CURTISS WRIGHT CORP 10-K

Item 8. Financial Statements and Supplementary Data. CONSOLIDATED STATEMENTS OF EARNINGS For the years ended December 31, (In thousands, except per share data) 2024 2023 2022 Net sales Product sales $ 2,639,953 $ 2,389,711 $ 2,135,882 Service sales 481,236 455,662 421,143 Total net sales 3,121,189 2,845,373 2,557,025 Cost of sales Cost of product sales 1,690,574 1,507,480 1,348,569 Cost of service sales 277,066 270,715 253,847 Total cost of sales 1,967,640 1,778,195 1,602,416 Gross profit 1,153,549 1,067,178 954,609 Research and development expenses 91,647 85,764 80,836 Selling expenses 145,360 137,088 121,586 General and administrative expenses 373,497 359,724 324,093 Loss on divestiture — — 4,651 Restructuring expenses 14,448 — — Operating income 528,597 484,602 423,443 Interest expense 44,869 51,393 46,980 Other income, net 38,328 29,861 12,732 Earnings before income taxes 522,056 463,070 389,195 Provision for income taxes ( 117,078 ) ( 108,561 ) ( 94,847 ) Net earnings $ 404,978 $ 354,509 $ 294,348 Basic earnings per share $ 10.61 $ 9.26 $ 7.67 Diluted earnings per share $ 10.55 $ 9.20 $ 7.62 Dividends per share $ 0.83 $ 0.79 $ 0.75 Weighted average shares outstanding: Basic 38,153 38,283 38,386 Diluted 38,373 38,529 38,649 See notes to consolidated financial statements 43 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, (In thousands) 2024 2023 2022 Net earnings $ 404,978 $ 354,509 $ 294,348 Other comprehensive income Foreign currency translation, net of tax (1) ( 43,905 ) 37,519 ( 61,241 ) Pension and postretirement adjustments, net of tax (2) 13,903 8,174 ( 7,210 ) Other comprehensive income (loss), net of tax ( 30,002 ) 45,693 ( 68,451 ) Comprehensive income $ 374,976 $ 400,202 $ 225,897 (1) The tax benefit (expense) included in other comprehensive income for foreign currency translation adjustments for 2024, 2023, and 2022 was immaterial. (2) The tax benefit (expense) included in other comprehensive income for pension and postretirement adjustments for 2024, 2023, and 2022 was immaterial. See notes to consolidated financial statements 44 CONSOLIDATED BALANCE SHEETS As of December 31, (In thousands, except share data) 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 385,042 $ 406,867 Receivables, net 835,037 732,678 Inventories, net 541,442 510,033 Other current assets 88,073 67,502 Total current assets 1,849,594 1,717,080 Property, plant, and equipment, net 339,118 332,796 Goodwill 1,675,718 1,558,826 Other intangible assets, net 596,831 557,612 Operating lease right-of-use assets, net 169,350 141,435 Prepaid pension asset 299,130 261,869 Other assets 55,963 51,351 Total assets $ 4,985,704 $ 4,620,969 LIABILITIES Current liabilities: Current portion of long-term and short-term debt $ 90,000 $ — Accounts payable 247,185 243,833 Accrued expenses 219,054 188,039 Deferred revenue 459,421 303,872 Other current liabilities 80,288 70,800 Total current liabilities 1,095,948 806,544 Long-term debt 958,949 1,050,362 Deferred tax liabilities 140,659 132,319 Accrued pension and other postretirement benefit costs 67,413 66,875 Long-term operating lease liability 148,175 118,611 Other liabilities 124,761 117,845 Total liabilities 2,535,905 2,292,556 Contingencies and Commitments (Notes 9, 13, and 18) STOCKHOLDERS’ EQUITY Common stock, $ 1 par value, 100,000,000 shares authorized as of December 31, 2024 and December 31, 2023; 49,187,378 shares issued as of December 31, 2024 and December 31, 2023; outstanding shares were 37,650,645 as of December 31, 2024 and 38,202,754 as of December 31, 2023 49,187 49,187 Additional paid in capital 147,940 140,182 Retained earnings 3,861,073 3,487,751 Accumulated other comprehensive loss ( 243,225 ) ( 213,223 ) Common treasury stock, at cost ( 11,536,733 shares as of December 31, 2024 and 10,984,624 shares as of December 31, 2023) ( 1,365,176 ) ( 1,135,484 ) Total stockholders' equity 2,449,799 2,328,413 Total liabilities and stockholders’ equity $ 4,985,704 $ 4,620,969 See notes to consolidated financial statements 45 CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, (In thousands) 2024 2023 2022 Cash flows from operating activities: Net earnings $ 404,978 $ 354,509 $ 294,348 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 107,667 116,172 112,027 Loss on divestiture — — 4,651 Gain on sale/disposal of long-lived assets ( 10 ) ( 2,883 ) ( 4,671 ) Deferred income taxes ( 11,822 ) 2,908 ( 23,635 ) Share-based compensation 18,888 16,803 15,384 Non-cash restructuring charges 4,274 — — Changes in operating assets and liabilities, net of businesses acquired and disposed of: Receivables, net ( 88,808 ) ( 2,394 ) ( 75,955 ) Inventories, net ( 34,500 ) ( 21,568 ) ( 62,562 ) Accounts payable and accrued expenses 16,024 ( 15,779 ) 98,340 Deferred revenue 144,269 47,914 ( 17,646 ) Pension and postretirement liabilities, net ( 18,880 ) ( 18,307 ) ( 15,049 ) Other current and long-term assets and liabilities 2,195 ( 29,286 ) ( 30,456 ) Net cash provided by operating activities 544,275 448,089 294,776 Cash flows from investing activities: Proceeds from sale/disposal of long-lived assets 3,206 9,147 9,841 Purchases of investments — — ( 10,000 ) Additions to property, plant, and equipment ( 60,974 ) ( 44,666 ) ( 38,217 ) Acquisition of businesses, net of cash acquired ( 225,541 ) — ( 282,429 ) Additional consideration paid on prior year acquisitions — — ( 5,062 ) Net cash used for investing activities ( 283,309 ) ( 35,519 ) ( 325,867 ) Cash flows from financing activities: Borrowings under revolving credit facilities 21,309 638,116 1,697,647 Payment of revolving credit facilities ( 21,309 ) ( 638,116 ) ( 1,791,547 ) Borrowings of debt — — 300,000 Principal payments on debt — ( 202,500 ) — Repurchases of company stock ( 250,000 ) ( 50,141 ) ( 56,870 ) Proceeds from share-based compensation plans 11,345 10,584 9,997 Dividends paid ( 31,656 ) ( 30,249 ) ( 28,779 ) Other ( 1,182 ) ( 1,097 ) ( 1,020 ) Net cash provided by (used for) financing activities ( 271,493 ) ( 273,403 ) 129,428 Effect of exchange-rate changes on cash ( 11,298 ) 10,726 ( 12,367 ) Net increase (decrease) in cash and cash equivalents ( 21,825 ) 149,893 85,970 Cash and cash equivalents at beginning of year 406,867 256,974 171,004 Cash and cash equivalents at end of year 385,042 406,867 256,974 See notes to consolidated financial statements 46 CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock January 1, 2022 $ 49,187 $ 127,104 $ 2,897,922 $ ( 190,465 ) $ ( 1,068,163 ) Net earnings — — 294,348 — — Other comprehensive loss, net of tax — — — ( 68,451 ) — Dividends paid — — ( 28,779 ) — — Restricted stock — ( 8,523 ) — — 8,523 Employee stock purchase plan — 1,273 — — 8,724 Share-based compensation — 15,205 — — 179 Repurchase of common stock (1) — — — — ( 56,870 ) Other — ( 506 ) — — 506 December 31, 2022 $ 49,187 $ 134,553 $ 3,163,491 $ ( 258,916 ) $ ( 1,107,101 ) Net earnings — — 354,509 — — Other comprehensive income, net of tax — — — 45,693 — Dividends paid — — ( 30,249 ) — — Restricted stock — ( 13,878 ) — — 13,878 Employee stock purchase plan — 3,312 — — 7,272 Share-based compensation — 16,456 — — 347 Repurchase of common stock (1) — — — — ( 50,141 ) Other — ( 261 ) — — 261 December 31, 2023 $ 49,187 $ 140,182 $ 3,487,751 $ ( 213,223 ) $ ( 1,135,484 ) Net earnings — — 404,978 — — Other comprehensive loss, net of tax — — — ( 30,002 ) — Dividends paid — — ( 31,656 ) — — Restricted stock — ( 13,944 ) — — 13,944 Employee stock purchase plan — 5,714 — — 5,631 Share-based compensation — 18,644 — — 244 Repurchase of common stock (1) — — — — ( 251,977 ) Other — ( 2,656 ) — — 2,466 December 31, 2024 $ 49,187 $ 147,940 $ 3,861,073 $ ( 243,225 ) $ ( 1,365,176 ) (1) For the years ended December 31, 2024, 2023, and 2022, the Corporation repurchased approximately 766,000 , 270,000 , and 390,000 shares of its common stock, respectively. See notes to consolidated financial statements 47 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Curtiss-Wright Corporation and its subsidiaries (the Corporation or the Company) is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense markets, as well as critical technologies in demanding commercial power, process, and industrial markets. Principles of Consolidation The consolidated financial statements include the accounts of the Corporation and its majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated. Use of Estimates The financial statements of the Corporation have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP), which requires management to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. The most significant of these estimates includes the estimate of costs to complete on certain contracts using the over-time revenue recognition accounting method, cash flow estimates used for testing the recoverability of assets, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, fair value estimates around assets and assumed liabilities from acquisitions, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Actual results may differ from these estimates. Cash and Cash Equivalents Cash equivalents consist of money market funds and commercial paper that are readily convertible into cash, all with original maturity dates of three months or less. Inventory Inventories are stated at lower of cost or net realizable value. Production costs are comprised of direct material and labor and applicable manufacturing overhead. Property, Plant, and Equipment Property, plant, and equipment are carried at cost less accumulated depreciation. Major renewals and betterments are capitalized, while maintenance and repairs that do not improve or extend the life of the asset are expensed in the period that they are incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. Average useful lives for property, plant, and equipment are as follows: Buildings and improvements 5 to 40 Machinery, equipment, and other 3 to 15 See Note 6 to the Consolidated Financial Statements for further information on property, plant, and equipment. Intangible Assets Intangible assets are generally the result of acquisitions and consist primarily of purchased technology, customer related intangibles, trademarks, and technology licenses. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from 1 to 20 years. See Note 8 to the Consolidated Financial Statements for further information on other intangible assets. 48 Impairment of Long-Lived Assets The Corporation reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. If required, the Corporation compares the estimated fair value determined by either the undiscounted future net cash flows or appraised value to the related asset’s carrying value to determine whether there has been an impairment. If an asset is considered impaired, the asset is written down to fair value in the period in which the impairment becomes known. The Corporation recognized no significant impairment charges on assets held in use during the years ended December 31, 2024, 2023, and 2022. Goodwill Goodwill results from business acquisitions. The Corporation accounts for business acquisitions by allocating the purchase price to the tangible and intangible assets acquired and liabilities assumed. Assets acquired and liabilities assumed are recorded at their fair values, and the excess of the purchase price over the amounts allocated is recorded as goodwill. The recoverability of goodwill is subject to an annual impairment test or whenever an event occurs or circumstances change that would more likely than not result in an impairment. The impairment test is based on the estimated fair value of the underlying businesses. The Corporation’s goodwill impairment test is performed annually in the fourth quarter of each year. See Note 7 to the Consolidated Financial Statements for further information on goodwill. Fair Value of Financial Instruments Accounting guidance requires certain disclosures regarding the fair value of financial instruments. Due to the short maturities of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, the net book value of these financial instruments is deemed to approximate fair value. See Notes 10 and 13 to the Consolidated Financial Statements for further information on the Corporation's financial instruments. Research and Development The Corporation funds research and development programs for commercial products and independent research and development and bid and proposal work related to government contracts. Development costs include engineering for new customer requirements. Corporation-sponsored research and development costs are expensed as incurred. Research and development costs associated with customer-sponsored programs are capitalized to inventory and are recorded in cost of sales when products are delivered or services performed. Funds received under shared development contracts are a reduction of the total development expenditures under the shared contract and are shown net as research and development costs. Accounting for Share-Based Payments The Corporation follows the fair value based method of accounting for share-based employee compensation, which requires the Corporation to expense all share-based employee compensation. Share-based employee compensation is a non-cash expense since the Corporation settles these obligations by issuing the shares of Curtiss-Wright Corporation instead of settling such obligations with cash payments. Compensation expense for performance shares and time-based restricted stock is recognized over the requisite service period for the entire award based on the grant date fair value. Income Taxes The Corporation accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the results of operations in the period the new laws are enacted. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that such assets will be realized. The Corporation records amounts related to uncertain income tax positions by 1) prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements and 2) the measurement of the income tax benefits recognized from such positions. The Corporation’s accounting policy is to classify uncertain income tax positions that 49 are not expected to be resolved in one year as a non-current income tax liability and to classify interest and penalties as a component of interest expense and general and administrative expenses, respectively. See Note 12 to the Consolidated Financial Statements for further information. Recently Issued Accounting Standards Recently issued accounting standards adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosure of significant reportable segment expenses that are regularly provided to the chief operating decision-maker (“CODM”) and included within the Corporation's measure of segment profit or loss. ASU 2023-07 also requires that all disclosures around segment profit or loss and assets be provided on both an annual and interim basis. The Company adopted this standard as of December 31, 2024 and included revised disclosures within Note 17 of the Consolidated Financial Statements. Recently issued accounting standards to be adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvement to Income Tax Disclosures , which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregated information related to income taxes paid. The ASU is effective for annual reporting periods beginning with the year ending December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements. In December 2024, the FASB issued ASU 2024-03 , Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about certain income statement line items in the notes to the financial statements. The ASU is effective for annual reporting periods beginning with the year ending December 31, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements. 2. REVENUE The Corporation accounts for revenues in accordance with ASC 606, Revenue from Contracts with Customers . Under ASC 606, revenue is recognized when control of a promised good and/or service is transferred to a customer at a transaction price that reflects the consideration that the Corporation expects to be entitled to in exchange for that good and/or service. Performance Obligations The Corporation identifies a performance obligation for each promise in a contract to transfer a distinct good or service to the customer. As part of its assessment, the Corporation considers all goods and/or services promised in the contract, regardless of whether they are explicitly stated or implied by customary business practices. The Corporation’s contracts may contain either a single performance obligation, including the promise to transfer individual goods or services that are not separately distinct within the context of the respective contracts, or multiple performance obligations. For contracts with multiple performance obligations, the Corporation allocates the overall transaction price to each performance obligation using standalone selling prices, where available, or utilizes estimates for each distinct good or service in the contract where standalone prices are not available. In certain instances, the transaction price may include estimated amounts of variable consideration including but not limited to incentives, awards, price escalations, liquidated damages, and penalties, only to the extent that it is probable that a significant reversal of cumulative revenue recognized to date around such variable consideration will not occur. The Corporation estimates variable consideration to be included in the transaction price using either the expected value method or most likely amount method, contingent upon the facts and circumstances of the specific arrangement. Variable consideration associated with the Corporation’s respective arrangements is not typically constrained. The Corporation’s performance obligations are satisfied either at a point-in-time or on an over-time basis. Typically, over-time revenue recognition is based on the utilization of an input measure used to measure progress, such as costs incurred to date relative to total estimated costs. Changes in total estimated costs are recognized using the cumulative catch-up method of accounting which recognizes the cumulative effect of the changes on current and prior periods in the current period. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. A significant change in an estimate on one or more contracts could have a material effect on the Corporation's consolidated financial position, results or operations, or cash flows. There were no significant changes in estimated contract costs during 2024, 2023, or 2022. If a performance obligation does not qualify for over-time revenue 50 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 years ended December 31, 2024, 2023, and 2022: Year Ended December 31, 2024 2023 2022 Over-time 49 % 47 % 51 % Point-in-time 51 % 53 % 49 % Contract backlog represents the remaining performance obligations that have not yet been recognized as revenue. Backlog includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Total backlog was approximately $ 3.4 billion as of December 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 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 Year Ended December 31, (In thousands) 2024 2023 2022 Aerospace & Defense Aerospace Defense $ 616,590 $ 551,622 $ 479,743 Ground Defense 353,326 308,008 219,739 Naval Defense 821,898 720,013 694,015 Commercial Aerospace 378,086 324,949 276,519 Total Aerospace & Defense Customers $ 2,169,900 $ 1,904,592 $ 1,670,016 Commercial Power & Process $ 540,788 $ 509,998 $ 472,300 General Industrial 410,501 430,783 414,709 Total Commercial Customers $ 951,289 $ 940,781 $ 887,009 Total $ 3,121,189 $ 2,845,373 $ 2,557,025 Contract Balances Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Consolidated Balance Sheet. The Corporation’s contract assets primarily relate to its rights to consideration for work completed but not billed as of the reporting date. Contract assets are transferred to billed receivables when the rights to consideration become unconditional. This is typical in situations where amounts are billed as work progresses in accordance with agreed-upon contractual terms or upon achievement of contractual milestones. The Corporation’s contract liabilities primarily consist of customer advances received prior to revenue being earned. Revenues recognized for the years ended December 31, 2024, 2023, and 2022 included in the contract liabilities balance at the beginning of the respective years were approximately $ 230 million, $ 195 million, and $ 219 million, respectively. Changes in contract assets and contract liabilities as of December 31, 2024 were not materially impacted by any other factors. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Consolidated Balance Sheet. 3. ACQUISITIONS 51 The Corporation continually evaluates potential acquisitions that either strategically fit within the Corporation’s existing portfolio or expand the Corporation’s portfolio into new product lines or adjacent markets. The Corporation has completed numerous acquisitions that have been accounted for as business combinations and have resulted in the recognition of goodwill in the Corporation's financial statements. This goodwill arises because the purchase prices for these businesses reflect the future earnings and cash flow potential in excess of the earnings and cash flows attributable to the current product and customer set at the time of acquisition. Thus, goodwill inherently includes the know-how of the assembled workforce, the ability of the workforce to further improve the technology and product offerings, and the expected cash flows resulting from these efforts. Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations. The Corporation allocates the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. In the months after closing, as the Corporation obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and as the Corporation learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Corporation will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required. For the year ended December 31, 2024, the Corporation acquired two businesses for an aggregate purchase price of $ 226 million, net of cash acquired. Such acquisitions contributed $ 8 million of total net sales and $ 1 million of net losses for the year ended December 31, 2024 which are included in the Consolidated Statement of Earnings. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated: (In thousands) 2024 Accounts receivable $ 23,855 Inventory 5,789 Other current and non-current assets 8,876 Property, plant and equipment 4,106 Intangible assets 98,967 Operating lease right-of-use assets, net 1,858 Current and non-current liabilities ( 22,973 ) Deferred revenue ( 12,969 ) Deferred income taxes ( 14,121 ) Net tangible and intangible assets 93,388 Goodwill 132,153 Total purchase price $ 225,541 Goodwill deductible for tax purposes $ — 2024 Acquisitions WSC Inc. (WSC) On April 1, 2024, the Corporation completed the acquisition of WSC for $ 34 million. The Share Purchase Agreement contains representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited in escrow as security for potential indemnification claims against seller. The acquired business, which operates within the Naval & Power segment, is a provider of simulation technology that supports the design, commissioning, and reliable operation of commercial nuclear power generation and process plants. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete. Ultra Nuclear Limited and Weed Instrument Co., Inc. (Ultra Energy) On December 31, 2024, the Corporation completed the acquisition of Ultra Energy, a subsidiary of Ultra Electronics, for $ 192 million in cash, net of cash acquired. The acquired business, which operates in the Naval & Power segment, is a designer and 52 manufacturer of reactor protection systems, neutron monitoring systems, radiation monitoring systems, and temperature and pressure sensors. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete. 4. RECEIVABLES Receivables primarily include amounts billed to customers, unbilled charges on long-term contracts consisting of amounts recognized as sales but not billed, and other receivables. Substantially all amounts of unbilled receivables are expected to be billed and collected within one year. The amount of claims and unapproved change orders within our receivables balances are immaterial. The Corporation is either a prime contractor or subcontractor to various agencies of the U.S. Government. Revenues derived directly and indirectly from government sources (primarily the U.S. Government) were 57 % and 56 % of total net sales in 2024 and 2023, respectively. Total receivables due from government sources (primarily the U.S Government) were $ 561.9 million and $ 482.5 million as of December 31, 2024 and 2023, respectively. Government (primarily the U.S. Government) unbilled receivables, net of progress payments, were $ 319.0 million and $ 266.9 million as of December 31, 2024 and 2023, respectively. The composition of receivables as of December 31 is as follows: (In thousands) 2024 2023 Billed receivables: Trade and other receivables $ 479,837 $ 427,830 Unbilled receivables (contract assets): Recoverable costs and estimated earnings not billed, net of progress payments 359,402 308,874 Less: Allowance for doubtful accounts ( 4,202 ) ( 4,026 ) Receivables, net $ 835,037 $ 732,678 5. INVENTORIES 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. Long-term contract inventory includes an immaterial amount of claims or other similar items subject to uncertainty concerning their determination or realization. Inventories are valued at the lower of cost or net realizable value. The composition of inventories as of December 31 is as follows: (In thousands) 2024 2023 Raw materials $ 262,365 $ 239,313 Work-in-process 108,088 103,750 Finished goods 134,624 126,174 Inventoried costs related to U.S. Government and other long-term contracts, net of progress payments 36,365 40,796 Inventories, net $ 541,442 $ 510,033 6. PROPERTY, PLANT, AND EQUIPMENT The composition of property, plant, and equipment as of December 31 is as follows: (In thousands) 2024 2023 Land $ 15,774 $ 16,173 Buildings and improvements 251,228 253,408 Machinery, equipment, and other 927,964 905,409 Property, plant, and equipment, at cost 1,194,966 1,174,990 Less: Accumulated depreciation ( 855,848 ) ( 842,194 ) Property, plant, and equipment, net $ 339,118 $ 332,796 53 Depreciation expense for the years ended December 31, 2024, 2023, and 2022 was $ 50 million, $ 51 million, and $ 51 million, respectively. 7. GOODWILL The changes in the carrying amount of goodwill for 2024 and 2023 are as follows: (In thousands) Aerospace & Industrial Defense Electronics Naval & Power Consolidated December 31, 2022 $ 321,550 $ 702,786 $ 520,299 $ 1,544,635 Foreign currency translation adjustment 3,581 7,592 3,018 14,191 December 31, 2023 $ 325,131 $ 710,378 $ 523,317 $ 1,558,826 Acquisitions — — 132,153 132,153 Foreign currency translation adjustment ( 1,627 ) ( 8,659 ) ( 4,975 ) ( 15,261 ) December 31, 2024 $ 323,504 $ 701,719 $ 650,495 $ 1,675,718 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 Corporation completed its annual goodwill impairment testing as of October 31, 2024, 2023, and 2022 and concluded that there was no impairment of goodwill. 8. OTHER INTANGIBLE ASSETS, NET 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 generally range between 1 and 20 years. The following tables present the cumulative composition of the Corporation’s intangible assets as of December 31, 2024 and December 31, 2023, respectively. 2024 2023 (In thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Technology $ 330,593 $ ( 208,094 ) $ 122,499 $ 308,256 $ ( 195,446 ) $ 112,810 Customer-related intangibles 736,612 ( 367,872 ) 368,740 670,966 ( 339,325 ) 331,641 Programs (1) 144,000 ( 48,600 ) 95,400 144,000 ( 41,400 ) 102,600 Other intangible assets 55,738 ( 45,546 ) 10,192 54,227 ( 43,666 ) 10,561 Total $ 1,266,943 $ ( 670,112 ) $ 596,831 $ 1,177,449 $ ( 619,837 ) $ 557,612 (1) Programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology, and trademarks underlying the associated program. During the year ended December 31, 2024, the Corporation acquired intangible assets of $ 99 million. The Corporation acquired Customer-related intangibles of $ 71 million, Technology of $ 26 million, and Other intangible assets of $ 2 million, which have weighted average amortization periods of 12 years, 15 years, and 3 years, respectively. During the year ended December 31, 2023, the Corporation did not acquire any intangible assets. Amortization expense for the years ended December 31, 2024, 2023, and 2022 was $ 57 million, $ 65 million, and $ 61 million, respectively. The estimated future amortization expense of intangible assets over the next five years is as follows: 54 (In millions) 2025 $ 72 2026 $ 59 2027 $ 56 2028 $ 50 2029 $ 50 9. LEASES The Corporation conducts a portion of its operations from leased facilities, which include manufacturing and service facilities, administrative offices, and warehouses. In addition, the Corporation leases machinery and office equipment under operating leases. Our leases have remaining lease terms ranging from approximately 1 year to 15 years, some of which include options for renewals, escalations, or terminations. Rental expenses for all operating leases amounted to $ 47 million, $ 44 million, and $ 42 million for the years ended December 31, 2024, 2023, and 2022, respectively. Generally, the Corporation's lease contracts do not provide a readily determinable interest rate. Accordingly, the Corporation determines the incremental borrowing rate as of the lease commencement date in order to calculate the present value of its lease payments. The incremental borrowing rate is determined based on information available at the lease commencement date, including the lease term, market rates for the Corporation’s outstanding debt, as well as market rates for debt of companies with similar credit ratings. The components of lease expense were as follows: Year Ended (In thousands) December 31, 2024 December 31, 2023 Operating lease cost $ 47,256 $ 44,322 Finance lease cost: Amortization of right of use assets $ 1,037 $ 1,037 Interest on lease liabilities 299 347 Total finance lease cost $ 1,336 $ 1,384 Supplemental cash flow information related to leases was as follows: Year Ended (In thousands) December 31, 2024 December 31, 2023 Cash used for operating activities: Operating cash flows used for operating leases $ ( 38,590 ) $ ( 36,294 ) Operating cash flows used for finance leases ( 299 ) ( 347 ) Non-cash activity: Right-of-use assets obtained in exchange for operating lease obligations $ 21,831 $ 14,361 55 Supplemental balance sheet information related to leases was as follows: As of December 31, (In thousands, except lease term and discount rate) 2024 2023 Operating Leases Operating lease right-of-use assets, net $ 169,350 $ 141,435 Other current liabilities $ 29,772 $ 30,629 Long-term operating lease liability 148,175 118,611 Total operating lease liabilities $ 177,947 $ 149,240 Finance Leases Property, plant, and equipment $ 15,561 $ 15,561 Accumulated amortization ( 10,719 ) ( 9,682 ) Property, plant, and equipment, net $ 4,842 $ 5,879 Other current liabilities $ 1,269 $ 1,181 Other liabilities 5,473 6,742 Total finance lease liabilities $ 6,742 $ 7,923 Weighted average remaining lease term Operating leases 7.6 years 7.2 years Finance leases 4.7 years 5.7 years Weighted average discount rate Operating leases 4.37 % 3.99 % Finance leases 4.05 % 4.05 % Maturities of lease liabilities were as follows: As of December 31, 2024 (In thousands) Operating Leases Finance Leases 2025 $ 36,768 $ 1,518 2026 32,759 1,556 2027 27,549 1,595 2028 24,529 1,634 2029 19,725 1,108 Thereafter 69,871 — Total lease payments 211,201 7,411 Less: imputed interest ( 33,254 ) ( 669 ) Total $ 177,947 $ 6,742 10. FAIR VALUE OF FINANCIAL INSTRUMENTS Interest Rate Risks The Corporation’s primary interest rate exposure results from changes in U.S. dollar interest rates. Debt The estimated fair value amounts were determined by the Corporation using available market information, which is primarily based on quoted market prices for the same or similar issues as of December 31, 2024. The fair values of our debt instruments are characterized as Level 2 measurements which are based on market-based inputs or unobservable inputs and corroborated by market data such as quoted prices, interest rates, or yield curves. The estimated fair values of the Corporation’s fixed rate debt 56 instruments as of December 31, 2024, net of debt issuance costs, totaled $ 964 million compared to a carrying value, net of debt issuance costs, of $ 1,046 million. The estimated fair values of the Corporation’s fixed rate debt instruments as of December 31, 2023, net of debt issuance costs, totaled $ 973 million compared to a carrying value, net of debt issuance costs, of $ 1,046 million. The fair values described above may not be indicative of net realizable value or reflective of future fair values. 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. 11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses consist of the following as of December 31: (In thousands) 2024 2023 Accrued compensation $ 162,249 $ 130,471 Accrued interest 13,782 13,150 Accrued external commissions 5,967 8,421 Accrued insurance 9,055 5,988 Income taxes payable 5,013 10,352 Other 22,988 19,657 Total accrued expenses $ 219,054 $ 188,039 Other current liabilities consist of the following as of December 31: (In thousands) 2024 2023 Short-term operating lease liabilities $ 29,772 $ 30,629 Warranty reserves 13,372 15,207 Pension and other postretirement liabilities 5,399 4,981 Other 31,745 19,983 Total other current liabilities $ 80,288 $ 70,800 12. INCOME TAXES 2017 Tax Cuts and Jobs A ct In conjunction with the enactment of the 2017 Tax Cuts and Jobs Act (the Tax Act), the Corporation recorded provisional income tax expense of $ 18.2 million for the year ended December 31, 2017 related to the one-time transition tax on certain foreign earnings. The finalized transition tax of $ 23.6 million was to be paid over 8 years pursuant to the Tax Act. The transition tax liability, which is expected to be paid in 2025, was $ 6.1 million and $ 7.8 million as of December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024, the Corporation reassessed its assertion around whether foreign undistributed earnings should continue to no longer be considered permanently reinvested. The Corporation remains no longer permanently reinvested with the exception of three foreign subsidiaries. The Corporation has recorded a liability for withholding taxes that would arise upon distribution of the Corporation’s foreign undistributed earnings. Except as noted above, the Corporation remains permanently reinvested to the extent of any outside basis differences in its foreign subsidiaries in excess of the amount of undistributed earnings, as it is not practicable to determine the provision impact, if any, due to the complexities associated with this calculation. Earnings before income taxes for the years ended December 31 consist of: (In thousands) 2024 2023 2022 Domestic $ 323,898 $ 300,200 $ 239,356 Foreign (1) 198,158 162,870 149,839 $ 522,056 $ 463,070 $ 389,195 57 (1) The Corporation recognized a pre-tax loss of $ 5 million during the first quarter of 2022 pertaining to the sale of its industrial valve business in Germany. The provision for income taxes for the years ended December 31 consists of: (In thousands) 2024 2023 2022 Current: Federal $ 62,165 $ 58,629 $ 65,047 State 18,272 13,098 12,717 Foreign 43,200 36,791 34,520 Total current 123,637 108,518 112,284 Deferred: Federal ( 5,507 ) ( 180 ) ( 11,413 ) State 950 507 ( 4,442 ) Foreign ( 2,002 ) ( 284 ) ( 1,582 ) Total deferred ( 6,559 ) 43 ( 17,437 ) Provision for income taxes $ 117,078 $ 108,561 $ 94,847 The effective tax rate varies from the U.S. federal statutory tax rate for the years ended December 31, principally: 2024 2023 2022 U.S. federal statutory tax rate 21.0 % 21.0 % 21.0 % Add (deduct): State and local taxes, net of federal benefit 3.0 2.3 1.7 Foreign earnings (1) 1.1 1.3 0.7 Foreign loss on sale — — 0.2 Financing arrangement (2) ( 1.0 ) — — R&D tax credits ( 1.3 ) ( 1.1 ) ( 1.1 ) Foreign-derived intangible income ( 1.4 ) ( 1.2 ) ( 1.2 ) All other, net 1.0 1.1 3.1 Effective tax rate 22.4 % 23.4 % 24.4 % (1) Foreign earnings primarily include the net impact of differences between local statutory rates and the U.S. Federal statutory rate, the cost of repatriating foreign earnings, and the impact of changes to foreign valuation allowances. (2) In an effort to simplify its organizational structure and facilitate repatriation, the Corporation underwent a substantial internal reorganization of its foreign ownership structure in 2024 that included the establishment of financing arrangements. 58 The components of the Corporation’s deferred tax assets and liabilities as of December 31 are as follows: (In thousands) 2024 2023 Deferred tax assets: Capitalized R&D expenses $ 60,818 $ 39,463 Operating lease liabilities 40,840 32,041 Inventories, net 23,926 24,282 Incentive compensation 11,011 9,314 Environmental reserves 9,324 8,949 Net operating loss 6,431 8,348 Other 34,264 30,417 Total deferred tax assets 186,614 152,814 Deferred tax liabilities: Goodwill amortization 117,340 110,543 Other intangible amortization 62,277 53,551 Pension and other postretirement assets 46,828 37,870 Operating lease right-of-use assets, net 38,741 30,327 Withholding taxes 13,017 16,120 Depreciation 14,880 15,339 Contract revenue recognition 15,256 5,297 Other 3,776 2,863 Total deferred tax liabilities 312,115 271,910 Valuation allowance 4,988 4,892 Net deferred tax liabilities $ 130,489 $ 123,988 Deferred tax assets and liabilities are reflected on the Corporation’s Consolidated Balance Sheets as of December 31 as follows: (In thousands) 2024 2023 Net noncurrent deferred tax assets (1) $ 10,170 $ 8,331 Net noncurrent deferred tax liabilities 140,659 132,319 Net deferred tax liabilities $ 130,489 $ 123,988 (1) Amount is classified within the "Other Assets" caption in the Corporation's Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023, respectively. The Corporation has income tax net operating loss carryforwards related to international operations of $ 21.0 million, of which $ 17.9 million have an indefinite life and $ 3.1 million which expire through 2029. The Corporation has federal and state income tax net loss carryforwards of $ 18.5 million, all of which are net operating losses that expire through 2041. The Corporation has recorded a deferred tax asset of $ 6.4 million, reflecting the benefit of the loss carryforwards related to international and domestic operations. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. As of December 31, 2024, the Corporation decreased its valuation allowance to $ 5.0 million, in order to measure only the portion of deferred tax assets that more likely than not will be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as projections for growth. Income tax payments, net of refunds, of $ 135.7 million , $ 136.4 million, and $ 61.1 million were made in 2024, 2023, and 2022, respectively. The Corporation has recorded a liability in Other liabilities for interest of $ 4.9 million and penalties of $ 2.5 million as of December 31, 2024. 59 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (In thousands) 2024 2023 2022 Balance as of January 1, $ 17,888 $ 17,371 $ 17,018 Additions for tax positions of prior periods 1,805 2,387 3,004 Reductions for tax positions of prior periods ( 2,213 ) ( 2,419 ) ( 1,732 ) Additions for tax positions related to the current year 1,747 1,744 1,068 Settlements ( 215 ) ( 1,195 ) ( 1,987 ) Balance as of December 31, $ 19,012 $ 17,888 $ 17,371 In many cases, the Corporation’s uncertain tax positions are related to tax years that remain subject to examination by tax authorities. The following describes the open tax years, by major tax jurisdiction, as of December 31, 2024: United States (Federal) 2020 - present United States (Various states) 2013 - present United Kingdom 2023 - present Canada 2020 - present The Corporation does not expect any significant changes to the estimated amount of liability associated with its uncertain tax positions through the next twelve months. Included in total unrecognized tax benefits as of December 31, 2024, 2023, and 2022 is $ 16.2 million, $ 15.3 million, and $ 15.1 million, respectively, which if recognized, would favorably impact the effective income tax rate. 13. DEBT Debt consists of the following as of December 31: (In thousands) 2024 2024 2023 2023 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value 3.85 % Senior notes due 2025 $ 90,000 $ 89,876 $ 90,000 $ 88,243 4.24 % Senior notes due 2026 200,000 196,059 200,000 195,556 4.05 % Senior notes due 2028 67,500 64,733 67,500 64,801 4.11 % Senior notes due 2028 90,000 85,784 90,000 85,999 3.10 % Senior notes due 2030 150,000 131,386 150,000 131,942 3.20 % Senior notes due 2032 150,000 125,426 150,000 127,649 4.49 % Senior notes due 2032 200,000 182,451 200,000 187,584 4.64 % Senior notes due 2034 100,000 89,538 100,000 92,961 Total debt 1,047,500 965,253 1,047,500 974,735 Debt issuance costs, net ( 1,326 ) ( 1,326 ) ( 1,541 ) ( 1,541 ) Unamortized interest rate swap proceeds (1) 2,775 2,775 4,403 4,403 Total debt, net 1,048,949 966,702 1,050,362 977,597 Less: current portion of long-term debt ( 90,000 ) ( 89,876 ) — — Total long-term debt $ 958,949 $ 876,826 $ 1,050,362 $ 977,597 (1) Represents the gain from termination of the Corporation's interest rate swap agreements on its 3.85 % and 4.24 % Senior Notes in February 2016, which will be amortized into interest expense over the remaining terms of the respective notes. The Corporation's total debt outstanding had a weighted-average interest rate of 3.7 % in 2024 and 3.9 % in 2023. 60 Aggregate maturities of debt are as follows: (In thousands) 2025 $ 90,000 2026 200,000 2027 — 2028 157,500 2029 — Thereafter 600,000 Total $ 1,047,500 Interest payments of $ 42 million , $ 52 million, and $ 42 million were made in 2024, 2023, and 2022, respectively. Revolving Credit Agreement In May 2022, the Corporation terminated its existing credit agreement, which was set to expire in October 2023, and entered into a new credit agreement (Credit Agreement) with a syndicate of financial institutions. The Credit Agreement, which is set to expire in May 2027, increased the size of the Corporation’s revolving credit facility to $ 750 million, and expanded the accordion feature to $ 250 million. The Corporation plans to use the Credit Agreement for general corporate purposes, which may include the funding of possible future acquisitions or supporting internal growth initiatives. As of December 31, 2024, the Corporation had $ 21 million in letters of credit supported by the Credit Agreement and no outstanding borrowings under the Credit Agreement. The unused credit available under the Credit Agreement as of December 31, 2024 was $ 729 million, which the Corporation had the ability to borrow in full without violating its debt to capitalization covenant. The Credit Agreement contains covenants that the Corporation considers usual and customary for an agreement of this type for comparable commercial borrowers, including a maximum consolidated debt to capitalization ratio of 60 % ( 65 % for four consecutive quarters following an acquisition greater than $100 million). The Credit Agreement has customary events of default, such as non-payment of principal when due; nonpayment of interest, fees, or other amounts; cross-payment default and cross-acceleration. Borrowings under the credit agreement accrue interest based on (i) the Secured Overnight Financing Rate (SOFR) or (ii) a base rate of the highest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted Daily Term SOFR Rate. The interest rate and level of facility fees are dependent on certain financial ratios, as defined in the Credit Agreement. The Credit Agreement also provides customary fees, including administrative agent and commitment fees. In connection with the Credit Agreement, the Corporation paid customary transaction fees that have been deferred and are being amortized over the term of the Credit Agreement. Senior Notes On October 27, 2022 , the Corporation issued $ 300 million of Senior Notes (the 2022 Notes), consisting of $ 200 million of 4.49 % notes that mature on October 27, 2032 and $ 100 million of 4.64 % notes that mature on October 27, 2034 . The 2022 Notes are senior unsecured obligations, equal in right of payment to the Corporation’s existing senior indebtedness. The Corporation, at its option, can prepay at any time all or any part of the 2022 Notes, subject to a make-whole payment in accordance with the terms of the Note Purchase Agreement. In connection with the issuance of the 2022 Notes, the Corporation paid customary fees that have been deferred and are being amortized over the term of the 2022 Notes. Under the terms of the Note Purchase Agreements, the Corporation is required to maintain certain financial ratios, the most restrictive of which are a debt to capitalization limit of 60 % ( 65 % for four consecutive quarters following an acquisition greater than $100 million) and an interest coverage ratio not to be less than 3 to 1. The debt to capitalization ratio (as defined per the Notes Purchase Agreement and Credit Agreement) is calculated using the same formula for all of the Corporation’s debt agreements and is a measure of the Corporation’s indebtedness to capitalization, where capitalization equals debt plus equity. The 2022 Notes also contain a cross default provision with respect to the Corporation’s other senior indebtedness. On August 13, 2020 , the Corporation issued $ 300 million of Senior Notes (the 2020 Notes), consisting of $ 150 million of 3.10 % Senior Notes that mature on August 13, 2030 and $ 150 million of 3.20 % Senior Notes that mature on August 13, 2032 . The 2020 Notes are senior unsecured obligations, equal in right of payment to the Corporation’s existing senior indebtedness. The Corporation, at its option, can prepay at any time all or any part of the 2020 Notes, subject to a make-whole payment in accordance with the terms of the Note Purchase Agreement. In connection with the issuance of the 2020 Notes, the Corporation paid customary fees that have been deferred and are being amortized over the term of the 2020 Notes. Under the terms of the Note Purchase Agreements, as amended, the Corporation is required to maintain certain financial ratios, the most restrictive of 61 which are a debt to capitalization limit of 60 % ( 65 % for four consecutive quarters following an acquisition greater than $100 million) and an interest coverage ratio not to be less than 3 to 1. The debt to capitalization ratio (as defined per the Notes Purchase Agreement and Credit Agreement) is calculated using the same formula for all of the Corporation’s debt agreements and is a measure of the Corporation’s indebtedness to capitalization, where capitalization equals debt plus equity. The 2020 Notes also contain a cross default provision with respect to the Corporation’s other senior indebtedness. On February 26, 2013 , the Corporation issued $ 500 million of Senior Notes (the 2013 Notes). The 2013 Notes consisted of $ 225 million of 3.70 % Senior Notes that matured on February 26, 2023 , $ 100 million of 3.85 % Senior Notes that mature on February 26, 2025 , and $ 75 million of 4.05 % Senior Notes that mature on February 26, 2028 . $ 100 million of additional 4.11 % Senior Notes were deferred and subsequently issued on September 26, 2013 that mature on September 26, 2028 . On October 15, 2018, the Corporation made a discretionary $ 50 million prepayment on the $ 500 million 2013 Notes. The 2013 Notes are senior unsecured obligations, equal in right of payment to the Corporation’s existing senior indebtedness. The Corporation, at its option, can prepay at any time all or any part of the 2013 Notes, subject to a make-whole payment in accordance with the terms of the Note Purchase Agreement. In connection with the issuance of the 2013 Notes, the Corporation paid customary fees that have been deferred and are being amortized over the term of the 2013 Notes. Under the terms of the Note Purchase Agreement, as amended, the Corporation is required to maintain certain financial ratios, the most restrictive of which are a debt to capitalization limit of 60 % ( 65 % for four consecutive quarters following an acquisition greater than $100 million) and an interest coverage ratio of less than 3 to 1. The debt to capitalization ratio (as defined per the Notes Purchase Agreement and Credit Agreement) is calculated using the same formula for all of the Corporation’s debt agreements and is a measure of the Corporation’s indebtedness to capitalization, where capitalization equals debt plus equity. The 2013 Notes also contain a cross default provision with respect to the Corporation’s other senior indebtedness. On December 8, 2011 , the Corporation issued $ 300 million of Senior Notes (the 2011 Notes). The 2011 Notes consist of $ 100 million of 3.84 % Senior Notes that matured on December 1, 2021 and $ 200 million of 4.24 % Senior Series Notes that mature on December 1, 2026 . The 2011 Notes are senior unsecured obligations, equal in right of payment to our existing senior indebtedness. The Corporation, at its option, can prepay at any time all or any part of our 2011 Notes, subject to a make-whole payment in accordance with the terms of the Note Purchase Agreement. In connection with the 2011 Notes, the Corporation paid customary fees that have been deferred and are being amortized over the term of the 2011 Notes. Under the terms of the Note Purchase Agreement, as amended, the Corporation is required to maintain certain financial ratios, the most restrictive of which is a debt to capitalization limit of 60 % ( 65 % for four consecutive quarters following an acquisition greater than $100 million) and an interest coverage ratio of less than 3 to 1. The debt to capitalization ratio (as defined per the Notes Purchase Agreement and Credit Agreement) is calculated using the same formula for all of the Corporation’s debt agreements and is a measure of the Corporation’s indebtedness to capitalization, where capitalization equals debt plus equity. The 2011 Notes also contain a cross default provision with our other senior indebtedness. As of December 31, 2024, the Corporation had the ability to borrow additional debt of $ 2.5 billion without violating our debt to capitalization covenant. 14. EARNINGS PER SHARE The Corporation is required to report both basic earnings per share (EPS), based on the weighted-average number of common shares outstanding, and diluted earnings per share, based on the basic EPS adjusted for all potentially dilutive shares issuable. For the years ended December 31, 2024, 2023 and 2022, there were approximately 24,000 , 12,000 , and 28,000 anti-dilutive equity-based awards excluded from the calculation of diluted earnings per share. 62 Earnings per share calculations for the years ended December 31, 2024, 2023, and 2022, were as follows: (In thousands, except per share data) Net Earnings Weighted- Average Shares Outstanding Earnings per Share 2024 Basic earnings per share $ 404,978 38,153 $ 10.61 Dilutive effect of deferred stock compensation 220 Diluted earnings per share $ 404,978 38,373 $ 10.55 2023 Basic earnings per share $ 354,509 38,283 $ 9.26 Dilutive effect of deferred stock compensation 246 Diluted earnings per share $ 354,509 38,529 $ 9.20 2022 Basic earnings per share $ 294,348 38,386 $ 7.67 Dilutive effect of deferred stock compensation 263 Diluted earnings per share $ 294,348 38,649 $ 7.62 15. SHARE-BASED COMPENSATION PLANS In May 2024, the Corporation’s stockholders approved the Curtiss-Wright 2024 Omnibus Incentive Plan (the 2024 Omnibus Plan). The plan replaced the Corporation's existing 2014 Omnibus Incentive Plan. Beginning in May 2024, all awards were granted under the 2024 Omnibus Plan. The maximum aggregate number of shares of common stock that may be issued under the 2024 Omnibus Plan are 1,560,000 less one share of common stock for every one share of common stock granted under any prior plan after December 31, 2024 and prior to the effective date of the 2024 Omnibus Plan. In addition, any awards that were previously granted under any prior plan that terminate without issuance of shares shall be eligible for issuance under the 2024 Omnibus Plan. Awards under the 2024 Omnibus Plan may be in the form of stock options, stock appreciation rights, restricted stock units (RSU), other stock-based awards, performance share units (PSU), or cash-based performance units (PU). During 2024, the Corporation granted share-based awards in the form of RSUs and PSUs. Previous grants under the 2014 Omnibus Incentive Plan were in the form of RSUs and PSUs. Under our employee benefit program, the Corporation also provides an Employee Stock Purchase Plan (ESPP) to most active employees. Certain awards provide for accelerated vesting if there is a change in control. The compensation cost for employee and non-employee director share-based compensation programs during 2024, 2023, and 2022 is as follows: (In thousands) 2024 2023 2022 Employee Stock Purchase Plan $ 2,002 $ 1,869 $ 1,764 Performance Share Units 5,362 5,109 5,069 Restricted Share Units 9,730 8,032 6,725 Other share-based payments 1,794 1,793 1,826 Total share-based compensation expense before income taxes $ 18,888 $ 16,803 $ 15,384 Other share-based grants include service-based restricted stock awards to non-employee directors, who are treated as employees as prescribed by the accounting guidance on share-based payments. The compensation cost recognized follows the cost of the employee, which is primarily reflected as general and administrative expense in the Consolidated Statement of Earnings. No share-based compensation costs were capitalized during 2024, 2023, or 2022. Performance Share Units The Corporation has granted performance share units to certain employees, whose three-year cliff vesting is contingent upon the Corporation's total shareholder return over the three-year term beginning at the start of the fiscal year of the date of grant. Performance is measured by determining the percentile rank of the total shareholder return of the Corporation's common stock in relation to the total shareholder return of a self-constructed peer group. The non-vested shares are subject to forfeiture if 63 established performance goals are not met or employment is terminated other than due to death, disability, or retirement. Share plans are denominated in share-based units based on the fair market value of the Corporation’s common stock on the date of grant. The performance share unit’s compensation cost is amortized to expense on a straight-line basis over the three-year requisite service period. Restricted Share Units Restricted share units cliff vest at the end of the awards’ vesting period. The restricted share units are service-based and thus compensation cost is amortized to expense on a straight-line basis over the requisite service period, which is typically three years . The non-vested restricted units are subject to forfeiture if employment is terminated other than due to death, disability, or retirement. Employee Stock Purchase Plan The Corporation’s ESPP enables eligible employees to purchase the Corporation’s common stock at a price per share equal to 85 % of the fair market value at the end of each offering period. Each offering period of the ESPP lasts six months, commencing on January 1st and July 1st of each year. Compensation cost is recognized on a straight-line basis over the six-month vesting period during which employees perform related services. 16. PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The Corporation maintains nine separate and distinct pension and other post-retirement defined benefit plans, consisting of three domestic plans and six separate foreign pension plans. The domestic plans include a qualified pension plan, a non-qualified pension plan, and a postretirement health-benefits plan. The foreign plans consist of one defined benefit pension plan each in the United Kingdom, France, Canada, and Switzerland, and two in Mexico. Domestic Plans Qualified Pension Plan The Corporation maintains a defined benefit pension plan (the CW Pension Plan) covering certain employee populations under six benefit formulas: a non-contributory non-union and union formula for certain Curtiss-Wright (CW) employees, a contributory union and non-union benefit formula for employees at the EMD business unit, and two benefit formulas providing annuity benefits for participants in the former Williams Controls salaried and union plans. CW non-union employees hired prior to February 1, 2010 receive a final average pay benefit based on years of credited service, using the five highest consecutive years’ compensation during the last ten years of service. These employees became participants under the CW Pension Plan after one year of service and were vested after three years of service. CW non-union employees hired on or after the effective date were eligible for a cash balance benefit through December 31, 2013, and were transitioned to the new defined contribution plan, further described below. CW union employees who have negotiated a benefit under the CW Pension Plan are entitled to a benefit based on years of service multiplied by a monthly pension rate. The formula for EMD employees is based on a career average pay benefit and covers both union and non-union employees and is designed to satisfy the requirements of relevant collective bargaining agreements. Employee contributions are withheld each pay period and are equal to 1.5 % of salary. The benefits for the EMD employees are based on years of service and compensation. On December 31, 2012, the Corporation amended the CW Pension Plan to close the benefit to EMD employees hired after January 1, 2014. Participants of the former Williams Controls UAW Local 492 Plan for union employees are entitled to a benefit based on years of service multiplied by a monthly pension rate, and may be eligible for supplemental benefits based upon attainment of certain age and service requirements. Effective January 1, 2014, all active non-union employees participating in the final and career average pay formulas in the defined benefit plan will cease accruals 15 years from the effective date of the amendment. In addition to the sunset provision, cash balance benefit accruals for non-union participants ceased as of January 1, 2014. Non-union employees who were not currently receiving final or career average pay benefits became eligible to participate in a new defined contribution plan which provides both employer match and non-elective contribution components. Subsequent to the original amendment, the Corporation successfully negotiated the sunset provision into the bargaining agreements for all represented employees that received benefits through this plan. 64 As of December 31, 2024, and 2023, the Corporation had a noncurrent pension asset of $ 279.6 million and $ 244.1 million, respectively. The change in balance was primarily due to a higher discount rate in 2024. Nonqualified Pension Plan The Corporation also maintains a non-qualified restoration plan (the CW Restoration Plan) covering those employees of CW and EMD whose compensation or benefits exceed the IRS limitation for pension benefits. Benefits under the CW Restoration Plan are not funded, and, as such, the Corporation had an accrued pension liability of $ 47.9 million and $ 44.8 million as of December 31, 2024 and 2023, respectively. The Corporation’s contributions to the CW Restoration Plan are expected to be $ 3.6 million in 2025. Other Post-Employment Benefits (OPEB) Plan The Corporation provides post-employment benefits consisting of retiree health and life insurance to three distinct groups of employees/retirees: the CW Grandfathered plan, and plans assumed in the acquisitions of EMD and Williams Controls. The Corporation also provides retiree health and life insurance benefits for substantially all Curtiss-Wright EMD employees. The plan provides basic health and welfare coverage for pre-65 participants based on years of service and are subject to certain caps. Effective January 1, 2011, the Corporation modified the benefit design for post-65 retirees by introducing Retiree Reimbursement Accounts (RRAs) to participants in lieu of the traditional benefit delivery. Participant accounts are funded a set amount annually that can be used to purchase supplemental coverage on the open market, effectively capping the benefit. The plan also provides retiree health and life insurance benefits for certain retirees of the Williams Controls salaried and union pension plans. Effective August 31, 2013, the Corporation modified the benefit design for post-65 retirees by introducing RRAs to align with the EMD delivery model. The Corporation had an accrued postretirement benefit liability of $ 17.6 million and $ 20.0 million as of December 31, 2024 and December 31, 2023, respectively. The Corporation expects to contribute $ 1.6 million to the plan during 2025. Activity associated with the postretirement benefit liability for the years ended December 31, 2024 and 2023 was immaterial. Foreign Plans As of December 31, 2024 and 2023, the total projected benefit obligation related to all foreign plans was $ 71.8 million and $ 80.8 million, respectively. As of December 31, 2024 and December 31, 2023, the Corporation had a net pension asset of $ 12.2 million and $ 10.7 million, respectively. The Corporation's contributions to the foreign plans are expected to be $ 1.1 million in 2025. Components of net periodic benefit expense The net pension and net postretirement benefit costs consisted of the following: Pension Benefits (In thousands) 2024 2023 2022 Service cost $ 16,460 $ 16,224 $ 23,217 Interest cost 33,344 34,085 20,923 Expected return on plan assets ( 65,932 ) ( 63,013 ) ( 54,855 ) Amortization of prior service cost ( 5 ) ( 106 ) ( 318 ) Recognized net actuarial loss 848 139 17,198 Cost of settlements/curtailments 787 — 4,499 Net periodic benefit cost $ ( 14,498 ) $ ( 12,671 ) $ 10,664 The cost of settlements/curtailments indicated above represents events that are accounted for under guidance on employers’ accounting for settlements and curtailments of defined benefit pension plans. In 2022, the Company recognized settlement charges related to the retirement of former executives. 65 The following table outlines the Corporation's consolidated disclosure of the pension benefits information described previously. The Corporation had no foreign postretirement plans. All plans were valued using a December 31, 2024 measurement date. Pension Benefits (In thousands) 2024 2023 Change in benefit obligation: Beginning of year $ 753,370 $ 733,434 Service cost 16,460 16,224 Interest cost 33,344 34,085 Plan participants’ contributions 1,228 1,200 Actuarial (gain) loss ( 40,169 ) 17,312 Settlements ( 3,463 ) — Benefits paid ( 42,155 ) ( 52,228 ) Actual expenses ( 1,834 ) ( 1,997 ) Currency translation adjustments ( 3,816 ) 5,340 End of year $ 712,965 $ 753,370 Change in plan assets: Beginning of year $ 963,364 $ 912,702 Actual return on plan assets 40,255 93,488 Employer contribution 2,896 4,601 Plan participants’ contributions 1,228 1,200 Benefits paid ( 42,155 ) ( 52,228 ) Actual expenses ( 1,834 ) ( 1,997 ) Settlements ( 3,463 ) — Currency translation adjustments ( 3,407 ) 5,598 End of year $ 956,884 $ 963,364 Funded status $ 243,919 $ 209,994 Pension Benefits (In thousands) 2024 2023 Amounts recognized on the balance sheet Noncurrent assets $ 299,130 $ 261,869 Current liabilities ( 3,839 ) ( 3,280 ) Noncurrent liabilities ( 51,372 ) ( 48,595 ) Total $ 243,919 $ 209,994 Amounts recognized in accumulated other comprehensive income (AOCI) Net actuarial loss $ 104,770 $ 121,557 Prior service cost ( 148 ) ( 163 ) Total $ 104,622 $ 121,394 Information for plans with an accumulated benefit obligation in excess of plan assets: Projected benefit obligation $ 78,067 $ 77,189 Accumulated benefit obligation 67,462 68,257 Fair value of plan assets 22,855 25,314 66 Plan Assumptions Pension Benefits 2024 2023 Weighted-average assumptions in determination of benefit obligation: Discount rate 5.38 % 4.71 % Rate of compensation increase 3.32 % 3.33 % Weighted-average assumptions in determination of net periodic benefit cost: Discount rate 4.71 % 4.95 % Expected return on plan assets 6.58 % 6.41 % Rate of compensation increase 3.33 % 3.34 % The Corporation applies the spot rate, or full yield curve, approach for developing discount rates. The discount rate for each plan's past service liabilities and service cost is determined by discounting the plan’s expected future benefit payments using a yield curve developed from high quality bonds that are rated Aa or better by Moody’s as of the measurement date. The yield curve calculation matches the notional cash inflows of the hypothetical bond portfolio with the expected benefit payments to arrive at one effective rate for these components. Interest cost is determined by applying the spot rate from the full yield curve to each anticipated benefit payment, based on the anticipated optional form elections. The overall expected return on assets assumption is based on a combination of historical performance of the pension fund and expectations of future performance. Expected future performance is determined by weighting the expected returns for each asset class by the plan’s asset allocation. The expected returns are based on long-term capital market assumptions utilizing a ten-year time horizon through consultation with investment advisors. While consideration is given to recent performance and historical returns, the assumption represents a long-term prospective return. Pension Plan Assets The overall objective for plan assets is to earn a rate of return over time to meet anticipated benefit payments in accordance with plan provisions. The long-term investment objective of the domestic retirement plan is to achieve a total rate of return, net of fees, which exceeds the actuarial overall expected return on asset assumptions used for funding purposes and which provides an appropriate premium over inflation. The intermediate-term objective of the domestic retirement plan, defined as three to five years, is to outperform each of the capital markets in which assets are invested, net of fees. During periods of extreme market volatility, preservation of capital takes a higher precedence than outperforming the capital markets. The Finance Committee of the Corporation’s Board of Directors is responsible for formulating investment policies, developing investment manager guidelines and objectives, and approving and managing qualified advisors and investment managers. The guidelines established define permitted investments within each asset class and apply certain restrictions such as limits on concentrated holdings, and prohibits selling securities short, buying on margin, and the purchase of any securities issued by the Corporation. The Corporation maintains the funds of the CW Pension Plan under a trust that is diversified across investment classes and among investment managers to achieve an optimal balance between risk and return. In the first quarter of 2022, the Corporation implemented an asset de-risking strategy in recognition of the strong funded status of the plan and a desire to reduce volatility as the plan approaches the cessation of accruals in 2028. As a part of its strategy shift, the Corporation transitioned to an Outsourced Chief Investment Officer model that introduces asset allocation constraints that increase the fixed income allocation over time and with changes in the funded status. Accordingly, our established target allocations for each of the following asset classes: domestic equity securities, international equity securities, and debt securities have changed. Below are the Corporation’s actual and current target allocations for the CW Pension Plan, representing 91 % of consolidated assets: As of December 31, Target Expected 2024 2023 Exposure Range Asset class Domestic equities 22 % 29 % 22 % 17 %- 27 % International equities 7 % 10 % 8 % 4 %- 11 % Total equity 29 % 39 % 30 % 20 %- 40 % Fixed income 71 % 61 % 70 % 60 %- 80 % 67 As of December 31, 2024 and 2023, cash funds in the CW Pension Plan represented approximately 3 % and 2 % of portfolio assets, respectively. Foreign plan assets represent 9 % of consolidated plan assets, with most of the assets supporting the U.K. plan. Generally, the foreign plans follow a similar asset allocation strategy and are more heavily weighted in fixed income resulting in a weighted expected return on assets assumption of 4.7 % for all foreign plans. The Corporation may from time to time require the reallocation of assets in order to bring the retirement plans into conformity with these ranges. The Corporation may also authorize alterations or deviations from these ranges where appropriate for achieving the objectives of the retirement plans. Fair Value Measurements The following table presents consolidated plan assets (in thousands) using the fair value hierarchy as of December 31, 2024 and December 31, 2023. Asset Category Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 16,105 $ 16,105 $ — $ — Equity securities (1) 358,082 341,575 16,507 — Fixed Income (2) 578,797 9,316 569,481 — Other (3) 10,380 3,672 — 6,708 December 31, 2023 $ 963,364 $ 370,668 $ 585,988 $ 6,708 Cash and cash equivalents $ 22,742 $ 22,742 $ — $ — Equity securities (1) 275,109 258,246 16,863 — Fixed Income (2) 650,832 8,245 642,587 — Other (3) 8,201 2,588 — 5,613 December 31, 2024 $ 956,884 $ 291,821 $ 659,450 $ 5,613 (1) This category consists of domestic and international equity securities. It is comprised of individual U.S. securities and exchange-traded funds benchmarked against the S&P 500 index and Russell Mid Cap and Russell 2000 indices, international securities and exchange-traded funds benchmarked against the MSCI EAFE and EM indices, global equity index mutual funds associated with our U.K. based pension plans, and a balanced fund associated with the Canadian based pension plan. (2) This category consists of domestic and international bonds. The domestic fixed income securities consist of a portfolio of investment grade corporate debt, below investment-grade issues, fixed income exchange traded funds, and U.S. Treasury securities of intermediate and long-term duration for liability matching fixed income. International bonds consist of bond mutual funds for institutional investors associated with the Switzerland and U.K. based pension plans. (3) This category consists of a domestic real estate exchange-traded fund and real estate investment trusts in Switzerland. Valuation Equity securities and exchange-traded equity and bond mutual funds are valued using a market approach based on the quoted market prices of identical instruments. Pooled institutional funds are valued at their net asset values and are calculated by the sponsor of the fund. Fixed income securities are primarily valued using a market approach utilizing various underlying pricing sources and methodologies. Real estate investment trusts are priced at net asset value based on valuations of the underlying real estate holdings using inputs such as discounted cash flows, independent appraisals, and market-based comparable data. Cash balances in the United States are held in money market funds and classified as a Level 1 asset. Non-U.S. cash is valued using a market approach based on quoted market prices of identical instruments. Activity associated with Level 3 assets held during the years ended December 31, 2024 and 2023 was immaterial. 68 Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid from the plans: (In thousands) Pension Plans 2025 $ 52,816 2026 55,702 2027 56,746 2028 59,353 2029 59,750 2030 - 2034 280,785 Defined Contribution Retirement Plans The Corporation offers all of its full-time domestic employees the opportunity to participate in a defined contribution plan. Effective January 1, 2014, all non-union employees who were not currently receiving final or career average pay benefits became eligible to receive employer contributions in the Corporation's sponsored 401(k) plan. 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 year ended December 31, 2024, the expense relating to the plan was $ 27.0 million, consisting of $ 14.2 million in matching contributions to the plan in 2024, and $ 12.8 million in non-elective contributions, primarily paid in January 2025. Cumulative contributions of approximately $ 111 million are expected to be made from 2025 through 2029. 17. SEGMENT INFORMATION The Corporation’s segments are composed of similar product groupings that serve the same or similar end markets. Based on this approach, the Corporation has three reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power, as described below in further detail. The Aerospace & Industrial reportable segment is comprised of businesses that provide a diversified offering of highly engineered products and services supporting critical applications primarily across the commercial aerospace and general industrial markets, and to a lesser extent, the defense markets. The products offered include electronic throttle control devices, joysticks, power management electronics, traction inverters and transmission shifters, sensors, electro-mechanical actuation control components, and surface technology services such as shot peening, laser peening, and engineered coatings. The Defense Electronics reportable segment is comprised of businesses that primarily provide products to the defense markets and to a lesser extent the commercial aerospace market. The products offered include commercial off-the-shelf (COTS) embedded computing board level modules, integrated subsystems, turret aiming and stabilization products, tactical communications solutions for battlefield network management, weapons handling systems, avionics and electronics, flight test equipment, and aircraft data management solutions. The Naval & Power reportable segment is comprised of businesses that primarily provide products to the naval defense and power & process markets, and to a lesser extent, the aerospace defense markets. The products offered include main coolant pumps, power-dense compact motors, generators, secondary propulsion systems, pumps, pump seals, valves, control rod drive mechanisms, fastening systems, specialized containment doors, airlock hatches, spent fuel management products, fluid sealing products, reactor protection systems, and arresting systems. The Corporation’s measure of segment profit or loss is operating income. Interest expense and income taxes are not reported on an operating segment basis as they are not considered in the segments’ performance evaluation by the Corporation’s chief operating decision-maker (CODM), its Chief Executive Officer. The CODM uses operating income to assess the performance of each segment by evaluating current period results against budget and prior period results when determining the allocation of operating and capital resources to each segment. 69 Operating results by reportable segment are as follows: Year Ended December 31, (In thousands) 2024 2023 2022 Net sales Aerospace & Industrial $ 933,206 $ 889,744 $ 838,885 Defense Electronics 914,358 818,547 693,709 Naval & Power 1,278,895 1,142,590 1,030,918 Less: Intersegment Revenues ( 5,270 ) ( 5,508 ) ( 6,487 ) Total net sales $ 3,121,189 $ 2,845,373 $ 2,557,025 Cost of sales Aerospace & Industrial $ 600,131 $ 577,038 $ 550,001 Defense Electronics 481,374 432,313 365,372 Naval & Power 868,109 761,202 678,745 Total cost of sales $ 1,949,614 $ 1,770,553 $ 1,594,118 Research and development expenses Aerospace & Industrial $ 26,729 $ 23,211 $ 21,132 Defense Electronics 52,132 50,865 48,587 Naval & Power 11,435 10,793 9,179 Total research and development expenses $ 90,296 $ 84,869 $ 78,898 Selling expenses Aerospace & Industrial $ 25,614 $ 25,897 $ 25,355 Defense Electronics 58,705 54,811 47,202 Naval & Power 58,332 54,847 46,951 Total selling expenses $ 142,651 $ 135,555 $ 119,508 General and administrative expenses Aerospace & Industrial $ 123,907 $ 118,320 $ 105,401 Defense Electronics 95,472 88,783 77,980 Naval & Power 140,696 126,521 113,810 Total general and administrative expenses $ 360,075 $ 333,624 $ 297,191 Other segment items (2) Aerospace & Industrial $ 8,802 $ — $ — Defense Electronics 1,936 — — Naval & Power 660 — 4,651 Total other segment items $ 11,398 $ — $ 4,651 Operating income Aerospace & Industrial $ 148,023 $ 145,278 $ 136,996 Defense Electronics 224,739 191,775 154,568 Naval & Power 199,663 189,227 177,582 Total Segment $ 572,425 $ 526,280 $ 469,146 70 Corporate and Eliminations (1) ( 43,828 ) ( 41,678 ) ( 45,703 ) Total Consolidated $ 528,597 $ 484,602 $ 423,443 Depreciation and amortization expense Aerospace & Industrial $ 32,217 $ 33,994 $ 34,336 Defense Electronics 31,017 33,347 35,120 Naval & Power 41,499 46,165 39,712 Corporate 2,934 2,666 2,859 Total Consolidated $ 107,667 $ 116,172 $ 112,027 Capital expenditures Aerospace & Industrial $ 19,861 $ 17,067 $ 18,554 Defense Electronics 11,180 5,573 3,504 Naval & Power 25,952 18,112 13,652 Corporate 3,981 3,914 2,507 Total Consolidated $ 60,974 $ 44,666 $ 38,217 (1) Corporate and Eliminations includes pension expense, environmental remediation and administrative expenses, legal, and other expenses. (2) Other segment items includes restructuring expenses associated with the 2024 Restructuring Program as well as the loss on divestiture from the Corporation's sale of its industrial valves business in 2022. As of December 31, (In thousands) 2024 2023 Segment assets Aerospace & Industrial $ 1,090,739 $ 1,077,808 Defense Electronics 1,446,949 1,517,877 Naval & Power 1,927,325 1,496,063 Corporate 520,691 529,221 Total Consolidated $ 4,985,704 $ 4,620,969 Reconciliations Year Ended December 31, (In thousands) 2024 2023 2022 Earnings before taxes: Total reportable segment operating income $ 572,425 $ 526,280 $ 469,146 Corporate and Eliminations ( 43,828 ) ( 41,678 ) ( 45,703 ) Interest expense 44,869 51,393 46,980 Other income, net 38,328 29,861 12,732 Earnings before income taxes $ 522,056 $ 463,070 $ 389,195 As of December 31, (In thousands) 2024 2023 Assets: Total assets for reportable segments $ 4,465,013 $ 4,091,748 Non-segment cash 165,762 228,930 Other assets 354,929 300,291 Total consolidated assets $ 4,985,704 $ 4,620,969 71 Geographic Information Year Ended December 31, (In thousands) 2024 2023 2022 Revenues United States of America $ 2,287,285 $ 2,060,986 $ 1,879,001 United Kingdom 134,621 115,078 102,965 Other foreign countries 699,283 669,309 575,059 Consolidated total $ 3,121,189 $ 2,845,373 $ 2,557,025 As of December 31, (In thousands) 2024 2023 Long-Lived Assets - Property, plant, and equipment, net United States of America $ 250,781 $ 243,542 United Kingdom 26,244 25,898 Other foreign countries 62,093 63,356 Consolidated total $ 339,118 $ 332,796 18. CONTINGENCIES AND COMMITMENTS From time to time, the Corporation and its subsidiaries are involved in legal proceedings that are incidental to the operation of our business. Some of these proceedings allege damages relating to asbestos and environmental exposures, intellectual property matters, copyright infringement, personal injury claims, employment and employee benefit matters, government contract issues, commercial or contractual disputes, and acquisitions or divestitures. The Corporation continues to defend vigorously against all claims. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals and insurance coverage, the Corporation does not believe that the disposition of any of these matters, individually or in the aggregate, will have a material adverse effect on its consolidated financial condition, results of operations, and cash flows. Legal Proceedings The Corporation has been named in a number of lawsuits that allege injury from exposure to asbestos. To date, the Corporation has not been found liable for or paid any material sum of money in settlement in any asbestos-related case. The Corporation believes its minimal use of asbestos in its past operations and the relatively non-friable condition of asbestos in its products make it unlikely that it will face material liability in any asbestos litigation, whether individually or in the aggregate. The Corporation maintains insurance coverage for these potential liabilities and believes adequate coverage exists to cover any unanticipated asbestos liability. The Corporation is party to a number of other legal actions and claims, none of which individually or in the aggregate, in the opinion of management, are expected to have a material effect on the Corporation’s results of operations or financial position. Letters of Credit and Other 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 December 31, 2024 and 2023, there were $ 21 million and $ 20 million of stand-by letters of credit outstanding, respectively, and $ 15 million and $ 16 million of bank guarantees outstanding, respectively. The Corporation, through its Electro-Mechanical Division (EMD) business unit, has three Pennsylvania Department of Environmental Protection (PADEP) radioactive materials licenses that are utilized in the continued operation of the EMD business. In connection with these licenses, the Corporation has known conditional asset retirement obligations related to asset decommissioning activities to be performed in the future, when the Corporation terminates these licenses. As of December 31, 2024, the Corporation has recorded an asset retirement obligation of approximately $ 9 million for two of the three licenses. For its third license, the Corporation has not recorded an asset retirement obligation as it is not reasonably estimable due to insufficient information about the timing and method of settlement of the obligation. Accordingly, this obligation has not been recorded in the Consolidated Financial Statements. A liability for this obligation will be recorded in the period when sufficient 72 information regarding timing and method of settlement becomes available to make a reasonable estimate of the liability’s fair value. 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 effective through December 31, 2024. 19. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The total cumulative balance of each component of accumulated other comprehensive income (loss), net of tax, is as follows: (In thousands) Foreign currency translation adjustments, net Total pension and postretirement adjustments, net Accumulated other comprehensive income (loss) December 31, 2022 $ ( 160,807 ) $ ( 98,109 ) $ ( 258,916 ) Other comprehensive loss before reclassifications (1) 37,519 8,218 45,737 Amounts reclassified from accumulated other comprehensive income (1) — ( 44 ) ( 44 ) Net current period other comprehensive income 37,519 8,174 45,693 December 31, 2023 $ ( 123,288 ) $ ( 89,935 ) $ ( 213,223 ) Other comprehensive loss before reclassifications (1) ( 43,905 ) 13,898 ( 30,007 ) Amounts reclassified from accumulated other comprehensive income (1) — 5 5 Net current period other comprehensive income (loss) ( 43,905 ) 13,903 ( 30,002 ) December 31, 2024 $ ( 167,193 ) $ ( 76,032 ) $ ( 243,225 ) (1) All amounts are after tax. 20 . RESTRUCTURING COSTS During the year ended December 31, 2024, the Corporation executed restructuring activities across all of its segments to support its ongoing effort of improving operating efficiency ("2024 Restructuring Program"). These activities, which primarily include workforce reductions, consolidation of facilities, and costs related to legal entity restructuring, resulted in pre-tax charges of $ 15.9 million for the year ended December 31, 2024. The Company anticipates that these actions will be substantially completed by June 30, 2025. The following tables summarize the respective balances related to these restructuring activities by both reportable segment as well as on a consolidated basis: 73 In thousands Restructuring Liability as of December 31, 2023 Provision Cash Payments Restructuring Liability as of December 31, 2024 Aerospace & Industrial Severance $ — $ 1,750 $ ( 1,750 ) $ — Facility closure and other costs — 5,037 ( 4,350 ) 687 Total Aerospace & Industrial $ — $ 6,787 $ ( 6,100 ) $ 687 Defense Electronics Severance $ — $ 1,117 $ ( 656 ) $ 461 Facility closure and other costs — — — — Total Defense Electronics $ — $ 1,117 $ ( 656 ) $ 461 Naval & Power Severance $ — $ 667 $ ( 93 ) $ 574 Facility closure and other costs — — — — Total Naval & Power $ — $ 667 $ ( 93 ) $ 574 Consolidated (including Corporate) Severance $ — $ 3,558 $ ( 2,522 ) $ 1,036 Facility closure and other costs — 8,051 ( 6,121 ) 1,930 Total consolidated $ — $ 11,609 $ ( 8,643 ) $ 2,966 A reconciliation of total pre-tax restructuring charges is as follows: Affected line item in the Consolidated Statement of Earnings Year Ended (In thousands) December 31, 2024 Inventory write-downs Cost of product sales $ 1,435 Severance, facility closure, and other costs Restructuring expenses 11,609 Property, plant, and equipment & operating lease right of use asset impairments Restructuring expenses 2,839 $ 14,448 Total restructuring charges Earnings before income taxes $ 15,883 There were no such comparable charges for the year ended December 31, 2023. * * * * * * 74 Report of the Corporation The Consolidated Financial Statements appearing in Item 8 of this Annual Report on Form 10-K have been prepared by the Corporation in conformity with accounting principles generally accepted in the United States of America. The financial statements necessarily include some amounts that are based on the best estimates and judgments of the Corporation. Other financial information in this Annual Report on Form 10-K is consistent with that in the Consolidated Financial Statements. The Corporation maintains accounting systems, procedures, and internal accounting controls designed to provide reasonable assurance that assets are safeguarded and that transactions are executed in accordance with the appropriate corporate authorization and are properly recorded. The accounting systems and internal accounting controls are augmented by written policies and procedures, organizational structure providing for a division of responsibilities, selection and training of qualified personnel, and an internal audit program. Management of the Corporation has completed an assessment of the Corporation’s internal controls over financial reporting and has included “Management’s Annual Report on Internal Control Over Financial Reporting” in Item 9A of this Annual Report on Form 10-K. Deloitte & Touche LLP, our independent registered public accounting firm, performed an integrated audit of the Corporation’s Consolidated Financial Statements that also included forming an opinion on the internal controls over financial reporting of the Corporation for the year ended December 31, 2024. An audit includes examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The objective of their audit is the expression of an opinion on the Corporation’s Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America, in all material respects, and on the internal controls over financial reporting as of December 31, 2024. The Audit Committee of the Board of Directors, composed entirely of directors who are independent of the Corporation, appoints the independent registered public accounting firm for ratification by stockholders and, among other things, considers the scope of the independent registered public accounting firm’s examination, the audit results, and the adequacy of internal accounting controls of the Corporation. The independent registered public accounting firm and the internal auditor have direct access to the Audit Committee, and they meet with the committee from time to time, with and without management present, to discuss accounting, auditing, non-audit consulting services, internal control, and financial reporting matters. 75 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Curtiss-Wright Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Curtiss-Wright Corporation and subsidiaries (the "Company") as of December 31, 2024 and December 31, 2023, the related consolidated statements of earnings, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 13, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue – Over-Time Basis – Refer to Note 2 to the financial statements Critical Audit Matter Description The Company recognizes revenue when control of a promised good and/or service is transferred to a customer at a transaction price that reflects the consideration that the Company expects to be entitled to in exchange for that good and/or service. The Company identifies a performance obligation for each promise in a contract to transfer a distinct good or service to the customer. Revenue recognized on an over-time basis for the year ended December 31, 2024, accounted for approximately 49% of total net sales. Contracts that qualify for over-time revenue recognition are generally associated with the design, development, and manufacture of highly engineered industrial products used in commercial and defense applications and generally span between 2-5 years in duration. Typically, over-time revenue recognition is based on the utilization of an input measure used to measure progress, such as costs incurred to date relative to total estimated costs. Included within revenue recognized on an over-time basis are certain contracts that require the use of reasonable and dependable estimates of future costs that will be incurred to complete production of goods or provision of services as well as a 76 disciplined cost estimating system in which all functions of the business are integrally involved. These estimates are determined based on industry knowledge and experience of engineers, project managers, and financial staff. Specific to these contracts, auditing over-time revenue required extensive audit effort due to a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to auditing over-time revenue specific to these contracts (as described above) included the following, among others: ◦ At select business units, we tested the effectiveness of controls over the recognition of over-time basis revenue, including those over costs incurred to date and estimates of future costs related to the performance obligation. ◦ Obtained the population of active contracts during 2024 and assessed (1) contract year-to-date revenue in relation to inception-to-date margin and (2) contract value in relation to inception-to-date margin to identify potential outliers in the portfolio of active contracts that may contain characteristics of audit interest. ◦ For those contracts identified through sampling, or that contained characteristics of audit interest, performed further audit procedures tailored to evaluate the estimate, or to address the specific characteristics of audit interest identified. Procedures performed, among others, included: ▪ Read the relevant portions of contracts including any recent contract modifications to understand contract terms, including incentives, fee arrangements, scope of work, and any unusual contract terms. ▪ Evaluated the estimates of total costs to be incurred and profits for these selected contracts by: • Evaluating management’s ability to achieve the estimated cost and profit by 1) performing inquiries with the business managers and corroborating the information gained from these inquiries with other parties who have detailed knowledge of the contract’s progress, issues being encountered, and overall production status, 2) considering management’s historical performance against estimates, and 3) considering any contradictory information. • Comparing management’s estimates for selected contracts to costs and profits of similar related contracts, when applicable. ◦ We developed independent estimates of revenue based on historical profit margins and current year costs incurred to date. We compared those estimates to revenue recognized by the Company. ◦ Tested the accuracy and completeness of the costs incurred to date. /s/ Deloitte & Touche LLP Morristown, New Jersey February 13, 2025 We have served as the Company's auditor since 2003. 77 Report of Independent Registered Public Accounting Firm To the stockholders and the Board of Directors of Curtiss-Wright Corporation Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Curtiss-Wright Corporation and subsidiaries (the "Company") as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 13, 2025, expressed an unqualified opinion on those financial statements. As described in Management's Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at WSC Inc. ("WSC"), and Ultra Nuclear Limited and Weed Instruments Co., Inc. ("Ultra Energy"), which were acquired on April 1, 2024 and December 31, 2024 respectively, and whose financial statements constituted less than 1% of total net sales and approximately 1% of total assets of the consolidated financial statement amounts (excluding acquired intangible assets and goodwill) as of and for the year ended December 31, 2024. Accordingly, our audit did not include the internal control over financial reporting at WSC and Ultra Energy. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Morristown, New Jersey February 13, 2025 78 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.