What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-05 · 321 added, 167 removed, 546 unchanged (47% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands, except per share data) 2022 2021 2022 2021

28 unchanged sentences

(In thousands)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Net earnings $ 70,872 $ 61,408 $ 111,557 $ 120,877

3 unchanged sentences

Pension and postretirement adjustments, net of tax (2)

3,988 4,442 9,754 10,042

Other comprehensive income (loss), net of tax ( 36,348 ) 11,685 ( 37,407 ) 13,325

Comprehensive income $ 34,524 $ 73,093 $ 74,150 $ 134,202

(1) The tax benefit included in foreign currency translation adjustments for the three months ended March 31, 2022 and 2021 was immaterial.

(2) The tax expense included in pension and postretirement adjustments for the three months ended March 31, 2022 and 2021 was $ 1.4 million and $ 1.7 million, respectively.

(1) The tax expense included in foreign currency translation adjustments for the three and six months ended June 30, 2022 was $ 0.9 million and $ 1.1 million, respectively.

The tax benefit included in foreign currency translation adjustments for the three and six months ended June 30, 2021 was immaterial.

(2) The tax expense included in pension and postretirement adjustments for the three and six months ended June 30, 2022 was $ 0.5 million and $ 1.9 million, respectively.

The tax expense included in pension and postretirement adjustments for the three and six months ended June 30, 2021 was $ 1.5 million and $ 3.1 million, respectively.

See notes to condensed consolidated financial statements

2 unchanged sentences

(In thousands, except per share data)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Current assets:

16 unchanged sentences

Accrued expenses 133,706 147,701

Income taxes payable 1,478 3,235

Deferred revenue 215,188 260,157

Liabilities held for sale — 12,655

Due to seller 247,215 —

Other current liabilities 89,009 102,714

9 unchanged sentences

Stockholders’ equity

Common stock, $ 1 par value, 100,000,000 shares authorized as of March 31, 2022 and December 31, 2021;

49,187,378 shares issued as of March 31, 2022 and December 31, 2021;

outstanding shares were 38,471,738 as of March 31, 2022 and 38,469,778 as of December 31, 2021

Common stock, $ 1 par value, 100,000,000 shares authorized as of June 30, 2022 and December 31, 2021;

49,187,378 shares issued as of June 30, 2022 and December 31, 2021;

outstanding shares were 38,381,875 as of June 30, 2022 and 38,469,778 as of December 31, 2021

49,187 49,187

2 unchanged sentences

Accumulated other comprehensive loss ( 227,872 ) ( 190,465 )

Common treasury stock, at cost ( 10,715,640 shares as of March 31, 2022 and 10,717,600 shares as of December 31, 2021)

Common treasury stock, at cost ( 10,805,503 shares as of June 30, 2022 and 10,717,600 shares as of December 31, 2021)

( 1,086,156 ) ( 1,068,163 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In thousands) 2022 2021

1 unchanged sentence

Net earnings $ 111,557 $ 120,877

Adjustments to reconcile net earnings to net cash used for operating activities:

Adjustments to reconcile net earnings to net cash provided by (used for) operating activities

Depreciation and amortization 53,645 57,616

9 unchanged sentences

Deferred revenue ( 45,397 ) 6,663

Income taxes payable 6,927 16,247

Pension and postretirement liabilities, net ( 4,376 ) ( 4,017 )

Other current and long-term assets and liabilities ( 50,605 ) ( 15,193 )

Net cash used for operating activities ( 124,315 ) ( 26,603 )

Net cash provided by (used for) operating activities ( 93,271 ) 48,476

Cash flows from investing activities:

4 unchanged sentences

Cash flows from financing activities:

Borrowings under revolving credit facility 241,198 65,301

Payment of revolving credit facility ( 121,198 ) ( 65,301 )

Borrowings under revolving credit facilities 653,547 163,507

Payments of revolving credit facilities ( 494,347 ) ( 163,507 )

Repurchases of common stock ( 31,645 ) ( 24,395 )

Proceeds from share-based compensation 5,284 4,919

Dividends paid ( 14,220 ) ( 6,961 )

Other ( 499 ) ( 462 )

Net cash provided by (used for) financing activities 106,179 ( 7,107 )

Net cash (used for)/provided by financing activities 118,120 ( 26,899 )

Effect of exchange-rate changes on cash ( 6,204 ) ( 2,188 )

Net decrease in cash and cash equivalents ( 34,322 ) ( 51,179 )

Net increase (decrease) in cash and cash equivalents 410 ( 740 )

Cash and cash equivalents at beginning of period 171,004 198,248

4 unchanged sentences

(In thousands)

For the three months ended March 31, 2021

For the six months ended June 30, 2022

Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock

1 unchanged sentence

Net earnings — — 111,557 — —

Other comprehensive income, net of tax — — — 1,640 —

Other comprehensive loss, net of tax — — — ( 37,407 ) —

Dividends declared — — ( 14,220 ) — —

5 unchanged sentences

Other — ( 506 ) — — 506

June 30, 2022 $ 49,187 $ 126,316 $ 3,006,164 $ ( 227,872 ) $ ( 1,086,156 )

For the three months ended June 30, 2022

Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock

March 31, 2022 $ 49,187 $ 122,603 $ 2,942,580 $ ( 191,524 ) $ ( 1,073,426 )

For the three months ended March 31, 2022

Net earnings — — 70,872 — —

Other comprehensive loss, net of tax — — — ( 36,348 ) —

Dividends declared — — ( 7,288 ) — —

Share-based compensation — 3,713 — — 58

Repurchase of common stock (1)

— — — — ( 12,788 )

June 30, 2022 $ 49,187 $ 126,316 $ 3,006,164 $ ( 227,872 ) $ ( 1,086,156 )

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

For the six months ended June 30, 2021

Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock

1 unchanged sentence

Net earnings — — 120,877 — —

Other comprehensive loss, net of tax — — — ( 1,059 ) —

Other comprehensive income, net of tax — — — 13,325 —

Dividends declared — — ( 14,321 ) — —

5 unchanged sentences

Other — ( 597 ) — — 597

June 30, 2021 $ 49,187 $ 119,946 $ 2,776,884 $ ( 297,531 ) $ ( 753,782 )

For the three months ended June 30, 2021

Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock

March 31, 2021 $ 49,187 $ 119,172 $ 2,722,829 $ ( 309,216 ) $ ( 743,808 )

(1) For both the three months ended March 31, 2022 and 2021, the Corporation repurchased approximately 0.1 million shares of its common stock.

Net earnings — — 61,408 — —

Other comprehensive income, net of tax — — — 11,685 —

Dividends declared — — ( 7,353 ) — —

Restricted stock — ( 2,600 ) — — 2,600

Share-based compensation — 3,374 — — 24

Repurchase of common stock (1)

— — — — ( 12,598 )

June 30, 2021 $ 49,187 $ 119,946 $ 2,776,884 $ ( 297,531 ) $ ( 753,782 )

See notes to condensed consolidated financial statements

(1) For the three and six months ended June 30, 2022, the Corporation repurchased approximately 0.1 million and 0.2 million shares of its common stock, respectively.

For the three and six months ended June 30, 2021, the Corporation repurchased approximately 0.1 million and 0.2 million shares of its common stock, respectively.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate.

During the three months ended March 31, 2022 and 2021, there were no significant changes in estimated contract costs.

During the three and six months ended June 30, 2022 and 2021, there were no significant changes in estimated contract costs.

In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in these financial statements.

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If a performance obligation does not qualify for over-time revenue recognition, revenue is then recognized at the point-in-time in which control of the distinct good or service is transferred to the customer, typically based upon the terms of delivery.

The following table illustrates the approximate percentage of revenue recognized for performance obligations satisfied over-time versus at a point-in-time for the three months ended March 31, 2022 and 2021:

The following table illustrates the approximate percentage of revenue recognized for performance obligations satisfied over-time versus at a point-in-time for the three and six months ended June 30, 2022 and 2021:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Over-time 53 % 52 % 53 % 52 %

2 unchanged sentences

Backlog includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods.

Total backlog was approximately $ 2.3 billion as of March 31, 2022, of which the Corporation expects to recognize approximately 89 % as net sales over the next 36 months .

Total backlog was approximately $ 2.4 billion as of June 30, 2022, of which the Corporation expects to recognize approximately 88 % as net sales over the next 36 months .

The remainder will be recognized thereafter.

1 unchanged sentence

The following table presents the Corporation’s total net sales disaggregated by end market and customer type:

Total Net Sales by End Market and Customer Type Three Months Ended

Total Net Sales by End Market and Customer Type Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 2022 2021

4 unchanged sentences

Commercial Aerospace 68,192 71,555 129,084 128,824

Total Aerospace & Defense customers $ 360,971 $ 401,936

Total Aerospace & Defense $ 379,916 $ 397,477 $ 740,887 $ 799,413

Power & Process $ 125,355 $ 125,333 $ 230,143 $ 230,837

General Industrial 104,086 98,685 197,788 188,304

Total Commercial customers $ 198,490 $ 195,123

Total Commercial $ 229,441 $ 224,018 $ 427,931 $ 419,141

Total $ 609,357 $ 621,495 $ 1,168,818 $ 1,218,554

5 unchanged sentences

The Corporation’s contract liabilities primarily consist of customer advances received prior to revenue being earned.

Revenue recognized during the three months ended March 31, 2022 and 2021 included in contract liabilities at the beginning of the respective years was approximately $ 79 million and $ 77 million, respectively.

Revenue recognized during the three and six months ended June 30, 2022 included in the contract liabilities balance as of January 1, 2022 was approximately $ 56 million and $ 135 million, respectively.

Revenue recognized during the three and six months ended June 30, 2021 included in the contract liabilities balance as of January 1, 2021 was approximately $ 65 million and $ 142 million, respectively.

Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet.

The Corporation continually evaluates potential acquisitions that either strategically fit within the Corporation’s existing portfolio or expand the Corporation’s portfolio into new product lines or adjacent markets.

The Corporation has completed numerous acquisitions that have been accounted for as business combinations and have resulted in the recognition of goodwill in the Corporation's financial statements.

This goodwill arises because the acquisition purchase price reflects the future

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

earnings and cash flow potential in excess of the earnings and cash flows attributable to the current product and customer set at the time of acquisition.

Thus, goodwill inherently includes the know-how of the assembled workforce, the ability of the workforce to further improve the technology and product offerings, and the expected cash flows resulting from these efforts.

Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations.

The Corporation allocates the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities.

In the months after closing, as the Corporation obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and as the Corporation learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price.

Only items identified as of the acquisition date are considered for subsequent adjustment.

The Corporation will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

During the six months ended June 30, 2022, the Corporation acquired one business for an aggregate purchase price of $ 247 million, which is described in more detail below, and represents a non-cash investing activity in the Condensed Consolidated Statement of Cash Flows.

During the six months ended June 30, 2021, the Corporation did not complete any acquisitions.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the acquisition consummated during the six months ended June 30, 2022.

(In thousands) 2022

Accounts receivable $ 9,970

Inventory 22,790

Property, plant, and equipment 1,683

Other current and non-current assets 1,872

Intangible assets 130,500

Operating lease right-of-use assets, net 1,197

Current and non-current liabilities ( 9,607 )

Net tangible and intangible assets 158,405

Goodwill 88,810

Total purchase price $ 247,215

Due to seller $ 247,215

Cash paid to date $ —

Goodwill deductible for tax purposes $ 88,810

2022 Acquisition

Safran Aerosystems Arresting Company (SAA)

On June 30, 2022 , the Corporation completed the acquisition of SAA for $ 247 million.

The Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type.

SAA is a designer and manufacturer of mission-critical, fixed-wing aircraft emergency arresting systems.

The acquired business will operate within the Naval & Power segment.

The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete.

ASSETS HELD FOR SALE

8 unchanged sentences

The composition of receivables is as follows:

(In thousands) March 31, 2022 December 31, 2021

(In thousands) June 30, 2022 December 31, 2021

Billed receivables:

Trade and other receivables $ 414,195 $ 362,007

Unbilled receivables:

Unbilled receivables (contract assets):

Recoverable costs and estimated earnings not billed 291,485 291,758

9 unchanged sentences

The composition of inventories is as follows:

(In thousands) March 31, 2022 December 31, 2021

(In thousands) June 30, 2022 December 31, 2021

Raw materials $ 239,575 $ 191,066

7 unchanged sentences

Inventories, net $ 482,790 $ 411,567

(1) This caption includes capitalized development costs of $ 24.9 million as of March 31, 2022 related to certain aerospace and defense programs.

(1) This caption includes capitalized development costs of $ 19.8 million as of June 30, 2022 related to certain aerospace and defense programs.

These capitalized costs will be liquidated as units are produced under contract.

As of March 31, 2022, capitalized development costs of $ 17.1 million are not currently supported by existing firm orders.

The changes in the carrying amount of goodwill for the three months ended March 31, 2022 are as follows:

As of June 30, 2022, capitalized development costs of $ 12.3 million are not currently supported by existing firm orders.

The changes in the carrying amount of goodwill for the six months ended June 30, 2022 are as follows:

(In thousands) Aerospace & Industrial Defense Electronics Naval & Power Consolidated

December 31, 2021 $ 316,147 $ 714,014 $ 432,865 $ 1,463,026

Adjustments — ( 469 ) — ( 469 )

Acquisitions — — 88,810 88,810

Foreign currency translation adjustment ( 6,335 ) ( 10,445 ) ( 4,024 ) ( 20,804 )

March 31, 2022 $ 314,518 $ 711,684 $ 432,697 $ 1,458,899

June 30, 2022 $ 309,812 $ 704,536 $ 517,651 $ 1,531,999

OTHER INTANGIBLE ASSETS, NET

2 unchanged sentences

The following tables present the cumulative composition of the Corporation’s intangible assets:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(In thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net

5 unchanged sentences

(1) Programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology, and trademarks underlying the associated program.

Total intangible amortization expense for the three months ended March 31, 2022 was $ 14 million, as compared to $ 15 million in the comparable prior year period.

During the six months ended June 30, 2022, the Corporation acquired intangible assets of $ 130.5 million, which included Customer-related intangibles of $ 94.6 million, Technology of $ 31.5 million, and Other intangible assets of $ 4.4 million.

The weighted average amortization periods for these aforementioned intangible assets are 15.9 years, 15.0 years, and 10.0 years, respectively.

Total intangible amortization expense for the six months ended June 30, 2022 was $ 28 million, as compared to $ 30 million in the comparable prior year period.

The estimated future amortization expense of intangible assets over the next five years is as follows:

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Effects on Condensed Consolidated Balance Sheets

As of March 31, 2022 and December 31, 2021, the fair values of the asset and liability derivative instruments were immaterial.

As of June 30, 2022 and December 31, 2021, the fair values of the asset and liability derivative instruments were immaterial.

Effects on Condensed Consolidated Statements of Earnings

Undesignated hedges

The (losses) and gains and on forward exchange derivative contracts not designated for hedge accounting are recognized to general and administrative expenses within the Condensed Consolidated Statements of Earnings.

The respective (losses) and gains for the three months ended March 31, 2022 and 2021 were immaterial.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The estimated fair value amounts were determined by the Corporation using available market information that is primarily based on quoted market prices for the same or similar issuances as of March 31, 2022.

The gains and losses on forward exchange derivative contracts not designated for hedge accounting are recognized to general and administrative expenses within the Condensed Consolidated Statements of Earnings.

The losses for the three and six months ended June 30, 2022 were $ 5 million and $ 6 million, respectively.

The gains for the three and six months ended June 30, 2021 were immaterial.

Accordingly, all of the Corporation’s debt is valued as a Level 2 financial instrument.

1 unchanged sentence

Furthermore, the use of different methodologies to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(In thousands) Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value

18 unchanged sentences

Total debt, net $ 1,209,077 $ 1,166,818 $ 1,050,610 $ 1,104,707

Revolving Credit Agreement

In May 2022, the Corporation terminated its existing credit agreement, which was set to expire in October 2023, and entered into a new credit agreement (“Credit Agreement”) with a syndicate of financial institutions.

The Credit Agreement, which is set to expire in May 2027, increases the size of the Corporation’s revolving credit facility to $ 750 million, and expands the accordion feature to $ 250 million.

The proceeds available under the Credit Agreement are to be used for general corporate purposes, which may include the funding of possible future acquisitions or supporting internal growth initiatives.

PENSION PLANS

Defined Benefit Pension Plans

The following table is a consolidated disclosure of all domestic and foreign defined pension plans as described in the Corporation’s 2021 Annual Report on Form 10-K.

The components of net periodic pension cost were as follows:

Three Months Ended

The following table is a consolidated disclosure of all domestic and foreign defined benefit pension plans as described in the Corporation’s 2021 Annual Report on Form 10-K.

The components of net periodic pension cost for the three and six months ended June 30, 2022 and 2021 were as follows:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 2022 2021

8 unchanged sentences

Contributions to the foreign benefit plans are not expected to be material in 2022.

During the three months ended March 31, 2022, the Company recognized a settlement charge related to the retirement of a former executive.

The settlement charge represents an event that is accounted for under guidance on employers’ accounting for settlements and curtailments of defined benefit pension plans.

During the six months ended June 30, 2022, as well as during the three and six months ended June 30, 2021, the Company recognized settlement charges related to the retirement of former executives.

The settlement charges represent events that are accounted for under guidance on employers’ accounting for settlements and curtailments of defined benefit pension plans.

Defined Contribution Retirement Plan

1 unchanged sentence

subsidiaries.

The employer contributions include both employer match and non-elective

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

contribution components up to a maximum employer contribution o f 7 % of eligible compensation.

During the three months ended March 31, 2022 and 2021, the expense relating to the plan was $ 5.7 million and $ 5.3 million, respectively.

The employer contributions include both employer match and non-elective contribution components up to a maximum employer contribution of 7 % of eligible compensation.

During the three and six months ended June 30, 2022, the expense relating to the plan was $ 4.6 million and $ 10.3 million, respectively.

During the three and six months ended June 30, 2021, the expense relating to the plan was $ 4.3 million and $ 9.6 million, respectively.

EARNINGS PER SHARE

1 unchanged sentence

A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 2022 2021

2 unchanged sentences

Diluted weighted-average shares outstanding 38,654 41,088 38,657 41,092

For the three months ended March 31, 2022 and 2021, approximately 26,000 and 88,000 shares, respectively, issuable under equity-based awards were excluded from the calculation of diluted earnings per share as they were anti-dilutive based on the average stock price during the period.

For the three and six months ended June 30, 2022, approximately 37,000 and 31,000 shares, respectively, issuable under equity-based awards were excluded from the calculation of diluted earnings per share as they were anti-dilutive based on the average stock price during the period.

There were approximately 34,000 and 61,000 anti-dilutive equity-based awards for the three and six months ended June 30, 2021, respectively.

SEGMENT INFORMATION

1 unchanged sentence

Interest expense and income taxes are not reported on an operating segment basis as they are not considered in the segments’ performance evaluation by the Corporation’s chief operating decision-maker, its Chief Executive Officer.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Net sales and operating income by reportable segment were as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 2022 2021

13 unchanged sentences

Adjustments to reconcile operating income to earnings before income taxes are as follows:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 2022 2021

3 unchanged sentences

Earnings before income taxes $ 92,872 $ 84,843 $ 146,849 $ 164,793

(In thousands) March 31, 2022 December 31, 2021

(In thousands) June 30, 2022 December 31, 2021

Identifiable assets

7 unchanged sentences

The cumulative balance of each component of accumulated other comprehensive income (AOCI), net of tax, is as follows:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) Foreign currency translation adjustments, net Total pension and postretirement adjustments, net Accumulated other comprehensive income (loss)

2 unchanged sentences

( 10,829 ) 107,211 96,382

Amounts reclassified from accumulated other comprehensive loss (1)

Amounts reclassified from accumulated other comprehensive income (1)

— 24,009 24,009

3 unchanged sentences

( 47,161 ) 2,091 ( 45,070 )

Amounts reclassified from accumulated other comprehensive income (loss) (1)

Amounts reclassified from accumulated other comprehensive income (1)

— 7,663 7,663

Net current period other comprehensive income (loss) ( 47,161 ) 9,754 ( 37,407 )

March 31, 2022 $ ( 106,391 ) $ ( 85,133 ) $ ( 191,524 )

June 30, 2022 $ ( 146,727 ) $ ( 81,145 ) $ ( 227,872 )

(1) All amounts are after tax.

8 unchanged sentences

Total reclassifications $ ( 7,663 ) Net earnings

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONTINGENCIES AND COMMITMENTS

2 unchanged sentences

The Corporation continues to defend vigorously against all claims.

Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals and insurance coverage, the Corporation does not believe that the disposition of any of these matters, individually or in the aggregate, will have a material adverse effect on its condensed consolidated financial condition, results of operations, and cash flows.

Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals and insurance coverage, the Corporation does not expect that such legal proceedings will have a material adverse impact on its condensed consolidated financial statements.

Legal Proceedings

4 unchanged sentences

Letters of Credit and Other Financial Arrangements

The Corporation enters into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to guarantees of repayment, future performance on certain contracts to provide products and services, and to secure advance payments from certain international customers.

As of March 31, 2022 and December 31, 2021, there were $ 19.5 million and $ 21.1 million of stand-by letters of credit outstanding, respectively.

As of March 31, 2022 and December 31, 2021, there were $ 2.7 million and $ 4.5 million of bank guarantees outstanding, respectively.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

secure advance payments from certain international customers.

As of June 30, 2022 and December 31, 2021, there were $ 17.2 million and $ 21.1 million of stand-by letters of credit outstanding, respectively, and $ 2.4 million and $ 4.5 million of bank guarantees outstanding, respectively.

In addition, the Corporation is required to provide the Nuclear Regulatory Commission financial assurance demonstrating its ability to cover the cost of decommissioning its Cheswick, Pennsylvania facility upon closure, though the Corporation does not intend to close this facility.

5 unchanged sentences

As of December 31, 2021, the Corporation was adequately accrued regarding this matter.

SUBSEQUENT EVENTS

On August 1, 2022, the Corporation announced that it priced a private placement debt offering of $ 300 million for senior notes.

The offering is expected to close in the fourth quarter, subject to customary closing conditions.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

5 unchanged sentences

Examples of forward-looking statements include, but are not limited to:

(a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance and potential impacts from COVID-19, including the impacts to supply and demand, and measures taken by governments and private industry in response, (d) statements of future economic performance and potential impacts due to the conflict between Russia and Ukraine, and (e) statements of assumptions, such as economic conditions underlying other statements.

(a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance and potential impacts from COVID-19, including the impacts to supply and demand, the impact of significant inflation, higher interest rates or deflation, and measures taken by governments and private industry in response, (d) statements of future economic performance and potential impacts due to the conflict between Russia and Ukraine, and (e) statements of assumptions, such as economic conditions underlying other statements.

Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continue,” “could,” “estimate,” “expects,” “intend,” “may,” “might,” “outlook,” “potential,” “predict,” “should,” “will,” as well as the negative of any of the foregoing or variations of such terms or comparable terminology, or by discussion of strategy.

21 unchanged sentences

However, given the diversified breadth of our company, we believe that we are well-positioned to mitigate any material risks arising as a result of COVID-19 or any of its variants.

From an operational perspective, our current cash balance, coupled with expected cash flows from operating activities for the remainder of the year as well as our current borrowing capacity under the Revolving Credit Agreement, are expected to be more than sufficient to meet operating cash requirements, planned capital expenditures, interest payments on long-term debt obligations, payments on lease obligations, pension and postretirement funding requirements, and dividend payments through the current year and beyond.

From an operational perspective, our current cash balance, coupled with expected cash flows from operating activities for the remainder of the year as well as our current borrowing capacity under the Credit Agreement, are expected to be more than sufficient to meet operating cash requirements, planned capital expenditures, principal payments on the current portion of long-term debt obligations, interest payments on long-term debt obligations, payments on lease obligations, pension and postretirement funding requirements, and dividend payments through the current year and beyond.

RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of the Corporation for the three months ended March 31, 2022.

The financial information as of March 31, 2022 should be read in conjunction with the financial statements for the year ended December 31, 2021 contained in our Form 10-K.

The financial information as of June 30, 2022 should be read in conjunction with the financial statements for the year ended December 31, 2021 contained in our Form 10-K.

The MD&A is organized into the following sections:

16 unchanged sentences

Condensed Consolidated Statements of Earnings

Three Months Ended

(In thousands) 2022 2021 % change

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 % change 2022 2021 % change

Aerospace & Industrial $ 208,572 $ 199,713 4 % $ 399,684 $ 380,044 5 %

9 unchanged sentences

Interest expense 9,788 10,180 4 % 19,318 20,139 4 %

Other income, net 2,997 4,843 (38) %

Other income, net 4,555 440 NM 7,552 5,283 43 %

Earnings before income taxes 92,872 84,843 9 % 146,849 164,793 (11 %)

2 unchanged sentences

New orders $ 776,162 $ 698,970 11 % $ 1,410,428 $ 1,271,857 11 %

NM - Not meaningful

Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Three Months Ended Six Months Ended

June 30, June 30,

2021 2022 vs.

Sales Operating Income Sales Operating Income

Organic (1 %) 2 % (3 %) (9 %)

3 unchanged sentences

Total (2 %) 4 % (4 %) (12 %)

Sales during the three months ended March 31, 2022 decreased $38 million, or 6%, to $559 million, compared with the prior year period.

Sales in the second quarter decreased $12 million, or 2%, to $609 million, compared with the prior year period.

On a segment basis, sales from the Defense Electronics and Naval & Power segments decreased $13 million and $8 million, respectively, with sales from the Aerospace & Industrial segment increasing $9 million.

Changes in sales by segment are discussed in further detail in the results by business segment section below.

Operating income during the three months ended March 31, 2022 decreased $25 million, or 29%, to $61 million, compared with the prior year period, while operating margin decreased 340 basis points to 10.8%, compared with the same period in 2021.

In the Defense Electronics segment, decreases in operating income and operating margin were primarily due to unfavorable overhead absorption on lower sales as well as unfavorable mix, which more than offset the benefits of our ongoing

Sales during the six months ended June 30, 2022 decreased $50 million, or 4%, to $1,169 million, compared with the prior year period.

On a segment basis, sales from the Defense Electronics and Naval & Power segments decreased $51 million and $18

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

2 unchanged sentences

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

operational excellence initiatives.

Operating income and operating margin in the Naval & Power segment decreased primarily due to a loss on sale of our industrial valves business in Germany, unfavorable overhead absorption on lower sales in the naval defense market, and unfavorable mix in the power & process market.

million, respectively, with sales from the Aerospace & Industrial segment increasing $19 million.

Changes in sales by segment are discussed in further detail in the results by business segment section below.

Operating income in the second quarter increased $4 million, or 4%, to $98 million, and operating margin increased 90 basis points to 16.1% compared with the same period in 2021.

Operating income and operating margin in the Naval & Power segment benefited from favorable mix in the naval defense and process markets, as well as the benefits of our ongoing operational excellence initiatives.

In the Aerospace & Industrial segment, favorable absorption on higher sales and the benefits of our ongoing operational excellence initiatives were essentially offset by higher research and development investments.

Decreases in operating income and operating margin in the Defense Electronics segment were primarily due to unfavorable overhead absorption on lower sales.

Operating income during the six months ended June 30, 2022 decreased $21 million, or 12%, to $159 million and operating margin decreased 110 basis points to 13.6%, compared with the same period in 2021.

In the Defense Electronics segment, decreases in operating income and operating margin were primarily due to unfavorable overhead absorption on lower sales, which more than offset the benefits of our ongoing operational excellence initiatives.

Operating income and operating margin in the Naval & Power segment were negatively impacted by a loss on sale of our industrial valves business in Germany in the current period, as well as unfavorable overhead absorption on lower sales in the naval defense market.

These decreases were partially offset by increases in operating income and operating margin in the Aerospace & Industrial segment, primarily due to favorable absorption on higher sales, as well as the benefits of our ongoing operational excellence initiatives.

Non-segment operating expense during the three months ended March 31, 2022 increased $6 million , or 73%, to $15 million , primarily due to costs associated with shareholder activism in the current period.

Interest expense of $10 million was essentially flat compared to the prior year period.

Other income, net during the three months ended March 31, 2022 decreased $2 million, or 38%, to $3 million, primarily due to pension settlement charges recognized in the current period related to the retirement of a former executive.

The effective tax rate for the three months ended March 31, 2022 of 24.6% decreased as compared to an effective tax rate of 25.6% in the prior year period, primarily due to higher stock compensation benefits in the current period.

Comprehensive income for the three months ended March 31, 2022 was $40 million, compared to comprehensive income of $61 million in the prior year period.

Non-segment operating expense in the second quarter decreased $1 million, or 10%, to $9 million, primarily due to lower pension costs in the current period.

Non-segment operating expense during the six months ended June 30, 2022 increased $5 million, or 29%, to $24 million, primarily due to costs associated with shareholder activism in the current period.

Interest expense in the second quarter and six months ended June 30, 2022 of $10 million and $19 million, respectively, was essentially flat against the comparable prior year periods.

Other income, net in the second quarter increased $4 million to $5 million.

O ther income, net during the six months ended June 30, 2022 increased $2 million, or 43%, to $8 million.

Increases in both periods were primarily due to lower overall pension costs against the comparable prior year periods.

The effective tax rate of 23.7% in the second quarter decreased compared to an effective tax rate of 27.6% in the prior year period.

The effective tax rate of 24.0% for the six months ended June 30, 2022 decreased as compared to an effective tax rate of 26.6%.

Decreases in both of the comparable periods were primarily due to an unfavorable foreign rate change on deferred tax liabilities in the prior year that did not recur, as well as lower provisional tax expense associated with the Tax Act for foreign withholding taxes in the current year period.

Comprehensive income in the second quarter was $35 million, compared to comprehensive income of $73 million in the prior year period.

The change was primarily due to the following:

• Net earnings decreased $19 million, primarily due to lower operating income.

• Foreign currency translation adjustments for the three months ended March 31, 2022 resulted in a $7 million comprehensive loss, compared to a $4 million comprehensive loss in the prior period.

• Foreign currency translation adjustments in the second quarter resulted in a $40 million comprehensive loss, compared to a $7 million comprehensive gain in the prior year period.

The comprehensive loss during the current period was primarily attributed to decreases in the British Pound.

New orders increased $55 million during the three months ended March 31, 2022 from the comparable prior year period, primarily due to the timing of naval defense orders in the Naval & Power segment, as well as an increase in new orders for industrial vehicles and commercial aerospace products in the Aerospace & Industrial segment.

These increases were partially offset by the timing of orders across all defense-related markets in the Defense Electronics segment due to ongoing supply chain disruption.

Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.

• Net earnings increas ed $9 million, primarily due to higher operating income and other income, net.

Comprehensive income during the six months ended June 30, 2022 was $74 million, compared to comprehensive income of $134 million in the prior year period.

The change was primarily due to the following:

• Foreign currency translation adjustments for the six months ended June 30, 2022 resulted in a $47 million comprehensive loss, compared to a $3 million comprehensive gain in the prior period.

The comprehensive loss during the current period was primarily attributed to decreases in the British Pound.

• Net earnings decreas ed $9 million, pr imarily due to lower operating income.

New orders in the second quarter increased $77 million from the comparable prior year period, primarily due to the timing of naval defense orders in the Naval & Power segment, as well as an increase in new orders for commercial aerospace equipment in the Defense Electronics and Aerospace & Industrial segments.

These increases were partially offset by the timing of new orders for industrial vehicles in the Aerospace & Industrial segment.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

New orders during the six months ended June 30, 2022 increased $139 million from the comparable prior year period primarily due to the timing of naval defense orders in the Naval & Power segment, as well as an increase in new orders for commercial aerospace equipment in the Defense Electronics and Aerospace & Industrial segments.

RESULTS BY BUSINESS SEGMENT

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The following tables summarize sales, operating income and margin, and new orders within the Aerospace & Industrial segment.

Three Months Ended

(In thousands) 2022 2021 % change

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 % change 2022 2021 % change

Sales $ 208,572 $ 199,713 4% $ 399,684 $ 380,044 5%

Operating income 32,464 31,977 2% 57,317 51,002 12%

Operating margin 13.0 % 10.6 % 240 bps

Operating margin 15.6 % 16.0 % (40 bps) 14.3 % 13.4 % 90 bps

New orders $ 215,279 $ 222,825 (3%) $ 443,593 $ 421,940 5%

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Three Months Ended Six Months Ended

June 30, June 30,

2021 2022 vs.

Sales Operating Income Sales Operating Income

Organic 7 % 2 % 7 % 14 %

3 unchanged sentences

Sales in the Aerospace & Industrial segment are primarily generated from the commercial aerospace and general industrial markets, and to a lesser extent the defense and power & process markets.

Sales during the three months ended March 31, 2022 increased $11 million, or 6%, to $191 million from the prior year period, primarily due to higher demand for actuation and sensors products as well as surface treatment services on narrow-body platforms in the commercial aerospace market.

Sales also benefited from higher demand for industrial vehicle products in the general industrial market.

Operating income increased $6 million, or 31%, to $25 million during the three months ended March 31, 2022 compared to the prior year period, while operating margin increased 240 basis points to 13.0%.

The increases in operating income and operating margin were primarily due to favorable overhead absorption on higher sales, as well as the benefits of our ongoing operational excellence initiatives.

New orders during the three months ended March 31, 2022 increased $29 million from the comparable prior year period, primarily due to an increase in new orders for industrial vehicles and commercial aerospace equipment.

Sales in the second quarter increased $9 million, or 4%, to $209 million from the prior year period, primarily due to higher sales in the commercial aerospace and general industrial markets.

Sales in the commercial aerospace market benefited $5 million from higher demand for actuation and sensors products as well as surface treatment services on various narrow-body and wide-body platforms.

Sales in the general industrial market increased $5 million primarily due to higher demand for industrial vehicle products.

These increases were partially offset by sales decreases in the aerospace defense market primarily due to lower sales of actuation and sensors products on various fighter jet programs.

Sales during the six months ended June 30, 2022 increased $19 million, or 5%, to $400 million from the prior year period, primarily due to higher sales in the commercial aerospace and general industrial markets.

In the commercial aerospace market, sales increased $10 million primarily due to higher demand for actuation and sensors products as well as surface treatment services.

The general industrial market benefited from sales increases of $9 million primarily due to higher demand for industrial vehicle products.

Operating income in the second quarter increased approximately $1 million, or 2%, to $32 million from the prior year period, and operating margin decreased 40 basis points to 15.6%, as favorable absorption on higher sales and the benefits of our ongoing operational excellence initiatives were essentially offset by higher research and development investments.

Operating income during the six months ended June 30, 2022 increased $6 million, o r 12%, to $57 million from the prior year period, and operating margin increased 90 basis points to 14.3%.

The increases in operating income and operating margin in

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

each of the respective periods were primarily due to favorable overhead absorption on higher sales, as well as the benefits of our ongoing operational excellence initiatives.

New orders in the second quarter decreased $8 million, as an increase in new orders for commercial aerospace equipment was more than offset by the timing of new orders for industrial vehicles.

New orders during the six months ended June 30, 2022 increased $22 million primarily due to an increase in new orders for commercial aerospace equipment.

This increase was partially offset by the timing of new orders for industrial vehicles.

Defense Electronics

The following tables summarize sales, operating income and margin, and new orders within the Defense Electronics segment.

Three Months Ended

(In thousands) 2022 2021 % change

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 % change 2022 2021 % change

Sales $ 149,549 $ 162,351 (8%) $ 292,618 $ 343,563 (15%)

Operating income 24,460 29,271 (16%) 47,750 65,894 (28%)

Operating margin 16.3 % 20.2 % (390 bps)

Operating margin 16.4 % 18.0 % (160 bps) 16.3 % 19.2 % (290 bps)

New orders $ 195,442 $ 184,033 6% $ 355,130 $ 359,773 (1%)

Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Three Months Ended Six Months Ended

June 30, June 30,

2021 2022 vs.

Sales Operating Income Sales Operating Income

Organic (7 %) (21 %) (14 %) (29 %)

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Total (8 %) (16 %) (15 %) (28 %)

Sales in the Defense Electronics segment are primarily to the defense markets and, to a lesser extent, the commercial aerospace market.

Sales in the second quarter decreased $13 million, or 8%, to $150 million from the prior year period.

In the commercial aerospace market, sales decreased $9 million primarily due to lower sales of avionics and flight test equipment on various domestic and international platforms.

Sales in the aerospace defense and ground defense markets were negatively impacted by ongoing supply chain headwinds and the delayed signing of the FY22 defense budget.

These decreases were partially offset by higher sales on the Virginia-class submarine program in the naval defense market.

Sales during the six months ended June 30, 2022 decreased $51 million, or 15%, to $293 million from the prior year period.

In the ground defense market, sales decreased $23 million primarily due to ongoing supply chain headwinds as well as the delayed signing of the FY22 defense budget, which contributed to lower sales of embedded computing and tactical communications equipment on various programs.

The aerospace defense market was also negatively impacted by ongoing supply chain headwinds, which resulted in lower sales of $16 million, primarily on embedded computing equipment on various programs.

In the commercial aerospace market, sales decreased $10 million primarily due to lower sales of avionics and flight test equipment on various domestic and international platforms.

Operating income in the second quarter decreased $5 million, or 16%, to $24 million compared to the prior year period, and operating margin decreased 160 basis points from the prior year period to 16.4%.

Operating income during the six months ended June 30, 2022 decreased $18 million, or 28%, to $48 million, and operating margin decreased 290 basis points from the

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Sales in the Defense Electronics segment are primarily to the defense markets and, to a lesser extent, the commercial aerospace market.

Sales during the three months ended March 31, 2022 decreased $38 million, or 21%, to $143 million from the prior year period, primarily due to timing across all defense markets.

In the ground defense market, sales decreased $17 million primarily due to ongoing supply chain headwinds, which contributed to lower sales of embedded computing and tactical communications equipment on various programs.

Sales in the aerospace defense market decreased $14 million primarily due to the delayed signing of the FY22 defense budget, which resulted in lower sales of embedded computing equipment on various programs.

Sales in the naval defense market were negatively impacted by the timing of orders on various submarine and surface combat ship programs.

Operating income during the three months ended March 31, 2022 decreased $13 million, or 36%, to $23 million, and operating margin decreased 390 basis points from the prior year period to 16.3%.

The decreases in operating income and operating margin were primarily due to unfavorable overhead absorption on lower sales and unfavorable mix.

New orders during the three months ended March 31, 2022 decreased $23 million from the comparable prior year period, primarily due to the timing of orders across all defense-related markets due to ongoing supply chain disruption.

prior year period to 16.3%.

The decreases in operating income and operating margin for each of the respective periods were primarily due to unfavorable overhead absorption on lower sa les.

New orders in the second quarter increased $11 million, primarily due to an increase in new orders for commercial aerospace equipment.

New orders during the six months ended June 30, 2022 decreased $5 million, as an increase in new orders for commercial aerospace equipment was more than offset by the timing of orders across all defense-related markets due to the delayed signing of the FY22 defense budget.

Naval & Power

The following tables summarize sales, operating income and margin, and new orders within the Naval & Power segment.

Three Months Ended

(In thousands) 2022 2021 % change

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 % change 2022 2021 % change

Sales $ 251,236 $ 259,431 (3%) $ 476,516 $ 494,947 (4%)

Operating income 50,001 43,095 16% 77,289 81,152 (5%)

Operating margin 12.1 % 16.2 % (410 bps)

Operating margin 19.9 % 16.6 % 330 bps 16.2 % 16.4 % (20 bps)

New orders $ 365,441 $ 292,112 25% $ 611,705 $ 490,144 25%

Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Three Months Ended Six Months Ended

June 30, June 30,

2021 2022 vs.

Sales Operating Income Sales Operating Income

Organic (3 %) 15 % (4 %) 2 %

4 unchanged sentences

Sales in the Naval & Power segment are primarily to the naval defense and power & process markets.

Sales during the three months ended March 31, 2022 decreased $11 million, or 4%, to $225 million from the prior year period.

In the naval defense market, sales decreased $6 million primarily due to lower sales on the CVN-80 aircraft carrier and Virginia-class submarine programs, partially offset by higher demand on the Columbia-class submarine program.

Sales in the second quarter decreased $8 million, or 3%, to $251 million from the prior year period.

In the naval defense market, sales decreased $7 million, as higher demand on the Columbia-class submarine and CVN-81 aircraft carrier programs was more than offset by lower sales on the CVN-80 aircraft carrier and Virginia-class submarine programs.

In the power & process market, higher nuclear aftermarket sales as well as higher demand for industrial valve products were essentially offset by the wind-down on the China Direct AP1000 program.

Sales during the six months ended June 30, 2022 decreased $18 million, or 4%, to $477 million from the prior year period.

Sales decreased $14 million in the naval defense market, as higher demand on the Columbia-class submarine and CVN-81 aircraft carrier programs was more than offset by lower sales on the CVN-80 aircraft carrier and Virginia-class submarine programs.

In the power & process market, higher nuclear aftermarket sales were more than offset by the wind-down on the China Direct AP1000 program.

Operating income in the second quarter increased $7 million, or 16%, to $50 million, and operating margin increased 330 basis points from the prior year period to 19.9%, primarily due to favorable mix in the naval defense and process markets, as well as the benefits of our ongoing operational excellence initiatives.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

2 unchanged sentences

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Operating income during the three months ended March 31, 2022 decreased $11 million, or 28%, to $27 million, and operating margin decreased 410 basis points from the prior year period to 12.1%.

The decreases in operating income and operating margin were primarily due to a loss on sale of our industrial valves business in Germany, unfavorable overhead absorption on lower sales in the naval defense market, and unfavorable mix in the power & process market.

New orders increased $48 million during the three months ended March 31, 2022 from the comparable prior year period, primarily due to the timing of naval defense orders.

Operating income during the six months ended June 30, 2022 decreased $4 million, or 5% , to $77 million, and operating margin decreased 20 basis points from the prior year period to 16.2%.

Both operating income and operating margin were negatively impacted by a loss on sale of our industrial valves business in Germany in the current period, as well as unfavorable overhead absorption on lower sales in the naval defense market.

These decreases were partially offset by favorable mix in the naval defense and process markets, as well as the benefits of our ongoing operational excellence initiatives.

New orders in the second quarter and six months ended June 30, 2022 increased $73 million and $122 million, respectively, from the comparable prior year periods, primarily due to the timing of naval defense orders.

SUPPLEMENTARY INFORMATION

The table below depicts sales by end market and customer type, as it helps provide an enhanced understanding of our businesses and the markets in which we operate.

The table has been included to supplement the discussion of our operating results.

Net Sales by End Market and Customer Type Three Months Ended

(In thousands) 2022 2021 % change

The table has been included to supplement the discussion of our consolidated operating results.

Total Net Sales by End Market and Customer Type Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2022 2021 % change 2022 2021 % change

Aerospace & Defense markets:

10 unchanged sentences

Aerospace & Defense markets

Sales during the three months ended March 31, 2022 decreased $41 million, or 10%, to $361 million, primarily due to lower sales in the aerospace defense, ground defense, and naval defense markets.

Sales in the aerospace defense and ground defense markets decreased primarily due to timing of sales of embedded computing and tactical communications equipment on various programs .

Sales decreases in the naval defense market were primarily due to lower sales on the CVN-80 aircraft carrier and Virginia-class submarine programs, partially offset by higher demand on the Columbia-class submarine program.

Sales in the second quarter decreased $18 million, or 4%, to $380 million against the comparable prior year period, due to lower sales across all markets.

Sales in the aerospace defense market decreased primarily due to lower sales of actuation and sensors products on various fighter jet programs, as well as lower sales of embedded computing equipment on various fighter jet and helicopter platforms.

The ground defense market was negatively impacted by ongoing supply chain headwinds and the delayed signing of the FY22 defense budget, which resulted in lower sales of tactical communications equipment.

In the naval defense ma rket, higher demand on the Columbia-class submarine and CVN-81 aircraft carrier programs was more than offset by lower sales on the CVN-80 aircraft carrier and Virginia-class submarine programs.

Sales in the commercial aerospace market were negatively impacted by lower sales of avionics and flight test equipment on various domestic and international platforms, partially offset by higher demand for actuation and sensors products as well as surface treatment services on various narrow-body and wide-body platforms.

Sales during the six months ended June 30, 2022 decreased $59 million, or 7%, to $741 million, primarily due to lower sales in the aerospace defense, ground defense, and naval defense markets.

Sales in the aerospace defense and ground defense markets decreased primarily due to ongoing supply chain headwinds and the delayed signing of the FY22 defense budget .

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Commercial markets

Sales during the three months ended March 31, 2022 increased $3 million, or 2%, to $198 million, primarily due to higher demand for industrial vehicle products in the general industrial market.

Sales in the second quarter increased $5 million, or 2%, to $229 million primarily due to higher demand for our industrial vehicle products in the general industrial market.

Sales during the six months ended June 30, 2022 increased $9 million, or 2%, to $428 million primarily due to higher demand for our industrial vehicle products in the general industrial market.

In the power & process market, higher nuclear aftermarket sales were offset by the wind-down on the China Direct AP1000 program.

LIQUIDITY AND CAPITAL RESOURCES

4 unchanged sentences

In some cases, these payments can exceed the costs incurred on a project.

Management continually evaluates cash utilization alternatives,

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

including share repurchases, acquisitions, increased dividends, and paying down debt, to determine the most beneficial use of available capital resources.

Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, increased dividends, and paying down debt, to determine the most beneficial use of available capital resources.

We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets, are sufficient to meet both the short-term and long-term capital needs of the organization.

Condensed Consolidated Statements of Cash Flows Three Months Ended

(In thousands) March 31, 2022 March 31, 2021

Cash provided by (used in):

Condensed Consolidated Statements of Cash Flows Six Months Ended

(In thousands) June 30, 2022 June 30, 2021

Cash provided by (used for):

Operating activities

5 unchanged sentences

Effect of exchange-rate changes on cash (6,204) (2,188)

Net decrease in cash and cash equivalents (34,322) (51,179)

Net cash used in operating activities increased $98 million from the prior year period, primarily due to lower net earnings, higher inventory receipts, the timing of advanced cash receipts, and a legal settlement payment made to WEC during the current period.

Net cash used in investing activities decreased $2 million from the prior year period, primarily due to higher current period proceeds from disposal of long-lived assets.

Net cash provided by financing activities increased $113 million from the prior year period, primarily due to higher current period net borrowings of $120 million under our revolving credit facility.

Net increase (decrease) in cash and cash equivalents 410 (740)

Net cash provided by operating activities decreased $142 million from the prior year period, primarily due to the timing of advanced cash receipts, higher inventory receipts, and a legal settlement payment made to WEC during the current period.

Net cash used for investing activities decreased $2 million from the prior year period, primarily due to higher current period proceeds from disposal of long-lived assets.

Net cash provided by financing activities increased $145 million from the prior year period, primarily due to higher current period net borrowings under our Credit Agreement.

Refer to the "Financing Activities" section below for further details.

Financing Activities

The Corporation’s debt outstanding had an average interest rate of 3.2% and 3.5% for the three months ended March 31, 2022 and 2021, respectively.

The Corporation’s average debt outstanding was $1,112 million and $1,057 million for the three months ended March 31, 2022 and 2021, respectively.

Credit Agreement

As of March 31, 2022, the Corporation had $214 million of outstanding borrowings under the 2012 Senior Unsecured Revolving Credit Agreement (the “Credit Agreement” or “credit facility”) and approximately $19 million in letters of credit supported by the credit facility.

The unused credit available under the Credit Agreement as of March 31, 2022 was $267 million which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the three months ended March 31, 2022, the Corporation used $19 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program.

During the three months ended March 31, 2021, the Corporation used $12 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program.

Cash Utilization

Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, and increased dividends to determine the most beneficial use of available capital resources.

We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets are sufficient to meet both the short-term and long-term capital needs of the organization.

The Corporation’s debt outstanding had an average interest rate of 3.2% for both the three and six months ended June 30, 2022, and 3.5% for both the three and six months ended June 30, 2021, respectively.

The Corporation’s average debt outstanding was $1.2 billion for both the three and six months ended June 30, 2022, and $1.1 billion for both the three and six months ended June 30, 2021, respectively.

Revolving Credit Agreement

In May 2022, the Corporation terminated its existing credit agreement, which was set to expire in October 2023, and entered into a new Credit Agreement with a syndicate of financial institutions.

The Credit Agreement, which is set to expire in May

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

2027, increases the size of the Corporation’s revolving credit facility to $750 million, and expands the accordion feature to $250 million.

As of June 30, 2022, the Corporation had $253 million of outstanding borrowings under the Credit Agreement, and $17 million in letters of credit supported by the Credit Agreement.

The unused credit available under the Credit Agreement as of June 30, 2022 was $480 million, which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the six months ended June 30, 2022, the Corporation used $32 million of cash to repurchase approximately 0.2 million outstanding shares under its share repurchase program.

During the six months ended June 30, 2021, the Corporation used $24 million of cash to repurchase approximately 0.2 million outstanding shares under its share repurchase program.

Cash Utilization

Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, and increased dividends to determine the most beneficial use of available capital resources.

We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets are sufficient to meet both the short-term and long-term capital needs of the organization.

The Corporation made dividend payments of $14 million and $7 million during the six months ended June 30, 2022 and June 30, 2021, respectively, with the increase primarily due to timing of the quarterly dividend payment during the current period.

Additionally, beginning in the second quarter, the Corporation increased its quarterly dividend 6% to $0.19 per share.

Debt Compliance

1 unchanged sentence

The debt to capitalization limit is a measure of our indebtedness (as defined per the notes purchase agreement and credit facility) to capitalization, where capitalization equals debt plus equity, and is the same for and applies to all of our debt agreements and credit facility.

As of March 31, 2022, we had the ability to borrow additional debt of $1.5 billion without violating our debt to capitalization covenant.

As of June 30, 2022, we had the ability to borrow additional debt of $1.5 billion without violating our debt to capitalization covenant.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

10 unchanged sentences

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk during the three months ended March 31, 2022.

There have been no material changes in our market risk during the six months ended June 30, 2022.

Information regarding market risk and market risk management policies is more fully described in "Item 7A.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements