What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 178 added, 365 removed, 491 unchanged (53% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(In thousands, except per share data) 2024 2023

10 unchanged sentences

General and administrative expenses 94,049 88,344

Loss on divestiture — — — 4,651

Operating income 99,961 78,615

15 unchanged sentences

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

Net earnings $ 76,495 $ 56,846

3 unchanged sentences

Pension and postretirement adjustments, net of tax (1)

235 3,856 ( 188 ) 13,610

Other comprehensive income (loss), net of tax ( 15,032 ) 14,474

Comprehensive income $ 61,463 $ 71,320

(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.

(1) The tax benefit/(expense) included in both foreign currency translation adjustments and pension and postretirement adjustments for the three months ended March 31, 2024 and 2023 was immaterial.

See notes to condensed consolidated financial statements

2 unchanged sentences

(In thousands, except per share data)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Current assets:

27 unchanged sentences

Stockholders’ equity

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

Common stock, $ 1 par value, 100,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

49,187,378 shares issued as of March 31, 2024 and December 31, 2023;

outstanding shares were 38,315,999 as of March 31, 2024 and 38,202,754 as of December 31, 2023

49,187 49,187

2 unchanged sentences

Accumulated other comprehensive loss ( 228,255 ) ( 213,223 )

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

Common treasury stock, at cost ( 10,871,379 shares as of March 31, 2024 and 10,984,624 shares as of December 31, 2023)

( 1,130,491 ) ( 1,135,484 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(In thousands) 2024 2023

1 unchanged sentence

Net earnings $ 76,495 $ 56,846

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

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

Depreciation and amortization 26,983 28,927

Loss on divestiture — 4,651

Loss/(gain) on sale/disposal of long-lived assets 157 ( 4,241 )

Loss on sale/disposal of long-lived assets 21 93

Deferred income taxes ( 2,742 ) ( 2,619 )

3 unchanged sentences

Inventories, net ( 45,851 ) ( 42,897 )

Progress payments 64 ( 1,330 )

Accounts payable and accrued expenses ( 34,816 ) ( 85,442 )

2 unchanged sentences

Other current and long-term assets and liabilities ( 12,167 ) ( 44,602 )

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

Net cash used for operating activities ( 45,633 ) ( 91,599 )

Cash flows from investing activities:

Proceeds from sale/disposal of long-lived assets 41 224

Purchases of investments — ( 10,000 )

Additions to property, plant, and equipment ( 12,055 ) ( 10,661 )

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

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

Net cash used for investing activities ( 12,014 ) ( 10,437 )

Cash flows from financing activities:

Borrowings under revolving credit facilities 586,230 1,332,219

Payments of revolving credit facilities ( 586,230 ) ( 1,038,019 )

Borrowings under revolving credit facility 4,879 465,025

Payment of revolving credit facility ( 4,879 ) ( 286,825 )

Principal payments on debt — ( 202,500 )

1 unchanged sentence

Proceeds from share-based compensation 5,472 5,225

Dividends paid ( 14,950 ) ( 14,220 )

Other ( 288 ) ( 268 )

Net cash (used for)/provided by financing activities ( 245,046 ) 244,788

Net cash used for financing activities ( 7,006 ) ( 31,729 )

Effect of exchange-rate changes on cash ( 4,180 ) 7,450

6 unchanged sentences

(In thousands)

For the nine months ended September 30, 2023

For the three months ended March 31, 2023

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

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 )

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

Net earnings — — 56,846 — —

7 unchanged sentences

Other — ( 261 ) — — 261

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

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 loss, net of tax — — — ( 28,041 ) —

Dividends declared — — ( 7,652 ) — —

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

Share-based compensation — 3,935 — — 419

Repurchase of common stock (1)

— — — — ( 13,001 )

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

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

For the nine months ended September 30, 2022

March 31, 2023 $ 49,187 $ 126,909 $ 3,213,039 $ ( 244,442 ) $ ( 1,101,439 )

For the three months ended March 31, 2024

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

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 )

December 31, 2023 $ 49,187 $ 140,182 $ 3,487,751 $ ( 213,223 ) $ ( 1,135,484 )

Net earnings — — 76,495 — —

7 unchanged sentences

Other — ( 183 ) — — 183

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

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 — —

Other comprehensive loss, net of tax — — — ( 46,242 ) —

Dividends declared — — ( 7,293 ) — —

Employee stock purchase plan — 459 — — 4,254

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

Repurchase of common stock (1)

— — — — ( 12,789 )

September 30, 2022 $ 49,187 $ 131,230 $ 3,061,734 $ ( 274,114 ) $ ( 1,094,699 )

March 31, 2024 $ 49,187 $ 133,166 $ 3,556,572 $ ( 228,255 ) $ ( 1,130,491 )

(1) For the three months ended March 31, 2024 and March 31, 2023, the Corporation repurchased approximately 53,000 and 73,000 shares, respectively, of its common stock.

See notes to condensed consolidated financial statements

(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

1 unchanged sentence

BASIS OF PRESENTATION

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.

Curtiss-Wright Corporation and 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 and nine months ended September 30, 2023 and 2022, there were no significant changes in estimated contract costs.

During the three months ended March 31, 2024 and 2023, 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.

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 nine months ended September 30, 2023 and 2022:

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 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 months ended March 31, 2024 and 2023:

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

Over-time 49 % 49 %

2 unchanged sentences

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

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

Total backlog was approximately $ 3.1 billion as of March 31, 2024, of which the Corporation expects to recognize approximatel y 90 % 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 Nine Months Ended

September 30, September 30,

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

(In thousands) 2024 2023

4 unchanged sentences

Commercial Aerospace 89,775 70,490

Total Aerospace & Defense $ 490,773 $ 414,422 $ 1,365,411 $ 1,155,309

Total Aerospace & Defense customers $ 490,256 $ 408,581

Power & Process $ 124,039 $ 120,339

General Industrial 98,872 101,940

Total Commercial $ 233,553 $ 216,120 $ 694,171 $ 644,051

Total Commercial customers $ 222,911 $ 222,279

Total $ 713,167 $ 630,860

5 unchanged sentences

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

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.

Revenue recognized during the three months ended March 31, 2024 and 2023 included in contract liabilities at the beginning of the respective years was approximately $ 90 million and $ 89 million, respectively.

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

3 unchanged sentences

The amount of claims and unapproved change orders within our receivables balances are immaterial.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The composition of receivables is as follows:

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

(In thousands) March 31, 2024 December 31, 2023

Billed receivables:

Trade and other receivables $ 446,747 $ 427,830

Unbilled receivables (contract assets):

Unbilled receivables:

Recoverable costs and estimated earnings not billed 334,671 309,561

5 unchanged sentences

Receivables, net $ 776,662 $ 732,678

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) September 30, 2023 December 31, 2022

(In thousands) March 31, 2024 December 31, 2023

Raw materials $ 266,413 $ 239,313

3 unchanged sentences

Government and other long-term contracts 40,689 43,255

43,735 39,685

Inventories, net of reserves 553,918 512,492

1 unchanged sentence

Inventories, net $ 553,037 $ 510,033

(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 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:

The changes in the carrying amount of goodwill for the three months ended March 31, 2024 are as follows:

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

1 unchanged sentence

Foreign currency translation adjustment ( 734 ) ( 4,027 ) ( 1,722 ) ( 6,483 )

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

March 31, 2024 $ 324,397 $ 706,351 $ 521,595 $ 1,552,343

OTHER INTANGIBLE ASSETS, NET

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

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

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

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(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.

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.

Total intangible amortization expense for the three months ended March 31, 2024 was $ 14 million, as compared to $ 16 million in the comparable prior year period.

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

1 unchanged sentence

FAIR VALUE OF FINANCIAL INSTRUMENTS

Forward Foreign Exchange and Currency Option Contracts

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.

The purpose of the Corporation’s foreign currency risk management program is to reduce volatility in earnings caused by exchange rate fluctuations.

Guidance on accounting for derivative instruments and hedging activities requires companies to recognize all of the derivative financial instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets based upon quoted market prices for comparable instruments.

Interest Rate Risks and Related Strategies

2 unchanged sentences

The Corporation’s policy is to manage interest cost using a mix of fixed and variable rate debt.

Effects on Condensed Consolidated Balance Sheets

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

Undesignated hedges

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

The 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.

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 September 30, 2023.

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

3 unchanged sentences

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

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

15 unchanged sentences

100,000 91,533 100,000 92,961

4.64 % Senior notes due 2034

100,000 86,470 100,000 90,341

Total debt 1,047,500 964,627 1,047,500 974,735

4 unchanged sentences

Defined Benefit Pension Plans

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 nine months ended September 30, 2023 and 2022 were as follows:

Three Months Ended Nine Months Ended

September 30, September 30,

The following table is a consolidated disclosure of all domestic and foreign defined pension plans as described in the Corporation’s 2023 Annual Report on Form 10-K filed with the SEC.

The components of net periodic pension cost/(benefit) were as follows:

Three Months Ended

(In thousands) 2024 2023

4 unchanged sentences

Amortization of unrecognized actuarial loss 266 77

Cost of settlements — — — 1,842

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 nine months ended September 30, 2023, and does not expect to do so throughout the remainder of the year.

Net periodic pension cost/(benefit) $ ( 3,420 ) $ ( 2,859 )

The Corporation did not make any contributions to the Curtiss-Wright Pension Plan during the three months ended March 31, 2024, 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 2024.

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.

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 of 7 % of eligible compensation.

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.

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, 2024 and 2023, the expense relating to the plan was $ 7.6 million and $ 6.1 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 Nine Months Ended

September 30, September 30,

Three Months Ended

(In thousands) 2024 2023

2 unchanged sentences

Diluted weighted-average shares outstanding 38,431 38,516

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.

For the three months ended March 31, 2024 and 2023, approximately 59,000 and 24,000 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.

SEGMENT INFORMATION

2 unchanged sentences

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

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(In thousands) 2024 2023

11 unchanged sentences

Total consolidated $ 99,961 $ 78,615

(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.

(1) Includes pension and other postretirement benefit expense, certain environmental costs related to remediation at legacy sites, 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 Nine Months Ended

September 30, September 30,

Three Months Ended

(In thousands) 2024 2023

3 unchanged sentences

Earnings before income taxes $ 98,999 $ 73,438

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

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) March 31, 2024 December 31, 2023

Identifiable assets

10 unchanged sentences

37,519 8,218 45,737

Amounts reclassified from accumulated other comprehensive income (1)

Amounts reclassified from accumulated other comprehensive loss (1)

— ( 44 ) ( 44 )

3 unchanged sentences

( 15,579 ) 744 ( 14,835 )

Amounts reclassified from accumulated other comprehensive income (1)

Amounts reclassified from accumulated other comprehensive loss (1)

— ( 197 ) ( 197 )

Net current period other comprehensive income (loss) ( 15,579 ) 547 ( 15,032 )

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

March 31, 2024 $ ( 138,867 ) $ ( 89,388 ) $ ( 228,255 )

(1) All amounts are after tax.

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

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

Defined benefit pension and other postretirement benefit plans

Amortization of prior service costs $ 100 Other income, net

Amortization of actuarial losses ( 64 ) Other income, net

36 Earnings before income taxes

( 3 ) Provision for income taxes

Total reclassifications $ 33 Net earnings

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.

From time to time, the Corporation is involved in legal proceedings that are incidental to the operation of its 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 expect that such legal proceedings will have a material adverse impact on its condensed consolidated financial statements.

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.

Legal Proceedings

4 unchanged sentences

Letters of Credit and Other Financial Arrangements

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

As of 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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

secure advance payments from certain international customers.

As of March 31, 2024 and December 31, 2023, there were $ 19 million and $ 20 million of stand-by letters of credit outstanding, respectively.

As of both March 31, 2024 and December 31, 2023, there were $ 16 million of bank guarantees outstanding.

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.

SUBSEQUENT EVENTS

On April 1, 2024, the Corporation completed the acquisition of WSC, Inc.

for approximately $ 34 million in cash.

WSC is a provider of simulation technology that supports the design, commissioning, and reliable operation of commercial nuclear power generation and process plants.

For the year ended December 31, 2023, WSC generated sales of approximately $ 15 million.

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

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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

(a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance, (d) impacts on our business relating to ongoing supply chain delivery disruptions, significant inflation, higher interest rates or deflation, and measures taken by governments and private industry in response, (e) statements of future economic performance and potential impacts due to the conflict between Russia and Ukraine, (f) the effect of laws, rules, regulations, new accounting pronouncements, and outstanding litigation on our business and future performance, and (g) statements of assumptions, such as economic conditions underlying other statements.

(a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, liquidity requirements, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance and potential impacts from global supply chain disruptions, the inflationary environment, higher interest rates or deflation, labor shortages, and measures taken by governments and private industry in response, (d) statements of future economic performance and potential impacts due to the war between Russia and Ukraine as well as the Israel and Hamas war, and the related sanctions, (e) the effect of laws, rules, regulations, tax reform, new accounting pronouncements, and outstanding litigation on our business and future performance, and (f) statements of assumptions, such as economic conditions underlying other statements.

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

2 unchanged sentences

These risks and uncertainties include, but are not limited to, those described in “Item 1A.

Risk Factors” of our 2022 Annual Report on Form 10-K filed with the SEC, and elsewhere in that report, those described in this Quarterly Report on Form 10-Q, and those described from time to time in our future reports filed with the Securities and Exchange Commission.

Risk Factors” of our 2023 Annual Report on Form 10-K filed with the SEC, and elsewhere in that report, those described in this Quarterly Report on Form 10-Q, and those described from time to time in our future reports filed with the Securities and Exchange Commission and other written or oral statements made or released by us.

Such forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, those contained in Item 1.

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COMPANY ORGANIZATION

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.

Curtiss-Wright Corporation is a global integrated business that provides highly engineered products, solutions, and services mainly to A&D 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.

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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 nine month periods ended September 30, 2023.

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 financial information as of March 31, 2024 should be read in conjunction with the financial statements for the year ended December 31, 2023 contained in our Form 10-K filed with the SEC.

The MD&A is organized into the following sections:

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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 that acquisitions and divestitures had on the current year results.

The term “incremental” is used to highlight the impact 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.

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

The definition of “organic” excludes the effects of foreign currency translation.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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Condensed Consolidated Statements of Earnings

Three Months Ended Nine Months Ended

September 30, September 30,

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

Three Months Ended

(In thousands) 2024 2023 % change

Aerospace & Industrial $ 219,325 $ 202,447 8 %

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Components of sales and operating income increase (decrease):

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2023 vs.

Sales Operating Income Sales Operating Income

Three Months Ended

Sales Operating Income

Organic 13 % 28 %

Acquisitions — % — %

Loss on divestiture — % — % — % 2 %

Foreign currency — % (1 %)

Total 13 % 27 %

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

Sales during the three months ended March 31, 2024 increased $82 million, or 13%, to $713 million, compared with the prior year period.

On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $17 million, $49 million, and $16 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, 2024 increased $21 million, or 27%, to $100 million, compared with the prior year period, while operating margin increased 150 basis points to 14.0%, compared with the same period in 2023.

Increases in operating income and operating margin were primarily due to favorable absorption on higher sales as well as favorable mix on defense electronics products in the Defense Electronics segment.

These increases were partially offset by an unfavorable naval contract adjustment in Naval & Power segment.

In the Aerospace & Industrial segment, operating income

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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 23.8% 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 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 nine months ended September 30, 2023 was $240 million, compared to comprehensive income of $102 million in the prior year period.

was essentially flat while operating margin decreased, as favorable overhead absorption on higher sales was essentially offset by unfavorable mix on actuation products as well as the timing of development contracts.

No n-segment operating expense during the three months ended March 31, 2024 increased $2 million, or 17%, to $11 million, primarily due to higher corporate costs.

Interest expense decreased $2 million, or 18%, to $11 million, primarily due to lower borrowings under our revolving Credit Agreement (the “Credit Agreement” or “credit facility”) as well as the repayment of our 2013 Notes in February 2023.

Other income, net during the three months ended March 31, 2024 increased $2 million , or 24%, to $10 million, primarily due to lower pension costs during the current period.

The effective tax rate for the three months ended March 31, 2024 of 22.7% was essentially flat compared to an effective tax rate of 22.6% in the comparable prior year period.

Comprehensive income for the three months ended March 31, 2024 was $61 million, compared to comprehensive income of $71 million in the prior year period.

The change was primarily due to the following:

• 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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

• Net earnings increased $20 million, primarily due to higher operating income.

• Foreign currency translation adjustments for the three months ended March 31, 2024 resulted in a $16 million comprehensive loss, compared to a $15 million comprehensive gain in the prior period.

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

New orders increased $184 million during the three months ended March 31, 2024 from the comparable prior year period, primarily due to an increase in naval defense orders in the Naval & Power segment, as well as an increase in orders for defense electronics equipment, including embedded computing and tactical communications products, in the Defense Electronics segment.

These increases were partially offset by the timing of aerospace defense orders in the Aerospace & Industrial segment.

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

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 Nine Months Ended

September 30, September 30,

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

Three Months Ended

(In thousands) 2024 2023 % change

Sales $ 219,325 $ 202,447 8 %

Operating income 27,466 26,545 3 %

Operating margin 17.7 % 18.3 % (60 bps) 15.6 % 15.7 % (10 bps)

Operating margin 12.5 % 13.1 % (60 bps)

New orders $ 252,218 $ 258,644 (2 %)

Components of sales and operating income increase (decrease):

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2023 vs.

Sales Operating Income Sales Operating Income

Organic 2 % — % 6 % 5 %

Foreign currency 1 % — % — % — %

Total 3 % — % 6 % 5 %

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 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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

Components of sales and operating income increase (decrease):

Three Months Ended

Sales Operating Income

Organic 8 % 5 %

Acquisitions — % — %

Foreign currency — % (2 %)

Total 8 % 3 %

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, 2024 increased $17 million, or 8%, to $219 million from the prior year period.

In the commercial aerospace market, sales increased $15 million primarily due to higher OEM sales of actuation and sensors pro ducts, as well as surface treatment services, on narrowbody and widebody platforms.

Sales in the aerospace defense market benefited from higher actuation development on various fighter jet programs.

These increases were partially offset by lower sales of industrial automation products and surface treatment services in the general industrial market.

Operating income during the three months ended March 31, 2024 increased $1 million, or 3%, to $27 million from the prior year period, while operating margin decreased 60 basis points to 12.5%, as favorable overhead absorption on higher sales was essentially offset by unfavorable mix on actuation products as well as the timing of development contracts.

New orders during the three months ended March 31, 2024 decreased $6 million from the comparable prior year period, primarily due to the timing of aerospace defense orders.

Defense Electronics

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

Three Months Ended Nine Months Ended

September 30, September 30,

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

Three Months Ended

(In thousands) 2024 2023 % change

Sales $ 211,741 $ 162,154 31 %

Operating income 48,081 23,368 106 %

Operating margin 26.0 % 22.7 % 330 bps 21.3 % 18.6 % 270 bps

Operating margin 22.7 % 14.4 % 830 bps

New orders $ 287,280 $ 234,115 23 %

Components of sales and operating income increase (decrease):

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2023 vs.

Sales Operating Income Sales Operating Income

Three Months Ended

Sales Operating Income

Organic 30 % 106 %

Acquisitions — % — %

Foreign currency 1 % — %

Total 31 % 106 %

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

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 $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 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 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 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.

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

Sales during the three months ended March 31, 2024 increased $49 million, or 31%, to $212 million from the prior year period.

In the ground defense market, sales increased $25 million primarily due to higher demand for tactical battlefield communications equipment.

Sales in the aerospace defense market benefited $18 million primarily due to higher demand for embedded computing equipment on various fighter jet, unmanned aerial vehicle, and helicopter programs.

In the commercial aerospace market, sales increased primarily due to higher OEM sales of avionics and electronics on various platforms.

Operating income during the three months ended March 31, 2024 increased $25 million, or 106%, to $48 million, and operating margin increased 830 basis points from the prior year period to 22.7%, primarily due to favorable absorption on higher sales as well as favorable mix on defense electronics products.

New orders during the three months ended March 31, 2024 increased $53 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.

Naval & Power

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

Three Months Ended Nine Months Ended

September 30, September 30,

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

Three Months Ended

(In thousands) 2024 2023 % change

Sales $ 282,101 $ 266,259 6 %

Operating income 35,191 37,937 (7 %)

Operating margin 16.6 % 16.2 % 40 bps 15.9 % 16.2 % (30 bps)

Operating margin 12.5 % 14.2 % (170 bps)

New orders $ 361,846 $ 225,058 61 %

Components of sales and operating income increase (decrease):

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2023 vs.

Sales Operating Income Sales Operating Income

Three Months Ended

Sales Operating Income

Organic 6 % (7 %)

Acquisitions — % — %

Loss on divestiture — % — % — % 4 %

Foreign currency — % — %

1 unchanged sentence

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

Sales during the three months ended March 31, 2024 increased $16 million, or 6%, to $282 million from the prior year period.

In the aerospace defense market, sales increased $10 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.

In the power & process market, sales increased primarily due to higher nuclear aftermarket sales supporting the maintenance of existing operating reactors in the United States and Canada, partially offset by the wind-down on the China Direct AP1000 program.

Sales in the naval defense market benefited from increased demand on the Columbia-class submarine program, partially offset by the timing of sales on the Virginia-class submarine and CVN-80 aircraft carrier programs.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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.

Operating income during the three months ended March 31, 2024 decreased $3 million, or 7%, to $35 million, and operating margin decreased 170 basis points from the prior year period to 12.5%, as favorable overhead absorption on higher sales was more than offset by an unfavorable naval contract adjustment.

New orders increased $137 million during the three months ended March 31, 2024 from the comparable prior year period, primarily due to an increase in naval defense orders.

SUPPLEMENTARY INFORMATION

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

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

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

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) 2024 2023 % change

Aerospace & Defense markets:

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Total Curtiss-Wright $ 713,167 $ 630,860 13 %

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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 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.

Sales during the three months ended March 31, 2024 increased $82 million, or 20%, to $490 million, primarily due to higher sales across all markets.

Sales in the aerospace defense market increased primarily due to higher demand for embedded computing equipment on various fighter jet, unmanned aerial vehicle, and helicopter programs, higher sales of arresting systems equipment supporting various domestic and international customers, and higher actuation development on various fighter jet programs.

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

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

In the commercial aerospace market, sales increased primarily due to higher OEM sales of actuation and sensors pro ducts, as well as surface treatment services, on narrowbody and widebody platforms.

Commercial markets

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.

Sales of $223 million during the three months ended March 31, 2024 were essentially flat against the comparable prior year period.

In the power & process market, sales increased primarily due to higher nuclear aftermarket sales supporting the maintenance of existing operating reactors in the United States and Canada.

This increase was essentially offset by lower sales of industrial automation products and surface treatment services in the general industrial market.

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;

cash flow is therefore subject to market fluctuations and conditions.

Most of our long-term contracts allow for several billing points (progress or milestone) that provide us with cash receipts as costs are incurred throughout the project rather than upon contract completion, thereby reducing working capital requirements.

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

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

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

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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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):

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;

cash flow is therefore subject to market fluctuations and conditions.

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

Condensed Consolidated Statements of Cash Flows Three Months Ended

(In thousands) March 31, 2024 March 31, 2023

Cash provided by (used in):

Operating activities

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Net decrease in cash and cash equivalents (68,833) (126,315)

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 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.

Net cash used in operating activities decreased $46 million from the prior year period, primarily due to higher current period cash earnings, lower current period tax payments, and a $10 million settlement payment made to Westinghouse Electric Company (WEC) in the prior year period to resolve all open claims and counterclaims under the AP1000 U.S.

and China contracts.

Net cash used in investing activities increased $2 million from the prior year period, primarily due to higher capital spending in the Defense Electronics segment during the current period.

Net cash used in financing activities decreased $25 million from the prior year period, primarily due to the repayment of our 2013 Notes in February 2023.

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

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

Financing Activities

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.

The Corporation’s debt outstanding had an average interest rate o f 3.8% and 4.4% for the three months ended March 31, 2024 and 2023, respectively.

The Corporation’s average debt outstanding was $1,048 million an d $1,129 million for the three months ended March 31, 2024 and 2023, respectively.

Credit Agreement

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.

As of March 31, 2024, the Corporation had approximately $19 million in letters of credit supported by the credit facility.

The unused credit available under the credit facility as of March 31, 2024 was $731 million, which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

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.

For the three months ended March 31, 2024 and March 31, 2023, the Corporation used $12 million of cash in each period to repurchase approximately 53,000 and 73,000 outstanding shares, respectively, under its share repurchase program.

Cash Utilization

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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

As of the date of this report, we were in compliance with all debt agreements and credit facility covenants, including our most restrictive covenant, which is our debt to capitalization limit of 60%.

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

The debt to capitalization limit is a measure of our indebtedness (as defined in 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, 2024, we had the ability to borrow additional debt of approximately $2.4 billion without violating our debt to capitalization covenant.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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Securities and Exchange Commission on February 20, 2024, 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 nine months ended September 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