AMPCO PITTSBURGH CORP

Previous wording

inability to obtain necessary capital or financing on satisfactory terms to acquire capital expenditures that may be necessary to support our growth strategy;

Current wording

inability to obtain necessary capital or financing on satisfactory terms to support our growth strategy;

Previous wording

those discussed more fully elsewhere in this report and in documents filed with the Securities and Exchange Commission by us, particularly in Item 1A, Risk Factors, in Part I of our latest Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

those discussed more fully elsewhere in this report and in documents filed with the Securities and Exchange Commission by us, particularly in Item 1A, Risk Factors, in Part I of our Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

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

Current wording

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

Previous wording

For the FCEP segment, the roll market in North America has been flat as a result of end customer demand; however, order intake is expected to improve in the second half of the year, for delivery in 2025. Higher pricing and increased market share, when compared to a year ago, is expected to help minimize the effect of the expected decline in the overall volume of shipments for 2024. While stable, the European steel producers are operating at lower levels when compared to pre-pandemic levels as Europe continues to experience economic uncertainty and due to the entry of low-priced product from China. In addition, increased imports of flat rolled steel has resulted in pricing and volume pressures for steel producers there. The FEP market remains challenged by increased imports and high inventory levels at bar distributors. The primary focus for this segment is to maintain a strong position in the roll market and, with the completion of the previously announced capital program, to improve operational efficiencies and reliability at its domestic forge facilities and increase capacity for the manufacturing of its FEP.

Current wording

For the FCEP segment, demand for steel in the segment’s two largest markets, North America and Europe, has been flat when compared to the prior year, resulting in customers operating with lower overall roll inventories and placing orders for new rolls on an as-needed basis. Order intake has begun to show signs of improvement with shipments expecting to increase for the segment’s cast roll facilities in early 2025 and the segment’s forge roll facilities by mid-2025. Pricing has been stable and market share has increased, compared to a year ago, which is expected to improve the segment’s overall utilization in 2025 when compared to 2024. European steel producers, however, continue to operate at lower levels compared to pre-pandemic levels as Europe continues to experience economic uncertainty. Additionally, increased entry of low-priced products from other countries has negatively impacted local demand both in Europe and the U.S. with several of the segment’s largest customers engaging in trade cases to reduce the number of imports into the U.S. The FEP market remains challenged by low activity among bar distribution customers, improved block utilization, and lower activity among the segment’s block customers. The primary focus for the FCEP segment is to maintain a strong position in the roll market and to continue to improve operational efficiency and equipment reliability resulting from the completion of the previously announced capital program.

Previous wording

The Corporation is actively monitoring, and will continue to actively monitor, the lingering effects from a post-pandemic environment, geopolitical and economic conditions and other developments relevant to its business including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.

Current wording

The Corporation is actively monitoring, and will continue to actively monitor, the lingering effects from a post-pandemic environment, repercussions from the Russia-Ukraine and Middle East conflicts and similar geopolitical matters, economic conditions, and other developments relevant to its business including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.

Previous wording

Net sales approximated $110,988 and $107,211 for the three months ended June 30, 2024 and 2023, respectively, and $221,203 and $212,014 for the six months ended June 30, 2024 and 2023, respectively. The increase is attributable to higher sales for the ALP segment. A discussion of net sales for the Corporation’s two segments is included below.

Current wording

Net sales approximated $96,166 and $102,218 for the three months ended September 30, 2024 and 2023, respectively, and $317,369 and $314,232 for the nine months ended September 30, 2024 and 2023, respectively. The decrease for the three months ended September 30, 2024, when compared to September 30, 2023, is attributable to lower sales for the FCEP segment while the increase for the nine months ended September 30, 2024, when compared to September 30, 2023, is attributable to higher sales for the ALP segment. A discussion of net sales for the Corporation’s two segments is included below.

Previous wording

Income from operations approximated $5,043 and $3,288 for the three months ended June 30, 2024 and 2023, respectively, and $5,125 and $5,281 for the six months ended June 30, 2024 and 2023, respectively. Included in operating income for the three and six months ended June 30, 2023 is a credit of approximately $1,874 for the reimbursement of past energy costs at one of the Corporation’s foreign operations by its local government (the “Foreign Energy Credit”). A discussion of income from operations for the Corporation’s two segments is included below.

Current wording

Income from operations approximated $1,870 and $1,722 for the three months ended September 30, 2024 and 2023, respectively, and $6,995 and $7,003 for the nine months ended September 30, 2024 and 2023, respectively. Included in operating income for the three and nine months ended September 30, 2023 is a credit of approximately $191 for proceeds received from an insolvent asbestos-related insurance carrier (the “Asbestos-Related Credit”) and, for the nine months ended September 30, 2023, a credit of approximately $1,874 for the reimbursement of past energy costs at one of the Corporation’s foreign operations by its local government (the “Foreign Energy Credit”). A discussion of income from operations for the Corporation’s two segments is included below.

Previous wording

Backlog equaled $360,375 as of June 30, 2024 versus $378,912 as of December 31, 2023. Backlog represents the accumulation of firm orders on hand which: (i) are supported by evidence of a contractual arrangement, (ii) include a fixed and determinable sales price, (iii) have reasonably assured collectability, and (iv) generally are expected to ship within two years from the backlog reporting date. Backlog at a certain date may not be a direct measure of future revenue for a particular order because price increases, negotiated subsequently to the original order, are not included in backlog until the updated contract is received from the customer and certain surcharges are not determinable until the order is complete and ready for shipment to the customer. Approximately 44% of the backlog is expected to be released after 2024. A discussion of backlog by segment is included below.

Current wording

Backlog equaled $383,550 as of September 30, 2024 versus $378,912 as of December 31, 2023. Backlog represents the accumulation of firm orders on hand which: (i) are supported by evidence of a contractual arrangement, (ii) include a fixed and determinable sales price, (iii) have reasonably assured collectability, and (iv) generally are expected to ship within two years from the backlog reporting date. Backlog at a certain date may not be a direct measure of future revenue for a particular order because price increases, negotiated subsequently to the original order, are not included in backlog until the updated contract is received from the customer and certain surcharges are not determinable until the order is complete and ready for shipment to the customer. Approximately 71% of the backlog is expected to be released after 2024. A discussion of backlog by segment is included below.

Previous wording

Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended June 30, 2024 and 2023 approximated 79.0% and 79.7%, respectively, and for the six months ended June 30, 2024 and 2023 approximated 81.5% and 81.1%, respectively. For the FCEP segment, costs of products sold, excluding depreciation and amortization, for the three and six months ended June 30, 2024 and 2023 were comparable. Whereas the current year periods benefited from favorable pricing, the prior year periods benefited from the Foreign Energy Credit. For the ALP segment, costs of products sold, excluding depreciation and amortization, increased for the three and six months ended June 30, 2024, when compared to the same periods of the prior year, primarily due to an unfavorable product mix of heat exchangers, caused by the timing of shipments for several large orders, and centrifugal pumps, due to shipping older lower-margin orders.

Current wording

Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended September 30, 2024 and 2023 approximated 79.4% and 82.7%, respectively, and for the nine months ended September 30, 2024 and 2023 approximated 80.8% and 81.6%, respectively, due principally to improved margins for the FCEP segment. For the ALP segment, costs of products sold, excluding depreciation and amortization, were comparable for the three months ended September 30, 2024 when compared to the same period of the prior year, but increased for the nine months ended September 30, 2024 when compared to the same period of the prior year primarily due to product mix and shipment of older lower-margin orders for centrifugal pumps.

Previous wording

Interest expense approximated $3,017 and $2,245 for the three months ended June 30, 2024 and 2023, respectively, and $5,774 and $4,316, for the six months ended June 30, 2024 and 2023, respectively. When compared to the same periods of the prior year, the increase is principally due to:

Current wording

Interest expense approximated $2,976 and $2,468 for the three months ended September 30, 2024 and 2023, respectively, and $8,750 and $6,784, for the nine months ended September 30, 2024 and 2023, respectively. When compared to the same periods of the prior year, the increase is principally due to:

Previous wording

Higher interest on the equipment financing facility, net of capitalized interest, of approximately $545 and $615 for the three and six months ended June 30, 2024, respectively;

Current wording

Higher interest on the equipment financing facility, net of capitalized interest, of approximately $279 and $894 for the three and nine months ended September 30, 2024, respectively;

Previous wording

Higher average borrowings outstanding under the revolving credit facility, which increased interest expense by approximately $120 and $420 for the three and six months ended June 30, 2024, respectively;

Current wording

Higher average borrowings outstanding under the revolving credit facility, which increased interest expense by approximately $182 and $602 for the three and nine months ended September 30, 2024, respectively;

Previous wording

Higher average interest rates for 2024 versus 2023, which increased interest expense by approximately $85 and $265 for the three and six months ended June 30, 2024, respectively; and

Current wording

Higher average interest rates for 2024 versus 2023, which increased interest expense by approximately $47 and $312 for the three and nine months ended September 30, 2024, respectively; and

Previous wording

Higher interest on the sale and leaseback financing transactions, including interest on the proceeds received from the Disbursement Agreement in June 2023, which increased interest expense by approximately $50 and $160 for the three and six months ended June 30, 2024, respectively.

Current wording

Interest on the sale and leaseback financing transactions, including interest on the proceeds received from the Disbursement Agreement in June 2023, which was comparable for the three months ended September 30, 2024 and 2023 but higher by approximately $158 for the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023.

Previous wording

In addition, as of December 31, 2023, as a result of the Corporation moving certain of its cast roll production from the U.K. to Sweden given the significant increases in energy costs in the U.K. due in part to Russia-Ukraine conflict, the Corporation’s U.K. operations entered into a three-year cumulative loss position resulting in a valuation allowance to be established against the net deferred income tax assets of the U.K. operations. As of June 30, 2024, the U.K. operations remain in a three-year cumulative loss position. Accordingly, the income tax provision for the three and six months ended June 30, 2024 does not include any income tax benefit for the net operating losses of the U.K. By comparison, the income tax provision for the three and six months ended June 30, 2023, which is prior to establishing the valuation allowance, includes a income tax benefit for the operating losses of the U.K.

Current wording

In addition, as of December 31, 2023, as a result of the Corporation moving certain of its cast roll production from the U.K. to Sweden given the significant increases in energy costs in the U.K. due in part to Russia-Ukraine conflict, the Corporation’s U.K. operations entered into a three-year cumulative loss position resulting in a valuation allowance being established against the net deferred income tax assets of the U.K. operations. As of September 30, 2024, the U.K. operations remain in a three-year cumulative loss position. Accordingly, the income tax provision for the three and nine months ended September 30, 2024 does not include any income tax benefit for the net operating losses of the U.K. operations. By comparison, the income tax provision for the three and nine months ended September 30, 2023, which is prior to establishing the valuation allowance, includes an income tax benefit for the operating losses of the U.K. operations of $636 and $1,177 for the three and nine months ended September 30, 2023, respectively.

Previous wording

Net income (loss) attributable to Ampco-Pittsburgh and net income (loss) per common share attributable to Ampco-Pittsburgh equaled $2,012 and $0.10 per common share and $423 and $0.02 per common share for the three months ended June 30, 2024 and 2023, respectively, and equaled $(705) and $(0.04) per common share and $1,099 and $0.06 per common share for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Net (loss) income attributable to Ampco-Pittsburgh and net (loss) income per common share attributable to Ampco-Pittsburgh equaled $(1,959) and $(0.10) per common share and $809 and $0.04 per common share for the three months ended September 30, 2024 and 2023, respectively, and $(2,664) and $(0.13) per common share and $1,908 and $0.10 per common share for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for the three and six months ended June 30, 2023 include an after-tax benefit associated with the Foreign Energy Credit of $1,874 or $0.10 per common share.

Current wording

Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for the three months ended September 30, 2023 include an after-tax benefit of $185 or $0.01 per common share associated with the Asbestos-Related Credit.

Previous wording

The change in net sales for the three and six months ended June 30, 2024, when compared to the same periods of the prior year, is primarily due to the following:

Current wording

The change in net sales for the three and nine months ended September 30, 2024, when compared to the same periods of the prior year, is primarily due to the following:

Previous wording

Higher volume of and favorable changes in product mix for forged roll sales, particularly earlier in 2024, which increased net sales by approximately $100 and $3,100 for the three and six months ended June 30, 2024, respectively;

Current wording

Lower volume and changes in product mix for roll sales, which decreased net sales by approximately $4,100 and $5,900 for the three and nine months ended September 30, 2024, respectively;

Previous wording

Lower volume of FEP shipments, which decreased net sales by approximately $1,800 and $2,000 for the three and six months ended June 30, 2024, respectively.

Current wording

Lower volume of FEP shipments, which decreased net sales by approximately $1,800 and $3,800 for the three and nine months ended September 30, 2024, respectively; and

Previous wording

Improved pricing, net of lower variable-index surcharges passed through to customers as a result of fluctuation in the price of raw material, energy and transportation, which increased net sales by approximately $4,100 and $2,200 for the three and six months ended June 30, 2024, respectively; offset by

Current wording

Lower variable-index surcharges passed through to customers as a result of lower prices for raw material, energy and transportation, net of higher base pricing, which reduced net sales by approximately $1,400 for the three months ended September 30, 2024, reducing the year-to-date benefit of improved pricing, net of variable index surcharges, to approximately $800 for the nine months ended September 30, 2024 when compared to the same period of the prior year; offset by

Previous wording

Income from operations for the three and six months ended June 30, 2024 increased when compared to the three and six months ended June 30, 2023 primarily due to:

Current wording

Income from operations for the three and nine months ended September 30, 2024 increased when compared to the three and nine months ended September 30, 2023 primarily due to:

Previous wording

Benefit from improved pricing and fluctuations in manufacturing costs, net of lower variable-index surcharges, which increased income from operations by approximately $5,000 and $4,600 for the three and six months ended June 30, 2024, respectively, and

Current wording

Benefit from improved pricing and changes in manufacturing costs, net of lower variable-index surcharges, which increased income from operations by approximately $2,000 and $6,600 for the three and nine months ended September 30, 2024, respectively, and

Previous wording

Lower manufacturing absorption and the insurance deductible associated with a fire at one of the Corporation’s cast roll facilities in the first quarter of 2024, which decreased operating income by approximately $1,100 and $1,500 for the three and six months ended June 30, 2024; respectively;

Current wording

Improved manufacturing absorption, net of the impact associated with a fire at one of the Corporation’s cast roll facilities in the first quarter of 2024, which increased operating income by approximately $1,900 and $400 for the three and nine months ended September 30, 2024, respectively; offset by

Previous wording

Impact from the net lower volume of shipments, which decreased operating income by approximately $1,200 and $900 for the three and six months ended June 30, 2024, respectively; and

Current wording

Lower volume of shipments, which decreased operating income by approximately $2,300 and $3,200 for the three and nine months ended September 30, 2024, respectively;

Previous wording

Foreign Energy Credit of $1,874 received in the prior year which benefited operating income for the three and six months ended June 30, 2023;

Current wording

Foreign Energy Credit of $1,874 received in the prior year which benefited operating income for the nine months ended September 30, 2023;

Previous wording

Lower gains on the disposal of property, plant and equipment associated with equipment being replaced in the prior year in connection with the segment’s strategic capital expenditure program of approximately $131 for the six months ended June 30, 2024.

Current wording

Lower gains on the disposal of property, plant and equipment associated with equipment being replaced in the prior year in connection with the segment’s strategic capital expenditure program of approximately $131 for the nine months ended September 30, 2024; and

Previous wording

Backlog decreased at June 30, 2024 from December 31, 2023 by $16,153. The backlog for mill roll orders at June 30, 2024 decreased from December 31, 2023 by approximately $12,500 primarily due to timing of 2025 orders from most of the segment’s major forged roll customers which are expected in the third quarter of 2024. The backlog for FEP was comparable at June 30, 2024 and December 31, 2023. Lower foreign exchange rates used to translate the backlog of the Corporation’s foreign subsidies into the U.S. dollar decreased backlog at June 30, 2024 when compared to backlog at December 31, 2023 by approximately $3,600. At June 30, 2024, approximately 39% of backlog is expected to ship after 2024.

Current wording

Backlog increased at September 30, 2024 from December 31, 2023 by $4,535 due to an increase in backlog for mill roll orders of approximately $3,800 and higher exchange rates used to translate the backlog of the Corporation’s foreign subsidies into the U.S. dollar which increased backlog by approximately $770. The backlog for FEP was comparable at September 30, 2024 and December 31, 2023. At September 30, 2024, approximately 68% of backlog is expected to ship after 2024.

Previous wording

Net sales for the three and six months ended June 30, 2024 improved over the comparable prior year periods principally due to an increase in shipments of air handling systems attributable to higher order intake as a result in the segment’s expansion of its sales distribution network throughout 2023 and the additional manufacturing facility opened in the third quarter of 2023. Net sales of heat exchange coils for the three and six months ended June 30, 2024 improved when compared to net sales for the three and six months ended June 30, 2023 primarily as a result of higher net sales to original equipment manufacturers and fossil utility customers. Net sales of centrifugal pumps for the six months ended June 30, 2024 exceed the comparable prior year period due to a higher volume of shipments to commercial customers but declined for the second quarter of 2024 when compared to the second quarter of 2023 as a result of timing of shipments.

Current wording

Net sales for the three and nine months ended September 30, 2024 improved over the comparable prior year periods. Net sales of air handling units for the third quarter of 2024 were slightly less than net sales for the comparable prior year period primarily due to timing of shipments and associated revenue recognition. Net sales of air handling systems for the nine months ended September 30, 2024 exceeded the comparable prior year period due to higher order intake as a result of the segment’s expansion of its sales distribution network throughout 2023 and the additional manufacturing facility opened in the third quarter of 2023. Net sales of heat exchange coils for the three and nine months ended September 30, 2024 improved when compared to net sales for the three and nine months ended September 30, 2023 primarily as a result of higher net sales to original equipment manufacturers and power generation customers. Net sales of centrifugal pumps for the three and nine months ended September 30, 2024 exceeded the comparable prior year periods principally due to a higher volume of shipments to commercial customers.

Previous wording

Changes in exchange rates between the periods reduced income from operations slightly for the current year periods when compared to the same periods of the prior year.

Current wording

Operating income decreased for each of the current year periods, when compared to the same periods of the prior year, principally due to:

Previous wording

Higher selling and administrative costs of approximately $500 and $1,000 for the three and six months ended June 30, 2024 primarily as a result of higher commissions and employee-related costs including costs associated with expansion of the segment’s sales distribution network; and

Current wording

Higher selling and administrative costs of approximately $300 and $1,300 for the three and nine months ended September 30, 2024, respectively, primarily as a result of higher commissions associated primarily with the increase in sales and employee-related costs including costs associated with expansion of the segment’s sales distribution network;

Previous wording

Higher lease costs associated with the additional manufacturing facility of approximately $100 for the six months ended June 30, 3024.

Current wording

Higher depreciation costs of approximately $100 for the three and nine months ended September 30, 2024 associated with the capital investment at the additional manufacturing facility; offset by

Previous wording

Higher volume of shipments, net of changes in product mix and manufacturing costs, which increased operating income by approximately $700 and $300 for the three and six months ended June 30, 2024; offset by

Current wording

Higher volume of shipments, net of changes in product mix and manufacturing costs, which increased operating income by approximately $300 and $600 for the three and nine months ended September 30, 2024; respectively.

Previous wording

Backlog at June 30, 2024 decreased from December 31, 2023 by $2,384. Backlog for air handling units decreased approximately $7,800 from December 31, 2023 due to the strong sales and lower order activity as a result of the manufacturing facilities being at capacity for the balance of 2024. Backlog for centrifugal pumps improved from December 31, 2023 by approximately $5,900 and backlog for heat exchangers was modestly lower versus December 31, 2023. At June 30, 2024, approximately 53% of backlog is expected to ship after 2024.

Current wording

Backlog at September 30, 2024 and December 31, 2023 was comparable. Backlog for centrifugal pumps improved from year-end 2023 by approximately $4,600 due to improved order intake while backlog for air handling units decreased from year-end 2023 by approximately $4,600 due to the strong sales and lower order activity as a result of the manufacturing facilities being at capacity. Backlog for heat exchangers at September 30, 2024 was modestly higher versus December 31, 2023. At September 30, 2024, approximately 77% of backlog is expected to ship after 2024.

Previous wording

The Corporation presents non-GAAP adjusted income from operations which is calculated as income from operations excluding the Foreign Energy Credit for the three and six months ended June 30, 2023. This non-GAAP financial measure is not based on any standardized methodology prescribed by accounting principles generally accepted in the United States of America (“GAAP”) and may not be comparable to similarly titled measures presented by other companies.

Current wording

The Corporation presents non-GAAP adjusted income from operations which is calculated as income from operations excluding the Asbestos-Related Credit for the three and nine months ended September 30, 2023 and the Foreign Energy Credit for the nine months ended September 30, 2023. This non-GAAP financial measure is not based on any standardized methodology prescribed by accounting principles generally accepted in the United States of America (“GAAP”) and may not be comparable to similarly titled measures presented by other companies.

Previous wording

The Corporation has presented non-GAAP adjusted income from operations because it is a key measure used by the Corporation’s management and Board of Directors to understand and evaluate the Corporation’s operating performance and to develop operational goals for managing its business. This non-GAAP financial measure excludes significant charges or credits that are one-time charges or credits, or unrelated to the Corporation’s ongoing results of operations, or beyond its control. Additionally, a portion of the incentive and compensation arrangements for certain employees is based on the Corporation’s business performance. The Corporation believes this non-GAAP financial measure helps identify underlying trends in its business that otherwise could be masked by the effect of the items it excludes from adjusted income from operations. In particular, the Corporation believes the exclusion of the Foreign Energy Credit can provide a useful measure for period-to-period comparisons of the Corporation’s core business performance. The Corporation also believes this non-GAAP financial measure provides useful information to management, shareholders and investors, and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects and allowing for greater transparency with respect to key financial metrics used by the Corporation’s management in its financial and operational decision-making.

Current wording

The Corporation has presented non-GAAP adjusted income from operations because it is a key measure used by the Corporation’s management and Board of Directors to understand and evaluate the Corporation’s operating performance and to develop operational goals for managing its business. This non-GAAP financial measure excludes significant charges or credits that are one-time charges or credits, or unrelated to the Corporation’s ongoing results of operations, or beyond its control. Additionally, a portion of the incentive and compensation arrangements for certain employees is based on the Corporation’s business performance. The Corporation believes this non-GAAP financial measure helps identify underlying trends in its business that otherwise could be masked by the effect of the items it excludes from adjusted income from operations. In particular, the Corporation believes the exclusion of the Asbestos-Related Credit and the Foreign Energy Credit can provide a useful measure for period-to-period comparisons of the Corporation’s core business performance. The Corporation also believes this non-GAAP financial measure provides useful information to management, shareholders and investors, and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects and allowing for greater transparency with respect to key financial metrics used by the Corporation’s management in its financial and operational decision-making.

Previous wording

Adjusted income from operations is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are limitations related to the use of adjusted income from operations rather than income from operations, which is the nearest GAAP equivalent. Among other things, there can be no assurance that additional benefits similar to the Foreign Energy Credit will not occur in future periods.

Current wording

Adjusted income from operations is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are limitations related to the use of adjusted income from operations rather than income from operations, which is the nearest GAAP equivalent. Among other things, there can be no assurance that additional benefits similar to the Asbestos-Related Credit and the Foreign Energy Credit will not occur in future periods.

Previous wording

The adjustment reflected in adjusted income from operations is pre-tax. The tax impact associated with the adjustment is not significant due to the Corporation having a valuation allowance recorded against the deferred income tax assets for the jurisdiction where the income is recognized.

Current wording

The adjustments reflected in adjusted income from operations are pre-tax. The tax impact associated with these adjustments is not significant due to the Corporation having a valuation allowance recorded against the deferred income tax assets for the jurisdictions where the income is recognized.

Previous wording

The following is a reconciliation of income from operations to non-GAAP adjusted income from operations for the three and six months ended June 30, 2024 and 2023, respectively:

Current wording

The following is a reconciliation of income from operations to non-GAAP adjusted income from operations for the three and nine months ended September 30, 2024 and 2023, respectively:

Previous wording

Net cash flows used in operating activities equaled $(780) and $(7,105) for the six months ended June 30, 2024 and 2023, respectively. The change in net cash flows from operating activities for the six months ended June 30, 2024 when compared to the six months ended June 30, 2023 primarily is due to a lower investment in trade working capital. In addition, net cash flows used in operating activities includes:

Current wording

Net cash flows provided by (used in) operating activities equaled $10,576 and $(10,327) for the nine months ended September 30, 2024 and 2023, respectively. The change in net cash flows provided by operating activities for the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023 primarily is due to a lower investment in trade working capital. In addition, net cash flows provided by (used in) operating activities includes: