MOOG INC.

Previous wording

The following should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report filed on Form 10-K for the fiscal year ended September 28, 2024. In addition, the following should be read in conjunction with our Consolidated Financial Statements and Notes to Consolidated Condensed Financial Statements contained herein. All references to years in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are to fiscal years. Amounts may differ due to rounding as dollar and percentage variances are computed based on reported values.

Current wording

The following should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report filed on Form 10-K for the fiscal year ended September 27, 2025. In addition, the following should be read in conjunction with our Consolidated Financial Statements and Notes to Consolidated Financial Statements contained herein. All references to years in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are to fiscal years. Amounts may differ due to rounding as dollar and percentage variances are computed based on reported values.

Previous wording

•Defense market - primary and secondary flight controls and components for military aircraft, turreted weapon systems, tactical and strategic missile steering controls and various defense product components.

Current wording

•Defense market - primary and secondary flight controls and components for military aircraft, tactical and strategic missile steering controls, defense ground vehicle systems including turreted weapon systems and various other defense product components.

Previous wording

•Space market - satellite avionics, positioning controls and components, launcher thrust vector controls and components, as well as integrated space vehicles.

Current wording

•Space market - satellite avionics, propulsion and positioning controls and components, launcher thrust vector controls and components, as well as integrated space vehicles.

Previous wording

•Industrial market - various components and systems used in various applications including heavy industrial machinery used for metal forming and pressing, flight simulation motion control systems, energy exploration and generation products, material and automotive structural and fatigue testing systems, high efficiency pumps used in data center cooling applications, as well as for the electrification of construction vehicles.

Current wording

•Industrial market - various components and systems used in applications including: heavy industrial machinery used for metal forming and pressing, flight simulation motion control systems, energy exploration and generation products, material and automotive structural and fatigue testing systems, as well as liquid cooling pumps used in data centers.

Previous wording

•Medical market - components and pumps for enteral clinical nutrition and infusion therapy, CT scan medical equipment, ultrasonic sensors and surgical handpieces and sleep apnea equipment.

Current wording

•Medical market - pumps and sets for enteral clinical nutrition and infusion therapy, slip rings used in CT scan medical equipment and various components used in ultrasonic sensors and surgical handpieces.

Previous wording

Under ASC 606, 63% of revenue was recognized over time for the three months ended June 28, 2025, using the cost-to-cost method of accounting. The over-time method of revenue recognition is predominantly used in Space and Defense, Military Aircraft and Commercial Aircraft. We use this method for U.S. Government contracts and repair and overhaul arrangements as we are creating or enhancing assets that the customer controls. In addition, many of our large commercial contracts qualify for over-time accounting as our performance does not create an asset with an alternative use and we have an enforceable right to payment for performance completed to date.

Current wording

Under ASC 606, 66% of revenue was recognized over time for the three months ended January 3, 2026, using the cost-to-cost method of accounting. The over-time method of revenue recognition is predominantly used in Space and Defense, Military Aircraft and Commercial Aircraft. We use this method for U.S. Government contracts and repair and overhaul arrangements as we are creating or enhancing assets that the customer controls. In addition, many of our large commercial contracts qualify for over-time accounting as our performance does not create an asset with an alternative use and we have an enforceable right to payment for performance completed to date.

Previous wording

For the three months ended June 28, 2025, 37% of revenue was recognized at the point in time control transferred to the customer. This method of revenue recognition is used most frequently in Industrial. We use this method for commercial contracts in which the asset being createdhas an alternative use. We determine the point in time control transfers to the customer by weighing the five indicators provided by ASC 606. When control has transferred to the customer, profit is generated as cost of sales is recorded and as revenue is recognized.

Current wording

For the three months ended January 3, 2026, 34% of revenue was recognized at the point in time control transferred to the customer. This method of revenue recognition is used most frequently in Industrial. We use this method for commercial contracts in which the asset being createdhas an alternative use. We determine the point in time control transfers to the customer by weighing the five indicators provided by ASC 606. When control has transferred to the customer, profit is generated as cost of sales is recorded and as revenue is recognized.

Previous wording

Our products and technologies affect the lives of millions of people around the world. Our solutions are critical to preserving national security, ensuring safe air transportation, reducing factory emissions and enhancing patient's lives all while driving innovation. Our engineers collaboratively design and manufacture the most advanced motion control products, to the highest quality standards, for use in demanding applications. By capitalizing on these core foundational strengths, we believe we have achieved a leadership position in the high performance precision controls market and are "Shaping the way our world moves™."

Current wording

safe air transportation, reduce industrial factory emissions and enhance patients' lives, while driving innovation. Moog engineers collaboratively design and manufacture the most advanced motion control products, to the highest quality standards, for use in demanding applications. By building on these core foundational capabilities, we believe we have achieved a leadership position in the high-performance, precision controls market, and are "Shaping the way our world moves™".

Previous wording

Our fundamental long-term strategies that will help us achieve our financial objectives center around pricing and simplification initiatives. Our pricing initiatives focus on receiving recognition for the value we deliver to our customers across all of our markets. Our simplification initiatives center around 80/20 methodologies and include:

Current wording

Our long-term strategies to achieve our financial objectives focus on pricing and simplification initiatives. Our pricing strategy seeks recognition for the value we deliver to our customers across our markets. Our simplification initiatives, guided by 80/20 principles, include:

Previous wording

•shaping our product and business portfolio to invest in growth areas and to divest those that no longer fit,

Current wording

•shaping our product and business portfolio to invest in growth areas and to divest non-core assets,

Previous wording

•rationalizing our footprint to align with current and future business levels,

Current wording

•rationalizing our global footprint to meet current and future business volumes,

Previous wording

•investing in automation and technologies to improve business operations.

Current wording

•investing in automation and technologies to improve operational efficiency.

Previous wording

We focus on improving shareholder value through strategic revenue growth, both organic and acquired, improving operating efficiencies and utilizing low cost manufacturing facilities without compromising quality. Over time, we strive to have a balanced approach to capital allocation in order to maximize shareholder returns. Investing for organic growth through increased capital expenditures is a key element of our capital allocation strategy. Also, we have repurchased shares opportunistically, acquired businesses and remain committed to our dividend policy.

Current wording

We aim to improve shareholder value through strategic revenue growth, both organic and acquired, manufacturing

Previous wording

Acquisitions, Divestitures an Assets Held for Sale

Current wording

Acquisitions and Assets Held for Sale

Previous wording

See Note 3 - Assets, Divestitures and Assets Held for Sale in the Consolidated Financial Statements included in Item 1, Financial Statements of this report for details.

Current wording

See Note 3 - Acquisitions and Assets Held for Sale in the Consolidated Financial Statements included in Item 1, Financial Statements of this report for details.

Previous wording

On a regular basis, we evaluate the critical accounting policies used to prepare our consolidated financial statements, including revenue recognition on long-term contracts, contract reserves, reserves for inventory valuation, reviews for impairment of goodwill, reviews for impairment of long-lived assets, pension assumptions and income taxes.

Current wording

On a regular basis, we evaluate the critical accounting policies used to prepare our consolidated financial statements, including revenue recognition on long-term contracts, contract reserves, reserves for inventory valuation and income taxes.

Previous wording

See Note 1 - Basis of Presentation in the Consolidated Condensed Financial Statements included in Item 1, Financial Statements of this report for further information regarding Financial Accounting Standards Board issued ASUs.

Current wording

See Note 1 - Basis of Presentation in the Consolidated Financial Statements included in Item 1, Financial Statements of this report for further information regarding Financial Accounting Standards Board issued ASUs.

Previous wording

Asset impairment and restructuring changes in the third quarter and the first three quarters of 2025 included an impairment in Industrial, charges for various simplification activities, primarily within Industrial, and charges associated with the termination of a product development effort in Military Aircraft. Asset impairment and restructuring changes in the third quarter and the first three quarters of 2024 included charges related to simplification initiatives, primarily in Industrial and Military Aircraft, and an impairment in Military Aircraft.

Current wording

In the first quarter of 2026 and the first quarter of 2025, restructuring charges included charges for various simplification activities, primarily within Industrial and Space and Defense.

Previous wording

The twelve-month backlog increased in the third quarter of 2025 compared with the third quarter of 2024. Within Space and Defense, we had higher orders across the entire portfolio of the business, reflecting strong business capture and broad-based growth in both Space and Defense. The twelve-month backlog in Military Aircraft increased due to the timing of orders across legacy and new OEM programs. The twelve-month backlog in Industrial increased due to changes in foreign currency exchange rates, partially offset by divestitures. Commercial Aircraft twelve-month backlog decreased in the third quarter of 2025. The timing of commercial OEM orders decreased backlog, partially offset by orders associated with increased amounts of long-term contracts in commercial aftermarket.

Current wording

The twelve-month backlog at January 3, 2026 increased as compared with the twelve-month backlog at December 28, 2024. The twelve-month backlog in Military Aircraft increased due to higher orders for new and current aircraft. Within Space and Defense, we had higher orders across the entire portfolio of the business, reflecting strong business capture and broad-based growth in both space and defense markets. Within Commercial Aircraft, we had higher orders for narrowbody and widebody OEM programs. The twelve-month backlog in Industrial increased primarily due to higher demand for liquid cooling pumps used in data centers.

Previous wording

Operating profit, as presented below, is net sales less cost of sales and other operating expenses, excluding interest expense, equity-based compensation expense, non-service pension expense and other corporate expenses. Cost of sales and other operating expenses are directly identifiable to the respective segment or allocated on the basis of sales, headcount or profit. Operating profit is reconciled to earnings before income taxes in Note 20 - Segments in the Notes to Consolidated Condensed Financial Statements included in this report.

Current wording

Operating profit, as presented below, is net sales less cost of sales and other operating expenses, excluding interest expense, equity-based compensation expense, non-service pension expense and other corporate expenses. Cost of sales and other operating expenses are directly identifiable to the respective segment or allocated on the basis of sales, headcount or profit. Operating profit is reconciled to earnings before income taxes in Note 18 - Segments in the Notes to Consolidated Financial Statements included in this report.

Previous wording

Space and Defense net sales increased in the third quarter and in the first three quarters of 2025 compared to the third quarter and first three quarters of 2024, reflecting broad-based defense demand. Higher demand for components for satellites and missiles was partially offset by timing of activity on spacecraft vehicles and turrets.

Current wording

Space and Defense net sales increased in the first quarter of 2026 compared to the first quarter of 2025, reflecting broad-based defense demand. Demand was particularly strong for missile controls and satellite components.

Previous wording

Net cash used by investing activities in the first three quarters of 2024 included $110 million of capital expenditures and $6 million associated with the acquisition of DCL.

Current wording

Net cash used by investing activities in the first quarter of 2026 included capital expenditures of $34 million.

Previous wording

Net cash used by investing activities in the first three quarters of 2025 included $103 million of capital expenditures for investments in organic growth, which was partially offset by $13 million of proceeds from the sales of businesses.

Current wording

Net cash used by investing activities in the first quarter of 2025 included $33 million of capital expenditures, which were partially offset by $13 million of proceeds from the sales of businesses.

Previous wording

Net cash provided by financing activities in the first three quarters of 2025 included $206 million of net borrowings on our credit facilities. Financing activities included a use of cash of $100 million for shares under the repurchase program authorized by the Board of Directors, which is a component of the purchase of outstanding shares for treasury, and $27 million of cash dividends.

Current wording

Net cash provided by financing activities in the first quarter of 2026 included $111 million of net borrowings on our credit facilities, which were partially offset by dividend payments of $9 million.

Previous wording

Net cash provided by financing activities in the first three quarters of 2024 included $94 million of net borrowings on our credit facilities. Financing activities included a use of cash of $27 million of cash dividends.

Current wording

Net cash provided by financing activities in the first quarter of 2025 included $230 million of net borrowings on our credit facilities. Financing activities also included $39 million for shares under the authorized repurchase program and $9 million of cash dividends.

Previous wording

At June 28, 2025, our cash balances were $59 million, the majority of which is held outside of the U.S. by foreign operations. We regularly assess our cash needs, including repatriation of foreign earnings which may be subject to regulatory approvals and withholding taxes, where applicable by law.

Current wording

At January 3, 2026, our cash balances were $74 million, the majority of which is held outside of the U.S. by foreign operations. We regularly assess our cash needs, including repatriation of foreign earnings which may be subject to regulatory approvals and withholding taxes, where applicable by law.

Previous wording

Our U.S. revolving credit facility, which matures on October 27, 2027, has a capacity of $1.1 billion and also provides an expansion option, which permits us to request an increase of up to $400 million to the credit facility upon satisfaction of certain conditions. The weighted-average interest rate on the outstanding U.S. revolving credit facility borrowings was 5.92% and is based on SOFR plus the applicable margin, which was 1.60% at June 28, 2025. On May 30, 2025, we amended and restated our loan agreement to include a $250 million term loan with installment payments of $3 million in 2026, $9 million in 2027 and the remaining balance on the maturity date of

Current wording

Our U.S. revolving credit facility, which matures on October 27, 2027, has a capacity of $1.1 billion and also provides an expansion option, which permits us to request an increase of up to $400 million to the credit facility upon satisfaction of certain conditions. The weighted-average interest rate on the outstanding U.S. revolving credit facility borrowings was 5.08% and is based on SOFR plus the applicable margin, which was 1.35% at January 3, 2026. Our loan agreement includes a $250 million term loan with installment payments of $3 million in 2026, $9 million in 2027 and the remaining balance on the maturity date of October 27, 2027. Additional principal payments may be required under certain conditions. The proceeds of the term loan were used to pay down the outstanding revolver borrowings of the U.S. revolving credit facility. The interest rate on the term loan borrowings was 5.11% and is based on SOFR plus the applicable margin, which was 1.35% at January 3, 2026.

Previous wording

The SECT has a revolving credit facility with a borrowing capacity of $25 million, maturing on October 26, 2026. Interest was 6.54% as of June 28, 2025 and is based on SOFR plus a margin of 2.23%.

Current wording

The SECT has a revolving credit facility with a borrowing capacity of $25 million, maturing on April 24, 2027. Interest was 5.96% as of January 3, 2026 and is based on SOFR plus a margin of 2.23%.

Previous wording

At June 28, 2025, we had $790 million of unused capacity, including $766 million from the U.S. revolving credit facility after considering standby letters of credit and other limitations.

Current wording

At January 3, 2026, we had $815 million of unused capacity, including $793 million from the U.S. revolving credit facility after considering standby letters of credit and other limitations.

Previous wording

Our Receivables Purchase Agreement, which matures on December 11, 2026, allows the Receivables Subsidiary to sell receivables to the Purchasers in amounts up to a $125 million limit so long as certain conditions are satisfied. The receivables are sold to the Purchasers in consideration for the Purchasers making payments of cash. Each Purchaser’s share of capital accrues yield at a variable rate plus an applicable margin, which totaled 5.38% as of June 28, 2025.

Current wording

Our Receivables Purchase Agreement, which matures on December 11, 2026, allows the Receivables Subsidiary to sell receivables to the Purchasers in amounts up to a $125 million limit so long as certain conditions are satisfied. The receivables are sold to the Purchasers in consideration for the Purchasers making payments of cash. Each Purchaser’s share of capital accrues yield at a variable rate plus an applicable margin, which totaled 4.73% as of January 3, 2026. See Note 21 - Subsequent Events, of Part I, Item 1, Financial Information of this report for additional details on the extension of this agreement.

Previous wording

We are in compliance with all covenants under each of our financing arrangements. See Note 4 - Receivables and Note 10 – Indebtedness, of Part I, Item 1, Financial Information of this report for additional details.

Current wording

We are in compliance with all covenants under each of our financing arrangements. See Note 4 - Receivables and Note 9 – Indebtedness.

Previous wording

We are currently paying quarterly cash dividends on our Class A and Class B common stock and expect to continue to do so for the foreseeable future. See the Consolidated Condensed Statement of Shareholders Equity and Cash Flows, of Part I, Item 1, Financial Information, of this report for additional details.

Current wording

We are currently paying quarterly cash dividends on our Class A and Class B common stock and expect to continue to do so for the foreseeable future. See the Consolidated Statement of Shareholders Equity and Cash Flows, of Part I, Item 1, Financial Information, of this report for additional details.

Previous wording

The Board of Directors authorized a share repurchase program that permits repurchases for both Class A and Class B common stock, and allows us to buy up to an aggregate 3 million common shares. There are approximately 1.7 million common shares remaining under this authorization. See the Consolidated Condensed Statement of Shareholders Equity and Cash Flows, of Part I, Item 1, Financial Information and Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, of this report for additional details.

Current wording

The Board of Directors authorized a share repurchase program that permits repurchases for both Class A and Class B common stock, and allows us to buy up to an aggregate 3 million common shares. There are approximately 1.7 million common shares remaining under this authorization. See the Consolidated Statement of Shareholders Equity and Cash Flows, of Part I, Item 1, Financial Information and Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, of this report for additional details.

Previous wording

Our aerospace and defense businesses represented 73% of our 2024 sales. Our defense market, which represented 51% of our 2024 sales, is directly affected by defense funding levels and product demand, which have recently increased. Our commercial aircraft market, which represented 22% of our 2024 sales, is aligning with our customers' current plans. Within our various industrial markets, which collectively represented 27% of our 2024 sales, our customers are affected by a broad range of factors.

Current wording

Our aerospace and defense businesses currently represent 76% of our 2026 sales. Our defense market, which currently represents 52% of our 2026 sales, is directly affected by defense funding levels and product demand, which have recently increased. Our commercial aircraft market, which currently represents 24% of our 2026 sales, aligns with our customers' plans. Within our various industrial markets, which collectively represented 24% of our 2026 sales, our customers are affected by a broad range of factors.

Previous wording

The defense market is dependent on military spending for development and production programs. We have a growing development program order book for future generation aircraft and turret programs, and we strive to embed our technologies within these high-performance military programs of the future, including the Textron Bell MV-75 FLRAA. Aircraft production programs are typically long-term in nature, offering predictable capacity needs and future revenues. We maintain positions on numerous high priority programs, including the Lockheed Martin F-35 Lightning II. The large installed base of our products leads to attractive aftermarket sales and service opportunities. The tactical and strategic missile, missile defense and defense controls markets are dependent on many of the same market conditions as military aircraft, including overall military spending and program funding levels. At times when there are perceived threats to national security, U.S. and European defense spending can increase; at other times, defense spending can decrease. Future levels of defense spending have increased in the near-term given the current global tensions, and are subject to governmental approvals.

Current wording

The defense market is dependent on military spending for development and production programs. We have a growing development program order book for future generation aircraft and turret programs, and we strive to embed our technologies within these high-performance military programs of the future, including the Textron Bell MV-75. Aircraft production programs are typically long-term in nature, offering predictable capacity needs and future revenues. We maintain positions on numerous high priority programs, including the Lockheed Martin F-35 Lightning II. The large installed base of our products leads to attractive aftermarket sales and service opportunities. The tactical and strategic missile, missile defense and defense vehicle controls markets are dependent on many of the same market conditions as military aircraft, including overall military spending and program funding levels. At times when there are perceived threats to national security, U.S. and European defense spending can increase; at other times, defense spending can decrease. Future levels of defense spending have increased in the near-term given the current global tensions, and are subject to governmental approvals.

Previous wording

The commercial OEM aircraft market depends on a number of factors, including both the increasing global demand for air travel and increasing fuel prices. Both factors contributed to the demand for new, more fuel-efficient aircraft with lower operating costs that led to large production backlogs for Boeing and Airbus. Boeing and Airbus are producing widebody aircraft at rates to support their projected demand while working through their current supply-chain constraints. Any adjustments to their production rates affect the timing of the demand for our flight control systems.

Current wording

for air travel and increasing fuel prices. Both factors contributed to the demand for new, more fuel-efficient aircraft with lower operating costs that led to large production backlogs for Boeing and Airbus. Boeing and Airbus are producing widebody aircraft at rates to support their projected demand while working through their current supply-chain constraints. Any adjustments to their production rates affect the timing of the demand for our flight control systems.

Previous wording

The commercial aftermarket is driven by usage and the age of the existing aircraft fleet for passenger and cargo aircraft, which drives the need for maintenance and repairs. We have seen higher demand levels for our maintenance services and spare parts due to the increased number of flight hours across existing fleets.

Current wording

aircraft, which drives the need for maintenance and repairs. We have seen higher demand levels for our maintenance services and spare parts due to the increased number of flight hours across existing fleets.

Previous wording

The space market is comprised of three customer markets: civil, U.S. Department of Defense and commercial space. The civil market, namely NASA, is driven by investment for exploration activities. The U.S. Department of Defense market is driven by government-authorized levels of defense spending, including funding for defense-related satellite and space vehicle technologies. Levels of U.S. defense spending could increase as there is growing emphasis on space as the next frontier of potential future conflicts. The commercial space market is driven by demand for small satellites, which increases the demand for increased launch vehicle capacity. Our launch vehicle and satellite components and systems will continue to benefit from increased investments in each of these markets.

Current wording

The space market is comprised of three customer markets: civil, U.S. defense and commercial space. The civil

Previous wording

Within industrial, we serve two end markets: industrial and medical. The industrial market consists of industrial automation products, simulation and test products and energy generation and exploration products. The medical market consists of medical devices and medical component products.

Current wording

Within industrial, we serve two end markets: industrial and medical. The industrial market consists of industrial

Previous wording

The industrial market we serve with our industrial automation products is influenced by several factors including capital investment levels, the pace of product and technology innovation, economic conditions and cost-reduction efforts. A portion of our industrial automation customers serve the automotive market.

Current wording

The industrial market we serve with our industrial automation products is influenced by several factors including