What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 255 added, 214 removed, 601 unchanged (44% 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) 2023 2022 2023 2022

28 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

7 unchanged sentences

Comprehensive income $ 68,737 $ 27,526 $ 240,123 $ 101,676

(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.

(1) The tax benefit included in foreign currency translation adjustments for the three and nine months ended September 30, 2023 and September 30, 2022 was immaterial.

(2) The tax expense/(benefit) included in pension and postretirement adjustments for the three and nine months ended September 30, 2023 were immaterial.

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.

See notes to condensed consolidated financial statements

2 unchanged sentences

(In thousands, except per share data)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current assets:

27 unchanged sentences

Stockholders’ equity

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

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

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

outstanding shares were 38,263,012 as of September 30, 2023 and 38,259,722 as of December 31, 2022

49,187 49,187

2 unchanged sentences

Accumulated other comprehensive loss ( 253,416 ) ( 258,916 )

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

Common treasury stock, at cost ( 10,924,366 shares as of September 30, 2023 and 10,927,656 shares as of December 31, 2022)

( 1,122,728 ) ( 1,107,101 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(In thousands) 2023 2022

1 unchanged sentence

Net earnings $ 234,623 $ 185,325

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 86,836 83,520

11 unchanged sentences

Other current and long-term assets and liabilities ( 31,343 ) ( 37,955 )

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

Net cash provided by operating activities 165,717 2,387

Cash flows from investing activities:

Proceeds from sale/disposal of long-lived assets 464 9,110

Purchases of investments — ( 10,000 )

Additions to property, plant, and equipment ( 32,037 ) ( 28,789 )

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

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

10 unchanged sentences

Effect of exchange-rate changes on cash 2,737 ( 22,671 )

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

Net decrease in cash and cash equivalents ( 108,165 ) ( 57,452 )

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

4 unchanged sentences

(In thousands)

For the six months ended June 30, 2023

For the nine months ended September 30, 2023

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

December 31, 2022 $ 49,187 $ 134,553 $ 3,174,396 $ ( 258,916 ) $ ( 1,107,101 )

December 31, 2022 (as previously reported) $ 49,187 $ 134,553 $ 3,174,396 $ ( 258,916 ) $ ( 1,107,101 )

Correction of prior period error (Note 2) — — ( 10,905 ) — —

December 31, 2022 (as adjusted) $ 49,187 $ 134,553 $ 3,163,491 $ ( 258,916 ) $ ( 1,107,101 )

Net earnings — — 234,623 — —

7 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

September 30, 2023 $ 49,187 $ 136,610 $ 3,375,502 $ ( 253,416 ) $ ( 1,122,728 )

For the three months ended September 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 )

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

Correction of prior period error (Note 2) — — ( 10,905 ) — —

June 30, 2023 (as adjusted) $ 49,187 $ 130,846 $ 3,286,376 $ ( 225,375 ) $ ( 1,113,675 )

Net earnings — — 96,778 — —

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

Other comprehensive loss, net of tax — — — ( 28,041 ) —

Dividends declared — — ( 7,652 ) — —

Restricted stock — ( 73 ) — — 73

Employee stock purchase plan — 1,829 — — 3,529

Share-based compensation — 3,935 — — 419

1 unchanged sentence

— — — — ( 13,001 )

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

September 30, 2023 $ 49,187 $ 136,610 $ 3,375,502 $ ( 253,416 ) $ ( 1,122,728 )

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

1 unchanged sentence

(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

December 31, 2021 $ 49,187 $ 127,104 $ 2,908,827 $ ( 190,465 ) $ ( 1,068,163 )

December 31, 2021 (as previously reported) $ 49,187 $ 127,104 $ 2,908,827 $ ( 190,465 ) $ ( 1,068,163 )

Correction of prior period error (Note 2) — — ( 10,905 ) — —

December 31, 2021 (as adjusted) $ 49,187 $ 127,104 $ 2,897,922 $ ( 190,465 ) $ ( 1,068,163 )

Net earnings — — 185,325 — —

7 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 $ 3,061,734 $ ( 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 (as previously reported) $ 49,187 $ 126,316 $ 3,006,164 $ ( 227,872 ) $ ( 1,086,156 )

Correction of prior period error (Note 2) — — ( 10,905 ) — —

June 30, 2022 (as adjusted) $ 49,187 $ 126,316 $ 2,995,259 $ ( 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 $ 3,061,734 $ ( 274,114 ) $ ( 1,094,699 )

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.

(1) For the three and nine months ended September 30, 2023, the Corporation repurchased approximately 0.1 million and 0.2 million shares of its common stock, respectively.

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.

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, 2023 and 2022, there were no significant changes in estimated contract costs.

During the three and nine months ended September 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.

1 unchanged sentence

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

CORRECTION OF PRIOR PERIOD ERROR

During the third quarter of 2023, the Corporation identified an error related to a single long-term contract within a subsidiary of its Naval & Power segment.

The error primarily impacts 2020 and 2021, whereby certain events occurring during the pandemic, including constructive changes to the contract as well as labor inefficiencies and hiring delays due to a facility relocation, were not reflected in the contract’s estimated costs of completion.

In accordance with Staff Accounting Bulletin ("SAB") Nos.

99 and 108, the Corporation evaluated this error and, based on an analysis of quantitative and qualitative factors, determined that it was not material to any one of the prior reporting periods affected and, therefore, amendment of previously filed reports with the Securities and Exchange Commission is not required.

However, if the adjustment to correct the cumulative effect of the aforementioned error had been recorded in the three and nine months ended September 30, 2023, the impact would have been qualitatively material to the Condensed Consolidated Statements of Earnings for those respective periods.

Therefore, in accordance with SAB 108, the Corporation has revised the applicable prior period financial statements included within this filing, as summarized below.

The net impact of the error resulted in an overstatement of previously reported total net sales and net earnings of approximately $ 5 million and $ 4 million, respectively, for the year ended December 31, 2021 and an overstatement of previously reported total net sales and net earnings of approximately $ 8 million and $ 7 million, respectively, for the year ended December 31, 2020.

The impact of the error on previously reported total net sales and net earnings was inconsequential for the year ended December 31, 2022.

The Company will revise its consolidated financial statements as of and for the year ended December 31, 2021 in conjunction with the issuance of the 2023 Form 10-K.

The error did not impact net cash provided by operating activities within the Condensed Consolidated Statements of Cash Flows in any prior period.

The Condensed Consolidated Balance Sheet as of December 31, 2022 has been revised as follows:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) As previously reported Corrections As revised

Receivables, net $ 724,603 $ ( 1,299 ) $ 723,304

Total current assets 1,517,313 ( 1,299 ) 1,516,014

Total assets 4,449,602 ( 1,299 ) 4,448,303

Accrued expenses 177,536 ( 3,096 ) 174,440

Deferred revenue 242,483 12,318 254,801

Other current liabilities 82,395 384 82,779

Total current liabilities 971,439 9,606 981,045

Total liabilities 2,457,483 9,606 2,467,089

Retained earnings 3,174,396 ( 10,905 ) 3,163,491

Total stockholders' equity 1,992,119 ( 10,905 ) 1,981,214

Total liabilities and stockholders' equity 4,449,602 ( 1,299 ) 4,448,303

The Corporation recognizes revenue when control of a promised good and/or service is transferred to a customer in an amount that reflects the consideration that the Corporation expects to be entitled to in exchange for that good and/or service.

7 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, 2023 and 2022:

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,

2023 2022 2023 2022

3 unchanged sentences

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

Total backlog was approximately $ 2.8 billion as of June 30, 2023, of which the Corporation expects to recognize approximately 90 % as net sales over the next 36 months .

Total backlog was approximately $ 2.9 billion as of September 30, 2023, of which the Corporation expects to recognize approximately 89 % as net sales over the next 36 months .

The remainder will be recognized thereafter.

Disaggregation of Revenue

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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) 2023 2022 2023 2022

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, 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.

Revenue recognized during the three and nine months ended September 30, 2023 included in the contract liabilities balance as of January 1, 2023 was approximately $ 38 million and $ 185 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.

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

ASSETS HELD FOR SALE

In January 2022, the Corporation completed the sale of its industrial valve business in Germany for gross cash proceeds of $ 3 million.

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

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.

3 unchanged sentences

The composition of receivables is as follows:

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

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

Billed receivables:

8 unchanged sentences

Receivables, net $ 790,334 $ 723,304

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Inventoried costs contain amounts relating to long-term contracts and programs with long production cycles, a portion of which will not be realized within one year.

2 unchanged sentences

The composition of inventories is as follows:

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

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

Raw materials $ 248,932 $ 242,116

7 unchanged sentences

Inventories, net $ 540,180 $ 483,113

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

(1) This caption includes capitalized development costs of $ 14.5 million as of September 30, 2023 related to certain aerospace and defense programs.

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

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:

As of September 30, 2023, capitalized development costs of $ 7.7 million are not currently supported by existing firm orders.

The Corporation accounts for acquisitions by assigning the purchase price to acquired tangible and intangible assets and liabilities assumed.

Assets acquired and liabilities assumed are recorded at their fair values, and the excess of the purchase price over the amounts assigned is recorded as goodwill.

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

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

1 unchanged sentence

Foreign currency translation adjustment 716 923 395 2,034

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

September 30, 2023 $ 322,266 $ 703,709 $ 520,694 $ 1,546,669

OTHER INTANGIBLE ASSETS, NET

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets are generally the result of acquisitions and consist primarily of purchased technology and customer related

Intangible assets are amortized over useful lives that range between 1 to 20 years.

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

June 30, 2023 December 31, 2022

September 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 six months ended June 30, 2023 was $ 33 million, as compared to $ 28 million in the comparable prior year period.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Total intangible amortization expense for the nine months ended September 30, 2023 was $ 49 million, as compared to $ 46 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, 2023 and December 31, 2022, the fair values of the asset and liability derivative instruments were immaterial.

As of September 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

1 unchanged sentence

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 June 30, 2023.

The gains and (losses) for the three and nine months ended September 30, 2023 were ($ 5 ) million and $ 2 million, respectively.

The losses for the three and nine months ended September 30, 2022 were $ 6 million and $ 12 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, 2023 December 31, 2022

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 December 31, 2022

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

Revolving credit agreement, due 2027 $ 125,000 $ 125,000 $ — $ —

3.70 % Senior notes due 2023

23 unchanged sentences

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,

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

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2023 2022 2023 2022

6 unchanged sentences

Net periodic pension cost $ ( 2,873 ) $ 2,627 $ ( 8,599 ) $ 7,171

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.

The Corporation did not make any contributions to the Curtiss-Wright Pension Plan during the nine months ended September 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.

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.

During the nine months ended September 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.

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, 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.

During the three and nine months ended September 30, 2023, the expense relating to the plan was $ 5.2 million and $ 17.4 million, respectively.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

three and nine months ended September 30, 2022, the expense relating to the plan was $ 5.5 million and $ 15.8 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) 2023 2022 2023 2022

2 unchanged sentences

Diluted weighted-average shares outstanding 38,558 38,647 38,538 38,655

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.

For the three and nine months ended September 30, 2023, approximately 5,000 and 16,000 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 49,000 and 37,000 anti-dilutive equity-based awards for the three and nine months ended September 30, 2022, respectively.

SEGMENT INFORMATION

2 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) 2023 2022 2023 2022

11 unchanged sentences

Total consolidated $ 132,519 $ 107,583 $ 323,909 $ 266,198

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(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:

Three Months Ended Six Months Ended

June 30, June 30,

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2023 2022 2023 2022

3 unchanged sentences

Earnings before income taxes $ 127,046 $ 97,332 $ 306,221 $ 244,181

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

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

Identifiable assets

17 unchanged sentences

Amounts reclassified from accumulated other comprehensive income (1)

— ( 33 ) ( 33 )

Net current period other comprehensive income (loss) 5,688 ( 188 ) 5,500

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

September 30, 2023 $ ( 155,119 ) $ ( 98,297 ) $ ( 253,416 )

(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 and its subsidiaries are involved in legal proceedings that are incidental to the operation of our business.

9 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 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.

As of September 30, 2023 and December 31, 2022, there were $ 22 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.

The Corporation has provided this financial assurance in the form of a $ 35 million surety bond.

AP1000 Program

In February 2022, the Corporation and Westinghouse Electric Company (WEC) executed a settlement agreement to resolve all open claims and counterclaims under the AP1000 U.S.

and China contracts.

Under the terms of the settlement agreement, the Corporation paid WEC $ 15 million in the first quarter of 2022 and 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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

26 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 and six month periods ended June 30, 2023.

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 financial information as of September 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:

15 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) 2023 2022 % change 2023 2022 % change

16 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,

2022 2023 vs.

5 unchanged sentences

Total 15 % 23 % 14 % 22 %

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

Sales in the third quarter increased $94 million, or 15%, to $724 million, compared with the prior year period.

On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $7 million, $55 million, and $32 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.

Sales during the nine months ended September 30, 2023 increased $260 million, or 14%, to $2,060 million, compared with the prior year period.

On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $36 million, $122 million, and $102 million, respectively.

4 unchanged sentences

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

Operating income in the third quarter increased $25 million, or 23%, to $133 million, and operating margin increased 120 basis points to 18.3% compared with the same period in 2022.

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

In the Naval & Power segment, increases in both operating income and operating margin were primarily due to lower first year purchase accounting costs during the current period from our arresting systems acquisition as well as favorable overhead absorption on higher sales.

These increases were partially offset by unfavorable naval contract adjustments and unfavorable product mix.

In the Aerospace & Industrial segment, favorable absorption on higher sales was essentially offset by unfavorable mix in actuation products.

Operating income during the nine months ended September 30, 2023 increased $58 million, or 22%, to $324 million, and operating margin increased 90 basis points to 15.7%, 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.

Operating income in the Naval & Power segment 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 naval contract adjustments and unfavorable product mix.

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

Non-segment operating expense in the third quarter increased $1 million, or 7%, to $10 million, primarily due to higher foreign currency losses in the current period.

Non-segment operating expense during the nine months ended September 30, 2023 decreased $1 million, or 3%, to $32 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 third quarter decreased $2 million, or 11%, to $12 million, primarily due to lower current period borrowings under our revolving Credit Agreement (the "Credit Agreement" or "credit facility") as well as the repayment of our 2013 Notes in February 2023.

Interest expense during the nine months ended September 30, 2023 increased $7 million, or 21%, to $40 million, primarily due to the issuance of $300 million Senior Notes in October 2022 as well as higher interest rates under our Credit Agreement in the current period.

This increase was partially offset by the repayment of our 2013 Notes in February 2023.

Other income, net in the third quarter increased $3 million, or 87%, to $7 million.

O ther income, net during the nine months ended September 30, 2023 increased $11 million, or 101%, to $23 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 effective tax rate of 23.8% in the third quarter decreased compared to an effective tax rate of 24.2% in the prior year period, primarily due to the favorable impact of expected foreign tax credit utilization in the current year .

The effective tax rate of 23.4% for the nine months ended September 30, 2023 decreased as compared to an effective tax rate of 24.1%, primarily due to lower expected executive compensation adjustments as well as the favorable impact of expected foreign tax credit utilization in the current year.

Comprehensive income in the third quarter was $69 million, compared to comprehensive income of $28 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 $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.

• Foreign currency translation adjustments in the third quarter resulted in a $28 million comprehensive loss, compared to a $50 million comprehensive loss in the prior year period.

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

• Net earnings increas ed $23 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.

Comprehensive income during the nine months ended September 30, 2023 was $240 million, compared to comprehensive income of $102 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.

• Foreign currenc y translation adjustments for the nine months ended September 30, 2023 resulted in a $6 million comprehensive gain, c ompared to a $97 million comprehensive loss in the prior period.

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

• Net earnings increased $49 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,

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

New orders in the third quarter increased $27 million from the comparable prior year period, primarily due to an increase in orders for defense electronics products in the Defense Electronics segment.

New orders during the nine months ended September 30, 2023 increased $176 million from the comparable prior year period, primarily due to an increase in orders for defense electronics equipment in the Defense Electronics segment.

In the Naval & Power segment, the incremental impact from our arresting systems acquisition as well as an increase in orders for commercial nuclear aftermarket products was partially offset by the timing of naval defense orders.

New orders in the Aerospace & Industrial segment benefited from an increase in orders for actuation and sensors products within our A&D markets as well as surface treatment services within both our A&D and commercial markets, partially offset by the timing of new orders for industrial vehicles.

RESULTS BY BUSINESS SEGMENT

1 unchanged sentence

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) 2023 2022 % change 2023 2022 % 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,

2022 2023 vs.

4 unchanged sentences

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 .

Sales in the third quarter increased $7 million, or 3%, to $220 million from the prior year period.

Sales in the commercial aerospace market benefited $6 million from higher demand for actuation and sensors products on various narrow-body and wide-body platforms.

Sales in the general industrial market increased primarily due to higher demand for industrial automation products as well as higher sales of surface treatment services.

Sales during the nine months ended September 30, 2023 increased $36 million, or 6%, to $649 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 $22 million primarily due to higher demand for sensors products and surface treatment services on various narrow-body and wide-body platforms .

The general industrial market benefited from sales increases of $14 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

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

2 unchanged sentences

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.

Operating income in the third quarter of $39 million was essentially flat against the comparable prior year period, and operating margin decreased 60 basis points to 17.7%, as favorable absorption on higher sales was essentially offset by unfavorable mix in actuation products.

Operating income during the nine months ended September 30, 2023 increased $5 million, o r 5%, to $101 million from the prior year period, and operating margin decreased 10 basis points to 15.6%, as favorable overhead absorption on higher sales was partially offset by unfavorable mix in actuation and sensors products.

New orders in the third quarter increased $6 million primarily due to an increase in orders for actuation and sensors products within our A&D markets as well as surface treatment services within both our A&D and commercial markets.

New orders during the nine months ended September 30, 2023 increased $13 million primarily due to an increase in orders for actuation and sensors products within our A&D markets as well as surface treatment services within both our A&D and commercial markets.

These increases were 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) 2023 2022 % change 2023 2022 % 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,

2022 2023 vs.

4 unchanged sentences

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.

Sales in the third quarter increased $55 million, or 34%, to $216 million from the prior year period.

In the ground defense market, sales increased $30 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 in the aerospace defense market benefited $21 million from higher sales of embedded computing and flight test instrumentation equipment on various domestic and international 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.

Sales during the nine months ended September 30, 2023 increased $122 million, or 27%, to $576 million from the prior year period.

In the ground defense market, sales increased $84 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.

Sales in the aerospace defense market increased $25 million primarily due to higher demand for embedded computing and flight test instrumentation equipment on various domestic and international programs.

Sales increases of $11 million in the commercial aerospace market were primarily due to higher demand for avionics and flight test equipment on various domestic and international platforms.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

Operating income in the third quarter increased $20 million, or 54%, to $56 million compared to the prior year period, and operating margin increased 330 basis points from the prior year period to 26.0%, primarily due to favorable overhead absorption on higher sales.

Operating income during the nine months ended September 30, 2023 increased $38 million, or 46%, to $123 million, and operating margin increased 270 basis points from the prior year period to 21.3%, primarily due to favorable overhead absorption on higher sales.

New orders in the third quarter increased $38 million primarily due to an increase in orders for defense electronics products.

New orders during the nine months ended September 30, 2023 increased $147 million primarily due to an increase in orders for defense electronics products, including tactical communications and embedded computing products.

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) 2023 2022 % change 2023 2022 % 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,

2022 2023 vs.

6 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 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 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.

Sales in the third quarter increased $31 million, or 12%, to $288 million from the prior year period.

In the aerospace defense market, sales increased $13 million primarily due to higher demand for arresting systems equipment supporting various domestic and international customers.

Sales in the power & process market benefited $11 million from higher demand for industrial valves in the process market and higher demand supporting the maintenance of existing operating reactors as well as increased development on advanced small modular reactors in the commercial nuclear market.

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 the CVN-81 aircraft carrier program.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

2 unchanged sentences

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

Sales during the nine months ended September 30, 2023 increased $102 million, or 14%, to $834 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 $52 million primarily due to the incremental impact from our arresting systems acquisition.

Sales in the naval defense market benefited $16 million primarily due to higher sales on the Columbia-class and Virginia-class submarine programs, partially offset by the timing of sales on various aircraft carrier programs.

In the power & process market, sales increased $30 million primarily due to higher demand for industrial valves in the process market and higher demand supporting the maintenance of existing operating reactors as well as increased development on advanced small modular reactors in the commercial nuclear market.

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

Operating income in the third quarter increased $6 million, or 15%, to $48 million, and operating margin increased 40 basis points from the prior year period to 16.6%, as lower first year purchase accounting costs during the current period from our arresting systems acquisition as well as favorable overhead absorption on higher sales were partially offset by unfavorable naval contract adjustments and unfavorable product mix.

Operating income during the nine months ended September 30, 2023 increased $14 million, or 11% , to $132 million, while operating margin decreased 30 basis points from the prior year period to 15.9%.

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 naval contract adjustments and unfavorable product mix.

New orders in the third quarter decreased $16 million primarily due to the timing of naval defense orders, partially offset by an increase in orders for commercial nuclear aftermarket products.

New orders during the nine months ended September 30, 2023 increased $17 million primarily due to the incremental impact from our arresting systems acquisition as well as an increase in orders for commercial nuclear aftermarket products.

These increases were partially offset by the timing of naval defense orders.

SUPPLEMENTARY INFORMATION

1 unchanged sentence

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,

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

September 30, September 30,

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

10 unchanged sentences

Total Curtiss-Wright $ 724,326 $ 630,542 15 % $ 2,059,582 $ 1,799,360 14 %

Aerospace & Defense markets

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

2 unchanged sentences

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.

Aerospace & Defense markets

Sales in the third quarter increased $76 million, or 18%, to $491 million against the comparable prior year period, due to higher sales across all markets.

Sales in the aerospace defense market increased primarily due to higher demand for arresting systems equipment as well as embedded computing and flight test instrumentation equipment on various domestic and international programs.

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

Sales in the naval defense market benefited primarily from higher demand on both the Columbia-class and Virginia-class submarine programs, partially offset by the timing of sales on the CVN-81 aircraft carrier program.

Sales increases in the commercial aerospace market were primarily due to higher demand for actuation and sensors products as well as surface treatment services on various narrow-body and wide-body platforms.

The commercial aerospace market also benefited from higher sales of avionics and flight test equipment on various domestic and international programs.

Sales during the nine months ended September 30, 2023 increased $210 million, or 18%, to $1,365 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 as well a s higher demand for embedded computing and flight test instrumentation equipment on various domestic and international programs.

Sa les in the ground defense market increased primarily due to higher demand for tactical b attlefield 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.

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

Sales in the third quarter increased $17 million, or 8%, to $234 million.

Sales in the power & process market benefited from higher demand for industrial valves in the process market and higher demand supporting the maintenance of existing operating reactors as well as increased development on advanced small modular reactors in the commercial nuclear market.

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.

Sales during the nine months ended September 30, 2023 increased $50 million, or 8%, to $694 million.

In the power & process market, sales benefited from higher demand for industrial valves in the process market and higher demand supporting the maintenance of existing operating reactors as well as increased development on advanced small modular reactors in the commercial nuclear market.

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 as well as higher sales of surface treatment services.

LIQUIDITY AND CAPITAL RESOURCES

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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 Six Months Ended

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

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Condensed Consolidated Statements of Cash Flows Nine Months Ended

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

Cash provided by (used for):

6 unchanged sentences

Effect of exchange-rate changes on cash 2,737 (22,671)

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

Net decrease in cash and cash equivalents (108,165) (57,452)

Net cash provided by operating activities increased $163 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 for investing activities increased $4 million from the prior year period, primarily due to higher capital spending during the current period.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Net cash used for investing activities decreased $250 million from the prior year period, primarily due to our arresting systems acquisition in the prior year period.

Net cash used for financing activities increased $490 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.

1 unchanged sentence

Financing Activities

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.

During the nine months ended September 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 4.0% for both the three and nine months ended September 30, 2023, respectively, and 3.6% and 3.3% for the three and nine months ended September 30, 2022, respectively.

The Corporation’s average debt outstanding was $1.1 billion and $1.2 billion for the three and nine months ended September 30, 2023, respectively, and $1.4 billion and $1.2 billion for the three and nine months ended September 30, 2022, respectively.

Credit Agreement

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.

As of September 30, 2023, the Corporation had $22 million in letters of credit supported by the Credit Agreement.

The unused credit available under the Credit Agreement as of September 30, 2023 was $728 million, which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

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.

During the nine months ended September 30, 2023, the Corporation used $37 million of cash to repurchase approximately 0.2 million outstanding shares under its share repurchase program.

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.

Cash Utilization

1 unchanged sentence

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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

The Corporation made dividend payments of $15 million and $14 million during the nine months ended September 30, 2023 and September 30, 2022, respectively.

Additionally, beginning in the second quarter of 2023, the Corporation increased its quarterly dividend to $0.20 per share.

Debt Compliance

1 unchanged sentence

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

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

As of September 30, 2023, we had the ability to borrow additional debt of $2.2 billion without violating our debt to capitalization covenant.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

10 unchanged sentences

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements