The impact of divestiture activity decreased net sales by approximately $105 million and $180 million during the three and nine months ended March 31, 2025, respectively. Backlog in the Diversified Industrial segment also decreased, with approximately 95% of the decrease related to the CFC divestiture.

Aerospace Systems segment sales increased in both the current-year quarter and first nine months of fiscal 2025 primarily due to higher volume in the commercial and defense aftermarket. Higher volume in the commercial and defense original equipment manufacturer (OEM) market segments also contributed to the sales increase.

The company divested its composites and fuel containment business (CFC) for $555 million and a non-core filtration business for $66 million. These actions are part of an ongoing strategy to assess and divest businesses that are not considered a good long-term strategic fit.

Business realignment and acquisition integration charges were $11 million and $16 million for the current and prior-year quarter, respectively, and $37 million and $42 million for the first nine months of fiscal 2025 and 2024, respectively. These charges primarily consist of severance costs related to the simplification initiative and plant closures.

The company manages its supply chain through a 'local for local' manufacturing strategy, ongoing supplier management process, and broadened supply base. They actively monitor global trade policies and inflation, managing their impact through cost and pricing measures.

The effective tax rate for the current-year quarter of fiscal 2025 was lower than the U.S. Federal statutory rate of 21 percent due to tax benefits from the release of a foreign valuation allowance, share-based compensation, and foreign-derived intangible income.

The company acknowledges that global economic and political uncertainty, geopolitical risks, and public health crises could impact its business and results of operations. They continue to monitor the global environment and manage the business to minimize unfavorable impacts.

On February 9, 2025, a fire damaged a portion of the Saegertown, Pennsylvania facility, causing a pause in production. While some operations were quickly re-established, full capacity is expected to be restored during the fourth quarter of fiscal 2025.

The Company manages foreign currency transaction and translation risk by utilizing derivative and non-derivative financial instruments, including forward exchange contracts, cross-currency swap contracts and certain foreign currency denominated debt designated as net investment hedges.

Aerospace Systems Segment operating margin increased due to higher sales volume and favorable aftermarket mix, as well as benefits from cost containment initiatives and prior-year acquisition integration activities.

Sales in the Diversified Industrial Segment decreased due to lower demand from end users in the in-plant and industrial equipment, off-highway, transportation and energy markets, partially offset by an increase in end-user demand in the HVAC and refrigeration and aerospace and defense markets.

The company aims to engineer innovative systems and products to provide superior customer value through improved service, efficiency and productivity, which is a key element of their competitive strategy.

The company is driving efficiency by implementing lean enterprise principles. This is part of their overall strategy to mitigate impacts from global trade policies and inflation.

Days sales outstanding relating to trade accounts receivable was 53 days at March 31, 2025, 51 days at June 30, 2024 and 53 days at March 31, 2024. Days supply of inventory on hand was 85 days at March 31, 2025, 80 days at June 30, 2024 and 87 days at March 31, 2024.

Gross profit margin increased due to cost containment, which is a key focus area for the company. This is contributing to improved financial performance.

The Company intends to focus primarily on business opportunities in the areas of aerospace and defense, in-plant and industrial equipment, transportation, off-highway, energy and HVAC and refrigeration. We believe we can meet our strategic objectives by engineering innovative systems and products to provide superior customer value through improved service, efficiency and productivity

Repurchases under the Company's share repurchase program amounted to 1.2 million common shares for $750 million during fiscal 2025, compared to 0.3 million common shares for $149 million during fiscal 2024.

Additionally, we declared a quarterly cash dividend of $1.80 per share on April 24, 2025, payable on June 6, 2025, increasing our annual dividend per share paid to shareholders for 69 consecutive fiscal years.

We are continuing to target two percent of sales for capital expenditures and are prioritizing those related to safety, strategic investments and sustainability initiatives.

We will continue to monitor the global environment and manage our business with the goal to minimize unfavorable impacts on operations and financial results.

The Company acknowledges threats associated with international conflicts and cybersecurity risks and risks associated with protecting our intellectual property.