What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 278 added, 168 removed, 537 unchanged (45% 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) 2023 2022 2023 2022

28 unchanged sentences

(In thousands)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Net earnings $ 80,999 $ 70,872 $ 137,845 $ 111,557

6 unchanged sentences

Comprehensive income $ 100,066 $ 34,524 $ 171,386 $ 74,150

(1) The tax benefit included in foreign currency translation adjustments for the three months ended March 31, 2023 was $ 2.4 million.

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

(2) The tax benefit included in pension and postretirement adjustments for the three months ended March 31, 2023 was immaterial.

The tax expense included in pension and postretirement adjustments for the three months ended March 31, 2022 was $ 1.4 million.

(1) The tax benefit (expense) included in foreign currency translation adjustments and pension and postretirement adjustments for the three and six months ended June 30, 2023 and June 30, 2022 was immaterial.

See notes to condensed consolidated financial statements

2 unchanged sentences

(In thousands, except per share data)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Current assets:

27 unchanged sentences

Stockholders’ equity

Common stock, $ 1 par value, 100,000,000 shares authorized as of March 31, 2023 and December 31, 2022;

49,187,378 shares issued as of March 31, 2023 and December 31, 2022;

outstanding shares were 38,364,387 as of March 31, 2023 and 38,259,722 as of December 31, 2022

Common stock, $ 1 par value, 100,000,000 shares authorized as of June 30, 2023 and December 31, 2022;

49,187,378 shares issued as of June 30, 2023 and December 31, 2022;

outstanding shares were 38,292,332 as of June 30, 2023 and 38,259,722 as of December 31, 2022

49,187 49,187

2 unchanged sentences

Accumulated other comprehensive loss ( 225,375 ) ( 258,916 )

Common treasury stock, at cost ( 10,822,991 shares as of March 31, 2023 and 10,927,656 shares as of December 31, 2022)

Common treasury stock, at cost ( 10,895,046 shares as of June 30, 2023 and 10,927,656 shares as of December 31, 2022)

( 1,113,675 ) ( 1,107,101 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In thousands) 2023 2022

1 unchanged sentence

Net earnings $ 137,845 $ 111,557

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 57,975 53,645

Loss on divestiture — 4,651

(Gain) loss on sale/disposal of long-lived assets 93 ( 3,070 )

Loss/(gain) on sale/disposal of long-lived assets 16 ( 3,004 )

Deferred income taxes ( 6,553 ) ( 4,516 )

8 unchanged sentences

Other current and long-term assets and liabilities ( 40,867 ) ( 50,605 )

Net cash used for operating activities ( 91,599 ) ( 124,315 )

Net cash provided by (used for) operating activities 19,353 ( 93,271 )

Cash flows from investing activities:

4 unchanged sentences

Cash flows from financing activities:

Borrowings under revolving credit facility 465,025 241,198

Payment of revolving credit facility ( 286,825 ) ( 121,198 )

Borrowings under revolving credit facilities 481,099 653,547

Payments of revolving credit facilities ( 356,099 ) ( 494,347 )

Principal payments on debt ( 202,500 ) —

1 unchanged sentence

Proceeds from share-based compensation 5,225 5,284

Dividends paid ( 7,290 ) ( 14,220 )

Other ( 537 ) ( 499 )

Net cash provided by (used for) financing activities ( 31,729 ) 106,179

Net cash (used for)/provided by financing activities ( 104,467 ) 118,120

Effect of exchange-rate changes on cash 9,068 ( 6,204 )

Net decrease in cash and cash equivalents ( 126,315 ) ( 34,322 )

Net increase (decrease) in cash and cash equivalents ( 98,237 ) 410

Cash and cash equivalents at beginning of period 256,974 171,004

4 unchanged sentences

(In thousands)

For the three months ended March 31, 2022

For the six months ended June 30, 2023

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

1 unchanged sentence

Net earnings — — 137,845 — —

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

Other comprehensive income, net of tax — — — 33,541 —

Dividends declared — — ( 14,960 ) — —

5 unchanged sentences

Other — ( 261 ) — — 261

June 30, 2023 $ 49,187 $ 130,846 $ 3,297,281 $ ( 225,375 ) $ ( 1,113,675 )

For the three months ended June 30, 2023

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

March 31, 2023 $ 49,187 $ 126,909 $ 3,223,944 $ ( 244,442 ) $ ( 1,101,439 )

For the three months ended March 31, 2023

Net earnings — — 80,999 — —

Other comprehensive income, net of tax — — — 19,067 —

Dividends declared — — ( 7,662 ) — —

Restricted stock — ( 73 ) — — 73

Share-based compensation — 4,010 — — ( 330 )

Repurchase of common stock (1)

— — — — ( 11,979 )

June 30, 2023 $ 49,187 $ 130,846 $ 3,297,281 $ ( 225,375 ) $ ( 1,113,675 )

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

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 — — — 14,474 —

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 )

(1) For both the three months ended March 31, 2023 and 2022, the Corporation repurchased approximately 0.1 million shares of its common stock.

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 )

See notes to condensed consolidated financial statements

(1) For the three and six months ended June 30, 2023, the Corporation repurchased approximately 0.1 million and 0.1 million shares of its common stock, respectively.

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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

1 unchanged sentence

BASIS OF PRESENTATION

Curtiss-Wright Corporation and its subsidiaries (the "Corporation" or the "Company") is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense (A&D) markets, as well as critical technologies in demanding commercial power, process, and industrial markets.

Curtiss-Wright Corporation along with its subsidiaries (we, the Corporation, or the Company) is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense (A&D) markets, as well as critical technologies in demanding commercial power, process, and industrial markets.

The unaudited condensed consolidated financial statements include the accounts of Curtiss-Wright and its majority-owned subsidiaries.

10 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 months ended March 31, 2023 and 2022, there were no significant changes in estimated contract costs.

During the three and six months ended June 30, 2023 and 2022, 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.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s 2022 Annual Report on Form 10-K filed with the SEC.

The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

8 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 months ended March 31, 2023 and 2022:

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, 2023 and 2022:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Over-time 46 % 53 % 47 % 53 %

2 unchanged sentences

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

Total backlog was approximately $ 2.7 billion as of March 31, 2023, of which the Corporation expects to recognize approximatel y 90 % as net sales over the next 36 months .

Total backlog was approximately $ 2.8 billion as of June 30, 2023, 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

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

June 30, June 30,

(In thousands) 2023 2022 2023 2022

4 unchanged sentences

Commercial Aerospace 82,033 68,192 152,523 129,084

Total Aerospace & Defense customers $ 408,581 $ 360,971

Total Aerospace & Defense $ 466,056 $ 379,916 $ 874,638 $ 740,887

Power & Process $ 131,000 $ 125,355 $ 251,338 $ 230,143

General Industrial 107,340 104,086 209,280 197,788

Total Commercial customers $ 222,279 $ 198,490

Total Commercial $ 238,340 $ 229,441 $ 460,618 $ 427,931

Total $ 704,396 $ 609,357 $ 1,335,256 $ 1,168,818

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, 2023 and 2022 included in contract liabilities at the beginning of the respective years was approximately $ 89 million and $ 79 million, respectively.

Revenue recognized during the three and six months ended June 30, 2023 included in the contract liabilities balance as of January 1, 2023 was approximately $ 58 million and $ 147 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.

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

9 unchanged sentences

The composition of receivables is as follows:

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Billed receivables:

Trade and other receivables $ 434,557 $ 412,682

Unbilled receivables:

Unbilled receivables (contract assets):

Recoverable costs and estimated earnings not billed 322,025 316,682

9 unchanged sentences

The composition of inventories is as follows:

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Raw materials $ 252,666 $ 242,116

7 unchanged sentences

Inventories, net $ 545,596 $ 483,113

(1) As of March 31, 2023, this caption includes capitalized development costs of $ 16.3 million related to certain aerospace and defense programs.

(1) This caption includes capitalized development costs of $ 15.5 million as of June 30, 2023 related to certain aerospace and defense programs.

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

As of March 31, 2023, capitalized development costs of $ 10.6 million are not currently supported by existing firm orders.

The changes in the carrying amount of goodwill for the three months ended March 31, 2023 are as follows:

As of June 30, 2023, capitalized development costs of $ 8.3 million are not currently supported by existing firm orders.

The changes in the carrying amount of goodwill for the six months ended June 30, 2023 are as follows:

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

1 unchanged sentence

Foreign currency translation adjustment 3,070 5,473 2,730 11,273

March 31, 2023 $ 323,023 $ 705,010 $ 521,115 $ 1,549,148

June 30, 2023 $ 324,620 $ 708,259 $ 523,029 $ 1,555,908

OTHER INTANGIBLE ASSETS, NET

2 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(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, 2023 was $ 16 million, as compared to $ 14 million in the comparable prior year period.

Total intangible amortization expense for the six months ended June 30, 2023 was $ 33 million, as compared to $ 28 million in the comparable prior year period.

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

2 unchanged sentences

Forward Foreign Exchange and Currency Option Contracts

The Corporation has foreign currency exposure, primarily against the British Pound, Euro, and Canadian dollar.

The Corporation has foreign currency exposure primarily in the United Kingdom, Europe, and Canada.

The Corporation uses financial instruments, such as forward and option contracts, to hedge a portion of existing and anticipated foreign currency denominated transactions.

6 unchanged sentences

Effects on Condensed Consolidated Balance Sheets

As of March 31, 2023 and December 31, 2022, the fair values of the asset and liability derivative instruments were immaterial.

As of June 30, 2023 and December 31, 2022, 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 gain for the three months ended March 31, 2023 was $4 million.

The loss for the three months ended March 31, 2022 was immaterial.

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 gains for the three and six months ended June 30, 2023 were $ 3 million and $ 6 million, respectively.

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

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, 2023.

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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

24 unchanged sentences

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 2022 Annual Report on Form 10-K filed with the SEC.

The components of net periodic pension cost/(benefit) 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 2022 Annual Report on Form 10-K.

The components of net periodic pension cost for the three and six months ended June 30, 2023 and 2022 were as follows:

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2023 2022 2023 2022

5 unchanged sentences

Cost of settlements — — — 1,842

Net periodic pension cost/(benefit) $ ( 2,859 ) $ 3,256

The Corporation did not make any contributions to the Curtiss-Wright Pension Plan during the three months ended March 31, 2023, and does not expect to do so throughout the remainder of the year.

Net periodic pension cost $ ( 2,867 ) $ 1,288 $ ( 5,726 ) $ 4,544

The Corporation did not make any contributions to the Curtiss-Wright Pension Plan during the six months ended June 30, 2023, and does not expect to do so throughout the remainder of the year.

Contributions to the foreign benefit plans are not expected to be material in 2023.

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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the six months ended June 30, 2022, 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 contribution components up to a maximum employer contribution o f 7 % of eligible compensation.

During the three months ended March 31, 2023 and 2022, the expense relating to the plan was $ 6.1 million and $ 5.7 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, 2023, the expense relating to the plan was $ 6.1 million and $ 12.2 million, respectively.

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.

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) 2023 2022 2023 2022

2 unchanged sentences

Diluted weighted-average shares outstanding 38,555 38,654 38,528 38,657

For the three months ended March 31, 2023 and 2022, approximately 24,000 and 26,000 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, 2023, approximately 20,000 and 22,000 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 37,000 and 31,000 anti-dilutive equity-based awards for the three and six months ended June 30, 2022, respectively.

SEGMENT INFORMATION

2 unchanged sentences

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) 2023 2022 2023 2022

11 unchanged sentences

Total consolidated $ 112,775 $ 98,105 $ 191,390 $ 158,615

(1) Includes pension and other postretirement benefit expense, certain environmental costs related to remediation at legacy sites, foreign currency transactional gains and losses, and certain other expenses.

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

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

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2023 2022 2023 2022

3 unchanged sentences

Earnings before income taxes $ 105,737 $ 92,872 $ 179,175 $ 146,849

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Identifiable assets

10 unchanged sentences

( 61,241 ) ( 23,447 ) ( 84,688 )

Amounts reclassified from accumulated other comprehensive loss (1)

Amounts reclassified from accumulated other comprehensive income (1)

— 16,237 16,237

3 unchanged sentences

33,964 ( 485 ) 33,479

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

Amounts reclassified from accumulated other comprehensive income (1)

Net current period other comprehensive income (loss) 33,964 ( 423 ) 33,541

March 31, 2023 $ ( 146,141 ) $ ( 98,301 ) $ ( 244,442 )

June 30, 2023 $ ( 126,843 ) $ ( 98,532 ) $ ( 225,375 )

(1) All amounts are after tax.

Details of amounts reclassified from accumulated other comprehensive income (loss) are below:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) Amount reclassified from AOCI Affected line item in the statement where net earnings is presented

6 unchanged sentences

CONTINGENCIES AND COMMITMENTS

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

From time to time, the Corporation is involved in legal proceedings that are incidental to the operation of its business.

From time to time, the Corporation and its subsidiaries are involved in legal proceedings that are incidental to the operation of our business.

Some of these proceedings allege damages relating to asbestos and environmental exposures, intellectual property matters, copyright infringement, personal injury claims, employment and employee benefit matters, government contract issues, commercial or contractual disputes, and acquisitions or divestitures.

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

5 unchanged sentences

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, 2023 and December 31, 2022, there were $ 19 million and $ 17 million of stand-by letters of credit outstanding, respectively.

As of March 31, 2023 and December 31, 2022, there were $ 14 million and $ 3 million of bank guarantees outstanding, respectively.

As of June 30, 2023 and December 31, 2022, there were $ 21 million and $ 17 million of stand-by letters of credit outstanding, respectively, and $ 14 million and $ 3 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.

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COMPANY ORGANIZATION

Curtiss-Wright Corporation is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense markets, as well as critical technologies in demanding commercial power, process, and industrial markets.

Curtiss-Wright Corporation along with its subsidiaries is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense markets, as well as critical technologies in demanding commercial power, process, and industrial markets.

We report our operations through our Aerospace & Industrial, Defense Electronics, and Naval & Power segments.

2 unchanged sentences

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, 2023.

The financial information as of March 31, 2023 should be read in conjunction with the financial statements for the year ended December 31, 2022 contained in our Form 10-K filed with the SEC.

The financial information as of June 30, 2023 should be read in conjunction with the financial statements for the year ended December 31, 2022 contained in our Form 10-K.

The MD&A is organized into the following sections:

7 unchanged sentences

Throughout management’s discussion and analysis of financial condition and results of operations, the terms “incremental” and “organic” are used to explain changes from period to period.

The term “incremental” is used to highlight the impact acquisitions and divestitures had on the current year results.

The term “incremental” is used to highlight the impact that acquisitions and divestitures had on the current year results.

The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition.

5 unchanged sentences

Condensed Consolidated Statements of Earnings

Three Months Ended

(In thousands) 2023 2022 % change

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2023 2022 % change 2023 2022 % change

Aerospace & Industrial $ 226,260 $ 208,572 8 % $ 428,707 $ 399,684 7 %

15 unchanged sentences

Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Three Months Ended Six Months Ended

June 30, June 30,

2022 2023 vs.

Sales Operating Income Sales Operating Income

Organic 12 % 13 % 11 % 14 %

3 unchanged sentences

Total 16 % 15 % 14 % 21 %

Sales during the three months ended March 31, 2023 increased $71 million, or 13%, to $631 million, compared with the prior year period.

Sales in the second quarter increased $95 million, or 16%, to $704 million, compared with the prior year period.

On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $18 million, $48 million, and $29 million, respectively.

Sales during the six months ended June 30, 2023 increased $166 million, or 14%, to $1,335 million, compared with the prior year period.

On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $29 million, $67 million, and $70 million, respectively.

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, 2023 increased $18 million, or 30%, to $79 million, compared with the prior year period, while operating margin increased 170 basis points to 12.5%, compared with the same period in 2022.

In the Naval & Power segment, increases in operating income and operating margin were primarily due t o the absence of a prior year loss on sale of our industrial valves business in Germany, as well as favorable overhead absorption on higher organic sales.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

2 unchanged sentences

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Operating income and operating margin in the Aerospace & Industrial segment increased primarily due to favorable overhead absorption on higher sales .

In the Defense Electronics segment, operating income was essentially flat while operating margin decreased, as favorable absorption on higher sales was offset by unfavorable mix on defense electronics products.

Non-segment operating expense during the three months ended March 31, 2023 decreased $6 million , or 38%, to $9 million , primarily due to the absence of costs associated with shareholder activism in the prior year period.

Interest expense increased $3 million, or 36%, to $13 million, primarily due to the issuance of $300 million Senior Notes in October 2022 as well as higher interest rates in the current period under our revolving Credit Agreement (the “Credit Agreement” or “credit facility”).

Other income, net during the three months ended March 31, 2023 increased $5 million , or 159%, to $8 million, primarily due to the absence of pension settlement charges recognized in the prior year period related to the retirement of a former executive.

The effective tax rate for the three months ended March 31, 2023 of 22.6% decreased as compared to an effective tax rate of 24.6% 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, 2023 was $71 million, compared to comprehensive income of $40 million in the prior year period.

Operating income in the second quarter increased $15 million, or 15%, to $113 million, while operating margin decreased 10 basis points to 16.0% compared with the same period in 2022.

Operating income and operating margin in the Defense Electronics segment benefited from favorable overhead absorption on higher sales.

In the Aerospace & Industrial segment, favorable overhead absorption on higher sales was partially offset by unfavorable mix on actuation and sensors products.

In the Naval & Power segment, both operating income and operating margin decreased, as favorable overhead absorption on higher sales was more than offset by unfavorable product mix as well as first year purchase accounting costs from our arresting systems acquisition.

Operating income during the six months ended June 30, 2023 increased $33 million, or 21%, to $191 million, and operating margin increased 70 basis points to 14.3%, compared with the same period in 2022.

In the Defense Electronics segment, increases in operating income and operating margin were primarily due to favorable overhead absorption on higher sales, partially offset by unfavorable mix on defense electronics products.

Operating income and operating margin in the Aerospace & Industrial segment increased primarily due to favorable overhead absorption on higher sa les, partially offset by unfavorable mix on actuation and sensors products.

In the Naval & Power segment, operating income benefited from the absence of a prior year loss on sale of our industrial valves business in Germany, as well as favorable overhead absorption on higher organic sales.

These increases were partially offset by unfavorable product mix as well as first year purchase accounting costs from our arresting systems acquisition.

Non-segment operating expense in the second quarter increased $4 million, or 46%, to $13 million, primarily due to higher foreign currency losses in the current period.

Non-segment operating expense during the six months ended June 30, 2023 decreased $2 million, or 7%, to $22 million, as the absence of costs associated with shareholder activism recorded in the prior year period was partially offset by higher foreign currency losses in the current period.

Interest expense in the second quarter and six months ended June 30, 2023 increased $5 million, or 53%, to $15 million and $9 million, or 45%, to $28 million, respectively, primarily due to the issuance of $300 million Senior Notes in October 2022 as well as higher interest rates in the current period under our revolving Credit Agreement (the “Credit Agreement” or “credit facility”).

Other income, net in the second quarter increased $3 million, or 75%, to $8 million.

O ther income, net during the six months ended June 30, 2023 increased $8 million, or 108%, to $16 million.

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

The effective tax rate of 23.4% in the second quarter decreased compared to an effective tax rate of 23.7% in the prior year period, primarily due to lower expected executive compensation adjustments in the current period .

The effective tax rate of 23.1% for the six months ended June 30, 2023 decreased as compared to an effective tax rate of 24.0%, primarily due to lower expected executive compensation adjustments and higher stock compensation benefits in the current period.

Comprehensive income in the second quarter was $100 million, compared to comprehensive income of $35 million in the prior year period.

The change was primarily due to the following:

• Net earnings increased $16 million, primarily due to higher operating income.

• Foreign currency translation adjustments for the three months ended March 31, 2023 resulted in a $15 million comprehensive gain, compared to a $7 million comprehensive loss in the prior period.

• Foreign currency translation adjustments in the second quarter resulted in a $19 million comprehensive gain, compared to a $40 million comprehensive loss in the prior year period.

The comprehensive gain during the current period was primarily attributed to increases in the British Pound.

New orders increased $84 million during the three months ended March 31, 2023 from the comparable prior year period, primarily due to an increase in orders for defense electronics equipment in the Defense Electronics segment, as well as an increase in orders for actuation products within our A&D markets in the Aerospace & Industrial segment.

These increases were partially offset by the timing of naval defense orders in the Naval & Power segment.

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

• Net earnings increas ed $10 million, primarily due to higher operating income and other income, net.

Comprehensive income during the six months ended June 30, 2023 was $171 million, compared to comprehensive income of $74 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, 2023 resulted in a $34 million comprehensive gain, compared to a $47 million comprehensive loss in the prior period.

The comprehensive gain during the current period was primarily attributed to increases in the British Pound.

• Net earnings increased $26 million, pr imarily due to higher operating income and other income, net.

New orders in the second quarter increased $65 million from the comparable prior year period, primarily due to the incremental impact from our arresting systems acquisition, an increase in orders for nuclear aftermarket products and services,

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and higher demand for naval defense products in the Naval & Power segment.

New orders also benefited from an increase in orders for flight test equipment and tactical communications products in the Defense Electronics segment.

These increases were partially offset by the timing of orders for actuation products within the Aerospace & Industrial segment.

New orders during the six months ended June 30, 2023 increased $149 million from the comparable prior year period, primarily due to the incremental impact from our arresting systems acquisition, as well as higher demand for commercial nuclear aftermarket products in the Naval & Power segment.

New orders also benefited from an increase in orders for defense electronics equipment in the Defense Electronics 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

(In thousands) 2023 2022 % change

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2023 2022 % change 2023 2022 % change

Sales $ 226,260 $ 208,572 8% $ 428,707 $ 399,684 7%

Operating income 35,665 32,464 10% 62,210 57,317 9%

Operating margin 13.1 % 13.0 % 10 bps

Operating margin 15.8 % 15.6 % 20 bps 14.5 % 14.3 % 20 bps

New orders $ 192,670 $ 215,279 (11%) $ 451,313 $ 443,593 2%

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Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Three Months Ended Six Months Ended

June 30, June 30,

2022 2023 vs.

Sales Operating Income Sales Operating Income

Organic 9 % 11 % 8 % 8 %

Acquisitions — % — %

Foreign currency (1 %) (1 %) (1 %) 1 %

Total 8 % 10 % 7 % 9 %

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, 2023 increased $11 million, or 6%, to $202 million from the prior year period, primarily due to higher demand for sensors products as well as surface treatment services on narrow-body and wide-body platforms in the commercial aerospace market.

The general industrial market benefited from higher sales of surface treatment services and industrial vehicle products.

Operating income during the three months ended March 31, 2023 increased $2 million, or 7%, to $27 million from the prior year period, and operating margin increased 10 basis points to 13.1%.

The increase in operating income and operating margin was primarily due to favorable overhead absorption on higher sales, partially offset by unfavorable mix on sensors products.

New orders during the three months ended March 31, 2023 increased $30 million from the comparable prior year period, primarily due to an increase in orders for actuation products within our A&D markets.

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

Sales in the second quarter increased $18 million, or 8%, to $226 million from the prior year period.

Sales in the commercial aerospace market benefited $9 million from higher demand for sensors products as well as surface treatment services on various narrow-body and wide-body platforms.

Sales in the general industrial market increased primarily due to higher demand for industrial automation products.

Sales increases in the naval defense and aerospace defense markets were primarily due to the timing of sales for actuation equipment on various programs.

Sales during the six months ended June 30, 2023 increased $29 million, or 7%, to $429 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 $16 million primarily due to higher demand for sensors products as well as surface treatment services on various narrow-body and wide-body platforms .

The general industrial market benefited from sales increases of $11 million primarily due to higher demand for industrial automation products as well as higher sales of surface treatment services.

Operating income in the second quarter increased $3 million, or 10%, to $36 million from the prior year period, and operating margin increased 20 basis points to 15.8%.

Operating income during the six months ended June 30, 2023 increased $5 million, o r 9%, to $62 million from the prior year period, and operating margin increased 20 basis points to 14.5%.

The increases in

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

operating income and operating margin for each of the respective periods were primarily due to favorable overhead absorption on higher sa les, partially offset by unfavorable mix on actuation and sensors products.

New orders in the second quarter decreased $23 million primarily due to the timing of orders for actuation products within our defense markets.

New orders during the six months ended June 30, 2023 increased $8 million primarily due to an increase in orders for actuation and sensors products within our A&D markets.

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) 2023 2022 % change

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2023 2022 % change 2023 2022 % change

Sales $ 197,722 $ 149,549 32% $ 359,876 $ 292,618 23%

Operating income 43,180 24,460 77% 66,548 47,750 39%

Operating margin 14.4 % 16.3 % (190 bps)

Operating margin 21.8 % 16.4 % 540 bps 18.5 % 16.3 % 220 bps

New orders $ 229,555 $ 195,442 17% $ 463,670 $ 355,130 31%

Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Three Months Ended Six Months Ended

June 30, June 30,

2022 2023 vs.

Sales Operating Income Sales Operating Income

Organic 32 % 69 % 23 % 32 %

Acquisitions — % — %

Foreign currency — % 8 % — % 7 %

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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 increased $48 million, or 32%, to $198 million from the prior year period.

In the ground defense market, sales increased $27 million primarily due to higher demand for tactical battlefield communications equipment.

Sales in the aerospace defense market benefited $13 million from higher sales of embedded computing and flight test instrumentation equipment on various fighter jet programs.

Sales increases in the commercial aerospace market were primarily due to higher demand for avionics and flight test equipment on various domestic and international programs.

Sales during the six months ended June 30, 2023 increased $67 million, or 23%, to $360 million from the prior year period.

In the ground defense market, sales increased $54 million primarily due to higher demand for tactical battlefield communications equipment.

Sales in the commercial aerospace market increased $8 million primarily due to higher demand for avionics and flight test equipment on various domestic and international platforms.

Sales increases in the aerospace defense market were primarily due to higher demand for embedded computing and flight test instrumentation equipment on various fighter jet programs.

Operating income in the second quarter increased $19 million, or 77%, to $43 million compared to the prior year period, and operating margin increased 540 basis points from the prior year period to 21.8%, primarily due to favorable overhead absorption on higher sales.

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Sales during the three months ended March 31, 2023 increased $19 million, or 13%, to $162 million from the prior year period.

In the ground defense market, sales increased $27 million primarily due to higher demand for tactical battlefield communications equipment.

This increase was partially offset by lower sales of $9 million in the aerospace defense market primarily due to timing of sales of embedded computing equipment on various helicopter and unmanned aerial vehicle programs.

Operating income during the three months ended March 31, 2023 of $23 million was essentially flat against the prior year period, and operating margin decreased 190 basis points from the prior year period to 14.4%, as favorable absorption on higher sales was offset by unfavorable mix on defense electronics products.

New orders during the three months ended March 31, 2023 increased $74 million from the comparable prior year period, primarily due to an increase in orders for defense electronics equipment, including embedded computing and tactical communications products.

Operating income during the six months ended June 30, 2023 increased $19 million, or 39%, to $67 million, and operating margin increased 220 basis points from the prior year period to 18.5%, as favorable overhead absorption on higher sales was partially offset by unfavorable mix on defense electronics products.

New orders in the second quarter increased $34 million, primarily due to an increase in orders for flight test equipment and tactical communications products.

New orders during the six months ended June 30, 2023 increased $109 million primarily due to an increase in orders for defense electronics equipment, including embedded computing and tactical communications products.

Naval & Power

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

Three Months Ended

(In thousands) 2023 2022 % change

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2023 2022 % change 2023 2022 % change

Sales $ 280,414 $ 251,236 12% $ 546,673 $ 476,516 15%

Operating income 46,782 50,001 (6%) 84,719 77,289 10%

Operating margin 14.2 % 12.1 % 210 bps

Operating margin 16.7 % 19.9 % (320 bps) 15.5 % 16.2 % (70 bps)

New orders $ 419,377 $ 365,441 15% $ 644,435 $ 611,705 5%

Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Three Months Ended Six Months Ended

June 30, June 30,

2022 2023 vs.

Sales Operating Income Sales Operating Income

Organic 3 % (7 %) 7 % 2 %

4 unchanged sentences

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.

Sales during the three months ended March 31, 2023 increased $41 million, or 18%, to $266 million from the prior year period, primarily due to higher sales across our aerospace defense, naval defense, and power & process markets.

Sales in the second quarter increased $29 million, or 12%, to $280 million from the prior year period.

In the aerospace defense market, sales increased $23 million due to the incremental impact from our arresting systems acquisition.

Sales in the naval defense market benefited $9 million primarily due to higher sales on the Columbia-class submarine and CVN-81 aircraft carrier programs, partially offset by the timing of sales on the CVN-80 aircraft carrier program .

Sales in the power & process market benefited from higher demand for industrial valves in the process market, as well as higher commercial nuclear aftermarket sales supporting the maintenance of existing operating reactors.

These increases were partially offset by the wind-down on the China Direct AP1000 program.

The naval defense market benefited from higher sales on the Columbia-class and Virginia-class submarine programs, partially offset by the timing of sales on various aircraft carrier programs.

Sales during the six months ended June 30, 2023 increased $70 million, or 15%, to $547 million from the prior year period, primarily due to higher sales across our aerospace defense, naval defense, and power & process markets.

In the aerospace defense market, sales increased $39 million due to the incremental impact from our arresting systems acquisition.

Sales in the naval defense market benefited $11 million primarily due to higher sales on the Columbia-class and Virginia-class submarine programs.

In the power & process market, sales increased $19 million primarily due to higher nuclear aftermarket sales supporting the maintenance of existing operating reactors as well as higher industrial valve sales in the process market.

These increases were partially offset by the wind-down on the China Direct AP1000 program.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Operating income during the three months ended March 31, 2023 increased $11 million, or 39%, to $38 million, and operating margin increased 210 basis points from the prior year period to 14.2%, primarily due to the absence of a prior year loss on sale of our industrial valves business in Germany as well as favorable overhead absorption on higher organic sales.

New orders decreased $21 million during the three months ended March 31, 2023 from the comparable prior year period, primarily due to the timing of naval defense orders.

Operating income in the second quarter decreased $3 million, or 6%, to $47 million, and operating margin decreased 320 basis points from the prior year period to 16.7%, as favorable overhead absorption on higher sales was more than offset by unfavorable product mix as well as first year purchase accounting costs from our arresting systems acquisition.

Operating income during the six months ended June 30, 2023 increased $7 million, or 10% , to $85 million, while operating margin decreased 70 basis points from the prior year period to 15.5%.

Both operating income and operating margin benefited from the absence of a prior year loss on sale of our industrial valves business in Germany as well as favorable overhead absorption on higher organic sales.

These increases were partially offset by unfavorable product mix as well as first year purchase accounting costs from our arresting systems acquisition.

New orders in the second quarter increased $54 million primarily due to the incremental impact from our arresting systems acquisition, an increase in orders for nuclear aftermarket products and services, and higher demand for naval defense products.

New orders during the six months ended June 30, 2023 increased $33 million primarily due to the incremental impact from our arresting systems acquisition, as well as an increase in orders for nuclear aftermarket products and services.

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) 2023 2022 % 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) 2023 2022 % change 2023 2022 % change

Aerospace & Defense markets:

10 unchanged sentences

Aerospace & Defense markets

Sales during the three months ended March 31, 2023 increased $48 million, or 13%, to $409 million, primarily due to higher sales in the ground defense, naval defense, and commercial aerospace markets.

Sales in the ground defense market increased primarily due to higher demand for tactical battlefield communications equipment.

Sales increases in the naval defense market were primarily due to higher sales on the Columbia-class submarine and CVN-81 aircraft carrier programs, partially offset by timing of sales on the CVN-80 aircraft carrier program .

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

In the aerospace defense market, the incremental impact from our arresting systems acquisition was partially offset by the timing of sales of embedded computing equipment on various helicopter and unmanned aerial vehicle programs.

Commercial markets

Sales during the three months ended March 31, 2023 increased $24 million, or 12%, to $222 million.

In the power & process market, sales increased primarily due to higher nuclear aftermarket sales supporting the maintenance of existing operating reactors, as well as higher industrial valve sales in the process market.

The general industrial market benefited from higher sales of both surface treatment services and industrial vehicle products.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Use of Cash

Sales in the second quarter increased $86 million, or 23%, to $466 million against the comparable prior year period, due to higher sales across all markets.

Sales in the aerospace defense market increased primarily due to the incremental impact from our arresting systems acquisition as well as higher demand for embedded computing and flight test instrumentation equipment on various fighter jet programs.

In the ground defense market, sales increased primarily due to higher demand for tactical battlefield communications equipment.

Sales increases in the commercial aerospace market were primarily due to higher demand for sensors products and surface treatment services on various narrow-body and wide-body platforms, as well as higher sales of avionics and flight test equipment on various domestic and international programs.

The naval defense market benefited primarily from higher sales on the Columbia-class and Virginia-class submarine programs, partially offset by lower sales on various aircraft carrier programs.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Sales during the six months ended June 30, 2023 increased $134 million, or 18%, to $875 million, primarily due to higher sales across all markets.

In the aerospace defense market, sales benefited from the incremental impact from our arresting systems acquisition.

Sales in the ground defense market increased primarily due to higher demand for tactical battlefield communications equipment.

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

Sales in the commercial aerospace market primarily benefited from higher demand for sensors products and surface treatment services on narrow-body and wide-body platforms, as well as higher demand for avionics and flight test equipment on various domestic and international platforms.

Commercial markets

Sales in the second quarter increased $9 million, or 4%, to $238 million.

These increases were partially offset by the wind-down on the China Direct AP1000 program.

Sales in the general industrial market increased primarily due to higher demand for industrial automation products.

Sales during the six months ended June 30, 2023 increased $33 million, or 8%, to $461 million.

In the power & process market, sales increased primarily due to higher industrial valve sales in the process market, as well as higher nuclear aftermarket sales supporting the maintenance of existing operating reactors.

These increases were partially offset by the wind-down on the China Direct AP1000 program.

Sales in the general industrial market increased primarily due to higher demand for industrial automation products and surface treatment services.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Use of Cash

We derive the majority of our operating cash inflow from receipts on the sale of goods and services and cash outflow for the procurement of materials and labor;

4 unchanged sentences

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, including the return of capital to shareholders through dividends and share repurchases and growing our business through acquisitions.

Condensed Consolidated Statements of Cash Flows Three Months Ended

(In thousands) March 31, 2023 March 31, 2022

Cash provided by (used in):

Condensed Consolidated Statements of Cash Flows Six Months Ended

(In thousands) June 30, 2023 June 30, 2022

Cash provided by (used for):

Operating activities

5 unchanged sentences

Effect of exchange-rate changes on cash 9,068 (6,204)

Net decrease in cash and cash equivalents (126,315) (34,322)

Net cash used in operating activities decreased $33 million from the prior year period, primarily due to higher cash earnings and improved working capital.

Net increase (decrease) in cash and cash equivalents (98,237) 410

Net cash provided by operating activities increased $113 million from the prior year period, primarily due to higher cash earnings and improved working capital.

These increases were partially offset by higher tax payments in the current period.

Net cash used in investing activities of $10 million was essentially flat compared to the prior year period.

Net cash provided by financing activities decreased $138 million from the prior year period, primarily due to the repayment of our 2013 Notes.

This decrease was partially offset by higher current period net borrowings under our credit facility.

Net cash used for investing activities increased $4 million from the prior year period, primarily due to higher capital spending during the current period.

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Net cash used for financing activities increased $223 million from the prior year period, primarily due to the repayment of our 2013 Notes as well as lower current period net borrowings under our credit facility.

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

Financing Activities

During the three months ended March 31, 2023, we repaid $203 million of the 2013 Notes that matured on February 26, 2023.

The Corporation’s debt outstanding had an average interest rate o f 4.4% and 3.2% for the three months ended March 31, 2023 and 2022, respectively.

The Corporation’s average debt outstanding was $1,129 million an d $1,112 million for the three months ended March 31, 2023 and 2022, respectively.

During the six months ended June 30, 2023, we repaid $203 million of the 2013 Notes that matured on February 26, 2023.

The Corporation’s debt outstanding had an average interest rate of 4.1% and 4.0% for the three and six months ended June 30, 2023, respectively, and 3.2% for both the three and six months ended June 30, 2022, respectively.

The Corporation’s average debt outstanding was $1.3 billion and $1.2 billion for the three and six months ended June 30, 2023, respectively, and $1.2 billion for both the three and six months ended June 30, 2022, respectively.

Credit Agreement

As of March 31, 2023, the Corporation had $178 million of outstanding borrowings under its credit facility and approximately $19 million in letters of credit supported by the credit facility.

The unused credit available under the credit facility as of March 31, 2023 was $553 million which could be borrowed without violating any of our debt covenants.

As of June 30, 2023, the Corporation had $125 million of outstanding borrowings under the Credit Agreement, and $21 million in letters of credit supported by the Credit Agreement.

The unused credit available under the Credit Agreement as of June 30, 2023 was $604 million, which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the three months ended March 31, 2023, the Corporation used $12 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program.

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 six months ended June 30, 2023, the Corporation used $24 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program.

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.

Cash Utilization

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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, including the return of capital to shareholders through dividends and share repurchases and growing our business through acquisitions.

The Corporation made dividend payments of $7 million and $14 million during the six months ended June 30, 2023 and June 30, 2022, respectively.

Additionally, beginning in the second quarter, the Corporation increased its quarterly dividend to $0.20 per share.

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 March 31, 2023, we had the ability to borrow additional debt of approximately $1.8 billion without violating our debt to capitalization covenant.

As of June 30, 2023, we had the ability to borrow additional debt of $1.9 billion without violating our debt to capitalization covenant.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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Securities and Exchange Commission on February 22, 2023, in the Notes to the Consolidated Financial Statements, Note 1, and the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk during the six months ended June 30, 2023.

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

Quantitative and Qualitative Disclosures about Market Risk" of our 2022 Annual Report on Form 10-K.

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