AMPCO PITTSBURGH CORP

Overview of the Business

Ampco-Pittsburgh Corporation (the “Corporation”) manufactures and sells highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. It operates intwo business segments – the Forged and Cast Engineered Products (“FCEP”) segment and the Air and Liquid Processing (“ALP”) segment. This segment presentation is consistent with how the Corporation’s chief operating decision-maker evaluates financial performance and makes resource allocation and strategic decisions about the business (Note 18).

Note 1 – Unaudited Condensed Consolidated Financial Statements

The unaudited condensed consolidated balance sheet as of June 30, 2024 and the unaudited condensed consolidated statements of operations, comprehensive income (loss) and shareholders’ equity for the three and six months ended June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and 2023 have been prepared by the Corporation. In the opinion of management, all adjustments, consisting of only normal and recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented, have been made. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results expected for the full year.

Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Corporation’s latest Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures. The guidance requires disclosure of significant reportable segment expenses regularly provided to the chief operating decision-maker and included within each reported measure of a segment’s profit or loss. The guidance also requires disclosure of the title and position of the individual identified as the chief operating decision-maker and an explanation of how the chief operating decision-maker uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The guidance does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The guidance became effective for the Corporation’s annual period beginning January 1, 2024 and interim periods beginning January 1, 2025. The Corporation is currently evaluating the impact this new standard will have on its annual disclosures in its consolidated financial statements for the year ending December 31, 2024 and interim disclosures thereafter. It will not, however, impact the Corporation’s consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures. The guidance requires annual disclosure of specific categories of information within the effective tax rate reconciliation, and income taxes paid and income tax expense disaggregated by jurisdiction. The guidance becomes effective for the Corporation’s annual period beginning January 1, 2025. Early adoption is permitted. The Corporation is currently evaluating the impact this new standard will have on its annual disclosures. It will not, however, impact the Corporation’s consolidated financial position, results of operations or cash flows.

Note 2 – Inventories

At June 30, 2024 and December 31, 2023, substantially all inventories were valued using the first-in, first-out method. Inventories were comprised of the following:

Note 3 – Property, Plant and Equipment

Property, plant and equipment were comprised of the following:

Certain of the above property, plant and equipment are held as collateral including:

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The land and building of Union Electric Steel UK Limited, an indirect subsidiary of the Corporation (“UES-UK”), with a book value equal to $2,683 (£2,122) at June 30, 2024, are held as collateral by the trustees of the UES-UK defined benefit pension plan (Note 7).

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Certain of the machinery and equipment with a book value equal to $24,239 at June 30, 2024, purchased with proceeds from the equipment finance facility (Note 6), are held as collateral by the lender.

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Certain land and land improvements and buildings and leasehold improvements are included in the sale and leaseback financing transactions and Disbursement Agreement (Note 6). Title to these assets lies with the lender; however, since the transactions qualified as financing transactions, versus sales, the assets remain recorded on the Corporation’s condensed consolidated balance sheet.

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The remaining assets, other than real property, are pledged as collateral for the Corporation’s revolving credit facility (Note 6).

In 2023, Union Electric Steel Corporation (“UES”), a wholly owned subsidiary of the Corporation, completed certain leasehold improvements at the Carnegie, Pennsylvania manufacturing facility with the $2,500 of proceeds from the Disbursement Agreement(Note 6). The improvements are being amortized over the remaining lease term of 20 years.

In 2021, the Corporation began a$26,000 long-term strategic capital program to upgrade existing equipment at certain of its FCEP locations. The program was completed during the three months ended June 30, 2024. Interest capitalized for the strategic capital program totaled $16 and $341 for thethree months ended June 30, 2024 and 2023, respectively, and $251 and $602 for thesix months ended June 30, 2024 and 2023, respectively.

The gross value of assets under finance leases and the related accumulated amortization approximated $3,459 and $1,783, respectively, as of June 30, 2024 and $4,223 and $1,959, respectively, at December 31, 2023. Depreciation expense approximated $4,613 and $4,268, including depreciation of assets under finance leases of approximately $80 and $67, for thethree months ended June 30, 2024 and 2023, respectively. Depreciation expense approximated $9,195 and $8,549, including depreciation of assets under finance leases of approximately $162 and $137, for thesix months ended June 30, 2024 and 2023, respectively.

Note 4 – Intangible Assets

Intangible assets were comprised of the following:

Changes in intangible assets consisted of the following:

Note 5 – Other Current Liabilities

Other current liabilities were comprised of the following:

Customer-related liabilities primarily include liabilities for product warranty claims and deposits received on future orders. The Corporation provides a limited warranty on its products, known as assurance-type warranties, and may issue credit notes or replace products free of charge for valid claims. A warranty is considered an assurance-type warranty if it provides the customer with assurance that the product will function as intended. Historically, warranty claims have been insignificant. The Corporation records a provision for estimated product warranties at the time the underlying sale is recorded. The provision is based on historical experience as a percentage of sales adjusted for probable and known claims.

Changes in the liability for product warranty claims consisted of the following:

Customer deposits represent amounts collected from, or invoiced to, a customer in advance of revenue recognition. The liability for customer deposits is reversed when the Corporation satisfies its performance obligations and control of the inventory transfers to the customer, typically when title transfers. The majority of performance obligations related to customer deposits are expected to be satisfied in less thanone year. Performance obligations related to customer deposits expected to be satisfied beyondone year have been classified as a noncurrent liability.

Changes in customer deposits consisted of the following: