The accompanying unaudited condensed consolidated financial statements of Triumph Group, Inc. ("Triumph") have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position and cash flows. The results of operations for the three and six months ended September 30, 2020 and 2019, are not necessarily indicative of results that may be expected for the year ending March 31, 2021. The accompanying condensed consolidated financial statements are unaudited and should be read in conjunction with the fiscal 2020 audited consolidated financial statements and notes thereto included in the Company's Form 10-K for the fiscal year ended March 31, 2020, filed with the Securities and Exchange Commission (the "SEC") on May 28, 2020.

Triumph is a Delaware corporation which, through its operating subsidiaries, designs, engineers, manufactures, and sells products for the global aerospace original equipment manufacturers ("OEMs") of aircraft and aircraft components and repairs and overhauls aircraft components and accessories for commercial airline, air cargo carrier and military customers on a worldwide basis. Triumph and its subsidiaries (collectively, the "Company") are organized based on the products and services that they provide. The Company has two reportable segments: Systems & Support and Aerospace Structures.

Systems & Support consists of the Company’s operations that provide integrated solutions, including design; development; and support of proprietary components, subsystems and systems, as well as production of complex assemblies using external designs. Capabilities include hydraulic, mechanical and electromechanical actuation, power and control; a complete suite of aerospace gearbox solutions, including engine accessory gearboxes and helicopter transmissions; active and passive heat exchange technology; fuel pumps, fuel metering units and Full Authority Digital Electronic Control fuel systems; hydromechanical and electromechanical primary and secondary flight controls. Systems & Support also provides full life cycle solutions for commercial, regional and military aircraft. The Company’s extensive product and service offerings include full post-delivery value chain services that simplify the maintenance, repair, and overhaul (“MRO”) supply chain. Through its ground support equipment maintenance, component MRO and post-production supply chain activities, Systems & Support is positioned to provide integrated planeside repair solutions globally. Capabilities include metallic and composite aircraft structures; nacelles; thrust reversers; interiors; auxiliary power units; and a wide variety of pneumatic, hydraulic, fuel and mechanical accessories. Repair services generally involve the replacement and/or remanufacturing of parts, which is similar to the original manufacture of the part. The processes that the Company performs related to repair and overhaul services are essentially the repair of wear parts or replacement of parts that are beyond economic repair. The repair service generally involves remanufacturing a complete part or a component of a part.

Aerospace Structures consists of the Company’s operations that supply commercial, business, regional and military manufacturers with large metallic and composite structures and aircraft interior systems, including air ducting and thermal acoustic insulations systems. Products include wings; wing boxes; fuselage panels; horizontal and vertical tails; subassemblies such as floor grids; and aircraft interior systems, including air ducting and thermal acoustic insulations systems. Aerospace Structures also has the capability to engineer detailed structural designs in metal and composites. Capabilities include advanced composite and interior structures, joining processes such as welding, autoclave bonding, and conventional mechanical fasteners.

The accompanying consolidated financial statements include the accounts of Triumph and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated from the consolidated financial statements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU modifies the measurement of expected credit losses of certain financial instruments. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. The amendments in this ASU should be applied on a modified retrospective basis to all periods presented. The Company adopted ASU 2016-13 effective April 1, 2020, and the impact on our consolidated financial statements of adoption was not significant.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This ASU modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. ASU 2018-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value

measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted ASU 2018-13 effective April 1, 2020, and the adoption did not have a significant impact on its consolidated financial statement disclosures.

In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the annual disclosure requirements for defined benefit pension plans and other postretirement plans. The ASU does not modify interim disclosure requirements. ASU 2018-14 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The amendments in this ASU should be applied on a retrospective basis to all periods presented. As the ASU does not modify interim disclosure requirements, the Company is currently evaluating the effect that ASU 2018-14 will have on its annual consolidated financial statements and related disclosures.

Effective April 1, 2020, the Company changed its method of accounting for the determination of the market-related value of assets (“MRVA”) for a class of assets (fixed income securities) within the qualified U.S. defined benefit plan (the “Plan”) which is used in determining the expected return on asset component of net periodic benefit income. This class of assets is comprised solely of the fixed income securities asset class held in the portfolio for the Plan, which provides a natural hedge (liability-hedging assets) against the changes in the recorded amount of net periodic pension cost. Refer to Note 15 in the Company’s Form 10-K for the fiscal year ended March 31, 2020, for its fair value disclosure by asset classification. The Company’s previous method of accounting was to calculate the MRVA for all the Plan’s assets recognizing investment gains and losses into the MRVA over a five-year period. The Company has changed its method of accounting and elected to use the fair value of our fixed income assets, which represent approximately 44% of the Plan’s assets, to determine the MRVA beginning in the second quarter of fiscal 2021. This change in accounting principle is preferable as it results in an expected return on asset component of net periodic benefit income that more accurately reflects the changes in the fair values of the fixed income securities. No change is being made to the accounting principle for the other classes of pension assets, which represent the remaining 56% of the pension asset portfolio for the Plan. The gains and losses for these other plan assets will continue to be amortized into the MRVA over a five-year period.

The change in accounting principle requires retrospective application and prospective disclosure. The Company applied the change effective April 1, 2020, and recorded a cumulative adjustment to equity as for the earliest period presented. The tables below represent the impact of this change on the condensed consolidated statements of operations (including earnings per share) and the condensed consolidated statements of comprehensive loss for the periods presented below. The change in accounting principle had no impact on the condensed consolidated statements of cash flows for these periods.

The tables below represent the impact of the change in accounting principle on the condensed consolidated statement of operations and the condensed consolidated statements of comprehensive loss for the three and six months ended September 30, 2020.

	Three Months Ended									Six Months Ended
	As Reported (With Change), September 30, 2020			Impact of Change			Without Change, September 30, 2020			As Reported (With Change), September 30, 2020			Impact of Change			Without Change, September 30, 2020
Non-service defined benefit income	$	(12,427	)	$	(1,528	)	$	(13,955	)	$	(24,843	)	$	(3,056	)	$	(27,899	)
Loss before income taxes		(32,657	)		1,528			(31,129	)		(307,590	)		3,056			(304,534	)
Income tax expense		832			-			832			1,685			-			1,685
Net loss	$	(33,489	)	$	1,528		$	(31,961	)	$	(309,275	)	$	3,056		$	(306,219	)

Net Income per share - basic & diluted
Basic	$	(0.64	)	$	0.03		$	(0.61	)	$	(5.95	)	$	0.06		$	(5.90	)
Diluted	$	(0.64	)	$	0.03		$	(0.61	)	$	(5.95	)	$	0.06		$	(5.90	)

Defined benefit pension plans and other postretirement benefits:
Total defined benefit pension plans and other postretirement benefits, net of taxes	$	4,265		$	(1,528	)	$	2,737		$	8,530		$	(3,056	)	$	5,474
Total other comprehensive income	$	13,778		$	(1,528	)	$	12,250		$	21,062		$	(3,056	)	$	18,006
Comprehensive loss	$	(19,711	)	$	-		$	(19,711	)	$	(288,213	)	$	-		$	(288,213	)

The table below represents the impact of the change in accounting principle on the condensed consolidated balance sheet as of September 30, 2020.

	Three Months Ended									Six Months Ended
	As Previously Reported, September 30, 2019			Impact of Change			As Reported, September 30, 2019			As Previously Reported, September 30, 2019			Impact of Change			As Reported, September 30, 2019
Non-service defined benefit income	$	(28,416	)	$	592		$	(27,824	)	$	(43,291	)	$	2,065		$	(41,226	)
Income before income taxes		54,053			(592	)		53,461			76,948			(2,065	)		74,883
Income tax expense		11,352			(125	)		11,227			16,159			(434	)		15,725
Net income	$	42,701		$	(467	)	$	42,234		$	60,789		$	(1,631	)	$	59,158

Net Income per share - basic & diluted
Basic	$	0.85		$	(0.01	)	$	0.84		$	1.22		$	(0.03	)	$	1.18
Diluted	$	0.85		$	(0.01	)	$	0.84		$	1.21		$	(0.03	)	$	1.17

Defined benefit pension plans and other postretirement benefits:
Total defined benefit pension plans and other postretirement benefits, net of taxes	$	(69,319	)	$	467		$	(68,852	)	$	(67,910	)	$	1,631		$	(66,279	)
Total other comprehensive loss	$	(76,624	)	$	467		$	(76,157	)	$	(78,217	)	$	1,631		$	(76,586	)
Comprehensive income	$	(33,923	)	$	-		$	(33,923	)	$	(17,428	)	$	-		$	(17,428	)

The table below represents the impact of the change in accounting principle on the condensed consolidated balance sheet as of March 31, 2020.