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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K

(Mark One)ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 31, 2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                             to


Commission File No. 1-12235

Triumph Group, Inc.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

51-0347963(I.R.S. Employer Identification Number)1550 Liberty Ridge Drive, Suite 100, Wayne, Pennsylvania 19087(Address of principal executive offices, including zip code)Registrant's telephone number, including area code:(610) 251-1000




Securities registered pursuant to Section 12(b) of the Act:Common Stock, par value $.001 per share(Title of each class)

New York Stock Exchange(Name of each exchange on which registered)


Securities registered pursuant to Section 12(g) of the Act:None



Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ý    No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934. Yes o    No ý

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files). Yes o    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Securities Exchange Act of 1934. (Check one)

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of
1934). Yes o    No ý

As of September 30, 2009, the aggregate market value of the shares of Common Stock held by non-affiliates of the Registrant was approximately
$778 million. Such aggregate market value was computed by reference to the closing price of the Common Stock as reported on the New York Stock Exchange on September 30, 2009. For
purposes of making this calculation only, the Registrant has defined affiliates as including all directors and executive officers.

The
number of outstanding shares of the Registrant's Common Stock, par value $.001 per share, on April 30, 2010 was 16,686,373.



Documents Incorporated by Reference

Portions of the following document are incorporated herein by reference:

The
Proxy Statement of Triumph Group, Inc. to be filed in connection with our 2010 Annual Meeting of Stockholders is incorporated in part in Part III hereof, as specified
herein.



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Table of Contents



Item No.



PagePART I

3Item 1.

Business

3General

3Products and Services

4Proprietary Rights

5Raw Materials and Replacement Parts

6Operating Locations

7Sales, Marketing and Engineering

15Backlog

15Dependence on Significant Customer

15United States and International Operations

16Competition

16Government Regulation and Industry Oversight

16Environmental Matters

17Employees

17Research and Development Expenses

18Executive Officers

18Available Information

19Item 1A.

Risk Factors

19Item 1B.

Unresolved Staff Comments

24Item 2.

Properties

24Item 3.

Legal Proceedings

25Item 4.

Submission of Matters to a Vote of Security Holders

26PART II

27Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

27Item 6.

Selected Financial Data

29Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

30Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

49Item 8.

Financial Statements and Supplementary Data

49Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

104Item 9A.

Controls and Procedures

104Item 9B.

Other Information

107PART III

107Item 10.

Directors, Executive Officers and Corporate Governance

107Item 11.

Executive Compensation

107Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

108Item 13.

Certain Relationships and Related Transactions, and Director Independence

108Item 14.

Principal Accountant Fees and Services

108PART IV

108Item 15.

Exhibits, Financial Statement Schedules

108


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PART I

Item 1.    Business

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to
our future operations and prospects, including statements that are based on current projections and expectations about the markets in which we operate, and management's beliefs concerning future
performance and capital requirements based upon current available information. Actual results could differ materially from management's current expectations. Additional capital may be required and, if
so, may not be available on reasonable terms, if at all, at the times and in the amounts we need. In addition to these factors and others described elsewhere in this report, other factors that could
cause actual results to differ materially include competitive and cyclical factors relating to the aerospace industry, dependence of some of our businesses on key customers, requirements of capital,
product liabilities in excess of insurance, uncertainties relating to the integration of acquired businesses, general economic conditions affecting our business segment, technological developments,
limited availability of raw materials or skilled
personnel, changes in governmental regulation and oversight and international hostilities and terrorism. For a more detailed discussion of these and other factors affecting us, see the Risk Factors
described in Item 1A of this Annual Report on Form 10-K. We do not undertake any obligation to revise these forward-looking statements to reflect future events.

General

Triumph Group, Inc. ("Triumph" or the "Company") was incorporated in 1993 in Delaware. Our companies design, engineer,
manufacture, repair, overhaul and distribute aircraft components, such as hydraulic, mechanical and electromechanical control systems, aircraft and engine accessories, structural components and
assemblies, non-structural composite components, thermal acoustic insulation systems, auxiliary power units, or APUs, avionics and aircraft instruments. We serve a broad spectrum of the
aerospace industry, including original equipment manufacturers, or OEMs, of commercial, regional, business and military aircraft and components, as well as commercial airlines and air cargo carriers.

In
March 2010, we acquired Fabritech, Inc. (now Triumph FabricationsSt. Louis). Through the addition of Triumph FabricationsSt. Louis, we
have added high-end maintenance and manufactured solutions focused on aviation drive train, mechanical, hydraulic and electrical hardware items including gearboxes, cargo hooks and
vibration absorbers. Triumph FabricationsSt. Louis also produces fabricated textile items such as seat cushions and sound insulation blankets for military rotary-wing
platforms. The results of Triumph FabricationsSt. Louis are included in the Company's Aftermarket Services Segment from the date of acquisition.

In
March 2010, we entered into definitive agreement to purchase Vought Aircraft Industries, Inc. ("Vought") from TC Group, L.L.C. ("Carlyle") for cash and stock consideration.
Vought is a leading global manufacturer of aerostructures for commercial, military and business jet aircraft. Products include fuselages, wings, empennages, nacelles and helicopter cabins. Vought's
customer base is comprised of the leading global aerospace OEMs and over 80% of their revenue is from sole source, long-term contracts. Vought's revenues for the year ended
December 31, 2009 were $1.9 billion and they employed approximately 5,900 people. Following the closing of this acquisition, Carlyle will own approximately 31% of the outstanding common
stock of Triumph and will be subject to certain lock-up provisions. The transaction is subject to customary closing conditions, including regulatory approvals and approval of Triumph
shareholders, and is expected to be completed in July 2010. The acquired business will operate as Triumph AerostructuresVought Aircraft Division, LLC.

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Products and Services

We offer a variety of products and services to the aerospace industry through two groups of operating businesses: (i) Triumph
Aerospace Systems Group, whose companies design, engineer and manufacture a wide range of proprietary and build-to-print components, assemblies and systems for the global
aerospace OEM market; and (ii) Triumph Aftermarket Services Group, whose companies serve aircraft fleets, notably commercial airlines, the U.S. military and cargo carriers, through the
maintenance, repair and overhaul of aircraft components and accessories manufactured by third parties.

OurAerospace Systems Grouputilizes its capabilities to design, engineer and build complete metallic structural assemblies, as well as
mechanical, electromechanical, hydraulic and hydromechanical control systems, while continuing to broaden the scope of detailed parts and assemblies that we supply to the aerospace market. Customers
typically return such systems to us for repairs and overhauls and spare parts. This group also includes companies performing complex manufacturing, machining and forming processes for a full range of
structural components, as well as complete assemblies and subassemblies. This group services the full spectrum of aerospace customers, which include aerospace OEMs and the top-tier
manufacturers who supply them and airlines, air cargo carriers, and domestic and foreign militaries.

The
products that companies within this group design, engineer, build and repair include:



Our Aftermarket Services Groupperforms maintenance, repair and overhaul services ("MRO") and supplies spare parts of various types of
cockpit instruments, and gauges for the commercial and military aviation industry and primarily services the world's airline and air cargo carrier customers. This group also designs, engineers,
manufactures, repairs and overhauls aftermarket aerospace gas turbines engine components, offers comprehensive MRO solutions, leasing packages, exchange programs and parts and services to airline, air
cargo and third party overhaul facilities. We also continue to develop Federal

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Aviation
Administration, or FAA, approved Designated Engineering Representative, or DER, proprietary repair procedures for the components we repair and overhaul, which range from detailed components
to complex subsystems including APUs, thrust reversers, flight controls, engine accessories and avionics. Some specialties include navigation, flight, and engine monitoring instruments as well as
autopilots, voice and data recorders, smoke detection systems and aircraft lighting. Companies in our aftermarket services group repair and overhaul various components for the aviation industry
including:



Certain
financial information about our two segments can be found in Note 21 of "Notes to Consolidated Financial Statements."

Proprietary Rights

We benefit from our proprietary rights relating to designs, engineering and manufacturing processes and repair and overhaul procedures.
For some products, our unique manufacturing capabilities are required by the customer's specifications or designs, thereby necessitating reliance on us for the production of such specially designed
products.

We
view our name and mark as significant to our business as a whole. Our products are protected by a portfolio of patents, trademarks, licenses or other forms of intellectual property
that expire at various dates in the future. We develop and acquire new intellectual property on an ongoing basis and consider all of our intellectual property to be valuable. However, based on the
broad scope of our product lines, management believes that the loss or expiration of any single intellectual property right would not have a material effect on our results of operations, our financial
position or our business

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segments.
Our policy is to file applications and obtain patents for our new products as appropriate, including product modifications and improvements. While patents generally expire 20 years
after the patent application filing date, new patents are issued to us on a regular basis.

In
our overhaul and repair businesses, OEMs of equipment that we maintain for our customers increasingly include language in repair manuals that relate to their equipment
asserting broad claims of proprietary rights to the contents of the manuals used in our operations. There can be no assurance that OEMs will not try to enforce such claims including the
possible use of legal proceedings. In the event of such legal proceedings, there can be no assurance that such actions against the Company will be unsuccessful. However, we believe that our use of
manufacture and repair manuals is lawful.

Raw Materials and Replacement Parts

We purchase raw materials, primarily consisting of extrusions, forgings, castings, aluminum and titanium sheets and shapes, from
various vendors. We also purchase replacement parts which are utilized in our various repair and overhaul operations. We believe that the availability of raw materials to us is adequate to support our
operations.

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Operating Locations

We conduct our business through operating companies and divisions. The following chart describes the operations, customer base and
certain other information with respect to our principal operating locations at March 31, 2010:

Operation

Subsidiary

Operating Location

Business

Type of Customers

Number of EmployeesTRIUMPH AEROSPACE SYSTEMS GROUPConstruction
Brevetees
d'Alfortville

Construction
Brevetees
d'Alfortville SAS

Alfortville, France

Manufactures mechanical ball bearing control assemblies for the aerospace, ground transportation, defense and marine industries.

Commercial and Military OEMs, Ground Transportation and Marine OEMs.


67Triumph Actuation &
Motion Control Systems

Triumph Actuation &
Motion Control
SystemsUK, Ltd.

Buckley, UK

Designs and builds proprietary advanced control products for flight actuation and motor control applications in all electrical aircraft and Unmanned Aerial Vehicles ("UAVs").

Commercial, General Aviation, and Military OEMs.


47Triumph Actuation
SystemsClemmons(1)
Triumph Actuation SystemsFreeport

Triumph Actuation
Systems, LLC

Clemmons, NC
Freeport, NY

Designs, manufactures and repairs complex hydraulic and hydromechanical aircraft components and systems, such as variable displacement pumps and motors, linear actuators and valves, and cargo door actuation
systems.

Commercial, General Aviation, and Military OEMs; Commercial Airlines, General Aviation and Military Aftermarket.


243Triumph Actuation Systems
Connecticut

Triumph Actuation Systems
Connecticut, LLC

Bloomfield, CT
East Lyme, CT
Bethel, CT

Designs, manufactures and repairs complex hydraulic, hydromechanical and mechanical components and systems, such as nose wheel steering motors, helicopter blade lag dampers, mechanical hold open rods, coupling and
latching devices, as well as mechanical and electromechanical actuation products.

Commercial, General Aviation, and Military OEMs; Military Aftermarket.


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Operation

Subsidiary

Operating Location

Business

Type of Customers

Number of EmployeesTriumph Actuation Systems
Valencia(1)

Triumph
Actuation
Systems
Valencia, Inc.

Valencia, CA

Designs, manufactures and repairs complex hydraulic and hydromechanical aircraft components and systems, such as accumulators, actuators, complex valve packages, and landing gear retract actuators.

Commercial, General Aviation, and Military OEMs.


202Triumph Aerospace Systems
Newport News

Triumph
Aerospace
Systems
Newport News, Inc.

Newport News, VA
San Diego, CA
Huntsville, AL
New Haven, CT

Offers a fully integrated range of capabilities, including systems engineering, conceptual engineering, mechanical design and analysis, prototype and limited-rate production, and instrumentation assembly and testing
services and complex structural composite design and manufacturing.

Commercial and Military OEMs; Commercial and Military Aftermarket.


133Triumph Aerospace SystemsSeattle

Triumph
Actuation
Systems
Connecticut, LLC

Redmond, WA
Rochester, NY

System engineering and integration for landing gear, hydraulic, deployment, cargo door and electro-mechanical type systems. Capabilities include design, analysis and testing to support these types of systems and
components.

Commercial, General Aviation and Military OEMs.


72Triumph Aerospace
Systems
Wichita(1)

Triumph
Aerospace
Systems
Wichita, Inc.

Wichita, KS

Designs and manufactures aircraft windows, sheet metal assemblies (wing spars and leading edges), pilot/co-pilot control wheels, cockpit sun visors, and structural composite parts for the aerospace industry.

Commercial and General Aviation OEMs; General Aviation Aftermarket.


160Triumph Composite
Systems

Triumph Composite
Systems, Inc.

Spokane, WA

Manufactures interior non-structural composites for the aviation industry, including environmental control system ducting, floor panels, aisle stands and glare shields.

Commercial, General Aviation, and Military OEMs; Commercial Aftermarket.


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Operation

Subsidiary

Operating Location

Business

Type of Customers

Number of EmployeesTriumph Controls(1)

Triumph Controls, LLC

North Wales, PA
Shelbyville, IN

Designs and manufactures mechanical and electromechanical control systems.

Commercial, General Aviation and Military OEMs and Aftermarket.


127Triumph ControlsGermany
Triumph ControlsUK

Triumph ControlsGermany, GmbH
Triumph ControlsUK, Ltd.

Heiligenhaus,
Germany
Basildon, UK

Produces and repairs cable control systems for ground, flight, engine management and cabin comfort features in aircraft.

Commercial and Military OEMs.


36Triumph
Fabrications
Fort Worth(1)

Triumph FabricationFort Worth, Inc.

Fort Worth, TX

Manufactures metallic/composite bonded components and assemblies.

Commercial, General Aviation and Military OEMs and Aftermarket.


111Triumph
FabricationsHot
Springs

Triumph
Fabrications
Hot
Springs, Inc.

Hot Springs, AR

Produces complex sheet metal parts and assemblies, titanium hot forming, and performs chem-milling and other metal finishing processes.

Commercial, General Aviation and Military OEMs and Aftermarket.


348Triumph
Fabrications
Shelbyville

The Triumph
Group
Operations, Inc.

Shelbyville, IN

Produces aircraft fuselage skins, leading edges and web assemblies through the stretch forming of sheet, extrusion, rolled shape and light plate metals.

Commercial, General Aviation and Military OEMs.


99Triumph
Fabrications
San Diego(1)
Triumph FabricationsPhoenix

Triumph FabricationsSan Diego, Inc.
Triumph
Engineered
Solutions, Inc.

El Cajon, CA
Chandler, AZ

Produces complex welded and riveted sheet metal assemblies for aerospace applications. Components include exhaust systems, ducting, doors, panels, control surfaces and engine components.

Commercial, General Aviation and Military OEMs.


200Triumph Gear SystemsPark City(1)
Triumph Gear
SystemsMacomb(1)

Triumph Gear
Systems, Inc.
Triumph Gear SystemsMacomb, Inc.

Park City, UT
Macomb, MI

Specializes in the design, development, manufacture, sale and repair of gearboxes, high-lift flight control actuators, gear-driven actuators and gears for the aerospace industry.

Commercial and Military OEMs and Aftermarket.


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Operation

Subsidiary

Operating Location

Business

Type of Customers

Number of EmployeesTriumph Insulation Systems

Triumph Insulation Systems, LLC

Santa Ana, CA
Mexicali, Mexico
Beijing, China (2)

Designs, manufactures and repairs thermal-acoustic insulation systems for commercial aerospace applications.

Commercial and Military OEMs.


935Triumph GroupMexico

Triumph GroupMexico, S de R.L de C.V.

Zacatecas, Mexico

Provides rough machining of gears, actuations and structure components, as well as assembly, fabrications, engineering and composites to Triumph companies and certain customers. Facility scheduled to open Summer of
2010.

Commercial and General Aviation OEMs


8Triumph Northwest

The Triumph Group Operations, Inc.

Albany, OR

Machines and fabricates refractory, reactive, heat and corrosion-resistant precision products.

Military, Medical and Electronic OEMs.


25Triumph Processing

Triumph Processing, Inc.

Lynwood, CA

Provides high-quality finishing services to the aerospace, military and commercial industries.

Commercial, General Aviation, and Military OEMs.


87Triumph StructuresEast Texas

Triumph StructuresEast Texas, Inc.

Kilgore, TX

Manufactures structural components specializing in complex precision machining primarily for commercial and military aerospace programs.

Commercial and Military OEMs.


80Triumph StructuresKansas City

Triumph StructuresKansas City, Inc.

Grandview, MO

Manufactures precision machined parts and mechanical assemblies for the aviation, aerospace and defense industries.

Commercial and Military OEMs.


125Triumph StructuresLong Island

Triumph StructuresLong Island, LLC

Westbury, NY

Manufactures high-quality structural and dynamic parts and assemblies for commercial and military aerospace programs.

Commercial and Military OEMs.


118Triumph StructuresLos Angeles

Triumph StructuresLos Angeles, Inc.

Chatsworth, CA City of Industry, CA
Walnut, CA

Manufactures long structural components, such as stringers, cords, floor beams and spars for the aviation industry. Machines, welds and assembles large complex precision structural components.

Commercial, General Aviation and Military OEMs.


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Operation

Subsidiary

Operating Location

Business

Type of Customers

Number of EmployeesTriumph StructuresWichita

Triumph StructuresWichita, Inc.

Wichita, KS

Specializes in complex, high-speed monolithic precision machining, turning, subassemblies, and sheet metal fabrication, serving domestic and international aerospace customers.

Commercial and Military OEMs.


123Triumph Thermal Systems(1)

Triumph Thermal Systems, Inc.

Forest, OH

Designs, manufactures and repairs aircraft thermal transfer components and systems.

Commercial, General Aviation and Military OEMs.


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Operation

Subsidiary

Operating Location

Business

Type of Customers

Number of EmployeesTRIUMPH AFTERMARKET SERVICES GROUPTriumph Accessory ServicesWellington(1)

The Triumph Group Operations, Inc.

Wellington, KS
Milwaukee, WI

Provides maintenance services for aircraft heavy accessories and airborne electrical power generation devices, including constant speed drives, integrated drive generators, air cycle machines and electrical
generators.

Commercial, General Aviation and Military Aftermarket.


120Triumph Accessory ServicesGrand Prairie(1)

Triumph Accessory ServicesGrand Prairie, Inc.

Grand Prairie, TX

Provides maintenance services for engine and air frame accessories including a variety of engine gearboxes, pneumatic starters, valves and drive units, hydraulic actuators, lube system pumps, fuel nozzles, fuel pumps and
fuel controls.

Commercial and Military Aftermarket.


114Triumph Air Repair(1)

The Triumph Group Operations, Inc.

Phoenix, AZ

Repairs and overhauls auxiliary power units (APUs) and related accessories; sells, leases and exchanges APUs, related components and other aircraft material.

Commercial, General Aviation and Military Aftermarket.


104Triumph Airborne Structures(1)

Triumph Airborne Structures, Inc.

Hot Springs, AR

Repairs and overhauls fan reversers, nacelle components, flight control surfaces and other aerostructures.

Commercial Aftermarket.


122Triumph Aviation ServicesAsia(1)

Triumph Aviation Services Asia Ltd.

Chonburi, Thailand

Repairs and overhauls complex aircraft operational components, such as auxiliary power units (APUs), nacelles, constant speed drives, fan reversers and related accessories.

Commercial Aftermarket.


109Triumph EnginesTempe(1)

Triumph Engineered Solutions, Inc.

Tempe, AZ

Designs, engineers, manufactures, repairs and overhauls aftermarket aerospace gas turbine engine components and provides repair services and aftermarket parts and services to aircraft operators, maintenance providers, and
third-party overhaul facilities.

Commercial, General Aviation and Military Aftermarket.


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Operation

Subsidiary

Operating Location

Business

Type of Customers

Number of EmployeesTriumph FabricationsSt. Louis

Triumph FabricationsSt. Louis, Inc. (formerly Fabritech, Inc.)
Triumph FabricationsOrangeburg, Inc.

East Alton, IL
Orangeburg, SC

Provides maintenance and manufactured solutions for aviation drive train, mechanical, hydraulic and electrical hardware items including gearboxes, cargo hooks and vibration absorbers. Also, produces fabricated textile
items such as seat cushions and sound insulation blankets for military rotary-wing platforms.

Commercial, General Aviation and Military Aftermarket


63Triumph InstrumentsBurbank(1)

Triumph InstrumentsBurbank, Inc.

Burbank, CA
Van Nuys, CA

Repairs and overhauls aircraft instrumentation, power systems and avionics. Distributes and repairs aircraft smoke detectors and industrial instrumentation.

Commercial, General Aviation and Military Aftermarket.


62Triumph InstrumentsFt. Lauderdale(1)

Triumph Instruments, Inc.

Ft. Lauderdale, FL

Specializes in the repair, overhaul and exchange of electromechanical and pneumatic aircraft instruments.

Commercial, General Aviation and Military Aftermarket.


43Triumph Interiors

Triumph Interiors, LLC

Oakdale, PA(1)
Grand Prairie,
TX(1)

Refurbishes and repairs aircraft interiors such as sidewalls, ceiling panels, galleys and overhead storage bins and manufactures a full line of PMA interior lighting and plastic components.

Commercial Aftermarket.


108Triumph San Antonio Support Center

The Triumph Group Operations, Inc.

San Antonio, TX

Provides maintenance services for aircraft ground support equipment.

Military Aftermarket.


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Operation

Subsidiary

Operating Location

Business

Type of Customers

Number of EmployeesDISCONTINUED OPERATIONSTriumph Precision Castings

Triumph Precision Castings Co.

Chandler, AZ

Applies advanced directionally solidified (polycrystal or single crystal) and Equiax investment casting processes to produce products for the commercial and defense gas turbine market.

Commercial and Military Aftermarket.


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Sales, Marketing and Engineering

While each of our operating companies maintains responsibility for selling and marketing its specific products, we have developed two
group marketing teams focused on cross-selling our broad capabilities. The focus of these two marketing organizations, one for the Aerospace Systems Group and one for the Aftermarket Services Group,
is to sell systems, integrated assemblies and repair and overhaul services, reaching across our operating companies, to our OEM, military, airline and air cargo customers. We also conduct sales
activities in the Wichita, Kansas area through Triumph Wichita Support Center, a third-party sales organization dedicated solely to a sales effort on behalf of Triumph Group companies, which is
staffed by sales professionals focused on Boeing IDS, Spirit AeroSystems, Cessna, Bombardier/Learjet and Raytheon. In certain limited cases, we use independent, commission-based representatives to
facilitate responsiveness to each customer's changing needs and current trends in each market/geographic region in which we operate.

All
three of these marketing organizations operate as the front-end of the selling process, establishing or maintaining relationships, identifying opportunities to leverage
our brand, and providing service for our customers. Each individual operating company is responsible for its own engineering and technical support, pricing, manufacturing and product support. Also,
within the Aerospace Systems Group, we have created a group engineering function to provide integrated
solutions to meet our customer needs by designing systems that integrate the capabilities of our companies.

A
significant portion of our government and defense contracts are awarded on a competitive bidding basis. We generally do not bid or act as the primary contractor, but will typically bid
and act as a subcontractor on contracts on a fixed-fee basis. We generally sell to our other customers on a fixed-fee, negotiated contract or purchase order basis.

Backlog

We have a number of long-term agreements with several of our customers. These agreements generally describe the terms under
which the customer may issue purchase orders to buy our products and services during the term of the agreement. These terms typically include a list of the products or repair services customers may
purchase, initial pricing, anticipated quantities and, to the extent known, delivery dates. In tracking and reporting our backlog, however, we only include amounts for which we have actual purchase
orders with firm delivery dates or contract requirements generally within the next 24 months, which primarily relates to sales to our OEM customer base. Purchase orders issued by our
aftermarket customers are usually completed within a short period of time. As a result, our backlog data relates primarily to the OEM customers. The backlog information set forth below does not
include the sales that we expect to generate from long-term agreements for which we do not have actual purchase orders with firm delivery dates.

As
of March 31, 2010, our continuing operations had outstanding purchase orders representing an aggregate invoice price of approximately $1,309 million, of which
$1,260 million and $49 million relate to the Aerospace Systems Group and the Aftermarket Services Group, respectively. As of March 31, 2009, our continuing operations had
outstanding purchase orders representing an aggregate invoice price of approximately $1,323 million, of which $1,282 million and $41 million relate to the Aerospace Systems Group
and the Aftermarket Services Group, respectively. Of the existing backlog of $1,309 million, approximately $478 million will not be shipped by March 31, 2011.

Dependence on Significant Customer

For the year ended March 31, 2010, the Boeing Company, or Boeing, represented approximately 30% of our net sales, covering
virtually every Boeing plant and product. A significant reduction in sales to Boeing could have a material adverse impact on our financial position, results of operations, and cash flows.

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United States and International Operations

Our revenues from continuing operations to customers in the United States for fiscal years 2010, 2009 and 2008 were approximately
$1,039 million, $974 million, and $914 million, respectively. Our revenues from our continuing operations to customers in all other countries for fiscal years 2010, 2009 and 2008
were approximately $256 million, $267 million, and $237 million, respectively.

As
of March 31, 2010 and 2009, our long-lived assets for continuing operations located in the United States were approximately $855 million and
$851 million, respectively. As of March 31, 2010 and 2009, our long-lived assets for continuing operations located in all other countries were approximately
$74 million and $63 million, respectively.

Competition

We compete primarily with the top-tier systems integrators and manufacturers that supply them, some of which are divisions
or subsidiaries of other large companies, in the manufacture of aircraft systems components and subassemblies. OEMs are increasingly focusing on assembly activities while outsourcing more
manufacturing and repair to third parties, and therefore are less of a competitive force than in previous years.

Competition
for the repair and overhaul of aviation components comes from three primary sources, some with greater financial and other resources than we have: OEMs, major commercial
airlines and other independent repair and overhaul companies. Some major commercial airlines continue to own and operate their own service centers, while others have begun to sell or outsource their
repair and overhaul services to other aircraft operators or third parties. Large domestic and foreign airlines that provide repair and overhaul services typically provide these services not only for
their own aircraft but for other airlines as well. OEMs also maintain service centers which provide repair and overhaul services for the components they manufacture. Other independent service
organizations also compete for the repair and overhaul business of other users of aircraft components.

Participants
in the aerospace industry compete primarily on the basis of breadth of technical capabilities, quality, turnaround time, capacity and price.

Government Regulation and Industry Oversight

The aerospace industry is highly regulated in the United States by the FAA and in other countries by similar agencies. We must be
certified by the FAA and, in some cases, by individual OEMs, in order to engineer and service parts and components used in specific aircraft models. If material authorizations or approvals were
revoked or suspended, our operations would be adversely affected. New and more stringent government regulations may be adopted, or industry oversight heightened, in the future and these new
regulations, if enacted, or any industry oversight, if heightened, may have an adverse impact on us.

We
must also satisfy the requirements of our customers, including OEMs, that are subject to FAA regulations, and provide these customers with products and repair services that comply
with the government regulations applicable to aircraft components used in commercial flight operations. The FAA regulates commercial flight operations and requires that aircraft components meet its
stringent standards. In addition, the FAA requires that various maintenance routines be performed on aircraft components, and we currently satisfy these maintenance standards in our repair and
overhaul services. Several of our operating locations are FAA-approved repair stations.

Generally,
the FAA only grants licenses for the manufacture or repair of a specific aircraft component, rather than the broader licenses that have been granted in the past. The FAA
licensing process may be costly and time-consuming. In order to obtain an FAA license, an applicant must satisfy all applicable regulations of the FAA governing repair stations. These
regulations require that an

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applicant
have experienced personnel, inspection systems, suitable facilities and equipment. In addition, the applicant must demonstrate a need for the license. Because an applicant must procure
manufacturing and repair manuals from third parties relating to each particular aircraft component in order to obtain a license with respect to that component, the application process may involve
substantial cost.

The
license approval processes for the European Aviation Safety Agency (EASA was formed in 2002 and is handling most of the responsibilities of the national aviation authorities in
Europe, such as the United Kingdom Civil Aviation Authority), which regulates this industry in the European Union, the
Civil Aviation Administration of China, and other comparable foreign regulatory authorities are similarly stringent, involving potentially lengthy audits.

Our
operations are also subject to a variety of worker and community safety laws. For example, the Occupational Safety and Health Act of 1970, or OSHA, mandates general requirements for
safe workplaces for all employees. In addition, OSHA provides special procedures and measures for the handling of hazardous and toxic substances. Specific safety standards have been promulgated for
workplaces engaged in the treatment, disposal or storage of hazardous waste. We believe that our operations are in material compliance with OSHA's health and safety requirements.

Environmental Matters

Our business, operations and facilities are subject to numerous stringent federal, state, local and foreign environmental laws and
regulation by government agencies, including the Environmental Protection Agency, or the EPA. Among other matters, these regulatory authorities impose requirements that regulate the emission,
discharge, generation, management, transportation and disposal of hazardous materials, pollutants and contaminants, govern public and private response actions to hazardous or regulated substances
which may be or have been released to the environment, and require us to obtain and maintain licenses and permits in connection with our operations. This extensive regulatory framework imposes
significant compliance burdens and risks on us. Although management believes that our operations and our facilities are in material compliance with such laws and regulations, future changes in these
laws, regulations or interpretations thereof or the nature of our operations or regulatory enforcement actions which may arise, may require us to make significant additional capital expenditures to
ensure compliance in the future.

Certain
of our facilities, including facilities acquired and operated by us or one of our subsidiaries have at one time or another been under active investigation for environmental
contamination by federal or state agencies when acquired, and at least in some cases, continue to be under investigation or subject to remediation for potential environmental contamination. We are
frequently indemnified by prior owners or operators and/or present owners of the facilities for liabilities which we incur as a result of these investigations and the environmental contamination found
which pre-dates our acquisition of these facilities, subject to certain limitations. We also maintain a pollution liability policy that provides coverage for material liabilities
associated with the clean-up of on-site pollution conditions, as well as defense and indemnity for certain third party suits (including Superfund liabilities at third party
sites), in each case, to the extent not otherwise indemnified. This policy applies to all of our manufacturing and assembly operations worldwide. However, if we were required to pay the expenses
related to environmental liabilities for which neither indemnification nor insurance coverage is available, these expenses could have a material adverse effect on us.

Employees

As of March 31, 2010, for our continuing operations we employed 5,991 persons, of whom 647 were management employees, 90 were
sales and marketing personnel, 697 were technical personnel, 789 were administrative personnel and 3,768 were production workers. As of March 31, 2010, for our

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discontinued
operations, we employed 30 persons, of whom 1 was a management employee, 1 was a sales and marketing employee, 4 were technical personnel, 3 were administrative personnel and 21 were
production workers.

Several
of our subsidiaries are parties to collective bargaining agreements with labor unions. Under those agreements, we currently employ approximately 590 full-time
employees. Currently, approximately 9.8% of our permanent employees are represented by labor unions and approximately 20.0% of net sales are derived from the facilities at which at least some
employees are unionized. Our inability to negotiate an acceptable contract with any of these labor unions could result in strikes by the affected workers and increased operating costs as a result of
higher wages or benefits paid to union members. If the unionized workers were to engage in a strike or other work stoppage, or other employees were to become unionized, we could experience a
significant disruption of our operations and higher ongoing labor costs, which could have an adverse effect on our business and results of operations.

We
have not experienced any material labor-related work stoppage and consider our relations with our employees to be good.

Research and Development Expenses

Certain information about our research and development expenses for the fiscal years ended March 31, 2010, 2009 and 2008 is
available in Note 2 of "Notes to Consolidated Financial Statements."

Executive Officers

Name

Age

PositionRichard C. Ill


66

Chairman and Chief Executive OfficerJeffry D. Frisby


55

President and Chief Operating OfficerM. David Kornblatt


50

Executive Vice President, Chief Financial Officer and TreasurerJohn B. Wright, II


56

Vice President, General Counsel and SecretaryKevin E. Kindig


53

Vice President and Controller


Richard C. Illwas elected Chairman in July 2009, and had been our President and Chief Executive Officer and a director since 1993.
Mr. Ill continues to serve as Chief Executive Officer. Mr. Ill is a director of P.H. Glatfelter Company, Airgas Inc. and Baker Industries and a trustee of the Eisenhower
Fellowships.

Jeffry D. Frisbyhas been our President and Chief Operating Officer since July 2009. Before that, for a period in excess of five years,
Mr. Frisby served as Group President of our Aerospace Systems Group. Mr. Frisby serves on the Board of Directors of Quaker Chemical Corporation.

M. David Kornblattbecame Executive Vice President in July 2009 and had been Senior Vice President and Chief Financial Officer since June
2007. Mr. Kornblatt continues to serve as Chief Financial Officer. From 2006 until joining us, Mr. Kornblatt served as Senior Vice PresidentFinance and Chief Financial
Officer at Carpenter Technology Corporation, a manufacturer and distributor of specialty alloys and various engineered products. From 2003 to 2005, he was Vice President and Chief Financial Officer at
York International, prior to its acquisition by Johnson Controls in December 2005. Before that, Mr. Kornblatt was the Director of Taxes-Europe for The Gillette Company in London, England for
three years. Mr. Kornblatt is a director of Universal Stainless & Alloy Products, Inc.

John B. Wright, IIhas been a Vice President and our General Counsel and Secretary since 2004. From 2001 until he joined us,
Mr. Wright was a partner with the law firm of Ballard Spahr Andrews & Ingersoll, LLP, where he practiced corporate and securities law.

Kevin E. Kindighas been our Controller since 1993 and a Vice President since April 1999.

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Available Information

For more information about us, visit our website at www.triumphgroup.com. The contents of the website are not part of this Annual
Report on Form 10-K. Our electronic filings with the Securities and Exchange Commission, or SEC (including all Forms 10-K, 10-Q and 8-K,
and any amendments to these reports) are available free of charge through our website immediately after we electronically file with or furnish them to the SEC. These filings may also be read and
copied at the SEC's Public Reference Room which is located at 100 F Street, N.E., Washington, D.C. 20549. Information about the operation of the Public Reference Room can be obtained by calling
the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers who
file electronically with the SEC at www.sec.gov.

Item 1A.    Risk Factors

Factors that have an adverse impact on the aerospace industry may adversely affect our results of operations and liquidity.A
substantial percentage
of our gross profit and operating income was derived from commercial aviation for fiscal year 2010. Our operations are focused on designing, engineering and manufacturing aircraft components for new
aircraft, selling spare parts and performing repair and overhaul services on existing aircraft and aircraft components. Therefore, our business is directly affected by economic factors and other
trends that affect our customers in the aerospace industry, including a possible decrease in outsourcing by OEMs and aircraft operators or projected market growth that may not materialize or be
sustainable. We are also significantly dependent on sales to the commercial aerospace market, which has been cyclical in nature with significant downturns in the past. When these economic and other
factors adversely affect the aerospace industry, they tend to reduce the overall customer demand for our products and services, which decreases our operating income. Economic and other factors that
might affect the aerospace industry may have an adverse impact on our results of operations and liquidity. We have credit exposure to a number of commercial airlines, some of which have encountered
financial difficulties. In addition, an increase in energy costs and the price of fuel to the airlines, similar to that which occurred in 2008, could result in additional pressure on the operating
costs of airlines. The market for jet fuel is inherently volatile and is subject to, among other things, change in government policy on jet fuel production, fluctuations in the global supply of crude
oil and disruptions in oil production or delivery caused by sudden hostility in oil producing areas. Often airlines are unable to pass on increases in fuel prices to customers by increasing fares due
to the competitive nature of the airline industry, and this compounds the pressure on operating costs. Other events of general impact such as terrorist attacks against the industry or pandemic health
crises may lead to declines in the worldwide aerospace industry that could adversely affect our business and financial condition.

In
addition, demand for our MRO services is correlated with worldwide flying activity. A significant portion of the MRO activity required on commercial aircraft is mandated by government
regulations that limit the total time or number of flights that may elapse between scheduled MRO events. As a result, although short-term deferrals are possible, MRO activity is ultimately
required to continue to operate the aircraft in revenue-producing service. Therefore, over the intermediate and long term, trends in the MRO market are closely related to the size and utilization
level of the worldwide aircraft fleet, as reflected by the number of available seat miles, commonly referred to as ASMs, flown and cargo miles flown. Consequently, conditions or events which
contribute to declines in worldwide ASMs and cargo miles flown, such as those mentioned above, could negatively impact our MRO business.

Cancellations, reductions or delays in customer orders may adversely affect our results of operations.Our overall operating results
are affected by
many factors, including the timing of orders from large customers and the timing of expenditures to manufacture parts and purchase inventory in anticipation of future sales of products and services. A
large portion of our operating expenses are relatively fixed. Because several of our operating locations typically do not obtain long-term purchase orders or

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commitments
from our customers, they must anticipate the future volume of orders based upon the historic purchasing patterns of customers and upon our discussions with customers as to their
anticipated future requirements. These historic patterns may be disrupted by many factors, including changing economic conditions, inventory adjustments, or work stoppages or labor disruptions at our
customers. Cancellations, reductions or delays in orders by a customer or group of customers could have a material adverse effect on our business, financial condition and results of operations.

Our acquisition strategy exposes us to risks, including the risk that we may not be able to successfully integrate acquired businesses.We have a
consistent strategy to grow, in part, by the acquisition of additional businesses in the aerospace industry and are continuously evaluating various acquisition opportunities, including those outside
the United States and those that are larger than the acquisitions we have made previously. Our ability to grow by acquisition is dependent upon, among other factors, the availability of suitable
acquisition candidates. Growth by acquisition involves risks that could adversely affect our operating results, including difficulties in integrating the operations and personnel of acquired
companies, the potential amortization of acquired intangible assets, the potential impairment of goodwill and the potential loss of key employees of acquired companies. We may not be able to
consummate acquisitions on satisfactory terms or, if any acquisitions are consummated, satisfactorily integrate these acquired businesses.

We may fail to realize all of the expected benefits of the proposed Vought Acquisition.The success of the Vought Acquisition, assuming
it is
consummated, will depend, in part, on our ability to realize the anticipated benefits from combining the businesses of Triumph and Vought. However, to realize these anticipated benefits, we must
successfully combine the businesses. If we are not able to achieve these objectives, the anticipated benefits of the Vought Acquisition may not be realized fully or at all or may take longer to
realize than expected.

In
addition, it is possible that the integration process could result in the loss of key employees, the disruption of each company's ongoing businesses or inconsistencies in standards,
controls, procedures and policies that adversely affect our ability to maintain relationships with customers, suppliers and employees or to achieve the anticipated benefits of the Vought Acquisition.
Integration efforts between
the two companies will also divert management attention and resources and could have an adverse effect on each of Triumph and Vought during the transition period.

A significant decline in business with a key customer could have a material adverse effect on us.For the year ended March 31, 2010,
 The
Boeing Company, or Boeing Commercial, Military & Space, represented approximately 30% of net sales. Accordingly, a significant reduction in purchases by this customer could have a material
adverse impact on our financial position, results of operations, and cash flows. In addition, some of our operating locations have significant customers, the loss of whom could have an adverse effect
on those businesses.

Demand for our military and defense products is dependent upon government spending.Approximately 37% of our sales for fiscal year 2010
were derived
from the military and defense market, which includes primarily indirect sales to the U.S. Government. The military and defense market is largely dependent upon government budgets, particularly the
U.S. defense budget, and even an increase in defense spending may not be allocated to programs that would benefit our business. Moreover, the new military aircraft programs in which we participate may
not enter full-scale production as expected. A change in the levels of defense spending or levels of military flight operations could curtail or enhance our prospects in the military and
defense market depending upon the programs affected.

Our international sales and operations are subject to applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect
our
operations.We must comply with all applicable export control laws and regulations of the United States and other countries. United States laws and regulations
applicable to us include the Arms Export Control Act, the

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International
Traffic in Arms Regulations ("ITAR"), the Export Administration Regulations ("EAR") and the trade sanctions laws and regulations administered by the United States Department of
Treasury's Office of Foreign Assets Control ("OFAC"). EAR restricts the export of dual-use products and technical data to certain countries, while ITAR restricts the export of defense
products, technical data and defense services. The U.S. government agencies responsible for administering EAR and ITAR have significant discretion in the interpretation and enforcement of these
regulations. We also cannot provide services to certain countries subject to United States trade sanctions unless we first obtain the necessary authorizations from OFAC. In addition, we are subject to
the Foreign Corrupt Practices Act which, generally, bars bribes or unreasonable gifts to foreign governments or officials.

Violations
of these laws or regulations could result in significant additional sanctions including fines, more onerous compliance requirements, more extensive debarments from export
privileges, loss of authorizations needed to conduct aspects of our international business and criminal penalties and may harm our ability to enter into contracts with the U.S. government. A future
violation of ITAR or the other regulations enumerated above could materially adversely affect our business, financial condition and results of operations.

Our expansion into international markets may increase credit, currency and other risks, and our current operations in international markets expose us to such
risks.As we pursue customers in Asia, South America and other less developed aerospace markets throughout the world, our inability to ensure the creditworthiness
of our customers in these areas could adversely impact our overall profitability. In addition, with our operations in the United Kingdom, Germany, Mexico, and Thailand and as we seek customers in
other parts of the world, we will be subject to the legal, political, social and regulatory requirements and economic conditions of other jurisdictions. In the future, we may also make additional
international capital investments, including further acquisitions of companies outside the United States or companies having operations outside the United States. Risks inherent to international
operations include, but are not limited to, the following:



We may need additional financing for acquisitions and capital expenditures and additional financing may not be available on terms acceptable to us.A
key element of our strategy has been, and continues to be, internal growth supplemented by growth through the acquisition of additional aerospace companies and product lines. In order to grow
internally, we may need to make significant capital expenditures, such as investing in facilities in low cost countries, and may need additional capital to do so. Our ability to grow is dependent
upon, and may be limited by, among other things, access to markets and conditions of markets, availability under our credit facility and by particular restrictions

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contained
in our credit facility and our other financing arrangements. In that case, additional funding sources may be needed, and we may not be able to obtain the additional capital necessary to
pursue our internal growth and acquisition strategy or, if we can obtain additional financing, the additional financing may not be on financial terms that are satisfactory to us, particularly in light
of the current instability in the credit markets.

Competitive pressures may adversely affect us.We have numerous competitors in the aerospace industry. We compete primarily with the
top-tier systems integrators and the manufacturers that supply them, some of which are divisions or subsidiaries of OEMs and other large companies that
manufacture aircraft components and subassemblies. Our OEM competitors, which include Boeing, Airbus, Bell Helicopter, Cessna, Gulfstream, Sikorsky, Lockheed Martin, Northrop Grumman, Raytheon and
Honeywell may choose not to outsource production of aerostructures or other components due to, among other things, their own direct labor and overhead considerations, capacity utilization at their own
facilities and desire to retain critical or core skills. Consequently, traditional factors affecting competition, such as price and quality of service, may not be significant determinants when
OEMs decide whether to produce a part in-house or to outsource. We also face competition from non-OEM component manufacturers including, Alenia Aeronautica, Fuji Heavy
Industries, GKN Westland Aerospace (U.K.), Goodrich Corp., Kawasaki Heavy Industries, Mitsubishi Heavy Industries, Spirit AeroSystems and Stork Aerospace. Competition for the repair and overhaul of
aviation components comes from three primary sources: OEMs, major commercial airlines and other independent repair and overhaul companies. Some of our competitors have substantially greater financial
and other resources than we have. Competitive pressures may materially adversely affect our operating revenues and margins, and, in turn, our business and financial condition.

We may need to expend significant capital to keep pace with technological developments in our industry.The aerospace industry is
constantly
undergoing development and change and it is likely that new products, equipment and methods of repair and overhaul service will be introduced in the future. In order to keep pace with any new
developments, we may need to expend significant capital to purchase new equipment and machines or to train our employees in the new methods of production and service.

The construction of aircraft is heavily regulated, and we may incur significant expenses to comply with new or more stringent governmental
regulation.The aerospace industry is highly regulated in the United States by the FAA and in other countries by similar agencies. We must be certified by the FAA
and, in some cases, by individual OEMs in order to engineer and service parts and components used in specific aircraft models. If any of our material authorizations or approvals were revoked or
suspended, our operations would be adversely affected. New or more stringent governmental regulations may be adopted, or industry oversight heightened in the future, and we may incur significant
expenses to comply with any new regulations or any heightened industry oversight.

Some contractual arrangements with our customers may cause us to bear significant up-front costs that we may not be able to recover.Many
new aircraft programs require that major suppliers bear the cost of design, development and engineering work associated with the development of the aircraft usually in exchange for a
long-term agreement to supply critical parts once the aircraft is in production. If the aircraft fails to reach the full production stage or we fail to win the long-term
contract, the outlays we have made in research and development and other start-up costs may not generate our anticipated return on investment.

We may not realize our anticipated return on capital commitments made to expand our capabilities.We continually make significant
capital
expenditures to implement new processes and to increase both efficiency and capacity. Some of these projects require additional training for our employees and not all projects may be implemented as
anticipated. If any of these projects do not achieve the anticipated increase in efficiency or capacity, our returns on these capital expenditures may be lower than expected.

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Any product liability claims in excess of insurance may adversely affect our financial condition.Our operations expose us to potential
liability for
personal injury or death as a result of the failure of an aircraft component that has been serviced by us or the failure of an aircraft component designed or manufactured by us. While we believe that
our liability insurance is adequate to protect us from these liabilities, our insurance may not cover all liabilities. Additionally, as the number of insurance companies providing general aviation
product liability coverage has decreased in recent years, insurance coverage may not be available in the future at a cost acceptable to us. Any material liability not covered by insurance or for which
third party indemnification is not available could have a material adverse effect on our financial condition.

The lack of available skilled personnel may have an adverse effect on our operations.From time to time, some of our operating
locations have
experienced difficulties in attracting and retaining skilled personnel to design, engineer, manufacture, repair and overhaul sophisticated aircraft components. Our ability to operate successfully
could be jeopardized if we are unable to attract and retain a sufficient number of skilled personnel to conduct our business.

Any exposure to environmental liabilities may adversely affect us.Our business, operations and facilities are subject to numerous
stringent federal,
state, local and foreign environmental laws and regulations and we are subject to potentially significant fines and penalties, including criminal sanctions if we fail to comply with these
requirements. Although management believes that our operations and facilities are in material compliance with such laws and regulations, future changes in such laws, regulations or interpretations
thereof or the nature of our operations or regulatory enforcement actions which may arise, may require us to make significant additional capital expenditures to ensure compliance in the future.
Certain of our facilities, including facilities acquired and operated by us or one of our subsidiaries have at one time or another been under active investigation for environmental contamination by
federal or state agencies when acquired and, at least in some cases, continue to be under investigation or subject to remediation for potential environmental contamination. Individual
facilities of ours have also been subject to investigation on occasion for possible past waste disposal practices which might have contributed to contamination at or from remote waste disposal sites.
We are frequently indemnified by prior owners or operators and/or present owners of the facilities for liabilities which we incur as a result of these investigations and the environmental
contamination found which pre-dates our acquisition of these facilities, subject to certain limitations, including but not limited to limitations on the survival period of the indemnity.
We also maintain a pollution liability policy that provides coverage for material liabilities associated with the clean-up of on-site pollution conditions, as well as defense
and indemnity for certain third party suits (including Superfund liabilities at third party sites), in each case, to the extent not otherwise indemnified. This policy applies to all of our
manufacturing and assembly operations worldwide. However, if we were required to pay the expenses related to environmental liabilities for which neither indemnification nor insurance coverage is
available, these expenses could have a material adverse effect on our financial position, results of operations, and cash flows.

We are currently involved in intellectual property litigation, which could have a material and adverse impact on our profitability, and we could become so involved again in the
future.We and other companies in our industry possess certain proprietary rights relating to designs, engineering, manufacturing processes and repair and overhaul
procedures. In the event that we believe that a third party is infringing upon our proprietary rights, we may bring an action to enforce such rights. In addition, third parties may claim infringement
by us with respect to their proprietary rights and may initiate legal proceedings against us in the future. The expense and time of bringing an action to enforce such rights or defending against
infringement claims can be significant, as in the case of the litigation arising out of the claims of Eaton Corporation discussed in "Item 3. Legal Proceedings." The expense and time associated
with such litigation may have a material and adverse impact on our profitability. In addition, in our overhaul and repair businesses, OEMs of equipment that we maintain for our customers
increasingly include language in repair manuals relating to their equipment asserting

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broad
claims of proprietary rights to the contents of the manuals used in our operations. There can be no assurance that OEMs will not try to enforce such claims, including through the possible
use of legal proceedings, or that any such actions will be unsuccessful.

Item 1B.    Unresolved Staff Comments

None.

Item 2.    Properties

Our executive offices are located in Wayne, Pennsylvania, where we lease 11,700 square feet of space. In addition, as of
April 30, 2010, we owned or leased the following operating facilities.

Location

Description

Square
Footage

Owned/
LeasedTRIUMPH AEROSPACE SYSTEMS GROUPHot Springs, AR

Manufacturing facility/office


217,300

OwnedChandler, AZ

Manufacturing facility/office


34,300

LeasedChatsworth, CA

Manufacturing facility/office


101,900

OwnedChatsworth, CA

Manufacturing facility


21,600

LeasedCity of Industry, CA

Manufacturing facility/office


75,000

LeasedEl Cajon, CA

Manufacturing facility/office


122,400

LeasedLynwood, CA

Processing and finishing facility/office


59,700

LeasedLynwood, CA

Office/warehouse/aerospace metal processing


105,000

LeasedSan Diego, CA

Force measurement systems facility


7,000

LeasedSanta Ana, CA

Office


15,300

LeasedValencia, CA

Manufacturing facility/office


87,000

LeasedWalnut, CA

Manufacturing facility/office


105,000

LeasedBethel, CT

Office


1,700

LeasedBloomfield, CT

Manufacturing facility/office


29,800

LeasedEast Lyme, CT

Manufacturing facility/office


59,600

OwnedNew Haven, CT

Engineering/manufacturing


2,400

LeasedAlfortville, France

Manufacturing facility/office


7,500

LeasedHeiligenhaus, Germany

Manufacturing facility/office


2,200

LeasedShelbyville, IN

Manufacturing facility/office


193,900

OwnedShelbyville, IN

Manufacturing facility/office


100,000

OwnedWichita, KS

Manufacturing facility/office


145,200

LeasedWichita, KS

Manufacturing facility/office


130,300

LeasedMacomb, MI

Manufacturing facility/office


86,000

LeasedMexicali, Mexico

Manufacturing facility/office


261,000

LeasedZacatecas, Mexico

Manufacturing facility/office


270,000

LeasedGrandview, MO

Manufacturing facility/office


78,000

OwnedFreeport, NY

Manufacturing facility/office/warehouse


29,000

OwnedRochester, NY

Engineering Office


5,000

LeasedWestbury, NY

Manufacturing facility/office


93,500

LeasedWestbury, NY

Aerospace Metal Processing


12,500

LeasedClemmons, NC

Manufacturing facility/repair/office


110,000

OwnedForest, OH

Manufacturing facility/office


125,000

OwnedAlbany, OR

Machine shop/office


25,000

OwnedNorth Wales, PA

Manufacturing facility/office


111,400

OwnedFort Worth, TX

Manufacturing facility/office


114,100

OwnedKilgore, TX

Manufacturing facility/office


83,000

OwnedBasildon, UK.

Manufacturing facility/office


1,900

LeasedBuckley, UK.

Manufacturing facility/office


8,000

LeasedPark City, UT

Manufacturing facility/office


180,000

OwnedNewport News, VA

Engineering/Manufacturing/office


93,000

LeasedRedmond, WA

Manufacturing facility/office


19,400

LeasedSpokane, WA

Manufacturing facility/office


392,000

Owned


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Location

Description

Square
Footage

Owned/
LeasedTRIUMPH AFTERMARKET SERVICES GROUPHot Springs, AR

Machine shop/office


219,700

OwnedChandler, AZ

Thermal processing facility/office


15,000

LeasedPhoenix, AZ

Repair and overhaul shop/office


50,000

LeasedPhoenix, AZ

Repair and overhaul/office


24,800

LeasedTempe, AZ

Manufacturing facility/office


13,500

OwnedTempe, AZ

Machine shop


9,300

OwnedTempe, AZ

Machine shop


32,000

OwnedBurbank, CA

Instrument shop/warehouse/office


23,000

LeasedEast Alton, IL

Machine shop/office


25,000

LeasedFt. Lauderdale, FL

Instrument shop/warehouse/office


11,700

LeasedWellington, KS

Repair and overhaul/office


65,000

LeasedOakdale, PA

Production/warehouse/office


68,000

LeasedDallas, TX

Production/office


28,600

LeasedGrand Prairie, TX

Repair and overhaul shop/office


60,000

LeasedSan Antonio, TX

Repair and overhaul/office


30,000

LeasedChonburi, Thailand

Repair and overhaul shop/office


85,000

OwnedOrangeburg, SC

Machine shop


52,000

OwnedMilwaukee, WI

Office


2,600

LeasedDISCONTINUED OPERATIONSChandler, AZ

Casting facility/office


31,000

Leased


We
believe that our properties are adequate to support our operations for the foreseeable future.

Item 3.    Legal Proceedings

On July 9, 2004, Eaton Corporation and several Eaton subsidiaries filed a complaint against us, our subsidiary, Frisby
Aerospace, LLC (now named Triumph Actuation Systems, LLC), certain related subsidiaries and certain employees of ours and our subsidiaries. The complaint was filed in the Circuit Court
of the First Judicial District of Hinds County, Mississippi and alleged nineteen causes of action under Mississippi law. In particular, the complaint alleged the misappropriation of trade secrets and
intellectual property allegedly belonging to Eaton relating to hydraulic pumps and motors used in military and commercial aviation. Triumph Actuation Systems and the individual defendants filed
separate responses to Eaton's claims. Triumph Actuation Systems filed counterclaims against Eaton alleging common law unfair competition, interference with existing and prospective contracts, abuse of
process, defamation, violation of North Carolina's Unfair and Deceptive Trade Practices Act, and violation of the false advertising provisions of the Lanham Act. We and defendant Jeff Frisby,
President of Triumph Actuation Systems at the time the engineer defendants were hired, moved to dismiss the complaint for lack of personal jurisdiction.

The
above allegations also relate to alleged conduct that has been the subject of an investigation by the office of the U.S. Attorney in Jackson, Mississippi. On January 22, 2004,
a search warrant was executed on the offices of Triumph Actuation Systems in connection with this investigation. Triumph Actuation Systems cooperated with the investigation. On December 20,
2006, five engineers of Triumph Actuation Systems who are former employees of Eaton Aerospace, LLC, were indicted by a grand jury sitting in
the Southern District of Mississippi on five counts of trade secret misappropriation, conspiracy to misappropriate trade secrets, and mail and wire fraud. On June 15, 2007, all counts other
than part of one count were dismissed by the court, leaving a charge of conspiracy to misappropriate trade secrets.

On
October 11, 2007, the government obtained a new indictment against the same five engineer defendants raising new charges arising out of the same investigation, which were
essentially reiterated in a second superseding indictment obtained on November 7, 2007. The defendant engineers subsequently filed pretrial motions, including motions to dismiss. On
April 25, 2008, the court granted

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Table of Contents

some
of those motions and dismissed seven of the twelve counts of the second superseding indictment. The government appealed the dismissal with respect to three of the seven counts dismissed. On
January 21, 2009, while the appeal was still pending, the government obtained a new indictment against the five engineers containing three counts stating essentially the same charges as those
covered by the government's appeal. On February 9, 2009, the United States Court of Appeals for the Fifth Circuit unanimously affirmed the dismissal of one of the counts covered by the
government's appeal and reversed as to the other two counts. (The government thereafter dismissed the two counts of the most recent indictment similar to the two counts restored by the appellate
court.) On September 10, 2009, upon agreement of the government and the defendant engineers, the trial court entered an order continuing the case until after the trial in the civil case filed
by Eaton and staying all proceedings except the issuance of orders related to previously filed motions and the parties' compliance with ongoing discovery obligations. The trial court has since
disposed of all pending motions.

No
charges have been brought against Triumph Actuation Systems or us, and we understand that neither Triumph Actuation Systems nor the Company is currently the subject of the criminal
investigation.

In
the civil case, following stays of most discovery while the parties litigated a motion to dismiss and a motion to protect the defendant engineers' Fifth Amendment rights, discovery
recommenced in late August 2007. However, on January 4, 2008, the judge in the civil case, Judge Bobby DeLaughter, recused himself on his own motion. The case was reassigned to Chief Judge W.
Swan Yerger.

On
January 24, 2008, Triumph Actuation Systems filed a motion to stay all discovery in order to review and reconsider Judge DeLaughter's prior orders based on the ongoing federal
investigation of an alleged ex parte and inappropriate relationship between Judge DeLaughter and Ed Peters, a lawyer representing Eaton for whom Judge DeLaughter had worked prior to his appointment to
the bench. Judge DeLaughter was thereafter suspended from the bench and indicted by a federal grand jury sitting in the Northern District of Mississippi. On July 30, 2009, Judge DeLaughter pled
guilty to a count of obstruction of justice contained in the indictment and, on November 13, 2009, was sentenced to 18 months in federal prison.

Triumph
Actuation Systems filed other motions relating to this alleged inappropriate relationship with Mr. Peters, including a motion for sanctions. Judge Yerger ordered that this
conduct be examined and has undertaken, along with a newly appointed Special Master, to review Judge DeLaughter's rulings in the case from the time Mr. Peters became involved. That review is
ongoing. The court has stayed all other proceedings while conducting its review of the conduct of Mr. Peters, with the exception of the period between October 30, 2008 and
March 4, 2009 when discovery on the merits was briefly reopened. The case has been removed from the court's trial calendar for the date previously set, and no alternative date has been
assigned.

It
is too early to determine what, if any, exposure to liability Triumph Actuation Systems or the Company might face as a result of the civil suit. We intend to continue to vigorously
defend the allegations contained in Eaton's complaint and to vigorously prosecute the counterclaims brought by Triumph Actuation Systems.

In
the ordinary course of our business, we are also involved in disputes, claims, lawsuits, and governmental and regulatory inquiries that we deem to be immaterial. Some may involve
claims or potential claims of substantial damages, fines or penalties. While we cannot predict the outcome of any pending or future litigation or proceeding, we do not believe that any pending matter
will have a material effect, individually or in the aggregate, on our financial position or results of operations, although no assurances can be given to that effect.

Item 4.    Submission of Matters to a Vote of Security Holders

None.

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Table of Contents

PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Range of Market Price

Our Common Stock is traded on the New York Stock Exchange under the symbol "TGI." The following table sets forth the range of high and
low prices for our Common Stock for the periods indicated:

High

LowFiscal 20091st Quarter

$
73.76

$
46.162nd Quarter


58.87


39.203rd Quarter


46.45


26.894th Quarter


47.00


31.12Fiscal 20101st Quarter

$
45.11

$
34.362nd Quarter


49.85


34.963rd Quarter


50.92


45.934th Quarter


74.73


47.50


On
May 10, 2010, the reported closing price for our Common Stock was $72.80. As of May 10, 2010, there were approximately 87 holders of record of our Common Stock and we
believe that our Common Stock was beneficially owned by approximately 4,000 persons.

Dividend Policy

During fiscal 2010 and 2009, we paid cash dividends of $0.16 per share and $0.16 per share, respectively. However, our declaration and
payment of cash dividends in the future and the amount thereof will depend upon our results of operations, financial condition, cash requirements, future prospects, limitations imposed by credit
agreements or indentures governing debt securities and other factors deemed relevant by our Board of Directors. No assurance can be given that cash dividends will continue to be declared and paid at
historical levels or at all. Certain of our debt arrangements, including our credit facility, restrict our paying dividends and making distributions on our capital stock, except for the payment of
stock dividends and redemptions of an employee's shares of capital stock upon termination of employment. On April 26, 2010, the Company announced that its Board of Directors declared a regular
quarterly dividend of $0.04 per share on its outstanding common stock. The dividend is payable June 15, 2010 to shareholders of record as of May 28, 2010.

Repurchases of Stock

The following summarizes repurchases made pursuant to the Company's share repurchase plan during three years ended March 31,
2010. In December 1998, we announced a program to repurchase up to 500,000 shares of our common stock. In February 2008, the Company's Board of Directors authorized an increase in the Company's
existing stock repurchase program by up to an additional 500,000 shares of its common stock. From the inception of the program through March 31, 2010, we have repurchased a total of 499,200
shares for a total purchase price of $19.2 million. As a result, as of May 10, 2010, the Company remains able to purchase an additional 500,800 shares. Repurchases may be made from time
to time in open market transactions, block purchases, privately negotiated

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Table of Contents

transactions
or otherwise at prevailing prices. No time limit has been set for completion of the program.

Period

Total number of
shares purchased

Average price
paid per share

Total number of
shares purchased
as part of publicly
announced plans

Maximum number
of shares that may
yet be purchased
under the plansFebruary 1-28, 2008


220,000

$
56.10


499,200


500,800


Equity Compensation Plan Information

The information required regarding equity compensation plan information is included in our Proxy Statement in connection with our 2010
Annual Meeting of Stockholders to be held on September 28, 2010, under the heading "Equity Compensation Plan Information" and is incorporated herein by reference.

The
following graph compares the cumulative 5-year total return provided shareholders on Triumph Group, Inc.'s common stock relative to the cumulative total returns of
the Russell 2000 index and the S&P Aerospace & Defense index. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each of the
indexes on March 31, 2005 and its relative performance is tracked through March 31, 2010.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*  Among Triumph Group, Inc., The Russell 2000 Index  And The S&P Aerospace & Defense Index

LOGO

---

3/05

3/06

3/07

3/08

3/09

3/10Triumph Group, Inc.


100.00


113.66


142.46


146.89


98.94


182.18Russell 2000


100.00


125.85


133.28


115.95


72.47


117.95S&P Aerospace & Defense


100.00


123.21


142.99


150.30


87.43


149.44


The stock price performance included in this graph is not necessarily indicative of future stock price performance.

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Table of Contents

Item 6.    Selected Financial Data

The following selected financial data should be read in conjunction with the Consolidated Financial Statements and related Notes
thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included herein.

Fiscal Years Ended March 31,2010(1)(2)(3)

2009(1)(2)(4)

2008(1)(2)(5)

2007(1)(2)(6)(7)

2006(6)(in thousands, except per share data)Operating Data:Net sales

$
1,294,780

$
1,240,378

$
1,151,090

$
937,327

$
749,368Cost of sales


927,211


877,744


822,288


671,838


549,307367,569


362,634


328,802


265,489


200,061Selling, general and administrative expense


157,870


162,109


159,262


135,887


108,063Depreciation and amortization


54,418


48,611


43,215


35,703


30,827Operating income


155.281


151,914


126,325


93,899


61,171Interest expense and other


28,865


16,929


19,942


14,807


10,304(Gain) loss on early extinguishment of debt


(39
)

(880
)




5,088


Income from continuing operations, before income taxes


126,455


135,865


106,383


74,004


50,867Income tax expense


41,167


43,124


34,748


24,982


11,608Income from continuing operations


85,288


92,741


71,635


49,022


39,259Loss from discontinued operations


(17,526
)

(4,745
)

(8,468
)

(3,905
)

(4,744
)Net income

$
67,762

$
87,996

$
63,167

$
45,117

$
34,515Earnings per share:Income from continuing operations:Basic

$
5.18

$
5.66

$
4.34

$
3.02

$
2.47Diluted

$
5.12

$
5.59

$
4.08

$
2.99

$
2.45Cash dividends declared per share

$
0.16

$
0.16

$
0.16

$
0.12


Shares used in computing earnings per share:Basic


16,459


16,384


16,497


16,220


15,920Diluted


16,666


16,584


17,540


16,413


16,060




As of March 31,2010(1)(2)(3)

2009(1)(2)(4)

2008(1)(2)(5)

2007(1)(2)(6)(7)

2006(6)(in thousands)Balance Sheet Data:Working capital

$
487,780

$
372,159

$
416,842

$
324,877

$
256,480Total assets


1,712,677


1,591,207


1,412,760


1,218,480


977,253Long-term debt, including current portion


505,780


459,396


395,981


286,499


161,417Total stockholders' equity

$
860,686

$
788,563

$
706,436

$
645,177

$
563,703


(1)Fiscal
years 2010, 2009, 2008 and 2007 include noncash interest expenses of $6.2 million, $5.8 million, $6.5 million and
$3.1 million, respectively, related to the adoption and retroactive application of the convertible debt accounting standard as of April 1, 2009.(2)Fiscal
years 2010, 2009, 2008 and 2007 include stock-based compensation pre-tax charges of $3.2 million, $3.2 million,
$2.8 million and $2.5 million, respectively, related to the adoption of provisions of theCompensationStock Compensationtopic
of the Accounting Standards Codification ("ASC") as of April 1, 2006.(3)Includes
the acquisition of DCL Avionics, Inc. (January 2010) and Fabritech, Inc. (March 2010) from the date of each respective acquisition.
See Note 3 to the Consolidated Financial Statements.(4)Includes
the acquisition of Merritt Tool Company, Inc., Saygrove Defence and Aerospace Group Limited., The Mexmil Company, LLC and acquisition
of the aviation segment of Kongsberg Automotive Holdings ASA from the date of each respective acquisition (March 2009). See Note 3 to the Consolidated Financial Statements.(5)Includes
the acquisition of the assets and business of B. & R. Machine & Tool Corp. from the date of acquisition (February 2008). See
Note 3 to the Consolidated Financial Statements.(6)During
2008, the Company sold the assets of Triumph Precision, Inc. and also decided to sell Triumph Precision Castings Co. These businesses
have been classified as discontinued operations in 2009 and 2008 and, accordingly, the results for fiscal years prior to 2008 have also been reclassified to conform to the 2008 presentation. See
Note 4 to the Consolidated Financial Statements.(7)Includes
the acquisition of the assets and businesses of Excel Manufacturing, Inc. (April 2006), Air Excellence International, Inc. (April
2006), Grand Prairie Accessory Services, LLC (January 2007) and the acquisition through merger of Allied Aerospace Industries, Inc. (November 2006), from the date of each respective
acquisition. See Note 3 to the Consolidated Financial Statements.


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Table of Contents

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

(The following discussion should be read in conjunction with the Consolidated Financial Statements and notes thereto contained
elsewhere herein.)

OVERVIEW

We are a major supplier to the aerospace industry and have two operating segments: (i) Triumph Aerospace Systems Group, whose
companies design, engineer, manufacture and sell a wide range of proprietary and build-to-print components, assemblies and systems for the global aerospace OEM market; and
(ii) Triumph Aftermarket Services Group, whose companies serve aircraft fleets, notably commercial airlines, the U.S. military and cargo
carriers, through the maintenance, repair and overhaul of aircraft components and accessories manufactured by third parties.

In
March 2010, we entered into definitive agreement to purchase Vought. Vought is a leading global manufacturer of aerostructures for commercial, military and business jet aircraft.
Products include fuselages, wings, empennages, nacelles and helicopter cabins. Vought's customer base is comprised of the leading global aerospace OEMs and over 80% of their revenue is from
sole source, long-term contracts. Vought's revenues for the year ended December 31, 2009 were $1.9 billion and they employed approximately 5,900 people.

Financial
highlights for the fiscal year ended March 31, 2010 include:



For
the fiscal year ended March 31, 2010, net sales totaled $1.29 billion, a 4.4% increase from fiscal year 2009 net sales of $1.24 billion. Net income for fiscal
year 2010 decreased 23.0% to $67.8 million, or $4.07 per diluted common share, versus $88.0 million, or $5.30 per diluted common share, for fiscal year 2009. As discussed in further
detail below under "Results of Operations," the decrease in net income is attributable to the write-down of the carrying value of our discontinued operation to estimated fair value less
cost to sell, as well as the additional interest expense associated with the issuance of Senior Notes due 2017 in November 2009, offset by the contribution from recent acquisitions.

Our
working capital needs are generally funded through cash flows from operations and borrowings under our credit arrangements. For the fiscal year ended March 31, 2010, we
generated approximately $169.6 million of cash flows from operating activities, used approximately $62.5 million in investing activities and generated approximately $35.3 million
in financing activities.

We
continue to remain focused on growing our core businesses as well as growing through strategic acquisitions. Our organic sales declined in fiscal 2010 due to major program delays, the
dramatic decline in the regional and business jet markets due to the overall economy, lower passenger and freight traffic and airline inventory de-stocking. Our Company has an aggressive
but selective acquisition approach that adds capabilities and increases our capacity for strong and consistent internal growth.

In
the fourth quarter of fiscal 2010, we acquired Fabritech, Inc. (now Triumph FabricationsSt. Louis) and DCL Avionics, Inc. (now part of Triumph
InstrumentsBurbank), collectively, the "fiscal 2010 acquisitions." The results of Triumph FabricationsSt. Louis are included in the Company's Aftermarket Services
Segment from the date of acquisition.

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In
March 2009, we acquired Merritt Tool Company, Inc. (now Triumph StructuresEast Texas), Saygrove Defence & Aerospace Group Limited (now Triumph
Actuation & Motion Control SystemsUK), the aviation segment of Kongsberg Automotive Holdings ASA (now Triumph ControlsU.K and Triumph ControlsGermany) and
The Mexmil Company, LLC (now Triumph Insulation Systems), collectively, the "fiscal 2009 acquisitions." The results for the fiscal 2009 acquisitions are included in the Company's Aerospace
Systems Segment.

RESULTS OF OPERATIONS

The following includes a discussion of our consolidated and business segment results of operations. The Company's diverse structure and
customer base do not provide for precise comparisons of the impact of price and volume changes to our results. However, we have disclosed the significant variances between the respective periods.

Non-GAAP Financial Measures

We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. In accordance with recent
Securities and Exchange Commission (the "SEC") guidance on Compliance and Disclosure Interpretations, we also disclose and discuss certain non-GAAP financial measures in our public
releases. Currently, the non-GAAP financial measure that we disclose is EBITDA, which is our income from continuing operations before interest, income taxes, depreciation and amortization.
We disclose EBITDA on a consolidated and an operating segment basis in our earnings releases, investor conference calls and filings with the SEC. The non-GAAP financial measures that we
use may not be comparable to similarly titled measures reported by other companies. Also, in the future, we may disclose different non-GAAP financial measures in order to help our
investors more meaningfully evaluate and compare our future results of operations to our previously reported results of operations.

We
view EBITDA as an operating performance measure and as such we believe that the GAAP financial measure most directly comparable to it is income from continuing operations. In
calculating EBITDA, we exclude from income from continuing operations the financial items that we believe should be separately identified to provide additional analysis of the financial components of
the day-to-day operation of our business. We have outlined below the type and scope of these exclusions and the material limitations on the use of these non-GAAP
financial measures as a result of these exclusions. EBITDA is not a measurement of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net
income (loss), income from continuing operations, or as an indicator of any other measure of performance derived in accordance with GAAP. Investors and potential investors in our securities should not
rely on EBITDA as a substitute for any GAAP financial measure, including net income (loss) or income from continuing operations. In addition, we urge investors and potential investors in our
securities to carefully review the reconciliation of EBITDA to income from continuing operations set forth below, in our earnings releases and in other filings with the SEC and to carefully review the
GAAP financial information included as part of our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K that are filed with the SEC, as well as our
quarterly earnings releases, and compare the GAAP financial information with our EBITDA.

EBITDA
is used by management to internally measure our operating and management performance and by investors as a supplemental financial measure to evaluate the performance of our
business that, when viewed with our GAAP results and the accompanying reconciliation, we believe provides additional information that is useful to gain an understanding of the factors and trends
affecting our business. We have spent more than 15 years expanding our product and service capabilities partially through acquisitions of complementary businesses. Due to the expansion of our
operations, which included acquisitions, our income from continuing operations has included significant

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Table of Contents

charges
for depreciation and amortization. EBITDA excludes these charges and provides meaningful information about the operating performance of our business, apart from charges for depreciation and
amortization. We believe the disclosure of EBITDA helps investors meaningfully evaluate and compare our performance from quarter to quarter and from year to year. We also believe EBITDA is a measure
of our ongoing operating performance because the isolation of non-cash charges, such as depreciation and amortization, and non-operating items, such as interest and income
taxes, provides additional information about our cost structure, and, over time, helps track our operating progress. In addition, investors, securities analysts and others have regularly relied on
EBITDA to provide a financial measure by which to compare our operating performance against that of other companies in our industry.

Set
forth below are descriptions of the financial items that have been excluded from our income from continuing operations to calculate EBITDA and the material limitations associated
with using this non-GAAP financial measure as compared to income from continuing operations:



Management
compensates for the above-described limitations of using non-GAAP measures by using a non-GAAP measure only to supplement our GAAP results and to
provide additional information that is useful to gain an understanding of the factors and trends affecting our business.

The
following table shows our EBITDA reconciled to our income from continuing operations for the indicated periods (in thousands):

Fiscal year ended March 31,2010

2009

2008Income from continuing operations

$
85,288

$
92,741

$
71,635Depreciation and amortization


54,418


48,611


43,215Interest expense and other


28,865


16,929


19,942Gain on early extinguishment of debt


(39
)

(880
)

Income tax expense


41,167


43,124


34,748EBITDA

$
209,699

$
200,525

$
169,540


The
fluctuations from period to period within the amounts of the components of the reconciliations above are discussed further below within Results of Operations.

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Table of Contents

Fiscal year ended March 31, 2010 compared to fiscal year ended March 31, 2009

Year Ended March 31,2010

2009(in thousands)Net sales

$
1,294,780

$
1,240,378Segment operating income


181,566


178,882Corporate general and administrative expenses


(26,285
)

(26,968
)Total operating income


155,281


151,914Interest expense and other


28,865


16,929Gain on early extinguishment of debt


(39
)

(880
)Income tax expense


41,167


43,124Income from continuing operations


85,288


92,741Loss from discontinued operations, net


(17,526
)

(4,745
)Net income

$
67,762

$
87,996


Net
sales increased by $54.4 million, or 4.4%, to $1.29 billion for the fiscal year ended March 31, 2010 from $1.24 billion for the fiscal year ended
March 31, 2009. The fiscal 2010 acquisitions and fiscal 2009 acquisitions contributed $123.3 million in net sales. Organic sales declined $68.9 million, or 5.6%, which was
negatively impacted by major program delays, the decline in the regional jet market due to the overall economy, lower passenger and freight traffic and airline inventory de-stocking. Prior
year sales were negatively impacted by the Boeing strike.

Cost
of sales increased by $49.5 million, or 5.6%, to $927.2 million for the fiscal year ended March 31, 2010 from $877.7 million for the fiscal year ended
March 31, 2009. This increase includes the acquisitions noted above, which contributed $92.0 million. Excluding the effects of these acquisitions, gross margin was 28.7% for the fiscal
year ended March 31, 2010, compared with 29.2% for the fiscal year ended March 31, 2009.

Segment
operating income increased by $2.7 million, or 1.5%, to $181.6 million for the fiscal year ended March 31, 2010 from $178.9 million for the fiscal
year ended March 31, 2009. Operating income growth was a direct result of margins attained on increased sales as described above, and decreases in litigation costs ($0.9 million) and bad
debt expense ($1.6 million), partially offset by increases in depreciation and amortization ($5.8 million) primarily from the fiscal 2009 acquisitions.

Corporate
expenses decreased by $0.7 million, or 2.5%, to $26.3 million for the fiscal year ended March 31, 2010 from $27.0 million for the fiscal year ended
March 31, 2009, primarily due to decreased healthcare and workers' compensation costs ($0.8 million), consulting expenses ($1.6 million) and computer services costs
($1.0 million), partially offset by increases in acquisition-related costs ($1.6 million). In addition, we have recognized expenses of approximately $4.1 million
start-up costs related to the Mexican facility, predominately recorded within corporate expenses.

Interest
expense and other increased by $11.9 million, or 70.5%, to $28.9 million for the fiscal year ended March 31, 2010 compared to $16.9 million for the
prior year. During fiscal 2010, the Company issued $175.0 million in principal amount of 8% Senior Notes due 2017, resulting in additional interest expense of approximately $5.3 million.
The initial interest payment on this debt is due May 15, 2010. Fiscal 2010 also included full-year interest expense on our equipment leasing facility representing an additional
$4.0 million from fiscal 2009. During fiscal 2009, the Company entered into certain foreign currency derivative instruments that did not meet hedge accounting criteria and primarily were
intended to protect against exposure related to fiscal 2009 acquisitions. These instruments resulted in a gain of $1.4 million in fiscal 2009, which is included in interest expense and other.
Also during fiscal 2009, the Company paid $15.4 million to purchase $18.0 million of principal on the convertible senior

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Table of Contents

subordinated
notes, resulting in a gain on early extinguishment of $0.9 million. Included in interest expense and other is noncash interest expense of $8.1 million and
$7.9 million for the fiscal years ended March 31, 2010 and 2009, respectively, of which $6.1 million and $5.8 million, respectively, reflect accretion of interest
recognized in accordance with the convertible debt accounting standard.

The
effective tax rate was 32.6% for the fiscal year ended March 31, 2010 and 31.8% for the fiscal year ended March 31, 2009. The increase in the tax rate was primarily due
to the lapse of the research and experimentation tax credit as of January 1, 2010.

Loss
from discontinued operations before income taxes was $26.9 million for the fiscal year ended March 31, 2010, which included impairment charges of $19.9 million,
compared with a loss from discontinued operations before income taxes of $7.3 million for the fiscal year ended March 31, 2009. Due to failed negotiations with certain potential buyers
of the business occurring during the quarter ended December 31, 2009, the Company reassessed its estimated fair value of the business based on current viable offers to purchase the business,
recent performance results and overall market conditions, resulting in a write-down, which was applied to accounts receivable, inventory and property, plant and equipment. The Company
recognized a pre-tax loss of $17.4 million in the third quarter of fiscal 2010, based on the write-down of the carrying value of the business to estimated fair value
less cost to sell. Included in the loss from discontinued operations for the fiscal year ended March 31, 2010 is an additional impairment charge of $2.5 million recorded during the first
quarter of fiscal 2010. The income tax benefit for discontinued operations was $9.4 million for the fiscal year ended March 31, 2010 compared to a benefit of $2.6 million for the
prior year.

Fiscal year ended March 31, 2009 compared to fiscal year ended March 31, 2008

Year Ended March 31,2009

2008(in thousands)Net sales

$
1,240,378

$
1,151,090Segment operating income


178,882


148,292Corporate general and administrative expenses


(26,968
)

(21,967
)Total operating income


151,914


126,325Interest expense and other


16,929


19,942Gain on early extinguishment of debt


(880
)

Income tax expense


43,124


34,748Income from continuing operations


92,741


71,635Loss from discontinued operations, net


(4,745
)

(8,468
)Net income

$
87,996

$
63,167


Net
sales increased by $89.3 million, or 7.8%, to $1.24 billion for the fiscal year ended March 31, 2009 from $1.15 billion for the fiscal year ended
March 31, 2008. The fiscal 2009 acquisitions and the fiscal 2008 acquisition of B. & R. Machine & Tool Corp. (now Triumph StructuresLong Island) together contributed
$37.0 million. Excluding the effects of this acquisition, organic sales growth was $52.3 million, or 4.5%, which was negatively impacted by the Boeing strike and major program delays
(particularly in the 787 and 747-8 programs), partially offset by a favorable settlement of a retroactive pricing agreement.

The
Aerospace Systems segment benefited primarily from increased sales to our OEM customers driven by increased military aircraft build rates, while the increase in sales for our
Aftermarket Services segment was the result of increased demand for our services due to growth in global air traffic.

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Cost
of sales increased by $55.4 million, or 6.7%, to $877.7 million for the fiscal year ended March 31, 2009 from $822.3 million for the fiscal year ended
March 31, 2008. This increase includes the acquisitions noted above, which contributed $17.9 million. Excluding the effects of these acquisitions, gross margin was 28.6% for the fiscal
year ended March 31, 2009, compared with 28.4% for the fiscal year ended March 31, 2008. Despite having consistent consolidated gross margin, the gross margin for our Aerospace Systems
segment was favorably impacted by contribution from the acquisition of B. & R. Machine & Tool Company and the favorable settlement of a retroactive pricing agreement, whereas the gross
margin for our Aftermarket Services segment was negatively impacted by charges due to contract terminations ($1.3 million) and changes in estimate under
power-by-the-hour contracts ($1.1 million) as well as losses at our Phoenix APU facility due to cost overruns and excess overhead ($4.8 million) and
higher than expected warranty expenses ($0.6 million).

Segment
operating income increased by $30.5 million, or 20.6%, to $178.9 million for the fiscal year ended March 31, 2009 from $148.3 million for the fiscal
year ended March 31, 2008. Operating income growth was a direct result of margins attained on increased sales as described above, the contribution
of $13.8 million from the above-mentioned acquisitions, and decreases in litigation costs ($3.7 million) and incentive compensation ($1.3 million), partially offset by increases
in payroll ($2.4 million) and depreciation and amortization expenses ($1.1 million) associated with our acquisitions.

Corporate
expenses increased by $5.0 million, or 22.8%, to $27.0 million for the fiscal year ended March 31, 2009 from $22.0 million for the fiscal year ended
March 31, 2008, primarily due to increased healthcare ($3.0 million), stock compensation costs ($0.6 million) and the write-off of acquisition costs on a potential
acquisition that was not consummated ($0.5 million), partially offset by decreases in litigation costs ($1.8 million).

Interest
expense and other decreased by $3.0 million, or 15.1%, to $16.9 million for the fiscal year ended March 31, 2009 compared to $19.9 million for the
prior year. During fiscal 2009, the Company entered into certain foreign currency derivative instruments that did not meet hedge accounting criteria and primarily were intended to protect against
exposure related to fiscal 2009 acquisitions. These instruments resulted in a gain of $1.4 million in fiscal 2009, which is included in interest expense and other. In addition to this gain, the
decrease in interest expense was impacted by declining interest rates. Also during fiscal 2009, the Company paid $15.4 million to purchase $18.0 million of principal on the convertible
senior subordinated notes, resulting in a gain on early extinguishment of $0.9 million. Included in interest expense and other is non-cash interest expense of $7.9 million
and $8.1 million for the fiscal years ended March 31, 2009 and 2008, respectively, of which $5.8 million and $6.5 million, respectively, reflect accretion of interest
recognized in accordance with the convertible debt accounting standard.

The
effective tax rate was 31.8% for the fiscal year ended March 31, 2009 and 32.9% for the fiscal year ended March 31, 2008. The decrease in the tax rate was primarily due
to the retroactive reinstatement of the research and experimentation tax credit back to January 1, 2008.

Loss
from discontinued operations before income taxes was $7.3 million for the fiscal year ended March 31, 2009, compared with a loss from discontinued operations before
income taxes of $13.0 million for the fiscal year ended March 31, 2008, which included an impairment charge of $4.0 million. The income tax benefit for discontinued operations was
$2.6 million for the fiscal year ended March 31, 2009 compared to a benefit of $4.6 million for the prior year.

Business Segment Performance

We are a major supplier to the aerospace industry and have two operating segments: (i) Triumph Aerospace Systems Group and
(ii) Triumph Aftermarket Services Group. Our Aerospace Systems segment includes 39 operating locations, and the Aftermarket Services segment includes 15 operating

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locations
at March 31, 2010. The results of operations between our operating segments vary due to differences in competitors, customers, extent of proprietary deliverables and performance. For
example, our Aerospace Systems segment generally includes proprietary products and/or arrangements where we become the primary source or one of a few primary sources to our customers, where our unique
manufacturing capabilities command a higher margin. Also, OEMs are increasingly focusing on assembly activities while outsourcing more manufacturing and repair to third parties, and as a
result, are less of a competitive force than in previous years. In contrast, our Aftermarket Services segment provides MRO services on components and accessories manufactured by third parties, with
more diverse competition, including airlines, OEMs and other third-party service providers. In addition, variability in the timing and extent of customer requests performed in the Aftermarket
Services segment can provide for greater volatility and less predictability in revenue and earnings than that experienced in the Aerospace Systems segment.

The
Aerospace Systems segment consists of the Company's operations which manufacture products primarily for the aerospace OEM market. The Aerospace Systems segment's operations design
and engineer mechanical and electromechanical controls, such as hydraulic systems and components, main engine gearbox assemblies, accumulators and mechanical control cables. The Aerospace Systems
segment's revenues are also derived from stretch forming, die forming, milling, bonding, machining, welding and assembly and fabrication of various structural components used in aircraft wings,
fuselages and other significant assemblies. Further, the segment's operations also design and manufacture composite assemblies for floor panels, environmental control system ducts,
non-structural cockpit components and thermal acoustic insulation systems. These products are sold to various aerospace OEMs on a global basis.

The
Aftermarket Services segment consists of the Company's operations that provide maintenance, repair and overhaul services to both commercial and military markets on components and
accessories manufactured by third parties. Maintenance, repair and overhaul revenues are derived from services on auxiliary power units, airframe and engine accessories, including constant-speed
drives, cabin compressors, starters and generators, and pneumatic drive units. In addition, the Aftermarket Services segment's operations repair and overhaul thrust reversers, nacelle components and
flight control surfaces. The Aftermarket Services segment's operations also perform repair and overhaul services and supply spare parts for various types of cockpit instruments and gauges for a broad
range of commercial airlines on a worldwide basis.

We
currently generate a majority of our revenue from clients in the commercial aerospace industry, the military, the business jet and the regional airline industry. Our growth and
financial results are largely dependent on continued demand for our products and services from clients in these industries. If any of these industries experiences a downturn, our clients in these
sectors may conduct less business with us. The following table summarizes our net sales by end market by business segment.

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The
loss of one or more of our major customers or an economic downturn in the commercial airline or the military and defense markets could have a material adverse effect on our business.

Year Ended March 31,2010

2009

2008Aerospace SystemsCommercial aerospace


35.4
%

28.3
%

30.7
%Military


34.8
%

33.0
%

29.5
%Regional


3.1
%

5.3
%

4.2
%Business Jets


4.6
%

7.9
%

8.1
%Non-aviation


4.7
%

5.1
%

6.2
%Total Aerospace Systems net sales


82.6
%

79.6
%

78.7
%Aftermarket SystemsCommercial aerospace


13.0
%

14.4
%

13.7
%Military


2.5
%

3.3
%

3.3
%Regional


0.5
%

0.6
%

0.9
%Business Jets


0.7
%

0.9
%

0.7
%Non-aviation


0.7
%

1.2
%

2.7
%Total Aftermarket Services net sales


17.4
%

20.4
%

21.3
%Total Consolidated net sales


100.0
%

100.0
%

100.0
%


The
decline in our percentage of net sales to the Business jet and Regional jet markets is due to the overall economic conditions and the Commercial aerospace end market was impacted by
major program delays in fiscal 2010, as well as continued growth in the Military end market. Sales to the Commercial aerospace end market were negatively impacted in fiscal 2009 by the Boeing strike.

Business Segment PerformanceFiscal year ended March 31, 2010 compared to fiscal year ended March 31, 2009

Year Ended March 31,



% of Total Sales%
Change2010

2009

2010

2009(in thousands)NET SALESAerospace Systems

$
1,073,494

$
988,359


8.6
%

82.9
%

79.7
%Aftermarket Services


224,991


254,638


(11.6
)%

17.4
%

20.5
%Elimination of inter-segment sales


(3,705
)

(2,619
)

41.5
%

(0.3
)%

(0.2
)%Total net sales

$
1,294,780

$
1,240,378


4.4
%

100.0
%

100.0
%




% of Segment
SalesYear Ended March 31,%
Change2010

2009

2010

2009(in thousands)SEGMENT OPERATING INCOMEAerospace Systems

$
170,457

$
168,006


1.5
%

15.9
%

17.0
%Aftermarket Services


11,109


10,876


2.1
%

4.9
%

4.3
%Corporate


(26,285
)

(26,968
)

(2.5
)%

N/A


N/ATotal segment operating income

$
155,281

$
151,914


2.2
%

12.0
%

12.2
%


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Aerospace Systems:The Aerospace Systems segment net sales increased by $85.1 million, or 8.6%, to $1.07 billion for the
fiscal year
ended March 31, 2010 from $988.4 million for the fiscal year ended March 31, 2009. The fiscal 2009 acquisitions contributed $123.0 million of increased net sales. Organic
sales decreased by $37.8 million due to declines in the business jet and regional jet markets due to the overall economic conditions and major program delays, however, the prior year period
sales were negatively impacted by the Boeing strike.

Aerospace
Systems segment operating income increased by $2.5 million, or 1.5%, to $170.5 million for the fiscal year ended March 31, 2010 from $168.0 million
for the fiscal year ended March 31, 2009. Operating income increased primarily due to margins attained on increased sales, including the contribution from the above-mentioned acquisitions, as
well as decreases in litigation expenses ($0.9 million) and bad debt expenses ($2.3 million), partially offset by increases in depreciation and amortization ($6.0 million)
primarily associated with the fiscal 2009 acquisitions.

Aerospace
Systems segment operating income as a percentage of segment sales decreased to 15.9% for the fiscal year ended March 31, 2010 as compared with 17.0% for the fiscal year
ended March 31, 2009, due to the decrease in gross margin.

Aftermarket Services:The Aftermarket Services segment net sales decreased by $29.6 million, or 11.6%, to $225.0 million for
the fiscal
year ended March 31, 2010 from $254.6 million for the fiscal year ended March 31, 2009. This decrease was due to a decline in global commercial air traffic and airline inventory
de-stocking resulting in lower demand for the repair and overhaul of auxiliary power units and the brokering of similar units.

Aftermarket
Services segment operating income increased by $0.2 million, or 2.1%, to $11.1 million for the fiscal year ended March 31, 2010 from $10.9 million
for the fiscal year ended March 31, 2009. Despite decreased sales volume as described above, operating income increased primarily due to charges recorded in the fiscal year ended
March 31, 2009 for cost overruns and excess overhead at our Phoenix APU operations, contract terminations and changes in estimate under
power-by-the hour ("PBH") contracts, offset by $0.3 million in expenses incurred to shut down a service facility in Austin, Texas in fiscal 2010. While the results of
our Phoenix APU operations continue to improve, operating margins continued to be dilutive to the segment's results.

Aftermarket
Services segment operating income as a percentage of segment sales increased to 4.9% for the fiscal year ended March 31, 2010 as compared with 4.3% for the fiscal year
ended March 31, 2009, due to a decline in sales volume offset by improved results at the Phoenix APU operations.

Business Segment PerformanceFiscal year ended March 31, 2009 compared to fiscal year ended March 31, 2008

Year Ended March 31,



% of Total Sales%
Change2009

2008

2009

2008(in thousands)NET SALESAerospace Systems

$
988,359

$
907,376


8.9
%

79.7
%

78.8
%Aftermarket Services


254,638


246,609


3.3
%

20.5
%

21.4
%Elimination of inter-segment sales


(2,619
)

(2,895
)

(9.5
)%

(0.2
)%

(0.2
)%Total net sales

$
1,240,378

$
1,151,090


7.8
%

100.0
%

100.0
%


38

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% of Segment
SalesYear Ended March 31,%
Change2009

2008

2009

2008(in thousands)SEGMENT OPERATING INCOMEAerospace Systems

$
168,006

$
124,812


34.6
%

17.0
%

13.8
%Aftermarket Services


10,876


23,480


(53.7
)%

4.3
%

9.5
%Corporate


(26,968
)

(21,967
)

22.8
%

n/a


n/aTotal segment operating income

$
151,914

$
126,325


20.3
%

12.2
%

11.0
%


Aerospace Systems:The Aerospace Systems segment net sales increased by $81.0 million, or 8.9%, to $988.4 million for the
fiscal year
ended March 31, 2009 from $907.4 million for the fiscal year ended March 31, 2008. The increase was primarily due to organic sales growth to our OEM customers of
$44.0 million driven by increased aircraft build rates and by a favorable settlement of a retroactive pricing agreement, negatively impacted by the Boeing strike and major program delays
(particularly in the 787 and 747-8 programs). The net sales contributed from the fiscal 2009 acquisitions and the fiscal 2008 acquisition of B. & R. Machine & Tool Corp. (now
Triumph StructuresLong Island) of $37.0 million accounted for the remaining increase.

Aerospace
Systems segment operating income increased by $43.2 million, or 34.6%, to $168.0 million for the fiscal year ended March 31, 2009 from
$124.8 million for the fiscal year ended March 31, 2008. Operating income increased primarily due to margins attained on increased sales, including the contribution of
$13.8 million from the above-mentioned acquisitions, as well as decreases in litigation expenses ($3.8 million) and incentive compensation ($1.1 million), partially offset by
increases in payroll ($2.9 million) and healthcare costs ($2.0 million).

Aerospace
Systems segment operating income as a percentage of segment sales increased to 17.0% for the fiscal year ended March 31, 2009 as compared with 13.8% for the fiscal year
ended March 31, 2008, due to the contribution of the acquisition of B. & R. Machine & Tool Corp, the reduction in expenses discussed above, and the favorable settlement of a
retroactive pricing agreement.

Aftermarket Services:The Aftermarket Services segment net sales increased by $8.0 million, or 3.3%, to $254.6 million for the
fiscal
year ended March 31, 2009 from $246.6 million for the fiscal year ended March 31, 2008. This increase was due to increased market penetration in the repair and overhaul of
auxiliary power units and thrust reversers primarily at our Thailand repair and maintenance facility. These increases were offset by decreased fleet utilization by customers under PBH contracts
impacting revenue by approximately $3.1 million.

Aftermarket
Services segment operating income decreased by $12.6 million, or 53.7%, to $10.9 million for the fiscal year ended March 31, 2009 from
$23.5 million for the fiscal year ended March 31, 2008. Operating income decreased primarily due to losses at the Phoenix APU operations due to cost overruns and excess overhead
($4.8 million), higher than expected warranty expenses ($0.6 million), lower than expected PBH revenue ($3.1 million), PBH contract charges ($1.1 million) and additional
charges for the early termination of a maintenance contract ($1.3 million), partially offset by higher margins attained on increased sales as described above, as well as decreases in payroll
($0.8 million) and incentive compensation expenses ($1.1 million).

Aftermarket
Services segment operating income as a percentage of segment sales decreased to 4.3% for the fiscal year ended March 31, 2009 as compared with 9.5% for the fiscal year
ended March 31, 2008, due to the $5.5 million in charges due to contract terminations and changes in estimate under PBH contracts as well as the production and operation losses at the
Phoenix APU operations.

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Liquidity and Capital Resources

Our working capital needs are generally funded through cash flow from operations and borrowings under our credit arrangements. During
the year ended March 31, 2010, we generated approximately $169.6 million of cash flow from operating activities, used approximately $62.5 million in investing activities and
generated approximately $35.3 million in financing activities.

Cash
flows from operations for the fiscal year ended March 31, 2010 increased $34.7 million, or 25.7%, from the fiscal year ended March 31, 2009. Our cash flows from
operations increased despite a decrease of $20.2 million in net income, which included $5.8 million in additional non-cash charges for depreciation and amortization due to
the fiscal 2009 acquisitions and $19.9 million in impairment charges within discontinued operations during the fiscal year ended March 31, 2010. The increase in cash flows resulted from
continued improvements in our inventory management resulting in a source of cash of $30.2 million as compared to the use of cash of $7.7 million in the prior year period.

On
August 17, 2009, we amended the existing amended and restated credit agreement (the "Credit Facility") with our lenders to (i) increase the availability under the Credit
Facility to $485.0 million from $370.0 million, (ii) extend the maturity date to January 31, 2013 and (iii) amend certain other terms and
covenants. As of March 31, 2010, $478.9 million was available under our Credit Facility. On March 31, 2010, no borrowings and $6.1 million in letters of credit were
outstanding under the Credit Facility. Amounts repaid under the Credit Facility may be reborrowed.

In
November 2009, the Company issued $175.0 million principal amount of 8% Senior Subordinated Notes due 2017 (the "2017 Notes"). The 2017 Notes were sold at 98.558% of principal
amount for net proceeds of $172.5 million, and have an effective interest rate of 8.25%. Interest on the 2017 Notes is payable semi-annually in cash in arrears on May 15 and
November 15 of each year. In connection with the issuance of the 2017 Notes, the Company incurred approximately $4.4 million of costs, which were deferred and are being amortized on the
effective interest method over the term of the notes.

In
the fourth quarter of fiscal 2010, we acquired Fabritech, Inc. (now Triumph FabricationsSt. Louis) and DCL Avionics, Inc. (now part of Triumph
InstrumentsBurbank), collectively the "fiscal 2010 acquisitions." The total cash paid at closing for the fiscal 2010 acquisitions of $23.2 million was funded by cash from
operations. The fiscal 2010 acquisitions provide for deferred and contingent payments of $0.1 million and $16.0 million, respectively. The fair value of the contingent payments is
$10.6 million as of March 31, 2010.

During
the year ended March 31, 2009, we generated approximately $135.0 million of cash flow from operating activities, used approximately $185.6 million in
investing activities and generated approximately $52.1 million in financing activities. During the fiscal year ended March 31, 2009, our increased cash flow from operations was
attributable to higher net income and an improved performance on working capital due to increased cash collections efforts, offset by timing of cash disbursements and utilization of inventory.

In
August 2008, we entered into a receivable securitization facility (the "Securitization Facility"). Under the Securitization Facility, the Company sells on a revolving basis certain
accounts receivable to Triumph Receivables, LLC, a wholly-owned special purpose entity, which in turn sells a percentage ownership interest in the receivables to commercial paper conduits
sponsored by financial institutions. The Company is the servicer of the accounts receivable under the Securitization Facility. As of March 31, 2010, the maximum amount available under the
Securitization Facility was $123.5 million. The Securitization Facility is due to expire in August 2010 and is subject to annual renewal through August 2013. Interest rates are based on
prevailing market rates for short-term commercial paper plus a program fee and a commitment fee. The program fee is 0.85% on the amount outstanding under the Securitization Facility.
Additionally, the commitment fee is 0.65% on 102% of the maximum amount

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available
under the Securitization Facility. At March 31, 2010, there was $75.0 million outstanding under the Securitization Facility included in the current portion of
long-term debt on the consolidated balance sheet, representing the minimum borrowing requirement. We use this facility because it offers an attractive interest rate relative to other
financing sources. The Company securitizes
its accounts receivable, which are generally non-interest bearing, in transactions that are accounted for as borrowings under theTransfers and
Servicingtopic of the ASC. The agreement governing the Securitization Facility contains restrictions and covenants which include limitations on the making of certain
restricted payments, creation of certain liens, and certain corporate acts such as mergers, consolidations and the sale of substantially all assets.

In
March 2009, we acquired Merritt Tool Company, Inc. (now Triumph StructuresEast Texas), Saygrove Defence & Aerospace Group Limited (now Triumph
Actuation & Motion Control SystemsUK), the aviation segment of Kongsberg Automotive Holdings ASA (now Triumph ControlsUK and Triumph ControlsGermany) and
The Mexmil Company, LLC (now Triumph Insulation Systems), collectively the "fiscal 2009 acquisitions". No in-process research and development was attributed to the fiscal 2009
acquisitions. The total cash paid at closing for the fiscal 2009 acquisitions of $143.6 million was funded by borrowings under our Credit Facility. The fiscal 2009 acquisitions further provide
for deferred payments of $3.5 million, of which $2.1 million and $1.4 million are payable in March 2010 and September 2010, respectively. The fiscal 2009 acquisitions also provide
for contingent payments of $24.9 million, certain of which are contingent upon the achievement of specified earnings levels during the earnout period and another $10.0 million that is
contingent upon entering into a specific customer contract. The maximum earnout amounts payable in respect of fiscal 2010, 2011, 2012 and 2013 are $2.3 million, $4.6 million,
$5.4 million and $2.6 million, respectively. The contingent amounts have not been recorded as the contingencies have not been resolved and the consideration has not been paid.

Also
in March 2009, we entered into a 7-year Master Lease Agreement (the "Leasing Facility") creating a capital lease of certain existing property and equipment, resulting in
net proceeds of $58,546 after deducting debt issuance costs of approximately $188. The net proceeds from the Leasing Facility were used to repay a portion of the outstanding indebtedness under our
Credit Facility. The debt issuance costs have been recorded as other assets in the accompanying consolidated balance sheets and are being amortized over the term of the Leasing Facility. The Leasing
Facility bears interest at a weighted average fixed rate of 6.1% per annum.

Cash
provided by operations for the fiscal year ended March 31, 2008 was $45.7 million, compared to cash provided by operations of $41.3 million for the fiscal year
ended March 31, 2007. During the fiscal year ended March 31, 2008, our increased cash flow from operations was attributable to higher net income offset by a decline in performance on
working capital, due to timing of cash collections and utilization of inventory offset by timing of cash disbursements.

In
February 2008, we acquired the assets and business of B. & R. Machine & Tool Corp. (now Triumph StructuresLong Island), located in Westbury, New York. The
total cash paid at closing for the acquisition of $67.0 million was funded by borrowings under our Credit Facility. The purchase agreement provides for an earnout note for $13.0 million.
Payments under the earnout note are contingent upon the achievement of certain earnings levels during the earnout period. The maximum amounts payable in respect of fiscal 2009, 2010 and 2011, are
$3.5 million, $4.5 million and $5.0 million, respectively.

During
February 2008, we exercised existing authority to make stock repurchases and repurchased 220,000 shares of our outstanding shares under the program for an aggregate consideration
of $12.3 million, funded by borrowings under our Credit Facility. In February 2008, the Company's Board of Directors then authorized an increase in our existing stock repurchase program by up
to an additional 500,000 shares of our common stock. As a result, as of May 15, 2009, we remain able to purchase an additional 500,800 shares. Repurchases may be made from time to time in open
market

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transactions,
block purchases, privately negotiated transactions or otherwise at prevailing prices. No time limit has been set for completion of the program.

On
September 18, 2006, we issued $201.3 million in convertible senior subordinated notes (the "Notes"). The Notes are direct, unsecured, senior subordinated obligations of
the Company, and rank (i) junior in right of payment to all of our existing and future senior indebtedness, (ii) equal in right of payment with any other future senior subordinated
indebtedness, and (iii) senior in right of payment to all subordinated indebtedness.

The
Company received net proceeds from the sale of the Notes of approximately $195.0 million after deducting offering expenses of approximately $6.3 million. The use of the
net proceeds from the sale was for prepayment of our outstanding Senior Notes, including a "make whole" premium, fees and expenses in connection with the prepayment, and to repay a portion of the
outstanding indebtedness under our Credit Facility. Approximately $6.3 million in debt issuance costs have been recorded as other assets in the accompanying consolidated balance sheets. Debt
issuance costs are being amortized over a period of five years.

Effective
April 1, 2009, we adopted the convertible debt accounting standard, which requires retrospective application. The convertible debt accounting standard requires
separately accounting for the liability and equity components of the Notes in a manner that reflects our nonconvertible debt borrowing rate when interest and amortization expense is recognized in
subsequent periods. The excess of the principal amount of the liability component over its carrying amount has been recognized as debt discount and amortized using the effective interest method. This
change in accounting for the Notes has been applied to our consolidated financial statements on a retrospective basis, as required by the standard. For more details on the impact of this change on our
consolidated financial statements, see Note 2 to the consolidated financial statements. As of March 31, 2009, the remaining discount of $15.9 million will be amortized on the
effective interest method through October 1, 2011.

The
Notes bear interest at a fixed rate of 2.625% per annum, payable in cash semi-annually in arrears on each April 1 and October 1 beginning April 1,
2007. During the period commencing on October 6, 2011 and ending on, but excluding, April 1, 2012 and each six-month period from October 1 to March 31 or from
April 1 to September 30 thereafter, the Company will pay contingent interest during the applicable interest period if the average trading price of a Note for the five consecutive trading
days ending on the third trading day immediately preceding the first day of the relevant six-month period equals or exceeds 120% of the
principal amount of the Notes. The contingent interest payable per Note in respect of any six-month period will equal 0.25% per annum calculated on the average trading price of a Note for
the relevant five trading day period. This contingent interest feature represents an embedded derivative. Since it is in the control of the Company to call the Notes at any time after
October 6, 2011, the value of the derivative was determined to be de minimis. Accordingly, no value has been assigned at issuance or at March 31, 2009.

The
Notes mature on October 1, 2026 unless earlier redeemed, repurchased or converted. The Company may redeem the Notes for cash, either in whole or in part, anytime on or after
October 6, 2011 at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest, including contingent interest and additional amounts,
if any, up to but not including the date of redemption. In addition, holders of the Notes will have the right to require the Company to repurchase for cash all or a portion of their Notes on
October 1, 2011, 2016 and 2021, at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest, including contingent interest and
additional amounts, if any, up to, but not including, the date of repurchase. The Notes are convertible into the Company's common stock at a rate equal to 18.3655 shares per $1,000 principal amount of
the Notes (equal to an initial conversion price of approximately $54.45 per share), subject to adjustment as described in the Indenture. Upon conversion, the Company will deliver to the holder
surrendering the Notes for conversion, for each

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$1,000
principal amount of Notes, an amount consisting of cash equal to the lesser of $1,000 and the Company's total conversion obligation and, to the extent that the Company's total conversion
obligation exceeds $1,000, at the Company's election, cash or shares of the Company's common stock in respect of the remainder.

The
Notes are eligible for conversion upon meeting certain conditions as provided in the indenture agreement. For the periods from October 1, 2007 through December 31, 2007
and January 1, 2008 through March 31, 2008, the Notes were eligible for conversion; however, during this period, none of the Notes were converted.

To
be included in the calculation of diluted earnings per share, the average price of the Company's common stock for the fiscal year must exceed the conversion price per share of $54.45.
The average price of the Company's stock for the fiscal years ended March 31, 2010 and March 31, 2009 was $46.68 and $46.49, respectively. Therefore, no additional shares were included
in the diluted earnings per share calculations for those fiscal years. The average price of the Company's stock for the fiscal year ended March 31, 2008 was $68.95. Accordingly, 777,059
additional shares were included in the diluted earnings per share calculation.

If
the Company undergoes a fundamental change, holders of the Notes will have the right, subject to certain conditions, to require the Company to repurchase for cash all or a portion of
their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest, including contingent interest and additional amounts, if any.

During
fiscal 2010, the Company paid $4.0 million to purchase $4.2 million in principal on the Notes, resulting in a reduction in the carrying amount of the Notes of
$3.8 million and a gain on extinguishment of less than $0.1 million. During fiscal 2009, we paid $15.4 million to purchase $18.0 million of principal on the convertible
senior subordinated notes, resulting in a reduction in the carrying amount of the Notes of $16.3 million and a gain on early extinguishment of $0.9 million.

The
indentures under the Company's debt agreements and the Credit Facility contain restrictions and covenants which include limitations on the Company's ability to incur additional
indebtedness, issue stock options or warrants, make certain restricted payments and acquisitions, create liens, enter into transactions with affiliates, sell substantial portions of its assets and pay
cash dividends. Additional covenants require compliance with financial tests, including leverage and interest coverage ratio.

At
March 31, 2010, there were no borrowings and $6.1 million in letters of credit outstanding under the Credit Facility. At March 31, 2009, there were
$127.7 million in borrowings and $5.6 million in letters of credit outstanding under the Credit Facility. The level of unused borrowing capacity under the Company's revolving Credit
Facility varies from time to time depending in part upon its compliance with financial and other covenants set forth in the related agreement. The Credit Facility contains certain affirmative and
negative covenants including limitations on specified levels of indebtedness to earnings before interest, taxes, depreciation and amortization, and interest coverage requirements, and includes
limitations on, among other things, liens, mergers, consolidations, sales of assets, and incurrence of debt. The Company is currently in compliance with all such covenants. As of March 31,
2010, the Company had borrowing capacity under the Credit Facility of $478.9 million, after reductions for borrowings and letters of credit outstanding.

Capital
expenditures were approximately $31.7 million for the fiscal year ended March 31, 2010 primarily for manufacturing machinery and equipment. We funded these
expenditures through borrowings under our Credit Facility. We expect capital expenditures to be approximately $50.0 million for our fiscal year ending March 31, 2011. The expenditures
are expected to be used mainly to expand capacity or replace old equipment at several facilities. During the same period, we anticipate approximately $2.5 million of start-up costs
related to the Mexican facility which is in addition to our investment in capital and infrastructure.

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Our
expected future cash flows for the next five years for long term debt, leases and other obligations are as follows:

Payments Due by PeriodContractual Obligations

Total

Less than
1 Year

1-3 Years

4-5 Years

After 5
Years(in thousands)Debt principal(1)

$
517,685

$
91,929

$
206,549

$
22,750

$
196,457Debt-interest(2)


137,504


23,137


41,435


31,555


41,377Operating leases


51,710


12,308


16,060


10,855


12,487Contingent payments(3)


41,242


10,000


24,013


7,229


Purchase obligations


301,738


258,179


42,873


569


117Total

$
1,049,879

$
395,553

$
330,930

$
72,958

$
250,438


(1)Included
in the Company's consolidated balance sheet at March 31, 2010, plus discounts on Convertible Senior Subordinated Notes and the 2017 Notes of
$9.5 million and $2.4 million, respectively, being amortized to expense through September 2011 and November 2017, respectively.(2)Includes
fixed-rate interest only.(3)Includes
unrecorded contingent payments in connection with the fiscal 2009 acquisitions.


The
above table excludes unrecognized tax benefits of $4.4 million as of March 31, 2010 since we cannot predict with reasonable certainty the timing of cash settlements
with the respective taxing authorities.

The
table also excludes our pension benefit obligations. We made contributions to our union pension plans of $1.5 million and $0.3 million in fiscal 2010 and 2009,
respectively. We expect to make contributions of $3.2 million to our employee benefit plans during fiscal 2011. As of March 31, 2010, our defined benefit pension plans are frozen. See
Note 14, "Employee Benefit Plans" of our Consolidated Financial Statements for a further discussion of our pension and other employee benefit plans.

In
March 2010, we entered into definitive agreement to purchase Vought from TC Group ("Carlyle") for cash and stock consideration. The purchase consideration to Vought shareholders
includes $525.0 million of cash and, subject to certain adjustments, approximately 7.9 million shares of our common stock. The cash portion of the merger consideration is fixed. The
stock portion of the merger consideration will not be adjusted to reflect changes to Triumph's stock price prior to closing of the merger. The stock portion of the merger consideration will be
decreased by approximately 3,360 shares for each day prior to July 1, 2010 that the merger is completed and increased by approximately 3,360 shares for each day after July 1, 2010 that
the merger is completed. The stock portion of the merger consideration will also be reduced for expenses of Vought that Triumph pays in connection with completing the merger. We will also assume
Vought's debt, which was $592.2 million as of March 31, 2010. The cash portion of the acquisition, as well as the repayment of Vought's assumed debt is expected to be funded through a
combination of cash-on-hand, borrowing under our existing amended and restated credit agreement (the "Credit Facility") and the issuance of senior notes in the capital markets.
In anticipation of the merger, we have obtained a commitment letter, which provides us up to $1.1 billion in debt financing necessary to consummate the merger that may be used for funding in
the event the transaction closes prior to obtaining permanent financing in the capital markets.

We
believe that cash generated by operations and borrowings under the Credit Facility will be sufficient to meet anticipated cash requirements for our current operations for the
foreseeable future. However, we have a stated policy to grow through acquisitions and are continuously evaluating various

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acquisition
opportunities. As a result, we currently are pursuing the potential purchase of a number of candidates. In the event that more than one of these transactions is successfully consummated,
the availability under the Credit Facility might be fully utilized and additional funding sources may be needed. There can be no assurance that such funding sources will be available to us on terms
favorable to us, if at all.

On
May 10, 2010, the Company entered into a $535.0 million revolving credit facility, subject to the closing of the Vought acquisition. This revolving credit facility will
be available to partially fund the Vought acquisition and refinance any existing obligations under our existing Credit Facility, with a maturity date four years from the closing of the Vought
acquisition.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those accounting policies that can have a significant impact on the presentation of our financial
condition and results of operations, and that require the use of complex and subjective estimates based upon past experience and management's judgment. Because of the uncertainty inherent in such
estimates, actual results may differ from these estimates. Below are those policies applied in preparing our financial statements that management believes are the most dependent on the application of
estimates and assumptions. For additional accounting policies, see Note 2 of "Notes to Consolidated Financial Statements."

Allowance for Doubtful Accounts

Trade receivables are presented net of an allowance for doubtful accounts. In determining the appropriate allowance, we consider a
combination of factors, such as industry trends, our customers' financial strength and credit standing, and payment and default history. The calculation of the required allowance requires a judgment
as to the impact of these and other factors on the ultimate realization of our trade receivables. We believe that these estimates are reasonable and historically have not resulted in material
adjustments in subsequent periods when the estimates are adjusted to actual amounts.

Inventories

Inventories are stated at the lower of cost or market using the average cost or specific identification methods. We write down our
inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and estimated market value based upon assumptions about future demand and market
conditions. If actual market conditions are less favorable than those anticipated, inventory adjustments may be required. We believe that these estimates are reasonable and historically have not
resulted in material adjustments in subsequent periods when the estimates are adjusted to actual amounts.

Revenue Recognition

Revenues are recognized in accordance with the contract terms when products are shipped, delivery has occurred or services have been
rendered, pricing is fixed or determinable, and collection is reasonably assured. The Aftermarket Services Segment provides repair and overhaul services, certain of which services are provided under
long term power-by-the-hour contracts. The Company applies the proportional performance method to recognize revenue under these contracts. Revenue is recognized
over the contract period as units are delivered based on the relative fair value in proportion to the total estimated contract consideration. In estimating the total contract consideration, we
evaluate the projected utilization of our customer's fleet over the term of the contract, in connection with the related estimated repair and overhaul servicing requirements to the fleet based on such
utilization. Changes in utilization of the fleet by our customers, among other factors, may have an impact on these estimates and require adjustments to our estimates of revenue to be realized.

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Reserves
for contract losses are accrued when estimated costs to complete exceed expected future revenues. The Company's policy with respect to sales returns and allowances generally
provides that the customer may not return products or be given allowances, except at the Company's option. Accruals for sales returns, other allowances, and estimated warranty costs are provided at
the time of shipment based upon past experience.

Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite lives are not amortized; rather, they are tested for impairment on at least an annual
basis. Additionally, intangible assets with finite lives continue to be amortized over their useful lives.

The
Company's operating segments of Aerospace Systems and Aftermarket Services are also the reporting units under ASC 350,IntangiblesGoodwill and
Other. The Chief Executive Officer, President and Chief Operating Officer and the Chief Financial Officer comprise the Company's Chief Operating Decision Maker ("CODM"). The
Company's CODM evaluates performance and allocates resources based upon review of segment information. Each of the operating segments is comprised of a number of operating units which are considered
to be components under ASC 350. The
operating units, for which discrete financial information exists, are aggregated for purposes of goodwill impairment testing. The Company's acquisition strategy is to acquire companies that complement
and enhance the capabilities of the operating segments of the Company. Each acquisition is assigned to either the Aerospace Systems reporting unit or the Aftermarket Services reporting unit. The
goodwill that results from each acquisition is also assigned to the reporting unit to which the acquisition is allocated, because it is that reporting unit which is intended to benefit from the
synergies of the acquisition.

ASC
350 requires a two-step impairment test for goodwill and intangible assets with indefinite lives. The first step is to compare the carrying amount of the reporting unit's
assets to the fair value of the reporting unit. If the fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying amount exceeds the fair
value, then the second step is required to be completed, which involves allocating the fair value of the reporting unit to each asset and liability, with the excess being implied goodwill. An
impairment loss occurs if the amount of the recorded goodwill exceeds the implied goodwill. The determination of the fair value of our reporting units is based, among other things, on estimates of
future operating performance of the reporting unit being valued. We are required to complete an impairment test for goodwill and intangible assets with indefinite lives and record any resulting
impairment losses at least annually. Changes in market conditions, among other factors, may have an impact on these estimates and require interim impairment assessments.

We
completed our required annual impairment test in the fourth quarter of fiscal 2010 and determined that there was no impairment. Our methodology for determining the fair value of a
reporting unit includes the use of an income approach which discounts future net cash flows to their present value at a rate that reflects the Company's cost of capital, otherwise known as the
discounted cash flow method ("DCF"). These estimated fair values are based on estimates of future cash flows of the businesses. Factors affecting these future cash flows include the continued market
acceptance of the products and services offered by the businesses, the development of new products and services by the businesses and the underlying cost of development, the future cost structure of
the businesses, and future technological changes. The Company also incorporated market multiples for comparable companies in determining the fair value of our reporting units. Any such impairment
would be recognized in full in the reporting period in which it has been identified.

In
fiscal 2010, we conducted additional sensitivity analysis to assess the risk for potential impairment based upon changes in the key assumptions in our goodwill valuation test. We
reviewed the Aftermarket Services reporting unit since it had significant changes in its economic indicators and

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adjusted
for select changes in the risk adjusted discount rate to consider both the current return requirements of the market and the risks inherent in the reporting unit, expected
long-term growth rate and cash flow projections to determine if any decline in the estimated fair value of a reporting unit could result in a goodwill impairment. Based upon our additional
analysis, it was determined that there was no impairment to be recognized, however, the fair value of our Aftermarket Services reporting unit was not substantially in excess of its carrying amount, as
the fair value exceeded the carrying value by approximately 5%. The amount of goodwill for our
Aftermarket Services reporting unit amounted to $74.1 million at March 31, 2010. Going forward, we will continue to monitor the performance of this reporting unit in relation to the key
assumptions in our analysis. If management determines that impairment exists, the impairment will be recognized in the period in which it is identified.

In
the event that market multiples for stock price to EBITDA in the aerospace and defense markets decrease, or the expected EBITDA for our reporting units decreases, a goodwill
impairment charge may be required, which would adversely affect our operating results and financial condition. No impairment charges have been incurred during the fiscal years ended March 31,
2010, 2009 or 2008.

Finite-lived
intangible assets are amortized over their useful lives ranging from 5 to 30 years. We continually evaluate whether events or circumstances have occurred that would indicate
that the remaining estimated useful lives of our long-lived assets, including intangible assets, may warrant revision or that the remaining balance may not be recoverable. Intangible
assets are evaluated for indicators of impairment. When factors indicate that long-lived assets, including intangible assets, should be evaluated for possible impairment, an estimate of
the related undiscounted cash flows over the remaining life of the long-lived assets, including intangible assets, is used to measure recoverability. Some of the more important factors we
consider include our financial performance relative to our expected and historical performance, significant changes in the way we manage our operations, negative events that have occurred, and
negative industry and economic trends. If any impairment is indicated, measurement of the impairment will be based on the difference between the carrying value and fair value of the asset, generally
determined based on the present value of expected future cash flows associated with the use of the asset. For the fiscal years ended March 31, 2010, 2009 and 2008, there were no reductions to
the remaining useful lives and no write-downs of long-lived assets, including intangible assets, were required.

Recently Issued Accounting Pronouncements

In February 2008, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position ("FSP") No. 157-1,
which amends Statement of Financial Accounting Standards ("SFAS") No. 157,Fair Value Measurements("SFAS 157") to exclude SFAS
No. 13,Accounting for Leases, and other accounting pronouncements that address fair value measurements for lease transactions, and FSP
No. 157-2, which primarily were codified into ASC 820,Fair Value Measurements and Disclosures("ASC 820") and delayed the effective
date of SFAS 157 as it relates to nonfinancial assets and nonfinancial liabilities until April 1, 2009 for the Company, except for items that are recognized or disclosed at fair value in
the Company's financial statements on a recurring basis. The nonfinancial assets and nonfinancial liabilities for which the Company had previously not applied the fair value provisions of
SFAS 157 include: goodwill; intangible and other long-lived asset impairment testing; asset retirement obligations; liabilities for exit or disposal activities; and business
combinations. The adoption had no impact on the Company's financial position, results of operations and cash flows as the Company did not have any non-financial assets and
non-financial liabilities that were recognized or disclosed at fair value on a recurring basis at March 31, 2009.

In
April 2009, the FASB issued FSP No. 157-4,Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly, which primarily was codified into ASC 820. The FSP requires entities to evaluate the significance and
relevance of market factors for fair value inputs to determine if, due to reduced

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volume
and market activity, the factors are still relevant and substantive measures of fair value. The FSP is effective for interim and annual reporting periods ending after June 15, 2009, and
the adoption did not have any effect on our financial position or results of operations.

In
December 2008, the FASB issued FSP FAS 132(R)-1,Employers' Disclosures about Postretirement Benefit Plan Assets,
which primarily was codified into ASC 715,Compensation and Benefits. This FSP amends SFAS No. 132 (revised 2003), Employers' Disclosures about Pensions and Other
Postretirement Benefits, to provide guidance on an employer's disclosures about plan assets of a defined
benefit pension or other postretirement plan on investment policies and strategies, major categories of plan assets, inputs and valuation techniques used to measure the fair value of plan assets and
significant concentrations of risk within plan assets. This FSP was effective for fiscal years ending after December 15, 2009, with earlier application permitted. Upon initial application, the
provisions of this FSP are not required for earlier periods that are presented for comparative purposes. The required disclosures under the FSP have been included in Note 14 of "Notes to
Consolidated Financial Statements."

In
April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, which was primarily codified into ASC 825,Financial
Instruments. This FSP amends SFAS No. 107,Disclosures about Fair Value of Financial Instruments, to require disclosures
about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. Prior to this FSP, fair values for
these assets and liabilities were only disclosed annually. This FSP applies to all financial instruments within the scope of SFAS 107 and requires all entities to disclose the method(s) and
significant assumptions used to estimate the fair value of financial instruments. This FSP was effective for interim periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. The Company adopted this FSP in the quarter ended December 31, 2009 and the adoption of this FSP did not have a material effect on its disclosures.

Effective
April 1, 2009, the Company adopted SFAS No. 141(R),Business Combinations("SFAS 141(R)") which was
primarily codified into ASC 805,Business Combinations, and SFAS No. 160,Accounting and Reporting of Noncontrolling
Interests in Consolidated Financial Statements, an amendment of ARB No. 51 ("SFAS 160"), which was primarily codified into ASC 810, Consolidations. SFAS 141(R) and
SFAS 160 significantly change the accounting for and reporting of business combination transactions and
noncontrolling (minority) interests. The adoption of SFAS 141(R) and SFAS 160 did not have a material impact on the Company's consolidated financial statements.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to
our future operations and prospects, including statements that are based on current projections and expectations about the markets in which we operate, and management's beliefs concerning future
performance and capital requirements based upon current available information. Such statements are based on management's beliefs as well as assumptions made by and information currently available to
management. When used in this document, words like "may," "might," "will," "expect," "anticipate," "believe," "potential," and similar expressions are intended to identify forward-looking statements.
Actual results could differ materially from management's current expectations. For example, there can be no assurance that additional capital will not be required or that additional capital, if
required, will be available on reasonable terms, if at all, at such times and in such amounts as may be needed by us. In addition to these factors, among other factors that could cause actual results
to differ materially, are uncertainties relating to the integration of acquired businesses, including without limitation Vought, general economic conditions affecting our business segments, dependence
of certain of our businesses on certain key customers, the risk that we will not realize all of the anticipated benefits from the acquisition of Vought as well as competitive factors relating to the

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aerospace
industry. For a more detailed discussion of these and other factors affecting us, see the risk factors described in "Item 1A. Risk Factors."

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

Market Risk

Our primary exposure to market risk consists of changes in interest rates on borrowings. An increase in interest rates would adversely
affect our operating results and the cash flow available after debt service to fund operations and expansion. In addition, an increase in interest rates would adversely affect our ability to pay
dividends on our common stock, if permitted to do so under certain of our debt arrangements, including the Credit Facility. We manage exposure to interest rate fluctuations by optimizing the use of
fixed and variable rate debt. As of March 31, 2010,
approximately 85% of our debt is fixed rate debt. Our financing policy states that we generally maintain between 50% and 75% of our debt as fixed rate debt. We anticipate that our fixed rate debt may
continue exceed 75% of our total debt during fiscal 2011. In March 2008, the Company entered into a thirty-nine month interest rate swap to exchange floating rate for fixed rate interest
payments to hedge against interest rate changes on $85.0 million of the Company's variable rate debt. The Company utilizes the swap to provide protection to meet actual exposures and does not
speculate in derivatives. The net effect of the spread between the floating rate (30-day LIBOR) and the fixed rate (2.925%) will be reflected as an adjustment to interest expense in the
period incurred. In December 2009, the Company elected to de-designate the interest rate swap as a hedge. For the fiscal year ended March 31, 2010, $2.3 million of losses were
reclassified into earnings from accumulated other comprehensive income. The Company estimates that $2.1 million of losses presently in accumulated other comprehensive income will be
reclassified into earnings during fiscal year 2011. The information below summarizes our market risks associated with debt obligations and should be read in conjunction with Note 10 of "Notes
to Consolidated Financial Statements."

The
following table presents principal cash flows and the related interest rates. Fixed interest rates disclosed represent the weighted average rate as of March 31, 2010. Variable
interest rates disclosed fluctuate with the LIBOR, federal funds rates and other weekly rates and represent the weighted average rate at March 31, 2010.

Expected Years of Maturity

Next 12
Months

13-24
Months

25-36
Months

37-48
Months

49-60
Months

Thereafter

TotalFixed rate cash flows (in thousands)

$
16,929

$
195,395

$
11,154

$
11,473

$
11,277

$
194,289

$
440,517Weighted average interest rate (%)


5.31


5.98


7.39


7.56


7.70


7.56Variable rate cash flows (in thousands)

$
75,000













$
2,168

$
77,168Weighted average interest rate (%)


2.94














2.50


There
are no other significant market risk exposures.

Item 8.    Financial Statements and Supplementary Data

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Report of Independent Registered Public Accounting Firm

To
the Board of Directors and Stockholders of Triumph Group, Inc.

We
have audited the accompanying consolidated balance sheets of Triumph Group, Inc. as of March 31, 2010 and 2009, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the period ended March 31, 2010. Our audits also included the financial statement schedule listed in the index at
Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule
based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Triumph Group, Inc. at
March 31, 2010 and 2009, and the consolidated results of its operations and its cash flows for each of the three years in the period ended March 31, 2010, in conformity with U.S.
generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

As
discussed in Note 14 to the consolidated financial statements, the Company changed its method of accounting for collateral assignment split-dollar life insurance agreements as
of April 1, 2008.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Triumph Group, Inc.'s internal control over financial
reporting as of March 31, 2010, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our
report dated May 14, 2010 expressed an unqualified opinion thereon.

/s/ERNST & YOUNGLLP


Philadelphia,
Pennsylvania
May 14, 2010

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TRIUMPH GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

March 31,2010

2009ASSETSCurrent assets:Cash and cash equivalents

$
157,218

$
14,478Accounts receivable, less allowance for doubtful accounts of $4,276 and $5,641


214,497


209,463Inventories


363,925


389,348Rotable assets


25,587


25,652Assets held for sale


5,051


27,695Deferred income taxes


7,616


1,727Prepaid income taxes


2,005


4,434Prepaid expenses and other


8,834


6,021Total current assets


784,733


678,818Property and equipment, net


327,634


332,467Goodwill


502,074


459,541Intangible assets, net


79,844


108,350Other, net


18,392


12,031Total assets

$
1,712,677

$
1,591,207LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable

$
92,859

$
103,711Accrued expenses


111,266


109,580Liabilities related to assets held for sale


899


4,283Current portion of long-term debt


91,929


89,085Total current liabilities


296,953


306,659Long-term debt, less current portion


413,851


370,311Income taxes payable, noncurrent


4,240


2,917Deferred income taxes, noncurrent


113,640


108,413Other noncurrent liabilities


23,307


14,344Stockholders' equity:Common stock, $.001 par value, 100,000,000 shares authorized, 16,817,931 and 16,763,984 shares issued, 16,673,254 and 16,589,567 outstanding


17


16Capital in excess of par value


314,870


311,434Treasury stock, at cost, 144,677 and 174,417 shares


(7,921
)

(9,785
)Accumulated other comprehensive income (loss)


705


(2,233
)Retained earnings


553,015


489,131Total stockholders' equity


860,686


788,563Total liabilities and stockholders' equity

$
1,712,677

$
1,591,207


See
notes to consolidated financial statements.

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TRIUMPH GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

Year ended March 31,2010

2009

2008Net sales

$
1,294,780

$
1,240,378

$
1,151,090Operating costs and expenses:Cost of sales (exclusive of depreciation shown separately below)


927,211


877,744


822,288Selling, general and administrative


157,870


162,109


159,262Depreciation and amortization


54,418


48,611


43,2151,139,499


1,088,464


1,024,765Operating income


155,281


151,914


126,325Interest expense and other


28,865


16,929


19,942Gain on early extinguishment of debt


(39
)

(880
)

Income from continuing operations before income taxes


126,455


135,865


106,383Income tax expense


41,167


43,124


34,748Income from continuing operations


85,288


92,741


71,635Loss from discontinued operations, net


(17,526
)

(4,745
)

(8,468
)Net income

$
67,762

$
87,996

$
63,167Earnings per sharebasic:Income from continuing operations

$
5.18

$
5.66

$
4.34Loss from discontinued operations, net


(1.06
)

(0.29
)

(0.51
)Net income

$
4.12

$
5.37

$
3.83Weighted-average common shares outstandingbasic


16,459


16,384


16,497Earnings per sharediluted:Income from continuing operations

$
5.12

$
5.59

$
4.08Loss from discontinued operations, net


(1.05
)

(0.29
)

(0.48
)Net income

$
4.07

$
5.30

$
3.60Weighted-average common shares outstandingdiluted


16,666


16,584


17,540


See
notes to consolidated financial statements.

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TRIUMPH GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in thousands)

Outstanding
Shares

Common
Stock
All Classes

Capital in
Excess of
Par Value

Treasury
Stock

Accumulated
Other
Comprehensive
(Loss) Income

Retained
Earnings

TotalBalance at March 31, 2007


16,469,617

$
16

$
297,945

$


$
(120
)
$
347,336

$
645,177Net income

















63,167


63,167Foreign currency translation adjustment














2,731





2,731Pension liability adjustment, net of income tax benefit of $396














674





674Reclassification adjustment for realized gain on securities, net of income tax benefit of $196














(335
)




(335
)Total comprehensive income




















66,237Adoption of FIN 48

















(291
)

(291
)Purchase of 220,000 shares of common stock


(220,000
)







(12,342
)







(12,342
)Exercise of stock options


170,943





5,431


339








5,770Cash dividends ($0.16 per share)

















(2,661
)

(2,661
)Share-based compensation


96,814





2,809











2,809Excess tax benefit from exercise of stock options








1,737











1,737Balance at March 31, 2008


16,517,374


16


307,922


(12,003
)

2,950


407,551


706,436Net income

















87,996


87,996Foreign currency translation adjustment














(2,927
)




(2,927
)Pension liability adjustment, net of income tax expense of $253














(431
)




(431
)Change in fair value of interest rate swap, net of income tax benefit of $1,073














(1,825
)




(1,825
)Total comprehensive income




















82,813Adoption of EITF 06-10 and other

















(2,965
)

(2,965
)Gain on early extinguishment of debt








362








(85
)

277Exercise of stock options


37,333





(275
)

2,218





(714
)

1,229Cash dividends ($0.16 per share)

















(2,652
)

(2,652
)Share-based compensation


34,860





3,180











3,180Excess tax benefit from exercise of stock options








245











245Balance at March 31, 2009


16,589,567


16


311,434


(9,785
)

(2,233
)

489,131


788,563Net income

















67,762


67,762Foreign currency translation adjustment














2,215





2,215Pension liability adjustment, net of income taxes of $10














(17
)




(17
)Change in fair value of interest rate swap, net of income taxes of $221.














740





740Total comprehensive income




















70,700Gain on early extinguishment of debt








11








(39
)

(28
)Exercise of stock options


41,611








2,334





(1,173
)

1,161Cash dividends ($0.16 per share)

















(2,666
)

(2,666
)Share-based compensation


53,947


1


3,219











3,220Withholding of restricted shares for minimum tax obligation


(11,871
)







(470
)







(470
)Excess tax benefit from exercise of stock options








206











206Balance at March 31, 2010


16,673,254

$
17

$
314,870

$
(7,921
)
$
705

$
553,015

$
860,686


See notes to consolidated financial statements.

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Table of Contents



TRIUMPH GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Year ended March 31,2010

2009

2008Operating ActivitiesNet income

$
67,762

$
87,996

$
63,167Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization


54,418


48,611


43,215Gain on early extinguishment of debt


(39
)

(880
)

Accretion of debt discount


6,196


6,207


5,852Other amortization included in interest expense


1,951


1,685


2,289Provision for doubtful accounts receivable


773


2,406


1,643Provision for deferred income taxes


7,524


12,786


5,967Employee stock compensation


3,220


3,180


2,809Changes in other current assets and liabilities, excluding the effects of acquisitions:Accounts receivable


(6,172
)

10,478


(36,112
)Inventories


30,192


(7,719
)

(46,950
)Rotable assets


65


(2,260
)

(13,350
)Prepaid expenses and other current assets


(3,822
)

1,066


591Accounts payable, accrued expenses and income taxes payable


(15,742
)

(23,467
)

21,665Changes in discontinued operations


21,773


(3,236
)

(3,913
)Other


1,549


(1,856
)

(1,148
)Net cash provided by operating activities


169,648


134,997


45,725Investing ActivitiesCapital expenditures


(31,665
)

(45,421
)

(56,971
)Proceeds from sale of property & equipment


615


881


5,698Cash used for businesses and intangible assets acquired


(31,493
)

(141,073
)

(68,527
)Net cash used in investing activities


(62,543
)

(185,613
)

(119,800
)Financing ActivitiesNet (decrease) increase in revolving credit facility


(127,730
)

(66,020
)

92,950Proceeds from issuance of long-term debt


172,988


78,282


161Proceeds from equipment leasing facility and other capital leases


13,942


58,734


Retirement of debt and capital lease obligations


(13,811
)

(16,521
)

(5,775
)Payment of deferred financing cost


(8,344
)

(1,187
)

(72
)Dividends paid


(2,666
)

(2,652
)

(2,661
)Purchase of treasury stock








(12,342
)Withholding of restricted shares for minimum tax obligation


(470
)




Proceeds from exercise of stock options, including excess tax benefit of $206, $245, and $1,737 in 2009, 2008, and 2007


1,367


1,474


7,507Net cash provided by financing activities


35,276


52,110


79,768Effect of exchange rate changes on cash


359


(754
)

802Net change in cash and cash equivalents


142,740


740


6,495Cash and cash equivalents at beginning of year


14,478


13,738


7,243Cash and cash equivalents at end of year

$
157,218

$
14,478

$
13,738


See
notes to consolidated financial statements.

54

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Table of Contents



TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

1. BACKGROUND AND BASIS OF PRESENTATION

Triumph Group, Inc. ("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") is organized based on the products and services that it provides. Under this organizational structure, the
Company has two reportable segments: the Aerospace Systems Group and the Aftermarket Services Group.

The
Aerospace Systems segment consists of the Company's operations which manufacture products primarily for the aerospace OEM market. The segment's operations design and engineer
mechanical and electromechanical controls, such as hydraulic systems and components, main engine gearbox assemblies, accumulators and mechanical control cables. The segment's revenues are also derived
from stretch forming, die forming, milling, bonding, machining, welding and assembly and fabrication of various structural components used in aircraft wings, fuselages and other significant
assemblies. Further, the segment's operations also design and manufacture composite assemblies for floor panels, environmental control system ducts, non-structural cockpit components and
thermal acoustic insulation systems. These products are sold to various aerospace OEMs on a global basis.

The
Aftermarket Services segment consists of the Company's operations that provide maintenance, repair and overhaul services to both commercial and military markets on components and
accessories manufactured by third parties. Maintenance, repair and overhaul revenues are derived from services on auxiliary power units, air frame and engine accessories, including constant-speed
drives, cabin compressors, starters and generators, and pneumatic drive units. In addition, the segment's operations repair and overhaul thrust reversers, nacelle components and flight control
surfaces. The segment's operations also perform repair and overhaul services, and supply spare parts, for various types of cockpit instruments and gauges for a broad range of commercial airlines on a
worldwide basis.

Repair
services generally involve the replacement of parts and/or the remanufacture 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.

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

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

55

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents

Cash equivalents consist of highly liquid investments with a maturity of three months or less at the time of purchase. Fair value of
cash equivalents approximates carrying value.

Concentration of Credit Risk

Accounts receivable are recorded net of an allowance for doubtful accounts. The Company performs ongoing credit evaluations of its
customers and generally does not require collateral. The Company records the allowance for doubtful accounts based on prior experience and for specific collectibility matters when they arise. The
Company writes off balances against the reserve when collectibility is deemed remote. The Company's trade accounts receivable are exposed to credit risk; however, the risk is limited due to the
diversity of the customer base.

Inventories

Inventories are stated at the lower of cost or market using the average-cost or specific-identification methods. The
Company writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and estimated market value based upon assumptions about
future demand and market conditions. If actual market conditions are less favorable than those anticipated, inventory adjustments may be required. The Company believes that these estimates are
reasonable and historically have not resulted in material adjustments in subsequent periods when the estimates are adjusted to actual amounts.

Property and Equipment

Property and equipment, which includes equipment under capital lease and leasehold improvements, are recorded at cost and depreciated
over the estimated useful lives of the related assets, or the lease term if shorter in the case of leasehold improvements, by the straight-line method. Buildings and improvements are
depreciated over a period of 15 to 391/2 years, and machinery and equipment are depreciated over a period of 7 to 15 years (except for furniture, fixtures and computer equipment
which are depreciated over a period of 3 to 10 years).

Goodwill and Intangible Assets

The Company accounts for purchased goodwill and intangible assets in accordance with Accounting Standards Codification ("ASC") 350, IntangiblesGoodwill and
Other. Under ASC 350, purchased goodwill and intangible assets with indefinite lives are not amortized; rather,
they are tested for impairment on at least an annual basis. Intangible assets with finite lives are amortized over their useful lives.

The
Company's operating segments of Aerospace Systems and Aftermarket Services are also the reporting units. The Chief Executive Officer, President and Chief Operating Officer and the
Chief Financial Officer comprise the Company's Chief Operating Decision Maker ("CODM"). The Company's CODM evaluates performance and allocates resources based upon review of segment information. Each
of the operating segments is comprised of a number of operating units which are considered to be components. The operating units, for which discrete financial information exists, are

56

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

aggregated
for purposes of goodwill impairment testing. The Company's acquisition strategy is to acquire companies that complement and enhance the capabilities of the operating segments of the
Company. Each acquisition is assigned to either the Aerospace Systems reporting unit or the Aftermarket Services reporting unit. The goodwill that results from each acquisition is also assigned to the
reporting unit to which the acquisition is allocated, because it is that reporting unit which is intended to benefit from the synergies of the acquisition.

In
order to test goodwill and intangible assets with indefinite lives, a determination of the fair value of the Company's reporting units and intangible assets with indefinite lives is
required and is based, among other things, on estimates of future operating performance of the reporting unit and/or the component of the entity being valued. The Company is required to complete an
impairment test for goodwill and intangible assets with indefinite lives and record any resulting impairment losses at least on an annual basis. Changes in market conditions, among other factors, may
have an impact on these estimates and require interim impairment assessments. We completed our required annual impairment test in the fourth quarter of fiscal 2010 and determined that there was no
impairment. Our methodology for determining the fair value of a reporting unit includes the use of an income approach which discounts future net cash flows to their present value at a rate that
reflects the Company's cost of capital, otherwise known as the discounted cash flow method ("DCF"). These estimated fair values are based on estimates of future cash flows of the businesses. Factors
affecting these future cash flows include the continued market acceptance of the products and services offered by the businesses, the development of new products and services by the businesses and the
underlying cost of development, the future cost structure of the businesses, and future technological changes. The Company also incorporated market multiples for comparable companies in determining
the fair value of our reporting units. In the event that valuations in the aerospace and defense markets decrease, or the expected EBITDA for our reporting units decreases, a goodwill impairment
charge may be required, which would adversely affect our operating results and financial condition. Any such impairment would be recognized in full in the reporting period in which it has been
identified. The Company completed its required annual impairment tests in the fourth quarters of fiscal 2010, 2009 and 2008 and determined that there was no impairment.

Finite-lived
intangible assets are amortized over their useful lives ranging from 5 to 30 years. The Company continually evaluates whether events or circumstances have occurred that
would indicate that the remaining estimated useful lives of long-lived assets, including intangible assets, may warrant revision or that the remaining balance may not be recoverable.
Intangible assets are evaluated for indicators of impairment. When factors indicate that long-lived assets, including intangible assets, should be evaluated for possible impairment, an
estimate of the related undiscounted cash flows over the remaining life of the long-lived assets, including intangible assets, is used to measure recoverability. Some of the more important
factors management considers include the Company's financial performance relative to expected and historical performance, significant changes in the way the Company manages its operations, negative
events that have occurred, and negative industry and economic trends. If any impairment is indicated, measurement of the impairment will be based on the difference between the carrying value and fair
value of the asset, generally determined based on the present value of expected future cash flows associated with the use of the asset. For the fiscal years ended March 31, 2010, 2009 and 2008,
exclusive of the charges recorded in connection with

57

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

discontinued
operations, there were no reductions to the remaining useful lives and no write-downs of long-lived assets, including intangible assets, were required.

Revenue Recognition

Revenues are recognized in accordance with the contract terms when products are shipped, delivery has occurred or services have been
rendered, pricing is fixed or determinable, and collection is reasonably assured. The Aftermarket Services Group provides repair and overhaul services, certain of which services are provided under
long term power-by-the-hour contracts. The Company applies the proportional performance method to recognize revenue under these contracts. Revenue is recognized
over the contract period as units are delivered based on the relative fair value in proportion to the total estimated contract consideration. In estimating the total contract consideration, management
evaluates the projected utilization of its customer's fleet over the term of the contract, in connection with the related estimated repair and overhaul servicing requirements to the fleet based on
such utilization. Changes in utilization of the fleet by customers, among other factors, may have an impact on these estimates and require adjustments to estimates of revenue to be realized.

Reserves
for contract losses are accrued when estimated costs to complete exceed expected future revenues. The Company's policy with respect to sales returns and allowances generally
provides that the customer may not return products or be given allowances, except at the Company's option. Accruals for sales returns, other allowances, and estimated warranty costs are provided at
the time of shipment based upon past experience.

Shipping and Handling Costs

The cost of shipping and handling products is included in cost of products sold.

Research and Development Expense

Research and development expense was approximately $25,670, $21,001 and $9,883 for the fiscal years ended March 31, 2010, 2009
and 2008, respectively.

Foreign Currency Translation

The determination of the functional currency for Triumph's foreign subsidiaries is made based on appropriate economic factors. The
functional currency of the Company's subsidiaries, Triumph Logistics (UK) Ltd. and Triumph Aviation Services-Asia, is the U.S. dollar since that is the currency in which those
entities primarily generate and expend cash. The functional currency of the Company's remaining subsidiaries is the local currency, since that is the currency in which those entities primarily
generate and expend cash. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly
rates of exchange. The resultant translation adjustments are included in accumulated other comprehensive income. At March 31, 2010 and 2009, accumulated comprehensive income resulting from
foreign currency translation was $4,399 and $2,184, respectively. Gains and losses arising from foreign currency transactions of these subsidiaries are included in net income.

58

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

The Company accounts for income taxes using the asset and liability method. The asset and liability method requires recognition of
deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company's assets and
liabilities.

Adjustments to Consolidated Financial Statements

The accompanying consolidated financial statements have been adjusted for the retrospective application of the convertible debt
accounting standard, which became effective for the Company on April 1, 2009. The financial information contained in the consolidated financial statements and accompanying notes to the
consolidated financial statements reflect only the adjustments described below related to the retrospective application of the convertible debt accounting standard.

Effective
April 1, 2009, the Company adopted the convertible debt accounting standard. Early adoption was not permitted; however, once adopted the convertible debt accounting
standard requires retrospective application. The convertible debt accounting standard changes the balance sheet classification of a component of the Convertible Senior Subordinated Notes between
equity and debt, and results in additional non-cash interest expense recognized in the statement of income. Capital in excess of par has been increased by $19.8 million as of
September 30, 2007, to reflect the cumulative effect of the change in accounting principle to all prior periods.

The
following tables set forth the effect of the retrospective application of the convertible debt accounting standard on certain reported line items:

Years ended March 31,2009

2008As
previously
reported

As
adjusted

As
previously
reported

As
adjustedConsolidated Statements of IncomeInterest expense and other

$
11,096

$
16,929

$
13,422

$
19,942Gain on early extinguishment of debt


(2,580
)

(880
)




Income tax expense


45,586


43,124


37,161


34,748Net income

$
93,067

$
87,996

$
67,274

$
63,167Net income per share:Basic

$
5.68

$
5.37

$
4.08

$
3.83Diluted

$
5.61

$
5.30

$
3.84

$
3.60


59

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



March 31, 2009As
previously
reported

As
adjustedConsolidated Balance SheetsAssetsOther assets, net

$
13,731

$
12,031Total assets

$
1,592,907

$
1,591,207Liabilities and Stockholders' EquityLiabilitiesLong-term debt, less current portion

$
386,219

$
370,311Deferred income taxes other


117,462


122,757Stockholders' EquityCapital in excess of par


291,304


311,434Retained earnings


500,348


489,131Total stockholders' equity


779,650


788,563Total liabilities and stockholders' equity

$
1,592,907

$
1,591,207




Years ended March 31,2009

2008As
previously
reported

As
adjusted

As
previously
reported

As
adjustedConsolidated Statements of Cash FlowsNet income

$
93,067

$
87,996

$
67,274

$
63,167Adjustments to reconcile net income to net cash provided by operating activities:Gain on early extinguishment of debt


(2,580
)

(880
)




Accretion of discount on convertible debt





6,207





5,852Other amortization included in interest expense


2,059


1,685


1,621


2,289Provision for deferred income taxes


15,248


12,786


8,380


5,967Net cash provided by operating activities


134,997


134,997


45,725


45,725Net change in cash and cash equivalents


740


740


6,495


6,495Cash and cash equivalents at beginning of year


13,738


13,738


7,243


7,243Cash and cash equivalents at end of year

$
14,478

$
14,478

$
13,738

$
13,738


Recently Issued Accounting Pronouncements

In February 2008, the FASB issued FSP No. 157-1, which amends SFAS No. 157,Fair
Value Measurements("SFAS 157") to exclude SFAS No. 13,Accounting for Leases, and other accounting pronouncements
that address fair value measurements for lease transactions, and FSP No. 157-2, which primarily were codified into ASC 820,Fair Value Measurements and
Disclosuresand delayed the

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

effective
date of SFAS 157 as it relates to nonfinancial assets and nonfinancial liabilities until April 1, 2009 for the Company, except for items that are recognized or disclosed at
fair value in the Company's financial statements on a recurring basis. The nonfinancial assets and nonfinancial liabilities for which the Company had previously not applied the fair value provisions
of SFAS 157 include: goodwill; intangible and other long-lived asset impairment testing; asset retirement obligations; liabilities for exit or disposal activities; and business
combinations. The adoption had no impact on the Company's financial position, results of operations and cash flows as the Company did not have any non-financial assets and
non-financial liabilities that were recognized or disclosed at fair value on a recurring basis at March 31, 2009.

In
April 2009, the FASB issued FSP No. 157-4,Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly, which primarily was codified into ASC 820. The FSP requires entities to evaluate the significance and
relevance of market factors for fair value inputs to determine if, due to reduced volume and market activity, the factors are still relevant and substantive measures of fair value. The FSP is
effective for interim and annual reporting periods ending after June 15, 2009, and the adoption did not have any effect on our financial position or results of operations.

In
December 2008, the FASB issued FSP FAS 132(R)-1,Employers' Disclosures about Postretirement Benefit Plan Assets,
which primarily was codified into ASC 715,Compensation and Benefits. This FSP amends SFAS No. 132 (revised 2003), Employers' Disclosures about Pensions and Other
Postretirement Benefits, to provide guidance on an employer's disclosures about plan assets of a defined
benefit pension or other postretirement plan on investment policies and strategies, major categories of plan assets, inputs and valuation techniques used to measure the fair value of plan assets and
significant concentrations of risk within plan assets. This FSP shall be effective for fiscal years ending after December 15, 2009, with earlier application permitted. Upon initial application,
the provisions of this FSP are not required for earlier periods that are presented for comparative purposes. The required disclosures under the FSP have been included in Note 14.

In
April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, which was primarily codified into ASC 825,Financial
Instruments. This FSP amends SFAS No. 107,Disclosures about Fair Value of Financial Instruments, to require disclosures
about fair value of financial instruments
not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. Prior to this FSP, fair values for these assets and liabilities were only
disclosed annually. This FSP applies to all financial instruments within the scope of SFAS 107 and requires all entities to disclose the method(s) and significant assumptions used to estimate
the fair value of financial instruments. This FSP was effective for interim periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The
Company adopted this FSP in the quarter ended December 31, 2009 and the adoption of this FSP did not have a material effect on its disclosures.

Effective
April 1, 2009, the Company adopted SFAS No. 141(R),Business Combinations("SFAS 141(R)") which was
primarily codified into ASC 805,Business Combinations, and SFAS No. 160,Accounting and Reporting of Noncontrolling
Interests in Consolidated Financial Statements, an amendment of ARB No. 51("SFAS 160"), which was primarily codified into ASC 810, Consolidations. SFAS 141(R) and
SFAS 160 significantly change the accounting for and reporting of business combination transactions and
noncontrolling (minority) interests. The adoption of SFAS 141(R) and SFAS 160 did not have a material impact on the Company's consolidated financial statements.

61

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock-Based Compensation

The Company utilizes recognizes compensation expense for share-based awards based on the fair value of those awards at the date of
grant. Stock-based compensation expense for fiscal years 2010, 2009, and 2008 was $3,220, $3,180 and $2,809, respectively. The benefits of tax deductions in excess of recognized compensation expense
were $206, $245 and $1,737 for fiscal years ended March 31, 2010, 2009 and 2008, respectively. The Company has classified share-based compensation within selling, general and administrative
expenses to correspond with the same line item as the majority of the cash compensation paid to employees. Upon the exercise of stock options or vesting of restricted stock, the Company first
transfers treasury stock, then will issue new shares. (See Note 15 for further details.)

Subsequent Events

The Company has evaluated all subsequent events through the filing date of this Form 10-K with the Securities and
Exchange Commission, to ensure that this Form 10-K includes appropriate disclosure of events both recognized in the consolidated financial statements as of March 31, 2010,
and events which occurred subsequent to March 31, 2010 but were not recognized in the consolidated financial statements. There were no subsequent events which required recognition or
disclosure.

3. ACQUISITIONS

In March 2010, we entered into a definitive agreement to purchase Vought Aircraft Industries, Inc. ("Vought") from TC Group, L.L.C. ("Carlyle") for cash and stock consideration.
The purchase consideration to Vought shareholders includes $525,000 of cash and, subject to certain adjustments, approximately 7.9 million shares of our common stock. The cash portion of the
merger consideration is fixed. The stock portion of the merger consideration will not be adjusted to reflect changes to Triumph's stock price prior to closing of the merger. The stock portion of the
merger consideration will be decreased by approximately 3,360 shares for each day prior to July 1, 2010 that the merger is completed and increased by approximately 3,360 shares for each day
after July 1, 2010 that the merger is completed. The stock portion of the merger consideration will also be reduced for expenses of Vought that Triumph pays in connection with completing the
merger. We will also assume Vought's debt, which was $592,200 as of March 31, 2010. The cash portion of the acquisition, as well as the repayment of Vought's assumed debt is expected to be
funded through a combination of cash-on-hand, borrowing under our existing amended and restated credit agreement (the "Credit Facility") and the issuance of senior notes in the
capital markets. In anticipation of the merger, we have obtained a commitment letter, which provides us up to $1,085,000 in debt financing necessary to consummate the merger that may be used for
funding in the event the transaction closes prior to obtaining permanent financing in the capital markets. During fiscal 2010, the Company incurred $1,114 in acquisition-related costs recorded in
selling, general and administrative expenses in the accompanying statement of income.

Vought
is a leading global manufacturer of aerostructures for commercial, military and business jet aircraft. Products include fuselages, wings, empennages, nacelles and helicopter
cabins. Vought's customer base is comprised of the leading global aerospace OEMs and over 80% of its revenue is from sole source, long-term contracts. Vought's revenues for the year
ended December 31, 2009 were $1.9 billion and they employed approximately 5,900 people.

62

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

3. ACQUISITIONS (Continued)

Following
the closing of the Vought acquisition, Carlyle will own approximately 31% of the outstanding stock of Triumph and will be subject to certain lock up provisions. The transaction
is subject to customary closing conditions including regulatory approvals and approval of Triumph shareholders and is expected to be completed in July 2010. The acquired business will operate as
Triumph AerostructuresVought Aircraft Division, LLC.

FISCAL 2010 ACQUISITIONS

Acquisition of DCL Avionics, Inc.

Effective January 29, 2010, our wholly-owned subsidiary Triumph InstrumentsBurbank, Inc. acquired the assets
and business of DCL Avionics, Inc. ("DCL"). DCL operated a Federal Aviation Administration ("FAA") approved avionics repair station and components dealership. DCL provides
Triumph InstrumentsBurbank, Inc. with additional capacity as well as a strategic location on the Van Nuys, California, airport. The results for Triumph
InstrumentsBurbank, Inc. continue to be included in the Company's Aftermarket Services segment.

Acquisition of Fabritech, Inc.

Effective March 1, 2010, the Company acquired all of the outstanding shares of Fabritech, Inc. ("Fabritech"), renamed
Triumph FabricationsSt. Louis, Inc. Triumph FabricationsSt. Louis, Inc. is a component manufacturer and repair station for critical military
rotary-wing platforms. Fabritech provides the Company with high-end maintenance and manufactured solutions focused on aviation drive train, mechanical, hydraulic and electrical
hardware items including gearboxes, cargo hooks and vibration absorbers. The results for Triumph FabricationsSt. Louis, Inc. are included in the Company's Aftermarket
Services segment.

The
acquisitions of DCL and Fabritech are herein referred to as the "fiscal 2010 acquisitions." The combined purchase price for the fiscal 2010 acquisitions of $33,802 includes cash paid
at closing, deferred payments and estimated contingent payments. The estimated contingent payments represent
an earnout note contingent upon the achievement of certain earnings levels during the earnout period. The maximum amounts payable in respect of fiscal 2011, 2012 and 2013 are $6,400, $5,000 and
$4,600, respectively. The estimated fair value of the earnout note is $10,500, classified as a Level 3 liability in the fair value hierarchy. The excess of the purchase price over the estimated
fair value of the net assets acquired of $22,279 was recorded as goodwill, which is not deductible for tax purposes. The Company has also identified intangible assets valued at approximately $4,100
with a weighted-average life of 10.0 years. The Company is awaiting final appraisal of tangible and intangible assets related to the fiscal 2010 acquisitions. Accordingly, the Company has
recorded its best estimate of the value of intangible assets, property and equipment and contingent consideration. Therefore, the allocation of purchase price for the fiscal 2010 acquisitions is not
complete.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

3. ACQUISITIONS (Continued)

The
following condensed balance sheet represents the amounts assigned to each major asset and liability caption in the aggregate for the fiscal 2010 acquisitions:

Cash

$
532Accounts receivable


640Inventory


6,738Prepaid expenses and other


68Property and equipment


1,560Goodwill


22,279Intangible assets


4,100Total assets

$
35,917Accounts payable

$
304Accrued expenses


1,811Total liabilities

$
2,115


The
fiscal 2010 acquisitions have been accounted for under the acquisition method and, accordingly, are included in the consolidated financial statements from the effective date of
acquisition. The fiscal 2010 acquisitions were funded by the Company's cash and cash equivalents at the date of acquisition. The Company incurred $406 in acquisition-related costs in connection with
the fiscal 2010 acquisitions recorded in selling, general and administrative expenses in the accompanying consolidated statement of income.

FISCAL 2009 ACQUISITIONS

Acquisition of Merritt Tool Company, Inc.

Effective March 13, 2009, the Company acquired all of the outstanding shares of Merritt Tool Company, Inc. ("Merritt"),
renamed Triumph StructuresEast Texas, Inc. Triumph StructuresEast Texas, Inc. is a manufacturer of aircraft structural components specializing in complex
precision machining primarily for commercial and military aerospace programs. Merritt provides the Company with expanded capacity and increased market share in structural components. The results for
Triumph StructuresEast Texas, Inc. are included in the Company's Aerospace Systems segment.

Acquisition of Saygrove Defence & Aerospace Group Limited

Effective March 13, 2009, the Company acquired all of the outstanding shares of Saygrove Defence & Aerospace Group
Limited ("Saygrove"), renamed Triumph Actuation & Motion Control SystemsUK, Ltd. Triumph Actuation & Motion Control SystemsUK, Ltd. is a provider
of motion control and actuation products for the aerospace and defense industry. Saygrove provides the Company with added advanced control products for flight actuation and motor control applications
in all-electric aircraft and Unmanned Aerial Vehicles. The results for Triumph Actuation & Motion Control SystemsUK, Ltd. are included in the Company's Aerospace
Systems segment.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

3. ACQUISITIONS (Continued)

Acquisition of Aviation Segment of Kongsberg Automotive Holdings ASA

Effective March 31, 2009, the Company acquired the assets of the aviation segment of Kongsberg Automotive Holdings ASA ("KA")
through two newly organized wholly-owned subsidiaries, Triumph ControlsUK, Ltd. and Triumph ControlsGermany, GmbH. The acquired business, which is located in
Basildon, U.K. and Heiligenhaus, Germany, provides cable control systems for commercial and military aircraft to Europe's leading aerospace manufacturers. KA provides the Company with expanded
capacity and increased market share in cable control systems. The results for Triumph ControlsUK, Ltd. and Triumph ControlsGermany, GmbH will be included in the
Company's Aerospace Systems segment.

Acquisition of The Mexmil Company, LLC

Effective March 31, 2009, the Company acquired all of the equity interests of The Mexmil Company, LLC, and all of the
equity interests of several affiliates ("Mexmil"), renamed Triumph Insulation Systems, LLC. Triumph Insulation Systems, LLC and its affiliates primarily provide insulation systems to
OEMs, airlines, maintenance, repair and overhaul organizations and air cargo carriers. Mexmil provides the Company with an enhanced ability to provide a more comprehensive interiors solution to
current and future customers. The results for Triumph Insulation Systems, LLC and its affiliates will be included in the Company's Aerospace Systems segment.

The
acquisitions of Merritt, Saygrove, KA and Mexmil are herein referred to as the "fiscal 2009 acquisitions." The combined purchase price of the fiscal 2009 acquisitions of $152,741
includes cash paid at closing, estimated deferred payments and direct costs of the transactions. Included in the deferred payments are delayed payments of $2,270 paid in March 2010 and $1,507 payable
in September 2010, respectively. The fiscal 2009 acquisitions also provide for contingent payments, certain of which are contingent upon the achievement of specified earnings levels during the earnout
period and another $10,000 that is contingent upon entering into a specific customer contract. The maximum amounts payable in respect of fiscal 2010, 2011, 2012 and 2013, respectively, are $2,322,
$4,598, $5,426 and $2,629. The contingent amounts have not been recorded as the contingencies have not been resolved and the consideration has not been paid. The excess of the combined purchase price
over the preliminary estimated fair value of the net assets acquired of $95,072 was recorded as goodwill, $65,388 of which is tax-deductible. The Company has also identified intangible
assets valued at approximately $27,113 comprised of noncompete agreements, customer relationships, and product rights and licenses with a weighted-average life of 9.8 years. During fiscal 2010,
the Company finalized the purchase price allocation for the fiscal 2009 acquisitions as a result of receiving the final appraisals of tangible and intangible assets. Based on the revised allocations,
an additional $2,295 and $21,812 was allocated to property and equipment and goodwill, respectively; and intangible assets were reduced by $18,353.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

3. ACQUISITIONS (Continued)

The
following condensed balance sheet represents the amounts assigned to each major asset and liability caption in the aggregate for fiscal 2009 acquisitions:

Cash

$
5,182Accounts receivable


13,907Inventory


26,037Prepaid expenses and other


1,952Deferred tax asset


2,592Property and equipment


18,389Goodwill


95,072Intangible assets


27,113Total assets

$
190,244Accounts payable

$
9,707Accrued expenses


24,984Other current liabilities


108Other long-term liabilities


2,704Total liabilities

$
37,503


The
fiscal 2009 acquisitions have been accounted for under the purchase method of accounting and, accordingly, are included in the consolidated financial statements from the effective
dates of acquisition. The fiscal 2009 acquisitions were funded by the Company's long-term borrowings in place at the dates of acquisition.

FISCAL 2008 ACQUISITIONS

Acquisition of B. & R. Machine & Tool Corp.

Effective February 27, 2008, the Company acquired the assets and business of B. & R. Machine & Tool Corp.
("B & R") through a newly organized, wholly-owned subsidiary of the Company, Triumph StructuresLong Island, LLC. Triumph StructuresLong Island, LLC
provides aircraft structural components and dynamic parts and assemblies for commercial and military aerospace programs. The results for Triumph StructuresLong Island, LLC are
included in the Company's Aerospace Systems segment.

The
purchase price for B & R of $84,044 included cash paid at closing, estimated deferred payments and direct costs of the transaction. Included in the estimated deferred payments
is an earnout note for
$13,000. Payments under the earnout note are contingent upon the achievement of certain earnings levels during the earnout period. The maximum amounts payable in respect of fiscal 2009, 2010 and 2011
are $3,500, $4,500 and $5,000, respectively, the first installment was paid in fiscal 2010 and the second installment was earned and will be paid in fiscal 2011. The excess of the purchase price over
the estimated fair value of the net assets acquired of $47,885 was recorded as goodwill, all of which is tax-deductible. The Company has also identified intangible assets valued at
approximately $16,300 with a weighted-average life of 10 years.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

3. ACQUISITIONS (Continued)

The
B & R acquisition has been accounted for under the purchase method and, accordingly, is included in the consolidated financial statements from the effective date of
acquisition. The acquisition was funded by the Company's long-term borrowings in place at the date of acquisition.

The
following unaudited pro forma information for the fiscal years ended March 31, 2010 and 2009 have been prepared assuming the fiscal 2010 acquisitions and fiscal 2009
acquisitions had occurred on April 1, 2008. The pro forma information for the fiscal year ended March 31, 2010 is as follows: Net sales: $1,306,867; Income from continuing operations:
$83,538; Income per share from continuing operationsbasic: $5.08; Income per share from continuing operationsdiluted: $5.01. The pro forma information for the fiscal year
ended March 31, 2009 is as follows: Net sales: $1,357,828; Income from continuing operations: $94,046; Income per share from continuing operationsbasic: $5.74; Income per share
from continuing operationsdiluted: $5.67.

The
unaudited pro forma information includes adjustments for interest expense that would have been incurred to finance the purchase, additional depreciation based on the estimated fair
market value of the property and equipment acquired, and the amortization of the intangible assets arising from the transactions. The unaudited pro forma financial information is not necessarily
indicative of the results of operations as it would have been had the transaction been effected on the assumed date.

4. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

In September 2007, the Company sold the assets of Triumph Precision, Inc., a build-to-specification manufacturer and supplier of ultra-precision machined
components and assemblies in its Aerospace Systems segment. The effective date of the sale was July 1, 2007. The Company recognized a pretax loss of $650 on the sale of the business, which
included costs to sell of $150. The Company has also decided to sell Triumph Precision Castings Co., a casting facility in its Aftermarket Services segment that specializes in producing
high-quality hot gas path components for aero and land-based gas turbines. The Company recognized a pretax loss of $3,500 in the first quarter of fiscal 2008 based upon a
write-down of the carrying value of the business to estimated fair value less costs to sell. The write-down was applied to inventory and long-lived assets,
consisting primarily of property, plant and equipment. In October 2008, the Company exercised the buy out provision in the operating lease on its casting facility. Accordingly, the property, plant and
equipment related to the assets held for sale increased by $3,535.

Due
to failed negotiations with certain potential buyers of the business occurring during fiscal 2010, the Company reassessed its estimated fair value of the business based on current
viable offers to purchase the business, recent performance results and overall market conditions, resulting in a write-down, which was applied to accounts receivable, inventory and
property, plant and equipment. The Company recognized a pretax loss of $17,383 in the third quarter of fiscal 2010. Included in the loss from discontinued operations for the fiscal year ended
March 31, 2010 is an impairment charge of $2,512 recorded during the first quarter of fiscal 2010.

Revenues
of discontinued operations were $2,128, $10,433 and $10,913 for the fiscal years ended March 31, 2010, 2009 and 2008, respectively. The loss from discontinued operations
was $17,526, $4,745 and $8,468, net of income tax benefit of $9,376, $2,556 and $4,560 for the fiscal years ended March 31, 2010, 2009 and 2008, respectively. Interest expense of $2,342, $2,913
and $2,835 was allocated to

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

4. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

discontinued
operations for the fiscal years ended March 31, 2010, March 31, 2009 and March 31, 2008, respectively, based upon the actual borrowings of the operations, and such
interest expense is included in the loss from discontinued operations.

For
financial statement purposes, the assets, liabilities and results of operations of these businesses have been segregated from those of the continuing operations and are presented in
the Company's consolidated financial statements as discontinued operations and assets and liabilities held for sale.

Assets
and liabilities held for sale are comprised of the following:

March 31,2010

2009Assets held for sale:Accounts receivable, net

$
1,656

$
6,838Inventories


372


11,763Property, plant and equipment


3,000


9,062Other


23


32Total assets held for sale

$
5,051

$
27,695Liabilities held for sale:Accounts payable

$
227

$
1,630Accrued expenses


324


475Other noncurrent liabilities


348


2,178Total liabilities held for sale

$
899

$
4,283


5. INVENTORIES

Inventories are stated at the lower of cost (average-cost or specific-identification methods) or market. The components of inventories are as follows:

March 31,2010

2009Raw materials

$
51,028

$
51,856Manufactured and purchased components


162,281


142,833Work-in-process


111,975


113,641Finished goods


38,641


81,018Total inventories

$
363,925

$
389,348


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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

6. PROPERTY AND EQUIPMENT

Net property and equipment at March 31, 2010 and 2009 is:

March 31,2010

2009Land

$
18,258

$
18,052Construction in process


17,438


12,151Buildings and improvements


139,936


133,055Machinery and equipment


408,996


390,334584,628


553,592Less accumulated depreciation


256,994


221,125$
327,634

$
332,467


Depreciation
expense for the fiscal years ended March 31, 2010, 2009 and 2008 was $39,715, $36,836 and $32,779, respectively, which includes depreciation of assets under capital
lease.

7. GOODWILL AND OTHER INTANGIBLE ASSETS

The following is a summary of the changes in the carrying value of goodwill by reportable segment, for the fiscal years ended March 31, 2010 and 2009:

Aerospace
Systems

Aftermarket
Services

TotalFiscal 2010Balance at beginning of year

$
405,982

$
53,559

$
459,541Goodwill recognized in connection with acquisitions





22,279


22,279Purchase price allocation adjustments


22,749





22,749Effect of exchange rate changes and other


(784
)

(1,711
)

(2,495
)Balance at end of year

$
427,947

$
74,127

$
502,074Fiscal 2009Balance at beginning of year

$
330,175

$
53,565

$
383,740Goodwill recognized in connection with acquisitions


73,260





73,260Purchase price allocation adjustments


3,518





3,518Effect of exchange rate changes and other


(971
)

(6
)

(977
)Balance at end of year

$
405,982

$
53,559

$
459,541


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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

7. GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

Intangible Assets

The components of intangible assets, net are as follows:

March 31, 2010Weighted-
Average Life

Gross Carrying
Amount

Accumulated
Amortization

NetProduct rights and licenses

11.3 years

$
74,082

$
(51,762
)
$
22,320Noncompete agreements, customer relationships and other

9.6 years


83,606


(26,082
)

57,524Total intangibles, net



$
157,688

$
(77,844
)
$
79,844




March 31, 2009Weighted-
Average Life

Gross Carrying
Amount

Accumulated
Amortization

NetProduct rights and licenses

11.3 years

$
74,082

$
(45,079
)
$
29,003Noncompete agreements, customer relationships and other

10.1 years


97,476


(18,129
)

79,347Total intangibles, net



$
171,558

$
(63,208
)
$
108,350


Amortization
expense for the fiscal years ended March 31, 2010, 2009 and 2008 was $14,703, $11,775 and $10,436, respectively. Amortization expense for the five fiscal years
succeeding March 31, 2010 by year is expected to be as follows: 2011: $13,504; 2012: $12,075; 2013: $11,758; 2014: $10,290; 2015: $9,800 and thereafter: $22,416.

Effective
February 9, 2007, the Company, through its Triumph Air Repair subsidiary, included in the Aftermarket Services segment, entered into a software licensing agreement with
Honeywell Intellectual Properties, Inc. ("Honeywell"). The agreement grants Triumph a non-exclusive, limited license to access Honeywell proprietary commercial service manuals
identified for use on the Boeing 331-250[G] APU installed on the United States Air Force
C-17 aircraft. The license expires on September 30, 2013. As consideration, the Company agreed to pay $5,000 inclusive of imputed interest of $529, of which $700, $700 and $700 was
paid during fiscal years 2010, 2009 and 2008, respectively. At March 31, 2010, the remaining payable to Honeywell of $1,079 is included in the consolidated balance sheet in accrued expenses and
other noncurrent liabilities in the amounts of $556 and $523, respectively. As a result of the agreement, the Company recorded an intangible asset in the amount of $4,471, which is included in product
rights and licenses intangible assets, with a life of 6.7 years. The Company amortized to expense $838, $502 and $671 of this intangible during fiscal years 2010, 2009 and 2008, respectively.

Effective
January 1, 2005, the Company, through its Triumph Gear SystemsMacomb subsidiary, included in the Aerospace Systems segment, entered into an exclusive
agreement with General Electric ("GE") to provide the inlet gearbox as well as specific related spare parts for the CFM56 engine program for the life of the program. The Boeing 737 and the Airbus
A318, A319, A320, A321 and A340-200/-300 aircraft are the primary platforms for the CFM56 engine. As consideration, the Company agreed to pay an amount of $32,158 for the
exclusive right to use certain propriety

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

7. GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

technology
owned by GE, of which $2,572, $10,200, $14,232 and $5,154 was paid during fiscal 2008, 2007, 2006 and fiscal 2005, respectively. As a result of the agreement, the Company recorded an
intangible asset in the amount of $32,158, which is included in product rights and licenses intangible assets, with a weighted-average life of 12.1 years. The Company amortized to expense
$2,812, $2,810 and $2,814 of this intangible asset during fiscal 2010, 2009 and 2008, respectively.

8. ACCRUED EXPENSES

Accrued expenses are composed of the following items:

March 31,2010

2009Accrued compensation

$
39,516

$
38,592Deferred revenue


26,222


23,317Accrued interest


9,371


3,482Warranty reserve


5,184


5,956All other


30,973


38,233Total accrued expenses

$
111,266

$
109,580


9. LEASES

At March 31, 2010, future minimum payments under noncancelable operating leases with initial or remaining terms of more than one year were as follows: 2011$12,307;
2012$9,250; 2013$6,810; 2014$6,147; 2015: $4,708 and thereafter$12,487 through 2022. In the normal course of business, operating leases are
generally renewed or replaced by other leases.

At
March 31, 2010, future minimum sublease rentals are as follows: 2011$669; 2012$685; 2013$618; 2014$547; 2015: $557 and
thereafter$1,435 through 2018.

Total
rental expense was $14,954, $14,441 and $14,725 for the fiscal years ended March 31, 2010, 2009 and 2008, respectively.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

10. LONG-TERM DEBT

Long-term debt consists of the following:

March 31,2010

2009Convertible senior subordinated notes

$
169,584

$
167,342Senior subordinated notes due 2017


172,561


Revolving credit facility





127,730Receivable securitization facility


75,000


75,000Equipment leasing facility


69,560


65,232Subordinated promissory notes


11,107


16,575Other debt


7,968


7,517505,780


459,396Less current portion


91,929


89,085$
413,851

$
370,311


Credit Facility

On August 17, 2009, the Company amended its existing amended and restated credit agreement (the "Credit Facility") with its
lenders to (i) increase the availability under the Credit Facility to $485,000 from $370,000, (ii) extend the maturity date to January 31, 2013 and (iii) amend certain
other terms and covenants. The Credit Facility bears interest at either: (i) LIBOR plus between 2.25% and 3.50%; (ii) the prime rate; or (iii) an overnight rate at the option of
the Company. The applicable interest rate is based upon the Company's ratio of total indebtedness to earnings before interest, taxes, depreciation and amortization, as defined in the Credit Facility.
In addition, the Company is required to pay a commitment fee of between 0.30% and 0.50% on the unused portion of the Credit Facility. The commitment fee applicable for any fiscal quarter shall be
increased over the amounts set forth above by 15 basis points to the extent the average amounts outstanding in such fiscal quarter is less than or equal to 40% of the availability. The Company's
obligations under the Credit Facility are guaranteed by the Company's domestic subsidiaries. In connection with the amendment, the Company incurred $3,946 of bank-related fees. These fees,
along with $934 of unamortized debt issuance costs prior to the amendment, are being amortized into expense over the remaining term of the agreement.

On
July 10, 2008, the Company amended the Credit Facility with its lenders, primarily to allow for a receivable securitization facility of up to $125,000 and to amend certain
other terms and covenants. Coincident with the amendment, the Company exercised a provision of the Credit Facility to increase the amount available under the Credit Facility to $370,000 from $350,000.
On December 22, 2006, the Company amended the Credit Facility with its lenders primarily to eliminate a financial covenant restricting aggregate capital expenditures to 200% of consolidated
depreciation expense in any fiscal year. The Company's obligations under the Credit Facility are guaranteed by the Company's subsidiaries. On October 20, 2006, the Company amended the Credit
Facility with its lenders to increase the Credit Facility to $350,000 from $250,000, extend the maturity date to June 30, 2011 and amend certain other terms and covenants.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

10. LONG-TERM DEBT (Continued)

At
March 31, 2010, there were no borrowings and $6,123 in letters of credit outstanding under the Credit Facility. At March 31, 2009, there were $127,730 in borrowings and
$5,600 in letters of credit outstanding under the Credit Facility. The level of unused borrowing capacity under the Credit Facility varies from time to time depending in part upon the Company's
compliance with financial and other covenants set forth in the related agreement. The Credit Facility contains certain affirmative and negative covenants including limitations on specified levels of
indebtedness to earnings before interest, taxes, depreciation and amortization, and interest coverage requirements, and includes limitations on, among other things, liens, mergers, consolidations,
sales of assets, and incurrence of debt. The Company is currently in compliance with all such covenants. As of March 31, 2010, the Company had borrowing capacity under the Credit Facility of
$478,877 after reductions for borrowings and letters of credit outstanding under the Credit Facility.

Senior Subordinated Notes Due 2017

On November 16, 2009, the Company issued $175,000 principal amount of 8% Senior Subordinated Notes due 2017 (the "2017 Notes").
The 2017 Notes were sold at 98.558% of principal amount and have an effective interest yield of 8.25%. Interest on the 2017 Notes is payable semiannually in cash in arrears on May 15 and
November 15 of each year. In connection with the issuance of the 2017 Notes, the Company incurred approximately $4,390 of costs, which were deferred and are being amortized on the effective
interest method over the term of the 2017 Notes.

The
2017 Notes are senior subordinated unsecured obligations of the Company and rank subordinated to all of the existing and future senior indebtedness of the Company and the Guarantor
Subsidiaries (defined below), including borrowings under the Company's existing Credit Facility, and pari passu with the Company's and the Guarantor Subsidiaries' existing and future senior
subordinated indebtedness. The 2017 Notes are guaranteed, on a full, joint and several basis, by each of our domestic restricted subsidiaries that guarantees any of our debt or that of any of our
restricted subsidiaries under our Credit Facility, and in the future by any domestic restricted subsidiaries that guarantee any of our debt or that of any of our domestic restricted subsidiaries
incurred under any credit facility (collectively, the "Guarantor Subsidiaries"), in each case on a senior subordinated basis. If the Company is unable to make payments on the 2017 Notes when they are
due, each of the Guarantor Subsidiaries would be obligated to make them instead.

The
Company has the option to redeem all or a portion of the 2017 Notes at any time prior to November 15, 2013 at a redemption price equal to 100% of the principal amount of the
2017 Notes redeemed plus an applicable premium set forth in the Indenture and accrued and unpaid interest, if any. The 2017 Notes are also subject to redemption, in whole or in part, at any time on or
after November 15, 2013, at redemption prices equal to (i) 104% of the principal amount of the 2017 Notes redeemed, if redeemed prior to November 15, 2014, (ii) 102% of the
principal amount of the 2017 Notes redeemed, if redeemed prior to November 15, 2015 and (iii) 100% of the principal amount of the Notes redeemed, if redeemed thereafter, plus accrued and
unpaid interest. In addition, at any time prior to November 15, 2012, the Company may redeem up to 35% of the principal amount of the 2017 Notes with the net cash proceeds of qualified equity
offerings at a redemption price equal to 108% of the
aggregate principal amount plus accrued and unpaid interest, if any, subject to certain limitations set forth in the indenture governing the 2017 Notes (the 'Indenture").

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

10. LONG-TERM DEBT (Continued)

Upon
the occurrence of a change of control, the Company must offer to purchase the 2017 Notes from holders at 101% of their principal amount plus accrued and unpaid interest, if any, to
the date of purchase. This change of control feature represents an embedded derivative. Since it is in the control of the Company to call the Notes at any time after November 15, 2013, the
value of the derivative was determined to be de minimis. Accordingly, no value has been assigned at issuance or at March 31, 2010.

The
Indenture contains covenants that, among other things, limit the Company's ability and the ability of any of the Guarantor Subsidiaries to (i) grant liens on its assets,
(ii) make dividend payments, other distributions or other restricted payments, (iii) incur restrictions on the ability of the Guarantor Subsidiaries to pay dividends or make other
payments, (iv) enter into sale and leaseback transactions, (v) merge, consolidate, transfer or dispose of substantially all of their assets, (vi) incur additional indebtedness,
(vii) use the proceeds from sales of assets, including capital stock of restricted subsidiaries, and (viii) enter into transactions with affiliates.

Convertible Senior Subordinated Notes

On September 18, 2006, the Company issued $201,250 in convertible senior subordinated notes (the "Notes"). The Notes are direct,
unsecured, senior subordinated obligations of the Company, and rank (i) junior in right of payment to all of the Company's existing and future senior indebtedness, (ii) equal in right of
payment with any other future senior subordinated indebtedness, and (iii) senior in right of payment to all subordinated indebtedness.

Effective
April 1, 2009, the Company changed its method of accounting for its convertible debt instruments in order to separately account for the liability and equity components
of the Notes in a manner that reflects the Company's nonconvertible debt borrowing rate when interest and amortization cost is recognized in subsequent periods. The excess of the principal amount of
the liability component over its carrying amount has been recognized as debt discount and amortized using the effective interest method. This change in accounting for the Notes has been applied to the
consolidated financial statements on a retrospective basis. For more details on the impact of this change on the consolidated financial statements, see Note 2. As of March 31, 2010, the
remaining discount of $9,466 will be amortized on the effective interest method through October 1, 2011.

The
Company received net proceeds from the sale of the Notes of approximately $194,998 after deducting debt issuance costs of approximately $6,252. The use of the net proceeds from the
sale was for prepayment of the Company's outstanding Senior Notes, including a "make whole" premium, fees and expenses in connection with the prepayment, and to repay a portion of the outstanding
indebtedness under the Company's Credit Facility. The issuance costs have been allocated to the respective liability and equity components, with the liability component recorded as other assets and
the equity component recorded as a reduction of equity in the accompanying consolidated balance sheets. Debt issuance costs are being amortized over a period of five years.

The
Notes bear interest at a fixed rate of 2.625% per annum, payable in cash semiannually in arrears on each April 1 and October 1 beginning April 1, 2007. During
the period commencing on October 6, 2011 and ending on, but excluding, April 1, 2012 and each six-month period from October 1 to March 31 or from April 1
to September 30 thereafter, the Company will pay contingent interest

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

10. LONG-TERM DEBT (Continued)

during
the applicable interest period if the average trading price of a Note for the five consecutive trading days ending on the third trading day immediately preceding the first day of the relevant
six-month period equals or exceeds 120% of the principal amount of the Notes. The contingent interest payable per Note in respect of any six-month period will equal 0.25% per
annum calculated on the average trading price of a Note for the relevant five trading day period. This contingent interest feature represents an embedded derivative. Since it is in the control of the
Company to call the Notes at any time after October 6, 2011, the value of the derivative was determined to be de minimis. Accordingly, no value has been assigned at issuance or at
March 31, 2010.

During
fiscal 2010, the Company paid $3,994 to purchase $4,200 in principal amount of the Notes, resulting in a reduction in the carrying amount of the Notes of $3,830 and a gain on
early extinguishment of $39. During fiscal 2009, the Company paid $15,420 to purchase $18,000 of principal on the Notes, resulting in a gain on early extinguishment of $880.

The
Notes mature on October 1, 2026 unless earlier redeemed, repurchased or converted. The Company may redeem the Notes for cash, either in whole or in part, anytime on or after
October 6, 2011 at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest, including contingent interest and additional amounts,
if any, up to but not including the date of redemption. In addition, holders of the Notes will have the right to require the Company to repurchase for cash all or a portion of their Notes on
October 1, 2011, 2016 and 2021, at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest, including contingent interest and
additional amounts, if any, up to, but not including, the date of repurchase. The Notes are convertible into the Company's common stock at a rate equal to 18.3655 shares per $1,000 principal amount of
the Notes (equal to an initial conversion price of approximately $54.45 per share), subject to adjustment as described in the Indenture. Upon conversion, the Company will deliver to the holder
surrendering the Notes for conversion, for each $1,000 principal amount of Notes, an amount consisting of cash equal to the lesser of $1,000 and the Company's total conversion obligation and, to the
extent that the Company's total conversion obligation
exceeds $1,000, at the Company's election, cash or shares of the Company's common stock in respect of the remainder.

A
holder may surrender its Notes for conversion: (i) during any fiscal quarter if the last reported sale price of the Company's common stock for at least 20 trading days during
the period of 30 consecutive trading days ending on the last trading day of the previous fiscal quarter is more than 130% of the applicable conversion price per share of the Company's common stock on
such trading day; (ii) during the five business days immediately following any five consecutive trading-day period in which the trading price per $1,000 principal amount of a Note
for each day of that period was less than 98% of the product of the closing price of the Company's common stock and the conversion rate of the Notes on each such day; (iii) if the Company has
called the Notes for redemption; (iv) on the occurrence of a specified corporate transaction as provided in the indenture governing the Notes (i.e., change in control, distribution of
rights or warrants to purchase common stock below market value, distribution of assets (including cash) with a per share value exceeding 10% of the market value of common stock); or (v) during
the two-month period prior to maturity (starting August 1, 2026). The last reported sale price of the Company's common stock on any date means the closing sales price per share on
such date as reported by the New York Stock Exchange.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

10. LONG-TERM DEBT (Continued)

For
the periods from October 1, 2007 through December 31, 2007 and January 1, 2008 through March 31, 2008, the Notes were eligible for conversion; however,
during this period, none of the Notes were converted. The Company has classified the Notes as long-term as of March 31, 2010.

To
be included in the calculation of diluted earnings per share, the average price of the Company's common stock for the fiscal year must exceed the conversion price per share of $54.45.
The average price of the Company's common stock for the fiscal years ended March 31, 2010 and March 31, 2009 was $46.68 and $46.49, respectively. Therefore, no additional shares were
included in the diluted earnings per share calculations for those fiscal years. The average price of the Company's common stock for the fiscal year ended March 31, 2008 was $68.95. Therefore,
777,059 additional shares were included in the diluted earnings per share calculation.

If
the Company undergoes a fundamental change, holders of the Notes will have the right, subject to certain conditions, to require the Company to repurchase for cash all or a portion of
its Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest, including contingent interest and additional amounts, if any.

Receivable Securitization Program

In August 2008, the Company entered into a receivable securitization facility (the "Securitization Facility"). In connection with the
Securitization Facility, the Company sells on a revolving basis certain accounts receivable to Triumph Receivables, LLC, a wholly-owned special-purpose entity, which in turn sells a percentage
ownership interest in the receivables to commercial paper conduits sponsored by financial institutions. The Company is the servicer of the accounts receivable under the Securitization Facility. As of
March 31, 2010, the maximum amount available under the Securitization Facility was $123,467, secured by $164,075 in accounts receivable. The Securitization Facility is due to expire in August
2010 and is subject to annual renewal through August 2013. Interest rates are based on prevailing market rates for short-term commercial paper plus a program fee and a commitment fee. The
program fee is 0.85% on the amount outstanding under the Securitization Facility. Additionally, the commitment fee is 0.65% on 102% of the maximum amount available under the Securitization Facility.
At March 31, 2010, there was $75,000 outstanding under the Securitization Facility, representing the minimum borrowing requirement. In connection with entering into the Securitization Facility,
the Company incurred approximately $823 of costs, which were deferred and are being amortized over the life of the Securitization Facility. The Company securitizes its accounts receivable, which are
generally non-interest bearing, in transactions that are accounted for as borrowings pursuant to theTransfers and Servicingtopic of the
ASC.

The
agreement governing the Securitization Facility contains restrictions and covenants which include limitations on the making of certain restricted payments, creation of certain liens,
and certain corporate acts such as mergers, consolidations and the sale of substantially all assets.

Equipment Leasing Facility and Other Capital Leases

During March 2009, the Company entered into a 7-year Master Lease Agreement ("Leasing Facility") creating a capital lease
of certain existing property and equipment, resulting in net proceeds of $58,546 after deducting debt issuance costs of approximately $188. During fiscal 2010, the Company

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

10. LONG-TERM DEBT (Continued)

originated
additional capital lease financing resulting in proceeds of $13,942. The net proceeds from the Leasing Facility were used to repay a portion of the outstanding indebtedness under the
Company's Credit Facility. The debt issuance costs have been recorded as other assets in the accompanying consolidated balance sheets and are being amortized over the term of the Leasing Facility. The
Leasing Facility bears interest at a weighted-average fixed rate of 6.1% per annum.

Interest
paid on indebtedness during the years ended March 31, 2010, 2009 and 2008 amounted to $16,284, $13,352 and $14,512, respectively.

As
of March 31, 2010, the maturities of long-term debt are as follows: 2011$91,929; 2012$195,395; 2013$11,154;
2014$11,473; 2015$11,277; and thereafter$196,457 through 2020.

11. INCOME TAXES

The components of income tax expense are as follows:

Year ended March 31,2010

2009

2008Current:Federal

$
30,095

$
26,447

$
25,015State


2,819


2,791


1,530Foreign


729


1,100


85533,643


30,338


27,400Deferred:Federal


6,790


11,846


7,085State


472


940


263Foreign


262





7,524


12,786


7,348$
41,167

$
43,124

$
34,748


A
reconciliation of the statutory federal income tax rate to the effective tax rate is as follows:

Year ended March 31,2010

2009

2008Statutory federal income tax rate


35.0
%

35.0
%

35.0
%State and local income taxes, net of federal tax benefit


2.1


1.3


1.3Miscellaneous permanent items and nondeductible accruals


0.1


0.9


0.2Research and development tax credit


(2.4
)

(2.2
)

(1.8
)Foreign tax credits


(0.1
)

(1.4
)

Domestic production tax benefits


(1.9
)

(1.3
)

(1.3
)Other


(0.9
)

(0.5
)

(0.5Effective income tax rate


31.9
%

31.8
%

32.9
%


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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

11. INCOME TAXES (Continued)

The
components of deferred tax assets and liabilities are as follows:

March 31,2010

2009Deferred tax assets:Net operating loss carryforwards

$
4,217

$
4,157Accounts receivable


1,884


2,263Accruals and reserves


11,277


9,515Other


4,709


4,89822,087


20,833Valuation allowance


(351
)

(351
)Net deferred tax assets


21,736


20,482Deferred tax liabilities:Property and equipment


53,074


50,982Goodwill and other intangible assets


54,887


53,100Inventory


3,519


8,396Prepaid expenses and other


17,440


14,691128,920


127,169Net deferred tax liabilities

$
107,184

$
106,687


As
of March 31, 2010, the Company has federal and state net operating loss carryforwards of $65,032 expiring in various years through 2030.

Net
income taxes paid during the fiscal years ended March 31, 2010, 2009 and 2008 were $27,990, $28,713 and $21,740, respectively. The Company also has a foreign net operating
loss carryforward of $351 for which a valuation allowance has been established. There was no change in total valuation allowance for fiscal 2010.

The
Company has classified uncertain tax positions as noncurrent income tax liabilities unless expected to be paid in one year. Penalties and tax-related interest expense are
reported as a component of income tax expense. As of March 31, 2010 and 2009, the total amount of accrued income tax-related interest and penalties was $403 and $357, respectively.

As
of March 31, 2010 and 2009, the total amount of unrecognized tax benefits was $4,434 and $3,211, respectively, of which $3,331 and $3,188, respectively, would impact the
effective rate, if recognized. The Company anticipates that total unrecognized tax benefits may be reduced by $620 due to the expiration of statutes of limitation for various federal tax issues in the
next 12 months.

As
of March 31, 2010, the Company was subject to examination in state jurisdictions for the fiscal years ended March 31, 2005 through March 31, 2008, none of which
the Company believes is individually material. The Company has filed appeals in a state jurisdiction related to fiscal years ended March 31, 1999 through March 31, 2005. The Company
believes appropriate provisions for all outstanding issues have been made for all jurisdictions and all open years.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

11. INCOME TAXES (Continued)

With
few exceptions, the Company is no longer subject to U.S. federal income tax examinations for fiscal years ended before March 31, 2007, state or local examinations for fiscal
years ended before March 31, 2006, or foreign income tax examinations by tax authorities for fiscal years ended before March 31, 2007.

During
the fiscal years ended March 31, 2010, 2009 and 2008, the Company added $143, $490 and $517 of tax, interest and penalties related to activity for identified uncertain tax
positions, respectively.

A
reconciliation of the liability for uncertain tax positions for the fiscal years ended March 31, 2009 and 2010 follows:

Ending BalanceMarch 31, 2008

$
2,517Additions for tax positions related to the current year


497Additions for tax positions of prior years


940Reductions for tax positions of prior years


(4
)Reductions as a result of a lapse of statute of limitations


(1,014
)Settlements


Ending BalanceMarch 31, 2009


2,936Additions for tax positions related to the current year


1,655Additions for tax positions of prior years


153Reductions for tax positions of prior years


(4
)Reductions as a result of a lapse of statute of limitations


(571
)Settlements


Ending BalanceMarch 31, 2010

$
4,169


12. STOCKHOLDERS' EQUITY

During February 2008, the Company exercised existing authority to make stock repurchases and repurchased 220,000 shares of its outstanding shares under the program for an aggregate
consideration of $12,342, funded by borrowings under the Company's Credit Facility. In February 2008, the Company's Board of Directors then authorized an increase in the Company's existing stock
repurchase program by up to an additional 500,000 shares of its common stock. As a result, as of May 10, 2010, the Company remains able to purchase an additional 500,800 shares. Repurchases may
be made from time to time in open market transactions, block purchases, privately negotiated transactions or otherwise at prevailing prices. No time limit has been set for completion of the program.

The
holders of the common stock are entitled to one vote per share on all matters to be voted upon by the stockholders of Triumph.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

12. STOCKHOLDERS' EQUITY (Continued)

The Company has preferred stock of $.01 par value, 250,000 shares authorized. At March 31, 2010 and 2009, no shares of preferred stock were outstanding.

Prior
to August 2008, the Company had Class D common stock of $.001 par value, 6,000,000 shares authorized. At March 31, 2008, no shares of Class D common stock were
outstanding. The Class D common stock was eliminated upon the amendment and restatement of the Company's Certificate of Incorporation effective August 12, 2008.

13. EARNINGS PER SHARE

The following is a reconciliation between the weighted-average common shares outstanding used in the calculation of basic and diluted earnings per share:

Year ended March 31,2010

2009

2008(thousands)Weighted-average common shares outstandingbasic


16,459


16,384


16,497Net effect of dilutive stock options and nonvested stock


207


200


266Net effect of convertible debt








777Weighted-average common shares outstandingdiluted


16,666


16,584


17,540


14. EMPLOYEE BENEFIT PLANS

The Company adopted Emerging Issues Task Force Issue No. 06-10,Accounting for Collateral Assignment Split-Dollar Life Insurance
Arrangements, (codified in Subtopic 715-60) on April 1, 2008, and recognized a cumulative effect of a change in accounting of $2,991, net of an income tax
benefit of $1,756. The projected benefit obligation of the Company's postretirement benefit for this plan was $5,144 and $4,519 as of March 31, 2010 and 2009 respectively. The Company
recognized interest cost of $306 and $289 for the years ended March 31, 2010 and 2009, respectively, and paid benefits of $151 and $128 for the years ended March 31, 2010 and 2009,
respectively.

Defined Contribution Pension Plan

The Company sponsors a defined contribution 401(k) plan, under which salaried and certain hourly employees may defer a portion of their
compensation. Eligible participants may contribute to the plan up to the allowable amount as determined by the plan of their regular compensation before taxes. The Company generally matches
contributions at 50% of the first 6% of compensation contributed by the participant. All contributions and Company matches are invested at the direction of the employee in one or more mutual funds.
Company matching contributions vest immediately and aggregated $5,568, $5,648 and $5,309 for the fiscal years ended March 31, 2010, 2009 and 2008, respectively.

Defined Benefit Pension Plans

The Company has several defined benefit pension plans covering eligible employees. U.S. plans covering union employees generally
provide benefit payments of stated amounts for each year of

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

14. EMPLOYEE BENEFIT PLANS (Continued)

service.
The Company also sponsors an unfunded supplemental executive retirement plan ("SERP") that provides retirement benefits to certain key employees.

The
Company is required to measure plan assets and benefit obligations as of the date of the Company's fiscal year-end. The requirement was effective for fiscal years ending
after December 15, 2008, and was not to be applied retrospectively. The Company adopted the measurement provisions on March 31, 2009. Only the Company's union plans were affected by
these measurement provisions, since the union plans had a December 31 measurement date. The net periodic benefit cost for the period between December 31, 2008 and March 31, 2009
of approximately $27 was recognized, net of tax, during the fiscal year ended March 31, 2009.

The
following table sets forth the Company's consolidated defined benefit pension plans for its union employees and its SERP as of March 31, 2010 and 2009, and the amounts
recorded in the consolidated balance sheets at March 31, 2010 and 2009. Company contributions include amounts contributed directly to plan assets and indirectly as benefits are paid from the
Company's assets.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

14. EMPLOYEE BENEFIT PLANS (Continued)

Benefit
payments reflect the total benefits paid from the plans and the Company's assets. Information on the plans includes both the qualified and nonqualified plans.

March 31,2010

2009Change in projected benefit obligationsProjected benefit obligation at beginning of year

$
10,148

$
10,549Service cost


16


17Interest cost


753


670Actuarial loss (gain)


962


(741
)Curtailment





Benefits paid


(297
)

(347
)Projected benefit obligation at end of year

$
11,582

$
10,148Weighted-average assumptions used to determine benefit obligations at end of yearDiscount rate


6.00
%

7.25
%Rate of compensation increase


N/A


N/AChange in plan assetsFair value of plan assets at beginning of year

$
4,620

$
6,596Actual return on plan assets


1,638


(1,757
)Expenses


(159
)

(213
)Company contributions


1,502


342Benefits paid


(297
)

(348
)Fair value of plan assets at end of year

$
7,304

$
4,620Funded status (underfunded)Funded status

$
(4,278
)
$
(5,528
)Amounts recognized in the consolidated balance sheet consist ofAccrued expensescurrent liability

$
(2,881
)
$
(3,123
)Pension obligationnoncurrent liability


(1,397
)

(2,405
)Pension assetcurrent asset





Net amount recognized

$
(4,278
)
$
(5,528
)


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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

14. EMPLOYEE BENEFIT PLANS (Continued)

The
components of net periodic pension cost for fiscal years 2010, 2009 and 2008 are as follows:

Year Ended March 31,2010

2009

2008Components of net periodic pension costService cost

$
81

$
82

$
171Interest cost


753


670


608Expected return on plan assets


(439
)

(512
)

(489
)Amortization of prior service cost


165


519


518Amortization of net loss


151


84


104Total net periodic pension cost

$
711

$
843

$
912Weighted-average assumptions used to determine net periodic pension costDiscount rate


7.25
%

6.25
%

6.00
%Expected long-term rate on assets


8.00
%

8.00
%

8.00
%Rate of compensation increase


N/A


N/A


N/A


The
discount rate is generally based on the yield on high-quality corporate fixed-income investments. At the end of each year, the discount rate is primarily determined using
the results of bond yield curve models based on a portfolio of high-quality bonds matching notional cash inflows with the expected benefit payments for each significant benefit plan.

The
following table shows those amounts expected to be recognized in net period benefit costs during the fiscal year ending March 31, 2011:

AmountAmounts expected to be recognized in FY 2011 net periodic benefit costsPrior service cost ($45 net of tax)

$
72Actuarial loss ($115 net of tax)


183


The
accumulated benefit obligation for all defined benefit pension plans was $11,582 and $10,148 at March 31, 2010 and 2009, respectively.

March 31,2010

2009Amounts recorded in Accumulated Other Comprehensive Income (Loss)Prior service costs

$
399

$
564Actuarial losses


3,211


3,020Income tax benefits related to above items


(1,336
)

(1,326
)Unamortized benefit plan costs

$
2,274

$
2,258


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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

14. EMPLOYEE BENEFIT PLANS (Continued)

Expected Pension Benefit Payments

Benefit payments for pensions (including the SERP), which reflect expected future service, as appropriate, are expected to be as
follows:

Year

Amount2011

$
3,2282012


3802013


4002014


4412015


4562016-2019


2,722


Plan Assets, Investment Policy and Strategy

The table below sets forth the Company's target asset allocation for fiscal 2011 and the actual asset allocations at March 31,
2010 and 2009.

Actual AllocationTarget Allocation

March 31,Asset Category

Fiscal 2011

2010

2009Equity securities


40-65
%

55
%

57
%Fixed income securities


25-40
%

45


42Other


0-10
%




1Total





100
%

100
%


The
policy, as established by the benefits committee ("Committee"), is to provide for growth of capital with a moderate level of volatility by investing assets per the target allocations
stated above. The assets will be reallocated periodically, but in no event less than every six months, to meet the above target allocations. The investment policy will be reviewed on a regular basis,
in conjunction with an investment advisor, to determine if the policy should be changed.

The
table below provides the fair values of the Company's plan assets at March 31, 2010, by asset category. The table also identifies the level of inputs used to determine the
fair value of assets in each category (see Note 18 below for definition of levels).

Level 1

Level 2

Level 3

TotalAsset CategoryEquity securities

$
3,693

$


$


$
3,693Fixed income securities


3,574








3,574Other


37








37Fair value of plan assets at end of year

$
7,304

$


$


$
7,304


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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

14. EMPLOYEE BENEFIT PLANS (Continued)

Determination of Expected Long-Term Rate of Return

The expected long-term rate of return for the plans' total assets is based on the expected return of each of the above
categories, weighted based on the median of the target allocation for each class. Equity securities are expected to return 10% to 11% over the long-term, while cash and fixed income is
expected to return between 4% to 6%. Based on historical experience, the Committee expects that the plans' asset managers will provide a modest (0.5% to 1.0% per annum) premium to their respective
market benchmark indices.

Anticipated Contributions to Defined Benefit Plans

Assuming a normal retirement age of 65, the Company expects to contribute approximately $2,881 to its pension plans during fiscal 2011.

15. STOCK COMPENSATION PLANS

The Company has stock incentive plans under which employees and non-employee
directors may be granted options to purchase shares of the Company's common stock at the fair value at the time of the grant. Employee options and non-employee director options generally
vest over three to four years and expire ten years from the date of the grant. Compensation expense recognized for all option grants is net of estimated forfeitures and is recognized over the awards'
respective requisite service periods. There were no employee or non-employee director options granted during fiscal 2010, 2009 or 2008. The fair values relating to prior option grants were
estimated using a Black-Scholes option pricing model. Expected volatilities were based on historical volatility of the Company's stock and other factors, such as implied market volatility. We used
historical exercise data based on the age at grant of the option holder to estimate the options' expected term, which represents the period of time that the options granted are expected to be
outstanding. The Company anticipated the future option holding periods to be similar to the historical option holding periods. The risk-free rate for periods within the contractual life of
the option was based on the U.S. Treasury yield curve in effect at the time of grant. The Company recognizes compensation expense for the fair values of these awards on a straight-line
basis over the requisite service period of these awards.

In
fiscal 2006, the Company approved the granting of restricted stock as its primary form of share-based incentive. The restricted shares are subject to forfeiture should the grantee's
employment be terminated prior to the fourth anniversary of the date of grant, and are included in capital in excess of par value. Restricted shares generally vest in full after four years. The fair
value of restricted shares under the Company's restricted stock plans is determined by the product of the number of shares granted and the grant date market price of the Company's common stock. The
fair value of restricted shares is expensed on a straight-line basis over the requisite service period of four years.

The
Company recognized $3,220, $3,180 and $2,809 of share-based compensation expense during the fiscal years ended March 31, 2010, 2009 and 2008, respectively. The total income
tax benefit recognized for share-based compensation arrangements for fiscal years ended March 31, 2010, 2009 and 2008 was $1,107, $1,048 and $937, respectively. Total share-based compensation
expense was comprised of stock option expense of $0, $32 and $453 and restricted stock expense of $3,220, $3,148 and $2,356 for the fiscal years ended March 31, 2010, 2009 and 2008,
respectively. The Company estimates it will

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

15. STOCK COMPENSATION PLANS (Continued)

record
share-based compensation expense of approximately $3,400 in fiscal 2011. This estimate may be impacted by potential changes to the structure of the Company's share-based compensation plans
which could impact the number of stock options granted in fiscal 2011, changes in valuation assumptions, and changes in the market price of the Company's common stock, among other things and, as a
result, the actual share-based compensation expense in fiscal 2011 may differ from the Company's current estimate.

A
summary of the Company's stock option activity and related information for its option plans for the fiscal year ended March 31, 2010 was as follows:

Options

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term

Aggregate
Intrinsic ValueOutstanding at March 31, 2009


292,049

$
35.05Granted





Exercised


(41,611
)Forfeited





Outstanding at March 31, 2010


250,438

$
36.24

3.1 Years

$
2,614Exercisable at March 31, 2010


250,438

$
36.24

3.1 Years

$
2,614


As
of March 31, 2010 and 2009, all stock options are fully vested with no expected future compensation expense related to them. The intrinsic value of stock options exercised
during fiscal 2010, 2009 and 2008 was $737, $927 and $5,812, respectively.

At
March 31, 2010 and 2009, 1,322,011 and 1,380,958 shares of common stock, respectively, were available for issuance under the plans. A summary of the status of the Company's
nonvested shares as of March 31, 2010 and changes during the fiscal year ended March 31, 2010, is presented below:

Shares

Weighted-
Average Grant
Date Fair ValueNonvested at March 31, 2009


204,823

$
51.49Granted


67,989


40.56Vested


(48,475
)

48.09Forfeited


(9,042
)

48.27Nonvested at March 31, 2010


215,295

$
48.94


The
fair value of restricted stock vested during fiscal 2010 was $3,222. The tax benefit from vested restricted stock was $470 during fiscal 2010. The weighted-average grant date fair
value of share-based grants in fiscal 2010, 2009 and 2008 was $40.56, $57.19 and $67.57, respectively. Expected future compensation expense on restricted stock net of expected forfeitures, is
approximately $2,195, which is expected to be recognized over the remaining weighted-average vesting period of 2.0 years.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

15. STOCK COMPENSATION PLANS (Continued)

In April 2010, 34,061 restricted shares were granted following the determination of net earnings per share for fiscal 2010. Expected future compensation expenses on this April 2010
grant, net of expected forfeitures, is approximately $1,862, which is expected to vest over the remaining vesting period of 3.0 years.

During
the fiscal years ended March 31, 2010, 2009 and 2008, 5,000, 7,800 and 2,500 deferred stock units were granted to the non-employee members of the Board of
Directors, respectively, under the Directors' Plan. Each deferred stock unit represents the contingent right to receive one share of the Company's common stock. The deferred stock units vest over a
four-year period and the shares of common stock underlying vested deferred stock units will be delivered on January 1 of the year following the year in which the
non-employee director terminates service as a Director of the Company.

16. COMMITMENTS AND CONTINGENCIES

Certain of the Company's business operations and facilities are subject to a number of federal, state, local and foreign environmental laws and regulations. Former owners generally
indemnify the Company for environmental liabilities related to the assets and businesses acquired which existed prior to the acquisition dates. In the opinion of management, there are no significant
environmental concerns which would have a material effect on the financial condition or operating results of the Company which are not covered by such indemnification.

In
the ordinary course of our business, we are also involved in disputes, claims, lawsuits, and governmental and regulatory inquiries that we deem to be immaterial. Some may involve
claims or potential claims of substantial damages, fines or penalties. While we cannot predict the outcome of any pending or future litigation or proceeding and no assurances can be given, we do not
believe that any pending matter will have a material effect, individually or in the aggregate, on our financial position or results of operations.

17. DERIVATIVES

Interest Rate Swap

The Company uses interest rate swaps, a derivative financial instrument, to manage interest costs and minimize the effects of interest
rate fluctuations on cash flows associated with its Credit Facility. The Company does not use derivative financial instruments for trading or speculative purposes. While interest rate swaps are
subject to fluctuations in value, these fluctuations are generally offset by the estimated fair value of the underlying exposures being hedged. The Company follows the Derivatives and Hedgingtopic of
ASC to account for its interest rate swaps, which requires that all derivatives be recorded on the consolidated balance
sheet at fair value. This topic also requires that changes in the fair value be recorded each period in current earnings or other comprehensive income, depending on the effectiveness of hedge
transaction. Interest rate swaps are designated as cash flow hedges. Changes in the fair value of a cash flow hedge, to the extent the hedge is effective, are recorded, net of tax, in other
comprehensive income (loss), a component of stockholders' equity, until earnings are affected by the variability of the hedged cash flows. Cash flow hedge ineffectiveness, defined as the extent that
the

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

17. DERIVATIVES (Continued)

changes
in the fair value of the derivative exceed the variability of cash flows of the forecasted transaction, is recorded currently in earnings.

In
March 2008, the Company entered into an interest rate swap agreement (the "Swap"), maturing June 2011 involving the receipt of floating rate amounts in exchange for fixed rate
interest payments over the life of the agreement, without exchange of the underlying principal amount. Under the Swap, the Company receives interest equivalent to the one-month LIBOR and
pays a fixed
rate of interest of 2.925 percent with settlements occurring monthly. The objective of the hedge is to eliminate the variability of cash flows in interest payments for $85,000 of floating rate
debt.

In
December 2009, the Company elected to de-designate the Swap as a hedge prospectively. As a result, changes in fair value from the date of de-designation are
recognized through interest expense and other in the consolidated statement of income. For the year ended March 31, 2010, $298 was recognized as a reduction to interest expense and other for
the change in fair value of the Swap from the date of de-designation through March 31, 2010.

As
of March 31, 2010, the total notional amount of the Company's receive-variable/pay-fixed interest rate swap was $85,000. For the year ended March 31, 2010,
$2,252 of losses were reclassified into earnings from accumulated other comprehensive income.

The
fair value of the interest rate swap of $2,527 and $3,429 for the fiscal years ended March 31, 2010 and 2009, respectively, were included in other noncurrent liabilities.

The
effect of derivative instruments in the consolidated statements of income is as follows:

Amount of Gain (Loss) in OCI
(Effective Portion)
Year ended March 31,

Reclassification Adjustment
Gain (Loss) Amount
Year ended March 31,Cash Flow Hedges

Reclassification Adjustment
Gain (Loss) Location
(Effective Portion)2010

2009

2010

2009Interest rate swap

Interest expense and other

$
740

$
(1,825
)
$
(2,252
)
$
(566
)


The
amount of ineffectiveness on the interest rate swap is not significant. The Company estimates that approximately $2,128 of losses presently in accumulated other comprehensive income
(loss) will be reclassified into earnings during fiscal 2011.

During
fiscal 2009, the Company entered into certain foreign currency derivative instruments that did not meet hedge accounting criteria and primarily were intended to protect against
exposure related to fiscal 2009 acquisitions. The Company recognized a gain of $1,411 in fiscal 2009, which is included in interest expense and other related to these instruments. No such instruments
were outstanding in fiscal 2010.

18. FAIR VALUE MEASUREMENTS

The Company follows theFair Value Measurement and Disclosurestopic of the ASC, which requires additional disclosures about the Company's
assets and liabilities that are measured at fair value and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

18. FAIR VALUE MEASUREMENTS (Continued)

minimize
the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

The
following table provides the liabilities reported at fair value in Other noncurrent liabilities and measured on a recurring basis as of March 31, 2010:

Fair Value Measurements Using:Quoted Prices
in Active
Markets for
Identical Assets

Significant
Other
Observable
Inputs

Significant
Unobservable
InputsDescription

Total

(Level 1)

(Level 2)

(Level 3)Interest rate swap, net of tax of $(935)

$
(1,592
)
$


$
(1,592
)
$
Contingent earnout

$
(10,500
)
$


$


$
(10,500
)


The
fair value of the interest rate swap contract is determined using observable current market information as of the reporting date such as the prevailing LIBOR-based interest rate. The
fair value of the contingent earnout at the date of acquisition was $10,500 which was estimated using the income approach based on significant inputs that are not observable in the market. Key
assumptions included a discount rate and probability assessments of each milestone payment being made. The assumptions used to develop the estimate have not changed since the date of acquisition.

The Financial Instrumentstopic of the ASC requires disclosure of the estimated fair value of certain financial instruments. These
estimated fair values as of March 31, 2010 and 2009 have been determined using available market information and appropriate valuation methodologies. Considerable judgment is
required to interpret market data to develop estimates of fair value. The estimates presented are not necessarily indicative of amounts the Company could realize in a current market exchange. The use
of alternative market assumptions and estimation methodologies could have had a material effect on these estimates of fair value.

Carrying
amounts and the related estimated fair values of the Company's financial instruments not recorded at fair value in the financial statements are as follows:

March 31, 2010

March 31, 2009Carrying
Value

Fair
Value

Carrying
Value

Fair
ValueLong-term debt

$
505,780

$
582,199

$
459,396

$
469,221


The
fair value of the long-term debt was calculated based on interest rates available for debt with terms and maturities similar to the Company's existing debt arrangements.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

19. CUSTOMER CONCENTRATION

Trade accounts receivable from The Boeing Company ("Boeing") represented approximately 26% and 16% of total accounts receivable as of March 31, 2010 and 2009, respectively. The
Company had no other significant concentrations of credit risk. Sales to Boeing for fiscal 2010 were $388,975, or 30% of net sales, of which $352,203 and $36,772 were from the Aerospace Systems
segment and the Aftermarket Services segment, respectively. Sales to Boeing for fiscal 2009 were $284,687, or 23% of net sales, of which $240,494 and $44,193 were from the Aerospace Systems segment
and the Aftermarket Services segment, respectively. Sales to Boeing for fiscal 2008 were $259,516 or 23% of net sales, of which $215,018 and $44,498 were from the Aerospace Systems segment and the
Aftermarket Services segment, respectively. No other single customer accounted for more than 10% of the Company's net sales; however, the loss of any significant customer, including Boeing, could have
a material adverse effect on the Company and its operating subsidiaries.

The
Company currently generates a majority of its revenue from clients in the commercial aerospace industry, the military, and the regional airline industry. The Company's growth and
financial results are largely dependent on continued demand for its products and services from clients in these industries. If any of these industries experiences a downturn, clients in these sectors
may conduct less business with the Company.

20. COLLECTIVE BARGAINING AGREEMENTS

Approximately 9.8% of the Company's labor force is covered under collective bargaining agreements.

21. SEGMENTS

The Company is organized based on the products and services that it provides. Under this organizational structure, the Company has two reportable segments: the Aerospace Systems Group
and the Aftermarket Services Group. The Company evaluates performance and allocates resources based on operating income of each reportable segment. The accounting policies of the reportable segments
are the same as those described in the summary of significant accounting policies (see Note 2). The Company's CODM evaluates performance and allocates resources based upon review of segment
information. The CODM utilizes operating income as a primary measure of profitability.

The
Aerospace Systems segment consists of 39 operating locations, and the Aftermarket Services segment consists of 15 operating locations at March 31, 2010.

The
Aerospace Systems segment consists of the Company's operations that manufacture products primarily for the aerospace OEM market. The segment's operations design and engineer
mechanical and electromechanical controls, such as hydraulic systems, main engine gearbox assemblies, accumulators and mechanical control cables. The segment's revenues are also derived from stretch
forming, die forming, milling, bonding, machining, welding and assembly and fabrication of various structural components used in aircraft wings, fuselages and other significant assemblies. Further,
the segment's operations also design and manufacture composite assemblies for floor panels, environmental control system ducts, non-structural cockpit components and thermal acoustic
insulation systems. These products are sold to various aerospace OEMs on a global basis.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

21. SEGMENTS (Continued)

The
Aftermarket Services segment consists of the Company's operations that provide maintenance, repair and overhaul services to both commercial and military markets on components and
accessories manufactured by third parties. Maintenance, repair and overhaul revenues are derived from services on auxiliary power units, airframe and engine accessories, including constant-speed
drives, cabin compressors, starters and generators, and pneumatic drive units. In addition, the segment's operations repair and overhaul thrust reversers, nacelle components and flight control
surfaces. The segment's operations also perform repair and overhaul services and supply spare parts for various types of cockpit instruments and gauges for a broad range of commercial airlines on a
worldwide basis.

Segment
operating income is total segment revenue reduced by operating expenses identifiable with that segment. Corporate includes general corporate administrative costs and any other
costs not identifiable with one of the Company's segments.

The
Company does not accumulate net sales information by product or service or groups of similar products and services, and therefore the Company does not disclose net sales by product
or service because to do so would be impracticable.

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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

21. SEGMENTS (Continued)

Selected
financial information for each reportable segment is as follows:

Year Ended March 31,2010

2009

2008Net sales:Aerospace systems

$
1,073,494

$
988,359

$
907,376Aftermarket services


224,991


254,638


246,609Elimination of inter-segment sales


(3,705
)

(2,619
)

(2,895
)$
1,294,780

$
1,240,378

$
1,151,090Income before income taxes:Operating income (loss):Aerospace systems

$
170,457

$
168,006

$
124,812Aftermarket services


11,109


10,876


23,480Corporate


(26,285
)

(26,968
)

(21,967
)155,281


151,914


126,325Interest expense and other


28,865


16,929


19,942(Gain) loss on early extinguishment of debt


(39
)

(880
)

$
126,455

$
135,865

$
106,383Depreciation and amortization:Aerospace systems

$
40,789

$
34,784

$
30,007Aftermarket services


12,894


13,515


12,943Corporate


735


312


265$
54,418

$
48,611

$
43,215Capital expenditures:Aerospace systems

$
26,013

$
34,618

$
40,762Aftermarket services


3,895


8,804


15,255Corporate


1,757


1,999


954$
31,665

$
45,421

$
56,971




March 31,2010

2009Total Assets:Aerospace systems

$
1,189,224

$
1,213,142Aftermarket services


337,263


318,596Corporate


181,139


31,774Discontinued operations


5,051


27,695$
1,712,677

$
1,591,207


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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

21. SEGMENTS (Continued)

During fiscal years 2010, 2009 and 2008, the Company had foreign sales of $255,975, $266,646 and $237,043, respectively. The Company reports as foreign sales those sales with delivery
points outside of the United States.

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS

The Company's 2017 Notes are fully and unconditionally guaranteed on a joint and several basis by Guarantor Subsidiaries. The total assets, stockholder's equity, revenue, earnings and
cash flows from operating activities of the Guarantor Subsidiaries exceeded a majority of the consolidated total of such items as of and for the periods reported. The only consolidated subsidiaries of
the Company that are not guarantors of the 2017 Notes (the "Non-Guarantor Subsidiaries") are: (a) the receivables securitization special purpose entity, and (b) the foreign
operating subsidiaries. The following tables present condensed consolidating financial statements including Triumph Group, Inc. (the "Parent"), the Guarantor Subsidiaries, and the
Non-Guarantor Subsidiaries. Such financial statements include balance sheets as of March 31, 2010 and March 31, 2009, statements of operations for the fiscal years ended
March 31, 2010, 2009 and 2008, and statements of cash flows for the fiscal years ended March 31, 2010, 2009 and 2008.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS (Continued)

SUMMARY CONSOLIDATING BALANCE SHEETS:

March 31, 2010Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated
TotalCurrent assets:Cash

$
148,437

$
1,712

$
7,069

$


$
157,218Accounts receivable, net


1,571


29,995


182,931





214,497Inventories





335,316


28,609





363,925Rotable assets





22,456


3,131





25,587Assets held for sale





5,051








5,051Deferred income taxes


7,616











7,616Prepaid income taxes


2,005











2,005Prepaid expenses and other


3,107


5,176


551





8,834Total current assets


162,736


399,706


222,291





784,733Property and equipment, net


9,854


301,568


16,212





327,634Goodwill and other intangible assets, net





533,640


48,278





581,918Other, net


16,489


1,690


213





18,392Intercompany investments and advances


410,733


(1,563
)

2,853


(412,023
)

Total assets

$
599,812

$
1,235,041

$
289,847

$
(412,023
)
$
1,712,677Current liabilities:Accounts payable

$
2,560

$
83,885

$
6,414

$


$
92,859Accrued expenses


32,208


73,208


5,850





111,266Liabilities related to assets held for sale





899








899Current portion of long-term debt


469


14,915


76,545





91,929Total current liabilities


35,237


172,907


88,809





296,953Long-term debt, less current portion


342,550


71,301








413,851Intercompany debt


(771,776
)

636,409


135,367





Income taxes payable, non-current


4,240











4,240Deferred income taxes and other


128,875


9,376


(1,304
)




136,947Total stockholders' equity


860,686


345,048


66,975


(412,023
)

860,686Total liabilities and stockholders' equity

$
599,812

$
1,235,041

$
289,847

$
(412,023
)
$
1,712,677


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TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS (Continued)

SUMMARY CONSOLIDATING BALANCE SHEETS:

March 31, 2009Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated
TotalCurrent assets:Cash

$
3,821

$
5,457

$
5,200

$


$
14,478Accounts receivable, net


690


16,124


192,649





209,463Inventories





368,653


20,695





389,348Rotable assets





22,608


3,044





25,652Assets held for sale





27,695








27,695Deferred income taxes


1,416





311





1,727Prepaid income taxes


4,434











4,434Prepaid expenses and other


1,137


4,246


638





6,021Total current assets


11,498


444,783


222,537





678,818Property and equipment, net


3,070


312,568


16,829





332,467Goodwill and other intangible assets, net





521,841


46,050





567,891Other, net


9,890


1,945


196





12,031Intercompany investments and advances


367,614


(10,070
)

2,751


(360,295
)

Total assets

$
392,072

$
1,271,067

$
288,363

$
(360,295
)
$
1,591,207Current liabilities:Accounts payable

$
5,315

$
94,133

$
4,263

$


$
103,711Accrued expenses


18,765


84,037


6,778





109,580Liabilities related to assets held for sale





4,283








4,283Current portion of long-term debt


452


11,469


77,164





89,085Total current liabilities


24,532


193,922


88,205





306,659Long-term debt, less current portion


295,946


72,935


1,430





370,311Intercompany debt


(837,174
)

700,292


136,882





Income taxes payable, non-current


2,917











2,917Deferred income taxes and other


117,288


337


5,132





122,757Total stockholders' equity


788,563


303,581


56,714


(360,295
)

788,563Total liabilities and stockholders' equity

$
392,072

$
1,271,067

$
288,363

$
(360,295
)
$
1,591,207


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF INCOME:

Fiscal year ended March 31, 2010Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated
TotalNet sales

$


$
1,227,738

$
79,029

$
(11,987
)
$
1,294,780Operating costs and expenses:Cost of sales





881,828


57,370


(11,987
)

927,211Selling, general and administrative


25,551


122,521


9,798





157,870Depreciation and amortization


734


50,668


3,016





54,41826,285


1,055,017


70,184


(11,987
)

1,139,499Operating (loss) income


(26,285
)

172,721


8,845





155,281Intercompany interest and charges


(87,564
)

87,092


472





Interest expense and other


23,415


3,529


1,921





28,865Gain on extinguishment of debt


(39
)










(39
)Income from continuing operations, before income taxes


37,903


82,100


6,452





126,455Income tax expense


9,365


30,188


1,614





41,167Income from continuing operations


28,538


51,912


4,838





85,288Loss on discontinued operations, net





(17,526
)







(17,526
)Net income

$
28,538

$
34,386

$
4,838

$


$
67,762


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF INCOME:

Fiscal year ended March 31, 2009Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated
TotalNet sales

$


$
1,211,649

$
49,778

$
(21,049
)
$
1,240,378Operating costs and expenses:Cost of sales





863,836


34,957


(21,049
)

877,744Selling, general and administrative


26,656


125,858


9,595





162,109Depreciation and amortization


312


46,941


1,358





48,61126,968


1,036,635


45,910


(21,049
)

1,088,464Operating (loss) income


(26,968
)

175,014


3,868





151,914Intercompany interest and charges


(88,267
)

88,612


(345
)




Interest expense and other


17,499


1,445


(2,015
)




16,929Gain on extinguishment of debt


(880
)










(880
)Income from continuing operations, before income taxes


44,680


84,957


6,228





135,865Income tax expense


12,067


30,039


1,018





43,124Income from continuing operations


32,613


54,918


5,210





92,741Loss on discontinued operations, net





(4,745
)







(4,745
)Net income

$
32,613

$
50,173

$
5,210

$


$
87,996


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF INCOME:

Fiscal year ended March 31, 2008Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated
TotalNet sales

$


$
1,135,170

$
35,823

$
(19,903
)
$
1,151,090Operating costs and expenses:Cost of sales





817,644


24,547


(19,903
)

822,288Selling, general and administrative


21,702


130,642


6,918





159,262Depreciation and amortization


265


41,574


1,376





43,21521,967


989,860


32,841


(19,903
)

1,024,765Operating (loss) income


(21,967
)

145,310


2,982





126,325Intercompany interest and charges


(88,671
)

88,680


(9
)




Interest expense and other


21,946


(2,159
)

155





19,942Income from continuing operations, before income taxes


44,758


58,789


2,836





106,383Income tax expense


13,014


20,881


853





34,748Income from continuing operations


31,744


37,908


1,983





71,635Loss on discontinued operations, net





(8,468
)







(8,468
)Net income

$
31,744

$
29,440

$
1,983

$


$
63,167


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS:

Fiscal year ended March 31, 2010Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated
TotalNet income

$
28,538

$
34,386

$
4,838

$


$
67,762Adjustments to reconcile net income to net cash provided by operating activities


23,247


73,207


5,432





101,886Net cash provided by operating activities


51,785


107,593


10,270





169,648Capital expenditures


(1,815
)

(22,900
)

(6,950
)




(31,665
)Proceeds from sale of assets and businesses





614


1





615Cash used for businesses and intangible assets acquired





(27,674
)

(3,819
)




(31,493
)Net cash used in investing activities


(1,815
)

(49,960
)

(10,768
)




(62,543
)Net decrease in revolving credit facility


(127,730
)










(127,730
)Proceeds on issuance of debt


172,477


14,453








186,930Retirements and repayments of debt


(4,446
)

(9,262
)

(103
)




(13,811
)Payments of deferred financing costs


(8,344
)










(8,344
)Dividends paid


(2,666
)










(2,666
)Withholding of restricted shares for minimum tax obligation


(470
)










(470
)Proceeds from exercise of stock options, including excess tax benefit


1,367











1,367Intercompany financing and advances


64,458


(66,569
)

2,111





Net cash (used in) provided by financing activities


94,646


(61,378
)

2,008





35,276Effect of exchange rate changes on cash








359





359Net change in cash


144,616


(3,745
)

1,869





142,740Cash at beginning of year


3,821


5,457


5,200





14,478Cash at end of year

$
148,437

$
1,712

$
7,069

$


$
157,218


99

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS:

Fiscal year ended March 31, 2009Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated
TotalNet income

$
32,613

$
50,173

$
5,210

$


$
87,996Adjustments to reconcile net income to net cash provided by (used in) operating activities


24,796


27,780


(5,575
)




47,001Net cash provided by (used in)operating activities


57,409


77,953


(365
)




134,997Capital expenditures


(1,999
)

(42,274
)

(1,148
)




(45,421
)Proceeds from sale of assets and businesses





878


3





881Cash used for businesses and intangible assets acquired





(102,297
)

(38,776
)




(141,073
)Net cash used in investing activities


(1,999
)

(143,693
)

(39,921
)




(185,613
)Net decrease in revolving credit facility


(66,020
)










(66,020
)Proceeds on issuance of debt


1,400


60,616


75,000





137,016Retirements and repayments of debt


(15,494
)

(1,027
)







(16,521
)Payments of deferred financing costs


(1,187
)










(1,187
)Dividends paid


(2,652
)










(2,652
)Withholding of restricted shares for minimum tax obligation














Proceeds from exercise of stock options, including excess tax benefit


1,474











1,474Intercompany financing and advances


23,810


11,207


(35,017
)




Net cash (used in) provided by financing activities


(58,669
)

70,796


39,983





52,110Effect of exchange rate changes on cash








(754
)




(754
)Net change in cash


(3,259
)

5,056


(1,057
)




740Cash at beginning of year


7,080


401


6,257





13,738Cash at end of year

$
3,821

$
5,457

$
5,200

$


$
14,478


100

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

22. SELECTED CONSOLIDATING FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND NON-GUARANTORS (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS:

Fiscal year ended March 31, 2008Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated
TotalNet income

$
31,744

$
29,440

$
1,983

$


$
63,167Adjustments to reconcile net income to net cash provided by (used in) operating activities


24,493


(25,941
)

(15,994
)




(17,442
)Net cash provided by (used in) operating activities


56,237


3,499


(14,011
)




45,725Capital expenditures


(954
)

(54,581
)

(1,436
)




(56,971
)Proceeds from sale of assets and businesses





5,682


16





5,698Cash used for businesses and intangible assets acquired





(68,527
)







(68,527
)Net cash used in investing activities


(954
)

(117,426
)

(1,420
)




(119,800
)Net increase in revolving credit facility


92,950











92,950Proceeds on issuance of debt





161








161Retirements and repayments of debt





(5,775
)







(5,775
)Payments of deferred financing costs


(72
)










(72
)Dividends paid


(2,661
)










(2,661
)Purchase of treasury stock


(12,342
)










(12,342
)Proceeds from exercise of stock options, including excess tax benefit


7,507











7,507Intercompany financing and advances


(135,302
)

118,543


16,759





Net cash (used in) provided by financing activities


(49,920
)

112,929


16,759





79,768Effect of exchange rate changes on cash








802





802Net change in cash


5,363


(998
)

2,130





6,495Cash at beginning of year


1,717


1,399


4,127





7,243Cash at end of year

$
7,080

$
401

$
6,257

$


$
13,738


101

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Table of Contents

TRIUMPH GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share data)

23. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Fiscal 2010

Fiscal 2009June 30

Sept. 30

Dec. 31

Mar. 31

June 30

Sept. 30

Dec. 31

Mar. 31BUSINESS SEGMENT SALESAerospace Systems

$
259,973

$
256,421

$
262,882

$
294,218

$
258,232

$
257,569

$
222,751

$
249,807Aftermarket Services


57,784


57,313


51,409


58,486


62,968


66,481


63,107


62,082Inter-segment Elimination


(1,627
)

(595
)

(761
)

(722
)

(644
)

(659
)

(615
)

(701
)TOTAL SALES

$
316,130

$
313,139

$
313,530

$
351,982

$
320,556

$
323,391

$
285,243

$
311,188GROSS PROFIT(1)

$
83,030

$
80,837

$
75,758

$
92,810

$
95,826

$
94,573

$
80,570

$
89,162OPERATING INCOMEAerospace Systems

$
41,845

$
39,086

$
39,090

$
50,436

$
46,070

$
46,515

$
34,269

$
41,152Aftermarket Services


2,423


3,481


1,390


3,815


3,887


2,896


2,219


1,874Corporate


(6,398
)

(5,439
)

(7,542
)

(6,906
)

(6,629
)

(6,697
)

(6,057
)

(7,585
)TOTAL OPERATING INCOME

$
37,870

$
37,128


32,938

$
47,345

$
43,328

$
42,714

$
30,431

$
35,441INCOME (LOSS) FROMContinuing Operations

$
21,521

$
20,718

$
18,053

$
24,996

$
25,035

$
25,076

$
20,061

$
22,569Discontinued Operations


(3,482
)

(1,267
)

(12,453
)

(324
)

(1,203
)

(1,093
)

(818
)

(1,631
)NET INCOME

$
18,039

$
19,451

$
5,600

$
24,672

$
23,832

$
23,983

$
19,243

$
20,938Basic Earnings (Loss) per Share(2)Continuing Operations

$
1.31

$
1.26

$
1.10

$
1.52

$
1.53

$
1.53

$
1.22

$
1.38Discontinued Operations


(0.21
)

(0.08
)

(0.76
)

(0.02
)

(0.07
)

(0.07
)

(0.05
)

(0.10
)Net Income

$
1.10

$
1.18

$
0.34

$
1.50

$
1.46

$
1.46

$
1.17

$
1.28Diluted Earnings (Loss) per share(2)(3)Continuing Operations

$
1.30

$
1.25

$
1.08

$
1.49

$
1.48

$
1.51

$
1.21

$
1.36Discontinued Operations


(0.21
)

(0.08
)

(0.75
)

(0.02
)

(0.07
)

(0.07
)

(0.05
)

(0.10
)Net Income

$
1.09

$
1.17

$
0.34
*
$
1.47

$
1.41

$
1.44

$
1.16

$
1.26


*Difference
due to rounding.(1)Gross
profit includes depreciation.(2)The
sum of the earnings for Continuing Operations and Discontinued Operations does not necessarily equal the earnings for the quarter due to rounding.(3)The
sum of the diluted earnings per share for the four quarters does not necessarily equal the total year diluted earnings per share due to the dilutive
effect of the potential common shares related to the convertible debt.


24. SUBSEQUENT EVENTS

On May 10, 2010, the Company entered into a $535,000 revolving credit facility, subject to the closing of the Vought acquisition. This revolving credit facility will be available
to partially fund the Vought acquisition and refinance any existing obligations under our existing Credit Facility, with a maturity date four years from the closing of the Vought acquisition.

102

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Table of Contents



TRIUMPH GROUP, INC.

SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS

(Dollars in thousands)

Balance
at beginning of
year

Additions
charged to
expense

Additions(1)

(Deductions)(2)

Balance at
end of yearFor year ended March 31, 2010:Allowance for doubtful accounts receivable

$
5,641


773


699


(2,837
)
$
4,276For year ended March 31, 2009:Allowance for doubtful accounts receivable

$
4,723


2,406


246


(1,734
)
$
5,641For year ended March 31, 2008:Allowance for doubtful accounts receivable

$
3,857


1,687


130


(951
)
$
4,723


---

103

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Table of Contents

Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange
Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls
and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and
management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As
of March 31, 2010, we completed an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal
financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our principal executive officer and principal financial officer
concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2010.

104

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Table of Contents

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Triumph Group, Inc. ("Triumph") is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Triumph's internal control system over financial reporting is
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted
accounting principles. The company's internal control over financial reporting includes those policies and procedures that:



Because
of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may
become inadequate because of changes in condition, or that the degree of compliance with the policies or procedures may deteriorate.

Triumph's
management assessed the effectiveness of Triumph's internal control over financial reporting as of March 31, 2010. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on management's assessment and those criteria,
management believes that Triumph maintained effective internal control over financial reporting as of March 31, 2010.

Triumph's
independent registered public accounting firm, Ernst & Young LLP, has audited the Company's effectiveness of Triumph's internal control over financial reporting.
This report appears on page 100.

/s/ RICHARD C. ILLRichard C. Ill Chairman and Chief Executive Officer/s/ M. DAVID KORNBLATTM. David Kornblatt Executive Vice President,
Chief Financial Officer & Treasurer/s/ KEVIN E. KINDIGKevin E. Kindig Vice President and Controller


May 14,
2010

105

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Table of Contents

Report of Independent Registered Public Accounting Firm on Internal Control Over  Financial Reporting

To
the Board of Directors and Stockholders of Triumph Group, Inc.

We
have audited Triumph Group, Inc.'s internal control over financial reporting as of March 31, 2010, based on criteria established in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Triumph Group Inc.'s management is responsible for
maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, Triumph Group, Inc. maintained, in all material respects, effective internal control over financial reporting as of March 31, 2010, based on the COSO
criteria.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Triumph Group, Inc., as
of March 31, 2010 and 2009, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended March 31, 2010 and our
report dated May 14, 2010 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP


Philadelphia,
Pennsylvania
May 14, 2010

106

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Table of Contents

Changes in Internal Control Over Financial Reporting

In addition to management's evaluation of disclosure controls and procedures as discussed above, we continue to review and enhance our
policies and procedures for internal control over financial reporting.

We
have developed and implemented a formal set of internal controls and procedures for financial reporting in accordance with the SEC's rules regarding management's report on internal
controls. As a result of continued review and testing by management and by our internal and independent auditors, additional changes may be made to our internal controls and procedures. However, we
did not make any changes to our internal control over financial reporting in our fourth quarter of fiscal 2010 that has materially affected or is reasonably likely to materially affect our internal
control over financial reporting.

Item 9B.    Other Information

None.

PART III

Item 10.    Directors, Executive Officers and Corporate Governance

The information required for directors is incorporated herein by reference to our definitive Proxy Statement for our 2010 Annual
Meeting of Stockholders, which shall be filed within 120 days after the end of our fiscal year (the "2010 Proxy Statement"). Information required by this item concerning executive officers is
included in Part I of this Annual Report on Form 10-K.

Section 16(a) Beneficial Ownership Reporting Compliance

The information required regarding Section 16(a) beneficial ownership reporting compliance is incorporated herein by reference
to the 2010 Proxy Statement.

Code of Business Conduct

The information required regarding our Code of Business Conduct is incorporated herein by reference to the 2010 Proxy Statement.

Stockholder Nominations

The information required with respect to any material changes to the procedures by which stockholders may recommend nominees to the
Company's board of directors is incorporated herein by reference to the 2010 Proxy Statement.

Audit Committee and Audit Committee Financial Expert

The information required with respect to the Audit Committee and Audit Committee financial experts is incorporated herein by reference
to the 2010 Proxy Statement.

Item 11.    Executive Compensation

The information required regarding executive compensation is incorporated herein by reference to the 2010 Proxy Statement.

107

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Table of Contents

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required under this item is incorporated herein by reference to the 2010 Proxy Statement.

Item 13.    Certain Relationships and Related Transactions, and Director Independence

The information required under this item is incorporated herein by reference to the 2010 Proxy Statement.

Item 14.    Principal Accountant Fees and Services

The information required under this item is incorporated herein by reference to the 2010 Proxy Statement.

PART IV

Item 15.    Exhibits, Financial Statement Schedules



(1) The following consolidated financial statements are included in Item 8 of this report:



Triumph Group, Inc.

PageReport of Ernst & Young LLP, Independent Registered Public Accounting Firm

50Consolidated Balance Sheets as of March 31, 2010 and 2009

51Consolidated Statements of Income for the Fiscal Years Ended March 31, 2010, 2009 and 2008

52Consolidated Statements of Stockholders' Equity for the Fiscal Years Ended March 31, 2010, 2009 and
2008

53Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31, 2010, 2009 and 2008

54Notes to Consolidated Financial Statements

55(2) The following financial statement schedule is included in this report:PageSchedule IIValuation and Qualifying Accounts

103


All
other schedules have been omitted as not applicable or because the information is included elsewhere in the Consolidated Financial Statements or notes thereto.

(3)
The following is a list of exhibits. Where so indicated by footnote, exhibits which were previously filed are incorporated by reference.

Exhibit
Number

Description2.1

Agreement and Plan of Merger by and among Triumph Group, Inc., Vought Aircraft Industries, Inc., Spitfire Merger Corporation and TC Group, L.L.C., as the Holder Representative March 23, 2010.(14)3.1

Amended and Restated Certificate of Incorporation of Triumph Group, Inc.(1)3.2

Bylaws of Triumph Group, Inc.(2)4.1

Form of certificate evidencing Common Stock of Triumph Group, Inc.(2)


108

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Table of Contents

Exhibit
Number

Description4.2

Indenture, dated as of September 18, 2006, between Triumph Group, Inc. and The Bank of New York Trust Company, N.A. relating to the 2.625% Convertible Senior Subordinated Notes Due 2026.(3)4.3

Form of the 2.625% Convertible Senior Subordinated Note Due 2026. (Included as Exhibit A to Exhibit 4.2).(3)4.4

Registration Rights Agreement, dated as of September 18, 2006, between Triumph Group, Inc. and Banc of America Securities LLC.(3)10.1

Amended and Restated Directors' Stock Incentive Plan.(4)10.2

Form of Deferred Stock Unit Award Agreement under the Amended and Restated Directors' Stock Incentive Plan.(4)10.3#

2004 Stock Incentive Plan.(5)10.4

Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") dated August 14, 2009 among Triumph Group, Inc., PNC Bank National Association, as Administrative Agent, Bank of America,
 N.A., as Syndication Agent, Citizens Bank of Pennsylvania, as Documentation Agent, and JPMorgan Chase Bank, N.A., Sovereign Bank, Branch Bank & Trust Company and Manufacturers and Traders Trust Company, in their capacity as
managing agents for the Banks.(6)10.4(a)

First Amendment to Amended and Restated Credit Agreement, dated September 18, 2006.(7)10.5#

Triumph Group, Inc. Supplemental Executive Retirement Plan effective January 1, 2003.(9)10.6

Compensation for the non-employee members of the Board of Directors of Triumph Group, Inc.(4)10.7#

Form of Stock Award Agreement under the 2004 Stock Incentive Plan.(10)10.8#

Form of letter confirming Stock Award Agreement under the 2004 Stock Incentive Plan.(10)10.9#

Description of the Triumph Group, Inc. Annual Cash Bonus Plan.(11)10.10#

Change of Control Employment Agreement with: Richard C. Ill, M. David Kornblatt, John B. Wright, II and Kevin E. Kindig.(12)10.11#

Restricted Stock Award Agreement for M. David Kornblatt.(13)10.12

Form of Receivables Purchase Agreement, by and among the Triumph Group, Inc., as Initial Servicer, Triumph Receivables, LLC, as Seller, the various Purchasers and Purchase Agents from time to time party
thereto and PNC National Association, as Administrative Agent.(8)10.13

Stockholders Agreement, dated as of March 23, 2010, among Triumph Group, Inc., Carlyle Partners III, L.P., Carlyle Partners II, L.P., Carlyle International Partners II, L.P.,
CarlyleAerostructures Partners, L.P., CHYP Holdings, L.L.C., CarlyleAerostructures Partners II, L.P., CP III Coinvestment, L.P., C/S International Partners, CarlyleAerostructures International Partners, L.P.,
CarlyleContour Partners, L.P., Carlyle SBC Partners II, L.P., Carlyle International Partners III, L.P., CarlyleAerostructures Management, L.P., CarlyleContour International Partners, L.P., Carlyle Investment
Group, L.P. and TC Group, L.L.C.(14)


109

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Table of Contents

Exhibit
Number

Description10.14*

Credit Agreement dated May 10, 2010 by and among Triumph Group, Inc., PNC Bank National Association, as Administrative Agent, Sovereign Bank, as Documentation Agent, Citizens Bank of Pennsylvania and U.S. Bank
National Association, as Syndication Agent, and JPMorgan Chase Bank, N.A., Royal Bank of Canada, Branch Bank & Trust Company and Manufacturers and Traders Trust Company, in their capacity as managing agents for the Banks.21.1*

Subsidiaries of Triumph Group, Inc.23.1*

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.31.1*

Principal Executive Officer Certification Required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.31.2*

Principal Financial Officer Certification Required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.32.1*

Principal Executive Officer Certification Required by Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.32.2*

Principal Financial Officer Certification Required by Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.


(1)Incorporated
by reference to our Proxy Statement on Schedule 14A for the 2008 Annual Meeting of Stockholders.(2)Incorporated
by reference to our Registration Statement on Form S-1 (Registration No. 333-10777) declared effective on
October 24, 1996.(3)Incorporated
by reference to our Current Report on Form 8-K filed on September 22, 2006.(4)Incorporated
by reference to our Current Report on Form 8-K filed on August 1, 2006.(5)Incorporated
by reference to our Proxy Statement on Schedule 14A for the 2004 Annual Meeting of Stockholders.(6)Incorporated
by reference to our Current Report on Form 8-K filed August 14, 2009.(7)Incorporated
by reference to our Current Report on Form 8-K filed on September 23, 2009.(8)Incorporated
by reference to our Current Report on Form 8-K filed on August 12, 2008.(9)Incorporated
by reference to our Annual Report on Form 10-K for the year ended March 31, 2003.(10)Incorporated
by reference to our Annual Report on Form 10-K for the year ended March 31, 2009.(11)Incorporated
by reference to our Current Report on Form 8-K filed on July 31, 2007.(12)Incorporated
by reference to our Current Report on Form 8-K filed on March 13, 2008(13)Incorporated
by reference to our Current Report on Form 8-K filed on June 14, 2007.(14)Incorporated
by reference to our Current Report on Form 8-K filed on March 23, 2010.*Filed
herewith.#Compensation
plans and arrangements for executives and others.


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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly
caused this report to be signed by the undersigned, thereunto duly authorized.

TRIUMPH GROUP, INC.Dated: May 14, 2010

By:

/s/ RICHARD C. ILL Richard C. Ill Chairman and Chief Executive Officer
(Principal Executive Officer)


Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

/s/ RICHARD C. ILL Richard C. Ill

Chairman, Chief Executive Officer and Director
(Principal Executive Officer)

May 14, 2010/s/ M. DAVID KORNBLATT M. David Kornblatt

Executive Vice President, Chief Financial Officer
and Treasurer (Principal Financial Officer)

May 14, 2010/s/ KEVIN E. KINDIG Kevin E. Kindig

Vice President and Controller (Principal
Accounting Officer)

May 14, 2010/s/ PAUL BOURGON Paul Bourgon

Director

May 14, 2010/s/ RICHARD C. GOZON Richard C. Gozon

Director

May 14, 2010/s/ CLAUDE F. KRONK Claude F. Kronk

Director

May 14, 2010/s/ GEORGE SIMPSON George Simpson

Director

May 14, 2010/s/ JOSEPH M. SILVESTRI Joseph M. Silvestri

Director

May 14, 2010


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EXHIBIT INDEX

Exhibit
Number

Description2.1

Agreement and Plan of Merger by and among Triumph Group, Inc., Vought Aircraft Industries, Inc., Spitfire Merger Corporation and TC Group, L.L.C., as the Holder Representative March 23, 2010.3.1

Amended and Restated Certificate of Incorporation of Triumph Group, Inc.(1)3.2

Bylaws of Triumph Group, Inc.(2)4.1

Form of certificate evidencing Common Stock of Triumph Group, Inc.(2)4.2

Indenture, dated as of September 18, 2006, between Triumph Group, Inc. and The Bank of New York Trust Company, N.A. relating to the 2.625% Convertible Senior Subordinated Notes Due 2026.(3)4.3

Form of the 2.625% Convertible Senior Subordinated Note Due 2026. (Included as Exhibit A to Exhibit 4.2).(3)4.4

Registration Rights Agreement, dated as of September 18, 2006, between Triumph Group, Inc. and Banc of America Securities LLC.(3)10.1

Amended and Restated Directors' Stock Incentive Plan.(4)10.2

Form of Deferred Stock Unit Award Agreement under the Amended and Restated Directors' Stock Incentive Plan.(4)10.3#

2004 Stock Incentive Plan.(5)10.4

Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") dated August 14, 2009 among Triumph Group, Inc., PNC Bank National Association, as Administrative Agent, Bank of America,
N.A., as Syndication Agent, Citizens Bank of Pennsylvania, as Documentation Agent, and JPMorgan Chase Bank, N.A., Sovereign Bank, Branch Bank & Trust Company and Manufacturers and Traders Trust Company, in their capacity as managing
agents for the Banks.(6)10.4(a)

First Amendment to Amended and Restated Credit Agreement, dated September 18, 2009.(7)10.5#

Triumph Group, Inc. Supplemental Executive Retirement Plan effective January 1, 2003.(9)10.6

Compensation for the non-employee members of the Board of Directors of Triumph Group, Inc.(4)10.7#

Form of Stock Award Agreement under the 2004 Stock Incentive Plan.(10)10.8#

Form of letter confirming Stock Award Agreement under the 2004 Stock Incentive Plan.(10)10.9#

Description of the Triumph Group, Inc. Annual Cash Bonus Plan.(11)10.10#

Change of Control Employment Agreement with: Richard C. Ill, M. David Kornblatt, John B. Wright, II and Kevin E. Kindig.(12)10.11#

Restricted Stock Award Agreement for M. David Kornblatt.(13)


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Exhibit
Number

Description10.12

Form of Receivables Purchase Agreement, by and among the Triumph Group, Inc., as Initial Servicer, Triumph Receivables, LLC, as Seller, the various Purchasers and Purchase Agents from time to time party thereto
and PNC National Association, as Administrative Agent.(8)10.13

Stockholders Agreement, dated as of March 23, 2010, among Triumph Group, Inc., Carlyle Partners III, L.P., Carlyle Partners II, L.P., Carlyle International Partners II, L.P.,
CarlyleAerostructures Partners, L.P., CHYP Holdings, L.L.C., CarlyleAerostructures Partners II, L.P., CP III Coinvestment, L.P., C/S International Partners, CarlyleAerostructures International Partners, L.P.,
CarlyleContour Partners, L.P., Carlyle SBC Partners II, L.P., Carlyle International Partners III, L.P., CarlyleAerostructures Management, L.P., CarlyleContour International Partners, L.P., Carlyle Investment
Group, L.P. and TC Group, L.L.C.(14)10.14*

Credit Agreement dated May 10, 2010 by and among Triumph Group, Inc., PNC Bank National Association, as Administrative Agent, Sovereign Bank, as Documentation Agent, Citizens Bank of Pennsylvania and U.S.
Bank National Association, as Syndication Agent, and JPMorgan Chase Bank, N.A., Royal Bank of Canada, Branch Bank & Trust Company and Manufacturers and Traders Trust Company, in their capacity as managing agents for the Banks.21.1*

Subsidiaries of Triumph Group, Inc.23.1*

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.31.1*

Principal Executive Officer Certification Required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.31.2*

Principal Financial Officer Certification Required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.32.1*

Principal Executive Officer Certification Required by Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.32.2*

Principal Financial Officer Certification Required by Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.


(1)Incorporated
by reference to our Proxy Statement on Schedule 14A for the 2008 Annual Meeting of Stockholders.(2)Incorporated
by reference to our Registration Statement on Form S-1 (Registration No. 333-10777) declared effective on
October 24, 1999.(3)Incorporated
by reference to our Current Report on Form 8-K filed on September 22, 2006.(4)Incorporated
by reference to our Current Report on Form 8-K filed on August 1, 2006.(5)Incorporated
by reference to our Proxy Statement on Schedule 14A for the 2004 Annual Meeting of Stockholders.(6)Incorporated
by reference to our Current Report on Form 8-K filed August 14, 2009.(7)Incorporated
by reference to our Current Report on Form 8-K filed on September 23, 2009.(8)Incorporated
by reference to our Current Report on Form 8-K filed on August 12, 2008.


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(9)Incorporated
by reference to our Annual Report on Form 10-K for the year ended March 31, 2003.(10)Incorporated
by reference to our Annual Report on Form 10-K for the year ended March 31, 2009.(11)Incorporated
by reference to our Current Report on Form 8-K filed on July 31, 2007.(12)Incorporated
by reference to our Current Report on Form 8-K filed on March 13, 2008.(13)Incorporated
by reference to our Current Report on Form 8-K filed on June 14, 2007.(14)Incorporated
by reference to our Current Report on Form 8-K filed on March 23, 2010.*Filed
herewith.#Compensation
plans and arrangements for executives and others.


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