditions. See Notes 9 and 12 to the Consolidated Financial Statements for further information. Environmental Liabilities – We are actively involved in the investigation, closure and/or remediation of existing or potential environmental contamination under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), and state Superfund and similar environmental laws at two domestically owned locations allegedly resulting from past industrial activity. In both cases, we are one of several potentially responsible parties and have agreed to jointly fund the required investigation, while preserving our defenses to the liability. We may also have rights of contribution or reimbursement from other parties or coverage under applicable insurance policies. We provide for environmental remediation costs and penalties when the responsibility to remediate is probable and the amount of associated costs is reasonably determinable. Accruals are estimates based on the judgment of management related to ongoing proceedings. Estimates of our future liability at the environmental sites are based on evaluations of currently available facts regarding each individual site. In determining the probability of contribution, we consider the solvency of other parties, the site activities of other parties, whether liability is being disputed, the terms of any existing agreements and experience with similar matters, and the effect of both our October 2006 Chapter 11 reorganization and separation with AFI upon the validity of the claim. We evaluate the measurement of recorded liabilities each reporting period based on current facts and circumstances specific to each matter. The ultimate losses incurred upon final resolution may materially differ from the estimated liability recorded. Changes in estimates are recorded in earnings in the period in which such changes occur. We are unable to predict the extent to which any recoveries from other parties or coverage under insurance policies might cover our final share of costs for these sites. Our final share of investigation and remediation costs may exceed any such recoveries, and such amounts net of insurance recoveries may be material. However, we do not expect the total future costs to have a material adverse effect on our liquidity or financial condition as the cash payments may be made over many years. Business Combinations and Contingent Consideration – Acquired businesses are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the assets acquired and liabilities assumed at their respective fair values. Any excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed is recorded as goodwill. The estimated fair value of contingent consideration is recorded as a liability on our Consolidated Balance Sheets at the date of acquisition. The purchase price allocation requires us to make significant estimates and assumptions with respect to intangible assets and contingent consideration. Although we believe the assumptions and estimates we have made are reasonable, they are based in part on historical experience and information obtained from the management of the acquired companies. 32 We engage independent, third-party valuation specialists to assist in determining the fair values of acquired intangible assets and contingent consideration. The Geometrik acquisition in 2025 and the Insolcorp and BOK acquisitions in 2023 include the potential for future contingent earn-out payments based on the financial or operational performance of the acquired companies. We estimated the fair value of these contingent consideration liabilities upon acquisition and are required to measure these liabilities at fair value each reporting period until the contingencies are resolved, with changes in fair value after the acquisition date affecting earnings in the period of the estimated fair value change. See Notes 5 and 18 to the Consolidated Financial Statements for further information. The principal assumptions used in valuing certain intangible assets include discount rates, royalty rates, future expected cash flows from sales attributed to the acquired company's developed technologies, trade names and customer relationships, as well as assumptions about the period of time such assets will continue to be used in the combined company's portfolio. The principal assumptions used in valuing contingent consideration include the probability of meeting the future revenue and EBITDA growth targets and discount rates. These estimates are inherently uncertain and unpredictable, and if different estimates were used, the total consideration including the estimated fair value of the contingent consideration, could be allocated to the acquired assets and liabilities differently from the allocation that we have made. In addition, unanticipated events and circumstances may occur, which may affect the accuracy or validity of such estimates, and if such events occur, we may be required to record a charge against the value assigned to an acquired asset or an increase in the amounts recorded for assumed liabilities. ACCOUNTING PRONOUNCEMENTS EFFECTIVE IN FUTURE PERIODS See Note 2 to the Consolidated Financial Statements for further information. 33