Triumph (TGI) - 2022 Q2 - Quarterly Report

Part I. Financial Information This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Triumph Group, Inc Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Triumph Group, Inc., including balance sheets, statements of operations, comprehensive loss, stockholders' deficit, and cash flows, along with detailed notes explaining significant accounting policies, divestitures, revenue recognition, debt, and segment information for the periods ended September 30, 2021 and 2020 Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' deficit at specific reporting dates | Metric | September 30, 2021 (in thousands) | March 31, 2021 (in thousands) | | :--------------------------------- | :-------------------------------- | :------------------------------ | | Cash and cash equivalents | $194,122 | $589,882 | | Total current assets | $968,380 | $1,554,434 | | Total assets | $1,800,717 | $2,450,935 | | Total current liabilities | $549,010 | $718,367 | | Long-term debt, less current portion | $1,606,052 | $1,952,296 | | Total stockholders' deficit | $(828,869) | $(818,853) | - Cash and cash equivalents decreased significantly from $589.9 million at March 31, 2021, to $194.1 million at September 30, 2021[8] - Total assets decreased from $2.45 billion to $1.80 billion, while total stockholders' deficit increased from $(818.9) million to $(828.9) million[8] Condensed Consolidated Statements of Operations This section presents the company's revenues, expenses, and net loss over specific reporting periods, highlighting operational performance | Metric (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net sales | $357,396 | $481,815 | $754,042 | $976,892 | | Operating income (loss) | $16,451 | $7,422 | $37,283 | $(244,970) | | Net loss | $(9,070) | $(33,489) | $(39,421) | $(309,275) | | Loss per share—basic | $(0.14) | $(0.64) | $(0.61) | $(5.95) | - Net sales decreased significantly year-over-year for both the three-month and six-month periods, with a 25.8% decrease for the quarter and a 22.8% decrease for the six months[10] - Operating income improved substantially, turning from a loss of $(244.97) million in the six months ended September 30, 2020, to an income of $37.28 million in the same period of 2021[10] Condensed Consolidated Statements of Comprehensive Loss This section details the total comprehensive loss, including net loss and other comprehensive income or loss components | Metric (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net loss | $(9,070) | $(33,489) | $(39,421) | $(309,275) | | Total other comprehensive income | $4,315 | $13,778 | $26,987 | $21,062 | | Total comprehensive loss | $(4,755) | $(19,711) | $(12,434) | $(288,213) | - Total comprehensive loss significantly decreased from $(288.2) million in the six months ended September 30, 2020, to $(12.4) million in the same period of 2021, driven by a reduction in net loss[13] Condensed Consolidated Statements of Stockholders' Deficit This section outlines changes in the stockholders' deficit, reflecting net losses, comprehensive income, and other equity adjustments | Metric (in thousands) | March 31, 2021 | September 30, 2021 | | :-------------------- | :------------- | :----------------- | | Total Stockholders' Deficit | $(818,853) | $(828,869) | | Accumulated Deficit | $(1,254,391) | $(1,293,812) | | Capital in Excess of Par Value | $978,272 | $968,090 | - The total stockholders' deficit increased from $(818.9) million at March 31, 2021, to $(828.9) million at September 30, 2021, primarily due to net losses[15] - Accumulated other comprehensive loss improved from $(530.2) million to $(503.2) million, partially offsetting the increase in accumulated deficit[15] Condensed Consolidated Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric (in thousands) | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :---------------------------- | :---------------------------- | | Net cash used in operating activities | $(185,526) | $(239,723) | | Net cash provided by (used in) investing activities | $154,490 | $(11,283) | | Net cash (used in) provided by financing activities | $(364,120) | $203,220 | | Net change in cash and cash equivalents | $(395,760) | $(45,252) | | Cash and cash equivalents at end of period | $194,122 | $440,211 | - Net cash used in operating activities improved by $54.2 million, from $(239.7) million in 2020 to $(185.5) million in 2021[20] - Investing activities shifted from a net cash outflow of $(11.3) million in 2020 to a net cash inflow of $154.5 million in 2021, primarily due to proceeds from asset sales[20] - Financing activities saw a significant shift from a net cash inflow of $203.2 million in 2020 to a net cash outflow of $(364.1) million in 2021, largely due to debt redemptions[20] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements 1. Background and Basis of Presentation This note describes the company's business operations and the foundational principles used in preparing the financial statements - Triumph Group, Inc. designs, engineers, manufactures, and sells products for global aerospace OEMs and provides repair and overhaul services for commercial, air cargo, and military customers[23] - The Company operates through two reportable segments: Systems & Support and Aerospace Structures[23] 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods applied in the preparation of the financial statements - Revenue is primarily from long-term contracts for design, development, manufacturing, and support services, recognized over time using the cost-to-cost input method[28][36][38] - Cumulative catch-up adjustments from changes in contract estimates increased net sales by $3.07 million and $6.38 million for the three and six months ended September 30, 2021, respectively, positively impacting net loss[40][41] Trade Accounts Receivable Concentration | Customer | September 30, 2021 | March 31, 2021 | | :------- | :----------------- | :------------- | | Boeing | 15% | 23% | | Qarbon Aerospace Inc. | 12% | 0% | Sales to Boeing | Period | Sales to Boeing (in thousands) | % of Net Sales | | :----- | :----------------------------- | :------------- | | Six months ended Sep 30, 2021 | $273,426 | 36% | | Six months ended Sep 30, 2020 | $361,770 | 37% | 3. Divested Operations and Assets Held for Sale This note details the company's divestiture activities and assets classified as held for sale, including their financial impact - In May 2021, the Company completed the sale of its composites manufacturing operations in Georgia and Thailand, and large structure manufacturing operations in Red Oak, Texas, for approximately $155 million net proceeds, recognizing an additional loss of $6 million[54][55] - The Company is in the process of exiting its Spokane, Washington, composites manufacturing operations, with asset sales totaling approximately $11 million, of which $6 million has been received[56] - In August 2021, the Board committed to sell and license certain legacy product lines of its Staverton, UK operations, which closed in October 2021 for approximately $34 million net proceeds[57] 4. Revenue Recognition and Contracts with Customers This note provides a detailed breakdown of revenue recognition policies and contract balances with customers Disaggregated Net Sales by Satisfaction Method (in thousands) | Segment | Period | Satisfied over time | Satisfied at a point in time | Total Revenue | | :-------- | :----- | :------------------ | :--------------------------- | :------------ | | Systems & Support | 3M Sep 2021 | $114,683 | $132,582 | $248,758 | | Systems & Support | 3M Sep 2020 | $102,807 | $147,286 | $253,637 | | Aerospace Structures | 3M Sep 2021 | $97,633 | $11,005 | $108,638 | | Aerospace Structures | 3M Sep 2020 | $204,180 | $10,379 | $228,178 | | Total | 3M Sep 2021 | $212,316 | $143,587 | $357,396 | | Total | 3M Sep 2020 | $306,987 | $157,665 | $481,815 | Disaggregated Net Sales by End Market (in thousands) | Segment | Period | Commercial aerospace | Military | Business jets | Regional | Non-aviation | Total Revenue | | :-------- | :----- | :------------------- | :------- | :------------ | :------- | :----------- | :------------ | | Systems & Support | 3M Sep 2021 | $93,129 | $126,521 | $10,521 | $5,315 | $11,779 | $248,758 | | Systems & Support | 3M Sep 2020 | $95,393 | $131,120 | $8,708 | $7,112 | $7,760 | $253,637 | | Aerospace Structures | 3M Sep 2021 | $99,868 | $1,210 | $6,297 | $1,263 | $0 | $108,638 | | Aerospace Structures | 3M Sep 2020 | $121,550 | $35,438 | $54,150 | $3,414 | $7 | $228,178 | | Total | 3M Sep 2021 | $192,997 | $127,731 | $16,818 | $6,578 | $11,779 | $357,396 | | Total | 3M Sep 2020 | $216,943 | $166,558 | $62,858 | $10,526 | $7,767 | $481,815 | Contract Assets and Liabilities (in thousands) | Metric | September 30, 2021 | March 31, 2021 | Change (in thousands) | | :------------------ | :----------------- | :------------- | :-------------------- | | Contract assets | $158,425 | $139,937 | $18,488 | | Contract liabilities | $(214,729) | $(305,116) | $90,387 | | Net contract liability | $(56,304) | $(165,179) | $108,875 | - Unsatisfied performance obligations totaled $1.91 billion as of September 30, 2021, with $1.06 billion expected to be recognized within one year[72] 5. Inventories This note details the composition and valuation of the company's inventory, including raw materials, work-in-process, and finished goods | Inventory Component (in thousands) | September 30, 2021 | March 31, 2021 | | :--------------------------------- | :----------------- | :------------- | | Raw materials | $49,802 | $45,211 | | Work-in-process | $298,251 | $277,729 | | Finished goods | $10,822 | $51,221 | | Rotable assets | $29,031 | $26,205 | | Total inventories | $387,906 | $400,366 | - Total inventories decreased from $400.4 million at March 31, 2021, to $387.9 million at September 30, 2021, primarily due to a reduction in finished goods[74] 6. Long-Term Debt This note provides a breakdown of the company's long-term debt obligations, including various notes and finance leases | Debt Type (in thousands) | September 30, 2021 | March 31, 2021 | | :----------------------- | :----------------- | :------------- | | Finance leases | $15,728 | $20,125 | | Senior secured first lien notes due 2024 | $587,489 | $700,000 | | Senior secured notes due 2024 | $525,000 | $525,000 | | Senior notes due 2022 | $0 | $236,471 | | Senior notes due 2025 | $500,000 | $500,000 | | Total long-term debt (net of current portion) | $1,606,052 | $1,952,296 | - Total long-term debt decreased from $1.95 billion at March 31, 2021, to $1.61 billion at September 30, 2021, primarily due to the redemption of the 2022 Notes and a portion of the First Lien Notes[75][87][85] - The Company's receivables securitization facility had $0 borrowings and $24.77 million in outstanding letters of credit as of September 30, 2021, with a maximum available amount of $75 million[78][79] - Interest paid on indebtedness for the six months ended September 30, 2021, was $82.57 million, including a $7.49 million redemption premium on the First Lien Notes[91] 7. Earnings Per Share This note presents the calculation of basic and diluted earnings per share, reflecting changes in weighted average common shares outstanding | Metric (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Weighted average common shares outstanding – basic | 64,545 | 52,011 | 64,427 | 51,941 | | Weighted average common shares outstanding – diluted | 64,545 | 52,011 | 64,427 | 51,941 | - Weighted average common shares outstanding (basic and diluted) increased significantly from approximately 52 million shares in 2020 to 64.5 million shares in 2021 for both the three and six-month periods[92] 8. Income Taxes This note details the company's income tax expense, effective tax rates, and deferred tax assets and liabilities | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Effective income tax rate | (24.5)% | (2.5)% | (8.2)% | (0.5)% | - The effective income tax rate for the three and six months ended September 30, 2021, was negative, reflecting a limitation on the recognition of tax benefits due to a full valuation allowance against net deferred tax assets[96][99] - Total unrecognized tax benefits were $11.68 million as of September 30, 2021, with no anticipated reduction in the next 12 months[95] 9. Pension and Other Postretirement Benefit Plans This note provides information on the company's pension and other postretirement benefit plans, including net periodic benefit income and related charges Net Periodic Benefit Income (Pension Benefits, in thousands) | Component | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Service cost | $186 | $383 | $378 | $760 | | Interest cost | $11,698 | $16,100 | $23,521 | $32,186 | | Expected return on plan assets | $(33,377) | $(34,136) | $(66,832) | $(68,241) | | Amortization of net loss | $9,614 | $7,807 | $19,198 | $15,605 | | Curtailment loss | $0 | $0 | $16,024 | $0 | | Settlement loss | $3,826 | $0 | $3,826 | $0 | | Net periodic benefit income | $(7,885) | $(9,603) | $(3,621) | $(19,205) | - The Company recognized a one-time pension curtailment charge of $16.02 million and a settlement loss of $3.83 million for the six months ended September 30, 2021, related to divestitures and pension obligation settlements[107] 10. Stockholders' Deficit This note details the components of stockholders' deficit, including accumulated other comprehensive loss and its changes Changes in Accumulated Other Comprehensive Loss (AOCI, in thousands) | Component | June 30, 2021 | September 30, 2021 | | :-------------------------- | :------------ | :----------------- | | Currency Translation Adjustment | $(39,412) | $(45,104) | | Unrealized Gains and Losses on Derivative Instruments | $309 | $(890) | | Defined Benefit Pension Plans and Other Postretirement Benefits | $(468,417) | $(457,211) | | Total AOCI | $(507,520) | $(503,205) | - AOCI improved from $(507.5) million at June 30, 2021, to $(503.2) million at September 30, 2021, primarily due to positive changes in defined benefit pension plans[108] 11. Segments This note provides financial information disaggregated by the company's two reportable segments: Systems & Support and Aerospace Structures Segment Net Sales to External Customers (in thousands) | Segment | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Systems & Support | $248,758 | $253,637 | $507,163 | $491,652 | | Aerospace Structures | $108,638 | $228,178 | $246,879 | $485,240 | | Total Net Sales | $357,396 | $481,815 | $754,042 | $976,892 | Segment Adjusted EBITDAP (in thousands) | Segment | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Systems & Support | $45,047 | $34,169 | $87,895 | $64,237 | | Aerospace Structures | $7,019 | $(2,961) | $24,389 | $5,423 | | Total Adjusted EBITDAP | $35,563 | $13,104 | $76,581 | $30,709 | - Systems & Support net sales decreased slightly for the quarter but increased for the six-month period, while Aerospace Structures net sales significantly decreased due to divestitures and sunsetting programs[114][116] - Both segments showed improved Adjusted EBITDAP, with Aerospace Structures turning from a loss to a profit for the three-month period[114][116] 12. Commitments and Contingencies This note outlines the company's various legal disputes, lawsuits, and potential liabilities, including pension withdrawal risks - The Company is involved in various disputes and lawsuits, but does not believe any pending matter will have a material effect on its financial position or results of operations[119] - The exit of Spokane, Washington, composites manufacturing operations could trigger a multiemployer pension plan withdrawal liability, the amount of which is uncertain and dependent on market conditions and actuarial assumptions[120] 13. Restructuring This note details the restructuring activities and associated costs incurred by the company during the reporting periods Restructuring Costs (in thousands) | Period | Total Restructuring Costs | | :----- | :------------------------ | | Six months ended Sep 30, 2021 | $8,382 | | Six months ended Sep 30, 2020 | $28,676 | - Restructuring costs decreased significantly from $28.68 million in the six months ended September 30, 2020, to $8.38 million in the same period of 2021[124] - The Company estimates total restructuring costs of approximately $15 million for the fiscal year ended March 31, 2022, primarily for Aerospace Structures facility closures[124] 14. Subsequent Events This note reports significant events that occurred after the balance sheet date but before the financial statements were issued - Subsequent to September 30, 2021, the Company completed the sale and licensing of certain Staverton, UK product lines for approximately $34 million net proceeds[125] - In October 2021, $26 million of the proceeds were used to redeem $24.3 million of First Lien Notes, as required by their terms, leaving $563.2 million outstanding[125] - In November 2021, the Securitization Facility was amended, increasing the purchase limit from $75 million to $100 million and extending the term through November 2024[126] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations, highlighting key business developments, the impact of divestitures, the ongoing effects of the COVID-19 pandemic, and performance across its two reportable segments. It also includes a reconciliation of non-GAAP financial measures Overview This section provides a high-level summary of the company's business, recent strategic actions, and key financial highlights - Triumph Group is a major aerospace industry supplier with two segments: Systems & Support (integrated solutions, proprietary components, MRO) and Aerospace Structures (large metallic and composite structures, interior systems)[128] - Divestitures of composites and large structure manufacturing operations in May 2021 resulted in a $6.0 million additional loss, following a $102.5 million loss in fiscal 2021[130] Summary of Significant Financial Results (Three Months Ended September 30) | Metric | 2021 (in millions) | 2020 (in millions) | | :-------------------- | :----------------- | :----------------- | | Net sales | $357.4 | $481.8 | | Operating income | $16.5 | $7.4 | | Net loss | $(9.1) | $(33.5) | | Loss per common share | $(0.14) | $(0.64) | | Cash used in operating activities (Six Months) | $(185.5) | $(239.7) | - Backlog as of September 30, 2021, was $1.94 billion, with approximately $865.6 million expected to be shipped beyond September 30, 2022[133] - The Company is implementing the Biden Administration's Executive Order 14042, requiring full vaccination for U.S. employees on covered government contracts, with potential workforce attrition risks[136] - Boeing 787 production rates were temporarily reduced to two per month due to rework requirements, impacting revenue (6% of FY21 revenue); the 767 program accounts for 24% of the current backlog[138][139] Results of Operations This section analyzes the company's financial performance, including net sales, operating income, and net loss, across different periods and segments Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDAP, used to assess operational performance - The Company uses Adjusted EBITDA (net loss before interest, income taxes, amortization of acquired contract liabilities, legal settlements, loss on divestitures, depreciation and amortization) and Adjusted EBITDAP (Adjusted EBITDA before pension expense or benefit) as non-GAAP measures to evaluate operating performance[143] Adjusted EBITDA and Adjusted EBITDAP Reconciliation (in thousands) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net loss (U.S. GAAP) | $(9,070) | $(33,489) | $(39,421) | $(309,275) | | Adjusted EBITDA | $49,980 | $25,531 | $105,354 | $55,552 | | Adjusted EBITDAP | $35,563 | $13,104 | $76,581 | $30,709 | - Adjusted EBITDAP significantly increased by 171.4% for the three months and 149.4% for the six months ended September 30, 2021, compared to the prior year periods[150] Three months ended September 30, 2021, compared with three months ended September 30, 2020 This section analyzes the company's consolidated and segment financial performance for the three-month period ended September 30, 2021, compared to the prior year Consolidated Financial Performance (Three Months Ended September 30, in thousands) | Metric | 2021 | 2020 | | :-------------------- | :----- | :----- | | Net sales | $357,396 | $481,815 | | Total operating income | $16,451 | $7,422 | | Net loss | $(9,070) | $(33,489) | - Net sales decreased by $124.4 million (25.8%) due to divestitures ($83.6 million), sunsetting programs ($34.2 million), and decreased 787 volume, partially offset by increased repair & overhaul services[153] - Gross margin improved from 21.6% to 25.7%, primarily due to a $13.9 million reduction in acquired contract reserves[154] - Operating income increased by $9.0 million (121.7%), driven by improved margins, decreased depreciation, rent, R&D, and IT costs, despite a $6.9 million increase in loss on sale of assets[157][158] - Net loss decreased from $(33.5) million to $(9.1) million, reflecting improved operating performance[152] Segment Net Sales and Operating Income (Three Months Ended September 30, in thousands) | Segment | Net Sales 2021 | Net Sales 2020 | Operating Income 2021 | Operating Income 2020 | | :-------------------- | :------------- | :------------- | :-------------------- | :-------------------- | | Systems & Support | $248,781 | $254,171 | $38,100 | $29,592 | | Aerospace Structures | $108,643 | $228,778 | $3,605 | $(2,512) | - Systems & Support net sales decreased by 2.1%, but operating income increased by 28.8% due to reduced acquired contract reserves and increased gross margin (32.2% vs 26.4%)[166][167][169][170][171] - Aerospace Structures net sales decreased by 52.5% due to divestitures and sunsetting programs, but operating income turned positive from $(2.5) million to $3.6 million, driven by decreased expenses[166][167][173][175] Six months ended September 30, 2021, compared with six months ended September 30, 2020 This section analyzes the company's consolidated and segment financial performance for the six-month period ended September 30, 2021, compared to the prior year Consolidated Financial Performance (Six Months Ended September 30, in thousands) | Metric | 2021 | 2020 | | :-------------------- | :----- | :----- | | Net sales | $754,042 | $976,892 | | Total operating income (loss) | $37,283 | $(244,970) | | Net loss | $(39,421) | $(309,275) | - Net sales decreased by $222.85 million (22.8%) due to divestitures ($175.5 million) and sunsetting programs ($76.1 million), partially offset by organic growth in repair & overhaul services[180] - Gross margin improved from 23.0% to 25.9%, primarily due to a $19.2 million reduction in acquired contract reserves[181] - Operating income significantly improved from a loss of $(244.97) million to an income of $37.28 million, largely due to the absence of $252.4 million in long-lived asset impairment charges from the prior year[183] - Net loss decreased substantially from $(309.28) million to $(39.42) million[179] Segment Net Sales and Operating Income (Six Months Ended September 30, in thousands) | Segment | Net Sales 2021 | Net Sales 2020 | Operating Income 2021 | Operating Income 2020 | | :-------------------- | :------------- | :------------- | :-------------------- | :-------------------- | | Systems & Support | $507,194 | $494,058 | $73,646 | $55,023 | | Aerospace Structures | $246,895 | $486,655 | $14,828 | $(258,632) | - Systems & Support net sales increased by 2.7%, and operating income increased by 33.9% due to increased sales, improved margins (30.9% vs 27.5%), and reduced consulting/credit losses[188][189][190][191] - Aerospace Structures net sales decreased by 49.3%, but operating income dramatically improved from a loss of $(258.63) million to a profit of $14.83 million, primarily due to the absence of prior year impairment charges and decreased expenses[188][193][195] Liquidity and Capital Resources This section discusses the company's cash flows, available liquidity, and capital management strategies - Net cash outflow from operating activities improved by $54.2 million, from $(239.7) million in 2020 to $(185.5) million in 2021, despite increased supplier disbursements[197] - Investing activities provided $154.5 million in cash for the six months ended September 30, 2021, a $165.8 million increase from the prior year, driven by $185.6 million from asset sales[199] - Financing activities used $364.1 million in cash, primarily for the redemption of $236.5 million in 2022 Notes and $112.5 million of First Lien Notes (plus a $7.5 million premium)[200][205] - As of September 30, 2021, the Company had $194.1 million in cash and $50.2 million available under its Securitization Facility[200] - The Company deferred approximately $18.0 million in social security tax payments under the CARES Act, with 50% due by December 31, 2021, and the remainder by December 31, 2022[203] - In November 2021, the Securitization Facility was amended to increase the purchase limit to $100 million and extend the term through November 2024[209] Critical Accounting Policies This section highlights accounting policies that require significant judgment and estimates, which could materially impact financial results - No material changes to critical accounting policies or estimates were reported since the fiscal year ended March 31, 2021, Form 10-K filing[213][214] Forward-Looking Statements This section cautions readers that the report contains statements about future events and financial performance, subject to various risks and uncertainties - The report contains forward-looking statements regarding future operations and prospects, subject to uncertainties such as restructuring plans, business integrations, divestitures, economic conditions, and competitive factors in the aviation industry[215] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the Company's Annual Report on Form 10-K for detailed information on market risk, stating that no material changes have occurred during the current reporting period - No material changes in market risk disclosures were reported during the period covered by this report, referring to the Annual Report on Form 10-K for detailed information[216] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of September 30, 2021, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of September 30, 2021[218] - No material changes in internal control over financial reporting occurred during the fiscal quarter[219] Part II. Other Information This section includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, and other relevant information Item 1. Legal Proceedings This section states that there are no applicable legal proceedings to report - Not applicable[220] Item 1A. Risk Factors This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - No material changes in risk factors from those disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2021[221] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states that there are no applicable unregistered sales of equity securities or use of proceeds to report - Not applicable[222] Item 3. Defaults Upon Senior Securities This section states that there are no applicable defaults upon senior securities to report - Not applicable[223] Item 4. Mine Safety Disclosures This section states that there are no applicable mine safety disclosures to report - Not applicable[224] Item 5. Other Information This section states that there is no other information to report - Not applicable[225] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications, subsidiary guarantors, and financial information formatted in iXBRL - Includes certifications by the President and CEO, and Senior Vice President and CFO (Exhibits 31.1, 31.2, 32.1, 32.2)[226] - Financial information from the Quarterly Report is formatted in iXBRL (Exhibit 101 and 104)[226] Signatures This section lists the authorized signatories of the report, confirming its accuracy and completeness - The report was signed on November 8, 2021, by Daniel J. Crowley (President and Chief Executive Officer), James F. McCabe, Jr. (Senior Vice President and Chief Financial Officer), and Thomas A. Quigley, III (Vice President, Investor Relations and Controller)[229]