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What changed in ARMSTRONG WORLD INDUSTRIES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ARMSTRONG WORLD INDUSTRIES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+239 added−227 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-25)

Top changes in ARMSTRONG WORLD INDUSTRIES INC's 2025 10-K

239 paragraphs added · 227 removed · 212 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

48 edited+4 added−3 removed40 unchanged
Biggest changeWe classify our renovation opportunities as major renovation projects, which tend to be larger in scope, or repair and remodel projects, which generally involve the replacement of old products with new products. In our Architectural Specialties segment, we estimate that a majority of our commercial construction market sales are used for new building construction by end-users of our products.
Biggest changeIn our Mineral Fiber segment, we estimate that a majority of our commercial construction market sales are used for existing building renovation purposes by end-users of our products. We classify our renovation opportunities as major renovation projects, which tend to be larger in scope, or repair and remodel projects, which generally involve the replacement of old products with new products.
We sell standard, premium and customized products, a portion of which are sourced from third-party producers. Architectural Specialties products are sold primarily to resale distributors and direct customers, primarily ceiling systems contractors. This segment’s revenues are primarily project driven, which can lead to more variability in sales patterns.
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.
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 investment and related equity earnings/losses, the net funded status of our U.S.
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 investment and related equity earnings and losses, the net funded status of our U.S.
We sell our products to select, pre-approved customers using customary trade terms that allow for payment in the future. These practices are typical within the industry. Competition The markets in which our products are sold are highly competitive. Principal attributes of competition include product performance, product styling, service and price. Competition comes from both domestic and international manufacturers.
We sell our products to select, pre-approved customers using customary trade terms that allow for payment in the future. These practices are typical within the industry. Competition The markets in which our products are sold are highly competitive. Principal factors of competition include product performance and attributes, product styling, service and price. Competition comes from both domestic and international manufacturers.
In April 2024, we acquired all 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.
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.
Products are available in numerous materials, such as metal, felt, wood, resin, 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.
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.
Raw Materials We purchase raw materials from numerous suppliers worldwide in the ordinary course of business. Our principal raw materials are fiberglass, perlite, recycled paper and starch. Other raw materials we purchase include clays, felt, pigment, resin, wood and wood fiber. We manufacture most of our mineral wool needs at one of our facilities.
Raw Materials We purchase raw materials from numerous suppliers in the ordinary course of business. Our principal raw materials are fiberglass, perlite, recycled paper and starch. Other raw materials we purchase include clays, felt, pigment, resin, wood and wood fiber. We manufacture most of our mineral wool needs at one of our facilities.
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 in Overcast are included in our Unallocated Corporate segment.
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.
We track Occupational Safety and Health Administration (“OSHA”) recordable injuries and lost time rates by location monthly. We establish safety targets annually, which are tracked and reported to leadership monthly and reviewed with our Board of Directors. Compensation, Benefits and Wellness .
We track Occupational Safety and Health Administration (“OSHA”) recordable injuries and lost time rates by location monthly. We establish safety targets annually, which are tracked and reported to leadership monthly and reviewed with our Board of Directors. 9 Compensation, Benefits and Wellness .
Additionally, some of our products compete with alternative products or finishing solutions, namely, drywall and exposed structure (also known as open plenum). Excess industry capacity exists for certain products, which tends to increase price competition.
Additionally, some of our ceiling products compete with alternative products or finishing solutions, namely, drywall and exposed structure (also known as open plenum). Excess industry capacity exists for certain products, which tends to increase price competition.
During 2024, AWI terminated the license with AHF Products and sold the flooring specific trademarks previously licensed to AHF Products. None of these transactions had or are expected to have any material impact on the integrity of the Armstrong trademark.
During 2024, AWI terminated the license with AHF and sold the flooring specific trademarks previously licensed to AHF. None of these transactions had or are expected to have any material impact on the integrity of the Armstrong trademark.
Certain of our trademarks, including without limitation, , Armstrong®, 3form®, ACOUSTIBuilt®, Arktura®, BŌK Modern®, Calla®, Cirrus®, Cortega®, DESIGNFlex®, Dune™, Feltworks®, Infusions®, Kanopi™, Lyra®, MetalWorks™, Móz™, Optima®, ProjectWorks®, Soundscapes®, Sustain®, Tectum®, Templok®, Total Acoustics®, Turf®, Ultima®, WoodWorks® and Zahner®, are important to our business because of their significant brand name recognition. Registrations are generally for fixed, but renewable, terms.
Certain of our trademarks, including without limitation, , Armstrong®, 3form®, ACOUSTIBuilt®, Arktura®, BŌK Modern®, Calla®, CastWorks®, Cirrus®, Cortega®, DESIGNFlex®, Dune™, Feltworks®, Infusions®, Kanopi®, LightArt®, Lyra®, MetalWorks™, Móz™, Optima®, ProjectWorks®, Soundscapes®, Sustain®, Tectum®, Templok®, Total Acoustics®, Turf®, Ultima®, WoodWorks® and Zahner®, are important to our business because of their significant brand name recognition. Registrations are generally for fixed, but renewable, terms.
Sales to these distributors are included in both our Mineral Fiber and Architectural Specialties segment net sales. Working Capital We primarily produce goods for inventory and sell on credit to our customers. Generally, we believe our distributors and home center customers carry inventory as needed to meet local or rapid delivery requirements.
Sales to these customers were included in both our Mineral Fiber and Architectural Specialties segment net sales. Working Capital We primarily produce goods for inventory and sell on credit to our customers. Generally, we believe our distributors and home center customers carry inventory as needed to meet local or rapid delivery requirements.
AWI is an Americas leader in the design, innovation and manufacture of 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, wood, resin, wood fiber and glass-reinforced-gypsum.
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.
Given the competitiveness of our markets, we may not be able to recover the increased manufacturing costs through increasing selling prices to our customers. Sourced Products Some of the products we sell are sourced from third parties. Our primary sourced products include specialty ceiling and external metal products.
Given the competitiveness of our markets, we may not be able to recover the increased manufacturing costs through increasing selling prices to our customers. Sourced Products Some of the products we sell are sourced from third parties. Our primary sourced products include specialty ceiling and exterior metal products.
Ceiling component products consist of ceiling perimeters and trim, in addition to grid products that support drywall ceiling systems. For some customers, WAVE sells its suspension system products to AWI for resale to customers. Mineral Fiber segment results reflect those sales transactions.
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 following companies are our primary competitors: CertainTeed Corporation (a subsidiary of Saint-Gobain), Chicago Metallic Corporation (owned by Rockwool International A/S), Georgia-Pacific Corporation, Rockfon A/S (owned by Rockwool International A/S), USG Corporation (owned by Gebr. Knauf KG), Ceilings Plus (owned by USG Corporation), Rulon International, SAS International, and 9Wood.
The following companies are our primary competitors: CertainTeed Corporation (a subsidiary of Saint-Gobain), Chicago Metallic Corporation (owned by Rockwool International A/S), Rockfon A/S (owned by Rockwool International A/S), USG Corporation (owned by Gebr. Knauf KG), Ceilings Plus (owned by USG Corporation), Rulon International, SAS International, and 9Wood.
A portion of our sourced products are from suppliers located outside of the U.S., primarily from Europe and the Pacific Rim. Sales of sourced products represented less than 10% of our total consolidated revenue in 2024. 7 In general, we believe we have adequate supplies of sourced products. However, we cannot guarantee that the supply will remain adequate.
A portion of our sourced products are from suppliers located outside of the U.S., primarily from Europe and the Pacific Rim. Sales of sourced products represented less than 10% of our total consolidated revenue in 2025. In general, we believe we have adequate supplies of sourced products. However, we cannot guarantee that the supply will remain adequate.
We compete directly with other domestic and international suppliers of these products. The major markets in which we compete are: Commercial Construction. Our revenue opportunities come from new construction as well as renovation of existing buildings. Most of our revenue comes from the following sectors of commercial construction – office, education, healthcare, transportation and retail.
We compete directly with other domestic and international suppliers of these products. The major markets in which we compete are: Commercial Construction. Our revenue opportunities come from new construction as well as renovation of existing buildings. Most of our revenue comes from the following sectors of commercial construction: office (including data centers), education, healthcare, transportation and retail.
See Note 27 to the Consolidated Financial Statements and Risk Factors in Item 1A of this Form 10-K, for information regarding the possible effects that compliance with environmental laws and regulations may have on our businesses and operating results. Website We maintain a website at https://www.armstrongworldindustries.com. Information contained on our website is not incorporated into this document.
See Note 26 to the Consolidated Financial Statements and Risk Factors in Item 1A of this Form 10-K, for information regarding the possible effects that compliance with environmental laws and regulations may have on our businesses and operating results. Website We maintain a website at https://www.armstrong.com. Information contained on our website is not incorporated into this document.
In recent years we added parental leave and adoption benefits for all employees and launched a wellness program to promote physical, mental and financial well-being. In addition, we offer on-site wellness screenings at our manufacturing facilities in partnership with our medical provider.
In recent years we added parental leave and adoption benefits for all employees and launched a wellness program to promote physical, mental and financial well-being. In addition, we offer on-site wellness screenings at our manufacturing facilities in partnership with our medical provider. Finally, we offer mental well-being support and nutrition and financial wellness education to all employees.
There is no assurance that these raw materials will remain in adequate supply to us. Prices for certain high usage raw materials can fluctuate dramatically. Cost increases for these materials can have a significant adverse impact on our manufacturing costs.
There is no assurance that these raw materials will remain in adequate supply to us. 7 Prices for certain high usage raw materials can fluctuate dramatically, including due to tariffs. Cost increases for these materials can have a significant adverse impact on our manufacturing costs.
Information in the 2024 Sustainability Report or the Company's website is not incorporated herein by reference. Human Capital Workforce Demographics. As of December 31, 2024 and 2023, we had approximately 3,600 and 3,100 full time and part time employees, respectively.
Information in the 2025 Sustainability Report or the Company's website is not incorporated herein by reference. Human Capital Workforce Demographics. As of December 31, 2025 and 2024, we had approximately 3,800 and 3,600 full-time and part-time employees, respectively.
Through this strategy, we have delivered consistent growth in mineral fiber sales dollars per unit sold through product innovation, including our Total Acoustics® solutions and Sustain® family of products, and we have built a broad portfolio of architectural specialties products for ceilings, specialty walls and exterior metal architectural applications.
Through this strategy, we have delivered consistent growth in mineral fiber sales dollars per unit sold through product innovation, including our Templok® energy saving ceiling tiles, Total Acoustics® solutions and Sustain® family of products, and we have built a broad portfolio of architectural specialties products for ceilings, specialty walls and exterior metal architectural applications.
Key U.S. statistics that indicate market opportunity include existing home sales (a key indicator for renovation opportunity), housing starts, housing completions, home prices, interest rates and consumer confidence. 6 Customers We use our product quality, broad product portfolio, design capabilities, service, innovation and brand recognition to develop long-standing relationships with our customers.
Key U.S. statistics that 6 indicate market opportunity include existing home sales (a key indicator for renovation opportunity), housing starts, housing completions, home prices, interest rates and consumer confidence. Customers We have developed long-standing relationships with our customers based on our product quality, broad product portfolio, design capabilities, service, innovation and brand recognition.
In 2024, we published our fourth Sustainability Report which measures our progress towards achieving our 2030 sustainability goals and provides insights into our sustainability efforts. We expect to update our progress regularly. The report is available in the "Sustainability" section of our website, which is listed below.
In 2025, we published our fifth Sustainability Report which measures our progress towards achieving our 2030 sustainability goals and provides insights into our sustainability efforts. We expect to update our progress regularly. The report is available in the “Sustainability” section of our website, which is listed below.
Liabilities for environmental matters that we consider probable and for which a reasonable estimate of the probable liability could be made were $4.6 million and $0.5 million as of December 31, 2024 and 2023, respectively.
Liabilities for environmental matters that we consider probable and for which a reasonable estimate of the probable liability could be made were $4.1 million and $4.6 million as of December 31, 2025 and 2024, respectively.
Collective bargaining agreements covering approximately 180 employees at three U.S. plants will expire during 2025. We believe that our relations with our employees are constructive and positive. Employee Health and Safety. Safety is a core value at AWI and our culture is committed to making safety a personal core value for every employee.
Collective bargaining agreements covering approximately 260 employees at one U.S. plant will expire during 2026. We believe that our relations with our employees are constructive and positive. Employee Health and Safety. Safety is a core value at AWI and our culture is committed to making safety a personal core value for every employee.
Our sustainability program is organized around three program pillars: Healthy and Circular Products, Healthy Planet and Thriving People and Communities. 8 Our Healthy and Circular Products pillar broadly focuses on ensuring our products are free of chemicals of concern, reducing our products’ water intensity and carbon footprint, improving the circularity of our products so they can be recycled, reused or repurposed, and continuing to invest in solutions that meet customer demand for building products that align with their sustainability goals.
Our Healthy and Circular Products pillar broadly focuses on ensuring our products are free of chemicals of concern, reducing our products’ water intensity and carbon footprint, improving the circularity of our products so they can be recycled, reused or repurposed, and continuing to invest in solutions that meet customer demand for building products that align with their sustainability goals.
During 2024, our total voluntary and involuntary turnover rates were approximately 7% and 4%, respectively, for non-production employees and 13% and 8%, respectively, for production employees. As of December 31, 2024, approximately 52% of our approximately 1,700 production employees in the U.S. were represented by labor unions.
During 2025, our total voluntary and involuntary turnover rates were approximately 8% and 3%, respectively, for non-production employees and 12% and 7%, respectively, for production employees. As of December 31, 2025, approximately 54% of our approximately 1,700 production employees in the U.S. were represented by labor unions.
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.
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, government spending, corporate profits and retail sales. Our revenue from new construction can lag behind construction starts by as much as 24 months.
Many of our products meet the requirements for the award of LEED credits, and we are continuing to develop new products, systems and services to address market demand for products that enable construction of buildings that require fewer natural resources to build, operate and maintain. Our competitors also have developed and introduced products with an increased focus on sustainability.
Many of our products meet the requirements for the award of LEED credits, and we are continuing to develop new products, systems and services to address market demand for products that enable construction of buildings that require fewer natural resources to build, operate and maintain.
Further, in 2022, as part of the AFI bankruptcy and with AWI consent, all rights, obligations and protections that existed as part of the arrangement with AFI were transferred to AHF Products in North America, Zhejiang GIMIG Tech Co., Ltd. in China, and to Braeside Mills Investments Pty Ltd in Australia and New Zealand.
Further, in 2022, as part of the AFI bankruptcy and with AWI consent, all rights, obligations and protections that existed as part of the arrangement with AFI were transferred to AHF Products, LLC (“AHF”) in North America, Zhejiang GIMIG Tech Co., Ltd. in China and various countries throughout the Pacific Rim, India, Russia, Africa, and the geographical regions in the Middle East and Middle Asia and to Braeside Mills Investments Pty Ltd in Australia and New Zealand.
In July 2023, we acquired all 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. In November 2022, we acquired the business of GC Products, Inc.
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. Markets We primarily serve markets in the United States, Canada and Latin America.
The end-use of our products is based on management estimates as such information is not easily determinable. Residential Construction. We also sell a small portion of our products for use in single and multi-family housing. We estimate that existing home renovation work represents the majority of the residential construction market opportunity.
We also sell a small portion of our products for use in single and multi-family housing. We estimate that existing home renovation work represents the majority of the residential construction market opportunity.
Our growth initiatives continue to focus on market-driven innovation and digital tools to accelerate renovation and further differentiate our products and solutions, including our development of Templok® energy saving ceiling tiles.
Our growth initiatives continue to focus on market-driven innovation and digital tools to accelerate renovation and further differentiate our products and solutions.
In addition, we continue to invest in expanding our Architectural Specialties market and reach capabilities into new adjacencies through both organic investment and acquisitions. 5 Acquisitions and Investments in Unconsolidated Affiliates In December 2024, we acquired all the issued and outstanding stock of A. Zahner Company (“Zahner”), based in Kansas City, Missouri.
In addition, we continue to invest in expanding our Architectural Specialties market and reach capabilities into new adjacencies through both organic investment and acquisitions. 5 Acquisitions and Investments in Unconsolidated Affiliates In December 2025, we acquired all of the issued and outstanding stock of FGM-Parallel LLC (“Parallel”), based in Englewood, Colorado.
We principally sell commercial products to building materials distributors, who re-sell our products to contractors, subcontractors’ alliances, large architect and design firms, and major facility owners.
We principally sell commercial products to building materials distributors, who re-sell our products to contractors, subcontractors’ alliances, large architect and design firms, and major facility owners. Our design services and sales teams also work directly with architects, design firms and general contractors to ensure our products are included in project specifications.
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 a 19.5% ownership interest in Overcast, with future rights to increase our ownership interest.
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%).
This commitment is reflected in the Thriving People and Communities Pillar of our Sustainability program, which is led by our Vice President of Talent Sustainability and Talent Acquisition.
People and Workplace Culture. We believe that an inclusive workplace supports our ability to attract, develop and retain talented employees and is important to our success. This focus is reflected in the Thriving People and Communities Pillar of our Sustainability program, which is led by our Vice President of Talent Sustainability and Talent Acquisition.
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.
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.
Additionally, we believe that customer preferences for product type, style, color, performance attributes (such as acoustics, energy efficiency, sustainability and health attributes), availability, affordability and ease of installation also affect our revenue. In our Mineral Fiber segment, we estimate that a majority of our commercial construction market sales are used for existing building renovation purposes by end-users of our products.
We believe that these statistics, taking into account the time-lag effect, provide a reasonable indication of our future revenue opportunity from commercial renovation and new construction. Additionally, we believe that customer preferences for product type, style, color, performance attributes (such as acoustics, energy efficiency, sustainability and health attributes), availability, affordability and ease of installation also affect our revenue.
We have important relationships with national home centers such as Lowe’s Companies, Inc. and The Home Depot, Inc., with wholesalers who re-sell our products to dealers who service builders, and with direct customers, which include sales to contractors, architects and designers who specify products. In 2024, nearly 65% of our consolidated net sales were to distributors.
We have important relationships with home center customers, direct customers and certain national account customers, including wholesalers who re-sell our products to dealers who service builders, and maintenance, repair and operating supply (“MRO”) companies. In 2025, approximately 63% of our consolidated net sales were to building materials distributors.
We review the carrying value of indefinite-lived trademarks at least annually for potential impairment. See the “Critical Accounting Estimates” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K for further information.
See the “Critical Accounting Estimates” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K for further information. 8 Sustainability and Environmental Matters As a leading building products manufacturer, we are committed to operating sustainably across all areas of our business.
Our sustainability focus reflects our mission to make a positive difference in the lives of people where they live, work, learn, heal and play. Our approach to sustainability is designed to support our strategic priorities, align with stakeholder interests, and be visible and measurable.
This commitment is reflected in our ongoing initiatives to design and develop sustainable interior and exterior architectural applications, including ceilings, specialty walls and exterior metal solutions. Our sustainability focus reflects our mission to make a positive difference in the lives of people where they live, work, learn, heal and play.
Sales to large home centers accounted for nearly 10% of our consolidated net sales. Our remaining sales were primarily to direct customers. Gross sales to Foundation Building Materials, Inc. and GMS, Inc. totaled $735.6 million and individually exceeded 10% of our consolidated gross sales in 2024.
In addition, in October 2025, Foundation Building Materials, Inc., another one of our largest distributor customers, was acquired by Lowe's Companies, Inc. Gross sales to Lowe's Companies, Inc. (including sales to Foundation Building Materials, Inc.) and The Home Depot, Inc. (including sales to GMS, Inc.) totaled $937.8 million and each individually exceeded 10% of our consolidated gross sales in 2025.
As part of our commitment to diversity and inclusion, through our merit-based selection process, we strive to hire qualified candidates from a talent pool reflective of the communities in which we have operations. In addition, we are committed to engaging in events and outreach and providing employee resources to our entire workforce that support diversity and inclusion.
Through our merit-based selection process, we strive to hire qualified candidates based on skills and experiences to foster a work environment that values collaboration and professionalism. In addition, we engage in events and outreach and provide employee resources to support workforce development and a positive workplace culture across our organization.
(“GC Products”), based in Lincoln, California. GC Products is a designer and manufacturer of glass-reinforced-gypsum, glass-reinforced-cement, molded ceiling and specialty wall products. The operations, assets and liabilities of GC Products are included in our Architectural Specialties segment. Markets We primarily serve markets in the United States, Canada and Latin America.
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.
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Our revenue from new construction can lag behind construction starts by as much as 24 months. We believe that these statistics, taking into account the time-lag effect, provide a reasonable indication of our future revenue opportunity from commercial renovation and new construction.
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In our Architectural Specialties segment, we estimate that a majority of our commercial construction market sales are used for new building construction by end-users of our products. The end-use of our products is based on management estimates as such information is not easily determinable. Residential Construction.
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Sustainability and Environmental Matters As a leading building products manufacturer, we are committed to operating sustainably across all areas of our business. This commitment is reflected in our ongoing initiatives to design and develop sustainable ceiling and wall solutions.
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Sales to home center customers accounted for nearly 7% of our consolidated net sales. Our remaining sales were primarily to direct customers, independent retailers, national account customers and online customers. In September 2025, GMS, Inc., one of our largest distributor customers, was acquired by The Home Depot, Inc.
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Finally, we offer mental well-being support and nutrition and financial wellness education to all employees. 9 Diversity and Inclusion. We value diversity and inclusion within our organization, as we believe it is important to our success.
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We review the carrying value of indefinite-lived trademarks at least annually for potential impairment.
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Our approach to sustainability is designed to support our strategic priorities, align with stakeholder interests, and be visible and measurable. Our sustainability program is organized around three program pillars: Healthy and Circular Products, Healthy Planet and Thriving People and Communities.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

31 edited+5 added−2 removed101 unchanged
Biggest changeOur results of operations and financial position could be materially and adversely affected if we are unable to successfully execute these initiatives or if we are unable to achieve the investment cases or realize expected competitive advantages from the initiatives in a timely and efficient manner. 12 We may pursue strategic transactions, including mergers, acquisitions, joint ventures, strategic alliances or other investments, which could create risks and present unforeseen integration obstacles or costs, any of which could have a material adverse effect on our financial condition, liquidity or results of operations.
Biggest changeWe are likely to pursue strategic transactions, including mergers, acquisitions, joint ventures, strategic alliances or other investments, which could create risks and present unforeseen integration obstacles or costs, any of which could have a material adverse effect on our financial condition, liquidity or results of operations.
The cyclical nature of construction 16 activity, including construction activity funded by the public sector, tends to be influenced by prevailing economic conditions, including the rate of growth in GDP, financing availability, prevailing interest rates, government spending patterns, business, investor and consumer confidence, inflation, availability of labor, adequately functioning supply chains and other factors beyond our control.
The cyclical nature of construction activity, including construction activity funded by the public sector, tends to be influenced by prevailing economic conditions, including the rate of growth in GDP, financing availability, prevailing interest rates, government spending patterns, business, investor 16 and consumer confidence, inflation, availability of labor, adequately functioning supply chains and other factors beyond our control.
Overall, climate change, its effects, the impacts of government regulation, and consumer, investor and business preferences are inherently difficult to predict and could have a material adverse impact our business by increasing our energy costs, result in substantial, additional capital expenditures and operating costs in the form of taxes, emissions allowances, carbon offsets, or required equipment upgrades or require that we modify our products or processes in a manner that increases our costs and/or reduces our profitability.
Overall, climate change, its effects, the impacts of government regulation, and consumer, investor and business preferences are inherently difficult to predict and could have a material adverse impact on our business by increasing our energy costs, result in substantial, additional capital expenditures and operating costs in the form of taxes, emissions allowances, carbon offsets, or required equipment upgrades or require that we modify our products or processes in a manner that increases our costs and/or reduces our profitability.
Additionally, the agreements that govern our indebtedness include covenants that impose significant operating and financial restrictions, including restrictions on our ability to engage in activities that may be in our best long-term interests. Under the terms of our senior secured credit facility, we are required to maintain specified leverage and interest coverage ratios.
Additionally, the agreements that govern our indebtedness include covenants that impose significant operating and financial restrictions, including restrictions on our ability to engage in activities that may be in our best long-term interests. Under the terms of our amended senior secured credit facility, we are required to maintain specified leverage and interest coverage ratios.
Our concentrated operations in the Americas could subject us to a greater degree of risk relative to our global, diversified competitors. We are particularly vulnerable to adverse events (including acts of terrorism, natural disasters, weather conditions, labor market disruptions and government actions) and economic conditions in the U.S., Canada and Latin America.
Our concentrated operations in the Americas could subject us to a greater degree of risk relative to our global, diversified competitors. We are particularly vulnerable to adverse events (including geopolitical events, acts of terrorism, natural disasters, weather conditions, labor market disruptions and government actions) and economic conditions in the U.S., Canada and Latin America.
Repurchases under the Program may be made through open market, block and privately negotiated transactions, including Rule 10b5-1 plans, at times and in amounts as management deems appropriate, subject to market and business conditions, regulatory requirements and other factors.
Repurchases 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.
Our ability to achieve cost savings and other benefits within expected time frames is subject to many estimates and assumptions. These estimates and assumptions are subject to significant economic, competitive and other uncertainties, some of which are beyond our control.
Our ability to achieve the cost savings and other benefits within expected time frames is subject to many estimates and assumptions. These estimates and assumptions are subject to significant economic, competitive and other uncertainties, some of which are beyond our control.
The loss, reduction, or fluctuation of sales to key customers, including independent distributors or national home center customers, or any adverse change in our business relationships with them, whether as a result of changing customer demands and expectations, reduced demand, supply chain constraints, competition, industry consolidation or otherwise, could have a material adverse effect on our financial condition, liquidity or results of operations.
The loss, reduction, or fluctuation of sales to key customers, including national home center customers or independent distributors, or any adverse change in our business relationships with them, whether as a result of changing customer demands and expectations, competition, industry consolidation, supply chain constraints or otherwise, could have a material adverse effect on our financial condition, liquidity or results of operations.
We are actively involved in environmental investigation and remediation activities relating to two domestically owned locations allegedly resulting from past industrial activity, for which our ultimate liability may exceed the currently estimated and accrued amounts. See Note 27 to the Consolidated Financial Statements for further information related to our current environmental matters and the potential liabilities associated therewith.
We are actively involved in environmental investigation and remediation activities relating to two domestically owned locations allegedly resulting from past industrial activity, for which our ultimate liability may exceed the currently estimated and accrued amounts. See Note 26 to the Consolidated Financial Statements for further information related to our current environmental matters and the potential liabilities associated therewith.
Similarly, the availability and cost of raw materials, packaging materials, energy and sourced products, and the ability to pass along increased costs, are critical to WAVE’s operations and its results of operations. We believe the relationship with our partner, Worthington Enterprises, Inc., is an important element in the success of this joint venture. In December 2023, Worthington Enterprises, Inc.
Similarly, the availability and cost of raw materials, packaging materials, energy and sourced products, and the ability to pass along increased costs, are critical to WAVE’s operations and its results of operations. We believe the relationship with our partner, Worthington Enterprises, Inc., is an important element in the success of this joint venture.
Our income tax expense (benefit) and reported net earnings may fluctuate significantly and may be materially different than forecasted or experienced in the past.
Our income tax expense and reported net earnings may fluctuate significantly and may be materially different than forecasted or experienced in the past.
In May 2024, we published our annual Sustainability Report, which includes certain 2030 sustainability goals and describes our progress towards meeting those goals. We may not achieve the anticipated benefits we expect from these goals, which may damage our reputation, or these efforts may not align with new regulations or expectations of stakeholders.
In May 2025, we published our annual Sustainability Report, which includes certain 2030 sustainability goals and describes our progress towards meeting those goals. We may not achieve the anticipated benefits we expect from these goals, which may damage our reputation, or these efforts may not align with new regulations or expectations of stakeholders.
Evolving and/or conflicting government, customer and societal views related to climate change, climate transition, responsible sourcing and supply chain transparency, resource stewardship, diversity, human rights, social responsibility and other sustainability matters and our efforts to manage and report on them, as well as accomplish our sustainability goals, present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which could have a material adverse impact.
Evolving and/or conflicting governmental regulations, customer and societal views related to climate change, climate transition, responsible sourcing and supply chain transparency, resource stewardship, diversity, human rights, social responsibility and other sustainability matters and our efforts to manage and report on them, as well as accomplish our sustainability goals, present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which could have a material adverse impact.
In addition, claims and investigations may arise related to patent infringement, distributor relationships, commercial contracts, antitrust or competition law requirements, employment matters, employee benefits issues, and other compliance and regulatory matters, including anti-corruption and anti-bribery matters.
In addition, claims and investigations may arise related to patent infringement, customer relationships, commercial contracts, antitrust or competition law requirements, employment matters, employee benefits issues, and other compliance and regulatory matters, including anti-corruption and anti-bribery matters.
Changes in the demand for, or quality of, WAVE products, or in the operational or financial performance of the WAVE joint venture, could have a material adverse effect on our financial condition, liquidity or results of operations.
The performance of our WAVE joint venture is important to our financial results. Changes in the demand for, or quality of, WAVE products, or in the operational or financial performance of the WAVE joint venture, could have a material adverse effect on our financial condition, liquidity or results of operations.
Our business is influenced by market and economic conditions, including inflation, deflation, interest rates, tariffs, availability and cost of capital, consumer spending rates, energy availability, the effects of government spending programs and the impacts of geopolitical events.
Our business is influenced by market and economic conditions, including inflation, deflation, interest rates, tariffs, availability and cost of capital, consumer spending rates, energy availability, the effects of governmental trade policies or spending programs and the impacts of geopolitical events.
Any such strategic transaction involves a number of risks, including potential disruption of our ongoing business and distraction of management, difficulty with integrating or separating personnel and business operations and infrastructure, increasing or decreasing the scope, geographic diversity and complexity of our operations and markets, and expanding into new ceiling and wall adjacencies and exterior metal architectural applications, offering products with new attributes and/or offering installation of products.
Any such strategic transaction involves a number of risks, including potential disruption of our ongoing business and distraction of management, difficulty with integrating or separating personnel and business operations and infrastructure, increasing or decreasing the scope, geographic diversity and complexity of our operations and markets as we expand into new ceiling and wall adjacencies and exterior metal architectural applications, offering products with new attributes and/or increasing the size and scope of solutions offered, including design offerings and the installation of products.
Collective bargaining agreements covering approximately 180 employees at three U.S. plants will expire during 2025. We are also subject to the risk that strikes or other conflicts with organized personnel may arise or that we may become the subject of union organizing activity at our facilities that do not currently have union representation.
Collective bargaining agreements covering approximately 260 employees at one U.S. plant will expire during 2026. We are also subject to the risk that strikes or other conflicts with organized personnel may arise or that we may become the subject of union organizing activity at our facilities that do not currently have union representation.
We regularly evaluate potential mergers, acquisitions, joint ventures, strategic alliances or other investments that we believe could complement, enhance or expand our current businesses or product lines or that might otherwise offer us growth opportunities, particularly in our Architectural Specialties segment for which we have completed seven acquisitions since July 2020.
We regularly evaluate potential mergers, acquisitions, joint ventures, strategic alliances or other investments that we believe could complement, enhance or expand our current businesses or product lines or that might otherwise offer us growth opportunities, particularly in our Architectural Specialties segment for which we have completed nine acquisitions from July 2020 through December 31, 2025.
Efforts to achieve these goals may result in higher or unforeseen costs. In addition, we may encounter challenges measuring our progress towards the achievement of our sustainability goals. Further, concerns related to climate change have resulted in domestic and foreign legislative or regulatory actions as well as changing customer preferences and policies, such as environmentally responsible building codes and standards.
In addition, we may encounter challenges in meeting our sustainability goals by 2030 and/or in measuring our progress towards the achievement of our sustainability goals. Further, concerns related to climate change have resulted in domestic and foreign legislative or regulatory actions as well as changing customer preferences and policies, such as environmentally responsible building codes and standards.
These information systems may be disrupted or fail as a result of events that are wholly or partially beyond our control, including events such as power loss, software or hardware defects, hacking, computer viruses, malware, ransomware or other cyber-attacks.
These information systems may be disrupted or fail as a result of events that are wholly or partially beyond our control, including events such as power loss, software or hardware defects, ransomware, malware, phishing, social engineering attacks, supply chain attacks or other cyber-attacks.
The availability and cost of raw materials, packaging materials, energy and sourced products are critical to our operations and our results of operations. For example, we use substantial quantities of natural gas and some petroleum-based raw materials in our manufacturing operations. We source some materials from a limited number of suppliers, which, among other things, increases the risk of unavailability.
The availability and cost of raw materials, packaging materials, energy and sourced products are critical to our operations and our results of operations. For example, we use substantial quantities of natural gas and some petroleum-based raw materials in our manufacturing operations.
In the aggregate, our U.S. defined benefit pension plans were overfunded by $62.7 million as of December 31, 2024. Our unfunded postretirement plan liabilities were $39.4 million as of December 31, 2024.
In the aggregate, our U.S. defined benefit pension plans were overfunded by $74.6 million as of December 31, 2025. Our unfunded postretirement plan liabilities were $36.2 million as of December 31, 2025.
All of these risks are also applicable where we rely on outside vendors to provide services, which may operate in a cloud environment. We are dependent on third-party vendors to operate secure and reliable systems which may include data transfers over the internet.
All of these risks are also applicable where we rely on outside vendors to provide services, which may operate in a cloud environment. We are dependent on third-party vendors for critical services, and any compromise of their systems could result in a service interruption or loss of our data.
A decrease in availability or increases in costs of manufacturing inputs or sourced products, and any inability to pass along such costs through price increases, could have a material adverse effect on our financial condition, liquidity or results of operations. The performance of our WAVE joint venture is important to our financial results.
Future input cost volatility could occur because of our suppliers’ exposure to governmental trade policies, including tariffs, or geopolitical events. A decrease in availability or increases in costs of manufacturing inputs or sourced products, and any inability to pass along such costs through price increases, could have a material adverse effect on our financial condition, liquidity or results of operations.
We, along with third parties, may use data from our information systems and publicly available sources with artificial intelligence (“AI”) technologies and tools. The use of AI may increase risks of data exposure, including unauthorized access, misuse, or unintentional disclosure of sensitive information.
Finally, we, along with third parties, may use data from our information systems and publicly available sources in a manner that incorporates artificial intelligence (“AI”) technologies and tools. The use of AI may increase risks, including flawed algorithms, hallucinations, and biased outputs.
The evolving and broader use of AI tools and technologies may also impact the effectiveness of our cybersecurity, regulatory compliance and intellectual property protection programs. Our business is dependent upon third-party vendors and suppliers whose failure to perform adequately could have a material adverse effect on our financial condition, liquidity or results of operations.
Failure to successfully govern, integrate, or safeguard the use of AI could subject us to enhanced regulatory scrutiny, litigation, reputational harm, or competitive disadvantage. Our business is dependent upon third-party vendors and suppliers whose failure to perform adequately could have a material adverse effect on our financial condition, liquidity or results of operations.
Limited availability could require us to reformulate products or limit our production. Supply chain disruptions could decrease access to manufacturing inputs or sourced products or significantly increase the cost to purchase these items. Future input cost volatility could occur because of our suppliers’ exposure to tariffs or geopolitical events.
We source some materials from a limited, or single, number of suppliers, which, among other things, increases the risk of unavailability. Limited availability could require us to reformulate products or limit our production. Supply chain disruptions could decrease access to manufacturing inputs or sourced products or significantly increase the cost to purchase these items.
If the Worthington Separation or any other change with respect to our partner adversely impacts our relationship, WAVE’s performance could be materially and adversely impacted.
If there is a change in ownership, a change in control, a change in management philosophy, a change in business strategy or another event with respect to our partner that adversely impacts our relationship, WAVE’s performance could be materially and adversely impacted.
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, we have been authorized to repurchase up to an aggregate of $1,700.0 million of our outstanding shares of common stock through December 31, 2026.
As of December 31, 2025, we were authorized to repurchase up to $532.8 million of our outstanding shares of common stock under a share repurchase program first adopted in July 2016 and authorized through December 31, 2026 (the “Program”).
These factors could have a material adverse impact on our financial condition, liquidity or results of operations.
These factors could have a material adverse impact on our financial condition, liquidity or results of operations. Indicative of the trend of customer consolidation within the building products markets of the Americas, in September 2025, GMS, Inc., one of our largest distributor customers, was acquired by The Home Depot, Inc.
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(formerly known as Worthington Industries, Inc.) separated from Worthington Steel, Inc. into a separate, independent, publicly traded company (the “Worthington Separation”). Worthington Enterprises, Inc.’s investment in WAVE was not included in the assets and business transferred to Worthington Steel, Inc.
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Many factors, including changes in regulations and tax policies, lagging industry innovation in sustainable technologies and unfavorable market conditions for sustainability-related investments may adversely affect the timeline for achievement of our sustainability goals. Efforts to achieve these goals may also result in higher or unforeseen costs.
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In addition, a part of our growth strategy depends on our ability to expand our operations in Canada and Latin America, including emerging markets that have greater political and economic volatility and greater vulnerability to infrastructure and labor disruptions than established markets.
Added
Our results of operations and financial position could be materially and adversely affected 12 if we are unable to successfully execute these initiatives or if we are unable to achieve the investment cases or realize expected competitive advantages from the initiatives in a timely and efficient manner.
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In addition, in October 2025, Foundation Building Materials, Inc., another one of our largest distributor customers, was acquired by Lowe's Companies, Inc.
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Other risks include data exposure and misuse, including unauthorized access or unintentional disclosure of proprietary manufacturing processes, product designs, pricing data, or other sensitive information. Output generated by AI technologies could result in inaccurate solutions that adversely affect operational decisions, customer relationships, or product quality.
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As the use of AI technologies continues to evolve, including by competitors, the effectiveness of our cybersecurity, regulatory compliance and intellectual property protection programs may be impacted. In addition, faster or more advanced use of AI by competitors, customers, or other third parties could create competitive or operational disruptions to our business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeData protection and privacy is in place to ensure sensitive information is protected from exfiltration. Our cybersecurity defenses leverage systems and technologies, including firewalls, network access, endpoint protection, privileged access management, user behavior analytics, multi-factor authentication, intrusion detection systems and continuous monitoring. The purpose of these systems and technologies is to stay ahead of potential threats.
Biggest changeWe maintain data protection and privacy processes designed to reduce risk of unauthorized access, use or exfiltration of sensitive information. Our cybersecurity capabilities include network security, endpoint detection and response, identity controls, privileged access controls and continuous monitoring. The purpose of these systems and technologies is to stay ahead of potential threats.
In addition, our CIO leads the Information Security Steering Committee, a group comprised of key information technology employees and business leaders, including our Senior Vice President, Chief Financial Officer and Senior Vice President, General Counsel and Chief Compliance Officer.
In addition, our CIO leads the Information Security Steering Committee, a group comprised of key information technology employees and business leaders, including our Senior Vice President, Chief Financial Officer and Senior Vice President, General Counsel, Head of Government Relations & Chief Sustainability Officer.
Our cybersecurity program’s effectiveness is periodically evaluated against established quantifiable goals and other external benchmarks, including the National Institute of Standards and Technology security framework. This evaluation is carried out through internal and external risk assessments and compliance audits.
To enhance our response capabilities, we conduct periodic assessments, including third-party reviews, and simulate incidents through regular tabletop exercises. Our Cybersecurity program’s effectiveness is periodically evaluated against established quantifiable goals and other external benchmarks, including the National Institute of Standards and Technology Cybersecurity Framework (“CSF”). This evaluation is carried out through internal and external risk assessments and compliance audits.
The incident response plan establishes clear protocols for incident identification, impact assessment, containment and resolution, with defined escalation paths based on incident severity. Cybersecurity incidents above a defined threshold of criticality are evaluated for materiality to determine reporting and disclosure requirements. To enhance our response capabilities, we conduct periodic assessments, including third-party reviews, and simulate incidents through regular tabletop exercises.
The incident response plan establishes clear protocols for incident identification, impact assessment, containment and resolution, with defined escalation paths based on incident severity. Cybersecurity incidents above a defined threshold of criticality are evaluated for materiality by a cross-functional group to determine reporting and disclosure requirements.

Item 2. Properties

Properties — owned and leased real estate

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Biggest change(California (3), Illinois (2), Missouri (2), Ohio (3), North Carolina, Texas, Utah), and Canada (Quebec and Ontario) Sales and administrative offices are leased and/or owned, and leased facilities are used to supplement our owned warehousing facilities. Production capacity and the extent of utilization of our facilities are difficult to quantify with certainty.
Biggest change(California (3), Colorado, Illinois (2), Missouri (2), Ohio (3), North Carolina, Texas, Utah) and Canada (British Columbia, Ontario and Quebec) Sales and administrative offices are leased and/or owned, and leased facilities are used to supplement our owned warehousing facilities. Production capacity and the extent of utilization of our facilities are difficult to quantify with certainty.
WAVE operates seven additional plants in the U.S. to produce suspension system (grid) products, which we use and sell in our ceiling systems. Twelve of our plants are leased and the remaining eight are owned. Operating Segment Number of Plants Location of Principal Facilities Mineral Fiber 5 U.S. (Florida, Georgia, Ohio, Pennsylvania and West Virginia) Architectural Specialties 15 U.S.
WAVE operates seven additional plants in the U.S. to produce suspension system (grid) products, which we use and sell in our ceiling systems. Fourteen of our plants are leased and the remaining eight are owned. Operating Segment Number of Plants Location of Principal Facilities Mineral Fiber 5 U.S. (Florida, Georgia, Ohio, Pennsylvania and West Virginia) Architectural Specialties 17 U.S.
ITEM 2. P ROPERTIES We own a 100-acre, multi-building campus in Lancaster, Pennsylvania comprising the site of our corporate headquarters and most of our non-manufacturing operations. As of December 31, 2024, we operated 20 manufacturing plants, including 18 plants located within the U.S. and two plants in Canada.
ITEM 2. P ROPERTIES We own a 100-acre, multi-building campus in Lancaster, Pennsylvania comprising the site of our corporate headquarters and most of our non-manufacturing operations. As of December 31, 2025, we operated 22 manufacturing plants, including 19 plants located within the U.S. and three plants in Canada.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS See the “Specific Material Events” subheading under “Environmental Matters” section of Note 27 to the Consolidated Financial Statements, which is incorporated herein by reference, for a description of our significant legal proceedings.
Biggest changeITEM 3. LEGAL PROCEEDINGS See the “Specific Material Events” subheading under the “Environmental Matters” section of Note 26 to the Consolidated Financial Statements, which is incorporated herein by reference, for a description of our significant legal proceedings.
However, regardless of 20 outcome, litigation and related matters can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 21 PART II
However, regardless of outcome, litigation and related matters can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 21 PART II
We do not believe that any such current claims, individually or in the aggregate, will have a material adverse effect on our financial condition, liquidity or results of operations.
We do not believe that any such current claims, individually or in the 20 aggregate, will have a material adverse effect on our financial condition, liquidity or results of operations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 21 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. [Reserved] 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 21 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. [Reserved] 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 34 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Value of Shares that may yet be Purchased under the Plans or Programs October 1 – 31, 2024 112,929 $ 136.73 109,694 $ 661,795,002 November 1 – 30, 2024 56 $ 140.59 - $ 661,795,002 December 1 – 31, 2024 - $ - - $ 661,795,002 Total 112,985 109,694 (1) Includes shares reacquired through the withholding of shares to pay employee tax obligations upon the exercise of options or vesting of restricted shares previously granted under our long-term incentive plans.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Value of Shares that may yet be Purchased under the Plans or Programs October 1 – 31, 2025 77,674 $ 197.15 74,306 $ 568,118,032 November 1 – 30, 2025 187,206 $ 187.08 187,206 $ 533,096,274 December 1 – 31, 2025 1,620 $ 190.64 1,620 $ 532,787,440 Total 266,500 263,132 (1) Includes shares reacquired through the withholding of shares to pay employee tax obligations upon the vesting of restricted shares previously granted under our long-term incentive plans.
For more information regarding securities authorized for issuance under our equity compensation plans, see Note 22 to the Consolidated Financial Statements included in this Form 10-K. On July 29, 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”).
For more information regarding securities authorized for issuance under our equity compensation plans, see Note 21 to the Consolidated Financial Statements included in this Form 10-K. On July 29, 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”).
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED S TOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES AWI’s common shares trade on the New York Stock Exchange under the ticker symbol “AWI.” As of February 19, 2025, there were 159 holders of record of AWI’s common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED S TOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES AWI’s common shares trade on the New York Stock Exchange under the ticker symbol “AWI.” As of February 18, 2026, there were 152 holders of record of AWI’s common stock.
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. During 2024, we repurchased 0.5 million shares under the Program for a total cost of $55.0 million, excluding commissions and taxes, or an average price of $119.03 per share.
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. During 2025, we repurchased 0.8 million shares under the Program for a total cost of $129.0 million, excluding commissions and taxes, or an average price of $167.75 per share.
We declared dividends on a quarterly basis, totaling $1.148 per share in 2024. On February 19, 2025, our Board of Directors declared a dividend of $0.308 per common share outstanding. The dividend will be paid on March 20, 2025, to shareholders of record as of the close of business on March 6, 2025.
We declared dividends on a quarterly basis, totaling $1.263 per share in 2025. On February 18, 2026, our Board of Directors declared a dividend of $0.339 per common share outstanding. The dividend will be paid on March 19, 2026, to shareholders of record as of the close of business on March 5, 2026.
Since inception through December 31, 2024, we have repurchased 14.6 million shares under the Program for a total cost of $1,038.2 million, excluding commissions and taxes, or an average price of $70.89 per share.
Since inception through December 31, 2025, we have repurchased 15.4 million shares under the Program for a total cost of $1,167.2 million, excluding commissions and taxes, or an average price of $75.72 per share.
Since inception of the Program, we have been authorized to repurchase up to an aggregate of $1,700.0 million of our outstanding shares of common stock through December 31, 2026. We had $661.8 million remaining under the Board ’ s repurchase authorization as of December 31, 2024.
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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in Mineral Fiber net sales was primarily driven by improved AUV, as a result of increased like-for-like pricing and favorable mix, partially offset by lower sales volumes. Architectural Specialties net sales improved primarily due to contributions from the acquisitions of Zahner, 3form and BOK, in addition to increased custom project net sales.
Biggest changeArchitectural 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.
The operations, assets and liabilities of Zahner are included in our Architectural Specialties segment. In April 2024, we acquired all 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 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.
We sell standard, premium and customized products, a portion of which are sourced from third-party producers. Architectural Specialties products are sold primarily to resale distributors and direct customers, primarily ceiling systems contractors. This segment’s revenues are primarily project driven, which can lead to more variability in sales patterns.
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.
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/losses, the net funded status of our U.S.
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.
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 the fair value after the acquisition date affecting earnings in the period of the estimated fair value change.
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.
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, trade secrets 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 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.
Products are available in numerous materials, such as metal, felt, wood, resin, 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.
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.
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 31 values. Any excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed is recorded as goodwill.
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.
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. We engage independent, third-party valuation specialists to assist in determining the fair values of acquired 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.
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 in Overcast are included in our Unallocated Corporate segment.
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.
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’ 2024 net sales by geography and disaggregated expenses, see Note 3 to the Consolidated Financial Statements included in this Form 10-K.
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.
Acquisition costs above reflect certain contingent third-party professional fees incurred due to the Zahner and 3form acquisitions. Expenses related to the 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.
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.
Historical asset returns are monitored and considered when we develop our expected long-term 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.
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.
Discussions of year-to-year comparisons between 2023 and 2022 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, 2023.
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.
As of December 31, 2024, we were in compliance with all covenants of the senior credit facility. We use interest rate swaps to minimize the fluctuations in earnings caused by interest rate volatility associated with our senior credit facility. The Term Loan A is currently priced on a variable interest rate basis.
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.
For the RIP, the expected long-term 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 30 years.
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.
For information on our segments’ 2024 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.
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.
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 and third quarters of 2024, we implemented price increases on Mineral Fiber ceiling products. During the first and second quarters of 2024, WAVE implemented price increases on grid 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.
The $3.7 million change in actuarial loss impacting our U.S. pension plans is reflected as a component of other comprehensive income in our Consolidated Statements of Earnings and Comprehensive Income along with actuarial gains and losses from our foreign pension plan and our postretirement benefit plans.
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.
We evaluate our estimates and assumptions on an on-going 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 the financial statements.
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.
The change in fair value of contingent consideration is related to our BOK and Insolcorp acquisitions and was remeasured quarterly during each acquisition's respective earn-out periods. See Note 19 to the Consolidated Financial Statements for further information. Depreciation and amortization of fixed and intangible assets acquired have been excluded from the table above.
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 2024 and 2023.
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.
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 3 and 13 to the Consolidated Financial Statements for further information.
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.
Losses on sales of fixed assets, net were $0.6 million in 2024, which was comprised of a $5.2 million loss on sale for 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.
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.
See Note 18 to the Consolidated Financial Statements for more information. The estimated inflation in health care costs represents a 5 to 10-year view of the expected inflation in our postretirement health care costs.
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.
ACCOUNTING PRONOUNCEMENTS EFFECTIVE IN FUTURE PERIODS See Note 2 to the Consolidated Financial Statements for further information. 32
ACCOUNTING PRONOUNCEMENTS EFFECTIVE IN FUTURE PERIODS See Note 2 to the Consolidated Financial Statements for further information. 33
As of December 31, 2024, health care cost increases are estimated to decrease ratably until 2034, after which they are estimated to be constant at 4.50%. See Note 18 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.
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.
The expected long-term return on plan assets used in determining our 2024 U.S. pension cost was 6.00%. We have assumed a return on plan assets for 2025 of 6.00%. The 2025 expected return on assets was calculated in a manner consistent with 2024.
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.
Management utilizes the Aon Hewitt AA only 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, 2024 and 2023, we assumed discount rates of 5.68% and 5.01%, respectively, for our U.S. defined benefit pension plans.
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.
Absent any other changes, a one-quarter percentage point increase or decrease in this assumption would impact 2025 non-operating income by $0.9 million. Contributions to the unfunded pension plan were $2.5 million in 2024 and were made on a monthly basis to fund benefit payments. We estimate the 2025 contributions will be approximately $2.9 million.
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.
The estimated fair value of contingent consideration is recorded as a liability on the balance sheet at the date of acquisition. The purchase price allocation requires us to make significant estimates and assumptions, especially at the acquisition date, with respect to intangible assets and contingent consideration.
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.
We have established $36.3 million of valuation allowances consisting of $30.7 million for state deferred tax assets, primarily net operating loss carryforwards, and $5.6 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.
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.
As of December 31, 2024 and 2023, we assumed discount rates of 5.61% and 4.96%, respectively, for our U.S. postretirement plan. The effects of the change in discount rate will be amortized into earnings as described below.
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.
Both the BOK and Insolcorp acquisitions in 2023 include the potential for future contingent earn-out payments based on the financial or operational performance of the acquired companies.
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.
See Notes 5 and 19 to the Consolidated Financial Statements for further information.
See Notes 5 and 18 to the Consolidated Financial Statements for further information.
In July 2023, we acquired all 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. In November 2022, we acquired the business of GC Products, Inc.
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.
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.
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.
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 a 19.5% ownership interest in Overcast, with future rights to increase our ownership interest.
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%).
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, 2024, and 2023, we had $622.9 million and $646.7 million, respectively, of gross state NOL carryforwards expiring between 2025 and 2043.
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 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 2023 7.8 % 7.3 % 19.9 % 23.6 % 2024 10.5 % 7.8 % 11.8 % 12.0 % 2025 12.0 % 8.6 % The difference between the actual and expected health care costs is amortized into earnings as described below.
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.
Acquisition-Related Expenses and Losses In connection with our acquisitions of Zahner, 3form, Insolcorp, BOK and Arktura LLC (“Arktura”) acquired in December 2020, we recorded certain acquisition-related expenses and losses to operating income for the years ended December 31, 2024, 2023, and 2022, summarized as follows (dollar amounts in millions): 2024 2023 2022 Affected Line Item in the Consolidated Statements of Earnings and Comprehensive Income Inventory $ 0.3 $ - $ - Cost of goods sold Acquisition costs 1.8 - - SG&A expenses Deferred cash and restricted stock expenses - 10.7 7.9 SG&A expenses Loss related to change in fair value of contingent consideration 1.6 0.1 11.0 Loss related to change in fair value of contingent consideration Net negative impact to operating income $ 3.7 $ 10.8 $ 18.9 The inventory amounts above reflect the post-acquisition expenses associated with recording inventory at fair value as part of purchase accounting for the 3form acquisition.
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.
The following tables summarize our interest rate swaps, including forward interest rate swaps (dollar amounts in millions): Coverage Period Notional Amount Risk Coverage Trade Date March 2021 to March 2025 $ 100.0 USD-SOFR November 28, 2018 November 2023 to December 2025 $ 50.0 USD-SOFR October 23, 2023 March 2024 to June 2026 $ 50.0 USD-SOFR March 25, 2024 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 swap with a November 28, 2018 trade date above, we pay a fixed rate monthly and receive a floating rate based on SOFR, inclusive of a 0% floor.
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.
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 impact 2025 non-operating income by $0.3 million. We manage two U.S. defined benefit pension plans, our RIP, which is a qualified funded plan, and a nonqualified unfunded plan.
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.
Our operating expenses are comprised of direct production costs (principally raw materials, labor, and energy), manufacturing overhead costs, freight, costs to purchase sourced products 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, resin, wood and wood fiber.
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.
As of December 31, 2024, we also had $400 million of borrowing capacity available under our revolving credit facility.
As of December 31, 2025, we also had $500 million of borrowing capacity available under our revolving credit facility.
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.
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.
Overview AWI is an Americas leader in the design, innovation and manufacture of interior and exterior architectural applications including ceilings, specialty walls and exterior metal solutions. Our products primarily include mineral fiber, fiberglass, metal, felt, wood, resin, wood fiber and glass-reinforced-gypsum.
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.
Derivative gain/loss represents the mark-to-market value adjustments of our derivative assets and liabilities, and the recognition of gains and losses previously deferred in accumulated OCI.
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.
As of December 31, 2024, we have recorded valuation allowances totaling $36.3 million for various federal and state deferred tax assets.
As of December 31, 2025, we have recorded valuation allowances totaling $16.6 million for various federal and state deferred tax assets.
Over the 10-year period ended December 31, 2024, the historical annualized return was approximately 2.43% compared to an average expected return of 5.73%. The actual loss on plan assets incurred 29 for 2024 was 0.55%, net of fees. The difference between the actual and expected rate of return on plan assets will be amortized into earnings as described below.
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 following table presents details related to our letters of credit facilities (dollar amounts in millions): December 31, 2024 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 28 The table below reflects scheduled future payments of long-term debt, excluding $2.4 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): 2025 2026 2027 2028 2029 Thereafter Total Long-term debt $ 22.5 $ 22.5 $ 482.5 $ - $ - $ - $ 527.5 Scheduled interest payments 31.0 29.3 26.3 - - - 86.6 As of December 31, 2024, we had $79.3 million of cash and cash equivalents, $63.9 million in the U.S. and $15.4 million in various foreign jurisdictions, primarily Canada.
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.
See Note 11 to the Consolidated Financial Statements for further information. Interest expense was $39.8 million in 2024 compared to $35.3 million in 2023. The increase in interest expense was primarily due to higher average effective interest rates, partially offset by lower average debt balances. Other non-operating income, net was $12.6 million during 2024 compared to $9.9 million during 2023.
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.
Since inception of the Program, we have been authorized to repurchase up to an aggregate of $1,700.0 million of our outstanding shares of common stock through December 31, 2026. We had $661.8 million remaining under the Board’s repurchase authorization as of December 31, 2024.
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.
As further described in Note 16 to the Consolidated Financial Statements, our Consolidated Balance Sheet as of December 31, 2024, includes deferred income tax liabilities of $167.1 million, which is net of $106.8 million of deferred tax assets.
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.
Favorable AUV contributed approximately $62 million to our total consolidated net sales for the year ended December 31, 2024 compared to the same period in 2023. Our Architectural Specialties segment revenues are primarily generated by individual contracts that include a mix of products, both manufactured by us and sourced from third parties, that varies by project.
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.
REPORTABLE SEGMENT RESULTS Mineral Fiber (dollar amounts in millions) 2024 2023 Change is Favorable Total segment net sales $ 986.0 $ 932.4 5.7 % Operating income $ 322.5 $ 285.7 12.9 % Mineral Fiber net sales increased $54 million due to $62 million of favorable AUV, partially offset by $8 million of lower sales volumes.
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.
As of December 31, 2024, total borrowings outstanding under our senior credit facility were $427.5 million under Term Loan A and $100.0 million under the revolving 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.
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.
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.
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.
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.
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. Foreign currency translation adjustments during 2024 and 2023 were driven primarily by changes in 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.
Methodologies used for valuing our intangible assets did not change from prior periods. In 2024, 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 2024, 2023 or 2022 related to intangible assets.
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).
We also manufacture ceiling suspension system (grid) products through a joint venture with Worthington Enterprises, Inc. called Worthington Armstrong Venture (“WAVE”). Acquisitions In December 2024, we acquired all 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.
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.
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. For some customers, WAVE sells its suspension system products to AWI for resale to customers.
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.
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.
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.
Please refer to Notes 3 and 6 to the Consolidated Financial Statements for a reconciliation of segment operating income to consolidated earnings from continuing operations before income taxes and additional financial information related to discontinued operations.
Please refer to Note 3 to the Consolidated Financial Statements for a reconciliation of segment operating income to consolidated earnings before income taxes.
Architectural Specialties cost of goods sold during 2024 was $276 million, 60.1% of net sales, compared to $222 million, 61.3% for 2023. Gross profit increased $43 million, or 30.6%, compared to 2023.
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.
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.
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.
Cost of goods sold during 2024 was 59.8% of net sales, compared to 61.6% for 2023. The year-over-year decrease in cost of goods sold as a percentage of net sales was driven primarily by favorable AUV margin benefit, improved manufacturing productivity and lower input costs.
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.
Total net actuarial losses related to our U.S. pension benefit plans decreased by $3.7 million in 2024 primarily due to changes in actuarial assumptions, including a 67-basis point increase in the discount rate, partially offset by the impact of demographic changes.
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.
Equity earnings from our WAVE joint venture were $104.3 million in 2024, compared to $89.3 million in 2023. The increase in WAVE earnings was primarily driven by the benefits of favorable AUV, higher volumes and lower steel costs, partially offset by higher employee costs.
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.
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 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.
We estimate we will need to generate future U.S. taxable income of approximately $168.8 million for state income tax purposes during the respective realization periods (ranging from 2025 to 2043) to be able to fully realize the gross state NOL carryforwards offset by related valuation allowances. 30 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.
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.
These increases were partially offset by a $9 million decrease in acquisition-related expenses. In 2024, we recorded $1.6 million of remeasurement losses for changes in the fair value of contingent consideration related to the acquisitions of BOK and Insolcorp.
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.
In 2024, lower energy and freight costs were partially offset by higher raw material costs, resulting in a $6 million benefit to operating income compared to 2023.
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.
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.
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).
Equity earnings from unconsolidated subsidiaries were $103.4 million in 2024, compared to $89.3 million in 2023. In 2024, WAVE equity earnings were $104.3 million, while Overcast equity losses were $0.9 million. The increase in WAVE earnings was primarily driven by the benefits of favorable AUV, higher volumes and lower steel costs, partially offset by higher employee costs.
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.
Other non-operating income, net, is primarily comprised of the non-service cost components of pension and postretirement net periodic benefit costs and interest income. The increase in other non-operating income was primarily due to an increase in amortization of pension and postretirement credits. Income tax expense was $82.2 million in 2024 compared to $74.5 million in 2023.
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 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.
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.
Mineral Fiber cost of goods sold during 2024 was $586 million, 59.5% of net sales, compared to $574 million, 61.6% for 2023. Gross profit increased $42 million, or 11.6%, compared to 2023.
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.
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.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese ISDAs do not have any credit contingent features; however, a default under our bank credit facility would trigger a default under these agreements. Exposure to individual counterparties is controlled and we consider the risk of counterparty default to be negligible. Interest Rate Sensitivity We are subject to interest rate variability on our Term Loan A and revolving credit facility.
Biggest changeExposure to individual counterparties is controlled and we consider the risk of counterparty default to be negligible. Interest Rate Sensitivity We are subject to interest rate variability on our Term Loan A and revolving credit facility.
The following table summarizes our interest rate swaps as of December 31, 2024 (dollar amounts in millions): Coverage Period Notional Amount Risk Coverage Trade Date March 2021 to March 2025 $ 100.0 USD-SOFR November 28, 2018 November 2023 to December 2025 $ 50.0 USD-SOFR October 23, 2023 March 2024 to June 2026 $ 50.0 USD-SOFR March 25, 2024 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 These swaps are designated as cash flow hedges against changes in SOFR for a portion of our variable rate debt.
The following table summarizes our interest rate swaps as of December 31, 2025 (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 These swaps are designated as cash flow hedges against changes in SOFR for a portion of our variable rate debt.
A hypothetical increase of one-quarter percentage point in SOFR interest rates from December 31, 2024 levels would increase 2025 interest expense by approximately $0.5 million. We have active interest rate swaps outstanding, which effectively fix the interest rates for a portion of our debt. These interest rate swaps are included in this calculation.
A hypothetical increase of one-quarter percentage point in SOFR interest rates from December 31, 2025 levels would increase 2026 interest expense by approximately $0.3 million. We have active interest rate swaps outstanding, which effectively fix the interest rates for a portion of our debt. These interest rate swaps are included in this calculation.
As of December 31, 2024, we had interest rate swaps outstanding with notional amounts of $400 million. We use interest rate swaps to minimize the fluctuations in earnings caused by interest rate volatility. Under the terms of these swaps, we receive floating rate SOFR and pay a fixed rate over the hedged period.
As of December 31, 2025, we had interest rate swaps outstanding with notional amounts of $325 million. We use interest rate swaps to minimize the fluctuations in earnings caused by interest rate volatility. Under the terms of these swaps, we receive floating rate SOFR and pay a fixed rate over the hedged period.
These agreements can limit our exposure in situations where we have gain and loss positions outstanding with a single counterparty. We do not post, nor do we receive, cash collateral with any counterparty for our derivative transactions.
These agreements can limit our exposure in situations where we have gain and loss positions outstanding with a single counterparty. We do not post, nor do we receive, cash collateral with any counterparty for our derivative transactions. These ISDAs do not have any credit-contingent features; however, a default under our bank credit facility would trigger a default under these agreements.
The net liability measured at fair value was $1.5 million as of December 31, 2024. The table below provides information about our long-term debt obligations as of December 31, 2024, including payment requirements and related weighted-average interest rates by scheduled maturity dates.
The net liability measured at fair value was $3.4 million as of December 31, 2025. The table below provides information about our long-term debt obligations as of December 31, 2025, including payment requirements and related weighted-average interest rates inclusive of the stated SOFR interest rate spread under our credit facility by scheduled maturity dates.
Scheduled maturity date (dollar amounts in millions) 2025 2026 2027 2028 2029 After 2029 Total Variable rate principal payments $ 22.5 $ 22.5 $ 482.5 $ - $ - $ - $ 527.5 Average interest rate 4.17 % 4.11 % 4.20 % - - - 4.20 % Variable rate principal payments reflected in the preceding table exclude $2.4 million of unamortized debt financing costs as of December 31, 2024. 33
Scheduled maturity date (dollar amounts in millions) 2026 2027 2028 2029 2030 After 2030 Total Variable rate principal payments $ 10.3 $ 10.3 $ 20.5 $ 20.5 $ 349.0 $ - $ 410.6 Average interest rate 4.61 % 4.37 % 4.57 % 4.74 % 4.91 % - 4.86 % Variable rate principal payments reflected in the preceding table exclude $3.9 million of unamortized debt financing costs as of December 31, 2025. 34

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