This discussion should be read in conjunction with the financial statements, the accompanying notes, the cautionary note regarding forward-looking statements and risk factors included in this report and our Annual Report on Form 10-K for the year ended December 31, 2025. OVERVIEW AWI is an Americas leader in the design and manufacture of innovative interior and exterior architectural applications including ceilings, specialty walls and exterior metal solutions. We manufacture and source products made of numerous materials, including mineral fiber, fiberglass, metal, felt, architectural resin and glass, wood, wood fiber and glass-reinforced-gypsum. We also manufacture ceiling suspension system (grid) products through a joint venture with Worthington Enterprises, Inc. called Worthington Armstrong Venture (“WAVE”). Acquisitions In February 2026, we acquired all of the issued and outstanding shares of Event Scape Inc. and Eventscape U.S. Holdings Inc. (collectively, “Eventscape”), headquartered in Toronto, Ontario, Canada. Eventscape is a designer, manufacturer and installer of ceilings, walls and facades made of a broad range of materials. The operations, assets and liabilities of Eventscape are included in our Architectural Specialties segment. In December 2025, we acquired all of the issued and outstanding stock of FGM-Parallel LLC (“Parallel”), based in Englewood, Colorado. Parallel is a designer and manufacturer of extruded aluminum products primarily used in exterior architectural applications. The operations, assets and liabilities of Parallel are included in our Architectural Specialties segment. In September 2025, we acquired all of the issued and outstanding shares of Geometrik Manufacturing, Inc. (“Geometrik”), based in Kelowna, British Columbia, Canada. Geometrik is a designer and manufacturer of wood acoustical ceiling and wall systems. The operations, assets and liabilities of Geometrik are included in our Architectural Specialties segment. Manufacturing Plants As of June 30, 2026, we operated 24 manufacturing plants, including 20 plants located within the U.S. and four plants in Canada. WAVE operates seven additional plants in the U.S. to produce suspension system (grid) products, which we use and sell in our ceiling systems. Reportable Segments Our operating segments are as follows: Mineral Fiber, Architectural Specialties and Unallocated Corporate. Mineral Fiber – produces suspended mineral fiber and fiberglass ceiling systems. Our mineral fiber products offer various performance attributes such as acoustical control, rated fire protection, and energy efficiency, along with other health and sustainability features and aesthetic appeal. Ceiling products are primarily sold to resale distributors, ceiling systems contractors and wholesalers, and retailers (including large home centers). The Mineral Fiber segment also includes the results of WAVE, which manufactures and sells suspension system (grid) products and ceiling component products that are invoiced by both AWI and WAVE. Segment results relating to WAVE consist primarily of equity earnings and reflect our 50% equity interest in the joint venture. Ceiling component products consist of ceiling perimeters and trim, in addition to grid products that support drywall ceiling systems, structural and walkable grid systems. For some customers, WAVE sells its suspension system products to AWI for resale to customers. Mineral Fiber segment results reflect those sales transactions. The Mineral Fiber segment also includes all assets and liabilities not specifically allocated to our Architectural Specialties or Unallocated Corporate segment, including all property and related depreciation associated with our Lancaster, Pennsylvania headquarters. Operating results for the Mineral Fiber segment include a significant majority of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations. Architectural Specialties – designs, produces and sources specialty ceilings, walls, and other interior and exterior architectural applications primarily for use in commercial settings. Products are available in numerous materials, such as metal, felt, architectural resin and glass, wood, wood fiber and glass-reinforced-gypsum in various colors, shapes and designs. These products offer a range of design options and performance attributes such as acoustical control, rated fire protection, light, aesthetic appeal, energy efficiency and building performance. We sell standard, premium and customized products, a portion of which are sourced from third-party producers. Architectural Specialties products are sold mostly to direct customers, primarily ceiling systems contractors, and resale 26 Management’s Discussion and Analysis of Financial Condition and Results of Operations distributors. This segment’s revenues are primarily project driven, which can lead to more variability in sales patterns. Operating results for the Architectural Specialties segment include a portion of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations. Unallocated Corporate – includes certain assets, liabilities, income and expenses that have not been allocated to our other business segments and consists of: cash and cash equivalents, our Overcast Innovations LLC (“Overcast”) investment and related equity earnings and losses, the net funded status of our U.S. Retirement Income Plan (“RIP”), the estimated fair value of interest rate swap contracts, outstanding borrowings under our senior secured credit facility and income tax balances. Factors Affecting Revenues For information on our 2026 and 2025 net sales and disaggregated expenses by segment, see Note 2 to the Condensed Consolidated Financial Statements. For information on our 2026 and 2025 net sales disaggregated by major customer groups, see Note 3 to the Condensed Consolidated Financial Statements. Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we define organic results as consolidated and/or Architectural Specialties results excluding the impacts of the Eventscape, Parallel and Geometrik acquisitions. We define inorganic consolidated and/or Architectural Specialties results as the impacts of Eventscape, Parallel and Geometrik. Markets. We compete in the building product markets of the Americas. We closely monitor publicly available macroeconomic data and trends that provide insight into commercial construction market activity, including, but not limited to, Gross Domestic Product (“GDP”), office vacancy rates, the Architecture Billings Index, new commercial construction starts, state and local government spending, corporate profits and retail sales. The Company continues to monitor the impacts of governmental trade policies, including tariffs, and geopolitical events, including the ongoing conflict in Iran. These matters did not have a material direct impact on our financial condition, liquidity or results of operations in the first six months of 2026 or 2025. Sales Volumes. For the three months ended June 30, 2026, sales volumes increased $31 million compared to the prior-year period, due primarily to a $15 million increase in organic Architectural Specialties net sales and an $11 million inorganic increase resulting from our February 2026 acquisition of Eventscape, our December 2025 acquisition of Parallel and our September 2025 acquisition of Geometrik. Also contributing to the increase in net sales was a $5 million increase from higher sales volumes in our Mineral Fiber segment. For the six months ended June 30, 2026, sales volumes increased $47 million compared to the prior-year period, due primarily to a $24 million increase in organic Architectural Specialties net sales and a $17 million inorganic increase due to our 2026 and 2025 acquisitions. Also contributing to the increase in net sales was a $6 million increase driven by higher sales volumes in our Mineral Fiber segment. Average Unit Value. We periodically modify sales prices of our products due to changes in costs for raw materials and energy, market conditions and the competitive environment. Typically, realized price increases are less than announced price increases because of project pricing, competitive adjustments and changing market conditions. We also offer a wide assortment of products that are differentiated by style, design and performance attributes. Pricing and margins for products within the assortment vary. In addition, changes in the relative quantity of products purchased at different price points can impact year-to-year comparisons of net sales and operating income. Within our Mineral Fiber segment, we focus on improving sales dollars per unit sold, or average unit value (“AUV”), as a measure that accounts for the varying assortment of products and like-for-like pricing impacting our revenues. Favorable AUV increased our total consolidated net sales for the three and six months ended June 30, 2026 by $16 million and $27 million, respectively, compared to the same periods in 2025. Our Architectural Specialties segment revenues are primarily generated from individual contracts that include project-specific mixes of manufactured and sourced products. As such, we do not manage or evaluate performance using AUV for this segment but rather attribute all changes in net sales to volume, including gross to net sales adjustments. During the first quarter of 2026, we implemented price increases on Mineral Fiber ceiling products and WAVE implemented price increases on grid products. In the second quarter of 2026, we announced and implemented price increases on certain Architectural Specialties products, and WAVE announced and implemented price increases on grid products. Also in the second quarter of 2026, we announced price increases on Mineral Fiber products and WAVE announced price increases on grid products, both of which will become effective in the third quarter of 2026. Future pricing actions for Mineral Fiber, Architectural Specialties and WAVE products may be implemented based on numerous factors, including the impact of tariffs, the rate and pace of inflation and its impact on our business and the competitive environment. Seasonality. Historically, our sales tend to be stronger in the second and third quarters of our fiscal year due to more favorable weather conditions, customer business cycles and the timing of renovation and new construction projects. 27 Management’s Discussion and Analysis of Financial Condition and Results of Operations Factors Affecting Operating Costs Operating Expenses. Our operating expenses are comprised of direct production costs (principally raw materials, labor, and energy), manufacturing overhead costs, freight, costs to purchase sourced products, tariffs and selling, general and administrative (“SG&A”) expenses. Our largest raw material expenditures are primarily for fiberglass, perlite, recycled paper, and starch. Other raw materials include clays, felt, pigment, architectural resin and glass, wood and wood fiber. We manufacture substantially all of our mineral wool at one of our manufacturing facilities. We use aluminum and steel in the production of metal building products by us and by WAVE. Finally, we also purchase significant amounts of packaging materials and consume substantial amounts of energy, such as electricity and natural gas, and water. Fluctuations in the prices of these inputs impact our financial results. In the second quarter and first half of 2026, higher freight, raw material and energy costs negatively impacted operating income by $4 million and $6 million, respectively, compared to the same periods in 2025. Acquisition-Related Expenses and Losses In connection with our acquisitions of Eventscape in February 2026, Geometrik in September 2025, Insolcorp, LLC (“Insolcorp”) in October 2023 and BOK Modern, LLC (“BOK”) in July 2023, we recorded certain acquisition-related expenses and losses to operating income during the three and six months ended June 30, 2026 and 2025, summarized as follows (dollar amounts in millions): Three Months Ended Six Months Ended Affected Line Item in the Condensed June 30, June 30, Consolidated Statements of Earnings and 2026 2025 2026 2025 Comprehensive Income Acquisition costs $ - $ - $ 2.6 $ - SG&A expenses Loss related to change in fair value of contingent consideration, net 0.9 0.1 0.9 0.4 Loss related to change in fair value of contingent consideration, net Negative impact to operating income $ 0.9 $ 0.1 $ 3.5 $ 0.4 Acquisition costs above reflect certain third-party professional fees incurred due to the Eventscape acquisition. The change in fair value of contingent consideration was related to our Eventscape, Geometrik, Insolcorp and BOK acquisitions and is remeasured quarterly during each acquisition’s earn-out periods. See Note 15 to the Condensed Consolidated Financial Statements for further information. Depreciation of fixed assets acquired and amortization of intangible assets acquired have been excluded from the table above. Employees As of June 30, 2026 and December 31, 2025, we had approximately 4,000 and 3,800 full-time and part-time employees, respectively. RESULTS OF OPERATIONS See Note 2 to the Condensed Consolidated Financial Statements for a reconciliation of operating income to consolidated net earnings before income taxes. CONSOLIDATED RESULTS (dollar amounts in millions) 2026 2025 Change is Favorable Three Months Ended June 30, Consolidated net sales $ 472.0 $ 424.6 11.2 % Consolidated operating income $ 133.8 $ 123.2 8.6 % Six Months Ended June 30, Consolidated net sales $ 881.9 $ 807.3 9.2 % Consolidated operating income $ 228.0 $ 221.7 2.8 % Consolidated net sales for the second quarter of 2026 increased 11.2% from the prior-year quarter due to higher volumes of $31 million and favorable AUV of $16 million. Architectural Specialties net sales increased $26 million and Mineral Fiber net sales 28 Management’s Discussion and Analysis of Financial Condition and Results of Operations increased $21 million from the prior-year quarter. Architectural Specialties segment net sales improved due to a $15 million increase in organic net sales and an $11 million inorganic contribution. The increase in Mineral Fiber net sales was driven by favorable AUV and improved sales volumes. Consolidated net sales for the first six months of 2026 increased 9.2% over the prior-year period due to higher volumes of $47 million and favorable AUV of $27 million. Architectural Specialties net sales increased $41 million and Mineral Fiber net sales increased $33 million over the prior-year period. Architectural Specialties segment net sales improved due to a $24 million increase in organic net sales and a $17 million inorganic contribution. The increase in Mineral Fiber net sales was driven by favorable AUV and improved sales volumes. Cost of goods sold in the second quarter of 2026 were $277.0 million, or 58.7% of net sales, compared to $248.8 million, or 58.6% of net sales, for the same period in 2025. The slight increase in cost of goods sold as a percent of net sales was primarily driven by our 2026 and 2025 acquisitions. This increase was partially offset by favorable AUV benefits and ongoing manufacturing productivity. Cost of goods sold was also impacted by the net benefit from tariff-related items, including $2 million of International Emergency Economic Powers Act (“IEEPA”) tariff refunds recognized during the second quarter of 2026, largely offset by the ongoing impact of tariffs on our Canadian imports. Cost of goods sold in the first six months of 2026 were $531.6 million, or 60.3% of net sales, compared to $481.6 million, or 59.7% of net sales, for the same period in 2025. The year-over-year increase in cost of goods sold as a percent of net sales for the first six months of 2026 was primarily driven by our 2026 and 2025 acquisitions and a $2 million negative net impact from tariffs, including a tariff adjustment recorded in the first quarter of 2026 and the ongoing impact of tariffs on our Canadian imports, partially offset by IEEPA refunds recognized during the second quarter of 2026. These increases in cost of goods sold as a percent of net sales were partially offset by favorable AUV benefits and ongoing manufacturing productivity. SG&A expenses in the second quarter of 2026 were $93.7 million, or 19.9% of net sales, compared to $84.4 million, or 19.9% of net sales, in the prior-year quarter. The increase in SG&A expenses was primarily driven by investments to support growth, most notably a $3 million increase in people costs, including incentive compensation, and a $2 million increase in selling expenses. Also contributing to the increase was a $2 million inorganic increase due to our 2025 and 2026 acquisitions. SG&A expenses in the first six months of 2026 were $182.1 million, or 20.6% of net sales, compared to $162.1 million, or 20.1% of net sales, for the same period in 2025. The increase in SG&A expenses was primarily driven by investments to support growth, most notably a $5 million increase in people costs, including incentive compensation, and a $2 million increase in organic Architectural Specialties selling expenses. Also contributing to the increase was a $5 million inorganic increase, including Eventscape acquisition costs, and a $3 million increase in severance expenses. Losses related to changes in the fair value of contingent consideration were $0.9 million in the second quarter of 2025, compared to $0.1 million for the second quarter of 2025, and $0.9 million in the first six months of 2026, compared to $0.4 million for the same period in 2025. Changes in the fair value of contingent consideration were related to our Insolcorp, Geometrik and Eventscape acquisitions. See Note 15 to the Condensed Consolidated Financial Statements for further information. Equity earnings from unconsolidated affiliates were $33.4 million in the second quarter of 2026, compared to $31.9 million in the second quarter of 2025. WAVE equity earnings were $33.6 million in the second quarter of 2026, compared to $32.1 million in the second quarter of 2025. The increase in WAVE equity earnings was primarily driven by the impact of higher sales volumes and the benefit of favorable AUV, partially offset by higher steel costs. Equity earnings from unconsolidated affiliates were $60.7 million in the first six months of 2026, compared to $58.5 million in the same period of 2025. WAVE equity earnings were $61.0 million in the first six months of 2026, compared to $58.9 million in the same period of 2025. The increase in WAVE equity earnings was primarily driven by the benefit of favorable AUV and higher sales volumes, partially offset by higher steel costs. See Note 8 to the Condensed Consolidated Financial Statements for further information. Interest expense was $7.8 million in the second quarter of 2026, compared to $8.6 million in the second quarter of 2025. Interest expense was $15.1 million in the first six months of 2026 compared to $17.1 million in the first six months of 2025. The decreases in interest expense were due to a decrease in effective interest rates and lower average debt balances. Other non-operating income, net, was $0.9 million in the second quarter of 2026 compared to $0.7 million in the second quarter of 2025, and $2.4 million in the first six months of 2026 compared to $1.4 million in the same period of 2025. The increases in other non-operating income, net, were primarily driven by the non-service cost components of pension and postretirement net periodic benefits. 29 Management’s Discussion and Analysis of Financial Condition and Results of Operations Income tax expense was $30.2 million in the second quarter of 2026 compared to $27.5 million in the second quarter of 2025. The effective tax rate was 23.8% for the second quarter of 2026 compared to 23.9% in the second quarter of 2025. The slight decline in the effective tax rate was due to favorable impacts from executive compensation limitations and excess tax benefits related to stock-based compensation, largely offset by the absence of an investment tax credit recognized in the second quarter of 2025. Income tax expense was $51.8 million in the first six months of 2026 compared to $49.1 million in the first six months of 2025. The effective tax rate for the first six months of 2026 was 24.1% compared to 23.8% for the same period of 2025. The modest increase in the effective tax rate was due to the absence of an investment tax credit recognized in the prior year, partially offset by benefits from lower executive compensation limitations and higher excess tax benefits related to stock-based compensation. Total Other Comprehensive Loss (“OCL”) was $0.5 million in the second quarter of 2026 compared to total Other Comprehensive Income (“OCI”) of $1.9 million in the second quarter of 2025. The change from OCI to OCL was due to unfavorable Canadian dollar foreign currency translation adjustments, partially offset by interest rate swap derivative gains. OCI was $0.5 million in the first six months of 2026 compared to OCI of $1.3 million in the first six months of 2025. The decrease in OCI was due to unfavorable Canadian dollar foreign currency translation adjustments, partially offset by interest rate swap derivative gains. Derivative gains and losses represent the mark-to-market value fair adjustments for our derivative assets and liabilities, and the recognition of gains and losses previously deferred in Accumulated Other Comprehensive (Loss). Foreign currency translation adjustments represent the change in the U.S. dollar value of assets and liabilities denominated in foreign currencies. REPORTABLE SEGMENT RESULTS Mineral Fiber (dollar amounts in millions) 2026 2025 Change is Favorable Three Months Ended June 30, Segment net sales $ 288.2 $ 267.0 7.9 % Segment operating income $ 105.3 $ 98.4 7.0 % Six Months Ended June 30, Segment net sales $ 545.4 $ 512.1 6.5 % Segment operating income $ 190.8 $ 182.9 4.3 % Mineral Fiber net sales increased $21 million in the second quarter of 2026 compared to the prior-year quarter due to $16 million of favorable AUV, including like-for-like price and mix driven by continued demand at the high-end of our product portfolio, and $5 million of higher sales volumes, primarily due to strong commercial execution and benefits from growth initiatives, in addition to slightly improved market conditions. For the first six months of 2026, Mineral Fiber net sales increased $33 million from the prior-year period, primarily due to $27 million of favorable AUV, driven by favorable like-for-like price and, to a lesser extent, favorable mix, and $6 million of higher sales volumes, primarily due to strong commercial execution and benefits from growth initiatives. Cost of goods sold during the three months ended June 30, 2026 was $166.8 million, or 57.9% of net sales, compared to $156.7 million, or 58.7% of net sales, in the prior-year period. Gross profit increased $11 million, or 10.1%, compared to the prior-year quarter due to a $12 million benefit from favorable AUV and a $3 million benefit from higher sales volumes. These benefits were partially offset by a $4 million increase in manufacturing costs, including freight, raw material and energy inflation, partially offset by ongoing manufacturing productivity. Cost of goods sold during the six months ended June 30, 2026 was $322.1 million, or 59.1% of net sales, compared to $304.7 million, or 59.5% of net sales, in the prior-year period. Gross profit increased $16 million, or 7.7%, compared to the prior-year period due to a $21 million benefit from favorable AUV and a $4 million benefit from higher sales volumes. These benefits were partially offset by a $9 million increase in manufacturing costs, including freight, raw material and energy inflation, partially offset by ongoing manufacturing productivity. SG&A expenses during the three months ended June 30, 2026 were $48.7 million, or 16.9% of net sales, compared to $43.8 million, or 16.4% of net sales, in the prior-year quarter. The increase in SG&A expenses was primarily driven by investments to support growth, most notably a $2 million increase in people costs, including incentive compensation, and a $1 million increase in selling expenses. Also contributing to the increase was a $1 million increase in accruals for environmental remediation matters. 30 Management’s Discussion and Analysis of Financial Condition and Results of Operations SG&A expenses during the six months ended June 30, 2026 were $92.5 million, or 17.0% of net sales, compared to $83.2 million, or 16.2% of net sales, in the prior-year period. The increase in SG&A expenses was primarily driven by a $3 million increase in people costs, including incentive compensation, a $2 million increase in severance expenses, a $1 million decrease in company-owned officer life insurance gains related to deferred compensation plans and a $1 million increase in accruals for environmental remediation matters. Equity earnings from our WAVE joint venture were $33.6 million in the three months ended June 30, 2026, compared to $32.1 million in the prior-year period. The increase in WAVE equity earnings was primarily driven by the impact of higher sales volumes and the benefit of favorable AUV, partially offset by higher steel costs. Equity earnings from our WAVE joint venture were $61.0 million in the first six months of 2026, compared to $58.9 million in the prior-year period. The increase in WAVE equity earnings was primarily driven by the benefit of favorable AUV and higher sales volumes, partially offset by higher steel costs. Architectural Specialties (dollar amounts in millions) 2026 2025 Change is Favorable (Unfavorable) Three Months Ended June 30, Segment net sales $ 183.8 $ 157.6 16.6 % Segment operating income $ 29.4 $ 25.6 14.8 % Six Months Ended June 30, Segment net sales $ 336.5 $ 295.2 14.0 % Segment operating income $ 38.7 $ 40.4 (4.2 )% Architectural Specialties net sales increased $26 million in the second quarter of 2026 compared to the prior-year quarter due to a $15 million increase in organic net sales driven by strong growth across most of our specialty product categories and an $11 million inorganic contribution. For the first six months of 2026, Architectural Specialties net sales increased $41 million from the prior-year period due to a $24 million increase in organic net sales driven by strong growth across most of our specialty product categories and a $17 million inorganic contribution. Cost of goods sold during the three months ended June 30, 2026 was $109.8 million, or 59.7% of net sales, compared to $91.8 million, or 58.2% of net sales, in the prior-year period, with the increase in cost of goods sold as a percent of net sales primarily driven by the inorganic impact from our 2026 and 2025 acquisitions. Gross profit increased $8 million, or 12.5%, compared to the prior-year quarter due to a $5 million benefit from higher organic net sales and a $4 million inorganic benefit. Cost of goods sold was also impacted by the net benefit from tariff-related items, which included $2 million of IEEPA tariff refunds recognized in the second quarter of 2026, largely offset by the ongoing impact of tariffs on our Canadian imports. Cost of goods sold during the six months ended June 30, 2026 was $208.8 million, or 62.1% of net sales, compared to $176.2 million, or 59.7% of net sales, in the prior-year period, with the increase in cost of goods sold as a percent of net sales primarily driven by the inorganic impact and a net increase in impacts from tariff-related items. Gross profit increased $9 million, or 7.3%, compared to the prior-year period due to an $11 million benefit from higher organic net sales and a $6 million inorganic benefit. Partially offsetting these benefits was an $8 million increase in manufacturing costs, driven by a $4 million inorganic increase and a $4 million organic increase. The increase in organic manufacturing costs was also impacted by a $2 million negative net impact from tariffs, including a tariff adjustment recorded in the first quarter of 2026. SG&A expenses during the three months ended June 30, 2026 were $44.7 million, or 24.3% of net sales, compared to $40.3 million, or 25.6% of net sales, in the prior-year quarter. The increase in SG&A expenses was primarily driven by investments to support growth, including a $1 million increase in organic selling expenses and a $1 million increase in people costs, including incentive compensation. Also contributing to the increase was a $2 million inorganic increase. SG&A expenses during the six months ended June 30, 2026 were $89.1 million, or 26.5% of net sales, compared to $78.4 million, or 26.6% of net sales, in the prior-year period. The increase in SG&A expenses was primarily driven by investments to support growth, including a $2 million increase in organic selling expenses and a $2 million increase in people costs, including incentive 31 Management’s Discussion and Analysis of Financial Condition and Results of Operations compensation. Also contributing to the increase was a $5 million inorganic increase, including Eventscape acquisition costs, and a $1 million increase in severance expenses. Unallocated Corporate Unallocated Corporate operating loss was $1 million in the second quarter of 2026 and 2025, and $2 million in the first six months of 2026 and 2025. FINANCIAL CONDITION AND LIQUIDITY Cash Flow Net cash provided by operating activities for the first six months of 2026 was $125.9 million, compared to $122.6 million for the first six months of 2025. The favorable change in operating activities is primarily due to an increase in cash earnings and favorable timing related changes in accounts payable and accrued expenses, partially offset by unfavorable timing related changes in receivables. Net cash used for investing activities was $44.9 million in the first six months of 2026, compared to $13.2 million of cash provided by investing activities in the first six months of 2025. The unfavorable change in cash used for investing activities was primarily due to the acquisition of Eventscape, partially offset by an increase in dividends from WAVE. Net cash used for financing activities was $114.2 million in the first six months of 2026, compared to $134.7 million for the first six months of 2025. The favorable change in cash used for financing activities was primarily due to increased net borrowings due to the Eventscape acquisition, partially offset by an increase in repurchases of our outstanding common stock and an increase in payments of tax withholdings for share-based compensation plans. Liquidity Our liquidity needs for operations vary throughout the year. We retain lines of credit to facilitate our seasonal cash flow needs, since cash flow is historically lower during the first and fourth quarters of our fiscal year. We have a $910.6 million variable rate senior credit facility, which is comprised of a $500.0 million revolving credit facility (with a $150.0 million sublimit for letters of credit) and a $410.6 million Term Loan A. As of June 30, 2026, the revolving credit facility and Term Loan A were priced at 1.25% over the Secured Overnight Financing Rate (“SOFR”). The revolving credit facility and Term Loan A mature in December 2030. We also have a $25.0 million bi-lateral letter of credit facility and a $0.7 million letter of credit facility. As of June 30, 2026, the total principal balances outstanding under our senior credit facility included $405.5 million under Term Loan A and $90.0 million under the revolving credit facility. The senior credit facility includes two financial covenants that require the ratio of consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) to consolidated cash interest expense minus cash consolidated interest income to be greater than or equal to 3.0 to 1.0, and requires the ratio of consolidated funded indebtedness, minus AWI and domestic subsidiary unrestricted cash and cash equivalents up to $100 million, to EBITDA to be less than or equal to 3.75 to 1.0 (subject to certain exceptions for certain acquisitions). As of June 30, 2026, we were in compliance with all covenants of the senior credit facility. The Term Loan A is currently priced on a variable interest rate basis. We use interest rate swaps to minimize the fluctuations in earnings caused by interest rate volatility associated with our senior credit facility. The following table summarizes our interest rate swaps, including forward interest rate swaps (dollar amounts in millions): Coverage Period Notional Amount Risk Coverage Trade Date March 2025 to 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 March 2026 to December 2028 $ 50.0 USD-SOFR March 19, 2026 June 2026 to June 2029 $ 50.0 USD-SOFR June 22, 2026 32 Management’s Discussion and Analysis of Financial Condition and Results of Operations Under the terms of all interest rate swaps, we pay a fixed rate monthly and receive a floating rate based on SOFR. These swaps are designated as cash flow hedges against changes in SOFR for a portion of our variable rate debt. We use lines of credit and other commercial commitments to ensure that adequate funds are available to meet operating requirements. Letters of credit are currently arranged through our revolving credit facility, our bi-lateral facility, and letter of credit facility. Letters of credit may be issued to third party suppliers, insurance companies and financial institutions and typically can only be drawn upon in the event of AWI’s failure to pay its obligations to the beneficiary. The following table presents details related to our letters of credit facilities (dollar amounts in millions): June 30, 2026 Financing Arrangements Limit Used Available Bi-lateral facility $ 25.0 $ 7.7 $ 17.3 Letter of credit facility 0.7 0.5 0.2 Revolving credit facility 150.0 - 150.0 Total $ 175.7 $ 8.2 $ 167.5 As of June 30, 2026, we had $78.6 million of cash and cash equivalents, $54.4 million in the U.S. and $24.2 million in foreign jurisdictions, primarily Canada. As of June 30, 2026, we also had $410 million available under our revolving credit facility. We believe cash on hand and cash generated from operations, together with borrowing capacity under our credit facility, will be adequate to address our near-term liquidity needs based on current expectations of our business operations, capital expenditures and scheduled payments of debt obligations. CRITICAL ACCOUNTING ESTIMATES There have been no material changes to our critical accounting estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. 33