What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 238 added, 225 removed, 642 unchanged (42% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

11 unchanged sentences

Loss on divestiture — — 4,651 —

Impairment of assets held for sale — 8,656 — 8,656

Operating income 107,583 97,669 266,198 277,318

15 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

7 unchanged sentences

Comprehensive income $ 27,526 $ 58,424 $ 101,676 $ 192,626

(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.

(1) The tax expense included in foreign currency translation adjustments for the three months ended September 30, 2022 was immaterial.

The tax expense included in foreign currency translation adjustments for the nine months ended September 30, 2022 was $ 1.7 million.

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

(2) The tax expense included in pension and postretirement adjustments for the three and nine months ended September 30, 2022 was $ 1.2 million and $ 3.1 million, respectively.

The tax expense included in pension and postretirement adjustments for the three and nine months ended September 30, 2021 was $ 2.0 million and $ 5.1 million, respectively.

See notes to condensed consolidated financial statements

2 unchanged sentences

(In thousands, except per share data)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets:

18 unchanged sentences

Liabilities held for sale — 12,655

Due to seller 247,215 —

Other current liabilities 95,002 102,714

9 unchanged sentences

Stockholders’ equity

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

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

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

outstanding shares were 38,334,223 as of September 30, 2022 and 38,469,778 as of December 31, 2021

49,187 49,187

2 unchanged sentences

Accumulated other comprehensive loss ( 274,114 ) ( 190,465 )

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

Common treasury stock, at cost ( 10,853,155 shares as of September 30, 2022 and 10,717,600 shares as of December 31, 2021)

( 1,094,699 ) ( 1,068,163 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(In thousands) 2022 2021

1 unchanged sentence

Net earnings $ 185,325 $ 190,580

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

Adjustments to reconcile net earnings to net cash provided by operating activities

Depreciation and amortization 83,520 86,240

Loss on divestiture 4,651 —

Impairment of assets held for sale — 8,656

Gain on sale/disposal of long-lived assets ( 4,241 ) ( 604 )

1 unchanged sentence

Share-based compensation 12,027 10,861

Change in operating assets and liabilities, net of businesses acquired:

Change in operating assets and liabilities, net of business acquired:

Receivables, net ( 70,548 ) ( 81,498 )

5 unchanged sentences

Other current and long-term assets and liabilities ( 37,955 ) ( 4,768 )

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

Net cash provided by operating activities 2,387 155,761

Cash flows from investing activities:

Proceeds from sale/disposal of long-lived assets 9,110 3,389

Purchases of investments ( 10,000 ) —

Additions to property, plant, and equipment ( 28,789 ) ( 27,858 )

Acquisition of business, net of cash acquired ( 247,215 ) —

Additional consideration paid on prior year acquisitions ( 5,062 ) ( 5,340 )

16 unchanged sentences

(In thousands)

For the six months ended June 30, 2022

For the nine months ended September 30, 2022

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

9 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

September 30, 2022 $ 49,187 $ 131,230 $ 3,072,639 $ ( 274,114 ) $ ( 1,094,699 )

For the three months ended September 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 )

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

Net earnings — — 73,768 — —

1 unchanged sentence

Dividends declared — — ( 7,293 ) — —

Employee stock purchase plan — 459 — — 4,254

Share-based compensation — 4,455 — — ( 8 )

1 unchanged sentence

— — — — ( 12,789 )

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

September 30, 2022 $ 49,187 $ 131,230 $ 3,072,639 $ ( 274,114 ) $ ( 1,094,699 )

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

1 unchanged sentence

(In thousands)

For the six months ended June 30, 2021

For the nine months ended September 30, 2021

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

9 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

September 30, 2021 $ 49,187 $ 124,532 $ 2,839,294 $ ( 308,810 ) $ ( 804,143 )

For the three months ended September 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 )

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

Net earnings — — 69,703 — —

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

Other comprehensive loss, net of tax — — — ( 11,279 ) —

Dividends declared — — ( 7,293 ) — —

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

Employee stock purchase plan — 466 — — 4,320

Share-based compensation — 4,120 — — 16

1 unchanged sentence

— — — — ( 54,697 )

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

September 30, 2021 $ 49,187 $ 124,532 $ 2,839,294 $ ( 308,810 ) $ ( 804,143 )

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.

(1) For the three and nine months ended September 30, 2022, the Corporation repurchased approximately 0.1 million and 0.3 million shares of its common stock, respectively.

For the three and nine months ended September 30, 2021, the Corporation repurchased approximately 0.4 million and 0.6 million shares of its common stock, respectively.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

14 unchanged sentences

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

During the three and nine months ended September 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.

10 unchanged sentences

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 and six months ended June 30, 2022 and 2021:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

3 unchanged sentences

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

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 .

Total backlog was approximately $ 2.6 billion as of September 30, 2022, of which the Corporation expects to recognize approximately 90 % 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 Six Months Ended

June 30, June 30,

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

September 30, September 30,

(In thousands) 2022 2021 2022 2021

15 unchanged sentences

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

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.

Revenue recognized during the three and nine months ended September 30, 2022 included in the contract liabilities balance as of January 1, 2022 was approximately $ 54 million and $ 189 million, respectively.

Revenue recognized during the three and nine months ended September 30, 2021 included in the contract liabilities balance as of January 1, 2021 was approximately $ 46 million and $ 188 million, respectively.

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

11 unchanged sentences

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.

During the nine months ended September 30, 2022, the Corporation acquired one business for an aggregate purchase price of $ 247 million, which is described in more detail below.

The Condensed Consolidated Statement of Earnings for the nine months ended September 30, 2022 includes $ 14 million of total net sales and $ 6 million of net losses from the Corporation's 2022 acquisition.

During the nine months ended September 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 nine months ended September 30, 2022.

(In thousands) 2022

9 unchanged sentences

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.

Safran Aerosystems Arresting Company ("arresting systems acquisition")

On June 30, 2022 , the Corporation completed its arresting systems acquisition 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 acquired business is a designer and manufacturer of mission-critical, fixed-wing aircraft emergency arresting system, and operates within the Naval & Power segment .

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

2 unchanged sentences

The Corporation recorded a loss of $ 5 million upon sale closing during the first quarter of 2022.

Receivables primarily include amounts billed to customers, unbilled charges on long-term contracts consisting of amounts recognized as sales but not billed, and other receivables.

Substantially all amounts of unbilled receivables are expected to be

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Receivables primarily include amounts billed to customers, unbilled charges on long-term contracts consisting of amounts recognized as sales but not billed, and other receivables.

Substantially all amounts of unbilled receivables are expected to be billed and collected within one year.

billed and collected within one year.

An immaterial amount of unbilled receivables are subject to retainage provisions.

1 unchanged sentence

The composition of receivables is as follows:

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

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

Billed receivables:

12 unchanged sentences

The composition of inventories is as follows:

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

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

Raw materials $ 249,272 $ 191,066

7 unchanged sentences

Inventories, net $ 503,064 $ 411,567

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

(1) This caption includes capitalized development costs of $ 18.4 million as of September 30, 2022 related to certain aerospace and defense programs.

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

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:

As of September 30, 2022, capitalized development costs of $ 11.7 million are not currently supported by existing firm orders.

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

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

2 unchanged sentences

Foreign currency translation adjustment ( 10,984 ) ( 20,047 ) ( 9,541 ) ( 40,572 )

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

September 30, 2022 $ 305,163 $ 694,934 $ 512,134 $ 1,512,231

OTHER INTANGIBLE ASSETS, NET

2 unchanged sentences

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

June 30, 2022 December 31, 2021

September 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.

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.

During the nine months ended September 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.

Total intangible amortization expense for the nine months ended September 30, 2022 was $ 46 million, as compared to $ 45 million in the comparable prior year period.

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

11 unchanged sentences

Effects on Condensed Consolidated Balance Sheets

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

As of September 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

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Undesignated hedges

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.

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 June 30, 2022.

The losses for the three and nine months ended September 30, 2022 were $ 6 million and $ 12 million, respectively.

The losses for both the three and nine months ended September 30, 2021 were $ 2 million, respectively.

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.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

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

21 unchanged sentences

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.

The Corporation plans to use the Credit Agreement for general corporate purposes, which may include the funding of possible future acquisitions or supporting internal growth initiatives.

On October 27, 2022, the Corporation announced that it formally closed its private placement debt offering of $ 300 million for senior notes, consisting of $ 200 million 4.49 % notes due 2032 and $ 100 million 4.64 % notes due 2034.

PENSION PLANS

1 unchanged sentence

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:

The components of net periodic pension cost for the three and nine months ended September 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,

Three Months Ended Nine Months Ended

September 30, September 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 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.

During the nine months ended September 30, 2022, as well as during the three and nine months ended September 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.

3 unchanged sentences

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.

During the three and nine months ended September 30, 2022, the expense relating to the plan was $ 5.5 million and $ 15.8 million, respectively.

During the three and nine months ended September 30, 2021, the expense relating to the plan was $ 4.6 million and $ 14.2 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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2022 2021 2022 2021

2 unchanged sentences

Diluted weighted-average shares outstanding 38,647 40,950 38,655 41,040

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.

For the three and nine months ended September 30, 2022, approximately 49,000 and 37,000 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 no anti-dilutive equity-based awards for the three months ended September 30, 2021.

For the nine months ended September 30, 2021, approximately 41,000 shares 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.

SEGMENT INFORMATION

4 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2022 2021 2022 2021

13 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2022 2021 2022 2021

3 unchanged sentences

Earnings before income taxes $ 97,332 $ 91,341 $ 244,181 $ 256,134

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

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

Identifiable assets

22 unchanged sentences

Net current period other comprehensive income (loss) ( 97,259 ) 13,610 ( 83,649 )

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

September 30, 2022 $ ( 196,825 ) $ ( 77,289 ) $ ( 274,114 )

(1) All amounts are after tax.

23 unchanged sentences

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.

As of September 30, 2022 and December 31, 2021, there were $ 14.7 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.

3 unchanged sentences

and China contracts.

Under the terms of the settlement agreement, the Corporation paid WEC $ 15 million in March 2022 and is required to pay WEC a final amount of $ 10 million in the first quarter of 2023 in exchange for the Corporation’s full release from all open claims under such contracts, whether known or unknown, as well as negotiating and executing a right of first refusal for all future AP1000 projects.

Under the settlement, the parties also negotiated and executed a right of first refusal for all future AP1000 projects.

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

30 unchanged sentences

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.

Business Environment

During the current period, we have experienced supply chain challenges, including increased lead times, as well as heightened levels of inflation in material and transportation costs due to availability constraints and high demand.

Certain parts of our business have been adversely affected by disruptions that have hindered our ability to timely obtain raw materials and components from our suppliers in the required quantities, or on favorable terms.

In certain instances, these disruptions have delayed our ability to convert backlog into net sales in line with historical performance.

We expect inflationary and supply chain constraint trends to continue throughout at least the remainder of 2022.

While the long-term impact of these factors remains uncertain, we will continue to closely monitor the extent to which these factors will impact our business, financial condition, and results of operations.

Inflation Reduction Act of 2022 (IRA)

On August 16, 2022, the IRA was enacted into law.

The statute includes a 15% corporate alternative minimum tax on adjusted financial statement income which is effective for the fiscal year ended February 2, 2024.

The new law also imposes a 1% excise tax on share repurchases, effective for repurchases made after December 31, 2022.

We are currently assessing the potential impact of this law as it pertains to excise taxes, which will be dependent on the extent of share repurchases made in future periods.

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 and six month periods ended June 30, 2022.

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 financial information as of September 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:

5 unchanged sentences

The sales for the relevant markets will be discussed throughout the MD&A.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Analytical Definitions

3 unchanged sentences

Additionally, the results of operations of divested businesses are removed from the comparable prior year period for purposes of calculating “organic” and “incremental” results.

The definition of “organic” excludes the loss from sale of our industrial valves business in Germany as well as the effects of foreign currency translation.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

The definition of “organic” excludes the impairment of assets held for sale and corresponding loss from sale of our industrial valves business in Germany as well as the effects of foreign currency translation.

Condensed Consolidated Statements of Earnings

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

10 unchanged sentences

Interest expense 13,997 9,955 (41 %) 33,315 30,094 (11 %)

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

Other income, net 3,746 3,627 3 % 11,298 8,910 27 %

Earnings before income taxes 97,332 91,341 7 % 244,181 256,134 (5 %)

2 unchanged sentences

New orders $ 818,067 $ 629,046 30 % $ 2,228,495 $ 1,900,903 17 %

NM - Not meaningful

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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2022 vs.

2 unchanged sentences

Acquisitions 2 % (7 %) 1 % (3 %)

Loss on divestiture — % — % — % (4 %)

Loss on divestiture/impairment of assets held for sale — % 9 % — % 2 %

Foreign currency (1 %) — % (1 %) — %

Total 2 % 10 % (2 %) (4 %)

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

Sales in the third quarter increased $10 million, or 2%, to $631 million, compared with the prior year period.

On a segment basis, sales from the Aerospace & Industrial and Naval & Power segments increased $17 million and $13 million, respectively, with sales from the Defense Electronics segment decreasing $20 million.

Sales during the nine months ended September 30, 2022 decreased $40 million, or 2%, to $1,799 million, compared with the prior year period.

On a segment basis, sales from the Defense Electronics and Naval & Power segments decreased $71 million and $5 million, respectively, with sales from the Aerospace & Industrial segment increasing $36 million.

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

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

Operating income in the third quarter increased $10 million, or 10%, to $108 million, and operating margin increased 140 basis points to 17.1% compared with the same period in 2021.

In the Aerospace & Industrial segment, operating income and operating margin benefited from favorable absorption on higher sales in the general industrial and commercial aerospace markets, as well as our ongoing operational excellence initiatives.

Operating income and operating margin in the Naval & Power segment increased primarily due to a prior year impairment loss on assets held for sale in our industrial valves business in Germany, favorable absorption on higher organic sales, as well as the benefits of our ongoing operational excellence initiatives.

These increases were partially offset by a decrease in operating income in the Defense Electronics segment, primarily due to unfavorable overhead absorption on lower sales.

Operating income during the nine months ended September 30, 2022 decreased $11 million, or 4%, to $266 million and operating margin decreased 30 basis points to 14.8%, 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.

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 in the general industrial and commercial aerospace markets, as well as the benefits of our ongoing operational excellence initiatives.

In the Naval & Power segment, operating income was essentially flat while operating margin improved slightly, as favorable absorption on higher organic sales as well as lower current period losses associated with our industrial valves business in Germany were partially offset by first year purchase accounting costs from our arresting systems acquisition.

Non-segment operating expense in the third quarter of $10 million was essentially flat against the comparable prior year period.

Non-segment operating expense during the nine months ended September 30, 2022 increased $6 million, or 20%, to $33 million, primarily due to costs associated with shareholder activism in the current period.

Interest expense in the third quarter and nine months ended September 30, 2022 increased $4 million, or 41% , to $14 million, and $3 million, or 11% , to $33 million, primarily due to higher current period borrowings under our Credit Agreement.

Other income, net in the third quarter of $4 million was essentially flat against the comparable prior year period.

O ther income, net during the nine months ended September 30, 2022 increased $2 million, or 27%, to $11 million, primarily due to lower overall pension costs against the comparable prior year period.

The effective tax rate of 24.2% in the third quarter increased compared to an effective tax rate of 23.7% in the prior year period, primarily due to provisional tax expense in the current period to record a valuation allowance on unused foreign tax credits.

The effective tax rate of 24.1% for the nine months ended September 30, 2022 decreased as compared to an effective

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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 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.

tax rate of 25.6%, primarily due to a favorable state rate change on deferred tax liabilities in the current year versus an unfavorable foreign rate change on deferred tax liabilities in the prior year.

Comprehensive income in the third quarter was $28 million, compared to comprehensive income of $58 million in the prior year period.

The change was primarily due to the following:

• 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.

• 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.

• Foreign currency translation adjustments in the third quarter resulted in a $50 million comprehensive loss, compared to a $16 million comprehensive loss in the prior year period.

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

• Net earnings increas ed $4 million , primarily due to higher operating income.

Comprehensive income during the nine months ended September 30, 2022 was $102 million, compared to comprehensive income of $193 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.

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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.

• Foreign currency translation adjustments for the nine months ended September 30, 2022 resulted in a $97 million comprehensive loss, compared to a $13 million comprehensive loss in the prior period.

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

• Net earnings decreas ed $5 million, pr imarily due to lower operating income and higher interest expense.

New orders in the third quarter and nine months ended September 30, 2022 increased $189 million and $328 million, respectively, from the comparable prior year periods, primarily due to the timing of naval defense orders and the incremental impact from our arresting systems acquisition in the Naval & Power segment, as well as an increase in new orders for ground defense and aerospace defense equipment in the Defense Electronics segment.

New orders in both periods also benefited from an increase in new orders for commercial aerospace equipment in the Aerospace & Industrial segment.

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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

4 unchanged sentences

Components of sales and operating income increase (decrease):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2022 vs.

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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 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

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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.

Sales in the third quarter increased $17 million, or 9%, to $213 million from the prior year period, primarily due to higher sales in the general industrial and commercial aerospace markets.

Sales in the general industrial market increased $11 million primarily due to higher demand for industrial vehicle products.

In the commercial aerospace market, sales increased $5 million due to higher demand for sensors products as well as surface treatment services on various narrowbody and widebody platforms.

Sales during the nine months ended September 30, 2022 increased $36 million, or 6%, to $613 million from the prior year period, primarily due to higher sales in the general industrial and commercial aerospace markets.

Sales in the general industrial market increased $20 million primarily due to higher demand for industrial vehicle products.

In the commercial aerospace market, sales increased $15 million primarily due to higher demand for actuation and sensors products as well as surface treatment services.

Operating income in the third quarter increased $8 million, or 27%, to $39 million from the prior year period, and operating margin increased 260 basis points to 18.3%.

Operating income during the nine months ended September 30, 2022 increased $15 million, o r 18% , to $96 million from the prior year period, and operating margin increased 150 basis points to 15.7%.

Increases in operating income and operating margin for each of the respective periods were primarily due to favorable absorption on higher sales in the general industrial and commercial aerospace markets, as well as the benefits of our ongoing operational excellence initiatives.

New orders in the third quarter and nine months ended September 30, 2022 increased $11 million and $33 million, respectively, from the comparable prior year periods, as an increase in new orders for commercial aerospace equipment 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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

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Components of sales and operating income increase (decrease):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2022 vs.

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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

Sales in the third quarter decreased $20 million, or 11%, to $161 million from the prior year period.

In the aerospace defense market, sales decreased $14 million primarily due to ongoing supply chain headwinds, which contributed to lower sales of

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

embedded computing and flight test equipment.

In the ground defense market, we experienced lower sales of tactical communications equipment, primarily due to the aforementioned supply chain headwinds.

Sales during the nine months ended September 30, 2022 decreased $71 million, or 14%, to $454 million from the prior year period.

In the aerospace defense market, sales decreased $30 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 equipment on various programs.

The ground defense market was also negatively impacted by ongoing supply chain headwinds, which resulted in lower sales of $27 million, primarily on embedded computing and tactical communications equipment on various programs.

In the commercial aerospace market, sales decreased $12 million primarily due to lower sales of electronic systems and flight test equipment on various domestic and international platforms.

Operating income in the third quarter decreased $4 million, or 10%, to $37 million compared to the prior year period, and operating margin increased 20 basis points from the prior year period to 22.7%.

Operating income was negatively impacted by unfavorable overhead absorption on lower sales, while operating margin benefited from our ongoing operational excellence initiatives.

Operating income during the nine months ended September 30, 2022 decreased $22 million, or 21%, to $84 million, and operating margin decreased 170 basis points from the prior year period to 18.6%, primarily due to unfavorable overhead absorption on lower sa les.

New orders in the third quarter and nine months ended September 30, 2022 increased $76 million and $72 million, respectively, against the comparable prior year periods, primarily due to an increase in new orders for ground defense and aerospace defense equipment.

Naval & Power

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

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Components of sales and operating income increase (decrease):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2022 vs.

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Acquisitions 6 % (20 %) 1 % (6 %)

Loss on divestiture — % — % — % (7 %)

Loss on divestiture/impairment of assets held for sale — % 24 % — % 3 %

Foreign currency — % 1 % — % — %

Total 6 % 17 % (1 %) 2 %

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

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.

Sales in the Naval & Power segment are primarily to the naval defense and power & process markets, and to a lesser extent, the aerospace defense market.

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

Sales in the third quarter increased $13 million, or 6%, to $256 million from the prior year period, primarily due to the impact of our arresting systems acquisition in the aerospace defense market, which contributed incremental sales of $14 million.

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

Sales during the nine months ended September 30, 2022 decreased $5 million, or 1%, to $733 million from the prior year period.

Sales decreased $13 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.

These decreases were partially offset by the impact of our arresting systems acquisition in the aerospace defense market, which contributed incremental sales of $14 million.

Operating income in the third quarter increased $6 million, or 17%, to $42 million, and operating margin increased 160 basis points from the prior year period to 16.2%, primarily due to a prior year impairment loss on assets held for sale related to our industrial valves business in Germany, favorable absorption on higher organic sales, as well as the benefits of our ongoing operational excellence initiatives.

These increases were partially offset by unfavorable mix in the power & process market, as well as first year purchase accounting costs from our arresting systems acquisition.

Operating income during the nine months ended September 30, 2022 increased $2 million, or 2% , to $119 million, and operating margin increased 40 basis points from the prior year period to 16.2%, primarily due to favorable absorption on higher organic sales, as well as lower current period losses associated with our industrial valves business in Germany, which was sold in the current period.

These increases were partially offset by first year purchase accounting costs from our arresting systems acquisition.

New orders in the third quarter and nine months ended September 30, 2022 increased $102 million and $223 million, respectively, from the comparable prior year periods, primarily due to the timing of naval defense orders, the incremental impact from our arresting systems acquisition, as well as an increase in new orders for nuclear aftermarket and process products.

SUPPLEMENTARY INFORMATION

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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,

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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

September 30, September 30,

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

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Aerospace & Defense markets

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 third quarter decreased $1 million, or less than 1%, to $414 million against the comparable prior year period.

In the aerospace defense market, the incremental impact from our arresting systems acquisition was more than offset by lower sales of embedded computing and flight test equipment, primarily due to ongoing supply chain headwinds.

Sales in the commercial aerospace market benefited from higher demand for sensors products as well as surface treatment services on various narrowbody and widebody platforms.

Sales in the ground defense and naval defense markets were essentially flat.

Sales during the nine months ended September 30, 2022 decreased $59 million, or 5%, to $1,155 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 .

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 and CVN-81 aircraft carrier programs.

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MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Commercial markets

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.

Sales in the third quarter increased $11 million, or 5%, to $216 million primarily due to higher demand for our industrial vehicle products in the general industrial market.

Sales during the nine months ended September 30, 2022 increased $20 million, or 3%, to $644 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.

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

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 Six Months Ended

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

Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, increased dividends, capital expenditures, 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,

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MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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 Nine Months Ended

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

Cash provided by (used for):

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Net increase (decrease) in cash and cash equivalents (57,452) 36,168

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 operating activities decreased $153 million from the prior year period, primarily due to lower defense revenues, higher inventory purchases, lower advanced cash receipts, and a legal settlement payment made to WEC during the current period.

Net cash used for investing activities increased $252 million from the prior year period, primarily due to our arresting systems acquisition for $247 million.

Net cash provided by financing activities increased $329 million from the prior year period, primarily due to higher current period net borrowings under our Credit Agreement.

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Financing Activities

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.

The Corporation’s debt outstanding had an average interest rate of 3.6% and 3.3% for the three and nine months ended September 30, 2022, respectively and 3.6% for both the three and nine months ended September 30, 2021, respectively.

The Corporation’s average debt outstanding was $1.4 billion and $1.2 billion for the three and nine months ended September 30, 2022, and $1.1 billion for both the three and nine months ended September 30, 2021, respectively.

On October 27, 2022, the Corporation announced that it formally closed its private placement debt offering of $300 million for senior notes, consisting of $200 million 4.49% notes due 2032 and $100 million 4.64% notes due 2034 .

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

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.

As of September 30, 2022, the Corporation had $388 million of outstanding borrowings under the Credit Agreement, and $15 million in letters of credit supported by the Credit Agreement.

The unused credit available under the Credit Agreement as of September 30, 2022 was $347 million, which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the nine months ended September 30, 2022, the Corporation used $44 million of cash to repurchase approximately 0.3 million outstanding shares under its share repurchase program.

During the nine months ended September 30, 2021, the Corporation used $79 million of cash to repurchase approximately 0.6 million outstanding shares under its share repurchase program.

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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.

Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, increased dividends, capital expenditures, and repaying 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.

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.

The Corporation made dividend payments of $14 million during both the nine months ended September 30, 2022 and September 30, 2021, respectively.

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

In the third quarter, the Corporation declared dividends of $7 million, which was paid to shareholders of record in October 2022.

Debt Compliance

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

As of September 30, 2022, we had the ability to borrow additional debt of $1.4 billion without violating our debt to capitalization covenant.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

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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